7 Stewart Hosie debates involving the Department for Business, Energy and Industrial Strategy

Mon 14th Mar 2022
Mon 7th Mar 2022
Economic Crime (Transparency and Enforcement) Bill
Commons Chamber

Committee stage: Committee of the whole House & Committee stage
Tue 17th Nov 2020
National Security and Investment Bill
Commons Chamber

2nd reading & 2nd reading & 2nd reading: House of Commons & 2nd reading
Tue 28th Nov 2017
Budget Resolutions
Commons Chamber

1st reading: House of Commons

Professional Qualifications Bill [Lords]

Stewart Hosie Excerpts
Owen Thompson Portrait Owen Thompson
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I think the key word in that intervention is “agreements”. The Scottish Government, or within the European set-up the UK Government, would agree these frameworks with Europe. In this situation, the Scottish Government, and the Governments of Northern Ireland and Wales, have no say in what is imposed by this Westminster Government.

The truth is that there is nothing exceptional or even particularly noteworthy about a requirement for UK Ministers to seek such consent. It has been requested by the relevant Committees of the Scottish Parliament, confirmed by a vote of the Parliament as a whole, and raised multiple times in this place. It is not worth overriding the Sewel convention—something extremely serious which has happened on only four occasions, all of them directly related to major EU exit legislation. That makes one wonder if the Government are content to undermine the Sewel convention to the point at which it is no longer even a convention. Seeking consent would constitute little more than recognising devolved responsibilities and respecting the UK constitution, so the Government have some serious explaining to do to the Scottish Parliament if they go ahead with overriding Sewel yet again.

This farce has brought the Scottish Government to a point at which they simply could not recommend that the Scottish Parliament give the Bill its consent, and that should not be taken lightly. That said, I am heartened that we have a new clause before us—tabled by the hon. Member for Ceredigion, albeit not to be pressed to a Division—that could deal with the issue. It changes the consultation requirement to a consent requirement, and removes the procedure by which the Government could ignore devolved views and simply report to the House on why they did so. I sincerely hope that the Government will look at the new clause seriously. This is not political point-scoring; it is about protecting the constitution as it currently exists. That is evidenced by the fact that the Law Society of Scotland supports the argument that I am advancing today. The Government have assured us time and again that they have no intention of overriding devolution, so why not put it in writing instead of relying on a pinkie promise?

The Bill falls into a pattern of power grabs and disdain for consent, from Brexit to the United Kingdom Internal Market Act, and little wonder, because it comes from a Government led by a man who called devolution a disaster. This disdainful attitude to UK-Scottish relations damages the UK Government’s claims that they welcome early engagement on the Bill. It also severely undermines their commitments to recently agreed intergovernmental arrangements. I hope that the Minister will reflect seriously on the unnecessary damage that the Bill will do to devolution in its current form.

Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
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On the point about the damage that the Bill could do, is there not a point of principle at stake? This Government appear to be putting administrative utility ahead of devolved democratic considerations enshrined in various bits of Scotland Act legislation that should not be overridden lightly, particularly on matters such as professional qualifications.

Owen Thompson Portrait Owen Thompson
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My right hon. Friend makes an excellent point, and I absolutely agree. Of all the things to pick an argument over, why create this situation over something on which we broadly agree and are actually on the same page? It is not too late. My right hon. Friend is not pressing his amendment to a vote, but the Government could still accept new clause 5 so that we could fix this situation and deal with it. I sincerely hope that the Minister will prove my concerns wrong.

Angela Eagle Portrait Dame Angela Eagle
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Will the Minister give way?

Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
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Will the Minister give way?

Stewart Hosie Portrait Stewart Hosie
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Schedule 2, paragraph 6 describes a beneficial owner as meaning someone, for example, who

“has the right to exercise, or actually exercises, significant…control over”

an “entity”. However, part 4 of schedule 2—on beneficial owners exempt from registration—goes on to describe such a person as someone who has

“the right to exercise, or actually exercises, significant influence or control over”

an “entity”. It may be that that apparent confusion is dealt with in part 3 of schedule 2, which deals with an entity

“subject to its own disclosure requirements”,

but it is not at all clear whether someone has to be a registrable beneficial owner, or whether they are exempt for precisely the same criteria.

Paul Scully Portrait Paul Scully
- Hansard - - - Excerpts

I thank the right hon. Gentleman for that point; it comes back to something that was said in the previous debate about persons of significant control, which I did not address at the time. However, I will take that point away and discuss it with the right hon. Member for Barking (Dame Margaret Hodge) and others to make sure that we can get any drafting on that exactly right.

Edmonton EcoPark: Proposed Expansion

Stewart Hosie Excerpts
Wednesday 9th February 2022

(2 years, 5 months ago)

Westminster Hall
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

This information is provided by Parallel Parliament and does not comprise part of the offical record

Stewart Hosie Portrait Stewart Hosie (in the Chair)
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I remind Members to observe social distancing and to wear masks when they are not speaking.

Iain Duncan Smith Portrait Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
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I beg to move,

That this House has considered the potential environmental and health impacts of the proposed expansion at Edmonton EcoPark.

It is a privilege to serve under your stewardship, Mr Hosie. This debate does not directly have an effect on you, but I hope that you will find something interesting in it that may be applicable elsewhere.

This debate on the proposed expansion at Edmonton EcoPark, with its health and environmental impacts, is critical to those in my area and in my constituency, and I have an apology from the hon. Member for Edmonton (Kate Osamor), who is unable to attend. I want to read out a list of those who have signed letters and been involved in campaigning to stop the proposed incinerator, who include myself and the hon. Member for Edmonton; my hon. Friend the Member for Romford (Andrew Rosindell); my right hon. Friend the Member for Epping Forest (Dame Eleanor Laing), who has expressed her views on this; the hon. Members for Ilford South (Sam Tarry) and for Leyton and Wanstead (John Cryer); the right hon. Member for Islington North (Jeremy Corbyn), who is here; and Assembly Members Emma Best, Joanne McCartney, Siân Berry, Andrew Boff, Caroline Pidgeon, Zack Polanski and Caroline Russell. The AMs obviously could not be here. Some of the Members of Parliament could not be here either, but I thought it would be useful for that list to be read into the record. Those people are all in support of what I am about to say.

The problem is that, for some years, I have been deeply concerned about the way in which the process has been going. The incinerator that was built originally is about to be significantly increased in size. This is a cross-party issue, not one that divides along normal party lines, because it affects ordinary people in the constituencies and areas to which I have referred. They are affected regardless of their political views. I have pretty much never come across a constituent who actually wants this project.

The incinerator sits like an eyesore just below my constituency but, because of the prevailing winds from the south-west, the whole constituency is hit by what comes out of the chimneys. The other day, I happened to visit a shopping centre nearby. It was a cold day and the plume engulfed us as it travelled across my constituency. However, it goes to others as well.

