Harland & Wolff
Debate between Jonathan Reynolds and Nusrat Ghani(5 days, 13 hours ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I shall make a statement on the UK shipbuilding firm Harland & Wolff. I am pleased to inform the House that, subject to approvals, a commercial deal has been reached that will protect jobs, drive investment and secure the future of the workforce. The deal will see Navantia UK, a specialist in shipbuilding, purchase all of Harland & Wolff’s shipyards.
As right hon. and hon. Members will know, Harland & Wolff is a major employer in Belfast, with additional important yards at Arnish and Methil in Scotland and Appledore in Devon. For more than 150 years, the firm has built famous vessels for notable shipping organisations and companies, including the Royal Navy, the Royal Mail and the White Star Line. This industry-led deal, which we expect to complete shortly, will secure all four of Harland & Wolff’s shipyards, protecting around 1,000 jobs right across the UK. I hope that this announcement will come as some relief to Harland & Wolff’s employees. I realise that this has been a deeply worrying time for them, and for everyone affected by the continued speculation over the firm’s future. I welcome Navantia UK’s intention to work closely with the relevant unions to protect workers’ existing terms and conditions. That is important for the hard-working employees and communities who have served the firm over many years.
I was first informed that Harland & Wolff was in serious financial difficulty on day one of the new Government. As the previous Government had open-book arrangements with the company, it was clear that the firm had significant and unsustainable debts. Members will be aware that, at that point, Harland & Wolff was seeking a Government guarantee or liquidity loan. Had that occurred, the British taxpayer would have been put at significant risk of losing millions of pounds, without the safeguarding of any yards, jobs or ships. I believe that the possibility of the Government providing such a guarantee or loan, which was much speculated on in the press, was preventing a market-based solution. The former Government’s inability to make a decision left the yards and the workforce in limbo. That is why I made it clear in my first weeks in this job that no taxpayer guarantee or loan would be provided. I was dismayed that when I did so Conservative Members opposed that, knowing as they did that with a guarantee or loan there stood a significant risk of losing an eye-watering amount of taxpayers’ money. That was deeply irresponsible.
Crucially, the deal that has been agreed will secure the delivery of the fleet solid support contract of the Ministry of Defence. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed the absolute minimum of changes to the contract to ensure its continued delivery. Navantia UK is the prime contractor of the Team Resolute consortium, which is charged with building three logistics support vessels for the Royal Navy, and it will maintain the required portion of UK-only build as part of this deal. It is also worth saying that FSS is a vital component of the UK carrier strike capability, providing munitions, spares and stores. At a time when strategic alignment with our NATO allies is more critical than ever, the Government fully endorse this deal, which will also see Navantia UK invest significantly on commercial terms in Harland & Wolff shipyards.
Anyone familiar with Navantia UK will know that the firm boasts strong expertise in naval shipbuilding. I am pleased that, thanks to this agreement, it will continue to bring the next generation of technology to its operations here in the UK. This is quite simply a good deal for the Harland & Wolff shipyards, a good deal for its employees, and a good deal for British shipbuilding. It provides the best opportunity to sustain our essential sovereign shipbuilding capacity and capability, now and over the long term. Defence is at the heart of the industrial strategy that we have identified. Defence is one of our eight growth-driving sectors of the UK economy. That industrial strategy is unreservedly and unashamedly pro-business, engaging on complex issues that are currently barriers to growth and investment. National security is one of the foundations of our plan for change. Without it, we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs like those at Harland & Wolff.
UK shipbuilding alone supports some 42,500 jobs nationwide and adds £2.4 billion to the economy every single year. We recognise how important it is, as a vital pillar of our civil and defence industrial base. That is why my Department, together with the Ministry of Defence and the National Shipbuilding Office, is doing everything that we can to bolster our world-class shipbuilding industry. That includes the significant progress that we are making on key procurement programmes. We have a major contract with BAE Systems, which has increased the order from three to eight Type 26 anti-submarine warfare frigates on the Clyde, and a contract with Babcock for five Type 31 general purpose frigates at Rosyth. Those projects have already brought significant recapitalisation investment to shipyards throughout the UK, and there are further procurements to be won, ranging from Border Force and local councils to marine in-port service vessels at His Majesty’s naval bases.
The Government are absolutely committed to supporting vibrant, growing and successful shipbuilding and fabrication industries across the country, and I pay tribute to the skilled, diligent workforces who have made these industries what they are today. Thanks to the deal that has been announced, workers in Belfast, Arnish, Methil, Appledore and right across the country can be confident that the Government are squarely behind them, that UK ship- building is secure, and that together, as a United Kingdom, we will lead the sector into a better future. I hope that all workers in all four yards are now able to enjoy this Christmas with their families, as they should. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Secretary of State. Having served in his Department, I too will be paying close attention to the answer.
