Category Archives: Economics
Brilliant news, the monthly figures from the Office of National Statistics show that unemployment has fallen again in Hodge Hill.
The number of unemployed claimants in the constituency of Birmingham, Hodge Hill in June 2014 was 5,224.
That’s a 155 lower than in May 2014 and a whopping 1296 lower than in June 2013.
Despite this great news we can’t become complacent; I will continue to campaign to see more jobs come to Hodge Hill, particularly for our young people.
All the best
Today Cllr John Cotton and I published Birmingham Labour’s hard-hitting report into the growing scandal of child poverty in the city.
The evidence is set out in the final report of the Birmingham Labour Child Poverty review which has investigated the issue over the last six months – to read the report click here
The review found:
• A huge 20 per cent rise over the last year in children arriving in the city’s A&E departments, having self-harmed
• A 40 per cent rise in child self-harm cases in A&E since 2009/2010.
• Nearly a third of the city’s children – 84,114 – now live in poverty in Birmingham
• Birmingham’s child poverty now costs an estimated £914 million in extra services such as education, healthcare and benefits, as well as, lost tax receipts and lost earnings
The report’s main recommendation has led to plans for a new Child Poverty Commission for the city to coordinate action to support parents.
Liam Byrne said;
‘The scandal of child poverty in our city is a moral crisis and we simply refuse to stand by and do nothing. The child poverty crisis may now have triggered a huge increase in the number of our children so desperate that they try and take their own lives or self-harm.
This report is a wake-up call for Birmingham and for Britain. We may not have a government that cares but we can still take action ourselves.
Our new Child Poverty Commission must now call to action our business leaders, our teachers, NHS and the DWP to act together to make a difference. We cannot pretend this isn’t happening in our community.
We have to declare now that we will act together to end this scandal.’
John Cotton said:
“The fact that a third of Birmingham’s kids are growing up below the poverty line isn’t just a moral outrage, it’s an act of social and economic sabotage.
Continuing to tolerate a situation in which another generation is trapped in poverty, unemployment or low paid, insecure work doesn’t just hold back individuals, it holds back our city as a whole.
We can – and must – do more to fight poverty in all its forms”.
Tim Evans, co-author of the report, said:
“The best policies are made when we listen. As we listened to stories of people struggling, both our understanding and anger grew.
As we listened to committed people in the public and voluntary sector, to people of faith, we realised that harnessing people’s desire to tackle this moral and economic issue, based on real life experience, was the way forward.
So I am delighted to see the establishment of a Child Poverty Commission to co-ordinate this energy and transform the life chances of children in Birmingham.”
To read the report click here.
With all best wishes
Earlier today HS2 Ltd, along with Birmingham City Council, launched the city’s Urban Regeneration Company and announced the location of the HS2 Construction HQ. You can see my statement below:
“HS2 belongs in Birmingham. The arrival of 1,500 permanent jobs is fantastic news, and it provides a welcome boost to the growth of our City.
But this announcement underlines the need for a new deal for East Birmingham where the HS2′s marshalling yard has wiped out the chance to create 3,500 private sector jobs.
So today I’ve written to David Higgins, Chariman of HS2 Ltd, to begin talks on how we maximise the jobs boost for East Birmingham.”
In her first appearance in the chamber as Secretary of State for Education, Nicky Morgan was answering questions from MPs this afternoon.
I pressed her on the issue of the leaked conclusions of Peter Clarke’s report into Birmingham Schools, you can see a read-out of our exchange below.
I will be pressing her on this issue again at her statement tomorrow.
‘The market is failing – we need a new way forward’ my piece for the Evening Standard – 17 July 2014
Earlier this week I became Chair of the APPG on Inclusive Growth at the group’s inaugural meeting.
To mark the occasion I have written a piece for the Evening Standard which was published this afternoon. See below.
All the best
Liam Byrne: The market is failing – we need a new way forward
A fresh consensus is emerging about how Britain must think long-term to remain globally competitive
The puppets are for the chop. Earlier this week, Wonga’s loveable grandparents flogging payday loans on children’s TV were dispatched in the UK by the firm’s new chairman. It comes at a time when shareholder activism is on the rise, with a number of eye-wateringly large pay deals for top executives shot down by shareholders. The conscience of corporate Britain is rumbling as unease with Britain’s malfunctioning marketplace deepens.
So it should. With this week’s good job news has come fresh evidence of the squeeze on pay packets. Inflation has jumped to a five-month high. Meanwhile, the Institute for Fiscal Studies reports that the under-30s lost 13 per cent of household income, from 2007 to 2013 — nearly twice the hit taken by the older generation.
