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.

Space Policy

Chi Onwurah Excerpts

Wednesday 18th July 2018 Commons Chamber

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

I thank the Minister for advance sight of the statement.

We welcome this investment in the UK space sector. The global space economy, currently valued at about £160 billion, is estimated to be worth £400 billion by 2030. The UK should be leading the way. But why has it taken the Minister so long to come to the House with an announcement that was briefed to the papers three days ago? I hope he does not see the sector as merely a means to positive headlines for a beleaguered Government.

I have characterised Government policy in this area as “lost in space”. While this announcement is a step forward, it certainly does not mean it’s coming home. The Minister is right to talk about the inspirational nature of space and its down to earth economic benefits. At this morning’s Foundation for Science and Technology roundtable, which I attended, NASA’s chief technologist was able to set out the spin-offs from its programme. I look forward to a UK Minister being able to do the same. However, while the Government’s industrial strategy promised £1 billion in space technology investment over four years, this week’s announcement amounts to much less than that. So I ask the Minister: when will the Government announce the release of further funds for space? Will that be impacted by the £5 billion cost of his Galileo replacement? When will the space sector deal be published?

The thriving industry that we all want to see requires a strong regulatory framework and engagement with industry, yet the Space Industry Act 2018, passed earlier this year, is but a skeleton. When will the secondary legislation be in place to provide the regulatory certainty the industry needs? In addition, drones can affect the launch of spacecraft, but they are not covered under the Act. When will the Government bring forward the promised legislation to deal with them?

As Lord Heseltine made clear in his response to the Government’s industrial strategy, the European Space Agency is a great example of proactive industrial intervention by British Government at European level. This Government could learn a lot. Four fifths of Government investment in space is made through the agency, but the Government’s chaotic Brexit is endangering public and private investment, with Airbus announcing in April that it would relocate work on a €200 million ESA contract from Portsmouth to the continent. What steps is the Minister taking to ensure the UK continues to play a leading role in the ESA post Brexit? How will we maintain space sector supply chains, and the exchange of space scientists and engineers on which they depend?

The proposed Sutherland spaceport will be the northernmost operational spaceport in the world. As a Newcastle MP, I am all for going north. However, spaceports are overwhelmingly sited near the equator where the Earth’s rotational speed is highest, allowing rockets to harness an additional natural boost. Does funding take into account the potential extra costs associated, and what factors were taken into consideration when choosing the location far from the equator, although close to Tory marginals?

As the Minister said, the entire country should benefit from the amazing opportunities posed by space. What steps are the Government taking to ensure the fair regional distribution of space sector supply chains, creating good jobs across the country and ensuring that those jobs should be open to all in a diverse and inclusive space sector?

[Mr Gyimah]

I thank the Opposition spokesperson for recognising and welcoming the good news this week.

The announcement was made at Farnborough, but my statement demonstrates that there is far more going on in the Government’s space policy than that specific announcement: deeper collaboration with NASA in the US; collaboration with the European Space Agency; investment in our capacity at Harwell; and a space sector deal. So this statement goes far beyond what was announced at Farnborough earlier this week, and it is all good news that I think the House will welcome and, hopefully, celebrate.

On the European Space Agency and our role in Europe, the hon. Lady will know that the ESA is not an EU institution; it is independent of the EU and we are, and will continue to be, a leading member. We see the ESA as key to our strategy for international collaboration—and it is worth recognising that the fact it has “European” in its name does not make it an EU institution, as was suggested.

All the announcements made today are in addition to what we will do with regard to Galileo. We have made it clear in our EU negotiations that our first preference would be to continue to participate in all elements of the Galileo system; that would include the security and sensitive parts of the system, but it should also include UK industry’s being able to participate in it. Were that not forthcoming, we have the option of building our own satellite system. The UK is a proud and independent country, and as a lot of the know-how and skills for the Galileo system is from UK-based companies, I am confident that we could build our own. To that end, the Prime Minister has set up a taskforce to look at the feasibility of doing so, and once that information is available it will be made public to the House and more widely.

On why the first space launch in the UK will be in Scotland and not near the equator, I can reassure Members that equator launches tend to be large satellites to geostationary orbit, but the growth we are talking about here is in small satellites and these tend to be polar. That is why we are ideally located as a country to take advantage of that emerging technology.

