GKN: Proposed Takeover by Melrose

Rebecca Long Bailey Excerpts

Tuesday 27th March 2018 Commons Chamber

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

I thank the Secretary of State for today’s update. Sadly, however, the letter sent by the Government yesterday and the response by Melrose offer very little certainty and raise even more questions.

First, it was on 8 January 2018 that the board of GKN received a preliminary and unsolicited proposal from Melrose to acquire the entire share capital of GKN. Melrose put in its formal offer on 1 February. Concerns about Melrose’s plans had been raised by trade unions, Members of this House and the media for months, yet it took until 26 March for the Government to write to get some assurances from Melrose. So why did the Secretary of State wait until the last minute?

My second question concerns the enforceability of the assurances themselves. Which of the assurances and commitments given by Melrose in its letter of 27 March are actually legally enforceable and binding, because on my reading of the letter, it seems that very few are? Specifically, can the Government confirm that the commitments given under the heading “Takeover Panel enforceable undertakings” are indeed enforceable and will be enforced by the takeover panel? Can the Government also confirm that all the commitments below the paragraph headed “Long-term commitment” are totally unenforceable? What powers do the Government have to enforce any of the empty promises from page 2 onwards that are not post-offer undertakings? My discussions with the takeover panel suggest that enforceability is indeed limited to the areas referred to in Melrose’s letter under the heading “Takeover Panel enforceable undertakings”. I must also express concern regarding the “flexibility” that Melrose requests in relation to any offers it receives to sell the aerospace division prior to 2023. What will the Government do to protect this business and, indeed, the other elements of the business that are not even referred to in Melrose’s letter? Do we take their omission as a clear indication that they will not be protected?

My third question is about the substantive content of the assurances. Why did the Government not ask for or receive any post-offer undertakings on maintaining or increasing employment at GKN over a 10-year period? These can clearly constitute post-offer undertakings under takeover code. Indeed, when SoftBank took over Arm Holdings, it promised to increase the total number of UK Arm group employees to at least double the total number as at the takeover date. It is also not clear why Melrose did not include UK tax residency as a post-offer undertaking. Similarly, I would argue that many of the things that the Government asked for were weak and meaningless. For example, when the Government asked for the maintenance of a UK workforce, what did they actually mean? Is one employee in the UK enough to fulfil this condition? Similarly, on investing in the training and development of the workforce, how much, and by what time?

My fourth question concerns the Secretary of State’s powers under the Enterprise Act 2002 to block the bid on national security grounds. It would be helpful if he confirmed that Melrose has indeed waived the condition to get the approval of the Committee on Foreign Investment in the United States. More importantly, the Secretary of State still has the powers to block this on grounds of UK national security, so will he confirm unequivocally today whether he will do this?

Finally, there are reports that merger arbitrage funds are planning to accept the Melrose offer, but as they are holding derivatives of GKN shares, they will not pay stamp duty on the transaction. Will the Secretary of State undertake that if Melrose does indeed proceed with this offer, the Government will investigate all share dealings to ensure that the correct stamp duty has been paid?

If the Government think that today’s weak, late and unenforceable assurances from Melrose are sufficient, then they are deeply mistaken. There is nothing to assure workers, nor to put to bed concerns about our industrial strategy and national security. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) so eloquently stated recently, GKN is a jewel in Britain’s industrial crown that employed generation after generation. It needed a Government prepared to fight for its future, and I am afraid that the response so far has been far less than adequate.

[Greg Clark]

Everyone in this House, on both sides of the Chamber, agrees that GKN is a very important company that is crucial to vital R&D work and employs thousands of people across the country. That is why I consider it important, over and above my statutory powers—I have explained very clearly that this is without prejudice to the use of those powers—to encourage the bidder to set out much more clearly than it has done so far its intentions on many of the matters that the hon. Lady mentioned, such as research and development, being based in the UK, and a commitment to the length of tenure of this very important aerospace business. That seems to be an appropriate action at this stage in the proceedings.

Of course, this is a contrast to the sorry situation that arose—there are Members in this Chamber who will remember this—during the time in which the hon. Lady’s party was in government, when Cadbury was sold to Kraft and a plant that was expected to be kept open was closed forever. In response to that, when we came into government a regime was established that allowed legally binding undertakings to be given. I have said repeatedly in this House and to hon. Members that, given that that regime exists, I expect it to be used. I was not satisfied with the degree of commitments that had been given so far by Melrose, so I think that it was the right step, over and above my statutory powers, to set out those concerns in writing and to invite Melrose to respond to them.

The hon. Lady knows very well the statutory powers that I have. Again, they were passed when her party was in government, under the Enterprise Act 2002. The question of national security is a quasi-judicial one that will be addressed separately. It is not a subjective decision that I can take. It has to be based on a clear assessment. I make the commitment that I will take that assessment meticulously. There is a closing window for this bid, and it is right to use that window to obtain statements as to Melrose’s intentions.

The hon. Lady asked questions about the enforceability of the commitments. Melrose has said in its response that it is in discussion with the takeover panel. I regard that as the best way to lodge the commitments, so that they are enforceable with severe penalties, including contempt of court, if they are broken. The takeover panel monitors the adherence to the commitments after the event, were the bid to be successful. On security, the hon. Lady also asked about the company’s conversations with the US Administration. It is the case that the company took a decision to waive that condition.

The hon. Lady asked a question about commitment to the workforce. I have met the trade unions twice now. I specified in my letter to Melrose that I expected it to make a commitment to deal fairly with the trade unions in order to ensure that the future of the workforce is taken seriously, in lockstep with the trade unions. That is important. She also made a point about the avoidance of stamp duty. Clearly, any taxes that fall due ought to be paid.

I hope that the hon. Lady and the House—whatever their assessment of the bid—would, in recognition of the powers available, think that it is the right step to approach the bidder at this stage, before the timetable closes, in order to set out in a way that can be enforced for years to come, undertakings against which it can be held to account. That is the basis of my letter to the company.

Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 13th March 2018 Commons Chamber

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

The Government’s response to the Taylor review did virtually nothing to tackle the challenges and insecurity that self-employed people face. Equally poor was the Government’s response to the treatment of gig workers.

“Don has died and they should be making changes”.

Those were the words of DPD gig worker Don Lane’s widow, Ruth. With this in mind and with Matthew Taylor himself last week rating the Government’s response to the Taylor review a shocking four out of 10, what score would the Minister give himself?

[Andrew Griffiths]

Seven weeks in, I think I would give myself 10 out of 10. The hon. Lady quotes Matthew Taylor. He has said quite clearly that this is a complex and complicated matter. He wants us to get the definition of status right, because the rights of thousands of gig workers depend on it. That is why in the passage the hon. lady quotes he also said that when we have finished our consultation, if we deliver what we have promised he would give us seven or eight. I want to go further; I want it to be 10.

[Rebecca Long Bailey]

Ten out of 10 indeed! The Chancellor today might attempt to laud employment figures as positive news, but he will fail to state that over 3 million people are in insecure work, and, according to a recent report by the Centre for Labour and Social Studies, over a third of all workers do not even earn enough to live. There are also real fears, despite the Prime Minister’s assurances, that the quality of work will worsen still, with reports that the Foreign Secretary and other Ministers are pushing for major employment law deregulation. Will the Minister confirm whether his Department is carrying out any work looking at the deregulation of certain employment rights?

