Corporate Governance and Insolvency

Jeremy Lefroy Excerpts

Tuesday 20th March 2018 Commons Chamber

[Andrew Griffiths]

I thank the right hon. Gentleman for his question. He clearly has a vast amount of experience as a former Secretary of State in our Department. He is right to identify the value extraction element in this document. When a business is taken over, we often see the directors of the purchasing company put in place complicated measures to protect their own backs, to ensure that, whatever happens to the business, they will not be impacted. The powers proposed in this consultation would allow us to recoup and recover the amount of money involved, not just for shareholders and directors but for contractors and creditors in the supply chain. In relation to Toys R Us, he will recognise that some businesses will always fail. However, the Government are clear that this set of measures will put an emphasis on the responsibilities not just of directors but of shareholders. It is an important point that shareholders—particularly institutional shareholders—should have a voice in the way in which these businesses are run.

[Jeremy Lefroy (Stafford) (Con)]

I commend my hon. Friend for his statement, for this consultation, and for standing up for small businesses. Will he extend the consultation—or perhaps have a future consultation—to look at the forced liquidations of often small and sometimes slightly vulnerable businesses by banks and other secured creditors, which are totally unnecessary, and could be resolved by other means, thereby maintaining jobs, employment and prosperity in our constituencies, as opposed to leaving bust businesses that should be thriving?

Taylor Review

Jeremy Lefroy Excerpts

1st reading: House of Commons
Wednesday 7th February 2018 Commons Chamber

[Andrew Griffiths]

I thank the right hon. Gentleman for that question. The Chancellor set out our approach to those matters, and I have nothing further to add at the moment.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the Government’s position on this and urge them to make quick progress, but there is one area in which employment rights are potentially about to be seriously damaged: the right of British citizens to work in 30 other countries in the EU and the European economic area as we leave the EU. What are the Government doing to ensure that young people and others have the opportunity to go and work overseas, bringing great benefits to their own career and, when they return, to their businesses or the companies for which they work, which they have enjoyed for many decades?

[Andrew Griffiths]

I wondered how long it would be before we got on to the “B” word, Brexit. I know that my hon. Friend is hugely concerned about that, as are businesses large and small up and down the country. He will have to wait a little bit longer, I am afraid. That announcement will, I am sure, be made by someone higher up the food chain than I, but I can assure him that the concerns of workers and British business are being heard by Government.

Oral Answers to Questions

Jeremy Lefroy Excerpts

Tuesday 30th January 2018 Commons Chamber

[Mr Gyimah]

I welcome the characteristic passion with which the hon. Gentleman delivers his question, and I share his objective in that we both want the best future for young people. As he knows, the apprenticeship system is going through a change. It will now be employer-led with a focus on quality. We are in the first year of the levy operating and we did expect a bit of a dip, but this situation will recover to deliver the future for our young people.

[Jeremy Lefroy (Stafford) (Con)]

Further education colleges such as Newcastle-under-Lyme College and Stafford College are vital to the provision of apprenticeships, both under the levy and non-levy. But just having the levy on its own is not necessarily sustainable. Will the Minister ensure that all further education colleges have access to funding for non-levy apprenticeships?

[Mr Gyimah]

My hon. Friend makes a good point, but the levy is very much in its infancy. It is going to raise £2.6 billion to fund apprenticeships for young people. We have to give it time to work, but I take his point on board.

Vauxhall (Redundancies)

Jeremy Lefroy Excerpts

Monday 16th October 2017 Commons Chamber

[Claire Perry]

As my right hon. Friend the Secretary of State said at the time, and as has been said again, the company made a commitment to keep the plant open, both at the time of the acquisition and at subsequent points. We believe that the company stands by that.

The hon. Lady asked whether there is dialogue. There is ongoing dialogue, as I mentioned in my opening remarks, with the company—we had another conversation with it today about what exactly this means—with those in the broader area supporting the workers and with the unions. It is incredibly important that we are all joined up on this.

I entirely reject the idea that we do not have a joined-up strategy when it comes to the auto sector. We have turned around a sector that was on its knees in 2008-09. Under this Government, it has been turned into one of the country’s major investment and export stories, and we continue to invest for the future. As I have said, some models will do well and some will not. Companies need to know that this is the best place to invest for the future, so that the Ellesmere port plant can continue to be, as it was in 1964, a flagship manufacturing plant and so that we can retain high-skilled jobs in the UK and in the area.

The hon. Lady asked whether we are sending a clear signal. We continue to send a clear signal to this company and others that we will stand by them as the future evolves, to make sure that we are not left in the slow lane of technological innovation, but that we lead the world. We will reassure companies as much as possible about the certainty that we require from the Brexit negotiations—namely that, as my right hon. Friend the Secretary of State and I have made incredibly clear, we should have the closest possible relationship with the single market.

[Jeremy Lefroy (Stafford) (Con)]

Is my hon. Friend working together with the company and local government to ensure that the skills of those highly-skilled people who may, sadly, lose their jobs in the next few weeks and months will be retained in the area and built on? One thing that we learned from Germany in the late 2000s, during the great recession, is that if those skills are retained in the area, it will be possible to boost not only other companies but Vauxhall if it begins, as we all hope it will, to take on people again in the future to work on other models.

