(4 years, 6 months ago)
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Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I thought that we had just had the Adjournment debate, with the last petition from my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson); it has certainly eaten into the time available.
Following its announcement in May of a potential 6,000 job losses around the UK, Rolls-Royce last week proposed what it says is the first tranche. Some 3,000 posts across the UK are under threat, including 700 at the site in Inchinnan in my constituency. Inchinnan is a key site for the company’s maintenance, repair and overhaul—MRO—operations, as well as manufacturing compressors and seals. Such businesses provide parts and support for Rolls-Royce engines used around the world. Their output is world-class, and recognised throughout the business and the industry at large as first-rate. Under the proposals, Rolls-Royce will close the MRO business completely, and the rest of the plant will be downgraded. A total of 700 jobs are threatened, which is over half the total workforce in Inchinnan.
These plans would be a hard blow to the economy in my constituency and across the west of the Scotland. Its impact will also be felt across the supply chain, which goes right across Scotland and the UK. Just yesterday, Wyman-Gordon in Livingston announced 72 redundancies, blaming a drop in orders, including from Rolls-Royce. These are the high-value and highly skilled jobs that we are all fighting to secure for our constituencies—the jobs that Government Ministers promote so often it is almost a cliché. These jobs are the cornerstone of manufacturing in this country and have the potential to grow it further. Yet UK Ministers have been quiet—nay, silent—about what they intend to do to support the workforce and the high-value manufacturing that is so often the subject of press releases and photos of Ministers wearing hard hats.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The hon. Gentleman may be aware that the International Air Transport Association does not expect air travel to recover to last year’s levels until 2023. This sustained drop in demand is one reason why companies such as Rolls-Royce are considering large-scale redundancies. He may also be aware that British Airways has threatened to cut 12,000 jobs, citing reduced demand. Many of my constituents who have worked loyally for BA over many years have written to me about the fact that they are now being treated as expendable. I am deeply concerned about that. The hon. Gentleman is making a powerful argument; does he agree that we need an urgent Government intervention to ensure that jobs affected by reduced air travel are protected for the long term?
Gavin Newlands
The short answer is absolutely. I completely agree with the proposal that the hon. Lady outlines; in fact, it is a proposal that we have been making to the UK Government for months now. There are many estimates as to how long the industry will take to recover but, as I shall come on to say, there is no denying that the industry will face a long and slow recovery. The industry will face redundancies, but the issue is the nature of some of those redundancies. I shall certainly touch on British Airways a little later, although Rolls-Royce is the focus of my speech.
Gavin Newlands
Before I kick on, it would not be an Adjournment debate without hearing from hon. Gentleman.
Jim Shannon
First, I congratulate the hon. Gentleman on securing this debate. He brings forward excellent Adjournment debates and makes other excellent contributions in the House, which we all appreciate, and we are pleased to be able to participate.
I absolutely understand where the hon. Gentleman is coming from: just in the past few weeks a major employer in my constituency has outlined how redundancies will be on their way soon. Does he agree that Government support for local industries is essential, as we all know that once a company shuts an operation it never, or rarely, reopens? If we do not hold on to these industries, we will face mass unemployment, alongside the fact that we will be perceived to be a nation that no longer manufacturers or creates, leaving us absolutely at the mercy of imports, which should never be allowed to happen.
Gavin Newlands
As usual in these debates, the hon. Gentleman makes a good point. I will outline how Scotland has a very forward-looking approach to manufacturing, particularly in the area in which Rolls-Royce operates, but he is right that when these types of jobs go, they rarely return. I shall elaborate on that later.
When the Minister responds, I hope he will give us a full update on the work that he and his colleagues have undertaken to save the jobs of not only my constituents but those at Rolls-Royce sites right throughout the country. There is no doubt that in the short term there is a period of great challenge—perhaps the greatest ever challenge—for Rolls-Royce and the entire aviation and aerospace sector, but given the history of excellence at Inchinnan, there is also no doubt that as the sector recovers over the coming months and years, there will be a customer base for its output, and Rolls-Royce will benefit from that.
The unions recognise that and want to help. From the start they have set things out clearly to their members and to management and asked how they think the short-term operation of the site can work so that it has a long-term future. Throughout the process, the unions have been pragmatic, serious and forward-thinking, looking for a way forward that supports their members and the company’s operations. Anyone who thinks that the unions at Inchinnan or anywhere else in the Rolls-Royce business are interested in anything other than the long-term future of production at the sites is living in a parallel universe.
Several hon. Members rose—
Gavin Newlands
Who do I pick? I give way to my hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson).
Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank my hon. Friend for giving way; I predict that he will continue to be generous with his time as we all seek to intervene on him.
