Magnox: Early Contract Terminations
Greg Clark Excerpts(7 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Rebecca Long Bailey (Salford and Eccles) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the Nuclear Decommissioning Authority’s early contract terminations at the Magnox estate?
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
This morning, I informed the House that the NDA has terminated its contract with the Cavendish Fluor Partnership for the decommissioning of 12 redundant Magnox sites. The NDA ran a £6.1 billion tender process from April 2012, which resulted in a 14-year contract being awarded in September 2014 to the partnership, which is a joint venture between the British firm, Cavendish Nuclear, and Fluor Inc.
CFP started work on the estate on 1 September 2014 and there then started a consolidation process to ensure that the scope of the 2012 tender matched the actual status of decommissioning. It became clear to the NDA that there is a significant mismatch between the work that was tendered for and the actual scale of the work that is required to be carried out. The NDA board concluded that it should terminate the contract on two years’ notice. Termination is made with the agreement of CFP and is no reflection whatsoever on its performance.
Dealing safely with the UK’s nuclear legacy is fundamental and non-negotiable. Decommissioning work will continue under CFP for a further two and a half years. The NDA will establish arrangements for a replacement contracting structure to be put in place for when the current contract ends. The NDA has also settled outstanding claims against it by Energy Solutions and Bechtel in relation to the 2014 Magnox contract. The NDA was found by the High Court to have wrongly decided the outcome of the procurement process. It is clear that the 2012 tender process was deeply flawed. The NDA has agreed settlement payments with Energy Solutions of £76.5 million, plus £8.5 million of costs, and with Bechtel of $14.8 million, plus costs of about £462,000—approximately £12.5 million in total.
Those are very substantial costs, which could have risen further if the case had proceeded. Taxpayers must be able to be confident that public bodies are operating effectively and securing value for money. Where that has not been achieved, such bodies should be subject to rigorous scrutiny. I have therefore established an independent inquiry into the original procurement process and why the 2014 contract proved unsustainable. Those are separate issues, but they need to be examined thoroughly. I have asked Mr Steve Holliday, the former chief executive of National Grid plc, to lead this inquiry. It will take a cradle-to-grave approach, beginning with the NDA’s procurement and ending with the contract termination. The inquiry will set out the lessons learned and recommend any further actions it sees fit, including any disciplinary investigations or proceedings that may be appropriate. The inquiry will report jointly to me and to the Cabinet Secretary, and his report will be available to this House and to the Select Committee.
This was a defective procurement with significant financial consequences, and I am determined that the lessons to be learned should be exposed and understood; that those responsible should be properly held to account; and that this should never happen again.
Rebecca Long Bailey
The NDA has withdrawn its appeal against the judgment that was handed down in late July last year, so will the Secretary of State explain why this decision has been taken now, why the matter was brought to appeal in the first instance, and whether both actions were sanctioned by him or his predecessor?
The judgment confirmed that the NDA had not acted properly in the tender process, and that it was
“acutely aware that an unsuccessful bidder might challenge the outcome of the competition.”
The court stated that the NDA had fudged the evaluation to achieve a particular outcome. More worryingly, the judge also confirmed that the NDA attempted to get rid of information that might have been detrimental to its case, and there was reference to the shredding of notes. Given the serious nature of the judgment, will the Secretary of State assure the House that there will be full public disclosure of the investigations, and a public hearing? Does he agree that this case has called into question the future operation of the NDA? Will he explain what structural changes are necessary, and when? Can he offer any assurances to Magnox workers?
Finally, the Secretary of State’s written statement confirms:
“It has become clear to the NDA…that there is a significant mismatch between the work that was specified in the contract as tendered in 2012”.
Will he tell the House when he or his predecessor was first aware of that mismatch and whether it would have been apparent from the work that had already been carried out by previous contractors?
Greg Clark
The hon. Lady is quite right to ask her questions, and I hope she will agree that the written ministerial statement I have made today is thorough and comprehensive. I am very happy to have conversations with her and the Select Committee over the weeks and months ahead.
The hon. Lady asked some specific questions about the termination of the contract and the litigation. On the latter, there was indeed a Court hearing and judgment in July last year, and there was another one in December on which the NDA has reflected. On 1 March this year—a few weeks ago—a new chief executive and chair of the NDA took office. It seemed to me appropriate that a new set of eyes should consider these matters and the course of action, rather than those people who were responsible for and involved in the procurement exercise looking into it. In answer to the hon. Lady’s question, it was a decision for the NDA board—that is how it is constitutionally established—but its decision required ratification by me, the Chief Secretary to the Treasury and the accounting officer in my Department.
The hon. Lady asked some very important questions about the conduct of the original procurement process and its management. That is exactly why we need to have an independent figure—independent of Government and of the NDA—to make a report available to the House, to me and to the Cabinet Secretary, not only so that we can learn the lessons and ensure that things cannot happen again, but so that, if there is fault and an error has been made, the recommendation of disciplinary action can follow.
The hon. Lady rightly asked about the Magnox workforce, for whom this will be a difficult day. I am happy to confirm to the House that there is no question about the operational good performance of the contract; it was a question of the terms of the letting of the contract. Good progress has been made, and the workforce employed on the decommissioning contract will continue as planned. When the report is made available, lessons will be learned about the NDA’s structure, as well as any particular procedural aspects.
Mr John Whittingdale (Maldon) (Con)
Will my right hon. Friend join me in paying tribute to the workforce at Bradwell-on-Sea in my constituency? They are doing a magnificent job in decommissioning the power station there. Will he confirm that nothing in his statement will prevent that work from continuing? Will he also listen to their concerns about the effect on their pension entitlements of certain changes that have been made regarding the cap on exit payments?
Greg Clark
I join my right hon. Friend in paying tribute to the workforce. As he will be aware, good progress has been made in decommissioning the site in Bradwell, with the underground waste vaults containing intermediate level waste having been cleared and decontaminated. That is a reflection of the hard work. There is a separate set of discussions and consultations going on with regard to the pension arrangements, which is not related to today’s announcement.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I thank the Secretary of State for his response and the shadow Secretary of State for securing this urgent question. This debacle shows that the UK Government cannot even manage their current nuclear project, which comes at great cost to the taxpayer, leaving their case for a nuclear energy future more threadbare than ever. Given the bizarre and illogical decision to leave Euratom, the trade union Prospect is right to be concerned and to seek reassurances that uncertainty over the future of decommissioning will not lead to a deterioration in standards. What assurance can the Secretary of State give today?
This should be a wake-up call. The UK Government’s nuclear obsession will do nothing to lower energy bills and will only burden the next generation with unprecedented economic, environmental and security instability and risk. The Tories should do the responsible thing and scrap their nuclear obsession in favour of investment and renewable energy in carbon-capture technology. Scottish Renewables recently reported that one in six renewable energy jobs in Scotland will be under threat in the next year. Will the Government acknowledge that their energy policies need to be reviewed to allow the Scottish Government to continue with their competent and ambitious vision of a prosperous green future? Finally, when can we expect full details of the timetable of the investigation into this matter?
Greg Clark
A little humility might be appropriate here, because the Scottish Government provided oversight of this procurement as part of the NDA competition programme board. I am sure that the lessons to be learned from 2012 to 2014 also apply to the Government in Scotland. I am sure that, whatever the view on future new nuclear power, the people of Scotland, as well as those of the whole of the United Kingdom, would want the existing nuclear power stations to be decommissioned safely and to have arrangements in place to ensure that that can be done reliably. On the independent review, which I hope the hon. Lady welcomes, I have asked Mr Holliday to give some interim findings by October, so that they can inform the further decisions about the re-letting of the contract.
Sir Oliver Letwin (West Dorset) (Con)
I am sure that my right hon. Friend will pay no attention whatsoever to the bizarre asseverations of the Scottish National party spokesman. In asking Steve Holliday, in whom we have considerable confidence, to do this review, I hope that my right hon. Friend will seek to bring the review to a final conclusion reasonably soon after the interim report in October so that we can get to the bottom of this matter and ensure that it does not repeat itself in future years.
Greg Clark
I agree with my right hon. Friend: it is important quickly to learn the lessons and to apply them. This is very important work. The work is being carried out to a high standard, but those lessons must be learned and applied.
Mr Iain Wright (Hartlepool) (Lab)
May I thank the Secretary of State for his courtesy call on this matter this morning and for his subsequent letter? The Business, Energy and Industrial Strategy Committee will challenge hard, but work constructively with him and with Steve Holliday on this important issue. Will he clarify whether the inquiry will be confined to the procurement process, which led to this specific contract? Will it consider other contracts such as the one to decommission Dounreay, which was awarded to essentially the same consortium that won the Magnox contract? I think that he has already confirmed this, but will he say whether the inquiry will be broad enough to consider whether the governance and management arrangements of the NDA have always been, and will continue to be, fit for purpose?
Greg Clark
I am grateful to the Chairman of the Select Committee for what he said. I can confirm that the governance and the management arrangements of the NDA are very much in scope. I put the terms of reference in the Library of both Houses of Parliament this morning. It is open to Mr Holliday to go where the evidence takes him—to use that phrase on this. The particular concern is over this contract, but if he feels that he needs to look at other aspects of the NDA’s management, he is absolutely free to do so.
Edward Argar (Charnwood) (Con)
I welcome the characteristic candour and openness with which the Secretary of State has approached the issue. Will he reassure me and the House that the scope of the inquiry will look not only at the NDA, but—as I think he just alluded to—at the role, if any, of UK Government Departments and the Scottish Government in the process?
Greg Clark
I will, indeed. The terms of reference that were published with my written statement this morning make it very clear that, as is absolutely right and proper, the inquiry applies to the NDA and Government Departments, from the beginning of the procurement in 2012 to the conclusion of the litigation and the termination of the contract.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Under current plans, Trawsfynydd power station will lose most of its jobs in less than 10 years. The Government are now in a position to commit to a programme of continuous decommissioning, as recommended by the Select Committee on Welsh Affairs. When will the Secretary of State publish revised plans following today’s announcement, and will he agree to meet me to discuss the future of the Trawsfynydd site?
Greg Clark
I will certainly meet the hon. Lady. I am glad that she has given me the opportunity to emphasise that the work will continue as planned at all the sites. As she will know, work is ahead of schedule in the plant she mentioned. In the light of that, I will meet her to update her on the latest timings.
Antoinette Sandbach (Eddisbury) (Con)
This was clearly a defective procurement with quite serious financial consequences. I welcome the Secretary of State’s determination that the reasons will be exposed, but will he assure the House that people found to be responsible or at fault will be brought to account?
Greg Clark
I can confirm that the terms of reference make it very clear that the inquiry can make any recommendations that it sees fit, including as to any disciplinary investigations or proceedings that may, in its view, be appropriate as a result of its findings.
Catherine West (Hornsey and Wood Green) (Lab)
Will the Secretary of State please confirm that the thousands of people waiting for an outcome on their pensions will not be ripped off?
Greg Clark
Yes. There have been constructive discussions with the representatives of the workforce. Those discussions and consultations continue. Of course, we want to bring them to a satisfactory conclusion.
Mike Freer (Finchley and Golders Green) (Con)
The NDA settlement payments are very substantial. Will my right hon. Friend confirm that although the payments were made without accepting liability, the cost had the potential to rise much further were the matter taken to court?
Greg Clark
My hon. Friend is absolutely right. We have a duty to consider the further risks to public money, which is why my accounting officer, the Chief Secretary to the Treasury and I accepted on advice that, however painful it is—these are significant sums of money, as my hon. Friend the Member for Finchley and Golders Green (Mike Freer) said—we should prevent the sums of money from being even greater.
Rob Marris (Wolverhampton South West) (Lab)
Given the cost problems with the NDA’s Magnox decommissioning contract, how can the Secretary of State have any confidence whatever in the cost figures for Hinkley Point C, which will itself need decommissioning, especially given the farce of the massive cost overruns and huge time delays in building the EDF sister reactors in Finland and Normandy, neither of which has yet opened and each of which is years late?
Greg Clark
This is about a procurement process that was mis-specified around decommissioning; it is not against the build costs of a future reactor. If Steve Holliday’s report includes wider lessons for the industry, we will be sure to take them.
Huw Merriman (Bexhill and Battle) (Con)
All public sector organisations can learn much from procurement processes and public-private initiatives, as the £3,700 a minute spent by the NHS on private finance initiatives would attest. Will the Secretary of State assure me that all public sector organisations will be given the opportunity to learn best practice from the Holliday review?
Greg Clark
I will. It is important when there is such a serious set of consequences for public money that the conclusions should be publicly available, and available to this House and to other Government Departments that may want to reflect on them.
Mr David Nuttall (Bury North) (Con)
Will the Secretary of State confirm that the Holliday inquiry will have reached its final conclusions and issued its final report in time for any lessons learned to be taken into account before the new contract process begins?
Greg Clark
One reason I have asked Mr Holliday to make a report by October is so that that can happen. I will meet him in the coming days, as he sets out the scope and timetable, but that is one of the key reasons for the report, and I am sure he will want to make his recommendations available for the new process.
Mr Dennis Skinner (Bolsover) (Lab)
What were the terms of the pay-off? The Secretary of State has not mentioned it.
Greg Clark
I have mentioned the settlement—it is nearly £100 million for the settlement of the litigation. The chief executive of the NDA has come to the end of his contract.
BEIS Non-departmental Bodies
Greg Clark Excerpts(7 years, 1 month ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
I would like to inform the House that the Nuclear Decommissioning Authority (NDA) has today announced its decision to terminate its contract with Cavendish Fluor Partnership (CFP) for the management and decommissioning of 12 redundant Magnox sites (including two research sites) which, together with the Calder Hall reactor on the Sellafield site, formed the UK’s first fleet of nuclear power stations.
The NDA ran a £6.1 billion tender process from April 2012 which resulted in a 14 year contract being awarded in September 2014 to the Cavendish Fluor Partnership—a joint venture between the British firm Cavendish Nuclear, a subsidiary of Babcock International, and the US company Fluor Inc. This decision was approved by the then Department for Energy and Climate Change and HM Treasury.
CFP started work on the Magnox estate on 1 September 2014.There then started a process to ensure that the scope of the contract assumed in the 2012 tender matched the actual status of the decommissioning to be done on each site—a process known as consolidation.
It has become clear to the NDA through this consolidation process that there is a significant mismatch between the work that was specified in the contract as tendered in 2012 and awarded in 2014, and the work that actually needs to be done.
The scale of the additional work is such that the NDA board considers that it would amount to a material change to the specification on which bidders were invited in 2012 to tender.
In the light of this, the NDA board, headed by a new Chair and Chief Executive, has concluded that it should exercise its right to terminate the contract on two years’ notice. The contract will be terminated in September 2019, after five years rather than its full term of 14 years. This termination is made with the agreement of CFP.
Dealing safely with the UK’s nuclear legacy is fundamental and non-negotiable. It is important to emphasise that this termination is no reflection on the performance of Cavendish Nuclear or Fluor, and work on decommissioning at all the sites will continue with the management of CFP for a further two and a half years.
During this period, the NDA will establish arrangements for a replacement contracting structure to be put in place when the current contract ends. This work will be led by the NDA’s new Chief Executive, David Peattie.
I have every confidence that CFP will continue to deliver to high standards during the remainder of the contract.
Although this decision is one made by the board of the NDA, it requires the consent of myself, the Chief Secretary to the Treasury and the Accounting Officer of my Department. That consent has been given.
We have a responsibility to ensure that the NDA’s decisions reflect its legal obligations, including under procurement law, that further risks to taxpayers’ money are contained and that robust arrangements are put in place to deliver this essential decommissioning programme.
In addition I can announce today that the NDA has settled outstanding litigation claims against it by Energy Solutions and Bechtel, in relation to the 2014 Magnox contract award.
The NDA was found by the High Court in its judgment of 29 July 2016 to have wrongly decided the outcome of the procurement process.
As part of the settlements, NDA has withdrawn its appeal against the judgment. While these settlements were made without admission of liability on either side, it is clear that this 2012 tender process, which was for a value of up to £6.1 billion, was flawed. The NDA has agreed settlement payments with Energy Solutions of £76.5 million, plus £8.5 million of costs, and with Bechtel of $14.8 million, plus costs of around £462,000—approximately £12.5 million in total.
These are very substantial costs and had the potential to rise much further if the case had proceeded to trial.
Taxpayers must be able to be confident that public bodies are operating effectively and securing value for money. Where this has not been achieved such bodies should be subject to rigorous scrutiny.
I am therefore establishing today an independent inquiry into the conduct of the 2012 procurement process and the reasons why the 2014 contract proved unsustainable. These are separate issues but both need to be examined thoroughly by an authoritative and independent expert.
I have asked Mr Steve Holliday, the former Chief Executive of National Grid, to lead the inquiry. The inquiry will take a ‘cradle to grave’ approach beginning with the NDA’s procurement and ending with the contract termination.
The inquiry will also review the conduct of the NDA and of Government Departments and make any recommendations it sees fit—including what further investigations or proceedings, for example possible disciplinary proceedings, may be required as a result of its findings.
The terms of reference for Mr Holliday’s inquiry will be placed in the Libraries of both Houses. Mr Holliday will report jointly to me and to the Cabinet Secretary, and his report will be made available to this House, including to the Business, Energy and Industrial Strategy Committee.
This was a defective procurement, with significant financial consequences, and I am determined that the reasons for it should be exposed and understood; that those responsible should properly be held to account; and that it should never happen again.
[HCWS554]
Oral Answers to Questions
Greg Clark Excerpts(7 years, 2 months ago)
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Justin Tomlinson (North Swindon) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The UK’s space sector is world leading. A quarter of the world’s telecommunication satellites are either built here or are built with key UK components. Our recently announced draft Spaceflight Bill will enable UK businesses to enter a global market worth an expected £25 billion over the next 20 years. Our industrial strategy will ensure that we build on that and continue to be a global leader in this very important sector.
Justin Tomlinson
Many people think that my constituency, North Swindon, is out of this world, and they are not wrong, as we are home to the UK Space Agency. Will the Secretary of State therefore tell me how the upcoming Spaceflight Bill will enable the UK to build on its strengths in science, research and innovation?
Greg Clark
North Swindon has a stellar Member of Parliament, too. The space sector is one of our most important industries, and the Spaceflight Bill, in particular, will move us forwards and enable us to be in the business not only of manufacturing satellites but of launching them, which will give us further industrial opportunities from which not only Swindon but the whole UK can benefit.
Ian C. Lucas (Wrexham) (Lab)
The collaborative approach of the UK aerospace sector is one of the lessons that the Government need to remember in the difficult years ahead. Will the Secretary of State please come to one of the most important aerospace sectors in the country in north-east Wales to see its excellent work and the potential threats to one of the most successful industries in our country?
Greg Clark
The hon. Gentleman is absolutely right. One of the reasons why the space and satellite sector has been so successful is the collaboration between the firms, the Government and the research institutions, which is the way forward. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), will visit north Wales and the facilities that the hon. Member for Wrexham (Ian C. Lucas) mentions, and I look forward to hearing all about it.
Mr Steve Baker (Wycombe) (Con)
Greg Clark
I am glad that my hon. Friend is not questioning me on inertia ratios and matrices. The capacity is there, but it requires planning ahead. That is why the industrial strategy mentions the need to invest in science and research and development—it is important that we do that—and the need to look forward to make sure that we have the skills in the workforce to fulfil the order books. The purpose of having a long-term industrial strategy is so that we are prepared to reap those very opportunities.
Carol Monaghan (Glasgow North West) (SNP)
James Morris (Halesowen and Rowley Regis) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Last week, we published the midlands engine strategy. It is further demonstration that this Government are committed to investing in the midlands, a region that has seen over 180,000 more people in employment since 2010.
Lucy Allan
I thank the Minister for his reply. Telford is seeing increasing inward investment from businesses in the automotive supply chain such as Polytec and Magna’s Cosma, bringing real jobs and growth to Telford. Does he agree that Telford, with its reputation for innovation and advanced manufacturing, is set to play a key role in the midlands engine strategy, and will he congratulate those businesses on helping to build a successful future for Telford?
Greg Clark
I will indeed. My hon. Friend’s constituency, which includes Coalbrookdale, has a good claim to be the cradle of the first industrial revolution—[Interruption.] It is perhaps a disputed claim, but I think Abraham Darby, in 1709, was fairly early. However, now, Telford is at the heart of the fourth industrial revolution, as my hon. Friend says. The T54 site is proving to be a very important location for automotive sector supply chain.
James Morris
Does the Secretary of State agree that one pivotal thing that needs to be in an industrial strategy for the west midlands is closing the skills gap that has held back the west midlands for too long, so that areas such as the black country can continue to work to become leading specialists in things such as aerospace, automotive and advanced manufacturing, which are critical to the agenda of the Conservative candidate for west midlands Mayor, Andy Street?
Greg Clark
I agree with my hon. Friend—he is absolutely right. The reputation of the black country is very strong. There is the phrase
“Made in the Black Country, Sold around the World”,
but to fulfil that we need good skills. Andy Street, being a person of great business experience, is the best person available to bring that business acumen to bringing more businesses to the whole of the west midlands.
Mr Speaker
Order. This is supposed to be about an industrial strategy, rather than an electoral strategy, but there you go.
Rob Marris (Wolverhampton South West) (Lab)
In passing, may I say that it was the black country that was the birthplace of the industrial revolution, not Coalbrookdale? However, on transport spending, which is key to the industrial strategy for the west midlands, when does the Secretary of State expect to persuade his colleague the Secretary of State for Transport to spend as much per capita in the west midlands as in London?
Greg Clark
The hon. Gentleman, who is an assiduous reader of these things, will see that, in the industrial strategy, we propose a commitment to upgrade infrastructure right across the country. I hope he will respond to that so that when we have the Budget later in the year, we will be in a position to make further such announcements.