Jonathan Reynolds
I agree with the shadow Secretary of State on the iconic nature of this business; its role in British history and in the community, particularly in Belfast; and the esteem in which it is held. I do feel he could have thanked us for cleaning up another mess that the previous Government left us, although perhaps that is too much to ask. After all, they could have made the decisions to allow the market-based solution with support from Government that we have been able to achieve. Despite those caveats, I welcome the fact that he welcomed the news and recognised it as a substantial good news story for many workers as we go into Christmas and for the next years.
I turn to the hon. Gentleman’s specific questions. On the delivery of the fleet solid support contract, the issues that the previous Government left us may have some material impact, although there is no large, foreseen delay to the delivery of the project at this stage. On the support to the business, there is no support going directly from Government to the business to subsidise the transaction. There have been amendments to the contracts supported by my Department and the Ministry of Defence. He asked for the details. I will not reveal it in the House because of the commercial sensitivity, but I will find out whether there is a way to share that with him. On whether the deal is compliant with the Windsor framework and our commitments as a country under those arrangements, I am satisfied with all that. Despite the fact that we will always respect those arrangements, we are the UK Government and we make decisions for every part of the UK, with the regulatory approvals, and I seek no one’s permission to be the Secretary of State for Business and Trade across all the UK.
On additional work packages, there are no additional promises from the Government, although he will know that there is a 30-year supply pipeline for shipbuilding in the UK and many opportunities, particularly in sectors such as energy, maintenance and fabrication, and a whole range of functions where Members across the House would want to have a strong, diverse and competitive shipbuilding and maintenance sector.
Finally, on defence spending, the hon. Gentleman had a bit of a try-on. He asked what assurances the sector can have. The biggest assurance I can give is that we only ever hit that 2.5% under Labour Governments. The fact is that we have a Labour Government with that commitment to the defence sector and its role—the ability to deliver maximum economic benefits for the UK, as well as that vibrant and important defence role—and we will continue to deliver on the way to that.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Congratulations to the Secretary of State. This is excellent news for the people of Appledore and of Northern Ireland and for workers across the Harland & Wolff supply chain. He might want to confirm that the peril of providing a Government guarantee was the possibility of entailing a huge payout to a US-based hedge fund, which was the largest creditor for Harland & Wolff. What is happening to the contract value for the FSS deal? It was priced at about £1.6 billion. Has that contract value now gone up? Crucially, what does the Secretary of State envisage for Harland & Wolff after that enormous contract is safely and soundly delivered?
Jonathan Reynolds
I thank the Select Committee Chair for his kind words. I am delighted that we have been able to secure this future for Harland & Wolff. His assessment is right that the largest creditor to Harland & Wolff when we took office was Riverstone, a significant US hedge fund. He is right to say that had we gone ahead with that Government guarantee or loan, there would likely have been no real return to the taxpayer—no guarantee of jobs, shipyards or ships being built. That money would have gone to the creditors. Actually, in the commercial market-based solution that we have been able to broker, all creditors have behaved responsibly, but, understandably, if anyone thinks the Government will come along and give them free money, they will hold out for that option. That was why it was so important to make that decision early on to secure this far better outcome.
On the specific question, and I should have directed my answer to the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), there is no change to the UK-based content of the contract. As I said in the statement, there have been some changes on commercial terms, although they are relatively minor based on the overall value of the contract.
On the future, I can tell the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) that the deal we have brokered guarantees not only all four yards, but the jobs in the Belfast yard for three years and jobs in the three other yards for two years. We therefore have a chance not just for new investment coming into those yards, but for the long-term future to be secured for a pipeline of work and energy and defence contracts, which is a vibrant and successful opportunity for the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson, who has up to two minutes.
Steve Darling (Torbay) (LD)
This is an outstanding Christmas present for the 1,000 employees from Devon to the Isle of Lewis who will benefit from this decision and the deal that has been pulled off by the Government. In the west country, we have a low-wage economy, and in the Appledore dockyard, which is not too far from my constituency of Torbay, this will go down extremely well, so congratulations are in order. That is in sharp contrast with the failure of the previous Administration on implementing an industrial strategy, supporting our shipping industry and growing our economy over many years. The position that the Conservatives are taking now is utterly shameful. How can we hardwire that long-term support for our shipping industry so that we see growth in this area and support for industries such as steel manufacturing?
