Honda in Swindon
Rebecca Long Bailey Excerpts(5 years, 2 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
I thank the Minister for advance sight of his statement. This morning’s news is absolutely devastating for the 3,500 workers in Swindon, their families and the wider community. It is absolutely devastating for the businesses in Honda’s supply chain and the tens of thousands of workers employed in them. It is a devastating blow to the automotive sector, to UK manufacturing in general and, indeed, to our entire economy.
A worker employed at Honda in Swindon for 24 years summarised the situation last night when he said that the Government are “completely incompetent”. I could not agree more. Honda’s decision is a damning indictment of the Government’s failure to support car manufacturing and ensure business confidence, with regard both to Brexit and to their so-called industrial strategy. Before Members on the Government Benches become too agitated, let me say that I understand that Honda’s CEO said this morning that the decision was unrelated to Brexit. However, the company’s statement specifically says that it wants to
“focus activity in regions where it expects to have high production volumes”,
especially of electric vehicles. The logical question is this: why does Honda no longer believe that the UK will have high production volumes, and why does it no longer have the confidence to invest here to make it so? As the Secretary of State has said, it will in future be exporting to the EU from Japan rather than from Britain.
The reason why the likes of Honda and Nissan began producing in the UK in the first place was that it was a good place to locate their manufacturing, so something must have changed. Could it be the Government’s botched Brexit causing chaos and uncertainty and undermining business confidence? The Secretary of State also alluded to the EU-Japan trade deal, which imposes zero tariffs at a time when we do not know what our tariffs will be. The likes of Airbus, Nissan, Ford and Jaguar Land Rover have all halted investment or slashed jobs as a direct result of that uncertainty. Nissan reversed its decision to build the X-Trail here only two weeks ago, JLR has slashed 4,500 jobs, and Ford has cut 1,000 jobs. Over the weekend, the senior vice president of Airbus said that a no-deal Brexit would be “catastrophic”, adding:
“We will have to look at future investments... There’re many other countries that dearly love aerospace.”
In fact, Honda itself warned last year that leaving the EU without a deal would cost the company tens of millions, so there can be no doubt that the Government’s reckless threats of no deal and prolonged uncertainty are having an impact on business decisions in the here and now, even if that is not in the top line of a press release. No deal must therefore be taken off the table and a firm commitment to a customs union and single market deal agreed.
Honda has also said that global trends and the move to electric vehicles were a factor in its decision. Could it be that the Government’s failure to support the transition to electric vehicles through their industrial strategy has augmented Honda’s decision? It wants to expand its electric vehicle production, which is something we all want, but we need that production to be here in the UK now, not used as a reason to close down plants in the wake of Brexit.
The UK has a world-class automotive sector and could be a world leader in electric vehicles, at the cutting edge of electric vehicle technology and research, but the Government have failed to invest to support the transition. I will give just one example. The Treasury pledged last year to support the switch to zero-emission vehicles with a £400 million fund for charging infrastructure, giving manufacturers the certainty to invest in production. Half of the money was to come from the taxpayer, with the rest matched by the private sector. However, one year on, the money that it was promised would be raised from the private sector has not been secured and no money from the fund has been invested.
The automotive sector is the jewel in our manufacturing crown. It supports highly paid, highly skilled jobs, it contributes enormously to our economy, and it has been an exemplar of the kind of industry that we need in the UK. But its future is in jeopardy, as has been shown so clearly in the decisions of recent weeks. Can the Secretary of State commit now to taking a no-deal Brexit off the table, agreeing a customs union deal and working with manufacturers and unions to support the transition in the market before it is too late? Can he offer Honda any incentives or reassurances that its investment here would be secure? After all, he did offer Nissan a sweetheart deal. Or is he happy to let yet another industry, and the communities who rely on it, fall by the wayside on the Conservatives’ watch?
Greg Clark
For over 30 years, Japanese companies investing in our automotive sector have been able to count on a bipartisan commitment to talking about the advantages of investing in Britain: our skills, our commitment to innovation and the efficiency of our operations. Members on both sides of the House know that I and my colleagues have worked intensively, including with trade unions, to ensure that we get investments that recognise those advantages. I hope that we can send to companies considering investment a clear determination, across both sides of the House, that we will continue to keep faith with that tradition of stability.
I think it was evident in my remarks that I share the dismay of the hon. Member for Salford and Eccles (Rebecca Long Bailey) at the decision and the consequences for the excellent workforce in Swindon and their suppliers. We will do everything we can to ensure that they have good opportunities in future.
The hon. Lady asked about Brexit. The company said that the decision was not about Brexit and clearly we must accept that. She asked about its market share. In truth, it has a small market share in Europe compared with the markets in which it said it was expanding. Those are the reasons that it has given. However, I have always been clear with the House that the motor industry, Japanese investors and particularly Honda have made it clear for many months that Brexit is an additional worry at a difficult time. They have been instrumental in shaping the deal that has been negotiated. If there is one message all of us in the House can give that they want to hear it is that the deal should be ratified.
Ford Motor Company said:
“A no-deal Brexit would be a catastrophe…It’s important that we get the agreement ratified that’s on the table at the moment.”
