Oral Answers to Questions

Debate between Andy McDonald and Grant Shapps

Thursday 24th October 2019 Commons Chamber

[Grant Shapps]

The interesting thing about the countries the hon. Gentleman cites is that largely they do not produce cars. It is very, very easy if you are not a car manufacturer to introduce all sorts of measures that essentially mean that only electric cars will be favoured and sold. In this country, we have a big car manufacturing sector and we export 80% of the cars we produce. I am very anxious to move the sector to a faster timetable, but to protect jobs as well as the environment it is a question of doing that at a programmed pace. We have managed to do that so far.

[Andy McDonald (Middlesbrough) (Lab)]

May I associate myself with the Secretary of State’s remarks concerning the terrible tragedy in Essex? The nation is reeling from that abject horror. We send our sympathies to all the families of the deceased, wherever they may be across the world. I reassure the Secretary of State that Her Majesty’s loyal Opposition will want to co-operate and work with him to take whatever steps are necessary, legislative or otherwise, to reduce the likelihood of this terrible event ever happening again.

We are in a climate crisis. Transport is the most emitting sector of the economy and the only sector where emissions have risen in recent years. Given that the Government have slashed subsidies for electric vehicles and failed to invest money promised for charging points over two years ago, does the Transport Secretary seriously believe his announcement earlier this week for a consultation on whether to introduce green number plates for electric cars is really going to save the planet?

[Grant Shapps]

I thank the hon. Gentleman for his comments about the events in Grays, Essex yesterday. We will work together on that.

Green number plates are just one very small part of a very, very large package that includes £1.5 billion to subsidise the take-up of electric cars; £400 million on a charging infrastructure investment fund, which I announced earlier in the summer, to help to supercharge the number of charge points; and many, many other activities. As I say every I time I stand at the Dispatch Box, electric cars are fantastic. They are available new and on the second-hand market. The cost of ownership overall, because it costs £5 or £6 to drive from here to Manchester and refuelling with those charge stations is much easier, is something that everybody can invest in now.

[Andy McDonald]

I am afraid the Transport Secretary ignores my warnings, but will he listen to the Government’s own advisers when they say the UK is way off track to meet their climate targets? Labour would invest £3.6 billion in charging networks, introduce 2.5 million interest-free loans for the purchase of electric vehicles, and target a 2030 phase-out for the sale of new diesel and petrol cars. The Government are attempting to disguise their lack of action on the climate crisis with a lick of green paint. Is the Secretary of State not embarrassed at his poverty of ambition?

[Grant Shapps]

As I have already said, I passionately believe in bringing this forward. I have already said that I am going to investigate moving forward from 2040 to 2035 a commitment given before the 2050 net zero, and I have a package of measures, which I was referring to before, that will be in the decarbonisation plan to ensure we meet all those targets.

Thomas Cook

Debate between Andy McDonald and Grant Shapps

Wednesday 25th September 2019 Commons Chamber

[Andy McDonald (Middlesbrough) (Lab)]

I would like to thank the Secretary of State for giving me timely advance sight of his statement; that is a welcome change. What I do not welcome is the collapse of Thomas Cook, which is a tragedy for the 178-year-old business, its customers and its staff. The travel company went under because successive chief executives failed to steer the group effectively or to evolve the business. Thomas Cook had five offers for its airline business, yet these were rejected by the board. I, too, would like to pay tribute to Richard Moriarty and his team at the Civil Aviation Authority for the work done yet again to repatriate holidaymakers. I applaud their sense of public service and duty.

Aviation is a fiercely competitive industry that has lost services because of terrorism and Brexit uncertainty. The Government’s dithering on their aviation strategy has only added to these difficulties. In May, speaking on airline insolvencies, the Secretary of State’s predecessor said that the Government

“will work swiftly to introduce the reforms that are needed to ensure a strong level of consumer protection and value for money for the taxpayer.”—[Official Report, 9 May 2019; Vol. 659, c. 33-34WS.]

This was misleading. The Government have done nothing to protect consumer or taxpayer interests. The Government have sat back and let the company fold.