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I add my congratulations to the Government for getting this agreement over the line, but when will we get their defence industrial strategy? So far we have had only a rather lengthy statement of intent. We need to reindustrialise our defence industrial base in order to face modern challenges, and that is particularly essential given the threats we face from the east of Europe at this time. That is very difficult to do in government, because the Treasury hates his stuff, as the Secretary of State may already have discovered, but we will hold him to account on what he described as leading this sector into future growth, and indeed on reindustrialising our steel industrial base and so on, so that we have the self-sufficiency that is vital for the defence of the country.
Madam Deputy Speaker (Ms Nusrat Ghani)
I encourage the Secretary of State to be brave in responding to the point about the Treasury.
Jonathan Reynolds
Absolutely, Madam Deputy Speaker. I very much welcome the question and would like to put on the record that I have only good things to say about His Majesty’s Treasury at all times. [Laughter.] It is true; I mean that. The hon. Gentleman is absolutely right to say that there is great imperative—with a particular degree of responsibility in the defence part of the industrial strategy—in the challenges we face. It is imperative not just that we work closely with colleagues in the Ministry of Defence on procurement issues and Government-to-Government sales, in which my Department plays a major role, but that we address wider regulatory issues.
As the hon. Gentleman may know, the Department recently did work on environmental, social and governance criteria to ensure that they do not prevent investment into defence companies. There are issues with small and medium-sized enterprises in the defence sector struggling to access bank accounts—not through a prohibition on defence, but perhaps because of a lack of understanding about such commercial contracts being different from those in other parts of the economy. There are a whole range of issues that we must get right, but I think that, in the main, Members across the House share his aspirations and objectives. He has been a voice of expertise and authority on these issues throughout my time in Parliament, and I am grateful for his engagement on them.
Jonathan Reynolds
I recognise the role that shipbuilding has played in my hon. Friend’s city. I grew up in Sunderland —part of what was once one of the major civil shipbuilding locations in the world—and I recognise the identity and pride that comes with that industrial heritage. In many cases, people feel that it is something of the past, but in this statement we are stressing exactly what she said about the contemporary contribution and the opportunities for the future, about which we should be excited. There are a whole range of increasing needs to shipbuilding expertise, particularly in the energy sector—offshore wind, for example, creates a range of demand for different types of maintenance and supply vessels—so this should be an optimistic story for the future. Sometimes I feel that the wider British public perhaps do not understand the number of jobs or the economic benefit that come from such a sector, so it is always good to make that case from the Dispatch Box—as my hon. Friend does every day from the Back Benches.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call John Cooper, a member of the Business and Trade Committee.
John Cooper (Dumfries and Galloway) (Con)
I congratulate this Front-Bench team and the wider Government on landing this deal in the face of what the Secretary of State has euphemistically called the “headwinds” —I would call them a full-force gale—created by the Budget. Did Navantia raise concerns about the forthcoming Employment Rights Bill? It swings the pendulum very much in favour of trade unions, which, as we know, are very often red in tooth and claw. Was that an issue in landing the deal?
Jonathan Reynolds
I am grateful to my hon. Friend for his comments on the deal and for his observations about the questions from the Opposition Front-Bench spokesman about the 2.5% target. On the modern industrial strategy that we are creating, we have had an incredible response to our Green Paper—some 22,000 individual answers to the questions it asked—showing that there is a huge appetite from industry across the board, both in the UK and abroad, to engage with what the Government are seeking to do. Again, I stress that that should always be on a cross-party basis; there is nothing in that Green Paper that anyone of any political stripe should be able to oppose. It is based on our national interest and the goal of being more competitive and business-friendly, succeeding to a greater degree on the world stage.
This week, we had our first meeting of the Industrial Strategy Advisory Council, with some tremendous representatives with expertise across the board—UK industry, academics and business figures. It is an incredibly exciting time. This is just one component of our growth mission, but clearly an important one, alongside areas of work for me such as the small business plan that we are putting together. I genuinely believe that everyone should be excited about the future.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Alison Griffiths, a member of the Select Committee.
Post Office Horizon: Redress
Debate between Jonathan Reynolds and Nusrat Ghani(3 months, 2 weeks ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
With your permission, Madam Deputy Speaker, I would like to update the House on the Government’s response to the Horizon scandal. How appropriate it is to see you, a former Business and Trade Minister, in the Chair.