Aston Martin said of the deal,
“it’s obvious that… it meets the needs of all the requests we put forward as an industry and as Aston Martin”.
McLaren said that the withdrawal agreement would
“provide urgently-needed certainty and an implementation period that allows us to plan for the future”.
Toyota said:
“We welcome the announcement of a deal. It would provide business with the certainty”
that it needs. I could go on. The clear message from the automotive companies is that we should get on and ratify the deal.
The hon. Lady asked about the industrial strategy. She will know that our commitment to it, and through it to the future of mobility, has been at the heart of our policy and has been widely recognised. The £250 million investment in the Faraday challenge to make Britain the best place in the world for new battery technology has resulted in the national battery manufacturing centre being established in the west midlands. We already have the biggest-selling electric vehicle in Europe—indeed, one in five electric vehicles in Europe is made in Britain. The fact that Honda’s R&D facility will continue to be in the UK and that companies such as Ford are moving their R&D to the UK underlines the strategy. The London Electric Vehicle Company is making taxis powered by electricity, not just for London but for export around the world. Aston Martin has invested £50 million in its new electric engine facility in Wales. Cummings is investing £210 million in its R&D in the automotive sector.
The hon. Lady asked about the charging network: £200 million is being invested in new, fast-charging networks for electric vehicles. Our reputation for automotive innovation and exports is strong and growing. That is one of the reasons why it is particularly frustrating that Honda has made this decision, when other companies are recognising the fruits of those investments and investing in Britain.
The announcement comes at a time of disruption and change in the industry. Veterans of the industry say that this is the biggest period of change in most of their careers. That reinforces how right we are to invest in the future and in promoting Britain as a place to develop the next generation of vehicles. I hope that in the weeks, months and years ahead, the whole House will support us in promoting those advantages, not just for Honda, but for other companies that can invest in this country.
Oral Answers to Questions
Rebecca Long Bailey Excerpts(5 years, 2 months ago)
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Greg Clark
I am grateful to my hon. Friend for her question. It was one of the first sector deals. We were very determined to act on the report of Sir Peter Bazalgette, which celebrated the potential for new jobs to be created. It is going extremely well. Investments are being made in virtual reality, creating new opportunities for small businesses to benefit from the technology that larger ones have.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Since the start of the year, the Financial Times, The Observer, The Times, POLITICO and The Spectator, as well as many specialist publications, have described the looming energy crisis facing the UK following the collapse of plans to develop three nuclear power stations at Wylfa, Moorside and Oldbury, but back in November 2018, the Secretary of State announced that the energy trilemma—the challenge of providing energy that is green, cheap and secure—was coming to an end. Is he still of this view?
Rebecca Long Bailey
That was straight and very to the point. The Secretary of State may have pointed to the falling cost of renewable energy, but he cannot disown his Government’s policies, unfortunately, which are plunging that industry from crisis to crisis. New deployment of solar has fallen 90% since 2016. New onshore wind deployment has fallen 80%, so that certainly does not sound like the end of the energy trilemma. With people getting nervous about how we are going to keep the lights on, will he describe in detail where exactly he expects the UK to source low-carbon electricity from by the end of the 2020s?
Nissan in Sunderland
Rebecca Long Bailey Excerpts(5 years, 3 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
Yesterday’s announcement by Nissan that it has reversed its decision to build the X-Trail at its Sunderland plant and move it to Japan instead is a bitter blow to the north-east, the automotive sector and Britain’s industrial strategy. Of course, Brexit was not the only reason for that, but it was pretty prominent in Nissan’s decision. To quote its initial statement,
“the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”
The Secretary of State’s opposition to a no-deal Brexit is, of course, well known, but still the Government juggernaut chaos hurtles on. Even he must be suitably frightened today by the uncertainty being created by his Government’s negotiating strategy.
This week, Nissan has reversed commitments to invest in the UK. Last week, we saw that car production is down 9% to its lowest level in five years, and fresh investment in the sector halved in 2018, according to the Society of Motor Manufacturers and Traders.
When Nissan made the commitment to produce the X-Trail and Qashqai models in Sunderland, the Government provided certain assurances, as the Secretary of State has outlined. After the Government’s refusals to publish the letter, even in response to freedom of information requests, today we have finally seen a copy. The letter acknowledged the
“uncertainties as the UK prepares to leave the EU”,
and in particular the
“fear that potential future trade arrangements could affect the business case for…investments”,
and it promised that Nissan would not be “adversely affected”.
Although the letter made no firm commitment to a customs union or single market deal, there was a pretty strong assurance that manufacturers would still be able to trade without barriers. However, Nissan clearly does not have any confidence in those assurances today. Can the Secretary of State confirm why those assurances no longer stand and what has changed in the Government’s approach since those commitments were made? Is it now Government policy to accept that there will be significant trade barriers as we leave the EU and potentially a no-deal situation? If not, can the Secretary of State rule out the possibility of no deal?
The letter went on to offer support of about £80 million towards Nissan’s investments at its Sunderland site, in return for the expansion of SUV production. The Secretary of State noted that £61 million was eventually applied for. Can he confirm whether any of the conditions surrounding that £61 million were written into any formal agreement? Can he also confirm whether Nissan will still receive the £61 million, despite the move? He intimated that it may have to reapply for certain forms of grant funding. What assessment has he made of the impact of yesterday’s decision on the wider supply chain, particularly those companies that might already have decided to start investment?