It is becoming harder than ever to earn a decent living — and if we don’t fix this soon, we’ll face not just an economic problem but a profound moral challenge. Hard work is hard-wired into Britain’s psyche and our moral code. This was supposed to be the deal: hard work got you on in life. Yet Britain’s families are working harder and going backwards, £1,600 a year worse off now, on average, than in 2010.
It’s not just a question of fairness: it doesn’t make business sense either. As someone who established my own company, I know very well that virtues such as trust, integrity and stability drive consumer confidence. They are the keystone of capitalism.
We can’t go on like this. Nearly 30 years ago, Ronald Reagan spoke for a new generation of neo-liberals, declaring that “government is not the solution to our problems, government is the problem”. Today the market is the problem: together, business and policy-makers are going to have to fix it.
So this week a cross-party group of parliamentarians has come together to find answers to the challenge of how we fix our malfunctioning markets and reconnect hard work with getting on in life. Our goal is simple: to build a new consensus on how we can change the rules of the game.
Since the Second World War we’ve enjoyed two grand phases of consensus that connected business and government in pursuit of the common good. After the war, we called it “Butskellism”, a marriage of ideas epitomised by the calm moderation of the Tories’ Rab Butler and Labour’s Hugh Gaitskell. The second phase was the neo-liberal consensus, born in the storms of the late Seventies and now in its death throes.
It’s time for a new approach: a “third wave” of consensus to reset the rules. There’s already plenty on which we can agree.
First, business and politicians know money markets need to act for the long term rather than the short term. The disastrous behaviour of the interest-rate riggers and the high-frequency traders portrayed in Michael Lewis’s new book Flash Boys epitomises a fill-your-boots piracy that destroys a firm’s ability to think long term.
It’s not just capital markets that need reform — it’s labour markets too. Unless we boost skills, it’s hard to give workers a pay rise. I think there’s wide consensus about what needs to change.
Lord Baker’s work on university technical colleges exemplifies an ambition to build a high-quality vocational route to better skills. Ed Miliband, Tristram Hunt and I have put that at the core of a new offer for a vocational path to degree-level training for the “forgotten 50 per cent”, those who do not want to pursue the traditional academic route.
Third, we can agree that a bigger, better business-government partnership in science and technology is vital to winning the race to the top, boosting productivity and jobs in and around Tech City, the Crick Institute and the spin-outs around London’s universities. The foundations of this “supply side” boost were built by Peter Mandleson and Lord Sainsbury, and were respected by the Tories’ David Willetts, who left government this week.
Abroad, business and government should agree that “good growth” is easier if markets are bigger, which is why we should be at the heart of Europe. At home, there is broad agreement that a radical devolution of power is vital if big parts of Britain aren’t left to languish. “Inclusive growth” is not just about who prospers, it’s about where prospers — an idea championed by Lords Adonis and Heseltine in their plans to return power to our cities.
We cannot avoid some issues where consensus will be harder but where the status quo is not an option: making sure companies pay their taxes and don’t rig markets to short-change consumers and cheat their competition.
Indeed, hard-headed Tories such as Lord Heseltine and Richard Harrington, who have real experience of running large businesses, recognise that the market needs to work in a more sustainable way. It needs to respect its consumers and its employees, making a profit while not becoming immersed in a race to the bottom that, in the end, hurts most businesses as much as it hurts working families.
From boardrooms to Westminster, we need to crystallise this “new consensus”. For a decade and more, the price and prize of globalisation have not been fairly shared. Yet we risk a new era of inequality if we don’t get our act together. The new potential of trade and technology is accelerating the “second machine age”, where from driverless cars to automated checkouts, technology wipes out both blue and white-collar jobs, concentrating riches in the hands of a tiny global elite.
The founders of the greatest traditions in British capitalism — leaders such as George Cadbury, William Lever and John Spedan Lewis — knew that “enlightened self-interest” was always the best way to do business. If we want to build a great society in a global economy, reformers need to join together now: we’re running out of time.
Rt Hon Liam Byrne MP is chairman of the newly formed All Party Group on Inclusive Growth.
The consultation on our recently published green paper on science continues. Yesterday it was great to see Scientists for Labour publish their response ‘Policy Plan’ which can be read here. The publication is accompanied by a piece in Progress Online by Mike Galsworthy of SfL which can read here.
