I rise to commend to the House the seventh report of our Select Committee and the combined brilliance of Committee members in setting out a plan, a blueprint and a framework for scrutiny of the industrial strategy, which is still to come.
Our report starts with a note of optimism, because the truth is that we stand on the cusp of a once-in-a-century transformation of our economy, from which Britain stands to gain enormously. In the next decade alone, the world economy may grow by something like £25 trillion, and those prizes could be seized by Britain. In the race on which we have embarked, we happen to hold many of the cards. In a world that is building walls, we in this country are building bridges to new markets. In a world that is about to be transformed by artificial intelligence, we are a science superpower. In a world that is crying out for energy, we are on the cusp of building green energy abundance.
Time and again throughout our long history, these isles of wonder have made history by inventing the future. Even now, we have the future potential in our grasp in a way that we have not had for decades, but this report is a sobering read, because its conclusion is that our performance right now is very different from our potential, and promise is not going to be delivery. Unless we remake the state for a new age and renew the partnership between public ambition and private enterprise, we will squander the riches that could lie within our grasp.
Our Committee has found that we are trapped by obstacles of our own making. We have sky-high energy costs that are driving away industry. We have a broken system of procurement that squanders £350 billion every single year—£1 in every £6 of our GDP. We have a chronic skills gap that locks out millions from the potential jobs that they could get stuck into, and which denies firms the skills that they need to grow. We have blocks on innovation diffusion that hoard breakthroughs with superstar firms. We have a finance system that all too often starves scale-ups of capital, and we have a Whitehall machine that is over-centralised, risk averse and too complex to drive change at the speed that the modern economy demands.
Those are not conditions of growth; they are conditions of decline, and this country needs to rally to fix them fast. We therefore argue in the report that the industrial strategy has to break through the confines on growth. We need an ambition that is as great as the challenge before us, and we argue that that means mobilising public and private action around the grand challenges—the moonshots that are going to define the next century. We argue that we should maximise domestic demand through a dramatic overhaul of our public procurement system. We need to maximise foreign demand for the things that we make here through the trade deals that we strike with our allies around the world. We need to rewire the institutions of our economy in skills, energy, finance and innovation, and we then need to transform Whitehall itself by devolving power where we can, cutting red tape and putting regions back in control of their own destiny.
In this report, we set out practical steps for how we can achieve every single one of those ambitions, and we then set 10 tests by which the forthcoming industrial strategy could be best judged. There must be vision, so that we can steer effectively. There must be metrics, so that we can judge progress effectively. There should be grand challenges set out by the Government to help galvanise a rally around national purpose and the possibilities of the future. There has got to be procurement reform, so that the £350 billion that the state spends each year drives domestic demand in new ways. There has to be trade alignment to connect our strengths with the global marketplace into which we sell. There has to be far better access to scale-up finance, to stop businesses being lifted and shifted—largely to the United States. There has to be cheaper energy, because we heard overwhelmingly that our energy prices are simply uncompetitive. There must be devolved skills funding where mayoral areas can prove that they are fit for purpose, to help manage and organise technical education. There needs to be much wider diffusion of research in order to spread prosperity. Above all, there has to be leadership from the very top, driven by the Prime Minister himself, and there have to be new ways in which we cut through the incoherence of regulation that bedevils business today.
We propose a bold devolution of power, money and responsibility, particularly to mayoral areas where they can prove that they are up to the task. We propose new legislation to put the Industrial Strategy Advisory Council on a statutory footing, with the Prime Minister chairing meetings at least once a quarter. We propose that the Regulatory Innovation Office be expanded and moved to the Cabinet Office, and that it take on the role of a clearing house to make sure that there is somewhere that business can go in order to highlight ridiculous conflicts between rules and regulations that just hold back growth day after day. We also propose hardwiring the link between the Industrial Strategy Advisory Council and the new Council of the Nations and Regions.
Yesterday, we saw some progress on a number of our recommendations—our Committee is nothing if not influential with both the Treasury and the Department for Business and Trade. On capital access, the British Business Bank is now set to receive almost £3 billion in order to crowd in tens of billions of pounds more, and the National Wealth Fund will grow to almost £30 billion, but we have to simplify access to that finance for businesses that need it. On energy, we had confirmation of investments in Sizewell C, offshore wind and small nuclear reactors, but we need lower energy costs in the here and now. On skills, there will be an extra £1.2 billion by 2028 for 65,000 more learners, but the skills governance reforms that we need were not quite clear enough, and business needs those reforms pronto. On research and development, £22.6 billion a year was promised by 2029, and there are targeted funds for advanced manufacturing, defence innovation, the Advanced Research and Invention Agency, and the new Edinburgh supercomputer.
Those are good beginnings, but without a clear plan to diffuse the best ideas to every corner of our economy, we will not get the uplift in productivity that this country needs. There are without doubt big challenges, but what gave us heart as we took evidence over the course of this year is that business, trade unions and consumer groups are up for the challenge. They genuinely believe that we can become the fastest-growing economy in the G7. In 32 conclusions and recommendations, we set out very clearly the steps that Ministers could and should take in order to unlock the possibilities of the future.
My final message is that we should draw a lesson from our history. Over the course of the last century and since the days of Joseph Chamberlain, there have been geopolitical shocks every 20 to 30 years that have forced us to think anew about the sovereign capabilities that we need, which always leads to conclusions about how we remake the state for new times. We are at exactly such a moment in our history, and yesterday gave us some heart that there is investment going into the things that business needs.
This Government want to invest in growth, good jobs and good wages, but the potential of this country will be squandered unless we now build on the kinds of ambitions that we heard yesterday and implement the steps that our Committee has set out. Above all, I think that our plan is practical, and I have no reservation in commending it to the House.