Nuclear Sector Deal

Drew Hendry Excerpts

Wednesday 11th July 2018 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Owen, especially since in such debates as this we often refer to developments in your constituency.

I congratulate the hon. Member for Copeland (Trudy Harrison) on securing this important debate. We have heard a lot of enthusiasm for new nuclear, but I will change that, because I do not share that enthusiasm. In fact, the Government have many questions to answer on their path towards new nuclear, in particular on new developments.

The disastrous Hinkley Point C project exemplifies the Government’s regressive energy strategy and lack of a long-term plan that could cost taxpayers billions. The project at Wylfa is no different: total project costs are unclear, but have been trailed to be about £20 billion—more expensive than Hinkley’s £19.6 billion—a figure that could rise with inevitable delays. The direct investment represents a reversal of decades of opposition to investing taxpayer money in new nuclear.

The Government must fulfil the Public Accounts Committee’s recommendation of a full value-for-money assessment before signing any deals, and they must consider the National Audit Office’s report on Hinckley Point C. Consumers already face the impact of a bad deal made by the Government. Hinkley Point is set to cost consumers a fortune because of the appalling strike price deal that the UK Government made with EDF. As a result of the bad deal, consumers are set to pay at least £30 billion over the 35-year contract through their electricity bills.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

I apologise for being late, Mr Owen. I had a supply chain meeting.

I invite the hon. Gentleman to come to Hinkley C—I mean that sincerely. I will host him and I will show him around the site and what is going on at Hinkley C so that he can see on the ground what is happening there and at the National College for Nuclear. I think that it would give him a new perspective on the situation.

[Drew Hendry]

I am grateful to the hon. Gentleman for the invitation to Hinkley Point C, but seeing the construction and the rest of the work, however good the quality, would not change the fact that the deal is disastrous for the taxpayer. It is also unlikely to get any better, because we face paying for another failing nuclear project.

The strike price for the new project has been trailed at £77.50 per megawatt-hour, which is down from Hinkley Point’s £92.50 through UK Government support for capital costs. That figure, however, is still significantly more than for offshore wind at £57.50 per megawatt-hour, even including intermittency costs of about £7 per megawatt-hour. How can the Minister justify that cost to the taxpayer?

My second question concerns financial liability for nuclear power station safety. Liability for nuclear developers is capped at €1.3 billion in the event of a nuclear incident, as agreed in the Brussels and Paris conventions. An event such as the one at Fukushima, however, would cost hundreds of billions of pounds. Moreover, The Times reported that Hitachi “won’t pay” for nuclear accidents at Wylfa and that, according to Nikkei reports, some of Hitachi’s directors want

“safeguards that reduce or eliminate Hitachi’s financial responsibility for accidents at the plant”.

Hitachi has already had two serious safety breaches at its nuclear developments, one of which resulted in a $2.7 million fine by the US Government.

Decommissioning costs ate up around half the budget of the now disbanded Department of Energy and Climate Change after the liabilities for cleaning up old nuclear plants were in effect nationalised in 2004 and 2005, when British Nuclear Fuels Ltd and British Energy faced financial problems. At the moment Hinkley C’s decommissioning costs are estimated at between £5.9 billion to £7.2 billion. Dr Paul Dorfman notes that given that decommissioning costs have been consistently underrated, and the precedent set by the Government’s taking ownership of liabilities of these companies more than a decade ago, it is highly likely that the Government will be forced to shoulder further costs if Hinkley developers have a shortfall. Again, will the Minster give an urgent assurance that taxpayers will not be left liable for safety failures at the Wylfa nuclear plant? That is wrong headed, especially for Scotland.

The announcement comes at a time when the prices of offshore wind, other renewables and storage solutions have dropped dramatically. Let us remember that the UK Government made the shameful decision to pull the rug out from under their long-term carbon capture and storage scheme in Peterhead. By cancelling the £1 billion competition just six months before it was due to be awarded, after spending £100 million on it, they broke their own election manifesto promise and left Peterhead—a key candidate for support—behind. The decision left a huge and damaging legacy to investment incentives and consumer confidence in the UK. Their new idea for carbon capture and storage is not the £1 billion minimum required, but a tenth of that—£100 million—which equals what was already wasted.

While the UK Government continue to fail Scotland’s energy sector, the Scottish Government see carbon capture utilisation and storage—CCUS—as an important decarbonisation infrastructure requirement and essential climate change technology. Scotland remains the best-placed country in Europe to realise CCUS on a commercial scale. That is why the Scottish Government support the Acorn CCS project at St Fergus, which has also secured €1.9 million in funding. The Scottish Government have delivered an exceptional range of support for the oil and gas sector. They have delivered an increase of £270 million to the economy, jobs and a fair work portfolio, including an uplift of more than £194 million in the enterprise and energy budget to support entrepreneurship, construction and productivity. That additional funding contributes to investment of almost £2.4 billion in enterprise and skills through our enterprise agencies and skills bodies.

I could go on and give a lot more detail on the Scottish Government’s support, but I will welcome one thing that the UK Government did recently: introducing the transferable tax histories mechanism in the 2017 Budget. But why has that been deferred by at least a year, when it is a crucial time for industry? That incentive could have been used to realise long-life assets.

The Scottish Government are doing everything they can with a world-leading climate Bill and bold support for renewable energy. The Scottish Government’s forward-looking agenda puts Westminster’s to shame. The UK Government should do more to support oil and gas and far more to support renewables opportunities. They should not make this mistake with nuclear. It is high time that they abandoned their costly love affair with nuclear and instead focused investment that can make a real, positive difference for our environment, jobs and our economy.

[Several hon. Members rose—]

Leaving the EU: Airbus Risk Assessment

Drew Hendry Excerpts

Monday 25th June 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Airbus’s risk assessment is sobering news for those drunk on the fantasies of Brexit. Airbus has forecast “severe disruption” and “interruption of production” in the UK, forcing it to switch investment planning away from the UK. Airbus says that this is not “Project Fear” but a dawning reality. The fact is that business after business is shouting, “Brace, brace.” At the heart of this is the lack of any plan or any sense over the customs union from this Government. This, coupled with no sign of any agreement over the EU-US open skies arrangement, means that Airbus is taking flight while the planes it already has in service could be stuck on the ground here.

The UK Government’s disastrous plan to leave the EU customs union and single market risks 80,000 jobs by 2030 in Scotland. Will the Secretary of State provide details about how the Government will protect 8,000 jobs and £541 million of activity in Scotland indirectly supported by Airbus? What technical discussions has he had with Airbus and sectoral organisations on the impact Brexit will have on the industry? In the light of this, what policy changes, if any, will he take forward?

[Greg Clark]

The hon. Gentleman talks about the impact of Brexit. It may have escaped his attention that we are negotiating the terms of our future economic partnership with the rest of the EU. The representations that have been made by Airbus—as I say, directed at the UK but also at other member states and the Commission —are about what that future economic partnership should look like. I hope there will be a broad consensus in the House that it should be a regime that allows fantastic sectors and companies within them to not only continue to export in a just-in-time system in which any delay at the border undermines the business model, but also to expand production in a rapidly expanding market, not just in Europe but around the world. That is what we are negotiating, and that is the context in which Airbus has given advice to us and the other side of the negotiations.

Energy Policy

Drew Hendry Excerpts

Monday 25th June 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Secretary of State for advance sight of his statement.