Yesterday, Governments in Scandinavia stepped in to back Thomas Cook subsidiaries in that region. The German Government also stepped in with a loan of €380 million for the Thomas Cook subsidiary Condor, to help that company to survive. The chief executive of Thomas Cook Airlines, Christoph Debus, has seamlessly just gone to work for Condor, and jubilant scenes of the survival of the subsidiary are doing the rounds on social media. Can the Secretary of State tell the House what steps his Government took to enter into a joint investment with other interested nation states? It is reported that the Governments of Spain and Turkey were understandably willing to do this, but seemingly the UK Government were not.

We are somewhat reassured that there is provision to return holidaymakers to the UK, but sadly there is no provision for the return of Thomas Cook’s staff. The unions Unite and the Transport Salaried Staffs Association have valiantly fought for their members, while this Government have done nothing. Can the Secretary of State guarantee that all staff will be repatriated? Can he say what provisions he is putting in place to ensure that customers who have lost their planned holidays are fully compensated and able to make alternative arrangements at no expense to themselves?

The Government learned nothing from the Monarch collapse two years ago. Monarch cost taxpayers £40 million in repatriation costs and Thomas Cook looks set to cost a similar amount or more, not to mention redundancy and future welfare payments. Can the right hon. Gentleman give us an estimate of what the total costs are likely to be? Monarch was the victim of financial engineering by Greybull Capital two years ago, and of conflicts of interest with the company’s administrator. Similarly, the collapse of Thomas Cook raises major questions about the accounting of the firm by PwC and EY, never mind the bonuses paid to senior executives. On that point, will the Secretary of State make it clear to those executives that they should return their undeserved and unwarranted multi-million pound bonuses, including that of Peter Fankhauser, who has had £4.6 million in bonuses since 2014?

I say again that the Government have not acted to protect the public interest, and that nothing has been learned or done to improve how our insolvency arrangements deal with such exceptional and complex circumstances. What is more, the ATOL fund has been much reduced by the Monarch fiasco and has had to rely on insurance to make up the shortfall. Does the Secretary of State believe that the reforms of ATOL enacted by his Government have been effective? The Government must confirm that they will immediately guarantee the workers full compensation for unfair dismissal, given the lack of proper consultation, and that those workers will not have to pursue the matter through the courts. Can he confirm that they will be relieved of that burden and stress?

In a further sad development, we also learned today that Northern Ireland’s last manufacturer, Wrightbus, has gone into administration with the loss of 1,400 jobs. In July, the Prime Minister said that

“we will do everything we can to ensure the future of that great UK company.”—[Official Report, 25 July 2019; Vol. 663, c. 1496.]

Is it not the case that this Government are guilty of the industrial neglect of this country? In contrast to other countries, UK Ministers have stood by and let some of our great companies wither and die. This Government are engulfed by inertia and incompetence. They are not a functioning Government, because of the Brexit chaos and Prorogation paralysis that they have brought upon themselves. The people of Britain are paying a high price for their inadequacy. They have failed to reform insolvency rules and failed to improve financial reporting. This is a colossal failure of political leadership from this Government. They were warned, but they did nothing. That is a shameful failure to fulfil their duties and their responsibilities.

[Grant Shapps]

Let me see what we can deal with here. It is true, as the hon. Gentleman outlined, that the world has changed. In 2007, Thomas Cook bought MyTravel just as the internet was starting to take off. In 2016, when the high street was clearly struggling because the internet had taken off, it bought the high street shops of Co-op Travel, further expanding its problems and its massive debt to £1.7 billion. I agree with him that this was, in the end, a very poorly run business that was going in the wrong direction at the wrong time.

The hon. Gentleman made a very sensible point in his query about the return of the bonuses that we have all been reading about. I have described how my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service. Under the Insolvency Act 1986, the official receiver has the power to require the return of bonuses in certain circumstances. I absolutely agree with the hon. Gentleman that that needs to be fully looked into, including the role of the auditors.