The consultation on One Nation Labour’s plan for science, which can be read here, is open until 1 August and throughout this consultation Labour will be listening to researchers, businesses and voices across the science community. I look forward to reading more fascinating responses such as this one.
If you would like to feed in to Labour’s science policy please send your views on the Green Paper to Charlie.email@example.com by 1st August
With all best wishes
‘Ending the gap between classroom and career: Labour’s next steps in skills and higher education reform’ – my speech at the City of Westminster College – 7 July 2014
This morning I gave a speech to the City of Westminster College entitled; ‘Ending the gap between classroom and career: Labour’s next steps in skills and higher education reform’.
See the full text below:
Ending the gap between classroom and career: Labour’s next steps in skills and higher education reform
Speech by Liam Byrne MP, Labour’s Shadow Minister for Universities, Science and Skills
Monday 7 July 2014, City of Westminster College
[CHECK AGAINST DELIVERY]
It’s a huge privilege to be here at the City of Westminster College’s Paddington Green campus.
As the grandson of a college principal I feel very much at home.
It’s a privilege to be with those who share my grandfather’s passion for learning that changes lives.
And it’s a privilege to tell the story of someone who shows us just what that change can mean.
Catherine was homeless when she enrolled here.
She’d leave a nearby shelter each and every morning, making the daily trip to and from this very campus.
By night, she’d study under torchlight, dreaming of a way out, dreaming of a way in which she could make her life better.
And she did just that.
Ladies and gentlemen, Catherine graduated in 2011.
She’s can now pay rent, support a family and live the sort of comfortable life that so many of us take for granted.
Her energy, her commitment, her belief were the driving forces behind her remarkable achievement… but without the values and virtues of this College, the City of
Westminster College, there would have been no ladder to climb.
So Catherine has a lesson for us:
We have to ensure that everyone, regardless of their circumstances, has a real choice to change their lives with education.
Without that real choice, we’ll hear less stories of lives changed – less stories like Catherine’s.
And that’s what I want to talk about today.
With under a year to go until the next election, the battle of ideas is taking shape.
The Tory-led government’s script is already clear.
And so are its flaws.
As I said last week they might boast of a recovery – but it’s not a recovery for the many.
Families will be £974 a year worse off in 2015 than they were back in 2010
What does that mean in practice?
It means we have to work harder – it’s an extra fortnight every year at the moment – just to stand still.
Why? Because that old curse, the ‘British Disease’ is back.
That crisis of low productivity that haunts industry and makes it ever harder to give your staff a pay rise.
Since the last election, output for every hour worked hasn’t gone up.
It’s gone down.
Output per worker?
Not up, but down.
Did you know that today’s crisis in productivity is actually far worse than it was the end of the 1970s?
The damage to our global position is huge.
We’re now 21% less productive than the G7 average.
What countries in the G7 finish making on a Thursday, takes us till the end of Friday to complete.
If there is a global race, we are well and truly losing.
We can’t go on like this;
Thankfully, over the last fortnight you heard the voices now calling for a change of course.
The IPPR’s ground-breaking condition of Britain report sets out a path back to full employment, especially for our young people and our parents.
Mike Wright’s review of manufacturing and the supply chain is making clear the role of government in bringing together sectors to plan long term to boost skills and lower our cost base
Lord Adonis’ breakthrough report arguing for a radical devolution of powers and resources to our city regions.
John Armitt’s call for a new approach to infrastructure.
Our own launch of a review into science and innovation policy.
And tomorrow Ed Miliband is speaking at the Sutton Trust’s conference on the importance of high quality vocational education
When you boil it down, our argument is simple:
Big reform, not big spending
An inclusive prosperity for this century
As Ed Balls puts it: “more good jobs, boosting skills and long-term investment as we restore the broken link between the wealth of the nation and family finances.”
Now the sharp-eyed amongst you will have noticed that running through every single report, every single major statement of the last month, running like a golden thread is the challenge of skills.
And that is why you are so important.
Your country needs you like never before.
The years ahead should become a golden age for educators.
When your passion for learning and your mission of service put our country on a new and better path.
It’s now very clear that skills are the key to a Britain that grows more, firms that employ more, and workers who earn more,
How much evidence do we need?
The inextricable trends in trade and technology, discussed so eloquently in books like the ‘Second Machine Age’, sound the death-knell of ‘routine’ jobs
The Migration Advisory Committee has added 117 high-skilled roles to the shortage occupation list.
British business has had to sponsor over 282,000 skilled people into Britain – that’s the same size of Newcastle – because they couldn’t find the skills here.
