Bombardier

Julian Lewis Excerpts

Thursday 22nd November 2018 Commons Chamber

[Mr Speaker]

I say to the Minister: my cup runneth over with excitement. Little did I know that service as Speaker entailed a personal briefing on reverse thrust, but one learns something new every day.

[Dr Julian Lewis (New Forest East) (Con)]

If we are in the business of reverse thrusts, may I suggest that a bit of reverse thrusting be done in the direction of Bombardier? Although my hon. Friend the Minister is absolutely right in that it is a private company and he has no power over it, he should not underrate his own degree of influence. He will meet the company, as he says. Let him do a bit of thrusting and let him thrust it in the right direction.

[Richard Harrington]

Mr Speaker, I think you will soon consider declaring “thrusting” comments completely out of order and unparliamentary language. As you might imagine, the sentiments of what my right hon. Friend says are absolutely right. We are in continual touch with Bombardier. I am proud of the factory; I am proud of the workers there; and I am proud of the Government’s role.

GKN: Proposed Takeover by Melrose

Julian Lewis Excerpts

Thursday 15th March 2018 Westminster Hall

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

It is a great pleasure to serve under your chairmanship, Mr Stringer. I think that gives me nine minutes to cover the points and address the issues raised by hon. Members, so, to coin a phrase, I will crack on. I congratulate the hon. Member for West Bromwich West (Mr Bailey) not only on securing the debate but on the thoughtful, clear tone in which he made his contribution. He has no constituency interest but raises this issue because he cares passionately about the UK economy and our manufacturing industry in particular. I applaud him for that.

The context is important. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) said we want to be a nation of makers, and it is important to recognise that we have just seen the longest consecutive period of growth in manufacturing in the UK for 50 years. I am therefore pleased to report to the House that manufacturing is in rude health. The United Kingdom is a successful open economy and the Government’s industrial strategy, which has been discussed at length today, will build on our strengths and address our weaknesses to create a Britain fit for the future.

A key part of the UK’s dynamic economy is our mergers regime. Mergers and takeovers can bring benefits to both consumers and the UK economy. I can report to hon. Members that the UK has the third-highest foreign direct investment stock in the world, behind only the US and China. That investment means jobs in growing sectors and opportunities to develop skills, and it helps companies deliver products and services at competitive prices. Mergers and takeovers also provide important opportunities for companies to grow and innovate. Many of the UK’s most successful companies have grown through mergers and takeovers, both in the UK and abroad.

The UK’s merger regime is highly regarded the world over due to its design. The regime, based on transparent rules administered consistently by expert bodies, recognises that decisions are primarily a matter for the shareholders and restricts the role of Ministers to transactions that raise public interest concerns. As a result, the regime offers clarity for businesses and maintains investor confidence.

For example, the takeover code, administered by the independent Takeover Panel, provides a robust framework to ensure that takeovers of listed companies are conducted in an orderly manner with fair treatment of the shareholders. The Takeover Panel has repeatedly strengthened the code. Its most recent changes, which came into effect on 8 January 2018, require bidders to make earlier and fuller disclosure of takeover plans and to give companies subject to a bid more time to prepare their response—the question that the hon. Member for Newcastle upon Tyne Central raised earlier. Those changes have applied to the bid by Melrose.

[Dr Julian Lewis (New Forest East) (Con)]

I apologise for coming late to the debate. While what the Minister says is absolutely beyond question, does he accept that where the defence of the realm is concerned, certain other considerations must also apply?

[Andrew Griffiths]

I thank my right hon. Friend, who as always makes a salient and sensible contribution to the debate. I agree with him wholeheartedly that the defence of our nation is the most important point in any of these decisions.

As hon. Members have heard, the Enterprise Act 2002 grants Ministers statutory powers to intervene in mergers that give rise to public interest concerns only on the grounds of national security, financial stability or media plurality. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) raised the issue of that financial stability. It is the financial stability of the country’s economy as a whole. This Government take very seriously our responsibility to protect national security in particular, and we are robust in assessing any possible public interest concerns and carefully considering when those powers should be exercised. If necessary, they will be exercised.