This is a huge opportunity for this country, and we are determined that all of the UK should benefit. Not only Scotland, but Cornwall and Snowdonia have the potential to benefit, and the announcements this week will allow market development in all of these areas. The private sector will of course ultimately carry this forward, and there is nothing to stop local authorities working with the private sector to capture the benefits of this huge development for our economy.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 17th July 2018 Commons Chamber

[Richard Harrington]

I hope the hon. Gentleman does not think my eyes are too wide. Despite your efforts last week, Mr Speaker, there seems to be a shortage of Members on both sides of the Chamber who have actually read the White Paper. I would be very happy to give one to him.

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

Moving to electric vehicles should be transformative for our country and our £77 billion car sector, creating new markets and jobs in manufacturing, services, the supply chain and battery recycling. What are the Government doing? Their Faraday challenge does not cover manufacturing or skills, they have ditched renewable energy investment, delayed the £400 million investment in charging infrastructure and allowed the takeover of GKN’s world-leading battery technology, and yesterday they voted for a customs plan that will sever automotive supply chains, putting more than 800,000 jobs at risk. Is it not the Government’s role to help create high-skilled, high-productivity jobs, not destroy them?

[Richard Harrington]

I totally agree with the hon. Lady: it is the Government’s role to do exactly that. That is why we have the Faraday battery challenge, which covers skills, and why the Government are putting so much effort into battery technology and clean technology for this country. I am very proud of that. I have seen skills in the automotive industry when I have visited car factories and the schools around them. The number of apprenticeships shows that the Government are totally committed to skills. We have a very bright future with batteries.

Leaving the EU: Airbus Risk Assessment

Chi Onwurah Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

It is imperative that we do not do that. I am actually more optimistic than my right hon. and learned Friend about the prospects of a deal that will avoid that. Part of what this company and others have said is that it is strongly in the mutual interest of this international business that there should be an orderly agreement that allows a very successful company to continue to trade without friction. I think that that is in prospect.

We are leaving the European Union; that decision has been clearly taken. The task before us is to make an agreement that implements that decision and which, at the same time, ensures that these avoidable threats of frictions and tariffs do not take place. That is absolutely within our grasp and it is what the whole House should back during the months ahead.

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

Thank you, Mr Speaker, for granting this urgent question. I congratulate my hon. Friend the Member for Alyn and Deeside (Mark Tami) on securing it and on so eloquently setting out the importance of Airbus to our economy and the 110,000 workers whose livelihoods depend on it.

Airbus is not alone. Last week we heard from: BMW, which has 8,000 workers; Unipart, with 6,000 workers; Siemens, with 15,000 workers; and INEOS, which has 18,500 workers. These are the ones that have put their heads above the parapet, to be shot down by their own Government. The Secretary of State may say that he is listening, but the Health Secretary calls Airbus “completely inappropriate”, the Trade Secretary blames the EU and it would be unparliamentary to fully quote the Foreign Secretary, wherever he is.

Businesses are told to shut up when they call for clarity, Labour MPs are accused of scaremongering and Conservative MPs are called traitors. This Government are so insecure—so at odds with themselves and the country—that they cannot stand scrutiny. Their chaotic handling of Brexit is dividing the country, not bringing it together, and it is risking our industrial base. They should abandon their red lines, rule out no deal, accept that a new customs union and single market is in all our interests, and give business and workers the certainty that they need—or step aside for a Labour Government who will.

Oral Answers to Questions

Chi Onwurah Excerpts

Tuesday 12th June 2018 Commons Chamber

[Mr Gyimah]

It is for the Scottish Government to make their own budget representations, but as we have always said, we are committed to the roll-out of superfast broadband across the UK. Some 95% of the country has superfast broadband, thanks to the work of this Government.

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

Science is a great British success story, supporting jobs and growth across the country. With Europe’s funding for UK science down a fifth, more than 6,000 engineers and scientists denied visas in this year alone and universities reporting that Brexit chaos is freezing them out of Europe’s new £90 billion science fund, UK science risks crashing down to earth. Does the Minister accept that his threat to spend the entire UK science budget on duplicating Galileo because the Government have bungled negotiations on this £9 billion UK-EU collaboration is final proof that his science strategy is lost in space?

