The Government’s Productivity Plan

Kirsty Blackman Excerpts

Tuesday 28th February 2017 Commons Chamber

[Roger Mullin]

The best thing I can do is leave that to my hon. Friend the Member for Aberdeen South (Callum McCaig), who is an expert in these matters. He will be summing up for our party and is from that part of the country. I am aware that the Scottish Government have been undertaking considerable work on this matter. Our growth commission is under way, and part of its work deals with looking at precisely the matter the right hon. Gentleman raises. The commission is yet to report.

[Kirsty Blackman (Aberdeen North) (SNP)]

My hon. Friend would agree that the Scottish National party is doing a lot on this issue. In Aberdeen, we are holding a meeting next week with the London Stock Exchange Group so that supply chain companies can learn about alternative methods of capital financing, meaning that we can secure those industries in our city and ensure that they can continue exporting way into the future.

[Roger Mullin]

I thank my hon. Friend for that intervention.

I wish to move on to another area that has been addressed. I believe it was the hon. Member for Horsham (Jeremy Quin) who mentioned the importance in our society of universities, the production of higher levels of knowledge and our research capability, and how that was a tremendous attraction if we are to drive up levels of productivity. I agree entirely with him, but there is a problem that we must be willing to face. The universities are under a type of strain that they have never faced before: the threat to the research community created by the Government’s attitude towards EU nationals. I can take Members to universities in Scotland and show them people who are leaving, or planning to leave, the university and the research community because of the uncertainty created by this Government. If there is one thing the Government could do, either today or very soon after, to secure our research community, it would be to give these people absolute guarantees that they are welcome and will carry all their rights with them into the future.

Scotland has different productivity needs, one of which relates to our attitude towards immigration. I would argue that we need more immigration, of the right type. Many blockages to enhancing that immigration can be found in the Government’s policies, and I wish to give hon. Members one example. A few years ago, for the tier 1 investor visa, the Government increased the sum that people would have to have to bring into the economy to invest in British business to a minimum of £2 million. I would be very happy for Scotland to attract people with a wee bit less than that to invest in Scottish business, because they could still do a tremendous amount of good.

As the Minister knows—we have discussed this in the past—another tier 1 visa is the entrepreneur visa. Residents and citizens of England or Scotland do not need bags of cash to become an entrepreneur. Indeed, some of our most wonderful entrepreneurs started with very little but an idea. What do we say to people who want to come here as entrepreneurs? At the moment we are saying, “You have to produce, in advance, a detailed business plan to be assessed.” It is doubtless to be assessed by the Home Office. They have to produce a business plan of how they will start a business in the UK, even though they are not in the UK. That strikes me as a wee problem to begin with. Secondly, they need a minimum of £50,000 in their back pocket to bring in with them to invest here, along with the business plan. We would never ask that of people who live here domestically. There are therefore things that could be done to sort out a number of the supply-side blockages that prevent us from attracting some of the investors and entrepreneurs who could do so much to help to build capacity and improve productivity in our society in the longer run.

Finally I wish to touch on skills, which has also been mentioned. Many years ago—it was 1990 or 1991—in the early days of “competence-based qualifications”, we had a body called the National Council for Vocational Qualifications, which was based in London. The people there had seen me on a television programme, so they called me to ask whether I would come down to give it some advice. Because they waved a cheque in front of me, and being a Scotsman, I readily agreed. They said to me, “We have a problem with competence-based assessment. We are unsure that it is actually delivering and accrediting people for their competence.” I did a piece of work that they subsequently published, which I have never seen refuted, in which I said that the method of competence-based assessment operating in the UK would generate a vast number of false positives—that is, a large number of people who receive qualifications but are not actually competent. That might be a contributing factor to the fact there is no evidence at all that those who come into the labour market with competence-based qualifications are doing anything to enhance productivity in our society. There is therefore a long way to go, but it has been a privilege to take part in the debate.