Eighteen months ago, an independent review commissioned by the UK Government said that moving ahead with the Swansea Bay tidal lagoon would be a “no regrets policy”. Well, plenty of people are regretting this decision today. The Welsh Government were willing to put £200 million into the scheme if it went ahead. It was described as a world-leading opportunity to establish Wales as a centre for expertise and manufacturing, and a long-term source of low-carbon energy. This statement is, yet again, pulling the plug on a Tory promise.

In Scotland, we know how Wales feels. We witnessed the promised £1 billion for carbon capture and storage in Peterhead being pulled for no good reason, stunning both the public and the companies that had bought into the promise, surrendering the technological lead, and costing the taxpayer £100 million. Now it is back—it is flavour of the month—but, of course, grossly underfunded. Here we go again.

The Secretary of State hides behind the scale when making the comparison. He says that he cares about consumers, but this Government are happy to see bill payers paying through the nose for the calamitously bad deal that is Hinkley C. The Government’s disastrous deal with EDF on the strike price will see them pay at least £30 billion over 35 years. At a time when offshore wind strike prices are dropping dramatically, they seem to waste more and more on failing nuclear.

Will the Secretary of State confirm that this and other renewable support is being withdrawn in order to subsidise the likes of Hitachi’s Wylfa nuclear plant? That company has requested loans and guarantees of £12 billion, as per the secret negotiations. Will he admit that this is yet another mistake, and will he have the backbone to categorically rule out any other public bail-outs for failing, costly and desperate nuclear providers?

[Greg Clark]

The hon. Gentleman represents a country that has prospered from the development of the offshore wind industry. The truth is that if a decision had been taken to subsidise this proposal, that money would have come out of the budget for offshore wind, which would have led to job losses in Scotland and elsewhere around the United Kingdom. He mentions a proposed subsidy. The truth is that if a project that is not viable is subsidised by the taxpayer, it is simply a taxpayer-subsidised unviable project. That is no basis on which a project can be approved.

The hon. Gentleman refers to the nuclear power programme. If he regards the price agreed for the power from Hinkley Point C as too high, that is all the more reason for him to oppose this proposal, because it is so much costlier. He must accept that there is a responsibility for the use of consumers’ and taxpayers’ money that comes with being in office. When a proposal is so out of kilter with what can offer value for money, the necessary decision must be made, and he should respect that.

Insecure Work and the Gig Economy

Drew Hendry Excerpts

Wednesday 20th June 2018 Westminster Hall

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing this timely and important debate.

As we have heard from the contributions this afternoon, a lot of people are rightly concerned about the fate of workers in the gig economy. The hon. Lady talked about the insecure employment of between 1 million and 3 million people, which is an outstanding figure to contemplate. She talked about the balance of power lying with employers, about how unscrupulous companies are using employees, especially in distribution warehouses and the public sector, and tellingly about how there is little future for those trapped in such employment. The £300 million in lost national insurance contributions alone should be of interest to the Government.

I would love to cover everybody who spoke in the debate, but that will not be possible, so I will refer to some hon. Members and not others. However, I thought everybody made a telling contribution. My hon. Friend the Member for Glasgow South West (Chris Stephens) rightly commended Better than Zero for the work that it has done and talked about the difference between the 4,504 full-time-equivalent people chasing social security claimants and the 400 workers chasing people regarding employment rights and compliance. I thought the key moment was when he spoke about career advisers not advising anyone to go for a zero-hours-contract career.

My hon. Friend rightly talked about shift cancellations and adjustments and suggested that people should be paid double time in such circumstances. There has to be a consequence if people are turning up at work and finding out that the goal posts have shifted for them unfairly. He also talked about the status of the definition of a worker and the responsibility of the principal contractor.

The hon. Member for Chichester (Gillian Keegan) was the only Tory MP to speak, which is a telling shame. She rightly said that the gig economy can provide opportunities for people, but as we have noted, flexibility is used too often as an excuse for exploitation. That is not good enough for people.

Hon. Members talked about people without proper jobs, such as those on zero-hours contracts, not having a future and struggling to keep their head above water and about the need to treat people with respect. The hon. Member for Ilford North (Wes Streeting) rightly talked about the move from an industrial to a services economy. That was backed up later when one of his colleagues talked about the move to automation. There are real challenges and workers need to be protected. As the hon. Member for Ilford North said, people should not have to rely on trade unions to make those points; they should have those protections.

The hon. Member for Batley and Spen (Tracy Brabin) rightly talked about women—a subject too often overlooked in detail—and the issues of pregnancy sick pay and maternity leave. Her ten-minute rule Bill sounds eminently sensible. I look forward to seeing the detail, but I am sure that that is something the Government should consider.

The Scottish National party firmly opposes exploitative zero-hours contracts and other types of employment that offer workers little or no job security. Scotland is ahead of the curve in promoting fairer working practices and protecting workers’ rights. Only today, my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) sought leave to bring in a Bill for a genuinely representative body for the armed forces. The SNP has led on such matters at Westminster and on tackling exploitative work practices. Too often, when exploitative zero-hours contracts are used, it is said that they will provide flexibility, but the workers simply end up being exploited. Those workers often have too few alternative options. Where that practice occurs, or is likely, there should be a ban.

The Scottish Government were the first Government in the UK to become an accredited living wage employer. New guidance has been issued, to ensure that companies that bid for public sector contracts cannot use exploitative zero-hours contracts. Scotland is the best performer of all the four countries in the UK, with the highest proportion of employees paid the living wage or more. The figure is 81.6%, compared with 78% in England, 75% in Wales and 72% in Northern Ireland. We have more than 1,200 accredited living wage employers in Scotland, paying a minimum of £8.75 an hour, which is the new real living wage.

In 2015, the Scottish Government introduced the Fair Work Convention, so that fair work will be embedded in the workplace by 2025. The Scottish business pledge has signed up 498 companies, including Coca-Cola, Microsoft and Virgin Money, to demonstrate a commitment to fair work, employee engagement and, crucially, productivity. That is where companies can really take the benefit: when workers are treated properly and get a fair wage and conditions, they are far more productive in the workplace. That is demonstrable.

The Scottish Government are developing a fair work charter, to be finalised this year in conjunction with the TUC as a guide for employers and workers who face unexpected events, including severe weather such as the beast from the east, but we could do more. The Smith commission proposed that the administration of 22 reserved tribunals be devolved to the Scottish Parliament, where we could make a further difference, but the UK Government have yet to do that. Those matters cover the underlying substantive rights and duties that remain reserved to this place, so I ask the Minister whether he will now commit to acting on the issue, devolve the remaining powers and allow more protection for Scottish workers?

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 12th June 2018 Commons Chamber

[Claire Perry]

I think that the question in all that preamble was, “What is the date?” As I said, we will be announcing that soon.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Globally, the nuclear power market is declining rapidly while the low-carbon power of offshore wind and battery storage becomes more affordable. How can the UK Government justify taking a reported £5 billion direct stake, and a further guarantee of £9 billion, in the nuclear white elephant that is Hitachi Wylfa Newydd?

[Claire Perry]

As I have said repeatedly, we have entered into negotiations. I have to tell the hon. Gentleman that one of the saddest things I saw at the conference of the parties in Bonn this year was the barge-loads of dirty brown coal sailing down the Ruhr because countries like Germany have made an ideological choice about their energy supply rather than focusing on what keeps the lights on, costs down and carbon falling.

[Drew Hendry]

The Minister said earlier that she “gave a stuff” about household budgets, yet Tory dogma is set to saddle consumers with nuclear energy costing about £80 per megawatt-hour compared with under £60 for offshore wind. Is it not time that the UK Government stopped living in the past, scrapped this nuclear project and put households, who bear the brunt of costs, front of mind?

