Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 17th July 2018 Commons Chamber

[Greg Clark]

I and our colleagues in the Treasury have constant discussions with the services sector. It is important that our distinctive financial services sector not be subject to a set of rules in the future that might be very much against its interests. Everyone who knows the City needs to recognise that the flexibility and distinctiveness of our approach must continue.

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

Airbus, Jaguar Land Rover, BMW, Siemens—just a few of the businesses that have recently spoken out about the Government’s handling of Brexit. They alone provide thousands of jobs and significant investment in the UK, but the Government’s chaos is putting this in jeopardy. The Secretary of State himself was forced to rebuke the flagrant dismissal of his own Front-Bench colleagues, stating that big employers were entitled to be listened to with respect. Would he say that he has now listened to the concerns of business with respect?

[Greg Clark]

The hon. Lady is absolutely right. Those businesses did speak out. Since the publication of the White Paper, they have also recognised that the zero-friction proposal made in it merits support and they have committed to advocating for it across the rest of the EU, as I hope that she will.

[Rebecca Long Bailey]

Well, the CBI and the British Chambers of Commerce have both said they are no clearer on the Government’s negotiating position in several key areas, and last night business leaders are reported to have warned the Prime Minister that her customs legislation was not fit for purpose, but the Government pressed ahead, even accepting amendments that their own colleagues state fundamentally undermine the Chequers proposal, and wrecked it, caving in to the hard, no deal Brexiteers. When exactly will the Secretary of State’s Government start paying more than lip service to the concerns of business?

[Greg Clark]

The hon. Lady is wrong. All the organisations she mentioned have given the White Paper and the Chequers proposals a warm welcome. In the Prime Minister’s Mansion House speech, we committed to minimising frictions at the border. The proposal now is to have zero friction at the border. That is strongly in the interests of business and allows our successful supply chains to continue to prosper. We need the Opposition to recognise the national interest in having a good deal. Almost everyone in the country wants a good deal negotiated between Britain and the EU. Rather than edging for difference and trying to make political points, she should get behind this excellent suggestion for the country.

Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 12th June 2018 Commons Chamber

[Claire Perry]

My hon. Friend is right. I should clarify that we are entering commercial negotiations—a deal needs to be done—but we should make a virtue of the fact that we have one of the most diversified energy supplies in the world and one of the lowest-carbon energy supplies. We have also managed to get ourselves off coal, which other countries long to do.

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

The Government’s shambolic policy on the solar and onshore wind sectors in recent years has meant that significant economic growth and decarbonisation opportunities have been lost. For example, we have seen dramatic feed-in tariff subsidy cuts; business and VAT rate hikes; and obstruction to clean power auctions. Sadly, as we have heard today, there are reports that the Swansea Bay tidal lagoon, the world’s first tidal lagoon, which would create thousands of jobs and local supply chains and use 100,000 tonnes of majority British steel, is potentially on the Secretary of State’s hit list. Will the Minister buck that trend today and confirm when the decision will be made, and outline what support she will give to solar and onshore wind?

[Claire Perry]

I remain bemused by the hon. Lady’s ability to seize a disaster out of a triumph. We have delivered more renewable energy than we ever thought possible, at a price that is unimaginable—[Interruption.] I know the Opposition Front Benchers do not give a stuff about consumer bills, as they have made that totally obvious, but we care about decarbonisation at the right price for the consumer.

[Rebecca Long Bailey]

I think we touched a nerve there. The Minister is living in a parallel universe to me, because in the first quarter of 2018 the deployment of new solar slowed to its lowest level since 2010, and next year onshore wind installation is expected to be at its lowest level since before 2008. But it gets worse: last November, the industrial strategy was published, yet seven months on progress has been slow, with business becoming increasingly frustrated. The industrial strategy council has not yet been appointed, no strategy for reaching the research and development target has been published and dozens of sectors are waiting for responses to their sector deals. So does the Minister accept, as some key business leaders do, that perhaps her Government’s chaos over Brexit and the apparent inability even to concentrate on an industrial strategy are undermining British business and indeed our growth?

[Claire Perry]

The previous point still stands. We are incredibly proud of our industrial strategy, with its groundbreaking opportunities to link up government and businesses for the first time. I go back to the point on the hon. Lady’s questions about solar: the thing about offshore wind is that we lead—[Interruption.] Again, if they could all stop chuntering, Mr Speaker—God almighty. We lead the world in terms of the installed capacity, and we have created tens of thousands of jobs. I know the Opposition Front Benchers, as per the first question, do not give a stuff about jobs, let alone consumer bills, but the point is that—

Retail Sector

Rebecca Long Bailey Excerpts

Wednesday 6th June 2018 Commons Chamber

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

I beg to move,

That this House notes that 21,000 jobs were lost in the retail sector in the first three months of 2018 due to store closures and company administrations, with more announced since; further notes that the retail sector is one of the largest employers in the UK and contributed £94.6 billion to the UK economy in 2016; regrets that the Government’s industrial strategy contains only three references to the retail sector; further regrets that the Government has presided over the biggest squeeze in wage growth in a generation, is failing to provide certainty around future trading arrangements after Brexit and has failed to ensure a fair business rates system; and calls on the Government to urgently publish a strategy for the retail sector.

[Melanie Onn (Great Grimsby) (Lab)]

Will the shadow Minister give way?

[Rebecca Long Bailey]

I will.

[Melanie Onn]

I thank the shadow Minister. The point on business rates is one that small businesses in my constituency regularly raise with me as something that not only curtails their opportunity to grow, but impedes their security for the immediate future. Does she think that the Government should do something about this immediately?

[Rebecca Long Bailey]

I thank my hon. Friend for her intervention and I completely agree. I will come on to business rates and the action that I would suggest that the Government take shortly.

[Kate Green (Stretford and Urmston) (Lab)]

I welcome this debate. My hon. Friend may be aware of research by Revo and intu shopping centres that looked at the UK’s appeal to international investors in the retail sector. They highlighted that business rates were the single biggest inhibitor of new international inward investment. Does she agree that that is a further reason why, in a post-Brexit environment, it will be all the more important that we review our business rate regime?

[Rebecca Long Bailey]

Yes, and I thank my hon. Friend for her intervention—I completely agree. Before I start the substantive part of my comments, it is important to note that the commercial retail sector has faced significant strain over recent years, affecting landlords and tenants alike. That is not least due to the business rates system. A lot of major property investors—for example, St Modwen—have divested themselves of their retail arms, because they are simply not profitable anymore, not only for tenants but for landlords, so it is critical that the business rates question is addressed urgently.

[Rachael Maskell (York Central) (Lab/Co-op)]

I really appreciate my hon. Friend giving way on such an important issue as business rates. Can she fathom why the Government, when they announced 15 months ago that they were going to review business rates, have not done anything to progress this issue?

[Rebecca Long Bailey]

I completely agree, and now I will begin the substantive part of my comments, if I may.

The retail sector is undergoing a period of transformative change that will impact millions of workers across the UK. As has been played out in the press over the last few months, the sector is experiencing huge challenges, with almost silence from the Government, sadly. We have seen an onslaught of store changes; big-name chains that have been the stalwart of our town centres and high streets for years have collapsed and gone into administration.

[Alex Cunningham (Stockton North) (Lab)]

My home town of Stockton won the rising star award in the British high street awards, sponsored, ironically, by Marks & Spencer, which is now abandoning our town after taking profits from our people for over a century. We believe however that our town has got a future, but does my hon. Friend agree that firms like Marks & Spencer should consider the future prospects of towns properly, and show a bit of loyalty to their loyal customers instead of taking their profits and running off to out-of-town shopping centres?

[Rebecca Long Bailey]

I agree with my hon. Friend, but the issue is twofold. It is not simply about imposing obligations on businesses; the Government have a duty to provide a fertile business environment in which large and small businesses can grow and provide a positive contribution to their communities.

Toys R Us and Maplin collapsed on the same day in February, putting 5,500 jobs at risk in one day. Card Factory, Moss Bros, Laura Ashley, Carpetright and Mothercare have all issued profit warnings this year, and some have entered into company voluntary arrangements, with hundreds of store closures expected. In April we heard news of a possible merger between Asda and Sainsbury’s; a couple of weeks ago the one and only Marks & Spencer announced it will be closing 14 branches this year and 100 stores by 2022; and just this week there were reports that House of Fraser is on the brink of collapse and attempting to negotiate a CVA. That list is not exhaustive but it clearly demonstrates the scale of the challenge faced by the industry.

