Oral Answers to Questions

Geraint Davies Excerpts

Tuesday 13th December 2016 Commons Chamber

[Jesse Norman]

My hon. Friend is right to recognise the central importance of small and medium-sized businesses to our economy. The Government have been supporting that vital sector of our economy through: the extension of small business rate relief; our support for the British Business Bank, which has dealt with more than 51,000 small businesses; the new productivity council, which was announced in the autumn statement; and the new patient capital review.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Given the number of businesses, will the Minister ensure that there is a level playing field so that the level of subsidy for tariffs applied to the motor industry is applied equally across all exporters? Will he publish the total amount of subsidy before 31 March?

[Jesse Norman]

There has been no special deal for Nissan or any other part of the motor industry. Whatever arrangements are made to support different sectors of the UK economy are fully transparent. The general picture is that we are proceeding vigorously and with some care towards a rather attractive destination.

Tidal Lagoons and UK Energy Strategy

Geraint Davies Excerpts

Tuesday 6th December 2016 Westminster Hall

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I beg to move,

That this House has considered tidal lagoons and UK energy strategy.

It is a pleasure to serve under your chairmanship, Mr Paisley. This is a timely moment for the House to return to the subject of tidal lagoons as a future energy source, and specifically the projects of Tidal Lagoon Power Ltd, starting in Swansea bay, for which it has already received a development consent order.

My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), my constituency neighbour, led the previous Westminster Hall debate on Swansea tidal lagoon on 8 March 2016, which underlines the keen interest in this project from people in west Wales. It is encouraging to see colleagues here from across the United Kingdom, which demonstrates that what we are discussing is of strategic importance to the whole UK’s energy policy, economic policy and industrial policy.

The previous debate was essentially held under a different Government, when energy and climate change belonged in a stand-alone Department under a different team of Ministers led overall by a different Prime Minister. I welcome the new ministerial team at the Department for Business, Energy and Industrial Strategy. The team is experienced and well equipped to take on the challenges before us. I also welcome what the new Business Secretary said to the Institute of Directors on 27 September in his speech on industrial strategy:

“Many of the policies and decisions that form our industrial strategy will not be about particular industries or sectors, but will be cross-cutting.”

I welcome the departmental integration of industry with energy to make that happen, and tidal lagoons are a good example of the kind of opportunity that such integration is intended to foster.

The last general election feels like ancient history, but it is worth reminding ourselves that Conservative colleagues stood on a manifesto that:

“All parts of the UK will soon be helping to deliver secure, affordable and low-carbon energy, from the Hinkley Point nuclear power station, to offshore wind turbine manufacturing at the new Green Port in Hull, the next generation of pipelines West of Shetland and the Swansea tidal lagoon.”

I am proud of that manifesto commitment, and I would like to see it delivered.

Ten months ago the Government announced an independent review of the feasibility and practicality of tidal lagoon energy in the UK, recognising that tidal lagoons have the potential to provide the country with clean and secure energy but saying that more work needs to be done to determine whether it provides value for money. The Government therefore commissioned a review of the technology to improve our understanding of how tidal lagoons could contribute to the UK’s future energy mix in the most cost-effective way. The purpose of the review, led by the widely respected former Energy Minister Charles Hendry, was to help to establish an evidence base to ensure that all decisions on tidal lagoon energy are in the UK’s best interest, to better understand whether tidal lagoons can be cost-effective and to consider the impact on consumer bills both today and in the longer term.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does the right hon. Gentleman agree—perhaps the Minister will reflect on this too—that, given that 75% of identified fossil fuels cannot be exploited if we are to fulfil our Paris and COP 22 climate change obligations, the spot price of oil, which is often deflated by Saudi excess production to attack frackers, should not be the point at which we identify value for money? We should get sustainable green power at the lowest cost possible, even if the cost of oil is down.

[Stephen Crabb]

The hon. Gentleman makes his point well. The purpose of the Hendry review is to help to provide clarity so that the Government can determine the role that tidal lagoons could have as part of a long-term strategy to provide secure, clean and affordable energy for families and businesses across the country. The review is now complete and will be presented to the Government this afternoon. I, and I suspect the Minister, have no idea what the review says and what it concludes, but given the strength of support for a tidal lagoon industry across such a wide spread of business and political opinion, I imagine that Mr Hendry has heard some powerful and compelling arguments that cannot be dismissed lightly.

It would be absurd to ask the Minister to address his remarks this afternoon to the contents of the review—he will rightly need time to digest and assess it—but my one request is that he commits today that a decision will be made, along with a full response to the review, in as short a timeframe as possible. Even as I say “as short a timeframe as possible,” I sense the scope that that allows for foot dragging, so I seek assurance that the Government will respond in a timely and purposeful way, with no foot dragging. This cannot become another third runway decision, where industry makes repeated calls for a Government decision only for it to be kicked further down the road. There is too much at stake.

--- Later in debate ---

[Stephen Crabb]

Perhaps we need another occasion to talk more fully about the role that apprenticeships play in rebalancing the economy, but the hon. Lady makes a vital point. If we are to have a new tidal lagoon industry, there is a lot of training to be done. A lot of new skills need to be brought into the workforce, so one can readily see that apprenticeships will play a key role.

I will draw my remarks to a close by drawing attention to the elephant in the room, which a number of hon. Members have already mentioned: money and affordability. I was discussing the Swansea tidal lagoon project with one Minister recently who described it to me as “eye-wateringly expensive”. When I pressed him on that, it became embarrassingly clear that he did not understand the project at all and was merely repeating what he had heard someone else say about it. A myth of unaffordability has grown up around the vision of tidal lagoons as it has developed over the last five years.

Let us be clear: the projected investment costs should not deter us. We know that investors are ready to support the Swansea bay project, whose overall project cost is about £1 billion to achieve construction and connection to the national grid. Tidal Lagoon Power has already spent around £50 million on the development work, and another tranche of money is ready to be used to bring the project to financial close, as long as the Government give the green light. Of the total capital investment of around £1.3 billion, we know that around 84p of every £1 will be spent here in the UK, and at least 50% of that will be spent in Wales. For the Welsh economy, a project of that scale would certainly help to move the dial in terms of gross value added.

We have still have not addressed the crucial point on which this whole thing hangs: value for money. I am interested to see what the Hendry review says about it, but after seeing the figures that crossed my desk when I was a Minister, and again more recently, I have been greatly encouraged that the project does represent value for money. By taking a long-term view of the asset—for that is what it is: a long-term source of power generation—and using established modelling that will be familiar to Treasury officials, the current net value of subsidy for Swansea could amount to a contract for difference equivalent of £89.90 per megawatt-hour. We would be talking about a 90-year contract with a diminishing subsidy each year for 35 years—because it is de-linked from inflation—which then starts to pay money back to the Government for the rest of the life of the contract. That compares favourably with Hinkley C, which locks in an escalating strike price with a contract for difference of £92.50 per megawatt-hour.

The point is that it is affordable: Swansea bay tidal lagoon would put an additional 18p on to household bills, and would require only 0.41% of the 2020-21 levy control framework budget in its first year. By its 35th year, Swansea bay would require just 0.15%—effectively a rounding error—of the levy control framework budget. To put that into context, Hinkley C will add around £12 to household bills.

[Geraint Davies]

Does the right hon. Gentleman accept that because the value of the pound plummeted by something like 20% after the news of Brexit—I think it is now down by around 14%—the lagoon will be much greater value for money, because it obviously costs more to import oil and energy if sterling has a low value?

[Stephen Crabb]

I genuinely do not know about that. We are discussing the long-term view. I do not know what oil and gas prices, or the value of sterling, will be in six months, let alone in 35 years.

The Swansea bay project does have strong credentials as a stand-alone project, but think about a Cardiff tidal lagoon as the first full-scale project. That would see the cost of electricity drop markedly, with a potential contract that could, I am told, take around £5 off the average household electricity bill. That is why it is so important to talk about a tidal lagoon industry, not just about doing Swansea as a one-off. It is the fleet of full-scale lagoons that will unlock the full energy opportunity for the UK. If we get it right, the country will win with low-cost, reliable and clean power and the emergence of a new globally significant industry here in the UK. Tidal power is reliable, as well as clean, and it is not subject to the vagaries of the weather. It is predictable—we know exactly when every high tide will be for years ahead—and tidal lagoon systems will be built to last for at least 120 years, making them all the more worthy of investment.

We have a unique and historic industrial opportunity before us, and we absolutely should seize it. We have the natural resource on our coastline, and we need new sources of low-carbon power. We have a rich industrial heritage that has bequeathed us the skills, the capabilities and the ambition to take on the challenge. After five years and expenditure of more than £50 million, the pathfinder project at Swansea bay is almost ready to start construction. The project has planning consent, strong funders, strong industrial partners, political and public support, and a delivery team and supply chain ready to kick into action. It has also proved to the international marketplace that the successful commercial development of tidal lagoon infrastructure can be achieved.

I urge the Minister not to delay in his consideration of the Hendry review. I urge him to seize the moment, to give the go-ahead to Swansea bay, and to launch this affordable, sustainable, first new post-Brexit British industry, which will serve our energy needs into the 22nd century.

--- Later in debate ---

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is great to have you in the Chair, Mr Paisley. I have been a supporter of tidal lagoons since I was elected in 2010. At that time, I asked searching questions about flood mismanagement, possible contamination and suchlike. Those have been looked at and, essentially, this project is good for jobs, for the environment and for the economy, so we should go forward. The hon. Member for Eddisbury (Antoinette Sandbach) shakes her heard. I should mention what she said about nuclear power.

Nuclear power is good, but if we look at global uranium supplies, at the current rate of consumption, which is 2.5% of global consumption, we will run out in 50 years. If that goes up to 12.5%, we will run out within 10 years. So we need a diverse portfolio that does not exclusively rely on nuclear.

As I mentioned earlier, 75% of fossil fuels cannot be exploited, so we need to look carefully at the tidal lagoon project. There is no excuse for further delay. The previous Chancellor came to Swansea with the former Prime Minister and in the autumn statement of 2013 mentioned the Swansea bay lagoon, but we are still waiting. We now have the Hendry review, which has found that the project is technically sound, is value for money and will deliver economies of scale and falling marginal costs as the portfolio is spread around. So, as hon. Members have said, let us get on with it and let us have a target date. Let us say by June next year. I do not think by Christmas is realistic, but let us have a target date and let us get on with it.

