Summer Jobs
Rebecca Smith Excerpts(2 weeks, 6 days ago)
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Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
It is always good to speak with the hon. Member for East Renfrewshire (Blair McDougall) on the Front Bench. Were we discussing the threats that we face or the problems we have with China and the desperate way that they have undercut the market using slave labour, we would be on the same side of the House completely. My respect for him is enormous. However—[Laughter.] I do want to talk about today’s subject.
I was not planning to say anything about summer jobs, but my first experience of one was in Italy, where I had been studying. I had gone to the coast to find a job. All I could find was a job working as a plongeur, as it were, in the dishwashing section of a restaurant. I was a useless waiter and got told to stop sitting down and talking to those who were eating, so I was sent back to the kitchen. During the evenings I had nowhere to stay, but I had managed to borrow a Fiat 600—an old one that I could start with the end of a teaspoon—and I drove it round to the car park and used to sleep in the back. It was wonderfully cheap but not exactly very comfortable. I am not quite sure what I learned from that—I did learn a few lessons, but I am not prepared to divulge them all here. Washing in the sea was one of them, though I have to say I am not sure how that has stood me in any good stead for the last few years. We will move on from that.
We can overstate the lessons to be learned from a job, but being in work does teach young people about working to get a salary, turning up on time, as colleagues have said, and recognising that if they do not do so, the employer has every right to get rid of them. That is the key bit that we constantly talk to our families about.
I want to come back to the problems that we face. When I was Secretary of State for Work and Pensions when we came to power in 2010, we had just had a huge, difficult recession. We had high unemployment, and we had to get that unemployment down. I say to the Government is that the cost of all their problems is not one issue alone—it is when they fail to realise the impact of one change after another on what is ultimately the most at-risk group. I agree completely with my right hon. Friend the Member for East Hampshire (Damian Hinds) that the most at-risk group is young people. When the Government make changes to employment regulation, add on costs and change people’s rights, it is always younger people who are the most affected. They are the easiest to move out of employment, and they are almost invariably the last ones in. They are also the most expensive to look after while they are in work—for a good reason.
When I used to tour the jobcentres I spoke to young people who were there looking for a job. I used to ask, “What is the biggest hurdle that you face?” They would say that every time they go in front of an employer, the employer would ask them what experience they have in work. They would say, “I have no experience.” Then the employer says, “Well we cannot take that risk. I am looking for someone else, so you will not get the job”. As my right hon. Friend the Member for East Hampshire said, not only is it a marginal cost but it is also about the complete lack of experience and the risk that an employer takes on when they hire the younger person.
The triple whammy of the national insurance charge, particularly on part-time work, the Employment Rights Act and the rise in the minimum wage are the vice that is squeezing this situation. Any one of those we probably could have got through, but to have all three of them hitting employment is the real problem that we face, and unemployment is the result.
Youth unemployment at 16.2% is staggering. We used to pride ourselves on having a lower youth unemployment than the rest of Europe, but that is not necessarily the case now. The latest figures show us categorically that now have three times the NEET rate as the Netherlands has. The Netherlands is probably the closest type of economy to us in Europe; it is often quite flexible, and it often looks to the UK to import some of its flexibilities. The reality, therefore, is that the group who will suffer—they were always going to—is young people. Without that work experience, they will not go on to get that job they want—in fact, it is the job that they need—as a starter job.
Turning to apprenticeships, an individual apprentice is now much more likely to get a full-time job and go on to earn more money than somebody who has studied at university. The collapse of the relationship between university and a brilliant career will fundamentally change the nature of who we are as a country if people who go to university with the promise that they would earn much more money than they would ever have to pay in debt then find that is a broken concept. That is a matter for both sides of the House. We must deal with it.
I have family who are paying off debts. The astonishing interest rate on those debts has become staggering, and it is trapping them—they are unable to look at buying houses or anything else. That is the pressure on those people, and sometimes what they earn at work is not enough for them to be able to get by and do well.
The Opposition’s motion, which I will come to, is really important. The point is that we have to make a change. The Government may want to have young people in work and want there to be those so-called Saturday jobs, but Alan Milburn says in his report that the
“first rung has thinned. The clearest examples are the decline of the Saturday job…For earlier generations, these were…the routes through which young people first entered working life. They provided income, but they also helped young people build confidence, learn the habits of work and show employers what they could do. For too many young people now, those opportunities are weaker or have disappeared altogether.”
We did not really need the Milburn report to know that—we knew what was going on—but his saying that must be telling for the Government. The Government have overstepped the reality.
For example, zero-hours contracts were flexible and were liked by the vast majority of those who had them. Older adults—mostly those with caring responsibilities—liked the flexibility of being able to go to hospital appointments or take those with disabilities to hospital appointments one week, while on other weeks they could work, doing more hours to make up the money. That flexibility helped them. It also helped students coming out to do all the big jobs in entertainment, hotels and short-term affairs such as Wimbledon. It is travesty that the Government have tightened that up. They need to learn from this.
I stress again that most people liked the idea of zero-hours contracts as they gave them flexibility in work that allowed them to get work experience, which they could sell when going to get a full-time job, as well as the chance to earn some money to subsidise themselves while doing other work, studying or whatever. It is astonishing that the Government have got rid of that.
