Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 8th January 2019 Commons Chamber

[Greg Clark]

It has always been my view, and I know it is my hon. Friend’s view, that the more we can trade on what has been a very successful model the better. He represents a west midlands constituency and knows how important it is in the west midlands that we have flourishing trade, to the benefit of our economy and those of our neighbours and friends on the continent.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

From Airbus in Bristol to Nissan in Sunderland, millions of British jobs depend upon supply chains that crisscross the channel. Ministers fantasise about replacing them with American or Australian ones, and then, as they did yesterday, hire 80 trucks to drive around Kent in a ghost of Brexit future pantomime of the chaos to come. The Minister for Business, Energy and Industrial Strategy has acted honourably in saying he will not be part of a Government who allow a no-deal Brexit, so will the Secretary of State reassure Aston Martin, Brompton the bicycle manufacturer, and the other businesses stockpiling parts—spending money that could be spent creating jobs—by saying he understands the requirements of business and geography and rule out a no deal now?

[Greg Clark]

I completely understand the requirements of business, including the manufacturers the hon. Lady mentions. It is essential that we be able to continue to trade, which is why I have always been clear—representing very strongly the views of small business and large business—that no deal should not be contemplated, but the way to avoid no deal is to do what the motor manufacturers, the Institute of Directors, the Federation of Small Businesses, the British Chambers of Commerce and all the business organisations say we should do, which is vote for the agreement that will come before the House next week.

Leaving the EU: State Aid, Public Ownership and Workers’ Rights

Chi Onwurah Excerpts

Tuesday 11th December 2018 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate my hon. Friend the Member for Crewe and Nantwich (Laura Smith) on securing this important debate, which is now the only piece of Brexit business tabled today—not what I was expecting.

State aid, public ownership, and workers’ rights are the critical building blocks of our nation’s economic model, and getting them right will be crucial to our future prosperity and the nature of any post-Brexit settlement. As my hon. Friend expressed so clearly, the Brexit vote has exposed the flawed foundations of our economic model. After decades of crying that “there is no alternative” to neo-liberal privatisation, laissez-faire economics, and deregulated labour markets, it was a Conservative Chancellor who, after the Brexit vote, threatened to “change our economic model”. Of course, he was actually proposing an acceleration of neoliberal reform without the constraints of European law—a “race to the bottom” in workers’ rights and protections, as the Leader of the Opposition put it in Lisbon last week.

The European Union delivers and guarantees important rights to British workers that we cannot allow to be taken away, but it has not always fulfilled the promise of a social Europe. I was also in Lisbon last week, representing the British Labour party at the congress of the party of European Socialists. I told them that no matter what happens with Brexit, we must all fight for socialist values within Europe: strengthening the rights of workers and trade unions, and ending austerity and wage suppression.

Yesterday in France President Macron finally recognised that French working people need higher incomes, not lower ones, if France is to prosper. It should not take riots in the street for our leaders to get that point. Here in Britain the real issue underlying Brexit is that working people want and deserve real rights, a real voice, and better lives. The Brexit deal must therefore defend what we have won in a European context by upholding workers’ rights and social protections, and if Brexit does not mean that, it is a total fraud against working people. The deal must also allow us to make further gains in the context of our continuing economic relationship with Europe, whether by strengthening European works councils, or restoring public ownership of public goods. That is what the Leader of the Opposition meant when he said in Lisbon:

“As socialists and trade unionists, we will work together to help build a real social Europe, a people’s European socialist Europe”.

What should that mean in practice for state aid, public ownership, and workers’ rights? As many hon. Friends have eloquently said, Labour Members reject the Government’s position that the best the state can do for the economy is get out of the way of the private sector. In the words of the renowned economist Mariana Mazzucato, we believe in an entrepreneurial state that stands shoulder to shoulder with the private sector. We are not talking about uneconomic subsidies for dying industries or failing firms; we want targeted interventions that support a prosperous, competitive, growing, and technologically driven economy that works for all. Yes, that should include public ownership where there is a natural monopoly or important public goods are at stake. Mazzucato also observed that, much like taxation and regulation, state aid rules are often used as an excuse for no investment and general inertia, and as my hon. Friend the Member for Stroud (Dr Drew) pointed out, that is particularly true for the UK Government. One example of that is in my region, the north-east, where the steel sector was allowed to decline and suffer because of Conservative inaction.

The UK has never gone as far as European Union law allows to enable the state to support the UK economy. As a percentage of GDP, we spend far less on state aid than our European neighbours—roughly 0.3%, compared with 0.6% in France and 1.2% in Germany. Public ownership is common on the continent, guaranteed by article 345 of the Lisbon treaty, which allows countries to make their own decisions on ownership. SNCF is France’s national state-owned railway company, and the German energy sector is experiencing a return to public and communal ownership. In this country we have Scottish Water, which was mentioned by the hon. Member for Glasgow East (David Linden). Some French and German public companies even own parts of our privatised utilities, and in that far-left enclave, the Netherlands, private ownership of water companies is illegal.

Although it is true that European Union member states are bound by a requirement to provide aid only on the basis of a level playing field, public service compensation does not constitute state aid when it applies to services of general economic interest. Those are economic activities that deliver outcomes in the overall public good that would not be supplied by the market—or would be supplied under different conditions regarding objective quality, safety, affordability, equal treatment or universal access—without public intervention. That could refer to a number of services, so will the Minister commit to report back to Parliament on which of our services of general economic interest we need to protect?

Before entering Parliament I had a job as Head of Telecoms Technology for Ofcom, the communications regulator, and I spent many months comparing our use of provisions for services of general economic interest with the way they were used by our European neighbours. I can confirm to the House, and especially my hon. Friend the Member for Crewe and Nantwich, that we do not use such provisions. The Government do not even seem committed to protecting our public services in new trade deals. Will the Minister commit to ensuring that future trade deals do not threaten the public ownership of crucial national assets such as our NHS?

As my hon. Friend the Member for Barnsley East (Stephanie Peacock) remarked, regardless of whether people voted leave or remain in the European Union referendum, no one voted for worse rights at work. Well, at least not at their work. Members of the European Research Group may well have voted for worse rights for others, while wishing to retain and indeed expand their privileges as parliamentarians. They want working people back in the middle ages, but not the sanctions that MPs received at that time. A poll commissioned by the Institute for Public Policy Research in February this year found that more than 70% of people want European Union rights at work to be strengthened or maintained after Brexit—more than double the number who thought they should be watered down.

The Prime Minister has repeatedly promised to maintain workers’ rights post Brexit. For example, she said at her party conference in 2016 that

“existing workers’ legal rights will continue to be guaranteed in law—and they will be guaranteed as long as I am Prime Minister.”

Only last month, she assured the House that her deal successfully safeguarded workers’ rights. Yet, as colleagues pointed out, this Government repeatedly voted down Labour amendments to the European Union (Withdrawal) Bill that would have required primary legislation if future Governments sought to reduce workers’ rights. With that rejection, our rights are left vulnerable to deregulation by ministerial diktat.

By not allowing new European works councils to form or having a contingency plan to replace them, the Tories would leave British workers at a disadvantage to their European Union colleagues. Will the Minister commit to reversing the decision to scrap European works councils?

The Government’s withdrawal agreement contains significant flaws with regard to workers’ rights. As was pointed out, one of the provisions of the backstop is a non-regression clause on labour standards, which would prevent either party from lowering protections below their current levels. However, it allows for some divergence, meaning that a UK Government would still be able to water down workers’ rights—a worrying possibility given this Government’s track record on labour protections.

Moreover, the non-regression clause would not require us to update our labour legislation alongside the European Union, meaning that over time we could end up with significantly poorer protections. That is a real concern given the growth of the so-called gig economy. Only last month, Tory MEPs joined the UK Independence party in voting against new rights for gig economy workers in the European Parliament. Will the Minister commit to updating workers’ rights in line with European best practice following the end of the transition period?

My party has pledged to protect workers and their hard-won rights, reject no deal as a viable option, and negotiate transitional arrangements to avoid a cliff edge for the UK economy and workers. We have pledged to ensure workers are represented on company boards and to require firms with more than 250 employees to set up ownership funds, making workers part-owners of their companies.

My party will make full use of the powers the state has, and should have, to build an economy that supports workers’ rights, trade union rights, innovation and industry in every region of our country, and that works for my constituents in Newcastle and for the constituents of the hon. Member for Henley (John Howell)—in short, an economy that works for the many, not the few.