I appreciate that there has been much speculation about the potential use of those powers in this case. However, as we heard earlier, public interest interventions are quasi-judicial in nature. It is therefore important that Ministers act, and are seen to act, impartially, on the basis of an open mind and of the evidence available. For that reason, it is not appropriate for me to comment on their use in this individual case. As hon. Members might expect, my right hon. Friend the Secretary of State and I have taken a close interest in events. He has spoken to the chief executive officers of both GKN and Melrose to understand their intentions and to make it clear that he wants an open line with the companies, consistent with his potential statutory role in the process.

The bid, however, is primarily a commercial matter for the parties concerned, and we wait to see how things develop. GKN shareholders now have until 29 March to decide whether to accept the Melrose bid. It has become clear that, regardless of whether the takeover by Melrose is successful, GKN will not be the same company we know today. Beyond the potential sale of the Driveline, both GKN and Melrose have outlined plans to sell the powder metallurgy business and other non-core businesses. There remains the distinct possibility that, irrespective of which party ultimately controls GKN after the resolution of the bid, it will choose to sell all or parts of GKN’s current business to foreign companies.

On 13 March, Melrose wrote to the Business, Energy and Industrial Strategy Committee at its request, setting out the company’s position on pensions and post-offer undertakings. In addition to the conversations held between the Government and the parties involved, the hon. Member for Newcastle upon Tyne Central, who raised the question of Unite, will be pleased to know that the Secretary of State has been in close contact with the union.

I know that some hon. Members have concerns about GKN’s pension schemes. Individual cases are a matter for the independent Pensions Regulator, but the Government are aware that the parties are in discussions with the pension trustees, who have made their expectations clear. The hon. Member for West Bromwich West raised the issue of R&D investment; Melrose has told the Business, Energy and Industrial Strategy Committee that it supports R&D and will maintain the level of investment in R&D that GKN has spent in the past, which I think was 2.2% of sales between 2014 and 2016.

The hon. Gentleman also mentioned the question of how France and Germany could block takeovers. The reality is that they cannot. The UK’s takeover rules are based on EU takeover rules, which apply to all European countries and limit the ability of national Governments to block mergers unless they are based on national security, financial stability or media plurality grounds. France and Germany would also be unable to block a takeover of that kind due to EU takeover rules.

My hon. Friend the Member for Redditch (Rachel Maclean) is a doughty fighter for her constituents, and I know how passionate she is about this issue. She asked whether we are confident about the assurances Melrose has given about the UK headquarters. Under the takeover code, companies can make legally binding post-offer undertakings, and that is an important element. The hon. Member for Paisley and Renfrewshire South raised the question of pensions. Of course, it is a matter for the Pensions Regulator and it would be inappropriate for me to comment; however, the Government understand that the Pensions Regulator is in discussion with all parties.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—I hope I got that right—asked what assurances we can give that Government R&D investment will stay in the UK. I can tell him that Government grants to support R&D are awarded on the basis of R&D carried out in this country, so the conditions of any contract with Government would mean that those responsibilities would transfer to the new company.

Retail Energy

Julian Lewis Excerpts

Thursday 12th October 2017 Commons Chamber

[Sir Desmond Swayne (New Forest West) (Con)]

rose—

[Dr Julian Lewis (New Forest East) (Con)]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Battle of the New Forests! I call Sir Desmond Swayne.

--- Later in debate ---

[Greg Clark]

As I said earlier, that is being considered as a separate exercise.

The hon. Gentleman referred to pre-legislative scrutiny by the Select Committee. I think that that is necessary so that we can establish a consensus and allow the technical scrutiny that is needed, so that once the Bill has passed that scrutiny and been introduced to the House, it can proceed with the strongest possible consensus.

[Dr Julian Lewis]

Given the time that will elapse before the cap is introduced, is there a danger that the energy companies will raise prices as much as possible in the hope of influencing the level at which the cap will be set? What will the Government do to prevent such a tactic from succeeding?

[Greg Clark]

Ofgem has powers, and that is one of the reasons why it is responsible for setting the cap. The prices must reflect the actual costs, and extensive powers are available to Ofgem to prevent that kind of abuse.

