GKN Automotive Plant: Birmingham
Grahame Morris Excerpts(3 years ago)
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Grahame Morris (Easington) (Lab)
Thank you for accommodating me and allowing me to be here in person, Dame Angela. I congratulate my good and hon. Friend the Member for Birmingham, Erdington (Jack Dromey) on securing this debate, which is not just important for Birmingham and the west midlands, but is of national significance because of the nature of the issues. I declare an interest as a long-standing member of Unite the union and chair of the Unite group in Parliament.
My hon. Friend has described what Melrose is doing to the GKN automotive factory in Birmingham. Frankly, it is an absolute disgrace. Out of deference to the procedures of the House, we do not curse and use foul language, but what is happening to the loyal workforce at this plant is an outrage. Over 500 jobs—my hon. Friend says 519—many thousands of jobs in the supply chain, and more than 50 years of proud history at the site are in the firing line. If this plant is allowed to close, and I am looking here at the Minister—we do not want just warm words but definite actions—it will be a nail in the coffin of UK manufacturing. We look to the Government for a response and a reaction.
GKN is a living, breathing symbol of a great British company. It has been building critical equipment, including for the defence of the realm, for over 260 years. My hon. Friend mentioned that it was involved in building Spitfires, and cannon balls that were used by the British artillery at Waterloo. Surely that is a history worth defending and a future worth saving.
I express solidarity with Steve Turner, assistant general secretary of Unite, who has been involved in plans to save jobs at the plant and Frank Duffy, Unite convener there, and his members, who have fought valiantly and continue to fight. Despite company promises to build a “British manufacturing powerhouse”, many Members of Parliament, including my hon. Friend and others present, and the trade unions, warned what would happen when Melrose launched its hostile takeover bid three years ago. Sadly, despite the comments, made I am sure in good faith, of the hon. Member for Rugby (Mark Pawsey), those predictions have proved correct. I do not accept the argument that the plant is not viable. Melrose’s directors have been heavily criticised for excessive bonuses and profits. I will not quote a figure, but it is eye-watering.
It strikes me that there are some parallels with what has happened with the European super league, where an elite wring out value from an organisation—in this case, GKN. As we have heard, Melrose is already closing one factory in Birmingham, and now it wants to throw the other, on Chester Road, on the scrapheap with the intention of stripping it of its assets, because that is what asset strippers do: they buy companies cheap, break them up and sell them off, and they throw away what is left. I had some experience of it in the north-east many years ago with Helical Bar, a property company that bought up the capital assets that were sold off cheap from Aycliffe and Peterlee Development Corporation, then sold them off, making a huge profit for Michael Slade, the chief executive, and walked away without adding any value to the community or to the local economy.
The more than 500 skilled engineering jobs under threat at Birmingham are good jobs and part of the backbone of British manufacturing, but apparently they are not valuable to Melrose, because the company just wants to throw them away. However, these jobs are valuable to the workforce themselves—of course they are. They are valuable to the families who the workers support. They are valuable to the communities in the west midlands where the people live. They are valuable to the trade union. They are also valuable to the economy, to us here in this room; well, I hope they are. The question I put to the Minister is: if they are valuable, what are Ministers going to do to save them? What are they going to do to save British manufacturing, especially the automotive sector, as we shift rapidly to electric vehicles? I look forward to the Minister’s comments later in the debate.
The key issue with the GKN plant in Birmingham is whether it is viable, as my hon. Friend the Member for Birmingham, Erdington touched on. Unite the union has worked through the figures and looked at the numbers with independent experts that have been recognised by the company. They looked at whether it is viable, and at Melrose’s claim that, in fact, the plant has been losing money for several years. According to the information I have seen, this seems to be a case of what we would call creative accounting. It is called transfer pricing, where large companies that operate over several sites, often based in different countries, pretend the different sites are buying and selling from each other while building a product. In that way, they can say that some sites are theoretically profitable while others are loss-making, depending on what prices the company chooses to charge itself or elements of itself.
It seems to me that that is a fiction, and it is often used to reduce the tax paid in some countries because the profits made in another are higher. In reality, all the sites contribute to the value of the product made, and that is certainly the case with GKN in Birmingham. Melrose bosses think they can just get the work done cheaper in Poland and France, an appalling attitude for a company that promised the Business, Energy and Industrial Strategy Committee only a short time ago to build a British manufacturing powerhouse.