The Government’s letter to Nissan also said:
“It will be a critical priority of our negotiations to support UK car manufacturers, and ensure their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU.”
Yet it is important to note that Nissan’s announcement came days after a free trade agreement was signed between the EU and Japan whereby tariffs on Japanese car exports to the EU will begin to taper towards zero over the next 10 years. What assurances can the Secretary of State give today to British automotive sector companies that there will be no tariffs on British-made vehicles entering the EU?
Similarly, in relation to cars exported to non-EU countries where the EU currently enjoys preferential trading terms, the International Trade Secretary has suggested that we can simply replicate those terms and Tipp-Ex out “EU” and replace it with “UK” on the front page of nearly 40 free trade agreements. How is he getting on with that? What assurances can the Business Secretary provide that Britain will continue to enjoy those trading terms?
Furthermore, what assessment has the Secretary of State made of the real risks of a temporary, Brexit-induced slowdown in British manufacturing? Has he examined any temporary support measures he could offer, such as examples in the German industrial sectors following the financial crash?
Finally, it is clear that we have reached a tipping point. I know that the Secretary of State agrees with me that a real industrial strategy is designed to give businesses the confidence to invest for the long term, but his Government’s handling of Brexit is undermining our industrial strategy. Businesses are no longer speaking out simply to highlight the future dangers of a badly handled Brexit; they are now losing confidence in the Government and taking real action to protect their businesses. Without real assurances from the Secretary of State and a firm commitment to take no deal off the table, it is hard not to think that managed decline is indeed the Government’s plan.
Greg Clark
If the hon. Lady had spent time talking to employers in the automotive sector, she would have come to a different set of conclusions. First, she should welcome the fact that Nissan has committed to Sunderland. After the referendum, before any negotiations had taken place and even before article 50 was triggered, the plant was in jeopardy, and the workforce, the unions and the Government worked closely and hard together to secure its future. At the time, her former colleague, the then hon. Member for Hartlepool and Chair of the Business, Energy and Industrial Strategy Committee, hailed it as
“a welcome example of targeted Government commitment to a successful company in a strategically vital sector”.—[Official Report, 31 October 2016; Vol. 616, c. 684.]
That commitment continues.
The hon. Lady asks whether the financial support that Nissan applied for continues, and I hope that I was clear in my statement that the support is available to the sector and has been for many years. Nissan will be invited to resubmit an application in the light of its changed investment.
The hon. Lady’s second point is that we need to conclude our Brexit negotiations, but what she spectacularly ignores is that Nissan and the UK automotive industry back the deal that the Prime Minister has negotiated. The deal achieves what they need: no disorderly Brexit on 29 March, a transition period and a commitment to no tariffs, no quotas and no rules of origin checks at the border.
The Japan Automobile Manufacturers Association has welcomed both the withdrawal agreement and the political declaration, and it has called for this House and the European Parliament to ratify the agreement swiftly. If the hon. Lady wants to rule out no deal—if that is her concern and her motivation—she should back the calls from the industry to ratify the agreement.
The continued uncertainty I referred to in my statement, as the hon. Lady will acknowledge, is a reflection, in part at least, on the Opposition’s failure to come to a decision and back the deal. During all Nissan’s 30 years in the UK, it has been able to count on constructive support from all parties, yet Labour Front Benchers have evaded having a policy on this vital issue for our country, hiding behind six tests that are a fake and a sham designed expressly to avoid a deal, and they know it. They claim to represent the workers of this country, but the livelihoods of millions of workers are being jeopardised by the machinations of the people occupying the Labour Front Bench.
In a call from Japan yesterday, a senior Nissan executive told me, “Please pass on the view to your Opposition that they need to meet in a way that forms a deal.” I think all of us in this House should act on that.
Oral Answers to Questions
Rebecca Long Bailey Excerpts(5 years, 4 months ago)
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Mr Speaker
Order. I was not looking for the right hon. Gentleman, although it is always a pleasure to be reminded of the fact of his presence.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I wish you and the Secretary of State a happy new year, Mr Speaker, but the sad fact is that the good work plan does little to change the lives of precarious limb (b) workers, who will still not be entitled to statutory sick pay, maternity pay or the right to claim unfair dismissal. For those on a zero-hours contract, all the requests in the world will not legally oblige their employer to provide more stable employment. I have asked this question time and again to no avail: can the Secretary of State confirm what happens when an employer refuses a request for more stable working hours?
Greg Clark
It is very clear that we are not making it mandatory for people not to have a zero-hours contract. Such contracts are available to employers, but employees will have the right to request. Reasonable employers have offered more stable contracts to employees, but the Taylor report is very clear that the flexibility that zero-hours contracts offer is valued by many of the people who use them.
Rebecca Long Bailey
I am glad the Secretary of State has clarified that the right to request a more stable contract is, in fact, a meaningless proposal on paper. What is worse is that the Government also rejected recommendations from their own director of labour market enforcement to increase fines for companies that breach the minimum wage and for that money to be used to increase enforcement resource. The Government also rejected his recommendation that public procurement contracts should compel compliance with labour market regulations. With reports that the average employer can expect an investigation once in every 500 years, does the Secretary of State really think he is being serious about enforcing workers’ rights?