[Claire Perry]

The hon. Gentleman cites numbers that have no relevance to the negotiations. We have to keep bills down, and we have to make sure that the lights are on, that we have a secure energy supply and that we decarbonise. We think nuclear is very much part of that mix.

Retail Sector

Drew Hendry Excerpts

Wednesday 6th June 2018 Commons Chamber

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is always a genuine pleasure to follow the shadow Secretary of State and, indeed, the Secretary of State in these debates, particularly when they are on very important subjects such as retail that go right to the heart of our towns, cities and communities. As a former retailer myself, I should like to start by paying tribute to those sore-footed legions who go home every night having served us in their shops and stores. They perform an absolutely vital function, and that should not go without being underlined today and I mean to do that during my contribution.

Retailers always try to create the conditions to attract customers. The environment that they work in and that they present to consumers is extremely important for them. They will spend a long time working out whether they should concentrate on high-density product placement, low-density product placement, special offers and the placing of those offers. They know that the environment in which people shop is extraordinarily important to them. They approach that in a range of different ways. I do not want to major on the actual high street itself, but I do want to focus on it, because it is something that was perhaps glossed over by the Secretary of State today.

The success of retail depends on the wider economic environment—or the context, as the Secretary of State called it earlier. That is why the unrelenting situation that we have over austerity causes so much difficulty for high street retailers, and retailers in general. Store closures, such as the ones announced by Marks & Spencer, are just another indictment of what happens when these policies are brought forward, and they drive consumers away from the high streets. If people do not have a disposable income, they are not able to go and spend in the shops.

The Scottish Government continue to support the Scottish retail business, especially the crucial small business retail sector, with initiatives such as the small business bonus, and I will return to that matter shortly.

[Ged Killen]

The hon. Gentleman is talking about the Scottish Government’s assistance for small businesses. In my area, three businesses have had to close as a result of the treatment they have received from landlords, the most recent being The Big Coffee Cup. Does he not think that it is regrettable in Scotland that there is no statutory or common law right for a commercial lease to be renewed? These businesses were told that they had to close because their lease was not going to be renewed.

--- Later in debate ---

[Drew Hendry]

I would love to give the hon. Gentleman a direct answer, but I have not come across that situation myself. I will happily look into it. I will not come here and make up something that I do not know anything about, so I will look into the lease issue for him.

I will come back to what the Scottish Government are doing in Scotland later in my speech. In tough times, the last thing that retailers need is for costs to rise. When prices go up, the number of customers goes down. It is a natural cause and effect. The biggest current risk to the Scottish economy and the retail sector comes from the hard Brexit that is on the table now from this Tory Government. We still do not know what the Labour position is. [Interruption.] Well, we still do not know what the Labour position is on a hard Brexit. Hopefully, we will find out soon.

[Stephen Kerr]

rose—

[Drew Hendry]

Oh, Madam Deputy Speaker, have I ever refused the hon. Member for Stirling (Stephen Kerr)?

[Stephen Kerr]

And the hon. Gentleman maintains his record of giving way, so I thank him. He says that the biggest threat to the retail sector in Scotland is a hard Brexit, which is, I am afraid to say, all too predictable from the Scottish National party spokesman. That is not what the director of the Scottish Retail Consortium, David Lonsdale, says. He says that the devolved Administration’s increase in surcharges and business rates inflexibility have served to make it more expensive to operate shops in our town centres. We cannot go to a higher authority than the Scottish Retail Consortium to describe what is wrong with Scottish retail.

[Drew Hendry]

Of course, if the hon. Gentleman wants to trade in higher authorities, let us see if we can find one. Let us go to the Governor of the Bank of England, Mark Carney, who says that a hard Brexit will cost each family £900 per year—a reduction in income that people simply cannot afford and that will not aid anyone, especially retailers. Let us go to the Office for Budget Responsibility, which says that lower economic growth is predicted in each of the next five years—lower than the 1.7% in 2017.

The single market and the customs union remain vital for Scotland’s economy. It is a Herculean task to find a business person or a business organisation in Scotland that does not agree with that. Hard Brexit not only threatens the cost outlined by Mark Carney and others, but, according to the SPIE 2 report, means that costs will reach £2,300 per person per year compared with remaining in the EU. Report after report highlights the economic folly of the hard Brexit approach. All of that sucks up disposable income—the lifeblood of the high streets.

Let me return now to austerity and its effect on retail. Austerity is a choice. Dealing with a deficit can be done by encouraging growth, not by austerity. Between now and 2022-23, the Scottish Government modelling suggests that the Chancellor could provide an additional investment in Scotland of around £5 billion while still meeting the UK Government’s targets on structural deficit and debt reduction. These policies disproportionately affect the least well off—the very people who spend more of their income in local shops. On welfare cuts, the Resolution Foundation states:

“The coming year (2018-19) is set to be the second biggest single year of welfare cuts…(after 2012-13) at £2.5bn.”

Having been in a pilot area for universal credit for more than five years now, I can testify to the effects that it has had on the local economy by draining the ability for people to spend in their local shops. The people of Inverness in my constituency are all too aware of these consequences.

Of course, there is another effect that is likely to cause great problems and to be a damaging issue for retail. Retail needs people—to buy and to sell. The unique selling point of being in retail, particularly high street retail, is that customers can speak to staff and staff can show customers products. The Government’s proposed approach to immigration could mean that real-terms GDP in Scotland is 9.3% lower by 2040. That affects tax and employment not just for shops and businesses, but also for public services.

Over the decade to 2019-20, Scottish Government funding has been cut by £2.7 billion, which is 8.4% in real terms. The Scottish Government will only receive 2.5% or £37 million of the £1.5 billion funding for Brexit preparations allocated in 2018, so when we look at support for business, it is against a background of lower funding. The Scottish Government’s recent budget set out how reforms of the business rates, for example, will ensure that Scotland provides the best possible environment for business. Rates relief for small business in Scotland is more competitive than in England. We provide the most competitive reliefs package in the UK, worth a record £720 million—up from £660 million in 2017-18. From 2018, we will introduce a business growth accelerator that will see no bill rise for 12 months as a result of improvements or expansion of existing business property. It will also ensure that no rates are paid on new builds for a year when they are entered into the valuation roll.

Earlier I mentioned the small business bonus scheme, which was protected in the 2018-19 Scottish Government budget and has saved businesses almost £1.5 billion cumulatively since it was introduced in 2008. The scheme has provided record relief to almost 104,000 recipients over the past year. The estimated total relief under the scheme, which removes or reduces rates bills, rose to £230 million—an increase of £43 million from £187 million last year. This amounts to an average saving per property of £2,000. The maximum savings that a business can achieve through the scheme will increase next year from £6,990 to £7,200 a year. That is a record level of small business support. Andy Willox, the Scottish policy convener for the Federation of Small Businesses, said:

“Without this rates help, Scottish firms tell us they would scale back investment, and their plans for growth. This vital scheme forms the centrepiece of the Scottish Government’s package of help for smaller firms.”

The Secretary of State rightly talked about the need to diversify in retail, and we have to ensure that we take that factor into account. As he rightly said, most successful businesses are able to adapt and change with the circumstances they face and the opportunities that arise. Many successful retailers—small and large—have adopted online platforms alongside their traditional face-to-face retail. In fact, they are finding that a double benefit: not only can people find and access their products, but they also know somewhere where they can go and get direct advice about those products. It is of course important to set the environment to ensure that that can work properly.