[Mr Gyimah]

As I said, we have the biggest increase in science and innovation in this country for 40 years. As for the UK-EU science collaboration, the EU Commissioner himself said:

“It is very important for the UK and it is very important for the EU to have a relationship in science and innovation. We’ve had this relationship for so long”.

On Galileo, negotiations are under way and we have made it very clear not only that it benefits the UK but that EU member states stand to lose skills and other important issues without the UK’s involvement.

Industrial Strategy

Chi Onwurah Excerpts

Wednesday 18th April 2018 Commons Chamber

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

This has been a timely, well-attended and generally well-informed debate. Members on both sides of the House have come together to call for an industrial strategy that brings good jobs to every region in our post-Brexit world. I listened with considerable respect to the contributions made by the hon. Members for Spelthorne (Kwasi Kwarteng), for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and for Copeland (Trudy Harrison), my hon. Friend the Member for West Bromwich West (Mr Bailey), the hon. Member for Fylde (Mark Menzies), my hon. Friend the Member for Luton North (Kelvin Hopkins), the hon. Member for Wells (James Heappey), my hon. Friend the Member for Stockton North (Alex Cunningham), the hon. Member for Rugby (Mark Pawsey), my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), the hon. Member for Cleethorpes (Martin Vickers), my hon. Friend the Member for Aberavon (Stephen Kinnock), the hon. Members for Berwickshire, Roxburgh and Selkirk (John Lamont), for Kilmarnock and Loudoun (Alan Brown) and for Stoke-on-Trent South (Jack Brereton), my hon. Friend the Member for Glasgow North East (Mr Sweeney), and the hon. Members for Boston and Skegness (Matt Warman), for Chippenham (Michelle Donelan), for Chelmsford (Vicky Ford), for Redditch (Rachel Maclean), for Stirling (Stephen Kerr) and for North East Derbyshire (Lee Rowley).

Given the Secretary of State’s predecessor’s refusal to utter the words “industrial” and “strategy” in sequence, the current Secretary of State’s rhetoric is to be welcomed. But it is just that: rhetoric from a Government forced to accept the reality facing working people. The White Paper, while lengthy—it was generously padded out to 256 pages with glossy pictures and large type—did little to turn that rhetoric into reality. To take just one example, my hon. Friend the shadow Secretary of State pointed out that the Government’s target of spending 2.4% of GDP on research and development by 2027 is inadequate. By contrast, Labour would raise investment in R&D to 3% by 2030, ensuring that the UK has the greatest proportion of high-skilled jobs in the OECD as a consequence. My hon. Friends the Members for Aberavon and for Glasgow North East called for just such an economy.

The Government’s strategy is not only under-resourced but sectoral, favouring sectors and areas that are already well organised and can push to the front of the queue. As Sheffield Hallam University researchers found last year, the Government’s pledges would have an impact on only 10% of our manufacturing base and only 1% of the whole economy. Many Members, including my hon. Friends the Members for West Bromwich West and for Luton North, considered the implications of this disparity for their constituencies. As my hon. Friend the Member for Stockton North implied, this is not so much about picking winners as rewarding those who have already won.

Let me take one example: Cambridge, a city that has contributed so much to the country’s innovation economy. With a population of 285,000, it has as many private R&D jobs as the whole of the north, which has 50 times more people. This must not be an either/or. We need an industrial strategy that maintains our current centres of excellence, while ensuring that other areas can grow successful innovation-intensive economies as we move outside the European Union. Unlike the Government, we are not just focusing on headline-grabbing tech trends. We are committed to putting innovation at the heart of the lowest-paid and least productive sectors, for example by creating a retail catapult to support the 2.8 million people in our retail sector.

The Government’s industrial strategy has no strategy to it and it has nothing to say about the fundamental workings of our economy. As the world-leading economist Mariana Mazzucato argues in her new book, “The Value of Everything”, at the heart of capitalism’s fundamental failure is the two faces of financialisation. The first is the way in which the financial sector has stopped resourcing the real economy. Instead of investing in companies that produce stuff, finance is financing finance. Why would someone lend money for a manufacturing plant that can take years to yield a return and cannot easily be sold on when they could bet on some options hedged with other options and virtually guarantee a return in a few weeks? With so much financial engineering demanding investment, real engineering does not stand a chance.

