Sale of New Petrol and Diesel Cars and Vans

Richard Burden Excerpts

Thursday 4th July 2019 Commons Chamber

[Richard Burden (Birmingham, Northfield) (Lab)]

It is a pleasure to follow the hon. Member for Eddisbury (Antoinette Sandbach). I congratulate my hon. Friend the Member for Hove (Peter Kyle) on securing this debate and commend him on what he said about the experience of driving an electric vehicle. He is also right that ambitious targets are important if road transport is to make the contribution it needs to if we are to achieve net zero emissions by 2050. But he rightly spent a lot of his time also talking about pathways to get there, because no target, however ambitious, implements itself: it requires action.

We have a mixed picture in that regard, however. There is good news: there was an increase of nearly 30% in the sales of alternatively fuelled vehicles last year. But more sobering is the fact that alternatively fuelled vehicles still account for only 6% of new vehicle sales, and electric vehicles—battery electric—and fuel cell vehicles account for just 0.7%. It is clear that a step-change is needed in the take-up of such vehicles if we are to meet the targets envisaged by the Committee on Climate Change that my hon. Friend talked about. That means that people need to feel confident enough about driving an alternatively fuelled vehicle.

The fact is, however, that anxiety about running out of power is still a barrier to both private and fleet buyers in making the shift to electric. The good news is that the range of electric vehicle batteries is growing exponentially. I am pleased to say that the Government have been more proactive than before in providing investment to speed up research and development to further advance battery technology here in the UK, but we are late to the game compared with some other countries, and I say to the Minister that a lot more needs to be done to stimulate that.

As has been said, infrastructure is a key part of the picture. Again, there are some welcome initiatives. The fact that we now have legislation in place allowing the Government to mandate provision and inter-operability of rapid charging points is good, but there is so much more yet to do if we are to achieve the step-change in charging infrastructure necessary to provide the confidence for a step-change in the take-up of electric and other alternatively fuelled vehicles. That must include providing answers about who is going to pay for the investment in the charging infrastructure at the scale needed and who is going to maintain it; my hon. Friend the Member for Stroud (Dr Drew) made that point earlier. It also requires tackling the issue of how to enable home charging, particularly for those who do not have off-street parking. We also need to see a lot more activism from the Government on the grid: how to avoid overload and how to make it easier for vehicles to become energy sources as well as energy users, given that the majority of their time is spent parked rather than on the move.

If people are to make the shift to electric, they also need to be able to afford to do so, and the price of new electric vehicles is still beyond the reach of most people. Solving that is not entirely within the gift of Government, but Government can help with the right consumer incentives. Ministers say that the fact that the numbers of electric vehicles and other alternatively fuelled vehicles being sold has gone up means that they can cut back on the plug-in car grant for electric vehicles and scrap it entirely in the case of plug-in hybrids. However, this market is still fragile and volatile—my hon. Friend the Member for Hove made that point very well—and customer incentives help stimulate both private sales and, crucially, the fleet market, whose turnover in new EVs is critical to driving the used car market, in which most motorists buy their cars. I say to the Minister that now is not the time to be reducing those customer incentives.

The pathway to net zero is not only about how to make sure there is a step-change in the number of alternatively fuelled vehicles on the road; it is also about the transition and how to ensure that on the way there the petrol and diesel vehicles on the roads are as clean as they can be to protect air quality and produce as little CO₂ as possible. The good news is that a great amount has already been achieved in that regard. Technological advances mean that emissions from new vehicles on the road are just a fraction of what they were just a few years ago. But the picture is not all positive: last year, aggregate CO₂ emissions from new cars rose for the first time in a decade. That happened not because the environmental performance of new vehicles has taken a dip; average new car CO₂ emissions are 31% lower than in 2000. The biggest factor has been a nearly 30% drop in the sale of new diesels.

That drop is partly a consequence of the injury the automotive industry inflicted on itself through the VW dieselgate scandal, but it is also partly a result of the confused messages that have been coming out of Government about newer diesel engines—not least in the vehicle excise duty regime, which penalises the cleanest diesels on the road while leaving older dirtier diesels untouched. Little wonder, then, that both private motorists and companies leasing new vehicles have delayed plans to replace vehicles, with detrimental consequences for both CO₂ and air quality.