My party’s motion rightly mentions the astonishing high street business rates. We rightly talk about wanting to protect our high streets against competition from online retail and so on, and the majority of those part-time, small jobs are on the high streets. Those small businesses and shops need people to help them make their business grow, but business rates for some of the shops on the high street in my area have risen by 60%. It is unbelievable to think that a small business will be able to survive a 60% increase. That business has to make choices, which mean that not only can it no longer hire someone, but it has to lay people off—it can no longer keep them in employment. We have seen dramatic layings off and closures on the high street for the simple reason that people cannot afford to run their business.
Rebecca Smith (South West Devon) (Con)
Does my right hon. Friend recognise that the group of people who often get forgotten in these debates—certainly by Government Members—are business owners? They are trying to hang on to these young people, or even to their normal employees, and they want to do the right thing so they pay them before themselves, but often, because the minimum wages have gone up, by the time those businesses close the owners are not benefiting from that income. We tend to forget the small business owners, but they are vital, as we are trying to highlight.
Sir Iain Duncan Smith
It is all about throwing out the baby with the bathwater. I fully understand that the Government want to regulate some of that employment to ensure that people are protected, but the Employment Rights Act is so all-consuming and far-reaching that there is not just the cost—estimated at about £5 billion—for companies and businesses but the knock-on effect for those who need a job but can no longer be employed, as well as for those who would employ them but will have to close their businesses.
Flexibility is critical in employment—it always has been. It has always been a case of, “What is the risk in hiring you? Do you have the experience? Can you do the job? Can I afford to pay you the wages? Do I have to do half that job for you as a result?” For small businesses, that is a real problem. The Employment Rights Act has been a real nightmare.
The issue is not just that £5 billion cost but the way in which that impacts on economic growth. Regulating employment is not an isolated issue that does not affect anything else; it affects growth in the economy. I talked earlier about the triple whammy. With business rates alongside that, businesses face even higher costs and problems. They are being regulated a great deal, they do not have flexibility in employment, and they have to pay more.
The third critical issue in our motion is the cost of energy in the United Kingdom, which is astonishing. We have the highest energy costs in the developed world—it could be said that we have the highest energy costs in the world as it is—and a huge amount of that is to do with the ridiculous helter-skelter drive to get to clean energy no matter what. We are now threatening businesses with fines—the car industry gets fines if the right cars are not produced—and energy costs are so high that businesses can no longer manage to manufacture goods here. We will need to manufacture goods when we need to spend the money that we do not have at the moment but will have to have for the defence industry. That is a manufacturing case, yet none of those industries says that it can afford to expand its manufacturing base because the cost of energy is so high. Those three things are critical. I therefore support the Opposition’s motion.
I finish with one single fact. We have all been talking rather blithely about what we did in those summers and how we got our first jobs, but it is worth reminding ourselves that for the generation going through now, the flexibility, opportunities and ability to earn are far less than they have ever been. When we talk to our children, we discover how difficult employment is for them. We can talk to them about being able to earn the right money, about being able to pay for a house or about sky-high rents. This is a serious problem. If we want to face it and take it on, we should think of the old health dictum, “do no harm”. I say to the Government that when they pile those three massive burdens on to industry and the individual, they are doing great harm to those we need to protect. My advice to the Government is simply this: think again about the triple whammy and reduce the burden they have put on industries.
Blake Stephenson
Or, indeed, I was overpaid.
I moved on and washed pots in my local pub. Then I progressed and became a waiter and ran wedding receptions. By the time I got to university, I was working in a Zizzi pizza restaurant—other pizza restaurants are available—and I enjoyed it thoroughly. I made connections, I blossomed, and I became more confident. I know that people describe these as soft skills, but my right hon. Friend the Member for East Hampshire (Damian Hinds), who is not in his place, correctly said that they are the hard skills—the difficult skills that we need in our economy. We will only have them in our economy if we grow them in young people when they first start working.
Rebecca Smith
My hon. Friend reminds me that one of the other soft skills that we learn that way is resilience. I am wondering how he got those jobs, because I earned £10 a day in my first job. I was sweeping the floor in a florist and, if I was lucky, bundling up some flowers before I sold them. Part of that £10 was my bus fare to get to and from work, because the place where I was fortunate enough to live was a long way from the city centre. Does he agree that resilience is a skill that is missing in a lot of today’s young people, and that if we are taking away the jobs where they can learn that skill, it is yet another way that we are de-skilling the workers of the future?
The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)
It is a pleasure to close this debate after so many thoughtful contributions from hon. Members across the House. Many difficult questions have been raised. I thought of following the example of the soon-to-be-former hon. Member for Clacton (Nigel Farage) in just resigning to avoid those difficult questions—[Interruption.]. I will resist the encouragement.
It has been fantastic to listen to hon. Members talking about their own experience of Saturday and summer jobs. It allowed me to imagine the right hon. Member for Aldridge-Brownhills (Wendy Morton) running around with multiple plates balanced on her arms, and the hon. Member for Mid Bedfordshire (Blake Stephenson) getting busy with his chamois. I pictured the hon. Member for Aberdeen South (Douglas Lumsden), who I belatedly welcome to his position, as a postie in shorts, fighting the rain coming off the North sea. I pictured the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) with long, flowing locks getting busy scrubbing pots in the Italian sunshine. That was important, because it allowed me to picture Conservative MPs doing something productive. More importantly and seriously, it was a reminder of the importance of our first employment experiences in making ourselves into fully rounded human beings and workers.