I pay tribute in all of this to the active local campaign group, Stop the Edmonton Incinerator Now, which represents the feelings of many of our constituents. Carina Millstone in particular, and others, have been active on this issue. That is a good sign of how local politics is alive and well and talking about real issues, rather than some of the stuff we sometimes get bound up in in this building.

The project does not represent good value for money, which is the key element of the argument that I am making. In almost everything else we do in the Government or Opposition, we ask whether what we are about to do is good value for money and, further down the road, if costs increase, whether it still represents good value for money. I do not think that the incinerator expansion is a good return for taxpayers in our constituencies. The costs have spiralled, almost doubling from the original £650 million to £1.2 billion now, and nothing has yet been built. The North London Waste Authority has already spent £4.3 million developing plans for the new incinerator. Everywhere, I and other Members have asked for a value for money review of the project, from the Public Accounts Committee right the way through to every single Department and pretty much every single Secretary of State—I do not think I have asked the Defence Secretary, but who knows. The fact is, I have tried to ask everyone.

In normal circumstances, with a budget of £1.2 billion, might someone not want to ask whether a project still represents good value for money? However, nobody seems to say that they will take responsibility for it in Government or local government. It appears that the only body that is capable of reviewing or changing the project is the North London Waste Authority itself. In a way, it sets the exam question and answers it for itself every time. That cannot be right. I hope that my right hon. Friend the Minister will give us some inkling as to whether the Government think that the project carrying on is right.

The high cost is a key reason why we should pause, review and ask fundamental questions about whether this is still the best course of action for our constituents. Let us look at overcapacity. The incinerator is already burning over 320,000 tonnes of waste that could be recycled and composted—just imagine that we are pressing ahead on that basis. Since the plans to expand were originally drawn up, waste generation has actually fallen, because most members of the public are reacting to the drive for recycling and taking greater care in what they do.

The NLWA had a long-standing goal of reaching a 50% recycling and composting rate by 2020, but it is currently still below 30%. If it had got to the 50% marker, there would be even less reason for the incinerator to be there for the local area, and the plan was that it was for the local area—north-west London. I am therefore concerned about the plans because they are no longer about north-west London. To make the project viable, we will now have to drag stuff all the way across London to keep this thing burning. Now we are going to have more traffic on the road, extra fumes and extra environmental damage—just to keep an incinerator going. Why are we so fixed on having this huge thing near my constituency—so much so that we have to drag waste from all over London and clog up the roads just to keep it going? If it does not have enough from the local area as it stands at the moment, what is its purpose?

There are serious health implications for our constituents if the expansion goes ahead. Some 700,000 tonnes of waste will be incinerated every year, releasing what we call ultrafine particulate matter over residential areas. The levels of air pollution over parts of my constituency are already dangerously high. I am informed by Plume Plotter, an independent organisation that plots the plumes of incinerators across the country, that today the plume from the incinerator is blowing right across the whole of my constituency, but particularly the north part, and across the other constituencies I have already named.

We already have many hotspots in my constituency where air pollution is above the World Health Organisation’s air quality guideline levels. Asthma UK and the British Lung Foundation have calculated that 100% of schools, GP surgeries and care homes in my constituency are in areas that are already above the recommended guidelines. Even before any attempts to expand the Edmonton EcoPark, air pollution is having a significant impact on the health of residents across the constituency.

Public Health England has shown that short and long-term exposure to air pollution has significant health risks, including reducing life expectancy and having an impact on lung function, which increases asthma cases and cardiovascular admissions—all extra costs in pure value for money terms, even if we do not think too hard about the terrible health implications.

Seventy NHS GPs from across north London wrote to the Prime Minister last year and said that the plans to expand the incinerator should be pulled. In their letter, they claim that the Prime Minister could save more lives by pulling the expansion than they will save in their entire careers. So here is a big dilemma: the Government tell me that they do not have the power to intervene, but it seems that the waste authority has an unlimited demand for money. Something has gone badly wrong in all this.

The environmental impacts are huge. The issue is that incineration captures only a small amount of carbon from the material it burns. We know that alternative waste disposal methods exist, such as mechanical biological treatment, steam autoclaving and anaerobic digestion. All those things are now being used elsewhere, but not here. Over all the years, we have remained wedded to the idea that we have to burn waste. The methods I have mentioned have all lowered carbon emissions, yet the waste authority continues to push for incineration. Most notable scientific advisers have said exactly the same and questioned the suitability of incineration as a method of waste disposal.

I remind right hon. and hon. Members that the Edmonton EcoPark is right in the middle of a residential area. It is not as though this is some industrial park; it is right in the middle of a very densely occupied residential area, which covers all the constituencies that I named. The chief scientific adviser to the Department for Environment, Food and Rural Affairs said that the UK should move away from incineration and find better ways to use the value of materials, rather than turning them into carbon dioxide.

This is meant to be a competitive bid, but it is not. It is now down to one bidder. In other words, it is a slam dunk—name your own price. Acciona, the company involved, won the contract with no competitors. The chief executive officer of Acciona acknowledged the other day that the proposed plant is significantly larger than it should be. The man who is building it now does not actually think it should be built. It is bizarre. Every day I look at this project and wonder whether this is a parallel universe. The CEO said at a panel event at COP26:

“The massive oversizing of the [Edmonton] plant is something that is beyond our control. It’s a specific issue of the plant.”

I have raised this issue with the Department for Business, Energy and Industrial Strategy, with Housing, with the Chancellor and even with the Prime Minister. Civil servants have said constantly that it is not feasible to intervene, but the North London Waste Authority, surely, somewhere along the line, needs to be held to account on all the points I have made, which I am sure hon. Members will add to. What more evidence do we need?

Here we have the intransigent, inflexible, arrogant North London Waste Authority—and I mean arrogant, because at hearings it has just swept evidence from doctors and scientists to one side—refusing to budge on a policy that is clearly wrong and that is failing. It is a shameful state of affairs when a public body can no longer be held to account, because it no longer represents what the public want.

When something goes so badly wrong, the Government have to look at it again and ask how it can be that, amidst spiralling costs, health damage and pollution issues, we still plough ahead with a technology that is no longer needed and that will damage people’s lives in my constituency and others. I hope that my right hon. Friend the Minister will be able to answer those questions.

Stewart Hosie Portrait Stewart Hosie (in the Chair)
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Before I call the next speaker, I would just say that if the Back-Bench Members could contain their remarks to around eight minutes we will have plenty time for the Front-Bench speeches. I call Jeremy Corbyn.

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Alan Whitehead Portrait Dr Whitehead
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Indeed. It is more or less the same thing.

Stewart Hosie Portrait Stewart Hosie (in the Chair)
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Order. I hope that the hon. Gentleman is coming close to the end of his remarks. I want to leave time for the Minister.

Alan Whitehead Portrait Dr Whitehead
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Indeed, Mr Hosie, I am approaching the end of my remarks and I am guided by your instruction.