[Claire Perry]

My hon. Friend is absolutely right. It is vital that we maintain those skills. It is worth noting that there is a significant cluster of other businesses in the region, which is home to Bentley Motors, Jaguar Land Rover, Getrag Ford, Toyota’s engine plant and Leyland Trucks. It is really important that we continue to invest in those skills to minimise job losses and to ensure that the country does not lose the talent that people have built up over the years.

Oral Answers to Questions

Jeremy Lefroy Excerpts

Tuesday 27th June 2017 Commons Chamber

[Margot James]

I agree that action is needed, but it is important that we take the right action. We have undertaken a consultation, the results of which will be published shortly. That will be followed by a consultation on the 2011 changes to the Housing Grants, Construction and Regeneration Act 1996, which will consider the merits of ring-fencing retentions and the extent to which contractors are making the payment of retentions conditional on the performance of obligations under other, completely separate contracts.

[Jeremy Lefroy (Stafford) (Con)]

4. What steps he is taking to ensure that the electric grid is able to support the charging of the number of electric cars estimated to be in use by 2020.

[The Minister of State, Department for Business, Energy and Industrial Strategy (Claire Perry)]

I congratulate my hon. Friend on his pathfinding work in this area. I understand he is a proud owner of a Nissan Leaf—an electric vehicle made in the UK. He will therefore know that this is an exceptionally important point for us. I am very proud of the Government’s ambition for almost all cars on our roads to be zero-emissions by 2050, and also of our success in positioning the UK as a leading destination for the manufacture of and research into these vehicles. He will be reassured to know that good progress is being made with grid-readiness, and the upcoming smart systems plan and the automated and electric vehicles Bill will ensure that electric vehicle demands are managed efficiently, and the roll-out of electric vehicles is accelerated.

[Jeremy Lefroy]

I thank the Minister for her response, and I am glad to hear that, because a study of the impact of electric vehicles on the UK’s distribution network has estimated that

“voltage imbalances, coupled with overloaded distribution transformers could…impair power lines.”

How quickly can we have a report on that, given that the usage of such vehicles is likely to rise substantially in the coming years?

[Claire Perry]

I think my hon. Friend is right. With policies to really accelerate the usage of electric vehicles, this is a critical thing. He will know that Ofgem has approved business plans for the local network companies, which already bake in billions of pounds of investment, to ensure that the expected demands on the grid can be met. But, equally, it is not just about raw investment in cables; it is actually about changing consumers’ behaviour to ensure they can charge their vehicles at a time that puts least demand on the grid and perhaps saves them money. I refer back to our plan and to the Bill, which will enable smart charging and help people to charge their vehicles at a time when it puts least demand on the network.

Oral Answers to Questions

Jeremy Lefroy Excerpts

Tuesday 14th March 2017 Commons Chamber

[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)]

T6. I thank the Secretary of State for his support for the midlands engine. In Stafford, we build them. Last week I had the honour of opening the technical training centre at Perkins’ large engine plant in Stafford. Does he agree that that shows just how important it is for businesses to be proactive in putting together the facilities needed for apprentices and taking on more of them, as Perkins is?

[Margot James]

I quite agree with my hon. Friend. That demonstrates the need for all businesses, especially SMEs, to take advantage of our target of 3 million apprenticeships and the huge improvement in the quality of apprenticeships that the National Apprenticeship Service supports.

Vauxhall/Opel: Proposed Takeover

Jeremy Lefroy Excerpts

Monday 20th February 2017 Commons Chamber

[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.

Oral Answers to Questions

Jeremy Lefroy Excerpts

Tuesday 13th December 2016 Commons Chamber

[Mr Hurd]

We are reviewing our priorities in relation to the energy innovation portfolio, which sits inside our Department, and the hon. Gentleman will have noticed the comments by the Chancellor at the autumn statement. We are reviewing our priorities and will announce them shortly.

[Jeremy Lefroy (Stafford) (Con)]

12. What assessment he has made of the security of the UK’s energy supply between 2017 and 2020.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)]

National Grid’s electricity capacity report for this year was published in July and includes a forward look on electricity security. Through competitive capacity auctions, we have already secured capacity from 2018-19 to 2020-21, and in January we will hold a further auction to secure capacity for 2017-18. Our most recent gas security analysis was published in October and shows that our diverse and flexible gas supply can meet demand even under severe weather conditions.

[Jeremy Lefroy]

The importance of substantial gas storage to electricity generation and avoiding damaging price hikes was highlighted by the partial closure of the Rough storage facility. What are the Government doing to tackle the question of increasing gas storage for the future?

[Jesse Norman]

That is a proper and important question. Our gas supply arrangements are quite diverse, and we have more than 30% spare gas capacity even on a cold winter’s day. The system has been tested, and has responded well in the past to shocks, including higher than expected demand for heating or power and restrictions to supply infrastructure, but it is certainly something we keep under constant review.