My job was working on Saturdays before going to university and in the summers at Beveridge fishmongers’ in Giffnock. The antisocial teenager in me would want to be in the back of the shop filleting something, but every time a customer came in I had to remake myself and find confidence all over again. It is in no way an overstatement to say that all the Saturday and summer jobs that hon. Members have spoken about are why we are all here. They gave us that first chance and opportunity to find confidence in ourselves, as many hon. and right hon. Members have said.
However, I will caution Conservative Members. Yes, this is about experience and people finding an opportunity and, as some have said, avoiding the long-term scarring effect of youth unemployment, but for many young workers this is about paying the bills. These jobs are not a nice additional thing. I think of the young woman with a family who I met; she had a zero-hours contract and simply did not know from month to month whether she would be able to pay her rent or take her kids to anything special.
My hon. Friend the Member for Banbury (Sean Woodcock) spoke powerfully about how insecurity in the workplace is linked to the health of the economy. When people’s incomes are hollowed out, it hollows out the centre of our towns and ends up in the empty high street shops that we see.
Rebecca Smith
The Minister makes a very interesting point about city centres being hollowed out, but the main thrust of this debate is about young people doing summer jobs before they go back to school or university in the autumn. They are the very young people who would ordinarily take those wages to buy a hot chocolate in Lorenzo’s, like I used to, or to go and buy the new pair of trainers that they have saved up for. If they do not have a job in the first place and do not come from a family in which their parents can subsidise all those things, they miss out on that opportunity. While I accept the point he is making, will he accept the point I am making? The very thing we are discussing this afternoon is part of that problem, and removing those young people from the market altogether will not help.
Blair McDougall
The reason I am responding to the debate by talking about the impact of zero-hours contracts is that Conservative Member after Conservative Member rose to speak in defence of those contracts. Of course, many people value flexibility in the workplace, but some employers have used that flexibility to take advantage of their employees, including young employees.
Blair McDougall
Those people will still be able to have those contracts under the legislation, but we are talking about potentially hundreds of people in the right hon. Member’s constituency—that was his formulation—who rely on zero-hours contracts as their main form of employment, with no certainty of income from month to month. That cannot go on in this country; it is fundamentally unfair.
Several Conservative Members mentioned business rates, which the Government take incredibly seriously. The Conservative party began the revaluation without any plans whatsoever for any transitional support or relief for the people affected by it; Labour introduced a support package worth £4.3 billion to protect ratepayers from seeing large overnight bill increases because of that revaluation. As my hon. Friend the Member for Rhondda and Ogmore (Chris Bryant) said, over half of ratepayers will see no bill increases this year, and 23% will see their bills go down. Plenty of arguments could be made about whether we have gone far enough and how far our continued reforms of business rates should continue, and my colleagues in the Treasury will do that, but for members of a party that had no plans for any relief whatsoever to be saying now that they will spend £4 billion on abolishing those rates altogether, without saying where it will come from, is frankly ridiculous.
My hon. Friend the Member for Mid Derbyshire (Jonathan Davies) mentioned the great British savings this summer, and made a very fair request for those in the Treasury, as they look at the overall impact of that, to look at the impact on individual young people as well.
Many Opposition Members rightly raised the impact of increased national insurance contributions. As I have said before from the Dispatch Box, we recognise that that was a big ask of business, but what it did was say to the international money markets that we were a serious country again. That has been seen in lower mortgages, and in lower borrowing rates for businesses. I understand the genuine concern expressed by Opposition Members about the impact on youth employment, but I would say that it is at best a partial explanation, given that employers of workers under the age of 21 and those employing young apprentices do not pay national insurance.
The hon. Members for South West Hertfordshire (Mr Mohindra) and for Meriden and Solihull East (Saqib Bhatti) and the right hon. Member for Chingford and Woodford Green suggested that whenever a Government add to existing business costs, we should think about the cumulative impact rather than viewing it in isolation, and that is an entirely fair argument. Every time we ask something of businesses, that gives us in government a further incentive and, indeed, responsibility to do more to remove costs from them. That is precisely why, through the £2.5 billion youth guarantee package, businesses are being given a £3,000 incentive to employ 18 to 24-year-olds who are at risk of long-term unemployment, a £2,000 incentive to hire foundational apprentices, a further £2,000 to hire apprentices aged between 16 and 24, and fully funded costs for 16 to 24-year-old apprentices. That, of course, is on top of all the other work that we are doing to reduce the costs on business.
Rebecca Smith
I am glad that the Minister has brought up the subject of fully funded apprenticeships for those under 25. As soon as that was announced, an electrician in my constituency contacted me and said, “That is all well and good, but I still have to pay the higher wages.” Although such businesses are not paying national insurance, this is not as free, or as cheap, as the Government maintain. Will the Minister accept that it is not 100% correct to say that these are fully funded apprenticeships, because those businesses still have to pay increased salaries?