Although the Scottish Government have committed to extending superfast broadband access of 30 megabits per second to Scotland by the end of 2021, the UK Government really have to up their act and understand that 10 megabits is not good enough for the rural parts of Britain that are not covered by the Scottish Government’s actions. The UK Government appear intent on cutting Scottish consumers out of the broadband universal service obligation completely, despite the fact that they are being asked to pay for it alongside consumers in other parts of the UK. In Scotland, we are investing £600 million through the first phase of our Reaching 100%, or R100, programme to achieve our goal of superfast broadband access for all. Procurement is under way and deployment will begin during 2019. Even though telecoms is reserved to Westminster, the UK Government’s contribution to R100 is just £21 million—only 3% of the total.

Figures provided by thinkbroadband show that the UK Government have met their target of 95% superfast broadband coverage, at the UK definition of 24 megabits and above. But, in fact, using the same data used by the UK Government and our own internal data, we have confirmed that we exceeded our target of 95% fibre broadband coverage across Scotland by the end of 2017. Our Scottish 4G infill programme aims to push 4G coverage beyond commercial roll-out by investing up to £25 million of public funding to deliver future-proofed 4G mobile infrastructure to help selected mobile notspots.

I agree with the Secretary of State that the quality of people’s working lives must be enhanced, and I join him in paying tribute to Aldi for making a commitment to being the highest paying supermarket. For too long retail sector wages have been too low for too many people. As I said in my opening remarks, working in retail is a rewarding job, but it is also challenging at times. Retail’s future workforce and customers are obviously going to come from the ranks of young people, so I will make the kind request that has been made eloquently in this Chamber by many other Members, for the UK Government to start to understand that they need to reward young workers, not punish them.

Research from the Scottish Parliament’s information centre shows that workers under the age of 18 would earn roughly £6,500 less than people who are over 25. The research further highlighted that 18 to 20-year-olds would find themselves £3,705 worse off—and apprentices £7,605 worse off—compared to workers over the age of 25. If the UK Government seriously want to reward hard workers, as they so frequently say they do, will they listen to the SNP’s demand and retract this deeply discriminatory decision that punishes workers solely for being young? It is a missed opportunity to provide economic empowerment to young people from lower socioeconomic demographics.

The SNP would encourage every employer to reward their staff fairly and, where possible, to pay the real living wage. Many of the most successful retailers, such as Aldi, are already committed to doing the best for their staff, and that is the right thing to do. The new national living wage rate of £7.83 an hour for over-25s came into effect on 1 April 2018, but the national living wage refers to average earnings, not living costs, and is therefore not a real living wage. The living wage differs in that it is calculated according to the basic cost of living, and therefore takes account of the adequacy of household incomes for achieving an acceptable minimum living standard. Incidentally, the Scottish Government were the first Government in the UK to become an accredited real living wage employer. Our young workforce and consumers—the very people who need to get into the habit of using retail and finding ways to stimulate the economy, and the people who will be paying taxes to support pensions into the future—must be included in a fair strategy.

To conclude, I ask Ministers—[Interruption.] I am getting some warm applause from the Tory Benches. How delighted I am to always find a few extra words to thank them for their attention during these exchanges! Will Ministers copy what has been working in Scotland with the small business bonus? Will they look at adjusting the rates system in that way? Will they finally listen to the endless stream of businesses and business organisations that have come forward to point out the perils of a hard Brexit direction? Will they listen to the people affected by the universal credit roll-out? This all cumulatively affects the future of retail and the ability of people to operate on the high street. It is time to help the whole of the economy. Listening to these points would definitely hit that mark. It is well past time to ditch the dogmatic approach to austerity.

[Several hon. Members rose—]

--- Later in debate ---

[Bill Esterson]

Indeed; as my hon. Friend the Member for Bishop Auckland also said in the debate, there is no such strategy.

In the response to the urgent question on Marks & Spencer on 24 May, the Minister for Energy and Clean Growth, the right hon. Member for Devizes (Claire Perry), said that the Government had set up a new Retail Sector Council, but why has that taken so long? Why did it take eight years to create that council? What is needed now is action. Business rates are a huge fixed cost for businesses in our high streets, and that is a disadvantage that their larger online-only rivals do not have to contend with. The Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Burton (Andrew Griffiths), will no doubt say that there have been changes to business rates, but those changes have made matters worse for many businesses, particularly smaller ones. Last year’s revaluation resulted in an average rates increase for smaller shops of £3,363 over the next five years.

The Government commissioned Mary Portas—remember her?—to tell them how to re-energise high streets. How is that going? Not so well. Her report recommended cuts to business rates, not the massive hikes that so many are experiencing. Meanwhile, ASOS reports its profits going up 26% while its rates bill fell by £30,000. Rates rises for our brilliant independent retailers alongside rates cuts for the multinational online retailers are hardly the stuff of fair competition or a level playing field. There was very little in the Secretary of State’s opening speech about independent retailers, yet smaller firms in all sectors, including retail, are crucial to the future economic success of this country. The Association of Convenience Stores has stated that

“the cost of business rates remains too high”.

And what about the fact that investors in retail are put off by the high cost of business rates? The Government should be doing so much more to ensure the right balance between high street, online and out-of-town retail, and we need to see that happening in the sector deal when it comes forward.

That brings me to the retail workforce. There are 2.9 million people working in retail and the sector is worth £94.6 billion to the economy. It is where many people develop their first experience of the world of work, and it is often the source of good-quality employment in businesses large and small, but the pressures on retailers are starting to show. We have seen job losses at Toys R Us, Maplin, M&S, Conviviality and maybe now House of Fraser, and CVAs and profit warnings at many others. We have seen 21,000 jobs go in the first three months of this year alone, and cuts in pay and conditions at companies such as Sainsbury’s, which has ended paid breaks and premium pay. Yes, there has been a rise in the hourly rate, but it has been offset by cuts in workers’ rights, adding up to a pay cut for too many people.

Ministers could and should be working closely with campaigning unions such as USDAW, GMB and Unite, which are doing such a good job on behalf of workers’ rights and on campaigns such as Freedom from Fear. It is in the interests of responsible retailers and of the whole economy for the Government to play their part in ensuring that workers are treated fairly. A high-pay economy is good for workers, but it is also good for business because workers are also consumers who buy goods and services from retailers. It makes economic sense to prevent the exploitation of workers, not least in the large distribution centres. It was simple complacency for the Minister for Energy and Clean Growth to imply in her answer to the urgent question on 24 May that M&S staff could just go and work at Amazon, complete with its airport-style security and unpaid toilet breaks.

I am afraid that it was also simple complacency for the Secretary of State to say earlier that retail employment was going up. There are 2,500 fewer retail stores than there were three years ago. According to the Office for National Statistics, 40,000 fewer staff were working in retail in 2016 compared with 2015. The British Retail Consortium says that its figures show from 2015 to 2017 the number of jobs fell by 73,000. Meanwhile, the average hours worked in January to March 2018 were 30.2 a week, which is a fall of 30 minutes on the previous year.

Those figures are a cause for concern, not complacency, and are indicative of an overall decline in retail employment. The Government should be doing so much more to improve productivity. As in other sectors, it is true in retail that skills and investment in infrastructure and new technology are the keys to better productivity, and that needs to lead to better-paid jobs as well as more profitable businesses. My hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey) set out some ideas for how to boost pay. The British Retail Consortium has its “better jobs” agenda, and I refer the Business Secretary and the Under-Secretary of State for Business, Energy and Industrial Strategy to its excellent report. Productivity gains from cuts to workers’ pay and conditions or to the prices paid to suppliers are short term and characterise the lack of economic progress under the Government, not least in retail.

