Oral Answers to Questions

Greg Clark Excerpts

Tuesday 12th September 2017 Commons Chamber

[Alan Mak (Havant) (Con)]

7. What steps he has taken to support the development of electric and autonomous vehicles.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Our industrial strategy capitalises on our strengths as we build the next generation of motor vehicles. On 25 July, we committed £246 million to the Faraday challenge to make Britain a centre for the development of battery storage. The following day, BMW announced that the new electric Mini will be built in Oxford.

[Alan Mak]

As the fourth industrial revolution gathers pace, countries that embrace electric and autonomous vehicles will find it easier to move both people and products, reducing costs and boosting productivity. Will the Secretary of State continue to support such vehicles, as they drive our future economic growth and productivity?

[Greg Clark]

I will indeed and I am grateful to my hon. Friend for his championing of those investments. We already have an outstanding reputation in the automotive sector through our leadership and investment in both electric and automated vehicles. Ford, for example, has announced that its European smart mobility research will be based in Britain, and Nissan is conducting its automated vehicle testing in the UK. Our code of practice for testing new technologies is globally recognised as the best in the world. We have a successful motor industry and we want it to be stronger still.

[Stephen Kinnock (Aberavon) (Lab)]

On 20 February, the Secretary of State said that he would release the famous letter to Nissan

“when it is no longer commercially confidential”. —[Official Report, 20 February 2017; Vol. 621, c. 784.]

Will he explain whether that will be in 2017, 2018, 2019, or sometime thereafter?

[Greg Clark]

Yes, I will release the letter. The hon. Gentleman reminds us of the fact that the investment Nissan is making in Sunderland has secured 7,000 jobs on that site and nearly 50,000 jobs in the supply chain. It was a very welcome investment. We need to respect Nissan’s confidentiality, but I have made a commitment to the House that, when it no longer applies, I will certainly release the letter.

[Mr Gregory Campbell (East Londonderry) (DUP)]

What discussions is the Secretary of State having with manufacturers on prolonging battery life as rapidly as possible, and on rolling out electricity charging points to ensure the existing points are working and not broken down, and that they become more readily available throughout the UK?

[Greg Clark]

We are gaining international respect and attention, including from some of companies that have been mentioned, for our commitment to research and development of battery storage. That is why, through our industrial strategy, the Faraday challenge to make us the best in the world in battery storage is so important. The hon. Gentleman is absolutely right to mention charging points. We want to make it possible for people to plug in and charge their cars. We have over 11,000 publicly accessible charge points. That is the largest network in Europe, and we want to expand it further.

[Maria Eagle (Garston and Halewood) (Lab)]

8. What steps he is taking to ensure the security of the UK’s energy supply after the UK leaves the EU.

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[Jo Swinson (East Dunbartonshire) (LD)]

9. What steps he is taking to encourage long-term decision-making in corporate governance.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

One of Britain’s greatest assets in competing in the global economy is our reputation for being a dependable place in which to do business. In our response to the recent Green Paper on corporate governance, we set out plans to build on those strengths through greater transparency and accountability to shareholders, employees and suppliers, and others with an interest in the long-term success of companies.

[Jo Swinson]

A myopic focus on short-term profit and share price in many British boardrooms damages the UK economy, leading to chronically low rates of business investment and the treatment of workers as units of production rather than human beings. Some respondents to the Green Paper suggested that long-term investors should be rewarded with stronger shareholder voting rights. Can the Secretary of State explain why the Government rejected that interesting proposal?

[Greg Clark]

We consulted widely on the Green Paper, and the set of reforms that we are making has enjoyed broad support. We are proposing to extend the holding periods for long-term share incentives from three years to five years. I think the hon. Lady played some part in the introduction of the three-year periods, and I hope that she will welcome the extension. We are also making it a more explicit requirement of boards, including boards of directors, to reflect in their reports and accounts what they are doing for a wider range of stakeholders, not just the short-term issues. I hope the hon. Lady will welcome that as well.

[Mr Gavin Shuker (Luton South) (Lab/Co-op)]

11. To ask the Secretary of State what assessment he has made of the capacity of the industrial strategy challenge fund to increase economic growth.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The industrial strategy challenge fund will help to drive growth in all parts of the country by using research and development to position us well in global markets where Britain has particular strengths.

