Oral Answers to Questions

Philip Hollobone Excerpts

Tuesday 21st September 2021 Commons Chamber

[Greg Hands]

The hon. Gentleman has managed to pack a lot into that question. Let me try to answer it in three ways. First, when it comes to the heat and buildings strategy, he will just have to wait until we publish it. We are doing the right thing. Secondly, when it comes to energy price rises, my right hon. Friend the Secretary of State pointed out at great length the action we are taking to protect customers, including vulnerable customers, with the rest of the support that the Government provide. Thirdly, when it comes to the Climate Change Committee, we have done very well on achieving, for example, last year’s recommendations. Actually we have achieved in full or in part 40 of the Committee’s 92 recommendations last year; 32 are already on their way. We are looking forward to responding as well to this year’s recommendations.

[Mr Philip Hollobone (Kettering) (Con)]

The Kettering constituency generates enough wind power to power all local homes, but if we are to meet our net zero target by 2050, we need to develop more offshore wind power. Can the Energy Minister confirm that we are on track to increase the capacity of offshore wind from 30 GW to 40 GW by 2030?

[Greg Hands]

I always call my hon. Friend Mr Kettering, Mr Speaker, as he has been a councillor there for a long time and the Member of Parliament representing Kettering so diligently and astutely in this House. He is right: the UK currently has 10 GW of offshore wind capacity, which is around a third of the world’s total. We are looking to grow that to 40 GW by the year 2030.

UK Gas Market

Philip Hollobone Excerpts

Monday 20th September 2021 Commons Chamber

[Kwasi Kwarteng]

My hon. Friend the Member for Clwyd South (Simon Baynes) mentioned the warm home discount and the winter fuel payments; we try to protect the most vulnerable with lots of such schemes. On the call I had earlier, I was delighted to see Citizens Advice, which is particularly aware of such issues. I am very prepared to engage with the hon. Gentleman to see how his constituents and Northern Ireland can withstand what may well be a long and difficult winter.

[Mr Philip Hollobone (Kettering) (Con)]

I thank the Secretary of State for his statement. On a practical level, will he ensure that Ofgem recruits more customer-facing advisers and has a fully functioning helpline and easy-to-use website, so that those consumers whose energy supplier does go bust, whether in Kettering or elsewhere, do not face a Driver and Vehicle Licensing Agency-type customer service experience?

[Kwasi Kwarteng]

My hon. Friend can rest assured that I will raise those precise points with the chief executive of Ofgem when I speak to him tomorrow.

Oral Answers to Questions

Philip Hollobone Excerpts

Tuesday 6th July 2021 Commons Chamber

[Anne-Marie Trevelyan]

I agree that there is significant potential for these new marine technologies. Recent market engagement carried out by the Crown Estate showed a high level of market appetite to develop more projects in the area, which is very encouraging. We will set out the details of the new technology as part of CfD round 4 in the autumn, so I hope that my right hon. Friend can wait that long. In the meantime, I look forward to being able to visit Pembrokeshire to meet him with businesses and those in the community who are keen to progress these projects.

[Mr Philip Hollobone (Kettering) (Con)]

If he will take steps to increase (a) renewable energy production and (b) energy efficiency in the UK.

[The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)]

In December, the Government aim to deliver our biggest auction yet for new renewables, through the contracts for difference scheme. We aim to launch the green heat network fund in April next year. The Government are also committed to investing £9 billion in improving the energy efficiency of our buildings while creating thousands of green skilled jobs.

[Mr Hollobone]

With some 30 major wind turbines and several solar farms, the Kettering constituency is doing its bit for renewable energy. Last year, how much renewable electricity was produced in Kettering? How many homes would it power?

[Anne-Marie Trevelyan]

As at the end of December 2019, the east midlands region produced more than 5,500 GW of electricity from renewable resources, including nearly 1,600 GW from offshore wind. To break that down, 1,534 of the 88,000 renewable electricity installations were in the Kettering constituency, including photovoltaic, onshore wind, anaerobic digestion, landfill gas and plant biomass. This is generating 173 GW, or enough power to power 45,000 homes.

UK Steel Production: Greensill Capital

Philip Hollobone Excerpts

Thursday 25th March 2021 Commons Chamber

[Kwasi Kwarteng]

As the hon. Lady knows, we are always looking at ways in which we can promote green steel and industrial decarbonisation. I have alluded many times to the fact that we published the strategy last week, and the steel fund is clearly part of that strategy.

[Mr Philip Hollobone (Kettering) (Con)]

British-made steel, British electric car manufacture and British-backed clean growth: would my right hon. Friend agree that the prospects for all three are stronger and brighter now that we have left the European Union?