BAE Systems Military Air & Information Sites: Job Losses

Julian Lewis Excerpts

Tuesday 10th October 2017 Commons Chamber

[Mr Speaker]

I call the good doctor—Dr Julian Lewis.

[Dr Julian Lewis (New Forest East) (Con)]

When BAE Systems says to the Government that this is normal business practice, will the Government reply to BAE Systems by reminding it that it is not a normal business, because it enjoys a near monopoly position in many parts of the British defence procurement structure? Will they therefore extract from BAE Systems a promise to work closely with the Government to examine to what extent any streamlining is really necessary and to what extent it can be ameliorated by common action, bearing in mind the special treatment that BAE Systems so often receives from the United Kingdom Government?

[Claire Perry]

My right hon. Friend is right to remind us that we spend almost £4 billion in procuring products and services from BAE Systems. Again, if we want to have a globally competitive, highly efficient bastion of success in this vital industry, it is really important to allow the company to go through its management processes. Of course we want to procure from BAE Systems, but we also procure from a wide range of other suppliers. It would be wrong for the Government to try to interfere in business processes, but we can say that we are committed to making sure that the company does this as sensitively as possible.

We also want to explore other opportunities. I am struck by the locations of some of the plants that may be affected, and I am also struck by the investment opportunities with, for example, the Siemens investment in offshore wind turbine production in Hull. There are opportunities for skilled engineering staff right accross the UK and right across the region. [Interruption.] I am sorry to hear the hon. Member for Kingston upon Hull East (Karl Turner), who knows Hull very well, talking down a major investment in skilled engineering. We remain absolutely committed to working with this company.

Exiting the EU and Workers’ Rights

Julian Lewis Excerpts

Monday 7th November 2016 Commons Chamber

[John Redwood]

I think it is incumbent on this Parliament to accept the verdict of the referendum that we gave to the British people and to understand that we are all under a duty now. Democracy is on trial. What would the public think if their Parliament gave them a decision to make and then tried to stop that decision being implemented? That would put us in an impossible position, and anyone who followed that course would have a very miserable time when they next faced the electors.

Once the referendum is over, we have a duty to represent all our constituents. I have to represent the remain constituents of Wokingham just as much as the leave constituents. I cannot possibly vote on both sides of the issue, but I can ensure that the legitimate concerns of my remain voters are taken into account. I can assure the House that I will be very active in lobbying Ministers when remain voters identify real problems. The main problem that they are identifying at the moment is the uncertainty. They want us to speed up, and the more Members think that delay is a good idea, the more the uncertainty will build and the more damage could conceivably be done. We all have a duty now to speak for all our constituents, but we can only have one vote. Surely MPs must now vote for the settled will of the British people, having offered them that referendum.

[Dr Julian Lewis (New Forest East) (Con)]

Does not my right hon. Friend find it rather strange that, although the people on the remain side who do not want to accept the verdict of the electorate in the referendum want to drag out and delay the process of triggering article 50, the other members of the European Union want us to get on with it? We talk about the binding nature, or otherwise, of the referendum, but is not the person who best illustrates its binding nature none other than David Cameron? If it was just an advisory referendum, why on earth did he feel it necessary to announce his resignation the following day?

[John Redwood]

That is another piece of evidence—of which there is so much—that it was not an advisory referendum. We know that from ministerial statements at the Dispatch Box, from the Hansard records of the passage of the legislation and from the leaflets that were sent to every household. That was one of the few things on which the remain campaign and the leave campaign agreed. Both stressed to the voters the fact that this was deathly serious, that it was their decision and that if they got it wrong, they might not like the answer. Indeed, the whole purpose of the remain campaign, as I saw it, was to terrify people. It worked on the premise that if we voted to leave, we would be out. I remember Mr Dimbleby announcing the final result on television—the BBC was a bit reluctant to get to that point, but it eventually did so—that we were out of the European Union. He did not say, “Oh, we’ve just had an interesting advisory vote and maybe some people in Parliament will now think they ought to do something about it.”