The second is the financialisation of the real economy. With industry driven by short-term returns, this results in less reinvestment of profits and rising burdens of debt, which in a vicious cycle makes industry even more driven by short-term considerations. As my hon. Friend the Member for Birmingham, Erdington emphasised, the sale of GKN to Melrose demonstrated that this Government are not prepared to step into defend our long-term economic industrial assets when they are under threat. Every time, short-term interest takes precedence.

We need a real industrial strategy that lays out a vision for the high-wage, high-skill, high-productivity economy that we want to build. As well as the two existing missions that my hon. Friend the shadow Secretary of State laid out earlier, our industrial strategy is based on a platform of strong horizontal policies—from our national education service making lifelong learning free at the point of use, to our £250 billion national transformation fund to deliver much-needed infrastructure improvements across our country and our diversity charter challenges to ensure that businesses draw on a wide range of talents.

Our approach is positive and practical. It speaks to the student who is anxious about their future, the single mum working two minimum wage jobs and the Redcar steelworker wanting a job to be proud of. It addresses the crisis in productivity, skills and wages that keeps us poorer, even with unemployment relatively low. The Secretary of State has already borrowed from our approach to an industrial strategy on more than one occasion—imitation is the sincerest form of flattery—and I urge him to do so again for the good of our economic future.

GKN: Proposed Takeover by Melrose

Chi Onwurah Excerpts

Thursday 15th March 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend the Member for West Bromwich West (Mr Bailey) for calling this important debate and acknowledge the many impressive contributions by Members on both sides of the Chamber. We heard that GKN is one of the world’s oldest and most prestigious engineering firms. As an engineer myself, I can imagine people’s pride at knowing they are following in such an illustrious tradition. I appreciate the pride of the hon. Member for Redditch (Rachel Maclean) and my hon. Friend the Member for Caerphilly (Wayne David) at having GKN in their constituencies, and that of other Members, too.

GKN is at the centre of the fourth industrial revolution, boasting of strengths in defence, aerospace, automotive, batteries and the internet of things. My hon. Friend the Member for West Bromwich West set out the significance of its economic contribution, and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) emphasised the significance of its investment in R&D in the United Kingdom. As the shadow Minister for industrial strategy and a chartered engineer, I believe that all those factors make GKN an important part of our future innovation economy. As my hon. Friends the Members for Birmingham, Northfield (Richard Burden) and for Caerphilly emphasised, it plays an important part in our national security, too.

Members on both sides of the Chamber critiqued the Melrose bid. Unite, which represents most GKN workers, has called the bid “predatory” and Melrose an “asset-stripper”. It calls for the Government to halt the bid, as does the Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Leeds West (Rachel Reeves). Melrose contests that, but admits that it would cut GKN’s management, deliver a “fundamental” culture change, sell sections of the company and boost the firm’s profitability through what its CEO calls

“the catharsis of a change of control.”

It sounds like Melrose is an advocate of Schumpeterian creative destruction, but with little regard for what is destroyed or, indeed, created. In practical terms, that could mean the closure of sites and divisions across the UK, the loss of jobs, a threat to pensions, as we heard, and the disappearance of crucial engineering expertise.

As my hon. Friend the Member for Birmingham, Erdington emphasised, Melrose’s record does little to assuage those concerns. It does not make purchases for the long term. The biggest example is its stewardship of Brush Turbogenerators, bought as part of FKI in 2008. Since then, the firm has had five different managing directors, and just last month it announced that it would cut up to 270 jobs in Loughborough and shift production overseas, despite the fact that last year Melrose paid out bonuses worth £160 million to only four people. My hon. Friend the Member for Redcar (Anna Turley) remarked earlier this week that meeting representatives from Melrose was like “meeting neoliberalism in person.”

However troubling we might find Melrose’s practices, this is not about just one company; it is about how our economy works. The Secretary of State for Business, Energy and Industrial Strategy hosted and attended the first meeting of the University College London commission for mission-oriented innovation and industrial strategy, chaired by world-leading economist Mariana Mazzucato. In her new book, she argues that the “two faces of financialisation” are at the heart of capitalism’s fundamental failure. The first is the way in which the financial sector has stopped resourcing the real economy—making stuff. Instead of investing in companies that make stuff, finance is financing finance.