I appreciate that the focus of this debate is on Rolls-Royce, which is quite appropriate given that my hon. Friend has been leading on this issue as a constituency Member who faces a lot of redundancies in his constituency. I know he will agree with me, because he has done a lot of work on the fact that BA has also announced 12,000 redundancies, added to the 9,000 at Rolls-Royce and the terrible treatment of the workforce at BA. I know that my hon. Friend shares my concern that this is only the tip of the iceberg; is he, like me, hopeful that the Government will intervene? This is the tip of the iceberg and we are going to see tens of thousands more jobs lost across the whole aviation, travel, tourism and aerospace sector. Does he agree that we need urgent Government action right now?
Gavin Newlands
I think I was told that I would agree with my hon. Friend, so I do agree with her—I agree completely with what she says. I will come on to discuss British Airways, so if anybody else has an intervention on British Airways, perhaps they should wait until that section of my speech .
Darren Jones (Bristol North West) (Lab)
I thank the hon. Gentleman for allowing me to intervene in this popular Adjournment debate. I congratulate him on making the case for the long-term growth prospects that come from the aerospace sector and Rolls-Royce’s work. Does he agree that time is now of the essence for Ministers? The Business, Energy and Industrial Strategy Committee, which I chair, has in recent weeks heard that redundancy decisions are being taken now about tens of thousands of jobs throughout the country. If we look to other countries, such as France, Germany and the United States, which have already brought forward measures to support the industry, we see that the UK is starting to lag behind. We really need to see action sooner rather than later.
Gavin Newlands
The hon. Gentleman makes a strong point, and I could not agree with him more. We constantly hear Ministers, particularly from the Department for Transport, talk about things being “under review”, but it has been four months now; we do not have time for further review. We need action, so I totally agree with the hon. Gentleman.
David Linden (Glasgow East) (SNP)
I am grateful to my friend for giving way. Although he is a friend of mine, I do wish to pay tribute to him for the amount of campaigning work he has done on this issue. A number of constituency Members throughout the country have a situation in which the local economy appears to be collapsing, and my hon. Friend has really led this charge, so I pay tribute to him for that.
I have constituents in Glasgow East who, like my hon. Friend’s constituents, work at the Inchinnan plant and are incredibly concerned about the situation. The Government have shown, whether through things like the furlough scheme or other aspects of how they have handled coronavirus, that they will intervene, and it is right that when they do things right we pay tribute to that. This is a Government who have in the past intervened, stood up and strongly signalled when they needed to see action, so may I say to the Minister and the Government , through my hon. Friend, that on this issue the Government need to speak up and reassure my constituents back home in Glasgow East that they are fighting to try to protect these jobs as much as possible?
Gavin Newlands
I am grateful to my hon. Friend for those words; I am sure the Minister will address them in his speech.
Chris Stephens (Glasgow South West) (SNP)
I thank my hon. Friend and constituency neighbour the Member for Paisley and Renfrewshire North (Gavin Newlands) for his tenacity, and not just on Rolls-Royce. With Glasgow airport in his constituency, he has his work cut out for him, but he has certainly risen to the occasion. He will be aware that constituents of mine are also employed in Rolls-Royce in Inchinnan. One of the key concerns I hear from them is that the Rolls-Royce facility is part of the planned National Manufacturing Institute Scotland, which is to develop skills and engineering in the west of Scotland. Does my hon. Friend agree that it is important that the UK Government step in so that we can continue to use the Rolls-Royce facility to develop highly skilled engineering jobs in the west of Scotland?
Gavin Newlands
Yes, I could not agree more with my hon. Friend. I will touch on NMIS later in my speech, so I do not want to give too much away now.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Obviously, we must focus on the long term, but there is an immediate and short-term issue. Does my hon. Friend share my concern that some companies seem to have rushed to make decisions on closures when the furlough scheme has been on the go and available for a while now? I have a company in Kilmarnock, Wabtec, which has announced it is closing its plant, ending railway works at the site after more than 100 years. It refuses to consider the furlough scheme, and I do not understand why. It seems to me that Rolls-Royce might be having the same knee-jerk reaction. It could utilise short-term support, then look at the long-term future and see whether it could get long-term Government support.
Gavin Newlands
My hon. Friend makes a good point, but I would have preferred it if the Government had not signalled their intention to end the furlough scheme in October, because for many businesses, it will just push redundancies from earlier in the year to later. Perhaps the Government should look at extending it and phasing it out a bit more gradually than they have said. However, the scheme exists and is here until October, and too many businesses are not utilising the scheme to the maximum.
Gavin Newlands
Yes, although I do not think I have given any of my own speech for a good time.