I am sure many Members across the House will at one point or another have worked in the retail sector; it is many people’s first experience of the working world, as it was for me. My first job was as an assistant at a pawn shop. I must clarify that it was a pawn, not a porn, shop—at a meeting a few years ago I said I had worked in a pawn shop and one lady in the audience, thinking it was a porn shop, was horrified. That first job was important because it taught me valuable skills and allowed me to gain some financial independence, but for millions of people retail is not just a Saturday job; it is their livelihood. It is therefore vital that the Government take the challenges facing the sector seriously and provide support to it.

The industry is one of the largest sectors in the UK, contributing £94.6 billion to the UK economy in 2016. However, staggeringly, its productivity is less than four-fifths that of the national average, and this low productivity drags down the productivity of the UK, a point made recently by the Institute for Public Policy Research. And, sadly, with low productivity comes low pay. We should not fall into the trap of thinking that all people in retail are low paid and in economic hardship—the student doing a summer job would certainly not be in that position—but there is a widespread problem in the retail sector, and according to the Joseph Rowntree Foundation there are around 1.5 million people in low pay in retail, with a higher proportion of households facing economic hardship than in working households generally.

Because retail is such a large sector, the industry now accounts for just under one third of the total number of people in low pay in the UK. The economic importance of the sector should therefore not be understated, and the Government should be doing more to support it. I am sure the Secretary of State will listen to my suggestions today, but I hope that when he speaks later he staggers me with a comprehensive plan to support the sector.

I will start my kind suggestions to the Secretary of State by saying that one of the most glaring omissions from the industrial strategy White Paper was an appreciation that an industrial strategy is not just about labs or hard-hats, but is also about low productivity service sectors, where the majority of people work. Investing in and talking about headline-grabbing hi-tech industries is of course critical, but this alone does not constitute an industrial strategy. Despite the Government’s intention to improve productivity, sadly the industrial strategy Green Paper mentioned retail only twice in 132 pages, and the White Paper only three times in 256 pages, with vague references to working

“closely with sectors such as hospitality, retail and tourism on each of the foundations of productivity”,

but with very little detail to match.

Many challenges are facing the sector, and I will touch on just a few key areas today. Retail firms have since the economic crisis come under increasing pressure. Things have got so bad that in the first three months of 2018 some 21,000 jobs in the retail sector were at risk. The drive towards online retailing, and indeed bad weather, have of course had a significant impact on our spending habits, but one reason for this that is rarely mentioned is a clear failure to sustain wage growth. Wages are not expected to return to pre-crash levels until at least 2022, and household debt has spiralled to unprecedented levels. This clearly has a significant impact on what people spend their money on, with many, sadly, relying on credit cards just to get by each week, never mind buy luxury items.

The Office for National Statistics has stated that consumer spending is worth around 60% of GDP, and it has been one of the driving forces behind the recovery of the UK economy. Interestingly, however, trends are showing that British consumers have stopped taking on more debt, and Credit Suisse recently told clients that it believes this trend will continue, which would damage one of the key drivers of GDP growth.

Another issue is the increasingly hostile business environment many retailers are now facing. But it is not just businesses that will lose out: communities are having their hearts ripped out and high street after high street is becoming littered with empty shops, charity shops and bookmakers.

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

Does my hon. Friend agree that another issue for high streets is that the banks have been leaving? Many retailers tell me that having an ATM beside their business makes all the difference to their takings. Does my hon. Friend think that the Government, as the majority shareholder in RBS, should step up to the mark and take action on branch closures?

[Rebecca Long Bailey]

I completely agree, and interestingly historically RBS had a last-man-standing agreement to be the last bank on many high streets, and that does not seem to have been enforced by the Government, so I call on the Secretary of State to look at this. My hon. Friend makes a pertinent point, and it is not just bank closures that are damaging the high street infrastructure; the closure of post offices is also a significant issue.

These issues are exacerbated even further by years of under-investment in many of our regions and nations. If the Government are not prepared to provide the tools businesses and communities need to provide a fertile environment for local businesses, how can we expect these fortunes to change? A worrying report by David Jinks called “The Death of the High Street” argues that, unless we see radical change within 13 years, the impact of online shopping and home deliveries will “destroy” over half of today’s town centre stores. His report also argues that between 2020 and 2030 half of the UK’s existing shop premises will disappear; 100,000 stores will close, leaving just 120,000 shops on our high streets.

Britain’s high streets are fading away because new shops are not opening fast enough to replace those that close. The Government attempted to deal with this issue through the Portas review, which advised that town teams be created to assist towns undergoing significant strain, but official funding for town teams ended on 1 April 2015.

The Government’s recent announcement to develop local industrial strategies was a welcome step forward. However, think-tank Localis stated last month that there was a capacity gap in Whitehall for developing these, leading to concern that a pipeline of local industrial strategies will face significant delays. I will be grateful if the Secretary of State provides clarity on this and confirms what resources are available to local enterprise partnerships and local authorities in taking these strategies forward.

EU funding has also been a significant supporting factor to many areas in decline; it has always been strongly targeted at less prosperous regions. The Government are currently failing to provide any certainty to business over the UK’s future trading relationship with the EU, the extent of regulatory alignment, or access to labour, but they have also failed to provide clarity on one key tool that previously helped spur the regeneration of many towns and high streets that had been starved of investment: EU structural funds. We know that the Government are planning a new fund to replace them when we leave the EU, but so far there has been no commitment on the scale of that fund, on how it will be administered or which investment it will be directed at. Will the Secretary of State give us more information on that today?

When we add to this massive uncertainty the significant cuts that local authorities have faced in recent years, we have a recipe for complete high street annihilation. That environment, and the lack of support that many businesses face, was made very clear in the shambolic handling of last year’s business rates revaluation, in which many businesses faced an unmanageable overnight hike in their rates. I am pleased that the Government have brought forward CPI indexation, but I urge them to go further by immediately introducing statutory annual revaluations, guaranteeing a fair and transparent appeals process and excluding new investment in plant and machinery from future business rates valuations. They must urgently evaluate and reform the whole system to make it fit for purpose and capable of addressing the changes that we are seeing in the sector.

Businesses were failed not only in regard to business rates; we also saw a failure to handle the scourge of late payments, which can lead to businesses struggling to cover costs or to invest, and sometimes going bust. We saw the effects of this recently in the collapse of Carillion, when huge swathes of supply chain companies faced a cliff edge due to late payments, often of up to 120 days. Many of those businesses will never see their money again. I urge the Government to adopt Labour’s position by ensuring that anyone bidding for a Government contract is mandated to pay their own suppliers within 30 days and by developing a robust system of binding arbitration and fines for persistent late payers.

As the retail sector struggles, how to boost productivity remains a major challenge. There are at least two schools of thought on this. The first concentrates on improving technology and ultimately automating many jobs. That involves automating warehousing, sales, deliveries and so on, and job losses could result. That was the view of Deloitte, which suggested that 60% of jobs could be lost. The jobs that would remain would require a range of skills such as operating advanced machinery, software and robotics. They are likely to be higher paid and involve higher skills.

The second model involves redesigning how business operates to boost productivity growth. Research from the Joseph Rowntree Foundation has shown that many capable employees in the retail sector are reluctant to move up the rungs of the management ladder, as that involves greater responsibilities without much of an increase in pay. Jobs need to be redesigned so that an individual performs a range of different tasks that straddle the staff-management boundary and pay is increased. In that way, talented individuals could be engaged in the management side, raising performance and productivity. Either of those models—or a hybrid of the two, whichever the Government chose to take forward—would require dedicated Government investment in skills training for employees, to enable them to navigate the changes.

[Rachel Maclean (Redditch) (Con)]

I agree with a lot of the challenges that the hon. Lady is outlining. My son works in the retail sector, and he has recently had a promotion to management level. He is only 18, so I give full credit to Zara for encouraging his talents. Does she agree, however, that the Government’s approach in bringing in T-levels has played an important part in tackling those challenges and that they are working with industrial partners to bring those changes forward?

