Oral Answers to Questions

Greg Clark Excerpts

Tuesday 16th October 2018 Commons Chamber

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

23. What assessment he has made of the effect on business growth in Scotland of the UK leaving the EU internal market.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Reaching a good agreement with the European Union will have a positive effect on business growth in Scotland and in every other part of the United Kingdom. In Green GB Week, it is important to highlight the huge clean growth opportunities in Scotland in a sector that supports tens of thousands of jobs and brings £11 billion into Scotland’s economy.

[Peter Grant]

Yesterday, AstraZeneca joined a long line of major UK employers that have put investment plans on hold because of Brexit uncertainty. The Governor of the Bank of England has indicated that, even before we leave, Brexit has already cost £900 per UK household. Does the Secretary of State agree with the Governor’s estimate? If he does not, what is his estimate of what Brexit has cost us to date?

[Greg Clark]

The hon. Gentleman’s point underlines why it is important that we secure a positive deal, and the implication of that analysis is that if we do secure that deal, as I hope and expect that we will, there will be a substantial upside for the economy. The hon. Gentleman is interested in the negotiations because they provide us with access to European markets, but it is a matter of record that the Scottish National party wants to take Scotland out of the internal market of the United Kingdom by dint of leaving the rest of the UK, with which Scotland does four times as much trade as it does with the rest of the EU, so I would call for a bit of consistency from the hon. Gentleman.

[Patrick Grady]

This is just nonsense. Does the Secretary of State not accept that, by definition, the best possible relationship with the European Union has to be membership and therefore that leaving the single market and ending the freedom of movement of goods, services and people will inevitably be bad for business? Can he offer any reassurances at all to the 134,000 Scottish workers whose jobs the Fraser of Allander Institute estimates are reliant on trade with the EU?

[Greg Clark]

The proposals have been warmly welcomed by businesses across the country, including in Scotland, because they would allow us to continue what are successful trading arrangements without frictions.

[Gavin Newlands]

In its Brexit risk assessment, Airbus said that if the UK left the EU without a deal, that

“would lead to severe disruption and interruption of UK production”

and

“would force Airbus to reconsider its investments in the UK, and its long-term footprint in the country”.

What steps is the Secretary of State, along with the wholly united Cabinet, taking to ensure that more firms do not depart Brexit Britain?

[Greg Clark]

We need to make sure that we have a negotiated deal along the lines of the proposals made in the White Paper that have been welcomed by the manufacturing industry in all parts of the UK.

[Stephen Kerr (Stirling) (Con)]

22. One of the effects of leaving the European Union is that Scottish businesses will not have access to patient capital from the European Investment Bank, so will my right hon. Friend take the time to review the industry panel’s response to the patient capital review, which highlights the need for a patient capital investment vehicle? With only a few changes, the British Business Bank could become such a vehicle.

[Greg Clark]

My hon. Friend is right. Part of the industrial strategy is about making more patient capital available in Scotland and all across the UK for growing businesses, of which he has many in his constituency.

[James Heappey (Wells) (Con)]

Does the Secretary of State agree that our membership of the internal energy market is not necessarily conditional on our membership of the wider single market? Does he agree that we would be better off were we to remain within the internal energy market, with all the energy security advantages that that brings?

[Greg Clark]

My hon. Friend anticipates some negotiations that will need to take place on our future economic partnership. Suffice it to say, however, that we have a mutual interest in the interconnection between the UK and the continent, and it is strongly in the interests of consumers in this country and on the continent that the ability to trade over those interconnectors should continue.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

Has my right hon. Friend made any assessment of the impact on business growth in Scotland if it left the UK’s internal market?

[Greg Clark]

It would be disastrous. The value of exports from Scotland to the rest of the UK is £45.8 billion, compared with around £12.5 billion to the rest of the EU, so anyone who, like me, is interested in being able to trade without frictions should apply their own analysis to their own policy of pulling out of the UK.

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

Scotland’s financial sector has described the prospect of a no deal Brexit as “horrific”. Does the Secretary of State agree that to protect businesses and to stay in the single market and the customs union the resignations of the Secretary of State for Scotland and Ruth Davidson are a price well worth paying?

[Greg Clark]

I hope that the hon. Gentleman supports the Government’s determination to ensure that the integrity of the whole United Kingdom is guaranteed by the negotiation. He suggests that the consequences of no deal would be negative; of course they would. That is why we are doing everything we can, with increasing confidence, to secure a positive deal with the rest of the European Union. I hope he will support that.