Craig Tracey (North Warwickshire) (Con)
Greg Clark
The self-employed have an important role to play. One trend that colleagues on both sides of the House will know of is that the development of supply chains is one of the key sources of innovation in many industries. Within that, start-up businesses, including those run by the self-employed, can make a big contribution to making us attractive for jobs and new businesses.
Christian Matheson (City of Chester) (Lab)
Louise Haigh (Sheffield, Heeley) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
We have had great success over the years in developing key sectors, including aerospace and the automotive sector. To build on this, we have set out proposals for new business-led sector deals in the industrial strategy. The first set of deals is already under development. We are taking steps to drive growth in sectors across the economy, including with funding for science, infrastructure and technical education.
Christian Matheson
Does the Secretary of State share my concern that the implementation of an industrial strategy led by the big players will focus solely on the big players? What is he doing to ensure that the small and medium-sized enterprises in those sectors, which are often the engine rooms, get their fair say and their fair share?
Greg Clark
I assure the hon. Gentleman that that is not the case. I have regular discussions with the Federation of Small Businesses, the British Chambers of Commerce and smaller businesses right across the country. The supply chain, and making our country more attractive to supply chain businesses, are absolutely foundational to our industrial success, and that involves a particular regard for small businesses.
Louise Haigh
Cyber-security is one of the most important sectors for this country’s growth, but the UK has the highest skills gap in cyber-security in the world. Does the Secretary of State think that the Government’s current commitment to educate 1% of our students in cyber-security by 2021 is anywhere near good enough?
Greg Clark
The hon. Lady makes a very good point. If we are to take advantage of the opportunities that exist, we need to upgrade our technical education. That is why in last week’s Budget the Chancellor made such a clear commitment, prominent in the industrial strategy, to transform the level of technical education, including to increase by 50% the hours of tuition that are available. Cyber-security is one of the areas in which I would expect that to be applied.
Lucy Frazer (South East Cambridgeshire) (Con)
Greg Clark
Yes. I would expect all competitive areas to make a bid for these places. The University of Cambridge and Anglia Ruskin University in Cambridgeshire, and other institutions more broadly across the country, will be in a good position to benefit from that.
Andrew Stephenson (Pendle) (Con)
Greg Clark
My hon. Friend is absolutely right. This is an important sector, as has been evident from our discussions this morning. That reflects the track record of working together that will continue and be reinforced. I think that all Members across the House will have been as delighted as I was that Boeing made its commitment to its first ever UK plant in Sheffield, showing how attractive we are to advanced manufacturing businesses such as that.
Rebecca Long Bailey (Salford and Eccles) (Lab)
The BEIS Committee’s recent report stated that the industrial strategy Green Paper
“provides little clarity on how…sectoral deals will work in practice”,
and that it appears to lack “political will”, falling short of
“providing a clear framework for decision making in the long term.”
Is it lack of clarity or lack of political will that has led to a bespoke Brexit deal for certain manufacturers while leaving others, and indeed other industries, in a state of uncertainty?
Greg Clark
May I welcome the hon. Lady to her first BEIS oral questions? I see her predecessor behind her. She is, I think, my third opposite number in the eight months that I have had this job. The first was appointed in the summer, the second in the autumn, and she was appointed in the winter. I noticed this week that the birds were singing and the sun was out, so I hope that is not bad news for the hon. Lady. On her points about the industrial strategy, the sector deals that we have proposed have been widely welcomed. We have set out a number of initial deals in, for example, life sciences and the creative industries. We are already talking to other sectors such as the steel sector, and a lot of colleagues in the House will want to see that taken forward.
Rebecca Long Bailey
Oh, the Secretary of State is cheeky! He might want to refer to the report, because it also states that the White Paper on exiting the EU failed to meaningfully refer to an industrial strategy
“and reinforces a lack of coordination between the Government’s major challenge and its principal plank of business policy.”
Given that last week’s Budget failed to mention Brexit or the industrial strategy, does the Secretary of State agree with the recent Foreign Affairs Committee report that the Government have provided “no evidence” of industrial contingency planning in the event of no deal? If that is so, what is his no deal plan?
Greg Clark
I say gently to the hon. Lady that she will have to do a bit better than that. I have the Budget here. She says that it does not mention the industrial strategy. I can tell her that it is mentioned in the first paragraph on the first page, and throughout. Given her interest in this, she ought to read the Budget.
Mary Robinson (Cheadle) (Con)
Greg Clark
In my hon. Friend’s area, as in every area of the country, the opportunities for the supply chain to be attracted to and to locate in this country—to supply the major manufacturers and service providers, but also to export around the world—is one of the key themes emerging from the sector deals that are being negotiated.
Pat Glass (North West Durham) (Lab)
Sir Desmond Swayne (New Forest West) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
I will respond shortly to the Competition and Markets Authority report, and I will take steps to increase competition and help consumers.
Sir Desmond Swayne
If the Secretary of State is successful in engendering much greater competition, will we need a regulator at all?
Greg Clark
The aim of Government policy must be to have such vigorous competition in markets that that takes care of itself. Unfortunately, I do not think we are in that position, so I am determined to make sure that customers are treated fairly.
David Rutley (Macclesfield) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
As well as continuing the consultation on our industrial strategy Green Paper, we are acting on its diagnosis. Last week’s Budget set out our plan to transform technical education—increasing the hours students are taught by 50%, increasing funding for technical education by £500 million a year and establishing new institutes of technology. We announced in the Budget the first £270 million of projects under the industrial strategy challenge fund, including a world-leading investment in the development, design and manufacture of batteries to power the next generation of electric vehicles, and we announced a £100 million fellowship fund to attract the world’s brightest minds to come and work in the United Kingdom.
David Rutley
I am pleased that my right hon. Friend is planning to visit AstraZeneca’s Macclesfield site, the largest pharmaceutical site in the United Kingdom, in the near future. Will he tell the House what plans the Government have to support the life sciences further as part of its northern powerhouse strategy?
Greg Clark
My hon. Friend, who is a great champion of the life sciences as well as of the Cheshire economy, knows that the opportunity to negotiate a sector deal for life sciences, which is being led by Sir John Bell, will be good for the whole country, but will have particular relevance to Cheshire and Macclesfield. I am looking forward to visiting his constituency to see the facilities for myself.
Ian Austin (Dudley North) (Lab)
Greg Clark
Having dipped my toes into controversy by talking about places with claims to be the cradle of the industrial revolution, I am certainly not going to nominate the best local newspaper in the country—suffice it to say that I gather the Foreign Secretary began his illustrious career on the Express & Star, although I do not know whether that shows its prescience, or whether it has recovered from that particular judgment. Local newspapers make a vital contribution to the success of local business, and I am delighted to hear about the initiative that the Express & Star is promoting.
Kelly Tolhurst (Rochester and Strood) (Con)
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Greg Clark
Making ourselves attractive as a country to the workforce and making sure that we are the best place to operate a business and to work is an important theme of the strategy. I look forward to the hon. Lady’s contribution to the consultation, and if that issue does not have the emphasis that she thinks it needs, we will have the opportunity to address that.
Jeremy Lefroy (Stafford) (Con)
Ms Angela Eagle (Wallasey) (Lab)
Tom Tugendhat (Tonbridge and Malling) (Con)
Tom Pursglove (Corby) (Con)
When I visited the Corby steelworks on Friday, there was real enthusiasm for a sector deal for the steel industry and a real commitment to ongoing partnership working. Is my right hon. Friend the Secretary of State willing to visit the Corby works to discuss those opportunities?
Greg Clark
I would be delighted to visit Corby with my hon. Friend. He is absolutely right—my discussions with the steel industry show a real appetite for a long-term sector deal to secure the future of the steel industry.
Richard Arkless (Dumfries and Galloway) (SNP)
Greg Clark
As my hon. Friend knows, in the growth deals that are part of the midlands engine there is support, through local enterprise partnerships, for small businesses—both start-ups and growing businesses.
Mr Iain Wright (Hartlepool) (Lab)
Following npower’s 15% price hike last month, the Government pledged that
“where markets are not working we are prepared to act.”
E.ON raised its prices by 14% last week and SSE by 8% yesterday. How many more companies need to raise their prices before the Government actually act to stop energy customers getting fleeced?
Greg Clark
The hon. Gentleman is absolutely right that that behaviour is unacceptable. It has been reported by Ofgem that there is no reason to increase prices. We have committed to a Green Paper on consumer markets, which will be published very shortly. The time is up for these companies.
Robert Courts (Witney) (Con)
As the recently elected chair of the all-party group for small and micro business, I know that access to finance in the early years is a real challenge for small businesses. What advice could the Minister give to those in my constituency who are looking for access to finance in the early years?
Andrew Stephenson (Pendle) (Con)
On Friday, I visited Graham Engineering, in Nelson. It is an excellent company in the nuclear supply chain that currently has 30 new vacancies, which will be on offer at my seventh annual Pendle jobs fair on 24 March. What more can we do to support the nuclear supply chain?
Greg Clark
One of the things that we have done to support the nuclear supply chain is to have a continuing commitment to nuclear power in this country, and that will benefit my hon. Friend’s constituents. Through our network of training colleges, we will make sure that we grow the nuclear skills that we need for this industry.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I thought the Minister was a touch complacent in his earlier answer on smart meters given that this will cost the taxpayer £11 billion by the end of the Parliament. What is he going to do about the fact that they do not work when a customer switches supplier?
Melanie Onn (Great Grimsby) (Lab)
The digital strategy is a key component of the Government’s industrial strategy. Can the Secretary of State do better than the Department for Culture, Media and Sport and tell me which companies have committed to work in Great Grimsby as part of the digital skills partnership?
Greg Clark
The whole of the industrial strategy is an invitation to businesses in every sector to come forward and propose to the Government what is required to grow jobs and skills. That is the invitation to all digital companies.
Greg Mulholland (Leeds North West) (LD)
The Pubs Code Adjudicator Paul Newby failed to declare a much more fundamental direct conflict of interest than Charlotte Hogg, yet Ministers are ignoring it. Tomorrow, tenants will protest outside his office. How long will Ministers keep failing to do their duty and not face up to this situation?
Opel/Vauxhall: Sale to PSA Group
Greg Clark Excerpts(7 years, 2 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of Opel/Vauxhall to PSA Group.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
This morning the boards of General Motors and PSA Group announced plans for PSA to acquire GM’s Vauxhall/Opel operations. The proposed deal is expected to be completed by the end of this year.
The Prime Minister and I have been engaged in discussions with both GM and PSA, and with the French and German Governments, to ensure that the terms of the agreement can give confidence to Vauxhall’s UK workforce now and for the future. Vauxhall is an iconic, important and successful British car manufacturer. Vauxhall cars have been made in Britain for 113 years, and we are determined that that should continue to be the case for many years to come.
The car plants at Ellesmere Port and Luton have a proud record of being among the most efficient in Europe, with workforces that are skilled, committed and flexible. Both PSA and GM have confirmed to the Prime Minister and me a number of important commitments, including that the company will honour its agreements with the Vauxhall workforce; that Vauxhall pensioners will be in at least as good a position as they are today; that the treatment of the UK division will be equal to that of other countries in the Vauxhall/Opel group; that the identity of Vauxhall will continue to be distinct and prominent; that the strategy of the new company will be one of building on existing strengths and commitments, not on plant closures, taking opportunities to increase sales around the world; and that the company will work with me and the rest of the automotive sector to ensure that it can participate in a substantial programme of research and investment for innovation in areas such as electric vehicles and battery technology, which is part of our industrial strategy.
This morning I had a further conversation with my French counterpart the industry Minister, and my hon. Friend the Minister for Climate Change and Industry spoke again to his German counterpart to agree a consistent approach. I speak frequently with Len McCluskey, the general secretary of the largest trade union at Vauxhall, and I have kept, and will keep, colleagues with particular constituency interests up to date at all times.
It is in everyone’s interests that Vauxhall should look forward to a successful future. A generation ago, the British car industry epitomised our economic woes; today that industry is a beacon of success. Companies invest in Britain because our automotive sector has a high-quality workforce and world-class efficiency, and is part of one of the most exciting places on earth for innovation and research in new technology. The future of the motor industry is bright in Britain, and we will be active at all times in doing everything that we can to make it brighter still.
Rebecca Long Bailey
I thank the Secretary of State for that positive response, but I would like further clarification on a number of issues.
First, although I welcome PSA’s promise to honour existing contracts, I am deeply concerned about the 40,000 workers who are currently employed at Luton and Ellesmere Port and in the wider supply chain, who will be worried about the future of their jobs. What assurances has the Secretary of State personally received about the future of Vauxhall’s plants and the wider UK workforce beyond existing contracts? During his discussions with PSA, did it confirm that the production of the new Astra model would take place in the UK?
Secondly, there has been some discussion about the £1 billion deficit in General Motors’ UK pension scheme, with some commentators stating that it could have jeopardised the deal. The scheme has 15,000 members and is one of the largest in the UK. Can the Secretary of State assure the House that the pensions of the UK workforce are guaranteed in full?
Thirdly, it is increasingly clear that the Government have little power to ensure that certain corporate takeovers are in the public interest and accord with Britain’s industrial strategy. Existing legislation allows intervention only when matters relate to national security or media concentration. Does the Secretary of State have any plans to broaden the definition of public interest, for example to serve stakeholders and not just shareholders? If so, when will he publish the draft legislation?
Finally, what support has been offered to PSA following Britain’s exit from the European Union? We welcomed Nissan’s decision to remain in the UK as a result of assurances provided by this Government. Has PSA been offered the same deal? If so, would it not make sense for the Government to set out their strategy for this sector as a whole, rather than enlightening businesses one crisis at a time?
Greg Clark
I am grateful to the hon. Lady for her questions. The last two weeks have been worrying times for the workforce. The statements that have been made by both parties today have been welcomed—not just by me, but by the trade unions—as steps in the right direction. It is important that we should hold the company to account on that.
On the points that the hon. Lady mentioned, PSA has said that it will honour GM’s agreements with the unions, which extend to at least 2021. In the motor industry, as she will know, new models come in at various points. We are fortunate that both the principal models in the UK are at quite an early stage in the cycle. I want, as I am sure she does, both plants to be competitive in expanding their production in the years to come.
I have discussed pensions regularly and in detail with GM and PSA. They have given an absolute commitment that no pensioner—current or prospective—will be worse off in any way. Of course, the Pensions Regulator, which is independent of the Government, is required to confirm any changes in pension arrangements.
In terms of the takeover regime generally, the hon. Lady will know that, in this case, one overseas-owned company is being taken over by another; we are not talking about a listed UK company that falls within the UK merger regime. In discussions with my counterparts in France and Germany, I have agreed that we should take a consistent approach on the assurances that are needed. The trade unions are equally in contact with their opposite numbers in other countries.
In terms of the support available to the automotive sector, as I mentioned to colleagues a few moments ago, that sector has been a great success in this country. One of the foundations of that success is the co-operation that we have had—Government to sector, and within the sector through the Automotive Council—to invest in research and development, particularly for electric vehicles and battery storage, and to make sure that we have institutions to train the future workforce. That has been a great success, and I hope that the future owners of Vauxhall will participate in the same way as other successful UK motor industry players have done.
Alistair Burt (North East Bedfordshire) (Con)
I thank my right hon. Friend for his statement and his engagement with those of us who represent employees in the areas concerned—in my case, Luton. I would be grateful if he indicated what reassurance has been given to PSA in recognition of the fact that part of the strength of the Luton plant arises from the quality of the supply chain and the investment that has been made in it over recent years. I hope that he can give us some reassurance, because an understanding of that position will help to secure jobs not just at Luton, but in the supply chain, which is so important to the home counties area around Bedfordshire.
Greg Clark
I agree with my right hon. Friend. We are talking about both the workforce directly employed by Vauxhall and the substantial employment in the supply chain. Both are very important, so this has been part of our discussions. I think that there is every opportunity—I will be vigorous in pursuing it—to expand the supply chain that supplies not only the Vauxhall plants, but other plants in this country. In the context of our industrial strategy, that is one of the avenues that we intend to expand on during the months ahead.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I congratulate the hon. Member for Salford and Eccles (Rebecca Long Bailey) on securing this urgent question. I welcome the Secretary of State’s initial comments regarding guarantees on pensions and short-term jobs, which are welcome. Even then, we have to appreciate that workers are clearly experiencing some uncertainty.
I know from manufacturing plants in my constituency that being efficient does not necessarily protect them from wider politics. It is quite clear from media vox pops that some of the workers are concerned about the future impact of Brexit, given the wider European plants that they are combining with. To repeat the earlier question, what guarantees has the Secretary of State got for the wider supply chain for components, given that we are now talking about a much bigger multinational company? Has he had any discussions about the effect that the UK being outwith the customs union would have on costs and component supply for UK plants? What discussions has he had with the Chancellor about the provision of R and D money out of the £23 billion so-called investment fund, which is clearly needed to do what he talked about—to support these plants, and continue the development of electric vehicles and battery storage?
Greg Clark
I am grateful to the hon. Gentleman for his question. On the first point, it is evident that these discussions are about the restructuring of GM’s operations and are not tied to Brexit. With regard to the supply chain, there are opportunities. It is very clear that PSA has been talking about expanding its production, and that should create further opportunities for the supply chain, which I intend to pursue in this country. Research and development has been an area of success for us, as is recognised by companies in the sector. With the industrial strategy challenge fund, which was announced in the autumn statement, we made a specific commitment to expand our research into battery technology in particular, and that will be very attractive to suppliers in this sector.
Andrew Selous (South West Bedfordshire) (Con)
May I ask the Secretary of State what he has learned about PSA’s plans to build ultra-low emission vehicles in the United Kingdom—whether electric, hybrid, hydrogen or indeed liquefied petroleum gas—all of which there will be increasing demand for in the future, not least as we meet our air quality objectives?
Greg Clark
My hon. Friend is absolutely right. We have had many discussions about opportunities for expanding the manufacture and provision of ultra-low emission vehicles. This country has a very good reputation as a hotbed of research in that area, and PSA wants to expand its exposure to that and is doing so. I am determined that we should seize the opportunity that that gives us for our sector to go from strength to strength.
Mr Iain Wright (Hartlepool) (Lab)
The plants at Luton and Ellesmere Port are productive and efficient. They have a highly skilled workforce that any company would be proud to employ—this is not a basket-case industry—but in the face of strong foreign Government support, we need an active and interventionist Government who are determined to safeguard these competitive skills and manufacturing assets for Britain. If the new enterprise plans to become profitable through the development of products and the supply chain, and by moving the production of Opel cars on to PSA assembly lines, what specific things will the Government pledge to do both to win the new model Astra for Britain and to develop this country’s automotive supply chain?
Greg Clark
The Chairman of the Business, Energy and Industrial Strategy Committee is absolutely right. I do not think that anyone in PSA and GM, or in the French and German Governments, would think that we have been anything other than completely active in promoting the strengths of the UK. He is absolutely right: the presence of those factories in this country is not a matter of altruism; they are efficient and they make a great contribution to the performance of the company. We will build on that through the industrial strategy. I have mentioned research and development on electric vehicles, and the training and development of the workforce is a very important asset. We have a good workforce there, which we need to keep equipped for the future. He will see in the industrial strategy, as it develops, a renewed commitment to research and training in the auto sector.
Amanda Milling (Cannock Chase) (Con)
My right hon. Friend outlined how the UK automotive industry has been a huge success in recent years, and he has mentioned the industrial strategy a number of times. Will he provide a little more detail about how the industrial strategy will help us to ensure that the automotive industry continues to develop and grow?
Greg Clark
I will, indeed, and I am grateful to my hon. Friend for her question. I have mentioned two areas in particular. On research and development, bringing together our universities and research institutions with the companies in the sector through the Automotive Council is very important. On the training of people who are going to work in the sector, I have had the pleasure of visiting the campus of Warwick University, where the automotive innovation centre is being built with a school for apprentices that will train 1,000 apprentices a year to work in this sector, and those are important developments. I have mentioned the supply chain, and through the industrial strategy we will make Britain even more attractive, particularly for smaller and medium-sized enterprises to service the major companies.
Justin Madders (Ellesmere Port and Neston) (Lab)
I thank the Secretary of State for keeping colleagues informed as matters have developed. It is clearly good news that we have a guarantee that production will continue until the end of the current Astra run at Ellesmere Port, but there is a deep concern in the community about what will happen after that. The noises that we have heard from PSA so far have been about plants being judged on their efficiency. I am very confident that, with the track record we have at Ellesmere Port of unions and management working together, we can put a very good case forward. However, there are things beyond their control, which is where the Government can step in, whether on business rates, procurement or the supply chain. I would like assurances from the Secretary of State that he will do everything in his power to ensure that we have a competitive environment for the Ellesmere Port and Luton plants.
Greg Clark
I will indeed. I will work with any hon. Member who has an interest in securing the future of this company and others in our economy. The hon. Gentleman is absolutely right. The fact that plants will be judged, as they tend to be in the automotive sector for new models, on the basis of competitive efficiency is a strength for us in this country, because our automotive plants are the strongest in the world. I would rather we competed on efficiency. I will work, through the Automotive Council and our industrial strategy, to ensure that all the competitive elements that have been so successful to date will continue and increase.
David Rutley (Macclesfield) (Con)
Like my right hon. Friend and other Cheshire Members, I want to ensure that the renaissance we have seen in the automotive sector in recent years continues for decades to come. Will my right hon. Friend tell the House what steps he will take to improve technical skills and apprenticeships to ensure that automotive manufacturers in Cheshire and elsewhere in the north-west get the support they need in the years ahead?