--- Later in debate ---

[Chris Skidmore]

Apologies—the hon. Member for Glasgow South West (Chris Stephens). I was deeply impressed by the hon. Gentleman’s ability to speak through his vocal impairment; he was cutting quite loudly through it by the end of his speech. We also heard from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) and, last but not least, the hon. Member for Stroud (Dr Drew), whom I thank for his generous congratulations on my fifth day in my new role.

[Chi Onwurah]

I regret that I did not take the opportunity to welcome the Minister to his new role and I wish him every success for the period he occupies it.

[Chris Skidmore]

I am deeply grateful for those kind words. I am getting stuck into the job by appearing at this debate, but I am here to represent the views of my Department as a replacement Minister. My hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), the Minister for Small Business, Consumers and Corporate Responsibility, sends her profuse apologises that she has been unable to attend. She is representing the Department in the debate on the Accounts and Reports (Amendment) (EU Exit) Regulations 2018 in Committee corridor. I am here in her place to represent the Department’s views.

Let me start with what state aid rules are and why they exist, what is and is not state aid, and when it is allowed. Put simply, state aid is Government support or subsidy of an economic operator that gives it an advantage it could not get on the open market and distorts competition in the single market. The EU has tough rules governing the way subsidies can be given, to stop companies from getting an unfair advantage over their competitors and to ensure that countries with deep pockets do not subsidise their companies to the detriment of companies in other member states. However, where there are good policy justifications for state aid—where the benefit from giving aid outweighs the potential harm of a subsidy—the rules enable aid to be given.

Not all Government spending is aid. In fact, less than 1% of UK Government spending meets the technical definition of state aid. The state aid rules are about supporting fair and open competition, and the UK has long been a vocal proponent of them. The rules exist to stop countries from subsidising their industries unfairly, which would put businesses out of business and workers out of work.

A second misconception is that state aid rules prevent nationalisation. As long as the Government do not pay more than the market price for any assets acquired, the rules do not prevent that. However, the rules oblige the state to act as a normal market investor. That is good, because it prevents public authorities from unfairly distorting markets. State aid rules are neutral on public ownership and on the detail of spending decisions.

State aid rules are also fundamental to any free trade agreement. The political declaration on the framework for the future relationship between the EU and the UK recognises that. Free and fair trade is not possible if one party is able to subsidise without restraint. In a single customs territory that allowed the free trade of goods, as provided for in the draft withdrawal agreement, neither the EU nor the UK would be able to apply tariffs as measures against unfair subsidies by the other party. To ensure fair and open competition, it is absolutely necessary for the same state aid rules to apply consistently within the single customs territory, not to be frozen or disapplied for one bit of it.

I turn to workers’ rights, which have been the predominant topic of discussion. It is important to be clear that we are not making a choice between protecting state aid rules and protecting workers’ rights. As a responsible Government, we will work both to prevent unfair subsidies and to protect the rights of workers. The UK—we had several history lessons through some of the learned contributions to the debate—has a long-standing record of ensuring that workers’ rights are protected. Those include employment and equality rights, and protections for health and safety at work.

The decision to leave the European Union does not change that. This Government have made a firm commitment to protect workers’ rights and to maintain the protections covered in the Equality Acts.

Draft Package Travel And Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018

Chi Onwurah Excerpts

Tuesday 4th December 2018 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Mr Hosie. As the Minister indicated, with the rise of the internet and the boom in low-cost airlines, the way we book our holidays has changed significantly. Last year, 38% of all holidays abroad by UK residents—17.5 million holidays—were package holidays. Holidays to the European Union made up 79% of all holidays, and 74% of package holidays, by UK residents. Consumers often buy packaged holidays a long time in advance. They often spend a considerable amount of money—a very significant proportion of their income—on a holiday, including on flights, hotels and car rental.

As the popularity of package holidays rises, so do the risks, including the risk of trader insolvency leaving consumers stranded, the risk of accommodation providers going bust, and the risk of difficulties with access to information, help or redress, to name just a few. That is why the EU directive was an important step forward in protecting consumers in both the UK and the EU.

As the Minister outlined, this statutory instrument amends EU-derived regulations that protect consumers buying package holidays or linked travel arrangements to ensure that these protections continue to operate effectively after the UK’s departure from the European Union. It proposes a new obligation on UK businesses that sell package holidays put together by a European Union business. Those UK businesses will be required to comply with UK insolvency protection requirements, unless they can demonstrate that the EU business has taken out appropriate insolvency protection.

Clearly it is vital that insolvency protection schemes work. To give just one example, in 2016, Lowcostholidays failed, which left 140,000 UK consumers at risk of losing the money they had paid for their holiday, and some stranded overseas. At the time of the failure, the company, which sold primarily to the UK market, was based in the Spanish Balearic islands, following a controversial move in 2013, and its insolvency arrangements were held there. The UK regulator, the CAA, was powerless to prevent the company selling to UK consumers, or to obtain information on its insolvency arrangements. Fortunately, in that case, the majority of UK consumers ended up receiving refunds through the Consumer Credit Act 1974, which covers refunds of credit card payments. However, it has since emerged that the company’s insolvency protection came nowhere near to covering the sales it had made. That illustrates the potential risks of insolvency protection schemes not working in a joined up manner. It is not enough to have a scheme; it needs to work in a joined up way.

The intention behind the mutual recognition rules is to prevent this type of scenario occurring, but without those rules, the only way to do that is to require UK sales to be protected here. As a result of the regulations, the mutual recognition of insolvency protection with EU member states will end. As part of the withdrawal negotiations, have the Government attempted to negotiate continued mutual recognition of this? If not, do they intend to?

As UK individuals and businesses will no longer benefit from mutual recognition of insolvency protection, they could see a reduction in their consumer rights. Is that compatible with the Prime Minister’s statement in October 2017 that she wanted a partnership with the European Union based on strong consumer rights?

Furthermore, the Minister will know when this SI came to the Committee in May, an impact assessment was undertaken, as it was recognised that businesses offering packages that would be newly within the scope of the package travel directive of 2015 would face costs of £21 million in ensuring proper performance of the package. Does she not agree that an impact assessment should have been prepared prior to this debate? The right hon. Member for South Holland and The Deepings asked how businesses could be made more aware of these changes; should that not have been costed as part of an impact assessment? Will she estimate what exactly the cost will be to businesses?

The Minister did talk about an impact assessment. What assessment has she and her Department made of the number of travel companies that may move away from the UK market as a result of the new changes in insolvency protection? Finally, what discussions has she had with British trading standards on the impact these amendments will have on its workload? We know British trading standards has, unfortunately, been underfunded. Will this add to its workload without adding resources? My final question: given the 56% reduction in staffing for trading standards due to Government cuts, has the Minister any assurance to make?

[Sir Hugo Swire (East Devon) (Con)]

How much more money would the hon. Lady’s party give to the trading standards body?

[Chi Onwurah]

I thank the right hon. Gentleman for his intervention, even though it is a little mischievous in nature. As he knows, we would have undertaken these negotiations in an entirely different and more effective way. To ask questions on the detail of what we would do—

[Sir Hugo Swire]

Will the hon. Lady give way?

[Chi Onwurah]

I will finish answering the right hon. Gentleman’s first point before I give way a second time. Asking how we would mitigate the negative consequences of agreements that are part of the Government’s deal—we will see whether it will be approved by the House in a week’s time—is taking hypothetical questions to the extreme.

[Sir Hugo Swire]

For the sake of the Hansard reporters, let me state that I would never want to be accused of saying that the Opposition were strong on detail, but the hon. Lady has just accused the Government of cuts, and of reducing the amount payable to a body, which suggests that her party would commit more funds. It is not hypothetical; we need to know what she means by this.

[Chi Onwurah]

It is entirely wrong to say that I am making an accusation against the Government by simply stating that there was a 56% reduction in staff numbers. How is that an accusation? That is a statement of fact, a statement of the consequence of this Government’s and the preceding Government’s austerity agenda, which has led to our consumer protection services being decimated. The right hon. Gentleman was looking for more detail on this point, and I am happy to give it to him. Our services have been decimated as a consequence of the Government’s austerity agenda. His Prime Minister has said that austerity has ended, but his Chancellor has in no way committed the funds to make that real.

[Sir Hugo Swire]

Will the hon. Lady give way?