[Kwasi Kwarteng]

My hon. Friend will remember that I was a Minister in the Department for Exiting the European Union, as I think it was called. I do not want to revisit those debates, but I will say that the future of our industrial strategy, in terms of our green commitments, in terms of the steel commitments and in terms of electric vehicles, is a very bright one indeed.

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Philip Hollobone Excerpts

Monday 1st March 2021 Commons Chamber

[Kwasi Kwarteng]

We are absolutely committed to that. When I was energy Minister, people like the hon. Member were saying, “When is the energy White Paper going to come out? What is the plan?” We have a 10-point plan, which has been widely accepted and welcomed. We also have an energy White Paper that sets out the path and we are developing strategies for how we get to net zero at a record pace. The Government are delivering. We have a very clear direction, and the industry has broadly welcomed that.

[Mr Philip Hollobone (Kettering) (Con)]

Existing electric vehicle batteries are too big, have a too limited range and take too long to recharge. I welcome the Government’s £318 million investment in the Faraday battery challenge. Will the Secretary of State tell the House how the Faraday battery challenge will lead to smaller batteries with a longer range that do not take very long to recharge?

Oral Answers to Questions

Philip Hollobone Excerpts

Tuesday 29th September 2020 Commons Chamber

[Alok Sharma]

As the hon. Gentleman knows, we are supporting the hospitality sector. Business rates are not required to be paid for the full year, and other support is available across the economy. If we want to get back to normality, we must get this infection under control, and we all have a part to play in that.

[Mr Philip Hollobone (Kettering) (Con)]

What advice does the Secretary of State offer to people in Kettering and across the country who are struggling to pay essential bills as a result of the pandemic?

[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.

Construction Industry: Cash Retentions

Philip Hollobone Excerpts

Thursday 27th February 2020 Westminster Hall

[Alan Brown]

Again, I agree with the right hon. Gentleman’s intervention, and I thank him for it. Apart from the skills issue in the UK, it is another reason why we use labour from abroad, as he said. Also, we have relied on EU labour, but now the UK Government are ending free movement, so that will cause another issue and certainly underlines why we need to resolve the matter.

If the late release of retentions is such an issue, why do the sub-contractors not do something about it, such as adjudication or arbitration? They are caught between a rock and a hard place—they need their money, but they are often frightened to rock the boat, perhaps losing a vital pipeline of work from the contractor they are in arbitration with. That was the case for a local contractor in my constituency who approached me, as the MP, on the issue of cash retentions.

The processes also cost money in terms of resource time, often valuable resource. Therefore, it is not as easy a process for sub-contractors to follow as Ministers have suggested in the past. According to the recently published Government response to a consultation, the average cost borne by firms in adjudication over the past five years is £28,000, which is cost-prohibitive for small companies.

[Mr Philip Hollobone (Kettering) (Con)]

I congratulate the hon. Gentleman on securing this debate and on his superb speech. Brian Griffiths of Griffiths Air Conditioning in Burton Latimer wrote to me on exactly that point:

“When monies are held for long periods (often years), SMEs simply do not have the time, resources or legal skills to chase or recover, and have to take it as loss.”

Is Mr Griffiths not spot on?

[Alan Brown]

He is absolutely spot on—I thank the hon. Gentleman for his intervention, which illustrates the point that I was making. For the record, I think it is the first time ever that he has said he is enjoying the speech I am making.

I stated that there is a historical logic to the origins of cash retentions, but there is no logic—and plenty of history—to UK Governments ignoring evidence and recommendations that time is up for the use of cash retentions. As long ago as 1964, the Banwell report, published through the Ministry of Public Building and Works, stated that:

“Where sensible methods of selecting contractors are used, the entire elimination of retention moneys could…be accomplished without any unreasonable risk”.

The report also suggested as an incentive that this

“might well lead to a reduction in tender prices.”

That possible carrot was not enough for the industry and the Government to take action.

A further 30 years down the line, in 1994, we had the Latham report. This was a joint construction industry and Government report that recommended that cash retentions should at least be protected in a trust account—recommendation 27 of the report. We have a tenancy deposit scheme to protect individuals in the private renting sector, and yet for some reason there has never been the will to do something with the deposits, in effect, in construction.

Why have delays continued for nearly another 30 years since the Latham report? In 2002, the Trade and Industry Committee looked at the matter of retentions, compiling the report, “The Use of Retentions in the UK Construction Industry”. It concluded that the use of retentions in public procurement should be phased out by 2007. That deadline came and went, so it is no surprise that in 2008 the Business and Enterprise Committee produced a report called “Construction matters”, which looked at cash retentions. That report noted that the system undermined team working, damaged the cash flow of small companies and impacted on training and innovation, and that it should be ended at least in all parts of the public sector. The theme is consistent, but we are still waiting for action.

