Bombardier

Debate between Lord Harrington of Watford and Alan Brown

Thursday 22nd November 2018 Commons Chamber

[Richard Harrington]

As ever, my right hon. Friend is right and as erudite as he always is in explaining the significance of the Government’s procurement role. That is also true for many other sectors in which I am involved, including construction. I think my right hon. Friend was asking me whether state aid policies will change in relation to the procurement of Government contracts and so on. I cannot answer that question, because we will have to see what happens in future, but I can say that my Department is regularly in touch with other Departments that are responsible for procurement, to push continually the advantages of Bombardier and many other companies in the supply chain, in all the areas that we deal with.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I thank the Minister for advance sight of the statement.

In the light of the 57% increase in profits announced earlier this year, the announcement of job losses is clearly a real kick in the teeth for the workforce. Our sympathies obviously go out to the 490 employees and their families. The latest news follows a longer-term pattern, with the 220 jobs lost in 2015, 630 lost in 2016, nearly 400 lost in 2017, and close to 500 lost now. Given that pattern, what discussions have the UK Government had with Bombardier over this period about stemming job losses and about the plant’s long-term future? What money can be made available either to protect these jobs or to help with redeployment? It is not good enough for the Government to say that it is a private company and a commercial decision, because they need to do everything to protect jobs from being lost.

We hear from the Government statistics about record employment and record low unemployment, but such statistics hide serious issues such as this one at Bombardier and the recent announcement of 850 job losses at Michelin in Dundee. What steps are the Government taking to make sure that the industrial strategy is fit for purpose and will protect manufacturing jobs?

One of the Brexit dividends so far has been the plummeting of the pound, which is actually supposed to help manufacturing exports. What assessment has the Minister made of future currency fluctuations and inflationary pressures in the sector and what that can mean for jobs?

Finally, the Minister’s statement confirms that the UK Government provided £20 million of research and development grants to the plant in Belfast, and this was to be used to bring in efficiency measures. Can he confirm that, when the Government give R&D grants for efficiency measures, they do an impact assessment to see what that means for jobs and that the grants are only for protecting jobs? Any job losses must come with transitional arrangements and plans for workforce redeployment.

[Richard Harrington]

I will try to answer the hon. Gentleman’s questions as best I can. I was jotting them down quickly as he said them.

First, I did say that this is a commercial decision, and it is a commercial decision. The last time I looked, Bombardier was not a nationalised industry, so it is not at all a question of the Government making people redundant. The Government’s support for Bombardier and for aerospace generally is unmatched by any time in history. Bombardier is an important part of the Aerospace Growth Partnership, which I chair jointly with Colin Smith, an industry veteran and former president of Rolls-Royce. We have channelled about £1.95 billion to support R&D, of which Bombardier is the beneficiary.

The hon. Gentleman mentioned the £20 million that was announced. This is for a number of projects including a reverse thrust project. [Interruption.] It is a reverse thrust for an engine. I know, Mr Speaker, that you will be personally interested in reverse thrusts. I have learned quite a lot about it and would be delighted to brief you personally on the subject if you require it. The serious point is that the whole of the aerospace industry, particularly in passenger jets, is changing. We must make sure that the Government funds that we have help to change our aerospace industry, which has a turnover of £42 billion, of which £38 billion is exported, and shape the business for the future. I am very pleased about the projects that are going on, and I have visited them with the hon. Member for Belfast East to see what was happening. The project itself—the factory that I visited—was opened by Arlene Foster when she was the Minister responsible for that area, so this is very much a cross-party thing.

The hon. Gentleman mentioned the ups and downs of the currency. He is right that it has changed significantly, but businesses such as Bombardier are used to dealing with changes in currencies. It has happened in cycles throughout history, and when companies such as Bombardier—I cannot speak for them, but this is what happens in my experience—get an order, they take hedging positions on the currency so that they do not face currency risk.

The most serious and significant point that the hon. Gentleman made, among the many points—[Interruption.] I will try. There has been a lot of chuntering about me going on too much, Mr Speaker, but the hon. Gentleman made a very important point about industrial strategy. Aerospace is a critical part of it. It is really about place, which is ideal for Bombardier because it is in Northern Ireland. It is about skills. Again, these are very highly skilled and very highly paid jobs, I am pleased to say. It is about channelling the partnership between the Government and the industry to produce a business for the future, and I am certain that Bombardier in Belfast will be part of that.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Alan Brown

Tuesday 20th November 2018 Commons Chamber

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

9. What steps he is taking to ensure that value for money is achieved from energy generated from proposed new nuclear power stations.