[Mr Shuker]

Can the Secretary of State explain why his challenge fund is directed at sectors that are dominated by an over-representation of men, while many of the professions in which females are over-represented face low investment, low skills, low pay and low productivity?

[Greg Clark]

Our exchanges this morning show the potential and the strengths that we have in successful sectors such as the automotive, healthcare and medicine, and satellite and space sectors, in which we are creating very good jobs. However, my ambition and my Department’s ambition—which I hope the hon. Gentleman shares—is to increase the proportion of women and other groups who are under-represented in those industries, because there is talent there that we should be using, and part of our drive is to get the best talent into those world-beating industries.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

A recent report produced by Sheffield Hallam University found that the challenge fund had too narrow a sectoral focus, which was disproportionately benefiting areas in the south-east at the expense of traditional manufacturing areas in, for instance, the west midlands. What elements of the fund will benefit areas such as mine?

[Greg Clark]

I have not seen the report. I will look at it, but I think it is mistaken. The challenge fund includes, for example, the Faraday challenge, which I launched at the University of Birmingham along with many industrialists and academics from across the west midlands. It is proposed that the west midlands should be at the heart of the challenge. Investment in driverless cars, and in satellites and space, is taking place throughout the country. One of the big features of the challenge fund is that it reaches every part of the country, and, indeed, every part of the United Kingdom.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

With Brexit uncertainty mounting, inflation rising, growth faltering, business confidence at a six-year low, and the euro at a record high—[Interruption.] I am sorry, but that is the truth. Our economy therefore needs action from this Government, but instead it is groundhog day, with the same money announced over and over again, which makes it back to the future for our regions, with, as my hon. Friend the Member for West Bromwich West (Mr Bailey) indicated, the challenge fund money being shown by Sheffield Hallam research to impact only 1% of the economy, overwhelmingly in the south-east. So will the Secretary of State stop prevaricating, do the right thing and tell us right now what level of regional growth he expects the challenge fund to deliver? Or does he not even know what success looks like any longer?

[Greg Clark]

Talking of groundhog day, the hon. Lady talks complete nonsense. The industrial strategy challenge fund and the industrial strategy Green Paper have been widely welcomed in all parts of the country. After our exchanges, I will send the hon. Lady the support it has had from the north-east of England, of which she should be aware. This is something that has long been called for. I have listed the sectors that will benefit. As we are talking about manufacturing, in terms of her reflections on the state of confidence in the economy, the hon. Lady should know that the EEF last week reported record orders, record export orders, record employment and record investment intention. She should welcome that.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

12. To ask the Secretary of State what steps his Department is taking to support small and medium-sized enterprises.

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[Dr Philippa Whitford (Central Ayrshire) (SNP)]

13. What plans he has to ensure that the industrial strategy is effectively implemented in rural areas.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Some of the biggest economic opportunities are in the rural parts of the United Kingdom, and I welcome the contribution of many rural representative groups to the development of our industrial strategy, including several organisations in Ayrshire.

[Dr Whitford]

Ayrshire has enormous industrial potential, including as a possible site for the medical manufacturing innovation centre and, of course, for the UK’s first spaceport, but for it to succeed and for local people to benefit and access those jobs we require wider infrastructure development. Ayrshire is not covered by a city deal, so will the Secretary of State speak to the Chancellor and back a full Ayrshire growth deal?

[Greg Clark]

The hon. Lady knows that I have great enthusiasm for a deal in Ayrshire, and conversations around that are ongoing. I am sure that she will welcome the progress being made on the spaceport, which is important for Prestwick, and the £3.5 million support for the Halo project at the old Johnnie Walker bottling plant in Kilmarnock. A lot is being done in Ayrshire, but I would like that progress to continue.

[Jo Churchill (Bury St Edmunds) (Con)]

Has the Secretary of State considered rural enterprise zones? Small, targeted areas within small rural communities would help to drive business in those environments.

[Greg Clark]

My hon. Friend makes an excellent suggestion. There are particular opportunities for start-ups and smaller businesses to locate in rural areas, where premises may be more available than in towns. Clustering them together so that they can support each other is an excellent suggestion and I will take it forward.