Greg Clark
I am working closely with Sir David Metcalf, the director of labour market enforcement. On his particular recommendation about increasing penalties, we just have increased the penalties and it is reasonable to look at their effectiveness. I have made the commitment to the House that, of course, we will increase them if that proves necessary, but one of the other reforms that we are making is to boost the enforcement of workers’ rights by bringing together the different enforcement bodies so that such employers—the minority that do play fast and loose with the rights to which employees are entitled—should expect justice to be brought about. This will be part of the package that we have tabled.
Good Work Plan
Rebecca Long Bailey Excerpts(5 years, 4 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
I thank the Secretary of State for giving me advance sight of his statement, but behind his declaration on high employment lies a dark truth. Nearly 4 million people are in insecure work, with 1.1 million working in the gig economy. At a time of low wages, stagnating productivity and endemic financial insecurity across the UK, I had hoped for something big today. I was hoping for proposals that would not only make our workforce feel secure but ensure that their human capital was genuinely valued as the linchpin of Britain’s industrial strategy. Proposals for a labour inspectorate, the abolition of the Swedish derogation and ensuring that workers keep their tips were among Labour’s policies to transform our labour market, so I am pleased that, after a hard-fought campaign by Labour Members and our trade unions, these points have finally made an appearance in the Government’s good work plan. However, as the TUC stated today, despite these small victories, the remaining
“reforms as a whole won’t shift the balance of power in the gig economy.”
Let me deal with just a few of the proposals.
First, the good work plan states at the outset:
“The Prime Minister has committed that we will not only maintain workers’ rights as the UK leaves the EU, but enhance them”,
but even that opening paragraph is a little—shall we say?—constructive with reality. The Government’s withdrawal agreement fails to live up to this commitment on workers’ rights, and the Institute for Public Policy Research has stated that
“the non-regression clause will not maintain current protections in full, enforcement procedures would be ineffective and if the EU were to raise standards, there would be no requirement for the UK to follow suit”.
Can the Secretary of State confirm today that if standards on workers’ rights increase within the EU, UK standards will follow suit?
Secondly, it appears that the critical point on employment status is equally ambiguous. People on the margins need to know whether they are employees, workers or neither. Do they qualify for unfair dismissal and redundancy or not? The Government are committing to legislating to improve the clarity of the tests, but there is no detail. Can the Secretary of State confirm the legal principles on which each status is likely to rest?
Thirdly, the Government will allow workers on zero-hours contracts to request a more predictable and stable contract. That all sounds rather lovely, but the Secretary of State must know that an ability to request stable hours exists now. What does not exist is an obligation on the employer to meet such a request. The Government’s paper is silent on that point. Will the Secretary of State confirm that the proposed draft legislation will address that deficiency? If it fails to do so, zero-hours contract workers will—as the TUC so poetically put it today—have
“no more leverage than Oliver Twist”.
The fourth critical issue is enforcement, on which there is again very little detail in the Government’s plan. This is not simply a question of shuffling the deck. The Government need to ensure that the enforcement agency has power and resources. In the light of the already swingeing cuts to bodies such as the Health and Safety Executive, can the Secretary of State confirm what financial commitments are being made to ensure that this proposal is financially supported?
Finally, on the proposal for increased penalties following successful employment tribunal claims, I am not against the principle but I fear that this is just window dressing. The TUC has stated that the current system for enforcing employment tribunal awards is not fit for purpose, with 35% of successful claimants not receiving any compensation. Can the Secretary of State tell us how increasing fines will address this? Will he also tell us what additional action he is taking to address the efficacy of tribunal award enforcement? The horrific tales of insecure workers swirl around us like passages from a Charles Dickens novel, from delivery drivers being forced to urinate in bottles to zero-hours staff giving birth in workplace toilets. The Government’s proposals were an opportunity to improve the lives of those workers, but sadly they fall dramatically short, and those workers face a Dickensian future unless the Government take serious action to protect and enforce the intrinsic value of their human capital within our economy.
Greg Clark
I would have thought that the hon. Lady might have congratulated Matthew Taylor, who worked for her party in the past. Along with his panel, he has devoted himself to producing a report that most people conclude is a substantial one. He has made a series of far-reaching recommendations, which we are enacting today. The central basis of his report is to reflect on the fact that we should build on success. He refers to the UK’s successful record in creating jobs, including flexible jobs, that open up work to people with different needs. That is an important step forward that I would have thought the hon. Lady welcomed. When it comes to the condition of employees and workers in this country, Matthew Taylor noted that, far from the Dickensian caricature that she fell into the trap of describing, the average take-home pay for someone in full-time employment in this country, if tax levels and tax credits are taken into account, is higher than in the rest of the G7. We also have higher employment than at any time in our history and lower unemployment than at any time in 40 years, and the hon. Lady should have welcomed that.