Blair McDougall
As was said earlier, we believe that people working full time should be able to afford the basics in life. My point is that we are dealing with the issue of youth unemployment by incentivising businesses to employ young people.
Many Opposition Members mentioned red tape. They will not have to wait terribly long to see the work that the Secretary of State and I have been doing to reduce the administrative burden on business. Many others spoke about additional costs being imposed on business. Let me remind them that our target to reduce that administrative burden by £5.6 billion is a net target, and they will not have to wait very long to see the progress that we have made in that regard.
Steel Tariffs
Rebecca Smith Excerpts(1 month, 1 week ago)
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Madam Deputy Speaker
Order. If Members have prepared a long question, I suggest they cross most of it out.
Rebecca Smith (South West Devon) (Con)
On Monday my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin) asked the Minister for Defence Readiness and Industry, the hon. Member for Plymouth Sutton and Devonport (Luke Pollard), about the impact of these new steel tariffs on the defence investment plan. His answer was not particularly clear, which surprised me, given the strong representations that both he and I will have had from the Plymouth Manufacturers’ Group. What conversations have the Minister and his colleagues had with the Ministry of Defence about the impact of tariffs on the DIP, and will he agree to meet me and the Plymouth Manufacturers’ Group?
Chris McDonald
I should be happy to meet the hon. Lady and representatives of businesses in her area. As the Minister for Industry, I am responsible for ensuring that we have adequate productive capacity to defend the nation, and in that respect these steel measures will provide the steel that we need for defence.
Oral Answers to Questions
Rebecca Smith Excerpts(5 months, 4 weeks ago)
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Rebecca Smith (South West Devon) (Con)
Chris Bryant
We have already had quite a bit of a discussion on business rates and I do not have much to add to that. I will just say that the health and beauty sector is not only a sector in the UK, but one that is vital to our new exports. I am sure the hon. Lady is aware of this, but because we managed to get tariffs down on beauty products in our free trade agreement with India, we have been facilitating lots of businesses going out to India as part of a trade fair to drive up our exports around the world. The whole of the sector has an opportunity to prosper when we manage to secure better free trade agreements.
Oral Answers to Questions
Rebecca Smith Excerpts(7 months, 2 weeks ago)
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Chris Bryant
I am very happy to meet my hon. Friend. The high street is a really important part of ensuring that we have economic growth across the whole of the United Kingdom, rather than just in some parts of it. One of the things we have been looking at is the fact that when a high street has a cinema, that often makes it a place that people want to go to, and it gives a sense of pride in place. That is why the Pride in Place investment that we have made is so important.
Rebecca Smith (South West Devon) (Con)
Chris Bryant
I backed the national minimum wage. Because I have been here since the time of Queen Victoria, I remember a time when the Conservative party—backed by the Lib Dems, incidentally—held out completely against the idea of a national minimum wage. If we are going to build successful businesses in this country, it is important that we have a national minimum wage that really pays the bills and enables people to put food on the table for their kids.
Specialist Manufacturing Sector: Regional Economies
Rebecca Smith Excerpts(8 months, 1 week ago)
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Rebecca Smith (South West Devon) (Con)
It is a pleasure to serve under your chairmanship, Mrs Harris. I welcome today’s debate. Plymouth and the surrounding area boast some of the finest examples of British advanced manufacturing. Babcock refits the Royal Navy’s frigates, maintains our nuclear deterrent and assembles the Supacat Jackal armoured vehicles at His Majesty’s Naval Base Devonport. Today, Helsing is opening a resilience factory in my constituency, manufacturing autonomous underwater gliders to protect critical infrastructure. The date was supposed to be last week, so I went to visit. Unfortunately, I am here for this debate today rather than there for the official opening today, but it is an exciting opportunity for my constituency of South West Devon and Plymouth as a whole. The company was attracted to the city because of its easy access to deep water for testing and sea trials of marine autonomy. For similar reasons, Thales at Turnchapel Wharf is delivering the first end-to-end autonomous maritime mine-hunting system to the Royal Navy.
Plymouth’s industry is not just defence companies equipping the men and women in uniform with world-class kit. Mars Wrigley, a company I visited last month, manufactures its chewing gum in Plymouth. Alderman Tooling, another advanced manufacturer in Plympton in my constituency, is a metal fabrication company that produces a range of products, including metal bed feet, bus handrails and displays for museums and fashion retailers. Plessey Semiconductors, Demon Pressure Washers and Princess Yachts are all significant to South West Devon, and many other businesses manufacture in neighbouring Plymouth constituencies.
It should therefore come as no surprise that Plymouth wears the crown as the south-west’s pre-eminent manufacturing city, ranking ninth across the UK. This is within the south-west region, which has the third highest proportion of advanced manufacturing jobs in the country, employing 86,500 people. Indeed, the Plymouth Manufacturers’ Group represents over 50 local businesses right across the city, employing almost 5,500 people.
With the current focus on the defence sector across the country and in Plymouth, it is easy to just focus on the prime companies: Babcock, BAE Systems and Rolls-Royce. However, it is important to also recognise the immense contribution of small and medium-sized businesses to the advanced manufacturing sector—both the defence supply chain and the wider manufacturing sector that populates Plymouth and the surrounding area.