That brings me to our relationship with the outside world. Frictionless trade is vital for the import of perishable goods. It is vital for the supply chain in the car industry, where components cross the border multiple times. Car retailers need certainty, as do our supermarkets, because 79% of food is imported by retailers. Certainty is needed for retailers to plan for the trading arrangements post Brexit. Arrangements at the Port of Dover, Holyhead, Liverpool and across the country will play a huge role not only in business life, but in daily life, and retail is one of the sectors that most affects daily life.

Warnings of empty shelves need to be heeded. Consumer choice will be badly affected—dramatically so—if border arrangements are adversely affected. The Government’s failure to confirm their preferred negotiating position with our European partners is causing real problems. Many retailers rely on foreign workers. It is not just the highest-qualified EU workers who need assurances that they are welcome in this country. Workers in lower-paid sectors, including retail, need the same assurances and so do businesses. Some 22% of retailers report that foreign workers have left since the referendum. It is time for clarity.

[Drew Hendry]

Will the shadow Minister give way?

[Bill Esterson]

No.

The Government need to make up their mind, stop negotiating with themselves and start negotiating with the EU for a deal that puts jobs and the economy first and that is not just in the interests of a handful of extreme Brexiteers in the Conservative party. Let us have a proper sector deal that sees action, not just words. Let us see the Government make a proper commitment to retail. Three mentions of the sector in a White Paper do not inspire confidence in the Government’s commitment to retail businesses or workers.

Let us have a deal with thriving town centres, not crippled communities, and one that addresses the concerns of the British Retail Consortium, which describes a sector in stasis, where vacancies are going up. Let us see a deal that reverses the long-term decline. Let us see proper business rate reforms that include the switch to CPI-measured inflation, encouraging innovation and growth, that exempt new investment in machinery from valuations and that ensure businesses can access a proper, comprehensive appeals process. We need a deal that has smaller independent retailers at its heart and one that supports retail by investing in skills, in education and in an immigration system that brings in the skills this country needs. We want a deal that takes on board Labour’s plans for a catapult centre for retail, that listens to the views of employers and unions and that promotes the best outcomes for workers, communities, consumers and businesses.

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

It is a delight to get to the Dispatch Box at last, Madam Deputy Speaker, and I hope that you will indulge me and allow me to answer some of the important points that have been made in this excellent debate. I thank the Opposition for bringing it forward. It is clear that there is strong agreement across the House that the retail sector is vital to our economy, our local communities and the many thousands of constituents who rightly rely on the sector for their livelihoods.

I will quickly address some of the points raised by right hon. and hon. Members in this debate. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), in an interesting speech that particularly focused on Brexit for a change, raised the issue of austerity but forgot to remind the House that, as a result of changes to lift the lowest paid in society out of paying tax and as a result of the biggest increase in the national minimum wage and the national living wage for 10 years, those on the lowest pay are now £3,800 a year better off—that is thanks to the policies of this Government.

The hon. Gentleman understandably raised an important point about the pay of the youngest in society. I share his desire to ensure that young people are fairly paid, but he forgot to mention that unemployment among 16 to 24-year-olds is persistently higher than among those aged 25 and over—12.1% compared with 3.1% across the country. The unemployment rate for 16 to 17-year-olds is 26.9%. Increasing pay would make it more difficult for young workers, whose priority is to get their first years on the job ladder, to secure work.

[Drew Hendry]

Will the Minister give way?

[Andrew Griffiths]

I know the points the hon. Gentleman will make, so I hope he will forgive me if I do not allow him to intervene. Time is pressing.

The hon. Member for Ellesmere Port and Neston (Justin Madders) made an interesting speech in which he talked particularly about the loss of banks. Although I share his concern, he will know the Government have invested some £370 million in the post office network, which now provides both business and retail banking. I am sure he values the contribution that that is making to the important post office network across our communities.

The hon. Member for Bishop Auckland (Helen Goodman) had a shopping list of questions, which is apt in a debate on retail, but, as with all shopping lists from the Labour party, it had a huge price tag attached. She asked for Boxing day to be a bank holiday for retail workers, but she forgot to mention that that would cost employers an extra £1.2 billion.

The hon. Lady raised the issue of competition policy and the banks being able to share premises. As I understand it, there is no competition policy issue that would prevent banks from sharing premises—they would obviously have to be careful about sharing data and personal information. If she has other concerns, I will be delighted to talk to her. Perhaps she could drop me a little note on her concerns.

My hon. Friend the Member for Torbay (Kevin Foster) made an interesting speech, particularly on “Love Your High Street,” which he is championing. I hope he will be getting free beer at the Peaky Blinders bar after he mentioned it. He made a particular point on the need to revitalise our high streets and change the way they are purposed, and I absolutely agree.

My hon. Friend the Member for Stirling (Stephen Kerr) raised the sad loss of The Boozy Cow and The Fat Cyclist Café, which are a great loss to us all. He also raised the important issue of the need for innovation in our town and city centres.

The hon. Member for Great Grimsby (Melanie Onn) again raised the Grimsby town deal, about which she cares passionately. She also raised the issue of coffee shops and said that surely we cannot eat any more cake—there are hon. Members present who might disagree. My hon. Friend the Member for North East Derbyshire (Lee Rowley) made some particularly important points, for which I am grateful.

Let us reflect on the recent structural changes in the sector and on the announcements we have had of late. There has been a shift in consumer behaviour, and we need to be aware of that shift. The move towards new technology is a great innovator and it provides great opportunities, but it also provides great challenges. I commend my hon. Friend the Member for Mansfield (Ben Bradley) for his campaign for free parking, which is an excellent proposal. He is standing up for his local residents.

My hon. Friend the Member for Redditch (Rachel Maclean) mentioned Labour’s yellow brick road, and on the folly of the Labour party, I point to the problems of Cannock Chase District Council, which is now trying to charge hard-working independent retailers £85 just for having an A-board to advertise their shops. That is the Labour party getting in the way of private business, as usual.

Many Members mentioned the key issue of business rates. The Government are aware of the wider business rates concerns and are looking to address them. We undertook the last fundamental review of business rates in 2016, announcing reforms worth £9 billion. A further £4.3 billion package was announced at the spring Budget in 2017, including £110 million to support 16,000 small businesses. I hope that Members from across this House will join me in celebrating Small Business Saturday later this year to try to support small high street retailers.

The Secretary of State mentioned the Retail Sector Council, which I am chairing, and the hon. Member for Sefton Central (Bill Esterson) asked whether we were working with USDAW. I should point out to him that USDAW sits on the RSC and is making a great contribution, and we are grateful for its support. The RSC will look at the issue of business rates, as per our manifesto commitment.

We all recognise the importance of retail and the contribution it makes, not just to the UK economy, but to our communities up and down the country, and the people it employs. I reassure the House that we will continue to work with the unions, the retail sector, local government and everyone else concerned to make sure that the retail industry across the UK has a bright future.

Question put and agreed to.

Resolved,

That this House notes that 21,000 jobs were lost in the retail sector in the first three months of 2018 due to store closures and company administrations, with more announced since; further notes that the retail sector is one of the largest employers in the UK and contributed £94.6 billion to the UK economy in 2016; regrets that the Government’s industrial strategy contains only three references to the retail sector; further regrets that the Government has presided over the biggest squeeze in wage growth in a generation, is failing to provide certainty around future trading arrangements after Brexit and has failed to ensure a fair business rates system; and calls on the Government to urgently publish a strategy for the retail sector.

