Trade, Exports, Innovation and Productivity

Hannah Bardell Excerpts

Wednesday 13th January 2016 Commons Chamber

[Richard Fuller]

I was just about to agree entirely with what the hon. Gentleman was saying because I thought he was talking about forecasting accuracy—a topic on which, of course, the SNP has a very good track record. The issue of marking down does point to the frailty of setting targets. It is a fair criticism of all Governments that they find it very easy to set targets and then very difficult to meet some of them.

Let me talk about what the Government are doing. First, a number of hon. Members have referred to the very broad nature of the Government’s productivity plan. I see that plan as being more about how we implement things than the variety of outcomes they will have in terms of the overall impact on productivity.

Secondly, the Government’s policy on the living wage will provide a substantial increase in productivity, specifically labour productivity. The living wage is, in essence, a 38% pay increase for the lowest-paid workers in our country. I am sure that the Government and the OBR have factored into their statistics the implications for comparability with other pay rates within the economy. A Conservative Government pushing to increase the wages of some of our hardest-working but lowest-paid workers will have, in a market economy, a positive impact on improving labour productivity.

[Hannah Bardell (Livingston) (SNP)]

It is important to clarify that, as has been discussed previously in this House, the increase in the national minimum wage by the UK Government is not the same as the living wage that has been set by a number of independent bodies. Conservative Members must recognise that.

--- Later in debate ---

[Kwasi Kwarteng]

I accept the hon. Gentleman’s intervention, and he makes a good point about China’s export practices, but I was making the general point that the steel industry believes there is overcapacity in Europe. This is not a British but a European problem. No Government action in the world will push water uphill or militate against that broad trend.

I digress from my main point. This has been a helpful and interesting debate, but my main concern is that we are not taking into account the different nature of the British economy. In terms of the phraseology, the context of the debate, and the words in the motion, we are reflecting circumstances that have not existed for two generations.

[Hannah Bardell]

On the steel and indeed other manufacturing industries, does the hon. Gentleman not recognise there is a place for protecting high-end, highly skilled manufacturing, particularly in the steel industry, for which there is a clear market?

[Kwasi Kwarteng]

There is always a case for Government supporting industry by setting the table, by setting the context—making sure the economic management is good and the regulation tolerable. I am reminded of the phrase of Adam Smith—I mention him not simply because he was Scottish but because he made some good points—about easy taxes and a tolerable administration of justice. These are the things Governments can affect. It is difficult, however, for Governments directly to subsidise individual industries exposed to the vagaries of international markets and massive price fluctuations.

This has been a valuable debate with some very good speeches, but I suggest we think more about how the British economy has evolved, instead of using terms that date from the 1960s and before, when the structure of British industry was very different.

--- Later in debate ---

[Hannah Bardell (Livingston) (SNP)]

It is a huge pleasure to speak in a debate that is of such great importance to SNP Members and to our SNP Government. I am sorry that the numbers on the Labour Benches are so deficient, but I pay tribute to those who have been present since the beginning, those good souls who have stuck with us.

It is always difficult at this stage of a debate to produce new ideas. I shall focus on productivity, innovation and investment in the context of inclusiveness and equality, which have not been mentioned much from the Government Benches. My hon. Friend the Member for Dundee East (Stewart Hosie) spoke passionately of the work that the SNP Government have done in this arena and of the importance of productivity and inclusive growth in closing the trade deficit, and I would like to expand on that. I will also highlight the importance of equality, diversity and inclusiveness in any nation’s drive to be productive and innovative and to encourage investment.

Nobel laureate Professor Joseph Stiglitz, who is part of Scotland’s fiscal commission working group under its chairman, Crawford Beveridge, has said that

“countries which are more unequal do not…grow as well and are less stable…A concentration of income restricts economic growth by limiting the potential of people to contribute productively. At the same time inequality may restrict government investment in infrastructure, education, and technology.”

He points out that since 1975 the income gap has grown faster in the UK than in any other developed country, stating:

“Such patterns of inequality will continue to have a negative impact on growth and prosperity over the long-term.”

If we want to make the UK and its nations an attractive place to invest in and to export from, we must have a stable and equal society. Yet all too often the policies pursued by this Government point in the opposite direction. In contrast, the Scottish Government, with much more limited powers, are developing a more egalitarian economic model. Professor Stiglitz has praised this model, saying:

“Tackling inequality is the foremost challenge that many governments face. Scotland’s Economic Strategy leads the way in identifying the challenges and provides a strong vision for change.”

Meantime, the Conservative Government are pursuing policies that attack our fundamental freedoms and civil liberties and risk widening the gap between rich and poor and the gender pay gap while, worst of all, marginalising the most in need. Those policies come in the form of the repeal of the Human Rights Act 1998, the anti-worker Trade Union Bill, and welfare cuts that take us back to a Dickensian era. Ultimately, the Government are balancing their books on the backs of the poor. If they are serious about boosting productivity, innovation and investment, they should not pursue policies that damage the very fabric of the society they seek to build and develop.

