Written Statements

Monday 22nd July 2024 Written Statements

Monday 22 July 2024

Harland and Wolff

Monday 22nd July 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

In recent weeks there has been media speculation over the status of Harland and Wolff and the nature of its ongoing discussions with the Government, upon which we have been unable to comment due to the commercially sensitive nature of those discussions. I am now pleased to be able to address the subject and update members of the House. My officials have been working with all parties extensively for a number of weeks to ensure an outcome for Harland and Wolff that delivers shipbuilding and fabrication across the UK and protects jobs.

After a detailed review of an application by Harland and Wolff for a UK Export Finance export development guarantee, His Majesty’s Government have decided not to proceed with the provision of a guarantee. This decision was based on a comprehensive assessment of the company’s financial profile and the criteria set out in our risk policies. We have also decided not to provide any form of emergency liquidity funding. While such a decision is not easy, it is my assessment, following extensive engagement by my officials with market players, that HM Government funding would not necessarily secure our objectives and there is a very substantial risk that taxpayer money would be lost. The Government believe, in this instance, that the market is best placed to resolve the commercial matters faced by Harland and Wolff.

A statement was published on 19 July by Harland and Wolff indicating that the company has commenced discussions with its existing creditors, Riverstone Credit Management LLC, to secure the additional funding it needs. This should allow the business to continue pursuing its short and longer-term objectives, in which the Government continue to take an interest. In all our engagements with them, Riverstone Credit Management LLC has recognised the importance of the assets at Harland and Wolff as well as the people who work there, showing a desire to find pragmatic solutions that support HM Government objectives.

Harland and Wolff indicates that these discussions on new financing should conclude in the next few days. This will involve the current CEO taking an immediate leave of absence and the onboarding of new management with a focus on recapitalisation and ensuring sustainable finances.

I know the recent media reports will have been of concern to workers across Harland and Wolff’s sites, as well as the wider supply chain. I am working closely with my colleagues the Secretaries of State for Northern Ireland and Scotland, and Ministers are also engaging with the leaders of the Northern Ireland Executive and Scottish Government, alongside the local Members of Parliament, to support a positive outcome for all affected sites across the UK. My ministerial team have also reached out to the trade unions represented across the four sites to reassure them that the steps set out by the company appear to me to hold by far the best prospects of ensuring business continuity, job security and the delivery of important existing contracts.

My officials will continue to work closely with those in the Ministry of Defence and the National Shipbuilding Office on the fleet solid support contract, for which Harland and Wolff remains a key subcontractor. Officials in the Ministry of Defence are also well engaged with the prime contractor, Navantia UK, to monitor delivery of this important contract.

I welcome potential new financing for Harland and Wolff and the appointment of new management and wish them all the best in their continued efforts to build up this business.

Shipbuilding supports 42,600 jobs nationwide, adds £2.4 billion to the economy every single year, and is an important pillar of our civil and defence industrial base. We are committed to supporting vibrant and successful shipbuilding and fabrication industries, and our skilled workforces who deliver them, in all parts of the UK, in which Harland and Wolff has its role to play.

[HCWS15]

Skills Reform

Monday 22nd July 2024 Written Statements

[The Secretary of State for Education (Bridget Phillipson)]

I am today announcing the creation of Skills England in shadow form, before it is established as an arm’s length body within the next twelve months.

The first mission of our new Government is to grow the economy, and for that we need a skills system that breaks down barriers to opportunity and delivers for our businesses.

Skills England will build stronger, more coherent connections between skills partners including employers, education and training providers, unions and combined authorities. We need a stronger, more widespread, and more data-driven understanding of the skills needed to deliver regional and national industrial priorities. Where skills gaps are identified, we need the system to support more rapid development and delivery of high-quality training opportunities which employers and learners understand and can access.

Skills England will help ensure we have the highly trained workforce needed to deliver the national, regional and local skills needs of the next decade, aligned with the Government’s forthcoming industrial strategy. This effort will be central to enabling delivery of the Government’s growth mission, filling skills gaps in key industries.

Skills England will convene employers, education and training providers, unions, experts, combined authorities and national Government to:

develop a single picture of national skills needs, working with industry, other Government Departments, the Migration Advisory Committee, unions and the Industrial Strategy Council to build and maintain a comprehensive assessment of current and future skills needs;

identify the priority areas for skills training, including the training for which the new growth and skills levy will be accessible—in doing so, it will ensure that businesses are able to use their skills funding more flexibly and effectively, for which so many have been calling;

play a crucial role in ensuring that the national and regional skills systems are aligned in meeting skills needs, in constituencies the length and breadth of England.