There are modern techniques that can deal with waste. My first plea to the North London Waste Authority is to think about those new techniques in a positive way and not simply decide to take the same old tried and tested routes. There are so much better ways of doing it. My second plea is that, if the North London Waste Authority decides to have a review of the matter, the Government will support that. I know that the right hon. Member for Chingford and Woodford Green has written on several occasions to request the Government’s support for some of the new measures that can deal with waste and resource in a different way.

We have the low carbon future to think about. We have got to get waste and resource management techniques in place that address that, either through carbon capture and storage or new methods of collection and dealing with waste. I am certain that the current proposal, should it go ahead, will not stand the test of the future. We should have our eyes on that future and together make sure that the waste arrangements for north-west London are fit for it rather than harking back to the past.

Ethnicity Pay Gap

Stewart Hosie Excerpts
Monday 20th September 2021

(2 years, 10 months ago)

Westminster Hall
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

This information is provided by Parallel Parliament and does not comprise part of the offical record

Stewart Hosie Portrait Stewart Hosie (in the Chair)
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Before we begin, may I encourage hon. Members to wear masks when they are not speaking? This is in line with the current Government guidance and that of the House of Commons Commission. Please also give one another and members of staff space when seated and when entering and leaving the room.

Elliot Colburn Portrait Elliot Colburn (Carshalton and Wallington) (Con)
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I beg to move,

That this House has considered e-petition 300105, relating to ethnicity pay gap reporting.

It is a pleasure to serve under your chairmanship, Mr Hosie. I thank all right hon. and hon. Members for expressing an interest in this afternoon’s Petitions Committee debate. The e-petition is entitled “Introduce Mandatory Ethnicity Pay Gap Reporting”. Let me begin with the text of this petition, which states:

“Much like the existing mandatory requirement for employers with 250 or more employees must publish their gender pay gap. We call upon the government to introduce the ethnicity pay gap reporting. To shine a light on race/ethnicity based inequality in the workplace so that they can be addressed.

Currently there is a lack of data available in gauging the ethnicity pay gap in the workplace. Introducing these measures will allow employers to be held accountable in closing the gap where there is disparity. In order to achieve a fairer workplace publishing this data is one of the next steps to knowing how extensive the issues are from a race and ethnicity perspective and not just through the lens of gender.”

The petition closed with 130,567 signatures, including 355 from my Carshalton and Wallington constituency. At the outset of today’s debate, I thank the petition creator for taking the time to talk to me about why they started the petition. I also thank organisations such as NatWest, Lloyds and Barclays, which took the time to speak to me about their experience of ethnicity pay gap reporting in their own organisations—I will talk about that later. I also thank the independent statistician Nigel Marriott for his very helpful briefing note and his thoughts, which Members can view on his website.

There have been many calls in support of ethnicity pay gap reporting, and that request is not something new or born out of this petition; it has been around for some time. Reporting in March 2021, the Commission on Race and Ethnic Disparities also found that pay gap reporting is a potentially useful tool. But if we cast our minds back to 2018, when my right hon. Friend the Member for Maidenhead (Mrs May) was Prime Minister, she launched a consultation on this issue, and the stated aim of the consultation at that time was to help employers to identify barriers and enable a fairer and more diverse workplace. That move was welcomed at the time by both the CBI and the Equality and Human Rights Commission, along with businesses, charities, academics and others.

All of these, including the petition creator and those who briefed me prior to today’s debate, made the case that ethnicity pay gap reporting, much like gender pay gap reporting, could help businesses to understand their workforce better, identify barriers to equality and create action plans to tackle those barriers. And of course it would help to inform Government as to the reality of pay gaps and enable them to consider the actions that they can take if needed.

I am sure that colleagues from across the Chamber will go into greater detail about the benefits of pay gap reporting throughout their contributions, so I will not steal everyone’s material in my opening speech, but I would like just to draw attention to an example of an existing system of pay gap reporting in the UK, which of course relates to gender. In a blog post published by the London School of Economics in March of this year, it was found that gender pay gap reporting has been effective in its aim of narrowing the gap. The difference between men’s and women’s pay had shrunk by just under a fifth during the relevant time. It has affected employers because, according to the blog post, female workers

“show a strong aversion to high pay-gap employers, suggesting that organisations have felt compelled to make changes in order to attract and retain workers.”

One would hope that the same would apply in the case of ethnicity pay gaps. When speaking to some of these organisations, such as the three large banks that I mentioned in my opening remarks, it is very clear that this reporting has taught their businesses a lot and has helped to inform their action plans to create more equal workplaces. However, as the Government identified in their response to this petition, it is true that there are some complications to the reporting that will need to be overcome before proposals can be brought forward. Those have been very ably explained by Nigel Marriott in his briefing note, and I will touch on a few of them. I must stress that they are not arguments against ethnicity pay gap reporting, but an identification of what the Government will have to consider before making any proposals.

The first thing to mention is that, while it might seem easy to go straight to gender pay gap reporting as the template for ethnicity pay gap reporting, it is not as simple as replicating that, for several reasons. Gender pay gap reporting is supported by the fact that it is largely binary—not exclusively so, but given how big that discussion is, we will save it for another day—and more or less evenly distributed across the country, whereas the ethnicity breakdown in the population can alter drastically depending on where someone lives and can be made up of a much larger number of categories. That then presents a number of data protection issues, because data of that kind must never inadvertently reveal the identity of the person it reports on. For example, a small business in a predominantly white community could inadvertently reveal information about employees’ pay for just one of their employees.

Then there is the difficulty of how to disaggregate the data in the first place: what categories or descriptions should be used, and how do people truly reflect their employees’ wishes and how they prefer to be identified? That is made all the more difficult when we consider the issue of disclosure, as it is estimated that something between 5% and 40% of employees do not disclose their ethnicity.

Again, these are not arguments against ethnicity pay gap reporting, but it is important to raise these problems here and consider how we can overcome them in order to bring forward proposals. It may be that we look only to businesses with more than a certain number of employees, or report on an industry rather than at individual employer level. As my hon. Friend the Minister and I are both London MPs, I might suggest to him that London is the perfect place to trial such a scheme before rolling it out countrywide.

Either way, I hope the Government are considering this matter carefully. I note from their written response that they will look to publish their analysis of the 2018 consultation later this year, so any further information on the date of that publication and any plans to bring forward proposals would be very welcome. I will end my remarks there, Mr Hosie, and hand over to the rest of my colleagues.

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Paul Scully Portrait Paul Scully
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I think the hon. Lady is mixing up two things, because the data I talked about was specific to the civil service. It was specifically to make the point that we can read different things out of statistics. What I was quoting about racism is not my view necessarily; it is the view of the report by the Commission on Race and Ethnic Disparities, which was tasked with looking at this and other issues. We are committed to taking action on ethnicity pay reporting, but we want to ensure we are doing the right things to genuinely help move things forward. Determining what it makes sense to report on and what use that data may be put to is key. It is far from straightforward.