Greg Clark
My hon. Friend is absolutely right. I pay tribute again to the workforce in both plants and in Vauxhall’s other operations in this country. They are efficient and highly committed, and they have been very flexible. As technology changes, we need to keep their skills up to date. The automotive sector is aware of that and is working with the Government on institutions to train not just apprentices, but other people in the industry. That will have my full-hearted commitment.
Kelvin Hopkins (Luton North) (Lab)
The Secretary of State will be aware that the Luton workforce are brilliant. They produce a superb vehicle. Today’s news is very positive, but Britain is still a net importer of motor vehicle products, in particular high value added components. Will he discuss with PSA the possibility of developing more high value added production in the supply chain over here, particularly in view of the recent depreciation of sterling, which looks likely to be permanent?
Greg Clark
I am grateful to the hon. Gentleman for his engagement over the past few weeks. He knows the workforce in Luton well and what he says about them is absolutely right. There is a big opportunity across the automotive sector to increase the supply chain. It is one of the areas where we can make further progress in what is already a successful sector. We will do that through the industrial strategy and it will have my personal engagement.
Sir Desmond Swayne (New Forest West) (Con)
Might that opportunity to increase the UK component of the component supply chain be increased if there is to be a change in our relationship with the internal market?
Greg Clark
We want to make sure that we have the best possible trading relationship with the rest of the single market, but whether we were leaving or staying in the EU the opportunity to get more suppliers in this country is there, and I am determined that we should take it.
Ms Angela Eagle (Wallasey) (Lab)
I have constituents who work in the Ellesmere Port plant and many others are reliant for their employment on local supply chains, so this is causing huge worry in the area. What can the Secretary of State say to reassure my constituents about the future, particularly given that our employment laws make it easier to sack workers in the UK compared with those who work in France and Germany, which puts them at an immediate disadvantage? What can he say to reassure them about the fact that we are leaving the EU and the single market, which again potentially puts them at a disadvantage in the competition to come?
Greg Clark
What I would say to the hon. Lady is, first, that the reason we have a successful record in this country is that our car plants and their workforces are highly efficient, and we should not forget that. Secondly, the commitments given—they have been shared with the trade unions—are to honour agreements that include the trade unions, which I think she will welcome. In the long term, we want to expand the industry. We want to take every opportunity to work with the automotive sector to increase the number of good jobs available to her constituents and people across the country.
Andrew Stephenson (Pendle) (Con)
I welcome PSA’s assurances that it will continue to respect the commitments made by General Motors to Vauxhall’s employees and, very importantly, Vauxhall’s pensioners. Can the Secretary of State assure us that he will continue to engage and work with PSA in the weeks and months to come to ensure not only that any assurances are kept, but that PSA will continue to build on the success of both plants for the long term?
Greg Clark
I will indeed. As soon as we heard about these proposals, my colleagues and I engaged immediately with the management and the unions of this country and with our counterparts. My engagement in our activity will not let up in the weeks ahead. These assurances are welcome, as everyone has noted, but we need to make sure that they are implemented in practice.
Christian Matheson (City of Chester) (Lab)
I echo the thanks to the Secretary of State for his efforts to keep those of us with a constituency interest involved. I am most grateful to him. Does he accept that our car industry is at a competitive disadvantage compared with those in other European countries because of the way that business rates operate, and that when new plant is installed, it increases business rate costs? Will he speak to his colleagues in the Government to see if we can find a way around this disincentive to invest?
Greg Clark
I am grateful to the hon. Gentleman for his kind words, but I remind him and colleagues that this country is a competitive place in which to do business, including in the car manufacturing sector. Different countries will have different policies. I am determined to make sure that we are competitive and that we remain competitive so that we can expand our production in the future.
Tom Pursglove (Corby) (Con)
Will my right hon. Friend update us on any discussions he has had about this takeover with specific reference to steel supply chains?
Greg Clark
I have talked about the supply chain in general, and I think that there are opportunities right across the supply chain—from individual components to materials—and I want to make full use of that. We are discussing with the steel industry a steel sector deal, part of which is to make sure that there are bigger opportunities, especially by UK customers, to make greater use of steel products.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Is the Secretary of State aware that the reassurances he has obtained from Peugeot, welcome as they are, are very limited in extent and duration, and that it would probably not take much longer than that if it were decided to close one of the British factories, which is exactly what happened at Ryton in Coventry, as the hon. Member for Rugby (Mark Pawsey) would confirm? Is it not therefore the case that he cannot rest on the assurances at this point, such as they are, but must push and continue to push for the only reassurance that we really have, which is replacement models for the plants in the UK?
Greg Clark
The hon. Gentleman is right that we need to stay engaged and to make sure that these commitments are delivered. I will make sure that we do that, as will colleagues in the trade unions and others. I think the hon. Gentleman will agree that it is important that these commitments have been given very clearly in writing today, which is far better than the opposite. As for the experience of Peugeot in Ryton, he will know that I have raised the matter with the management of PSA in the past. They describe a very different strategy from that which they pursued at that time. It is a different management, and their strategy now is based on expanding production, not closing plants, which again I welcome.
Mark Pawsey (Rugby) (Con)
The Secretary of State is right to draw attention to the transformation that has happened in the motor industry since the days when PSA was running and operating at Ryton. We now have an industry with world-leading expertise in autonomous vehicles and electric technology, which my right hon. Friend saw from Jaguar Land Rover on his recent visit to Warwick University. Does he agree that this merger provides the PSA Group with an opportunity to access the innovation and creative thinking of our designers, and the flexibility and quality of our workforce?
Greg Clark
I completely agree with my hon. Friend. One of the big advantages of locating in this country is that manufacturers can join a vibrant consortium of people collaborating in a network, as at Warwick, which is recognised as a world-leading place to do automotive research. We want to build on that and attract more businesses to support it.
Alison McGovern (Wirral South) (Lab)
I support the Secretary of State’s approach. He is demanding of PSA, so he will understand if we are a little demanding of him when it comes to what he is going to do. May I ask him again—as did my hon. Friend the Member for City of Chester (Christian Matheson)—about the business rates regime as it relates to investment in plant and machinery? Has he asked the Chancellor to change it, yes or no?
Greg Clark
As I said to the hon. Member for City of Chester (Christian Matheson), the competitiveness of our automotive sector is high. I will ensure that, across the board, we retain a world-competitive—not just European-competitive—sector, and I will look into any aspect of that if it is brought to my attention.
Mr Peter Bone (Wellingborough) (Con)
I am sure that the whole House would like to thank the excellent Secretary of State for his efforts on behalf of Vauxhall. It was reported today that the chief executive of PSA had said that there would be no plant closures, and that jobs would be protected. He pointed out that he had never closed a plant in his life, and that he was actually seeking expansion. Might not the merger be good news for Vauxhall and its future?
Greg Clark
I hope that it is, and we should do everything we can to make sure that it is. A company that is committed to expansion has an opportunity to ensure that that includes the expansion of UK plants. It is an area in which we are strong and in which we have a high reputation, and this should be an opportunity for us to make what is good even better.
John Pugh (Southport) (LD)
I cannot help feeling that the Minister is being a little bit complacent. Some 76% of cars produced at Ellesmere Port are exported, but many of them are left-hand drive cars for Europe. Would it really make sense to Peugeot to continue left-hand drive production outside the EU, and not in Poland or Germany?
Greg Clark
I persuade companies to invest in Britain; I think that the hon. Gentleman is thinking up reasons for them to be put off. I believe that the efficiency and the innovation that we have in this country are what cause people to invest here, and I will do all that I can to make this a positive and expanding industry in the future.
Richard Burden (Birmingham, Northfield) (Lab)
The Secretary of State is right to acknowledge that today’s announcement underlines the importance of reinforcing the UK’s role as a centre for research, innovation and the development of connected and ultra-low emission vehicles. What more can be done to ensure that PSA and other manufacturers—I hope the Minister will pardon the expression—take a leaf out of Nissan’s and Jaguar Land Rover’s book, and make those vehicles in the UK as well?
Greg Clark
I agree with the hon. Gentleman, and I have enjoyed working with him to promote the automotive sector. I think that this is an opportunity for a company—PSA—that has not had the same footprint in Britain in recent years to join in and benefit from the advantages that accrue to those that participate in our industrial strategy through the Automotive Council, prominent among which is the opportunity to participate in our research programmes, in relation not just to electric vehicles but, as the hon. Gentleman says, to autonomous vehicles as well.
Tom Brake (Carshalton and Wallington) (LD)
The Secretary of State must support the long-term future of these very efficient plants and their highly qualified workforces by backing new models. Does he accept, however, that the long-term prospects of the plants are weaker as a result of Brexit and French ownership, and that he may have to offer an even better deal than the one that he offered to Nissan to secure their futures? Will he make that deal public, so that other industries that are also badly affected by Brexit can know what level of financial support they can expect from the Government?
Greg Clark
I am disappointed that the right hon. Gentleman began by, again, talking about negatives when there are big opportunities for the sector. In fact, Mr Tavares himself said today that opportunities were arising from Brexit. I have made absolutely clear what is available to any automotive manufacturer and member of the supply chain in this country: working with us through the sector and investing in research and development, the development of skills, and the expansion of the supply chain. That is an invitation to manufacturers throughout the world to come and invest in Britain, and if they do, they will find a ready partner in all of us in the House and the country.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
It was reported recently that the Government had offered the new owners of Vauxhall assurances similar to those given to Nissan. Will the Government commit themselves to full transparency in that regard, with full disclosure of promises made to PSA, and also place copies of any correspondence in the Library of the House?
Greg Clark
We could not have been clearer: we have said that all companies that are part of the UK automotive sector will be able to enjoy all the benefits of that in terms of research and development, trading and the expansion of the supply chain that we will see through the industrial strategy.
Mr David Hanson (Delyn) (Lab)
Hundreds in the excellent workforce at Vauxhall’s Ellesmere Port and many in its supply chain reside over the border in north-east Wales. Will the Secretary of State ensure that he liaises with the Welsh Government on one of their primary objectives, which is to ensure that we have tariff-free access to mainland European Union markets?
Greg Clark
I will work with our colleagues in Wales through the Secretary of State here and the Welsh Assembly Government. I and my Ministers will shortly meet Ministers in Wales to discuss the industrial strategy, and I imagine that Ken Skates and others will want to have those conversations with them.
Margaret Greenwood (Wirral West) (Lab)
I commend the Secretary of State for his dialogue with the trade unions and hope he is able to give us a commitment that he will continue that. Interestingly, he does not seem to be answering the questions on Brexit head-on. Many of my constituents work at Vauxhall’s Ellesmere Port plant, and they are very concerned about this. Given the risk that thousands of high-skilled jobs of the future may go, and given the importance of the plant to the region’s economy, what are the Government doing to ensure future EU market access for this industry and other important exporting industries?
Greg Clark
I am grateful for the hon. Lady’s kind words. We have made it very clear that our objectives as we start the negotiations—which obviously have not commenced yet, because we have not triggered article 50 —are about making sure that we can have access to the single market without impediments and without tariffs. But in any case, we are determined that our industry, whether the automotive sector, advanced manufacturing generally or the whole economy, will be competitive. The head of PSA himself said today that Brexit actually offers some opportunities, but the hon. Lady can have my assurance that I will do everything within my power to make sure that the terms of trade that we secure through our negotiations are as advantageous as possible.
Mrs Madeleine Moon (Bridgend) (Lab)
I thank the Secretary of State for his kind offer after last week to meet me later today along with colleagues representing seats along the south Wales M4 corridor to talk about what happened with Ford in Bridgend last week, but today we have another announcement. It looks as though we are going to have drip, drip, drip announcements, causing great anxiety to people in the automotive industry. I asked the Prime Minister if we could have a summit involving MPs, manufacturers and the trade unions; is it not now time to call such a summit, so that rather than companies being taken apart one by one, we can discuss this as a whole House?
Greg Clark
I am looking forward to meeting the hon. Lady with her colleagues later today, but I do not think that is the right way to think about what has been proposed between the two companies today. It is a transfer of the assets of GM in Europe to PSA. What is needed is activism and alacrity on every one of these investments. I make that commitment to the hon. Lady with respect to Ford, and when we meet later today we can talk about what is required in terms of those discussions.
Helen Goodman (Bishop Auckland) (Lab)
The Secretary of State knows that the efficiency of the plants is down to the industry and the policy is down to him. Does his activism go so far as he having yet instructed his officials to have conducted an impact assessment of the impact on the automotive sector of leaving the customs union?
Greg Clark
As the hon. Lady well knows—I can tell from her smile—what she asks applies to the debate in general about our negotiating position. Of course, as a member of the Cabinet I am a part of the discussions about our negotiations, but she will know that, in terms of the automotive and other sectors of the economy, I will do what I can to ensure not only that we get the best deal in our negotiations, but that we are a competitive force in the world whatever the result of them.
Mr Jim Cunningham (Coventry South) (Lab)
I welcome the Secretary of State’s announcement, but I would also add a word of caution. We had this situation in Coventry, in Baginton, in 2005. The then Government intervened and tried to do their best, and the workers were promised new models, but they never materialised. Jobs were brutally cut and the factories were totally cut. I do not want to pour cold water on the Secretary of State’s announcement, but he needs to be very careful, given what he is dealing with.
Greg Clark
I accept the hon. Gentleman’s advice, based on his experience. As I said earlier today, I am cautiously optimistic. I think that the commitments go in the right direction. Actually, the language that I have used is the language that Len McCluskey has used, and I dare say that he is a veteran of negotiations such as these. I think we all need to welcome a positive future for Vauxhall, but we also need to do everything we can to ensure that it is delivered.
Mr Dennis Skinner (Bolsover) (Lab)
Is the Minister aware that he has twice—twice!—praised Len McCluskey in this House, and that he has mentioned the trade unions as though they were part of the CBI five times? Is this the same Minister who walked through the Lobby to attack the trade unions’ authority and introduce that lousy Act of Parliament?
Greg Clark
I am not sure that Len McCluskey would want me to praise him. I think I acknowledged that we had been working together on this, as I hope the hon. Gentleman would expect. I hope that the hon. Gentleman, and every Member of this House, would want us all to put party political differences aside and to do what we can to secure jobs in every constituency in this country represented by colleagues here.
Departmental Contingency Liability: Postal Services Holding Company Ltd
Greg Clark Excerpts(7 years, 2 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Government intend to put the Postal Services Holding Company Limited into voluntary liquidation on 30 March 2017. This company, previously known as Royal Mail Holdings plc, is wholly owned by Government.
The Government have decided that, following the disposal of all of the Royal Mail shares held by the company, there is no longer a need to retain the company. The voluntary liquidation will save the taxpayer money by removing the company’s running costs of around £120,000 per annum.
Shares held by the company in Post Office Limited (POL) will be transferred to direct ownership by the Secretary of State for BEIS and this transfer will have no impact on POL’s operations.
The directors of the company (all unremunerated, public or civil servants) are required to issue a Declaration of Solvency prior to the company’s liquidation.
The expectation is that all the company’s identified and existing liabilities will be met, apart from minimal expenses incurred during the liquidation process, after placing into to liquidation.
However, there is a small risk that some as yet unidentified liabilities could emerge. To give the directors comfort that such liabilities could be met, and to enable them to sign the Declaration of Insolvency, my Department intends to grant an indemnity to the Postal Services Holding Company Limited. The granting of an indemnity is effectively neutral to BEIS because if the company were not placed into liquidation and a liability emerged, the company would look to work with the Department, as sole shareholder, to address that liability.
The indemnity will be uncapped for a period of six years and will be issued prior to the liquidation.
When a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, it is required practice for the Minister concerned to present a departmental minute to parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until fourteen parliamentary sitting days after the issue of the minute, except in cases of special urgency.
As a matter of record I have attached a departmental minute for both Houses explaining the procedure followed and containing a description of the liabilities undertaken.
Attachments can be viewed online at: http://www.parliament. uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-03-06/HCWS519.
[HCWS519]
Vauxhall/Opel: Proposed Takeover
Greg Clark Excerpts(7 years, 2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Justin Madders (Ellesmere Port and Neston) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the proposed takeover of Vauxhall and Opel by PSA.
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Vauxhall is one of our oldest and most valued motor manufacturers. It has been making cars in Britain for 113 years and has been owned for the last 92 years by an overseas investor, General Motors. There are over 40,000 people employed directly by GM or in Vauxhall’s retail or supply chain in this country. Last Tuesday, news emerged that GM was in discussions with French company PSA about the future of GM’s European operations.
I spoke to the president of GM by telephone that afternoon and communicated the importance we attach to Vauxhall’s presence in the UK and to its workforce. I am grateful to Mr Ammann for travelling to meet me in my office last Thursday morning. In our meeting, he told me that no agreement with PSA had been reached and discussions were ongoing, that he shared my assessment of the success of the Vauxhall plants in Britain and the Vauxhall brand, and that GM’s intention was that any deal should be about building on the success of these operations, rather than seeking to rationalise them.
Following my meeting with GM, I travelled to Paris to meet my counterpart in the French Government, the Industry Minister, and following those discussions I met PSA board members for two hours later on Thursday night. I emphasised once again the importance I attach to the continuing success of Vauxhall in Britain and the recognition of its workforce. The PSA executives said that they, too, greatly valued the Vauxhall brand and the commitment of its workforce, and that any deal would build on these strengths. They also emphasised that their operational approach in recent years has been not to engage in plant closures, but to focus on continuous improvements in plant performance. On behalf of the UK Government, I emphasised our commitment to securing continued mutually beneficial access to European markets, and our intention, as part of an ambitious industrial strategy, to enhance the competitiveness of the UK economy generally—including, of course, the automotive sector. Earlier today, my Minister of State spoke to his German counterpart.
We remain in close contact with GM, PSA and the French and German Governments, and I look forward to meeting Carlos Tavares, PSA chief executive, later this week. Of course, I have also met, and will continue to meet, the trade unions and Members of this House with constituency interests. I will do everything I can at all times to secure the best possible future for Vauxhall and its workforce. Our unity of purpose in seeking this good future should be a source of strength in the House, and I will keep the House informed at every opportunity.
Justin Madders
I thank the Secretary of State for his response and for the helpful way in which he has kept me and other interested parties informed as matters have unfolded. As he said, not only are thousands employed directly at the plants in Ellesmere Port and Luton, but there are tens of thousands of other people working in the associated supply chain and sales network.
I want to make it clear that Vauxhall is a British success story. The plants in Ellesmere Port and Luton benefit from dedicated and highly skilled staff, who are among the most efficient anywhere in Europe. If this takeover does go ahead, we need to get the message out that risking the closure of either facility would be a retrograde step not just for the UK economy, but also for the new owners. Will the Secretary of State confirm that the Government stand ready to use all the tools at their disposal to safeguard British jobs at Vauxhall?
Of course, this is a worrying time for everyone affected, but it is not a new experience. There have been threats to the plants in the past, but they have been seen off by industry-leading collaborations between unions, workforce, management and Government. I want that to carry on, so can the Secretary of State confirm that he will continue to work closely with everybody at every stage?
Although it would be an over-simplification to characterise the proposed deal as being entirely down to Brexit, there are understandable concerns about Brexit’s potential impact, particularly if tariffs were imposed. Will the Secretary of State ensure that the future of the automotive sector is put front and centre of our negotiations and that a red line will be that there will be no deal that imposes tariffs—not just on the finished product, but on components in the supply chain?
We are very proud of our automotive sector in Ellesmere Port and Neston, but we know we cannot take it for granted. I will do everything I possibly can to fight for the future of Vauxhall, and I expect nothing less from the Government.
Greg Clark
I commend the hon. Gentleman, and I am grateful to him for giving us the opportunity to update the House on these matters. I completely agree with him about the importance and the success of the workforce at both Ellesmere Port, his constituency plant, and Luton, and of course the supply chain, the retail network across the country and the call centre and customer service sector.
Every part of Britain has a stake in Vauxhall, so I completely agree with the hon. Gentleman: we will do everything we can. My personal commitment, and the commitment of this Government, will be unbounded to make sure that the future, building on the success of the plant in the hon. Gentleman’s constituency and the workforce, will be maintained. That is my purpose, and I am grateful for the hon. Gentleman’s support for that. I will of course work with all the groups, including the trade unions and the workforce, to make that case to the new owners, if new owners there are to be.
Andrew Selous (South West Bedfordshire) (Con)
Vauxhall has been a huge name in Bedfordshire for over a century, and that tradition continues with the building of the excellent Vivaro van at the IBC plant in Luton. I want to see the Secretary of State doing everything he can to secure those jobs, but will he also say something about the pensioners in this country, many of whom are in my constituency and across Bedfordshire? They will be worried about the future of their pensions, so will he say a little bit about that issue as well as about the jobs?
Greg Clark
Of course, the continued welfare of the pensioners is of great importance in any prospective takeover, and I have mentioned in my discussions with GM and with PSA how important it will be. No deal has been concluded yet, but both those organisations are well aware of the importance that I, and my hon. Friend the Member for South West Bedfordshire (Andrew Selous), attach to that matter.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I thank the Secretary of State for his response and my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) for his question. Vauxhall employs over 40,000 people in the UK, as the Secretary of State said, including 4,500 at its manufacturing plants in Ellesmere Port and Luton and tens of thousands in its retail and support arms and in the supply chain. It is, as we have heard, a great British success story.
I would like to raise a number of questions. First, the French Government own a 14% share in Peugeot, which has prompted many to suggest that any job cuts are likely to fall on Opel’s six plants in Germany, the UK and Spain. The German Government have already demanded that there must be no job or plant losses as a result of any deal, and German papers reported yesterday that PSA had pledged to continue operating all four of Opel’s German production sites. Will the Secretary of State tell us what action the Government are taking to obtain the same assurances for the UK? Will the Prime Minster demand that no jobs or plants will be lost when she meets the PSA chief executive?
Secondly, at the 2016 Conservative party conference, the Prime Minister stated:
“We are the party of workers”.