The hon. Lady mentioned zero-hours contracts, but what she did not mention—[Interruption.] She mentioned the gig economy, by which I think she was referring to zero-hours contracts. At the moment, 2.4% of workers have flexible zero-hours contracts, and the number is falling. It has fallen from more than 900,000 a year ago. The key thing is that two thirds of those workers do not want an increase in hours. Nearly 20% of them are in full-time education. Matthew Taylor therefore concluded correctly that to ban zero-hours contracts, as the hon. Lady would, would do a disservice to, and go against the interests of, the people who benefit from them.
As for the scale of our response, the last set of measures to change and reform employment rights to this extent came over 20 years ago in the Employment Rights Act 1996 and not, coincidentally, under the previous Labour Administration, reflecting the fact that it is always Conservatives in government who put in protections for workers. The Labour party can criticise, but it did not take the opportunity to make the reforms that the hon. Lady mentioned. The hon. Lady also mentioned the alignment of the test for employment and for taxation. Matthew Taylor was clear in his report that it is a complex matter that will take some time to bring into effect and that we should consult carefully on it, and the Select Committees have endorsed that recommendation. We have said that we are committed to ending the disparity and to bringing the difference to a conclusion, and she should welcome that.
Finally, the hon. Lady mentioned the European Union, referring to the fact that we will be able to set our own employment policies once we leave the European Union. The Prime Minister has been clear that not only will we not reduce the protections that workers enjoy, but we will increase them, and today shows that. We are laying legislation this very day that goes far beyond the rights that are currently available in the European Union. The hon. Lady should have confidence in the ability of this House and this country to lead the world in employment rights, and I am proud that our Government are doing it.
Fuel Poverty
Rebecca Long Bailey Excerpts(5 years, 4 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
As we enter another winter, I welcome the opportunity to stand opposite the Minister in what will hopefully be a collegiate debate. I regret, though, the urgent necessity once again to debate fuel poverty in this Chamber.
Fuel poverty epitomises what a UN statement recently described as the “great misery” that has been “inflicted unnecessarily” on the UK’s poor, and in particular on the millions of children locked into a cycle of poverty. The UK is one of the world’s largest and wealthiest economies, with all the means at its disposal to eliminate fuel poverty, and yet it is not being eliminated. The latest data shows there were more households living in fuel poverty in England in 2016 than in 2015. The figures were higher in 2015 than in 2014, when in turn they were higher than in 2013. It is not just the extent of fuel poverty that is on the rise, but the depth of fuel poverty—that is, the difference between households’ energy bills and what they can afford to pay. Fuel poverty is not only persisting, but getting worse. Members should be in no doubt that this is not an unavoidable fact of life. It is a political choice.
According to the Office for National Statistics, the number of excess winter deaths throughout England and Wales last winter exceeded 50,000. As we have already heard, that is the highest recorded number for more than 40 years. The figures were described by the charity National Energy Action as “preventable and shameful”. According to that same group, at least 10,000 of those premature deaths were due to vulnerable people being unable to heat their homes adequately. I would like Members to reflect on the people behind those numbers. It means somebody’s neighbour, somebody’s parent, and somebody’s child—10,000 people dying before their time just because they could not keep warm.
The terrible impact extends beyond preventable deaths. I have previously mentioned the impact on health. We know that children living in fuel poverty are twice as likely to suffer from respiratory problems, such as asthma and bronchitis, and that fuel poverty is associated with low weight gains in infants and higher levels of hospital admissions in the first three years of life. Adolescents living in cold homes are at five times the risk of having multiple mental health problems. On top of that, there are the negative effects on educational performance, emotional resilience and wellbeing. When combined with the fact that fuel poverty is not evenly distributed throughout the country, but concentrated in pockets of urban and rural poverty, we have the makings of what can only be described as a social crisis. In some parts of my constituency, fuel poverty affects one quarter of all households, and over one quarter of single-parent households. We know that it is a problem locally because, between April 2017 and March 2018, of those people who came to a citizens advice bureau in Salford and Eccles about energy issues, the most common was dealing with fuel debt repayments.
In last year’s debate, I stated that 22% of households in Salford have prepayment meters compared with the national average of 15%, so I was particularly troubled by a report this year by Citizens Advice on the phenomenon of self-disconnection by those using prepayment meters. The report found that around 140,000 households in Great Britain could not afford to top up their meter in the past 12 months and that 88% of those households contained a child or someone with a long-term health issue. Half of those surveyed said that keeping their meter topped up was a daily concern, which is particularly shocking when we consider that more than 4 million households currently use prepayment meters.
Fuel poverty is not just an issue for those on prepayment meters. Following an unprecedented number of energy price hikes by suppliers rushing to increase prices in advance of the price cap, about which I will say more later, household energy debt has surged over the past year by 24%. It is often said that fuel poverty is due to the confluence of three factors that we have heard about very briefly already: low income, high fuel prices, and poor energy efficiency. I wish to say a few words about each.
After a decade of austerity and lost growth, annual wages are still £760 lower than they were in 2008. Is it any surprise therefore that 47% of all fuel-poor households in England are in full or part-time work? For those out of work, the benefits freeze has deepened fuel poverty as families, already struggling on very little, have experienced a real-terms income cut. The industry body, the Energy and Utilities Alliance, has noted that the introduction of universal credit, which leaves households without an income during the five-week changeover, is pushing more people towards making the decision not to heat their home and to face the dilemma of heating or eating. Raising the national minimum wage to £10 an hour, ending the welfare freeze, and reversing cuts to people with disabilities would go a long way to tackling absolute poverty, which is at the root of so much fuel poverty.