[Andrew Griffiths]

The hon. Lady must have missed the intention behind what the Government were doing with the Matthew Taylor report. Not only are we committed to continuing the existing employment rights and protections, but we are going further and faster than anyone else—further and faster than our European colleagues—to give gig workers and others in vulnerable conditions, such as agency workers, greater protections than ever before. We are not just talking about it; we are protecting those workers.

Domestic Gas and Electricity (Tariff Cap) Bill

Rebecca Long Bailey Excerpts

2nd reading: House of Commons
Tuesday 6th March 2018 Commons Chamber

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

I am pleased that the Bill is before the House today, but I must express my exasperation that it has taken so long to get to this point. The 2017 Conservative manifesto committed to implementing an energy price cap that would protect 17 million households. The Government then repeatedly rowed back on that promise, passing responsibility to Ofgem, which made it clear that legislation was required. After months of to-ing and fro-ing, the Prime Minister reintroduced her commitment in her conference speech, and finally, on 11 October, a draft Bill was published. That Bill was then passed to the Business, Energy and Industrial Strategy Committee for pre-legislative scrutiny, which, due to the thorough work rightly done by colleagues, was not completed until mid-February. At the same time, a leaked conversation between the civil service and an energy investor seemed to suggest that the Government had no intention of seeing through the legislation. So yes, I was relieved last week to finally see the Bill introduced to Parliament, and I welcome the Government’s foray into a policy that they previously denounced as Marxist, but it remains the case that, as a result of this Government’s inaction, millions of households have been left to scrape through the winter facing a choice between cold homes or astronomical bills.

As all hon. Members will be aware, the UK experienced one of its coldest periods for decades over the past week, with the Met Office reporting that the UK had officially broken its record for the lowest March temperatures in a 24-hour period on Friday. As a result of this Government’s dithering and delay, the 4 million households currently living in fuel poverty, 1 million of which include a disabled person, will be receiving whopping bills at the end of the month. Startlingly, the latest figures from National Energy Action for the winter of 2016-17 show that excess winter deaths were 39.5% higher than in the year before, with an estimated 34,300 excess winter deaths in England and Wales.

[James Heappey]

The hon. Lady underlines the fact that the harshness of the recent weather will have increased energy bills for millions of people. Was she therefore as impressed as I was by the speed at which emergency payments were made to the most vulnerable to help them with their additional heating costs?

[Rebecca Long Bailey]

The emergency payments were certainly welcome—I thank the hon. Gentleman for his comment—but the fact remains that this price cap should have been in place this winter and it was not.

National Energy Action also found that each year an average of 9,700 people die due to living in a cold home. That equates to 80 people per day, the same number of people who die from breast or prostate cancer each year. It has been Labour party policy since 2013 to introduce a price cap on consumer energy bills, and although the principle of this Bill is positive, I remain concerned that, as drafted, it does not go far enough.

[Antoinette Sandbach (Eddisbury) (Con)]

Given that electricity prices rose by 44% between 2003 and 2007, will the hon. Lady outline what action the Labour Government took in their 13 years in power to address this issue?

[Rebecca Long Bailey]

The hon. Lady makes an interesting point. I think that both sides of the House have reached something of a consensus on our energy market. People on the right and left—wherever they place themselves on the political spectrum—agree that our energy market is fundamentally broken and needs to be reviewed. It is interesting that the Government put their own commission in place, under Dieter Helm, but we have had no response from them so far about the proposals it made.

I have several issues with the Bill as drafted, but I start with the fact that it does not provide any direction from the Secretary of State on his preferred level of cap, which effectively passes the buck to Ofgem. The Bill merely states:

“The Authority must exercise its functions…with a view to protecting existing and future domestic customers who pay standard variable and default rates”.

In doing so, Ofgem must consider a number of factors, including creating incentives for suppliers to improve efficiency, enabling suppliers to compete effectively, maintaining incentives to switch between suppliers, and the need to ensure that holders of supply licences who operate efficiently are able to finance activities authorised by that licence.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

With respect, I dispute the hon. Lady’s claim that we are in accord on energy policy. The Opposition’s stated policy is to proceed with wholesale nationalisation, which Government Members strongly disagree with. Does she not accept that renationalising National Grid and the energy sector would be antithetical to driving down prices, which is what we all want?

[Rebecca Long Bailey]

I refer the hon. Gentleman to the Labour party’s manifesto, which clearly states that we wish to increase competition in the energy market by creating regional suppliers. We want to promote fair and transparent competition within the energy market, but unfortunately the Government do not advocate a similar position. We hope to fine-tune aspects of the Bill as it goes through the House so that competition in the energy market will be effective, fair and transparent.

[Gareth Thomas]

The hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) deliberately misinterprets our policy. The shadow Chancellor has committed the Labour party to supporting a doubling of the co-operative sector. Energy co-operatives do not mean nationalisation, but they do amount to democratic public ownership. Will my hon. Friend re-endorse the commitment to see more energy co-operatives in the market?

[Rebecca Long Bailey]

I wholeheartedly support my hon. Friend’s fantastic point. I think that our manifesto commitments have been misrepresented or, in the case of the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), overstated. I again encourage him to read our manifesto, which encourages competition in the energy market while also considering some of its fundamental problems, such as in relation to grid ownership. I will address those points later in my speech.

With regard to the factors that Ofgem must consider, the problem is that although the Opposition are not averse to these principles, at present they are at best ambiguous, and there is no duty to consult on how such measures can be accurately quantified. Perhaps the Minister for Energy and Clean Growth will confirm how these measures will be quantified. Will they form part of Ofgem’s cap methodology consultation? If not, how will Ofgem determine these ambiguous proposals?

Speaking of those guidelines, Energy UK has highlighted the uncertainty in which the provisions are shrouded. Indeed, The Guardian’s financial editor recently commented of the chief executive of Ofgem:

“At best, he is being sent mixed messages by government. At worst, he is being asked to deliver contradictory goals.”

We recognise that Ofgem will consult on the cap methodology to be used, but has the Secretary of State given any indication to Ofgem of the final outcome he wants to see? The Prime Minister promised that £100 would be knocked off 17 million household bills, but nothing in the Bill will ensure that that happens.

Labour has confirmed that we would introduce an immediate emergency price cap to ensure that the average dual fuel household bill remains below £1,000 a year. Had that policy been in place since 2010, the average customer would have saved more than £1,000 on their bills by now. Will the Minister confirm whether the final cap will go anywhere near Labour’s proposals, or indeed anywhere near the Prime Minister’s promise?

Just as ambiguous is the mechanism for deciding whether to extend the cap beyond the end of 2020. The Bill merely states:

“The Authority must carry out a review into whether conditions are in place for effective competition for domestic supply contracts.”

It does stipulate that the review must include an assessment of progress made in installing smart meters, but unfortunately that is as good as it gets. The industry has expressed concern that this provision is unclear. I agree. For example, Energy UK says that there is an absence of a

“clear and realistic definition of effective competition”.

Which? says:

“the criteria for effective competition are not defined so it is not certain under what circumstances the cap will be lifted or how its success will be judged.”

Will the Secretary of State issue any further guidance on what the conditions for effective competition might be, or are we simply deferring to Ofgem to determine that without question?

[Mark Pawsey]

Does the hon. Lady support the sunset clause, which means that this legislation will not apply indefinitely as we will reach a stage where there is sufficient competition, or would she rather see a permanent price cap that lasts forever?

[Rebecca Long Bailey]

The hon. Gentleman makes an important point, and I will refer to this later in my submission. The Bill does not provide an answer to the broken energy market; it is simply a sticking plaster while the energy market is reformed. We would not expect the provision to be in place for a prolonged period. We are not openly against sunset provisions, although we might dispute how they are drafted, which we will explore in Committee.