To make good that promise, will the Secretary of State confirm that he will demand equal treatment for UK workers, compared with workers in France and Germany, in any final deal package?
Thirdly, the UK’s automotive industry is dependent on the EU for sales and components. Nissan’s special deal provided assurances of unencumbered EU market access, more UK-based suppliers, and support for green vehicle research and development and for jobs and training. Can the Secretary of State confirm reports that PSA has been offered the same deal, and whether, in return, it has given an assurance that no UK jobs or plants will be lost? Is it not the case that all UK industries require certainty and stability? Would he agree that a haphazard and crisis-led approach is quite simply the very antithesis of an industrial strategy?
Greg Clark
First, I welcome the hon. Lady to the Dispatch Box and congratulate her on her appointment. She will find that there is no one more prepared than I am to be active in supporting employment prospects in every constituency in the country, wherever they might be. In our discussions with industry, including the automotive industry, about overseas investment, there has been tremendous enthusiasm and warm encouragement for our industrial strategy. This is something that has been pursued in other countries for some time. I think the hon. Lady described our approach as haphazard and random—
Greg Clark
Indeed. I am not sure that the hon. Lady, in speaking from her Front Bench, is in the best position to talk about that. She made some important points, however. She mentioned the fact that the French Government own a significant stake in PSA. That is why I felt it was important immediately to have a meeting with my French counterpart. That meeting was very constructive, and he recognised the importance of ensuring that the whole of Europe should be treated fairly in these discussions. We agreed to stay in close touch on that, and I was grateful to him for seeing me.
On the treatment of plants across Europe, one of the points that the PSA executives made to me is that, since the new management of PSA has been in place, they have taken pride in the fact that part of their strategy is not to close plants. The discussions are clearly continuing and no deal has been done, but I share the view of the hon. Lady, the hon. Member for Ellesmere Port and Neston (Justin Madders) and Members on both sides of the House: it is very important that our successful enterprises with successful workforces should be able to continue that success in the future.
As for questions about the European Union, many of GM’s operations in Europe are in Germany, which is not about to leave the European Union, so this is not a Brexit-related transaction. I have said very clearly that our commitment, evidenced in black and white in our industrial strategy, is to build on our strengths in advanced manufacturing, including in the automotive sector. That is available to all players in the sector through the Automotive Council, and in our industrial strategy we mention electric vehicles, battery storage and training, which are important to all members of the sector and, as I began by saying, have attracted enthusiastic support from firms all over the world.
David Rutley (Macclesfield) (Con)
I welcome my right hon. Friend’s characteristically speedy response to this new situation. Can he confirm that the UK automotive sector is not only integral and important to our industrial strategy but will play a vital role in shaping our future trade relationship with EU member states post-Brexit?
Greg Clark
I agree with my hon. Friend. One of the strengths of our automotive sector is that it is particularly international. It benefits from and is strengthened by trade to and from not only the rest of Europe but the whole world. Vauxhall’s being owned by GM for such a long time is a reflection of the fact that the motor industry has long been international beyond Europe. The industry will be very prominent in our discussions.
Callum McCaig (Aberdeen South) (SNP)
I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing this urgent question. I welcome the hon. Member for Salford and Eccles (Rebecca Long Bailey) to her Front-Bench position, and I look forward to working with her in that role.
Like every Member of this House, my party’s thoughts are with those affected at the plants in Ellesmere Port and Luton and with all those who work in the supply chain or for the company in other ways. I welcome that the Secretary of State has led from the front in his interactions with the French and others.
What assurances has the Secretary of State sought and/or received from the French Government or from PSA about the plants, employment and, in particular, the terms and conditions of employees and pensions? We cannot ignore the impact that Brexit might have on this issue. If there is direct competition between a German plant and a UK plant—regardless of the undoubted strength of UK plants—given that 75% of a UK plant’s components come from, and 80% of its exports go to, the single market, it will be at a comparative disadvantage with European counterparts.
Given that the Secretary of State has said that he will do everything he can at all times to rule out the hard Brexit that has been proposed, will he reassess single market membership? We can leave the EU, but we do not have to leave the single market, and staying in the single market would protect employees at Vauxhall and right across the economy.
Greg Clark
I am grateful to the hon. Gentleman for his kind words. I thought it was important to have discussions immediately with both parties to the negotiations. It is fair to say that, as a deal has not been concluded and discussions are continuing, the prospective purchaser is clearly not in a position to give contractual guarantees. One of the important reasons for meeting was to have a clear understanding of the prospective purchaser’s purpose and to commit to having further meetings as the discussions continue—I will be having a further meeting later in the week. Of course, the conditions for workers and pensioners are uppermost in the discussions.
In the context of Brexit, I made it clear, as the Prime Minister did in her speech at Lancaster House, that we want to negotiate the best possible access to the single market, free of tariffs and bureaucratic impediments. It is also important to reflect on the fact that we have a very strong and successful domestic market, with Vauxhall having a particularly strong share of it. That was mentioned to me by both parties, GM and PSA; they are very aware of that, and we will emphasise it in the days and weeks ahead.
John Redwood (Wokingham) (Con)
Are the Government considering their policy on when, why and how to intervene in mergers that could be damaging to British jobs and the public interest?
Greg Clark
In the context of the Hinkley Point C decision, we said that we would come forward with measures to govern the critical national infrastructure regime. In addition, we have proposed some changes to our corporate governance regime, and we will be making suggestions as to how we can keep our merger regime up to date.
Mr Iain Wright (Hartlepool) (Lab)
In an earlier answer, the Secretary of State said that this will not become entangled in Brexit, but the concern will be that the issue of this important company’s future in Britain will become collateral damage in wider negotiations and deals on Brexit. In the face of elections in France and Germany this year, does he think that nations will have to engage in an ever-rising bidding game in order to maintain production facilities in their countries? If so, what will he do for British manufacturing?
Greg Clark
The hon. Gentleman should reflect a bit more positively on the success of Vauxhall in this country. The two plants we have been talking about are among the most efficient in Europe and, therefore, the world. So this is not about altruism; these are successful plants, which is a tribute to their workforce, and they are competitive. As I said a few moments ago, the other side of the equation is that the Vauxhall brand is a very successful one in this country. So we start from a position of strength and, as he would want, I will be vigorous in promoting those strengths and influencing the negotiations so that this excellent workforce can continue and go from strength to strength in the future.
Graham Evans (Weaver Vale) (Con)
My right hon. Friend will be well aware of the importance of this plant to the Cheshire and greater Cheshire economy. Will he assure the House that he will ensure that PSA understands the skill and efficiency of the plant and its workforce?
Greg Clark
I will indeed, and from my initial conversations I can say that I think that is well understood. It is matter of pride that our automotive industry in general and those two plants in particular are such high performers, and nobody will be more vigorous than me in reminding all parties to the transaction of that.
Tom Brake (Carshalton and Wallington) (LD)
Does the Secretary of State believe that it will be much harder for companies that are looking at their integrated European operations to want to base themselves in the UK, because of the uncertainty surrounding our leaving the single market and the customs union? Does he agree that in those circumstances they are going to need some very attractive sweeteners? What sweeteners has he offered? Are those sweeteners also going to be available to the medium-priority and low-priority areas that the Government have identified, such as fisheries and chemicals, and steel and telecoms?
Greg Clark
I would say to the right hon. Gentleman what I said to the Chair of the Select Committee: he should reflect on the competitiveness of our automotive industry. Companies choose to invest in Britain because we are a competitive place from which to do business, we have a skilled and flexible workforce, and we have fantastic research and development facilities. We have been absolutely clear in the industrial strategy consultation that these strengths will be extended so that we continue to be a beacon of success in this and other industries.
Mr Andrew Tyrie (Chichester) (Con)
The Secretary of State has clearly made some reassuring noises to the firm. We need transparency on those, so will he now respond to the Treasury Committee request to publish the letter he sent to Nissan on 21 October giving reassurances to that company?
Greg Clark
My right hon. Friend may not have noticed that, some time ago, I said that of course we would release the letter sent to Nissan at the time when it is no longer commercially confidential.
Ms Angela Eagle (Wallasey) (Lab)
I commend the Secretary of State for his fast action in meeting all the parties. I represent people who work in the Ellesmere Port factory. We local MPs are all justifiably proud of the work that has been done there to keep the production process as one of the most efficient in the world. We bow to no one in the world when it comes to efficiency and productivity at the Ellesmere Port plant. Nevertheless, given that it is effectively much cheaper to get rid of British workers, because of the nature of employment rights in this country compared with those in France and Germany, what can the Secretary of State do to ensure that, when it comes to possible cost cutting, the equation is evened up so that we can support British production and British jobs?
Greg Clark
Like the hon. Lady, I am proud of the performance of the two plants, as well as that of the other plants in our automotive sector. The PSA executives communicated to me that performance is their guide to strategy. The two plants have very effective performance, so I want and expect them to be major parts of the future of an expanded group, if the transaction proceeds.
Jeremy Lefroy (Stafford) (Con)
I welcome my right hon. Friend’s action on this incredibly important issue of retaining the plants at Ellesmere Port and Luton. Most investment in motor manufacturing in this country comes from overseas, with the exception of Aston Martin and Triumph. What is my right hon. Friend doing to encourage British-based investment in motor manufacturing so that we do not always rely on overseas investment?
Greg Clark
I am very proud that we attract the world’s best automotive companies and that they see Britain as a place to prosper and succeed, so I am always encouraging that level of investment. Of course, it is not only about the major manufacturers; the supply chain is increasingly important in all advanced manufacturing, including the automotive industry. We have an increasingly good record of attracting small and medium-sized businesses either to locate here from overseas, or to grow from the bottom up. My hon. Friend will know that our industrial strategy makes a great focal point of the opportunity to grow our supply chains.
Maria Eagle (Garston and Halewood) (Lab)
The Secretary of State understands the importance of the plant at Ellesmere Port, and its suppliers and retailers, to the wider north-west’s automotive sector, which includes Jaguar Land Rover at Halewood. What will he do to ensure that we do not lose some of the essential skills, jobs and firms, and that the sector in the north-west does not shrink as a consequence of factors that are completely out of the control of the Government and the people who work at the Ellesmere Port plant?
Greg Clark
The hon. Lady knows from the work that we have done together that it is possible to make a case for attracting investment and commitment. She is absolutely right that the plant is important, and not only to the north-west but to the whole country, if the dealership network is taken into account. My ambition, as is the case for the rest of advanced manufacturing, is for our automotive sector to be more successful and to employ more people in the future. That does not happen by accident; it will involve our being engaged with the sector and making sure that facilities for research and development and training establish our reputation as the go-to place in the world for motor manufacturing, as we are for other sectors. I will work with the hon. Lady and others, and I will be vigorous in making sure that that message is very loudly understood.
Seema Kennedy (South Ribble) (Con)
Leyland in my constituency has a long and proud history as a part of the automotive sector. Will my right hon. Friend the Secretary of State tell the House what specific support for the automotive sector will be included in the industrial strategy?
Greg Clark
The automotive sector has been one of our most successful sectors in recent years. That is partly due to the effective arrangements that have been put in place through the Automotive Council, whereby firms, including small and medium-sized suppliers, can work together to support each other. An example of that is the National Automotive Innovation Centre, which I visited recently, where new facilities are being made available not only for the majors, but for people with new ideas who are setting up new businesses. That can reinforce and continue the success of one of our most effective industrial sectors.
Alison McGovern (Wirral South) (Lab)
A number of my constituents work for Vauxhall at Ellesmere Port and Unilever in Port Sunlight. If there are Members who think that everything in our economy is rosy, I invite them to come to Wirral South this weekend and say that. When it comes to the high-value manufacturing that the Secretary of State has talked about, does he realise the importance of the customs union, and has he made a great and important contribution to the Prime Minister’s strategy on Brexit with regard to keeping us inside the customs union?
Greg Clark
The automotive sector, like others, trades across borders. That is one reason why the Prime Minister and I have been very clear that we need to be able to negotiate trading arrangements that maintain our access across those borders without tariffs and without bureaucratic impediments—that is clearly understood. Those negotiations have some way to go, but it is important to emphasise, as I and the Prime Minister have done, what our intention is.
Sir Desmond Swayne (New Forest West) (Con)
What guarantees might General Motors USA be required to make to General Motors GB with respect to the pension deficit before any disposal can take place?
Greg Clark
As my right hon. Friend knows, the independent Pensions Regulator is the arbiter of any changes to pension arrangements. It is absolutely right that such robust independence is in place. I emphasise that discussions are still continuing. No agreement has yet been reached but, as I have said to a number of colleagues across the House, the future of pensioners is very important to me, as it is to all Members.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I was involved in the discussions that took place the last time that GM considered selling its European brands in the wake of the financial crisis. At that time, we had a successful resolution, in that the company decided to retain the brands. The Secretary of State is right that Vauxhall is tremendously successful. The Astra and Corsa are among the top 10 best-selling cars in the UK, but those cars are made by a Europe-wide company that has a Europe-wide supply chain. In any of the discussions that he has had in the past week, have exchange rate movements over the past year been raised?
Greg Clark
We have of course discussed all aspects of Brexit. One feature of the decisions that are being made about investment is the opportunity to locate more of the supply chain firms nearer to the production facilities. Across the board, it is important to emphasise our commitment to negotiating the best possible access to the single market, and also that the intrinsic competitiveness of the UK makes it attractive to overseas investors.
Mr Peter Bone (Wellingborough) (Con)
If I were on a board of directors of a very successful vehicle manufacturing outlet in the fifth biggest economy in the world and that economy was about to leave the EU, I think that I would want to invest more in that facility and make sure that I did not put all my eggs in one basket. Does not the future for Vauxhall look rather good and not the reverse?
Greg Clark
I agree with my hon. Friend that we have in Vauxhall a very successful firm that is well regarded in the domestic market and across the continent. It is building on the success that is in prospect, but it is important that, through the discussions, that is secured in the future arrangements of the firm.
Margaret Greenwood (Wirral West) (Lab)
Many of the thousands of people employed at Vauxhall Ellesmere Port live in Wirral and they are understandably concerned about the future of their jobs following the announcement of PSA Group’s acquisition of Opel. Some 80% of the cars made at Vauxhall Ellesmere Port are exported directly to EU states, and 75% of the value of each car is imported. The Prime Minister is reported to have received a meeting request from the chief executive of the PSA Group, which Downing Street has said will take place
“in principle, subject to diary availability”.
Will the Secretary of State suggest that the Prime Minister make a space in her diary as a matter of urgency?
Greg Clark
I think that the hon. Lady started by saying that the deal has been agreed, so let me first say that the deal has not been done. Secondly, no one could be under any illusions as to the vigour of our response. Of course, the Prime Minister will need to find the time in her diary for a meeting, but we are keen to continue the close contact we have had.
Nigel Mills (Amber Valley) (Con)
The various takeovers that were talked about over the weekend show the importance of having robust and enforceable rules on takeovers and mergers. When will the Government come forward with new policy so that we will know not only how we will handle takeovers when we leave the European Union, but how we can intervene in deals that we do not want to take place?
Greg Clark
It is important to reflect on the context: our reputation as an open economy that attracts overseas investment is one of the foundations of our success. We need to maintain that success and reputation. We have said that we will bring forward proposals, as we will regarding corporate governance. We will do that in due course and I will update the House at that time.
Christian Matheson (City of Chester) (Lab)
As a trade union official, I supported the management and workers at Ellesmere Port through new model bidding processes three times. Each time, they demonstrated themselves to be productive, efficient and flexible, and their plant to be profitable. Unfortunately, those attributes cut no ice with Peugeot, which has form in this area, as any Coventry Member will attest. May I suggest that the Secretary of State uses this opportunity to beef up his industrial strategy? I also suggest that any public procurement of motor vehicles, for example by police forces, local authorities and Government Departments, should involve only the purchase of cars from companies that build in the UK, and that those that choose not to build in the UK should not be considered?
Greg Clark
Of course, I discussed with PSA the context of its closure of the Coventry plant. It was pointed out to me that the company has new management and a different approach was described. These are early stages, but that was a better message to receive than the alternative. However, like the hon. Gentleman, I want to ensure that it is reflected in practice. On procurement, it is obviously important that we get good value for money, and we have changed the procurement rules to take into account some of these wider impacts.
Craig Whittaker (Calder Valley) (Con)
Opel has not made a profit in the EU since 1999, and Carlos Tavares, the chief executive of PSA, has a record of drastically reducing costs. What further tools does my right hon. Friend have in his armament to ensure that PSA does not move vehicle producing factories and the supply chain out of the UK?
Greg Clark
The discussions are at an early stage. The leak of the discussions came out only in the middle of last week and I have had a number of meetings since then. I have been clear to the House that the successful operations in this country need to be maintained. The PSA side of the discussions has pointed out quite recently that Vauxhall is not yet its company to make contractual statements about, but the direction in which the discussions are going is clear. I will continue to be vigorous in extracting the best possible agreements about the future of Vauxhall here.
Jim Shannon (Strangford) (DUP)
I welcome the Secretary of State’s statement and what he has said so far. It is clear that Vauxhall’s UK plants are run to a high standard, with above-normal efficiency ratings, so will the Secretary of State outline what support he will offer to ensure that the plants are retained—and, indeed, enhanced—and that jobs are secured during any takeover? What influence, including financial assistance, can the Government exert to help?
Greg Clark
I am grateful to the hon. Gentleman for what he says. Again, I come back to the fact that Vauxhall’s UK operation is successful. It is efficient and effective, which is the reason, as with other car companies, why investments come to this country. We have had a successful programme of joint working with the automotive sector in areas such as research and development, and in training and upskilling the workforce. That programme continues and is available to any manufacturer that participates in the sector.
Tom Pursglove (Corby) (Con)
The UK car sector and steel manufacturing are inextricably linked, so what role does my right hon. Friend see the industrial strategy playing in the betterment of both?
Greg Clark
The benefit of an industrial strategy is that we can look at the connections between areas and between sectors. Of course, a thriving automotive sector in this country is good for the steel industry.
Liz McInnes (Heywood and Middleton) (Lab)
Does the Secretary of State agree that the weaker protections against dismissal that are afforded to UK workers make them more vulnerable than their European counterparts? Given the Conservative party’s supposed recent conversion into a party of the workers, what plans does he have to strengthen protections for UK workers?
Greg Clark
I would say two things to the hon. Lady. First, the standards we have for workers in this country are very exacting, and we have made a commitment to maintain them as we leave the European Union. The second thing is that our record of employment is one we should be proud of—in just the last few days, we were able to report employment of record numbers. That shows that the environment we operate in is attractive to investors, and the consequence of that is good jobs for British workers.
Ian C. Lucas (Wrexham) (Lab)
As the Secretary of State said, the UK automotive manufacturing sector has been extremely impressive in the past decade. However, what is striking is that the one advanced industrial nation that has not invested in the UK sector is France. Does he believe that a French business such as PSA will really choose to invest in the UK when we are outside the European Union? Will not such a business invest in France and Germany? Will the Secretary of State therefore urgently look at a British solution to the future of the excellent Ellesmere Port plant, which provides work in north Wales, on Merseyside and right across the north-west?
Greg Clark
Notwithstanding—in fact, in many cases, as a result of—the successful partnership with overseas car manufacturers, 2016 was a record year for car production in this country, which was at a 17-year high. Providing that the arrangements are right, we should welcome other countries’ confidence in this country. The conversations that I have had with PSA lead me to believe that its intentions, as communicated to me, are to invest in performance, and we have a proud record of that.
Helen Goodman (Bishop Auckland) (Lab)
The Secretary of State approaches this issue with great calm and carefulness. I am sure that he has looked at the impact on the firm of being inside or outside the customs union. He wants a zero-tariff regime with Europe, but we have heard that a high proportion of the components are imported. Would the Vauxhall cars that are exported meet the threshold for being made in the UK under the rules of origin?
Greg Clark
The hon. Lady takes us further ahead than these preliminary discussions about a prospective sale of GM’s assets to PSA have got to. I have been very clear with not just PSA but every auto company—indeed, every manufacturer—that our intention is to pursue constructive negotiations and to have the best possible access to the single market, respecting the need to avoid bureaucratic impediments and tariffs.
Kerry McCarthy (Bristol East) (Lab)
I was born in Luton and spent the first 40 years of my life there, so I know how losing the Vauxhall plant would absolutely rip the heart out of the town. However, the issue is much broader than that, and the anxiety felt by Vauxhall workers is shared by others in the manufacturing sector as we face Brexit. What assurances can the Minister give that he is building into the Brexit strategy and the industrial strategy something that will embed those manufacturing jobs in our communities?
Greg Clark
I am delighted that the hon. Lady makes that point. I hope that she will respond to the consultation on the industrial strategy, because it is very clear that it reflects on and proposes ways to strengthen what are already pillars of success, including our excellence in research and development in terms of the efficiency of the industrial processes and the skills of the workforce. We cannot stand still. We need to prepare for the future, and that is precisely what the industrial strategy, which has been warmly welcomed by international investors, sets out to do.
Stephen Timms (East Ham) (Lab)
This deal would inevitably lead to job losses around Europe. The Prime Minister has said that we might have to leave the EU without a deal, so tariffs on vehicles and components are now a possibility. Does that not mean that UK employees will inevitably be at a disadvantage compared with their colleagues elsewhere in the European Union?
Greg Clark
What the right hon. Gentleman misses out of his analysis is the efficiency and success of our operations here in this country, and also our strong domestic market. It is necessary to negotiate and to get the best possible terms for our Brexit arrangement—everyone is clear about that—but he should not underplay our strengths that attract businesses to invest in this country.