[Huw Merriman (Bexhill and Battle) (Con)]

Could the hon. Lady assist me by telling me how creating 2 million new jobs can be marginalising those most in need?

[Hannah Bardell]

While we welcome the creation of any jobs, productivity is not just about paid employment—it is also about how people can contribute to society and what those from all sections of society can contribute, whatever their ability, race or gender.

Investment in what has become known as our human capital and the engagement and happiness of our people should all be part of a rounded strategy. We must ensure that across the nations of the UK we can positively engage with our people, whatever their race, gender, sexuality or ability, in ensuring that they get the opportunity of good-quality, long-term sustainable employment and, with that, boost our productivity levels. We must operate in a society where inclusiveness and diversity are central.

I recently met members of the Scottish Centre for Voluntary Organisations who spoke of the work they are doing on how we look at employability and productivity. The SCVO has undertaken extensive work on taking a rounder view of the contribution that people can make to Scotland’s economy. It is exploring the notion that being productive is not just about being in full-time, well-paid employment but about what kind of contribution people across the social spectrum can make as volunteers, activists or carers, to name but a few examples.

I do not think we would find any disagreement across the House, or indeed in society, about the fact that not everyone can always be in full-time paid employment. Many women, in particular, will take a break from their careers to have children; men may take a break to share parental care; and many men, although generally more women, may have to take time out later in their careers to care for elderly parents or relatives. These breaks may result in a change of career direction, the setting up of one’s own business, or long-term care of a child or elderly parent. Whatever the case, these roles all play an important, and indeed productive, part in an inclusive society.

I reference the experience in my own family. When my sister-in-law returned to work after having her first child, she could not get the flexibility in her work that she would have liked. She set up her own photography business and decided to go full time with it. I am sure that we all have across our constituencies such cases of women—and men—starting their own businesses because they could not find the flexibility in the workforce that they would have liked.

For some women, these breaks or diversions in their working life can often have detrimental impacts on pay and progression. We have debated and discussed much in this House the reasons and remedies for the gender pay gap. In the UK, the gender employment gap is currently 10 percentage points, but I am pleased to say that the gender employment gap in Scotland has narrowed from 10.6 to 6.3 percentage points since 2007. That is evidence that a greater sense of equality, inclusiveness and egalitarian values are helping in many areas of Scottish society.

How we innovate—not only in technology, but in our workforce—is of critical importance if we are to drive up productivity. We must work hand in glove with businesses and create the circumstances in which they can flourish, innovate and develop. No Government or policy maker has a monopoly on wisdom or a silver bullet, but listening and engaging must be at the forefront of our minds as we set policy and create legislation.

Many Members have spoken about the oil and gas industry and the challenges that it currently faces. Before I came into politics, my last professional job was in the oil and gas sector in Aberdeen. As I have often done recently, I think today of my friends and former colleagues whose jobs are under threat or those who have already lost their jobs. I urge Members on both sides of the House to put aside politics, where appropriate, and look at constructive ways in which we can help the industry.

I learned a great deal in one of my roles working in an oil and gas company. It was partnered with a Scottish technological company, which was a spin-off from Heriot-Watt University. Its technology provided the intelligence for an autonomous underwater inspection vehicle, while the company I worked for provided the hardware and investment. To give the House a brief flavour of the technology’s potential use, there was a significant gas leak offshore while I was in that role. If that technology had been advanced enough, it could have been used to stop the leak much sooner. It was stopped only when it was finally safe for humans to go in and fix the issue manually.

It is some time since I left that role, but I recall that the Scottish tech company was acquired by an American firm shortly after my departure. Such tales are all too familiar across the UK. I am sure all involved felt that it was a positive move, but I would like to think our historical reputation in Scotland as a great nation of innovators means that our developing tech firms will not see acquisition by American firms as a trademark of success. I am sure we all hope that we can retain and develop as much home talent as possible. After all, in the words of American writer Arthur Herman, Scotland “invented the modern world”. From the television to the telephone, penicillin and even the overdraft, we are a proud nation of innovators. Every day, in labs, workshops, offices and classrooms, the imaginations of our young people, academics and entrepreneurs are innovating and designing products that may be tomorrow’s solution to some of our greatest challenges, so why can we not bridge the gap between ideas, academic excellence, innovation and productivity?

The world rankings for universities were released yesterday. With Scotland hosting three of the world’s leading universities and the UK overall hosting 18 of the world’s top 100 universities, we punch above our weight as a family of nations. Yet at a recent CBI round table discussion I attended, the issue of the day—why productivity was lagging—had many scratching their heads, given how well the UK does in academia. I suggest that financing, access to funds and this Government’s failure to listen on funding for innovation has something to do with the challenges that the UK faces.