There are lessons for the Government here about the need to end those confused messages, and those lessons particularly need to be learned in the approaching comprehensive spending review. I urge the Minister to look again at vehicle excise duty rates in relation not only to the supplement on new diesels, but, even more significantly, to the impact on vehicle taxes if the worldwide harmonised light vehicle test procedure, or WLTP, is applied unchanged to current VED rates. The Society of Motor Manufacturers and Traders estimates that consumers would face an increase in costs totalling about £500 million, based on the size of the current new car market, if WLTP figures are applied to current rates of VED. It is difficult to see how that could add up to anything other than a depression in sales, and the sales that would be hit would be those of the most environmentally efficient conventionally powered vehicles.

We must also remember that if sales are down, that hits the health of the automotive sector, which is already rocked by the uncertainties of Brexit. If the industry is hit, the pace of investment in developing new generations of alternatively fuelled vehicles is also hit, undermining the very thing we are trying to achieve in the first place.

My plea to the Minister is to listen to what the sector is saying, to make sure that the policies adopted on vehicle taxation support rather than damage the market for cleaner petrol and diesel vehicles, and to support rather than damage the sector’s ability to invest in the way that is needed to enable the shift to electric and other alternatively fuelled and zero emission vehicles: by making them a more realistic and attractive option for many more people than they are now.

Net Zero Emissions Target

Richard Burden Excerpts

Wednesday 12th June 2019 Commons Chamber

[Greg Clark]

I know that the hon. Gentleman is frustrated at the decision that Ofgem has taken. He and I had a successful and productive meeting in Stornoway a few years ago, as he will recall, to make it possible for remote islands to benefit from wind. He knows that Ofgem has an independent role, but I will follow up on his concerns.

[Richard Burden (Birmingham, Northfield) (Lab)]

This morning, the all-party motor group, which I chair, met a wide range of senior representatives of UK automotive companies, and there was a real welcome for the announcement that the Government have committed to net zero by 2050. However, they also noted that there is so much more to do if we are going to get there. That has to include a step change in infrastructure investment, making sure that the rapid charging points are available in the quantities and places needed, and that they are interoperable, and ensuring that the grid can cope. They also noted that we have to manage the transition more effectively, which means ending the confusion in the Government’s signals about intermediate technologies, about the regulatory frameworks to be put in place and about the kinds of incentives that can help to change consumer behaviour. In that context, may I gently say to the Secretary of State that cutting back on the plug-in car grant does not necessarily help, in a market that is not yet mature?

[Greg Clark]

I am grateful to the hon. Gentleman for conveying the support of the automotive industry, which has a crucial role to play in this transition. He is right about, and in earlier exchanges I have paid particular attention to, the importance of getting that transition right, so that it does not have unintended consequences of depriving of investment an industry that is crucial to making that change. Of course we will look at all the policy components. The plug-in grant was established and has been successful in launching an industry—or, at least, in expanding the early take-up of an industry. It was intended that it should come to an end when its budget was exhausted, but of course, through the spending review, decisions will need to be taken on how the industry can be supported in future.

GKN Aerospace, Kings Norton

Richard Burden Excerpts

Wednesday 24th April 2019 Commons Chamber

[Richard Burden (Birmingham, Northfield) (Lab)]

I am grateful for this opportunity to raise the case of GKN Aerospace in Kings Norton. It is a year to the day since the Business Secretary made a statement to the House to tell us that, while he would not intervene to block Melrose Industries’ hostile takeover bid for GKN last year, we could all take comfort in the legally binding undertakings that the company had given him about the future. Indeed, at the time, Melrose was falling over itself to assure everyone of its commitment to manufacturing in the UK. For example, on 13 March 2018, Melrose’s chief executive Simon Peckham wrote to my hon. Friend the Member for Leeds West (Rachel Reeves), the Chair of the Business, Energy and Industrial Strategy Committee, setting out particularly clearly what the company asked us to believe about its intentions. He said that the company’s commitments included:

“Returning GKN to be a British manufacturing powerhouse—competitive on the global stage. Committed to innovation…Investing in skills, R&D and productivity to support the Industrial Strategy…Working with suppliers and customers to boost Britain’s industrial base and the wider economy.”

On 5 April, just over a year since Mr Peckham wrote that letter, workers at the GKN Aerospace plant at Kings Norton in my constituency were told what these assurances meant for them when GKN’s management announced that the plant is to be run down over the next two years and closed altogether in 2021, with the loss of over 170 jobs. The company says that the work undertaken by the factory will be transferred to

“other GKN Aerospace sites or low cost areas”.