Oral Answers to Questions
Greg Clark Excerpts(7 years, 3 months ago)
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Lilian Greenwood (Nottingham South) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The first section of our Green Paper on industrial strategy sets out our ambition to make Britain the best nation in the world for scientists, innovators and technical inventors. In support of this, we have announced an increase of £4.7 billion in public research and development funds, which is the biggest increase in support of science for 40 years.
Lilian Greenwood
In evidence to the Education Committee last week, Professor Arthur, the president of University College London, spoke not only of the huge sums flowing into UK research from Europe—through Horizon 2020 and the European Research Council, for example—but of the need for a system to replace the mobility of people, networking and the ability to work across multiple boundaries. Does the Secretary of State recognise that if the Eurosceptics in his party prevail and we have a hard Brexit, spending even 3% of GDP on science funding will not be enough to protect our global reputation for scientific research? What is he doing to stand up for the needs of this sector?
Greg Clark
The hon. Lady has two eminent universities in her constituency that are going from strength to strength. I agree that it is important that the best researchers from across the world come to our universities, and the Prime Minister said in her Lancaster House speech that that was a priority for our negotiations.
Mark Pritchard (The Wrekin) (Con)
Science funding includes funding for the satellite sector, which is an important industrial base for the UK. The Government have set a target to grow this sector by a further 10% of global share in the next two decades. What more money could be put into the satellite sector from the industrial strategy challenge fund?
Greg Clark
My hon. Friend raises an important point. We say in the strategy that we should build on our strengths, and the satellite sector is a shining British strength that is creating huge numbers of jobs. It is specified throughout the industrial strategy as an area in which we want the industry to work together to ensure that, in particular, we are training the technicians and engineers of the future, which is what we have been doing.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
The industrial strategy rightly points out the crucial significance of investment in science for our future economy and productivity. Given that the USA, Germany and France all outspend us in this area, will the Secretary of State give a commitment that future spending will outstrip theirs to give us a competitive advantage over them?
Greg Clark
The hon. Gentleman is a thoughtful Member with regard to these matters, having chaired the then Business, Innovation and Skills Committee, and he will see in the Green Paper that we are candid about the need to maintain the pace. Indeed, we have increased public investment. He was right to mention the US, but actually the proportion of public to business investment is higher in this country than in Germany, Japan, Sweden, Denmark, Finland, Norway and other countries besides. We are building on strength, but we want to take things further, and I look forward to his contribution to the consultation.
Dr Sarah Wollaston (Totnes) (Con)
There is great concern about the future of fusion research after Britain pulls out of the EU and Euratom. Will the Secretary of State reassure us that he will continue to support and fully fund the Joint European Torus project and other joint research projects such as ITER—the international thermonuclear experimental reactor—after Britain leaves the EU?
Greg Clark
The collaboration between scientists and those in the nuclear sector is one of the important aspects of the continued co-operation that we want and intend to see continue.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Green Paper makes much of re-announcing the welcome increase in science spending which, following cuts of up to 50% over the last seven years, has finally returned it to the levels under the last Labour Government. Research and development funding, however, remains barely half the recommended 3% target that Labour has committed to. Does the Secretary of State agree that, given the impact of Brexit on UK science, the lack of any overarching vision and the focus on picking sector winners, rather than mobilising the whole—
Greg Clark
The hon. Lady does not have it right. She should know—the science sector has welcomed this fact—that we protected funding for science during all the difficult years in which we were recovering from the financial situation that Labour left us. There was a huge welcome for the £2 billion increase, which is the biggest since 1979. In other words, that is bigger than what any Labour Government ever offered.
Fiona Bruce (Congleton) (Con)
Lucy Powell (Manchester Central) (Lab/Co-op)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
One of our most important reforms has been to devolve power and resources to local areas through city deals, devolution deals and growth deals, in which local businesses can shape the decisions most affecting them. The hon. Lady will have welcomed last week’s announcement that half a billion pounds was devolved to northern local enterprise partnerships, including £130 million to Greater Manchester.
Lucy Powell
I welcomed most of the announcements in the industrial strategy last week, but the Secretary of State will appreciate that a local area strategy is required for key infrastructure issues such as skills and childcare. What conversations has he had with colleagues in the Department for Education and across local government about the meaningful devolution of skills, early years and education?
Greg Clark
The hon. Lady is absolutely right that the needs of different places should be reflected in decisions that are made locally. Along with the centrality of skills and training, that is a big theme of the industrial strategy consultation, to which I hope she will respond. I look forward to her contribution.
Mr Alan Mak (Havant) (Con)
Business investment in science and technology is key to local economic growth and Britain’s leadership of the fourth industrial revolution. Will the Secretary of State continue supporting LEPs to fund these key sectors and technologies?
Greg Clark
I will indeed. One of the big opportunities is to make sure that the excellence we have in science and research is married with local strengths so that we can have the products of that research, in manufacturing for example, as well as the discoveries themselves.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
Northern Ireland has only one very small enterprise zone, which is up in Coleraine and has not really progressed. Can the Secretary of State give any support or assistance to the Northern Ireland Executive, when they are up and running again, for more enterprise zones within the Province?
Greg Clark
I have, as the hon. Gentleman would expect, conversations with Simon Hamilton, the Minister responsible in Northern Ireland. My colleagues and I are very happy to consider his suggestions and proposals when we meet him.
Mr Philip Hollobone (Kettering) (Con)
I declare an interest as a member of Kettering Borough Council. The borough of Kettering has had one of the fastest rates of business rate growth in the whole country in the last 10 years. Does my right hon. Friend agree that, with local government to be fully funded by business rates from 2020, all local councils will have to get far closer to their local businesses in order for local economies to function as best they can?
Greg Clark
My hon. Friend is absolutely right and, as a councillor, he knows how important it is that that very direct connection is made. It is one of the measures going through the House that I was proud to have proposed when I was Secretary of State for Communities and Local Government, and it is something for which local government has long campaigned. I am delighted that it was this Conservative Government who were able to deliver it.
Bill Esterson (Sefton Central) (Lab)
Bank lending is essential for local business success, and yesterday’s HBOS convictions are a stark reminder of the way that smaller businesses were treated by some banks during the financial crisis. Does the Secretary of State accept that lending has fallen over the last year? What is he doing to give confidence in the banks, unlock support and increase lending?
Greg Clark
The hon. Gentleman is absolutely right to draw attention to the misbehaviour of the banks, especially with regard to small businesses, when they were inadequately supervised as a result of the destruction of the supervisory regime under the previous Labour Government. That has now been put on a much sounder footing. He will know that the lending opportunities for small businesses have been transformed, but the industrial strategy Green Paper is very clear that we want to make further opportunities available, particularly outside London and the south-east.
Martin Vickers (Cleethorpes) (Con)
David Morris (Morecambe and Lunesdale) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Since our last questions, with the Prime Minister my ministerial team and I have launched our industrial strategy Green Paper, part of a cross-Government plan to build an economy that works for everyone. Efforts to secure global investment in British enterprise and innovation continue to meet with success, with the most recent example being the £115 million Novo Nordisk investment in Oxford, which is a further vote of confidence in Britain as a place to do both business and science. Today we launch the next energy capacity market auction. Last month, I signed a memorandum of co-operation with the Government of Japan on civil nuclear activities, and on Thursday I announced that we have secured a second mission to space for Major Tim Peake.
David Morris
As always, my right hon. Friend has been extraordinarily busy, but may I ask my extraordinarily busy right hon. Friend to turn his attention to Morecambe and Lunesdale, as we now have a new link road going straight to the Heysham port and we would like an enterprise zone? Will he help me to get an enterprise zone?
Greg Clark
I am never too busy for Morecambe and Lunesdale, and I know what a passionate campaigner my hon. Friend has been for the business prospects in his area. If I may, I will talk to the Minister responsible for the northern powerhouse, who has responsibility for enterprise zones—I am sure he will be happy to have a meeting with my hon. Friend.
Clive Lewis (Norwich South) (Lab)
The Secretary of State’s plan to impose arbitrary cuts on the pensions of 16,000 nuclear energy workers, 7,000 of them in Copeland, threatens industrial relations in a key sector. I urge him to take the opportunity, at this week’s meeting with trade unions, to end his attack on workers who power our country and abandon the raid on their pensions before the industry is plunged into chaos.
Tom Pursglove (Corby) (Con)
Greg Clark
As my hon. Friend would expect, my colleagues meet representatives of all kinds of businesses, both in the UK and those looking to invest here. We are clear, as the Prime Minister has been, that we intend to pursue our negotiations to secure the best possible access to the single market so that the manifest advantages of the UK continue to be available to companies, here, now and in future.
Christina Rees (Neath) (Lab/Co-op)
Nicky Morgan (Loughborough) (Con)
Greg Clark
I commend Loughborough University and its vice-chancellor, Robert Allison. It is a fantastic example of an excellent academic institution that makes a big impact locally. I am always happy to meet my right hon. Friend and the leadership of that fine university.
Richard Arkless (Dumfries and Galloway) (SNP)
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Greg Clark
I very much hope that my hon. Friend’s Committee will engage with the consultation. If we are to have a strategy that endures, it is important that it takes into account the views of all those on both sides of the House with an interest in securing our economic prosperity and future scientific excellence.
Kerry McCarthy (Bristol East) (Lab)
Kelvin Hopkins (Luton North) (Lab)
Greg Clark
We want British business and British industry to compete on the basis that they are price-competitive. There are opportunities that come from being outside some of the bureaucracy, which affects small businesses in particular when it comes to public procurement, and those are opportunities that we will be able to take.
Mr Speaker
I call Mr David Nuttall. I thought that he was interested in this question. Has his appetite diminished? [Interruption.] No? Go on. Get in there, man.
Mr David Nuttall (Bury North) (Con)
I had not planned to stand for topical questions, but may I urge my right hon. Friend not to be swayed by the arguments from the Opposition to spend a specific amount of our GDP on research for scientific projects? If the private sector is unwilling to fund those projects, we should ask serious questions about whether the public sector and my hardworking taxpayers should be asked to foot the bill.
Greg Clark
Happily, the private sector—British business —is an enthusiastic and increasing supporter of investment in science and research. Sometimes that is done jointly with important publicly funded institutions such as our universities, and that is one of our strengths as an economy.
Mr Iain Wright (Hartlepool) (Lab)
In November, the Secretary of State hauled energy companies into his Department to put pressure on them regarding claims that they were generating excess profits. This morning, at the Select Committee, Which? told us that energy companies are dismal when it comes to customer service and prices. Does he agree with that assessment, and will he outline to the House what progress has been made to get a better deal for energy customers since that meeting in November?
Greg Clark
Yes. The hon. Gentleman raises an important point. The Competition and Markets Authority report identified a huge detriment that consumers were facing. There has been some limited response from the energy companies. For example, they have deleted some of their more abusive tariffs, but there is further to go, and we will be making a response to the CMA report in the days ahead.
Amanda Solloway (Derby North) (Con)
It has been recently announced that the strategy for the midlands engine for growth will be announced soon. The midlands engine is vital for business in Derby and the midlands, so may I urge the Secretary of State to consider it sooner rather than later?
Greg Clark
The midlands engine is a very important part of the strengthening of the economy, and there is real momentum there. My hon. Friend can look forward to some very important announcements that will be made imminently.
Greg Mulholland (Leeds North West) (LD)
Last week, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stourbridge (Margot James), said that there had clearly been instances of the pubs code being flouted and that Members should bring such things to her attention. I have a case in her own constituency to bring to her attention, which also shows that the adjudicator is not doing his job. May we discuss this matter please?
Kevin Hollinrake (Thirsk and Malton) (Con)
The industrial strategy makes a clear commitment that future rounds of infrastructure investment will take into account the balance of spending per head as between different regions. On the basis that there is a 60% imbalance between London and the rest of the country at the moment, what balance would the Secretary of State like to see going ahead?
Greg Clark
I thank my hon. Friend for his contribution to the consultation. We are very clear that we need to see infrastructure investment in all parts of the country. It is one reason why we have created institutions such as Transport for the North to be able to take those decisions locally.
Stephen Kinnock (Aberavon) (Lab)
The Government’s industrial strategy has sector deals for a number of sectors, which is welcome. Given the vital cross-cutting foundational nature of the steel industry, will the Minister now commit to a sector deal for steel?
Greg Clark
I can tell the hon. Gentleman that I have already been having discussions with the steel industry with precisely that purpose in mind.
Several hon. Members rose—
Industrial Strategy Consultation
Greg Clark Excerpts(7 years, 3 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
This is a hugely important moment for the United Kingdom—a moment when we must prepare a new strategy to earn a prosperous living in the years ahead. Leaving the European Union allows, and requires, Britain to make long-term decisions about our economic future. We will, of course, be ambitious in the upcoming negotiations and will secure the best possible access for firms to trade with, and operate in, the European market. While the terms of trade with other economies is important, so is the competitiveness of our own economy. That is why the Government are committed to a modern industrial strategy, whose objective is to improve living standards and economic growth by increasing productivity and driving growth across the whole country. Today’s Green Paper is part of an open dialogue to develop that strategy as the enduring foundation of an economy that works for everyone.
We start from a position of considerable strength. We are the fifth biggest economy in the world, despite having the 22nd highest population. We have achieved higher levels of employment than ever before in our history —in fact, 2.7 million more than in 2010. We have businesses, research institutions and cultural achievements at the very forefront of global excellence. For all those reasons, we attract investment and talented individuals from around the world, but there are challenges that Britain must face up to, now and in the years ahead.
The first challenge is to build on those strengths and extend excellence into the future. British excellence in key technologies, professions, research disciplines and institutions provides us with crucial competitive advantages, but we cannot take them for granted. If other countries invest more in research and development and we do not, we cannot expect to keep, let alone extend, our technological lead in key sectors, or the world-beating performance of our universities. The same goes for our record as Europe’s leading destination for inward investment, or our position as a centre of international finance.
Our competitors are not standing still. They are upgrading infrastructure networks and reforming systems of governance, and therefore we too must strive for improvement. In industrial sectors, from automotive and aerospace to financial and professional services and the creative industries, the UK has a global reputation, but the competition for new investment is fierce and unending. The conditions that have allowed UK investment destinations to succeed include the availability of supportive research programmes, relevant skills in local labour markets, and capable supply chains. If our success is to continue, those foundations must be maintained and strengthened.
The second challenge is to ensure that every place meets its potential by working to close the gap between our best-performing companies, industries, places and people and those that are less productive. For all the global excellence of the UK’s best companies, industries and places, we have too many that lie too far behind the leaders. That is why, on average, workers in France, Germany and the United States produce about as much in four days as UK workers do in five. It is also why, despite having the most prosperous local economy in northern Europe—in central London—we also have 12 of the 20 poorest among our closest neighbours. We must address those long “tails” of underperformance if we are to build a strong economy and ensure sustainable growth in living standards. To do so will provide a huge opportunity for the whole nation to benefit from improved productivity—that is to say, earning power—in all parts of the country.
The third challenge is to make the UK one of the most competitive places in the world to start or grow a business. A fatal flaw of 1970s-style industrial strategies was their dominant focus on existing industries and the companies within them—and then mostly the biggest firms. Too often, they became strategies of incumbency. It is worth noting that many of the most important companies in the world today did not even exist 25 years ago. Unlike those past strategies, our industrial strategy must be about creating the right conditions for new and growing enterprise to thrive, not about protecting the position of incumbents.
In order to meet those challenges, we have identified 10 pillars around which the strategy is structured: that is, 10 areas of action to drive growth right across the economy and in every part of the country. They are to invest in science, research and innovation; to develop our skills further; to upgrade our infrastructure; to support businesses and help them to start and grow; to improve public procurement; to encourage trade and investment; to deliver affordable energy and clean growth; to cultivate world-leading sectors; to drive growth across all parts of the country; and to create the right institutions to bring together sectors and places.
In all those areas, the Government are making strategic decisions to keep British business on the front foot. For instance, we have given the go-ahead for major upgrades to our infrastructure, such as Hinkley Point C, Heathrow and High Speed 2, and, in the autumn statement, for the biggest increase in research and development spending since 1979.
In conjunction with today’s Green Paper, we are launching a range of further measures. They include: a new approach to enabling existing and emerging sectors to grow through sector deals, with reviews taking place regarding life sciences, ultra-low emission vehicles, industrial digitalisation, nuclear and the creative industries; deciding on the priority challenges and technologies for the new Industrial Strategy Challenge Fund; and an overhaul of technical education, including £170 million of capital funding to set up new institutes of technology to deliver education in science, technology, engineering and mathematical subjects.
In a world containing uncertainty, public policy should aim to be a countervailing force for stability, not an additional source of unpredictability. So our aim is to establish an industrial strategy for the long-term—to provide a policy framework against which major public and private sector investment decisions can be made with confidence. It is therefore vital that the full development of our industrial strategy should take place with—and not just for—British enterprise. The full involvement of innovators, investors, job creators, workers and consumers in England, Scotland, Wales and Northern Ireland is the only basis on which we can produce an enduring programme of action. That is why this is a Green Paper —a set of proposals for discussion and consideration, and an invitation to all to contribute collaboratively to their development. I commend this statement to the House.
Clive Lewis (Norwich South) (Lab)
I thank the Secretary of State for advance sight of his statement, on this occasion.
Today would be a momentous day if it was indeed the day that the Conservative party finally broke free from the free-market fundamentalism that has dogged it, and the country, for decades. Will the Secretary of State tell us whether the “new, active” role for the state means that the Government are abandoning the approach of the last Prime Minister and Chancellor—and of the Secretary of State’s own predecessor, who even banned the term “industrial strategy” from the previous Department? If so, I will make it clear at the outset that we welcome that, alongside the good intentions set out in today’s Green Paper. The question is whether the details will live up to them.
For example, action on skills will be widely welcomed, given the challenges presented by automation and the pace of technological challenge and change, but this Government have already cut adult education by over £1 billion. Can the Secretary of State explain how £170 million of one-off capital spending can even begin to close the skills gap?
Nor will the Government themselves be equipped to support an industrial strategy if the Secretary of State’s predecessor’s cuts are implemented. Can he confirm that the Department for Business, Innovation and Skills 2020 project has now been thrown in the bin, along with the rest of his predecessor’s legacy?
The Secretary of State rightly sets the goal of developing a competitive edge in the industries of the future, but how does he reconcile this with his Government’s plan to privatise the UK Green Investment Bank? If the Secretary of State is serious about tackling our productivity crisis, will he go beyond piecemeal offers and finally bring investment in R and D and infrastructure into line with the OECD average? Will the Secretary of State promise a fundamental rethink of business rates, which many businesses say would help them much more than any other single measure? Does the Secretary of State agree that a successful industrial strategy must include partnership and co-operation with the workforce? Yet the Green Paper does not mention trade unions once; surely now is the time to promise that the toxic Trade Union Act 2016 will be repealed.
Steel is a critical sector for our future economy, but it is mentioned only once in the Green Paper. Will the Secretary of State commit to implementing the recommendations on procurement and supply chains contained in the all-party group on steel and metal related industries report out today?
We cannot limit our focus to high-tech manufacturing. An industrial strategy that narrows its focus to a few chosen sectors will let down the majority of businesses in this country and the people they employ. So can the Secretary of State tell us what this industrial strategy will do for small and medium-sized enterprises, which are huge employers, and for financial services, which are our main exporters, as well as for foundation industries, or for the retail outlets that shape our high streets up and down the country?
Finally, there is a glaring inconsistency between the noble aims of this Green Paper and the threats made by the Prime Minister to turn Britain into an offshore tax haven if she fails in her Brexit negotiations. Until now, the industrial strategy has seemingly consisted of one deal, made in secret, with Nissan. If the Nissan deal did not last six months, how can businesses be confident of the other commitments in this Green Paper?
It is often said, correctly, that an industrial strategy is a long-term project and that, if it is to work, it must outlast particular Governments. With this in mind, I can pledge our support for its broad aims from this side of the Chamber, but I feel compelled to ask whether the Secretary of State can count on the same support from his own side. When we previously debated the industrial strategy here, one of his own hon. Friends said that they had two problems with it: one was “industrial”, the other was “strategy”. I hope that he faces down such attitudes, because now is not the time for half measures. The BBC reported this morning that the Government wished to be in the driving seat but not have two hands on the wheel. I know that Conservative Members do not much like safety legislation, but that is not an approach I would recommend, especially if the Government keep making U-turns. If the Secretary of State finds himself isolated in the coming months, my party will be happy to help. We, too, are ambitious for a proper industrial strategy, but it will succeed only if the means match the ends.
Greg Clark
It is true that an industrial strategy wants to help all parts of the United Kingdom, and I look forward to engagement with colleagues from all parts of the House who wish to represent the views of their constituents. I am relieved that the hon. Gentleman has given his grudging support for this statement, given that the last time he appeared at the Dispatch Box, he said:
“Is it simply a case of ‘public good, private bad’? That is what we think on the Opposition Benches”.—[Official Report, 11 January 2017; Vol. 619, c. 319.]
That would send a disastrous signal to investors in this country, and I am pleased to be on the other side of that argument.
The hon. Gentleman asked a number of questions. Our commitment to transforming technical education has been widely welcomed by the business community up and down the country today. Also, it is highly unusual for a Green Paper to commit any funds. This is about the consultation on the direction, and the fact that the Chancellor has announced £170 million for new institutes of technology is a great step forward. The hon. Gentleman asked about increasing the level of research and development. He might have missed what I said about the Chancellor having committed to the biggest increase in research and development since 1979. I recall that the period since then has included several years of a Labour Government, so by implication this is a bigger increase than any that took place during Labour’s 13 years in office. He also asked about business rates. We are legislating this very afternoon to introduce 100% retention of business rates by local councils so that the interests of local businesses and councils can be aligned.
The hon. Gentleman asked about the workforce. I was clear in my statement that the consultation would involve employees as well, and I am looking forward to a roundtable with the TUC and its member organisations. On steel, he will see in the Green Paper an approach to sector deals. I have already met the chief executives of the steel companies and I am about to meet representatives of the trade unions again. I look forward to that being one of the deals that is being put forward.