The only thing that has dragged on is the issue of cost. As I have mentioned already, the oil cost is not a proper indicator, because we cannot exploit all the oil and, also, we cannot really go down the road of fracking. People may have read the recent Council of Europe report on hydraulic fracturing. It concluded that, given that methane is 86 times worse for global warming than carbon dioxide and fracking has fugitive emissions of 5%, fracking is twice as bad as coal for global warming, so we need to have very tight controls on fracking. Perhaps the Minister will respond to that. Will he undertake to ensure that fugitive emissions are below 1% for the whole process and below 0.1% at the well head? If we can get that out of the way, it opens the door for Swansea bay lagoon and other lagoons like it as pathfinders. We should not mess around when we know that strategically other options are not open to us.

It looks as though we will be heading towards the disaster called “Brexit”. Let us assume for a moment that the Government do not delay triggering article 50 beyond the French and German elections and do not give the people a final say on the deal, in which case they would reject it. Let us assume we go for Brexit. Obviously, fuel prices will be much higher because sterling will be devalued owing to a lack of confidence in the economy outside the European market, with tariffs. That makes the Swansea bay lagoon better value for money. In the short term, of course, some of the component parts to build it will increase in price. However, overall, it is a great project. We have been waiting long enough. Let us get on with it. In the interests of the environment, of the economy and of Britain, let us do it.

--- Later in debate ---

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

Thank you very much, Mr Paisley. Members have already widely noted the honour it is to serve under your chairmanship, and I add my support to that sentiment. I congratulate my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate. It is testimony to him and the importance of the issue that he has generated such cross-party support and so many interesting speeches. The sentiment in the room has been so evident.

My right hon. Friend has long been a proponent of the economic benefits that tidal lagoons could bring to his constituency and to south Wales as a whole. Naturally, he and other Members here today are keen to understand better how the development of a tidal lagoon at Swansea specifically and a fleet of tidal lagoons around the UK coastline—were they to go ahead—would benefit their local economies. However, as he acknowledged, this is a difficult and complex question. The technology is new and untried, and the development warrants due care and consideration before decisions are taken. That is why in May the Government commissioned Charles Hendry to undertake an independent review of the strategic value of tidal lagoons in the UK. Among other things, the review was intended to consider whether and in what circumstances tidal lagoons could play a cost-effective role as part of the UK energy mix, to examine the potential scale of the opportunity, including in the supply chain, and to consider different sizes of projects as the first of a kind.

Contrary to what some Members have said, building a tidal lagoon in Swansea is not a manifesto commitment of the Conservative party, but it is mentioned in the manifesto. There is a commitment to explore the lagoon as a source of affordable energy, and that is exactly what Charles Hendry is being asked to do in his review. We are expecting him to deliver his report to Government very shortly. Colleagues may know better than me how shortly, but whenever that is, this debate is a timely opportunity to discuss the issues. Apparently, drafts have been sent to or discussed with officials—certainly in one case—but it is important to note that the review is not about Swansea as such. Rather, it is a general review of the costs and benefits of tidal energy. As it has not reported, it is irrelevant that the autumn statement has occurred, contrary to what some colleagues have tried to insist. It would be wrong for Government to announce anything while a review we had commissioned was under way. We look forward to receiving it and reading it with great interest.

The question has been raised as to whether, as my right hon. Friend said, there will be a timely and purposeful decision. Members asked when the Hendry review would be published and whether there would be a decision before the end of the year. Colleagues will understand that any decision before the end of the year would be unrealistic at this late stage, and my right hon. Friend acknowledged that. We will give this matter thorough and careful consideration. There will be no dragging of heels.

[Geraint Davies]

Is the Minister willing to set a target deadline that he will not go past? Will he say, “By June next year, we will try to do better,” or will he set no deadline at all?

[Jesse Norman]

The fairest thing to do is to see what the report says before we come to a view about an appropriate timetable. It would be quite wrong to prejudge the report and its conclusions.

For all the enthusiasm of my right hon. Friend the Member for Preseli Pembrokeshire for tidal lagoons, I note that he has taken a measured approach, respecting the complex issues that are being raised, for which I thank him. As he said to the House when he was Secretary of State for Wales,

“The Swansea tidal lagoon proposition is very exciting and commands wide support across the business community in Wales, but we also need to recognise that the project is asking for a very significant level of public subsidy and intervention. It is absolutely right that”

the Government

“should conduct very robust due diligence in making sure that such projects will deliver value for the taxpayer.”—[Official Report, 13 January 2016; Vol. 604, c. 842.]

That is precisely what we will do. We will take the time necessary to look at the review’s findings in relation to tidal lagoons, particularly in the context of a wider assessment of the nature of the UK’s future energy mix and our plans to reduce carbon emissions.

Last month, the Secretary of State set out his vision for how the energy sector should develop, in the context of our new UK industrial strategy. He recognises that the Government’s role must be to create the right framework for growth, harnessing both existing and new technologies, to deliver more secure, cleaner energy at a lower cost. That is our goal: a reliable, clean and inexpensive energy system.

Of course, new technologies such as tidal lagoons may have a role to play, but not at any cost. My hon. Friend the Member for Eddisbury (Antoinette Sandbach) rightly raised several issues, and we look to the energy review and other discussions to resolve them. She raised not merely the issue of cost, but her concerns about the lack of intellectual property, planning uncertainty and delays. The Government should properly consider those issues as part of a wider decision-making process.

As colleagues know, the contract for difference allocation round, which we announced last month, is under way. Overall, our energy policies and priorities have not changed. It is worth saying, in relation to the remarks of the hon. Member for Aberdeen South (Callum McCaig), that it is not true that CfDs do not include tidal stream technologies, although it is true that there is no ring-fenced allocation for them within the auction. That is because our responsibility is to bill payers. Tidal stream, which is not a technology that we are specifically discussing in the context of tidal lagoons—it is a different technology—has a strike price about three times higher than that of offshore wind. Until those prices fall, it may be difficult for it to compete. When they do, it will come within the policy horizon.

--- Later in debate ---

[Jesse Norman]

I am sorry to have given up time for that intervention, because I was coming to that point. SeaGen, as the hon. Gentleman recognises, was a research test bed, and it is being decommissioned now. It received a £10 million grant from the Department, and those conclusions are being carefully assessed. It is a project in which there has already been public investment. [Official Report, 14 December 2016, Vol. 618, c. 6MC.]

It is clear that we cannot allocate subsidies to every technology that asks for them. We have said that our focus will be on key technologies that have the potential to scale and deliver long-term cost savings, in which the UK has a comparative advantage and whose costs to consumers are acceptable.

[Geraint Davies]

Will the Minister give way?

[Jesse Norman]

I am very short of time. I am so sorry. I have taken an awful lot of interventions, and I want to make progress.

I note the enthusiasm of my right hon. Friend the Member for Preseli Pembrokeshire for the proposed Swansea bay project, but it is the Government’s job to consider the advantages and disadvantages and to scrutinise the evidence to ensure that decisions are taken in the longer-term interests of the UK and consumers. It is worth focusing on the significant uncertainties associated with the project—in particular, the use of a new and untried technology in a marine environment, the length of time over which the commitment would be made, and the planning issues, which have already been mentioned.

Since the debate on the economic impact of tidal lagoons in March, the Department has continued to have discussions with the developer of the Swansea bay lagoon. I cannot comment on those discussions, given their commercial nature, but the most recent proposal put forward by the developer would be a very significant deviation from current Government policy. It would not be impossible, but it would require careful consideration. We have always been clear that we will consider the findings of the independent review of tidal lagoons and all other relevant factors in deciding whether to proceed with negotiating a CfD on this project. The developer is aware of that.

The issue of value for money quite properly remains at the forefront. I mentioned the concerns about consents and leases, decommissioning and the supply chain. I note that the China Harbour Engineering Company is no longer working with the developer. There is also an issue of state aid approval. The point is that, even under ideal circumstances, it will take some time to resolve those issues, and the Government will need to take our time to consider the review and make a judgment in a proper and effective way.

As this important debate draws to a close, let me say that I expect a copy of the review’s report to be on my desk and those of colleagues very soon, and we will give it careful consideration. I assure hon. Members that the Government will strike the right balance between responding in a swift and timely way and taking the time required to consider this complex issue in the detail it deserves.

Exiting the EU: Higher Education

Geraint Davies Excerpts

Wednesday 23rd November 2016 Westminster Hall

[Hywel Williams]

I would be much more prepared to accept that argument if the Government here in London had a similar regional policy, so that when we leave the EU one could be guaranteed that the money that comes from Europe will come from London instead. When David Cameron was Prime Minister, I repeatedly asked him to guarantee that this funding would continue post-Brexit, but he refused to give such a guarantee. I doubt that it is in the power of the Minister today to make up for that failure, but I look to him for at least some reassuring indication that this issue is actually on the agenda.

I will refer very quickly to cross-border programmes. In the first year of the Horizon 2020 scheme from 2015 to 2016, Welsh university staff have already succeeded in securing £25 million of funding. Those programmes help Welsh students and institutions to compete on the world stage, which surely must be our ambition. Identified research funding to Wales suggests that Welsh institutions received some €183 million between 2002 and 2013, and it is estimated that Wales received at least €29 million from lifelong learning funds, including Erasmus, from 2007 to 2013. Those funds are vital to encourage joint working and collaboration between academics and students in different EU member states and further afield.

I will briefly refer to my own university of Bangor. There are 2,000 international students in Bangor; the total student population doubles the city’s population, so the university is vital to the local economy. Can the Minister assure me that the UK Government are giving due consideration to the disproportionate effects of post-Brexit immigration controls on small university towns or cities, of which Bangor is one? That is a particular issue. Bangor University also has widespread international links, which I referred to in the debate on higher education the other day, including a site in China, so we are worried and concerned. Moreover, Trinity College Dublin has a site in Bangor for Japanese students to learn English. It is an excellent institution, but I think the staff there are also worried.

To cut a much longer speech short, the HE sector in Wales is one of the keys to unlock the doorway to our prosperity—

[Geraint Davies (in the Chair)]

May I say that speakers have about nine minutes each, so you are okay?

