Leaving the EU: Protection for Workers

Greg Clark Excerpts

Wednesday 6th March 2019 Commons Chamber

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

I would like to make a statement about workers’ rights when we leave the European Union. Before I do, as this is my first time at the Dispatch Box since his death on Friday, I put on record my deep appreciation for the life and work of Lord Bhattacharyya, a heroic figure in British manufacturing. His work attracted investment to which hundreds of thousands of working men and women owe their livelihoods. A Labour Member of the House of Lords, Kumar worked easily with Ministers and, indeed, Prime Ministers from all parties for the benefit of the people of the west midlands and the whole nation.

The United Kingdom and this Parliament have a proud record of improving the rights of working men and women: from Shaftesbury’s Factories Acts to William Hague’s Disability Discrimination Act 1995; and from the minimum wage, introduced by a Labour Government, to the national living wage brought in by a Conservative Government. Although the EU sets minimum requirements in many areas of workers’ rights and health and safety, Britain has time and again been in advance of those requirements and has chosen to exceed them.

The EU agency for the improvement of working conditions ranks the UK as the second strongest of all 28 member states, behind only Sweden, for wellbeing in the workplace. The UK offers 39 weeks of statutory maternity pay, compared with the 14 weeks required by the EU. We have given fathers and partners a statutory right to paternity leave, which the EU is only just beginning to consider.

Our national living wage is one of the highest in the EU, and the Low Pay Commission that advises on it is widely respected. Because we have not, in practice, been limited to EU standards, there is no reason why we should not maintain this record of leadership outside the EU. The Prime Minister has given a commitment that Brexit will not be allowed to erode workers’ rights.

Nevertheless, some hon. Members have advanced the view in previous debates that a parliamentary mechanism should be established to monitor and implement that commitment. The hon. Member for Great Grimsby (Melanie Onn) introduced a private Member’s Bill to that effect, and the right hon. Member for Don Valley (Caroline Flint) and the hon. Members for Bassetlaw (John Mann) and for Stoke-on-Trent Central (Gareth Snell), among others, proposed an amendment to a previous motion in a similar vein.

We have been discussing closely with Members on both sides of the House, trade unions and businesses how we can turn this intention into law. The Government are today publishing draft clauses for inclusion in the withdrawal agreement and implementation Bill to put these commitments into law. The clauses have two main features. First, a new statutory duty will be placed on Ministers introducing a Bill that affects employment or workplace health and safety that they should certify, before Second Reading of any such Bill, that it is compatible with the Prime Minister’s principle of non-regression. They will be required to provide explanatory information to Parliament in support of that statement, which will be drawn up following consultation with businesses and trade unions. That will ensure that, while respecting and upholding the sovereignty of this Parliament, Members of this House in future will be able clearly to consider the compatibility of every proposed measure with the non-regression principle, to which the Prime Minister has made a commitment.

The second aspect of the draft clauses concerns future EU legislation. Parliament will be given the opportunity, at least every six months, to consider any changes to EU workers’ rights, and health and safety standards in the workplace. This will be reported to Parliament through a document that has, again, been subject to consultation with employers and trade unions, and which will be scrutinised by the relevant Select Committees of this House, subject to their agreement. The Government will be required to table an amendable motion on their intended course of action on those new EU rules. For example, the Government may set out that they intend to legislate to give effect to those commitments or that they intend to give effect to them in a different way, or that they do not intend to give effect to them, setting out their rationale. There are a number of legislative proposals currently under consideration in the EU that have a deadline for transposition into national law which will be after the implementation period. We would expect them to be put forward for Parliament’s consideration under this new process. These draft clauses, published in a Command Paper today, combine well our determination to honour the commitment the Prime Minister has made not to see workers’ rights weakened and respecting the sovereignty of this Parliament.