In considering the cap removal, I must raise an issue that was highlighted recently by the Business, Energy and Industrial Strategy Committee. It found that vulnerable and low-income people were especially affected by poor-value tariffs, with 83% of those living in social rented housing, 75% of those on low incomes, 73% of those with no qualifications and 74% of disabled customers on a standard variable contract. It was clear from the Committee’s findings that, even with the advent of smart meters, those groups will still require protection from overcharging. I therefore urge the Government to consider representations by charities such as Scope, which has called for clause 7 to be amended to ensure that Ofgem, when it considers “effective competition”, has regard to the impact of removing or extending the cap in relation to vulnerable and disabled customers.

Finally on the drafting of the Bill, I am concerned that there is no guarantee that the price cap will be in place this winter, despite the Secretary of State’s earlier assertions. The Bill states that Ofgem must introduce a cap “as soon as practicable” after it is passed, but Ofgem has already said that it would take around five months after a Bill receives Royal Assent to enact a price cap because it has a statutory duty to consult power companies. This morning Ofgem has said that it

“will look to set the level of the cap over the autumn and bring the cap into effect at the end of this year”.

It therefore seems that the cap will not even be in place when the weather turns in autumn this year. I think that the Bill would be greatly improved by the inclusion of a hard deadline by which the cap must be in place, and Labour will be seeking to include such a deadline in Committee.

Given that the Government have already set the date for Committee consideration as 15 March, it would be encouraging if they provided a clear date for cap implementation because, even accounting for the relevant consultation periods set out in the Bill, it would be possible to introduce the cap earlier than next winter. Indeed, my advice is that including such a date might even lay to rest suggestions in some press reports that the big six, and indeed some members of the Cabinet, have been lobbying the Secretary of State to procrastinate or even drop the Bill entirely.

[James Heappey]

The shadow Secretary of State is kind to give way to me a second time. Does she agree that another option she might consider to help to introduce the cap as quickly as possible would be for her party to pledge its full support in helping to get the Bill through the House and the other place as quickly as possible?

[Rebecca Long Bailey]

I thank the hon. Gentleman for that very helpful comment. I have not opposed the Bill in any of my comments so far; I am providing helpful advice. We support the principle of a price cap and want it to be introduced in the most efficient and detailed way possible.

I think that there is consensus across the House that the energy price cap is no more than a sticking plaster, and that much deeper problems within the UK’s energy market need to be addressed. The market is fundamentally broken. Electricity bills soared by 20% between 2007 and 2013, while in the past year alone, every household in the UK paid £120 for dividends to energy company shareholders. Over the past few months, report after report and news story after news story have detailed the unfairness of the current system, but it must be noted that the final bills that consumers face are not simply a consequence of manipulation by some supply companies. As the Business, Energy and Industrial Strategy Committee has highlighted, network costs make up the second highest element of a duel fuel energy bill.

The Energy and Climate Intelligence Unit found last year that the six distribution network operators made an average profit margin after tax of 32% a year between 2010 and 2015, equating to £10 billion over six years. At the same time, shareholders received £5.1 billion in dividends. In a subsequent report, the ECIU calculated that electricity network companies’ exceptionally high profits are set to add £20 to household energy bills this year. Moreover, analysis by Citizens Advice last year calculated that network operators, including National Grid, had made £7.5 billion in unjustified profits, which it thinks should be returned to consumers. Quite frankly, that is the exploitation of a natural monopoly. It is not a market and there is no effective competition, and I want to hear how the Minister will deal with competition within this element of the energy market.

[Gareth Thomas]

I am grateful to my hon. Friend for giving way a second time. Is it not a problem—and deeply ironic—that Conservative Members should defend an energy system in which foreign nationalised companies have more control and earn more income and wealth from the distribution and supply of British energy than the British citizenry?

[Rebecca Long Bailey]

My hon. Friend makes a fantastic point. Many people across Britain find the situation absurd.

As I said, I welcome the Minister’s comments about how she will tackle network exploitation but, along with the BEIS Committee, the Opposition are closely monitoring the next phase of network regulation. We also wonder whether the Minister will shine a little more light on what that might entail, what benchmark the Government have set as their acceptable level of regulation, and what actions she will take if Ofgem’s proposals are insufficient, as was the case with the initial price cap proposals.

The Labour party has been clear that it will not allow the exploitation to continue. We will radically reform the UK’s energy system, not just tinker around the edges, and if the Government are serious about reforming the market and protecting consumers, it is about time that they keep up. Sadly, however, the Secretary of State’s opening remarks were rather thin on proposals for long-term market reform. Reform of the market is not just critical in order to instil fairness and affordability, but vital to ensure that Britain has an energy system fit for the future.

We are experiencing a pace of technological change within the energy sector that has never been seen before. Batteries, storage and smart systems are transforming demand and supply. There is a move to smarter, more decentralised forms of energy generation and supply, emulating many of the models we have seen established across Europe, along with the potential of accessing a low-carbon market that is, according to Goldman Sachs, worth over $600 billion.

Dieter Helm, who was commissioned last year by the Government to conduct a review into the cost of energy, said:

“The corporate structures and policies designed for the 20th-century world no longer work well.”

That review had two main findings: first, that the cost of energy is significantly higher than it needs to be to meet the Government’s objectives and, in particular, to be consistent with the Climate Change Act 2008 and to ensure security of supply; and, secondly, that energy policy, regulation and market design are not fit for the purposes of the emerging low-carbon energy market as it undergoes profound technical change. Dieter published his report in late October. It echoed our calls for a change in ownership of the electricity network; unsurprisingly, we heard little from the Government.

Following the report’s publication, the Government launched a call for evidence to gather the views of stakeholders. That process closed on 5 January this year. I have not heard anything from the Government about that, so in the absence of any future energy vision from the Secretary of State today, perhaps the Minister for Energy and Clean Growth will confirm when a response to that consultation will be published and if the Government agree with Dieter Helm’s proposals.

[Mark Menzies]

The hon. Lady is making suggestions to improve the Bill, so what role does she see for the Competition and Markets Authority to ensure that consumers’ interests are paramount?

[Rebecca Long Bailey]

The hon. Gentleman makes an interesting point. We would expect all stakeholders to be engaged in the process, because the Bill must suit the entire energy market and deal effectively with competition. As I set out earlier, the Bill, as drafted, does not provide sufficient clarity on what is meant by “effective competition”.

[Mr Jim Cunningham (Coventry South) (Lab)]

In answer to the question asked by the hon. Member for Fylde (Mark Menzies), the regulator is supposed to represent consumers, but it is not strong enough to do that. The sooner we have a proper inquiry into the energy market the better. I have been saying that for the past seven years.

[Rebecca Long Bailey]

My hon. Friend makes a fantastic point about the need for a fundamental root-and-branch look into how our energy market functions and what we will expect to see from it if it is to suit our needs.

The Opposition are pleased that the Government have caught up and finally brought forward legislation to ensure that a price cap is implemented, but the Bill is frankly too little, too late, for millions of people who will not feel benefit this winter and nor, it would seem, for half of next winter. This sticking plaster is only guaranteed to be in place until the end of 2020, so the Government need urgently to bring forward radical proposals for long-term reform of the energy market. We have already set out a clear plan, and it is time that this Government started to catch up.

[Several hon. Members rose—]

Taylor Review

Rebecca Long Bailey Excerpts

1st reading: House of Commons
Wednesday 7th February 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 Government’s response to the Taylor review.