Antony Higginbotham
I welcome the debate the hon. Gentleman has managed to secure. He made a really important point about the impact this decision will have across the UK, not just because of Rolls-Royce’s geographic scope, but because of the whole supply chain that sits behind it. Does he agree that often supply chain businesses are clustered, so the impact will be felt in some communities far more than in others, which is why we need to be particularly mindful of these redundancies?
Gavin Newlands
The hon. Gentleman makes a very good point. My constituency has Glasgow airport in it, so as he can imagine, there are many aviation jobs and a strong aerospace sector. We face a pretty tough time in the coming months.
Mark Pawsey (Rugby) (Con)
I thank the hon. Gentleman for bringing this debate to the House. It is important for my constituents in Anstey, where about a third of the workforce are in danger of losing their jobs. They have recently secured some new repair and overhaul work at the plant, to bring in an additional 30 to 50 jobs, but I understand that some of that work is now going to be offshored and carried out by Rolls-Royce overseas. Does he agree that, at this time, we need to look at how to keep some of that activity here in the UK?
Gavin Newlands
I could not agree more, and I will go on to talk about offshoring. I have already made the point that when these jobs go and the work goes overseas to other sites in the Rolls-Royce family, if I can call it that, and to joint venture partners, it is very unlikely to return, so I totally agree with what the hon. Gentleman has just said.
Zarah Sultana
I thank the hon. Member for being generous with his time and congratulate him on securing this important debate. Coventry is home to the Rolls-Royce Ansty plant, whose skilled workers will be vital in building the sustainable economic recovery we need following this crisis. Does he agree that the Government must not sit on the sidelines and abandon Rolls-Royce workers, but instead work with the company and the trade unions to protect those jobs and invest in the green technologies of the future?
Gavin Newlands
I totally agree that it is not for the Government to sit on the sidelines here. We often hear Governments of all persuasions saying that these things are a matter for private business, but this is a strategic sector of extreme importance to the country. Again, once the jobs go, they will be gone, so the Government have to step in and do something.
We need to be clear that the sacrifices proposed by the workforce and the trade unions go beyond minor flexibilities. They involve real-terms hardship for workers and their families, working for less pay, mothballing sites for months and increasing working hours. These have all been proposed by the union reps at Inchinnan as practical and achievable solutions to the current temporary difficulties. They tell me, however, that these comprehensive offers have been met with complete silence from Rolls-Royce. That is simply unacceptable. Industrial relations should not be conducted as though we were living in the 19th century. The hard-working and loyal workforce must be fully involved in decisions that will change their future and those of their families. My constituents, and those of other Members, who work at Inchinnan should not be treated like chattels or given their jotters whenever the management decides that savings are to be made. As I have said, everyone accepts that there will be change—the unions, the workforce, elected members and management—but it is only the management that appear to have locked themselves in a bunker, appearing only to issue their edicts and give frankly ludicrous interviews to the media.
That brings me to the chief exec, Warren East. I watched Mr East’s interview with the BBC, in which he was giggling away as he was quizzed about the loss of thousands of UK jobs. I am sure he regrets that that happened, but it was grossly insensitive to the thousands of workers whose livelihoods would be lost as a result of that decision, and they are asking for an apology. I do not want to get personal with regard to Mr East, not least because he took a meeting with me on Friday to discuss the situation, for which I am grateful, and during which, incidentally, he said that the Inchinnan workforce were second to none in the business. But I am told that Mr East and his higher management have shown no interest in dialogue with the workforce. There has now been engagement with the Scottish Government, but that took some time and many requests. I should say that the Scottish Government are absolutely committed to supporting and working with Rolls-Royce to ensure that they do all they can to secure a strong future for Rolls-Royce and its workforce in Scotland.
Rolls-Royce has had a strong relationship with Scotland since 1939, when it built its facility at Hillington. It was built to produce Merlin engines for the RAF’s Hurricanes and Spitfires during world war two, and it produced nearly 24,000 Merlins by the end of the war. I grew up not far from the Hillington site, and I had a good view of the factory’s tall chimney from the family flat close to the site of the old Renfrew airport. It was a bittersweet moment when the factory closed in 2005, when the work moved to a purpose-built facility at Inchinnan and a redeveloped site at East Kilbride. The factory was part of the local landscape, and the investment would surely safeguard jobs for years, perhaps decades, to come, but just seven years later it was announced that the East Kilbride site was to close and that its production was also to move to Inchinnan. Now, just 15 years later, that purpose-built site is itself in grave danger.