The commission’s report and our post-consultation work with businesses and other organisations identify a wide range of technical and data challenges that ethnicity pay reporting brings. First, there is the challenge of statistical robustness. In 2019, the Royal Statistical Society argued for a minimum sample size per category of at least 100 to draw valid conclusions. Its purpose was to ensure that the calculation of a pay-gap statistic would be reasonably reliable when interpreted by non-statisticians, who would not likely be able to appreciate or measure the extent to which the statistic is affected by random chance.

The second challenge, as we have heard by my hon. Friend the Member for Carshalton and Wallington, is anonymity. It should never be possible to identify any individual from ethnicity pay-gap analysis. That means a sample size must be large enough so that it is not possible to link a number of individuals of the same ethnicity to a particular pay band. The third challenge is data collection and business burdens. A study of more than 100 organisations by PwC in August 2020 found that almost 35% did not collect any ethnicity data, with half identifying legal and GDPR requirements as barriers to collecting the data. Among the organisations that did collect data, around half said they would be unable to publish their ethnicity pay data due to poor or insufficient data driven by low response rates.

Fourthly, there is reporting on a binary basis. One way to mitigate low employee declaration rates is to combine all individuals from an ethnic minority background into a single group for reporting purposes. However, such an approach risks masking the significant variations in labour market outcomes between groups and therefore the relevance of any action plan. Finally, there is the challenge of skewed results. Reporting at a more granular level risks results being skewed by particularly large or small pay values because of low numbers of particular ethnic groups. If an employer with 300 people employs black individuals in the same proportion as the wider population—3% of England and Wales’ working population is black according to the Office for National Statistics—then their average pay would be calculated from just 9 individuals, and that assumes 100% declaration rates.

The uneven geographical distribution of specific ethnic groups complicates the issues further. In Wales, only 0.7% of the working-age population is black. It is therefore much harder to produce reliable and actionable statistics from relatively few data points. All this create complex challenges when deciding how best to take forward ethnicity pay reporting, but the Government are determined to take steps to help employers tackle race and ethnic disparities in the workplace. I think we would all agree that key to this endeavour is obtaining a good understanding of the issues that may be driving the disparities and, most importantly, developing meaningful action plans, based on that understanding. The Ruby McGregor-Smith report, the Government’s consultation on ethnicity pay reporting, and the commission’s work all make an important contribution to both the national conversation about race and the Government’s efforts to level up and unite the whole country.

The Government are now considering in detail what we have learned from the consultation on ethnicity and pay, our further work and the commission’s report. We are assessing the next steps for future Government policy, and we will set out a response in due course. Once again, I thank hon. Members who have contributed to the debate. It has been a valuable discussion.

Stewart Hosie Portrait Stewart Hosie (in the Chair)
- Hansard - -

I call Elliott Colburn for a brief winding-up speech.

Elliot Colburn Portrait Elliot Colburn
- Hansard - - - Excerpts

I think I have half an hour, Mr Hosie, but you will be relieved to know that I will not take it all.

Stewart Hosie Portrait Stewart Hosie (in the Chair)
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I will be the judge of that.

Elliot Colburn Portrait Elliot Colburn
- Hansard - - - Excerpts

I thank all right hon. and hon. Members for their contributions to this Petitions Committee debate, and I thank the petitioners for allowing us the opportunity to discuss this important topic this afternoon. The key theme in a lot of Members’ contributions was the importance of getting good data and creating evidence-based policy as a result, which is absolutely what we want to see. Of course, skin colour should not be a predeterminate of pay, and that is what we all want to see tackled in this country. I look forward to hearing more from the Department about the response to the consultation and the next steps, as I am sure the petitioners do.

Question put and agreed to.

Resolved,

That this House has considered e-petition 300105, relating to ethnicity pay gap reporting.

National Security and Investment Bill

Stewart Hosie Excerpts
2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020

(3 years, 8 months ago)

Commons Chamber
Read Full debate National Security and Investment Bill 2019-21 View all National Security and Investment Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts
Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

My hon. Friend raises an important point. As he will know, and I am sure appreciate, I am not going to be able to set out every single test that we will apply when it comes to a national security assessment. The application of the tests will, of course, be based on information that we garner from across Government. He can be certain that in using the powers, the Government will act in a quasi-judicial fashion, we will have regard to the statement of policy that has been published, and we will act, again, in accordance with public law principles of necessity and proportionality. I also made the point earlier that any decision can, of course, be challenged by an affected entity.

Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
- Hansard - -

Before the Secretary of State moves on, will he give way?

Alok Sharma Portrait Alok Sharma
- Hansard - - - Excerpts

I will move on, if that is all right with the hon. Gentleman.

These powers are narrowly defined and will be exclusively used on national security grounds. The Government will not be able to use these powers to intervene in business transactions for broader economic or public interest reasons, and we will not seek to interfere in deals on political grounds. They will not and cannot be used for wider economic tests. The Government already have proportionate powers in statute for intervention on the grounds of competition, financial stability, media plurality and combating a public health emergency. Going further than that would risk chilling and destabilising investment in the United Kingdom and reducing growth opportunities and jobs.

The UK has the lowest corporation tax rate in the G20. We are rated one of the most innovative countries in the world, ranking fourth in the 2020 global innovation index. We are one of the top 10 countries in the world for ease of doing business. We have a world-leading research and development environment, and the stability of our institutions, tax system and legal framework are respected globally. It is because of our pro-market approach that the United Kingdom has become one of the premier places to invest in the world, and I certainly would not want to do anything to change that. The powers we seek in the Bill support and enhance our pro-business environment, supporting economic growth, prosperity and jobs across the United Kingdom, while enhancing security for our country. I commend the Bill to the House.

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Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
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I start with my ISC hat on because it was the ISC that first investigated UK Government powers and processes for scrutinising foreign investment in sensitive areas of UK industry, found them lacking and called for more powers. In its 2013 report, “Foreign involvement in the critical national infrastructure”, the Committee looked into the issue of

“foreign investment in the Critical National Infrastructure (CNI)”

and concluded:

“The difficulty of balancing economic competitiveness and national security seems to have resulted in stalemate.”

That is not a criticism and it is not meant to be contentious. This issue has arisen over the past few years and most, if not all, advanced economies are now grappling with it. I therefore welcome the Bill, in principle, or certainly a measure like it.

While on the subject of the ISC, I offer the apologies of its Chair, the right hon. Member for New Forest East (Dr Lewis), who is self-isolating having been contacted by the English version of Trace and Protect, and is sadly missing this debate.

The Bill is designed to bring additional scrutiny of foreign investment that may have an impact on national security. I say from the outset that not only is there nothing wrong with having a national security eye on investments in critical areas—it is in fact absolutely vital.

Currently, as we have heard, the ability of the Government to scrutinise investments on national security grounds contained within part 3 of the Enterprise Act—that is, the mergers provisions—is rather limited. In practice, it means that the UK Government are unable to scrutinise on the grounds of national security without the investment first meeting competition concerns or, in very limited circumstances, a public interest test. We know this concern and similar concerns are shared globally. A number of other countries have been tightening up their investment security regimes in response to changing national security-related threats, enabling technology, the loss of intellectual property and the increasing crossover between sectors, which I may touch on later. The Committee on Foreign Investment in the United States is largely seen as setting the standard. We have also seen tightening in Japan, Canada, Sweden, Germany and France at least, with the Japanese regime extraordinarily strict, in some cases limiting ownership to barely 1% of active management or, more accurately, to barely 1% of a company in certain circumstances.

