The Economy and Work — House of Commons, 2016-05-26
Topic: Macroeconomics
Jeremy John Elton Lefroy (Conservative, Centre-right): I welcome the reference in the Gracious Speech to improving Britain’s competitiveness and making "the United Kingdom a world leader in the digital economy." Since 2010, the UK has—I should perhaps say the people of the UK have—created 2.9 million jobs. Jobs do not appear out of thin air; they exist because of the entrepreneurship of the people of the UK. Our unemployment rate has fallen from 8% to 5.1%. That is still too high, but it is an achievement. We need to maintain a high level of employment while tackling the major risks to our economy, which are the twin deficits of the balance of payments and the budget, and low productivity when compared with other countries. The two are interrelated. Higher productivity leads us to be more competitive, both domestically and internationally, to improved exports and lower imports, and to greater growth, with the corresponding tax revenues Long-term analysis of our productivity shows that there are three main issues. First is insufficient investment in research and development, the latest technology and infrastructure over not just the past year or six years but decades. Second is weak management. We have some fantastically managed businesses, but we also have some with below-average management. Third is inadequate education and training. The Government are working on all three areas, and, again, they are all linked. High-quality R and D and good management both depend substantially on a well-educated population. Weak management will prioritise the status quo over risky decisions to invest and train for the future. The Government have taken action through growth in apprenticeships and technical education and by placing an emphasis on the quality of apprenticeship and standards in schools, which are absolutely critical. I want to highlight the recruitment of teachers, which is a real difficulty in certain areas, such as maths and science, but I know that the Government are well aware of that and are working on it Investment in R and D and technology comes down to the availability of people, the willingness of companies to invest and the incentives to do so. Incentives cost, so I urge the Government to concentrate resources for investment in R and D on businesses that show the greatest willingness to invest, which are more likely to generate long-term growth and jobs Much has already been said about infrastructure, but with the advent of HS2, the road network really needs strengthening in my area of Stafford. I ask the Government to look at that, because we might otherwise find that we get gridlock in an incredibly important area of the country while HS2 is constructed. Britain is a world leader in the digital economy, which is also vital for competitiveness. The largest private sector employer in my constituency is now General Electric, which sees its future as a digital business. As its chief executive Jeff Immelt has said: "If you went to bed last night as an industrial company, you're going to wake up this morning as a software and analytics company." My ambition for Stafford is for it to be a leader nationally in this digital economy. Not just manufacturing companies, such as General Electric, Perkins, JCB and Bostik are taking it seriously; we have a thriving community of software businesses that are growing steadily. We have financial services; risual, Microsoft’s 2015 partner of the year; Connexica, which supports the NHS; iProspect, which deals with digital marketing; and forensics. We also have three signals regiments, which will provide a very good workforce for the future when the servicemen and women complete their service. The future is digital, and the digital economy Bill is a strong part of that.