By “low cost areas” we can safely assume that the company means overseas.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Gentleman agree that this breach of faith cannot go unchallenged by this House or by the Minister lest every other big business that reaps the benefits of Government contracts, Government funding and Government subsidy decides that it too can go against its word and move its work to Mexico, Morocco or elsewhere? Shareholders can enjoy the benefits while our own hard-working men and women—the hon. Gentleman is a friend and a hard-working MP—wonder how to keep their homes and feed their families.

[Richard Burden]

The hon. Gentleman is quite right, and I thank him for his kind words. This breach of faith needs to be challenged, and I hope that the Minister will assure us that it is not only Opposition Back Benchers who are challenging the decision and that the Government will do so as well.

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

Although my hon. Friend says that 170 jobs will be lost, we actually have to multiply that by two or three because of the supply chain. Such figures can be utterly misleading. I am sure that my hon. Friend will recall that national security and the whole defence industry were mentioned when this matter was first debated. Despite the assurances received by Ministers, such companies have not honoured their agreements. There is a pattern of asset stripping with this company and others, and it is about time that the Government got tough with them. The Government also need to consider national security, because I have worked in the defence industry and know what it means.

[Richard Burden]

My hon. Friend is right to mention national security. It was raised last year, and I will refer to it later in my speech, because GKN Aerospace Kings Norton manufactures windscreens, windows and other transparencies for both military and civilian aircraft.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

My hon. Friend is making an important point, because this matter is not restricted to the defence industry. Asset stripping has a wider impact across our manufacturing base, and if this Government are serious about growing this country’s industrial base and manufacturing capability, they had better get a grip on these matters and insist on statutory provision and legislation to back up the obligations on private capital to deliver in the national interest. Does he agree?

[Richard Burden]

My hon. Friend makes a good point, and I hope that we hear some strong statements from the Minister about what the Government are going to do.

Last year, not only had Melrose sought to assure the Business, Energy and Industrial Strategy Committee of its intentions, but it provided a series of similar undertakings to Ministers. In the Business Secretary’s statement to the House on 24 April, one year to the day before this debate, he declared:

“I look to the management to honour its commitments in both the spirit and the letter, and to create a strong future for GKN, its employees, its suppliers, and the industrial sectors in which it will play a major role.”—[Official Report, 24 April 2018; Vol. 639, c. 760.]

He also said:

“Melrose has also agreed to meet my officials and me every six months to provide updates on its ownership of GKN.”—[Official Report, 24 April 2018; Vol. 639, c. 759.]

In the light of all that, one might have expected Ministers to have told the company this month that, rather than close the Kings Norton site, they expected it to honour the spirit, as well as the letter, of the undertakings it had given. Instead, in a written answer to me on 16 April, I was informed that the Secretary of State had been told that the closure plan was the result of

“an internal strategic review by GKN”

and that it was

“a commercial decision for GKN Aerospace and not in contravention of the deed of covenant agreed between BEIs and Melrose.”

If Melrose has indeed been meeting the Secretary of State’s officials every six months as promised, has anything been said in those meetings about the future of the Kings Norton plant being in doubt? If so, what alternatives to closure did BEIS urge on Melrose, and what was the company’s response? If not, what on earth is the point of these six-monthly reviews if they are not expected to cover an issue as important as the closure of a plant?

Of course, BEIS is not the only Department with which Melrose entered a deed of covenant last year. The Business Secretary told the House that the Ministry of Defence had received undertakings that would

“prevent the disposal of the…business, components of a business or assets without the consent of the Government”.—[Official Report, 24 April 2018; Vol. 639, c. 759.]

The Kings Norton plant produces windscreens and windows for military as well as civilian aircraft, so can we assume that the MOD will now step in? Apparently not. A written answer from that Department on 15 April told me that, as defence work is being “moved, not stopped”, the Secretary of State for Defence would not be issuing a note of concern under the covenant.

I assume the Minister spoke to his colleagues in the MOD before this debate, so can he tell me whether GKN has made an unambiguous commitment to retain in the UK all defence-related work undertaken by the Kings Norton plant? What has GKN said about how it plans to dispose of the Kings Norton plant after closure?

No doubt the Minister will tell me about the various investments GKN has announced in its aerospace and automotive divisions at other plants in the UK, and I welcome those investments. However, the first that employees at GKN Aerospace in Kings Norton knew of the company’s plans to close their plant was when they were told on 5 April 2019. That is simply not good enough, and it is a breach of faith with what Melrose said last year.

