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Labour to use public contracts to boost economy

Rachel Reeves

Rachel Reeves: ‘we will buy, make and sell more’

Labour is focusing its post-pandemic plans for the economy around using public contracts to stimulate demand and create jobs.

Shadow Chancellor Rachel Reeves has pledged to “buy, make and sell more” under a Labour government.  

As part of the economic recovery, Labour says its plans would raise standards across the UK, award more public contracts to British businesses and bring the jobs of the future to the UK. 

Ms Reeves’ pledge coincides with a commitment today by UK Business Secretary Kwasi Kwarteng to boost private sector investment by putting the UK at the front of the global innovation race.

In Scotland, the SNP’s new advisory council on economic transformation will meet for the first time as it considers a plan to develop a 10-year strategy.

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Ms Reeves, who is in Scotland, said Labour will use public contracts to grow skills and raise standards, taking inspiration from approaches in other countries, including France and the US.

As well as raising standards nationally and globally, this move will help boost British business and create new jobs, she said, without providing any costings or numbers.  

Ms Reeves will highlight how Labour’s new proposal will seize the opportunities for the long term of the post-pandemic, post-Brexit economy and “help to shape a more secure and resilient future for Britain, especially in the green and tech ideas of the future.”  

She will accuse the SNP of failing to use its significant procurement spend to boost Scottish business, create jobs, raise environmental standards and improve workers’ terms and conditions.

The Scottish public sector spends around £11 billion a year on good and services and Ms Reeves will say this financial clout could be used for good. However, Ms Reeves says less than 1% of Scotland’s SMEs actually benefited from this procurement spend.  

Scottish Labour has proposed a local first approach to procurement to benefit Scottish businesses and says this should be accompanied by a Better Business Pledge, requiring all businesses that benefit from public procurement to commit to paying the Scottish Living Wage and collective bargaining, and not using not zero-hours contracts or similar insecure work practices.

This would also introduce a local first approach to procurement to maximise its impact.   

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Scottish Labour has also proposed a Scottish Energy Development Agency to coordinate the growth in renewable energy production including in skills and training and ensure that green supply chain jobs stay in Scotland.  

“As we recover from the pandemic, we have a chance to seize new opportunities and shape a new future for Scotland and the rest of Britain,” says Ms Reeves.  

“For too long, the people of Scotland have not had a government fighting to deliver jobs and growth in the country.   

“121,000 Scots are unemployed, thousands of jobs in renewable energy have been lost and the country’s manufacturing base has been hollowed out. 

“Only Labour will get our economy firing on all cylinders by giving people new skills for the jobs of the future here in Scotland, bringing security and resilience back to our economy and public services, and helping our high streets thrive again.  

“That starts with our plan to buy, make and sell more in Scotland and the rest of Britain.

“From green jobs in manufacturing electric vehicles and offshore wind turbines, to fin tech, digital media and film, we must grow modern industries to build a long-term economy that provides good jobs and is built for the future.  

Mr Kwarteng’s Innovation Strategy is the UK Government’s long-term vision to put innovation at the heart of building back better, as a key pillar in its Plan for Growth.

It aims to boost private sector investment in R&D across the whole of the UK, and create the right conditions for all businesses to innovate so they have the confidence to do so.

The UK Government is committed to increasing annual public investment on R&D to a record £22 billion, but says the private sector also plays a key role in boosting spending on R&D.

Kwasi Kwarteng

Kwasi Kwarteng: ‘innovation missions’

It says the pandemic has shown that major challenges can be resolved by ambitious investment in science, technology, innovation and entrepreneurship, and has shown the public what British innovators can deliver when given ambitious support, freedom, and risk tolerance. 

The strategy takes lessons learned from the pandemic, including from the UK’s Vaccine Taskforce – where the public and private sectors successfully worked alongside each other – and applies them find solutions to fundamental challenges facing the UK – including the relative decline in business R&D investment, skills gaps and the need for pro-enterprise regulatory environment to spur innovation.

To achieve this aim, the Government will specify ‘innovation missions’ to set clear direction, urgency and pace on the issues confronting the UK that we want to tackle with the private sector in the coming years. These will be determined by the new National Science and Technology Council and supported by the Office for Science and Technology Strategy.

The Government is also outlining seven strategic technologies to prioritise and build on existing R&D strengths, including clean technologies, robotics, genomics and AI, where the UK has globally competitive advantage and industrial strength.

Mr Kwarteng said: “The UK can look back on a proud history of changing the world through innovation. From the industrial revolution to the vaccine development of the past year, the impact on our everyday lives is undeniable. 

“That spirit of discovery is still alive in this country today, but we have not always turned our genius for innovation into jobs and companies here in Britain.

“The countries that secure leadership in such transformational technologies will lead the world, enjoying unrivalled growth, security and prosperity for decades to come – and it’s our job to ensure the UK keeps pace with the global innovation race.

“Through this long-term plan, we want to rekindle our country’s flame of innovation and discovery, helping businesses to seize the vast opportunities that innovation can bring.

“If we get this right, we can build the foundations for the new industries of tomorrow, and ensure British firms are at the front of the pack to turn world-leading science into new products and services that are successful in international markets.”



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