In the UK Government’s proposals, if both the trigger and the threshold are met, the individual investment can be called in by the Secretary of State for approval. The powers can be retrospective; it can be called in after it has occurred. However, the time to conduct the national security assessment—30 days, with potentially an extra 45—might be deemed to be a little short, given how shrewd, or clever, certain institutions, organisations and individuals are at hiding genuine beneficial ownership. One thinks how long it took to find where beneficial ownership existed for some entities in the UK. Were it not for the Panama papers, we would probably still never know. I therefore question whether that maximum of 75 days is actually sufficient.

The Bill adds a mandatory notification scheme whereby investment interests in certain sectors and asset types—which I do not demur with—must be pre-emptively or retrospectively declared, but it removes notification of call-ins from the competition authority to a direct serve from the involved parties. In the interests of transparency, I seek clarity from the Government on the reasons why notification via the CMA is being removed.

The Bill also introduces new powers to increase screening in respect of health and preventing hostile acquisition through strategic buying of health supplies, for example. I welcome that, but the scope of activities that might be caught is very wide. There may be a good reason for that, but it is worth exploring. The statement of policy intent describes the core areas as including things such as advanced technology, which is perfectly reasonable, but it also contains a much wider definition of national infrastructure. The impact assessment for the Bill estimates that the new regime would result in between 1,000 and 1,830 transactions being notified per year. That is very specific and it is also an eye-watering number, given that only 12 transactions were reviewed on national security grounds since the current regime was introduced 17 years ago. The necessary resources, as the right hon. Member for Doncaster North (Edward Miliband) said, and access to intelligence agency assessments, as the right hon. Member for North Durham (Mr Jones) said, must be available in the proper manner in order to carry out the work.

Kevan Jones Portrait Mr Kevan Jones
- Hansard - - - Excerpts

Does the hon. Gentleman share my concern that the Bill sets out a voluntary reporting and a notification system, but it is not clear how the security services enact any concerns they may come across into this system? I shall be making the point that I do not think this should sit within the Department for Business, Energy and Industrial Strategy. Does he have concerns on that issue?

Stewart Hosie Portrait Stewart Hosie
- Hansard - -

I absolutely agree that these services should not sit within another Department. I am not sure whether it would be appropriate for them to be able to request call-ins directly, not least because where the information came from would then become abundantly clear, but there must be a mechanism whereby information that an agency comes across can be fed in to the proper people in order for this call-in to happen.

It is also self-evident that Members considering this legislation need to have far more information to understand the reasons for the Bill and the changing nature of the threat it is designed to counter. We also need carefully to assess the impact the Bill will have on sectors and infrastructure, not just in the UK as a whole, but in the devolved Administrations and in the English regions, in the light of the future economic opportunities they see and the plans they are already putting in place. It is far too soon to seek assurances, but I hope the Minister will wish to take a little time just to convince himself that there are no unintended consequences, either for the UK or for the Scottish Government’s inward investment plans, when Government agencies of all sorts are out actively seeking investment in some of the areas that may be deemed to be critical national infrastructure. As an example, let me cite the whole of Scotland’s tech sector, but that of Dundee in particular. It now has a digital ecosystem that spreads out across academia and through gaming, software design and development, and data centres. Many of the component parts of that have cross-sectoral application, some of which, depending on who owns them and who wishes to use them, could certainly raise a national security concern, depending on how bits of tech are deployed. How do we ensure collectively that the Bill does not impede growth or investment in such areas?

I also briefly wish to raise, at this early stage, some issues about implementation. The Bill is set to radically overhaul the UK’s approach to foreign investment, at a time of significant economic uncertainty. On leaving the EU, the UK Government cannot afford to get their global Britain approach wrong and suffer what has been described as the “chilling effect” on investment if this appears heavy-handed. So let me turn briefly to some of the possible implications and costs of these measures.

First, the impact assessment suggests a net cost to business of £43 million. Can the Government confirm whether that is the direct cost, or whether the figure includes the cost of lost investment? I suspect that it is the former because the latter is incalculable, but if the Government get this wrong, the true figure in lost investment, and the concomitant loss of output and productivity, could be substantial.

Secondly, the impact assessment suggests that microbusinesses are in scope. As the Secretary of State will know, some of those businesses develop high-tech, cutting-edge intellectual property, and their business models include selling tranches of shares to raise cash throughout the development and life of the business. What assessment has been made of how these measures might stifle that investment and growth?

The third point is specifically on universities and academia. Throughout the whole UK, universities all have incubators, start-ups, spin-outs and commercialisable research. What assessment has been made of their ability to continue to thrive if the measures in the Bill inhibit investment by proposed sales being called in—because word will get out—or even investment being put off because of the potential additional risk of those sales being called in? We do not yet quite know what the impact on academia would be. There are some wider concerns about the possible impact on essential investment in energy, particularly renewable energy, and the possibility of retaliatory action against UK investors overseas, but I think they can be explored later in the Bill’s progress.

Let me return to one particular issue. I said earlier that the impact assessment suggested notifications of up to 1,800 transactions a year. In clause 7(4)(c), the Bill describes a qualifying asset as

“ideas, information or techniques which have industrial, commercial or other economic value.”

I know that this is not the Government’s intention, but wielding a hammer or welding a pipe are techniques that have economic value, and my concern is that companies erring on the side of caution will refer or notify themselves when they need not.

I have three brief questions that were sent to me by the Photonics Leadership Group. I intend to ask these questions now because they will be typical of what many industrial and new tech sectors are asking. First, there will be a huge number of research groups and businesses for which this Bill is relevant. Has the Department for Business, Energy and Industrial Strategy considered the number involved, and is it ready for the volume of submissions? Secondly, the information that has been sent out to relevant groups includes a flow chart, which suggests that businesses currently engaged in relevant business have from 12 November until this Bill is passed to register. This would suggest that the process is live already, but there appears not to be a template to allow businesses to contact BEIS and ask the question. Thirdly, since many in the sector cannot rely on foreign investment, how are the Government planning to replace this should there be the chill on investment that some fear?

I am pleased the Secretary of State said that the assessments would be based on information gathered from around and throughout Government, because I think we need to make our own geopolitical assessments. But the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) quoted the Henry Jackson Society. It would be unfortunate if we found that our assessments of which investments may or may not be aligned were being driven, pushed or prodded by someone else’s geopolitical assessment. I say gently to the Secretary of State that we need to guard against that to ensure that national security is protected, but that we do not have the chill on investment that is possible if we get it wrong.