But look at the future and the skills crisis looms larger still.
In the UK, between 2012 and 2022, it is projected that we’ll need:
Over a million more people in professional occupations
Nearly 600,000 new managers, directors & senior officials
The Royal Society of Engineering tells us that we’re delivering 36,000 too few engineering graduates every year.
Mike Wright says that the country’s automotive and aerospace industries will suffer if there isn’t a greater focus on improving the level of domestic engineering skills in the
Andrew Adonis describes the skills shortage as the “single most important impediment” to British businesses
How many more times do we need to hear it?
The tragedy is that great firms want to bring back work to Britain.
I can understand why.
When I left Business School in America, there was only one place I’d consider to build any business.
Here is Britain.
It’s one of the best places in the world to build a business.
And lots of people want to do more.
In fact, PWC says that ‘re-shoring’ could create 100-200,000 extra jobs over the next decade, adding £6-12billion onto GDP.
What’s standing in the way?
A lack of skills.
This is what KPMG said is stopping too many jobs coming here.
And here’s the tragedy for workers.
Extra skill means extra pay.
Analysis for BIS shows the difference in earnings between a high quality level three apprenticeship and a GCSEs, is £117,000 over a lifetime.
But for most it’s a degree that’s the key to a middle-class life.
Economists may disagree on what technically constitutes ‘middle-class’, but the marketeers tell us it’s the difference between earning £37,000 and £47,000 a year.
That’s the kind of earning power a degree level qualification gives you.
On average, degree holders earn more than £100,000 more than someone with only two A-Levels.
Shifting more people into ‘top gear’ with a degree is one of the best things we can do to earn our way out of this cost-of-living-crisis.
But, right now it’s too hard for students to shift into ‘top gear’
There’s the traditional degree route which is well-established and open to half of our young people, thanks to changes that Labour made in office.
But what about everyone else?
More and more want an earn-while-you-learn route into higher-level skills.
Yet look at the figures: the number of under-25s starting on an apprenticeship isn’t rising, it’s falling under this Government.
In the last year alone, we’ve seen 11,400 fewer young people starting an apprenticeship.
That’s why Ed Miliband has made it a central mission to change the future for the forgotten 50% who today do not have a good enough or clear enough choice of high
quality vocational education.
They do not have enough apprenticeships and there’s no real vocational route to degree level technical and professional qualifications.
Right now a vocational route to higher-level skills is like navigating rapids: risky, a bit haphazard with a high risk of drowning.
First up, it’s very hard to get your foot on the ladder.
Last year, there were 11 applications for every apprenticeship vacancy.
That means it’s now twice as hard to get on an apprenticeship as it is getting into University.
High-quality apprenticeships, where firms are prepared to sponsor you to degree level skills are even harder to win.
It’s almost three times more difficult to enrol on a Rolls Royce apprenticeship than going to Oxford.
For BAE it’s 2.5 times harder than getting into Cambridge
So we have frustrated companies and we have frustrated workers
We need a new way forward.
A path that’s pro-company and pro-worker.
So today I want to out some principles for change.
First we have to accept the big, bold principle of devolution for skills that Andrew Adonis has set out.
Today I want to say more about how that might work in practice, and as I do I want to say a huge thank you to my advisory group, co-chaired by the Rt Hon Stephen Timms, Rushanara Ali, and advised by, amongst others, Cllr Keith Wakefield, Leader of Leeds and Cllr Sue Murphy, Deputy Leader of Manchester City Council.
Let me say at the outset that as we give employers and LEPs and Combined Local Authorities more say over how skills funding is spent, no-one is advocating for the proliferation of funding agencies, handling cash or contracts or countering fraud.
Second: We think the role of employer-led sector bodies, built on reformed SSCs and their industrial partnerships, are critical to fostering a ‘something-for-something’ deal with big employers and their supply chains to drive up apprenticeship numbers.
So we’ll give employers, working collectively through reformed sector bodies, more control over the standards and assessment criteria for training in their sectors, and enable them to broker a significant share of the £1.4bn apprenticeship budget to address their skills needs.
In return, we will ask them to work to drive up the number of high quality apprenticeships in their sectors and supply chains – and we’ll use the power of public procurement to help.
Large firms will need more apprenticeship to win big government contracts. Full stop.
Third: Combined Local Authorities and Local Enterprise Partnerships should shape the broad goals for adult skills in their neck of the woods.
To win this freedom, these authorities will have to show us that they are up to the job and Andrew Adonis has set out some tests for quality governance.