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

I am delighted to set out the Government’s response to the review of modern working, which was led by Matthew Taylor. He set out his ambition that the Government should place as much emphasis on creating quality jobs as they do on the number of jobs. Good work and developing better jobs for everyone in the British economy are at the centre of the industrial strategy vision.

The Prime Minister has repeatedly said that, as we leave the European Union, there will be no roll-back of employment protections, but today we are committing to go further and to seek to enhance rights and protections in the modern workplace for even more people. We will support employers who give individuals their correct employment rights, but we will prevent undercutting by unscrupulous employers who try to game the system, by clearly defining who is employed and who is not. We will extend the right to receive a payslip to all workers, including a statement of the hours that they work. We are requiring employers to clearly set out written terms from day one of the employment relationship, and to extend that to all workers. We are taking forward 52 of the 53 recommendations in the Taylor review, and all but one of the recommendations from the joint report of the Business, Energy and Industrial Strategy Committee and the Work and Pensions Committee.

For workers on zero-hours contracts, we are creating a right to request a stable contract. For the first time, the state will take responsibility for enforcing a wider set of employment rights, including sick pay and holiday pay, for the most vulnerable of workers. Employers who lose tribunal claims against staff and are found to have had no regard to the law will face fines of up to £20,000, quadrupled from the current £5,000. We will also ensure that employment tribunal awards are paid correctly.

The Government are very grateful to Matthew Taylor and his panel, as well as to the many individuals and organisations who contributed to the review. I would also like to thank the BEIS, Work and Pensions and Scottish Affairs Committees for their contribution to this work. Through our response, we are acting to ensure good work for all, to protect the rights of those on low pay and to ensure that more people get protection, security and certainty in the work they do.

[Rebecca Long Bailey]

The tragic case of Don Lane, a DPD gig worker, epitomises the precarious and unstable working life many people face and the failure of the Government to protect workers. They needed to do something bold today, but it appears that they are simply papering over the bleak realities with rhetoric. Launching four consultations, merely considering proposals, and tweaking the law here and there is not good enough. How would any of this have actually helped Don Lane? It simply would not—that is the fact of the matter.

So I ask the Minister: which rights will apply to which workers from day one? How will they be quantified for zero-hours workers? Why, despite public support, have the Government not protected agency workers by abolishing undercutting through the Swedish derogation? How does a right to request more stable hours differ from the current position? Without an obligation on the employer to accept such a request, it is meaningless. Why have the Government not brought forward any meaningful proposals to protect gig workers? Defining working time misses the point. We needed clarity on workers being paid when they are logged into apps waiting to receive jobs, as well as clear and urgent direction on the legal status of gig workers. Why was there not even one mention of trade unions? On the genuinely self-employed, we see the creation of a website allowing the self-employed to talk to each other—well, bravo! Why is there no system of support and no recognition of the precariousness of their situation? This is simply window dressing.

What we needed today was radical new architecture of the law at work to protect workers, in which the genuinely self-employed are offered key protections and the involvement of workers through their trade unions is crucial. We saw none of that, and to miss those things out of any recommendations is to miss the ocean and look at the pebbles underneath.

[Andrew Griffiths]

I have to say that I share the hon. Lady’s desire to improve the rights and protections for the workers we represent in our constituencies. It is disappointing that in her long response she was unable to welcome any of the steps we are taking. As a result of the actions set out in our response to this review, millions of workers will have greater rights and access to more protection. Indeed, I argue that we can rightly claim to be leading the world in improving the quality of work for our constituents.

The hon. Lady seems to argue that it is wrong to be consulting on these issues. I hope the House will understand that in addressing the issues she raises—such as employment status in the gig economy, the rights of agency workers and better transparency in the workplace—we are modernising employment law to make it fit for the future world of work. We are seeking expert views on how to do that, which is absolutely right. Our intention is clear, and we are consulting the experts on how we deliver on that promise. Matthew Taylor himself has said that these issues are complex and we must take time to get them right, but the House should be clear that we are consulting on them in order to act. Rather than rolling back employment legislation, which we are sometimes accused of, we are improving the rights of workers and the enforcement of those rights.

The hon. Lady mentions the very regrettable case that has been in the newspapers over the past few days. I extend my sympathies to the family of the individual concerned. I cannot speak about individual cases, but I direct her to page 15 of our response. It clearly sets out what we are going to do to ensure we have the correct definition of workers’ status, so they can have access to the kind of things she is talking about—sick pay, days off and the ability to attend doctor appointments if necessary.

Smart Meters Bill

Rebecca Long Bailey Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Monday 5th February 2018 Commons Chamber

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

My comments will be brief.

The Opposition do not oppose the Bill, and will support its Third Reading. However, there are still a number of outstanding issues, two of which have come to the fore since the Committee stage. First, there is the alarming fact that Capita, which wholly owns the Data Communications Company, has issued a profit warning, and company shares, as of last Thursday, have fallen to a 20-year low. All the communications and infrastructure for the operation of smart meters have been outsourced to Capita, and, in turn, Capita has engaged partners in the DCC to operate aspects of its overall function. As a result of the Bill, a special administration regime will hopefully mitigate the impact on smart metering should Capita’s fortunes worsen, but I reiterate the Opposition’s concern that if the DCC goes into administration, consumers will pay the price through this administration regime. Why should they pay the price for yet another failed outsourcing? I wonder what the Secretary of State’s rationale was for forcing them to pay for such failure.

In the case of the DCC, there will be some protection should Capita fail, but what about the detail, and what about contingency plans in relation to Capita’s other ventures? Indeed, what immediate measures are the Government putting in place for any potential collapse of Capita? Capita is a major outsourcing firm which last year alone was awarded 154 Government contracts. My colleague the shadow Cabinet Office Minister, my hon. Friend the Member for Hemsworth (Jon Trickett), last week said

“that the Government’s behaviour in response…has been marked by indifference to corporate mismanagement, incompetence in office and complacency in the face of a crisis.”—[Official Report, 1 February 2018; Vol. 635, c. 980.]

We need assurances that any contingency plans will protect services and information, guarantee jobs for current employees, and protect the pensions of those employees and the pensions of the public sector workers that the company is managing. Will the Secretary of State in time provide those much needed assurances?

The second development is that the National Audit Office has announced it will be investigating the economic case for the roll-out of smart meters and looking at whether the Government are on track to achieve their target to roll out meters by 2020. The report is expected in the summer of this year. I would not want to pre-empt the National Audit Office, but it would seem that it is not only Opposition Members who are concerned that the Government are on track to miss their target at consumers’ expense. Indeed, it seems extremely likely they will miss this target, given that 40,000 gas and electricity meters would need to be installed per day even on present projections; that is no mean feat and perhaps why the language has changed to state that consumers will be offered smart meters rather than there will be installation per se. It seems irresponsible of the Government to have rejected Labour’s new clause 4, which would require the Secretary of State to publish a report and a cost-benefit analysis relating to the smart meter implementation programme and lay a copy of the report before Parliament within three months of the Act coming into force.

I referred to the energy price cap on Second Reading and I do so again now as it has been three months since then and still no action has been taken. It is estimated that customers are to pay somewhere between £130 and £200 on their bills to recover the costs of the installation of a smart meter on their property. This is in addition to the price increases inflicted by energy providers. The Government have promised a price cap and we have had sight of legislation to implement it, but we are still a long way off an energy price cap having any real impact on household bills. I would like to take this opportunity to say to the Secretary of State that although the days are starting to get longer and the weather milder—although this week is a slight exception to that—we on this side of the House have not forgotten the Conservatives’ promise of an energy price cap, and specifically to knock at least £100 from 17 million household bills.