Moving forward to 2016, the industry again hoped for action. In a Westminster Hall debate on 27 January, the then Business Minister Anna Soubry assured us that the matter would be addressed following a review by Andrew Wolstenholme, to be completed by the end of that year. Due to cynicism in the Chamber, she confirmed that

“this Government”

will not

“prevaricate in any way or seek to knock things into the long grass.”—[Official Report, 27 January 2016; Vol. 605, c. 149WH.]

The following month, when the Enterprise Bill was going through its stages in the Commons, the same Minister said of cash retentions:

“I think they are outdated and I do not think they are fair. They are particularly unfair to small businesses.”

Yet the Government still defeated amendments proposing to eliminate the use of cash retentions, including one that I tabled on Report. When I expressed concern in Committee about timescales, the Minister also stated that

“the hon. Gentleman can be assured that this Minister gives absolutely her word that this matter is not going to be kicked into any long grass. In fact it is very short grass, which has only just grown, because the review will be completed by March and then recommendations will go out to public consultation. If legislation is required as a result of that consultation, I will be happy to be the Minister to take that through.”––[Official Report, Enterprise Public Bill Committee, 9 February 2016; c. 47-48.]

We now know that the consultation process did indeed end up in the long grass. In 2017, I tried to take through a private Member’s Bill on the subject. Although the election killed that Bill, it is fair to say that the Government would have blocked it anyway, given that they did not back the Bill of the hon. Member for Waveney (Peter Aldous) in the last Parliament. We had both had considerable cross-party support for our Bills, so it was disappointing that neither made any progress.

The only action taken by the Government since were the BEIS consultations on “Retention payments in the construction industry” and on “2011 changes to Part 2 of the Housing Grants, Construction and Regeneration Act 1996”, undertaken between October 2017 and January 2018. To be fair, three meetings with industry and stakeholders were held, and those groups agreed that the status quo and doing nothing were no longer regarded as a viable option.

With the last consultation closing in January 2018, I have been getting frustrated—two years later, and no sign of anything happening. Then mysteriously, the day before this debate, the Government magically publish the responses to the consultation. Who would have thought it? Luckily for the thrust of my debate—I had already written some of this speech—that did not change what I planned to say, because we only have publication of the consultation responses. There is no hard evidence for what the Government will do next. Sadly, I fear for industry and the SMEs that the long grass is once again being prepared.

One of the just published documents on cash retentions states:

“Our aim is to work with the construction industry and its clients to achieve a consensus within the industry on how to resolve the problems associated with cash retentions. Several policy options are under consideration, a possible retention deposit scheme, and phasing out of retentions completely, and work continues to assess the viability and potential impact of these.”

It feels like we are going in circles, but will the Minister at least confirm that the status quo is no longer an option?

Why was there no acknowledgement in the consultation publication that a deposit retention scheme is the preferred option of respondents? Separately, the Scottish Government are consulting on retentions, including the possibility of introducing a deposit retention scheme. Their consultation closes on 25 March, but a key premise of the consultation is based on Pye Tait research, which states:

“The research particularly noted that retention money held in trust in a separate, ring-fenced account until it is either used to rectify defects or becomes due for payment or in some form of retention deposit scheme would meet almost all of the serious criticisms of the current retention system.”

That would allow a statutory solution to help prompt payments and deal with problems with cash flow. It has certainly given hope to SMEs that action will be taken in Scotland, and I urge the Scottish Government to follow through on that. Given their early adoption of project bank accounts, I expect them to be more receptive. It is fair to say that their consultation is a stage ahead of the UK Government’s.

The thing is that a working deposit retention scheme solution is at hand. Industry bodies and a major tier 1 contractor have been working collaboratively with academics, banking and financial experts, insurers and software developers to develop an IT platform as a digital solution to ring-fencing cash retentions. The key features in the proposed retention deposit clearing house scheme are that the aggregate of the retention moneys handed over to the client will held in a bank account and ring-fenced by a trust, and allocated to all supply chain firms as is relevant to their deductions. Also, firms will be able to use an app for online checks of the amount of their retentions held in the scheme. An insurance policy will be made available to the client to cover any shortfall in the scheme in case there is non-compliant work that is not rectified, because of insolvency, for example. The scheme will be regulated by the Financial Conduct Authority. The costs of administering the scheme are estimated at just £23 per £10,000 of main contract value, so cost is clearly not a barrier to introducing it.