It does not have to be this way, not least because of the relationship that Rolls-Royce already has as a tier 1 partner with the Advanced Forming Research Centre—the AFRC—which sits alongside the Rolls-Royce plant. The AFRC is a globally recognised centre of excellence in innovative manufacturing technologies, R&D and metal forming and forging research, which I have visited a number of times. There has also been a huge level of manufacturing-oriented investment in the Inchinnan area, including £39 million of city deal funding to create the Advanced Manufacturing Innovation District Scotland—AMIDS—next to Glasgow airport. Again, this affects the whole site. There has also been £75 million of Scottish Government investment in building and establishing the National Manufacturing Institute Scotland —NMIS—with a further announcement of an additional £20 million on 28 May. Including other partners, this investment is now close to £100 million, so there can be no doubt of the Scottish Government’s commitment to high-value, highly skilled jobs being developed, retained and attracted to Scotland. The question for Rolls-Royce is whether it can match that commitment. There has been no discussion of the long term with the workforce and their representatives. The loyalty shown by the staff at Inchinnan, some of whom have been forced to transfer sites twice during their employment, first from Hillington and then to East Kilbride, has not been repaid and has not been respected.
This highlights a wider problem across the industry. The behaviour of IAG British Airways and its chief executive, Willie Walsh, has been widely reported and condemned in this Chamber and by the Transport Committee. It must be said that the behaviour of IAG British Airways is more reprehensible than that of Rolls-Royce, which still has some sort of relationship with its unions, albeit a little fractious of late. It is simply unacceptable for the loyalty shown by any workers, whether they work for Rolls-Royce, British Airways or anyone else, to be rewarded with the exit door the minute a challenge arises that management think can be met through cost-cutting alone. We cannot have industrial policy run as a race to the bottom with no regard to the longer term or to the communities and families who rely on these jobs.
Yesterday I presented my Employment (Dismissal and Re-employment) Bill to prohibit employers from dismissing employees and subsequently re-employing them for the purposes of diminishing their terms and conditions of employment. I cannot believe that I had to present a Bill to try to make this illegal, but apparently that is the case. Does the Minister think that it is fair for a workforce to be told that they would be made redundant and a proportion rehired on vastly reduced terms and conditions—up to 70%, in some cases? If not, will he back my Bill, or the aim of it, at least, to protect the workers of this country from unscrupulous management?
Jim Shannon
Does the hon. Member agree that it is obscene for British Airways or for any other company to take advantage of the Government’s furlough scheme to then change the contracts of their workers? Some of them are my constituents, and they have expressed great concern, anger and dismay that after 30 years of loyal employment with British Airways, they have been discarded. At a time when British Airways has plenty of money in reserves, as well, it seems that its policy may be to give Virgin a run for its money. Does he think that it is now perhaps time for Government to say to British Airways, “It’s time for your slots at Heathrow and elsewhere to be looked at and not given the special treatment that they presently have”?
Mr Deputy Speaker (Mr Nigel Evans)
Before the hon. Gentleman answers, the topic of the debate is Rolls-Royce. I absolutely understand people’s anger at what has gone on with British Airways. I will allow a little bit of latitude, but we must really focus on the topic. I think it is an excellent topic for another debate, to be honest.
Gavin Newlands
The hon. Gentleman makes a very strong point about the misuse, almost, of the furlough scheme. I know that this has drawn some criticism from Ministers, but if only they had listened at the start, because when they introduced the scheme, we all said that there are no protections in it for redundancies. Other countries have put in protections to stop this sort of behaviour, but the UK Government did not listen, and here we are with regard to British Airways.
Chris Stephens
I was pleased to co-sponsor my hon. Friend’s Bill yesterday. There is a wider point about redundancy, particularly as it relates to Rolls-Royce. We are seeing, far too many times, firms choosing to lay off UK workers because it is easier to lay off a worker, in terms of redundancy, in the UK than in other countries. For example, Germany has 120 days’ notice and there has to be a far tougher process. As we come out of lockdown, should not the UK Government be looking at and discussing the whole issue of redundancy when it comes to their legislation going forward?
Gavin Newlands
I concur with my hon. Friend. In fact, executives formally allude to the fact that there are different rules and regulations in other countries, and the UK workforce will bear the brunt.
Patricia Gibson
I thank my hon. Friend for giving way so frequently. This is a debate about Rolls-Royce, but is it not a concern that when bad practice is used for all to see, it emboldens other companies in bad behaviour? British Airways has set a bad example with its arrogant attitude to its employees, and it has always had terrible industrial relations. It fails to appreciate that the company is built on the back of the loyal workers; some have worked there for decades. In that context, we are all afraid of what might now happen with Rolls-Royce.
