Intellectual Property (Unjustified Threats) Bill [ Lords ] (First sitting)
Chi Onwurah ExcerptsTuesday 24th January 2017
(7 years, 3 months ago)
Public Bill CommitteesRead Full debate Intellectual Property (Unjustified Threats) Act 2017 View all Intellectual Property (Unjustified Threats) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 24 January 2017 - (24 Jan 2017)
The Chair
We will now start our line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. I hope all Members have it. It shows the selected amendments. They have not been grouped and will be taken individually. A Member who has put their name to the amendment is called first. Other Members are then free to catch my eye to speak on any amendment they wish. To remind everyone, a Member may speak more than once in a single debate. I will use my discretion to decide whether to allow a separate stand-part debate on the individual clauses. In this case, that really only affects clause 1 following the debate on the relevant amendments.
Clause 1
Patents
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I beg to move amendment 1, in clause 1, page 2, line 9, at end insert—
“(c) commissioning a product for disposal.”
This amendment would ensure the commissioner is treated the same as the manufacturer in the case of infringement. This would make it consistent with the arrangement for trademarks.
It is a pleasure to serve under your chairmanship, Mr Nuttall. In my speech on Second Reading last week, I noted that it is essential that the Bill makes sufficient provisions to protect manufacturers from unjustified threats. The Government, in bringing forward the Bill, made the claim that manufacturers and importers of infringing products do more commercial damage than retailers, stockists and customers. It has also been suggested that manufacturers, having invested in the product, are better placed to determine whether a threat of infringement proceedings is justified.
The amendment would ensure that commissioners and manufacturers are treated on an equal footing and go some way to protecting manufacturers. Such an arrangement already exists in trademark law. Any company that instructs or commissions work that applies a trademark it does not own is treated as a primary infringer and can be written to freely. That is not the case for patents and designs. In such cases, the manufacturer is instead treated as the primary infringer. They can be written to freely, but under the Bill’s provisions the person or company that commissioned the manufacturers to do the work cannot be written to without fear of a threats action.
That is perhaps more troubling when we consider the unequal relationship that often prevails in such cases. More often than not, it is a larger company that commissions work and instigates the infringement of a design or patent, while the company carrying out the work is a smaller manufacturer, perhaps a small or medium-sized enterprise based in one of our constituencies. Many of those smaller manufacturers will not realistically be in a position to insist on indemnities in the contracts with the commissioner. We know how unequal contract negotiations often are between large companies and smaller companies in their supply chain. The manufacturer will get dragged into infringement action, as they can be written to freely, but the real prime mover is protected by the provisions in the Bill. As they stand, the provisions allow infringing commissioners to hide behind manufacturers, who would not be protected. This amendment would prevent such circumstances arising and I urge the Minister to accept it.
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
It is a pleasure to serve in Committee under your chairmanship, Mr Nuttall. I thank the hon. Member for Newcastle upon Tyne Central for her amendment, which gives us a chance to discuss this important IP legislation again in more detail. The existing IP legislation defines clearly those acts that can infringe intellectual property rights. It is essential that the threats provisions are entirely consistent with those definitions of infringement. Otherwise, we would create a real mess for businesses in this area. The amendment would mean that threats made to someone “commissioning” an allegedly infringing product will not give rise to a threats action. The person commissioning would be treated in the same way as a manufacturer or importer. However, commissioning infringing goods is not itself an infringing act in any of the existing statutory definitions. That is an important point.
The amendment would therefore create an anomalous situation in which a threat to sue for infringement could safely be made to someone who is not, under the definitions, an infringer at all. There is no situation in which such a threat could be justified. The amendment would remove protection from people who are not actually infringers. That cannot be right. Treating commissioning as if it were an infringement, just for these purposes, would also bring confusion and inconsistency more widely to the law of infringement.
I want to make it clear that there is no inconsistency with the situation found in trademark law, to which the hon. Member for Newcastle upon Tyne Central referred. The provisions in the Bill relating to trademarks do not allow threats to be made for “commissioning”. The phrase
“causing a person to apply”
simply clarifies what is covered by the existing infringing acts in the Trade Marks Act 1994, in line with established case law. The amendment therefore seeks to address an issue that does not exist. For those reasons I ask the hon. Lady to withdraw her amendment.
Chi Onwurah
I thank the Minister for his clarifications and comments. Can he address my central point, which is that small manufacturers are in an unequal relationship with those commissioning the products to be manufactured, and the provisions in the Bill may put them at greater risk than those who are commissioning the infringing product? Will he consider ways in which small manufacturers can be better protected in the circumstances that I outlined?
Joseph Johnson
I am happy to attempt that. Manufacturers will benefit from the way these provisions prevent distortions in the wider marketplace. No evidence has been presented to the Government that stakeholders want that important aspect of the provisions to change. Manufacturers are already given considerable protection by the way in which the provisions prevent threats being made to others. Given that manufacturers are often the worst affected by unjustified threats made to those further down the supply chain, it is their customers who are scared off by threats of infringement proceedings. That is why the provisions allow anyone aggrieved by the threat to make use of the provisions, not just the recipient.
Chi Onwurah
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Chi Onwurah
I beg to move amendment 2, in clause 1, page 2, line 15, after “do,” insert “or claims to do,”.
This amendment deals with people or companies who hold themselves out as the primary infringer: ie, they claim to be the manufacturer or importer of a product (and therefore can be written to freely) when, in fact, they are not.
One of the virtues of the Bill is that it seeks to simplify and improve the workings of IP law and reduce the number of infringement cases brought before the courts for mistaken or outright false reasons. The amendment would enhance that aspect of the Bill by further reducing the scope for unnecessary litigation.
The amendment would allow people or companies that claim to be the primary infringer—that is, the manufacturer or importer of the product—to be communicated with freely by the rights holder, until it is clear that they are not the rights holder. That is a detailed point, and it may seem to be an obscure change, but it is important, otherwise I would not have tabled the amendment.
Under the Bill, the rights holder would not be able to communicate with a party falsely claiming to be the primary infringer, as that would run the risk of triggering the Bill’s provisions. If the amendment is agreed, the provisions would allow for communication from the rights holder until it is clear that the retailer or stockist is not, in fact, the manufacturer. That would reduce the impact on small and medium-sized enterprises—supporting SMEs is a constant theme of ours—and other organisations, because there would be fewer court actions and more such matters would be dealt with in the right way, which is directly between the participants. As such, I argue that the amendment is entirely in the spirit of the original Bill, and I ask the Government to accept it.
Joseph Johnson
In order to provide much-needed protection to retailers and customers, it is crucial that the IP threats provisions encourage rights holders to communicate with the trade source of an infringement. To facilitate that, the Bill sets out a clear statement of those acts that will not trigger an unjustified threats action.
The amendment would introduce circumstances where threats made to those further down the supply chain, such as retailers, would not give rise to an unjustified threats action. Those are exactly the people who should be protected by these provisions. The amendment would introduce the new concept of “claiming” to manufacture or import a product, and that is an inherently vague concept. It would no doubt be very difficult to prove in court and therefore the risk of satellite litigation on the point is considerable. Introducing the new concept would mean less certainty for businesses. It would likely be a long time before they would have clarity from case law about what constitutes “claiming”, and the additional complexity is unwelcome. The aim of the Bill is to help to clarify this area of law and make it easier to navigate.