[Hywel Williams]

I will conclude, as I have reached the last page of my speech. As I was saying, the HE sector in Wales is one of the keys to unlock the doorway to prosperity. Both the UK Government and the Welsh Government have a duty to protect and advance the HE sector in Wales, and we will scrutinise the way in which they do so very closely indeed.

--- Later in debate ---

[Liz McInnes]

I thank my hon. Friend for that intervention. I am not aware of that report. I do not know when it was published. It certainly does not echo the views that I am expressing in my speech or the views of eminent vice-chancellors and scientists who work in the UK today. Perhaps if he can send me a copy of the report, I will look at it at a later date.

As well as the potential for a modern-day brain drain, we have the very real potential of UK universities becoming less attractive to international research students. Indeed, the vice-chancellors of LSE, King’s College London and Bristol have already voiced their fears for the recruitment of international students and how that will have serious financial and human resource consequences for our universities. The vice-chancellor of Cambridge University, Professor Sir Leszek Borysiewicz, is a stalwart remainer, but he recognises the result of the referendum and he wants Cambridge to get the best out of Brexit. He says that to achieve that, the Government must provide some basic clarity on what Brexit actually means. He asks for three things from the Government: clarity on the national status of university staff; a recognition of the collaborative ideal implicit in EU projects; and a Government guarantee of vital university budgets. I hope that his requests will be listened to and heeded by the Government.

Some people might regard the vice-chancellor of Cambridge as something of an expert, and although the people of this country were urged not to listen to experts during the referendum, it is vital that, on this subject and the many other areas affected by the Brexit negotiations, the Government take note of our finest minds and our experts. They are not asking for a running commentary, but for clarity and a coherent, informed plan as to the exact nature and manner of our departure from the EU.

The EU makes substantial financial contributions to research in UK universities. Research funding from the EU amounts to some £1 billion a year, while Britain’s national research budget, as I alluded to while discussing British science, is below international averages. The EU’s contribution to the income of UK universities has risen by more than 30% in the past five years. I represent a Greater Manchester constituency, and universities across our region have more than 4,000 EU students currently on their campuses. That equates to spending of £90 million a year—that is not just tuition fees, but expenditure in the local economy. Manchester University has received £48 million in research funding in the past two years alone. The loss of such substantial funding and a failure to attract EU students could not fail to have a detrimental effect on our area.

I have spoken about the economic positives and security of funding, but the academic, scientific and higher education sectors are not merely about money. Education at its core is about collaboration, common understanding and continual progress. Education has no boundaries and no borders, and science knows no country. We must decide where Britain’s place post-Brexit is going to be. I hope that it will be not in isolationism and introversion, but that the Government will set out a clear plan for diversity, collaboration and funding and for our universities to maintain their place and their standing in the world.

[Geraint Davies (in the Chair)]

I have got five Members on the list to speak by half-past 10, so I ask them to keep their remarks down to just below five minutes. I invite Jim Shannon to give us an example of that.

--- Later in debate ---

[Jim Shannon]

Quite clearly my hon. Friend, like me, sees the glass as half full. We believe in the future and we have confidence in the future, and we look forward to that. We know we can deliver.

I am beyond proud of the universities in Northern Ireland: Queen’s University Belfast and Ulster University. We have tremendous courses that produce highly recognised degrees. I have met many politics students from Europe and the USA who made the choice to study in Northern Ireland because universities in the UK are so highly regarded. We have a legacy of high-class institutions in this country, and we must build upon and jealously guard that legacy. Queen’s University Belfast is made up of 32% international students. It is essential that our campuses retain the ability to access the international market. There are partnerships at Queen’s University and the University of Ulster with companies and students from overseas for new research into medicines.

There is no need for a knee-jerk reaction. The Government have made it clear that EU students applying to study from 2017 to 2018 will not only be eligible for the same funding and support as they are now, but their eligibility will continue throughout their course, even if the UK exits the European Union during that period. That is the Government’s commitment, so let us be clear where we are. We have time to consider the best way forward. We can all still be assured of that. The Minister in his response will reaffirm that position, and it is important that he does so.

We are all aware of the issues regarding visas for those who are not from the EU and who want to study here, and we must be aware of the statistics. Non-EU students contributed £3.5 billion in 2012-13, £3.9 billion in 2013-14 and £4.2 billion in 2014-15. It is clear from those stats that we are still able to attract international students without the benefits of EU membership, but I am certainly not saying that no thought should be given in the Brexit negotiations to reciprocal incentives that our former EU partners could avail themselves of in the short term. Let us ensure that we keep the co-operation with our EU partners that we have at the moment. The value and the importance of our EU and international students and their role in our economy should not be underestimated. Indeed, I believe that the Government are not underestimating them.

It is absolutely clear that we benefit from having universities that people from around the globe want to attend. In 2013-14, there were some 125,300 EU students at UK universities, and in that year £224 million was paid in fee loans to EU students on full-time courses in England. That was 3.7% of the total student loan bill. The higher education sector contributes a massive £73 billion to the UK economy, including £11 billion of export earnings. The latest available figures show that in 2011, EU and non-EU students in higher education contributed an estimated £9.7 billion to the UK economy through tuition fees and living expenditure. The publicly funded higher education sector currently receives 2% of its total income from the fees of EU students, with some individual institutions receiving higher levels of funding.

I will conclude, Mr Davies, because I am aware of the time restraints. International students want to study here; the universities want them to study here; and our Government are aware that in Brexit we must facilitate and foster this educational relationship in every way possible. The value of sharing educational findings and research grants is another issue that I know the Government are very aware of, and I know they have confidence in our ability to continue funding projects such as those that take place in Queen’s University in Belfast and at Ulster University, which have resulted in ground-breaking innovation. This must continue; I believe it will.

[Geraint Davies (in the Chair)]

I call Dr Roberta Blackman-Woods. You have five minutes.

--- Later in debate ---

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this debate. The issues that she raises, and the questions that universities are raising, are of course legitimate matters of concern, but the language that she used—“we are all jumping off a cliff without a parachute”—is the kind of negative language we should try to avoid. In my dealings with vice-chancellors —I represent Essex University in this Parliament, I am a graduate of Cambridge University and I deal with other universities; I am shortly to be appointed a visiting fellow of another university—I do not find universities are using this alarmist language. They want to make a success of the opportunities they have in the world.

It is important to understand the tremendous strength that our universities now have as a result of the progression towards fees and loans. They have been liberated from the constraints that Governments used to put upon them, have grown dramatically and are financially stronger than they have ever been in my lifetime. It is an extraordinarily good position to be in when approaching the present situation.

A lot of the uncertainty arises from confusion, which I have to say extends to Government Departments. I chair the Public Administration and Constitutional Affairs Committee; I see a lot of the civil service struggling to catch up with the absence of preparation for the outcome of the referendum, which is one of the lessons that we must take from it. It is unforgiveable for a Government to call a referendum and remain completely unprepared for one of the possible eventualities. There are many officials rapidly trying to get their brains around some difficult and complicated questions, in a scenario that they perhaps are not emotionally attracted to anyway. It is taking some time and the Government are entitled to take that time. I do not remember the Opposition parties telling the Government that they should prepare for Brexit when the referendum was called; I think they should be given the time that they need.

A lot of the uncertainty arises from confusion about what category the problems and concerns should be put in. Some concerns arise simply because of the uncertainty, and the Minister has already addressed some of those concerns. He could address some more and give more definition and assurance about funding streams, the status of students and academic staff joining universities at the moment, and so on.

Most of the debate is about what the Government’s policy will be after we leave the European Union—post-Brexit questions on issues of post-Brexit policy, such as what our immigration policy or our policy towards foreign students will be. There are relatively few issues that have to be included in the article 50 negotiations. In my discussions with universities, I advise them to try to categorise the issues and not to overload the article 50 negotiation process by trying to get everything resolved in that agreement. The less we put into that agreement, the more likely we are to get what we require.

There are three basic overall concerns. The first is about the access that foreign students—particularly EU students—have to the UK. It is interesting to note that only 5% of students in the UK are EU students. Some 10% are non-EU foreign students, who pay full fees, whereas EU students do not. It is actually going to be an advantage to the universities sector if we can charge EU students full fees. At the moment, the British taxpayer helps to fund those students. What is more, we are obliged to offer them loans, and the default rate among EU students is higher than that among UK students. There is talk in the Treasury about universities having to pay the cost of that default. We can resolve that issue by leaving the European Union.

The second concern is about access to EU funds. Table 9.9 of the Pink Book has become famous in the debate about leaving the European Union, but nobody disputes that we are one of the largest net contributors to the European Union. No Government in their right mind would use the pretext of leaving the European Union to cut the funds that universities receive, just because they get some of their money from the European Union. Let us remember that the money universities get from the European Union for research grants comes from us taxpayers. We put money into the European Union and we get only half of it back. We should be able to afford to pay more into our universities to fund more research and support our universities more effectively as a result of leaving the European Union, because we will no longer be forced to pay to subsidise universities elsewhere in the European Union. I acknowledge the concern that universities need certainty now and year on year into the future, but my hon. Friend the Minister should be able to give them a long-term assurance that we will fund research programmes in our universities as generously, if not more generously, in the future.

Finally, the idea that we are no longer going to collaborate with other universities in the EU is about as potty an idea as could be imagined. First, there are non-EU countries that participate in EU schemes. CERN, for example, is an international project. Let us have confidence in our universities. We have the crown jewels of scientific research in the EU in our universities. If I am correct, we have four universities in the world rankings top 10. We have 10 of the top 50 universities in the world—more than any other country outside the US. Two are in London—the same number as are in the entirety of the rest of the EU. It would be perverse if the EU wanted to cut itself off from UK universities, so we should approach the negotiations and future collaboration with universities with confidence. We have what it takes to promote successful collaboration with countries across the whole of Europe, whether they are in the EU or not. Outside the EU, our universities have as great a future, if not a greater future, than they would if we remained in the EU.

[Geraint Davies (in the Chair)]

Talking of cuts, the Front Benchers have nine minutes each.