A similar framework will apply to environmental protections as the UK leaves the EU, implemented through the environment Bill. On 19 December, we published the draft Environment (Principles and Governance) Bill, the first part of a much larger environment Bill to follow in the next Session. The draft Bill outlines our proposals to establish a world-leading body to hold the Government to account for environmental outcomes after the UK leaves the EU. The draft Bill also requires the Government to publish a statutory policy statement on the interpretation and application of nine environmental principles, including the four contained in EU treaties. The Government will also legislate to ensure that where future Bills could affect environmental protections, a Minister of the Crown will make a statement of compatibility to Parliament and provide explanatory information. We will also create a new statutory duty on the Government to monitor any strengthening of environmental protections and regulations by the EU, and to report regularly to Parliament about the Government’s intended course of action in those areas. That will give Parliament the information it needs to consider whether or not domestic protections need to be strengthened accordingly. Through these commitments, the Government will provide a robust framework for maintaining and strengthening environmental standards as the UK leaves the EU.

In addition to the measures I have described, I am announcing today steps that will strengthen the enforcement of employment rights. The vast majority of businesses operate fairly and treat their employees well, but I have been concerned, as I know many Members have been, about the practices in a small number of firms, in a small number of industries, where abuses of the conditions at work are used to the detriment not just of workers, but of reputable competitors, who suffer a disadvantage by comparison in those industries. I therefore intend to consult broadly on establishing a new body to bring together the relevant enforcement functions of the Gangmasters and Labour Abuse Authority, Her Majesty’s Revenue and Customs, and the Employment Agency Standards Inspectorate. As part of the forthcoming spending review, we will consider what level of funding is appropriate to ensure that it is adequately resourced to deliver a strengthened remit.

The measures that I have announced today reflect a process of engagement across this House, and with employers and trade unions. Not everyone will agree with every proposal, but if, as I hope, an agreement can be reached on the withdrawal process during the days ahead, it serves as a helpful guide as to how we might find and act on common ground across the House in the next phase of negotiations. I commend this statement to the House.

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

Let me, too, put on record my sadness at the death of Lord Bhattacharyya and my deep appreciation for his devotion to British industry and politics.

I must start by thanking the Secretary of State for his engagement with me over recent weeks, and indeed with trade unions and my parliamentary colleagues whom he mentioned: my hon. Friend the Member for Great Grimsby (Melanie Onn), my right hon. Friend the Member for Don Valley (Caroline Flint); and my hon. Friends the Members for Bassetlaw (John Mann) and for Stoke-on-Trent Central (Gareth Snell). They have championed unrelentingly the protection of British workers as we leave the EU and continue to help us move the position across the House to one that we are all content with.

However, as the Secretary of State knows from our discussions in recent days, sadly the proposals, as drafted, do not yet provide a full guarantee or assurance for UK workers. I hope that this spirit of collegiality will continue and that we will work together quickly to address my concerns and provide the changes and assurances that I seek. As he knows, the TUC has stated today:

“In the face of a government determined to reduce rights, these measures would in no meaningful way compensate for the loss of the protections that currently exist”.

The assessment of less favourability will be decided by parliamentary majority and not by the objective standards of the UK courts. The provisions can easily be revoked by a hostile Government, and even without being revoked, they can be rendered fairly meaningless in practice. Indeed, as drafted, the content of the proposed statement of compatibility and irregular parliamentary assessment of less favourability are not capable of legal challenge by any UK worker. Of course, the process outlined in the draft clauses could be subject to a judicial review, but simply issuing a statement and laying a motion are hardly rocket science. What will not be possible, however, is a challenge to the contents of a statement of compatibility or an approved parliamentary motion to accept a Government assessment.

I think the Secretary of State implied in his statement that we should not automatically accept favourable rights solely because the UK Parliament has already set higher standards of employment rights. On that point, let me be clear: no one—certainly none of the colleagues I have spoken to—is seeking anything other than that UK workers should be entitled to no less favourable rights at work than their EU comparators, not that we should accept unfavourable ones. That point is simple to draft and it could be made perfectly clear, and I am happy to work with the Secretary of State on that point.

Of course, Parliament is always welcome to give more, but history is littered with examples of the UK bitterly resisting EU directives on workplace rights. A Conservative Government sued the EU Commission over the working time directive, claiming that there was no legislative base for the directive since working time had nothing to do with health and safety at work. Luckily for workers in the UK and the rest of the EU, that Government lost.