Unite has developed an alternative plan with the independent experts, and they make it clear that it is possible not only to make a profit on the site but to increase capacity by 50% and deliver annual savings of up to £8 million for GKN. Most importantly, this will save those valuable jobs and create more jobs for the future, but it seems that Melrose is only interested in short-term profit. We need the Government to make Melrose see that this is an offer it cannot refuse. That will mean support for the rapid shift to electric vehicles, which the factory is perfectly placed to take advantage of, as my hon. Friend said.
GKN Birmingham Chester Road produces Driveline components, including side shafts and prop shafts; small, specialist components. According to Unite, the e-axle, known as the eDrive, which is an existing GKN technology that was developed at its UK innovation centre, is a key product that can secure the Birmingham site’s long-term future, as well as the UK’s critical manufacturing capability. The demand for that product will only increase as we move towards full electrification, but Melrose must get serious about supporting its manufacturing base, and so must the Government.
When the company’s chief executive, Simon Peckham, gave evidence to the Business, Energy and Industrial Strategy Committee in February, he put the blame squarely on electric vehicles. He claimed that
“electrification is a threat to jobs as well as an opportunity to grow jobs.”
He also said:
“For GKN Automotive as a whole, electrification is an opportunity; unfortunately, for”
the Birmingham plant “it is not.” We do not accept that. The workers do not accept that, and nor does Unite.
The question is: do the Government accept that electrification will not be an opportunity for those highly skilled engineers, who make parts for top brands, including Jaguar Land Rover, Toyota, and Nissan in my part of the country? Are Ministers, who promised a British manufacturing powerhouse, prepared to let Melrose throw those jobs on the scrapheap? Are they giving up on those skilled workers at a time when they need support most of all? I hope the Minister will let us know when she responds to the debate, because we will not give up on them, and neither will their union. We will fight all the way, because we are fighting for the future of British manufacturing. It is a fight that we are determined to win, even if it takes strikes, protests and other ways to disrupt Melrose’s disgraceful plans. The battle for the Birmingham plant has only just begun.
It would be useful if the Minister let us know which side she is on. Is she on the side of the skilled, productive workers, or that of the short-term, greedy bosses? I imagine the whole country would like to know the answer, especially as we go into the local elections in May. I hope the Minister will tell us.
Dame Angela Eagle (in the Chair)
Before calling Rachel Hopkins, I remind Members who are physically present to put their masks on when they sit down.
Budget Resolutions and Economic Situation
Grahame Morris Excerpts(3 years, 1 month ago)
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Grahame Morris (Easington) (Lab) [V]
I am grateful to be called in this debate.
I fear that the investment-led recovery and the levelling-up agenda referred to by the hon. Member for Cities of London and Westminster (Nickie Aiken) is set to fall at the first hurdle. The Minister will no doubt be aware of the plans by the notorious venture capitalists Melrose Industries to close the GKN Automotive factory in Birmingham. Indeed, hon. Members may remember the controversy that surrounded the hostile takeover of GKN by Melrose in 2018. Serious concerns were raised at the time by Unite the union and hon. and right hon. Members in this House about the implications of that takeover for national security and for the future of the GKN brand. In an attempt to allay these fears, Melrose promised to rebuild GKN into a British manufacturing powerhouse. It was a horrible promise. Five hundred highly skilled workers at the Chester Road site are now facing the sack.
The news of the planned closure has come as a shock to the workforce and to their union, which until recently had been in discussions with management about boosting investment into the site. Melrose maintains that the plant is unviable owing to the transition to vehicle electrification. Unite the union disputes this and is developing a rescue plan that will secure a bright future for the site. I want to place on record my concern that Melrose’s chief executive officer, Simon Peckham, misled MPs on the BEIS Committee last month about the kind of work that takes place on-site. With the Government bringing forward their ban on the sale of new petrol and diesel cars from 2040 to 2030, the shift to battery electric vehicle production is more urgent than ever, but it is vital that that transition to electric vehicles is investment-led and sustainable.
GKN can trace its origins back to the birth of the industrial revolution. It has more than 250 years of history. The Government owe it to British manufacturing and to this prestigious company, one of the largest UK industrial companies, to defend its future as we make a shift from the internal combustion engine to electric vehicles. I urge the Government to join Unite the union in urging Melrose to examine alternatives to the closure of the GKN automotive plant, and to prevent Melrose from asset-stripping and then disposing of this important British company.