Exiting the EU and Workers’ Rights

Geraint Davies Excerpts

Monday 7th November 2016 Commons Chamber

[Greg Clark]

I will be very clear that all of the workers’ rights that are enjoyed under the EU will be part of that Bill and will be brought across into UK law. That is very clear. There is no intention of having a sunset clause.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Currently all workers’ rights are guaranteed by the European Court of Justice. After we leave they will be guaranteed by the Supreme Court, advised by us. Therefore, in the future they can all be ripped up if we leave the EU, if that is the choice of future Governments; if we stay in the EU they cannot be ripped up but are guaranteed. They are guaranteed only under EU law. They cannot be sustainably guaranteed by the Secretary of State.

[Greg Clark]

I am surprised by the hon. Gentleman’s intervention. I would have thought that hundreds of years of parliamentary sovereignty and a robust and independent judiciary are a very strong guarantee of the rights we have in this country.

--- Later in debate ---

[Clive Lewis]

I want to make some progress.

So why should we believe that the party that has fought tooth and nail against EU protections for workers and that has dismissed as “unnecessary red tape” laws that have made UK workplaces more fair and more humane will now be the defender of those rights? I want to believe it—I truly do—but I cannot. It is not just because of the Government’s record of opposing the very legislation that they now claim to support; it is because, despite his good intentions—I am prepared to believe that he has good intentions—nothing that the Secretary of State or the Prime Minister or anyone else in this Government has said or done over the past six years convinces me that they understand or care about the lives of working people. This Government are the children of Thatcher. Sticking up for workers goes against every instinct and is contrary to the very political DNA of so many Conservative Members.

I would like to shift focus and reflect on people’s experiences of the world of work under this Government, on how workplaces and labour markets are changing, on what this has meant for working people and on what the Government have—or, more often, have not—done for them. From the recent exposé of Victorian employment practices at Sports Direct to the horror stories of Uber drivers being unable to take a toilet break, working conditions in this country are getting worse, not better, for too many people. Over the past six years, jobs have become lower skilled, less secure and worse paid. We have seen the rise of zero-hour contracts and growing reliance on agency workers. We have seen the birth of the gig economy, taking more and more workers outside formal employment regulations. The Tories boast about the recovery of employment since 2008, but on every other criterion, our labour market is failing.

[Geraint Davies]

Given that there will be enormous pressure on business from tariffs, no more money coming in and less inward investment because of blockages to the markets, does my hon. Friend accept that the business community will ask for their costs to be reduced, which will threaten statutory holiday pay, maternity pay and other workers’ rights? Once those powers have been given to this Government, they will be empowered to repeal those things in the future, and there will be no European guarantees. We will be at the will of future Governments. [Interruption.]

[Clive Lewis]

I hear Conservative Members talking about scaremongering, but the facts speak for themselves. You are the enemy of working people. The Tories boast—

--- Later in debate ---

[John Redwood (Wokingham) (Con)]

I admire the passion and enthusiasm of the hon. Member for Norwich South (Clive Lewis), but I would like him to reflect a little on what I put to him in an intervention: this is a unique moment in the House of Commons where Government and Opposition are completely united on something very fundamental. I strongly believe my right hon. Friend the Secretary of State and the Government he speaks for when they assure us that every right in the UK directly deriving from European law will be faithfully transferred into UK law and will be safe all the time they are governing this country from this Front Bench—and should the public decide at some point in the future to replace this Government with a Labour Government, I am quite sure they will offer exactly the same assurance.

It seems to me that we have for once got a wonderful understanding or agreement between the two parties. So I just ask the Labour party to understand that sometimes they have won—that sometimes they are in agreement with the Conservatives, and, as disagreeable as they may find that, surely it is cause for celebration that both main parties wish to advance employee rights, and have absolutely no wish to undermine employee rights that currently come from the EU and wish to offer the legal framework to protect them. So I repeat again: will the Labour party now agree to welcome and support the great reform Bill when it shows that all those crucial rights—not just the worker rights, but the environmental rights and the others they have mentioned—will be transferred?

[Geraint Davies]

But does the right hon. Gentleman not accept that if businesses face higher costs through tariffs and Britain wants to attract international inward investment platforming into Europe, it will move towards reducing costs in respect of public health and the environment and, in particular, workers’ rights, which are currently guaranteed through the European Court of Justice but will no longer be guaranteed other than in a sort of gentleman’s agreement here which is not sustainable in law?

--- Later in debate ---

[John Redwood]

That is another piece of evidence—of which there is so much—that it was not an advisory referendum. We know that from ministerial statements at the Dispatch Box, from the Hansard records of the passage of the legislation and from the leaflets that were sent to every household. That was one of the few things on which the remain campaign and the leave campaign agreed. Both stressed to the voters the fact that this was deathly serious, that it was their decision and that if they got it wrong, they might not like the answer. Indeed, the whole purpose of the remain campaign, as I saw it, was to terrify people. It worked on the premise that if we voted to leave, we would be out. I remember Mr Dimbleby announcing the final result on television—the BBC was a bit reluctant to get to that point, but it eventually did so—that we were out of the European Union. He did not say, “Oh, we’ve just had an interesting advisory vote and maybe some people in Parliament will now think they ought to do something about it.”

[Geraint Davies]

A lot of the Brexiters I have spoken to voted for Brexit on the basis that there would be lower costs—the figure of £350 million a week was mentioned—yet we are now going to tear up the deficit plans in the autumn statement. They also voted on the basis of continuing market access, which is now at risk from tariffs, and of lower migration, which is obviously going to go up in the next two years as people run in through the door. Does the right hon. Gentleman not agree that the British people should have a referendum on the exit package when they can see whether what they reasonably expected has come to fruition? They could then vote to leave if they wanted to, and if not, they could vote to stay in.

[John Redwood]

There is absolutely no point in having a referendum on the exit package. By the time we get to that point, we will already be leaving. The people have decided to leave. If we had a vote on the exit package and decided that we did not like it, the rest of the European Union would not say, “Oh, we’re very sorry, United Kingdom. We’ll improve your exit package.” Absolutely no way! They would say, “We are absolutely fed up with you, United Kingdom. You can’t make up your mind, you mess us around and you dominate the agenda with things we don’t want to talk about. You are out!” We have to understand that some of our partners have only a limited amount of patience. Some of them do not have very much patience already.

I regard my views and my vote as being those of a good European. I have always understood the full nature of the European project. It is a noble ideal to unite countries around a united currency, a political union and much more collaborative working. I also know that the British people, including myself, do not wish to do that. It is too close for us. That is why the British people have made the bold, heroic and sensible decision, as good Europeans, to say, “We don’t want to join the currency. We don’t want to join Schengen. We don’t want to join the next bit, which will be the political union.” So is it not good that Britain has honestly said—

--- Later in debate ---

[Anna Soubry]

Given the hour, the fact that we are all on a one-line Whip and the fact that the House will rise tomorrow, I suspect that a lot of Members will want to make their speeches by way of a quick intervention. I forgive the hon. Lady for her intervention and hope she does make a speech.

If there are to be further debates, we should consider some of the matters raised by the hon. Member for Foyle (Mark Durkan), who seems to have vacated his place. He talked about the detail of how the transfers will take place. Will that happen in a general sense under the great repeal Bill, or will it be done in dribs and drabs by virtue of statutory instruments? The effect will be exactly the same, so I do not have any concern in that regard. His point about how the devolved Administrations will be affected is important.

The hon. Member for Norwich South (Clive Lewis) should have raised such matters in his speech, but instead he used the debate as an excuse to launch off a series of slogans based on ideology that were, in many ways, deeply offensive. He then turned his speech, in a rather childlike way, into a tirade against Tories. His hugely unsubstantiated and sweeping statements did nothing to advance the argument for having a proper debate and restoring politics in this country to a much more civilised footing.

I do understand that Labour is in a huge dilemma. The reality is that seven out of 10 Labour MPs represent seats that not only voted remain, but, in most cases, overwhelmingly voted remain—[Hon. Members: “Leave”.] Sorry, I meant to say leave. If only they had voted in the way I said, but sadly they did not. Would that not have been a sweet moment? Would it not have made the position of the Labour party so much easier?

The hon. Member for Ashfield (Gloria De Piero) represents my neighbouring seat. I have a lot of time for her—I hope that that will not be used against her. Such is the current atmosphere, which has been stoked up by people such as the hon. Member for Norwich South, that a Conservative giving praise to a Labour MP can be used against them by the so-called Corbynistas and Momentum. I hope that I cause the hon. Lady no difficulty by paying tribute to her. She is a great MP who has brought much to our House. There was an 80% turnout in her constituency—no disrespect to the good people of Ashfield, but they have never voted in such numbers—and just under 70% of people voted to leave. That means that it is inconceivable that she will not vote for article 50, and she is by no means alone.

I very much hope that that vote takes place in this House. I do not want to go too far into that debate, Madam Deputy Speaker, because you would rightly admonish me, as we are meant to be talking about workers’ rights as well as about these other much bigger problems, but it is the sort of debate that we really should be having in this place. I want debates after which we have votes that actually mean something. Labour is in a real dilemma. As I say, if we have that vote on article 50, it is inconceivable that Labour Members to a man and a woman will not vote to leave the EU, not least because many of them, like me, understand that we went to the nation saying clearly that if people voted leave, that was what they would get.

I will be quite honest: I have struggled with this ever since June. It has been my long-held belief that our country—our nation—is considerably better off as a member of the European Union. I have spoken about that at length. I am a firm remainer. If there was a scale from one to 100 showing how firm a remainer someone was, I would put my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) at 100 and myself at about 95. I have grappled with my own long-held views, which I hold passionately, and with the fact that when I stood up and addressed my constituents, wrote my email newsletter or went out into the streets of Broxtowe and beyond, I said, “If you vote leave, you will get leave.” One colleague—it might have been my right hon. Friend the Member for Wokingham (John Redwood)— said that we in the remain camp were very clear about that.

Although I will find it extremely difficult, because it will be against everything I have ever believed in, I cannot see how I have any alternative but to be true to what I said I would do and true to my party’s manifesto—I never demurred from any of this at any time. Therefore, with huge regret, I would have to vote in favour of article 50 being triggered when the mater comes to this place—and it should come to this place; the learned judges are absolutely right. I say to the Government with some gentleness that it would be very good if having read the judgment, as I and many others have done, and understanding the law of this land, they said that they were not going to appeal. Three of the most senior judges took part in that judgment. The Government should not appeal it, but should bring legislation before this House.

