Industrial Strategy

Lord Maude of Horsham Excerpts

Monday 8th January 2018 Lords Chamber

[Lord Maude of Horsham (Con)]

My Lords, I draw attention to my entry in the register of interests. It is a pleasure to follow the noble Lord, Lord Kakkar, who has a deep knowledge of life sciences and the medical world and gave a powerful exposition of the opportunities for Britain to be a world leader in this sphere. I am conscious that I am speaking before my noble friend Lord Heseltine, described by the noble Lord, Lord Mandelson, as the grandfather of the industrial strategy. If my noble friend is the grandfather, maybe the noble Lord, Lord Mandelson, is the godfather, so I am in an uncomfortable position.

It is good that we are having this debate, and I congratulate the Minister on his excellent exposition of the strategy. There is much in the industrial strategy to agree with and very little to disagree with. If I had a criticism, it would be that it has turned into something of a compendium of all the Government’s economic policies. There is always a temptation in government to try to wrap together as much as possible into one document. To pick up a point made by the noble Lord, Lord Kakkar, I would have preferred something a little more focused on action and what the Government will actually do. As a Minister, I became an advocate of what became known as the JFDI—“just do it”—school of government. While the strategy document contains much on digital that is welcome, the process that led to its publication felt somewhat analogue. There was a time-honoured process of creating a Green Paper, which was put out to consultation for many months. One knows from experience that much of that consultation—this is not a criticism; it is just the very nature of it—will have been with large companies because smaller ones are getting on with running their businesses rather than engaging with such exercises.

I will focus my remarks on the kind of intervention that would normally be regarded as part of an industrial strategy. Obviously, much of this document concerns an issue in which the Government, inevitably, have always had a central role: the provision of infrastructure. It is in the nature of things that the Government’s role is central to that. We can debate how and when it is done and how much is spent, but it is indisputable that the Government must be at the heart of it. Similarly, the Government’s role will always be pretty central to skills, as it obviously is to creating the right regulatory and taxation fiscal environment for business to flourish. However, today I will focus on more sectoral issues. That approach was developed in the coalition Government, looking at how the Government can use their ability as a convener of business interests, as a funder in some circumstances and as a customer in many circumstances to make different things happen in the business world, perhaps creating a new opportunity or building for the future on some specific skills and strengths in the economy.

I will focus on three areas, the first of which is digital and data. I wholly support what is set out in the industrial strategy about digital. Although the implementation of the fast broadband programme may be slow—certainly in my part of the world—that commitment is welcome; it needs to be implemented effectively and swiftly.

London has become a focal point in Europe for the whole world of digital and technology. Berlin is a competitor but London is a long way ahead. Tech City is now not just a cluster; it goes much wider. At the last count, there were 24 or 25 different tech clusters around the UK, which is enormously important. The role of government in supporting that is huge but its role as a customer barely appears in the industrial strategy. When I became Minister for the Cabinet Office in 2010, 87% of government spend on IT was with seven multinational providers.

Procurement at that stage looked as though it was deliberately intended to freeze out newer, younger, more innovative UK-based suppliers. There was an almost universal requirement, even to bid for a contract, to show three years’ audited accounts. That would have ruled out most of Tech City—most of Silicon Valley, in fact. There was a requirement for turnover thresholds, for performance bonds and for a bidder to show that it had insurance in place to cover the total value of a contract, even before bidding for it. Endlessly complicated pre-qualification questionnaires, which were standard practice but different in each example, simply made it impossible and unattractive for small and newer businesses to compete. Mainly culture rather than regulation led to that, and we struggled to open up procurement to many more businesses. BIS was a big support to the growth of the start-up tech sector in the UK. By the end of the coalition Government, the map of suppliers of IT and digital services consisted of dots sprinkled across the entire UK, instead of seven dots predominating in London or the south-east of England. So the role of government in promoting the development and vitality of this sector is absolutely crucial.

It is clear that start-ups—indeed, the whole world of development of technology—depend heavily on overseas talent, and in the new world we are entering, it is essential that we remain open to talent. Taking back control of immigration absolutely allows us to give access to the right talent at the right time, but my concern—the Government need to be very alert to this—is the tendency of the Home Office to coat a lot of the processes with a heavy dose of bureaucracy. The ability of companies to get consent quickly for people to come here and make the commitment to work in the UK will be hugely important; the Civil Service needs to be galvanised into dealing with that effectively and swiftly.

The Government’s role in the world of data is hugely important, because they own a lot of data. Historically, they have guarded it closely, but of course it is not the Government’s property but the public’s. This data has been accreted over the years through the spending of taxpayers’ money, and much of it has come directly from the citizenry and the world of business. In the first Industrial Revolution, the raw materials were coal, iron and steel; in this industrial revolution, the raw material is data, and government can make much more of it available.

By the end of the coalition, the UK Government were ranked top in the world for open government, and a big part of that was a very aggressive programme of releasing government datasets, particularly but not exclusively in the geospatial field. However, we started to lag behind—Ordnance Survey in particular was very reluctant to release data. The French Government were much more aggressive than us, and that is where some of the geospatial development talent and enterprise started to gravitate towards. I urge the Government, as the industrial strategy permits them to, to pursue aggressively a continuing programme of open data and releasing data as raw material for this new industrial revolution.

The second area I want to focus on is nuclear, which barely gets a reference in the industrial strategy. Historically, Britain has had a huge stake and capability in civil nuclear, but much of large nuclear has disappeared from the UK, and we have had the creaking, tortuous process of getting to the point at which Hinkley is contracted for. I urge the Government to look more enthusiastically at the world of small modular nuclear reactors, for which we do have capability in this country. The advanced nuclear research centre based around the University of Sheffield—which may have been set up under the coalition Government, or possibly before then—is one of the research centres developing that capability. However, intensive government intervention is required to make all this happen.

The Government have the power to convene the different nuclear industrial interests and to work with them to make this happen. This technology could be a serious export activity for this country. Small modular nuclear reactors that can be built in the factory rather than painstakingly constructed on site, as large nuclear requires, are exportable pieces of equipment and could become a commodity product. There is a huge opportunity in developing countries, such as large parts of Africa, where this technology is very useable. I again urge the Government to look at this issue, which requires intensive and co-ordinated activity across government.

The third area is one of the grand challenges rightly identified in the industrial strategy: an ageing population. We know that the population is ageing, and I suppose in this Chamber I am preaching to the converted when I say that that is a very good thing. However, it does have its challenges. It is a truism that probably the single most significant factor in deciding whether a society will succeed in the decades ahead is how successful it is at keeping people living well and independently at home. Technology such as distance monitoring is absolutely central to that.

I want to pick up a point that the noble Lord, Lord Kakkar, made in his excellent remarks about the culture of the NHS. The role of the NHS in this is central, but far too often I have found its culture to be innovation averse. There is a tendency to believe that anything new is simply a cost, but we know that what really costs money in the NHS is people going into hospital and staying there. Technology that enables people to be kept well independently, at home, is not a cost but a saving. It is an essential part of any industrial strategy building on our strengths.

I commend the Government for bringing forward the strategy and hope that it will be taken forward with a strong focus on action and implementation.