Gavin Newlands
I totally agree. I said at the start, when British Airways came out with that horrendous proposal, that it would potentially give the wider sector cover to do something very similar. I have certainly been told stories of small and large businesses looking to do something similar and perhaps waiting to see the outcome of what happens if British Airways is allowed to carry on.
In both cases, Rolls-Royce and British Airways management have made great play of their roots, history and heritage here in this country. In both cases, that pride seems to extend only to proffering their hand for taxpayers’ cash. When it comes to repaying those taxpayers by keeping them in employment, supporting the industry and working together to tackle short-term problems, that heritage suddenly evaporates. Two thirds of Rolls-Royce’s proposed worldwide job cuts are set for the UK. That shows the loyalty the management have towards the communities and citizens of this country.
At the moment, Rolls-Royce employs roughly 52,000 people globally, of whom 23,000 are UK employees—about 44% of the entire workforce, down from 64% in 2000. That is in part as a result of some global acquisitions, but it is also the result of a previous restructuring which offshored jobs from the UK. It is hard, therefore, not to conclude that Rolls-Royce prefers to offshore UK jobs, rather than to work with sector partners and the UK workforce to recover and rebuild for the future, despite the fact that it has been in receipt of £670 million of UK Government money—mainly research and development money—over the past 20 years.
Rolls-Royce in Inchinnan is at the heart of the new advanced manufacturing innovation district that I described. That district represents a drive for world-class manufacturing and industry. I mentioned earlier that those buzzwords have almost become clichés, but in the case of Inchinnan they are 100% true. The maintenance, repair and overhaul of Inchinnan is world leading to the extent that for many years its workers have been sent around Europe and the far east to assist the company’s operations there. Five years ago, Rolls-Royce were recognising the
“dedication and flexibility of the Inchinnan workforce who continue to play a key role on the success of Rolls-Royce.”
What has changed in those five years? If Inchinnan plays a key role, why is it being singled out, disproportionately, as the hardest hit plant in the UK? It is difficult to reconcile Rolls-Royce’s previous faith in the workforce with the treatment it is now meting out.
Ministers have often stood at the Dispatch Box in this Chamber and lauded the kind of manufacturing that Inchinnan is renowned for—as they should. But the test is not what is said in this place and recorded in Hansard; it is the action the Government take to protect and promote our manufacturing sector, particularly at a time when the industry needs action from the state. So far that action has been virtually non-existent when it comes to my constituents and others around the UK. The UK is home to one of the world’s leading aviation and aerospace sectors. It supports more than 1 million jobs in the UK. It is one of the important strategic sectors of industry in this country, if not the most important. It is high time the Government acknowledged that and acted accordingly. We need to hear what the Government plan to do, because when these jobs go, very few, if any, will return. Other global sites will absorb that capacity, and those skills and those jobs will be lost to these shores.
Successive Administrations have made great play of the power of the free market, as if Milton Friedman himself had the skills and craftsmanship to produce the kind of output my constituents produce every day. That sort of ideological nonsense is dead. The impact of covid-19 has shown the need for the state to have a key role in setting the strategy for our economy and intervening where required. The workforce at Inchinnan have shown that they must be listened to, and that decisions must be taken by management after discussion and in consultation with them; not as a paper exercise, but as part of a real long-term plan.
I ask the UK Government to use their influence and power to intervene not just for my constituents in Inchinnan, but for all our aviation and aerospace businesses and workers. This is not the time to let our industries down. The Government laud high-skill production. Now is the time for them to show that they are interested in deeds, not words.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I thank the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) for securing this important debate today. I note that my hon. Friend the Member for Pendle (Andrew Stephenson), whose two sites in Barnoldswick are impacted—I know that some of those workers actually live in your constituency, Mr Deputy Speaker—and my right hon. Friend the Member for Sherwood (Mark Spencer), the Chief Whip, have both made representations to me on behalf of their constituents.
I would like to begin by stating that Rolls-Royce is one of our most important manufacturers in the United Kingdom. It is the world’s second largest manufacturer of large civil aerospace engines and our largest civil aerospace company, and it accounts for about 2% of all UK exports of manufactured goods. On 18 May, the Business Secretary spoke to Warren East, the chief executive of Rolls-Royce, who advised that he would be making an announcement on restructuring plans involving job reductions globally. Warren East explained that this latest restructuring was a difficult but necessary decision to respond to the changed medium-term market conditions for civil aircraft resulting from the covid-19 pandemic and, of course, to ensure the long-term sustainability of the company. Although still uncertain of the number of job reductions at any particular location, he indicated that all of its civil aerospace sites were likely to be impacted, and assured us that Rolls-Royce would notify the MPs in the constituencies that would be affected. Warren East was grateful for the Government’s covid-19 business support measures, which are helping the company in the short term. However, he made it clear that no Government support could replace the lost global customer demand and reduced flying hours. Rolls-Royce made a public announcement on the restructuring plans on 20 May. It said that it would reduce its global workforce by at least 9,000, and that about two thirds of the job reductions would be in the United Kingdom.