Already right hon. and hon. Members have heard not only my views but those of colleagues such as my right hon. Friend the Member for Loughborough (Nicky Morgan). It is clear that those of us who now sit in the corner from which I am speaking would vote in favour of triggering article 50.

[Geraint Davies]

I am amazed that the right hon. Lady thinks that everybody who voted to leave was voting unconditionally to leave. Many of the voters in my constituency believed what they were told: their jobs were secure, they would save money and all the rest of it. In fact, the deficit plan has been ripped up. In Swansea bay 25,000 jobs depend on EU exports, many of which will be at risk. If people wake up and find that they have lost their jobs, they will think, “This is not what we were promised,” and they will be very angry. It is ridiculous to give unconditional support, as if everything that was said was true and there will not be problems.

[Anna Soubry]

I am sort of grateful to the hon. Gentleman for that intervention. I have never given up on anything, but I have to understand, as he must, that we were very clear. We said to people that the referendum was their decision and that if they voted leave, they would get leave. However, that does not mean that I would not fight tooth and nail to make sure that the Government go into the negotiations seeking to make sure that we stay a member of the single market, for example.

The hon. Gentleman knows my views on the free movement of labour and people. Along with the right hon. Member for Tottenham (Mr Lammy), I am the most liberally minded—with a small l—Member of this House on immigration. Labour Members have the huge problem that they find themselves looking over their shoulders at the vote in their own constituency knowing, as I hope they do, why their constituents voted as they did. In many constituencies, people voted to leave because they wanted to reduce the number of people coming into our country. We should be clear about that. Labour Members have far more of a dilemma than I have as we leave the EU and try to work out the best deal for our country. I have no difficulty in making the case for us to stay in the single market, and I certainly have no difficulty in making the case for the free movement of people.

--- Later in debate ---

[Geraint Davies (Swansea West) (Lab/Co-op)]

It is a great pleasure to follow the hon. Member for Glasgow South West (Chris Stephens), who mentioned many of the benefits that workers get. The European Court of Justice guarantees those rights in work. The simple fact is that once we leave the EU, those rights will no longer be guaranteed. It is all very well having undertakings from Government Front Benchers that they will be there for the next few years; subsequent Parliaments may choose to repeal laws and get rid of those rights. If we stayed in the EU, they would not have that power.

It is also the case that if we leave the EU, as it looks like we will, we will face considerable tariffs and business costs. Businesses such as Nissan have already negotiated sweetheart deals, money under the table and that sort of thing; others will do the same, to have a level playing field. People suggest that there will not be tariffs, but only Germany and Holland have a net trade surplus with us. Other countries are likely to vote for some level of protectionism, if only to stop others leaving the EU.

Businesses will try to recover those costs and the Government will respond by reducing environmental standards, health standards and rights at work. The Government have already been taken to court by ClientEarth because 40,000 people are dying of diesel pollution. Why did the Government not act automatically? Of course, once we are out of the EU there will be no mandatory enforceability under EU standards. The case will be similar for people at work.

The Prime Minister has a vision of free trade for all. The International Trade Secretary has simply signed off the comprehensive economic and trade agreement—the Canadian trade deal—without reference to Parliament. The agreement enables companies to take democracies to court in arbitration courts without due process. They can sue Governments for passing laws that increase costs and reduce profits. We know the risks, and the assurances we have heard today cannot be trusted for the future.

My view, which I know not many people share, is that we should delay triggering article 50, because as soon as we trigger it, we have no negotiating power and have handed back our membership. The 27 other states will decide the deal we get and tell us what it is, and we can like it or lump it. Up to that point, we have negotiating power, but only if the EU assumes that we will map out a settlement that we can put to the people in a vote on the exit package.

I appreciate that there is not much appetite in the House for that, but I contend that the people of Britain who voted for Brexit did so on the basis of market access and lower costs—£350 million a week for the NHS. We know from the Chancellor that he will rip up his deficit reduction plans and borrow billions more. Obviously, there will be less money because there will be less inward investment, and therefore fewer jobs. They also voted on migration, but we have yet to see what will transpire. The simple point is that if people vote in principle for a product or action, they should have the right to vote again on whether their reasonable expectations have been fulfilled. In my view, they simply will not be fulfilled. In essence, people were mis-selling to the British public, and we will end up with a situation in which we will all be the poorer.

A lot has been said about the punishment from the majority of the British people if we have a quiet reconsideration of the situation and the exit deal, but I contend that the silent majority is already no longer in favour of leaving. That is clearly borne out when we look at the polls. Obviously, if 16 to 18-year-olds or ex-patriates had also been included, we would not have voted to leave. People are becoming increasingly dissatisfied with what is happening in the economy, whether it is because of the £14 for a visa to go to Europe, because the banks are saying that they will leave Britain, or because of the 30-year low in sterling and increasing inflation.

I do not believe that the advisory vote gives the Government a blank cheque to jump over the edge at all costs. We should certainly be free to debate and discuss these things without the intimidating tactics of people such as Nigel Farage, who said that we will see

“political anger the likes of which none of us have ever witnessed in our lifetimes”,

that there will be disturbances on the streets, and that he will summon up 100,000 people to march on the Supreme Court in order to put mob rule ahead of the rule of law and of parliamentary democracy. He seems to be the new, emerging Oswald Mosley.

It is frightening that the Government, in making the poor poorer by punishing them for the bankers’ errors, and in turning round and saying, “You can blame foreigners,” have helped to whip up a frenzy in the Brexit debate. The reality is that people from Europe who are working in Britain on average contribute 35% more in taxes than they consume in public services. I fear the direction of travel politically in this country. It is extremely divisive. As I have said, people are conjuring up hate and violence. Assuming that this goes through without people having the opportunity to have a final look at what they have voted for before jumping, they will be dissatisfied with what they get. Those who have most hope have most to lose.

The Labour party passed a conference motion saying that many people had, for various reasons, voted to leave and that the final settlement should be agreed to if it is considered acceptable. If it is not, we should have another look at it through a vote in Parliament, a general election or a second referendum. I appreciate that that view is not held wholeheartedly by my Labour colleagues.

I will conclude now, Mr Speaker, to give other Members time to speak. My fear is that people have voted in good faith for a stronger economy, lower migration and lower costs, but will not get that. If the package that is ultimately negotiated does not achieve that, they should have the right to reject it.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to be called in this debate. I thank the Minister and hon. Members for giving us all a chance to participate. There are a number of issues that my constituents have asked me to raise in the House and I intend to do so.

My office staff will laughingly point to a sign in the office which works out time off in such a way that they owe me. Annual leave is only one of many workers’ rights that will be discussed and, more importantly, protected during negotiations. The Government told us:

“‘This is your decision. The government will implement what you decide’—no ifs, no buts”,

no second referendum. It was not a regional or a constituency referendum. It was a decision which all the people of the United Kingdom of Great Britain and Northern Ireland took collectively, and that decision was to leave. Let us get on with the job and make sure that that happens.

The Government have been clear about the protection that will remain. The Prime Minister said that

“by converting the acquis into British law, we will give businesses and workers maximum certainty as we leave the European Union. The same rules and laws will apply to them after Brexit as they did before. Any changes in the law will have to be subject to full scrutiny and proper Parliamentary debate. And let me be absolutely clear: existing workers’ legal rights will continue to be guaranteed in law—and they will be guaranteed as long as I am Prime Minister.”

That is what our Prime Minister said. It is very clear. Let us focus on that as well.

I am probably a lone voice on the Opposition side of the Chamber, as one of those who voted out. I am very happy to say that I voted out, and my constituency voted that way as well. I genuinely respect every Member on this side of the House, and I enjoy their friendship, but the fact of the matter is that I have a different opinion from many of them.

[Geraint Davies]

Will the hon. Gentleman give way? Will he say how long the Prime Minister is going to be—

[Mr Speaker]

Order. The hon. Gentleman should not chunter from a sedentary position. We have to start the wind-ups at 9.40 pm.

--- Later in debate ---

[The Minister of State, Department for Exiting the European Union (Mr David Jones)]

It is a pleasure to follow the hon. Member for Greenwich and Woolwich (Matthew Pennycook) in what was, I believe, his first appearance at the Dispatch Box. This has been an excellent debate, and I thank all hon. and right hon. Members who have contributed to it. It is right that the question of workers’ rights should be debated at length and in some detail, because it is of fundamental importance to Members on both sides of the Chamber.

This has been the first in a series of debates on important issues that arise in the context of the UK’s withdrawal from the European Union promised by my right hon. Friend the Secretary of State for Exiting the European Union. My Department intends to bring forward, in Government time, a number of further debates on key issues related to EU withdrawal over the coming weeks and months.

Let me first reiterate that, as my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy said in his opening speech, the Government fully recognise the fundamental importance of strong workers’ rights in this country, and we are determined to preserve them. Not only do they exist for the protection of all employees, but they have a vital function in encouraging the development of a productive and thriving economy. It is clear that the Government’s determination to preserve, and not to erode, employment rights is shared by hon. Members on both sides of the House. My right hon. Friend the Member for Wokingham (John Redwood) celebrated the fact that we were experiencing a rare moment of accord between the Conservative and Labour parties.

The Prime Minister has made it clear that the Government will not, as a consequence of our withdrawal, allow any erosion of rights in the workplace, whether those rights derive from EU or UK law. She has further made it clear that the Government are determined to deliver an economy that works for everyone, and fundamental to that is the preservation of existing workers’ rights.

I repeat the point made by my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy in his opening speech that the UK already goes beyond EU minimum requirements in a number of areas of employment legislation. For example, UK domestic law already provides for more than a week’s additional annual leave—5.6 weeks rather than the minimum of four weeks set by the EU—nearly four times the required amount of statutory maternity leave and much greater flexibility around shared parental leave, as the hon. Member for Strangford (Jim Shannon) pointed out.