Nuclear Safeguards Bill

Drew Hendry Excerpts

Ping Pong: House of Commons
Tuesday 8th May 2018 Commons Chamber

[Stephen Kerr]

The hon. Lady is right to pick me up on those words, and I am grateful for her intervention. Because the Prime Minister has successfully concluded the implementation agreement with the European Union, the minimum that we should settle for is no disruption, especially in this sector.

I was about to say that we as a country must be in a position to continue to honour our international obligations, and to be the responsible nuclear state that we are. The importance of this Bill, with this amendment, is that in the event of there being no agreement with Euratom, which is not what we want, it will enable the United Kingdom to be in a position to act as an independent and responsible nuclear state. That is why the amendment should command support on both sides of the House.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I should like to begin by echoing the remarks of the hon. Member for Southampton, Test (Dr Whitehead) about the Minister’s participation in the Bill so far. He has indeed been helpful, inclusive and relentlessly courteous as we have gone through the process. I welcome the progress that has been made, but that must be set against the background of what we believe to be the folly of leaving Euratom in the first instance. The last time the Bill came before us, I said that despite the Government’s ideological intention to abandon Euratom—it is ideological; there has been no attempt to challenge whether there might be a possibility to stay in it—their proposals fell short of answering vital questions on the UK’s nuclear future. Those answers have been asked for by the nuclear industry, the medical profession, our research sector and virtually everyone associated with nuclear power. Simply put, we should not be leaving Euratom.

Even with some sensible amendments from the Lords that have been accepted by the Commons, the Bill still fails to answer many critical concerns. As I have stated before, we in the Scottish National party believe that the safest nuclear power is no nuclear power. In Scotland, we have demonstrated what can be achieved by alternative renewable energy sources, and there is still a vast potential to be tapped, especially offshore, for an abundance of low-cost clean energy. In contrast, the UK Government continue to chase the folly of new nuclear, including the white elephant that is Hinckley C. That means higher costs for consumers, and technologies whose capital costs continue to skyrocket.

[Kwasi Kwarteng]

Does the hon. Gentleman believe that “no nuclear” can be squared with full participation in Euratom? If he had to choose one or the other, what would he decide?

[Drew Hendry]

I find the hon. Gentleman’s question rather odd. I shall come to the reasons that we support Euratom in a moment, but a no-nuclear future means that we still have to navigate the nuclear that we have at the moment, and the wider public need to understand the existing nuclear technology.

[Kwasi Kwarteng]

rose—

[Drew Hendry]

I want to make progress, because I am aware that Members wish to move ahead and I wish to accommodate that as much as I can.

On safeguards, at Dounreay in the highlands we have lived with the consequences of the UK’s previous regulatory regime. Decades on, we are still finding nuclear material that has simply been dumped or buried. For these reasons, and many more, while we work for a nuclear-free future, we recognise the vital need for the continuing protections and benefits that we have enjoyed through Euratom. I hope that that answers the hon. Gentleman’s question.

Turning to the Lords amendments, and the Government amendment in lieu, I should like some clarification from the Minister. On Lords amendments 1 and 2, I have said that providing clarification on the definition of “civil activities” is a sensible move, but is he in a position to enlighten us on the question put by Lord Hutton as to why the phrase, “for peaceful purposes”, has been defined in regard to electricity generation? I understand that Lord Henley, the Under-Secretary for Business, Energy and Industrial Strategy, was to write to Lord Hutton with a response to that question. However, I am not aware that there is anything on the public record on that issue, so I would be grateful if the Minister enlightened us.

Lords amendment 4 proposes a sunset clause, but I still do not think that the Government have fully answered the question as to why the sunset provision needed to be extended to five years from two years, so I would welcome clarification from the Minister. That being said, this is a sensible clause to add to the Bill.

I also agree with Lords amendment 5, which will mean that we receive a report for each three-month period in the years after the Bill is enacted. I note that the reports could include information on the development of the domestic operational arrangements required for the new domestic safeguards regime. Will the Minister outline what level of information he expects to provide? What information does he intend to include in the reports? For example, will they include information on the profile of ongoing costs, including any increases, on skills, on the recruitment and skills opportunities for girls and women and on gender pay? Reports should also include a rolling risk register.

I also note that we are to expect, or “may” have, a report that includes information on future arrangements with Euratom, including on nuclear research and development and on the import and export of qualifying nuclear material. I listened carefully when the Minister said that he had “every confidence” about the situation. It is good that he does, but we should have a guarantee. As was said earlier, there should be no diminution of the current protection that we enjoy under Euratom. I remain concerned about radioactive isotopes, but I do not intend to go through the rationale that I presented in the previous debate for why they are vital—although if I did, I would make no apology for doing so. The medical profession is concerned about their future availability, and even if there are agreements about access to such isotopes, the question remains unanswered about how we are supposed to obtain them in a Brexit future that means no customs union. How are they going to get across the border in time, before their limited half-life has expired? I could say much more on that, but perhaps the Minister can tell us how he intends to overcome the customs barriers and get that material here.

The Scottish National party supports Labour’s position on Lords amendment 3, and if it comes to a vote, we will vote to disagree with the disagreement that the UK Government have brought forward. If the Minister was serious about giving Parliament assurances, he would accept Lords amendment 3, which was moved by a Cross-Bench peer. The amendment quite literally does what it says on the tin: no exit from Euratom if relevant and necessary agreements are not in place. Instead, in presenting their own amendment (a), the UK Government are again asking us to take things on trust and believe that everything will be all right on the night. That is not good enough when it comes to nuclear safeguards.

[Rachel Maclean (Redditch) (Con)]

The hon. Gentleman talks about taking things on trust, but does he not agree that we have just heard hard evidence from the Minister of other parties coming to the table and negotiating with us to put safeguards in place?

[Drew Hendry]

I am delighted that the hon. Lady intervened at that point, because I was just about mention that condition 2 in amendment (a) states that

“(a) one or more of the principal international agreements have not been signed, but

(b) in respect of each agreement that has not been signed, arrangements for the corresponding Euratom arrangements to have effect in relation to the United Kingdom after exit day—

(i) have been made”—

which would be fine—

“or (ii) will, in the Secretary of State’s opinion, have been made before exit day.”

That is simply not good enough. Given that we are already seeing a lack of transparency around Hinkley Point C and rising costs, and around what is happening in Anglesey at the Hitachi plant, we cannot take such things on trust. It is vital that the Government are transparent on this issue now, because so much is at stake for people.

In conclusion, we have been advised that a deal has been struck with the USA, but will the Minister provide an update on the other agreements that need to be in place before the UK exits Euratom? After all, he expects us to take him at his word, so it should follow that we will be regularly updated on progress. In the interests of transparency, will he place the draft withdrawal agreement with Euratom in the Library? Although this is a reserved matter for the UK Government, the Scottish Government have regulatory powers on nuclear waste and emissions, so what discussions has he had with the Scottish Government to date on this issue? If he has had none, as I expect, what discussions does he intend to have?

Oral Answers to Questions

Drew Hendry Excerpts

Tuesday 1st May 2018 Commons Chamber

[Andrew Griffiths]

Absolutely. We have a competitive workforce here. The economy is thriving, partly because of the contribution made by the people to whom my hon. Friend has referred. I particularly commend her for the work that she has done in relation to the soft fruit seasonal workers scheme.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Federation of Small Businesses says that the right of EU staff to remain in the UK is vital. In Scotland, 45% of tourism and leisure businesses rely on EU staff for their workforce. They fear that they will not be able to recruit for their future needs, and their fear is heightened by the possibility that the immigration skills charge—which is currently up to £1,000 a year—will be applied. Can the Minister categorically assure employers that they will not be subjected to any charge for EU workers post-Brexit?