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

As the Secretary of State said in his statement to the House on 4 June, in our negotiations with nuclear developers, a key focus of discussions will be achieving value for money and lower electricity costs for consumers.

[Alan Brown]

The National Audit Office has already confirmed that Hinkley Point C was a bad deal. Half the existing nuclear power stations will have closed by 2024 and the rest by 2028, and no nuclear power stations can be built in time to replace them. Why are the UK Government tying up energy policy for the next 50 years in deals that are poor value for money?

[Richard Harrington]

As far as I know, the hon. Gentleman and his party are against nuclear power altogether, so his is an interesting question. The Government, on the other hand, are committed to a diverse energy mix in which nuclear power plays a crucial part. Nuclear power is critical to our transmission to a low-carbon society, providing continuous, reliable, low-carbon electricity. We are also leaders in cutting emissions by renewables, and nearly 30% of our electricity comes from renewable sources.

Construction Sector Deal

Debate between Lord Harrington of Watford and Alan Brown

Thursday 5th July 2018 Commons Chamber

[Richard Harrington]

The review by my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is considering those points, and I am sure that we will be delighted to report the review’s progress to the House.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

As a chartered civil engineer, I welcome the principle of the construction sector deal. On protecting the supply chain, the Government must deal with two key issues: the elimination of cash retentions; and, as the Minister knows from his previous role, the effect that multi-employer pensions are having on subcontractors, particularly plumbers. Will the Minister review the Multi-employer Pension Schemes Bill—my private Member’s Bill—and have a word with the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), to ask him to take on board the measures in my Bill?

[Richard Harrington]

We are currently considering the entire policy on retentions, as I am sure that the hon. Gentleman knows. We are reviewing the responses to our consultation and considering the options for future policy.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Alan Brown

Tuesday 13th March 2018 Commons Chamber

[Richard Harrington]

As my hon. Friend, who also contributed a lot to the passage of the Bill, knows, SMETS 2 is the newer type of meter which at the moment is in its trial phase. As the months go on, SMETS 1 meters will be converted through software that is being developed by the Data Communications Company, and all new meters will be SMETS 2.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

How satisfied are consumers when they realise that a smart meter becomes a dumb meter when they switch suppliers? Can he put an accurate timeline on the roll-out of SMETS 2 meters?

[Richard Harrington]

As I explained, the software that is being developed now and will be in place shortly after the summer will ensure that that does not happen. The comparatively small number of SMETS 1 meters that do not operate as smart meters when suppliers change will suddenly become compliant, and they will all be able to speak to one another electronically, which is what we all want.

Oral Answers to Questions

Debate between Lord Harrington of Watford and Alan Brown

Tuesday 12th September 2017 Commons Chamber

[Richard Harrington]

I fully agree with my hon. Friend about the importance of the oil and gas industry, which supports more than 300,000 highly skilled jobs in regional centres of excellence across the UK. I understand from my recent visit to Aberdeen, where I was joined by him, that the sector is working on a compelling proposal for a deal, building on the unprecedented support we have already given to the industry, and I look forward to receiving it in the near future.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

20. The UK is already a net importer of electricity. Post-Brexit, for the security of energy, the UK needs to maintain access to interconnectors and to remain part of the integrated energy market, as this provides tariff-free access to gas and electricity. Will the Minister confirm whether the UK will remain in the internal energy market post-Brexit?

[Richard Harrington]

I absolutely can confirm that maximum continuity of supply is very important to us. We have an excellent relationship with the EU on this, and it is the Government’s responsibility to make sure that it continues. I am sure that that will satisfy the hon. Gentleman.

Plumbers’ Pensions

Debate between Lord Harrington of Watford and Alan Brown

Tuesday 25th October 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

It is a huge pleasure to serve under your chairmanship, Mr Bailey. I thank and commend the hon. Member for Perth and North Perthshire (Pete Wishart) for securing this debate. I am delighted that I can pronounce his constituency name without assistance. I also thank other hon. Members for their contributions.

This is a serious matter and not one the Government take lightly. I am quite new to this job, but it seems to me that the real lobbying from constituents through their Members of Parliament to the Government is an example of how things should work instead of teams of lobbyists coming to formal meetings. I commend hon. Members who are representing their constituents. They are not facing a heartless Government who treat the matter as a minor detail. The examples the hon. Gentleman gave of Mike and Kyle are typical and I would be pleased if he would send me details because I have seen similar examples and the question is how we deal with them.

I have listened carefully to what has been said about this worrying situation faced by small employers. As the hon. Gentleman said, they are fantastic people who have been going about their business for many years. The Government have received and listened to representations asserting that there is a simple solution. There is not. The issue is complex and, unfortunately because of the way government works, we cannot react quickly because the unintended consequences that have happened can lead to others. I hope hon. Members will not think this is just Government waffle.