Furthermore, we have recently adopted a number of measures to strengthen further the protections provided to workers, including introducing the national living wage in April this year and increasing funding for enforcement activity to ensure that employers are meeting their responsibilities. We have commissioned a review of modern employment practices—the Taylor review—with a view to ensuring that new practices of working, which were touched on by the hon. Member for Norwich South (Clive Lewis), do indeed work for everyone. We are legislating to ban exclusivity clauses in zero-hours contracts to stop the abuse of such contracts. We introduced shared parental leave in 2015 and extended the right to request flexible working to all employees from June 2014. Those are measures pursued by a Conservative Government committed to providing strong protections for workers. We are determined to maintain those protections beyond withdrawal from the EU by enshrining them in our law under the great repeal Bill.

A number of points were touched on by hon. and right hon. Members, and I will seek to address them in the brief time available to me. One point that was made by a number of Members—including by my right hon. Friend the Member for Broxtowe (Anna Soubry), in what I thought was an excellent and passionate speech, and by the right hon. Member for Leeds Central (Hilary Benn)—was the need to heal the wounds, so to speak: to build a national consensus ahead of our exit from the European Union. That is what the Government are seeking to do, and we hope that debates such as this will help to achieve it.

The hon. Member for Airdrie and Shotts (Neil Gray), echoed by the hon. Members for Carmarthen East and Dinefwr (Jonathan Edwards) and for Rutherglen and Hamilton West (Margaret Ferrier), raised issues about devolved competence and how they will affect the negotiations. The Government have made it absolutely clear that the concerns of the devolved Administrations will be central to the negotiations that we are embarking on. Indeed, the first meeting of the Joint Ministerial Committee for the exit negotiations will be held this very week, so there is close consultation between the Government and the devolved Administrations.

[Geraint Davies]

Will the Minister give way on that point?

[Mr Jones]

If the hon. Gentleman will forgive me, I will not give way. I have very little time, and I am trying to deal with as many points as I can.

The right hon. Member for Leeds Central made an excellent speech, which underlined his credentials as the chief scrutineer of the Government in his capacity as Chairman of the Select Committee. He raised a number of issues, and I will briefly touch on them. He asked what changes to employment legislation in the great repeal Bill will be made through primary as opposed to secondary legislation. Such issues fall to be considered during the passage of the Bill. The House will therefore have the opportunity to debate those issues in full in due course. There will have to be full parliamentary scrutiny, and I have no doubt that his Committee will play an important role in that regard.

The right hon. Gentleman raised, as did the hon. Member for Great Grimsby (Melanie Onn), the issue of what will happen to EU case law and judgments of the European Court of Justice. I wish to make it clear that the starting position of the Government is that EU-derived law, from whatever quarter, will be transferred into United Kingdom law in full at the point of exit.

The right hon. Gentleman raised the important issue of what happens if the United Kingdom has access to the single market, but we do not follow whatever new legislation may be developed in the EU. The word “if” is of course important, and it remains to be seen whether we will have full access to the single market. It is fair to say that the Government are still working on the many details that will determine our future relationship with the European Union. This will be an important consideration in that process, and, again, I have no doubt that his Committee will want to explore this issue further.

The hon. Member for Swansea West (Geraint Davies) made what I have to say was rather a bleak speech, although he seemed to recognise that Members on both sides of the House accept that Britain is indeed leaving the European Union, and he acknowledged that his is a minority opinion. He seemingly accepted the word of my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy that workers’ rights would not be eroded, but he expressed concern about what future Parliaments might do. I must point out to him that no Parliament can bind its successors, but the whole purpose of exiting the European Union is to restore sovereignty to this Parliament and to place our trust in our successors in the Parliaments of the future.

The hon. Member for Feltham and Heston (Seema Malhotra) made a very thoughtful and useful speech. She raised several important issues, particularly women’s issues, which were echoed by the hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh). May I say that the contribution of the hon. Member for Feltham and Heston to this debate is exactly the sort of contribution that the Government are looking for in debates such as this? Such contributions will certainly inform the Government’s consideration of the future relationship of the United Kingdom with the European Union. There were several other excellent speeches, but, sadly, I do not have the time to deal with them all.

The United Kingdom has a long and distinguished history of protecting workers’ rights, as my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) pointed out in his erudite and instructive speech. For example, the principal plank of our workplace safety legislation is the Health and Safety at Work etc. Act 1974, which was developed independently of the EU. In this country, we have a comprehensive framework of legally guaranteed minimum rights for workers that seek to ensure that everybody is treated fairly at work and that businesses thrive. The UK has led the way on improving workplace diversity. Our generous provisions on maternity and parental leave have helped record numbers of women into work, and as a consequence of our approach the UK economy is thriving.

This has indeed been an excellent debate. It has fully justified the Government’s approach of holding general debates. As I have said, all the contributions have been valuable, and they will inform our consideration as we leave the European Union.

Question put and agreed to.

Resolved,

That this House has considered exiting the EU and workers’ rights.

Steel Industry

Geraint Davies Excerpts

Thursday 3rd November 2016 Westminster Hall

[Tom Blenkinsop]

Other colleagues may want to comment on this, but my view is that in general the energy sector is predisposed to giving the individual consumer cheaper prices, with the costs going more towards manufacturing. The consequences of that have led to some manufacturers going off grid; and a consequence of that may be higher prices for the individual consumer, as capacity cannot be fulfilled by larger consumers. In European countries such as Germany and Holland, there are discounted energy costs for large manufacturers but with the understanding that the individual pays higher bills. There is consensus, to a certain degree, that people are willing to pay higher energy bills in order to maintain manufacturing in their country so that they have a job—but that is with open political consensus. We as politicians need to talk about what type of economy we want. Do we want to move it away from finance and services back to a more balanced economy? We need to talk about that in terms of energy policy, but I will go into that issue in more depth later.

The Government can act to support the steel industry’s attempts to improve its energy efficiency and thereby cut emissions and costs by providing an energy efficiency fund. Such a fund could supply capital for companies to make improvements and efficiencies in the way they use energy, meaning they can better compete on energy prices and millions of tonnes of carbon emissions can be cut.

The second immediate challenge is that of the British Steel pension scheme. The scheme’s deficit, estimated at £700 million earlier this year, has been a major obstacle to the sale of Tata Steel sites. In response to that, the pension scheme’s trustees have asked if it would be possible to alter the scheme’s benefits in order to make it viable without a sponsor employer. The Government have been consulted on that option and on the alteration to section 67 of the Pensions Act 1995 necessary to alter the scheme’s benefits. We are yet to hear a statement on the consultation, but recently the pensions deficit has been drastically re-estimated at £50 million, due to the trustees taking advantage of the post-Brexit economic situation—I must mention that that has more to do the British Steel pension scheme’s investments in other nations’ stock, which has boosted the pension fund.

If interest rates were to rise and the scheme’s asset value continued to increase, hypothetically the trustees may wish to withdraw their request to change the scheme’s benefits, and therefore a change in section 67 of the Pensions Act may not be necessary. The compounded complications are that any change to section 67 could affect any other workplace pension scheme, and any other representative of any other constituency without a steel interest would be highly hesitant about voting for such an action. I hope we can keep in constant contact with the Minister, so that if the scheme’s benefits continue to rise, we can look at measures short of the scheme falling into the Pension Protection Fund, because that is fundamental to the existing Tata sites. The Government must act to explore that possibility, provide certainty in an uncertain situation and secure the continued viability of Tata Steel sites. The BSPS is a fulcrum of the continuation of the current Tata sites.

As well as the five asks, strategic decisions will need to be made soon by Government that have the power to end or secure the industry’s future. Those are decisions that come in the wake of Brexit. There are many implications for the steel industry of the UK leaving the European Union, from workers’ rights to an ability to attract expertise and investment from the continent, but I wish to focus on one: trade, and in particular access to markets and trade defence measures.

Earlier this week, I warmly welcomed the Government’s actions to secure investment, jobs and growths at the Nissan plant in Sunderland, via the production of the two new Qashqai and X-Trail models. That move is warmly welcome, not least because Nissan is one of the largest buyers of British strip steel, largely from Tata Steel sites. It is a shame the Government did not take the same decisive action when it came to the closure of the SSI Redcar steel plant over a year ago, which I am certain my hon. Friend the Member for Redcar will talk about. None the less, it seems the Government have reassured Nissan that it will have access to European markets tariff-free. That is fantastic news, but it is not just Nissan or the automotive industry that rely on access to tariff-free trade with Europe.

Over half of all British steel exports are to the European Union, therefore any tariffs on British goods would damage the health of UK steel. I hope the Minister will commit today to providing steel producers with similar assurances. Doing so would again demonstrate this Government’s commitment to the sector, and of course do much for those whose jobs who are dependent on the steel trade. The Nissan deal also reflects how big and powerful the industry players and the automotive lobby is as a whole. Steel requires its players to come together and command such attention. It must also gain the understanding of the auto sector and all the other industrial lobbies that the UK steel supply on their doorstep requires their clear verbal support.

Leaving the European Union presents both an opportunity and a threat in terms of trade defence measures—a threat in that it means we would leave behind the trade defence measures provided by the EU, modest and limited though they are, and an opportunity in that it allows this country to implement our own trade defences. As many here will know, the over-production of primarily, though not exclusively, Chinese steel and its dumping, sometimes at below-cost prices, in foreign markets poses a real and significant threat to industry here in the UK. Currently the EU’s tariffs on steel differ by product: the highest import duty is about 73% on heavy plate steel, whereas in the US in March duties were set at over 265%.

While Chinese production of steel did slow as global demand dipped, the latest International Steel Statistics Bureau statistics show that Chinese exports remain at a year high, with August levels being some 7% above last year. The problem is not going to go away; it will certainly re-emerge. However, this Government seem to have set their face against trade tariffs on Chinese steel, as two quotes reveal. The first, from the Chancellor, was on granting China market economy status. He said:

“Our position on China’s market economy status is that we gave certain undertakings to China and believe that we are bound to go down this route.”

Recognising market economy status for China would limit our ability to apply duties on Chinese steel, potentially opening up our markets to a flood of cheap steel, undercutting domestic producers and risking thousands of British jobs.

Commitments made to endear ourselves to China should not take precedent over commitments to steelworkers or common sense. It is obvious that Chinese steel is not made under market competition conditions, and it is also obvious that by campaigning for MES for China, the Chancellor is campaigning against the interests of British steelworkers. This may be further complicated by Brexit. If we campaign for market economy status for China—as a country, I add; that is the Government’s position—while we are in the EU, will not this Government be obliged to recognise that once we can do so unilaterally after leaving the EU? Perhaps the Minister can shed some light on that.