Alan Brown
Did the Minister challenge Rolls-Royce on why the UK is losing workers so disproportionately, what the reasons are for that and what it could do to reverse that decision?
Nadhim Zahawi
I am grateful for the hon. Gentleman’s question, and I will come to that a little later in my speech. Essentially, the number reflects the proportion of civil aerospace jobs here compared with Rolls-Royce’s global footprint.
Rolls-Royce has now commenced its statutory consultation process, and on 3 June it opened a voluntary severance scheme that will reduce the number of compulsory redundancies. The Government fully appreciate that this news will come as a crushing blow—a crushing blow—to the Rolls-Royce workforce. We understand what a worrying time this is for its proud and talented workers who, through no fault of their own—and we heard the hon. Member for Paisley and Renfrewshire North eloquently describe the workers in his own constituency—will now be affected by this decision.
We now know that reductions are planned across all Rolls-Royce’s UK civil aerospace sites, and last week Rolls-Royce confirmed that at least 700 workers will be affected in Inchinnan in the hon. Member’s Paisley and Renfrewshire North constituency. The site in Inchinnan currently has about 1,300 employees, who manufacture compressor blades for civil aerospace and defence products, as well as performing maintenance, repair and overhaul services. I would like to use this opportunity to assure the hon. Member that my officials are in regular dialogue with colleagues in Scottish Enterprise, and will continue to work with them to support not only the Scottish Government’s effort to help those affected, but the broader aerospace industry that he spoke about in Scotland.
Sara Britcliffe (Hyndburn) (Con)
Over 200 job losses are proposed at Rolls-Royce in Barnoldswick. Rolls-Royce is a jewel in the crown of manufacturing in east Lancashire, and it is important to everyone, not least my hon. Friend the Member for Pendle (Andrew Stephenson), who has worked extremely hard on this. Does the Minister agree that supporting the small modular reactors programme would help protect jobs at Rolls-Royce?
Nadhim Zahawi
I thank my hon. Friend for her question. I was going to come to small modular reactors later on. Supporting that programme will mean that Rolls-Royce will have another product line which could become a world beater in a market that we estimate to be worth about £300 billion a year.
Gavin Newlands
I hear what the Minister says about liaising with Scottish Enterprise and so forth, and I am aware of the engagement that Rolls-Royce has had with Scottish Enterprise and the Scottish Government, but what are this Government doing, other than warm words with Scottish Enterprise? What are the Government doing to keep the jobs in this country?
Nadhim Zahawi
I thank the hon. Gentleman for his intervention, and I hope that as I make some headway in my speech he will recognise what we are doing. I can tell him, because he asked about this earlier, that in terms of financial support the corporate finance facility from the Bank of England has provided £1.8 billion of support to airlines, and £300 million to Rolls-Royce—I will come back to that—and £60 million to Meggitt as well.
David Linden
I want to press the Minister further on the point made by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). The Minister speaks about dealing with Scottish Enterprise and officials in Scotland, but I am afraid that that sounds to me like looking at the impact of this and thinking about the pace and so forth. Every time I visit a Government Department there are posters up all over the place saying “Britain is GREAT”, “Britain is open”, and “Britain is great for manufacturing”. The Minister mentioned that the Secretary of State had a conversation with Rolls-Royce on 18 May; has the Secretary of State picked up the phone to Rolls-Royce since then, or is it the UK Government’s view that it is just inevitable that this is going to happen, and in fact Britain is not open and Britain is not good for manufacturing? That is the message that I am getting at the moment.
Nadhim Zahawi
It is exactly the opposite of what the hon. Gentleman says, and I hope that when he listens to the words that I am about to deliver he will recognise the support we are putting into the aviation industry; I hold calls with the whole of the sector and I hope he will see after I have completed my speech to the House that this Government are committed to the sector.
Mark Pawsey
The Minister is about to talk about the financial support that the Government are providing to the sector, but he has also spoken about the catastrophic fall in demand for both air travel and new aircraft. Could the Government bring forward any measures to stimulate demand for air travel?
Nadhim Zahawi
I thank my hon. Friend for his question, and, again, he anticipates my speech. We are looking at all of this, as I hope he will recognise from some of the things I will be saying soon.
Patricia Gibson
I am very interested in what the Minister has just said about looking at ways to facilitate an improvement and an increase in air travel given the crisis we have just gone through. Does he agree with me and probably all his own Back Benchers that not having the quarantine, which has been brought in with no real medical evidence to support it at this late stage in the game, would help, and that to impose it will in effect deliver a hammer blow to some of the industries that he says he is trying to help?