Critically, the amendment would undermine protection for retailers and others further down the supply chain who inadvertently use ambiguous language, such as a reference to “our new product”. A retailer might easily imply, even accidentally, that it had made a product. Under the amendment, the retailer could lose all protection from unjustified threats. A rights owner may choose to rely on the public statement and issue a threat. By doing so, the rights owner chooses to risk that the recipient may bring a threats action. However, in the very unusual situation in which someone deliberately set out to entrap the rights holder, such behaviour would no doubt influence how the court would grant any remedies.
I am not convinced that there is an issue here that needs to be solved. If a rights holder is uncertain about whether a retailer is also a manufacturer, it can use a permitted communication to seek clarification. That removes the risk of an unjustified threats action. For those reasons, I ask the hon. Member for Newcastle upon Tyne Central to withdraw her amendment.
Chi Onwurah
I thank the Minister for his comments. I agreed in my speech that the amendment could appear obscure, but the fact is that supply chains are increasingly complex. He talked about the amendment introducing the new concept of claiming to be a manufacturer, but it is not a new concept in practice, given the increasing complexity of global supply chains. It may be a new concept to the Minister.
It is incredibly important that the Bill supports small businesses generally, and in particular our small manufacturers. At the least, it should not put further barriers in the way of their effective commercial working, because it is our small manufacturers that we hope to grow into large manufacturers and create the high-skill, high-wage jobs that we all seek for our future prosperity. I ask the Minister specifically to take a further look at the amendment or to consider different ways of achieving the same objective.
Question put, That the amendment be made.
Chi Onwurah
I beg to move amendment 3, in clause 1, page 2, line 19, at end insert
“or any other product or process having the same features so far as is material to the alleged infringement.”
This amendment would allow communications from the rights holder to the primary infringer to also refer to secondary infringing acts (by the primary infringer), without it constituting a threat.
As I noted earlier, it is a strength of the Bill that it simplifies the legal environment within which businesses operate. Any attempt to make the application of the law less costly and less uncertain is to be praised, particularly in an area, such as this one, that is so commercially sensitive and technical in many of its provisions. It is because of that that certain provisions in the Bill require amending to allow for greater certainty and to ensure that instances of infringement can be dealt with easily and with minimum fuss.
The amendment would allow communications from the rights holder to the primary infringer to also refer to secondary infringing acts by the primary infringer without it constituting a threat. In other words, rights holders would be able to refer to future infringing acts, or infringing acts that are fundamentally similar to the current infringing act. The amendment would enable them to be grouped together in communications.
The issue was raised by the Chartered Institute of Patent Attorneys in response to the Law Commission’s consultation. However, the Bill still does not reflect the CIPA’s concern that it does not allow the rights holder to ask the primary infringer not to infringe in future or not to infringe in a different way—that is, the secondary infringing acts. It leaves the rights holder with very narrow parameters for what they can say in communications to the primary infringer, allowing little room for manoeuvre. That is especially problematic when one again considers the case of small businesses holding rights. You may begin to detect a theme, Mr Nuttall, in terms of the Opposition’s constant concern for the protection of small businesses and in particular small manufacturers. Small businesses would not necessarily be able to afford advice on what communications were permissible, and could find themselves effectively bringing in other infringing communications without knowing it.
Joseph Johnson
It is crucial that the threats provisions allow rights holders to enforce their rights, but also that they encourage rights holders to communicate with the trade source of an infringement—those performing what are known as primary acts. For patents, that would include manufacturers and importers. The provisions will allow a threat to sue for infringement to be made to the manufacturer of a product, for example, a hair dryer. Threats can then also be made to that manufacturer for retailing that same hair dryer. Once the rights holder has found the manufacturer of the product, it is entirely sensible that the rights holder can raise all of the allegedly infringing acts they believe the manufacturer to be carrying out in relation to that product. That encourages sensible negotiation and helps to resolve the dispute.
However, the amendment would allow threats to be made to the same business for retailing similar hair dryers, even though the business in question is—for those products—merely acting as a pure retailer. That would chip away at the principle at the very heart of the threats provisions—that of protection for those further down the supply chain. The amendment would also blur the clear line between what does and does not give rise to a threats action, making it harder for rights holders to approach alleged primary infringers with confidence. In addition, the concept of “the same features so far as is material” is exceedingly vague and will create a great deal of uncertainty for business about whether products are, or are not, materially “the same”. I therefore ask the hon. Member for Newcastle upon Tyne Central to withdraw her amendment.
Chi Onwurah
I am disappointed that the Minister did not give more weight to CIPA’s concerns. His concern about the language being vague in certain provisions does not reflect the excellent work that I am sure could be done by his Department to make the language less vague. Equally, it does not reflect much of the language in existing provisions. However, I do not wish to test the patience—or, indeed, the presence—of the Committee, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clauses 2 to 9 ordered to stand part of the Bill.
New Clause 1
Review of the impact of exiting the European Union on provisions within this Act
“( ) Within 12 months of this Act coming into force, the Secretary of State must prepare and publish a report on the impact of the Government’s plans for exiting the European Union on the provisions within this Act, and must lay a copy of the report before Parliament.” —(Chi Onwurah.)
A probing new clause to assess the impact of exiting the European Union on the provisions within this Act.
Brought up, and read the First time.
Chi Onwurah
I beg to move, That the clause be read a Second time.
We can all agree that the Bill is unusual, in so far as it is less controversial and rather more technical than many that are debated on the Floor of the House. However, I think we can also all agree that no Bill—however technical or uncontroversial—will be unaffected by the UK’s impending exit from the European Union. We are, of course, awaiting a ruling today.
Maria Eagle (Garston and Halewood) (Lab)
We have the ruling: the Government lost by eight to three. The Supreme Court said that an Act of Parliament must be passed in this House and that the devolved Administrations will not have the power to stand in the way of Brexit.
Chi Onwurah
I thank my hon. Friend for bringing us the news that parliamentary sovereignty has been upheld.
The Chair
Order. That might be relevant to the European Union, but the new clause is specifically about how the matter relates to this Bill. We must not allow the debate to go to wider questions; we must keep it to that issue.
Chi Onwurah
Thank you, Mr Nuttall. As always, we will follow your guidance. I was seeking not to extend this debate, but simply to acknowledge the great victory for parliamentary democracy.
No Bill can be indifferent to or unimpacted by the UK’s impending exit from the European Union. Brexit will trigger profound changes in how the UK is governed and the ways in which our laws are enforced and implemented. That is no less true of intellectual property law than of any other area. It is therefore not in a partisan spirit that I move the new clause to require a report from the Secretary of State on the impact that the Government’s plans for exiting the European Union will have on the Bill’s provisions.
Exiting the European Union will have numerous impacts on the application of patent law in particular. For instance, it is unclear whether we will remain members of the European Patent Office; I hope that the Minister will be able to clarify that. We would almost certainly not be able to join the new unified patent court, which will be open to participation from member states of the European Union only, and which, under current plans, would be partly based in London. I was involved in lobbying for that office to be based in London, given London and the UK’s leading position in patents and patent law.
It is difficult to see the movement in recent years towards developing a single European patent as anything other than positive, in so far as it renders patent law simpler, more consistent across Europe and therefore more easily accessible for small and medium-sized businesses. It is regrettable that our participation in that project has been thrown into question. Will the Minister commit to taking all necessary steps to ensure that patent law, and IP law more generally, does not take a retrograde step in terms of its coherence and applicability following Brexit?
