My Lords, this Queen’s Speech is our first and best chance to set out what kind of country we are going to be outside the European Union. It is our chance to remind investors, businesses, workers and trade partners that what is true now of Britain—open, innovative, creative and productive—will continue to be true. It is our chance to capitalise on what opportunities may come from our new-found freedoms.
Austerity was essential to restore investor confidence, but our fiscal position remains vulnerable. That means that if we are going to increase borrowing and add to our debt, it must be in areas that will increase productivity and boost growth. I am encouraged therefore by many of the measures in the gracious Speech.
I am fortunate to have been a member of this House’s Select Committee on Artificial Intelligence and I am currently a board member of the Centre for Data Ethics and Innovation. I say “fortunate” because I feel that I have glimpsed the future of what will drive our economy: AI and data. These opportunities transcend Brexit, this fiscal cycle and even this Government. We need to invest in our future if we are to capitalise and boost productivity, growth and prosperity.
There are many aspects to productivity, but those to which I want to draw attention are R&D, skills and infrastructure. We cannot go too far wrong if we increase our investment in research. I am proud that, in the midst of spending cuts in the past two Parliaments, the Conservative Government protected the science budget. Similarly, we have long had a tax regime that encourages investment in R&D, so I am pleased that the gracious Speech pledges to increase the threshold for R&D tax credits to 13%. This is an important signal. We also need to do more to build on the early work of the industrial strategy, which places AI and data at its heart.
We have all the assets in the UK to realise this opportunity. We have world-class universities, a thriving tech sector and a deep pools of venture capital, so I commend the work of initiatives such as Oxford Sciences Innovation which bring all these actors together to ensure that we convert university research into commercial opportunity. We need to see more like this, and more from the Government’s catapult centres which focus on technology transfer.
As important as research are skills. My main takeaway from my work on AI and data is that we need a stronger pipeline of talent domestically, starting in our schools, and through our migration system so that we attract top talent. We have an acute skills shortage in these emerging professions, especially among women, which is so important to address if we are to avoid gender bias in the way codes and algorithms are written, as the noble Lord, Lord Clement-Jones, eloquently mentioned. The gracious Speech refers to the new £3 billion national skills fund, and the manifesto stresses that some of it will be set aside for “strategic investment in skills”. Perhaps the Minister will clarify that AI, data and other associated technology will be included in this strategic investment, essential as they are for our future productivity and prosperity. This needs to start in schools, but it should also look at retraining and continuous professional development.
The final piece of the productivity jigsaw is infrastructure. The gracious Speech promises a new national infrastructure strategy at the time of the next Budget, so we will have to wait and see what this entails, but I am pleased that what emphasis we have seen so far has been on digital—namely, broadband and digital infrastructure—as well as on the more prosaic targets for new housebuilding and what I am sure will be a strong pipeline of roads, bridges and new renewable energy capacity.
It is high time we addressed our flailing productivity, and if we have to borrow more to do so, then so be it. We have to provide reassurance to the markets of course, but we have also to provide something visionary. A UK that invests in infrastructure, research and human capital is a country that investors will continue to commit to, skilled workers will flock to and entrepreneurs will start companies in. This kind of borrowing might even pay for itself.
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