[Chi Onwurah]

Again, I would like to answer the right hon. Gentleman’s first point before giving way another time. A Labour Government will ensure that our public services are properly funded. We need to see exactly what mess this Government leaves for us before we can say exactly how much that will cost.

[Sir Hugo Swire]

Hopefully it will not be as great a mess as the one we inherited from her Government in 2010. People are beginning to rumble the Opposition for being opportunistic. The hon. Lady has talked about cuts and decimation; she has accused the Government of decimating this particular body. It is entirely right that, as parliamentarians, we should know what her counter-proposals are. It is no good trying to lose the room in blandishments and vague promises. We need to know, if she has looked at this, how she would better resource it.

[Chi Onwurah]

Our commitments are to comprehensive investment in our public services and our infrastructure, and to strengthening consumer rights and protections. I will not go through every line of funding in our first Budget as a Labour Government, because I am not in a position to do that. However, I am in a position to say categorically that we would not have indulged in the failed economic policy of austerity, which has cut our public services while also giving us the lowest economic growth within the Organisation for Economic Co-operation and Development, and the second lowest within the European Union. If that is successful economic investment, then I think the right hon. Gentleman has a lot to learn about a successful economic policy.

[Sir John Hayes]

Might I be helpful? I realise that I cannot match the assertiveness of my right hon. Friend the Member for East Devon, but this seems to be less about trading standards than about the way in which people book holidays. When I looked at these matters as a Minister, as I mentioned earlier, it became clear that the regime that has prevailed for some time was based on the fact that most people booked their holiday through a supplier, as a package. Increasingly, people construct their holiday by a variety of means, including through the internet. There is a reasonable point to be made about this being a dynamic sector that requires a moving regulatory environment.

When I challenged the Minister on this, she very helpfully committed—I thought she would—to providing information to all those bodies associated with that highly dynamic part of the market, as the explanatory note implied that we should. I am not putting words into the mouth of the hon. Member for Newcastle upon Tyne Central, but a more telling critique would be about that, rather than taking this more conventional approach around trading standards.

[Chi Onwurah]

I hesitate to disagree with the right hon. Gentleman, who is so well informed in many areas, but as I said in my opening remarks, while it is absolutely true that consumer behaviour has changed in terms of how holidays are booked, that does not mean that the need for protection and for trading standards has reduced. For example, if we look at how crime has moved from the high street to the virtual high street, then some might argue that there was a greater need for trading standards and for protection of consumers. While I take the point that any consumer protection regime needs to reflect consumer behaviours, I do not think that that in any way reduces the need for trading standards bodies to have the proper resources.

[Sir John Hayes]

rose—

[Sir John Hayes]

I am always guided by your wisdom, Mr Hosie. The point is that this is a complex area. The hon. Member for Newcastle upon Tyne Central is right that trading standards matter, but that is not all that matters. The Minister has made it clear that she is determined to make sure that information is provided to the businesses, voluntary organisations and charities that are likely to be affected, in exactly the way that I requested.

[Chi Onwurah]

Thank you for your advice, Mr Hosie. Let me reflect the right hon. Gentleman’s point and ask the Minister specifically what assurance she will make to resource British trading standards adequately to reflect additional workload. Assurances are very well, but it takes resource and funding to make them into reality. What resources will she put behind the information and communication campaign that she has apparently committed to in this debate?

Draft European Research Infrastructure Consortium (Amendment) (EU Exit) Regulations 2018

Chi Onwurah Excerpts

Monday 3rd December 2018 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a real pleasure to serve under your chairpersonship on such an important subject, Mr Sharma. With the article 50 deadline so close and the Government in such disarray—as demonstrated by the recent resignation of the former Science Minister, the hon. Member for East Surrey (Mr Gyimah)—we need more than ever the process of scrutiny that statutory instrument Committees allow.

Science is a great British success story, supporting jobs and growth across the country. From Newton to Hawking, and from Lovelace to Franklin, British scientific giants have bestrode the world. It is a global success story: in science and innovation, we are the partner of choice of our European neighbours and countries across the world. British science has benefited from what the director of the Campaign for Science and Engineering, Dr Sarah Main, describes as:

“A web of collaborations, shared facilities and cross-border research programmes…which has led to a rich flow of ideas, people and research funds into the UK.”

According to the Government’s 2013 report, the increasing internationalisation of UK science, powered in part by European collaboration, has allowed us to surpass the United States in science productivity.

As the Minister has explained, ERICs are one of the legal forms that underpin this collaboration, and they are crucial to the success of British science. We take a leading role in many pan-European organisations, with facilities often located in our country. Instruct-ERIC, for example, was set up to support structural biology research infrastructure, and has six centres in the UK. ECCSEL ERIC, which provides laboratory infrastructure for important research in carbon capture and storage, has a near surface gas monitoring facility and six carbon dioxide capturing facilities in the UK.

Even when such facilities are not located in the UK, participation in ERICs gives our researchers access to facilities, data, knowledge and contracts that would otherwise be inaccessible. That is beneficial not just for public research organisations but for the private sector, both through the tendering of construction opportunities to private businesses and through the use of ERICs to disburse funding for research projects, to which private organisations may be contributing. ERICs are therefore an important interface between research funding at the state and pan-European levels and the research endeavours of public and private institutions. Strengthening that interface will be crucial if we are to achieve the ambition shared on both sides of the House of meeting—and on the Opposition side, surpassing—the OECD average of 2.4% of gross domestic product invested in research and development.

The draft regulations are an attempt to pave the way for the continuation of current laws governing the establishment of ERICs when we leave the European Union. I will not go into the details that the Minister set out, but the Opposition are satisfied that the SI does not represent a policy change. The Government’s impact assessment says that the SI will not have a direct impact on business and research organisations, and that is true in the strictest sense. The SI does not change the process for joining an ERIC, or the rules under which they are governed. Crucially, as the Minister set out, countries do not need to be members of the European Union or its framework programmes to be a member of an ERIC, so we will continue to participate in ERICs even if we are not able to join Horizon Europe as an associate member.

However, I emphasise that it would be naive to assume, as the Minister seems to be doing, that the level of our participation in European framework programmes will have no impact on whether the UK continues to join new and existing ERICs. Science funding and investment have already been severely knocked by the chilling impact of not knowing what our relationship with Horizon will be after Brexit. Funding for UK science from Horizon 2020 was down by a fifth last year, while more and more universities tell me that Brexit chaos is freezing them out of funding opportunities. It is vital that we secure associated status with Horizon Europe, as CaSE and the Royal Society have called for and as Labour has pledged. I am glad that the Government are committed to seeking associated status, but am concerned by the lack of any apparent contingency plan if negotiations fail to secure that status.

That uncertainty is compounded by confusion at domestic level. Despite their lofty rhetoric on science spending, the Government have not produced a long-term funding plan. Disbursement through the challenge fund is uneven and unpredictable, while measures to support innovation through the tax code are continually being introduced and then axed. Finally, with the Government’s long-anticipated White Paper on migration supposedly around the corner, British science needs clarity on how and to what extent it will be able to access European talent after breakfast—Brexit. [Hon. Members: “Ah!”] Perhaps we will just have breakfast instead.

In conclusion, the Opposition will approve the SI, as we believe it is necessary for the continuing functioning of our science sector post-Brexit. However, the Government would do well to consider what else they need to do to ensure that we continue to be the scientific partner of choice for the world.

--- Later in debate ---

[Claire Perry]

I thank hon. Members for that series of interesting and helpful questions, which I will try to answer.

There was a series of questions about our post-Brexit position on ERICs and the scientific leadership that we wish to exert. It is absolutely right that we continue to discuss this. I should have declared an interest, Mr Sharma: I am married to a world-leading scientist—Professor O’Neill of Cambridge University—who has participated not in ERICs, but in a number of Europe-wide research projects. I know very clearly what the risks and benefits are of continuing or not continuing international collaboration.

The point about the talent pool is significant, because of course scientists are not fungible. Part of the reason why we have been able to attract so much investment, both domestically from private sector sources and from overseas, including Horizon—as of 28 September, we were second only to Germany in the funding commitments we have received—is that we have an astonishingly strong science and innovation research base. Arguably, we need to focus on scale-up to get from research to commercialisation, but that has nothing to do with our position in the European Union; it is to do with our will to harness industrial investment after early stage research and development.