[Andrew Griffiths]

We will set out in due course the system and the scheme that will operate post-Brexit. I can, however, assure the hon. Gentleman that I regularly meet representatives of the Federation of Small Businesses, and we will ensure that the workforce is there for those businesses.

[Drew Hendry]

The Scottish Affairs Committee, the Home Affairs Committee in its report, and the Economics Committee in the House of Lords all see the sense of a differentiated immigration system for Scotland. Can the Minister confirm that he, too, accepts that there is a clear case for a policy that recognises the different needs of businesses in Scotland?

[Andrew Griffiths]

This Government well understands the needs of businesses both throughout the UK and specifically in Scotland. As the hon. Gentleman will know, the Home Office will shortly present further details of the scheme that is to be introduced.

GKN

Drew Hendry Excerpts

Tuesday 24th April 2018 Commons Chamber

[Greg Clark]

Sanctions with regard to undertakings to the Takeover Panel are those for contempt of court, which include everything up to imprisonment.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Secretary of State for advance sight of his statement.

The Secretary of State mentioned holding Melrose to the spirit and letter of its commitments, but traders have been short selling £725 million, or 17%, of Melrose stock, effectively betting against it making a success of GKN. What action will he take if there is any breach of the spirit or letter of the commitments?

The Secretary of State did not cover jobs in his statement. I asked him following a previous statement to what extent he would require assurances to prevent assets from being stripped and jobs lost, and not just those in the MOD or national security. What assurances has he had on the financial restructuring involved in the takeover, which will mean more debt and less investment at the core of GKN? How will that situation progress the Government’s industrial strategy, and can he explain how allowing the takeover will protect the skilled jobs that we require and tackle productivity issues?

[Greg Clark]

I am grateful to the hon. Gentleman for his questions. He will know that one undertaking that has been given is a commitment to at least five years of research and development investment, including participation in the joint industry bodies, which have been a successful part of our arrangements in the aerospace and automotive sectors and are an important part of our industrial strategy. That is a valuable commitment that I would have thought the hon. Member for Salford and Eccles (Rebecca Long Bailey) and he would welcome.

The previous GKN management criticised the commitment to retain the aerospace business, saying that it should not have been entered into given that the sell-off of GKN’s automotive business had already been agreed to. It constitutes a longer-term commitment than was made during the latter period of the previous ownership.

The hon. Gentleman will understand that in obtaining commitments from a bidder, I have to bear in mind commitments that the incumbent management have or have not made. No commitments had been made on the total number of jobs, and indeed the sale programme involved a majority of the business. One of the features of today’s results announcement was that the debt of the previous business was higher than anticipated, and the plans that the new management have set out include paying it down.

Industrial Strategy

Drew Hendry Excerpts

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

The hon. Gentleman knows that I have a quasi-judicial role to exercise in response to certain takeovers, so I cannot comment on that particular case. I would say, however, that in technologies such as automotive and aerospace, there is a high degree of interest and, indeed, optimism about the future capabilities of companies right across those sectors and their supply chains. I mentioned marine engineering; aerospace and automotive are also examples of areas of British strength. The industrial strategy commits to build on that. My intention in implementing the industrial strategy is that our current strengths will be extended.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Earlier, the Secretary of State used the term, “this nation”. Does he accept that he has responsibility for growth in the economies of all the nations of the UK?

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I always enjoy listening to the Secretary of State; I find him a courteous and well-mannered person who tries to put forward a positive view at all times. I find the same to be the case when I work with his team.

This long-awaited industrial strategy is welcome—it is good to see something—but it lacks the substance that we should see in a document that would make a meaningful difference for people, and it misses the mark on fairness and ambition. I hope to delight the hon. Member for Spelthorne (Kwasi Kwarteng), because along with my criticisms, of which I have many, I am going to try to be constructive and suggest some points that the Secretary of State might want to consider.

On inclusive growth, the Scottish National party has long argued that ideologically-driven measures not only are harmful to society, but actively hinder business development, growth and investment. Inclusive growth must be at the heart of any economic strategy, yet the Government continue their obsession with a failing austerity dogma, and nothing in the industrial strategy signals a change of direction. The Institute for Fiscal Studies has forecast that austerity could last until the mid-2020s, meaning that Scottish businesses, households and public services could ultimately face 15 years of austerity measures—and that amid the harsh realities of a hard Tory Brexit. The UK is facing the biggest increase in inequality since the 1980s, the worst wage stagnation in 70 years, which the IFS described as “dreadful”, and a huge increase in child poverty as a direct effect of tax and benefit reforms.

In the context of Brexit, the Global Future study was released just today. After looking into all four options available to the Prime Minister, it established that, in the long term, the amount available for spending on public services will fall. Under the so-called Norway option, there would be £262 million less a week. Under the Canada model, there would be £877 million less per week, while under a no-deal scenario, there would be £1.25 billion less per week. For the NHS, there would be 22% less funding available if there was a bespoke deal, and 9%, 31% and 44% less under each of the other options. Of course, it is not just about the public sector. As we have found from speaking to industry after industry and sector after sector, there are many concerns across the piece about the direction of the Brexit negotiations.

Unfortunately, the hon. Member for Glasgow North East (Mr Sweeney) is no longer in the Chamber, but I wish to reflect on what he said about Jack McConnell and the post-study work visa. I have a great deal of respect for Jack McConnell, who was and remains a far-sighted politician. He recognised that Scotland requires different measures when it comes to our immigration needs. For many decades, our problem has been one of emigration. We need people to come to Scotland. If we are to retain competitiveness and increase productivity, it is essential that Scotland’s immigration system is outward-looking and that it allows businesses to attract the necessary skills to boost growth and create jobs.

[Stephen Kerr (Stirling) (Con)]

Will the hon. Gentleman give way?

[Drew Hendry]

I will give way briefly in a second, but I am mindful of what Madam Deputy Speaker and Mr Deputy Speaker have said about the time available for the debate. I shall make a little progress first.

The ability to attract workers to Scotland is a vital component of how we strengthen our economic advancement and tackle demographic challenges. Over the next 10 years, some 90% of our population growth is projected to come from migration, and that will be directly affected by Brexit dogma.

[Stephen Kerr]

The hon. Gentleman is absolutely right that we need to attract people, new talent and high-end jobs to Scotland. I just do not know how the SNP Government wish to achieve that by having Scotland as the highest-taxed part of the United Kingdom.

[Drew Hendry]

Of course, in a discussion about the future of EU nationals, many of whom are very worried about their future, the hon. Gentleman tries to make a rather petty political point. What he should acknowledge is that Scotland is far from being a less attractive place. Thanks to the huge council tax hikes in England, which are the largest in 14 years—bills are up by some 5.1%—people are actually paying more tax in England than they are in Scotland.

There are roughly 181,000 EU nationals in Scotland. Half the welcome net increase in the Scottish population between 2000 and 2015 has come from people born in EU countries, yet the strategy overlooks the likely impact of immigration restrictions on UK industry. If there were a time to pause and think about the effects of immigration on people and industry, it should surely be this week, when we have seen the manifest failings of the UK Government’s current immigration strategy.

