The following column was first published in The House on Friday 17 March, 2017. To see the original story click here.
Budgets don’t just generate short-term headlines and debate – they also shape Britain’s long-term future. For example, William Gladstone’s 1860 Budget is seen as key to entrenching the principle of free trade into our political discourse, building on Sir Robert Peel’s hard-won success in abolishing the Corn Laws.
Gladstone had backed Peel, and his Budget abolished no fewer than 371 protectionist duties, launching an upsurge in manufacturing and trade, and a new political consensus: Benjamin Disraeli would go on to dismiss the claims of landowners who wanted the Corn Laws reinstated, declaring Britain’s future lay in being the “the workshop of the world”.
Geoffrey Howe’s 1979 Budget, which launched Mrs Thatcher’s privatisation policy, has a similarly era-defining quality, as does Nigel Lawson’s memorable 1988 Budget which slashed the top rate of income tax from 60 to 40%.
Amidst the debate about national insurance, Philip Hammond’s Budget has embarked on an equally bold course which has the potential, over time, to kickstart a technology boom, drive up our exports, and help Britain lead what is becoming known as the fourth industrial revolution (4IR).
This term describes the wave of new technology and innovative products redefining economies and societies across the world, from driverless cars, artificial intelligence and 3D printers to Amazon’s drone deliveries, thinking computers and internet-connected household devices.
Since becoming chancellor, Hammond has quietly but firmly backed Britain to lead the world in these new, disruptive industries, announcing new investment in his Conservative party conference speech, the autumn statement and this month’s spring budget. “I am determined to ensure that Britain leads and benefits from [the 4IR], as we did from the first industrial revolution,” he wrote ahead of his Budget speech.
The spring budget included a range of pro-4IR policies, including £300m to support the brightest talent, including funding for 1000 new PhD places and fellowships, focused on STEM (science, technology, engineering and mathematics) subjects; £270m to launch the Industrial Strategy Challenge Fund, keeping Britain at the forefront of innovative technologies like biotech, robotic systems and driverless vehicles; £16m for a new 5G mobile technology hub; and £200m to expand high-speed broadband coverage.
This new investment will drive the development of the new jobs and industries that will future-proof Britain’s economy after Brexit. Working in tandem with the government’s ‘Exporting is GREAT’ campaign, it should also herald a new era of British exporting as UK-made 3D printers and driverless cars are shipped abroad.
But as automation threatens up to 35% of jobs in the UK, according to the Bank of England, just as imperative will be training a workforce with the right skills to take up the jobs of the future, and rebalancing the economy away from service sector jobs towards highly-skilled tech and engineering roles.
To address this, the Budget included new investment of £500m a year for technical education, increasing the amount of training for 16 to 19-year-olds by 50% to 900 hours a year. More than 13,000 existing technical qualifications will be simplified into 15 ‘T-levels’ linked to the needs of employers, helping build genuine parity of esteem between academic and technical education, backing the UK manufacturing sector, and bolstering the nation’s productivity.
These reforms – the most ambitious since A-levels were launched 70 years ago – complement the government’s work since 2010 to upskill Britain’s workforce.
But while the chancellor’s new money and pro-4IR policies put Britain on the right track, parliamentarians must get behind this national effort too. That’s why I have founded the all-party parliamentary group on the fourth industrial revolution, which will be launched by the chancellor on Monday 20 March in the Commons.
Ensuring Britain leads the fourth industrial revolution is a cross-party issue, and I’m delighted that Labour MPs Peter Kyle and Stephen Kinnock have become APPG officers, alongside me as chairman. Together we will raise awareness of the 4IR amongst parliamentarians, industry, academia, the media and other stakeholders.
To win the race for success in a 4IR-led global economy, Britain must be bold and innovative, replicating the vision of Gladstone, Peel, Lawson and Howe.
The current chancellor’s strong commitment to the 4IR is a vital first step, but to fully take advantage of the economic growth opportunities it presents, we need the support of parliament too. I hope MPs and peers from all sides will use the new APPG to get behind our shared vision that Britain’s economic future lies in leading the world’s fourth industrial revolution.
Alan Mak is Conservative MP for Havant