If the company believes there is a profitability issue at Kings Norton, should not Ministers be telling it that the spirit of the undertakings given last year means that it should first discuss the situation, and the options for the future, with the trade unions representing employees before decisions are made, rather than simply informing them afterwards? When Melrose said last year that its mission is “to power” the Government’s industrial strategy to secure “the best outcomes” for employees, suppliers, customers and the wider economy, is it not reasonable to ask what assessment it has made of the impact of closing the Kings Norton plant on the local economy? My hon. Friend the Member for Coventry South (Mr Cunningham) made that point earlier. Has BEIS asked the company that question and, if so, what has been the company’s response?

I do not believe that GKN now telling the Government it has conducted a strategic review is satisfactory. Do Ministers accept the need to press the company further? How did GKN reach this decision? What alternatives have been, or still could be, considered? What, in detail, is going to happen to the defence work carried out at Kings Norton, and how does GKN plan to dispose of the asset that is the Kings Norton plant? Finally, what impact, in practice, will closing Kings Norton have on the industrial strategy in Birmingham?

Without clear and convincing answers on those points, I ask the Minister to join me and other hon. Members in saying that Melrose and GKN should think again.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I welcome the Minister, Andrew Stephenson, on his first run out.

--- Later in debate ---

[Andrew Stephenson]

Thank you, Mr Deputy Speaker. As they did during the merger of GKN and Melrose, the Government continue to act to ensure that mergers result in the best outcomes for the United Kingdom. Our merger regime is a key part of the UK’s dynamic economy. Mergers and takeovers can bring great benefits to consumers and the economy. The UK has the third highest foreign direct investment stock in the world, behind the US and China. That investment means jobs in growing sectors and more opportunities to develop our skills base, and it helps companies to deliver products and services at competitive prices.

[Richard Burden]

It was remiss of me earlier not to welcome the Minister to his new position on the Front Bench. Can I ask him to address the question of alternatives? Frankly, saying that employees will be supported to find other jobs is not the same as asking the company whether it has looked at alternatives to closure. Has that question been asked, and what was the result? Is he not rather worried that nothing was apparently said about any of this in the Department’s last six-monthly review with Melrose?

[Andrew Stephenson]

The company has emphasised to us that it is at a very early stage in the process. It has not started formal consultation with workers, but it thought it was appropriate to set out its long-term vision for the site. I hope that the hon. Gentleman and others who meet the company will discuss alternatives to the site, and I hope that we can work together to support the 172 workers who are directly affected and those in the supply chain who will also be affected.

I fully appreciate the hon. Gentleman’s opposition to the takeover, which he set out today and in a debate in Westminster Hall on 15 March last year. I also understand the concerns that have been raised this evening by the hon. Members for Coventry South (Mr Cunningham), for Glasgow North East (Mr Sweeney) and for Strangford (Jim Shannon). However, I emphasise that mergers are an important part of our economy, and they can bring real benefits to consumers and the economy as a whole by attracting investment and promoting growth and innovation.

Honda in Swindon

Richard Burden Excerpts

Tuesday 19th February 2019 Commons Chamber

[Greg Clark]

Like my hon. Friend, I pay tribute to our colleagues, my hon. Friend the Member for North Swindon, my hon. and learned Friend the Member for South Swindon and my right hon. Friend the Member for Devizes, whose commitment to the success of the economy in Wiltshire is unflagging.

My hon. Friend the Member for North Wiltshire (James Gray) is absolutely right to refer to the fact that the success of Swindon and the whole of Wiltshire has been notable. In fact, one of the problems that Honda has occasionally discussed with me in the past is its struggle to recruit the volume of labour that has been required. It is a matter of sadness that that will not be a problem for the future, given this decision. He is right to emphasise that the demand for the kind of skilled labour that exists in that county is very strong. Through the taskforce, we will do everything we can to make sure that employers are matched with people with skills.

[Richard Burden (Birmingham, Northfield) (Lab)]

Brexit may not have been the direct cause of Honda’s announcement, but, to echo the wise words of the right hon. and learned Member for Rushcliffe (Mr Clarke), does the Business Secretary agree with me that it is an absolutely key part of the context in which Honda and other major car manufacturers are making decisions on where to invest in the generations of vehicles that will transform this industry? The harsh reality is that Britain’s reputation as a stable place to do business and as the gateway to Europe is being undermined before our eyes.