I join the Secretary of State in thanking all those who have spoken throughout the passage of this Bill and all Committee members who have worked so diligently. I thank the Front-Bench teams for the good nature of the debates we have had on this issue, and especially my Labour colleague, my hon. Friend the Member for Southampton, Test (Dr Whitehead), an expert who revels in the detail and minutiae of smart meters and has seen not one but two Bills through the House over the last two months—and who could forget his jovial use of the props Gaz and Leccy on Second Reading? [Interruption.] Google it; it is not to be missed. I also thank the Public Bill Office and the Clerks of the House for all their assistance on this Bill.

Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 30th January 2018 Commons Chamber

[Greg Clark]

The hon. Lady raises an excellent question, and I want to pay tribute to the CITB, which has been working closely with its Scottish colleagues, for a magnificent response. It has been able to not only contact but offer continuity to all the apprentices—I think I am right in saying that—to give them the ability to continue their training. That was a formidable, agile response to an urgent situation, and it deserves the praise of the House.

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

In July last year, the Government were warned by the Federation of Small Businesses and the Specialist Engineering Contractors Group that Carillion was transferring risk to its subcontractors. They highlighted that Carillion’s payment period was doubled from 65 to 120 days, that Carillion made money on the back of early payment by charging fees, and that regulation 113 of the Public Contracts Regulations 2015, which relates to 30-day payment, was not being enforced. Will the Secretary of State outline what actions, if any, he took on receipt of that information?

[Greg Clark]

The lessons and the scrutiny of what went wrong in Carillion, both on the part of its directors and its scrutineers, and in the oversight that took place across the whole of the public sector in terms of contracting, need to be looked at and will be looked at, including by Select Committees of this House. Whatever actions are required from that, we will take.

[Rebecca Long Bailey]

So it is clear that no action was taken and that subcontractors were being mistreated again and again. But that is not all: the FSB and SEC Group also highlighted how retention moneys and project funds due to suppliers were not being protected from Carillion’s potential insolvency. As a result of the Government’s inaction, microbusinesses are now owed on average £98,000, small firms £141,000 and medium-sized firms £236,000, and large businesses are owed on average £15.6 million. Will the Secretary of State therefore explain to the House and all the businesses affected why the Government took no action last July and why many are on the verge of bankruptcy today?

[Greg Clark]

Retentions and project bank accounts have been the subject, in response to those and other concerns, of a consultation on specific measures, which closed very recently. That came out of the recommendations that were made. Part of the taskforce that we have established includes these representative bodies, and they know that they have my commitment to take all the necessary actions to learn the lessons and protect any future concerns against things that could be learned from this case.

Nuclear Safeguards Bill

Rebecca Long Bailey Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 23rd January 2018 Commons Chamber

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

This is an important and necessary Bill, as the Secretary of State confirmed, to ensure that a contingency is available should the Government’s negotiations with the European Union and Euratom fail. That was why we did not oppose it on Second Reading, and it is why we will not oppose it on Third Reading tonight.

That does not mean, however, that we do not continue to have concerns about the Government’s approach and about whether there was any necessity at all for the Bill. On Second Reading, I made the case that it should be possible—or would have been possible—to retain the UK’s membership, or to secure a close association with Euratom that would allow the continuation of nuclear safeguarding. The Opposition still think that continued membership of Euratom or a close associate status is both achievable and necessary for the most efficient continued working of a whole raft of procedures relating to the nuclear industry, not just to safeguarding.

I am pleased that the Government seem to have acknowledged that negotiating a close association would be the best outcome for our nuclear industry and that Bill does not constitute a replacement for all Euratom’s functions. The Secretary of State’s written statement on 11 January set out that the Government’s strategy was to

“seek a close association with Euratom and to include Euratom in any implementation period negotiated as part of our wider exit discussions”.

It went on to say that the

“exact nature of the period will be subject to forthcoming negotiations”.—[Official Report, 11 January 2018; Vol. 634, c. 9-10WS.]

Given that statement, I wonder why the Government did not accept a number of Labour’s proposals: new clause 1, which would simply have asked the Secretary of State to “seek to secure” a transition period during which the UK could secure an association with Euratom, or indeed build any domestic capability; and new clause 2, which would have established that the provisions of the Bill are contingency arrangements if it proves impossible to establish an association with Euratom.

I point out that we could have been more legally robust in our language, especially in new clause 1. We could, for example, have used the words “best endeavours”, but we appreciate the issues that the Secretary of State faces and would have given him the opportunity simply of saying that he would try to secure a transitional period. We are sad that new clause 1 was not accepted today, but none the less I appreciate that the Secretary of State has listened somewhat to Labour’s concerns and promised to report back every three months about overall progress on Euratom in the EU negotiations. As three months from the first statement will be 11 April, which is in the middle of the Easter recess, I look forward to receiving an update on 29 March.

My Front-Bench colleagues have argued that a transitional agreement is vital if we are to ensure that the UK is physically able to provide a functioning domestic safeguarding regime. The evidence taken by the Public Bill Committee highlighted that particular concern of the industry. Dr Golshan of the ONR said:

“given our membership of Euratom, it has not been necessary for the UK and ONR to build capacity and resilience in this area.”

She added:

“a transitional arrangement will be extremely helpful.”

That is not least because the training of inspectors takes several years, as outlined by the representatives of Prospect and Unite the union. Indeed, when she was asked about training, Dr Golshan said:

“We have started that process, but it is a long road and I am not going to sit here and pretend that it is all going to be a smooth run.”––[Official Report, Nuclear Safeguards Public Bill Committee, 31 October 2017; c. 5-9, Q3, 8 and 16.]

We have ongoing concerns about the timely replacement of inspectors, so we urge Ministers to agree a transitional arrangement to prevent full obligations from being placed on an unready ONR. The Government did not see fit to accept amendment 4, which would have required the Secretary of State to declare that the ONR had the resources necessary to take on extra responsibilities for nuclear safeguarding in the UK, but I hope they will listen to this plea.

I will say a little word on the powers that the Bill will hand to the Government—the very small Henry VIII provisions, as they were referred to previously. The Minister did not see fit to accept our amendments that attempted to curtail the executive powers conferred by the Bill, but he promised to publish regulations ahead of Report. He did indeed publish those regulations, but not until Friday afternoon—beyond the deadline to table any further amendments to the Bill. I would just like to put on record that although I welcome the publication of the regulations, the timing was rather cheeky and not altogether in the spirit of the constructive approach that both sides have taken to the Bill.

I associate myself with the words of the Secretary of State in thanking all who have spoken throughout our consideration of the Bill, as well as all members of the Public Bill Committee. I want to thank the Front-Bench teams, including the Secretary of State and the Minister. I think it is fair to say that they have been in listening mode. I especially thank my Labour colleagues, not least my hon. Friend the Member for Southampton, Test (Dr Whitehead), who have worked diligently on the finer details of all things relating to nuclear safeguarding. Finally, I want to thank the Public Bill Office and the Clerks for all their tremendous support, as ever.

Oral Answers to Questions

Rebecca Long Bailey Excerpts

Tuesday 12th December 2017 Commons Chamber

[Margot James]

My right hon. Friend gets to the nub of many of the Taylor review’s recommendations. It is important that decent employment standards are maintained and that consumers are offered new opportunities, and we will be reviewing the proposals.