[Nigel Mills (Amber Valley) (Con)]

15. What steps his Department is taking to increase transparency in the property market.

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[John Penrose (Weston-super-Mare) (Con)]

17. Whether Ofgem is able to implement a domestic energy price cap within its present powers.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Ofgem has extensive powers that would allow it to establish a cap on household energy prices that cause consumer detriment. The Competition and Markets Authority identified a consumer detriment averaging £1.4 billion a year, which I expect Ofgem to take measures to eradicate.

[John Penrose]

I thank the Secretary of State for that clarification. Is it not pathetic of Ofgem to ask the Government to pass a law ordering it to impose an energy price cap when, as he says, it has the legal powers to do that already? Does that not show that Ofgem is miserably failing to stick up for energy customers? Will he therefore push Ofgem to grow a spine and introduce a cap without delay?

[Greg Clark]

Ofgem has yet to respond to my request. I have the power to oblige Ofgem to put a cap in place. Doing that would seem excessive, and it would require primary legislation. Ofgem has those powers, so there is no need for that. That is why, faced with this huge detriment of £1.4 billion on average, I believe it is essential that Ofgem uses the powers that Parliament has given it to eradicate the detriment.

[Caroline Flint (Don Valley) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Over the last few weeks we have made significant progress across a number of the Department’s responsibilities. We have been discussing the first sector deal, which will involve the Government working alongside life sciences businesses to capitalise on our expert science and research base to make that industry even more competitive. Our reforms of corporate governance, which will ensure that businesses publish pay ratios between chief executives and staff, will help to maintain the UK’s reputation as a confident place in which to do business. We continue to invest in innovation throughout the country through the industrial strategy. In July, I announced the Faraday challenge, a £0.25 billion investment in battery technology in all parts of the country that will boost both research and development and job creation in the industry.

[Caroline Flint]

The Secretary of State knows that the concern for Ofgem, even though it has the power, is that energy companies would appeal to the CMA and frustrate the process. What he has not acknowledged today is that, under section 26 of the Energy Act 2010, he already has the power to introduce a price cap if one group of customers is treated less favourably than other customers by an energy supplier. Why does he not seek measures to introduce the power he already has?

[Greg Clark]

Ofgem is the regulator, and it had a report from the Competition and Markets Authority saying that consumers are being ripped off to the tune of £1.4 billion a year. We have a regulator with powers given by Parliament, and those powers should be used. That is the challenge for Ofgem. I would be very surprised and very disappointed if any of the big six, knowing the objectivity of the CMA report, were to protest and appeal against such a determination.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T2. I know the ministerial team has been working hard on this, but the issue with sleep-in shifts, if it is not resolved, is that charities will have to close their doors and the people they support, including those with learning disabilities, will be left without care. Will the Minister update us on the progress on quantifying the back-pay liabilities of those charities and on when an appropriate solution will be delivered?

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

On 27 June, the Secretary of State failed to confirm to me that he would legislate for a price cap to deliver to 17 million customers the £100 saving promised by the Prime Minister if Ofgem did not propose such a cap. On 3 July, Ofgem announced its plans, which fall short of the Prime Minister’s promise, and later stated that a cap is really a matter for Government legislation. I ask again, will the Government now legislate for a price cap to deliver the Prime Minister’s promise?

[Greg Clark]

The hon. Lady is misinformed; Ofgem has not responded formally to my request, and it should act on the evidence presented to it, using its powers. The ball is in its court, and I expect Ofgem to do its job and stand up for consumers.

[Rebecca Long Bailey]

I am saddened that the Secretary of State is non-committal, because at the same time as we have rising prices, power distributors recently made an average yearly post-tax profit of 32%, paying out share dividends of £5.1 billion. For water, the situation is even worse, as over the past decade companies have made £18.8 billion in profits, paying out £18.1 billion of that as dividends, with Macquarie paying £1.6 billion in dividends alone, while Thames Water incurred £10.6 billion of debt, ran up a £260 million pensions deficit and paid no UK corporation tax. So I ask him: what are the Government’s plans to reform our broken utilities markets?

[Greg Clark]

On the specific point of retail energy markets, a two-year investigation has been carried out by the CMA, and it is now for Ofgem to respond. I hope it will respond and eradicate that deficit; that is the test that Ofgem faces. We have made it clear that we will rule nothing out if it falls short, but I do not want to remove the obligation on it to respond in that way. I hope that the hon. Lady will welcome our intention to publish a consumer Green Paper and that she will contribute to it. This will look across the board—across other utilities as well—to see whether the existing regulatory arrangements are sufficient.