The Business Secretary mentioned the EU-Japan trade agreement. Will it not be a ludicrous situation if we end up leaving the EU without a deal at the end of March, or if we end up on World Trade Organisation terms after a transition in 2020, and tariffs are put on cars exported from Honda in Swindon to the EU that do not apply to cars exported from Japan to the EU? Does that not indicate that, whatever else happens in the coming weeks, the option of a no-deal Brexit has to be ruled out once and for all?

[Greg Clark]

I agree with the hon. Gentleman when he describes the reality of how the automotive industry successfully trades in this country. It is based on a just-in-time system of production, which has been very well calibrated over the years to make us very efficient. That has been communicated not just to me but to Select Committees of this House. It is clear, and it has been much debated, as the hon. Gentleman will know from his constituency experience. That is what we must agree, and it is what has been agreed—the ability to continue to trade without tariffs, without rules of origin checks, without quotas and with a minimum of frictions—which is why the companies have endorsed the deal. I agree with him that to leave on WTO terms would be a hammer blow to a foundational industry in this country. However, he has it in his gift, as do all Members, to avoid that by coming together in the days ahead to agree a deal.

Nissan in Sunderland

Richard Burden Excerpts

Monday 4th February 2019 Commons Chamber

[Greg Clark]

To protect those jobs in the longer term, we need to secure our ability to trade without tariffs and without impediment across the whole of the rest of Europe. As I have stated very clearly to the House, it is my view that the House needs to come to a decision within the next few weeks. We need to make compromises with each other to be able to provide that certainty and security to important employers.

[Richard Burden (Birmingham, Northfield) (Lab)]

When it could soon cost less, in terms of tariffs, to import a car to the EU from Japan than it will to export a new car from the UK to the EU in the event of a hard Brexit, is it not easy to see just what impact Brexit uncertainties have on decisions like this? Could not the Government minimise those uncertainties—first, by jettisoning the customs union as a red line for the Government and, secondly, by ruling out no deal?

On diesel, is it not the case that the problem is not with the latest emissions standards, but that Government vehicle excise duty rates hit the newest, cleanest diesels hard and leave the oldest, dirtiest diesels untouched? Will the Secretary of State have a word with the Treasury to do something about that in the spring statement?

[Greg Clark]

The hon. Gentleman makes an important point about the importance of tariff-free trade. The European Union has agreed, and put into operation last week, a free trade agreement with Japan that provides advantages for companies in being able to import and export directly with Japan. In my view, it also increases the urgency that we face to conclude our agreement with the European Union that should allow us to continue to trade with it and with other countries, without interruption.

We have had many conversations about diesel. It is the case that companies, including Nissan, are accelerating their investment; they are investing more than they previously intended to in ultra-low emission vehicles. This is giving the supply chain opportunity. I agree with the hon. Gentleman that we should not send a message that the current generation of diesel engines is a choice that needs to be avoided by consumers thinking about their next car.

Budget Resolutions

Richard Burden Excerpts

Wednesday 31st October 2018 Commons Chamber

[Greg Clark]

I am grateful to the hon. Gentleman for what he says. I am a regular visitor to the west midlands and to Coventry, and of course it is vital for one of our proudest and most successful industries that we should be able to build on that success by seizing the initiative in the years ahead. Every country in the world is moving to electric and autonomous vehicles and, including in the hon. Gentleman’s constituency, we have some of the best brains on the planet in developing that new technology. I am absolutely determined that we will not do what happened in the past—we invent the technologies yet see them deployed elsewhere—but that instead we will manufacture these batteries and these vehicles, and that we will do so in every part of the country.

[Richard Burden (Birmingham, Northfield) (Lab)]

rose—

[Albert Owen (Ynys Môn) (Lab)]

rose—

[Greg Clark]

I will give way first to another west midlands MP, the hon. Member for Birmingham, Northfield (Richard Burden).

[Richard Burden]

Will the Secretary of State recognise the real concerns expressed to him by the automotive industry about the contradictory and confused signals coming out of Government in relation to fiscal policy and vehicle excise duty? Is there not something wrong when the system as it is at present penalises most the cars that are the cleanest and most CO₂ efficient? In the next few months, as he and his colleagues consult the industry on the introduction of the worldwide light vehicle test procedure, will he ensure that such perverse incentives do not continue into the next financial year?

[Greg Clark]

The hon. Gentleman makes an important point. The next generation of diesel engines are much more environmentally friendly and fuel-efficient than their predecessors, so to replace an existing old-style engine with a new one is a step in the right direction, and I have been very clear, as I think he knows, that diesel will have a role to play as we transition to a 100% emissions-free world. That is captured in the “Road to Zero” strategy on which we consulted the industry, and I know that he was involved in those discussions.