My priority as the new Secretary of State is to ensure that victims of the scandal receive the redress that they deserve. Over the past few weeks, I have begun meeting with some of the postmasters whose lives have been so badly damaged by those events. Their stories are harrowing, but their resilience and steadfastness in seeking justice are inspiring. I am also grateful for their candour in sharing insights on how the various compensation schemes can be improved.
May I make a personal point, Madam Deputy Speaker? I know I speak for hon. Members across the House when I say that it fills me with sadness to have to stand here today and address such a significant failure of the state. The role of Government must be to do right, seek justice and defend the oppressed, yet Governments have too often had to be forced into action by brave, tireless and resilient campaigning. Once again, I pay tribute to the Justice for Subpostmasters Alliance, and to campaigners such as Jo Hamilton, Lee Castleton and Sir Alan Bates—incidentally, I add my personal congratulations to Sir Alan on his recent wedding. Without their tireless efforts, justice may well never have been done in this case. As we stand here today, in the shadow not just of this scandal but those of Grenfell, infected blood and several more, I know that it is the firm conviction of everyone in this House that we must do better. This is an issue not of politics but of justice.
In that spirit, I cannot speak of the new Government’s work to address this wrong without again acknowledging and appreciating the work of Lord Arbuthnot and the new Lord Beamish—formerly the Member for North Durham—as well as that of my friend the hon. Member for Thirsk and Malton (Kevin Hollinrake) as Minister. The announcements that we make today are built on their efforts to hasten redress payments and quash wrongful convictions.
Earlier in the summer, the new Government announced the launch of the Horizon conviction redress scheme. I am pleased to report that the first payments have been issued and good progress made on processing the claims received to date. As was the case for the group litigation order compensation scheme, the Department will be setting a target to make, within 40 working days, the first offer to 90% of those who have submitted a full claim. Additionally, the Post Office has now settled over 50% of cases on the overturned convictions scheme, with 57 out of 111 cases fully settled. The Department has also now received over 50% of GLO claims and settled over 200 of them.
Progress has also been made on implementing the £75,000 fixed-sum awards on the Horizon shortfall scheme. As of 30 August, over 1,350 claimants who had previously settled below the £75,000 threshold have been offered top-ups to bring them to that amount, and the Post Office will shortly begin making fixed-sum offers to new claimants. Those interventions will have a significant impact on ensuring that postmasters can access redress swiftly and simply. However, we recognise that this option will not suit everyone and does not address all the concerns raised by postmasters and their representatives. That is why we are taking further action today.
The Horizon compensation advisory board recommended last year that we introduce an independent appeals process for the Horizon shortfall scheme. Today I am pleased to announce that we have accepted that recommendation. That appeals process will enable claimants who have settled their claim under the HSS to have their case reassessed, with the benefit of any new information that they were not able to include in the original application. It will be delivered in-house by my Department, and we will apply the lessons learned from redress schemes to date to ensure that the process is easy for postmasters to engage with and that outcomes are delivered at pace. We will announce further details in the coming months.
There will be no obligation for postmasters to appeal their settlement, and no doubt many will be content that their claims have been resolved fairly. I know that financial redress will never fully compensate victims for their suffering, but we want to help bring some closure to postmasters as soon as we can, which is why we will establish the new appeals process as quickly as possible.
In summary, the new Government will do everything in our power to deliver justice for postmasters, to bring them closure and to ensure that such a national tragedy is never allowed to happen again. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
No doubt that statement will mean a lot to many constituents, including those in my constituency of Sussex Weald. I call the shadow Secretary of State.
Jonathan Reynolds
I am grateful to the hon. Member for his response, and for the tone and collaboration that we tried to model when we were sitting in opposite places in this Chamber. I believe that helped advance what was a difficult piece of legislation to put on the statute book, particularly during a wash-up process, but was the only real vehicle for delivering what we all wanted to see. He has asked me a number of questions; all are absolutely reasonable, and I am happy to respond to them.
In a situation where someone has already received a top-up to £75,000, the hon. Member is right to say that the appeals scheme would not be available. It is a choice between the two best methods of redress and satisfaction for the postmaster. I recognise what the hon. Member has said—that, given the issues with the speed of delivering redress, having that system clogged up would not be satisfactory to anyone—but I think that both options represent reasonable ways forward for people who are in that position.
The hon. Member asked specifically about the remit of the appeals scheme, and I have listened to what he said. The reason we are announcing today that we will take this scheme forward, but will then consult with postmasters to make sure the eligibility criteria are correct—he asked about the timeline, which is just a matter of months—is to make sure that we do not have to revisit the scheme, and can all be satisfied that crucially, postmasters themselves have confidence in it. That is the intention, so I am grateful to the hon. Member for his comments about the remit of the scheme.