On the promise not to water down existing rights and protections, even if a Bill is found to be incompatible, there are at present no powers to stop the Government proceeding. In addition, the promise does not apply to secondary legislation, potentially allowing existing EU-derived rights to be watered down with ease. The bulk of UK legislation to implement EU law is actually done by way of secondary legislation—for example, working time regulations, TUPE, and health and safety regulations, to name but a few.

On the process relating to adopting future improvements in EU legislation, the proposals are equally in need of addressing. The only means of challenge is in Parliament, with a vote on an amendable motion, subject to the Government’s majority. Parliamentary procedure may not permit sufficient amendments to deal with all the additional changes to workers’ rights identified by MPs. In any event, resolutions of the House have recently proven to be an ineffective restraint on the Government. The Secretary of State seeks to provide comfort by stating that the Government will consult workers, Select Committees and employers’ representatives, and that sentiment is of course welcome, but, as he knows, there is no direct obligation on the Government to accept any recommendations.

On enforcement, I do welcome the commitments the Secretary of State has made to address funding deficiencies. I await further details in due course. On 1 April 2004, there were 1,483 Health and Safety Executive frontline inspectors; but by 2015 that had fallen to 972. In consequence, the statistically average workplace can now expect an inspection no more frequently than every 50 years.

I have conveyed to the Secretary of State in recent weeks the fact that for a guarantee of non-regression to be truly meaningful, it must be enforceable in the UK courts at the suit of any worker in the UK. Any dispute about whether or not the worker has less favourable rights than her EU comparator must be determined by the courts and not solely by Parliament, still less by a politically motivated Government majority in the House of Commons. Today’s proposals come nowhere near that and do not yet demonstrate that this Government take workplace rights seriously. I do hope, however, that, in this spirit of co-operation, we will work together to move towards more robust guarantees as a matter of urgency.

[Greg Clark]

I warmly welcome the tone in which the hon. Lady has approached this issue. We have different preferences on what would be ideal, and I know that both the TUC and her own Front-Bench colleagues would prefer EU directives automatically to take their place in UK law and to be enforced through the European Court of Justice, as they are now. She knows that we disagree with her on that—in our view, it would not be consistent with leaving the European Union or with the sovereignty of this Parliament—but I accept that that is her position and that she has said that, notwithstanding that, we should explore whether we can meet her perfectly reasonable observations. I am grateful for that.

What we are publishing this afternoon are draft clauses that have not yet gone into the Bill. I am open to working with all Members of the House—of course, continuing to include the hon. Lady—to see which of the observations can be accommodated, subject to the general approach we wish to take. I think that she recognises, and I hope other Members will recognise, that this is an important opportunity. If we are to pass a withdrawal agreement and implementation Bill, the chance to have on the statute book from the outset—literally within the next few weeks, I hope—some important protections for workers is one that I think we should all take.

The hon. Lady asked some specific questions, of which I shall attempt to answer as many as I can. She observed, in effect, that future Governments and Parliaments may take a different view from that which we intend. As we know, it is a fact that no Parliament can bind its successor, but it can express a clear intention, set up a test and provide mechanisms against which proper scrutiny of any proposal can be mounted, and that is what we are doing. I acknowledge her right hon. and hon. Friends’ contribution to and, in fact, origination of this idea.

The hon. Lady is concerned that the statements that are provided for could be ignored and may not be as effective as she intends. The case law clearly establishes that if a statutory consultation is provided for, it cannot be lightly swept aside. There is a requirement properly to engage with the recommendations that come from such a consultation, but I hear what she said about that process being open to workers as well as to people who might represent them. We can talk more about that.

The hon. Lady asked about the application to future changes to workers’ rights that may come outside primary legislation. Clearly, the big changes come through primary legislation, but in the spirit of what I said earlier, I am certainly open to exploring what assurances we can give on other significant pieces of legislation that might be in scope.

The hon. Lady mentioned the jurisprudence of the ECJ. It would clearly be inappropriate after Brexit for the ECJ to have a remit in the UK, but of course, as she knows as a lawyer herself, any court can have regard to the decisions of any court that it considers to be relevant in the case being considered.