On the cost of energy, last month Ofgem finally confirmed that an energy price cap will come into force in January 2019. That is almost two years after the Prime Minister first announced a price cap as Conservative policy, and it is set at a level that is hundreds of pounds higher than the cheapest tariffs available. In the intervening period, the big six energy suppliers have hiked their tariffs, some on multiple occasions. Ofgem has announced that the cap is likely to be revised upwards within months of being introduced.
In addition, wholesale prices are rising, I feel obliged to mention research published just yesterday by the UK Energy Research Centre, which finds that a no-deal or hard Brexit could increase electricity generation costs by £270 million a year. That is another reason, if we needed one, to redouble our efforts in this House to avoid no deal or a bad Brexit deal.
Labour’s 2017 manifesto pledged an immediate emergency price cap to ensure that the average dual fuel household energy bill remained below £1,000 per year. Had that cap been introduced in July 2017, it would have saved households £2.85 billion between July 2017 and November 2018.
James Heappey
I know the hon. Lady does a lot of reading into energy policy, so she will know that a price cap can only be a temporary correction to the market. What is her longer-term plan for delivering a fairer energy price?
Rebecca Long Bailey
The hon. Gentleman is very learned on the topic of fuel poverty, and I agree with what he said. The Labour party has persistently stated that an energy price cap is a sticking plaster while the wider energy market is reformed, because it is not currently working in the interest of consumers. It forms part of the wider plan of Labour’s energy policy portfolio completely to reform the energy system as we know it.
Network costs represent over one quarter of the cost of a gas and electricity bill, but customers have been getting a bad deal. Citizens Advice estimates that network companies will make £7.5 billion in unjustified profits over an eight-year period. A recent report by the Energy and Climate Intelligence Unit found even more excessive returns captured by distribution network operators than Citizens Advice had predicted, with the six distribution network operator parent companies posting an average profit margin of 30.4%. By bringing energy networks back into public ownership, Labour would reinvest and pass on to customers the money currently paid out in dividends.
Rebecca Long Bailey
I will make some progress before taking an intervention from the hon. Gentleman.
I turn to energy efficiency. A well-insulated home saves households money, makes homes naturally warmer and more pleasant places to live, and cuts energy use, helping to tackle climate change. At least £1 for every £4 spent heating UK homes is wasted due to poor insulation. Improving the energy efficiency of the UK’s housing stock, which is among the oldest and least efficient in Europe, really should be a no-brainer, so how are we currently faring?
According to the Committee on Climate Change, insulation rates have fallen by 90% since 2012. The energy company obligation—known as ECO—which is funded by a levy on bills, is the only remaining domestic energy efficiency delivery mechanism in England. It has also been cut from £1.2 billion a year when it was first introduced in 2013 to £720 million per annum in its second phase, and has been reduced still further to £640 million—effectively a 50% cut. It is therefore no surprise that the Government are off track to meet their targets.
In their 2015 fuel poverty strategy, the Government set a target of ensuring that fuel-poor homes are upgraded to an energy efficiency rating of EPC band C by 2030. But according to the Institute for Public Policy Research think-tank, the Government will not meet their target for upgrading fuel-poor homes until at least 2091. That is why, as a policy suggestion to the Minister, the Labour party proposed investing £2.3 billion a year to provide financial support for households to insulate their homes, and for local authorities to drive take-up and delivery of insulation schemes, in order to bring 4 million homes up to EPC band C by the end of one parliamentary term.
Labour’s plans included fully covering the cost of insulation for low-income homeowners and all social housing, which will particularly benefit older people living in fuel poverty and pensioners on low income struggling to cover the cost of sky-rocketing energy bills. This would have delivered savings of at least £270 a year to affected households. As well as this investment, Labour was also committed to tightening the regulation of privately rented homes, blocking poorly insulated homes from being rented out.
I have tried to set out just some of the measures that will tackle the causes of fuel poverty: low incomes, high fuel costs and poor energy efficiency. I am not seeking to make party political points, but rather to indicate the level of commitment needed if we are truly to address the problem, because what is the alternative? Are we really willing to accept preventable and shameful winter mortality at current levels? Are we really willing to accept that we live in a country where some people go to bed early to stay warm, leave the curtains drawn and even paper over their windows? Is it acceptable that people, often vulnerable people, have to seek out a library, a café or even an A&E department just to stay warm?
I do not believe that anybody in this House wants to see that, but wanting to end fuel poverty is simply not enough; rather, we must be willing to deploy the resources available to us to bring an end to what remains an avoidable indignity for millions.
Several hon. Members rose—
Oral Answers to Questions
Rebecca Long Bailey Excerpts(5 years, 5 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
Brexit cannot result in a race to the bottom for workers’ rights and protections but, sadly, the EU withdrawal agreement does not guarantee that it will not. Thompsons Solicitors says that the non-regression clause will be “ineffective” and the Institute for Public Policy Research states that it is
“not sufficient to maintain current protections”.