[Rebecca Long Bailey]

I thank the hon. Lady for her intervention. Please will she congratulate her son on his recent promotion? Some of the Government’s commitments are welcome, including the national retraining scheme and the T-levels that she has just mentioned, but sadly they are meaningless in the context of the cuts that we have faced over recent years. For example, £64 million was announced for the national retraining scheme, but £1.15 billion was cut from the adult skills budget between 2010 and 2015. I hope that the Secretary of State will put forward proposals today to increase investment in skills, because if we do not invest in skills, we will not be able to take our employees on the journey that they need to make.

[Stephen Kerr (Stirling) (Con)]

The hon. Lady has been speaking for some time now, giving her analysis and talking about what the Government should do, but in her position as the shadow Secretary of State for Business, does she have any pearls of wisdom to give to retailers on what they should do to attract people into their retail outlets?

[Rebecca Long Bailey]

I thank the hon. Gentleman for his comments, and I do apologise for speaking for some time. If he listens, perhaps he will get some of those pearls of wisdom in due course. The point I am making is that the Government need to recognise that businesses need support. Businesses themselves need to innovate and to ensure that they drive productivity increases in-house, but the Government need to show dedication to providing the tools required to increase fertility in the business environment. Frankly, that is not happening at the moment.

An essential element in improving retail productivity is innovation, which is the best means of raising wages and boosting the competitiveness of British industry. Innovation is required by businesses themselves, as I have just pointed out to the hon. Gentleman, but the Government must commit more money to research and development spending. They referred in their White Paper to increasing that spending to 2.4% of GDP, which is welcome, but if they are really going to support low productivity sectors such as retail and ensure that we can compete on the world stage, they need to increase it to at least 3%, as other world leaders such as South Korea and Japan have done.

I also welcome the Government’s recent establishment of a Retail Sector Council, but I have heard very little information about it since its establishment. Will the Secretary of State update the House on how often the council has met so far and whether there have been any discussions with the Government about what role the Government can play in boosting innovation in the sector? Labour has pledged to establish a catapult centre in relation to retail, to lead on technological, managerial and employee innovation. This is important because the Fabian Society recently reported that increasing managerial innovation and sharing best practice in retail can drive productivity by improving quality, as well as sale and business growth, and I call on the Government to examine Labour’s catapult centre proposals.

Infrastructure investment is also a critical part of boosting productivity in the sector. We must recognise that the future of our high streets depends on quality infrastructure, transport links, parking amenities and high-speed broadband, as well as on the local anchor institutions that draw people in, such as entertainment and leisure facilities and libraries. The sums announced in the White Paper are sadly negligible, and the TUC has stated that public investment will be increased to just 2.9% of GDP, while the average invested by other leading industrial nations in the OECD is 3.5%. Again, I hope that the Secretary of State has some earth-shattering updates for me today, to restore our faith in what the Economic Justice Commission recently dubbed

“the most regionally unequal country in the whole of Europe”

in terms of investment in our regions.

This brings me to the subject of retail workers, who are vital to the success of the sector. They provide positive customer experiences, and a lack of staff can have an adverse impact on customer service levels. The impact of job losses in retail should therefore not be understated. They have a profound impact on families and communities right across Britain. Retail has traditionally provided entry-level, part-time and flexible jobs for millions across the UK, and it has often provided livelihoods for people who have had to leave declining industries in particular regions.

[Anna McMorrin (Cardiff North) (Lab)]

One of my constituents who is directly affected by this has written to me. Her husband works in retail, and she is appalled by the contract changes being forced on people working in the sector, particularly in Sainsbury’s, where 9,000 long- standing and loyal staff will suffer a significant pay cut of up to £3,000 and see their paid breaks and premium pay scrapped.

[Rebecca Long Bailey]

My hon. Friend makes a vital point, and I shall come on to that shortly.

For some people, working in retail may be their only viable employment option. If a chain goes under and the local store closes or relocates out of the area, they will either have to travel further afield to find work or decide that the journey is simply not cost-effective and be forced to give up work altogether. According to a recent report by the Fabian Society, forecasts for the reduction in employment in the industry suggest that women, who make up the majority of the retail workforce, will sadly be the hardest hit. Workers in the retail sector are vulnerable, as my hon. Friend has just said. When costs need to be cut, workers are usually the first to face the squeeze. Only recently, Sainsbury’s announced sweeping changes to contracts for up to 130,000 staff in stores across the UK.

[Mike Amesbury (Weaver Vale) (Lab)]

Does my hon. Friend agree that the likes of Lidl, which has its senior management at Manor Park in Runcorn, should allow access to the trade union USDAW, because a healthy workforce is a productive workforce?

[Rebecca Long Bailey]

My hon. Friend makes an important point about another key factor in improving productivity. This is about not just improving skill levels, but engaging with the workforce proactively and collaboratively. That is best done through trade union membership and allowing trade unions access to workplaces, so issues on the shop floor can be identified and dealt with quickly, increasing productivity overall.

[Kate Green]

I am a proud USDAW member, and will my hon. Friend join me in commending its “Freedom From Fear” campaign, which seeks to ensure that shop workers are safe at work, travelling to work and leaving work? Too many of them still risk abuse and unpleasantness from customers in the workplace.

[Rebecca Long Bailey]

I thank my hon. Friend and support what she says.

Going back to Sainsbury’s, staff will no longer get paid breaks or higher rates of pay for working on a Sunday under the new terms. Premium rates for night-shift work will be restricted to between midnight and 5 am, and shop floor staff will no longer be able to earn bonuses. It is interesting, however, that the freeze on bonuses is allegedly not likely to impact senior managers or the CEO, who will still receive their bumper bonus packages. There are also worrying reports that staff may be forced to resign if they refuse to sign these new contracts.

Sainsbury’s is not alone in this trend towards fluctuating terms and conditions and insecurity. As USDAW recently reported, a number of clear trends within the sector have led to the workforce feeling increased pressure. Many retailers, seeking to maximise flexibility to deal with fluctuations in customer demand, have introduced flexible, short-hours contracts. As a result, two thirds of USDAW members are regularly working additional hours above those that they are contracted to work, yet they have no guarantee that those hours and the associated income will be available to them in the future. The Bakers, Food and Allied Workers Union reports similar trends, with McDonald’s workers recently striking in a dispute over zero-hours contracts and working conditions.

The Government’s recent response to the Taylor review included a right to request more stable hours, which I referred to when the Secretary of State made his statement on the review, but how does that actually differ from the current position? Without an obligation on the employer to accept, it is meaningless and I urge him to reconsider.

[Justin Tomlinson (North Swindon) (Con)]

Coming from a family of shopkeepers and as a former co-chair of the all-party parliamentary group on retail, I have been listened very carefully, but the shadow Business Secretary has made hardly any mention of Amazon and the onslaught of online trading that has decimated footfall on the high street. The vast majority of her speech has been gibberish to people in retail, with no practical suggestions. I hope that there will be something in her conclusion.

[Rebecca Long Bailey]

With the hon. Gentleman’s knowledge of the sector, I am surprised that he says that, given that business rates are one of the critical issues affecting the high street. Retailers often tell me about the unfairness of businesses such as Amazon receiving skewed business rates valuations due to the size of their operations, so I have dealt with that point.

[Vicky Ford (Chelmsford) (Con)]

I have listened carefully to the hon. Lady, who has accused British retailers of lacking innovation. However, the UK is the third largest e-commerce market in the world. Digital taxation needs to be done on a cross-border basis, so will she join me in congratulating our Chancellor on getting 100 countries across the world to look at implementing a digital tax to allow us to address the level playing field between online and offline?

--- Later in debate ---

[Rebecca Long Bailey]

I have not in any way, shape or form suggested that any business lacks the capacity or drive to innovate—quite the contrary—but they do lack Government support to drive that innovation. As for making tax digital, I ask the hon. Lady to read some of the Library research. While the sentiment is credible, the implementation has been far from it, with numerous businesses reporting problems from start to finish, and that needs to be addressed urgently.

[Rachael Maskell]

Does my hon. Friend recognise that the retail sector suffers from offshore landlords charging exorbitant prices for property, forcing businesses off our high streets?