The hon. Lady mentioned enforcement, on which we strongly agree. There are industries—sometimes concentrated in particular places in the country—in which what she described is correct: a calculation is made that employers who abuse the rights of their workers are unlikely to be detected and enforced against, which leads them to think that they can get away with it with impunity. The intention behind the strengthened enforcement body that I described, and our intention in terms of resourcing it, is to firmly remove that idea from the mind of any such employer. I will work closely with the hon. Lady on that.

It is appropriate to recognise in the House and draw some pride from our record of employment rights. We have a successful labour market that combines a reputation for high standards—standards that have been recognised throughout the EU as being among the best in Europe—while having what is the most important right for workers, which is the right to work. Many more people in this country are able to work as a result of the effectiveness of our labour markets. We need to preserve that while giving expression to the objectives articulated by the hon. Lady’s colleagues, to make sure that the commitment we have given to build on that strength in future is something that is not just a matter of words but has parliamentary force behind it. I am grateful for what the hon. Lady said about working together.

[John Redwood (Wokingham) (Con)]

I am assured that the Government and this Secretary of State want high standards of employment rules in this country, and I look forward to our having independence so that we can have our own domestically crafted high standards, which will be above the minimum EU standards, but will the Secretary of State please explain why he has proceeded with this statement? I thought its sole aim was to win over the Labour party, but it seems Labour is in complete disagreement with it.

[Greg Clark]

I was very much influenced by the exchange between my right hon. Friend and the hon. Member for Bassetlaw (John Mann) when the latter spoke to his amendment in January. As I recall, my right hon. Friend correctly intervened on the hon. Gentleman to reinforce his personal commitment to establishing and maintaining Britain as a place of voluntarily high standards. Because that represents a point of agreement in the House and is a reflection of our traditions—our reputation is as place of high standards, thanks to the accretion of steps taken by Governments of both parties—I think this is an opportunity to work together to see whether we can establish something that is rooted in the sovereignty of this House, which my right hon. Friend quite rightly insists on, but also provides assurance to those who want to see measures as well as words.

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

The Secretary of State started by talking about his party’s record on workers’ rights. He will forgive me for questioning whether the political party that put into legislation the Masters and Servants Act 1823, which codified corporal punishment for workers, has a good record on workers’ rights. Indeed, to bring us up to date, his party also introduced the anti-trade union Act.

Rather than guaranteeing or protecting workers’ rights, the statement does no such thing; in fact, it would be a misrepresentation to suggest otherwise. The Secretary of State will be aware that the EU is currently discussing regulations on the gig economy and rights for working parents that are far better than what can be found in the Government’s good work plan. If those EU regulations come to pass, how will the Government deal with them in this Chamber? Given that we keep being told that the next election is in 2022, is the Secretary of State committing the Government to at least matching EU regulations until then?

Given that the statutory instrument process is being used to weaken workers’ rights, as we saw recently with the denial of access to European works councils, what makes the Secretary of State believe that we should trust the Government on this? Will he, as a gesture of good will, table an amendable motion on the Government’s good work plan that will allow Members to strengthen regulations, particularly around zero-hours contracts and their elimination and sorting out workers’ status?

[Greg Clark]

On the good work plan, we will be introducing an employment Bill and it will of course be amendable, in the manner of legislation. We are provided, though, with a more immediate opportunity: that Bill is for the next Session, whereas I very much hope that the withdrawal Bill will be available during the weeks ahead and provide that immediate opportunity to express our determination to apply the commitment that the Prime Minister made on this issue.

The hon. Gentleman mentions the measures on the gig economy that are being contemplated by the European Union. Actually, that is a fine example of what I said earlier: those measures follow the commitments that we have made in the good work plan, and they are now making their way through Brussels. We were in advance of that. As I made clear in my statement, both those EU directives would go through the procedure that I described and would be available to the House, if Members thought there was anything extra in them. Actually, though, we think the directives are in many respects modelled on our own proposals.

On the ability of this House to enforce high standards, I say that that been the tradition. My experience as a Minister at European Councils over recent years is that our record of high standards when it comes to workers’ rights, employment protection and health and safety is looked at with admiration by many of our counterparts across the European Union. This allows us to continue that leadership.