Plymouth’s regeneration is being led by manufacturers, small and large, in our city. Our city’s future success is tied to theirs. The city’s offer is impressive and often overlooked. Our advanced manufacturing sector contributes hundreds of millions of pounds of GVA to the local economy and the country as a whole. Defence in the south-west adds £3.6 billion of GVA, with 43,500 jobs. However, it is well documented that Plymouth has a skills shortage. This in turn risks local growth, social cohesion and cost increases to the defence programme. To unlock Plymouth’s potential, we must meet those challenges head-on.
Recent data has highlighted that as many apprenticeships are needed by local SMEs as by defence primes—something we must be alive to as we promote our manufacturing sector and the skilled employees required. That is especially the case since high wage inflation—something already mentioned—brought about by the demands from the defence primes can impact those critical SMEs that also provide significant numbers of jobs and need to grow their skilled workforce, too.
We are not alone in this reality in the south-west. Recent Transport Committee hearings that I was part of have focused on the skills shortage in transport manufacturing, too. We often hear about welding, but ultimately those welders are needed right across the country in a whole range of jobs. It is very important we ensure that that supply and demand match each other. I am particularly interested to hear how the Minister can address that, because I sit in those meetings hearing about the need for welders, and I am not convinced that there are enough young people out there to fill those jobs, so I am interested to hear the Minister’s thoughts. The need for a laser focus on skills is crucial, and a reality check is needed on the numbers required across all manufacturing sectors to ensure we tackle the demand effectively.
Although I welcome the Government’s defence spending and commitment to Plymouth, I am watching to ensure that their investment also addresses the broader systemic challenges I outlined facing Plymouth’s advanced manufacturing sector. Labour has pursued policies that actively harm our SMEs. The jobs tax is costing small businesses £615 more a year per employee, and the Employment Rights Bill is tying them up in red tape. I hope that the Chancellor is taking a second look at the harm that those policies are causing to small businesses ahead of the Budget next week.
Plymouth is an exciting place to set up a business, with the Plymouth and South Devon freeport providing incentives and a skilled workforce that is growing every day, even with the challenges I have mentioned, all in the most beautiful place in the country to live. It is clearly the place to be to invest and to seek those jobs. My hope is that the Government will help and not hinder the city’s potential.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mrs Harris. I congratulate my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn) on securing the debate. We do not talk nearly enough about manufacturing in this place—I am sure the Minister would agree with that, given his personal commitment and understanding of the sector from his previous role.
I very much enjoyed the speech by the hon. Member for South West Devon (Rebecca Smith). I am sure that parts made in my constituency, at Meighs & Westleys, Goodwin or Mantec, make their way down to her local businesses, but I say gently to her that scaremongering about the Employment Rights Bill is a disincentive to industry and a restriction on our economy. The Bill is not yet anywhere near implementation.
Gareth Snell
Very briefly, as long as the hon. Lady is going to admit that she is wrong.
Rebecca Smith
I am not going to do that. Many businesspeople across my constituency have contacted me to stress how damaging the Bill will be. It seems to be more of an ideological issue on which Opposition Members differ. The red tape, particularly around things like zero-hours contracts, will have a massive impact, but I guess the proof will be in the pudding.
Gareth Snell
I am many things, but I have never been called an ideologue. We can have a debate about the Employment Rights Bill on a different occasion, but I suggest that securing the right for people to know what hours they are working does not seem to me like a minimum ask for anybody.
I am glad that my hon. Friend the Member for Calder Valley raised the importance of manufacturing to pride in place. He rightly talked about the valves made in Calder Valley, and he will know that I and my colleagues from north Staffordshire talk quite a lot in this place about ceramics and pottery—I cannot imagine your disbelief, Mrs Harris, but it is true. We talk about that because we are proud of the things that we make. We are proud to know that the tableware in our dining rooms was made by Duchess in Stoke-on-Trent, and the gifts in the Lords gift shop were made by Halcyon Days in Stoke-on-Trent. There are Wedgwood plates, Spode mugs and Burleigh prints all around this building that were made in Stoke-on-Trent.
It is not just Stoke-on-Trent that has a unique commitment and an integral identity connection to manufacturing. Think about the cutlery manufacturers of Sheffield, the jewellery quarter in Birmingham, the shoe manufacturers of Northampton, the knitwear and textiles in Scotland and, of course, the shipyards of Barrow and Belfast—clear commitments to industry that have helped to shape people’s identity. That is why we have to think about what regional investment means. We are proud of the things we make: they contribute to our local economy, which therefore contributes to the national economy. The supply chains need to stretch right across the whole United Kingdom because, as the hon. Member for Strangford (Jim Shannon) says, this is about the nations and regions of this country coming together to do what we all do best in our localities for the greater good of the nation.
In Stoke-on-Trent we do not just make tableware, giftware and ceramics; it is also proudly home to a factory that makes all the cherry bakewells in this country. I did not know she was here this morning, but one of our guests in the Public Gallery works in that factory. The workers there are proud of what they do and their creation of pastry, frangipane, icing and hand-placed cherries.