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

Recent reports uncovered the fact that people driving on behalf of Amazon were forced to deliver up to 200 parcels a day while earning less than the minimum wage. With impossible schedules that left little to no time for breaks and no access to paid holidays or sick pay, many drivers experienced conditions that could be described as Dickensian. As yet another high-profile employment case emerges, why are the Government not taking robust action to crack down on bogus self-employment and to enforce employment rights?

[Margot James]

The hon. Lady puts her finger on precisely why the Prime Minister commissioned the Taylor review in the first place. When employers are indulging in practices such as those the hon. Lady outlines there will definitely be a deleterious effect on employees’ health, and they should be roundly condemned.

[Rebecca Long Bailey]

The Government keep hiding behind their forthcoming response to the Taylor review, but Sir David Metcalf, the Government’s director of labour market enforcement, stated this year that even the Government’s existing powers have not been used to protect workers, despite numerous official statements that the Government have taken abuse by employers seriously. Only last week, the Government identified 16,000 workers who were paid less than the minimum wage, and yet the Low Pay Commission believes that the true figure is between 300,000 and 580,000. Does the Minister agree with Sir David Metcalf that the Government’s enforcement of basic employment rights is wholly inadequate?

[Margot James]

I await the publication of Sir David’s strategy for dealing with labour market enforcement, which we expect to see in the first quarter of next year. I am pleased with his appointment, and he is doing a great job so far of bringing together the enforcement agencies at the Government’s disposal to ensure that they work even more effectively in the pursuit of non-compliance with the law.

Budget Resolutions

Rebecca Long Bailey Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

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

I am surprised by the Secretary of State’s comments, which are usually quite measured, and he seems to be struggling with reality today. However, let us talk about the Budget. A substantial section of the Chancellor’s speech on Wednesday focused on the productivity crisis, and rightly so. Labour analysis has shown that we have to go back to 1820, when George IV ascended the throne just after the Napoleonic wars, before we can find a time when productivity increased by less than this over a 10-year period. The result has been catastrophic. People are earning less now than they were 10 years ago and, as the Institute for Fiscal Studies states, average earnings look set to be nearly £1,400 lower by 2021 than was forecast last year. The Chancellor and the Secretary of State have tried to paint that as a phenomenon that is quite separate from the Government—like a sort of freak accident that is nothing to do with them—but that could not be further from the truth. To help the Secretary of State with his recollection of history and reality itself, I will take him on a little trip down memory lane.

By late 2008, it was clear that monetary policy alone was not working in the traditional way—people were not spending and the economy was not recovering. To quote economist Paul Krugman,

“the truth is that mainstream, textbook economics not only justified the initial round of post-crisis stimulus, but said that this stimulus should continue until economies had recovered.”

But what did the Conservatives do? The polar opposite: slashing Government spending and investment, and essentially pulling the rug out from under the UK economy.

Not only that, but the financial crash had shown clearly that our economy was becoming dangerously over-reliant, both regionally and sectorally, on financial services in the south-east of Britain.

[Antoinette Sandbach]

Does the hon. Lady accept that, in effect, 12 previous years of Labour Government had left the economy in that state?

[Rebecca Long Bailey]

Frankly, I expect better from the hon. Lady; she usually makes very measured contributions. If she lets me continue, I will explain a little about what happened. Perhaps she will make different comments if she asks another question later.

It made perfect sense to use that economic turning point as an opportunity to invest in the development of our industrial base and to address the deep structural problems that had been emerging in our economy since the early 1980s. However, what happened was the scaling back of investment and funding in the tools that business needs to grow and succeed, such as skills, infrastructure, research and development, and access to long-term patient capital.

[Oliver Dowden (Hertsmere) (Con)]

As the hon. Lady is taking a trip down memory lane, does she recall the Labour party’s repeated predictions when we embarked on this necessary course of public spending restraint that it would lead to 1 million jobs being lost? In fact, 3 million jobs have been created.

[Rebecca Long Bailey]

Again, we have a Conservative Member who struggles with reality. I urge him to speak to workers in his constituency and ask them about the quality of said employment. I speak to workers in my constituency, and they are struggling in an era of casualised, low-paid, insecure work.

Our productivity was certainly impeded, but the picture worsens still when we focus on the recent productivity and investment figures of many British regions and nations. Stark research recently published by the Centre for Cities shows that London and the south-east are up to 44% more productive than many other British regions, and the Institute for Public Policy Research’s commission on economic justice has found that Britain is the most regionally imbalanced country in the whole of Europe.

What have we seen after seven years of this Government’s single-minded obsession with cutting the national debt? Higher debt and unprecedented downward revisions of GDP growth. As every economist knows, the only way substantially to manage the national debt is by growing the economy, but this Government have simply tried to deflect attention away from their miserable performance on GDP.

[Alex Chalk (Cheltenham) (Con)]

Will the hon. Lady assist the House by saying how much extra it would cost in annual interest payments if she led a Government that borrowed an additional £500 billion?

[Rebecca Long Bailey]

The hon. Gentleman should refer to comments made by the shadow Chancellor. It is not as straightforward as putting a figure on interest repayments. Each investment is dealt with on the basis of the level of return to the Government, so each infrastructure project, for example, needs to be assessed on its own merits. The hon. Gentleman should know that. He is a clever young man, and I would have expected him to know a little more about this subject.

[Alison McGovern (Wirral South) (Lab)]

I have been in this House slightly longer than my hon. Friend, so I saw the former Chancellor, George Osborne, having to U-turn on his deficit reduction plan. He failed to meet every one of his debt targets. Labour kept debt at 40% of GDP, and now it is 80% of GDP. Does my hon. Friend agree that the carping from Conservative Members is in total ignorance of the facts?

[Rebecca Long Bailey]

I could not agree more. That is very articulately put.

It is not as if the Government were not warned of the problems of austerity by my right hon. Friend the shadow Chancellor. Indeed, the International Monetary Fund warned the Government that

“episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output… The increase in inequality engendered by financial openness and austerity might itself undercut growth, the very thing that the neoliberal agenda is intent on boosting.

Refusing to heed that advice was a deeply reckless act.

The current Chancellor may well turn around and lament post-crisis productivity, but let us remember that he was in the Cabinet while this economic mess was being created. He is not absolved of responsibility, but he has the opportunity to admit that that approach was wrong and to change course.

Unfortunately, although the Chancellor admitted in his Budget speech last week that there is a big productivity problem—a big gold star for Phil there—there was very little to give our economy the upgrade it desperately needs, nor was there any attempt meaningfully to level up regional investment spend.

Indeed, despite the Chancellor’s jovial attempts at talking up our ability to harness the fourth industrial revolution, the Office for Budget Responsibility looked at his future investment plans and cut its forecast for growth in productivity, but he still had one last chance—the industrial strategy. I waited with bated breath yesterday, desperately hoping that the action would match the rhetoric. It started well enough with the strategy’s stated goal to create an economy that boosts productivity and earning power throughout the UK. “That’s spot on,” I thought. But sadly, having looked into the strategy in a little more detail, it seems little more than a repackaging of existing policies.

Unfortunately, the Conservatives have form on this. There has been a long line of PR gimmicks that simply do not deliver. Members may recall that, back in 2011, the previous Chancellor announced a march of the makers, but UK manufacturing has since grown at less than half the European average. Similarly, much was made of the northern powerhouse, which sounds great, but only two of the top 20 infrastructure and construction projects in the Government’s pipeline are in the north-east, north-west or Yorkshire and the Humber, leading my hon. Friend the Member for Bolsover (Mr Skinner) to call it the “northern poorhouse.”