[Rebecca Pow (Taunton Deane) (Con)]

I welcome this statement and the proposed clauses therein. As my right hon. Friend has been touching on this matter, does he agree that it is often the UK rather than the EU that has led the way not just on workers’ rights, but on environmental standards, and that we should be proud of that? Will he confirm that today’s announcements will ensure that we continue with these high standards in both areas and that we give due regard to any strengthening of environmental protections and regulations by the EU once we leave?

[Greg Clark]

My hon. Friend is quite right. Again, the provisions adopted by the Climate Change Act 2008 were not required by the European Union. They were a set of decisions that were taken by this House, and that has been our record. The proposals that I have set out allow us to continue to do that, while making sure that the House is not only properly informed but required to make an explicit determination that, if there are new policies that are adopted and directives that are proposed, they are debated and considered in this House. That seems to me to be a good mechanism to ensure that we are always aware of what is being done in the European Union after we have left it.

[Caroline Flint (Don Valley) (Lab)]

Madam Deputy Speaker, you and I remember doing an all-nighter in this House when the Labour Government took through the national minimum wage. In fact, we were here all night long, until 9 o’clock in the morning, because both Conservatives and Liberal Democrats filibustered and voted against the national minimum wage. I am glad those days are behind us—at least the all-nighters. I do not need lectures from anyone about being wary of the Conservatives, but may I welcome the statement today by the Secretary of State and the response by the shadow Secretary of State, my hon. Friend the Member for Salford and Eccles (Rebecca Long Bailey), as we try to forge assurances enshrined in law to protect workers’ rights as we leave the EU? May I press the Secretary of State to say something more about how we will ensure that any changes on workers’ rights and health and safety are consulted on and that they are not cherry-picked by a future Government? May I also support the concerns of my hon. Friend about the right to judicial involvement for workers who want to make sure that those rights are upheld?

[Greg Clark]

I am grateful to the right hon. Lady for having initiated this conversation through her amendment to the previous motion, and I think a fruitful discussion has come from that. On the ability to cherry-pick those measures that are adopted by the European Union that might find favour with the Government but not those that do not, the requirement would be to report everything that the European Union has adopted during a six-month period and for the Government to have to make a statement in respect to all of those measures. The motion that would then be required to be put before the House would be amendable. The Government might say that they intended to implement one measure, to apply in a different way another, but to reject a third. That motion would be amendable, so the House could alter the Government’s intention and express its view directly. As for the direct access for workers to these procedures, I made a commitment to the hon. Member for Salford and Eccles (Rebecca Long Bailey) that we would work together to see what can be done on that, and I am sure that the right hon. Lady will want to be part of those conversations.

[Mr Clive Betts (Sheffield South East) (Lab)]

I actually whipped the minimum wage Bill through Committee on that occasion, so I well remember Conservative hostility to it.

What the Secretary of State is really promising today is future consultation and future opportunities for votes. Looking behind him, I do not see a great deal of commitment from those Benches to such measures. Why can he not go further? Why can he not agree to put a commitment into the withdrawal agreement and the treaty that the UK will never fall behind EU minimum standards on workers’ rights either now or in future? I know that he has mentioned parliamentary sovereignty and not binding future Parliaments but, historically, Governments have negotiated treaties and Parliaments have approved them and those treaties are binding on future Parliaments until they choose to withdraw from them. Why can we not have that sort of arrangement?

[Greg Clark]

We are talking about legislation here, not the treaty, and the withdrawal agreement has already been established. In the future economic partnership, there is a negotiation to be conducted—it is specified there—on our level of alignment when it comes to workers’ rights, but this is in advance of that. This provides an opportunity at the point of withdrawal to give Parliament the ability to make sure that it takes an informed view of whether it wants to continue to be aligned. That is a valuable opportunity. The hon. Gentleman says that we should do it now with the treaty. That is part of the next phase of the negotiations. It is taking all the Government’s efforts to conclude the withdrawal agreement, without being able to conclude the future partnership in the next few weeks. But this is an important opportunity to establish, in primary legislation, a requirement properly to consider all new regulations that would come from the European Union and to assess the compatibility of legislation that we make in this House with that of the rest of the European Union. That, it seems to me, is a valuable opportunity.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Let me start by echoing the warm words of the Secretary of State about Kumar Bhattacharyya. The Jaguar plant in my constituency is open, employing more than 2,000 workers, in no small way due to his herculean efforts over many years to turn around Jaguar Land Rover.