As I noted earlier, intellectual property is an essential means of ensuring that innovation is rewarded. That is why we are here today and I think we all recognise the importance of rewarding innovation and creativity. As the UK makes its way in the world outside the European Union, our ability to support a high-wage, high-skill economy will depend on our ability to innovate and create new products and services that are welcomed across the world. IP law provides a crucial source of motivation and reassurance for investors in supporting new products. It is welcome that, through the Bill, the Government are taking steps to ensure that IP law remains up to date and consistent; it would be troubling if the time and effort spent on the Bill were to be undermined following Brexit. I call on the Minister to accept the new clause and to ensure that the law in these areas remains consistent and easily applicable as we leave the European Union.
Maria Eagle
It is a pleasure to serve under your chairmanship, Mr Nuttall. I rise, briefly, to support my hon. Friend’s new clause and to give the Minister a chance to show, in view of the judgment that we have just heard about, a new openness from the Government to Parliament about the implications of the UK leaving the EU. He can be the first Minister to explain in detail precisely what the implications of leaving the EU are on the provisions that he seeks to take through the House to become an Act of Parliament. We need to know that the good intentions and good measures contained in the Bill, which have widespread support across the Committee and I am sure will have widespread support across the House, will not be undermined by other things that the Government are focusing on doing in the broader political sphere.
My hon. Friend said that the UK is a signatory to the unified patent court agreement, which establishes the unified patent court, common to all participating states. It deals with disputes relating to European patents and European patents with unitary effect. The provisions seem to demonstrate that the jurisdiction of that court is intended to be pretty wide and to cover a lot of those businesses and entrepreneurs that the Bill seeks to assist by removing the threat of unjustified litigation.
It is tremendously important that the Minister sets out as fully as possible what the implications of us leaving the EU are for the operation of that court. Will we still be members? Do the Government intend to remain in some way opted into that common European provision? To what extent does our membership of the court depend on our remaining a member of the European Union? Will it be possible for us to opt into the operations of the court, which would be a good thing? Even if it is possible, what is the Government’s intention, because the Prime Minister said in her speech that she does not want us to be half in, half out? Does the Minister think that if we remain part of the European patent court, we would be half in, half out of the EU, or are we going to be purists?
Chi Onwurah
My hon. Friend’s excellent contribution makes me recall my time working as head of market development for an American telecommunications company, which was looking to invest in and roll out across Europe. One of the significant costs that we encountered was related to the need to apply for patents and to consider patent law separately in each jurisdiction of the European Union. Given the Prime Minister’s planned visit to the United States to meet its new President, does my hon. Friend agree that the unified patent court will be part of attracting investment, particularly American investment, to the UK in future?
Maria Eagle
I agree that anything that reduces the costs of doing business across jurisdictions—with appropriate safeguards, of course—will be welcomed by businesses and companies that seek to do just that. Given that as we leave the European Union we will have to be more outward looking and focused on trade, immediately acting to impose extra burdens on businesses that might be seeking to invest in this country is not a particularly good signal. However, the Minister may well be about to provide us with every ounce of assurance possible and set out in full the Government’s intention with regard to our participation in the court.
Joseph Johnson
I will happily come on to that in due course. I remind the hon. Lady that the Bill is not part of the ratification process for the unified patent court and we are in danger of straying off topic and beyond the scope of the Bill.
The new clause would require the Secretary of State to report on the impact of the Government’s plans for exiting the European Union on the provisions of the Bill within 12 months of it coming into force. The Law Commission review that led to the Bill was of the existing threat provisions that apply to all patents, trademarks and designs that have force in the UK, including the relevant EU-wide rights. The Bill therefore applies the new threat provisions to EU trademarks and community design rights.
It is important that businesses in the UK are protected against unjustified threats in relation to their activities in the UK, regardless of whether those threats relate to infringement of a UK national intellectual property right or an EU-wide IP right that is in force in the UK. Not to cover EU-wide IP rights in so far as they apply to the UK would leave a large loophole and make the threats regime inconsistent across relevant IP rights.
In answer to the remarks of the hon. Member for Garston and Halewood, there is no question of the UK leaving the European Patent Office and the international patent convention that underpins it. It is not connected to the EU.
The Bill also ensures that the threats regime is compatible with the proposed unitary patent and unified patent court, when they come into effect. The Law Commission did detailed work with legal and business interests on that specific point. For as long as we are members of the EU, the UK will continue to play a full and active role. Ensuring that the IP regime continues to function properly for EU-wide rights is an example of that. However, that position and our decision to proceed with ratification of the UPC should not be seen as pre-empting the UK’s objectives in the forthcoming negotiations with the EU. No decision has been taken on our future involvement in the EU IP framework once we have left. That will be part of the negotiations, which have not yet begun.
It is likely that the negotiations will still be in progress one year on from the point at which the Bill would come into force—the point at which the new clause would require us to report. The Prime Minister has been firm that we will not provide a running commentary on negotiations. Publishing the report required by the new clause could well undermine our ability to negotiate the best deal for Britain in this area.
In her speech on 17 January, the Prime Minster set out our negotiating objectives for Brexit. We seek an equal partnership between an independent, self-governing, global Britain and our friends and allies in the EU. The UK has one of the best IP regimes in the world and our work continues to support and develop that. The UK leaving the EU will not change that. We will continue to deliver high-quality rights-granting services, to lead the world in IP enforcement and to be a positive force in the international IP arena. In light of my remarks, I ask the hon. Member for Newcastle upon Tyne Central to withdraw her new clause.
Chi Onwurah
Let me start by saying that I welcome the Minister’s clarification on us remaining a member of the European Patent Office. At least, I think it was a clarification; it was not entirely clear whether it was a clarification or simply an exposition on the current status.
In the Minister’s response to the questions put and the comments made by my hon. Friend the Member for Garston and Halewood, he did not seem to recognise the respect for Parliament and accountability to Parliament that—I do not want to try the patience of the Chair—today’s judgment has enforced and reflected. He gave that as a reason why he cannot deliver a report on the implications, but his position is highly inconsistent. My hon. Friend characterised it as sitting on the fence, but it is an inconsistent fence. It is almost like sitting on two fences that are one.
At the same time as the Minister said it is clear that we are a member of the European Union until we are no longer a member of the European Union, he also said that that was not to presuppose any of the negotiations. He then effectively refused to give any kind of report on the implications of the negotiations when throughout the world investors who are considering investing in the UK and the manufacturing of particular products will be in a state of uncertainty. As I am sure the Minister and everyone on the Government Benches recognise—we certainly recognise it on the Opposition Benches—uncertainty is the death knell for business. Business needs as much certainty as is possible.
Given that we are in such uncertain times, not to be prepared to offer a little more certainty by giving a report one year out on the implications for patents of such a big change in our legislative framework seems short-sighted. I hope that the Minister has now had time to reflect—and perhaps to look at the judgment on his electronic device—and feels able to consider supporting the new clause, which would create a not unjustified level of sharing of implications and reduce business uncertainty. I am sure we can all agree that that is important, as we move towards leaving the European Union. The Minister does not seem inclined to respond to my appeal, so I will press the new clause to a Division.
Question put, That the clause be read a Second time.
Intellectual Property (Unjustified Threats) Bill [ Lords ]
Chi Onwurah ExcerptsMonday 16th January 2017
(7 years, 3 months ago)
General CommitteesRead Full debate Intellectual Property (Unjustified Threats) Act 2017 View all Intellectual Property (Unjustified Threats) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 4-R-I Marshalled list for Report (PDF, 74KB) - (21 Nov 2016)
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. I start by joining the Minister in thanking the Law Commission for its invaluable work. I also thank the Minister himself for moving the motion recommending that the Bill receive its Second Reading, and the Government for taking the Law Commission’s recommendations forward in this important and complex area.