[Rebecca Long Bailey]

I referred earlier to the commercial retail property market, and the Government must recognise that they have to work collaboratively across the sector and with landlords to enable tenants to secure fair tenancies. In the current climate, many tenancies are unfair to retailers, forcing many of them over the edge. Offshore landlords are a significant issue that we have discussed at length in this Parliament.

That completes my whistle-stop tour of many of the issues the sector faces, and I hope that my comments have been helpful to the Business Secretary. He knows that retail is our largest industrial sector. It has the power not only to transform our economy, but to transform our communities, providing high streets and towns with the services and consumer choice that Britain deserves.

When I was little, my Uncle Ray was a butcher. He was proud of having his own business and the family were proud of him. However, he was not just proud of being an entrepreneur; he was proud of the services that he provided to his local community and to the people who came into his shop every single day. In all my life, I have never seen such profound change in the retail sector, and the alarm bells are ringing loud and clear. How many more Uncle Raymonds are there who want to start their own business but are frightened to do so in the current climate? How many more Uncle Raymonds are out there who are in business but are frightened of going bust due to the hostile environment they face? Once our high street is gone, it will be gone forever, and the basic lifeblood of an entrepreneurial nation from high street grocers and hairdressers all the way through to department stores will be in tatters. I urge the Business Secretary to act now before it is too late.

Nuclear Power

Rebecca Long Bailey Excerpts

Monday 4th June 2018 Commons Chamber

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

There is cross-party consensus that new nuclear will continue to play a vital role in the UK’s energy mix, and I am therefore pleased to hear that progress has been made, after some uncertainty, on the Wylfa nuclear plant. Given the well-documented failings of the Hinkley Point C deal, however, I am deeply concerned by the way in which the financing has been or will be negotiated—namely, the lack of transparency and parliamentary scrutiny thus far.

On 15 May, I wrote to the Secretary of State requesting information about the negotiations and I am yet to receive a response. Until the last few days, we have had to piece together snippets of information from the Japanese press, and titbits from energy and environmental groups. We have finally heard today that a deal will be negotiated with Hitachi, which media reports suggest will include a guaranteed strike price, loan guarantees and an equity stake in the project in exchange for direct Government investment.

I must say that this is a surprising shift from the Government’s ideological position against Government investment in new energy infrastructure, and I wonder whether the shift applies to other renewable technologies, for which support has been repeatedly cut by this Government. I suspect not. I must sound a note of caution. Without sufficient detail and transparency, the House is unable to determine the risks and benefits borne by consumers and taxpayers in the proposed deal.

Last year, the National Audit Office concluded on the Hinkley Point C deal that the Department had

“not sufficiently considered the costs and risks of its deal for consumers.”

The NAO made a series of recommendations, including mechanisms for reviewing value for money and the affordability of the deal; making it clear who is accountable for oversight and governance; ensuring that the cost and timing implications of alternatives are shown clearly; and developing a plan to realise the benefit across local economies and supply chains. Last year, I asked the Government to adopt those recommendations. So will the Secretary of State say whether he has done so and, if not, why not? However, if the Government have done so, will he publish all relevant documentation showing that each recommendation has been followed in relation to Wylfa or, indeed, confirm that they will be followed if they have not been processed yet?

Negotiations between the Government and Hitachi thus far appear to have been conducted behind closed doors. Will the Secretary of State say whether the House will be given time to scrutinise the proposed deal outline, or is this simply a done deal? If so, have any binding commitments been made or, for example, have any preliminary heads of terms or memorandums of understanding been issued? The NAO stated that

“making commitments to investors can limit flexibilities to react to a change in circumstances.”

The implications of that need to be understood and communicated clearly to decision makers. It is important to ensure that the cost and timing implications of alternative funding arrangements are shown clearly—again, that is advocated by the NAO. If such alternatives have been, or will be, examined, can the Secretary of State provide the House with details today?

I move on to safety issues. It has been widely reported in the press that Hitachi is seeking to “reduce or eliminate” its financial responsibility for accidents. Will the Secretary of State say whether that is true? If so, where will such liability lie and what safety impact assessments have or will be carried out from construction and operation through to decommissioning? Indeed, on the issue of decommissioning, will he explain who will bear that liability and how much the cost is likely to be?

Despite the good news for Wylfa, subject to the queries that I have outlined, it appears that further down the Welsh coast the news is not so good for renewables generation. Media speculation suggests an impending negative decision on the much-anticipated Swansea tidal lagoon project after years of planning and campaigning by Tidal Lagoon Power, the Welsh Government, environmental groups and MPs across the House. If that is true, it is outrageous. To assume that Swansea is somewhat redundant, given the plan for investment in Wylfa, is very short-sighted.

I understand that Tidal Lagoon Power has offered to negotiate further, but has not received a response from the Government. Under the plans, there would be a zero-carbon power plant producing energy for over 100,000 homes, creating thousands of jobs across Britain; turbines built in a wall in the sea that harness the power of the tides, so that we can turn the kettle on in the morning; world-leading infrastructure built in Britain using British steel to last more than a century; and the potential to export our expertise and products across the globe. An ambitious, decisive and forward-thinking Government would jump at a project like that, just as they have done with Wylfa. Well, perhaps not. Recently, someone joked to me that the desk of the Secretary of State was where good ideas went to die. I hope that that is not the case with the Swansea tidal lagoon, and I implore the Secretary of State one last time to stop messing about, and to sit down with the company and the Welsh Government to develop a deal urgently.

[Greg Clark]

I am disappointed that the hon. Lady did not continue in the spirit in which she opened her contribution. This is an important moment, and we are beginning a negotiation on a project that will supply energy to this country for the next 60 years, until towards the end of the century, which will create jobs and reduce our carbon emissions. She said that her party supported the proposal and that there was cross-party consensus—one could be forgiven for missing that in her tone—and it is important to establish that, because it is evident that any 60-year project will take place over the life of successive Governments. This country has given nuclear investors confidence over time that there is a strong commitment to such major infrastructure projects, so I hope that she will back the commitments that she and her party made in their manifesto last year to support new nuclear and recognise the considerable opportunities, as she put it, for nuclear power internationally and domestically.

The hon. Lady asked about the financing model. She urged me in a letter to reflect on the recommendations of the National Audit Office and the Public Accounts Committee to explore alternative financing models that can reduce the price of the electricity that is generated. That is exactly what I have set out—I have followed the recommendations of the NAO and the PAC. We are entering a negotiation—I think somewhere in her remarks there was a welcome for that—but the essence of doing so is that a deal has not been agreed. We need to explore that, and it is subject to the very tests that she set out and that the NAO and the PAC observed are required, including on value for money.

On safety, the hon. Lady should be reassured—there are many hon. Members who are familiar with the nuclear industry in this country—that the safety standards operated through our independent nuclear inspectorate are the highest in the world, and that the generic design assessment is the most exacting in the world. We always abide by the rulings and requirements of the independent regulators so that we can have full confidence in the safety of this important industry.

Finally, the hon. Lady mentioned other potential investments, including the proposal for renewable power in Swansea. She knows—we have had exchanges about it across the Dispatch Boxes—that I believe in a diversity of energy supply, but we need to make sure that value for money is offered for taxpayers and bill payers. A rigorous assessment is required and, as I have done today, I will update the House when the process is concluded.

Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 1st May 2018 Commons Chamber

[Richard Harrington]

I can assure the hon. Gentleman that the money is already spent. It is our intention to launch a request for proposals to secure a fund manager this summer. Further details will be included in the Department for Transport’s forthcoming zero-emissions road transport strategy.

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

Following figures showing that car registrations plunged in March by 15.7% compared with 2017, Jaguar Land Rover announced that 1,000 jobs would be cut at Solihull and that it was temporarily reducing production at Halewood. Sadly, reports suggest that the Solihull workers were told this news at a mass meeting that lasted only 10 minutes, with no opportunity to ask questions. We have heard some hints from Members today, but will the Minister tell us whether he has made any assessment of the causes and the potential knock-on effect on jobs in the supply chain? What steps is he taking to support workers and to reverse this worrying trend in the whole automotive sector?