Chris McDonald
That point is well made. Of course, alongside our industrial strategy, we have our defence industrial strategy. When I come to talk about procurement, I may say more about that, and many hon. Members have talked about defence.
When we talk about our manufacturing sector, it is important to highlight some of the headline statistics. Manufacturing pays higher wages and has generally higher productivity in the areas where it is located and, when it comes to the balance of trade, although around 10% of our employment is in manufacturing, it accounts for around 50% of our exports. Those outputs, jobs and exports consist of thousands of specialist manufacturers, large and small, up and down the whole United Kingdom. Those exports are global and, as we have heard, we also export into space.
On procurement—I know that this area has been a major concern for many hon. Members, and particularly Government procurement—I have great sympathy for the comments of my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), and I am happy to pursue the specific issues that he raised. I see it as vital to our manufacturing and industrial sectors that we ensure that the money that we as a Government, or our regulated sectors, spend is significant and is concentrated as effectively as possible in the UK, for both its economic and its social value. We need to raise awareness of the opportunities. We must ensure that those opportunities are open to UK manufacturers and that our UK companies are competitive enough to win those contracts. The industrial strategy plays a part in ensuring that those companies can do that.
To increase business investment, we must also ensure that we have a real market opportunity, both at home and overseas. Our clean energy strategy is introducing measures aimed at directly increasing UK beneficiaries in Government procurement. The clean industry bonus for offshore wind, for instance, is designed to encourage investment in Britain’s coastal industrial areas and supply chains. We also want to see robust local content targets. We are examining market demand guarantees to encourage UK scale-ups and introducing a clean energy supply chain fund to support UK-based clean energy manufacturing.
The defence industrial strategy, which I mentioned earlier—the defence industry is, of course, another user of valves—sets out a major reform agenda for procurement to grow our UK industrial base. We will be speeding up procurement processes and reducing bureaucracy, while ensuring greater visibility of defence procurement and taking steps to ensure that small and medium-sized enterprises will have greater access to our supply chains. Our procurement and capital programmes are key to anchoring manufacturing here in the UK and then encouraging businesses to secure investment and export overseas.
UK manufacturing, however, ranks just 24th globally for robotics and automation. Here I move to the topic of productivity, which is of course a key element in profitability and competitiveness. That is an area where, as a nation, we need to work more. If we are not working digitally, we cannot adopt automation and move as fast as our competitors. Our Made Smarter adoption programme, with up to £99 million of additional funding, will help with this. It will support more manufacturing SMEs to take up new technologies and improve their digital capabilities. We have had reference today to the High Value Manufacturing Catapult, which I know from personal experience is a great supporter of improving competitiveness, robotics, automation and productivity in our supply chains.
Skills was also an important feature of today’s debate. They were raised by my hon. Friend the Member for Calder Valley, with his inspiring story of Stuart Billingham —maybe we all need to see more Stuart Billinghams in our lives. The hon. Member for East Londonderry (Mr Campbell) also mentioned regional skills development. I know that persistent skills shortages and the availability of good applicants are a concern felt across our manufacturing sectors. That is certainly an area for Government and industry to work closely together on, to encourage talented people from across the UK to seek jobs in our manufacturing sector. Fort Vale in Calderdale has a strong tradition in apprenticeships, and I understand that it receives over 140 applications each year for the opportunities it provides. That experience of high numbers of applications for apprenticeships is something I see across the country. I applaud the work of the West Yorkshire Manufacturing Services charity and its partnership with Calderdale college on the Industry 4.0 hub, which addresses exactly those digital issues.
Rebecca Smith
I mentioned skills as a significant challenge in the defence sector and the additional manufacturing. We have five defence technical excellence colleges opening by the end of next year. How well connected is the Minister’s Department with the Department for Education? Does he have any knowledge of when those colleges will be announced? They are surely a key part of what the Government hope to achieve with defence skills, but they will also be important for regions such as the south-west.
Chris McDonald
I welcome those comments. The hon. Member is right to point out that skills is a cross-Government exercise, and that applies not only to defence skills colleges. Work is done across the two Departments I work in—the Department for Business and Trade and the Department for Energy Security and Net Zero—and skills itself resides in the Department for Work and Pensions, which is where it is co-ordinated. Moving skills into that area and having the co-ordination there is exactly right. I also meet Defence Ministers to discuss this issue; many of these skills are transferable across industries, and we want to ensure that people can transfer across from different industries. A couple of weeks ago I launched the clean energy jobs plan, which provides support for people to move out of the oil and gas sector, for instance, and into clean energy industries. I thank the hon. Member for raising that issue.
Our focus on skills includes a new engineering skills package, worth over £182 million, to fund technical excellence colleges in advanced manufacturing. More widely, through the post-16 education and skills strategy, we are introducing wider reforms, including new foundation apprenticeships for young people in target sectors. Our new V-levels will encourage young learners into vocational pathways, and I am sure that hon. Members will have heard the personal priority the Prime Minister placed on this during his speech at the Labour party conference.