We have discussed manufacturing and the need not only to continue to drive it, but to modernise. For the steel industry in particular, the Scottish Government have invested and done all they can to protect jobs in that sector. We hope that the UK Government will continue to push the EU on energy tariffs.

Carolyn Fairbairn, the director general of the CBI, has said that

“the shift from grants to loans for Innovate UK could dampen bold and game changing innovation, particularly amongst smaller businesses.”

In Scotland, we have the example of CodeClan, which is supported by the Scottish Government. It encourages young people or people retraining to come into the area of coding.

In Scotland, output per hour has grown 4% since 2007, compared with zero growth in UK productivity during the same period. The result is that Scottish productivity has caught up significantly with UK levels, rising from 92% of the UK average in 2007 to 98% in 2013. These trends are encouraging, and the Scottish Government are committed to improving them further, with measures such as the living wage, the Scottish business pledge and more encouragement for businesses to focus on improving productivity.

We have many great examples of companies innovating and deploying their expertise in the UK or exporting across the globe, but we must sustain investment to encourage more to do so. Among such companies are Craneware in Edinburgh, which specialises in software for healthcare billing, and Waste Switch Ltd in my constituency, which is engineering and designing innovative waste management systems across the UK. We could all cite a raft of fantastic local and national success stories, but we must work together to ensure that we create the right policies and an environment in which businesses and people can innovate, export and boost productivity.

In her book, “Difference Works”, Caroline Turner argues that

“retention, productivity and profitability can be boosted through inclusion.”

Arianna Huffington, the founder of The Huffington Post, wrote compellingly in her book, “Thrive”, about the third metric and stated that redefining success was about:

“Creating a life of well-being, wisdom and wonder.”

I was particularly struck by her comments about the race to the bottom and the burn-out that are driven by male-dominated cultures, particularly in corporate business, which are about who can be in earliest and leave latest. It reminded me a little of this place.

If we are to succeed across the nations of the UK, we must put inclusive growth at the heart of our drive to innovate, be productive and narrow the widening export gap. Today, more than 100 disabled people will lobby Parliament about their concerns over the Welfare Reform and Work Bill, although I probably will not get there because I have been in the Chamber all day. Those people represent a very important section of society that contains unique perspectives, skills and talents. They may have a range of physical or other disabilities, but they are equal members of our society who can, and no doubt want, to play an active, engaged and productive role.

I feel passionately that whatever a person’s gender, race, sexuality or ability, they represent hope and opportunity in some form. Although some may not fit into this Government’s view of what productive work means or be able to tick a specific box, it does not mean that they cannot play an active and productive role. We must, across all party boundaries, work together to ensure that we have an inclusive society that gives everyone the opportunity to contribute and be productive.

[Several hon. Members rose—]

--- Later in debate ---

[Richard Graham]

The hon. Gentleman and his colleagues will know the answer to that question better than me, but I think he will find that the expertise involved in setting up the Commonwealth games largely came from the 2012 Olympics held in London, so it was a perfect example of how the UK can work together for the greater good of everyone, including Scotland.

[Hannah Bardell]

I am sure the hon. Gentleman would not seek to mislead the House, so let him answer the question my colleague asked: the answer is zero. In terms of the Olympics, Scotland—along with many other parts of the UK—had its lottery funding sucked away into that project and did not for quite a considerable period of time get the returns it was promised.

[Richard Graham]

The hon. Lady, of whom I am a great fan, risks sounding as if she is carping on the issue of the Commonwealth games. I did make the point that that was a really good example of working together. [Interruption.] She will know of the input from all the people who made such a success of the Olympics. [Interruption.]

So let me now to the final bit of my speech—despite the chuntering of the right hon. Member for Gordon (Alex Salmond), who is welcome to intervene if he wishes. [Interruption.] He is still chuntering; we still do not know if he wishes to intervene. He has his chance. [Interruption.] An hon. Member says he is not allowed to speak from the Bench he is currently occupying; well, there we have it—we will keep his chuntering for another day.

We can surely all agree today that there is a great deal more to be done. I hope the report from the Business, Innovation and Skills Committee and the Education Committee will contain helpful recommendations to Government, and I know the Ministers are working on their own productivity plan. I hope the Government will take note of the suggestions made both by my neighbour my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) and me.

Sadly, I have not heard many positive ideas from the SNP Benches, with the honourable exception of the hon. Member for Inverness, Nairn, Badenoch and Strathspey, as I mentioned earlier. I do believe that Scotland needs to rediscover her entrepreneurial spirit, and find more Tiggers and fewer Eeyores to promote business, and I am sure the hon. Members for Livingston (Hannah Bardell) and for Ochil and South Perthshire (Ms Ahmed-Sheikh) can do this and get that brave heart playing its full role in the revival of the growth of the UK, with a drive for all of us to increase our exports and our inward investment.