UK Automotive Industry: Job Losses

Richard Burden Excerpts

Tuesday 22nd May 2018 Westminster Hall

[Richard Burden (Birmingham, Northfield) (Lab)]

I start by declaring an interest; I chair the all-party parliamentary motor group, which receives support from the Society of Motor Manufacturers and Traders, the Motorsport Industry Association and the RAC Foundation. I congratulate my hon. Friend the Member for Warwick and Leamington (Matt Western) on his comprehensive tour of the challenges facing the UK’s automotive industry and his explanation of how this industry literally drives economic growth in this country.

In the short time I have available, I will focus on two areas, both of which my hon. Friend covered: first, the challenges of Brexit, and secondly the transition away from petrol and diesel production. As he said, when we have over 1,000 trucks coming in across the channel every day, delivering £35 million worth of parts to build 6,600 cars and 9,800 engines every single day, most of which then go back to the European Union by similar means, achieving frictionless trade post Brexit is vital to this industry. I simply do not see a way of doing that except by continued membership of a customs union.

My hon. Friend also mentioned regulatory alignment. Keeping the Vehicle Certification Agency’s ability to certify cars as safe for sale throughout the EU is key to the industry in this country. I ask the Minister what negotiations are going on to ensure that that is the case, and how he feels that could be achieved except through as close as possible a relationship with the single market.

On skills, a key part of the integration of the industry internationally, particularly across Europe, is the ability to transfer skills from one country to another. Frankly, the UK’s visa requirements all too often get in the way of that, but the integration is at its closest with our European partners. I ask the Minister what negotiations are going on to ensure that, post Brexit, it will still be possible to transfer those skills between the UK automotive industry and partners on the other side of the channel.

Very briefly, in relation to the transition away from petrol and diesel, there are three challenges: anxiety over the range of electric vehicles, price and infrastructure. I hope that the Automated and Electric Vehicles Bill will help to improve infrastructure, but I must say to the Minister that more needs to be done to ensure and to mandate interoperability of charge points. It makes no more sense to have differences on that than to have different domestic plugs depending on whether someone has a Dyson or a Hoover vacuum cleaner. What is being done to ensure that we can achieve on-street charging? In particular, what negotiations and what work are being undertaken to try to enable wireless charging? What are the Government doing to ensure that there is infrastructure in place not just for conventional electric vehicles, but for hydrogen-powered vehicles in the future?

My last point is on the transition. As my hon. Friend said, there is something wrong when the cleanest diesels are being hit the hardest. Of course, the UK’s air quality crisis means there must be a trend away from petrol and diesel in the future, but the real challenge is to get the oldest and most polluting diesels off our roads, and we will not do that by hitting the cleanest ones. What are the Government’s ideas for getting those older, more polluting diesels off the road? At the moment, the signals being sent out by Government are confused.

--- Later in debate ---

[Richard Burden]

Consumer incentives will have to be part of the package that we hope will incentivise the shift towards zero emissions. The Government have scaled back both the plug-in car grant and the grant available for the home charging of electric vehicles. Does that not send out a confused signal, if we are trying to encourage people to make that shift?

[Richard Harrington]

One of the issues is not reducing the amount of grants, but where the grants should go, which I am happy to discuss separately with the hon. Gentleman, as I need to make progress due to lack of time. There are questions: for example, should hybrid cars receive the same grant as all electric cars? I would be delighted to meet him to talk this through, formally or informally.

I want to stress the importance that the automotive industry has to us with regard to the future. My hon. Friend the Member for Chichester (Gillian Keegan), while stressing frictionless trade, mentioned Rolls-Royce in her constituency and how it might appear as a small blob on a map compared to vast production, but it is critically important to the country and the local economy. I would be happy to accept her kind invitation to visit with her.

Investment generally in the UK auto industry is important to us. The industrial strategy and landmark automotive sector deal show how the Government can work with industry at the forefront of new technologies, to ensure that we remain the destination of choice for future investment decisions. There was good news, which hon. Members have mentioned, about the Luton plant with the Vivaro vans. Toyota announced that it will build the next generation Auris in Derbyshire. Those decisions are not to be sneered at, but are important. While I accept that decisions are made over a long period, I think that 10-year decisions for any significant investments are also important, but they can be pulled. Like any decisions, a company can decide to do that at the last minute for whatever reason it wants—for example, if it is short of money or if there is uncertainty in the market or points are raised about Brexit. Although they are long-term decisions, they are not decisions until they are finally made. BMW’s investment in the electric Mini and Nissan’s investment in Sunderland mean that since 2016, this country has won every single competitive model allocation decision by major car manufacturers. That does not mean we can take it for granted.