That is where we agree. Where we disagree is that it is not the case that this situation is somehow unique to Thomas Cook. As I mentioned, airlines elsewhere in the sector are in good health. Many of them have been very helpful in bringing Thomas Cook passengers home over the past couple of days and have offered extraordinary help, even lending aircraft and, in the case of one well-known airline, cutting prices for Thomas Cook customers, rather than charging more. However, in response to what the hon. Gentleman said about this insolvency, it is only right to point out that Germania, a German airline, went bust; Primera Air, a Danish airline, went bust; Air Berlin, a German airline, went bust; as did Cobalt Air of Cyprus and FlyVLM of Belgium. This is not a UK issue; this is an issue where some airlines manage to do the right things and succeed, and others do not.

The hon. Gentleman rightly mentioned what has happened with Condor. Here, we will find partial agreement and partial disagreement. Condor was operating under a somewhat different business model. In Germany, people do not book holidays in quite the same way as they do in the UK, partly because UK citizens tend to use the internet in a different way and are much more becoming their own travel agents. With Condor, the business remained profitable. [Interruption.] The hon. Member for York Central (Rachael Maskell) asks what difference that makes. The difference is that it was a profitable business, unlike the business here.

It is also the case—this is where I think there will be a degree of agreement—that German insolvency rules allow for administrations to take place, and then for aircraft to carry on being used and for other buyers to come in during the administration process. That is not something that our current rules on airline liquidation and insolvency allow for.

The hon. Gentleman rightly pointed out that the previous Secretary of State said he wanted to do something about that and commissioned a review. So that we are all clear on the timeline, that review reported on 9 May 2019. It suggested that we should have rules that are not dissimilar to the German rules to allow our airlines to trade in administration. That would make repatriation massively easier, because we could use those airlines. I entirely agree with the hon. Gentleman on that. Perhaps he did not hear me mention it during my statement, but we need a new Session of Parliament to introduce that primary legislation in order to bring that in. We are very happy to have a new Session of Parliament. If we get agreement, perhaps that is something we can progress.

I believe that, given the number of people and the number of lives that have been affected by this situation, we should be working together cross-party to get this job done. I welcome the hon. Gentleman gesturing that he will provide support to sort out this problem, because that would clearly be in everybody’s interest.

The hon. Gentleman referred to whether foreign Governments were prepared to ride to the rescue. I confirm that I received no approach from the Turkish Government and that the only contact via the Spanish Government was not a viable plan and came so late in the day that the company was already starting its administration proceedings. There was no viable plan out there at the time.

I agree with the hon. Gentleman that the ATOL system should be reformed. As he rightly pointed out, although the funds are limited because of Monarch, ATOL itself is reinsured to cover most of that cost. Finally, on a point of accuracy, he mentioned that £40 million has been spent on Monarch. In fact, we think that the final cost was £50 million.

HS2

Debate between Andy McDonald and Grant Shapps

Thursday 5th September 2019 Commons Chamber

[Grant Shapps]

First, on the budget and the schedule, it is exactly as I said in my opening statement: I completely agree with my right hon. Friend that there is no future in trying to obscure costs or in being unclear. It is the case that in a massive, developing infrastructure project—Europe’s biggest—costs just are not known. They are speculated about and then start to firm up, in this case, literally as we start to dig into the ground. I can see how over a period of time things move. None the less, I take the view that as soon as I have the information, I will inform the House—as soon as I got that Cook report and the House returned, I stuck it straight into the Library. I assure my right hon. Friend that I will continue to do exactly that going forward.

Secondly, it might be helpful to colleagues to know that I have asked for Douglas Oakervee to meet Members of Parliament. He will be in Committee Room 2A on Monday 9 September, between 3.30 pm and 5 pm. That is an opportunity for any colleagues to go and see him. Colleagues can make their own arrangements with him separately, and I will inform the House of that.

Thirdly, on the enabling works, we are in a position where I have to make a go/no-go decision in December. I know that this will not a delight my right hon. Friend, but it seemed to me that if we did not continue to make preparatory works, I would not even be in the position to make a go/no-go decision. I am sorry to disappoint my right hon. Friend, but that is the current position. We can then take a decision.