I and the Department remain very positive about the outlook for the UK’s role in participating in world-leading science and innovation. We have taken a couple of domestic measures, including providing an additional £7 billion to the public funding of R&D from 2017 to 2020, which I understand to be the biggest increase that has ever been made. We are also working through sector deals to try to align the principles of the industrial strategy with the very practical steps that different sectors are taking forward, including on R&D-specific projects, places and individuals funded through those sector deals. It feels to me entirely fundamental to the UK’s progress—I believe that this should have happened regardless of our decision on Brexit—to harness that world-leading science and innovation base in a way that delivers more of an alignment with the industrial strategy.

[Chi Onwurah]

I thank the Minister for the tone of her response, but I take issue with her proposition that the ability of UK companies to scale up is not related to whether we are part of the European Union. Funding is one thing, but access to talent and potential markets for scale-ups are obviously related to whether we have access to one of the world’s biggest trading blocs.

[Claire Perry]

The hon. Lady is right. It is why the proposed framework is to have as close as possible alignment on goods. I know she speaks to many universities and researchers, so she will know that we have an endemic problem with scale-up. What tends to happen is that the intellectual property is sold overseas before the commercialisation stage, and often the full commercialisation of projects and services is done by overseas companies, rather than the IP being held back in the UK—but I am digressing slightly. Forgive me, Mr Sharma.

I am going to address the migration points. I thank the hon. Member for Wallasey for her contributions to the European Statutory Instruments Committee. I know she has a lot of stuff going on with that, and these are important questions. Third countries cannot host ERICs, so there is a question about hosting versus participation. We host two ERICs and we are members of 12. This relates to our future negotiations, which are spelled out in the political declaration, but we have expressed a desire to continue to host. We hope that our special status as one of the world leaders—I cannot remember the patent numbers, but I believe we are up there with economies very much larger than ours—will allow us some special status for ERICs hosting. I believe that is part of the future negotiations.

--- Later in debate ---

[Claire Perry]

Thank you, Mr Sharma.

[Chi Onwurah]

In the context of ERICs, I feel that it is important to emphasise that we all wish for more women not just to come forward, but to be encouraged to be part of science. Speaking as an engineer myself, I know the virtue of collaboration is that different people from different disciplines and different backgrounds come together to create innovation. That is not an issue with regard to whether or not home-grown women are accessing the skills pool.

[Claire Perry]

The hon. Lady is absolutely right. I think she rather supports the point that I made earlier, which is that scientists are not fungible. That is why I believe that we should maintain very strong confidence in the UK’s incredible reputation in science and innovation. We have world-leading science bases and research, and that is entirely strengthened by collaboration, as she said. Projects such as ERIC will help to facilitate such collaboration. I would be grateful to the Committee for allowing the regulations to proceed, because they are simply a technical clearing out of some rules that will no longer apply, and they will enable us to maintain our membership of ERICs post-exit, or to join new projects. I therefore commend the regulations to the Committee.

Question put and agreed to.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 20th November 2018 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

“High tech manufacturing in every part of the country”—the Secretary of State’s words. General Electric is closing in Rugby and Michelin is closing in Dundee. From Swansea to Copeland to Lowestoft, his energy policies destroy more jobs than they create. By ending the enhanced capital allowance, the Budget took hundreds of millions of pounds from manufacturers, while doling out billions in corporate tax cuts. Manufacturing demand is now dropping at its fastest rate since 2015, yet the Cabinet is in meltdown over whether to walk out on the customs union in four months with no deal or in 24 months with the Prime Minister’s plan. Does the Minister agree that a permanent customs union is essential for British manufacturing and British jobs?

[Richard Harrington]

It will come as no surprise to you, Mr Speaker, that I disagree with a lot of what the hon. Lady has said. She says the Cabinet is in meltdown. It is not. [Interruption.] The Cabinet is not in meltdown. On her substantive question about energy, to the best of my knowledge, offshore energy is producing a lot of jobs, including in Tyneside. [Interruption.] It very much is. She must be aware, as far as the customs union part of her question is concerned, of the importance of the Government’s proposals, which provide the benefit of a very close relationship with all the countries in the EU. They also mean that this country will be able to enter into negotiations to sign free trade agreements with countries all over the world.

Budget Resolutions

Chi Onwurah Excerpts

Wednesday 31st October 2018 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

With the leave of the House, I shall speak instead of the shadow Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), who has been taken ill and is disappointed not to be here today. We wish her a speedy recovery.

Every Opposition Member is disappointed by the Chancellor’s Budget, which can best be described as a “broken promises” Budget, despite the spin that the Secretary of State has tried to place on it. The Prime Minister promised the end of austerity, but the Chancellor was already backtracking within the first few minutes of his speech, simply saying that austerity is “coming to an end” and even that turned out not to be true. Austerity is certainly not over.

The truth is that the small giveaways in this Budget do not begin to even touch the sides of the cuts made since the Government took office. The £1.7 billion promised to universal credit is less than a third of the £7 billion of social security cuts still to come. School funding has been cut by 8%, but there was nothing to fill the gap, and the Chancellor’s idea that schools should be grateful for a one-off payment of £400 million for “little extras” is insulting. Local councils still face a funding gap of £7.8 billion by 2025, and budgets will be cut by a further £1.3 billion next year. How is that the end of austerity? In fact, the Resolution Foundation has predicted that the Department for Business, Energy and Industrial Strategy will have suffered a real-terms per capita cut of over 50% by 2024.

[Dan Carden (Liverpool, Walton) (Lab)]

The Secretary of State just mentioned Liverpool. Since 2010, Liverpool’s local authority budget has been cut by 64%. That is the problem that Liverpool is facing today.

[Chi Onwurah]

My hon. Friend makes an excellent point. All our constituents have had to suffer cuts to services, so for the Secretary of State to say that austerity is over is an insult to our intelligence.

[Mr Kevan Jones (North Durham) (Lab)]

Like Liverpool, Durham County Council has lost nearly half its budget since 2010, and the cuts are still going on. This Budget contained no change to next year’s cuts in revenue support grant, so another £40 million will be taken out of the council’s budget.

[Chi Onwurah]

My hon. Friend is absolutely right. The services that make such a difference to our constituents’ daily lives face increased cuts, which is why our constituents know that austerity is not ending under this Government.

[Mr Simon Clarke]

Do the hon. Lady’s constituents want to pay billions more in tax or to have the nation weighed down by billions or even trillions more in borrowing?

[Chi Onwurah]

Our manifesto commitments show that 95% of the people of this country would not suffer any tax increase under a Labour Government. The Conservatives have managed to double our debt, while preaching austerity—doubling the debt because the economy did not grow significantly under the austerity ideology.

The Secretary of State may point to the increased spend on the NHS as an example of austerity ending, but the Health Foundation has branded it as simply not enough. Paul Johnson of the Institute for Fiscal Studies said yesterday that if we look at total spending—[Interruption.] The Secretary of State seems to suggest that health spending is not relevant to the economy, but it is the wellbeing of all our constituents that enables us to deliver an economy that works for everyone. Paul Johnson of the IFS said:

“If you look at total spending beyond the NHS it’s not really going anywhere… If you look at total spending as a fraction of national income, it’s not really going anywhere... This is not a dramatic change in the sense of undoing much of the cuts we’ve had over the last eight years.”

The Chancellor has squandered an opportunity to repair the damage done to our public services and our economy by his predecessor’s pursuit of a failed economic ideology. That ideology has created many of the problems holding back our economy today, from chronically low productivity and business investment to eye-watering levels of inequality in terms of both income and geography.

[Vicky Ford]

What was eye watering was the debt under the previous Labour Government. Does the hon. Lady not agree that growth of over 1.5% going hand in hand with public spending is a phenomenal achievement and is thanks to a balanced economy?

[Chi Onwurah]

The hon. Lady should finally recognise that the economic crisis—the crash—was caused by casino capitalism and reckless bankers, and the Conservative party chose to make the poorest people pay for it, and they continue to pay, given the slowest recovery since the Napoleonic era.

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

Does my hon. Friend agree that the economy was growing and national debt was below 50% when Labour left Government? Debt has grown to 85% under this Government because of their failed austerity programme. Indeed, when we built the NHS in 1948, debt was 250% of GDP, but it dropped because we invested in the economy.

[Chi Onwurah]

My hon. Friend is absolutely right. He could give a lesson in basic economics to most Conservative Members.

[Mr Kevan Jones]

Is it not a fact that debt was 43% of GDP when Labour came to office in 1997 and went down to 40% by 2006? That was down to good management of the economy before the crash. Through those years, the Conservative party was not just agreeing to our spending commitments, but asking for more expenditure, so we will have no lessons from the Tory party about reckless spending.