Individuals will not even be able to bring about proceedings, and if the EU raises standards, the UK is permitted simply to fall behind. When the Secretary of State called stakeholders after agreeing the deal last week, were trade unions on that call? Will he confirm exactly how he intends to maintain current standards and enforceability and to prevent Britain from falling behind the EU’s standards?
Greg Clark
I note that the hon. Lady dismissed the withdrawal agreement on the airwaves before she had even read it, so it does not surprise me that her question is so misplaced. As for the trade unions, I met Frances O’Grady, the general secretary of the TUC, to discuss the provisions of the agreement in person. When it comes to our record of protecting employees’ rights, the hon. Lady should have more confidence in this country and in this House. We are perfectly capable. We have been leaders in protecting and promoting workplace rights for many generations. We do not need to be required to do so by the European Union; this House can do that itself.
Rebecca Long Bailey
The trade unions were not on that call, which is telling. However, many workers are being treated shamefully even before we leave the EU. There is a bank branch where male workers were expected to urinate in a bucket, and cleaners and security staff are on poverty wages with few rights and protections. The first case was highlighted by Unite yesterday, but the second can be found in the Government’s own Departments under the watch of this Secretary of State, who is responsible for employment rights and protections. Given that the Taylor review was published nearly 500 days ago and yet we still have no update on Government policy and that two months have passed without action since I wrote to the Secretary of State about the treatment of his own staff, how can we trust him to protect workers in the UK now, let alone stop a race to the bottom?
Greg Clark
We value highly the colleagues in our Department and across Government who do important work in public service, and I have made a commitment that we will always treat them well, including on pay and conditions. I am glad that the hon. Lady is looking forward with anticipation to the publication of the response to the Taylor review. It was a landmark report to which this Government committed, and I look forward to her endorsing this Government when we enact Taylor’s recommendations in the weeks ahead.
Nuclear Power: Toshiba
Rebecca Long Bailey Excerpts(5 years, 5 months ago)
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Greg Clark
I pay tribute to the workforce and the community that my hon. Friend represents, and indeed to her leadership and her advocacy for the case for recognising the strategic importance of that, as well as to that of her neighbouring MPs. I enjoyed spending time with her during the summer visiting Sellafield, as I have done before, and in particular looking at the opportunities in the supply chain for new nuclear, in which Cumbria has clearly a lot to offer, given not just the heritage but the actuality of the skills there.
We continue our programme of new nuclear builds; it is important that they should be developer-led. As I said, there is a pipeline of proposed new projects, but it is important in every case that the regulatory conditions are met and that each proposal offers value for money. There is a very bright future for the highly skilled workforce in my hon. Friend’s constituency, now and in the future. Through the sector deal that was agreed enthusiastically between the industry, the Government and local partners, we are investing in the future, including in those skills.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Toshiba’s decision to withdraw from Moorside is a blow to the UK’s energy security, its decarbonisation goals, and the economy of Cumbria. But let us be clear where the real responsibility lies. The Cumbrian chamber of commerce, and the GMB and Prospect trade unions, among others, have all laid the blame with this Government for their lack of clarity over funding and their ultimate failure to take a direct stake in Moorside—something that Labour has repeatedly committed to do.
So, first, will the Secretary of State reaffirm a promise made to the people of Copeland during last year’s by-election when they were told that voting Conservative would ensure a new nuclear plant at Moorside, and will he describe his plan for salvaging the development? Secondly, Moorside was projected to provide about 7% of the UK’s electricity. If the Secretary of State cannot commit to the future of Moorside, can he describe the contingency plans the Government have in place to guarantee the UK’s energy security?
Thirdly, the electricity produced by Moorside would be low-carbon, which is key to meeting the UK’s future carbon budgets, so if the Secretary of State cannot commit to the future of Moorside, can he describe what additional measures the Government will take to reduce the UK’s greenhouse gas emissions? Finally, what contingency plans does the Secretary of State have in place for the economic development of west Cumbria, to which Moorside would have brought a reported 6,000 jobs in the construction phase and 1,000 permanent jobs thereafter?
Greg Clark
I am rather surprised by the statement and questions of the hon. Member for Salford and Eccles (Rebecca Long Bailey). First, it is widely known that Toshiba has had to engage in a corporate restructuring because its major nuclear subsidiary, Westinghouse, had to enter bankruptcy proceedings. That is what has happened. When I met the board of Toshiba last week, it was clear that that was the reason it is retreating. That is the central fact and the reason it is moving out of NuGen.
The hon. Lady asked about the Government’s approach to new nuclear. The policy of this Government is clear: we are in favour of new nuclear as part of a diverse and low-carbon energy mix. We are the first Government for 25 years actually to deliver a new nuclear power station. As my hon. Friend the Member for Copeland mentioned, the sector deal we have struck with the industry has been very widely supported. For the first time, we are training a new generation of nuclear engineers through the nuclear apprenticeship programme. It is an important industry now, and it will be an important industry in the future.
One of the things I find when I talk to investors in the nuclear industry is some concern at the complete absence of a united policy on nuclear on behalf of the Labour party. We would think from hearing the hon. Member for Salford and Eccles that the Labour party was in favour of nuclear power, whereas the leader of her party, who I assume has some influence on policy, has said:
“I stand here as somebody who is passionately opposed to nuclear power and nuclear weapons in equal measure.”—[Official Report, 13 December 2011; Vol. 537, c. 699.]