No one can argue with the core principles outlined in the 255-page document we saw yesterday but, as the Financial Times summarised today,

“the judgment being passed…is that it amounts to a good start—but much still remains to be done to ensure success.”

Although the strategy certainly acknowledges many of the fundamental problems our economy faces, I fear that the level of detail and proposed investment simply do not match the surrounding rhetoric, falling far short of what is needed.

The White Paper gives us a handy one-page summary of the strategy’s key policies to strengthen the “foundations of productivity.” It is perhaps poignant to point out that even the previous Chancellor was trying to fix our foundations and outlined a productivity plan called “Fixing the foundations” two years ago. What happened to that? I digress slightly.

Let us look at the first foundation: ideas. The key policies are raising total R and D investment to 2.4% of GDP by 2027, increasing the R and D tax credit and allocating some of the increased spend to a second wave of the industrial strategy challenge fund. Although increasing R and D spend is, of course, a step in the right direction, it is an unambitious target.

[Vicky Ford (Chelmsford) (Con)]

Given that this is the largest increase in research and development and innovation funding in more than 40 years, what part of it is unambitious?

[Rebecca Long Bailey]

The hon. Lady misses the point. The UK has been below the OECD average of 2.4% of GDP for years, and we are way behind global leaders such as South Korea, Japan, Finland and Sweden, which all spend at least 3% of GDP on R and D. If we are to be in any way capable of competing on a world stage, we have to up our game. If the Government really want us to be at the forefront of the fourth industrial revolution, they should be aiming above the average, rather than just trying to catch up.

Furthermore, not reforming where and how it is spent risks widening regional divides, as almost half of all research funding currently goes to the south-east. To quote a Conservative Member:

“If we just put more money into the same funding streams we will have the same outcomes and continue to spend half the science budget in just three cities.”

[Angus Brendan MacNeil]

The hon. Lady is talking about competing with our international competitors. Where will her industrial strategy be on trade defence? We know the Conservative Government do not seem to have trade defence, but she supports them on the UK being out of the customs union, and I presume she has the same view of not wanting to partition Ireland with a customs union. Therefore she would be running no tariffs on the Irish border and there would be no trade defence. Where would that leave her industrial strategy, given that, we must remember, there was not a hair’s breadth between the Tories and Labour on austerity? Labour was going to do £7 billion-worth of cuts and, with students, it is responsible for £6,000 of the £9,000. Where is Labour different from the Conservatives on trade defence and industrial strategy, particularly with reference to the Irish border?

--- Later in debate ---

[Rebecca Long Bailey]

I thank the hon. Gentleman for his extremely long comment. He made some valid and interesting points, and we can all agree that the Government’s shambolic handling of Brexit undermines our industrial strategy going forward. Labour’s industrial strategy, however, is committed to achieving 3% of GDP spent on research and development by 2030 and reviewing Government channels for disbursing public R and D funding, with a view to encouraging greater regional equality.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

My hon. Friend and neighbour is making an excellent speech. On research funding, is she aware that more than two thirds of health innovation research money goes to the “golden triangle”, despite the fact that Greater Manchester has a cutting edge in life sciences? Would that not be a good place to start?

[Rebecca Long Bailey]

I thank my hon. Friend and neighbour for her contribution, and she is correct in what she says. I do not think we saw anything in the industrial strategy that goes any way towards rebalancing the regional divides in investment spending in R and D. Critically, a Labour Government would also ensure that the UK maintains our leading research role by seeking to stay part of Horizon 2020 and its successor programmes after we leave the EU. As with so many areas outlined in the White Paper, the UK’s research role is compromised by the Government’s reckless and cliff-edge approach to Brexit.

Let me turn to the second foundation: people. Key policies include establishing a technical education system, investing £406 million in maths, digital and technical education, and creating a national retraining scheme with an investment of £64 million. Again, the intent is good, but let us remember that the Government cut £1.15 billion from the adult skills budget from 2010 to 2015. Similarly, on first analysis the £406 million appears to be the sum of the amounts the Government have already spent on maths, computing and digital skills. The reality is that the Chancellor has overseen the steepest cuts to school funding in a generation, at £2.7 billion since 2015, according to the National Audit Office, and a cap on public sector pay that has seen the average teacher lose £5,000 since 2010. [Interruption.] Unfortunately, the long term results of that are clear, and I do not know why Government Members are protesting. The Government have missed their recruitment targets five years running, and for two years in a row more teachers have left the profession than joined. The policies contained in the White Paper are a start, but they are not even enough to undo the damage since 2010, let alone form part of a decent industrial strategy.

[Lucy Frazer (South East Cambridgeshire) (Con)]

rose—

[Rebecca Long Bailey]

I am going to make some progress.

The strategy identifies infrastructure as the third foundation of productivity and outlines £31 billion of investment through the national productivity investment fund, with some ring-fenced for the necessary infrastructure for electric vehicles and boosting digital infrastructure. As I outlined yesterday, TUC analysis shows that that £31 billion increases investment to just 2.9% of GDP, whereas the average spent on investment by leading industrial nations in the OECD is at least 3.5%. In addition, it is unclear whether the extra £7 billion announced in last week’s Budget is new money at all, rather than a re-allocation from other areas of capital spend which was previously budgeted—it would help if those on the Government Front Bench listened to this question, as it is important. Perhaps the Secretary of State can confirm the meaning of footnote 3 in table 2.1 of the Budget Red Book, because it does not appear to be very clear.

Key policies to improve the business environment are sector deals; a £2.5 billion investment fund incubated in the British Business Bank, as announced in the Budget; and yet another review of encouraging growth in small and medium-sized enterprises. That is, sadly, another case of lacking ambition—

[Andrew Bridgen]

Can the hon. Lady explain how the Labour party’s declared policy of huge increases in corporation tax is going to encourage companies to invest in R and D, and become more competitive and productive? Is she not part of a party that still believes it can tax the country to prosperity?

[Rebecca Long Bailey]

I applaud the hon. Gentleman’s attempts at crowbarring that in there. I was talking about access to SME finance, so I will carry on.

[Ruth George]

As there is tax relief for R and D, the higher the rate of corporation tax, the greater the incentive for companies to invest in R and D, as the hon. Member for North West Leicestershire (Andrew Bridgen) would do well to learn.

[Rebecca Long Bailey]

I thank my hon. Friend for her comments. The Government’s proposals on unlocking access to finance for business lack ambition and fail to recognise the impediments many businesses face when attempting to access finance. Indeed, Craig Berry, a member of the Industrial Strategy Commission, has said:

“the plan for unlocking private investment is under-cooked and, frankly, pitiful.”

Furthermore, the proposed sector deals appear very narrow and the strategy as a whole will do nothing to help the millions who work in retail, hospitality, care and other large low-wage, low-productivity sectors. A large proportion of those people are women, but, as we know, the Government do not have the best record when it comes to supporting women in the economy. [Interruption.] If I were a Conservative Member, I would listen to this, because these are the stark statistics: men are expected to receive 46% more of the funding from this Budget than women; and the Budget made no impact on the shocking fact that 86% of tax and benefit changes since 2010 have come at the expense of women, according to Labour and House of Commons Library research. That is scandalous.

[Nigel Huddleston (Mid Worcestershire) (Con)]

rose—

[Rebecca Long Bailey]

I will make some progress. Key to improving productivity and living standards is not just supporting those sectors we know we have strengths in and the ability to generate high returns, but using our endeavours to transform what have been traditionally viewed as low productivity sectors and make sure that they become the leading sectors of the future.