But I think these broad plans will have some important things in common.
First, they should include what Lord Adonis calls Business Hubs – and what I’ve described in this post as City Apprenticeship Agencies.
One stop shops that provide information and advice in particular to small and medium businesses with a real focus on support for apprenticeship recruitment.
It’s a model like we’ve seen in Leeds – a solution that’s seen apprenticeship numbers doubling in the city.
In an age where SMEs are creating jobs five times faster than big business, we need solutions that works for all firms, regardless of their size.
So in the future, if I run an SME in Birmingham I will have on my doorstep, a hub that can offer me advice on how to set up a high quality apprenticeship with a choice of apprenticeship arrangements: some put in place by sectors nationally; or as a service delivered locally.
Second, we want LEPs and combined local authorities (CLA) to shape some goals for the adults’ skills in their area.
Back in December 2006, Sandy Leitch set down an important principle: “The skills system must meet the needs of individuals and employers. Vocational-skills must be demand-led rather than centrally planned”
This is an important principle.
But for the £2.4bn 19+ Adult Skills budget we need to bring a better balance to the ambitions of learners on the one hand, and the ambitions of business to employ them.
So: we desperately need better information and guidance so ‘demand’ is better informed.
We need a different relationship with DWP, as you see work so well in Germany, where students are far better informed about the local world of of opportunity.
But I think we also need LEPs/CLAs and providers together to forge the kind of ‘Outcome Agreements’ that are tried and tested in Scotland and over the medium term, aim to eliminate the skills gaps in a demand-led system.
Third, I think there is a need for the CLAs/LEPs to directly commission what you might call a strategic core of skills, where serious local skills gaps have been identified.
This flexibility is absolutely critical in a world where we envisage Combined Local Authorities and LEPs are taking a much bigger role in co-commissioning Work Programme contracts.
This will – for the first time ever – ensure that skills provision meets the needs of local areas, balancing social and economic demands with identified areas for growth.
Many parts of Britain, including my own constituency, have very high-levels of unemployment alongside firms crying out for skills.
Mike Wright of JLR has spoken about JLR’s challenges.
Yet on the south side of the M6, half a mile from the Castle Bromwich gates is my constituency with the highest youth unemployment in Britain. The balance between the ‘commissioned core’ and the ‘market margin’ will obviously look different in different places.
Giving local areas the flexibility and freedom to commission against local labour market priorities will help us join up the skills system and the welfare to work system for the first time.
Naturally, there is still a great deal for us to work through, and I look forward to those discussions ahead.
Already clear is that two funding systems, split between the adult and young people’s skills budget, is a complex set-up.
So we’ll want your advice on whether to move post-19 funding to a per-student, not per-qualification basis, as works for under-19s and in Scotland.
The changes we propose offer the chance of a creating a far stronger ‘triple track’ for skills, for young and old alike.
Some will want to take the well-established academic route from A-Levels through to University
Others will want to progress through the vocational track, with opportunities to move through colleges specialising in delivering technical and provisional skills, on courses better aligned to the needs of local employers.
And we hope many more will secure high-quality apprenticeships with high-quality training ahead.
But every track will need to offer something more.
A surer route to higher-level skills.
Back in 2006, Sandy Leitch advised an increased focus on L5 and above skills.
Yet today it’s incredibly difficult to take an apprenticeship or college route to degree level professional and technical skills.
Just 2% of apprentices are given the chance to study to degree level each year.
None of our competitors are making the same mistakes.
Back at the end of the 19th Century, the huge explosion of our university system was in part driven by the need to equip a new generation of businesses and a new generation of workers with the skills to shift into ‘top gear’ with the qualifications that can unlock a middle class life.
Beginning with the creation of my alma mater, Owens Colleges, Manchester in 1851, eleven universities were opened over the course of fifty years with a clear empathy for the German model, pioneered by the University of Berlin in 1810, and what Rev. J Percival described as:
“Teaching [the people] things which would help them in their occupations”
In the years that followed, science and engineering expanded whilst classics declined until finally under the pressure of World War One, a modern relationship was finally forged between government, academia and business.
This was a spirit and a purpose which Harold Wilson rediscovered in his famous ‘white heat’ speech.
Before the 1964 election, Labour’s Higher Education Study group concluded:
‘Economic expansion is only possible if university and technological education expands rapidly and continuously to provide the necessary brain power and skill’.
This was the analysis that inspired the great explosion of Polytechnics.