[Chi Onwurah]

Absolutely. The Conservative party initiated and promoted the reckless deregulation of our financial sector, which contributed significantly to the financial crisis, and then failed to manage the economy in such a way as to ensure sustained, significant growth. Under this Government, we have had half the historical level of growth.

The prognosis for growth is reflected in business investment, which is the lowest in the G7. We are the only major economy in which investment is falling. Our productivity is 15% lower than in other major economies, and it has not grown this slowly since the Napoleonic wars—there is an achievement. The average real wage growth since the second world war is 2.4% a year, but under the Conservatives, pay has fallen by 3% and the UK remains the most regionally unequal country in Europe.

We needed a big Budget to rebalance our economy and to provide the industrial strategy with the backing it needs to address the serious problems, but the Budget is deeply disappointing. We got an arbitrary announcement of more funding for the national productivity investment fund, but that will be in 2023, with no information on where the money will be allocated.

On research and development, we had another repackaging of money that was announced last year dressed up as additional funding when, in fact, of the £1.6 billion cited by the Government only £180 million, barely 10%, is new. Although we are pleased that there has been a marked increase in R&D expenditure, there is still no overarching strategy for its direction or for how the Government intend to meet their target of spending 2.4% of GDP on R&D. We are a world leader in science, but, let us be clear, the Government’s 2.4% target is average when it comes to R&D spend. Labour’s target is 3% to become one of the leading nations in R&D spend.

What little information there was in the Budget again focused on sexy high-tech areas like nuclear fusion and quantum mechanics. As an engineer, I understand the desire of the Prime Minister and the Secretary of State to be associated with sexy technologies, and it is of course a vital part of our industrial strategy to support the industries of the future, but the Secretary of State has repeatedly failed to recognise that supporting our biggest sectors to improve their productivity through technology and investment is so important.

Retail is one of the biggest employers outside the public sector, and it is facing a unique crisis. Over 100,000 jobs have been lost in the past three years, and over 25,000 shops stand empty. High streets are the centre of communities, and they should and can continue to be vibrant spaces of which communities are proud, but to achieve that we need proactive policies from the Government, as Labour have been demanding for months.

The Secretary of State has been a bit cheeky and stolen a number of Labour’s policies in this area. A register of empty properties, an adjustment to business rates and a high street taskforce were just some of the policy proposals in the conference speech of my hon. Friend the shadow Secretary of State. It would be churlish of me to demand our policies back, but that is where the consensus ends.

The Government’s overall package, “Our Plan for the High Street,” simply does not do enough. Business rates relief would not have saved a single House of Fraser or Debenhams—the vast majority of retail workers are employed in such shops. The British Retail Consortium has said that the Government

“must engage in more extensive business rates reform to help all retailers and their employees through this period of transformation.”

The CBI responded:

“Smaller businesses will be relieved by the support on Business Rates… But larger retailers and manufactures—and the millions they employ across the UK—will continue to suffer needlessly until there is a full, in-depth review.”

Yet the Budget contained no commitment to a review of business rates.

The future high streets fund is yet another fund allocated out of the national productivity investment fund, and there are no details of where the money will be targeted, who will be responsible for administering it or how quickly funds will be made available. The proposals for planning reform have missed the point. It seems that the Government’s idea to save our high streets is to turn them into non-high streets. Frankly, much more work is needed if we are to protect our high streets and the millions of workers who rely on them.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

My hon. Friend is making an excellent point about the high street. Does she agree that it is ridiculous of the Chancellor to ask that local authorities develop a plan for their high streets, which is something we support, while he is taking away the means for them to be able to plan for their high streets by introducing yet more permitted development?

--- Later in debate ---

[Chi Onwurah]

My hon. Friend makes an excellent point. The attack on the capacity of local authorities, as well as on their powers, means that their ability to determine the future of our high streets is severely limited.

Retail is our biggest employment sector, and many of the job losses will be in towns and cities outside London and the south-east where good jobs are already hard to find. The precariousness of work in the retail sector is one symptom of the crisis blighting high streets across the UK.

There is very little in this Budget for workers, across all sectors, who after eight years of austerity are facing an uncertain future. Only yesterday, workers marched on Parliament to demand proper pay and terms and conditions. Many of those workers are outsourced to private providers and are on precarious, poorly paid contracts. Yet the Government continue to turn a blind eye, and there is absolutely nothing in the Budget to improve the lives of those marching.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

The hon. Lady is completely right on that point. Does she agree that it is a disgrace that, after Ministers from the Department for Business, Energy and Industrial Strategy talked out my private Member’s Bill to ban unpaid trial shifts, which are a blight on retail, the Government now refuse to meet anybody to talk about it, despite acknowledging that unpaid trial shifts are a major problem?

[Chi Onwurah]

The hon. Gentleman makes an excellent point, and I look forward to the Government’s response.

[Vicky Ford]

Will the hon. Lady give way?

[Chi Onwurah]

I will now make some progress, as I am sure Mr Speaker will not indulge me much longer.

I am not sure what is needed for the Conservative Government to see that their economic policies are causing more harm than good. Rising prices and stagnating wages mean that people are now £800 a year worse off than they were a decade ago. Just under half a million young people are still unemployed, and one in nine are in insecure agency work, on a zero-hours contract or in low-paid self-employment. That is the everyday reality for millions of working people—the people behind the supposed record levels of employment bandied about by the Government as the marker of a successful labour market.

The truth is that there are real issues in our labour market—rising insecurity, stagnating wages and a productivity crisis—so it is disappointing to see so little to address them in the Budget. There are increases to the minimum wage or, as the Government have rebranded it, the national living wage, but it is still significantly below the rate set for the real living wage. One in five people earn less than the wage they need to get by, according to the Living Wage Foundation, and the increases will not change that. In addition, unlike the Government’s minimum wage, the real living wage is based on a review of the evidence on what is happening to people’s living standards right now.

The Government’s failure to immediately reform the IR35 rules, which govern how much tax those working as contractors pay, shows that they are refusing to take tax avoidance seriously. By pushing back those reforms to 2020, the Government are denying themselves much-needed revenue, which could be used to properly fund our schools and the NHS, or to pay workers a decent wage. How many more people need to take to the streets protesting about their precarious working conditions? How bad do things have to get before the Government finally take action?

We have heard lots of warm words about defence spending, but they are cold comfort to many of the workers in the shipbuilding industry, such as at Cammell Laird and Appledore, who are facing real uncertainty as to whether their jobs are safe. It is disappointing that the Government failed to announce any support for our manufacturing or shipbuilding industries, which are vital to our long-term economic success.

In the same month that the Intergovernmental Panel on Climate Change, the leading authority on climate change, set out the devastating consequences for human civilisation of a business-as-usual approach and the scale of ambition needed to avoid dangerous climate change, what did the Chancellor do? He did not even mention climate change, and the Red Book was little better. The Chancellor left the carbon price support unchanged and said that the Government would seek to reduce the rate if the total carbon price remains high—that is as clear as mud. The Chancellor tinkered at the edges of the climate change levy, a policy introduced by Labour but undermined by his predecessor, George Osborne, who removed exemptions for renewable energy. The Government did announce a £315 million industrial energy transformation fund to support businesses to increase their energy-efficiency. That sounds good, but when we realise that it will be paid for entirely by money saved from scrapping capital allowances for energy and water efficiency, which enabled businesses to claim back the costs of investments, we see that it is really just rearranging the furniture.

What else was there? As has been said, the Government announced £20 million for nuclear fusion. I do not know whether the Chancellor’s understanding of nuclear fusion is as limited as his understanding of blockchain, but these figures should illustrate the challenge here: £20 million is 330 times smaller than the €6.6 billion the EU will contribute to one nuclear fusion experimental facility in France—this is not even a drop in the nuclear ocean. Of renewable energy—wind, solar and tidal—not a single mention was made, at a time when electricity and gas wholesale prices are rising, and we enter another winter with household bills surging and millions facing fuel poverty. There was £10 million for urban tree planting and a commitment to purchase £50 million-worth of carbon credits from tree planting, although it is unclear whether that is new funding. The lack of action on climate mitigations is disappointing.

[John Howell]

I think the hon. Lady’s figures on fusion technology are completely wrong, as she is not comparing like with like. The project in the south of France is a commercial project to make fusion possible at a commercial scale. That means that the projects continuing in the UK do not have to be at that scale, and the £20 million is an enormous contribution to what they are trying to do.