The shadow Chancellor has said that he would end nuclear power
“in the first 100 days of a Labour Government”.
It is no wonder that the trade unions the hon. Lady refers to have said that her own party’s energy plans would not leave the lights on.
Our approach is to continue with the programme of nuclear new build that we have. It is subject to being developer-led and, as is strictly necessary, to the safety case being made in each example, as well as to establishing value for money. It is, after all, the taxpayers or consumers who pay the bills, and we will always have that in mind as we continue our programme.
Oral Answers to Questions
Rebecca Long Bailey Excerpts(5 years, 6 months ago)
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Greg Clark
I think it is well known, and my right hon. Friend is aware, that we have been one of the leading forces in the world in ensuring that the rules should be changed, so that companies that currently pay little tax because of international agreements make a fair contribution. There is more to be done, but my right hon. Friend served in Cabinets in which this was put at the top of the agenda, and some progress has been made.
Rebecca Long Bailey (Salford and Eccles) (Lab)
I warmly welcome the Under-Secretary of State, the hon. Member for Rochester and Strood (Kelly Tolhurst), to her new role. I am sure she will do fantastically.
All the major business representatives, from the CBI to the chambers of commerce and the Federation of Small Businesses, have highlighted the need for business rates reform and temporary relief. The CBI says:
“The…system is stifling growth and investment”,
and the FSB says it creates a significant barrier to small business growth. Can the Secretary of State confirm today whether there will be any action on this issue in the forthcoming Budget?
Greg Clark
The hon. Lady knows that decisions on the Budget are for the Chancellor, but one of the measures we have taken, which I hope she would acknowledge, is a very substantial reduction in the burden of business rates on small businesses. That shows that the Government are alive to the importance of business rates for small businesses. We of course listen constantly to the organisations she mentions, but also to the Retail Sector Council.
Rebecca Long Bailey
I suddenly have a sense of déjà vu. At the last autumn statement, business groups warned of the devastating effect of business rates. In return, we saw only minor tinkering. Since then we have had a raft of store closures, with more than 100,000 retail jobs lost in the past three years. Many businesses cite business rates as a root cause. The Secretary of State has reportedly said that adjusting business rates would be one way to recognise the value of our high streets, yet the Chancellor said in July that there were no plans for reform. Just what is going on? Will there be action, or should we expect another year of meaningless tinkering from the Chancellor?
Green GB Week and Clean Growth
Rebecca Long Bailey Excerpts(5 years, 6 months ago)
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Rebecca Long Bailey (Salford and Eccles) (Lab)
I thank the Minister for advance sight of her statement today. I am pleased to be responding to the news that she has written to the Committee on Climate Change asking for advice on setting a date for achieving net zero greenhouse gas emissions. However, despite any good intentions she may have had in writing that letter, she must understand that Government policy is demonstrably incompatible with that goal.
First, investment in renewable energy has undergone what the Environmental Audit Committee refers to as a “dramatic and worrying collapse”—falling 56% in 2017. Changes in planning rules and Government funding since 2015 have seen the rate of deployment of new solar fall 95%, and planning applications for new onshore wind fall 94%. The Government now plan to remove support to small-scale renewables, which according to the Solar Trade Association, risks the almost total collapse of the industry. How is this compatible with net zero emissions?
Secondly, this Government and the last have sadly overseen a collapse in investment in energy efficiency, with Energy UK pointing to a 53% drop in investment between 2012 and 2015, an 80% reduction in improvement measures, and further declines projected to 2020. Again, how is this compatible with net zero emissions?
Thirdly, this Government have pursued a policy of fracking at any cost, overruling local planning decisions and reportedly even considering relaxing earthquake regulations. Shale gas can only be described as low carbon if it replaces coal in the energy mix, but coal is already on its way out of the UK’s energy mix, before fracking has even started. If shale gas were to come online now, it would be displacing genuinely low carbon energy, not coal. James Hansen, the former NASA scientist known as the father of climate science last week slammed this Government’s decision to pursue fracking as “aping” Donald Trump. What a terrible irony it is that the first day of Green Great Britain Week is the day that fracking is due to commence in Preston. How is this compatible with net zero emissions?
Fourthly, last week the Government announced that they are cutting the electric vehicle plug-in grant by £1,000—a move described by industry as “astounding”. Fifthly, according to the Committee on Climate Change, the Government are off course to meet existing carbon budgets, which are set with a view to achieving an 80% reduction in emissions by 2050. So I ask again: how is this compatible with meeting the more ambitious target of net zero emissions?
I believe that the answer to that question is contained within today’s letter to the Committee on Climate Change, in which the Minister describes carbon budgets 3 to 5, which run up to 2032, as “out of scope” of the referral. By effectively ruling out any additional action on climate change in the next 14 years, the Government seem to be asking the committee for advice but only in so far as they do not actually have to act on it. Unlike Labour’s plan to dramatically decarbonise energy supply and insulate 4 million homes as part of a green jobs revolution, the Government do not expect actually to implement any of the real measures needed to avert dangerous climate change. Sadly, without more robust and radical action from the Minister, she must realise that her Government’s vision for a green Great Britain is just a great green washout.