The second telling quote came from the Secretary of State for International Trade. During his speech to the Conservative Way Forward group, the right hon. Gentleman, now infamous for calling British business people fat and lazy, said we

“must turn our backs on…voices that tell us: ‘It’s OK, you can protect bits of your industry, bits of your economy and no one will notice’”.

That seems to set the right hon. Gentleman against any industrial strategy and certainly against trade defence measures for the steel industry. I hope that that misapplication of free trade dogma to trade with a communist country and its state-owned and subsidised steel industry does not spill over into Government policy. I hope Ministers from BEIS have explained the absurdity of that position to the Secretary of State; if not, I fear someone will have to very soon. Those two aspects of the Brexit negotiations are fundamental to any industrial strategy and I hope the Minister will outline today the conversations he has had with and the cases he has been making to the Chancellor, the Prime Minister and the Secretary of State for Exiting the European Union about Brexit and our industrial strategy.

I would like now to address my own Front Benchers. As a party, we have been vocal in campaigning to save our steel industry, and we should be proud of that, but, if our party is to help to revive the steel industry in the UK, as I hope it will, and not merely be its pallbearer, we must stop cutting off potential demand for British steel by opposing or sitting on the fence over major infrastructure projects. Heathrow will require 370,000 tonnes of steel and could support hundreds of jobs in the industry. Labour does not seem to have a settled opinion—I know mine—and we must be clear. Trident will support British jobs in the steel industry, despite the Government allowing French steel to be used in the vessels’ hulls, but Labour’s own leadership casts doubt on our commitment to this project, despite party policy and a consensus at our conference and among trade unions to accept it.

Shale gas is an example. Our party has vowed to ban the practice of fracking. The GMB union called this decision ridiculous, nonsense and madness, and my union, Community, said the decision was rushed and did not fully consider the evidence. Both unions have since signed a memorandum of understanding with United Kingdom Onshore Oil and Gas, the industry trade body. Two proud unions, with large private sector bases and affiliated to our party, are asking the party to back a proposal that would provide jobs in regions across the UK—not just jobs, but secure, well paid jobs that would help to stop our reliance on autocratic nations for our energy. It would offer people, not least the thousands of offshore oil workers being made redundant, well trained, highly skilled, long-term roles, but we have denied them that option. Shale gas would cut energy prices for the steel industry more profoundly than any tax break or subsidy. On Teesside, it would provide a gas supply to a much-needed chemicals industry at 50% less than the cost of conventional North sea gas.

The infrastructure and sites would also require thousands of tonnes of steel. The viability of British-made welded steel pipes for fracking is currently being explored. It is vital to both Corby’s and Hartlepool’s pipe mills. The industry is moving ahead without the Labour party. We should be shaping the shale gas industry, not ignoring it for our own satisfaction. We should be making sure it is safe, that it uses British steel, that energy price cuts are passed on to steel producers and that they organise their workforce so that it can bargain collectively and secure benefits for local communities.

Blanket opposition to infrastructure projects may offer the false comfort of the moral high ground, but it is not responsible. Failing to make these choices is not the action of a Government in waiting who intend to deliver for steelworkers. As a party, we must be pro-jobs and pro-steel choices, and not just attend marches and wear badges. I hope my party will think about these issues and choose jobs over familiar, fashionable and flawed opinion.

[Geraint Davies (in the Chair)]

From one Tom to another, I call Tom Pursglove.

--- Later in debate ---

[Tom Pursglove]

Again, I am grateful for the intervention. I have consistently said that I think it is incumbent on British Ministers to make the point to the Chinese that if they want to play in the premier league, they have to play by the rules. That is fundamental; it has to be front and centre in our ongoing discussions with the Chinese Government as we try to make progress. That is absolutely right and proper. If they want to be regarded as a significant international player in trade, they have to play by the rules.

I welcomed what the hon. Member for Middlesbrough South and East Cleveland had to say about trade earlier, because I think that this issue will be crucial. What opportunities will there be to better export British steel around the world in a post-EU exit world? I ask that because the steel that this country produces is the best in the world. There is no doubt about that, and I think that we ought to be shouting from the rooftops, making the point that the steel that we produce is of that high quality, that it is good value for money because of that, and that we want to sell it the world over. I would be interested to hear the Minister’s thoughts on that.

I also want to know about some of the early cross-departmental discussions that are taking place. What is the current thinking? What is the interface between the different Departments to ensure that the steel sector is properly represented in those discussions? What work has been done to hear what the needs, aspirations and requirements are? I recognise that there will be many competing priorities at the moment, but for my constituents and me and for all hon. Members present, the steel issue is very pressing and we need to know what the direction of travel is likely to be.

On industrial strategy, I come back to the point about the emphasis of the Government. I very much welcome the shift in emphasis. The steel APPG, to a man and woman, campaigned for it. We always wanted to see an industrial strategy develop that would help to bolster the steel industry. I am proud to be part of a Conservative Government who are delivering on that, who have recognised the need for an industrial strategy that is designed to ensure that steel is properly represented in our industrial policy. That is a very big step forward; it is a step change. And I say that coming at the debate as a small-c conservative. I recognise that the Government do not have all the answers, but this is about getting the broad economic conditions right and ensuring that where there are opportunities for our industries to thrive and prosper, we try to fit all that together to ensure that it works and has the best possible outcomes.

An industrial strategy is key to ensuring that we have strong core industries in this country. We have all said for a long time that steel is fundamental to our national security. Having an industrial strategy means that policy discussion in this country focuses on that point and ensures that no community is left behind. In Corby, people feel acutely that the steel industry is what our town is all about. Our town was built on the steel industry; that is what we are about in Corby, and I think that this measure gives real regard to that. I would therefore be interested in a progress report from the Minister on where the thinking is on the industrial strategy, what engagement there has been and what opportunities he thinks that will bring for our steel towns.

On procurement, I commend the Government, because we have made enormous strides forward, working across Government, in recent months. Of course we must maximise the public sector opportunities that exist. Today we heard about the construction of a number of new prisons. I urge my right hon. Friend the Secretary of State for Justice to ensure that British steel is used. One of the sites is Wellingborough, which is 10 minutes down the road from my constituency. We can provide top-quality steel, probably within the hour, if that is what is needed to build that new prison.

We must ensure that these big, Government-backed infrastructure projects use British products, British content and British steel at every opportunity. I want to pick up the point made by the hon. Member for Middlesbrough South and East Cleveland about fracking, because Corby is one of the sites that would be strongly placed to provide top-quality steel for fracking. When the Government are looking at subsidies for renewable energy projects or any energy projects, it makes sense to hammer home the expectation that British content and British steel will be used. That should be the key condition.

However, this debate is not just about the public sector; it now has to be looked at also in the context of the private sector. I welcomed Heathrow’s commitment to use British steel in the forthcoming construction. I hope that that will lead the way in encouraging other companies and organisations around the country to use British content wherever possible. On most occasions, we can cater for their requirements, and if we do not cater for those requirements, we have the ingenuity and ability to innovate to make that happen. The industry should be given the opportunity to cater for these projects whenever possible, because it is morally right to use British steel. We have great quality and a great workforce, and we should feel the benefit in the supply chains in this country.

Earlier, there was an urgent question on air quality. In my view, it does not make sense to be bringing poor-quality steel across from other countries around the world when we can produce great steel in this country and reduce some of the transport costs and implications of shipping steel from all over the world. Overall, that must be better for air quality across the globe.

Those issues should be front and centre of what the Government, the public sector more broadly and the private sector ought to be championing. That is a key element of the debate. How does it link to the industrial strategy? That will be a very important consideration that we need to reflect on as we move forward. How does the whole thing link together to ensure that, from end to end, we do right by British steel producers?

I am a regular visitor to the Corby works and I pay tribute to all those who work there. They are incredibly talented and hard-working people. We have a remarkable workforce and we can all be exceptionally proud of that. Whenever I visit at the moment, I am asked about three key policy areas: where is Government thinking on the industrial strategy, on the EU exit and on procurement? We have to show leadership on all those points.

I am proud of Corby’s steelmaking—the quality of our product, our incredible workforce—and of our rich steel history, which is what the town of Corby is all about. I am proud of the Conservative Government for really trying to show some leadership and for listening, acting and getting out there in pursuit of solutions to help to secure the future of the industry. But I am under no illusions; I do not think this is going to be straightforward. It is not going to be plain sailing as we move to a world outside the European Union. It is going to be difficult and there are going to be bumps in the road. However, if we get out there and get the engagement right, we can have an enormously successful future chapter for our steel industry because we have got those broad policy foundations in place.

[Geraint Davies (in the Chair)]

From a small “c” conservative, to a big “L” Labour, I call Angela Smith.

--- Later in debate ---

[Angela Smith]

A number of opportunities have been missed over the years, and wind energy is one of them. The turbine-making capacity is not now available here in the UK. Wherever possible, it would be good to see the Government attempting to work with industry to put those mistakes right and see what we can do to develop that capacity in future.

Unlocking all that potential will mean an active industrial policy from the Government. Will the Minister therefore reassure the House that UK steel will be at the heart of the forthcoming industrial strategy? As was mentioned earlier, will he give an absolute commitment that steel—which, let us remember, is a foundation industry—is an ongoing priority as we await the publication of the strategy and that it will be at the heart of everything that the new Department does between now and next spring, when the strategy is introduced?

In an industry where investment is vital and timescales are long, certainty is important, so my concluding remarks are of course about Brexit. It is my firm view that, as an industry, steel needs full access to the single market. That is vital, especially when one considers that 50% of all the industry’s exports go to the European Union. Given that the automotive industry has secured a guarantee from the Government, as we leave the European Union, to allow the necessary investment and ensure that it continues in Sunderland—I absolutely welcome that, by the way; it is great news for Sunderland and really important for the UK economy—will the Minister tell us whether we can expect the same sort of guarantee for the steel industry? It is critical that the steel industry should be able to continue to enjoy access to its key markets. Let us remember that many thousands of jobs depend on a successful steel sector.