It transpires from the responses that have just been published that the retention deposit scheme is the preferred option. Additionally, as I am sure the Minister is aware, the BEIS roundtable meeting of client and industry stakeholders in May 2019 voted for work to begin on the feasibility of a retention deposit scheme. I want therefore to ask the Minister what Government progress there has been to date, in relation to that work. What is the Department’s timetable for taking action on protecting cash retentions? Those are the key issues on which I am looking for an answer from the Minister—but by way of a conclusion there are some other questions I should like to put to him. Why did it take so long to publish the responses to the consultation? Does he agree that tier 1 contractors should not use subcontractor retentions for their own cashflow purposes? Will he definitively rule out the status quo? I have outlined Scottish Government recognition of the need for legislative measures on retentions, so what plans does BEIS have for legislative solutions? What is the Government position on retentions within their own projects? For example, will BEIS confirm that retentions will be removed from all Government-funded projects, as has been recommended for decades?

I genuinely hope that the Minister can give positive responses. Maybe he will be the one to cut through the long grass that cash retention has been hiding in for a long time. I assure him I would be happy to work with him to help him cut that grass, and help companies to get the money they deserve.

--- Later in debate ---

[Peter Aldous]

That is true, and reminds me of something else I am handling at the moment where Her Majesty’s Revenue and Customs is put right at the top of the list. The right hon. Gentleman makes a good point.

The hon. Member for Kilmarnock and Loudoun has explained the problem and I shall not go into much detail about it. Retentions are ostensibly held as security in case a firm fails to return to rectify defects. In practice, they are often withheld to bolster the working capital of the group withholding them. Under standard industry contracts, they should be returned within 12 months of the handover of the works in question, but there are regular delays, often of up to three years. I have seen one case of a delay of 12 years, and some retentions have even been held in perpetuity, as they are never returned. Most of that cash is provided by SMEs. No other industry puts so much cash at risk and places such burdens on its small businesses. That abuse of retentions has a negative knock-on domino impact that cascades through the construction industry. It restricts investment in new equipment and facilities, prevents firms from taking on more work, and disadvantages them in relation to employing more people and investing in apprenticeships. At a time when we need to build more homes and invest in infrastructure, the construction industry should be operating at full throttle. Instead, owing to the self-imposed brake of retentions abuse, it is struggling to get out of third gear.

What is the solution? There have been many failed attempts to solve the problem voluntarily, and they have all got nowhere. We can continue to go round and round in circles, but we should be introducing a statutory solution with legislation that secures the moneys so that they will be able to be returned, subject to the other party having recourse to the money. The Construction (Retention Deposit Schemes) Bill that I presented and the hon. Member for Kilmarnock and Loudoun kindly supported proposed that retentions should be retained in a Government-approved scheme. That would operate in a similar way to what is required for shorthold tenants under the Housing Act 2004, whereby deposits taken from them must be placed in an approved scheme. Ring-fencing the moneys in that way will mean that they will be secure, and available to be released on time rather than, as currently happens, after a wait of three or more years—if ever. That will help to increase the velocity of cash in the system, and if moneys are secured in that way banks will be able to lend to firms on the back of such security.

It is appropriate to look briefly at the situation in other countries. The UK is now very much out of step with what happens elsewhere, where there is legislation ring-fencing cash retentions and/or providing security for construction payments in general. In Canada and the United States there is a system of charges that can be placed on a building or structure by a firm that has not received its payments. Australia and New Zealand have legislated to ring-fence the money. France has a statutory framework that requires bank guarantees to be used as security for payment in the construction industry. The Bill is a relatively straightforward one that amends the Construction Act and requires the Secretary of State to introduce regulation to protect moneys.

[Mr Hollobone]

My hon. Friend has a fan in Kettering. Mr Brian Griffiths, of Griffiths Air Conditioning and Electrical Contractors, which employs 30 people locally, has mentioned my hon. Friend to me in dispatches. Mr Griffiths is of the view, as am I, that the ready-made solution to the problem is my hon. Friend’s Bill, which the Government could simply introduce as a Government Bill. Not only is my hon. Friend outlining the problem extremely effectively, he is providing the Government with a ready-made solution.

[Peter Aldous]

I believe that the Bill is the framework for resolving the issues, and an awful lot could flow from putting it in place.

A retention deposit scheme seeks to safeguard the money. Cash retentions can still be deducted as security, but they in turn must be secured by depositing them in the scheme. Failure to do so will mean that any contractual clause enabling the deduction of cash retentions would be invalid. The Bill would finally bring closure to the many efforts that have been made over the past two decades and before to address the problem. In doing so, it would transform the prospects of many SMEs that make up the vast majority of firms in the UK construction industry.