[Jo Churchill (Bury St Edmunds) (Con)]

T3. The life sciences industry is worth £64 billion to the UK, and Sir John Bell’s report last week indicated how important manufacturing was. Will the Minister therefore join me in welcoming the opening of the cell and gene manufacturing unit and welcome further jobs in this industry in the east of England, particularly in my constituency?

[Jessica Morden (Newport East) (Lab)]

T5. This week’s electricity grid connection deal would make the Cardiff tidal lagoon the UK’s largest renewable energy project, generating some of the cheapest power in the country, and it would be a big boost to Newport, but its potential can be realised only with the Government first backing the pilot project in Swansea bay. When will that happen?

[Greg Clark]

I do understand the great interest in this matter. As the House knows, I am enthusiastic about renewable technologies, but we have an important responsibility to make sure that they proceed at a price that is reasonable for consumers, who pay through their bills. That is being assessed and I will report to the House when that assessment is finished.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

T4. Although wind turbines play an important part in the nation’s energy mix, it is alleged that the quality of life and health of some rural residents is adversely affected by noise emissions. Are the current noise limits and recording methodologies sufficient—I am referring to low-frequency noise and infrasound—or should the methodologies be reviewed?

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[Greg Clark]

I am aware of the issue and the representations being made on it. I am happy to meet the hon. Gentleman to explore what steps might be available, but he will be aware that pensions are, correctly, run at arm’s length from the Government, through an independent regulator and through the trustees, and so the Government’s ability to determine these things is very limited.

[Sir Edward Leigh (Gainsborough) (Con)]

T6. Trading on the world’s markets as a free trade nation after 2019 will be a bit like swimming in the Serpentine on a winter’s morning: bracing and invigorating but a bit heart-stopping if one is not prepared. Will my right hon. Friend the Secretary of State explain how he is gearing up his entire Department to ensure that British industry no longer debates the rights or wrongs of staying in the EU or the single market but is fully prepared, and up-to-scratch with conferences, seminars and all the rest, to trade on the world’s markets?

[Greg Clark]

My hon. Friend will be aware that my whole departmental team are very active, both in this country and overseas, in setting out the huge opportunities to build on this country’s strengths and be economically successful post-Brexit. I know that that work enjoys his full support.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

The growth of new and renewable technologies presents a huge opportunity for the north-east economy but, given the continued uncertainty about the clean growth plan and our membership of and access to the single market, what are the Government doing to encourage business investment in this area?

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[Stephen Hammond (Wimbledon) (Con)]

T8. Now that it is autumn, many of our constituents are concerned about the cost of fuel and energy this winter. What can the Secretary of State say to reassure all our constituents that fuel and energy will be accessible for all this winter?

[Greg Clark]

We still have in this country some of the lower energy prices in Europe, but the major energy companies’ increases for those on the standard variable tariffs are clearly unacceptable. The issue has been identified by Ofgem, which needs to take action to correct it.

[Peter Kyle (Hove) (Lab)]

Since the launch of the much heralded productivity plan 18 months ago, productivity has plummeted to pre-crash levels. Will the Secretary of State tell us which one part of that productivity plan he feels is responsible for the cataclysmic productivity figures we have today?

[Greg Clark]

The hon. Gentleman is an intelligent fellow and knows that the route to building productivity in this country is to look to the long term to establish, in a serious way, a shared analysis and determination about what is to be done. On skills, for example, I hope he will share our view that by investing in technical education through the new T-levels and extending the hours for which people are educated, we are taking a step towards addressing what is a generational challenge for the UK economy.

[Vicky Ford (Chelmsford) (Con)]

More than eight out of 10 British manufacturers export elsewhere in the EU and tariffs or customs delays could have a negative impact. Will the Secretary of State confirm that the Government will seek to negotiate transitional relationships that maintain the economic benefits of the single market and customs union until a new relationship with the EU can be implemented?

[Greg Clark]

It is completely understood that a cliff edge would be bad for business. Companies need to have the confidence to be able to make investment decisions over the next few months and years. That acceptance across Government is welcomed by business.