[Richard Harrington]

The hon. Lady will know that JLR has been clear that this restructuring is part of the cyclical nature of automobile production. It is very confident about this country; it is employing a lot of apprentices and skilled people and training up its workforce to take part in the next phase of automobile expansion.

[Rebecca Long Bailey]

I am not sure that that has actually answered my question. Automotive is not the only sector in crisis. This year alone in retail, Toys R Us has collapsed, Maplin has gone into administration, New Look has announced job losses, Carpetright is planning a company voluntary arrangement and retail profit warnings across the UK have hit a seven-year high. The chief executive officer of The Entertainer has stated:

“The Government just haven’t got it. They need to take some responsibility for the high street’s decline.”

Can the Minister explain why Government action in this sector—from woeful action on business rates and income stagnation and under-investment in retail innovation—has been so lacklustre, and what urgent action he is taking to help a sector that is currently in crisis?

[Richard Harrington]

The hon. Lady will be aware that the same thing is happening in the retail sector all over the world. I would be very pleased—on another occasion—to find out whether there are any exceptions. The Government have taken action. My hon. Friend the Under-Secretary of State for Business, Energy and Industrial Strategy—who is the Minister for retail, among many other things—launched the Retail Sector Council recently. A lot of thought is going into this, to change retail into a modern, leisure-driven shopping choice.

Domestic Gas and Electricity (Tariff Cap) Bill

Rebecca Long Bailey Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 30th April 2018 Commons Chamber

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

You will be pleased to hear, Mr Deputy Speaker, that I will be brief.

I thank all Members who have contributed to proceedings on the Bill and all members of the Public Bill Committee, who worked diligently and in such a consensual way. I particularly congratulate my hon. Friend the Member for Southampton, Test (Dr Whitehead), who over the past weeks and months has spent many hours working on not only this Bill, but a great many pieces of legislation. I thank the Public Bill Office and the Clerks for their tremendous support, as always.

Somewhat unusually, I am delighted that we are here to send a Bill to the other place in a speedy fashion. The Opposition will support the Bill’s Third Reading. However, the Minister and the Secretary of State, diligent as they are, may share some of my exasperation that wider Government inaction—shall we say?—and delay at the beginning of this Parliament has meant that millions of people are still suffering with big energy bills as the winter comes to a close.

The 2017 Conservative manifesto committed to implementing an energy price cap that would protect 17 million households. On 9 May 2017, the Prime Minister herself wrote of the cap in The Sun:

“I expect it to save families on poor value tariffs as much as £100.”

Yet the policy was thrown into doubt when the Queen’s Speech said merely that the Government would introduce

“measures to help tackle unfair practices in the energy market to help reduce energy bills.”

That was followed by numerous letters between Ofgem and the Secretary of State in which it was made clear that legislation was required, but the Government still did not introduce a draft Bill.

It was not until mid-October that we saw evidence of the Government’s commitment coming to fruition, but even then there were reports that some in the Cabinet had no intention of seeing legislation on the statute book. Thankfully, pressure from the Opposition, and indeed from Government Members, has ensured that the Bill has made progress. A price cap will therefore eventually be in place, but the fact sadly remains that in nine days’ time it will have been exactly a year since the Prime Minister wrote her commitment to energy customers in The Sun.

I am happy that we are here today—I commend the Minister and the Secretary of State—but it is disappointing to say the least that a year has passed and the cap is still some way from implementation. As a result, energy customers have not been protected during a winter in which we have seen some of the coldest weather on record. Prices have continued to rise, and in the past couple of weeks, British Gas has announced a 5.5% price rise, while EDF has announced a 2.7% rise.

My hon. Friend the Member for Southampton, Test and other hon. Members attempted to improve this Bill and help the Government to ensure that their own commitments were met. Sadly, although the Minister was very amiable, the Government did not accept many of the amendments.

[Caroline Flint]

May I add another couple of dates to help Members to understand how long it has taken to get us here today? I think that, as I get older, collective memory becomes an even more important asset. It was in October 2011 when the then Prime Minister, David Cameron, held a summit to tackle rising energy prices, and it was in October last year—six years later—when we finally heard talk of a Bill.

[Rebecca Long Bailey]

My right hon. Friend is correct. I share her exasperation and that of many Members on both sides of the House about how long it has taken to tackle this very serious issue.

Briefly, let me turn to some of the amendments that were discussed—Members will be pleased to hear that I will not go through all of them. Amendment 6 would have required Ofgem to ensure that the tariff cap conditions resulted in customers on standard variable and default rates having their annual expenditure reduced by no less than £100, as per the Prime Minister’s election promise. If the Government had accepted that amendment, it would have given energy customers confidence that the Government were serious about their commitment significantly to reduce the bills of millions of customers. However, the Minister said that she felt that the Opposition had been mischievous in trying to place a Government policy within a piece of Government legislation. I do not think that I need to say any more about that—we will not try to do so again.

After our discussions in Committee, we redrafted an amendment that we had previously tabled. Rather than proposing a hard stop date, amendment 5 would have simply ensured that the cap would be in place within five months of Royal Assent. Ofgem has stated that it will take five months from Royal Assent to implement the cap. It indicated that placing such a deadline in the Bill would not cause it a problem or hinder its process so, again, it was sad that our amendment was not accepted.

Similarly, new clause 1 would have developed requirements for a differential between a supplier’s cheapest and most expensive rates after the termination of the cap. That would have offered a degree of ongoing protection for consumers while wider market reform could take place.

I wish to pick the Secretary of State up on a statement that he made on Second Reading. He said:

“Britain has long been a pioneer in not only the privatisation and liberalisation of industries but the regulation of these utility industries, too.”—[Official Report, 6 March 2018; Vol. 637, c. 206.]

I am afraid that I have to take issue with him. Although I am pleased that the Bill is completing its final stages today, the necessity of the Bill in itself demonstrates the Government’s abject failure adequately to ensure that our UK utilities have been regulated. In the past year alone, £120 has been paid by every household in the UK for dividends to energy company shareholders. As I have said before, the six distribution network operators had an average profit margin after tax of 32% a year between 2010 and 2015, which equates to £10 billion over six years. During that time, shareholders received £5.1 billion in dividends, or half the net profit generated. In the past 10 years, water companies paid 1,000 times more in dividends than in tax. Three of them paid more in dividends than they made in profit in that period, which means that they were borrowing on the back of household bills to pay their shareholders. Radical reform of our energy market is needed—it is not optional, but necessary.

We have yet to see any response to Dieter Helm’s consultation on the cost of energy, which included many proposals for reform. Perhaps the Secretary of State will confirm when a response to that consultation will be published. It is urgent that we have such a response if effective competition is to be achieved by the end of 2020, or indeed by 2023, when the energy price cap will definitely be lifted.

I support the Bill and I welcome this Government action, but, as I have said, the cap is simply a sticking plaster. I hope that the Government will now act speedily and listen to the comments of Members about the wider reforms that our energy market requires.

Sainsbury and Asda Merger

Rebecca Long Bailey Excerpts

Monday 30th April 2018 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the proposed merger of Sainsbury’s and Asda.

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

On 30 April, J Sainsbury plc and Walmart Inc. announced that they had agreed terms in relation to a proposed combination of Sainsbury’s and Asda Group Ltd, a wholly owned subsidiary of Walmart, to create an enlarged business. There are no planned Sainsbury’s or Asda store closures as a result of the merger. The proposed deal is conditional on clearance by the Competition and Markets Authority.

The Competitions and Markets Authority will hold pre-notification discussions with the parties and, when it has sufficient information, will commence its phase 1 investigation. Usually, a phase 1 investigation will last up to 40 working days before the authority will decide whether to clear the merger or refer it on to a detailed phase 2 investigation. I understand that the parties have requested to fast-track straight to phase 2. As part of its competition inquiry, the CMA can look at the buying power of a merged company in relation to its suppliers and the impact that the merger would have on them. Decisions about mergers are taken independently of ministerial control and are subject to legal challenge. Under the Enterprise Act 2002, Ministers have the power to intervene in mergers only on public interest grounds covering national security, media plurality and financial stability.