Although intellectual property law is complex, it is an essential means of ensuring that innovation is rewarded. It provides a crucial source of motivation and reassurance for investors when supporting new products from which we all benefit. As someone who has spent most of her career outside of Parliament, as an engineer building and designing new things, I understand the importance of IP rights in undergirding the creation of new ideas.
UK investment in intangible assets protected by IP rights has been estimated at 4.2% of total GDP, while 50% of our investment in the knowledge economy is protected by IP rights. It is therefore welcome that the Government are taking steps to ensure that IP laws remain up to date and consistent; we can all too quickly find that legislation is overtaken by technology.
The Labour party is keen that the Government’s industrial strategy creates a fairer and more prosperous Britain; to be fair, we are keen to see some inkling of a Government industrial strategy. I will not focus on the lack of a Green Paper—or any paper on this area—but simply say that no discussion of industrial strategy can omit mention of IP.
Industries frequently highlighted as central to our national success, such as the creative industries, are often those that invest a higher proportion of revenue back into intangible assets that are protected by IP rights. Reforming current legislation to protect IP rights while avoiding an overly litigious culture is, in my view and that of my party, the right step to ensure that our creative industries, and others highly dependent on IP, can prosper.
I am less convinced, however, that the Bill makes sufficient provision to protect manufacturers from unjustified threats. In introducing the Bill, the Government claimed that
“manufacturers and importers of infringing products…do more commercial damage”
than retailers, stockists and customers. They also suggested that manufacturers, having invested in the products,
“are better placed to determine whether a threat of infringement proceedings is justified.”—[Official Report, House of Lords, 15 June 2016; Vol. 773, c. GC2.]
Is the Minister confident that the Bill will not leave manufacturers vulnerable to unjustified threats, from which others are quite rightly protected? I am sure we will all agree that this is no time to undermine our great manufacturing industries, on which our future prosperity can and should be based.
Moreover, we are disappointed that the Bill offers little in the way of alternative remedies to claimants. The greater use in recent years of alternative dispute resolution as an affordable alternative to lengthy legal battles is a positive development. Drawn-out and costly court battles invariably hand an advantage to the party with the deepest pockets, as well as supplement the incomes of lawyers—that is certainly true with respect to intellectual property. It is therefore unfortunate that the Bill offers no new remedies.
Despite those omissions, we owe a great debt of gratitude to the Law Commission for its work on the Bill. Perhaps the primary reason for changing the law is that the present arrangements are not merely deficient in certain areas but complex and inconsistent. The Bill is clearly an attempt to remedy that and to adopt what the Law Commission calls an “evolutionary approach”. The Labour party welcomes this—and, indeed, any—attempt to make the application of the law less costly, less uncertain and therefore more accessible. That has to be praised.
The next step should be to incorporate the thrust of the Bill’s provisions into the general law of competition, to bring it in line with the Paris convention for the protection of industrial property. I do not say that to criticise the Bill, but to use it as a starting point for something broader, specifically a new tort in relation to the wider issue of false allegations in trade and of problems with the general proprieties of business practice and business ethics, of which unjustified threats over IP are only one symptom.
Finally, I have some general comments on IP rights and what we know about their relation to the real economy. It has been claimed on numerous occasions that the number of patents possessed by any given company or companies within any given nation is a proxy for the level of innovation. As shadow Minister for industrial strategy, science, and innovation, it is part of my job description to engage with such claims, about which I am quite sceptical. As the innovation economist Mariana Mazzucato has argued, a
“rise in patents does not reflect a rise in innovation but a change in the patent laws and a rise in the strategic reasons why patents are being used”.
I am pleased that the Bill has been introduced to reduce the misuse of IP law to stifle competition, but we would benefit from a broader debate on how IP law can be further reformed to encourage and promote real innovation in our industries.
Exiting the EU: Science and Research
Chi Onwurah Excerpts(7 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The American physicist Dr Michio Kaku calls science “the engine of prosperity”, and that is certainly true for us in the United Kingdom. In 2015, the Campaign for Science and Engineering found that for every £1 invested by the Government on research and development, we got back 20p to 30p each and every year in perpetuity.
I am a strong believer in science for science’s sake—it is part of our innate humanity to seek to push forward the bounds of knowledge—but we must also recognise that as far as the UK economy is concerned science investment is the gift that keeps on giving. Our world-renowned science sector plays a huge role in economic growth and the creation of jobs: 20% of the UK workforce are employed in science roles, and employees earn 40% more than the average wage in these high-skilled, well-paid jobs.
The UK punches above its weight on science. As the Minister said, we represent just 0.9% of the global population, but we produce a staggering 16% of the world’s most significant research citations. We are the home of Stephen Hawking, Ernest Rutherford and the discoverer of the Higgs boson. Peter Higgs may have been at Edinburgh University, but I am proud to say that he was born in Elswick in Newcastle.
Despite such a proud history, we lag behind on investment. Since 2012, UK public sector spending on science has fallen to below 0.5% of our GDP, the lowest level in any G8 country. The UK has long been known for its research and development, but we are at risk of losing that reputation and the rewards we reap for our economy and jobs if the Government refuse to support science through Brexit.
The UK’s world-leading position in technology, research and development is thanks in part to our integration with and the contribution of our soon-to-be ex-partners in the European Union. The Minister mentioned Horizon 2020, and £1 in every £6 spent on science by the European Union is spent in the United Kingdom. I know from my own constituency that scientists benefit not only from EU funding, but from the highly skilled researchers and scientists it brings with it.
Newcastle University employs nearly 600 staff from various European Union countries. European Union funding allows it to retain and attract talented researchers through prestigious European Research Council grants. For example, there are the Marie Sklodowska-Curie individual fellows, 50 of whom are hosted by Newcastle University, which equates to €11 million in research funding. Some of Newcastle’s leading research centres would not be possible without European Union staff. For example, in the John Walton muscular dystrophy research centre team, which is pioneering treatments for children with Duchenne muscular dystrophy, more than 30% of staff are European and three of its four lead academics are from the European Union. Many right hon. and hon. Members will have similar examples in their constituencies.
Leaving the European Union presents our science and research sectors with numerous challenges in relation to process, timing, funds, skills, creativity and resources, and the Government have a duty to address those challenges. However, as highlighted in the Science and Technology Committee’s most recent report, the Government’s communication of its Brexit and science strategy—the Minister’s speech notwithstanding—has been woefully insufficient. Why is science not at the heart of the Government’s Brexit strategy when it is at the heart of our economy?
The Government say they will match the funding until the Horizon 2020 programme expires, but that suggests they are planning to withdraw from the scheme thereafter. The Royal Society has estimated that the programme accounts for 22.2% of global research programmes, which is higher than either China’s or the US’s contributions to global research. Why would we seek to withdraw from such a scheme? We receive significantly more from the EU than we pay in: we received €8.8 billion between 2007 and 2013, as against the €5.4 billion we paid in. We do not have to lose access to the framework programmes, because 13 non-member states currently enjoy associate country status, which gives them full access to Horizon 2020 funding and the same status as member states.
The benefits of involvement in European Union programmes are not confined to funding. Contrary to the picture painted by many in the leave campaign, EU science and technology institutions actually reduce bureaucracy and streamline administration processes. For example, they prevent the same work from being done in different labs, they spread good practice within the European scientific community and they harmonise clinical trial regulations. The last is absolutely critical for the diffusion and adoption of innovative new treatments on which many lives depend.