To the outside world, nothing has happened since January 2018. The Brexit impasse brought the machinery of government to a halt. However, behind the scenes, a fair amount has been going on. As a result of the outstanding efforts of the Building Engineering Services Association and the leading electrotechnical and engineering services body, the Electrical Contractors’ Association, the January 2018 Bill secured the support of more than 80 industry bodies and trade associations, representing over 580,000 businesses and sole traders. It was the largest fair payments campaign ever formed in the UK, representing every level of the supply chain from across the construction and engineering professions. The British Chamber of Commerce, the Federation of Small Businesses and the Institute of Directors were also supportive. Only last week, Suffolk-based Breheny Civil Engineering, one of the largest privately owned regional civil engineering contractors, wrote to me in support of the Bill.

In the last Parliament, the Bill received strong parliamentary support, with more than 250 MPs from across the political spectrum indicating their support. Indeed, on the list that I have before me, in perfect alphabetical symmetry I am second from the top of the list and the Minister is second from the end. It is appropriate to acknowledge the work of previous Ministers at the Department for Business, Energy and Industrial Strategy who recognised the need for change, in particular my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) and our former colleague Richard Harrington.

Richard convened a roundtable meeting of industry representatives to address the problem. He very kindly ensured that I received invitations to the opening session in October 2018 and the concluding one in May 2019, although by then he was no longer a Minister. He made absolutely clear at the outset that doing nothing was not an option, and that we cannot continue to kick this particular can down the road. I got the impression that he wanted this reform to be his legacy from his time in office. Unfortunately, it was not to be. The outcome of the roundtable was not conclusive, though, on balance, my sense is that there was a clear preference for a retention deposit scheme as the Bill proposes, rather than an alternative surety bond-based solution.

Over the past 18 months, pay2Escrow has been modelling how a retention deposit scheme could work. The hon. Member for Kilmarnock and Loudoun outlined that scheme; pay2Escrow has taken me through its proposals, and I understand it has made presentations to officials at BEIS. I would anticipate that the Minister has been briefed on those.

I presented my ten-minute rule Bill 10 days before the Government’s consultation on retentions closed. Yesterday, they published a summary of the responses. Of the 52 responses in Citizen Space, 60% thought that a retention deposit scheme could apply to the whole sector. Of the seven business representative organisations that responded to the same question, 71% considered that an RDS could apply to the whole sector. Some 82% of 55 responses in Citizen Space believed an RDS should set up on a statutory footing. Of the eight business representative organisations that responded to the question, 75% believed an RDS should be set up on a statutory footing. The Minister concludes his foreword to the summary by stating:

“We will continue to work with industry on these issues and the policy options for addressing the problem of unjustified and late payment of cash retentions.”

Will the Minister address three questions? First, does he agree with Richard Harrington that doing nothing is not an option? Secondly, will he facilitate a pilot for the retentions deposit model that has been worked up? Finally, will he work to secure Government time for the passage of the Construction (Retention Deposit Schemes) Bill?

Oral Answers to Questions

Philip Hollobone Excerpts

Tuesday 16th July 2019 Commons Chamber

[Mr Speaker]

Pithiness personified: I call Mr Philip Hollobone.

[Mr Philip Hollobone (Kettering) (Con)]

Is not the best way to protect value, service and price for consumers through the promotion of competition?

[Greg Clark]

I completely agree with my hon. Friend.

UK Steel Industry

Philip Hollobone Excerpts

Tuesday 9th July 2019 Westminster Hall

[Several hon. Members rose—]

[Mr Philip Hollobone (in the Chair)]

Order. The debate can last until 5.30 pm, and I am obliged to call the Front-Bench speakers no later than seven minutes past 5. The guidelines are that the SNP spokesperson may speak for five minutes, the Opposition spokesperson may speak for five minutes and the Minister may speak for 10 minutes, while Mr Dakin will have two or three minutes at the end to sum up the debate. However, our afternoon will be interrupted by Divisions in the House, which are expected at 4.58 pm, so the debate is likely to finish later than 5.30 pm. Six Members wish to speak—a galaxy of talent and knowledge about the UK steel industry. Therefore, each speaker may speak for no more than four minutes, beginning with Simon Clarke.

--- Later in debate ---

[Jessica Morden (Newport East) (Lab)]

I thank my hon. Friend the Member for Scunthorpe (Nic Dakin) for securing yet another debate about steel, for chairing the all-party parliamentary group on steel and metal related industries, and for being such a thoughtful and passionate advocate for our steel industry, and particularly his steel community, in difficult times. Steel workers in my constituency will be feeling for the steel workers in his constituency as we wait to hear about British Steel.