The hon. Member asked about legal representation. Yes, that is part of the scheme, again learning lessons from where we have been in the past. As he knows, most of the schemes have now been adjusted to reflect that, but I absolutely take his point about new announcements.
I want to be clear about the difficulty that has existed with the Horizon convictions redress scheme. To update the House, I will give the hon. Member the figures: so far, 180 letters have gone out from the Ministry of Justice. Including those letters and the people who have registered with the Government who perhaps have not all received a letter yet, there are now 276 claimants. I will make the appeal again: while we are doing everything we can with Ministry of Justice colleagues to make sure those letters go out, people can proactively register with the Government. To be frank, this has been a frustration. When the hon. Member and I were having our conversations when we sat in different places in the Chamber, neither of us perhaps knew the state of the database and the records, and—having passed the legislation—the frustrations we would face in getting to people. However, doing so is clearly integral to sorting this out.
Finally, the hon. Member asked about the scheme reviewer. If I may, I will come back to him on that; I will write to him to tell him the up-to-date situation.
In summary, I say again that we will work with all parties and all postmasters to get redress at pace, and to learn the lessons from where things have not gone well in the past, to make sure new announcements carry the confidence of the people who really need to have confidence in them.
Madam Deputy Speaker (Ms Nusrat Ghani)
Members should continue to bob if they want to be called. I am going to call everybody, as I know the Secretary of State also wants to respond to everybody. I call the previous Chair of the Business and Trade Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I add my congratulations to Sir Alan Bates and Lady Suzanne on what looked like a very happy day.
I welcome what the Secretary of State has set out for the House this afternoon. When our Select Committee reported back in March, we said that trust in the Post Office was fundamentally broken and that the appeals scheme needed to be independent. This is an important step in that direction, but sub-postmasters have told me this morning that there is still a problem with the time it takes to get offers back when an offer is contested. The claimant’s lawyers have a fixed amount of time to put in a claim; when that claim is contested, it is taking far too long for Addleshaws, in particular, to come back and provide a second offer. What comfort can sub-postmasters take from the Secretary of State’s announcement today? This whole House agrees that justice delayed is justice denied.
Jonathan Reynolds
I am grateful to my right hon. Friend, who will, I hope, see his work as Chair of the Select Committee reflected in this announcement—specifically, that we are setting the target to issue initial offers to 90% of claims within 40 working days of receiving a full claim. On the point of how that is defined, a full claim is one where, following legal assessment, it is deemed that it does not require any further evidence to assess the claim further. Once that is in, the targets, which his Select Committee rightly called for to make sure redress is delivered at speed, are part of this process.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrats spokesperson.
Tim Farron (Westmorland and Lonsdale) (LD)
I thank the Secretary of State for sight of the statement and, indeed, for his decision to come to the House at this early stage to update us on progress.
I think it is worth saying that we are dealing with a catastrophic injustice that has affected hundreds upon hundreds of families—people who have paid with their livelihoods and, in some cases, tragically, with their lives. There is a complete lack of trust in Government, of whatever political colour, over the last 20 or so years because of this. That is why his answer to the questions raised already about the number of sub-postmasters who have been paid interim payments—only six, on the last data available, under the Horizon convictions redress scheme—is such a key issue. Likewise, as we have heard, the latest data show that fewer than one in six wrongly accused sub-postmasters have received letters confirming the quashing of their convictions.
Given this lack of trust—this mistrust—in Governments of whatever kind and in the Post Office management as a whole, would the Secretary of State also turn his thoughts to rebuilding trust in the Post Office management and in the network in the long term? In the eyes of the public, the brand of the post office is solid, but in the eyes of those who work in the industry and those who may come in as sub-postmasters, it is far less so. We were delighted in my constituency recently to see the reopening of post offices in Shap and Kirby Stephen. It was wonderful to see those two reopenings, but in Grasmere, Hawkshead and Stavely we are without post offices. In all three of those cases, it is in part because the former sub-postmaster, while not always directly affected by the Horizon scandal, but with disgust at the Post Office management, has left the industry and left those villages without a post office.
What can the Secretary of State say to this House and to the current cadre of sub-postmasters, and those who may want to join that cadre, to encourage them? Will he focus on pastoral care, financial support and other things that will bring about a package of inducements and enticements, so that those people who have felt let down so badly by Post Office Ltd management over the last 20 years will feel that the Post Office is something they can commit their lives to for the good of our communities and country as a whole?