British Steel

Debate between Baroness Kramer and Lord Henley

Wednesday 22nd May 2019 Lords Chamber

[Lord Henley]

I shall not comment on my noble friend’s assertion that Teesside is the cradle of the Industrial Revolution because I think that one or two other areas would also make that claim, and I do not want to have to be the judge on that. She is however right to point out that the loss of manufacturing jobs in a particular area is a very painful process, and we want to offer as much help as we can to those who are affected. She is right to take an optimistic approach in talking about developments in Durham with Hitachi, for example, where new jobs are on offer and there are therefore possibilities for retraining people from Teesside. It is important to remember that while we are looking at a risk to those jobs—at this stage it is only a risk, because good news could emerge in due course—at the same time, we have to look at the unemployment figures. Unemployment continues to decline very steadily and employment continues to rise.

[Baroness Kramer (LD)]

My Lords, can the Minister help me understand the situation so as to better understand the appropriate response? Is he describing a company that in a sense is unlikely to be viable in any normalised market condition or a company that is in fact both efficient, producing high-quality goods with appropriate costs, but also suddenly in trouble because its primary European customers, afraid of the consequences of a no-deal Brexit with tariffs and disruptive supply chains, have had to source their product from other companies within the 27? If that is so, it seems that the burden falls on government, and it also means that we will start to see a chain of similar problems in other companies that are dependent on exports to the European Union 27.

[Lord Henley]

No, I am not describing a company that has terminal problems. I think that it has a future, and it is the official receiver’s job to explore that and to find something viable that he can sell on. British Steel is producing fine products but it has been having problems. The level of the pound has increased the cost of its imports and, the company believes, the uncertainty over Brexit has also caused problems. However, I do not think that that is necessarily terminal for the company. It is a good company that produces fine products, and it is for the official receiver to find the right solution.

Employment: Automation

Debate between Baroness Kramer and Lord Henley

Monday 1st April 2019 Lords Chamber

[Lord Henley]

My noble friend is an optimist, as the House will be aware. He is a rational optimist—if I may give a little plug for his book—but he is quite right to mention that there have always been worries that, with each new wave of automation, jobs will be lost. As my noble friend has said, what has happened is that, with each new wave of automation, we have seen jobs go but it is the boring, repetitive jobs that have disappeared to be replaced by machines. It might be that, as he points out, some of the boring, repetitive jobs that solicitors do, such as conveyancing, can be more easily done by machine.

[Baroness Kramer (LD)]

My Lords, only 19% of the digital technology workforce is female, as are only 15% of computing graduates and only 17% of fintech founders. In an age where automation will become dominant, is it not time that the Government abandoned relying on these sorts of piecemeal, scattered or small-scale initiatives to increase diversity and launched a holistic, well-resourced and high-profile strategy, along the lines of the anti-smoking campaign, to challenge everything from unconscious bias to the lack of training and role models, and to de-risk change generally?

[Lord Henley]

My Lords, I do not quite take the almost semi-Stalinist approach that the noble Baroness is putting forward. What I am saying is that society will change as a result of these things but the Government must also recognise that it is going to change. That is what the industrial strategy is all about, and we will go along with that.

Nissan in Sunderland

Debate between Baroness Kramer and Lord Henley

Tuesday 5th February 2019 Lords Chamber

[Lord Henley]

Things have changed. It is not solely to do with that. As other noble Lords have said, the whole car industry is going through a rather turbulent time. We only have to look at what has been happening in, for example, sales of diesels. For that reason, Nissan has to make difficult decisions. It has decided that it will go ahead with the X-Trail but will build it in Japan, no doubt for markets over there. Nissan is still committed to Sunderland. There are still 7,000 jobs there. There are still 35,000 more jobs in the supply chain. Things are not as bad as the noble Lord is trying to suggest.

[Baroness Kramer (LD)]

My Lords, as a Minister in the coalition, I had the privilege of visiting the Nissan plant in Sunderland, and I also visited most of the major Japanese car companies’ headquarters in Tokyo. As a consequence, I am very aware that British plants won the right to produce cars for these various companies by only the tiniest hair’s breadth, as a competition is run across the globe, and certainly across Europe, for each new piece of investment and for each new major production line. Does the Minister recognise that if he cannot give an assurance that there will be absolutely no increase in friction and non-tariff barriers, by definition those plants have no possibility of winning such competitions in future?

[Lord Henley]

My Lords, decisions on where to invest are very difficult. The noble Baroness is quite right to say they are made by a hair’s breadth. One of the reasons companies come to the UK is because they know that we have the right people in the right places. That is why they go to Sunderland and why we got that investment in the right place. We should be proud of that. We will continue to seek other companies to come to invest in this country, like the companies I mentioned earlier have done. The noble Lord opposite suggested that BMW and Honda made competitive decisions that went against the UK. I am advised that that is not the case and no competitive decisions have gone against the UK in recent years.