Today, we want colleges, universities and business to come together in a new alliance as they did in the 1960s.
Not in two different worlds. But in one, world-class system.
We want to open many routes – not just one road – to a degree and the better life degree level skills can open.
When we were last in office, we began the job of reform.
Bill Rammell gave colleges the right to apply for powers to award foundation degrees.
John Denham pioneered the Workforce Development Programme.
But the truth is today there are many rocks in the path of building the vocational path to degree level professional and technical skills.
Over the months ahead, we want your advice on turning this ambition into action.
Every so often in British politics, we arrive at this point where we see the skills challenge in a stark and profound way.
Back in 1944, Lord Percy, Rector of the Newcastle Division of Durham University put it like this: ‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’
I couldn’t put it better myself. And we are determined to change it.
There is no other way to a prosperity that is inclusive.
And a recovery for the many and not the few.
Thank you very much.
I wanted to let you know about the Royal Society’s excellent Vision report for science and mathematics education. You can access the full pdf copy here.
Published on Thursday, just two days after our science green paper, this is an insightful reminder of the kind of ‘supply line’ of science which our country needs if we’re to see science and innovation-based growth.
Just like our science green paper (which you can read here) this report sets out a number of concerns that the Royal Society has about the state of science in our country. Research for the report highlights some of these concerns. For example; in 2011 57% of university science staff reported that practical skills of new undergraduates had declined in the previous five years and just 13% of young people in the UK study mathematics beyond the age of 16.
Great Britain has a glorious scientific history. Many of the scientific discoveries and innovations that have shaped our modern world were made here in the UK. But this status as a world-class player in science and research is now under threat.
As Sir Paul Nurse sets out in his introduction; if we are to continue shaping the world in the centuries to come we need a plan for science and maths education which can; “…enable people to make informed choices, empower them to shape scientific and technological developments, and equip them to work in an advanced economy.”
I am pleased to say that the Labour Party is already committed to maths education until 18 and I am sure we will be looking very closely at some of the other recommendations that this report makes.
I met with Prof Jim Al-Khalili, one of the board members behind this fantastic report, earlier this week. We discussed the report as well as our science green paper; ‘Agenda 2030: One Nation Labour’s Plan for Science.’
My speech to Parliamentary Links Day 2014 – Launching Labour’s Green Paper on Science – 24 June 2014
It was an honour to launch Labour’s Science Green Paper, entitled: Agenda 2030: One Nation Labour’s Plan for Science and Innovation, this morning at the annual Parliamentary Links Day 2014.
You can read the paper here.
My speech is in full below:
Strengthen British Science and Strengthen Britain
Launch of Labour’s Green Paper, Agenda 2030: One Nation Labour’s Plan for Science and Innovation
Rt Hon Liam Byrne MP
Speech to [Parliamentary Links Day], House of Commons, London. Tuesday, 24th June 2014
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It is a tremendous honour to help mark the greatest day of the year for science in parliament.
I want to pay an enormous tribute to Dr Stephen Benn and the Society of Biology for helping bring the day together.
I want to commend you all for the way so many people and so many organisations have come together from across the worlds of science and engineering to talk, debate, speculate and lobby and leave us here in parliament with fresh impressions, fresh analysis and fresh evidence of how important both science and engineering are to the future of our world.
I want to thank you above all for the inspiration of your example.
I count myself as very lucky to have known an extraordinary scientist from a very young age.
She was a biologist and a teacher and a head of science at comprehensive schools including my own.
She was someone who inspired in me a lifelong wonder for science, a curiosity, and an admiration.
Ruth Byrne was not only my teacher, she was my mother.
And when she died at the age of 52 from cancer of the pancreas, she left me not only with a sense of scientific possibility but a sense of how much work still lies ahead.
Science and Parliament
Your theme this year is about Parliamentary links to Science and Engineering. I want to offer you a view about how we cement science and engineering centre-stage in the run-up to the General Election. As we are in Parliament I thought it would be apposite to reflect on the way science and engineering, industry and politics come together today and the relationship that lies ahead.
Around 300 years ago, a very great writer left London on his travels around the country to write a book, which is today one of our finest records of Britain on the eve of the industrial Revolution.
Daniel Defoe’s ‘A plan of the English commerce, being a complete prospect of the trade of this nation’ paints a portrait of a country amidst tremendous change.
‘The most flourishing and opulent country in the world,’ he called it and the cause he said was clear; ‘Trade’ and its two daughters, ‘Manufacture and Navigation’
Defoe suspected that for all the advance he saw, something bigger was coming.