[Carolyn Harris (Swansea East) (Lab)]

2. What recent assessment he has made of the effectiveness of the electrical product recall regime.

--- Later in debate ---

[Mohammad Yasin (Bedford) (Lab)]

3. Whether he has made an assessment of the effect of the proposed merger of Sainsbury’s and Asda on the (a) pay, (b) conditions and (c) job security of the employees of those companies.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

Sainsbury’s has confirmed that there are no planned store closures as a result of the merger. The proposed merger of Sainsbury’s and Asda remains conditional on clearance by the Competition and Markets Authority. I wrote to the CMA on the issue in May, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst) and I had a meeting with the chief executive of Sainsbury’s yesterday.

[Mohammad Yasin]

It is right that the concerns of the workers are heard during the Asda-Sainsbury’s merger, so does the Secretary of State agree that there is a pressing need for the Competition and Markets Authority to hear the worker’s voice and take into account the impact of any merger or takeover on the workforce, not just on the competition?

[Greg Clark]

It is true that the directors of the company have an obligation to have regard to the workforce. The CMA is independent of the Government, as the hon. Gentleman knows. It will make its report and assessment, and I am sure that it will look at all the companies’ responsibilities.

[Theresa Villiers (Chipping Barnet) (Con)]

In taking forward this merger, will the Secretary of State urge Sainsbury’s to reaffirm its commitment to local suburban high streets, not least in New Barnet, where Sainsbury’s is a key store?

[Greg Clark]

I will indeed. Our supermarkets make an important contribution to our high streets, as do independent stores, and we want that to continue in the future. Sainsbury’s plays an important role on the high street.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

The Competition and Markets Authority says that it will not let the merger go ahead if any concerns that it has around higher prices or worse quality of service for shoppers are not fully dealt with. What assurances will the Secretary of State give that the same rigorous tests are being applied regarding the employment rights of employees at both companies, and will he commit to a meeting with the recognised trade unions?

[Greg Clark]

I am always very happy to meet the trade unions. As I have said, I met the chief executive of Sainsbury’s yesterday. The company intends to run the Asda and Sainsbury’s businesses separately. It does not propose store closures or changes to the terms and conditions of the separate employees.

[Mr Philip Hollobone (Kettering) (Con)]

In the town of Kettering, there is a large Sainsbury’s and a large Asda, but local shoppers and supermarket employees are asking what guarantee there is that both supermarkets will still exist in two or three years’ time.

[Greg Clark]

My hon. Friend raises an interesting point. That is why the CMA is conducting its investigation, and it has powers to prevent the loss of competition if it is in prospect.

[Jim Shannon (Strangford) (DUP)]

Will the Minister further outline what effect this merger will have on my constituents, who may see higher prices and less competition as a result of further limitation of the already smaller choice of supermarkets than on the mainland? Has the Department fully taken the likes of Northern Ireland and rural areas into consideration?

[Greg Clark]

The hon. Gentleman raises a very important question. The essence of the CMA investigation is to see whether there could be—not just nationally, but in particular places—any diminution of competition. If the CMA thinks that that is in prospect, it has the powers to block the merger or to place conditions on it, such as requiring the sale of businesses to a competitor.

[John Stevenson (Carlisle) (Con)]

4. What steps he is taking to tackle rising energy prices.

--- Later in debate ---

[Neil Gray (Airdrie and Shotts) (SNP)]

6. What recent discussions he has had with the Chancellor of the Exchequer on the level of UK Government financial support available to businesses in Scotland.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The Chancellor and I work closely together to support businesses across the United Kingdom. I also work with the Cabinet Secretary for Finance, Economy and Fair Work in the Scottish Government to ensure that we can create the right environment for innovative businesses throughout Scotland to thrive. Indeed, I will be meeting him again later this afternoon.

[Neil Gray]

I hope the Secretary of State has heard that the Scottish Government have provided £18 million as part of a £65 million package of investment for its National Manufacturing Institute, which will be good news for manufacturers in Airdrie and Shotts, so will he change his industrial strategy to match that funding?

[Greg Clark]

The industrial strategy is something on which we have good collaboration with the Scottish Government. It is right that we should work together for the long term. If we want to make sure that Scottish businesses can thrive, there needs to be a competitive environment. One thing that I know is very much on the minds of Scottish businesses is that Scotland is the highest taxed part of the United Kingdom, which is a substantial drain on confidence. I hope the hon. Gentleman will take that back to his colleagues and discuss it with them.

[Mr Speaker]

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) has Question 21, which is on the matter of businesses, and he does come from Scotland. It therefore would be pertinent for him to come in at this point if he wishes.