Attracting young people into manufacturing is clearly a priority for the sector, and our advanced manufacturing sector plan sets out ways in which we can do that. Wages in the sector are 8% higher than the UK average, which can provide great opportunities for young people. We heard earlier that welders earn even more than that—something that my nephew, who is a welder, also tells me. My welding is terrible, so I was absolutely unable to pursue that as a career. We are also concerned about equalities, and we have a target of 35% representation of women in the sector by 2035.
Young people also value their employment rights, and I should say to the hon. Member for South West Devon (Rebecca Smith) that before I came to this place I ran a small business that had almost all of those employment rights. I understand that small business owners might be concerned, but I can assure them that it is perfectly—[Interruption.]
UK Modern Industrial Strategy
Rebecca Smith Excerpts(1 year, 1 month ago)
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Jonathan Reynolds
First, let me congratulate my hon. Friend on her recent honour. [Hon. Members: “Hear, hear!”] I know that she is not one for a fuss, but it is inspiring, and it is great to see that recognition.
My hon. Friend is right that access to finance is a pillar of the industrial strategy. For instance, in the spending review, the British Business Bank’s capacity was increased to up to £4 billion, and the maximum ticket it could write was increased to £60 million as part of that. We also had a huge increase in the capacity of UK Export Finance in the spending review—as my hon. Friend knows, the north-east is a huge exporting region and has the most positive balance of payments of any English region—and its direct lending capacity has increased as well.
We now have a story on finance from UKRI and Innovate UK for innovative start-ups, to the British Business Bank for scale up and maturity, going to the National Wealth Fund, and UK Export Finance supporting every part of that journey. That comprehensive offer is detailed in this strategy document, and it will benefit all parts of the UK, including of course the north-east of England.
Rebecca Smith (South West Devon) (Con)
I welcome the announcement of Plymouth’s defence cluster and the national centre for marine autonomy. I am proud that much of this work is being done in my constituency at Turnchapel Wharf and soon at Langage in the Plymouth and South Devon freeport, and that it includes Smart Sound, all of which were supported by the last Conservative Government. Indeed, this did not really need a special name as it was already happening. The Chancellor’s spending review speech initially included mention of £4 billion for autonomous systems split between three locations including Plymouth yet, when checked against delivery, this element was missing. Please can the Minister clarify what funding is available for these autonomous systems’ development in the strategy, in addition to the money announced for the submarine and continuous at sea deterrence programme at His Majesty’s naval base Devonport?
Jonathan Reynolds
Well, I think that was a positive response to the industrial strategy. It certainly sounded like there were some positive themes there. The hon. Member asks a reasonable, specific question about her constituency, and I will check that with officials and write to her so that she has the correct information. If she has had a chance to look at it, she will see that the strategy includes big commitments to the advanced manufacturing R&D budget for a whole range of sectors. We are putting in the money that perhaps was not as firm as it is now in the national finances, but we also have long-term plans in many of those sectors around quantum, advanced manufacturing and aerospace 10-year settlements, for example, to give the kind of assurance and consistency we really need, but I will get her the specific answer she needs.
Oral Answers to Questions
Rebecca Smith Excerpts(1 year, 5 months ago)
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Gareth Thomas
The hon. Gentleman seems to have forgotten the extra investment that Nissan has announced, and the extra investment that has been announced by a number of other car manufacturers. He and his colleagues were very clear in opposing the measures that we took in the Budget, including measures that backed investment in the automotive sector, and they set out no plans to pay for that investment. I gently encourage him to reflect a little further on the mistakes that his party made in government, which have caused some of the problems that we are having to sort out now.
Rebecca Smith (South West Devon) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The Post Office has the freedom to operate the branch network within the parameters set by the Government. We protect the network by setting minimum access criteria so that, in urban and rural areas, everyone has easy access to their nearest post office. Those criteria ensure that however the network changes, services remain within local reach of all citizens.
Rebecca Smith
The community of Plymstock in my constituency saw its main post office close in September 2021, when Morrisons closed more than 80 of its newsagents across the country; the post offices were essentially collateral damage. Despite the best efforts of the community, my predecessor and councillors—including me, at the time—since the Post Office has downgraded the franchise on offer from main branch to post office local, it has been impossible to secure an operator due to the financial unviability of the model. Yesterday, the final local branch announced that it will close later in the year. What is the Minister doing to ensure that sustainable joint post office and banking services replace closing branches in constituencies like mine?
Gareth Thomas
We have supported the Post Office in taking measures to increase sub-postmaster pay, to make it a more attractive profession to come into, in order to deal with precisely the issues that the hon. Member set out. She will understand that I do not have specific knowledge of the issues around the post office in her constituency, but I am always happy to challenge the Post Office on constituency issues, so if she would like to write or speak to me about this afterwards, I would be happy to look at the issue in more detail.
Local Post Offices
Rebecca Smith Excerpts(1 year, 5 months ago)
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Rebecca Smith (South West Devon) (Con)
In September 2021, Plymstock post office closed. It was part of the collateral damage of the closure by Morrisons of more than 80 newsagents. It was a legitimate business decision no doubt, but it highlights the issue of the post office franchise model. Those businesses just disappeared from the high street. What followed was a public petition, which I started. There was huge public disappointment, as older populations are used to using cash. The postmistress of the next nearest post office wants to retire, which leaves just one bank with one cash machine. The next nearest cash machine is 10 or 15 minutes’ walk away. Importantly, this was the loss of an anchor at a shopping centre that is vital for the local community.