Nadhim Zahawi
With respect to the hon. Lady, I completely disagree. At the beginning of this epidemic, when we were in the contain phase because the number of incidences was low, we had a triage at ports and airports for passengers coming from hot countries and places such as Wuhan and the rest of China, northern Italy and then the whole of Italy, Japan and of course Iran as well. But as we moved from contain to delay, because the virus began to spread in our communities, the scientific advice was very clear that having that sort of triage at airports was making very little difference. Now that we have the virus under control, and the numbers are reducing every single day and the spread in our communities is becoming very low, it is dangerous not to have a quarantine, because we could easily import the virus from other countries. We are reviewing this every 21 days, and, of course, working on the air bridges that we have heard the Prime Minister and the Secretary of State for Transport talk about for the future. That is important; lives are incredibly important, but so are livelihoods.
Nadhim Zahawi
I will try to make headway, without abusing your patience, Mr Deputy Speaker. I have given way before, so now let me try to make some headway with my speech.
We will do all we can to support every worker affected at each location, including through the Department for Work and Pensions, Jobcentre Plus and, of course, the Partnership Action for Continuing Employment in Scotland.
Rolls-Royce has confirmed that it will work with those bodies and other regional organisations, such as local enterprise partnerships, local authorities and the unions, to help those who will be affected to get back into employment as quickly as possible.
I have also kept in close contact with my counterpart in the Scottish Government, Fiona Hyslop and Ken Skates in the Welsh Government, and Diane Dodds and the Northern Ireland Executive. During these challenging times, we have a weekly call as a team looking at the shocks of covid-19. I will be meeting with the Minister for Business, Fair Trade and Skills next week to have an in-depth discussion on the Scottish aerospace sector. At a national level, we are working closely with the aerospace industry, particularly through the Aerospace Growth Partnership. My colleagues were asking what support we will be delivering to assist companies through the pandemic and into recovery—
Darren Jones
With all due respect, all of us are having those types of meetings on a daily basis, and we understand the challenges facing the sector. The difference is that the Minister is in a position to do something about it, and the clock is really ticking now for many, many workers, including small and medium-sized enterprises in the supply chain that supply Rolls-Royce. Redundancy notices are being handed in to trade unions now. We are losing workers, we are losing skills and we are losing production capacity. May I gently encourage the Minister in his summing up perhaps to give us some dates and some announcements about action that will be taken, ideally, in the coming weeks?
Nadhim Zahawi
I thank the hon. Gentleman for his intervention, and I hope that, as I make some headway, he will see some of the action that we have already taken to help the industry. I have held several meetings with groups of senior industrialists from the sector during this period. I am pleased that aerospace companies have been able to draw on the Government’s extensive financial support package, which includes £330 billion of loans and guarantees, the tax deferrals and the furlough scheme for workers. Rolls-Royce has benefited from £300 million of support from the Bank of England’s Covid Corporate Financing Facility. My Department is working with an industry-led UK aerospace supply chain taskforce, set up by the ADS Group, the national aerospace trade association, in consultation with Airbus. The taskforce, led by Tom Williams, the former chief operating officer of Airbus, is looking at supply chain vulnerabilities within the industry and at potential remedies, including around financing. That will ensure that ongoing covid-19 Government support is co-ordinated with the actions of business to support supply chains and employment.
We are continuing to back the sector strongly. Our Aerospace Technology Institute, the ATI programme, is providing £1.95 billion of Government funding for aerospace R&D by 2026, which will be matched by industry. The programme has been a game-changer for the UK aerospace industry since 2013, providing real long-term certainty about the availability and the level of public funding, giving industry the confidence it needs to invest. From Broughton in north Wales, to Derby in the east midlands and Inchinnan in the constituency of the hon. Member for Paisley and Renfrewshire North, we are at the cutting edge of global aerospace innovation. We manufacture the most advanced parts of an aircraft here in the UK, and we want to maintain our position for many years to come. Indeed, creating this positive business environment helped to give Rolls-Royce the confidence to build its new large engine testbed in Derby, the largest indoor facility of its type in the world.
Nadhim Zahawi
If the hon. Gentleman will give me a couple more minutes, I will come back to him.