Oral Answers to Questions
Grahame Morris Excerpts(3 years, 4 months ago)
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Chris Loder (West Dorset) (Con)
Grahame Morris (Easington) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
Businesses in tier 2 that are required to close can access payments of up to £1,500 per 14 days of closure. We are giving additional financial support of £1.1 billion to local authorities to support other businesses severely affected by restrictions even though open.
Grahame Morris
It is essential that the local restrictions support grant is available promptly to businesses and is not subject to a prolonged application process. In anticipation of some areas—hopefully my own in the north-east—moving into tier 2 this week, will the Secretary of State ensure that grants are paid quickly to businesses, including the retrospective grants, particularly to pubs?
Nadhim Zahawi
The local restrictions support grants, additional restriction grants and Christmas support payments are all available now for businesses through their local authority. I know that the Secretary of State takes these businesses very seriously. Throughout this whole process, since back in March, he made sure that all his Ministers talked to local government to make sure that we do get those payments out promptly.
Future of Coal in the UK
Grahame Morris Excerpts(3 years, 5 months ago)
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Grahame Morris (Easington) (Lab)
Thank you for calling me in this important debate, Madam Deputy Speaker. It is a debate that is very close to my heart, and to the hearts of many Members representing coalfield constituencies. I welcome the debate, congratulate the hon. Member for North West Durham (Mr Holden) on securing it, and thank the Backbench Business Committee for allocating the time.
My constituency of Easington has always been at the heart of UK coal, from peak coal production in the 1920s, to the role that my predecessor, Manny Shinwell, played as Minister of Fuel and Power in the post-war Labour Government, delivering the nationalisation of the industry on vesting day in January 1947 outside Murton colliery in my home village. But there was a cost to mining coal, and we suffered many tragedies; the most recent in my constituency, involving multiple fatalities, was the Easington Colliery pit disaster on 29 May 1951, when 83 men, including a number of members of the rescue team, lost their lives. I ask the hon. Member for North West Durham to reflect on the Hartley Colliery disaster in his own constituency, where 204 men and boys died. There are lessons to be learned about only having one means of egress—not just in mining terms, but more generally in how we run the economy.
The miners’ collective spirit and solidarity secured pay increases in 1972 and supported miners and their families throughout the miners’ strike of 1984-85 in a valiant battle to save jobs and communities. Sadly, the miners did not prevail in 1984. Industrial east Durham at that time had near full employment, and that is what we want to return to, but to do so we require investment in health, housing, education and employment.
This nation’s wealth was built on coal and on the toil of miners working in dark and dangerous conditions. Let us not forget that we owe a debt of honour as a nation to the miners and their communities, those men who mined the coal that fired the engines of industry in the last century that made Britain great. As coal is phased out of UK energy production, we should never forget the sacrifice in lives lost and shortened; I think of my late father, my grandfathers and a dear friend of my father’s, Jimmy Grogan, a staunch trade unionist who sadly passed away yesterday.
The legacy of coal in the UK should be a new, bright, clean and green future for former coalfield areas. We should be exploring technology by ground source heat exchange pumps that have enormous potential in former coal-mining areas. The future of coal and the debt we owe the former coal-mining communities must include settling the historic injustices that former miners in coalfield communities still encounter, 30 years after the pits closed. As we consider the future of coal in the UK, let us use this time as an opportunity to amend these historical injustices in relation to the Mineworkers’ Pension Scheme surplus, justice for Orgreave and investment in coalfield communities.
I am pleased that the Minister is familiar with this issue, and I remind him that in the general election Labour had a manifesto commitment to a 90-10 share of the surplus from the Mineworkers’ Pension Scheme, and I am hopeful that the Conservative Government will honour the commitment given by the Prime Minister to a coalfield community in Mansfield.
Oral Answers to Questions
Grahame Morris Excerpts(3 years, 5 months ago)
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Alok Sharma
I am absolutely delighted to congratulate my hon. Friend’s constituent, Jess. I thank him for all the work he does in his constituency to support engineering apprenticeships. He is absolutely right. We want the sector to keep supporting well-paid skilled jobs for our young people moving into the workplace as we build back better into the decade ahead.
