Industrial Strategy — House of Commons, 2016-10-20
Topic: Macroeconomics
George Kerevan (Scottish National Party, Centre-left): I am glad to be tail-end Charlie. Fortunately for someone in this situation, my book on industrial policy is published next month, so I may save time and send it to the Minister The challenge is: is there is an industrial policy? I accept that there is no generic policy—the hon. Member for Bedford (Richard Fuller) is correct—but there is industrial strategy in the here and now. Its definition is what the state does to help to provide competitive advantage to the companies in that state. If the state does not do that, other states will help theirs, which will wipe out those companies. I remind the hon. Gentleman that that is why the UK’s exports have flatlined for the past five years I put that point to the Chancellor of the Exchequer yesterday, and he spoke about international conditions and lack of demand. Yet Germany’s total industrial exports have risen by a third in the past five years, helped by the German Government. They tax industry more than it is taxed in this country, but they pour the money back into industrial support. In the United States, generations of productivity growth have been funded by investment in its defence industries, which flows through into the private sector. The point about the state picking winners is that there is a partnership in which the state backs up its industries, and particularly its companies. The state gets out of the way where it needs to, but there has to be such a partnership I do not have a lot of time, so I will do something really strange, which is to support something that has been a Government policy for the past five years. I was originally very cynical about it, but the more I have researched it and talked to people in the industry, the more I think it has been very successful, although it may have been stumbled on by accident. That is the policy of having Catapult centres. Public money is put into centres for technology that small companies cannot buy on their own, so that such companies can use it, which helps to provide a competitive advantage. Catapult centres provide competitive grants and challenge companies to come up with solutions to problems, and that works. Catapult centres are the solution. They are not about picking winners, but about creating a competitive environment and providing resources. If we do not do that, other countries will To give a very simple example, there is a close correlation between exports as a percentage of GDP and how much is spent on research and development—not blue-skies R and D in universities, but industrial R and D. In countries that have a higher share of exports in their GDP, industrial R and D is orders of magnitude higher than the amount we spend, because their Governments and their military put money into it. The hon. Member for Havant (Mr Mak) made a very good point about the role of the military I found a statistic that my good friend the hon. Member for Wycombe (Mr Baker) might like, as an ex-RAF officer. At the moment, the RAF has 475 aircraft that were built in Britain. For the first time, the majority of its aircraft have been bought from abroad—507 of them. I should say that I tried to bump up the number of British-built planes by including the Spitfires in the Battle of Britain memorial flight. If we buy from Boeing and Lockheed, and let those companies use their technology, we cannot survive. We have to use the weight of the state behind our companies. That is what industrial policy is about My final point is that the budget for the Catapult centres is about £600 million a year. That sounds a lot, but if we look at a comparable organisation in Finland, we find that its budget is about 75% of that. The UK spend is peanuts. We should treble that amount. Will some of that money be wasted? Yes, but some will produce the ideas and new technology that we need.