I pay tribute to steel workers and unions in my area, who have such pride in their industry and have made such sacrifices over recent years in this cyclical business. The communities of east Newport and over to Caldicott have been built on that pride. Most people have family or friends who have worked in the industry, but the current generation of steel workers live with the constant threat that their jobs are uncertain. They look towards Bridgend and what happened to Ford workers; they are understandably concerned and worried about problems in the automotive sector. That is not just because of the bonds of working in that industry, although that bond is real—Tata Steel’s Zodiac plant at Llanwern and the auto-finishing line depend on securing work from the automotive sector. We need the Government to urgently do all they can to ensure that our steel and automotive industries are open for business.

It is often said in such debates, but it worth repeating that steel is a foundation industry and a national asset. For our manufacturing industry and our economy to thrive we need our own steelmaking capacity. We must not neglect this foundation industry and end up importing our steel. My hon. Friend the Member for Scunthorpe reminded us in a recent debate, and again today, that the strongest economies in the world—the USA, China and Japan—have the strongest steel industries. We currently come in at number 30, and we must not fall further down the table.

I want to talk about Tata Steel’s Cogent Orb works in my constituency, which has been making steel since 1898. The 350 steel workers at Orb make electrical steel that has the potential to be used as the high-quality grain-oriented steel required to build electric vehicle motors. The automotive industry has been calling on the Government to support the production of a high volume of batteries required to support EV production in Britain and avoid the risk of importing from abroad. [Interruption.]

[Mr Philip Hollobone (in the Chair)]

Order. I am sorry to interrupt the hon. Lady.

[Jessica Morden]

That is okay. I was just finishing.

[Mr Philip Hollobone (in the Chair)]

A Division has been called in the House. The hon. Lady has one minute and 45 seconds to finish her speech when she comes back from the Divisions. I understand that there will be multiple Divisions, so we will resume 10 minutes after the last Division.

--- Later in debate ---

On resuming—

[Mr Philip Hollobone (in the Chair)]

Jessica Morden has one minute and 39 seconds left.

[Jessica Morden]

Thank you, Mr Hollobone. I was talking about Cogent Power and the potential in the electric vehicles industry, because demand for electric vehicles is only going to grow and we have a fantastic opportunity with that company to get in on the cutting edge of that new industry and to develop a supply chain for it. But these are smaller companies and will need the Government to help to bring the supply chain together. The Orb works is the only plant in the UK capable of making the steels and is therefore a strategically important business that can support the Government’s industrial strategy in relation to electrification. We must take advantage of that new industry. I visited Orb recently and have invited the Secretary of State for Wales. I would be very keen for the Minister from the Department for Business, Energy and Industrial Strategy also to visit when he is in Newport, which I think might be fairly soon. That plant must be able to take advantage of that opportunity, but we need the Government’s help for that.

As well as Llanwern and Orb, Liberty Steel is based in my constituency. Liberty bought the old Alphasteel plant in 2015, and Sanjeev Gupta has announced that it has now become one of the largest steel producers in Europe, with a global footprint employing 30,000 workers. It appreciates that steel is a cyclical business and needs investment to get it through the cycles in order to make money. It is working on a model of an exciting bright future for steel, but it too asks the Government to deliver on the industrial strategy with a delivery taskforce to support and drive the investment that we need, particularly in the green steel area.

On behalf of the steel industry and workers in my area, I will repeat the asks so often made in these debates. We have waited too long for a sector deal for steel. We need more and faster action on energy prices. We need more action on procurement. We also need more action on dumping and on what will happen with the trade defence instruments in Europe. I am grateful for the opportunity to take part in this debate. On behalf of all those who work in Llanwern and at Liberty, I hope that we can expect action and not more warm words from the Minister.

[Anna Turley (Redcar) (Lab/Co-op)]

As always, Mr Hollobone, it is a pleasure to serve under your chairmanship.

I congratulate my hon. Friend the Member for Scunthorpe (Nic Dakin) not only on securing this debate but on the last few months, when he has been such a doughty champion for his constituents and for the steel industry in this country. We are very proud of him and I know that his hard work is going to pay off.

Of course, we know why we are here today participating in this debate, which is extremely timely and important because, yet again, here we are in another steel crisis, while steelworkers sit at home, hoping and praying that they have a future and a job and a salary to continue to provide for their families. Yet again they are in a precarious situation.