In addition, cross-border and cross-discipline collaboration has benefits for innovation and creativity that cannot be expressed in pounds, shillings and pence—or in euros. If the Government pursue their commitment to ending existing European Union freedom of movement arrangements, these benefits will be jeopardised. In 2014, Switzerland held a referendum blocking free movement for Croatian nationals, and that led directly to their suspension from Horizon 2020.
The Conservatives cannot call themselves the party of business while actively working to undermine our science and technology sectors. The Prime Minister’s astounding refusal to reassure European Union nationals living in this country that they will continue to be able to do so and the Home Secretary’s reported plans to halve student visa numbers highlight their failure to recognise the potency of British scientific research in the wider British economy. We are entering a fourth industrial revolution and technological advancement is central to the way in which we work, but the Government are seeking to curtail our access to the brightest and best in science, as well as curtailing opportunities for our own citizens to work and study abroad.
The Conservatives’ current policy is more about short-term political point scoring than their now forgotten long-term economic plan. We do not hear so much about that now, do we? Indeed, as the vice-chancellor of one our leading universities recently said about student visas, “politics is trumping economics”. Of course, the Tories have form in this area. Under the last Tory Government, science spending was squeezed. Indeed, the Save British Science campaign was launched in 1986 in response to the then Thatcher Government’s woeful record on science and research. However, between 1997 and 2007, Labour more than doubled the science budget, from £1.3 billion to £3.4 billion, reaching almost £4 billion by 2010. The Save British Science campaign had to be renamed the Campaign for Science and Engineering, because British science had been saved by Labour.
The boost to the R and D budget in the autumn statement has been widely welcomed, but we must set it against the backdrop of six years of subsistence spending. Not only are we now the lowest funder of science of any G8 country, but our spending as a proportion of GDP has fallen to its lowest point in 20 years. The increases in forecast expenditure also assume that all other spending commitments for science and research will remain in place, safe from sweeping Conservative cuts. Given the party’s previous actions, I believe we should remember the motto of the world’s oldest scientific institute, the Royal Society: “Take nobody’s word for it”.
I began by saying how important science and research are to our economy, and that is why today’s debate is so critical. Science provides the inventions and the infrastructure that propel our industry forward. It uncovers the challenges that we face today and provides our industries with a vision for the future. We in the Labour party recognise that in order to have an industrial strategy that works for each and every member of our society, a thriving science community is key. I asked the Secretary of State for Business, Energy and Industrial Strategy last week whether he would give the UK economy the Christmas present it deserves: an industrial strategy. Sadly, it seems that Santa’s elves are nowhere near ready on this one.
As my hon. Friend the Member for Norwich South (Clive Lewis), the shadow Secretary of State for Business, Energy and Industrial Strategy, has said, we believe that an industrial strategy should be mission orientated. When it is mission orientated, one of the roles of public spending is to lay down the foundations for new opportunities, which then galvanise businesses—the private sector—to invest. Mariana Mazzucato, the world’s leading economist on mission orientated innovation, has shown how business investment should not be assumed, but created via ambitious public investment policies. However, no matter how excited businesses may get, they will invest only when there is a potential market.
Government can help to create new markets and enlarge existing ones through procurement and, critically, trade agreements. The European Union is possibly the most successful trade agreement in history. It has benefited British companies for decades. Forty-four per cent of UK goods and services went to the European Union in 2015.
Mr Julian Brazier (Canterbury) (Con)
The hon. Lady said that the European Union was the most successful trade agreement in history. That was certainly true for a generation or so, but does it not worry her that it is now the slowest growing economic bloc in the world and that that 44% has fallen more than 10 points over the last few years and continues to fall?
Chi Onwurah
I am glad the hon. Gentleman agrees with me that the European Union was the most successful trade agreement in history. He makes a point about the economic growth of the European Union, but it is still one of the largest and most successful economies in the world. It is still a huge market for our goods and services and has some of the richest people in the world. Although economic growth may have been slow over the last few years, I hope he agrees that, as one of the biggest trading blocs in the world, it still represents a huge opportunity. We should obviously be looking outside the European Union for trade opportunities, but we need to be trading with the European Union. There are a lot of people who buy a lot of our goods who need to continue to buy them.
It is clear that a hard Brexit would significantly reduce the size of that market for British companies. On top of that, Brexit will reduce European Union-financed research and development investments. That means that an existing problem in this country—low private sector investment in research—may get worse because the market for goods will be smaller. Given the Government’s claim to be focused on reducing public debt—although, as we know, it has gone up hugely under this Government —it is ironic that, by reducing private investment, public investment in research and development will need to take more of the strain. We in the Labour party believe in public investment, but it should not make up for a lack of private sector investment. We have committed to raise the total investment in research and development in science to 3% of GDP, but we expect the private sector to do its bit.
I urge the Minister to try to get this right for British science. If not, once again the next Labour Government will have to make up for the economic, scientific and social mess that a Tory Government have left behind. The history of these isles speaks of a people who have a verve for technological and scientific endeavour. All we ask is that the Government provide the conditions for continued investigation and inquiry. We cannot have an economy that relies on cheap and insecure labour. A high-tech, knowledge-intensive economy must be Britain’s future. This Government and the people of Britain cannot afford to suffocate our sciences in the smoke of Brexit.
Oral Answers to Questions
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Greg Clark
It follows from what I have just said—science does not respect boundaries—that the science community is very global and international. Of course, as the hon. Gentleman would expect, we will in the negotiations reflect the importance of that not just for Scotland, but for the whole United Kingdom.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State talks about an industrial strategy and those words are in his title, but so far he has shared only bland generalities. Despite the high-profile examples cited, the Institute of Chartered Accountants predicts that business investment will fall by 2.4% in 2017. There are great opportunities for British businesses post-Brexit, but they need leadership, and this climate of uncertainty is toxic to investment. Will the Secretary of State stop playing Scrooge with his assurances, and give British business the Christmas present it wants—an industrial strategy?
Greg Clark
A bit of optimism on the part of the hon. Lady would not go amiss, especially in this Christmas season. In fact, there is huge enthusiasm in businesses right across the country and huge engagement with us in developing our long-term policies. Perhaps she has been distracted by some of the events in her party in recent months, so let me summarise the things we have done since July. We have given the go-ahead—she may have missed this—for some very important strategic infrastructure projects: Hinkley Point C, the third runway at Heathrow and the next phase of HS2. We have secured investment in Nissan, close to her constituency, as we announced a month ago. We have ratified the Paris agreement, and we have secured the extra investment that my hon. Friend the Minister for Universities, Science, Research and Innovation talked about. We have done more to put our industrial future on the right footing in five months than the previous Government did in 13 years.
South-west Growth Charter
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I, too, congratulate the hon. Member for South West Devon (Mr Streeter) on securing this debate. Owing to lack of time, I will not be able to reflect on all hon. Members’ contributions, which were extremely powerful in sending a message—I am sure the Minister received it—about the importance of the south-west and industry in the south-west. I want to reassure the hon. Gentleman that I do not see the south-west as a sleepy area. I am an MP for the north-east, which some may think is as far away from the south-west as one can get geographically, but in the north-east we are very fond of and admire the south-west. We share a history of mining and agriculture, as well as railways and great engineers, as other Members have mentioned.