Briefly, while we are on employment, let me say that I am shocked to see the Government lauding the fact that some workers do not have adequate employment or trade union rights as some kind of competitive advantage. Celebrating the flexibility of our labour force when their recent Taylor review clearly highlighted the imbalance of flexibility between employer and employee in many workplaces seemed a little bizarre when I came across it in the White Paper. True two-way flexibility, where employees can indeed choose it to improve their lifestyle, rather than have flexibility imposed upon them because there is no choice, should be celebrated, but we cannot celebrate these rare examples at the expense of providing workplace security and enabling workers to make a valuable contribution to the running of a firm, which in turn helps improve productivity. This is why strengthening trade union rights and the ability of people to join trade unions is an important way to boost productivity, and it should be central to any industrial strategy. The White Paper does not even mention trade unions—why is that?

I turn now to the final foundation: places. The Government will agree local strategies, create a transforming cities fund and pilot a teacher development premium

“for teachers working in areas that have fallen behind”.

I am afraid we have heard all this before. The northern powerhouse, one of the Chancellor’s flagship policies to transform northern cities, is not delivering, as I outlined earlier. Without a substantial increase to level up regional investment, as Labour called on the Chancellor to do in the Budget, the local industrial strategies will simply fail. I am afraid the policies that the Government have identified as key to the industrial strategy are simply not going to deliver the scale of change needed to turn the economy around.

I am coming to the end of my remarks, but I wish briefly to say something about the Government’s grand challenges. I am pleased that they have chosen to talk about grand challenges, as that mirrors the Labour party policy of advocating missions to deal with the big issues of our time. One of the Government’s four grand challenges is to

“maximise the advantages for UK industry of the global shift to clean growth”.

That is simply laughable in the context of their track record on supporting green energy, and especially so given that last week’s Budget essentially closed down support for much low-carbon development in the UK. There will be no new low-carbon electricity levies until 2025, with no alternative funding outlined. Nor was there any support for, or indeed any mention of, specific renewable projects such as the Swansea tidal lagoon. There is a huge contradiction between the Government’s rhetoric on clean growth and the reality of their policies.

There are some moments in history that can have a lasting impact for years and decades to come. What we do at such moments will determine not only our future but the future of our children. The 2008 recession and its aftermath was one of those moments, but the Government’s austerity policies and the reduction of investment have done lasting damage to the UK economy. Today, we are again at one of those critical moments. We are about to leave the European Union—a critical point in this country’s history that will shape our economy long into the future. Although this week’s industrial strategy might have contained the right rhetoric, without the investment and detail to match, prospects for productivity growth are considerably bleak.

A few weeks ago, I opened a food bank in my constituency. I usually love going to ribbon-cutting opportunities, as they are a chance to celebrate the great things that happen in my city, but on that day I felt nothing but shame—shame that in one of the world’s richest economies in the world, one of the world’s leading industrial nations, with the greatest minds and businesses of our time, we have built an economy that has simply squandered that greatness and that forces even those in work to rely on charity just to get by. This is not the Britain of the future and it is not the Britain that I want to create, so it is time the Government woke up and halted the greatest act of recklessness in a generation.

Industrial Strategy

Rebecca Long Bailey Excerpts

Monday 27th November 2017 Commons Chamber

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

I am pleased that the White Paper seems to acknowledge many of the fundamental problems faced by our economy, and give credit to the Secretary of State for adopting one of Labour’s policies to set national missions or “challenges”, as he likes to call them. But as I delve into the finer details of the paper, the aims of which may be well intentioned, it appears to be little more than a repackaging of existing policies and commitments.

The Office for Budget Responsibility figures contained in last week’s Budget were a damning assessment of the impact of seven years of Conservative austerity, with productivity, real wages, and GDP growth and GDP per capita revised down, but debt revised up. The Conservatives’ economic credibility has been shot to pieces, with people earning less than they did in 2007 until at least 2023. We have to go back to 1820, when George IV ascended the throne, before we find a time when productivity increased less than this over a 10-year period.

Today, I was full of hope—desperately hoping that the Government would press the reset button—but they have simply restated their plans for a £31 billion national productivity investment fund. As TUC analysis shows, this only raises investment to 2.9% of GDP, whereas the average for leading OECD industrial nations is 3.5 %. Labour even called on the Chancellor to use his Budget to level up regional investment in line with London, but only one—just one—of the named transport projects in the national productivity investment fund is in the north. The development of local industrial strategies is certainly welcome, but will the Secretary of State admit that they simply could not deliver the desired effects under the Government’s current investment plans?

The strategy restates the commitment to raise total research and development investment to 2.4% of GDP. This is moving in the right direction, but it is still behind world leaders and far less ambitious than Labour’s commitment to reaching 3% of GDP by 2030. The allocation of £725 million to the industrial strategy challenge fund is again welcome, but it seems to lack any real strategy. As Sheffield Hallam University recently found, the areas already identified by the fund

“account for little more than 1 per cent of the whole economy (by employment) and 10 per cent of UK manufacturing.”

Many of the policies focus on R and D spending in only a handful of specified sectors in which the UK already has a comparative advantage. This will do nothing to help the millions who work in large, low-wage, low-productivity sectors such as retail, hospitality and care, or people who do not live in the golden triangle made up of London, Cambridge and Oxford.

Finally, this industrial strategy fails to start from the bottom up. It is all well and good talking about leading the fourth industrial revolution, but this can only happen with a highly skilled, technology-savvy workforce. After seven years of Conservative Government, only 11% of students in England take IT at GCSE, and only 30% are at schools that provide it. That is certainly not laying the foundations for an economy of the future, and the amount of money for skills outlined today does not even begin to make up for the cuts inflicted on our education system since 2010. Indeed, the money allocated for the national retraining scheme amounts to only 6.6% of the funding slashed from the adult skills budget since 2010.

This industrial strategy may well be a start, but I fear that the Government have simply produced a public relations gimmick that is thin on detail, thin on investment and thin on ideas. I truly hope the Secretary of State will listen to my concerns as well as those from business and the trade union movement over the coming months, because we have one chance to reset our economy, and if we let this slip through our fingers, the people of Britain will never forgive us.

[Greg Clark]

I am grateful to the hon. Lady. When she has the time to read the Industrial Strategy White Paper we have published today, I hope that she will reflect on the substance, content and ambition of this strategy and that she will come out in support of it.

One thing that the hon. Lady should know, and that every Member of the House knows, is that for our country to prosper, we need a sound economy. The last time the Labour party was in government, we had the biggest financial crisis since the 1930s, racking up billions and billions of pounds of extra debt for our children and grandchildren to pay. As usual, the Labour party has not learned the lesson from that, because its proposal is to borrow an extra £250 billion. In attracting the confidence of the world to invest in this country, the hon. Lady needs to make sure that the economy is sound. In the prospectus that she puts forward, there is nothing that is capable of achieving that.

In the weeks ahead, I hope the hon. Lady will discover that, around the country—from north, south, east and west, and from business organisations to trade unions to our respected scientific institutions—there has been substantial collaboration, based on the Green Paper, which has resulted in some major changes. It is a strategy for the long term—it is right that it should be the strategy for the long term—but it is being backed up by investment now. In the Budget just last week, we saw the announcement of the biggest increase in investment in research and development in this country that there has ever been. The hon. Lady should welcome that because it is being welcomed throughout the country.

With our partners right across the United Kingdom, we will implement this industrial strategy. I hope, when the hon. Lady goes out and talks to businesses and leaders across the land, that she will find that there is great support for this approach and that she will join us in seeking to implement it and to provide the certainty we need in the years ahead.