Grahame Morris (Easington) (Lab)
Alok Sharma
I did address this issue earlier, but as the hon. Gentleman will know Rolls-Royce has indicated that it will retain key work in Barnoldswick, including fan blade capability relating to the Trent 700 engines, the joint strike fighter and a new technical capability for product development. I can also tell him that I will be meeting a cross-party group of Members of Parliament, together with Rolls-Royce, next week.
Oral Answers to Questions
Grahame Morris Excerpts(3 years, 7 months ago)
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Grahame Morris (Easington) (Lab)
The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)
In July, the Government published their ambitious R&D road map, reaffirming our commitment to cement the UKs position as a science superpower. We will revitalise our whole system of science, research and innovation to release its potential, and our investment in multiple disciplines and methodologies will be guided by expert researchers.
Grahame Morris
I thank the Secretary of State for that answer. A successful transition to new approach methodologies requires the support of Government- backed infrastructure, a strategic allocation of funding, improved education, multidisciplinary collaboration between universities and industry, and close collaboration with the regulators. Will he undertake to prioritise the opportunities offered by human-relevant methods, so that the UK does not risk losing its position as a global leader in biomedical research and innovation?
Alok Sharma
I know that the hon. Gentleman cares deeply about this issue and launched a white paper on it earlier this year; I welcome the contribution of that report. The use of animals in research is carefully regulated and remains important in ensuring that new medicines and treatments are safe. However, the Government are committed to reducing and replacing the use of animal research, and we have invested £67 million to support the development of new techniques that will help to achieve that.
Alok Sharma
My hon. Friend may know that we have funded Citizens Advice to provide local advice during this crisis, and we have negotiated a voluntary agreement with energy suppliers to support households impacted by covid-19. I also commend the Money Advice Service for developing the money advice tool, which gives people important practical support in managing their finances.
Grahame Morris (Easington) (Lab)
Kwasi Kwarteng
We are very supportive of any schemes in this country that promote the net-zero agenda, and I would be interested to hear details of that scheme in the hon. Gentleman’s constituency. I would be happy to meet him, and others, to discuss those matters further.
Oral Answers to Questions
Grahame Morris Excerpts(4 years ago)
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Grahame Morris (Easington) (Lab)
Mark Eastwood (Dewsbury) (Con)
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Michael Gove)
Every NHS and careworker must get the personal protective equipment they need. That is why we have appointed Lord Deighton to lead a national effort to boost PPE production and to support the scaling up of engineering efforts for small companies capable of contributing supplies.
Grahame Morris [V]
A large number of UK companies and consortia came forward with offers to manufacture and supply PPE, including the Protecting Heroes community interest company, which manufactures plastic visors and face masks. However, after the pandemic began, how many of those offers did not receive a reply for weeks at a critical time, resulting in some businesses selling vital PPE abroad? What were the reasons for the delay in processing and responding to such offers? Have the Government now established a more timely and efficient system for doing so?
Michael Gove
We have received 12,789 offers of help with the provision of PPE and 10,436 of those companies have now been contacted. I am sure that the House appreciates that many of those who make well-intentioned and generous offers of help are offering PPE that may not be appropriate in health and social care settings. We must ensure that we have appropriate PPE in appropriate settings.
A Green Industrial Revolution
Grahame Morris Excerpts(4 years, 3 months ago)
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Grahame Morris (Easington) (Lab)
I congratulate the hon. Members for Birmingham, Northfield (Gary Sambrook) and for Barrow and Furness (Simon Fell) on their excellent and most entertaining maiden speeches. I am sure that we will hear a lot more from them during this Parliament.
I am very pleased to speak in this debate, and I was following very closely the Secretary of State’s words. One of the key issues that we need to resolve, whichever side of the Chamber we sit on, is the growing economic divide between the north and the south. I will refer quite extensively to a new report published by Sheffield Hallam University, “The State of the Coalfields 2019”, which details the situation, identifying not just problems, but solutions.
In the UK, power and finance is concentrated in the centre, in the near exclusive control of Whitehall and Westminster. This has led to decades of under-investment in the north-east and former industrial communities such as mine. I believe that our economy and country as a whole will not succeed post Brexit if we remain exclusively reliant on the success of London and the south-east. Today, I will focus on the green industrial revolution and the economic benefits that it could bring to constituencies such as mine— Easington, in County Durham.