[Chi Onwurah]

I thank the hon. Gentleman for his intervention, but in fact he illustrates the scale of the problem. Nuclear fusion requires significant investment in order to commercialise it, as he would agree. The level of investment that this Government are making in it is entirely inadequate to meet the challenge and in respect of the contribution fusion can make to our economic and climate future.

Labour is serious about achieving a net zero emissions economy before 2050. We are developing policies to dramatically decarbonise energy and insulate 4 million homes in our first term, as part of our green jobs revolution. We believe in the power of people, the power of leadership and the power of government to address what are frankly existential challenges. After eight years of austerity and counting, it is evident that the Tories have given up on this. This Budget shows the Tories giving up on the planet, too. They lack both ideas and the courage to do what is needed. They must step aside.

--- Later in debate ---

[Vicky Ford (Chelmsford) (Con)]

It is a pleasure to speak in favour of the Budget tonight. The decade since the financial crisis has been tough, and it is very good to know that the corner has been turned. The economy must come first, because without a strong economy we cannot afford other priorities such as healthcare, welfare, defence and education. Today in Chelmsford unemployment stands at 1.6%; we have record numbers of jobs and opportunities. We know that politicians do not make jobs—businesses do—but we can help. Businesses often tell me how low corporation taxes have helped them to invest here. Chelmsford businesses ask me for lower business rates, fixed VAT thresholds and a level playing field between online and offline trade, because tech giants should pay tax too. I am really glad that all three of those asks have been addressed in the Budget.

We know that innovation drives growth and keeps us ahead of the pack, and I am proud that this Government have increased investment in science and research by more than any Government in the past 40 years. We on this side do not underestimate the importance of collaboration in science, which is why our EU strategy keeps us in those European networks. I am glad that the Minister for Immigration is here. She knows that we need a fair and fast immigration system to enable scientists to continue to come here.

Fundamental research in science is key. Ideas involving liquid crystals, molecular machines and gas phase chemistry were once just intellectual curiosities, but they have now driven real transformational breakthroughs. We need to ensure that the ideas we have here are made into reality here. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) dismissed quantum technology as a “sexy” sector, but my biggest employer in Chelmsford has embraced the quantum revolution. It has made the cold atom trap—

[Chi Onwurah]

I thank the hon. Lady for giving way in what is the final Back-Bench speech of the debate. I feel that it is wholly unjustified to say that I should not call technology sexy. One of the things I would like to do as an engineer is to show people how sexy and important technology and engineering are. Calling it sexy was not dismissing it. I was just saying that we need to celebrate all different types of technology, not just quantum technology.

[Vicky Ford]

Maybe it was the tone that felt dismissive. In my constituency, we have embraced quantum technology. We are making a cold atom trap and the oscillator for a quantum clock. There is nothing wrong with being in a “sexy” sector. Last week, that employer called in 120 of its lowest-paid workers and gave them a pay rise of between 8% and 18%. These are real products, real sales, real profits and real pay rises. That is what will drive our country’s future.

I thank the Treasury for the investment in infrastructure. People in my constituency spend too much time in traffic jams and on delayed trains. It is a waste of their personal time and it hits the country’s productivity. We are building tens of thousands of homes in my constituency, and we need the infrastructure too. We need the second railway station and the north-east bypass, and we have got our bids in to the housing infrastructure fund—it is great to see that fund being increased—and the local roads fund. We need money for main roads, cash for cycleways and pounds for our potholes, but in Chelmsford, my pinch point is the ancient Army and Navy flyover. I want our local roads fund to be Ford’s flyover fund, please.

There are three other things in the Budget that I would really like to praise. The first is the tax on virgin plastics. We need a game changer in the way we use plastics on this planet, and I am really glad that Britain is leading the way on this. The second is the improvement in universal credit. That is welcomed not only by us on this side of the Chamber but by the Joseph Rowntree Foundation, the Trussell Trust and the Resolution Foundation. All those organisations are real experts in fighting poverty. The third thing is the massive boost for the NHS in the form of £20 billion for health and mental health, which is not funded through hiking up taxes. We are putting more money into the pockets of our lowest-paid workers by freezing and raising their tax thresholds.

There is a great deal in this Budget to be proud of, and I am proud to be the last Back-Bencher to speak in favour of it tonight.

Student Loan Book: Sale

Chi Onwurah Excerpts

Thursday 11th October 2018 Commons Chamber

[Mr Gyimah]

The loans we currently have are income contingent and are collected through the tax system, so even when the loans are sold off, the new owner of the loans has no means or mechanism to contact the students or chase them for payment.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

The Minister seems to be saying that he is selling off the student loan book to invest in the public services that his Government have slashed. Given that it is the end of austerity, should it not be possible to invest in those public services without privatising the financing of our higher education and the debt of so many students?

[Mr Gyimah]

All the Government are doing is trying to capture an income stream that we will get over 25 to 30 years. This is money due to the Government and the Government are coming to a financial arrangement that allows the money to be captured today. As the last Labour Government saw fit, so this Government see fit, in a sensible and prudent way, to manage the Government finances.

Economic Growth: East of England

Chi Onwurah Excerpts

Wednesday 10th October 2018 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Waveney (Peter Aldous) on securing a debate on the important subject of our industrial strategy and economic growth in the east of England. As a Member of Parliament for a north-eastern constituency, I am intimately familiar with the challenges of regional economic growth, although a premiership football club can make a significant difference.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)]

Enjoy it while you can!

--- Later in debate ---

[Chi Onwurah]

Exactly. As we heard, the east of England contributes nearly 10% of the UK’s gross value added and has experienced cumulative growth of 13% since 2010—slightly higher than average. It boasts enormous strengths, from world-leading science and innovation to agriculture and food production, as was highlighted by the hon. Member for Central Suffolk and North Ipswich (Dr Poulter). With the right support, the region can continue to thrive and contribute to the future prosperity of our country, yet it appears that uncertainty, particularly over Brexit, is causing economic growth in the region to stall, with both business creation and GDP growth down since 2016. That effect is seen in the news that both Robinsons, which has been in the region for 90 years, and Colman’s, which has produced mustard in Norwich for 160 years, are to leave the region, taking jobs with them.

Meeting the challenges of Brexit requires a positive industrial strategy. Unfortunately, what has been put forward so far does not cut the mustard, as Colman’s might say. Let us look at just three aspects of the Government’s industrial strategy. First, if the Government stick to their current policy of arbitrary migration targets with no concern for economic need, and if they press ahead with the Prime Minister’s plans to cut what she calls low-skilled—earning less than £50,000 a year—immigration, businesses will have huge problems recruiting and retaining staff. That is true not only of agriculture, which employs tens of thousands in the east of England, but of research in the region’s great universities and development in the Silicon Fen tech cluster around Cambridge worth £1.54 billion. The Government’s industrial strategy does not try in any meaningful way to address the huge skills gap caused by the Government’s Brexit position.

On skills, it would be easier to plan for future skills need if the Government offered any real devolution or economic decision-making powers to the region, such as the

“massive devolution of the skills agenda and funding”

that the all-party parliamentary group’s Budget submission calls for. The Cambridgeshire and Peterborough Combined Authority does not have the powers or autonomy enjoyed by others in England, and there has been no visible effort from Government to consult on or put forward regional industrial strategies. I look forward to the Minister explaining how that will happen.

The Government’s approach contrasts starkly with what Labour is doing: we are putting regional need first, with plans for a network of regional investment banks with real money behind them and decisions made locally. We will hold the first in a series of regional industrial strategy conferences in Newcastle next month, and another business conference in the north-west in January. The shadow Chancellor and the shadow Secretary of State for Business, Energy and Industrial Strategy are touring the country holding regional economic conferences and roundtables.

Thirdly, as the Government are paying scant attention to the spread of growth within regions, the all-party parliamentary group’s submission to the Budget argued that the key issue for the east of England is

“how to manage and spread Cambridge’s growth to market towns and coastal communities in a strategic and effective manner.”

My hon. Friend the Member for Cambridge (Daniel Zeichner) gave a detailed account of the economic strengths his city brings to the region. It boasts as many private-sector research and development jobs as the whole of the north, which has 50 times more people. He also highlighted the key challenges of the unaffordability of housing and poor transport links, both of which deter talent and investment. Tory-led Governments have failed to address either of those issues in eight years, but Labour will build 1 million affordable homes over five years and transform our country’s transport infrastructure with our £250 billion national transformation fund. According to the comments of the right hon. Member for Witham (Priti Patel), the hon. Member for Clacton (Giles Watling) and the hon. Member for Central Suffolk and North Ipswich, that transformation is much desired.