The hon. Gentleman asked about involving small businesses. The chairman of the Federation of Small Businesses has said today:
“FSB has appreciated being part of the discussions with the business secretary…to help shape the Industrial Strategy.”
He said that the proposals
“fit well with the UK small business community.”
As far as the hon. Gentleman’s position on the fiscal arithmetic goes, he should reflect on the fact that the first foundation of any credible industrial strategy is confidence in the public finances, which were left in such a disastrous state during the time that Labour was in government. The hon. Gentleman made a point about unanimity of purpose. We are having a consultation on the industrial strategy, but I understand from reports in recent days that he is having a consultation with himself about whether he can support his own party’s position on triggering article 50. We will be looking forward to the responses to our consultation from all parts of the House as we form a strategy for the years ahead.
Mr George Osborne (Tatton) (Con)
I congratulate my right hon. Friend on the intelligent approach set out in the Green Paper, building on what has been achieved over the past six years but taking it much further in skills, science and, in particular, the northern powerhouse.
The university sector is a jewel in the British economy’s crown. The Higher Education and Research Bill will open up the sector to new entrants, just as it was opened up in the 19th and 20th centuries through the arrival of London University and the red-brick universities. The Bill now faces significant opposition in the House of Lords from people who represent the existing players in the sector. Will my right hon. Friend reassure me that he will see off that opposition?
Greg Clark
My right hon. Friend will see in the approach we are setting out a vigorous continuation of many of the measures, such as the northern powerhouse, that he championed in his time in government that are making such a big difference in the north and other parts of the country. I can confirm that with the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), and colleagues in the House of Lords we will drive the reforms that have proved so successful in the past when expanding the institutions that contribute to our excellence in higher education. The standard and standing of higher education in this country have never been higher, which is a reflection of the soundness of the policies that have been pursued in recent years.
Callum McCaig (Aberdeen South) (SNP)
I give this proposal a cautious welcome. It is honest in some ways in its reflection of the state of the economy. In many ways it is brutally honest about some problems, including regional disparity and productivity. Likewise, it recognises some successes, such as the automotive and aviation sectors and, on page 90, Aberdeen as an oil and gas hub. The problems are not new, so how will the Secretary of State ensure that the same mistakes are not repeated? How will he ensure that existing industries are not sacrificed in the quest to support new ones?
Will the right hon. Gentleman confirm that the allocation of new research and development money will be in addition to anything that would have come from the European Union and that he will provide long-term commitments to match EU funding? How much of that R and D spend will be outwith London and south-east England? Imagine how much worse regional disparities would have been without EU structural funds. Will he commit to long-term replacements for those funds?
On renewables and carbon capture and storage, the right hon. Gentleman will be unsurprised that I am a little disappointed by the lack of ambition in an industry that will be worth hundreds of billions, if not trillions, of dollars in the near future. Will he consider a sectoral deal for renewables? If so, will he work with the Scottish Government on how that could be done in Scotland? Access to finance is identified as a problem, and I share the concerns about the Green Investment Bank. It is short-sighted to sell it off when this key sector needs access to funding and when the bank is the perfect vehicle for that.
How will the consultation process work with the devolved Governments? However good this industrial strategy may be, we must accept that the biggest threat to the economies of both Scotland and the UK is lack of access to the single market and to skilled people that comes through our EU membership. Will the right hon. Gentleman seriously consider the Scottish Government’s plan that would see Scotland maintain its membership of the European single market?
Greg Clark
I thank the hon. Gentleman for his thoughtful remarks. I am impressed that he has reached page 90 already, which shows his diligence. He says that we are brutally honest, but if we are to look forward and have an industrial strategy that reflects the challenges we face, we need to be clear-eyed. On technical education levels and the imbalances, some areas are prosperous and some can catch up, so it is right to be ambitious in that.
The research and development money that the Chancellor announced in the autumn statement is separate from whatever might be decided on the European funds. It was independently granted and is available to universities and research institutions. The consultation on how that money is spent is part of the consultation on this exercise, and the money is for research and development. One of the points we make is that we have often been excellent at producing brilliant new ideas but less successful at commercialising them. Pushing further on how we translate good ideas into practice is an important feature of addressing that.
The hon. Gentleman mentions renewables, which of course are important in Scotland. The emissions reduction plan, which is currently being prepared, will particularly address that but, on the green economy, a chapter of the Green Paper has a big commitment to doing what we can to make sure that we obtain industrial advantage from the investments we are making in green technology.
Finally, the hon. Gentleman says that the biggest threat to the economy is the exit from the European Union. The United Kingdom has been very successful in recent years, and I would say that the biggest threat to that is if the successful alliance of our nations in the United Kingdom were broken up by the independence of Scotland.
Claire Perry (Devizes) (Con)
There is so much to welcome in this very thoughtful report, and I congratulate my right hon. Friend and his team on delivering it. Will he say a little more about how the Government’s unprecedented investment in infrastructure will deliver export growth? I am sure he will not be surprised, but he may be disappointed, to know that our export potential, particularly from our rail industry, is far outstripped by that of our neighbours in continental Europe. We are spending a lot of money. How can we turn that money into exports and jobs?
Greg Clark
From her experience in the Department for Transport, my hon. Friend knows how important it is to make connections between places—it is an important means of underpinning growth. She will be aware that, through the national infrastructure fund, funding will rise by 60% from this year to 2022, which is a huge investment, and an appropriate one to make sure that the quality of our infrastructure keeps pace with the investments that our competitors are making.
Mr Iain Wright (Hartlepool) (Lab)
I warmly welcome and support the Government’s endorsement of a long-term, interventionist industrial strategy. I hope the strategy will play an active role in ensuring that workers are upskilled and receive higher wages and that British firms can scale up and become more enterprising, more competitive and more productive.
What is different this time from previous iterations of industrial strategy, including industrial strategies for which he was a Cabinet Minister? What will be the short-term, medium-term and long-term metrics by which the success or failure of this industrial strategy will be evaluated?
Greg Clark
I am grateful to the hon. Gentleman for his welcome. He says that it is an interventionist strategy, and it is true that the Government should be engaged with the economy to make sure that we have the right conditions for success, but I also point out that openness for competition to have its full run in our economy is vital to our success. As Chairman of the Business, Energy and Industrial Strategy Committee, he will reflect that point. I look forward to the Select Committee’s inquiry on the strategy.
The hon. Gentleman asks how the strategy is different from its predecessors, and I would suggest two ways in particular. First, as he will have observed, many of the themes that I have discussed are not about investing in particular companies or subsidising particular businesses but are cross-cutting. The themes are horizontal in that they look at skills right across the economy, infrastructure —looking at the importance of place and the differences between places—science and research. These are cross-economy measures, which is a different approach from those taken in the past.
Secondly, a lot of efforts in previous industrial policy were correctly about innovation, but they concentrated just on new discoveries and new inventions. That is important—as I have made clear, we need to extend our excellence into the future—but there is a big opportunity to make differences for the companies that follow and in the regions that are not competing at the top level. If we can really increase productivity there, we can make a big difference to the whole economy. That has not been the focus of previous industrial strategies.
Sir Nicholas Soames (Mid Sussex) (Con)
May I congratulate my right hon. Friend on a bold and ambitious statement and give him a unique, once-in-a-lifetime chance to get his new training plans for technical colleges off to a tremendous start? In Haywards Heath in my constituency there is a sixth-form college that was bankrupted by Labour’s ferocious education cuts and by corporate governance that would have done credit to Al Capone. It will shortly be empty, and would be a perfect starting place for one of his excellent new colleges.
Greg Clark
I am grateful to my right hon. Friend for that early pitch. He highlights the important point that we should have throughout the country a better and more reliable ability to provide technical education to those who can benefit from it. Many jobs are available in West Sussex but are not accessible for people who do not have the right skills. Our plan will help to solve that.
Lucy Powell (Manchester Central) (Lab/Co-op)
I welcome the Government finally accepting that we have a skills challenge in this country, particularly with the long tail of under-achievement. How does the Secretary of State square that with the huge cuts faced by further and adult education over the past six and a half years of his Government? Why is there not more emphasis on what can be done to close the productivity gap by investing in childcare and getting more women back to work, which is not even mentioned in his report?
Greg Clark
I shall say two things to the hon. Lady. First, as I said to the hon. Member for Norwich South (Clive Lewis), the Conservative-led Government’s task in restoring sanity to the public finances was absolutely foundational to a successful industrial strategy. Secondly, she will be aware that this Government have been particularly innovative in extending childcare to many people who previously were not able to access it. That is an important foundation on which we build.
Michael Gove (Surrey Heath) (Con)
Does my right hon. Friend agree that many of the highly impressive propositions on technical education in the Green Paper owe their origin to the work undertaken by our hon. Friend the Member for Grantham and Stamford (Nick Boles) when he drew up the skills plan that was laid before the House in July? Does he further agree that the success of specialist maths schools at King’s College London and the University of Exeter is an example that other universities should follow if they hope to hang on to their current high level of tuition fees?
Greg Clark
I endorse very warmly the due acknowledgement that my right hon. Friend makes to our hon. Friend the Member for Grantham and Stamford (Nick Boles), who made a massive contribution. In fact, I texted him yesterday to flag up the fact that many of the proposals in the Green Paper owe their origin to him. We wish him well in his recovery.
I commend very warmly the examples of the maths schools mentioned by my right hon. Friend. To expand maths schools throughout the country so that people with a real flair for maths can be pushed further and be equipped to go even higher in their ambitions is a fantastic thing. Whether in Exeter or London, that is a good template for others to follow.
Vernon Coaker (Gedling) (Lab)
My hon. Friend the Member for Manchester Central (Lucy Powell) pointed out that one of the things that have held back industrial strategies in this country for decades has been the skills gap. There is mention in the Green Paper of an overhaul of technical and vocational education; what this country needs is a cultural change—a shift to valuing technical, vocational and skills education as highly as academic education. Until that changes, the Secretary of State will not achieve what he wants, however much we all want him to.
Greg Clark
I agree with the hon. Gentleman’s analysis. I hope he will join us in making that change and approach this matter with a spirit of optimism and determination to make the change that the country needs.
Amanda Solloway (Derby North) (Con)
I welcome this common-sense statement. Does my right hon. Friend agree that the pillars will provide the ideal opportunity to enable regions to use their assets to the best effect for a more balanced UK economy, and to further grow the midlands engine for growth?
Greg Clark
I do agree with my hon. Friend. We are one of the most centralised countries in the world, but it is patently the case that our levels of prosperity are not uniformly high. We should learn from other countries and from what has worked well when we have devolved powers and given people who know what will make a difference locally a better ability to take those decisions.
Lilian Greenwood (Nottingham South) (Lab)
The Minister is right to make upgrading infrastructure a pillar of his industrial strategy, and I welcome the investment in HS2, but how can he claim to be providing greater certainty and a clear long-term direction when the east midlands’ top transport priority—electrification of the midland main line—has been paused, unpaused, delayed by four years and now dropped altogether? Does he not understand—this follows up on the previous question—that this uncertainty damages our economy, damages the east midlands rail industry and harms the region’s potential to grow exports?
Greg Clark
I expected the hon. Lady to welcome the commitment to upgrading infrastructure across the country. This is a Green Paper that is proposing priorities for the years ahead, and I had hoped that she would welcome that and the fact that the Chancellor has provided a 60% increase in infrastructure investment, which will benefit the east midlands and other parts of the country.
Sir Oliver Letwin (West Dorset) (Con)
I strongly welcome this Green Paper, particularly three elements of it: Mark Walport’s battery review; the special sector deal for new ultra-low emission vehicles; and the considerable efforts to create a hub for autonomous vehicles. Does my right hon. Friend agree that those three together should give the UK the opportunity to become one of the world’s leading producers of the electric and autonomous vehicles that we will all be driving 20 or 30 years from now?
Greg Clark
I do agree with my right hon. Friend. An industrial strategy offers us the opportunity to align policies that reinforce each other. We have some of the world’s best researchers in energy storage, and one of the world’s most effective, efficient and innovative automotive sectors. We are one of the leaders in renewable energy through offshore wind. If we bring them together, one will reinforce the other to give us this chance to be a world leader in a set of technologies that, under any reasonable estimate, seems likely to be taken up around the world in the future.
Stephen Timms (East Ham) (Lab)
The last thing we need is 10% tariffs imposed on autonomous vehicles. The Secretary of State is right to make the point that we have been the leading destination in Europe for overseas investment, but much of that was from companies outside Europe wanting to gain access to the single market, which the Prime Minister has now told us we are going to leave. Does he believe that the UK can remain Europe’s leading destination for inward investment outside the single market?
Greg Clark
Yes, I do. I said at the beginning of my statement that, as a Government and, hopefully, a country that believe in free trade, we want to have the best possible access to the single market. We continue to be a very attractive destination, but we want to be even more attractive, which is why we have set out our commitment to upgrading science and research, building better technical skills, and improving our infrastructure. Those are investments and policies that will enhance the reputation and attractiveness of the British economy.
John Redwood (Wokingham) (Con)
When reviewing procurement, will the Government ensure that, under this new strategy, we will find all those areas where British companies can supply goods better and cheaper and give them the contracts? At the moment, we are importing large quantities of military vehicles, building materials, steel for submarines and medical equipment, all of which we could make competitively here if we had an intelligent Government customer.
Greg Clark
My right hon. Friend is right. He will see that there are various proposals on procurement that I hope will have his support. One in particular opens up Government procurement to smaller and medium-sized enterprises, which, too often, have found that the bureaucracy associated with procurement regimes has kept them off the list. That is something that we can reform.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
The Green Paper rightly identifies the crucial role that better connectivity to regional airports could play in growing economies and highlights the vital importance of the Emirates route from Newcastle airport, which has significantly increased exports from the north-east. What discussions is the Secretary of State having with Treasury colleagues about the impact on airports such as Newcastle of devolving air passenger duty to the Scottish Government?
Greg Clark
In the context of a Green Paper on industrial strategy, I will await the representations from the hon. Lady, but I am pleased that she acknowledges the emphasis that we have placed on connections to every region of the country—not just by road and rail, but through airports—and the importance of establishing links to other nations with which we can have good trading relationships.
Sir Alan Haselhurst (Saffron Walden) (Con)
How much priority does my right hon. Friend give to the establishment of a digital railway? Will he encourage Network Rail in its plans to bring this technology to the Great Eastern main line, and hopefully to the West Anglia main line as well, because then the new trains that are on order could be equipped to take advantage of this in advance, rather than retrospectively at greater expense?
Greg Clark
My right hon. Friend is absolutely right. That is one of the proposals in the Green Paper that I hope will have his support through the consultation.
Fiona Mactaggart (Slough) (Lab)
The Green Paper rightly focuses on productivity, but there is one area of infrastructure where Britain lags enormously behind all our competitors: the cost of childcare. Childcare costs more in Britain than it does in every other OECD country apart from Switzerland—it takes up over 40% of the average wage—yet it is hardly mentioned in the Green Paper. That is the way to liberate the talent of women. What is he going to do about it?
Greg Clark
The Green Paper invites comments and proposals, so I look forward to seeing the right hon. Lady’s response to it. As I said earlier, the Government have taken very seriously the importance of childcare in allowing women and men to return to work in good jobs, and we have made great progress. I will be interested to read her response to the consultation.
Chris White (Warwick and Leamington) (Con)
I welcomed the opportunity to join the Secretary of State on Friday for his visit to the Warwick Manufacturing Group, an institution that represents many important elements of this industrial strategy. Does he agree that the midlands can play a leading role in the development of such a strategy, as it is home to world-class research, advanced manufacturing and a skilled workforce?
Greg Clark
I agree with my hon. Friend. One of the things that I found striking when visiting the National Automotive Innovation Centre, a fantastic centre that is being built, is the fact that as well as having research and development facilities that will be available to large companies and small challenger firms, there is on the same site a school that will take in 1,000 apprentices a year to equip them with the skills the motor industry across the west midlands can benefit from. That is a very good example of how research and development can tie in with the agenda of driving improved standards of technical skills.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
If the Secretary of State is serious about building an industrial strategy that works for the whole country, and that encourages and maximises the opportunity for research and innovation, there must be space in it for the development of marine renewable energy—wave and tidal power. World-leading work on that is being done in my constituency at the European Marine Energy Centre. Will he visit and see for himself the way in which our island communities can help to build the strategy that he says he wants to create?
Greg Clark
I would be delighted to visit the right hon. Gentleman’s constituency—it is quite a time commitment, but I am sure it would be worth it. He will see when he reads the Green Paper that there are a number of sources of support for innovation. Obviously, in a competitive way, the research and development funding is available for scientists and researchers to bid for. There is also a chapter on the green economy that makes suggestions on how we can ensure that we get industrial advantage as well as keeping costs low for renewables. Both routes might be applicable for wave and tidal technologies.
Amanda Milling (Cannock Chase) (Con)
I have been calling for ambitious, bold and visionary redevelopment plans for the Rugeley B power station site to attract businesses that will create highly skilled jobs, so I welcome my right hon. Friend’s statement and the Green Paper. Does he agree that the new, modern industrial strategy will provide the framework and conditions to help deliver this vision for Rugeley?
Greg Clark
I am grateful to my hon. Friend for her question. I remember visiting that site with her, and it has great potential not just to be a home for the start-up businesses that are very important in our economy, but as a place where technical skills can be imparted to the next generation of her constituents so that they can have good, well-paid and satisfying jobs.
Julie Elliott (Sunderland Central) (Lab)
I welcome some of the things in the Green Paper on the future of industry and our strategy moving forward, but to tackle those things, we have to secure what industry we have now. On Friday, Carlos Ghosn, the chief executive officer of Nissan, said he was going to revisit the competitiveness of the plant in Sunderland. What is the Minister’s view on that and on securing the jobs that already exist in Sunderland?
Greg Clark
The decision to back Sunderland and to build the two new models here was a significant moment for the hon. Lady’s constituents and for the country. It is true that all investors, whether domestic or international, constantly look to make sure that they are competitive, and what every page of the Green Paper does is show our determination to make sure that this economy is competitive now and into the future and to take the actions that will make it so.
Richard Fuller (Bedford) (Con)
I welcome this wide-ranging discussion of Government policies at this time, even if the broad buffet of good things outlined will unleash a torrent of insatiable demands, not least from the Davos business leaders jetting back with their Government advisers to barge their way to the table. Will my right hon. Friend therefore assure me that his agenda will be set by entrepreneurs? Will he be honest about the fact that, for every sector that is favoured, other sectors of the economy will be shunned? Will he assure me that he understands that there are no magic levers in his Department saying “raise productivity” or “improve skills”? Those things eluded his predecessors, and they will likely elude him.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. What I would say to everybody is that we still have a lot of people standing, and we still have a lot of business. In order to get everybody in, can we have brevity, both in questions and answers?
Greg Clark
My hon. Friend is right. The essence of our strategy has to be to support the ability of people to compete and to make life difficult for the incumbents. There are no cosy clubs for the incumbents, and the test of our support in sectors is whether it helps new businesses to emerge. That is extremely important.
Hannah Bardell (Livingston) (SNP)
The Federation of Small Businesses reported last year that significant numbers of women are starting small businesses and enterprises. Is the Secretary of State not therefore surprised, as I am sure the rest of the House is, that there is no mention of women in this industrial strategy, no mention of inclusion and very little mention of diversity? Will he undertake to review that?
Greg Clark
Throughout this document, we want to close the gaps that mean that we do not achieve our full performance, and that is absolutely the case when it comes to the position of women at the highest levels in science, for example, and in research. As the Minister in the Department, I have been successful in the past in driving the appointments under my gift to increase the proportion of women at the top level. However, the hon. Lady is absolutely right that, when there is under-representation of people of talent, the whole economy suffers, and that should be corrected.
Stephen Crabb (Preseli Pembrokeshire) (Con)
I strongly welcome today’s statement and the consultation paper. When we visit large innovative manufacturers such as JCB, Toyota and Airbus, they all speak about the importance of the relationship with their local further education colleges. Does my right hon. Friend agree that one of the objectives of the strategy should be to replicate examples of excellence and to drive up standards in the FE sector so that even more workers and employers share in a picture of world-class skills education?
Greg Clark
My right hon. Friend is absolutely right. One of the proposals on which we are consulting is to have much better connections between local employers and further education to make sure that the skills that are being provided are those that can be taken up immediately in these industries.
Albert Owen (Ynys Môn) (Lab)
I very much welcome the statement by the Secretary of State and his indication that he will work across the country, including with the devolved Administrations. On skills and low carbon, he and I both want to see a successful lower-carbon energy sector; in particular, he mentions nuclear. One of the concerns that nuclear workers have is that their conditions are being undermined by this Government. Will he agree to work with me and meet me to discuss this issue, because we need those skills bases to build on for the future?
Greg Clark
I am grateful for the hon. Gentleman’s welcome. I should mention that I did not say to the hon. Member for Aberdeen South (Callum McCaig) that as part of our proposals we will work very closely with the devolved Administrations in all parts of the United Kingdom, and I look forward to doing so. I am always happy to meet the hon. Member for Ynys Môn (Albert Owen).
Neil Carmichael (Stroud) (Con)
I take great pleasure in welcoming the character and ambition of this industrial strategy, which is exactly the right direction of travel. I also salute the focus on technical skills. Does the Secretary of State agree that it is very important to create the right pathway through our schools system to these institutions so that we encourage young people to consider from the very start the STEM subjects—science, technology, engineering and maths—on which he has focused, because that is a combination that will lead to high wages and high skills?