GKN/Melrose Takeover: Update

Debate between Baroness Kramer and Lord Henley

Tuesday 27th March 2018 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I want to press the Government a little more on one or two of the issues raised by the noble Lord, Lord Stevenson. One of those is the timing of the letter. The Minister will be very much aware that, presumably, it was meant to elicit information and to express some government concerns to be taken into consideration by the shareholders of GKN before they exercise their votes. However, as he will know, many of the shareholders have already declared —and I think he will confirm that a declaration once made cannot be retracted. In addition, the remaining shareholders have largely had all their internal meetings to come to their final decisions, and cannot pull those meetings back together to reconsider in the very brief timeframe of the next 48 hours. Therefore, if this is something other than public relations, will he explain to me how it is meant to inform shareholders, because I do not understand that? Will he especially, in that case, confirm that he still takes the view that the Secretary of State can call in this transaction, in whatever form it goes through, if concerns remain following the vote?

I scanned through the Melrose response very quickly but there seems to be no mention of the 6,000 workers. There are various assurances on other points but I saw no mention of them. Will the Minister comment on that? I am also concerned that all the various declarations seem to have a timeframe of five years. Considering the length of time needed to plan measures such as the industrial strategy and the sustainable relationships that need to be developed in the aerospace, defence and other fields, five years seems an infinitesimal period. Will the Minister explain why that short timeframe apparently reassures him, because I am not sure that it does me?

Does the public interest definition need to be looked at again as it does not mention workers’ rights or pensioners and does not refer to the industrial strategy, which is supposed to have a much more important role now? Airbus, for example, has expressed concerns about a potential new owner, which could undermine the direction in which the Government are trying to take industry in this country.

My last point concerns an issue I do not fully understand. However, the Minister may be able to help me. I understand that many of the shares are held by arbitration houses, and that rather than buying them and paying stamp duty they have them on loan and are exercising them in that format. Is that really appropriate and is it something else we should look at?

[Lord Henley]

My Lords, I shall make a fist at answering some of the points put to me by the noble Lord, Lord Stevenson, and the noble Baroness, Lady Kramer. However, I apologise in advance if I fail to do so on some points as this issue is highly technical. I want to be very careful about precisely what I say, bearing in mind that my right honourable friend will possibly have to make quasi-judicial decisions following advice from the Ministry of Defence. I am not party to that but the noble Baroness and the noble Lord will understand what I mean: I have to take care over what I say.

The noble Lord’s first criticism was that we were slow off the mark on this issue. I can assure him that right from the start, from the moment we knew there was a bid—it goes back only to January—the Government have monitored this and paid attention to it. As the noble Lord will know, as things have hotted up, we have taken a more active line; hence the letter from my right honourable friend yesterday, to which he and the noble Baroness referred. I will say a little more about that, and about the response today from Melrose.

The noble Lord also asked about the timescale and what we will do to keep the House informed. I can assure him that we will keep the House informed as things happen, as my right honourable friend made clear. The Secretary of State set out the statutory timeframe under the 2002 Act. He will inform the House if an intervention is ordered, again in line with his quasi-judicial powers. As I made clear, there are limits to what my right honourable friend can and cannot do. He set out in his Statement just when he could intervene under the terms of the Act. In the third paragraph of the letter to Melrose, he again makes it clear that the Act gives powers to the Secretary of State to act in a quasi-judicial manner.

He goes on to say, when talking about broader stakeholder interests, that in addition to his statutory role, he, as Business Secretary, had a wider concern that,

“where important businesses are involved, takeovers should not act against the interests of our economy, employees or the broader set of stakeholders”.

He adds that Section 172 of the Companies Act, to which he referred in his Statement, sets out that statutory requirement for directors,

“to have regard to, amongst other things, the interests of the company’s employees; the company’s business relationships with suppliers, customers and others; and the impact on the community and the environment”.

A response to that letter came through from Melrose. It is now available in the Library, and I hope the noble Lord, the noble Baroness and others have seen copies of that letter. In the letter, Melrose again set out what it felt it could do, particularly where it agreed with the takeover panel on the form of the legally enforceable undertakings:

“For a period of five years, Melrose will: maintain its UK listing; maintain its UK headquarters; ensure a majority of its directors are resident in the UK …”,


and so it goes on. There are commitments about the amount of research and development it will invest in. That is all set out in what it refers to as its takeover panel-enforceable undertakings. The letter goes on to make further long-term commitments that we hope that it, as an honourable company, will adhere to should it be successful. That is obviously, as my right honourable friend made clear, a matter for the shareholders.