I am very proud of Labour’s manifesto and I thought that our Front Bencher, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), made a terrific contribution at the start of the debate in outlining the advantages of Labour’s green industrial revolution. In my lifetime, the north-east was one of the engines of economic success. It powered the industrial revolution and has a long and proud history in shipbuilding, coalmining and engineering. In Murton, where I live, the colliery was the mainstay of the village, providing employment and coal for the nation’s furnaces from 1834 until it stopped production in November 1991. It employed my father, uncles, cousins and grandfather.
Labour had planned to make the north-east a centre for the next industrial revolution—the green industrial revolution. Indeed, Labour’s manifesto set out not just slogans, but specific pledges: £13 billion of new investment in the green transformation fund, including plans for Crossrail for the north, expanding our ports, particularly on the Tyne and the Tees, a steel recycling plant in Redcar, and manufacturing facilities to support the Dogger Bank wind farms. We would have had 80,000 well-paid new green jobs. We heard about investment in manufacturing electric vehicles and the benefits of expanding the electric vehicle charging network. That would protect the 18,000 workers directly employed in the automotive sector in the north-east while reducing emissions and improving air quality. Also important is the upgrading of housing—the national figure was quoted earlier—from which 1.2 million households across the north-east could benefit. It would reduce bills, eliminate the vast majority of fuel poverty and make our homes healthier and more comfortable.
It is important that we consider the record of the last Government. It is not just a feeling or an impression, but certainly true that former coalfield constituencies such as mine have been at the sharp end of austerity and suffered disproportionately. If we grouped together all the coalfield areas, some of which are now represented by Conservative MPs, into one distinct region, it would have a population of 5.7 million and would be the poorest region in the United Kingdom, so the shared prosperity fund that Ministers talk about needs to be targeted at regions and former coalfield areas such as mine in the north-east.
The IPPR North research department found that between 2009-10 and 2017-18 the north-east saw a £3.6 billion cut in public spending, while the south-east and south- west together actually saw a real-terms £4.7 billion rise. Indeed, my local authority, Durham County Council, had a 40% budget cut—almost £250 million—at a time of increasing demands on services. We also have to hold the Government to account for their industrial policy, or lack of it: the abolition of One North East, our regional development agency; the scrapping of our Minister for the North—someone who could be an advocate for a joined-up government—and of specific measures to help with employment in my region; and their failure to support the industrial base, as several Members have mentioned, particularly the steel industry on Teesside.
I ask that the Minister consider the report by Sheffield Hallam University’s centre for regional, economic and social research. It contains some specific actions that I think he will find are very well thought through and evidence based. It documents the consequences of a legacy of failure that stretches back several decades and which manifests itself in many ways. For example, health problems are more widespread in former coalfield areas; more than one third of residents aged over 16 report health problems lasting for more than 12 months; and although the number of jobs is increasing, it is doing so at only half the rate we see in the main regional centres and a third of the rate we see in London, which widens the economic inequalities in coalfield areas such as mine.
The current focus on the City and financial sectors of the economy disadvantages coalfield communities, which have a higher proportion of manufacturing jobs. Such is the scale of the intervention needed—the Secretary of State mentioned some figures—that to raise employment to the national average would require 80,000 additional residents in work in the north-east and to raise it to the level of the south-east our region would require an additional 170,000. Part-time work accounts for a third of all our employment, there is a skills shortage, which is not helped by education cuts, and we have fewer degree-level qualifications. The young and better qualified have little option but to move out of coalfield communities to meet their employment aspirations. Welfare reform has hit us particularly hard, with £2.4 billion having been taken out of our communities—money that would otherwise have been spent in the local economy.
I want to conclude with some specifics. I have obviously got a vested interest in promoting the green industrial revolution. The north-east is the home of UK manufacturing. We have the most productive car plant in the world producing electric vehicles the world wants to buy. I know of constituents driving polluting diesel vehicles who would love to switch to electric if they could afford it. In my constituency, we have the commercial space—office and factory units—to accommodate the green businesses of the future, and at the end of this month Biffa will be opening a new £27.5 million plastic recycling plant in my constituency. Also in my constituency is Drilcorp, specialists in renewable technologies, heat pumps and geothermal systems, while our East Durham College has established a technical academy that delivers courses and training in engineering and manufacturing, including renewable technologies of the future. The Minister has an opportunity—I am asking for his help—to unleash the immense potential of our former coalfield communities and of constituencies such as mine.