Greg Clark
The Chair of the Education Committee is absolutely right. I hope that he and his Committee might make a contribution to the consultation to help us as we establish precisely that pathway, which starts in school but goes beyond people’s commencement of work, because people often need to retrain and take on new skills during their working life.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I welcome the desire to transform technical education—something of a recurring theme ever since the days of Prince Albert. In trying to help the Secretary of State to make it a success this time, may I ask him to pay greater attention to the 14 to 19-year-olds at university technical colleges like the one at Aston University? Could I persuade him to give the training levy to the newly elected regional mayors, who can then make strategic training decisions that are appropriate to the regions they represent?
Greg Clark
The right hon. Lady makes two important points. First, as others in the past have recognised, it is vital to recognise the importance of technical education and to improve it, and that is certainly our intention. On the particular proposal that she mentions, if she would care to discuss it with me, we could feed it into the consultation.
Sir Desmond Swayne (New Forest West) (Con)
Where does the crucial role of free markets sit in this strategy?
Paul Flynn (Newport West) (Lab)
Newport has suffered grievously from the neglect of steel, but it is now having a mini-revival with the reopening of the site. Steel does not travel well or cheaply. Does the Secretary of State agree that if a new prosperity for manufacturing industry is to be created, it must be constructed on foundations of steel?
Greg Clark
Steel is a very important sector, and it needs to compete in the world in which we find ourselves. The discussions that I have been having with the steel industry are based around a strategy that it is pulling together to make British steel competitive in the years ahead.
Bill Wiggin (North Herefordshire) (Con)
The New Model in Technology and Engineering, or Hereford University as it should properly be known, has received tremendous support from the Secretary of State’s Department, but will the £170 million that he has promised in this statement be too late for Herefordshire, as we only have until 28 January to apply for new funding?
Greg Clark
My hon. Friend is right to point out the prescience of his friends and neighbours in Herefordshire in making their proposal. This is a very good example of precisely the sort of reform that we need, and I think that its prospects are pretty bright.
Gloria De Piero (Ashfield) (Lab)
We heard no mention of former coalfield communities such as Ashfield that still mourn the loss of well-paid jobs in the pits. I understand that this is a Green Paper, but what new jobs or tangible differences does the Business Secretary hope to see in communities such as mine, and by when?
Greg Clark
There is very much a reference to communities such as those that the hon. Lady mentions. When I talk about parts of the country that have fallen behind the best performing places in terms of productivity, they are the areas and towns that we have in mind—that is essential. It seems to me that one of the foundations for future prosperity is to ensure that the level of skills is higher than it has been for the industries that are expanding. It is particularly in areas such as hers that that transformation can have the greatest effect.
Graham Evans (Weaver Vale) (Con)
I was delighted earlier today to welcome the Prime Minister and, indeed, the Secretary of State to the marvellous Sci-Tech Daresbury in Weaver Vale to unveil the Government’s industrial strategy for the UK. Does my right hon. Friend agree that the £556 million boost for the northern powerhouse, alongside the £4.7 billion fund for science, technology and innovation, will help to create high-skill, high-wage jobs, helping to close the north-south divide?
Greg Clark
I was delighted to be back in Daresbury, which I have visited several times with my hon. Friend.
Greg Clark
Clearly lots of good things happen in Daresbury—[Interruption.] Some better than others, it is pointed out—that is a little mean.
My hon. Friend the Member for Weaver Vale (Graham Evans) mentions two things. The first is the devolution through the local growth fund, which is making a big difference across the country by putting more funds in the hands of people with the knowledge of what is needed locally to make a difference. The second, of course, is the big investment in research and development, of which impressive facilities such as that in Daresbury will make good use.
Chris Bryant (Rhondda) (Lab)
Mobile technology is a very important part of modern infrastructure, but may I urge the Secretary of State to be cautious when he looks at Ofcom’s figures? I suspect that many of us in the Chamber have looked at its maps that say, “Yes! Universal coverage with 3G and 4G—no problems at all,” only to find that the situation on the ground is phenomenally difficult. According to Ofcom, Porth—and this building, for that matter—have perfect access to all four mobile signals, but that is not true, is it?
Greg Clark
The hon. Gentleman makes an important point. When we talk about infrastructure, digital infrastructure, whether it is mobile or broadband, is very important. For businesses that depend on it, it is about dependability and reliability, not theoretical availability. That is very important, so it forms part of our approach.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Secretary of State rightly pointed out that 1970s’ industrial strategy was flawed by the fact that it almost exclusively focused on big industry. Will he ensure that his industrial strategy does not repeat that mistake by focusing exclusively on large, mature economies at the expense of medium-sized, emerging economies? Together, they represent the future.
Greg Clark
My hon. Friend is absolutely right. That is one of the reasons why much of the proposals are cross-cutting, rather than about particular firms. It is also why there is a particular emphasis on helping small businesses to grow and new businesses to be set up.
Nic Dakin (Scunthorpe) (Lab)
Steel is a key product for all the infrastructure projects that the Secretary of State mentioned, including Hinkley C, Heathrow and High Speed 2, so I welcome his statement that there is likely to be a sector deal for steel. What does the steel industry need to do to make sure that it achieves that deal?
Greg Clark
The steel industry is already embarking on a consideration of how it can plan out its future. I have encouraged it to do that—although it needed no encouragement, because it is keen to do so—and I look forward to seeing the fruits of that during the weeks ahead.
Antoinette Sandbach (Eddisbury) (Con)
I welcome the recognition that rural broadband is particularly important for increased GDP growth. Will the Secretary of State make a commitment that no small rural business will be left behind when it comes to digital connectivity?
Greg Clark
My hon. Friend makes an excellent point. We want to help everywhere to achieve its potential. We know that the prosperity of many rural areas is held back if they do not have good digital connectivity, so that is one of the ambitions that we set out in the Green Paper.
Stephen Kinnock (Aberavon) (Lab)
Given the vital nature of steel as a foundation industry, it is pretty astonishing that it gets only one passing mention on about page 100 of this Green Paper. May I commend to the Secretary of State the report “Steel 2020”, which was produced by the all-party group on steel and metal-related industries? May I ask him to read it and perhaps come to a future meeting of the all-party group so that he can explain why steel has not been given a sector deal in the Green Paper, and why it seems to have been airbrushed out of the strategy so far?
Greg Clark
I am afraid that the hon. Gentleman talks nonsense. I have had very cordial and successful meetings with the steel industry, and it is excited about the prospects of working strategically for its future. I have had the pleasure of attending meetings of the all-party group in the past, and I look forward to doing so again.
Andrew Selous (South West Bedfordshire) (Con)
Last Tuesday, the Chancellor described the roll-out of ultra-low emission vehicles as “disappointing”. We have 87,000, and the Government want 1.6 million by 2020. Will the Green Paper lay out a reliable road map to enable us to hit that target, as it is also a key part of improving our air quality?
Greg Clark
My hon. Friend is right that there are significant opportunities in the roll-out of electric vehicles, not just in the transport sphere but in our energy systems. An electric vehicle is, among other things, a unit for storing electricity. Combining and making connections between these sectors is good for consumers, industry and the resilience of the country.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
As the Secretary of State knows, the automotive industry is a major contributor to the greatness of the industrial heartland in the north-east, yet the Prime Minister’s indication that there will be a hard Brexit has made many businesses across the country and in the north-east nervous, including Nissan in my constituency. Will the Secretary of State ensure that the consultation fully addresses those concerns, and supports the success of—and, hopefully, with regard to electric vehicles and batteries, the future expansion of—this vital industry?
Greg Clark
The hon. Lady is right to emphasise the importance of being at the cutting edge of research and development in the automotive sector. That is one of the reasons why many car companies find Britain an attractive place to base, which is important. When it comes to the discussions about Brexit, we are clear—the Prime Minister has been clear—that we want to have a free trading relationship with our friends and neighbours in Europe, and that is the way in which we will approach the negotiations.
Mark Menzies (Fylde) (Con)
As you are only too well aware, Mr Deputy Speaker, the north-west of England is very much the hub of the nuclear sector in the UK. Can the Secretary of State shed some light on what thinking he has given to ensuring that people in the north-west of England are the prime beneficiaries of the new supply chain that will be emerging in the nuclear sector?
Greg Clark
My hon. Friend is absolutely right that there are huge opportunities through the development of new nuclear, which will require the training of a new generation of nuclear engineers and technicians. It is important that that is in place. There are also opportunities, not just in this country but around the world, to use our expertise in decommissioning to earn income for the UK and to create good jobs. There are big opportunities in the sector with regard to skills and the expansion of industries.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Prime Minister’s strategy lacks concrete proposals for Wales. Considering our £5 billion of trade and good net surplus with the EU, Wales is set to suffer most from the pursuit of a brutal Brexit. Does the Minister accept that doing nothing to counter the loss of EU convergence funding will serve only to exacerbate the already significant geographical wealth and earnings inequalities that characterise the British state?
Greg Clark
I urge the hon. Lady to read the Green Paper, in which she will see an absolutely crystal-clear commitment to making sure that all parts of the United Kingdom are able to share prosperity. That is good for those places and good for the UK as a whole.
Oliver Dowden (Hertsmere) (Con)
I welcome the Green Paper’s recognition of the vital role of the creative industries, the one sector that grew throughout the whole of the last recession. Will the Secretary of State reassure me that that extends to the TV and film industry? The recent hit Netflix series “The Crown”, which was filmed in my constituency, is a wonderful example of how jobs, investment and exports can be generated by the sector. Does he agree that that requires not only the right skills, but the requisite supply of commercial space, particularly in the south-east?
Greg Clark
I agree with my hon. Friend. The creative industries, together, have some claim to be Britain’s most successful sector in recent years—they have been growing very strongly. Sir Peter Bazalgette has agreed to work with the industries to look at what they need to build on that success in the future and to continue to create the great jobs they have produced. I look forward to that work.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I warmly welcome the Government’s new industrial strategy Green Paper, although it implicitly admits that the past six and a half years without an industrial strategy have been wasted. Having said that, the Materials Processing Institute has made a bid to be a metals catapult, and there is no mention of carbon capture and storage. Those issues are critical to the ability of any energy-intensive industries to go forward. Of real concern is certain BEIS civil servants’ views of virgin steelmaking capacity, and certain advice going to Ministers in relation to importing steel, rather than relying primarily on British-made steel, whether that is from Scunthorpe or Port Talbot. Will the Secretary of State please get up at the Dispatch Box and rule that out?
Greg Clark
I do not recognise the issue that the hon. Gentleman mentions, but if he speaks to me later, I will be able to find out more about it. I am grateful for his welcome to our approach. I argue strongly that it builds on some of the successes we have enjoyed in recent years, not least by devolving powers and funds to local areas and looking to create institutions that can conduct research and development that now has a worldwide reputation. However, we cannot be complacent; we need to continue that and build on it in the future.
David Rutley (Macclesfield) (Con)
I congratulate my right hon. Friend on his impressive industrial strategy, which works hand in glove with the Government’s Brexit plans to strengthen business confidence further. The new strategy also underpins the Government’s commitment to the life sciences. With that in mind, will my right hon. Friend accept an invitation to come to Macclesfield to see AstraZeneca’s site—the largest pharmaceutical site in the UK—to find out more about its exciting growth plans for the future?
Greg Clark
I will, indeed. Talking about the life sciences in the north-west touches on one of the themes of the Green Paper, which is the interaction between sectors and places, and how we can build institutions that can encourage smaller businesses to benefit from the presence of a range of other businesses in that sector. We have further work to do, and my hon. Friend will be expert adviser on it.
Neil Gray (Airdrie and Shotts) (SNP)
A Green Paper should set out the Government’s ambitions in a particular policy area, and the central focus of an industrial strategy should be on jobs. I asked the Secretary of State on 13 December 2016 about the disability employment gap and how the industrial strategy could help to support the Government’s ambition to halve that gap by 2020. Will he explain why the words “disability” and “disabled” do not feature in the Green Paper?
Greg Clark
The Green Paper does mention the fact that we will set out further measures on employment policies. I have agreed with the hon. Gentleman in the past that, just as I said in relation to the question from the hon. Member for Livingston (Hannah Bardell), when people’s contribution is not adequately made use of, it is a loss and an injustice for not just the individuals concerned, but the whole of the country and the economy.
Justin Tomlinson (North Swindon) (Con)
This is a very welcome and ambitious Green Paper. In Swindon, we have embraced development to attract new businesses and jobs, but to be able to reach our full potential, we need to unlock additional land and infrastructure funding quickly. How can that process be speeded up?
Greg Clark
I am keen that we should be agile and fleet of foot. It is important that land and premises are available, not least for businesses that are expanding, or those that are being founded or located for the first time. My right hon. Friend the Communities Secretary has that very much in mind as part of his reforms to the planning system.
Kelvin Hopkins (Luton North) (Lab)
UK manufacturing and exports are benefiting greatly from the more sensible and appropriate parity of sterling, but much more needs to be done to rebuild Britain’s industrial strength. Will the Secretary of State therefore give serious consideration to re-establishing the National Economic Development Council to provide a forum for employers, trade unions and Government to consult and advise on how British industry may be promoted for the future?
Greg Clark
I am interested in the hon. Gentleman’s proposal. I had not thought of reviving a body that I think was associated with a different type of industrial strategy. The council was about the big employers sitting down with Government. As some of my hon. Friends have pointed out, the approach that we want to take is more about creating conditions in which insurgents, new businesses and challengers to existing businesses have a central place. I am not sure that his suggestion would be the right approach, but I would be interested in hearing from him about it.
Mr Philip Hollobone (Kettering) (Con)
Small and medium-sized enterprises are the bedrock of local economic endeavour in Northamptonshire, and light industry, small-scale manufacturing and engineering firms are the backbone of the local economy. How can the Secretary of State best demonstrate to my constituents that his new industrial strategy is relevant to them?
Greg Clark
In a number of ways, I think. My experience of such businesses is that sometimes what constrains their ability to fulfil growing order books is a lack of skilled staff whom they can employ. The big focus on technical skills, and on improving the standard of technical education by working closely with employers, will make a big difference, especially to small and medium-sized business that cannot operate large training institutes themselves.
George Kerevan (East Lothian) (SNP)
How does the Secretary of State reconcile his commitment to innovation and insurgency with the wholesale pillage of the cream of British high-technology firms through foreign takeover, not least the current takeover by Mastercard of VocaLink and the prospective sale by the Government themselves of the Green Investment Bank to Macquarie?
Greg Clark
I regard it as a badge of pride that this country is open to overseas investment, from which we have benefited hugely. When I was with my hon. Friend the Member for Warwick and Leamington (Chris White) in the west midlands on Friday, we met the chief executive of Jaguar Land Rover, which is owned by an Indian company and has been a force for great good in the area. I want to be open to overseas investment.
John Glen (Salisbury) (Con)
I warmly welcome the rigour of the analysis underlying the Green Paper. When the Secretary of State considers the future of the aerospace growth partnership, will he think about what happens across Government, particularly at Boscombe Down with the long-term relationship between the Ministry of Defence and QinetiQ, and look for opportunities to grow such areas of real expertise?
Greg Clark
The aerospace growth partnership has been a success, and we are committing not only to continuing that now very successful institution, but to learning lessons for how other sectors might create similar institutions themselves.
Jim McMahon (Oldham West and Royton) (Lab)
I absolutely support the need for an industrial strategy, so I welcome the Green Paper on that basis, but the proof of the pudding will be in investment and whether the money is there to support the proposals. May I invite the Secretary of State to Oldham College in my constituency so that he can hear from the principal and the governing body about how the lack of funding in schools is undermining the efforts that are pointed out in the industrial strategy?
Greg Clark
I hope that the hon. Gentleman will take the opportunity, through a consultation that seeks to establish as much common ground as possible on our priorities for the future, to work with colleges and employers to ensure that the reforms that are needed are put in place so that we can equip his and all our constituents with the skills that they will need to get good jobs in the future.
Kit Malthouse (North West Hampshire) (Con)
I applaud the Secretary of State for putting life sciences front and centre of his industrial strategy and point out that the industry’s largest customer is the national health service. Will he therefore confirm that, as part of his review of procurement, the NHS’s inflexible and unimaginative procurement processes will fall within the scope of the review, not least in relation to drugs, devices, therapies and diagnostics?
Greg Clark
It is evident that this is a whole-Government Green Paper; not just my Department but all Departments are joined in it, and the Health Secretary is an enthusiastic participant and will want to be part of those conversations —advised, I am sure, by the expertise that my hon. Friend brings to the subject.
Alan Brown (Kilmarnock and Loudoun) (SNP)
When the Secretary of State met the four Ayrshire MPs to discuss the Ayrshire growth deal, we had a very positive and encouraging discussion, and we welcomed that. He suggested that the growth deal aligned with the Green Paper, and having now seen the 10 action points, I agree. Will he confirm that he still believes that the Ayrshire growth deal aligns with the industrial strategy? If so, will he also commit to working with his Treasury colleagues to secure some money for it?
Greg Clark
I strongly believe in the city deals and growth deals, and I thought the presentation from the hon. Gentleman and his colleagues showed a very good ambition, bringing together the industrial strengths and opportunities of their area, so I wish it every success. These deals need to be negotiated, but he will know that in Scotland we have a good record of making progress on city and growth deals.
Jo Churchill (Bury St Edmunds) (Con)
I welcome the statement. As the Secretary of State knows, the east of England enjoys an excellent ecosystem for life sciences. Does he agree that the strategy provides industry and business, particularly the life sciences sector, with the opportunity to bring their ideas to the door in order to truly drive their sectors and upskill our workforce? Also, may I invite him to Bury St Edmunds, which sits beautifully next to Cambridge and has both an enterprise zone and West Suffolk College, which would make an excellent institute for technology?
Greg Clark
That is an enticing invitation—it would be very nice to visit Bury St Edmunds—but I am in danger of filling my diary for the year. My hon. Friend’s points resonate with the themes of the Green Paper, which is about ensuring that we have the right institutions and skills to support the businesses of the future. The strategy will be business-led. It is not about the Government directing business; it is an invitation to business, employers and consumers to respond by saying what they need from it, rather than the Government simply saying, “This is how it’s going to be”.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Secretary of State briefly alluded to the importance of migration policy for the industrial strategy, productivity and innovation, so will he consult on taking over responsibility for certain parts of migration policy, seeing as the Home Office is making a mess of it? Even better, given his warm words on the importance of devolution, will he consult on devolving immigration policy so that the nations and regions can use local knowledge to determine the local skills needs?
Greg Clark
My responsibilities are broad enough and keeping me busy without my taking my right hon. Friend the Home Secretary’s job. That said, the hon. Gentleman’s question gives me the opportunity to re-emphasise that the strategy is a whole-Government approach, and of course it is important that the brightest and the best can continue to be employed here and to make the contribution they do to the whole UK economy.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
There is obviously much to be welcomed in the strategy, but may I express my particular support for the importance being placed on science investment and developing skills? To that end, will my right hon. Friend, first, seize the moment and make the case across Government for increasing spending on science and technology to 3% of GDP, which many of our competitor nations have done and which the Science and Technology Committee, which I chair, has called for? Secondly, will he please publish the digital strategy as a matter of urgency?
Greg Clark
I am grateful to the Chairman of the Select Committee for pushing us in that direction. He will see in the Green Paper that we are clear sighted about the need to invest in science and research, and this is not just Government investment; we want to create the conditions in which the private sector can invest in research and development. On the digital strategy, that is very much part of the programme that this industrial strategy is leading, and he will not have long to wait before he sees it.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I welcome the Green Paper, and the Secretary of State is right to try to position us for the jobs and sectors of the future, but what does he propose to do in the here and now? Many of my constituents working at Doosan Babcock and Chivas Brothers face redundancy. What can he do for them?
Greg Clark
The House of course knows of the situation at Doosan Babcock. Whenever any business makes redundancies, or redundancies are threatened, that is a worrying time for the employees. We are active, through Jobcentre Plus and our other agencies, in making sure that whatever opportunities are available, whether new jobs or training, are offered. In that respect, we generally have a good record, including in the hon. Gentleman’s constituency, and the Green Paper takes up that approach. It acknowledges that businesses will close from time to time, but that the most important thing is that we equip those workers with the right skills to get good jobs in the future.
Rishi Sunak (Richmond (Yorks)) (Con)
I welcome the Government’s commitment to skills. Does my right hon. Friend agree that creating a UCAS-style system for apprenticeships could realise the Government’s ambition by giving technical education greater parity of esteem with universities, making it easier for young people to find local vacancies and increasing the number of SMEs offering apprenticeships?
Greg Clark
I am grateful to my hon. Friend for his words and for his contribution, which, as he will see when he reads it, features prominently in the Green Paper. It is an excellent idea, and I hope he will promote its success in the years ahead.
Christian Matheson
I would hope not least, Mr Deputy Speaker.
The Science, Engineering and Manufacturing Technologies Alliance has calculated that there is an annual shortfall of 50,000 skilled engineers and that this will aggregate to about 800,000 by 2020. How does the Secretary of State plan to close that gap? While he is at the Dispatch Box, will he take the opportunity to scotch the recent press reports and confirm that all the steel in HS2 will be made at UK plants, including Shotton, where many of my constituents work?
Greg Clark
On the first point, it is clear that our investment in and focus on technical education goes precisely to meet the challenge that the hon. Gentleman identifies—around the gap between the needs of employers and the skills available in the workforce. On procurement for HS2, he will know that we have changed the guidelines to enable the contribution from British steel to be viewed on a fairer basis, but obviously that is part of a process that HS2 will need to go through to procure the product.
Robert Jenrick (Newark) (Con)
Given the failed industrial policies of the post-war period—unforgiveable sums of taxpayers’ money were wasted trying to prop up and pick winners—I am reassured to hear the Secretary of State say that his approach will be a much broader and more intelligent one. With that in mind and with a view to horizontal reforms, where do tax simplification and deregulation—arguably two of the greatest supply-side reforms that helped to lift the British economy out of the doldrums in the 1980s—fit into his strategy?
