Industrial Strategy

Lord Whitty Excerpts

Thursday 1st February 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I offer congratulations to my noble friend Lord Watson on securing this debate, and a warm welcome to the noble Lord, Lord Rosenfield—I appreciated his speech.

Arguably, the biggest failure of the British economy over several decades now has been that we face a falling share of global investment in industry in its widest sense, including the service and digital industries. That means we have to have the confidence of investors—and by “investors” I mean everybody from the boards of multinational companies, those who run the great sovereign funds which decide where the money goes, those who run private equity firms and, indeed, those who run the more mundane pension schemes and the ordinary Joe who has a few shares. They all want to invest and they take the risk to invest, but one of the essential contradictions of capitalism—of which there are a few—is that those who earn their money by taking risks actually require a degree of certainty. That applies to investors of all sorts. I remember industrial policies, or whatever they were called at the time, from Harold Wilson onwards, and none of them lasted long enough, none of them was clear enough and none of them convinced the investors of the world that Britain was the place to invest. It was different in other countries, as my noble friend Lord Watson said.

Over the past 48 hours, I have met three sectors of business. All of them are operating under what may be a high-level industrial strategy: the pathway to net zero. Each told me the same thing, in effect. I met the nuclear industry, which has suffered over decades through changes to industrial policy when it needs a real, long-term environment. I met the automotive industry, which is now committed to moving away from fossil fuel-powered vehicles but sees the Government changing dates and not giving enough certainty there. And I met the new sector of carbon capture and storage, which will be another vital sector in delivering net zero but needs greater certainty from government; it has already had two false starts in developing technology where we could have been world leaders.

We need an industrial strategy that provides certainty both to investors and to the future workforce that we hope to recruit and benefit from. It needs to be a just and fair transition—fair to workers and to different parts of the country. That means it has to involve an effective medium-term to long-term policy for training, including the retraining of existing staff and the training of future generations. We will have to take the workforce, including the trade unions, on board in this; we will also have to take those who are in different parts of the country into consideration in developing the strategy.

But a long-term strategy is what we need. We have not had it properly and we need it even more desperately now.