Some sectors in Scotland, such as the thriving food and drink sector, are particularly reliant on the employment of EU nationals. Many businesses across Scotland and the UK employ and rely on EU workers, but the UK Government’s regressive approach to immigration has failed to take proper account of that fact. It is simply not possible to replace straightforward access to the EU labour market with domestic recruitment, and replicating existing immigration rules for non-EU nationals would place significant and unnecessary costs and bureaucracy on business. As has been noted, we have had two very clear cases of people in my constituency of Inverness, Nairn, Badenoch and Strathspey who have been contributing to our local economy being booted out by the immigration policy of this Tory Government.

Let us now turn to the ambition of the industrial strategy. If we really want to deliver affordable energy and clean growth, it is astounding that the UK Government have failed properly to recognise renewable energy in the industrial strategy. The devastating predicted drop in renewable investment of 95% between 2017 and 2020 should be a wake-up call that urgent action should be taken to secure a thriving future for this dynamic sector. Of course, during that period, we have also seen the near decimation of the solar industry.

Scotland is proudly in the vanguard for the development of renewable energy projects and investment. The SNP Scottish Government have set out ambitious targets for a transition to a low-carbon economy. By contrast, the UK Government’s erratic energy approach and the UK’s decision to leave the European Union have created uncertainty in the sector. The UK Government have responsibility for the damaging effects that we have seen.

[James Heappey]

rose—

[Drew Hendry]

No, I will not give way. I did say earlier that I would limit the number of interventions. I have a lot to say on this subject, and I am wary about people taking too much time early in the debate.

Carbon capture and storage technology should play a leading role in tackling climate change, yet the UK Government have been complicit in stifling investment to develop this technology, as well as showing a lack of interest in developing and protecting jobs in Scotland. We wholly condemn the decision to cancel the CCS competition, which left Peterhead betrayed, resulting in a damaged relationship between the Government and industry as well as a negative legacy on investment and consumer confidence.

We have heard warm words about new investment in CCS, and I welcome that, but what I say constructively to the Secretary of State is that one 10th of the previous required investment will not cut it in terms of making the difference that needs to be made. Sustainable energy has been a success story for Scotland in recent years, and the Scottish Government have set out an ambitious strategy for renewable investment with the powers at their disposal. We firmly believe that supporting long-term energy security and environmental protection should be a key priority for any responsible Government. A robust and sustainable strategy for energy security would not only assist the creation of a low-carbon future, but boost productivity, which has largely flatlined in the UK for far too long.

Scotland’s oil and gas industry still has a prosperous future ahead of it, but support is needed to maximise the longevity and success of this dynamic industry. The industrial strategy has failed to mention any new developments in the oil and gas sector. Although I understand that work is ongoing to develop a sector deal, we remain in the dark about what this might look like. Furthermore, Brexit again poses a risk to the development of this vital sector. The Oil and Gas Institute at Robert Gordon University in Aberdeen has said that the departure from the EU bloc is likely to cost the North sea oil and gas supply chain another £200 million a year in tariffs and export taxes. It is time for the Secretary of State to show the same level of support for the oil and gas sector that has been mooted for the automotive and aviation sectors.

The UK Government have ploughed ahead with costly and ineffective investments in nuclear energy projects such as Hinkley Point C at the expense of the rest of the industry. The UK Government must halt the agenda of unexpected, cherry-picked and damaging announcements and policies in favour of making this a thorough industrial strategy for the supply and demand of energy.

I know that I will please the hon. Member for Spelthorne by saying that the UK Government must now invest more in science and in research and development. More than 50,000 international students study in Scotland, which is home to 19 educational institutions. The Scottish National party is incredibly proud of Scotland’s world-class university and higher education sector, and will support the necessary steps to ensure that it remains open, outward-looking and inclusive, yet the industrial strategy offers no assurances that this relationship will be protected. I again ask the Secretary of State to make his Government take the opportunity to do this.

Science, and research and development, have the potential to thrive further in Scotland. For example, the life sciences sector in Scotland could be worth £8 billion a year by 2025, according to industry groups. Although we welcome the sector deal for the life sciences, it is particularly worrying that it was agreed without any consultation with the SNP Government. That must not be replicated in any other sector deals.

On trade and inward investment, being a member of the EU means that Scotland’s businesses are operating within the world’s largest trading area of 500 million potential customers. The EU single market is eight times bigger than the UK’s alone. Moreover, trade with EU countries is becoming more important for Scotland. Since 2007, Scottish exports to the EU have grown by more than 25% to more than £12 billion in 2015. Although some steps are welcome, including the creation of an inward investment strategy, the mechanisms offered to overcome the challenges do not go far enough to alleviate the threat posed by the loss of EU single market membership and the trading partners that come with it. The Government must stop their reliance on rhetoric about trade and investment needs, take action to acknowledge the industry’s concerns and work constructively with the Scottish Government to maximise inward investment as part of a genuinely co-operative approach.

Members of the SNP have a shared goal: to make Scotland the best place to live, work and do business. Although the UK Government have overall responsibility for the economy, we will use all the powers that we can in Scotland to try to achieve this. The SNP has had a plan with trade and investment, manufacturing, innovation and employment at its heart for a number of years, and the recent enterprise and skills review aligns its agencies and resources behind those plans.

Since 2007, the Scottish Government’s central purpose has been to create a more successful country through increasing sustainable economic growth. That remains our ambition and is at the core of our single economic strategy, which was published in 2015. The strategy sets out the overarching economic approach of the Scottish Government and is backed by a series of policies to boost economic performance. We are supporting business and growing Scotland’s economy by focusing on investment, internationalisation, innovation and inclusive growth; building on the successes of our enterprise and skills agencies; and developing a system of support for Scottish businesses and the economy.

An overarching strategic board is now in place that will maximise the impact of the collective investment that we make in enterprise and skills development, and it will create the conditions for delivering inclusive growth. We have also created a new enterprise agency in the south of Scotland with an interim economic partnership in place, backed with £10 million of investment. We have appointed Benny Higgins to lead the work to establish a Scottish national investment bank to support investment growth, among many other measures.

I have a lot more to say, but I am going to cut my speech short to aid progress. On fairness, we have put in place progressive social policies in Scotland. With the cost of living rising, our commitment to our social contract with the people of Scotland is more important than ever and vital for economic prosperity for all. Conservative Members have referred to the changes to income tax. Indeed, this will make Scotland the fairest-taxed part of the UK, with the majority of taxpayers paying less than elsewhere in the UK. Compared with last year, everyone earning less than £33,000 will pay less tax in Scotland. By choosing a fairer path on taxation, we will protect Scotland’s cherished public services.

Given that the cost of living is rising, we will deliver a minimum 3% pay rise for public servants earning less than £36,500—75% of public sector workers—while those earning more than £36,500 will receive a 2% rise, and a cash cap will be put on increases for those earning more than £80,000. There is new investment to ensure that Scotland is the best place to do business and invest. We are investing an extra £100 million to deliver the best business rates package in the UK, increasing investment in business research and development by 70% and making a £4 billion investment in vital infrastructure—and doing much more to build a fairer Scotland.

Finally, I have some asks for the Secretary of State. Will he take on board Scotland’s concerns about Brexit and its industrial strategy? The risks are real, as he knows, and they threaten the economy and people’s incomes. With his overarching responsibility for the success or failure of the UK nations’ economies, will he acknowledge that Scotland’s economy, like those of the other nations of the UK, is unique, and will he engage in a meaningful way with the Scottish Government on the industrial strategy so that we can maximise the benefits for all and support some of the key sectors that I have outlined? Does he recognise that we need inclusive growth to prosper and will he ask the Government to put an end to austerity policies that are damaging the lives of thousands of families across all the nations of the UK?