Before I came into the Government I thought things were much simpler than they are and that is part of our democratic system, but it does not mean that we treat them lightly. I am well aware of the difficulties facing small employers in these schemes when managing their own pension commitments in the current economic climate and their responsibility for other people in the scheme.

[Alan Brown]

I appreciate what the Minister is saying about the matter being complicated for technical reasons and that the Government are sympathetic, but we need to know about the timescale. Some of these plumbers have already triggered section 75, so there is debt coming at them at a rate of knots. Timescales and assurances are required.

[Richard Harrington]

The hon. Gentleman has made a very reasonable point, which I hope to come to. By the way, my door is open to hon. Members and, if they feel it necessary, their constituents or representatives. This is not something that we are avoiding. I had better make progress now if the hon. Member for Kilmarnock and Loudoun will excuse me.

We have been talking to a lot of stakeholders about aspects of the operation of employer debt for some time. I have read the files. The hon. Gentleman asked for urgency, and he is right, but the matter is in hand. Last year, there was a call for evidence, which is an official mechanism for seeking views, on the operation of the current regime, the effectiveness of the current easements and the impacts of proposed changes. My officials are reviewing the responses that we received and exploring what further flexibility we could introduce to help employers to manage precisely the kind of debt that has been referred to, but as many respondents to the call for evidence highlighted, there is no easy or quick solution. Quite a few different ones have been mentioned.

My original thought was, as I said, that the issue was much simpler and that a change to the system of valuation could deal with it—the hon. Member for Perth and North Perthshire made a point about that in his opening speech. However, all of this has consequences. The reason why these laws were in existence in the first place was to protect the very people who otherwise could have found themselves retiring with no pension because of all the surrounding circumstances, but we are not saying that this is something that will just go on for years and years; we hope to do a formal consultation very soon.

I should like to state again on the record that the current employer debt legislation is there for a very good reason: to protect members of occupational pension schemes and ensure that, when they retire, they receive the pension that they have been promised. We cannot let that aim disappear. We have to find a way to ensure that the injustices mentioned by hon. Members contributing to the debate are dealt with, but at the same time we must not do anything to threaten the pensions of the other people.

The Government have made a significant number of changes to the legislation in response to representations made by employers. A number of mechanisms are in place whereby only part of the debt, or no debt at all, may be payable. The hon. Member for Perth and North Perthshire may be aware that there are currently eight such mechanisms in legislation, which reflects the wide variety of circumstances that can arise with diverse scheme structures and the equally diverse range of employer types. For example, the existing scheme and flexible apportionment arrangements permit an employer debt attributable to the departing employer to be shared among the remaining employers or taken over by them, so reducing the debt to nil or a nominal amount. Those can be useful provisions in cases in which an employer ceases to employ members or undertakes corporate restructuring.

For small employers, which we are talking about today, that are participating in a large non-associated multi-employer scheme such as the plumbers scheme, a period-of-grace arrangement provides for the situation in which an employer temporarily ceases to employ active members but intends to do so again in the future. The regulations provide for a period of grace of up to 36 months when no debt triggers, giving time for new employees to be recruited.

The high proportion of orphan members has been mentioned. The scheme would like the liabilities that relate to such members, whose employers no longer participate in the scheme, to be passed elsewhere rather than be shared among remaining employers. The requirement to meet a share of orphan liabilities is common to all schemes and an important part of member protection. Although it would be very difficult to make a special case for a particular scheme, we are looking more widely at the challenges faced by defined-benefit schemes and want to encourage a wide debate about the challenges facing those schemes and what the solutions might be, including that one. We are well aware that some parts of the pension sector are stressed, but the situation is very mixed and the problems are far from universal. We are trying to build a better understanding of those, using the call for evidence and all the meetings with stakeholders, to form an opinion on what the Government intervention should be.

[Alan Brown]

I thank the Minister for giving way again. The topics that he is covering involve wider pension issues. Does that not underline yet again the fact that there should be an independent pensions regulator to help to address these matters?

[Richard Harrington]

That is a whole different argument, as the hon. Gentleman knows. I would be very happy if we could have another debate on that and I am happy to check with him informally about it because it is something that has been proposed, particularly by his party. Respectfully, however, as far as this issue is concerned, that is irrelevant. I am not saying that the argument has merits or does not, but as far as this issue is concerned, we do not have a standing commission. The Government are here to try to deal with the issue and it is our intention to do so. We will produce a Green Paper very soon. We have said that that will be in the winter, which will certainly be before the leaves reappear, even in Scotland. We will do it as quickly as we possibly can.