In my previous being, on behalf of the Transport and General Workers’ Union, I took the case of the Eastbourne dustmen all the way to the European Court of Justice because a Conservative Government refused to apply the acquired rights directive to 6 million public servants. We won and TUPE was extended to those 6 million public servants. In future, however, there will not be the same enforcement mechanism. The trade union movement has spoken with one voice today. Frances O’Grady said that this will not protect rights and that there is nothing to stop future Governments from tearing up the legislation. She added that no one should be “taken in” and that our rights are “still under threat.” Does the Secretary of State understand that residual concern and that, crucially, unless the Government go significantly further with regard to legally enforceable rights, not just depending on the whims of future Governments, she is right: these guarantees are worthless?

[Greg Clark]

These rights will be enforceable by the UK courts. I meet Frances O’Grady very regularly. As I said to the shadow Secretary of State, I recognise that the TUC has a different preference, which is to continue to embed European rights directly and to have them enforced by the Court of Justice of the European Union. That is a different approach. In my view, it is not compatible with Brexit. Therefore, we are looking for a way in which this House, this Parliament and the UK courts can provide the guarantees that I think everyone in this House wants to give.

[Gloria De Piero (Ashfield) (Lab)]

Trust is a big issue here. In July 2016, the Prime Minister told the nation:

“I want to see changes in the way that big business is governed…we’re going to have not just consumers represented on company boards, but workers as well.”

Can the Secretary of State confirm that that promise to workers was broken?

[Greg Clark]

No, what the Prime Minister set out in that speech was to have the voice of workers represented in the boardroom. The action that we have taken in requiring businesses to establish a worker representative, or to have a non-executive director with the function of representing workers, or to have a works council with an influence on the board, was something that I was proud to set out in furtherance of the Prime Minister’s assurance.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I am sure that the Secretary of State can see that there is a little bit of a credibility gap to close. He said in his statement that the Prime Minister has given a commitment that Brexit will not be allowed to erode workers’ rights, so can he explain why both he and the Prime Minister last week voted in favour of statutory instruments that do exactly that?

[Greg Clark]

I am very proud of the record of this country and this Government in advancing rights in the workplace. The “Good Work” report by Matthew Taylor established, way before many other countries, a means of ensuring changes to UK law around the platform economy and the gig economy to ensure that people are not disadvantaged by these new platforms. The Prime Minister and I have both given that commitment. In deference to some of the scepticism that the words of the Prime Minister should be sufficient, this parliamentary mechanism to enshrine a degree of scrutiny and give this House the ability to insist that that non-regression is abided by is the basis of the amendment that was proposed, and that we are accepting and acting on today.

[Ann Clwyd (Cynon Valley) (Lab)]

They say that the Secretary of State is a very nice man. I do not know him. I am sure he is. But I do not trust the gang that he is part of.

I was a Member of the European Parliament from 1979 to 1984. Before that, I took a petition to the European Parliament in ’77, arguing for equal rights for men and women. I then became a member of the employment committee in the European Parliament, and I am glad to say that some of the things in that petition became law because of the European Parliament, not because of this place. You will know very well, Madam Deputy Speaker, that I was a shadow Employment Minister when the Opposition were working on the minimum wage. I know how hard we had to fight every inch of the way, because we were told that that was not possible, that it would cost jobs, that industry would not be able to afford it, and so on.