As shadow Science Minister, I am keen to see an industrial strategy that maintains current centres of excellence such as Cambridge. Our strategy would do that, but it should not end there. Last year, research from Sheffield Hallam University found the Government’s pledges as part of their industrial strategy would have an impact on just 1% of the economy. By focusing on a small number of elite technologies and industries, the Government have failed to provide a vision for how workers in Clacton-on-Sea, Yarmouth or Lowestoft can share in the prosperity and growth generated by Cambridge. Labour is committed to building an innovation nation where prosperity, high productivity and good quality, high-skilled jobs are shared across the nation.

The east of England deserves a real industrial strategy that lays out a vision for a shared prosperity across the region: a high-wage, high-skill, high-productivity region that leads the way to a more prosperous post-Brexit future. That is what Labour offers and I hope the Minister will be bold and follow our lead.

--- Later in debate ---

[Richard Harrington]

I could not quite hear what they were saying, and it is probably better that I could not.

I congratulate my hon. Friend the Member for Waveney (Peter Aldous) not only on calling today’s debate but on his contributions to many other debates I have taken part in. He has always contributed in a non-partisan and a very statesmanlike way, and today was absolutely no exception. I welcome the east of England APPG submission, which we have read in my Department. I hope that some of my points respond to its recommendations.

I have a bit of a strange relationship with the east of England, simply because my constituency, as mentioned by my hon. Friend, is in the east of England, but most people who live in it do not think they are in the east of England, simply because it is such a large area, as was mentioned by several hon. Members. It varies from what some people think is outer London—it is not quite, but there is a more urban type of London demographic—to areas that are geographically quite remote. My right hon. Friend the Member for Witham (Priti Patel) mentioned—eloquently, as ever—that Essex is a huge county in its own right: it varies from outer London urban to quite remote country areas. It is difficult for any policy to take into consideration such a large area, and there is no simple solution. I accept the point about transport and more modern infrastructures being critical to everything, and I will come to that. It is easy for the European Union and national Government to talk of regions—as we talk about metropolitan areas—as being fairly homogenous.

I want to reiterate the Government’s commitment to promoting growth in the east of England. Any Minister would say that, and I would certainly say that to my constituents in the east of England. But the facts speak for themselves. The region is growing fast. It has seen continued growth in jobs and is one of only three regions that is a net contributor to the UK. Those are exactly the sorts of strengths the country needs to build on in securing a prosperous economic future for the UK as a whole.

As my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) said, the region has not always pushed its case well, probably because of its large area and the different organisations in it. The all-party group’s report clearly reverses that, but as my hon. Friend the Member for Waveney said, it is the beginning of a process, not a one-off report—the Government certainly do not treat it as such.

Hon. Members highlighted many of the strengths of the east of England. I will not repeat the comprehensive list, but there are world-famous brands in Cambridge, which the hon. Member for Cambridge (Daniel Zeichner) mentioned, as there are in Milton Keynes, Hertfordshire, the coastal region and so on. However, I agree with him that the future is not guaranteed, which is why we have an industrial strategy. The shadow Minister was really quite scathing about that strategy—I hope I have time to come on to that. Governments have industrial strategies and policies because nothing in the economy is guaranteed. She mentioned the effects of our leaving the European Union. None of us knows what they will be, but whatever happens while we are in the European Union or out of it, nothing is guaranteed. It is important that the Government realise the importance of the east of England to the economy.

The shadow Minister will disagree, but since 2010 the Government have made good progress on supporting businesses and people in the east of England. Unemployment has halved, the number of small businesses has increased by more than 100,000 and, although good points were made about apprenticeships, 350,000 people have started them in the area.

The hon. Member for Cambridge mentioned the CPIER report. I welcome that and look forward to seeing how it is reflected in the local industrial strategy. He also mentioned land value capture. The Treasury and I look forward to receiving further developed proposals on land value capture in Cambridgeshire and Peterborough from the Mayor in due course. We have yet to see the full effect of Mayors, but I am positive about them and pleased that we have them.

The east of England is at the forefront of industrial strategy. We have local enterprise partnerships and, as I said, mayoral combined authorities developing and implementing industrial strategies. We are at the beginning of that road, but the east of England is in good shape. The Cambridgeshire and Peterborough combined authority and the South East Midlands LEP have been identified as trailblazer areas as part of the Oxford to Cambridge arc. Those pilot areas have made good progress and are on track to publish their strategies in March next year, with the rest of the region publishing theirs in 2020.

I reject much of what the shadow Minister said—not because she has a premier league football team in her constituency. I have made rather unpleasant comments about that, which I would like to withdraw, and I apologise for any offence caused. I am sure Newcastle United will remain in the premier league at least for this season, if not beyond. If that does not happen, at least she can blame their relegation on our leaving the European Union, since she seems to blame that for everything else.

[Chi Onwurah]

I thank the Minister for the initial generosity of his remarks about Newcastle United. Should they leave the premier league, we will be clear that the fault lies not with Brexit but with the club’s ownership. We hope his Government do something to address that.

[Richard Harrington]

I think the hon. Lady just called for the nationalisation of Newcastle United football club. Another few billion for the national debt—it really doesn’t matter, does it? We have many billions more.

Economic Justice Commission

Chi Onwurah Excerpts

Tuesday 11th September 2018 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) for securing the debate, for his excellent work as chair of the all-party parliamentary group on inclusive growth, and for starting the debate with such a passionate and comprehensive call for a change to the economy.

I also thank the IPPR for bringing together such an amazing group of commissioners—Justin Welby, Mariana Mazzucato, Frances O’Grady and Lord Kerslake, to name but a few—to carry out such a far-reaching investigation into economic justice and to reach such radical and, at the same time, common-sense conclusions, as we have heard. That is such a contrast with the “same old, same old,” right-wing, neo-liberal policies of this Government and their Tory-led predecessors.

The British people are sick and tired of being told over and over again—largely by the same smug and privileged voices—that there is no alternative to the economy-wrecking, service-slashing, opportunity-destroying, soul-sapping austerity agenda. The Brexit vote and Labour’s surge in the polls in last year’s election were both, in different ways, products of the paucity of economic justice under the current regime.

As my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) emphasised, we need to address the challenges of Brexit, but also the causes of Brexit. We are experiencing the longest period of stagnant wages for 150 years, with 6% of the workforce on short-term contracts and 3% on zero-hours contracts. UK productivity is 13% lower than the G7 average and we are, as we have heard, the most regionally imbalanced economy in Europe.

My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) highlighted the plight of retail workers, but we see those kinds of conditions in other sectors across our economy. The commission’s assessment of those problems and of the need for the fundamental reform of the British economy matches the principles of Labour’s transformative economic programme. Indeed, many of the report’s recommendations are already Labour policy: a national investment bank with a regional network, compulsory diversity reporting for companies and a mission-oriented industrial strategy, as championed by leading economist and commissioner Mariana Mazzucato. Other recommendations we will look at closely as we prepare our programme for Government.

Having written before on the need for radical action to tackle our productivity crisis, I was struck by the commissioners’ detailed proposals here; their suggestions on data are a welcome attempt to take seriously the power of this new property that drives the new economy. We have heard that strengthening union participation, as recommended in the report, is good not only for workers but for companies, the economy and, ultimately, the country. On that, as well as a number of other areas, the commission has produced thoughtful and practical recommendations, in stark contrast to the total lack of action on the Government’s part. I hope that the Government will take the recommendations seriously. I welcome the Minister to her role and ask her to commit to publishing a full response to the commission’s report.

Two years ago, the Prime Minister stood on the steps of Downing Street and talked about building

“a country that works for everyone”,

but in reality she has clung to the discredited zombie economics of Mr Osborne. The relentlessly negative and unimaginative election campaign waged by the Conservatives last year was proof of that. Meanwhile, Labour offered a serious critique of our economic model, with positive and practical measures to build a high-wage, high-skilled, high- productivity Britain. It is no coincidence that the publication of our manifesto saw our party soar 20 points in the polls, while Tory support fell dramatically once people saw what thin gruel they were being offered.