I share my right hon. Friend’s concern and anxiety about compulsory purchase order payments. When people’s lives, livelihoods and homes are potentially going to be ripped apart by a project that is supposedly for the wider good, it is right that the state compensates them promptly and efficiently. I would be most grateful to see more details of the cases he mentioned. I have already had one across my desk, which I have sorted out, and I would like to see others. There is no excuse for a CPO for which people are not paid.

[Andy McDonald (Middlesbrough) (Lab)]

I, too, congratulate the Secretary of State on his appointment and welcome him to his place. He comes into post at a time of crisis for the country, but at an absolutely critical moment for HS2.

I gently remind the Secretary of State that we did ask for regular reports and recommended a peer review when phase 2a was before the House some weeks ago. I am sorry that he was not able to vote for that—or, indeed, that the Prime Minister was not able to express a view at all.

The Secretary of State mentioned that the review that is under way is a cross-party one, but I gently point out that there has been no consultation whatever with me. If it is to be genuinely cross-party, perhaps he might want to take up that invitation.

We have consistently been told by the Secretary of State’s predecessor and the then ministerial team that the 2015 figure of £55.7 billion for the entire project was the full cost of HS2 and that there was no reason to change it. It is hard to conclude anything other than that it has been plain and obvious for some considerable time that this was not accurate. Will the Transport Secretary tell us when his predecessor was told that the figure of £55.7 billion was not accurate or sustainable and when he was first told that the timetable for delivery could not be adhered to?

Is this not yet more evidence that this Government have totally failed to exercise any control over the project—not just over costs, but with regard to redundancy payments and key appointments that transpired to be unsustainable? In addition, when the contracts for phase 1 were being granted, despite hedge fund managers making a packet out of the inevitable demise of Carillion, this Tory Government crashed on regardless, awarding the doomed organisation a valuable HS2 contract.

It is beyond doubt that the Government have been totally incompetent and reckless, but, worse than that, there hangs over this Government the unpleasant smell that Parliament may have been misled—however unwittingly—given that it is stark staringly obvious that when the Minister responsible for HS2 stood at the Dispatch Box a matter of weeks ago to tell the House that there was only one figure and one figure alone for HS2 that assertion was completely and totally inaccurate. If there is going to be delay, what assurances can the Secretary of State give to the 9,000 people currently employed by HS2?

This Government continue to be characterised by a lack of transparency. I welcome the Secretary of State’s remarks that he intends to put that right, but it still remains, as does a lack of candour. Once we can be assured that there is no prospect of the Government reneging on the legislation to avoid a no-deal Brexit, Labour relishes the prospect of a general election to turf them out.

[Grant Shapps]

On regular reports, I will come back to the House as many times as it is prepared to hear about this matter, and I will continue to update Members in every possible way. It might be helpful if I were to make the introduction—if the hon. Gentleman has not already had it—to Doug Oakervee; perhaps I could organise for the hon. Gentleman to meet him separately. Of course, there are cross-party members on the review panel and it is genuinely full of sceptics. I think people were surprised when we launched a review of this project that had such a broad, cross-party view.

The hon. Gentleman is absolutely right that prices have changed over time. I seem to recall that this was originally a project by the previous Labour Government and that when it was conceived the whole thing was going to cost about £13 billion. One of the issues that we have, which is a wider issue than just HS2, is that these things start off being fixed at a price of a particular period of time—the figure of £55.7 billion was about 2015 prices—and that does not actually allow for inflation. We therefore end up quoting prices that are just out of date. On that basis, every project will always be said to have overrun on cost, although of course the benefits probably improve as well. We have to find better ways of doing all this.

I can reassure the hon. Gentleman that the first time that I received advice on this matter was Allan Cook’s final report on 1 August, and that is the report that I published. Finally, I undertake to ensure that we return to the House with every update that we have, and I encourage the hon. Gentleman to be involved in the Oakervee review.