The south-west has huge success stories, from the scientists of the Eden project to the engineers of the SC Group and AgustaWestland and the wine producers of the Campbell Valley. We would see such projects thrive if the Government sought fully to unleash the capabilities of all the regions of our United Kingdom. The charter for growth is a key step in achieving that. It is an opportunity for the Government to deliver on their promises, as has been pointed out by hon. Members, particularly by my right hon. Friend the Member for Exeter (Mr Bradshaw).
We could say that, before the election, the Conservative party issued letters of promise for investment in the south-west to be redeemed after the election, but they have yet to be redeemed, as is clear from the contributions so far. I look forward to the Minister setting out how he will make right on the promises so freely given before the election.
Mr Bradshaw
One of the welcome differences with the current Prime Minister was an apparent willingness to invest more in infrastructure based on borrowing, which had been a long-time Labour policy. Does my hon. Friend agree that tomorrow will be a test of whether she was serious about that?
Chi Onwurah
I thank my right hon. Friend for that intervention. It is absolutely clear that the economic failure of the previous Government to recognise the importance of counter-cyclical state investment has been rejected—in words at least—by the current Government. We will see tomorrow whether that rejection is made solid.
The previous Government’s abolition of the regional development agencies, which supported growth outside London, exacerbated the problem. Growth in the regions of the UK, particularly the south-west, faced economic hardship from austerity, particularly in the way in which it drained demand and reduced income for those in the public and private sectors. The Government have an opportunity to address those failings. I understand the sense of disappointment expressed by many MPs about the current indications that the local LEP will be materially disadvantaged in terms of regional funding because it does not have an elected mayor model. Now is the time for the Government to show they recognise that regions can achieve greatly without necessarily having a big man, a mayor, to meet the Government’s requirements.
The need for the charter is urgent. The south-west received €1.5 billion from the European structural funds throughout the 2014 to 2020 funding cycle and that stimulates development in the region. In fact, the south-west received the second highest amount of money from the European Union, second only to nearby Wales. Business in the area must be concerned about the Government’s toxic combination of indecision, doubt and confusion about Brexit. A commitment to a growth charter would be the first step in providing some answers for companies in the south-west.
Investment in physical infrastructure is one of the very important points in the charter. I must say I admire and respect the south-western Members of Parliament for making it to Parliament today, given the extraordinary lengths that some had to go to to make the journey from the south-west. For proper investment, we need long-term patient funding rather than the current short-term free market approach. For example, as has been mentioned, the A303, A30 and A358 corridor between Taunton, Honiton and Amesbury is key to reducing journey times to markets, promoting the inward investment that will help make the south-west’s economy more self-sustaining, as well as strengthening the already vibrant tourism in the area.
As hon. Members have said, rail links are equally important. The 20-year plan will bring jobs and growth to the region, as well as faster connections to the London airports. Businesses in the south-west should have better access to Bristol, London and the midlands, as well as to Heathrow and Gatwick. Rail links are key not just to link the south-west to other English economic hubs, but to support British industry and manufacturing. This investment should be brought forward and considered a priority. How will the Minister ensure that the Infrastructure Commission is independent and fully funded to make the much needed investment in our regional infrastructure?
However, physical infrastructure is not the whole story. As Member after Member has pointed out, in the face of the fourth industrial revolution, digital connectivity is just as important, so the plan for an ultra-fast south-west is welcome. The Labour Government left office with fully costed plans for universal broadband by 2012. As has been said today, we still have many businesses and individuals who cannot even get access to broadband speeds of 2 megabits, never mind the ultra-high speed mentioned in the announcements made today; and the universal service obligation is still four years away.
The European Union investment that was so welcome in Cornwall will not be available post-Brexit, and yet Ofcom researchers showed that in rural areas 48% of premises are unable to receive speeds above 10 megabits. I look forward to the Minister saying specifically how his Government will invest in rural broadband.
James Heappey
The shadow Minister is obviously aware of the speech delivered by the then Prime Minister and Chancellor in January last year setting out the long-term economic plan for our region. Her speech today has reflected that Conservative vision for our region. Should we assume she supports it?
Chi Onwurah
I thank the hon. Gentleman for that intervention. I support regional economies that are strong and sustainable, where investment is in people, skills and infrastructure. I support economies that deliver high-quality jobs that enable his constituents to make plans for their own futures, rather than being at the whim of short-term, zero-hour, low-skill, low-value jobs. That is the vision for the future economy of the south-west, and indeed for the country, that I wholeheartedly support.
I look forward to the Minister setting out exactly what his industrial strategy is. The Prime Minister has created a Department with industrial strategy in its title—I have yet to hear what the strategy is. The Prime Minister’s speech yesterday did not set out how the Government will, for example crowd in investment from the private sector in innovation, new opportunities and skills. As a Member of Parliament for the north-east, I too regret the skills brain drain from our regions to the capital because of its stronger economy.
I particularly look forward to the Minister setting out how the Government’s industrial strategy is not simply an ever-growing reduction in corporation tax but one that takes our whole country with it to invest in increased industry, shifting the centre of gravity away from London to support our great regions, such as the south-west. The south-west growth charter is to be welcomed. I look forward to the Minister demonstrating that he will support its implementation.
Sir Roger Gale (in the Chair)
Order. Before I call the Minister, due to the incredible self-discipline exercised by colleagues, we have a reasonable amount of time. I congratulate you all on achieving that. We have called 13 Members in one form or another in addition to the Front-Bench spokespeople. I regard that as exceptional. Without wishing to incite insurrection, that does mean that the Minister will therefore probably be able to take interventions and still allow time for Mr Streeter to respond at the end of the debate.
Jesse Norman
I welcome my right hon. Friend’s point. I need not say it myself, because he did so much more eloquently than I could. I recognise the issue that he and my hon. Friend the Member for Torbay (Kevin Foster) referred to, which was mentioned in the Peninsula Rail Task Force report, and on which campaign work has been done. I congratulate them on that.
I am conscious of the passage of time, notwithstanding your incendiary words, Sir Roger, so let me proceed. The key themes of the industrial strategy will be those that have been flagged up in this debate. There will be an emphasis on sectors, the commercialisation of research and development, and innovation, and there will be a particular focus on infrastructure, skills and abilities, and the embedded institutions in particular regions. Those issues have been brought out very well today.
As the hon. Member for South West Devon said, this is a relatively tightly defined debate in terms of place, but an industrial strategy has to reflect the fact that places are very different from one another. Defining what the south-west is and where it ends can be a challenge for the Government, even if it is not a challenge for those who live there. It is an extraordinarily diverse, beautiful region, which has extraordinary assets to be cherished and developed. It is home to world-class universities, very skilled people and hundreds of thousands of growing businesses, many of which are in advanced, high-tech areas. The development at Hinkley Point C, which has already been mentioned, will give the region a major boost. The counterpart to that is the need to invest in smaller pieces of infrastructure.
An awful lot of people’s happiness, certainly in rural areas —I speak as a Member of Parliament for Herefordshire, which can only gaze at the quality of the south-west’s infrastructure and its access to higher education—depends on small-scale road and rail infrastructure, as well as large-scale connectivity. I certainly hope, as I know colleagues do, that that aspect of infrastructure development will be reflected in the plans to come.
Jesse Norman
I am afraid I am running out of time, owing to your excellent work, Sir Roger.
Jesse Norman
I am happy to take an intervention with your approval, Sir Roger.
Chi Onwurah
Before the Minister finishes, he said that the industrial strategy will take some time and that it will take allowance of skills and sectors. Will he give a concrete indication of how long the consultation will last and when the industrial strategy will be published? During that time, will he give a running commentary on what is in the industrial strategy so business can make appropriate plans?