I welcome this report as an important intervention in the economic debate that Labour ignited last year. It is a debate in which this Government have no meaningful voice or even ideas; but perhaps that is about to change. Perhaps the Minister will now pledge to give this report the attention it so richly deserves. If not, she should step aside and allow us to do so.

[Mr Philip Hollobone (in the Chair)]

If the Minister would be kind enough to finish her remarks no later than 5.27 pm, that will give Mr Byrne time to sum up the debate.

--- Later in debate ---

[Kelly Tolhurst]

I will make some more progress.

Our corporate governance reforms are driving changes in how our largest companies engage, at board level, with employees and external stakeholders. Significant changes to the corporate governance code will strengthen workers’ voices in boardrooms by requiring boardrooms to put in place robust employee engagement mechanisms, while new laws will require companies to report how they engage with employees and have regard to their interests. Amplifying the voices of employees and external stakeholders will improve boardroom decision making, deliver more sustainable business performance and build confidence in the way businesses are run.

We are also introducing pay ratio reporting, requiring quoted companies to compare CEO pay with average worker pay, supported by an explanation of why the ratio is consistent with pay, reward and progression policies in the wider workforce. Under the revised UK corporate governance code, remuneration committees will have to engage with the workforce to explain how executive remuneration aligns with wider company policy. These changes will help to ensure that boardroom pay is connected with wider workforce pay and not set in an artificial bubble.

[Chi Onwurah]

I thank the Minister for setting out the Government’s industrial strategy proposals. Does she intend to deal with the proposals in the report? Specifically, does she agree with the report’s underlying assertion—that our economy is currently unjust?

[Kelly Tolhurst]

The premise of the report and some of the measures it suggests are already being considered by the Government, and I am outlining the actions we are taking in those areas. I am committed, and so are the Government, to providing fairness and high-quality jobs in the workforce.

The Government are investing. We plan to deliver £20 billion of investment in innovative and high-potential businesses by establishing a new £2.5 billion investment fund, incubated in the British Business Bank, and we will continue to support businesses to grow by accessing international markets. We aim to create a business environment well equipped to meet the challenges and opportunities of new technologies and new ways of doing business.

Across Government we are making huge strides towards rebalancing the economy and empowering local government. Through devolution deals we have strengthened local leadership and devolved powers and funding away from Whitehall, so that they are exercised by those with the strongest understanding of the needs of their communities. We are absolutely committed to this continuing.

Brexit, Science and Innovation

Chi Onwurah Excerpts

Thursday 6th September 2018 Commons Chamber

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I thank the right hon. Member for North Norfolk (Norman Lamb) for opening this debate and the Committee for its report. I am a great admirer of its work under his leadership, as I was of its work under his predecessor, the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe). I also particularly thank Members who have contributed to this debate.

We do not talk enough about science in this Chamber. All too often it is sidelined for other apparently more sexy subjects, but I hope this debate has shown that science is sexy too. I speak not only as shadow Minister, a chartered engineer and a fellow of the Institution of Engineering and Technology, but as a constituency MP who understands just how important science is to my constituents. As many hon. Members, including the hon. Members for South Basildon and East Thurrock, for Berwickshire, Roxburgh and Selkirk (John Lamont), for Ochil and South Perthshire (Luke Graham) and for Chelmsford (Vicky Ford), have emphasised, the UK has a proud scientific tradition. From Isaac Newton to Stephen Hawking, from Ada Lovelace to Rosalind Franklin, and from Jocelyn Bell Burnell, who we have heard about today, to Newcastle-born Peter Higgs, British scientific giants bestride the globe.

Our science sector leads the world, powering our economy in the process. Science is an engine of job creation: 20% of the UK workforce is employed in science roles, and wages for these jobs are 40% higher than the average. Science is crucial to creating the high-skilled, high-wage, high-productivity economy we in Labour want to see. Our science sector is intertwined with our European partners’ through pooled funding, the free exchange of talent and shared institutions. I shall talk to each of those.

According to the Government’s own 2013 report, it is the increasing internationalisation of UK science, powered in part by European collaboration, that has allowed us to surpass the US in science productivity. I am glad, therefore, that the Government are committed to achieving what they call

“a far-reaching science and innovation pact”,

but as the Committee’s report points out, delays are

“undermining the UK’s position as a science superpower”,

and a no-deal scenario would be a

“very real threat to scientific progress” ,

according to the president of the Royal Society.

One quarter of our research and development funding stems from international sources, predominantly the European Union. As has been said, we are a net recipient of Horizon 2020 funding. While the Government have committed to underwriting this funding, they have failed to commit to the £90 billion successor framework programme. That means that Britain would access these funds as a third country, making it impossible for us to receive the benefits we currently do and preventing us from being a net receiver.

As it stands, we could lose access to over £1 billion a year in the event of a no-deal scenario, which has yet to be ruled out, and the Royal Society has highlighted that even with the UK Government’s guarantees, UK-based researchers and businesses will still lose half a billion pounds a year in research funding, which will have an immediate impact on research under way in the UK. The Royal Academy of Engineering has emphasised that EU support for UK small and medium-sized enterprises, including the SME instrument, is critical, crucial and unique. Labour is committed to staying part of Horizon 2020 and its successor programmes. Will the Minister commit the Government to doing the same?

The second key area is access to talent—an issue raised by many on both sides of the House, including the hon. Members for Boston and Skegness (Matt Warman) and for Ayr, Carrick and Cumnock (Bill Grant). One in six academic staff in our higher education institutions is from the EU, while R&D-intensive companies rely on the frequent transfer of highly skilled staff between countries to respond to day-to-day challenges. So as the Committee’s report argues, a science and innovation pact that does not encompass people would be “pointless”. While the Government have said that they do not want to stop the brightest and the best from coming to the UK, their reliance on tier 1 exceptional talent visas fails to recognise that innovation relies on contributions from a wide range of scientific and technical staff, as my hon. Friends the Members for Bristol North West (Darren Jones) and for Oxford East (Anneliese Dodds) emphasised passionately.

In March, 48 leading science organisations wrote to the Prime Minister to say that

“the repeated rejection of skilled workers due to the Tier 2 cap being reached is already damaging the UK’s international appeal.”

Is the Prime Minister listening? More than 6,000 engineers and scientists from outside the EU have been denied visas this year alone. How many more have been put off applying? We cannot carry forward that approach to the EU. Even when visa applications are successful, cost can be a huge deterrent, as we have heard. Will the Minister say today whether EU nationals will be subject to these levels of visa costs? There is also the regional impact. I have repeatedly asked techUK to share the regional distribution of its visas, but it has refused to do so. Will the Minister look into this?

The Campaign for Science and Engineering has argued that

“immigration policy should be contributing to rather than fighting against Government’s wider economic and societal aims”.

Instead, the Government hide their incompetence behind an arbitrary migration figure, which they have never met and which damages our economic wellbeing. Labour would not set any such arbitrary figure and would guarantee the rights of EU nationals to remain in Britain.

Finally, I want to discuss regulation and institutions, an area on which the Government have said very little. International agreements and shared regulation are essential for so much of science, from chemicals registration, so that industry and academia know what it is they are using, to the movement of living animals and organisms, and from clinical trials to the exchange of medicines across borders. At present, 45 million packs of medicine move from the UK to the European Union each month, with 37 million moving the opposite way. Under a no- deal scenario, that would be impossible. AstraZeneca, our largest pharmaceutical company, is now openly talking about stockpiling medicines, and this morning, on Radio 4, the Health Secretary confirmed that this would be necessary. This is yet another example of the consequences of current Brexit uncertainty.

We know that Brexit raises complex issues and we also know that the Government lack the intellectual rigour or concentration to resolve them. An additional failing, however, is the lack of communication high- lighted by the Royal Society of Biology. That has led the Wellcome Trust to suggest that a standalone science agreement needs to be pursued. Is the Minister considering that?

Unsure and uncertain, scientists are either leaving our shores or not coming in the first place. Businesses are making investment decisions in a policy vacuum. Labour believes not only in our nation’s scientific future, but in putting in place the policies to make it happen. We would build an innovation nation supporting our world-leading science sector by investing 3% of GDP in research and development by 2030, democratising and spreading both the benefits and the sources of scientific greatness. Our industrial strategy will build on scientific strengths, our national education service and growing innovation infrastructure to provide high skill, high wage jobs in every corner of the country.

Building an innovation nation means retaining and strengthening the innovation union from which we currently benefit, but the chaos at the heart of this Government is preventing that. I thank the Committee for its report and wish we had a Government who could give it the response that it merits.