--- Later in debate ---
John Hayes Portrait Sir John Hayes
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Yes, the Minister needs to explain how the Government’s arrangements for the new investment security remit interface and interact with the national security structures that already exist, such as the investment security group. There needs to be clarity about the process, as I described it a few moments ago.

Stewart Hosie Portrait Stewart Hosie
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Of course, it is not just about the formal structures, because of the fast-changing nature of the threat and the way in which technology emerges and develops. Perhaps we should have an annual debate in here, where we can think out loud about emerging technologies that may become a threat and, on the other side, those technologies that have become so redundant they are no longer a threat, to avoid them being pre-emptively given to the Government and clogging up the system.

John Hayes Portrait Sir John Hayes
- Hansard - - - Excerpts

That is an excellent suggestion from another member of the Intelligence and Security Committee. My goodness, we are here in force and working as a team, as you can see, Madam Deputy Speaker. It is important that the House considers these matters, as well as the Committees I mentioned which have a particular responsibility for dealing with these things and holding the Government to account.

The point was made earlier that the national interest and national security are not identical. But they are coincidental—they do overlap—as there is a point at which national resilience, or its absence, compromises national security. The Government acknowledge that in the scope of the Bill. They talk about critical national infrastructure, as well as technology sectors of various kinds. By the way, I first looked at this issue, Madam Deputy Speaker—this is not a widely known fact, but I am happy to share it in the privacy of this intimate gathering—as a Cabinet Office Minister, with the former Member for West Dorset, Sir Oliver Letwin. We looked particularly at the threats posed to core infrastructure, such as the energy sector. By the way, that threat is posed not only by hostile state actors, but other players who might choose to disrupt core activities, with extraordinarily damaging consequences for our citizens. The Government do look at those things, but historically I do not think they have done so systematically enough. I know my right hon. Friend the Member for Tunbridge Wells, who has a distinguished record in this area, will have had similar experiences to me when we, in turn, looked at energy as part of our ministerial responsibilities.

China has been mentioned. I do not want to speak about it at great length, but clearly the ISC is currently looking at China and will be considering these very subjects in relation to that inquiry. That will come as no surprise to the House or the Minister.

I said this Bill was necessary, but necessity requires a degree of precision and I have some specific questions that I hope the Minister will deal with, either in summing up or by writing to the ISC if he does not have time to address them today. In looking at a specific case, will the investment security unit be able to consider the cumulative effect of a particular business transaction? In other words, will it take into account whether past acquisitions in that sector, when combined with the case currently under consideration, will result in a cumulative threat to national security? Moreover, will the unit consider acquisitions that might result in an indirect threat, for example, through supply chains or managed service providers? This may well involve very small businesses; sometimes a single expert or a small group of experts will play a vital role, as component parts, in either a technology or an industry that is vital to our national security.

Funding Higher Education

Stewart Hosie Excerpts
Wednesday 28th February 2018

(6 years, 4 months ago)

Westminster Hall
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.

Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.

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Sam Gyimah Portrait Mr Gyimah
- Hansard - - - Excerpts

In the spirit of compromise, I agree that, yes, access should be not just about getting to university but succeeding when there and getting a well-paid job afterwards. If people do not get to university in the first place, the idea of succeeding when there and getting a well-paid job is purely academic, not to put too fine a point on it. There is clearly work to be done, but where we are now shows significant progress from where we were in 2010.

The review seeks to look at the whole higher education sector for post-18 education, including choice and competition in the market, how the funding system works and how HE and FE can be joined up, and the overlaps. That is particularly important. However, we are not waiting for the review; a significant number of reforms are under way, building on our successes.

We are in the process of implementing the Higher Education and Research Act 2017, and the new Office for Students, at whose launch I will speak later today, will be a strong voice for students and ensure minimum standards. The OFS director for fair access and participation will further drive social mobility. The teaching excellence and student outcomes framework will drive quality teaching—that is particularly important—and the reforms will facilitate further diversity, with new providers and shorter degrees delivered at lower cost. In fact, today my right hon. Friend the Secretary of State is publishing the first statement of Government priorities and guidance for the OFS. The Government are also publishing the results of recent consultations on the new regulatory approach, and the OFS is publishing the regulatory framework. That marks a key milestone in delivering our higher education reforms in that area. The review will build on all of that.

There are questions about the teaching grant, which will be looked at in the review, and whether new money will go in. As always, it is important to look at things within the constraints of the Government’s overall fiscal framework, and that will be considered alongside budget lines in wider education and our public spending.

There are issues around changing the system completely and whether we look at some kind of graduate contribution or graduate tax system. Obviously, those are all welcome suggestions. I would say they have been looked at by successive Governments over the years, but fresh thinking is welcome, and I welcome the fresh thinking that my hon. Friend the Member for South West Devon brought to the debate.

We have a higher education system that is the envy of the world, and many international students are queuing to come and study here, but the Government recognise that to deliver for students more needs to be done. My right hon. Friend the Secretary of State has said that the variability in fees that we expected has not materialised, and it is important to look at all the different ways in which universities operate. There were 534,000 students who accepted a place at university last year. They clearly do not all have the same desires, the same aspirations and the same needs, yet our university system gives all of them pretty much the same offer.

Stewart Hosie Portrait Stewart Hosie (in the Chair)
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Order.

Motion lapsed (Standing Order No.10(6)).

Budget Resolutions

Stewart Hosie Excerpts
1st reading: House of Commons
Tuesday 28th November 2017

(6 years, 7 months ago)

Commons Chamber
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Stewart Hosie Portrait Stewart Hosie (Dundee East) (SNP)
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It is always a pleasure to follow the right hon. and learned Member for Rushcliffe (Mr Clarke). I was struck by his discussion of his bus pass, state pension and winter heating allowance. It might be that the right hon. and learned Gentleman does not need these things, but if we begin to erode them and means test them, the problem is that those who do need them will not claim, and—I suppose this is an ideological position from the Scottish National party—we would then begin to erode social cohesion on other important matters.

I welcome much of what the Business Secretary says about the future economy, including on tackling long-term underinvestment in research and development, addressing the long tail of underproductive companies, recognising the importance of innovation, big data, the life sciences and the other sectoral areas he mentioned, and the absolute imperative for UK businesses to export more. However, the future economy cannot simply be about supporting new businesses with new products selling into new markets; it must also be about supporting businesses that are already here delivering for their customers, their shareholders and the economy, and particularly, as the right hon. and learned Member for Rushcliffe said, into the EU, which is a substantial market for the UK. So while I certainly welcome many of the specifics in the White Paper and what was said today, I make no apologies at all for talking about the impact of Brexit, which has the very real potential to undermine the good intentions of the plan.

I say that because the uncertainty created by the hard Tory Brexit plans is already harming the economy. The UK Government’s failure so far to secure a transitional deal is pushing many banks, in particular, and other companies to start looking to relocate to other parts of the EU for fear of being unable to trade freely there in April 2019. Indeed, the Bank of England has warned that 75,000 jobs might be at risk in the banking sector alone, and many of those may well move to the EU. It is vital that we remedy that, and do so quickly, as FinTech, which is mentioned in the White Paper, is undoubtedly one of the areas that ought to be able to make a positive contribution to the future economy of the UK. However, if we do not resolve this issue, meaning that banks’ head offices and decision-making functions go, I fear that FinTech and the ability to fund it will be subsequently reduced.