Industrial Strategy

Jeremy Lefroy Excerpts

Thursday 20th October 2016 Commons Chamber

[Chris White]

I welcome that intervention. The hon. Gentleman and I have attended some of those very interesting institutions and worked together at Warwick University, one of our leading international universities.

I am pleased that Tata has based its new technology centre in Leamington, which shows what effect inward investment can have on our constituencies and our country. Despite the collaboration—the links between our educational institutions and business, its location and its workforce—how much more could we do as a constituency and as a country if we had the strong foundations of an industrial strategy?

Since working in the automotive sector, I have always had a passion for manufacturing, not least as co-chair of the all-party manufacturing group. I am a member of the Business, Energy and Industrial Strategy Committee—I am pleased to see its Chairman, the hon. Member for Hartlepool (Mr Wright), in his seat—and we are currently taking evidence on this concept.

We have recently heard evidence from the right hon. Member for Tatton (Mr Osborne), the former Member for Twickenham and Lord Heseltine, who all assured us in their own different and special ways that we have had an industrial strategy all along. Perhaps they are right, but I would like to use this speech to say how I think an industrial strategy could be reformed to meet some of the present challenges that we face.

In the last Queen’s Speech debate, I spoke on industrial strategy. I remember that most of the other speakers spoke about sugar tax, an important issue at the time. I must admit that I was not entirely overwhelmed by the Government’s enthusiasm for what I was saying, so no one is more delighted than me to see the inclusion of the words “industrial strategy” in the name of a Department.

There has been a sense of scepticism about industrial strategy. [Interruption.] That was more warmth than I received for my remarks in the Queen’s Speech debate. Industrial strategy has been given negative connotations. Let us consider British economic performance, for example, in the post-war period. Britain’s relatively poor record between 1950 and 1979 has generally been blamed on the lack of competition, with traditional firms being unwilling to adopt technological or process advances. Wilson’s “white heat” of the scientific revolution was replaced by a heavy reliance on the financial sector. Neglect in the past has seen a weakening of our supply chains and a huge shortfall in the skills that a world-class industrial base requires to satisfy both demand and opportunity.

We need to have a strategy and structure in place, a need made even more urgent following the EU referendum. In addition, highly capital-intensive advanced manufacturing requires long-term planning. There is a burden on companies to invest in skills and equipment, and a burden on the state to help create stability for long-term decision making—macroeconomic, fiscal and regulatory.

For manufacturing to grow, an emphasis needs to be placed on encouraging investment and greater long-termism. Although initiatives such as the midlands engine and the northern powerhouse are laudable, they need to be supported by strong tangible policy, and that policy will be less effective if it is piecemeal. For example, capital allowances were popular with industry, but were discrete in their design. A coherent strategy can work for the midlands, the north and the south, driving growth, building economies and providing sustainable employment and the subsequent reduction in community and individual inequalities.

Any new industrial strategy must fit the times we live in, the domestic economy, the global marketplace and developing themes such as Industry 4.0. In September 1965, the then Secretary of State for Economic Affairs produced the national plan, which sought to cover

“all aspects of the country’s economic development for the next five years”.

The plan was more than 450 pages long and looked at everything from the running costs of schools to the future development of the electronics industry. The plan was comprehensive in scope, but our economy no longer operates under such a structure and the plan would have negative consequences if replicated today.

The lack of success of documents such as the national plan does not mean that there should not be a national industrial strategy now for the UK, or that there is not a case for a coherent document to be drafted by the Government, outlining the support that they intend to give the sector and Departments. In countries such as Germany, long seen as a model industrialised nation, there has been little need for the Government to pin down formal strategies or statements because this philosophy is so entrenched and embedded in all activity. In Britain, there has been a tradition of volunteerism when it comes to economic organisation.

[Jeremy Lefroy (Stafford) (Con)]

Does my hon. Friend agree that in Germany, in the Kreditanstalt für Wiederaufbau—KfW—which has been in place since the late 1940s and provided long-term support to small and medium-sized enterprises, we have a model that could be replicated here, perhaps in the form of a UK investment and development bank?

[Chris White]

I thank my hon. Friend for his contribution, but I gently suggest to him that that slightly misses the point. It is just one element of an industrial strategy.

Hinkley Point C

Jeremy Lefroy Excerpts

Thursday 15th September 2016 Commons Chamber

[Greg Clark]

I understand my hon. Friend’s point. I hope that he will concede that I have come to the House at the earliest opportunity. Such decisions have consequences for financial markets, and it is the norm to disclose such decisions at the opening of the markets. He can rest assured—I am sure that he will accept this—that my sense of responsibility to the House is clear in my mind, but the conduct of business must be orderly when it comes to the implications for financial markets.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the announcement about the golden share and support what my right hon. Friend the Member for Wokingham (John Redwood) said about future British investment, perhaps through a UK investment bank or UK pension funds, being important. Will the Secretary of State confirm where the currency risk will arise, in particular, for future subsidy payments out of the contracts for difference?

[Greg Clark]

The contract is expressed in pounds. The construction risk is entirely with the investors.