To be honest, it is depressing that we are here again, because a year ago tomorrow we had a debate in Westminster Hall, this exact same Chamber, which was three years on from the 2015 steel summit and all the promises that were made then, and all the asks that we made of Government. And here we are yet again, despite having seen the devastation that my constituents bore the brunt of. We can see what happens when we fail on steel.

My constituency is still struggling. I am here today, not just to fight on behalf of the 700 British Steel workers in my constituency today but because of what happened to us three and a half years ago in Redcar. We lost 2,200 jobs immediately in SSI and another 900 in the supply chain. I always say to people, “Imagine that in London, Manchester, or Birmingham. It would be devastating. Then put that in a seaside town, or a town like Scunthorpe, and imagine the effect of that on an economy, on a society, on a community, on families and on individuals.”

We are still not recovering; we are still not there. We know the average salary of those who worked in the steelworks; we know they are good jobs. They were the highest paid jobs in my constituency. The average salary is down by £10,000 a year. Many workers have had to move away to find other employment. Some are working in British Steel on Teesside or have even gone to Scunthorpe, where yet again they find themselves back in this precarious situation.

A month ago, I met a worker who had had 13 different jobs since he lost his job at the steelworks. That is the kind of insecurity and economic disaster that happens if the Government do not step in and stand by our steel industry, and that is before we even get on to talking about the reclaiming of the site, which stands there corroding and rusting. It will cost millions to get that ready for other businesses to come in, clean it up and bring jobs. I just raise that with the Minister to say that this is what happens—this is the cost of failure.

I pay tribute to the Secretary of State, who I am sure cannot be with us today because he is probably—hopefully—travelling the world and trying to secure a deal for British Steel. I pay tribute to him, because I think he gets that. He understands and, to be fair, things are different to what they were in 2015. The Government have stepped in; they have given the indemnity to the official receiver; they have bought us some time; and they have kept the workforce paid and the asset in place. So I pay tribute to him, but I have a few requests to make of him and of the Minister who is here in his absence today.

Obviously, we know that the official receiver is bound by his legal obligations. However, I will echo the sentiments that were expressed earlier today about keeping the business together. It is vital that the Government support bidders who bid for the whole business—no more cherry-picking and no more asset-strippers such as Greybull.

It is vital that we have the investment to deal with the environmental liabilities that are so important on the Redcar site, but the importance of innovation must not be forgotten either. We cannot beat China and others on price, but we can beat them on innovation, with lighter, stronger, greener steel. And I make a pledge again to—

[Mr Philip Hollobone (in the Chair)]

Order. To be helpful to the hon. Lady, we have five minutes of Back-Bench time still to go and the remaining speaker is not here, so she can slow down rather than speed up. [Laughter.]

[Anna Turley]

I am extremely grateful to the Chair, because I was barely pausing for breath. I can get back into my stride.

Innovation is crucial. The hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) mentioned the Materials Processing Institute, which is in my constituency. It is doing fantastic work. It has been around for 75 years; it was formed just after D-Day. It has a fantastic vision for innovation: new technologies, decarbonised steel, the digitisation of the steel and metals sector, and a circular economy for steel, alloys and rare metals. Those are really important innovations. If we do not support originations and businesses that are doing that work, I am afraid we will see more redundancies and job losses, and the loss of a huge amount of capacity and capability. Therefore, innovation must be at the cutting edge of productivity, and we must support innovation experts such as the MPI, which are at the heart of this.

Like other hon. Members, I want to highlight the importance of the long-term issues that we have raised time and time again in this place. We need action on energy prices, business rates and procurement. I hope that the long-awaited sector deal is not a figment of our imagination and that we will live to see one for the steel sector. Sector deals are as important for our sector as they are for the many other sectors that have had a response and engagement from the Government. That would send a clear signal that the Government are committed to the steel industry and want to do business with the private sector.

I will end on Brexit. The industry has been very clear that there is no Brexit deal that would bring benefits to the British steel industry. That is just a fact. Of course, the disaster of no deal cannot be underestimated. We would see 97% of our exports subject to trade restrictions, and 25% tariffs to the EU—£1 million per day for the steel industry in this country. We would lose access to £1.6 billion of research funds for coal and steel. As my hon. Friend the Member for Scunthorpe said, no deal means no steel. The industry could not be clearer about that.

I pay tribute to the Secretary of State, and I am grateful to the Minister for coming to respond. I know that he gets it. I know that the Government are trying to do all they can for British steel, and that he understands the importance of this industry to our country, our defence, our manufacturing and our place in the world. Unfortunately, the future of this proud industry hangs in the balance once again. I look forward to the Minister doing his part.