I would like to speak for an hour on the EU exit issue. I cannot, however, due to your quite rightly ruthless chairing, Mr Bone. The Government have reached an agreement on the terms of the implementation period, but we have to plan for all scenarios. I have a lot of confidence that we will leave with a deal and that a no-deal scenario in March 2019, which I think would be disastrous for the automotive industry—I am happy for that to be on record and will defend it to anybody—is significantly less likely. I hope that it is totally unlikely. I hope that it does not happen and I believe that it will not happen. There needs to be a competitive market as part of a European-wide industry. It has been a huge success. It was Mrs Thatcher who persuaded many of the Japanese firms to invest here, because of the market that they would be involved in. Whatever hon. Members’ different views about Mrs Thatcher are, I think that they will all agree that that has been a good thing for the country.

Our vision for the UK is clear. We are seeking a comprehensive solution, which includes most of the things that the industry wants, such as vehicle standards, one series of approvals and simple, frictionless movement for parts and labour, where it is required in the industry. We are pleased that the Government are producing a White Paper, which will set out in detail the UK’s position on a future relationship. I think that it will be significant and show the exact terms of the relationship we are seeking with the EU and our preferred option for the future customs relationship, providing detail on precisely these issues, such as tariffs, rules of origin and mutual recognition, which are important to the industry.

I am happy to take up this discussion afterwards. I am meeting the hon. Member for Ellesmere Port and Neston (Justin Madders) and others later today, and I am happy to meet any hon. Member to talk in more detail about this complex issue. In conclusion, hon. Members should know how strong the automotive sector is for us. We are a strong manufacturing nation. I believe that we will be a lot stronger. I thank everyone for their attention today.

GKN

Richard Burden Excerpts

Tuesday 24th April 2018 Commons Chamber

[Greg Clark]

I will indeed, and I am grateful to my right hon. Friend, who speaks with considerable authority not just as a former MOD Minister, but as an ex-serviceman. Defence considerations are important, and I work closely with the MOD, which has provided a comprehensive assessment. That is the proper basis on which those with expertise in such matters can say what is required to safeguard national security, and I promised this House that I would abide meticulously by the expert advice that I receive. I am glad that I have had access to that expertise and have made my decision based on it. Of course, when it comes to considering the future opportunities for this company, our engagement through the industrial strategy is as important in the defence sector as it in the automotive and civil aerospace sectors.

[Richard Burden (Birmingham, Northfield) (Lab)]

The Melrose takeover of GKN was approved by 52% to 48% after 20% of the company had been snapped up by hedge funds. The Secretary of State has heard calls from both sides of the House for those with short-term interests to be excluded from making decisions on takeovers and for the public interest test to be expanded to include questions about research and development. He has rejected those calls today, but he says that he keeps matters under review. What form will his review take, and when does he expect it to report?

[Greg Clark]

On the hon. Gentleman’s first point, I have said to many colleagues in the House that when it comes to shareholdings, every purchaser in the latter stages has bought from a longer-term shareholder, who has in effect expressed a judgment on the company. This Government, previous Governments and this House have looked carefully at the rights of different classes of owners and have concluded that the hon. Gentleman’s suggestion would not be the right reform. However, he knows me well and I will of course consider the assessment of the conduct of this bid, but it would be wrong to mislead him by saying that I have formed a different view. I will take an objective view of the conduct of the bid, as will others in the House. The grounds for intervention are specified in the Enterprise Act 2002, which reflects the requirements across the European Union that every member state must apply.

GKN: Proposed Takeover by Melrose

Richard Burden Excerpts

Tuesday 27th March 2018 Commons Chamber

[Greg Clark]

I agree with the hon. Gentleman, who knows the industry well and with whom I have discussed this matter. That is why I consider it important to request and advise the company to be clear about its commitment to research and development. In its reply to me, it has made some statements about that, which he and others can evaluate, along with some specific commitments about the level and nature of R&D. His description of the need for such a commitment to research and development is absolutely right.