--- Later in debate ---

[Michelle Thomson]

I am aware of that, and I have had conversations with the Minister, Macquarie and the Green Investment Bank. The fundamental concern is that, potentially, Scotland risks losing an asset in terms of the headquarters in Edinburgh. Despite the assurances of the preferred bidder—let us call it Macquarie—I will be watching this matter very carefully, because there is a risk that we will lose head office functions and the board. Going back to my hon. Friend’s point, it is building an infrastructure that enables productivity and these kind of things to succeed. If we put in public capital investment and we then do not get the value from it, that seems to me to be short-sighted and misguided. Equally, without the firm commitment to maintaining jobs in Scotland, all the productivity plans and industrial strategies in the world will not address the regional disparities that we see in Scotland, especially if we promptly roll away all these things.

On carbon capture and storage, we have spent £100 million on two competitions to try to kick start this new technology. We heard yesterday on a BEIS Committee day trip to Edinburgh that that is very difficult, and I accept that. As my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) commented, we must be prepared to take risks to drive things forward for future gain. We accept that £100 million has been spent, but if we do not press ahead with some of these proposed projects, our country could once again lose its competitive advantage, and we cannot rule that out and forget about it.

I am most concerned by some of the narrow-minded views that have been exhibited in some of the debates around Brexit. They have a pervasive narrative that sounds isolationist and deeply disappointing when it comes to the wealth of opportunities of renewable energy. For example, a new interconnector between Scotland and Norway will soon allow the transfer of wind power and hydro power between the two nations, allowing them both to cut their emissions. This is not the time for retrenching and retreating. Construction has also started on a new 1 GW interconnector to France, further demonstrating our inter-dependence with our European neighbours.

Let me move away from energy and quickly dwell on some of the other issues that have been most affected by Brexit in the productivity plan. The first is the issue of international students. In the BEIS report on the productivity plan we said:

“We recommend the Government does not allow migration pressures to influence student or post-study visa decisions. It is illogical to educate foreign students to one of the highest standards in the world only for them to leave before they have had an opportunity to contribute to the UK economy.”

I have a story from my constituency of Edinburgh West. A remarkable young man, Mr Olubenga Ibikunle, won a substantial sum of money to do a PhD in civil and coastal engineering. As soon as he completed his course, he was turfed out. The level of his ground-breaking research, commitment and dedication to self-improvement means that he is exactly the sort of person that we would like to keep in Scotland.

The Prime Minister refused to consider removing students from net migration targets when she was in front of the Liaison Committee. I hope that she will reconsider her position, because international student numbers are already beginning to fall as evidenced by the latest immigration statistics. We cannot allow our position as a world leader for international students to be eroded by a dogmatic fixation on an arbitrary target of tens of thousands of migrants.

[Kirsty Blackman]

Obviously, Scotland’s higher education sector is a huge success story and does fabulous work. The Smith Commission explicitly mentioned that we should be looking at the possibility of a post-study work visa in future for Scotland. The UK Government have announced that they might consider that for some universities in the south of England, but that does not help universities in my constituency, or in the constituency of my hon. Friend.

[Michelle Thomson]

I absolutely agree with my hon. Friend. Part of the problem could be solved by devolving those powers to Scotland so that we can protect our own higher education sector.

We have also heard this month from the chief executive of Innovate Finance, Lawrence Wintermeyer, who told the BBC that

“Brexit has had a chilling impact on investment.”

Investment is vital to industrial strategy and productivity. Wintermeyer backed up his statement with figures that show venture capital investment in FinTech firms, which is vital for my city of Edinburgh, has dropped in the UK from £970 million in 2015 to £632 million in 2016. In objective 12 of the productivity plan, the Government used Innovate Finance’s investment figures as a measure of success.

Finally, the productivity plan wanted to

“help deliver a Europe that is more dynamic and outward focused...by accelerating the integration of the single market, completing trade agreements, and improving the quality of regulation.”