[Official Report, 2 May 2018, Vol. 640, c. 4MC.]Today, the Secretary of State and I have spoken to Sainsbury’s chief executive officer Mike Coupe, and Asda CEO Sean Clarke, so that we can better understand their plans. Additionally, I have today spoken to the Union of Shop, Distributive and Allied Workers and Unite unions, and I will speak to the GMB union immediately after leaving here. When I spoke to Len McCluskey this morning, I made it clear that I expect Sainsbury’s and Asda to conduct proper and thorough engagement with the unions. This afternoon, I have spoken to the Groceries Code Adjudicator, Christine Tacon, to reiterate the importance of ensuring that suppliers, particularly small and medium-sized enterprises, are treated fairly.

The UK’s merger regime is designed to offer clarity for businesses and to build investor confidence. Mergers are an important part of a dynamic economy, and the Government appreciate that they can bring real benefits to consumers and the economy as a whole by attracting inward investment. We will continue to monitor the situation closely.

[Rebecca Long Bailey]

The landscape for retailers has become increasingly difficult over recent years, and I am sure that the Minister shares my concerns regarding this deal, given its potential to squeeze competition in the market and the risks that it poses to workers, suppliers and consumers. He confirmed that there will be no store closures, but will he also confirm that there will be no job losses, no changes to pay, terms and conditions, and no closure of any sites within each company’s estates portfolio—distribution sites and offices, for example? If so, for how long will that promise be effective, and will he seek legally binding assurances?

It is clear that a duopoly of the big supermarkets—Tesco, and Asda and Sainsbury’s—will now emerge providing never-before-seen bargaining power. Indeed, the statement this morning included a promise to bring prices down for consumers, but it is feared that that will be at the expense of suppliers, farmers and manufacturers whose prices and terms will be driven down, pushing many to the edge of collapse. Can the Minister confirm that that will not be the case? In addition, does he agree that control of 60% of the market by the duopoly may pose a risk to consumer choice and provide less incentive to entice with good offers? If so, what assurances has he received in that regard? I am sure that he agrees that an urgent CMA investigation is imperative, but can he confirm that the CMA will prevent the integration of the companies during investigation, as it is entitled to do?

The Minister will agree that many of the risks associated with this deal do not bear directly on the CMA’s remit of testing whether there would be a substantial lessening of competition. As he said, he has no power to intervene directly in the merger as it does not meet the public interest tests of national security, media plurality and financial stability. Given that the deal could radically alter the whole grocery sector—from farm and factory to supermarket shelf—will he finally use his powers to broaden the scope of the public interest test to include deals of such economic and national significance, as he has been repeatedly asked to do?

[Andrew Griffiths]

I thank the hon. Lady for her important points. I share many of the concerns that she voices, but she says that the CMA’s remit does not extend to the substantial lessening of competition—[Interruption.] That is exactly what the CMA does. Its role is to examine competition matters—[Interruption.] If I misheard the hon. Lady, I apologise.

The CMA’s role is to consider the impact of this merger on not just competition in the marketplace, but suppliers. The hon. Lady rightly raised the impact that the merger could have on farmers and suppliers, and that was why the Secretary of State and I reiterated to Asda and Sainsbury’s when we spoke to them this morning the importance of their engaging with not just the CMA, but bodies such as the National Farmers Union and other unions to ensure that this is a proper process that we understand. The hon. Lady will know that section 172 of the Companies Act 2006 puts a duty on directors of the new company to have regard to the impact that their decisions would have on their suppliers, and we will be monitoring that very closely in the months to come.

We must also recognise, as the hon. Lady said at the very beginning of her contribution, that the retail sector is in a huge state of flux. We must all understand that the way in which consumers purchase these days is changing dramatically. There has been a 9% increase in sales through online vehicles in the last 12 months alone. That, by necessity, means that the retail sector has to change and adapt. One of the things that the merger will offer is reduced costs for the consumer, which I hope she will welcome. We all want to protect consumers and make sure they are getting great value for money, and that is one of the things that the merger promises. I can assure her, from the discussions I have had with the CMA, the Groceries Code Adjudicator and both parties, that ensuring the supply chain is properly protected is one of the priorities and something that I guarantee we will keep a close eye on.

GKN

Rebecca Long Bailey Excerpts

Tuesday 24th April 2018 Commons Chamber

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

I thank the Secretary of State for giving me advance sight of his statement.

There are two issues that I must raise today: the fact that the reported assurances obtained by the Government, both in the letter of 27 March and subsequently, are not sufficient to guarantee the security of the long-term prospects of the company and, indeed, the workforce; and the inadequate capacity of the takeover regime to protect companies outside the very limited grounds of national defence, media plurality and financial stability.

First, as I made clear last month, the assurances obtained by the Government in Melrose’s letter of 27 March were sadly inadequate. Apart from the first five assurances which were post-offer undertakings, what was in the letter was completely unenforceable. For example, there were no post-offer undertakings on maintaining employment or tax residency, which could easily constitute such undertakings. Indeed, the maintenance of employment is vital to our national security, and the loss of these jobs will cause the diminishment of vital skills that are integral to our defence industry.

Putting aside issues of enforceability, what of the assurances that have been reported since 27 March? The reported veto power that the Secretary of State for Defence has to stop the sale of certain businesses will not, I am afraid, solve the national security problem. Melrose reportedly has a short-term outlook which undermines the long term that is required for defence projects. That is important, and a veto on the sale of certain parts of the business by the Defence Secretary will not help significantly. Sadly, the Government’s failure to address the short-term horizons of Melrose may damage the capability of a business to deliver projects that could last for 10, 15 or 20 years.

Secondly, our takeover regime is inadequate, and the Secretary of State is acutely aware of that. If a takeover falls outside the grounds of national defence, media plurality and national stability, the Secretary of State cannot act, even though the takeover may be harmful for the business, harmful for employees, harmful to research and development, and harmful to supply chains.

Let us take the case of Unilever. Last year it was threatened with a takeover, and there was nothing that the Government could do because the takeover fell outside the three public interest exemptions. Unilever has since commented on the inadequacy of the UK takeover regime, and its recent decision to place its headquarters in the Netherlands was, as reported by the Financial Times, arguably driven by a desire to escape the poor safeguards for takeovers in the UK. Labour Members have called on the Government to broaden the public interest test. The measures that the Government have proposed so far are not good enough. We know that, in GKN’s case, they already had the power to act and did not do so. However, our takeover rules would not have prevented Unilever from being taken over had Kraft been prepared to follow through, because that had nothing to do with any of the three exemptions.

I agree with the Secretary of State that our takeover regime must be open enough to encourage foreign investment, but it must also protect against short-termism and long-term damage to our economy and national security. Arguably, too often it is short-termism that prevails. Only this week we heard reports that the hedge funds that bought GKN shares to make Melrose’s takeover possible are now targeting Melrose, shorting the company on the stock exchange.

What we needed from the Secretary of State today was not just a waving through of the deal, but action, both in obtaining concrete assurances from Melrose on the future of GKN and its workforce, and in the form of clear plans to reform and widen our takeover regime to protect British businesses. I fear that the short-term predators already smell their next victim—and it is not just Melrose; it is Britain’s industrial future.

[Greg Clark]

Right from the outset, the hon. Lady has been unable to advise us of what specific undertakings she thought it was appropriate to obtain. She needs to understand that as this is a quasi-judicial decision, the statement that she made that she would block the bid would disqualify her from making that decision, as the right hon. Member for Twickenham (Sir Vince Cable) knows to his cost.

The evidence presented to me was that this was a British company taking over another British company, that no such takeover has ever been blocked on national security grounds, and that the Ministry of Defence and the other agencies said there was no reason for intervention on those grounds. I have to tell the hon. Lady that the previous directors of GKN themselves said that there was no reason for an intervention on national security grounds. She should reflect on the commitments that the Defence Secretary and I have secured to retain the aerospace division for at least five years, to ensure that the Government have the right to approve any future sale of any defence business or asset, and to invest in research and development to at least the current level. Not once in the past four months has she engaged in a similarly forensic way to set out what she thinks would be appropriate commitments.

The hon. Lady says that the commitments are inadequate, but they have been given as legal deeds and in some cases set out to the Takeover Panel as post-offer undertakings. The truth is that she has had the opportunity to engage with this matter, but having prejudiced her position by saying from the outset that the takeover should be blocked, she has given away the ability to have influence on what the regime should be.