[Mr Philip Hollobone (in the Chair)]

We now come to the Front-Bench speeches, the first of which will be from the hon. Member for Motherwell and Wishaw (Marion Fellows). The guideline limits are five minutes for the SNP, five minutes for the Opposition and 10 minutes for the Minister.

--- Later in debate ---

[Gill Furniss]

I thank my hon. Friend for his intervention. I absolutely agree, and I very much look forward to my home town of Sheffield taking up those opportunities, because it is well placed to lead a green industry.

As I was saying, we always need steel, which literally forms the fabric of everything we see. I sincerely worry that both contenders to be the next Prime Minister are advocating a no-deal Brexit. As UK Steel has clearly stated, that would be catastrophic for the sector. It could cost it £70 million and lead to further collapses.

The steel industry has many strengths and is able to thrive, but, for that to be achieved, we need the Government to commit to help. The future of UK steel can be bright, and the Government’s own analysis has identified a £3 billion opportunity by 2030, sustaining good jobs in the areas that need them the most. The news last week that Jaguar Land Rover will invest £1 billion in building electric cars in the UK was an enormous boost, with the company leading the way on electrifying the cars on our roads and signalling a commitment to a greener economy. The opportunities for end-to-end supply in that process—making the steel at home to support the building of those vehicles—could be enormous. That could support and encourage growth in the steel sector while spearheading a green revolution.

It is disappointing that the opportunity to secure a steel sector deal has never come to fruition. I am pleased to see the new Minister in his place, and I urge him to give that issue the greatest importance. The steel sector needs that deal for innovation, for user research and development, and to be there to take on exciting opportunities for the future. The steel industry is there and waiting to be helped with the challenges ahead and the opportunities to make it thrive.

UK steel companies pay 50% more in energy costs than their competitors in the EU. On procurement, we know that UK Government decisions are a hugely powerful policy tool to boost British steelmakers’ orders. The decision to use our steel for the royal fleet, mentioned, I believe, by my hon. Friend the Member for Rotherham (Sarah Champion), would be much welcomed. It would also make complete sense for our national defence. Please, Minister, look at that, because those are the opportunities that need to be put forward.

I commend the UK steel charter, which is aimed at enhancing and maximising procurement opportunities for UK steel producers. The Welsh Labour Government were the first to sign up to that commitment. They are leading the way, but Departments in Whitehall appear to be resistant to signing up. Will the Minister commit that all Departments will sign up to the charter?

On business rates, the perverse inclusion of investment in machinery, which increases a company’s business rates, is patently a barrier to investment. Some British steel companies have huge disparities in their business tax bills across their plants in Europe. For example, Tata pays a business tax bill in Wales that is 10 times that of its operation in the Netherlands. Will the Government join the Labour party in our pledge to remove machinery for steel companies from business rates to ease that burden and invite more investment back into the steelworks? I am not saying it will be easy, but what is a Government for if not to support our foundation industries and encourage their growth?

Our steel industry is fabulous, innovative, flexible and resilient, and it can thrive. Please help us to make sure it stays that way.

[Mr Philip Hollobone (in the Chair)]

In calling the Minister for steel, I think we should note the presence of the Secretary of State for Business, Energy and Industrial Strategy and encourage other Secretaries of State to attend debates here in Westminster Hall.

Recall of Tumble Dryers

Philip Hollobone Excerpts

Monday 17th June 2019 Commons Chamber

[Kelly Tolhurst]

Trading standards, in Peterborough or anywhere else nationally, are carrying out, every day, the important work of enforcing safety issues; they are taking lots of enforcement action. I, for one, am very proud of and grateful to trading standards officers, who sometimes work in challenging circumstances but do some fantastic work. One reason the OPSS was set up was in January last year was to look at product safety and standards, and it was the body that carried out the review of the Whirlpool modification programme, working with regional trading standards, including Peterborough’s. Trading standards do have the ability to work with the OPSS on the scientific research and data, using the expertise the OPSS brings to help them carry out their duty locally. Therefore, I very much disagree on this; action taken by any enforcement body is being taken on behalf of the consumer, not in the interests of large manufacturers.

[Mr Philip Hollobone (Kettering) (Con)]

If any of my constituents correctly identify their tumble dryer as a potentially unsafe model, how quickly would the Minister expect them to be given a replacement by Whirlpool?

[Kelly Tolhurst]

My hon. Friend asks when his constituents would have a replacement. I would say that the affected tumble dryer should be modified, but any action must be taken swiftly. The particular circumstance, the age of the model and the brand of the model would dictate which action Whirlpool takes.