I also make no apology for saying that Brexit has the capacity to undermine the Chancellor’s plans for raising productivity, which we all agree will be vital if our future economy is to deliver success and prosperity for everyone across these islands. The UK is now at the bottom of the G7 for economic growth. The eurozone and other advanced economies are enjoying higher growth, as well as higher levels of consumer and business confidence. These plans and the money to be spent on them—some of the cash is substantial—might barely mitigate the damage of Brexit, rather than kick-starting the economy to power ahead, which we all hope they will do.

Let me put some flesh on the bones of that, because it is important. The OBR has slashed its forecasts for productivity, economic growth and pay growth. The new forecasts show that the economy is expected to grow at below its long-term trend of around 2% until well into the next decade. The downgraded OBR expectations lower significantly the predicted level of growth. Although the OBR previously said that growth would proceed at much the same pace as before the crisis, it has turned out to be much lower.

This goes back to something the Minister said as a throwaway. Borrowing will still be at £26 billion a year in 2022-23, but he said we want to live within our means. We all want to live within our means, but when we see a national debt of 87% on the treaty calculation, and when we see borrowing of £26 billion by 2022-23—the current account was supposed to be in balance or in surplus in 2015—I think we can say with some certainty that the Government have failed to deliver every single one of the targets they have set since they came to power, with a Tory Chancellor, in 2010.

Ed Davey Portrait Sir Edward Davey
- Hansard - - - Excerpts

Does the hon. Gentleman agree that the real story behind this Budget was the growth forecast, which will impact not only the borrowing he is talking about, but public spending and, frankly, the whole shape of the British economy and British society in the years ahead? Do we not need an urgent debate on how we really raise that growth rate? The industrial strategy was simply not up to that job, which is so tricky.

Stewart Hosie Portrait Stewart Hosie
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I agree with the first part of that intervention entirely. The big story from the Budget was that the growth figures were marked down over the entire forecast period that productivity per head was almost halved for that period and that pay growth was marked down, which has an impact on real people. As for a debate, we have been having debates about the productivity conundrum and growth since before I was an MP, and given that I am now about 110, that was some time ago. I suspect that we need to look at the work that has gone into the White Paper. Let us get behind the things we can support and make suggestions when we can improve things—my goodness, there are some we can most certainly improve—but we do not need to go back to the drawing board again.

I think that each and every one of us, if given a blank piece of paper, would come up with broadly the same plan with regard to fairness about investment, infrastructure, education, and supporting R and D and exports. I do not think that there is anything particularly new there. The question for me is: can we deliver that this time, or will this be to no avail if Brexit undermines the potential of any of these plans?

Angus Brendan MacNeil Portrait Angus Brendan MacNeil
- Hansard - - - Excerpts

Both Labour and the Conservatives recently voted in this House to come out of the customs union. That will increase trade barriers with 27 countries, as well as another 67 countries that rely on 38 to 40 other deals with the European Union, so we stand a very real risk of increasing trade barriers with up to 94 countries. Surely to goodness that is putting an already perilously placed UK in an even more perilous position? That was supported by the Labour and Conservative parties, hand in hand, damaging together.

Stewart Hosie Portrait Stewart Hosie
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My hon. Friend is right. Every single assessment that we have seen, starting with the leaked Treasury document of a couple of years ago, says that the worst-case scenario—if there are tariffs, other regulatory barriers and an immediate reversion to World Trade Organisation rules—is a 10% hit on GDP, full stop, before we start. I do not understand why anyone—even Tories, and certainly the bulk of the Labour party—voted to come out of the customs union. That was an idiotic thing to do. If we must leave at all, we should look to have the closest possible formal links, so that we maintain as much trade as possible on current terms.

Ed Davey Portrait Sir Edward Davey
- Hansard - - - Excerpts

Will the hon. Gentleman give way?

Stewart Hosie Portrait Stewart Hosie
- Hansard - -

I will in a little while.

The Resolution Foundation has reported that productivity growth in the 10 years to 2020 will be the lowest for 200 years. As a result, we have the worst economic growth forecasts that the OBR has ever delivered. Equally importantly, the forecast for the UK’s balance of payments current account as a share of GDP has also been downgraded significantly due to a slowdown in business investment and the deterioration of the UK’s net trade balance. That is expected to be a whole 1% deeper in deficit this year and next, and for the following year a 2% fall is predicted compared with the spring forecast.

We know that this is not a new problem. The Tory plans for post-Brexit policy—trade is vital if the future economy plan is to work—are delusional. The Tories aim to leave the single market, but apparently want to keep all the benefits of the club, while creating this preposterous “Empire 2.0” nonsense and signing trade deals across the globe. However, as my hon. Friend the Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) pointed out, the UK already has trade deals with almost 90 non-EU countries, besides the 31 other members of the European economic area, thanks to our membership of the single market and the customs union.

Ed Davey Portrait Sir Edward Davey
- Hansard - - - Excerpts

Will the hon. Gentleman give way now?

Stewart Hosie Portrait Stewart Hosie
- Hansard - -

In one second. These existing trade agreements will be vital if our economy is to thrive. I give way one more time.

Ed Davey Portrait Sir Edward Davey
- Hansard - - - Excerpts

I am very grateful to the hon. Gentleman. I was trying to tee him up before. Given the growth forecast and the shocking impact that the situation will have on people’s incomes and the public finances, is not now the worst possible time to be leaving the European Union, the customs union and the single market? Is this not the most disastrous economic decision, given the economic forecasts?

Stewart Hosie Portrait Stewart Hosie
- Hansard - -

Of course, leaving the world’s most successful trade body and access to half a billion customers, tariff-free, would be an idiotic thing to do at any point. The fact that we are doing it now—and, more importantly, unprepared—is key. I will say a little more about that.

The existing trade agreements that are being discussed are vital if our economy is to thrive. The Government have suggested more support for exporters to new markets, but that seems to be at the expense of the trade routes that companies already have. To put some flesh on the bones of the last intervention, the EU accounts for 43% of the UK’s goods and services exports, and 54% of imports. The UK Government have failed in their intention of starting to negotiate the future economic relationship with the EU at the same time as negotiating the divorce settlement. The delays in the first phase of the negotiations are deeply worrying and undermine the plan. We risk approaching a Brexit deadline without having concluded negotiations, and without a transitional arrangement.

In case anyone is in any doubt about how our friends in the EU view this, Federica Mogherini has said:

“It is absolutely clear on the EU side that as long as a country is a member state of the EU, which is something that the UK is at the moment…there are no negotiations bilaterally on any trade agreement with third parties. This is in the treaties and this is valid for all member states as long as they remain member states until the very last day.”