Jesse Norman
It is difficult if remarks one has already made have not been heard. I have already said that the industrial strategy will be launched in the form of a consultation paper in the next few weeks. It is not a thing in and of itself. The Government anticipate that there will then be contributions and a further refinement. At some point, it will be published, and it will then be a reference document from which regions and businesses can take comfort and refer to when making their own plans.
That is the structure of the industrial strategy. It is fair to say, in that context, that the south-west has made its voice heard in a way that few other regions have succeeded in doing. It has done wonderfully well in flagging up the advantages of that part of the world. It is a pleasure for me to work with the two LEPs that have been mentioned. I salute the work of the south west growth summit and the charter. We can only hope that that work will continue to be transferred into local energy and further Government investment.
Oral Answers to Questions
Chi Onwurah Excerpts(7 years, 6 months ago)
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Mr Hurd
I certainly agree with my hon. Friend that huge potential remains for the UK to generate energy from our natural resources and our water assets. The real test in the future will be how competitive those technologies are against comparable technologies. I am sure that my hon. Friend does not need any lessons from us on the need to be very cost-conscious at this moment in time.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Brexit Britain faces a choice: an industrial strategy that invests in innovation to deliver smart, sustainable and shared growth; or the slashing of wages, rights and corporate responsibilities in a race to the bottom. Sunday’s report from Sheffield Hallam University, “Jobs, Welfare and Austerity”, put the price of the last Tory Government’s disastrous de-industrialisation strategy at £20 billion a year today. Will the Minister stop prevaricating and set out how he will invest in skills, research capacity and infrastructure to stimulate innovation in our great industrial regions?
Mr Hurd
The hon. Lady has a distinguished record and knowledge of innovation, but I do not recognise the picture she paints. She totally ignores the job creation under the previous Government and that manufacturing productivity has grown three times faster over the past 10 years than the rest of the UK economy. She is right—I have already stated the importance of this—about placing innovation at the heart of our industrial strategy, because it is key to productivity.
Industrial Strategy
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I declare an interest in that I have worked for a competition regulator, Ofcom. The hon. Gentleman is suggesting that a lack of competition is always the fault of the Government, either by doing or not doing something. Does he not recognise that it is possible—indeed, it is what the literature shows—that companies acting in monopolistic ways or capturing markets are themselves responsible for a lack of competition?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a real pleasure to speak for the Opposition in this debate and to follow so many interesting, provocative and informative contributions. I have not agreed with all of them—or at least all of all of them—but I have been pleased to listen to them. I congratulate the Backbench Business Committee on bringing forward the debate.
I want to single out some contributions, however difficult that is among so many. The opening contribution was from the hon. Member for Warwick and Leamington (Chris White), who spoke eloquently and compellingly about the importance of having an industrial strategy. I mention, too, the contributions of my hon. Friend the Member for Hove (Peter Kyle), the hon. Member for Havant (Mr Mak), who sponsored the recent debate on the fourth industrial revolution, and my hon. Friend the Member for Hartlepool (Mr Wright), who chairs the Business, Energy and Industrial Strategy Committee.
It crucial for this House to show the nation and the world that industry is what we are about. I am grateful for the contribution of the Minister for Universities, Science, Research and Innovation in setting out the beginnings of a timetable for an industrial strategy, but it would have been nice to hear something concrete on the subject from the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Hereford and South Herefordshire (Jesse Norman), and I look forward to doing so.
As the contributions from Members of all parties have shown, industrial strategy is an issue that this House takes very seriously. Labour Members have made it absolutely clear that we recognise the hugely positive contribution that industry makes. Industry—and the businesses and workers that form it—drives our nation’s economic success and positive outcomes for our constituents. We can build an economy and society that we want—one that reflects our values as a nation and what we want for the next generation. That, I would say, is the purpose of an industrial strategy. Labour calls for an industrial strategy that is based on our values. That means the principles we hold dear—equality, democracy, empowerment, the value of labour, and economic liberation guiding the direction of a growing economy.
We need an industrial strategy that is geared towards stable jobs, tackling the great challenges of our time such as climate change and narrowing the gap between the haves and the have-nots. Working from first principles, we can put together mission goals for a new economy and develop the industrial strategy that delivers them. From building a green future to closing the gender pay gap; from balancing the economy beyond the financial services to tackling youth unemployment, industrial strategy can contribute to addressing those great challenges.
A strategy is necessary. The market alone has not provided the answers. We have not let it. Without an industrial strategy, the market has not been allowed to deliver the economy that we want. It has given no respite for those who have seen their communities starved through austerity, for young people who will never have well-paid jobs or own their own houses—or at least fear that they will not—or for those subject to draconian conditions in warehouses such as in Sports Direct.
We have seen an increase in precarious work, bogus self-employment, lower wages and higher costs of living. The market has failed all but a privileged few at the top of our society, which the Minister did not seem to recognise. But then the Tories have not had an industrial strategy since the 1950s. Their time in government over the past six years would be to be pitied if they had not actually ruined the lives of so many people.
Let me give just one example. Many of my constituents live in fear of the rise of the robots, which could result in fewer jobs. OECD research shows that 25% of workers could see the majority of their work automated in the next 10 years. I want this Government to be proactive and to use technology to help create more jobs for people across the country. Sadly, however, the Science and Technology Committee has condemned the Government for the complete absence of a strategy on digital.
In 2010, the Conservatives claimed that they would restore the balance between sectors of our economy, but manufacturing is still at the same level as in every year since 2007, accounting for 10% of economic output. In fact, the Conservatives have starved our communities with their austerity agenda. That agenda is now apparently forgotten, but my constituents merit an apology for what they have had to suffer in the name of austerity—and, unfortunately, that will be as nothing by comparison with the impact of the hard Brexit that we see the three Brexiteers attempting to implement.
We have seen the Conservatives’ lack of strategy for our industries in the disintegrating and fragmenting of our industrial support infrastructure. Innovation, for example, is now promoted by at least three separate bodies—Innovate UK, the research councils and NESTA—as well as the Catapult centres. The Government have starved regions outside London by abolishing regional development agencies and providing no replacement for them.
Each industrial age needs leadership from the Government. Harold Wilson said in his famous 1960s “white heat of technology” speech that innovation was driving us in a new direction, but we need leadership to embrace the changes and—this is very important—to ensure that that direction is for the benefit of us all, because growth has a direction. We have seen the third industrial revolution, but now we need leadership more than ever as the next waves of technological change break over us.
We would welcome the Government’s late coming to an understanding of the importance of industrial strategy, but unfortunately—as was pointed out earlier by my hon. Friend the Member for Norwich South (Clive Lewis)—the Tories have shown time and again that, although they can talk the talk, they cannot walk the walk. Since the Prime Minister took office, she has ignored the need for a digital industrial strategy. The Digital Economy Bill, which is currently in Committee, ignores the opportunities that the digital revolution could provide for businesses in Britain, and that has resulted in very real neglect. As we heard earlier, one of our tech success stories, ARM Holdings in Cambridge, was sold to Japanese investors with no reassurances about job security for the 3,000 people who worked there.
The Minister for Digital and Culture (Matt Hancock)
Just on a point of fact, assurances were given that the number of jobs would increase.
Chi Onwurah
I am glad that the Minister has attempted to make a contribution to supporting our industrial strategy, but we remember the assurances that were given in the case of, for example, Cadbury and Kraft. Assurances need to be concrete if we are to see the benefits, and we need to have the necessary powers.