Skills England will support employers across the country to shape skills training, and it will identify levers to encourage them to invest in upskilling their workforces. In doing so, it will build on the contribution that thousands of businesses already make to grow the pool of talent from which they can draw.

The functions which currently sit with the Institute for Apprenticeships and Technical Education will transfer to Skills England, as part of the new organisation’s broader remit. IfATE will continue its important work in the interim as the transition of functions to Skills England is finalised. A permanent board, Chair and CEO will be appointed in due course, to provide Skills England with the best possible leadership.

For us to deliver on the forthcoming industrial strategy and the Government’s missions, we will need to boost skills and unlock economic growth in all parts of the United Kingdom, so Skills England will also engage and work closely with the devolved Administrations.

[HCWS14]

Sustainable Aviation

Monday 22nd July 2024 Written Statements

[The Secretary of State for Transport (Louise Haigh)]

Sustainable aviation fuel is an important part of the strategy to decarbonise air travel. It can be used in existing aircraft, and it emits on average 70 per cent fewer greenhouse gas emissions than using fossil jet fuel on a life cycle basis.

Developing, using and producing SAF will help drive our missions to kickstart economic growth and make Britain a clean energy superpower, delivering the Government’s manifesto commitment to secure the UK aviation industry's long-term future, including through promoting sustainable aviation fuels.

Today, in addition to the announcement we have already made in the King’s Speech on 17 July that a Bill will be introduced to support sustainable aviation fuel production, we are taking a further important step in confirming that, subject to parliamentary approval, we will introduce a SAF mandate to start from 1 January 2025. We will be one of the first countries in the world to legislate in this way. We are also today confirming the full policy detail of the mandate.

Today’s announcement is good for aviation, the environment and for the UK overall: sustainable aviation fuel production is estimated to add over £1.8 billion to the economy and over 10,000 jobs across the country while supporting decarbonisation. The SAF mandate will drive demand for SAF in the UK, deliver emission reductions up to 2.7 MtCO2e in 2030 and up to 6.3 MtCO2e in 2040 and provide investor confidence that the UK will be a place to produce, use and supply SAF.

SAF mandate

The SAF mandate will start in 2025 at 2% of total UK jet fuel demand, increase on a linear basis to 10% in 2030 and to 22% in 2040. From 2040, the obligation will remain at 22% until there is greater certainty regarding SAF supply.

The mandate will encourage the innovation of advanced fuels that can generate greater emission reductions and the diversification of feedstocks to reduce dependencies on scarce resources, by including in the mandate:

a cap on the feedstocks used in the hydroprocessed esters and fatty acids process, but not until other types of SAF are also commercially viable to recognise the important part that HEFA SAF will play in the 2020s. HEFA supply will not be limited under the mandate for the first two years, fall to 71% in 2030 and still contribute 35% in 2040;

a separate obligation on power to liquid fuels from 2028 that reaches 3.5% of total jet fuel demand in 2040.

The mandate will include a buy-out mechanism for both the main and power to liquid obligations to incentivise supply while protecting consumers where suppliers are unable to secure a supply of SAF. These will be set at £4.70 and £5.00 per litre of fuel, respectively. These provide a significant incentive for fuel suppliers to supply SAF into the market rather than pay the buy-out. They also set a maximum price for the scheme, and therefore deliver emission reductions at an acceptable cost. The plan includes a review mechanism to help minimise the impact on ticket fares for passengers.

We will also work closely across Government on feedstock availability to ensure that feedstocks are used in a sustainable and productive way.

SAF revenue certainty mechanism

The Bill announced on 17 July will introduce a revenue certainty mechanism for SAF producers who are looking to invest in new plants in the UK. This builds on the SAF mandate, which will create demand for SAF by setting targets on fuel suppliers to use a proportion of SAF. This new sector will create jobs and growth opportunities in the UK, help secure a supply of SAF for UK airlines, and enhance energy security.

There are a number of SAF projects being developed across the UK. Bringing in a revenue certainty mechanism will help to reduce risk, giving investors the confidence they need to invest in UK SAF plants. It will increase the likelihood SAF plants will be built in the UK, thereby securing a supply of SAF for the UK aviation sector and supporting the delivery of the SAF mandate.

These two SAF initiatives will drive the Government’s mission-driven plan to kick start economic growth and make Britain a clean energy superpower.

[HCWS16]