[Greg Clark]

I do recognise that, not just in the case of hon. Gentleman’s beautiful but remote constituency but in the case of those of very many hon. Members across the country. This is a commitment that we have made in the industrial strategy. If we are to be a successful economy, using digital skills and attracting digital businesses, we need an upgrade in our broadband infrastructure.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

7. What steps he is taking to improve access to finance for small businesses.

--- Later in debate ---

[Sir Edward Davey (Kingston and Surbiton) (LD)]

8. What recent assessment he has made of the effect of business rates on the viability of small businesses.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The small business sector is thriving. We have 5.7 million small and medium-sized enterprises, and we are ranked in the top 10 in the world for ease of doing business. As the right hon. Gentleman knows, the Government have taken significant action on business rates in each of the last three Budgets, including £9 billion of support announced in 2016, making sure that nearly two thirds of a million small businesses pay no rates at all.

[Sir Edward Davey]

Small retailers across Kingston and Surbiton have been hit by a combination of high rises in business rates and unfair competition from online retailers, who too often escape taxation. Will the Secretary of State talk to the Chancellor before the Budget, and to European colleagues before Brexit, to agree a new tax for internet retail, using the proceeds to slash business rates and save our high streets before it is too late?

[Greg Clark]

When the right hon. Gentleman was a Minister in the Business Department, he took part in a decision to defer revaluation, for reasons that he understands. I accept the point—it has been made strongly by the Retail Sector Council—that reflecting the contribution that high street businesses make to their communities is a significant need. As business rates are reviewed, that is one of the council’s recommendations that we will take forward.

[Derek Thomas (St Ives) (Con)]

The Secretary of State will know that I have been concerned about this issue for some time. I met a business on Saturday whose business rates, which are currently about £300 a month, will go up to over £1,000 a month next April. What can I take to that business to assure them that we are on its side?

[Greg Clark]

My hon. Friend can reflect on the fact that the Government have taken action to permanently double business rates relief from 50% to 100% and to raise the threshold from £6,000 to £12,000. That means that a third of all properties, including small shops, now pay no business rates at all.

[Nic Dakin (Scunthorpe) (Lab)]

With Small Business Saturday coming up on 1 December, I am sure everybody in this House will be celebrating their local small businesses. I will be launching my Small Business Saturday competition soon. Is it not a good opportunity to use the Budget to show that we are behind small businesses by doing something about business rates, which are hitting small businesses on the high street?

[Greg Clark]

I join the hon. Gentleman in drawing attention to Small Business Saturday, which is coming up. I am sure colleagues right across the House will want to enthusiastically promote businesses in their constituencies. I hope that, being a fair-minded Member, he will reflect on the major changes that have been made. As I said, the Retail Sector Council has made some suggestions for the future, and I am sure the Chancellor will be listening.

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

Does the Secretary of State believe there is a level playing field between high street providers and internet providers?

[Greg Clark]

I think it is well known, and my right hon. Friend is aware, that we have been one of the leading forces in the world in ensuring that the rules should be changed, so that companies that currently pay little tax because of international agreements make a fair contribution. There is more to be done, but my right hon. Friend served in Cabinets in which this was put at the top of the agenda, and some progress has been made.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

I warmly welcome the Under-Secretary of State, the hon. Member for Rochester and Strood (Kelly Tolhurst), to her new role. I am sure she will do fantastically.

All the major business representatives, from the CBI to the chambers of commerce and the Federation of Small Businesses, have highlighted the need for business rates reform and temporary relief. The CBI says:

“The…system is stifling growth and investment”,

and the FSB says it creates a significant barrier to small business growth. Can the Secretary of State confirm today whether there will be any action on this issue in the forthcoming Budget?

[Greg Clark]

The hon. Lady knows that decisions on the Budget are for the Chancellor, but one of the measures we have taken, which I hope she would acknowledge, is a very substantial reduction in the burden of business rates on small businesses. That shows that the Government are alive to the importance of business rates for small businesses. We of course listen constantly to the organisations she mentions, but also to the Retail Sector Council.

[Rebecca Long Bailey]

I suddenly have a sense of déjà vu. At the last autumn statement, business groups warned of the devastating effect of business rates. In return, we saw only minor tinkering. Since then we have had a raft of store closures, with more than 100,000 retail jobs lost in the past three years. Many businesses cite business rates as a root cause. The Secretary of State has reportedly said that adjusting business rates would be one way to recognise the value of our high streets, yet the Chancellor said in July that there were no plans for reform. Just what is going on? Will there be action, or should we expect another year of meaningless tinkering from the Chancellor?