Going back to those initial undertakings about legally enforceable commitments in the letter, the Secretary of State indicated in his letter his wish to see Melrose making those other commitments, to which I referred in the main letter, in good faith. I hope the company will stick to that. Since the noble Lord asked particularly about R&D and training, the commitments about R&D are listed in its letter in the paragraphs about enforceable undertakings, which state:

“Melrose will at least maintain GKN’s current level of expensed research and development investment equal to 2.2% of sales over the financial years 2019, 2020, 2021, 2022 and 2023”.


This is a legally enforceable commitment.

As I said, I am limited in what I can say, and I want to be very careful about what I do say and how far I go because the Secretary of State has to look at this thereafter. I will leave it there and take up that rather technical point that the noble Baroness made about arbitration houses—

[Baroness Kramer]

Arbitrage houses.

[Lord Henley]

Yes, arbitrage houses. I will write to her in due course, because I would not want to give a response that was in any way misleading. I hope that deals with most of noble Lords’ concerns.

Whistleblowers

Debate between Baroness Kramer and Lord Henley

Monday 27th November 2017 Lords Chamber

[Baroness Kramer (LD)]

My Lords, will the Minister resist this negative connotation of whistleblowers? This summer I met whistleblowers whose lives are in complete ruins. The example given by the noble Lord, Lord Cromwell, is one of very many. The regulators have a long history of being totally passive, of providing no protection and often of being gratuitously suspicious of whistleblowers. In the United States, not only is there compensation for a life damaged and ruined but there is an Office of the Whistleblower—a concept that we attempted to get into the then Criminal Finances Bill—which provides appropriate protection from a significant, senior and high level.

[Lord Henley]

My Lords, I do not believe that we are taking these matters lightly. I know that the noble Baroness has considerable concerns about this matter. She raised them during the passage of the Criminal Finances Bill, enacted in 2017, and many of them were dealt with by my noble friend far better than I could do in the brief time I have available at the Dispatch Box. I could quote at length the answers that my noble friend gave the noble Baroness on that occasion, but suffice it to say that we note her concerns. The FCA is looking at this issue and conducting another review, and no doubt the noble Baroness will take a look at that when it comes out next year.

Thames Tunnel

Debate between Baroness Kramer and Lord Henley

Monday 18th July 2011 Lords Chamber

[Lord Henley]

Again, it is a matter for the planning process and planning authorities to propose what conditions they think appropriate to impose on Thames Water. Since it is proposed at the moment that the tunnel should follow the river down, I would have thought it might be possible to have a lot of the access points close to the river. It should therefore be possible. However, it is not a matter for Government but for the planning process to consider using the river, rather than roads, for disposal of that spoil.

[Baroness Kramer]

I must declare an interest in that I live by the river and am a member of the Skiff Club in Teddington and therefore a supporter of the Thames Tunnel. Does the Minister agree that the reason why greenfield sites such as Barn Elms are at risk is that they are cheaper than the brownfield alternatives and that therefore it is a Defra issue? Will the Minister consider talking to Thames Water to make sure that environmental vandalism to sites such as Barn Elms does not take place?

[Lord Henley]

Obviously, we would want to encourage the use of brownfield sites, where possible, rather than greenfield sites. However, I do think that this should be a matter for the planning authorities and the planning process rather than for a diktat from Defra itself.

Oak Processionary Moth

Debate between Baroness Kramer and Lord Henley

Wednesday 27th April 2011 Lords Chamber

[Baroness Kramer]

To ask Her Majesty’s Government what plans they have to eradicate oak processionary moth.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, Forest Research has moved from a strategy of eradication to one of containment in the west London outbreak area. Outside this, a protected zone has been declared, within which regular surveys will be conducted to ensure that any new infestations are eradicated.

[Baroness Kramer]

My Lords, I must declare an interest as a patron of the Friends of Richmond Park. Richmond Park will spend £50,000 or more this year to remove nests of that moth in order that the public can continue to use the park.

The Minister will be aware that the health hazards of the oak processionary moth caterpillar are such that to remove the nests people have to be in full chemical contamination gear, including breathing apparatus. Therefore, he will understand that I am very distressed that the eradication programme has now been set aside. Can he tell us how containment is going to work; and can he give assurances that areas of oak woodland will not have to be closed to the public, as they have been in Holland and Germany, because of the impact of this moth?

[Lord Henley]

My Lords, I am grateful to my noble friend for all she has said. She is quite right in, first, underlining the public health issues and, secondly, underlining the fact that some oak woodland areas might have to be removed from public access, as has happened in other parts of the EU, although we hope that it will not happen here.

The reason we have moved from eradication to containment is based on scientific advice that eradication within the five boroughs in south-west London that the noble Baroness is aware of is not possible. We managed to eradicate the outbreaks in Leeds and Sheffield but we got on to those much earlier. We did not get on to this outbreak, which started in the summer of 2006, early enough and therefore it will be very difficult to get rid of it. However, we are very grateful for all the work being done by Forest Research, Fera and by Kew Gardens, which also has an interest as it is right in the middle of the area.