And he was right.
By the time ’A Plan’ was published in 1728, the Royal Society, founded in Gresham College, was 50 years old. Sir Isaac Newton, its great master, had died the year before and in Birmingham, one of founders of the industrial revolution, Matthew Boulton was born.
Over the next six decades, Boulton, together with his friends in the Lunar Society in a story wonderfully told by Jenny Uglow, took the traditions and methods of those great founders of the Royal Society and fused them to industrial method, helping trigger the industrial revolution.
A nation of explorers and traders quickly became a nation of inventors and industrialists. The worlds of science and industry were irrevocably connected.
Back in the early days of the Enlightenment, the French writer Diderot had observed that uniquely in Britain:
‘philosophers are honoured, respected; they rise to public offices, they are buried with kings’.
Well, it wasn’t long before we were putting great inventors and industrialists like James Watt alongside our philosophers and our kings.
But it was to take another century before science and industry were really fused with the dirty and difficult business of politics.
From the 1850s and 1890s, concern with the state of our science base, and the state of our schools gathered pace until under the burning pressure of world war one a real partnership came together;
- The Department of Scientific and Industrial Research was founded in 1915.
- Universities came to play a mission critical role in the work effort and crucially a new alliance between science, industry and government was hard-wired together.
And we’ve been trying to get the relationship right ever since.
Now that alliance has never been more important.
The scale of the problems, which I realise are merely solutions in disguise and which we are tackling today, are simply too big for one scientist, one university, one company, or one government to tackle alone.
The new partnerships that you see in such spectacular collaborations like the Gaia One Billion Star Surveyor, or the Hadron Collider are gigantic incarnations of the same ethos and approach that drove the Lunar Society, but they are global in scale.
These journeys of curiosity, exploring the endless frontier, are rightly your principal concern.
But there is a second reason the alliance is so vital.
Your country needs you.
Searching for some inspiring words for today’s speech, I stumbled across these in the House of Commons library last week;
‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’
Those were the words of Lord Percy, Rector of the Newcastle Division of Durham University, reporting to the government in 1944.
They could have been written last week.
Two years later, Lord Barlow agreed;
‘If we are to maintain our position in the world and restore and improve our standard of living’ he wrote ‘we have no alternative but to strive for that scientific achievement without which our trade will wither’.
What was true back in 1945 is true again today.
The Challenge Today
Our old enemy, ‘British disease’ is back with a vengeance.
That traditional crisis, of extremely low productivity while other nations streak ahead, now scars the recovery and haunts industry, making it even harder to escape today’s cost-of-living crisis.
Producing more with less, as every business owner knows, is the key to doing well and the fastest way to give your workers a pay rise.
But look at the figures today.
Since the last election, output for every hour worked has not gone up; it’s actually gone down. Equally, output per worker has not gone up. It’s gone down. We’re actually less productive than we were four years ago.
This appalling record is far worse than the last years of the 1970s, long deemed the moment when ‘British disease’ reached its peak but a period when output per worker, and output per hour worked actually rose by over 5%.
Worse, we’re now falling rapidly behind our competitors. The gap in productivity per hour between the UK economy and G7 average is now 21 per cent – the widest gap there has been since 1992.
This is absolutely fatal for any escape from the cost of living crisis. If companies can’t produce more then it’s not easy for firms to give their staff a pay rise.
As someone who started work behind a fry station in McDonalds, I know that any job is better than no job.
But I also know that a good job is better than a bad one and right now we’re simply not producing enough good jobs.
Today, the average full-time worker has to work an extra one hour and 52 minutes a week in 2013 to earn what they earned in real terms in 2010.
Look at our ‘knowledge economy’ and it becomes clear what is going wrong.
Economists and scientists now know that science and research is the key to growing productivity.
As the breakthrough report from Research Councils UK put it;
‘The greatest long-term productivity advances come through breakthroughs in basic knowledge’.
In the US, the authors of the Gathering Storm remind us that 85% of growth in wealth per capita is driven by innovation.
The knowledge economy is the powerhouse of productivity growth, creating better jobs with better wages.
Yet, with the honourable exception of automotive and aerospace, which Labour did so much to save during the global crash, the story isn’t good.
Getting innovation policy right is not actually rocket science. It is about people, ideas and money. You need great people, great institutions and strategic investment.
Yet, look at what is happening in the UK.
In 2012, the last year data is available, UK investment in R&D by government and business together has fallen by nearly £1 billion – (£923M) – the largest annual fall since consistent records began in the mid-1980s.