We have heard all the rhetoric from the Trade Secretary, who has conceded that his staff do not have the ability to cut the deals. At the same time, the EU is continuing talks with multiple countries across the globe, including Australia and New Zealand, which many Members point to as post-Brexit allies. That means that we will be playing catch-up with the EU’s trade policy, and it will take years—possibly decades—simply to replicate the arrangements we already have, if we can even do that. Doing so is vital to the trading future of Scotland and the UK and to our future economy.

Another point to make about the EU concerns the free movement of people. Part of the plan is to attract the best and brightest. In my view, we must not just continue to attract them, but keep the ones we have. The 128,500 EU citizens employed in Scotland contribute some £4.2 billion to the Scottish economy. We must not send a signal to people—to those who are here, to those from the EU or around the world who want to come here, or to those who seek the collaborative partnerships in research and development contained in the plan—that the door is now closed. That would be catastrophic, whether it is said officially or that impression is given. It would add to the potential loss of 7% of gross value added to Aberdeen, of 6% to Edinburgh and of 5.5% to Glasgow—a £30 billion loss of GVA to the cities of the UK alone. We will therefore continue to defend Scotland’s economic interests now and in the future, and we will prioritise maintaining membership of the single market and the customs union for Scotland—and, so far as I am concerned, the free movement of people, on which this plan, to a large measure, is predicated.

I do, however, welcome much of what the Secretary of State has said alongside the publication of the industrial strategy, which aims to tackle the productivity slowdown and address the challenges and opportunities brought about by technological advance. We agree with many of the five foundations of productivity that he has laid out and many of the key policy areas that he has suggested, including raising R and D investment to 2.4% of GDP by 2027 and the increase in R and D tax credits rate to 12%, as well as the £725 million industrial strategy challenge fund.

We also welcome some of the smaller things, because although many of them are England-only or England and Wales-only, they are still good for the Secretary of State to do. They include the introduction of the T-levels, the additional money for maths, technical and digital education, and the £64 million for retraining. We welcome many investment announcements, including for infra- structure, broadband, energy and transport.

We would not disagree with the four main challenges—artificial intelligence and the data revolution; clean growth; mobility; and an ageing society—although I am rather at a loss to see how the Government can trumpet clean growth when they have refused for a decade or more to address the challenge of the imbalance in connectivity to the grid, which damages the potential of offshore wind in the north-west of Scotland. If the Government could finally resolve the imbalance, which means that a charge is paid by the Western Isles whereas central London receives a subsidy, there might be unequivocal support for the policy of clean growth.

Angus Brendan MacNeil Portrait Angus Brendan MacNeil
- Hansard - - - Excerpts

My hon. Friend brings up a fantastic point, on which his view is shared by the SNP and the Scottish Government. The UK Government choose to penalise the place where the wind resource is, but unfortunately the wind just will not blow at the whim of the bureaucratic pen of the UK Government. I would have thought that they would have realised that after all these years.

Stewart Hosie Portrait Stewart Hosie
- Hansard - -

One would have thought so, given the number of times the Government have been told that this is an ongoing problem. I could almost repeat it verbatim: there is £23 per kWh charge in the north-west of Scotland and a £7 per kWh subsidy down in the south of England. At some point soon, now that the Government have a clean energy strategy as part of the future economy, I hope that even they might think to address that fundamental inequity.

I want some real joined-up thinking. I know that the industrial strategy recognises, as the Secretary of State said in his statement yesterday, the contribution of the Scottish Government and the other devolved institutions. It is worth putting on record that the Scottish Government already have an economic strategy, with strategic plans for trade, investment, manufacturing, innovation and employment. Following the recent enterprise and skills review, they are aligning their agencies and resources behind those plans. The UK Government should have such a joined-up approach.

The Scottish Government are taking action to support the economy and to counter some of the uncertainty brought about by Brexit, despite the real-terms Budget cuts. This includes the £500 million Scottish growth scheme to target high-growth, innovative and export-focused small and medium-sized enterprises. The first tranche of that money was delivered in June, and a further tranche will be made with an expansion of the SME holding fund, along with the leveraging in of private capital. The Scottish Government are also taking forward infrastructure investment plans, with projects valued at more than £6.5 billion either in construction or starting this year.

In addition to the innovation and investment hubs in London and Dublin, the Scottish Government have established hubs in Berlin and Paris. They are maximising the opportunities there while also developing our existing presence in Brussels into a hub. That is important because there is no point in just supporting big businesses that already export. If we are ever to mitigate the potential loss of export trade with the EU, we need to have the people and resources in place to hold the hands of businesses and ensure that more of them start to export. The Scottish Government are establishing a new south of Scotland enterprise agency.

The Scottish Government are implementing a number of other measures, the most important of which is the roll-out of digital connectivity. Had the roll-out of 4G been left to the market and the UK Government, I understand that we would be about 60% of the way there. However, because of the additional hundreds of millions put in by the Scottish Government, we are at 95%, and we are driving forward the “Reaching 100%” project to deliver superfast broadband access to all residential and business premises by 2021.

Angus Brendan MacNeil Portrait Angus Brendan MacNeil
- Hansard - - - Excerpts

My hon. Friend is giving a long list of impressive boasts by the SNP Government, but he may not know that people on the west side of one of the smallest islands in the Outer Hebrides can get 48 megabits per second. I believe that central London and many other places cannot match what the SNP Government have achieved in the west of the highlands and islands of Scotland.

Stewart Hosie Portrait Stewart Hosie
- Hansard - -

That sounds to me like a pitch for inward investment for Barra, given what my hon. Friend says about 48 megabits per second. The whole point is that it is possible to deliver to some of the most remote communities the kind of access to technology that every business and individual needs.

We welcome the fact that the UK Government have published their industrial strategy, and we are committed to working with them to ensure that the strategy delivers the maximum benefits for Scotland. However, as my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said yesterday, we are disappointed that the Scottish Government were not formally consulted ahead of the publication of the strategy, even though the White Paper recognises the critical role that the Scottish Government have to play. That is a worry in areas such as life sciences, in which Scotland is a world leader, because a sectoral deal seems to have been agreed without any consultation with the Government in Scotland.

We have set out our programme for government in Scotland, which includes a commitment to create a Scottish national investment bank to deliver infrastructure development, finance for high-growth businesses and strategic investments in innovation. That mirrors much of what the UK Government have said—[Interruption.] I am conscious of the time. I have had 20 minutes, but I will finish soon; I am sure there will be plenty of time for Labour Back Benchers. We are also committed to a transition to a low-carbon economy, as this is an important economic opportunity for Scotland.

Finally, let me make a point that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey also made yesterday. We welcome the plan and the substantial sums that are being invested, but we note that the £7 billion for the extension of the innovation fund will not to be spent until 2022-23. If it is important to spend that money, and it is, and if it is important to mitigate the damage that Brexit might do, and it is, I simply say to the Secretary of State that he should perhaps bring forward that spending.

None Portrait Several hon. Members rose—
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