Steel is vital to a country that wants to continue to be a manufacturer. We need the Government to be fully engaged in helping the industry not just to survive but to develop and to provide security against the uncertainties of the global economy. The future is not going to be easy and although Brexit is frequently posited as bringing many opportunities—these nebulous opportunities that have yet to materialise—we can be absolutely certain that it will deliver more than its fair share of challenges. The steel sector will need the Government to be an active partner to help it to deal with the uncertainties it faces.

What happens to the steel industry if, when we Brexit in two years’ time—presumably in April 2019—the Government have not negotiated a long-term deal? What happens if they have not even be able to negotiate a transitional deal with the European Union? What happens to the steel industry if we end up falling back on World Trade Organisation rules? The Government need to be clear and to work closely with the steel industry and Parliament to ensure that those uncertainties are minimised and thought through, and that we are absolutely certain that, in the worst-case scenario, the Government will be there with a plan to support the steel industry as it moves forward—indeed, to support all manufacturing industry. That question is critical and is worrying the business sector to a degree that I have never seen before in my lifetime in politics.

A country without a steel industry cannot class itself as a major economy. The stakes are that high, and I implore the Minister and the Government to do everything necessary to make sure we secure a thriving steel industry for the future, preferably with the UK as a full member of the single market. Whatever happens, we need to ensure that the Government, who had no plans for Brexit, certainly have a plan if the worst materialises in two years’ time.

[Geraint Davies (in the Chair)]

Moving from a big “L” to a big “C”—or should I say a deep “C”?—I call Mr Peter Bone.

--- Later in debate ---

[Mr Bone]

No, unfortunately we have not.

Since the referendum, sterling has fallen by, say, 17%. That makes exports to the EU 17% cheaper and exports into the UK from around the world 17% more expensive. Therefore, a small tariff is irrelevant because we have already had a huge dividend from Brexit. There has been a lot of confused talk around the subject. I absolutely agree with putting tariffs on China—and other countries, if they are dumping—but I do not agree with the idea that somehow there will be a huge problem if we have world trade rules because 50% of exports go to the EU. Clearly we have benefited enormously from the devaluation of sterling. I know that a lot of people want to speak today, but we must look at two issues: the benefit of sterling and the fact that we can absolutely believe in free trade while absolutely having tariffs on dumped goods. That is rather important.

Finally—I really do appreciate that there is a time pressure—I agree entirely with having British steel for British goods. Rushden Lakes is a large development in my constituency, and all the steel there is British. Today, the Government announced a new prison for Wellingborough—I apologise that I must leave the debate temporarily to deal with a matter to do with that prison —which is an opportunity to use British steel. There is a great opportunity for us in the future. The work of the all-party parliamentary group and other hon. Members here today has kept British steel on the agenda. I think the new Government have listened, and I am really very positive about the future of steel.

[Geraint Davies (in the Chair)]

Thank you very much, Mr Bone; I hope you are not going to prison for too long. [Laughter.] I will not pronounce Jonathan Edwards the big “P”, but I call him to speak. If hon. Members can limit their remarks to 10 minutes each, we will get everyone in.

--- Later in debate ---

[Jonathan Edwards]

I am grateful for the hon. Gentleman’s intervention. I was endeavouring to make the point that the Liberty-Excalibur deal potentially offers a future in which green steel, as it is called, and primary steel are produced side by side in the two blast furnaces at Port Talbot. Keeping those two blast furnaces open is vital for the viability of Port Talbot. He is completely correct.

I have a simple message for the Minister: this could be a huge success story for Wales and the UK as a whole. My last ask today is for him to agree at least to meet the leaders of the Excalibur-Liberty deal to see whether there is an option for the UK Government and the Welsh Government to put their weight behind a bid that seems to have unanimous support in Wales. Diolch yn fawr iawn.

[Geraint Davies (in the Chair)]

I call Anna Turley. We have all been waiting for her speech.

--- Later in debate ---

[Anna Turley]

My hon. Friend is right. The SSI site was not only efficient but had a fantastic workforce. An enormous amount of money was put in to bring it up to such standards. The site had everything that could have seen it playing a leading role in the steel industry. It is a tragedy that the site could not be supported to weather a few months of difficulty so that it could thrive in the future.

The site now stands looking over the town, cold and rusting, with its future tied up in faraway wrangles between an official receiver and faceless banks in south-east Asia that show no signs of progressing. I would be delighted if the Minister had anything—anything at all—to share with us about what steps the Government are taking to wrestle the site out of the hands of the Thai banks, so that the people and businesses of Teesside can start to rebuild, invest, regenerate and bring much-needed jobs to our area.

I believe that the future for steel on Teesside did not disappear entirely with SSI. Potential inward investors recognise Teesside as the preferred location for UK investment, with its unique availability of infrastructure, supply chains, innovation support and skilled workforce, and its transport benefits through its geographical location and existing assets. Our British steel beam mill is doing fantastic work and has a great workforce. If the Government are concerned about the future of the UK steel industry, they need still to be concerned about Teesside. I have met serious potential investors who are looking closely at it, but we need the former SSI site to be liberated. Although I have come here to bat for the wider steel industry in this country and to fight for the jobs and livelihoods of steelworkers around the country, I do so on behalf of Teesside, with an anger that cannot be repressed and a determination to achieve some form of future for steel in our area.

I turn now to some broader issues. The June referendum result has huge implications for every part of our economy, and businesses from all sectors will be seeking favourable terms in the Brexit negotiations. Last week’s Nissan announcement was fantastic news for the automotive industry, and I congratulate every single man and woman at the plant and in the supply chain who sent out the message to the world that the north-east is the best place to come invest and build the cutting-edge cars of the future. We have a fantastic workforce, terrific businesses in the supply chain and world-beating research and development.

It is important that Brexit does not become a game of who can shout the loudest. Our approach to an industrial strategy as we leave the EU must benefit everyone. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is absolutely right that steel must have the same weight as the automotive industry in the decisions made about tariffs. The steel industry is still in crisis as it continues to battle with the challenges of global overcapacity, falling demand and uncompetitive trading conditions. Some progress has been made, but further reductions in steel jobs and production capacity are a possibility if action is not taken. The uncertainty of Brexit adds to the challenges.

We fought to secure this debate to ensure that tackling the risks to the future of steel remains a Government priority. Many of the industry’s asks remain unanswered. The primary importance of the Brexit negotiations cannot mean that other issues fall by the wayside. Many industry proposals to redress the huge imbalance in electricity costs for UK steel compared with our competitors have so far not been carried forward by the Government, and the delay has cost the sector an estimated £20 million since June. The Government have also not yet accepted the request for plant and machinery to be excluded from business rate calculations, meaning that French and German steelmakers continue to pay up to 10 times less in rates than their UK counterparts. I sincerely hope that the Government are considering that ahead of the autumn statement.

I have mentioned Heathrow’s important commitment to use British steel in the recently approved airport expansion. The same support for local materials must be present in other major construction and infrastructure projects, including High Speed 2 and 3, the new fleet of nuclear submarines and Hinkley Point. More than two thirds of UK steel exports went to the European Union in 2015. It is crucial that freedom to trade in the single market is maintained.

Steel is also a crucial foundation industry, underpinning the manufacturing sector as a whole, which itself relies on single market access for both the export of completed goods and the import of parts and raw materials. The assurances given to Nissan were positive for the steel industry, particularly as they are the biggest automotive customer of UK steel. However, the automotive sector has a large supply chain, and those companies need the same assurances that they will not be hit by tariffs when we have left the EU. It cannot be the case that the biggest companies who shout the loudest secure special protection.

On Teesside, every single one of our boroughs voted by more than 60% for Brexit. I spoke to lots of people during the referendum campaign who were motivated to vote leave by anger at the loss of our steelworks and the idea, wrongly pushed by the leave campaign, that inaction in Europe was to blame. They want the Government to be more active in their support for industry and to challenge unfair trading practices by China. When forming post-Brexit trade policies, the UK must implement robust anti-dumping measures to stop the flood of subsidised steel that has devastated the industry in the UK, not push the hands-off attitude suggested by one leading Brexit Minister, as my hon. Friend the Member for Middlesbrough South and East Cleveland exposed.

I also want to mention the importance of innovation to the future of the UK steel industry. Innovation is core to our domestic industry’s success. Such is the impact of British inventiveness that two thirds of steel produced here is in forms not invented 20 years ago. That is why I was appalled to learn earlier this year that officials at Innovate UK judged support for materials and metals not to be a priority for Britain. The implications of Tata’s announcement in March revealed the short-sightedness of that approach, so it is reassuring that the Government have overruled that decision. I would love it if the Minister agreed in this debate to the overwhelming evidence for a materials and metals catapult.

If we are to retain our lead, public support needs to reflect the research requirements of Britain’s increasingly fragmented industry and the principles of relentless continuous innovation by making long-term commitments advocated by UK steel experts, rather than Whitehall. I recommend to the Minister the work of the Materials Processing Institute in my constituency, which was established in 1944 to provide research to a then-fragmented industry similar to the one emerging again now.

The institute is Europe’s go-to steel and materials research expert, as my hon. Friend said, welcoming delegations from Germany, Sweden, China and elsewhere this summer to advise them on how to future-proof their domestic steel industries, which are wrestling with many of the same issues as ours. Just this week, the institute was approached by one of the world’s largest steel companies overseas to become its preferred research partner. Its proposals for long-term support to commercialise innovation have the support of Tata Steels Speciality Steels, British Steel, Celsa Steel, Liberty Steel, Albion Steel, Acenta Steel, the British Stainless Steel Association and UK Steel. I would be delighted to welcome the Minister to discuss the matter further and see the institute’s world-class facilities for himself.

Bridging all these issues is the need for a long-term industrial strategy that supports British industry and manufacturing to be competitive in the global market by creating an environment for investment, innovation and, ultimately, the creation of more highly skilled and well paid jobs. The assurances given to Nissan and the proposal for a 25% Government stake in Tata UK steel assets are two examples of a more interventionist Government prepared to support British industry, which is good to see. It is a marked improvement on their complacency and inaction during the SSI crisis in Redcar; this must be the start of a more proactive approach to industry. UK steel is still in crisis, but with the right help, its future both nationally and on Teesside can be secured.

[Geraint Davies (in the Chair)]

Diolch yn fawr. Nawr te, siaradwch, Stephen Kinnock.