[Richard Burden (Birmingham, Northfield) (Lab)]

Most of the undertakings that Melrose has given in answer to the questions that the Secretary of State put to it will expire after five years. As the Secretary of State has already heard, lead-in times for the aerospace and defence industries can be five, 10, 15 or 20 years, and Airbus has said that Melrose’s business model may threaten its ability to continue to be a customer of GKN. Does the Secretary of State consider the undertakings given by Melrose to be satisfactory or sufficient answers to the questions he has asked?

[Greg Clark]

It is not for me to evaluate the competing bids, given that I may have a quasi-judicial role in determining whether to intervene. However, I thought it was right to set out the areas on which I would invite the bidder to state its intentions so that those intentions are clear not only to shareholders but to this House, including the hon. Gentleman, and members of the public, and they can make their own assessment.

GKN: Proposed Takeover by Melrose

Richard Burden Excerpts

Thursday 15th March 2018 Westminster Hall

[Richard Burden (Birmingham, Northfield) (Lab)]

I thank my hon. Friend the Member for West Bromwich West (Mr Bailey) for securing this important debate. I echo the serious concerns that he and the hon. Member for Redditch (Rachel Maclean) raised about the bid for the proposed takeover by Melrose of GKN. GKN employees raised similar concerns when I recently met them at a lobby organised by Unite the union just a couple of weeks ago, and they are echoed in my constituency, where GKN Aerospace employs 220 people and is a world leader in commercial and military flight-deck transparencies. It provides toughened glass for flight-deck windows, and specialist safety glass to more than 50 programmes. There is no better illustration of why this takeover bid has national security implications than GKN Aerospace’s military involvement at Kings Norton.

I do not need to remind the Minister of the importance of the UK’s aerospace industry. That is why we need to take the concerns raised by the industry seriously. ADS, the leading organisation representing the aerospace sector, warned that what happens to GKN is of critical importance to the wider sector. My hon. Friend the Member for West Bromwich West rightly mentioned the unprecedented intervention of the chief operating operator of Airbus, who said yesterday:

“It would be practically impossible for us to give any new work to GKN under such an ownership model when we don’t know who will be the long-term investor.”

GKN is also a key strategic player in the automotive sector. Driveline does pioneering work on components for the ultra-low-emission vehicles of the future. I am aware that GKN’s management is proposing to split off that part of the company through the merger of Driveline and the United States firm Dana. On the positive side, there is the prospect that that will create an engineering powerhouse in the automotive sector on a global scale. I very much hope it achieves that prospect, but I do not want to be starry-eyed about it. Ministers should seek assurances from GKN and Dana about the long-term commitment of the new merged company to the UK, including on jobs and our research and development base.

Also, if GKN Aerospace is left as a stand-alone company, I endorse west midlands industry analyst Professor David Bailey’s call—my hon. Friend is right to pay tribute to his work on this issue—for the Government to consider taking a golden share to protect the public interest in the company for the long term.

None of that makes me any warmer about the Melrose alternative. Melrose claims—the hon. Member for Redditch mentioned this—that it will

“return GKN to be an engineering and manufacturing powerhouse”,

but its track record of taking over and selling on companies does not give me confidence that its takeover bid is in the interests of the long-term future of GKN or British industry, whether in the aerospace or automotive sectors. That is why there is such cross-party opposition to the takeover bid in this House. I am pleased that Birmingham City Council’s leader, Councillor Ian Ward, and its cabinet member for jobs and skills, Councillor Brett O’Reilly, have warned about the consequences of the Melrose bid for the industrial base of Birmingham and the wider west midlands. I am pleased that they have been joined by the West Midlands Mayor, who has added his voice on the subject.

Industry analysts have observed that such a takeover bid would not be allowed to go ahead in France or Germany. That is yet another reminder, if we needed one, of why the UK’s takeover laws need urgent reform, including the public interest test, against which takeovers are assessed, and the majorities needed to approve takeovers. Why cannot we require a majority of 75% in this country, as Germany does? We must ensure that institutions whose interests are intrinsically short-term, such as hedge funds, are not able to decide on issues that affect the long-term future of key, strategic companies in our economy.

That is for the future, but GKN’s extensive role in the UK defence industry indicates, as my hon. Friend the Member for West Bromwich West said, that this takeover bid raises national security issues, which means that the Government already have the grounds and the responsibility to intervene under section 58 of the Enterprise Act 2002. No doubt the Minister will say that, because the Secretary of State has a quasi-judicial role on these matters, he is prevented from saying much today, but I put this to him: it is not what Ministers say about this takeover bid that is important; it is what they do. They should intervene and block it.