Greg Clark
They are both important. The third of the three challenges I mentioned at the beginning of my statement was to make and keep the UK as one of the best places in the world to found or grow a business, and both of the policies my hon. Friend mentions are crucial to that. This country has succeeded in creating and hosting new businesses in recent years partly because we in the Conservative party have had that very much in mind.
James Heappey (Wells) (Con)
I congratulate the Secretary of State and his team on the Green Paper and welcome the recognition that the digitisation of our energy system and the inclusion of storage and demand-management technologies will improve productivity as keenly as any other infrastructure improvement. Does he agree that the UK could and should be the world leader in clean tech, and does he share my view that the south-west would be an ideal focal point for the UK’s growth in that sector?
Greg Clark
I certainly agree with the first proposition; we have an opportunity there. On the second, I would say that my hon. Friend is commendably vigorous in his promotion of the south-west, which will have a very big role to play. So, too, will other parts of the country: Cumbria, for example, with its strong nuclear cluster; and the east coast with its expertise in marine engineering and supplying offshore wind. All parts of the UK can benefit from our leadership in clean growth.
Helen Whately (Faversham and Mid Kent) (Con)
I welcome the industrial strategy paper, especially its focus on science and skills, its building on local strengths and its addressing of institutional gaps. As my right hon. Friend knows, Kent has strength in life sciences, but a conspicuous institutional gap in its lack of a medical school—an institution from which life science innovations frequently emerge. I mention to my right hon. Friend that I am hopeful that this industrial strategy might be a vehicle for Kent to seek support for a medical school, and I would be grateful to him for any encouragement he might offer.
Greg Clark
I am grateful to my hon. Friend for her words. She will know that in life sciences, one proposal is to review what the sector needs to be able to support the small and medium-sized businesses in it, so that proposal might be something to be taken up.
Mr Alan Mak (Havant) (Con)
I congratulate my right hon. Friend on the statement and on the Green Paper. As he develops the industrial strategy, will he continue to support Britain’s leadership role in the fourth industrial revolution, and the new jobs, innovations and companies that are driving forward our growth? Will he encourage them to contribute to the Green Paper consultation, which I warmly welcome?
Greg Clark
I am grateful to my hon. Friend for all the work he has done to make sure that this country does not cede to others the energy and initiative to take advantage of what is termed the fourth industrial revolution. The pamphlet that he recently wrote is full of good ideas, and I hope that my hon. Friend and his colleagues who wrote the pamphlet will respond to the consultation.
Tom Pursglove (Corby) (Con)
I commend the Secretary of State’s statement, and I commend to him the report of the all-party parliamentary group on steel and metal-related industries, which has been published today. I hope that it will be useful as part of the ongoing discussions within government. The Government have made great strides forward in public sector procurement, so will my right hon. Friend make sure as part of this work that we do everything we can to transfer some of those principles into private sector procurement, too?
Greg Clark
My hon. Friend makes a very good point. I will certainly bear in mind what he said and will read closely the APPG report that he mentions.
Matt Warman (Boston and Skegness) (Con)
Any industrial or digital strategy must rely on transformative investment in broadband infrastructure. Can the Secretary of State reassure us that this is a strategy that will address not only the problems of the last 10 years, but those of the next 20 and 30 years, so we can plan for a world web with an internet of things and the fourth industrial revolution, which my hon. Friend the Member for Havant (Mr Mak) mentioned a few moments ago?
Greg Clark
My hon. Friend makes an excellent point. Our strategy must, of course, be forward looking and must be able to create the conditions in which investors and firms can make commitments now that are going to lead to our prosperity in the future. My hon. Friend’s frame of reference is absolutely right.
Maggie Throup (Erewash) (Con)
I warmly welcome the Green Paper on the modern industrial strategy, but will my right hon. Friend reassure my constituents in Ilkeston and Long Eaton that traditional industries such as lace-making and upholstery, which contribute so much to our local economy, will not get left behind?
Greg Clark
I am interested to hear this observation from my hon. Friend. We are talking about a consultation. It is important to participate in the new industries, so that through our research and development and scientific expertise we can take our place in that respect, but of course a lot of our existing industries make an important contribution to our economy and to employment, and we want to make sure that they can prosper, too.
Marcus Fysh (Yeovil) (Con)
I welcome these proposals and note that in all 10 of the areas of focus, the Yeovil area and its aerospace cluster present outstanding and crucial opportunities to optimise our potential. Will my right hon. Friend visit my constituency and help me to promote a local centre of excellence, an institute of technology, to build local skills and actively to encourage inward investment from the likes of Boeing, so that in partnership with great local companies such as Leonardo, we can deliver the skills and jobs of the future and maintain our strategic abilities in helicopters?
Greg Clark
In my tour of the country—from Orkney to Somerset, it now seems—I will be delighted to look at the aerospace cluster in Yeovil. Companies reinforce each other by their presence, and as we know from experience across the world, when we have several companies all in the same sector, it is a source of resilience to local economies.
Steve Double
Thank you, Mr Deputy Speaker. I know you have been saving the best for last.
Many references have been made to mobile technologies and electric vehicles as growth areas for the future. They both rely heavily on batteries. Will the Secretary of State therefore join me in welcoming last week’s news that large deposits of lithium have been found in Cornwall? This creates a great opportunity to build on our mining heritage in Cornwall and develop new industries around the extraction of lithium. Will my right hon. Friend confirm that this industrial strategy is designed precisely to support industries such as this one?
Greg Clark
I am interested to hear this—I had not picked up that news—from my hon. Friend. It is certainly true that the technological developments in energy storage, including batteries, provide a big opportunity. If Cornwall has an opportunity to contribute some of the raw materials for that, I am sure that this will be excellent news for the county.
Industrial Strategy Consultation
Greg Clark Excerpts(7 years, 3 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Government are today publishing a Green Paper: “Building our Industrial Strategy”.
This signals a new and collaborative approach to industrial strategy in the United Kingdom, helping to deliver an economy that works for everyone.
We are working from a position of strength. We have built an open, dynamic and competitive economy since the financial crisis, with a record number of people in work. We have more businesses than ever, industry sectors that are world leading, a strong science and research base, and have seen significant growth.
But there are challenges that the United Kingdom must face up to now and in the years ahead. Specifically we must:
Build on our strengths and extend excellence into the future;
Close the gap between the UK’s most productive companies, industries, places and people and the rest; and
Make the UK one of the most competitive places in the world to start or grow a business.
“Building our Industrial Strategy” sets out our approach to addressing these challenges in order to attain our objective: to improve living standards and economic growth by increasing productivity and driving growth across the whole country.
In order to endure, our strategy should reflect the considerable contribution of a wide group of people and bodies who share our ambitions. That is why this is a Green Paper—a set of proposals for discussion and consideration, and an invitation to others to contribute collaboratively to their development. I have placed copies of the document in the Libraries of the House.
[HCWS429]
Oral Answers to Questions
Greg Clark Excerpts(7 years, 5 months ago)
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Dr Philippa Whitford (Central Ayrshire) (SNP)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Our industrial strategy will help to build an economy that works for everyone. To do that, we will look to drive productivity and growth in all parts of the country. We have already set out steps to deliver this, including, as my hon. Friend the Minister for Universities, Science, Research and Innovation just said, significant funding announcements for science, research and development and infrastructure in the autumn statement.
Neil Gray
I thank the Secretary of State for that answer, and I note that he said that the industrial strategy should work for everybody. The Office for Budget Responsibility projects that there will be an additional 500,000 new jobs by 2020, but even if all those jobs were taken up by disabled people, the disability employment gap would still not be halved. Can the Secretary of State explain how the industrial strategy will support achieving the Government’s commitment to halve the disability employment gap by 2020?
Greg Clark
The hon. Gentleman makes a good point. It is important that we close that gap, and the Government have made a firm commitment to doing so. He will see when we make our proposals—I hope that he will contribute to them—that part of our purpose is to ensure that people who may have been excluded from the labour market have the skills to enable them to prosper in the future.
Dr Whitford
Ayrshire is a beautiful coastal county with areas of both rural and urban deprivation, but with huge potential in the aerospace and pharmaceutical industries. The Scottish Government are supportive of a growth deal to invest in infrastructure and key sectors. Will the Minister meet me to hear the proposal to unlock Ayrshire’s industrial potential?
Greg Clark
I would be delighted to meet the hon. Lady. I am proud of the city deals and the growth deals that we have negotiated, including in Glasgow, which is not far away from Ayrshire in the west of Scotland. Ayrshire has a huge amount to offer, and Prestwick is an important asset. I welcome the initiative of the councils in Ayrshire.
Rishi Sunak (Richmond (Yorks)) (Con)
May I urge my right hon. Friend to consider creating free ports across the nation? Such free trade zones around our great port cities can simultaneously boost manufacturing, promote regional growth and grow exports—surely, all key ingredients in a successful industrial strategy.
Greg Clark
I am grateful to my hon. Friend for his industry. He has published an excellent report for the Centre for Policy Studies, which makes for very good reading. He knows that I am considering it with my colleagues, and I commend him for writing it and putting it forward.
Richard Fuller (Bedford) (Con)
As my right hon. Friend develops his industrial strategy, may I give him some friendly advice? Drop the word “industrial” and drop the word “strategy”, and replace them with the words, “competition, innovation and skills policy”.
Greg Clark
I am grateful to my hon. Friend for his question. He will see that one of the differences between our approach to industrial strategy and policy—it is important to note that industry, for this purpose, means the services sector as well as manufacturing—and previous approaches is that our approach will not be about simply addressing the needs of incumbents; we want to make Britain the best, the most competitive and the most contestable place for business to locate. I would be grateful if my hon. Friend contributed to it. I think that he will find that it is music to his ears.
Dame Rosie Winterton (Doncaster Central) (Lab)
Surely, one of the Secretary of State’s priorities should be the steel industry. Is he aware that Noel Village foundry in Doncaster is being badly affected by reductions in the steel industry supply chain? Will he ask his Department to give urgent advice to the company to see whether anything can be done to prevent it from going into administration, even at this late stage?
Greg Clark
I am happy to meet the right hon. Lady about this, but I can give her some news on steel that I think she will welcome. I can announce today that the Government are going to publish their demand for steel, through public sector bodies, to 2020; that will be 3 million tonnes. We are updating the procurement guidelines for steel to include the health service and local authorities and to drop the previous threshold of £10 million for which those guidelines apply. That will be good for the steel industry generally and for all firms within it.
Mr Philip Hollobone (Kettering) (Con)
Small-scale manufacturing in firms that often have fewer than half a dozen people is key to the local economy in Kettering and is responsible for a lot of the employment opportunities. Will the Secretary of State make sure that small-scale manufacturers are a key priority in his industrial strategy?
Greg Clark
I will indeed. I would commend two things to my hon. Friend. First, we want to make sure that small manufacturers can access the extra funding for research and innovation that my hon. Friend the Minister for Universities, Science, Research and Innovation has described. Secondly, we want to address the ability of small and growing firms to obtain the finance to allow them to grow to the next stage, which is very important in having a vigorous competitive market, as my hon. Friend suggests.
Callum McCaig (Aberdeen South) (SNP)
From education to research and development, Scotland’s universities play a key role in boosting our economy across all regions and sectors. With that in mind, will the Secretary of State outline what the role of universities will be in his forthcoming industrial strategy? Will the recently announced new money for R and D be available to Scottish universities?
Greg Clark
Yes; universities are very important. We have had a number of very constructive sessions with university leaders and researchers. The hon. Gentleman is absolutely right that science does not recognise boundaries. Universities and researchers in Scotland have a fantastic record of success. In fact, with 8.5% of the UK population, Scotland attracts 10% of UK research funding, which shows that it can prosper and thrive with the new changes we are making on funding.
Callum McCaig
Science does not recognise boundaries. Universities Scotland estimates that 10% of research funding comes from the EU and that up to 16% to 20% of staff come from EU nations. With that in mind, will the Secretary of State ensure that, as we exit the EU, Scotland’s universities are not hit punitively by immigration sanctions and the withdrawal of EU funding?
Greg Clark
It follows from what I have just said—science does not respect boundaries—that the science community is very global and international. Of course, as the hon. Gentleman would expect, we will in the negotiations reflect the importance of that not just for Scotland, but for the whole United Kingdom.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Secretary of State talks about an industrial strategy and those words are in his title, but so far he has shared only bland generalities. Despite the high-profile examples cited, the Institute of Chartered Accountants predicts that business investment will fall by 2.4% in 2017. There are great opportunities for British businesses post-Brexit, but they need leadership, and this climate of uncertainty is toxic to investment. Will the Secretary of State stop playing Scrooge with his assurances, and give British business the Christmas present it wants—an industrial strategy?
Greg Clark
A bit of optimism on the part of the hon. Lady would not go amiss, especially in this Christmas season. In fact, there is huge enthusiasm in businesses right across the country and huge engagement with us in developing our long-term policies. Perhaps she has been distracted by some of the events in her party in recent months, so let me summarise the things we have done since July. We have given the go-ahead—she may have missed this—for some very important strategic infrastructure projects: Hinkley Point C, the third runway at Heathrow and the next phase of HS2. We have secured investment in Nissan, close to her constituency, as we announced a month ago. We have ratified the Paris agreement, and we have secured the extra investment that my hon. Friend the Minister for Universities, Science, Research and Innovation talked about. We have done more to put our industrial future on the right footing in five months than the previous Government did in 13 years.
Bob Blackman (Harrow East) (Con)
Chris Elmore (Ogmore) (Lab/Co-op)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
The Steel Council will next meet in the new year. I will also meet senior steel industry chief executives and the trade union steel committee next month.
Chris Elmore
I am sure the Secretary of State will join me in congratulating all those involved in the Save our Steel campaign—especially the Community, GMB and Unite trade unions—on their vital contribution to the recent announcement on Port Talbot and other steel sectors across the UK. I am sure that he agrees that it is trade unionism at its best. Thousands of steelworkers and their families can look forward to a more certain 2017, but one of their real concerns remains their pensions. What will he do to bring forward better plans to ensure that steelworkers’ pensions, as well as their jobs, are protected?
Greg Clark
I certainly join the hon. Gentleman in welcoming and congratulating the workforce, trade unions and the employers on their very constructive set of discussions. It is important that the membership is consulted, but this is a positive step forward and he is right that this will provide greater comfort to employees this winter. The hon. Gentleman will know that it is right and proper for the independent Pensions Regulator, rather than the Government, to approve and be content with pensions arrangements. It would be wrong for the Government to intervene in that.
Chris Green (Bolton West) (Con)
Greg Clark
I will indeed congratulate Severfield Steel, which is a very successful company, not only on the Ordsall Chord but on winning a global award in recent weeks. It was also responsible for construction of the Olympic stadium, the Shard, and Birmingham New Street station. Many of the buildings that we admire and have in our minds are constructed with British steel by British companies.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
While we have recently had some really good news for the steel industry, giving steel workers and their families the stability they need for now, the fact that steel was not mentioned in the autumn statement gives cause for concern. Furthermore, the UK Government’s leading of a group of countries that are blocking the EU reform of anti-dumping trade defence instruments is another serious issue for the industry. Will the Secretary of State commit to including the steel industry in the future industrial strategy, and detail the steps that the Government will take to support this vital foundation industry?
Greg Clark
Of course steel is incredibly important, and it is important that it should have a bright future—we all want to see that. One thing I have been doing with the Minister for Climate Change and Industry, working closely with the steel industry on both the employer and trade union side, is to fund and bring together a strategic review, and the whole industry is coming together to work on it. That is expressly designed to inform our industrial strategy, so that we can look forward with confidence to a very successful steel industry.
James Morris (Halesowen and Rowley Regis) (Con)
Neil Carmichael (Stroud) (Con)
The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)
Over the last month we have made substantial progress across the Department’s responsibilities. Our recently published review of corporate governance will make sure Britain is not only an excellent place to do business, but also is where business is done best. We continue to tackle climate change, ratifying the Paris agreement. My hon. Friend the Minister for Climate Change and Industry played an important part in the climate discussions in Marrakech, and he and I had the great pleasure of opening the Siemens wind turbine factory in Hull, creating 1,000 new jobs in that great city. By providing an additional £2 billion a year for research and innovation by 2020 and giving British homes and businesses certainty that their electricity demands will be met for the next five years, we are investing in our country’s economic future.
Neil Carmichael
That was a fabulous introduction to my question about the Hendry review. I know the Government have received the review, and I am confident that it makes some clear and useful recommendations, so I would like to know whether the Government intend to make it public soon, and what are their thoughts about some of Charles Hendry’s comments and recommendations?
Greg Clark
I am grateful to my hon. Friend for his question, and would like to put on record my gratitude to Charles Hendry for writing his report. It is important that it is published soon. Charles Hendry is travelling at the moment, but as soon as he is back I will agree with him a date to publish it and he can answer questions on it. It is a substantial document and my hon. Friend will understand that we will want to consider it and make our response in due course.
Deidre Brock (Edinburgh North and Leith) (SNP)
Jason McCartney (Colne Valley) (Con)
Greg Clark
We certainly will. It is important that the industrial strategy and business policy recognise the strengths of particular places. Yorkshire is a particularly fine example.
Mr Iain Wright (Hartlepool) (Lab)
Two weeks ago, GB Energy ceased trading, affecting 160,000 customers. Credit must go to Ofgem for ensuring that those customers were promptly transferred to another supplier, but does the Secretary of State believe that the regulator’s approach to risk management needs to change? Instead of carrying out little or no assessment of the viability of new entrants and then picking up the pieces if they fall, more rigorous financial health checks need to be undertaken to minimise the risk of failure, disruption to customers and a loss of confidence in switching to new energy providers.
Greg Clark
I am grateful to the hon. Gentleman. Like him, I commend Ofgem for the arrangements that it put in place. He raises a reasonable point, and as Chairman of the Business, Energy and Industrial Strategy Committee he will want to work with me to ensure that the right arrangements are in place.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Stephen Kinnock (Aberavon) (Lab)
The energy-intensive industries compensation scheme is due to end in April 2017. The Government have promised to bring forward legislation to exempt energy-intensive industries from renewable obligations and feed-in tariffs, but we are still waiting for that to happen. As things stand, the steel industry is therefore looking down the barrel of having to go back to the crippling energy costs it faced until the compensation package was introduced. Will the Secretary of State assure us that measures will be put in place before April 2017 to ensure that we do not go back to that situation?
Greg Clark
The discussions we have had with the steel sector emphasise the importance of energy costs, and our commitment is to work with the sector to bring them down.
Philip Davies (Shipley) (Con)
Bob Blackman (Harrow East) (Con)
Greg Clark
It is important that nuclear energy should form a key part of that. One of the pieces of neglect of the previous Labour Government is that they presided over the forecast closure of our nuclear fleet without making any plans to replace it. When I made the statement about Hinkley Point C, I also said that this would be the beginning of a new era of civil nuclear power in this country, and that is absolutely right.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
In the week when we saw a great deal between Tata Steel and the Community trade union, largely down to Roy Rickhuss and the return of Ratan Tata, we also saw the merger of Baosteel and Wuhan Iron and Steel. What risk assessment has the Department made of market economy status for China and its effects on the British steel industry?
Greg Clark
I join the hon. Gentleman in paying tribute to both Ratan Tata and Roy Rickhuss, as both the company and the unions have worked constructively together, and the progress is welcome. I have, with the Minister for Climate Change and Industry, a very regular dialogue with both employers and trade unions. As the hon. Gentleman knows, we have been active in making sure that we have the right trade defences against practices where countries dump steel unfairly in the UK market.
Graham Evans (Weaver Vale) (Con)
INEOS, Tata Chemicals and Banner Chemicals in my constituency provide high-quality, high-wage, high-skilled jobs. What consideration has been given to energy price competiveness in respect of our European neighbours, as a more competitive energy price would disproportionately benefit the northern powerhouse?
Greg Clark
As I said to a number of hon. Members, the energy prices that are paid by businesses generally, and by energy-intensive industries in particular, are a crucial part of competitiveness, and we want to work with these industries to reduce the costs.
Peter Kyle (Hove) (Lab)
Nissan has benefited from a pre-Brexit deal. What reassurance can the Secretary of State offer Brighton-based businesses such as American Express and EDF that, after Brexit, they will still be able to have an open and free relationship with the EU?
Greg Clark
American Express is a very important employer in Brighton, and it is very welcome here. It has located itself in this country because Britain is a fantastic place from which to do business. That is the message that I receive wherever I travel to in the world. There is great appetite to invest in Britain, and the hon. Gentleman will know of our recent success stories. I hope that American Express will continue to invest more and employ more in his constituency.
Martin Vickers (Cleethorpes) (Con)
Following the collapse of the Greater Lincolnshire devolution deal, the LEPs in Humber and Greater Lincolnshire take on a greater significance, but there is concern that some central Government funding may be lost as a result of the collapse of the deal. Will my right hon. Friend assure me that the LEPs will be used to channel the funds from his Department when suitable projects are identified?
Greg Clark
As my hon. Friends on the Front Bench have said, we regard local growth as a very important component of our industrial strategy, and my hon. Friend knows that I have been a big champion of local growth, so I want to see more of that. Obviously, certain offers were part of the proposed deal, but these deals are never compulsory, and if the councils and the businesses do not want to proceed then it is a matter for them.
David Simpson (Upper Bann) (DUP)
Does the Secretary of State agree that, as part of the industrial strategy, the future development of enterprise zones will be of great economic benefit, especially to the manufacturing sector?
Greg Clark
I agree that enterprise zones have been successful. They have provided some tax advantages and, in many cases, a simplified regulatory environment, which is very attractive to businesses. Their experience commends them.