Chi Onwurah
I am glad that the Minister has seen fit to intervene again. I look forward to those assurances being proven, and I look forward to his apology should that not be the case.
The Tories’ legacy for Britain’s industrial future will be one of apathy and incompetence. There is no vision for business, or how it could bring about a more just society. On energy, on automotive, on materials, on manufacturing, on food and drink, on agribusiness, on process industries, on biotech, on steel, on tech and on the creative industries, it is for us in the Labour party to provide the leadership on industrial strategy that the country needs so much.
Oral Answers to Questions
Chi Onwurah Excerpts(7 years, 8 months ago)
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Joseph Johnson
We are working closely with the devolved Administrations as we put in place the creation of UK Research and Innovation. Excellent science and innovation will be supported through the new body, and we look forward to continuing to fund excellence in science and innovation, wherever it is found in the United Kingdom.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Innovation is key to our regional economies, helping to create high-skilled, well-paid jobs. Innovation needs investment in research and development and in small businesses if we are to make a success of new ideas. European funding has helped to grow our regional innovation infrastructure. The north-east alone will receive £130 million in research funding between now and 2020, and 72% of EU funding to UK businesses goes to small and medium-sized businesses. Will the Minister commit to matching the funding for innovation that currently comes from the European Union?
Joseph Johnson
We have been monitoring the impact—any impact—on our research institutions and businesses since the referendum. The Treasury’s announcement on 13 August that it will underwrite for the life of the project all competitively bids for EU research funding that are applied for before our departure from the EU shows our determination to take action wherever necessary to maintain the global competitiveness of the UK’s research base and of the innovative businesses that win such bids.
Fourth Industrial Revolution
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Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I congratulate the hon. Member for Havant (Mr Mak) and my hon. Friend the Member for Hove (Peter Kyle) on securing this Back-Bench business debate on this very important subject, and expressing my own personal pleasure in having the opportunity to respond on behalf of the Opposition on a subject that, as we have heard, we will no doubt return to many times over the coming years. I welcome the Minister to his place. I am sure that his time leading the Culture, Media and Sport Committee has imbued him with enthusiasm for all things digital. I look forward to hearing about the digital industrial strategy that he has promised us. I am sure that as well as being informed by the past, as his speech was, it will look to the future.
There has been some debate about the origins and the location of the first industrial revolution. Let me just say that it was growing up in the powerhouse of that industrial revolution, the north-east, that inspired me to become an electrical engineer before moving to this place. It is therefore with some pride that I have heard so many hon. Members describe how information technology is at the heart of the fourth industrial revolution. I have been hugely impressed by the technological insight and understanding displayed by so many Members in all parts of the Chamber. That is something that this House will increasingly have need of as we move into the fourth, and fifth, industrial revolutions. It reflects well on the House that we can have such a well-informed and wide-ranging debate on the drivers of that revolution.
Hon. Members have spoken about the incredible technological changes that we are witnessing and how they herald astounding new opportunities: increased connectivity, boosting productivity and social reach; open data, inspiring creativity, bringing together previously separate areas of the economy and empowering citizens; smart meters in our homes, putting us in charge of our energy usage, as well as smart networks and smart grids, improving energy consumption; the use of 3D printers, enabling manufacturing at home; increased automation in industrial manufacturing; and machine learning, making us work faster and create more, which is vital for the UK to stay competitive in the 21st century.
My constituents in Newcastle have seen local government lead on embracing those opportunities. Just last week, Newcastle City Council launched free outdoor wi-fi across the city, benefiting consumers, citizens and businesses and enabling them to reach out to new and improved markets.
As many Members have said, those opportunities also bring challenges. We have a new set of intermediaries, such as Uber and Deliveroo, whose workers are disempowered and to whom they are unaccountable. How much real power does the Uber driver have in relation to Uber? This informal gig economy gives workers little security and few rights. These new business models can also put downward pressure on wages and move business risk on to ordinary people, causing stress and a lack of security, as my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) has said.
In addition, citizens and consumers face threats to their identity and data. For example, to download an application from the Google Play store, people must first have a Google account, which is used to identify and control their device. How many consumers know that? Indeed, how many MPs in this Chamber right now know who has their data and what they are doing with them? How can we give citizens the skills, as well as the necessary connectivity, to participate fully in the digital economy?
The rise of the algorithmic software application brings many of those challenges to the fore. I have been told that a well-known web-dating application has optimised its match-making algorithm for short-term relationships. That maximises its revenues but leaves consumers entirely powerless to verify where the interests of that algorithm lie.
I am proud that I was the first MP to mention the internet of things in this House. I did so more than five years ago and I believe that it can change our lives more than any technology since electricity, but its lifeblood is data and we have no legislative framework for that. All those challenges have huge implications for the economy and our society, as Members have said. Low, unstable wages prevent people from participating fully in the economy, and they remove demand from it. They also bring higher costs to the public sector, either through a larger demand on benefits or increased reliance on public services. Vulnerability to hacking destroys businesses and livelihoods; it creates instability, which is exactly the opposite of what we want for the economy in the years ahead. In addition, if citizens lack confidence in what happens to their data when the entire economy is digital and based on data, they will lack confidence in our economy.
On skills and connectivity, the digital divide means that whole groups could find the new economy inaccessible. The ever-expanding digital world should be designed not only for a small segment of the population.
I am a digiphile and proud of it, but digital power has not even begun to be distributed fairly. We need more women in technology and better representation of working people and ethnic minorities, so that the fourth industrial revolution represents us all. In fact, the fourth industrial revolution needs a Labour movement to go with it, to create a truly progressive digital economy and to protect those who work in it. Harold Wilson said in his famous 1960s “white heat of technology” speech that innovation is driving us in a new direction, but we need leadership to embrace the changes and to ensure that that direction is for the benefit of us all. The Government’s Digital Economy Bill would be the perfect opportunity to provide such leadership, but it is a squandered opportunity. The Government are managing simultaneously to bury their head in the sand and to jump on any passing bandwagon; that is quite an achievement.
On broadband infrastructure, the Government tendered for failure, designing a process heaped with delays that managed to pay BT to create a new monopoly, which still does not meet the needs of the British people. On data rights and fraud, the Government refuse to deliver a legislative framework that people can understand and rely on. The new digital age needs a new set of digital rights. Who owns my data? Who owns my identity? That requires active participation by digitally savvy citizens, consumers and workers.
As my hon. Friend the Member for Aberavon (Stephen Kinnock) has said, while the Government should be setting out a vision for our digital future—one that encompasses the new Department for Business, Energy and Industrial Strategy, Innovate UK, the research councils, the manufacturing catapult, which the Minister mentioned, and the digital catapult, which I do not think he mentioned—they are instead squabbling over their un-plan for Brexit. We have been told that “Brexit means Brexit”, but we have been given no details about what that will look like.
On immigration, the Prime Minister has ruled out a points-based system, but she has given no indication of how the UK’s flourishing technical sector, which is part of the basis for the fourth industrial revolution, will be able to employ or retain people with the skills that it needs. The Government are also failing to make plans to bring the benefits of the digital single market to the UK. The Government need to focus on the new economy. They must respond to the challenges of identity, data, algorithms, labour rights and digital inclusion.
We must not suffer from the faults of the first industrial revolution, which my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) highlighted. We do not want the modern-day equivalent of nine-year-olds going down mines, or of limbs being lost in the unguarded looms of the workplace. Labour Members will work to bring about a progressive industrial revolution, and we hope that Conservative Members will see the future and want to be part of it.