Amongst advanced Western nations, Britain now ranks 23rd out of 33 in the league table of R&D spenders.
In our most important research industry – pharmaceuticals – which accounts for a quarter of all UK R&D spending, research budgets have fallen by a huge £467 million since 2010, that’s a 10% fall.
In telecoms, one of our other leading R&D sectors, budgets have fallen by 20% – that’s £240M.
Look at our great institutions.
In our universities, the great epicentres of science and knowledge, we have the world’s best thinkers.
But their labs and classrooms now rest on a mountain of debt. University borrowing will reach £7.3bn worth of debt by 2015, an increase of £1.8 billion from 2012. That’s £45.6 million for every university in the UK.
Vice-chancellors tell me that falling research budgets now mean that the brain drain has been gathering pace for at least the last 18 months.
And that’s nothing when we consider the black hole that’s been created in the finances of the Department for Business, Innovation and Skills by the Government’s unsustainable funding system.
The Public Accounts Committee now estimates that at current rates, students will be borrowing nearly £200 billion over the next twenty years to fund their studies and 45 per cent of this will be written off. It’s universities and our researchers of the future who will be paying the price.
And let’s not forget that other great institution that is important here.
The European Union.
European policy makers now understand that innovation is the only way out of austerity.
And the creation of the Horizon 2020 programme is proving crucial for the strength of British science, as UK universities, research centres and businesses can expect to receive £2bn in the first two years of the new funding round.
Leaving the EU, as some propose, would be absolutely catastrophic for science funding.
Third we must address human capital. The skills gap across the country grows worse. A fortnight ago, KPMG reported that skills shortages are bringing to a halt the plans of manufacturing firms to ‘re-shore’ work.
Since 2010, the number of people working in ‘Scientific research and development’ has fallen by over 12,000.
The Migration Advisory Committee has now added 117 high skilled roles to the shortage occupation list, which employers can fast track onto visas, because there are not enough skills in Britain.
The Royal Academy of Engineering estimates that we’re currently 36,000 short and at the rate we’re going there will still be big gaps to fill.
In our schools, Michael Gove’s disastrous School Direct scheme for teacher training has produced a huge shortage of physics teachers.
Half of state schools now send not one girl to do A Level physics.
Practical experiments have been taken out of the exam curriculum. The careers service has been destroyed. Apprenticeships for the under 24s are actually falling.
We cannot go on like this.
That’s why today I am pleased to be launching our green paper on science and innovation.
Our message is simple.
We need to strengthen British science – because British science will strengthen Britain.
We want to start a big debate on how business and government come together to grow the strength of science.
We want to work with the science and engineering community, in all parts of Britain to get the answers right.
We want to work across parties – because wherever we can maximise cross-party consensus we will.
We know that predictability and certainty are important; that they help make your work easier.
We want a new culture of science and evidence in public policy.
We want stronger universities with a bigger share of global science budgets and a bigger role in their regional economies.
And crucially we want to strengthen every rung on the ladder up into a science and engineering career for our young people.
As NESTA argued two weeks ago, the debate around science and engineering is seen by the public as vitally important.
In part, that’s because the public knows science, engineering and the business of innovation is key to the development of new cures for diseases, earlier diagnosis, greener, cheaper energy and crucially the jobs of the future.
The public knows that if we are not the pioneers then others will be.
If we don’t develop the jobs of the future, then others will.
And that will irreparably damage the opportunities of our children and our grand-children.
After all they are the very people for whom we want better chances than the chances that we enjoyed.
I think we know how futures are really built.
I think we learned that lesson a long time ago.
And now is not the time to ignore the lessons of history.
  http://www.nap.edu/openbook.php?record_id=11463&page=1. The 85% refers to the work of Robert Solow and Moses Abramovitz published in the middle 1950s demonstrated that as much as 85% of measured growth in US income per capita during the 1890-1950 period could not be explained by increases in the capital stock or other measurable inputs. The unexplained portion, referred to alternatively as the “residual” or “the measure of ignorance,” has been widely attributed to the effects of technological change
This morning I will be sharing our Green Paper on Science entitled – ‘Agenda 2030: One Nation Labour’s Plan for Science.’
If we are to build an opportunity economy with high skilled jobs and the wages to go with them then science and innovation have to be central to our strategy. Britain needs a long-term vision for science and this paper intends to start a discussion about what that vision should look like.
Please do read the document here and share your views.
With all best wishes