The hon. Lady knows perfectly well what the Government’s powers on takeovers are, because the 2002 Act was passed under a Labour Government and sets out those limited powers, which are the same as in the rest of Europe. The difference between the Government and the Opposition is that when we came into government, we reformed those powers to allow post-offer undertakings to be given, so the situation when Kraft bid for Cadbury and undertakings were reneged upon cannot happen in the current circumstances. We have taken an active approach to ensuring that all stakeholders’ interests are secured, whereas the hon. Lady preferred to float above it all and simply say no before considering the evidence. We have proceeded responsibly, and she would do the employees of and stakeholders in GKN a service if she engaged more forensically in future.

Points of Order

Rebecca Long Bailey Excerpts

Tuesday 24th April 2018 Commons Chamber

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

rose—

[Jack Dromey (Birmingham, Erdington) (Lab)]

rose—

[Mr Speaker]

I am saving up the hon. Member for Birmingham, Erdington (Jack Dromey). It would be a pity to squander him at too early a stage of our proceedings.

[Rebecca Long Bailey]

On a point of order, Mr Speaker. The Secretary of State for Business, Energy and Industrial Strategy suggested in response to my earlier comments that I have never said what further undertakings he should have sought from Melrose. I know he cherishes our exchanges—there are many of them, so I forgive him for forgetting one of them—but on 27 March, in response to an update from him, I questioned the absence of numerous undertakings and was very specific about what they were. I would simply like to correct the record, and I accept his apology in advance.

[Mr Speaker]

I am most grateful to the hon. Lady for her attempted point of order, which I would prefer to classify as a point of continued debate. I am sure it will be of intense interest across the House, and copies of this particular extract of today’s proceedings will probably be lodged in the Library. More particularly, I rather imagine that she will wish speedily to communicate what she has just said to many, many thousands of people across Salford and Eccles.

Industrial Strategy

Rebecca Long Bailey Excerpts

Wednesday 18th April 2018 Commons Chamber

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

According to the Government’s own declaration, the industrial strategy sets out their plan to create an economy that will boost productivity and earning power throughout the United Kingdom. The Secretary of State has just presented a very rosy picture of his Department’s industrial strategy, but I am afraid those spectacles he is wearing may be a little bit rose-tinted.

The key questions that must be asked today are whether the strategy is working and whether it addresses the huge problems that our economy is facing. The first of those problems is productivity. I agree with the Secretary of State’s comments about investing in the foundations of productivity, but we have just seen the productivity figures for 2017, and they are not good. Two negative quarters were followed by two positive quarters of growth. The two quarters of growth were caused by GDP growth slowing, but hours worked slowing even further. In other words, productivity has increased through the worst possible means. Even incorporating the 2017 figures, the productivity growth that has taken place over the 10 years since the crash has been the worst since 1820, just after the Napoleonic wars.

The second problem is GDP stagnation. For the 60 years preceding the financial crash, rising GDP meant broadly rising living standards. When GDP rose, unemployment came down and wages went up. However, over the course of 2017, UK GDP growth was weaker than GDP growth in any other G7 nation, standing at 1.4% compared to a G7 average of 2.4%. The figures were 2.9% in Germany and 2.5% in France. The situation is not forecast to improve: yesterday the International Monetary Fund forecast that we would be the slowest in the G7 bar Italy over the next two years, and the OECD predicts that we will grow more slowly than France, Germany and the United States in both 2018 and 2019. Worse still, among major advanced economies since the crash, Britain is the only one to have grown slightly while real wages have fallen.

The third problem is wage stagnation. In real terms, average weekly earnings are lower now than they were in 2007, 10 years ago. Working people, particularly those on low to middle incomes, have suffered the worst decade for a generation in terms of living standards. That is unprecedented since at least the end of the second world war. The quality of work is also an issue, as we have heard from some of my hon. Friends. The Secretary of State lauded employment figures in his opening remarks, but he must acknowledge that insecure employment is rife. According to the TUC, there are 3.2 million people in insecure work—about one in 10—and the number has risen sharply over the last half-decade, by 27%.

The Government tried to paper over those bleak realities with rhetoric in their recent response to the Taylor review, but I am not as optimistic or as excited as the Secretary of State was when he responded to comments earlier. Launching four consultations, merely considering proposals, failing really to act on the review’s recommendations, and tweaking the law here and there is simply not good enough.

The fourth problem is uncertainty. Britain is facing an uncertain future—we are about to leave the European Union, and businesses are craving a deal that will put the economy and jobs first, with as much access to Europe as possible—but Europe aside, parts of our economic framework do not encourage certainty. Our takeover regime leaves many companies deeply uncertain about their future and prey to predatory and hostile takeovers. We have already heard about GKN today. Under our takeover laws, that fantastic manufacturing company was bought up by Melrose. It was clear that our takeover regime needed more teeth and more clarity, but I must add that even in that case the Government had grounds to intervene on matters of defence and still failed to act. As the Financial Times suggested recently, the failure to equip our takeover regime adequately may be partly why a great company such as Unilever decided to make its legal home the Netherlands. How many other companies will follow?

The fifth and final problem is inequality. Sadly, the UK is one of the most unequal countries in Europe in terms of household income. As the Resolution Foundation recently revealed, inequality is projected to increase after 2016-17. On some measures, it is projected to rise to record highs by 2023. Furthermore, there are clear inequalities between our regions and nations. The Institute for Public Policy Research Commission on Economic Justice has found that Britain is the most regionally imbalanced country in Europe.

All these problems are not just abstract, general issues; they have recently manifested themselves in concrete examples—a barometer of the health and efficacy of the Government’s industrial strategy going forward. We started this year with the insolvency of Carillion, but that is not an isolated example. Our retail sector shows signs of strain: Toys R Us has collapsed; Maplin has gone into administration; New Look is fighting to avoid it; and Carpetright is planning a company voluntary arrangement. Workers have also felt the pain of a stalling economy: in the last week alone, literally thousands of workers have been threatened with job losses at Jaguar Land Rover and Shop Direct, yet we have received no statement whatsoever from the Government on what they are doing to protect those jobs, so perhaps the Minister will outline in his summing-up speech the action he is taking.

[Ruth George]

I met many businesses in my constituency last week. Does my hon. Friend share my concern that several of them are already having to move trade to EU countries because they are worried about the cost of a visa system when they cannot guarantee that they will hang on to the staff they pay for, the ending of preferential tariffs at the EU rate—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady is not making a speech; she is also taking away from the time for other Members.

[Rebecca Long Bailey]

My hon. Friend made some pertinent points and I will talk about skills shortly, and the extreme worry that many of our business leaders across the country have voiced about both Brexit and the quality and adequacy of the supply we have currently in the UK.

Returning to the problems that are a barometer of the issues in our economy, will the Minister update us in his summing up on the Government’s rabbit-in-the-headlights approach to the risks currently faced by our steel industry as a result of recent discussions and the global crisis of overcapacity and dumping? This Government have been in power for eight years—the best part of a decade—and they must own these problems if they are to make any progress; they must own the fact that they have not solved the five problems I outlined earlier, and that instead they have festered.

The Secretary of State and I are in clear agreement on the need for an effective industrial strategy. I applauded the Government for adopting to some extent Labour’s mission-orientated policy approach and the Secretary of State outlined the challenges again today, but I am afraid that this is where the consensus ends. As I set out late last year, the detail and investment proposed in the industrial strategy White Paper simply did not match the surrounding rhetoric and fell far short of what was needed truly to boost our economy. Indeed, a Government source was recently quoted as saying:

“It’s all perfectly worthy, who could oppose any of it? But there is no money, and even if there was, no one has a decent idea of what to do with it.”

So for the benefit of the House let us look briefly at a few key snippets again.

The Secretary of State touched on innovation. Raising total R&D investment to 2.4% of GDP by 2027 is certainly better than where we were, but the UK has been below the OECD average of 2.4% of GDP for years, and we are way behind world leaders who spend over 3% such as Japan, South Korea, Finland and Sweden. Why are we simply aiming for average? It must also be noted that the R&D investment of many of our regions and nations is also well below average. Over half of all research funding goes to the south-east, for example.

