Rolls-Royce (Redundancies)

Chris Stephens Excerpts

Wednesday 10th June 2020 Commons Chamber

[Gavin Newlands]

I am grateful to my hon. Friend for those words; I am sure the Minister will address them in his speech.

[Chris Stephens (Glasgow South West) (SNP)]

I thank my hon. Friend and constituency neighbour the Member for Paisley and Renfrewshire North (Gavin Newlands) for his tenacity, and not just on Rolls-Royce. With Glasgow airport in his constituency, he has his work cut out for him, but he has certainly risen to the occasion. He will be aware that constituents of mine are also employed in Rolls-Royce in Inchinnan. One of the key concerns I hear from them is that the Rolls-Royce facility is part of the planned National Manufacturing Institute Scotland, which is to develop skills and engineering in the west of Scotland. Does my hon. Friend agree that it is important that the UK Government step in so that we can continue to use the Rolls-Royce facility to develop highly skilled engineering jobs in the west of Scotland?

[Gavin Newlands]

Yes, I could not agree more with my hon. Friend. I will touch on NMIS later in my speech, so I do not want to give too much away now.

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[Gavin Newlands]

The hon. Gentleman makes a very strong point about the misuse, almost, of the furlough scheme. I know that this has drawn some criticism from Ministers, but if only they had listened at the start, because when they introduced the scheme, we all said that there are no protections in it for redundancies. Other countries have put in protections to stop this sort of behaviour, but the UK Government did not listen, and here we are with regard to British Airways.

[Chris Stephens]

I was pleased to co-sponsor my hon. Friend’s Bill yesterday. There is a wider point about redundancy, particularly as it relates to Rolls-Royce. We are seeing, far too many times, firms choosing to lay off UK workers because it is easier to lay off a worker, in terms of redundancy, in the UK than in other countries. For example, Germany has 120 days’ notice and there has to be a far tougher process. As we come out of lockdown, should not the UK Government be looking at and discussing the whole issue of redundancy when it comes to their legislation going forward?

[Gavin Newlands]

I concur with my hon. Friend. In fact, executives formally allude to the fact that there are different rules and regulations in other countries, and the UK workforce will bear the brunt.

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[Nadhim Zahawi]

I thank the hon. Gentleman for his intervention, and I hope that, as I make some headway, he will see some of the action that we have already taken to help the industry. I have held several meetings with groups of senior industrialists from the sector during this period. I am pleased that aerospace companies have been able to draw on the Government’s extensive financial support package, which includes £330 billion of loans and guarantees, the tax deferrals and the furlough scheme for workers. Rolls-Royce has benefited from £300 million of support from the Bank of England’s Covid Corporate Financing Facility. My Department is working with an industry-led UK aerospace supply chain taskforce, set up by the ADS Group, the national aerospace trade association, in consultation with Airbus. The taskforce, led by Tom Williams, the former chief operating officer of Airbus, is looking at supply chain vulnerabilities within the industry and at potential remedies, including around financing. That will ensure that ongoing covid-19 Government support is co-ordinated with the actions of business to support supply chains and employment.

We are continuing to back the sector strongly. Our Aerospace Technology Institute, the ATI programme, is providing £1.95 billion of Government funding for aerospace R&D by 2026, which will be matched by industry. The programme has been a game-changer for the UK aerospace industry since 2013, providing real long-term certainty about the availability and the level of public funding, giving industry the confidence it needs to invest. From Broughton in north Wales, to Derby in the east midlands and Inchinnan in the constituency of the hon. Member for Paisley and Renfrewshire North, we are at the cutting edge of global aerospace innovation. We manufacture the most advanced parts of an aircraft here in the UK, and we want to maintain our position for many years to come. Indeed, creating this positive business environment helped to give Rolls-Royce the confidence to build its new large engine testbed in Derby, the largest indoor facility of its type in the world.

[Chris Stephens]

Will the Minister give way?

[Nadhim Zahawi]

If the hon. Gentleman will give me a couple more minutes, I will come back to him.

The facility is capable of testing large engines and, crucially, the next generation of UltraFan engines. Looking to the future, we recently opened the £300 million feature flight challenge, which will award £125 million of grants to small and medium-sized companies investing in future aviation systems and vehicle technologies, which will enable new classes of electric or autonomous air vehicles. We are supporting SMEs through innovation and productivity programmes, and we are looking at what scope there is to refocus some of these to assist with the short-term needs of businesses. That is what we are doing currently with those SMEs. We are making sure that Rolls-Royce and others can sustain investment in cutting-edge technology so that they are competitive when the markets actually recover. Our joint research projects funded through our ATI programme, which I referred to earlier, are supporting the development of the next generation of cleaner and quieter aero engines.

[Chris Stephens]

I thank the Minister for his generosity in giving way. He rightly talks about the support the Government have given to industry and the aviation industry, but with that we expect some corporate social responsibility. Will he outline what that means? Does it mean the Government are going to have to and will review redundancy legislation so that companies that are not engaging in CSR and are getting taxpayers’ money are told by the Government, “Sorry, you can’t make people redundant.”?

[Nadhim Zahawi]

I hope to address the hon. Gentleman’s point in my concluding remarks. Suffice it to say that the most valuable resource in any organisation—I have spent more years being in business than I have as a Member of Parliament and a Minister—is the human resource and that any leader, and chief executive, would be minded to think long and hard before behaving in a way that makes their people, the family who make up their business, feel as though their leadership are not listening to them.

In addition, we are supporting investments in new green aviation technologies, which will not only help us to deliver on our net zero commitments, but keep the UK at the forefront of the aerospace sector globally. We continue to back Rolls-Royce’s export campaigns, including, where needed, through UK Export Finance. The recovery of the aerospace sector is, of course, dependent on the wider aviation sector, as has been mentioned in this debate, and on getting aircraft flying again. The Government are committed to getting this crucial sector restarted. Led by my right hon. Friend the Transport Secretary, we are in active discussions with industry through an expert steering group, as part of an international aviation taskforce. The group has been instrumental in the development of the health measures guidance for passengers and operators, which my Department for Transport colleagues will be publishing as soon as possible. The border health measures that we spoke about earlier will be subject to review—currently this will be every three weeks—to ensure that they are in line with the latest scientific evidence, and remain effective and necessary. We are examining the possibility of alternatives to the international passenger self-isolation rules, including air bridges, where countries have managed the virus and we are confident in their measures for departing passengers—I spoke about that earlier. We will continue to work with industry on this concept and, ultimately, we will be guided by the science. I am sure the House will appreciate that the health of the public will always come first.