[Greg Clark]

The hon. Lady knows, and retailers will tell her if she listens to them, that the change in the pattern of retail trade, as more of us are buying more goods online, is going to make a change to the high street. Everyone accepts that. Do business rates make a contribution, and can they help? Yes, of course. That has been behind the changes that have been made. I have said before, and I said it today, that it is reasonable for the taxation system to reflect the contribution that high street businesses make to communities.

[Daniel Zeichner (Cambridge) (Lab)]

10. What his policy is on achieving net zero greenhouse gas emissions by 2050.

--- Later in debate ---

[Ian C. Lucas (Wrexham) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

This week, through more than 30 events, Green GB Week is celebrating the UK’s status as a world leader in clean growth. At the world’s first zero emission vehicle summit last month, we announced further investment in research and development relating to green vehicles, new batteries and low-carbon technology, as part of the Faraday challenge in our industrial strategy. That resulted in a pledge by the industry to invest half a billion pounds in those opportunities.

In addition, since we last met we have announced action to protect small businesses against unfair late payment terms imposed by larger firms. Alongside the Siemens chief executive Juergen Maier, I chaired the first meeting of the Made Smarter Commission, which will help to transform manufacturing through digital technologies. We have also announced that, to evaluate the impact of the industrial strategy in the years ahead, the Bank of England’s chief economist, Andy Haldane, will chair the Industrial Strategy Council.

[Ian C. Lucas]

A business took over Thomson Reuters in Wrexham a few weeks ago, and last Wednesday announced the redundancies of 300 skilled workers who had spent the last 10 years building it up. The jobs are being moved to India. In the context of Brexit, does the Secretary of State agree that we need to reconsider the takeover laws that apply in the United Kingdom, so that this type of predatory behaviour can end?

[Greg Clark]

Our record as a country of attracting inward investment from all over the world has stood us in pretty good stead. Many times, across the Dispatch Box, we have celebrated the success of Jaguar Land Rover, which is, of course, a recipient of Indian investment. It is important for us to maintain that tradition. As the hon. Gentleman will know, we are consulting on proposals to ensure the appropriate assessment of any national security considerations in respect of investment, but if we want to prosper as a country, it is also important for us to engage with the world and to attract investment from all over the world.

[Several hon. Members rose—]

--- Later in debate ---

[Dame Caroline Spelman (Meriden) (Con)]

Given that the new generation of diesel engines are up to 90% cleaner, what can the Secretary of State do to help ensure that consumers are not penalised unfairly by vehicle excise duty and company car tax bands?

[Greg Clark]

My right hon. Friend is correct in making the point that the next generation of diesel engines are very much less polluting than their predecessors. The road to zero strategy makes it very clear that diesel will continue to have a role for some years to come, and for some journeys it will be a particularly appropriate choice. My right hon. Friend will understand that the overall tax regime is a matter for the Chancellor.

[Jessica Morden (Newport East) (Lab)]

T9. The all-party group on steel and metal-related industries has written to the Chancellor ahead of the Budget calling for specific measures to help our steel industry. Will Ministers support these calls and when can we have a proper, much-needed sector deal for steel?

--- Later in debate ---

[Peter Kyle (Hove) (Lab)]

The UK is at the top of the global league for start-ups, but it is languishing at the bottom for scale-up. Is it not true that this is a black hole in the industrial strategy, because that is where productivity gains could be made? Why is the Secretary of State not acting on this?

[Greg Clark]

It is quite the opposite, and I am surprised to hear the hon. Gentleman say that. If he has read the industrial strategy, he will know that the commitment to scale-up is very prominent. I made reference earlier to the Made Smarter Commission that Juergen Maier is leading. Its purpose is precisely to diffuse the technology that the bigger firms have to those that are growing and scaling up.

[David Duguid (Banff and Buchan) (Con)]

In this Green GB Week, will the Minister join me in recognising the work being done by the major oil and gas companies, through the oil and gas climate initiative? They are voluntarily making huge efforts and investments towards a lower carbon future.

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The chief executive of Jaguar Land Rover has said that a bad or no deal Brexit would cost the company more than £1 billion a year and threaten its future investment in the UK. Can the Minister explain how that can be avoided if the UK is outside the customs union?

[Greg Clark]

It can be avoided by having a good deal based on the White Paper that was published earlier in the summer and that the motor industry has strongly endorsed.

[Several hon. Members rose—]