[Eddie Hughes (Walsall North) (Con)]

I just cannot contain my anger: settle for average? We have some of the best universities on the planet in this country and investment by this Government in some of the most world-leading, cutting-edge technology. I visited Birmingham university and saw its work on quantum computing; it is absolutely world-leading. We are not average at all, and it is so dismissive of this country to say we would settle for average; we are excellent.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman is not making a speech either, but I think the hon. Member for Salford and Eccles (Rebecca Long Bailey) has got his point.

[Rebecca Long Bailey]

The hon. Gentleman makes his point very passionately, but I do not think he has really listened to what I have been saying. We are certainly—[Interruption.] Please! If Government Members would listen rather than chunter, they might actually learn something.

We are far from average, as these comments from the Commission on Economic Justice illustrate quite articulately:

“We have vast ingenuity and creativity among our people, where enterprise and industry have deep roots going back to the Industrial Revolution. Many of the most important scientific discoveries in human history have taken place in Britain, advancing not only this country but also the entirety of humanity.”

We are far from average—I agree with the comments that the hon. Gentleman made in a, shall we say, quite haphazard and incoherent way—so why should we have to trail behind the world and settle for mediocrity from this Government in terms of investment in research and development?

[Vicky Ford]

Will the hon. Lady give way?

[Rebecca Long Bailey]

I will make some progress, if I may, then the hon. Lady can make further interventions.

In relation to skills, we were promised about £500 million of investment. That is frankly pitiful and does not even begin to repair the damage done to the adult skills budget between 2010 and 2015, when over £1.15 billion was cut. With research by PWC finding that 77% of CEOs worry that skills shortages could impair their company’s growth, and with the CBI stating that 69% of businesses are not confident about filling their high-skilled jobs, the Government’s actions have done little to show that they are creating a workforce truly ready for our industrial renaissance.

On infrastructure investment, we were promised £31 billion of investment through the national productivity investment fund. Again, that is below the levels seen in other leading industrial nations. As TUC analysis shows, the sums promised will simply increase investment to just 2.9% of GDP, whereas the average spend on investment by the leading industrial nations in the OECD is 3.5%. It is also clear that the Government have made no attempt to halt the skewing of infrastructure spending towards London, which is due to get more transport spending over the next five years than the rest of England put together.

That brings me to local industrial policy. Labour has been clear on the need for a national industrial strategy, but we are also clear about the need to be regionally powerful and distinctive, with the resources to match, and to build on the already world-class universities and businesses in our regions and nations. Since last November, the Labour party has been convening roundtables in every region and nation of the UK to discuss what businesses in those regions need from an industrial strategy. Alarmingly, in one region I heard that the responsibility for formulating a local industrial strategy had simply landed on the desk of the local enterprise partnership’s chief executive, with no additional resources. Could the Minster confirm whether there is a team in his Department working on local industrial strategy or whether that is simply now the responsibility of LEPs? Last month, the Local Government Chronicle argued that the Government should put more resources into agreeing a local industrial strategy if they did not want to risk concentrating their efforts on improving the economy in just a handful of areas.

[Rachel Maclean (Redditch) (Con)]

Further to the point made by my hon. Friend the Member for Walsall North (Eddie Hughes), I wonder whether the hon. Lady would like to visit the west midlands and meet the Conservative Mayor of that devolved authority, who has most certainly come together with a local industrial strategy. There are resources there, backed by this Government and their friends on these Benches, and that is making a real difference in our region. I would be happy to host the hon. Lady and enable her to speak to those successful businesses that are backing our Conservative Mayor.

[Rebecca Long Bailey]

rose—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. I just remind people that we have a lot of speakers in this debate. Short interventions, please.

[Rebecca Long Bailey]

I thank the hon. Lady for her comments, which are rather illuminating. I wonder whether she could share with the House how her region managed to secure those additional resources, so that we could let our colleagues know about it. That simply does not seem to be the case right across Britain.

Now, there was also a clear failure in business support. The Government’s proposals recognised that we need both public and private investment. Similarly, the Labour party has pledged to mobilise £250 billion of lending through a national investment bank and a network of regional development banks. However, the Government’s proposals fall far short of that. I said in the House last year that sector deals, a £2.5 billion investment fund incubated in the British Business Bank and yet another review into encouraging SME growth were simply not good enough. There was a clear failure to recognise the impediments that many businesses face when attempting to access finance and, indeed, there was a failure to protect businesses more generally.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Does my hon. Friend agree that we lost a lot of support after 2010 when Business Link was shut and the regional development agencies were closed down? Business support has gone backwards. We need to take it forwards, but we have lost eight years.

[Rebecca Long Bailey]

I completely agree. Unfortunately, what I see as I travel around Britain is a bit of a postcode lottery in business support, and the Government need to address that urgently.

As I said, the Government failed to recognise the impediments facing many businesses and to outline any more general protections. That could not have been displayed more clearly than in the Government’s handling of the Carillion scandal, where key requests by business organisations to mandate 30-day payment to suppliers and instigate the use of project bank accounts were effectively ignored. The Government simply looked on as Carillion and other big players like it abused the businesses that they contracted with and passed on financial liability and risk down the supply chain. Labour pledged to mandate 30-day prompt payment and the use of project bank accounts for all Government projects, and I will be grateful if the Minster will do the same today when summing up.

[Peter Kyle (Hove) (Lab)]

My hon. Friend rightly points to the failures around the collapse of Carillion, which was a disaster for the many thousands of people who worked for it. The other organisations that failed were the regulators, so does she agree that we need a root-and-branch think about how we regulate the private sector, particularly when organisations are delivering public services at vast cost to the public purse?

[Rebecca Long Bailey]

I completely agree again.

Another issue that has been brought to my attention relates to sector deals. I understand that sectors are ready with proposals for such deals, but there is no clear structure or process in place for them to follow. For example, the rail industry has had a proposal for a sector deal ready since October, and the plan would deliver transformation across rail over the next 20 years, including new approaches that will cut the cost of digital signalling, addressing capacity issues and reliability. Perhaps the Minister will explain to the House what the delay is. How many proposals for sector deals has he received and how many have been agreed? Perhaps he will also commit to setting out in clear guidance, accessible to all businesses, how to go about pitching for a sector deal? Finally, will he update us on the implementation of the “Made Smarter” review? It was effectively ready to go, but I am sad to say that it received only a few cursory lines in the Government’s industrial strategy White Paper.

In short, Mr Deputy Speaker, as I am sure you have gleaned from my comments, the Government's industrial strategy, as drafted, is inadequate. While they now recognise the importance of an industrial strategy—well done—they are not prepared to use the full policy levers at their disposal to achieve it.

[James Heappey]

Following the shadow Secretary of State’s consultations with businesses around the country, will she name just one that agrees with Labour’s plans for nationalisation?

[Rebecca Long Bailey]

I would not want to put on the record in public the names of any specific companies without their consent, but there has been resounding support for Labour’s approach to the industrial strategy, because we are prepared to invest in our country’s future and to provide the support that businesses deserve. I am afraid that I hear time and again from businesses that the Conservative party simply does not listen anymore.

[Several hon. Members rose—]

[Rebecca Long Bailey]

I will make some progress as I am coming to the end of my comments.

One of the key responsibilities of any Government is to deliver the best quality of life to every single person in Britain, and this Government have failed to do that. Labour knows that key to that responsibility is the delivery of a truly prosperous, ambitious and locally focused industrial strategy. We see a fourth industrial revolution that, with bold and focused Government investment and support, presents an opportunity for Britain to harness the power of technological and scientific innovation to achieve higher productivity and high-paid, high-skilled jobs in an employment landscape that values and protects workers.

We also see the need for an economic model that deals with the big issues of our time and the need to build an economy around missions so that we not only lead the world economically in these areas but deliver real social and economic benefits to our people. We recognise that industrial strategy must be a true collaboration between business, the Government and society, not a wild west that picks winners and losers, that pits region against region and that leaves businesses and workers to fend for themselves in a dog-eat-dog economy in which only the largest and most powerful survive.

That is the economy that Labour Members are intent on building, but sadly, it is not the economy that the Government are building. Although I am fiercely adamant that industrial strategy should not be political, from what I have seen so far from this Government, until we get a Labour Government we will not see an industrial strategy.