The facility is capable of testing large engines and, crucially, the next generation of UltraFan engines. Looking to the future, we recently opened the £300 million feature flight challenge, which will award £125 million of grants to small and medium-sized companies investing in future aviation systems and vehicle technologies, which will enable new classes of electric or autonomous air vehicles. We are supporting SMEs through innovation and productivity programmes, and we are looking at what scope there is to refocus some of these to assist with the short-term needs of businesses. That is what we are doing currently with those SMEs. We are making sure that Rolls-Royce and others can sustain investment in cutting-edge technology so that they are competitive when the markets actually recover. Our joint research projects funded through our ATI programme, which I referred to earlier, are supporting the development of the next generation of cleaner and quieter aero engines.
Chris Stephens
I thank the Minister for his generosity in giving way. He rightly talks about the support the Government have given to industry and the aviation industry, but with that we expect some corporate social responsibility. Will he outline what that means? Does it mean the Government are going to have to and will review redundancy legislation so that companies that are not engaging in CSR and are getting taxpayers’ money are told by the Government, “Sorry, you can’t make people redundant.”?
Nadhim Zahawi
I hope to address the hon. Gentleman’s point in my concluding remarks. Suffice it to say that the most valuable resource in any organisation—I have spent more years being in business than I have as a Member of Parliament and a Minister—is the human resource and that any leader, and chief executive, would be minded to think long and hard before behaving in a way that makes their people, the family who make up their business, feel as though their leadership are not listening to them.
In addition, we are supporting investments in new green aviation technologies, which will not only help us to deliver on our net zero commitments, but keep the UK at the forefront of the aerospace sector globally. We continue to back Rolls-Royce’s export campaigns, including, where needed, through UK Export Finance. The recovery of the aerospace sector is, of course, dependent on the wider aviation sector, as has been mentioned in this debate, and on getting aircraft flying again. The Government are committed to getting this crucial sector restarted. Led by my right hon. Friend the Transport Secretary, we are in active discussions with industry through an expert steering group, as part of an international aviation taskforce. The group has been instrumental in the development of the health measures guidance for passengers and operators, which my Department for Transport colleagues will be publishing as soon as possible. The border health measures that we spoke about earlier will be subject to review—currently this will be every three weeks—to ensure that they are in line with the latest scientific evidence, and remain effective and necessary. We are examining the possibility of alternatives to the international passenger self-isolation rules, including air bridges, where countries have managed the virus and we are confident in their measures for departing passengers—I spoke about that earlier. We will continue to work with industry on this concept and, ultimately, we will be guided by the science. I am sure the House will appreciate that the health of the public will always come first.
Alan Brown
I thank the Minister for giving in and giving way. Let us go back to the welcome support he outlined, which he is saying the Government are putting in for the future of aviation and cutting-edge technology, and being ahead of the world. If the UK is going to be so far ahead of the world and the Government are providing all that long-term certainty, can he explain why Rolls-Royce is still laying off so many workers in the UK? That still does not square. Let us go back to back the earlier intervention about small modular reactors. This is an unproven technology and good money is being thrown after bad. If we are looking at diversification, should it not be into green renewable energy? Should we not be looking to throw money into this in that way, to help sectors diversify, instead of looking at more nuclear energy?
Nadhim Zahawi
The hon. Gentleman makes a powerful point, but I did address it earlier in my speech—I hope he will read it in Hansard tomorrow morning.
I know that workers at Rolls-Royce who risk losing their jobs will be in a state of shock at the way events have unfolded. Just a few months ago, the sector was thriving. Apart from the financial impacts and worries, this news will take its toll on the overall wellbeing and health of individuals and families. I know that Rolls-Royce will act in a responsible way—colleagues mentioned corporate social responsibility—in assisting those affected and, as I have committed, we will also do all we can to support them.
I started by speaking about the importance of Rolls-Royce to the UK. Although this restructuring is hugely painful, it is intended to make sure that the company remains competitive and can return to growth in civil aerospace as we come out of the covid-19 challenge. Rolls-Royce remains committed to the UK, evidenced by their investment of over £2 billion in UK infrastructure over the past five years. We will continue to support the company and the wider UK aerospace industry to get back on its feet and back it into a position of growth, protecting high-paid jobs across the length and breadth of the United Kingdom.
The workforce was mentioned. The leadership at Rolls-Royce have made it very clear to us that they are being sensitive to their workforce, which is why they have introduced the voluntary scheme first of all. I will end by saying that we continue to look at what other countries are doing around the world in supporting aerospace and aviation, and we will review our support in the light of the global environment.
David Linden
On a point of order, Mr Deputy Speaker. I do not know whether the Minister perhaps did not hear, but my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) was seeking to intervene. Given that there are 55 minutes left for the debate, is it in order for him to make his point to the Minister, who would not let him in?
Mr Deputy Speaker (Mr Nigel Evans)
Interventions are either accepted or not accepted by whom they are intended for. It is for them to make that decision, not the Chair.
Question put and agreed to.