The second aspect is the financialisation of the real economy, with industry driven by short-term returns, which results in less reinvestment of profits and rising burdens of debt in a vicious cycle, which makes industry ever more driven by short-term considerations. Such finance is not neutral but changes the nature of what it finances. As we have seen in Melrose’s approach to managing Brush, its short-termism has led it to neglect the difficult, costly business of maintaining sunk assets such as factories or developing new technologies, such as those we heard about in the automotive sector. Melrose’s expenditure on R&D is proportionally less than a fifth of GKN’s.

Melrose’s track record indicates that it will focus on strategies such as offshoring jobs that neglect people and places but provide an immediate financial return. A Melrose takeover would therefore lead to the financialisation of GKN, placing UK jobs under threat and eroding our industrial base. That was very much the point made by Tom Williams, the chief operating officer of Airbus, when he said it would be practically impossible for his company to give new work to GKN after a Melrose takeover.

The debate is not about Melrose alone but about how our country’s economy works. As the Leader of the Opposition said last month at the EEF conference:

“The next Labour Government will be the first in 40 years to stand up for the real economy. We will take decisive action to make finance the servant of industry, not the masters of all.”

In the immediate term, as Members on both sides have said, there are powers that the Government can use to stop the Melrose takeover. When I mentioned that in the Chamber to the Secretary of State, he said, correctly, that according to the Enterprise Act 2002 he could intervene

“only in mergers that raise public interest concerns on the grounds of national security, financial stability or media plurality.”—[Official Report, 13 March 2018; Vol. 637, c. 711.]

As others, including Unite and the BEIS Committee have made clear, the proposed takeover raises national security concerns, given GKN’s close involvement with sensitive defence projects. While the Minister cannot answer in detail, will he answer in principle whether the Government believe that Melrose’s proposed takeover could raise public interest concerns on the grounds of national security? Will he explain what process the Government will go through in reaching a conclusion?

The Secretary of State also praised his Government’s corporate governance reforms, which

“have ensured that GKN had longer to prepare its defence, preventing the kind of smash and grab raid that Cadbury’s was subjected to under the previous Government”.—[Official Report, 13 March 2018; Vol. 637, c. 711.]

That has been mentioned in the debate. Kraft’s takeover of Cadbury in January 2010 did prompt changes to the takeover code in 2011 and further amendments to the takeover regime with the Enterprise and Regulatory Reform Act 2012, which set up the Competition and Markets Authority. I served on the Bill Committee, when Labour proposed amendments to strengthen the new CMA and broaden the scope of the public interest test. For example, one amendment would have allowed the Secretary of State to consider the effects of the proposed merger on the long-term competitiveness of the UK economy as part of the public interest test.

I sat and watched as the Government voted down amendment after amendment that would have provided them with a framework to act. Will the Government now explore and legislate for the expansion and broadening of the public interest test, which they failed to do six years ago? That would not be without precedent—for example, the financial stability clause, added in 2008 during the financial crisis. Can we tighten the financial stability test to include considerations of long-term financial viability, as suggested by the hon. Member for Paisley and Renfrewshire South (Mhairi Black)?

Only this morning, Unilever announced that it will relocate its headquarters from London to Rotterdam. One key factor in that decision was the greater protection afforded to the company by Dutch takeover law. Will the Government look at improving the protection offered by takeover rules to British companies?

Both Dana and Melrose have questions to answer with regard to the future of pension schemes that GKN is currently responsible for. Will the Minister explain what assessment has been made of the schemes and what assurances the Government have sought?

The Secretary of State talks of building an economy for the long term, just as his predecessor did. This is a litmus test for his industrial strategy. It cannot hold if time and time again our most successful and innovative companies are taken over and then taken apart. Investing in innovation is a long-term bet; Melrose is a short-term player. Do the Government have the will to build a high-skill, high-wage, high-productivity economy, or is casino capitalism what our future holds?

[Graham Stringer (in the Chair)]

Before I call the Minister, I ask him to leave three minutes at the end to allow Adrian Bailey to sum up.