Working closely with the Post Office and local businesses, we sought to secure a new post office, but it is a challenge to make the franchise business model work. That will be even harder now with the employer increased national insurance contributions that businesses face. I raised this matter with the Minster today and he gave me a helpful answer. He mentioned the increase in the sub-postmaster pay offer, but there remains the issue that we are not replacing closing post offices on a like-for-like basis.
Plymstock had a three-counter model, which the Post Office has offered to replace with a local franchise. It is offering just £15,000 to £18,000 a year to run that service within an existing or proposed business. We have to add on to that rent, business rates, staff, and set-up and running costs, because, at the moment, there are no businesses on the Broadway, where the post office was located, able to take on that service.
There is also a challenge with the franchise model, in that it is often not possible to tag on additional services at the beginning that would make the business more profitable. For example, passport processing is not always offered at the start, and those extra services can often be the difference between a business model that will work and one that is unsustainable.
Ironically, on 22 May, the day the general election was called, I met again with the Post Office—some three years later—to discuss the issue. The Post Office raised with me the statistics on what was needed. It thought that the use of a post office in the area would increase over time, but it would not take into account the fact that a neighbouring postmistress was seeking to retire. Therefore, the data showed that the area did not need anything more than a post office local. All it took was a tiny bit of horizon scanning to realise that there would be that need and that demand shortly. We got stuck in a Catch-22 situation. The Post Office reassured me that it had further people interested in running the post office, but, nearly one year later, nothing has come to fruition. The fight continues.
As has been mentioned by other hon. Members, there is the option of banking hubs. The work of the Conservative Government to trailblaze this modern solution for communities has helped remarkably, and I am sure that we will hear lots about that this afternoon.
David Mundell
To reinforce the point that the hon. Member for Taunton and Wellington (Gideon Amos) made, there is a real concern that communities that are looking to have a banking hub do not have a functioning post office in the way that we would understand it. Does my hon. Friend agree with me that the arrival of banking hubs is actually the opportunity to put a post office back into those communities as well?
Rebecca Smith
I absolutely agree with my right hon. Friend. I think that all of us in this Chamber will agree that having a post office within these banking hubs is vital. We have seen 76 hubs open across the country in the last few years. Clearly, there is an appetite and a need for them, but it does not make sense to the public, as has been alluded to, that they can pitch up to these places with a post office sign outside, but they cannot even buy a stamp inside. I do hope that that can be rectified.
The other challenge is that an area cannot have a banking hub while a bank is still present. Perhaps that is the silver lining to yesterday’s announcement that the Lloyds bank in the same location, on Plymstock Broadway, is closing in November. That will be a massive hit, as it has the only cash machine for the entire community. However, as I have been saying to my constituents, perhaps the silver lining is that we will see more banking available and, if the Government heed our calls today, that future post office as well. Perhaps we have to circumvent the system to get what we want. It would mean that we can now explore a banking hub and retain those banking services.
Clearly, there is a long way to go. I am sure that there are Members in the Chamber today who have secured banking hubs. I am told that it takes a big fight, but most of us are here because we are campaigners. Within an hour of the announcement of the closure of the Lloyds bank, we went out to the press, and we will do all we can to get a banking hub. However, I want to be able to reassure my constituents that this will solve the lack of a post office as well, so I do hope that we can see that policy change. There is a long way to go: we have to secure a venue, an operator and that policy change to see our post office services return.
Since I shared the idea yesterday, there has been huge local interest. People are really getting the idea of a banking hub—they are on board; it is what the community wants. I have had two conversations already with potential operators, one of whom I know runs a service in a neighbouring constituency and is doing a really good job there. So we have the interest; we have businessmen and women who want to do this. They have not been able to deliver it on the franchise model, but it seems that they can deliver it on the banking hub model.
We want to see this idea delivered, because even the shopping centre knows that, in order to get the footfall for all the other local businesses, having a bank and a post office for access to cash is vital. Even the local library needs that cash access, and if it is not available, there is going to be a problem. Local people need these vital services and amenities, and that is why we need to secure a banking hub.
I say to my constituents, particularly those in Plymstock, that they have my absolute commitment to fighting for this. I would add that we have some fabulous small community post offices in our villages; it is not all a bad news story. The Newton Ferrers shop, for example, has a fabulous post office counter, and attempts are made right across our constituencies to deliver these services for our constituents. However, where there is a problem like the one we are facing today, with closing banks and closing main branches, we do need to step up and take action.
To close, I will ask a few questions of the Minister. I have highlighted the reality of the current post office offer and, as I said, it is not all bad. He has kindly said that I can share some details about my constituency with him, which I will do, but I think it would be good to get the answers on the record in the Chamber. Does the Minister accept that downgrading a service from a main branch to a franchised local service hinders the replacement of post office services? Will he explore the fact that the current Post Office dataset does not allow for what will happen in the future? If a retirement is coming down the road, we should be able to business-plan around that and at the moment we cannot. Can the Minister reassure the House that he remains committed to delivering banking hubs, and say whether will they will incorporate postal facilities so that we can deliver for our constituents?