When there were big job losses in steel and coal, I was an MEP for one of the affected areas, and I took a group of steelworkers to Brussels to meet the Commission. The big criticism of the Government at that time was that the situation here was unlike that in Germany, where steelworkers were also losing their jobs, but every man in the steel industry in the Ruhr had another job to go to. In this country, there was no safety net. The criticism then was that there was a lack of social policy in this country. Why should I have faith that things have changed when I hear that the number of factory inspectors has diminished? If we do not have factory inspectors, we do not have people looking at the limitations in the industries. I would like to believe the Secretary of State, but I am sorry; I do not.

[Greg Clark]

I am grateful to the right hon. Lady for the compliment that she paid me. I would reflect on the facts. She mentioned that introducing the minimum wage was a fight. This House is used to having fights and campaigns. The purpose of this Chamber is to have crusades that are successful. She will know that, far from that innovation having been rescinded, it was a Conservative Government who introduced the national living wage, which was the biggest pay increase for low-paid workers in 20 years. She should take confidence in that.

The right hon. Lady refers to drawing these protections from the European Union. Once we leave the European Union, the basis for a framework of workers’ rights will obviously not be there, and the alternative is that there would simply be no reference to what is happening in the European Union; that would be the default. We are responding to some helpful suggestions from the right hon. Lady’s colleagues that this House should keep a close eye on what is happening in the rest of Europe and that there should be an ability for the House to act on that. That is a good idea. I cannot say that it was my idea originally—it was brought to my attention—but when we recognise a good idea, I think we should back it.

[John Mann (Bassetlaw) (Lab)]

I recall, as an MP, taking a delegation of miners’ leaders to Brussels to argue for jobs and investment, but we were blocked by the state aid rules that the European Commission enforced on us under a Labour Government. That is why Harworth colliery in my constituency closed.

I welcome the Secretary of State’s openness in his statement—both to amendments from Labour Front Benchers over the next few days, if there are precise amendments and, if they are not agreed, to the ability to table amendments to the withdrawal Bill that can be voted on by Parliament.

I negotiated the derogation, under the Labour Government, for one section of workers from the Work at Height Regulations 2005 because of the way in which the Commission framed the legislation. When it comes to health and safety, will there be automatic harmonisation—in other words, we accept everything that comes, regardless of its suitability to specific industries and groups of workers? When it comes to health and safety and sometimes environmental standards, that has been a fundamental issue, and it would be one if we had direct harmonisation.

[Greg Clark]

I am grateful to the hon. Gentleman for his work in crafting this proposal, and I repeat the commitment to continue to work together as the draft clauses become clauses that are laid before the House. The procedures of this House allow substantial debate of those clauses in Committee and on Report. I agree with his assessment. It is not the case that every regulation proposed by the European Union is ideal and well suited to our circumstances. From my experience in European Councils, there is a process that tries to apply a set of rules in many different countries and economies that may not actually be the best for the UK economy. The procedure that the hon. Gentleman has given us the ability to discuss today provides this House with a means by which to consider what the best form of regulation is, suited to our circumstances and respecting the sovereignty of this House and this Parliament.

[Madam Deputy Speaker (Dame Rosie Winterton)]

This is obviously an extremely important statement, but there is quite a lot of other business to get through this afternoon, so shorter questions and shorter answers might be in order.

[Alison McGovern (Wirral South) (Lab)]

The Secretary of State speaks well and everybody wishes to listen to him. However, not all his colleagues are of the same mind. Before Christmas, the Attorney General stood at the Dispatch Box and boasted that the non-regression clauses in the deal are

“not enforceable either by the EU institutions or by the arbitration arrangements under the withdrawal agreement.”—[Official Report, 3 December 2018; Vol. 650, c. 559.]

So why on earth should we trust these clauses?

[Greg Clark]

The Attorney General was making a statement of fact that the provisions in that agreement are not covered by that arbitration mechanism. That is a statement that accurately reflects the reality, which is one of the reasons why availing ourselves of the opportunity to have a parliamentary mechanism to act on and see implemented that non-regression commitment—putting it in the hands of this House—is especially valuable.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

The Secretary of State will accept that there is a lot of scepticism among Opposition Members about the Government’s integrity on this issue, and the fact that the trade unions were invited in so late in the Brexit process only fuels that. As he says, we have never solely relied on the EU for workers’ rights and legislation in this country, and when we leave the EU we will need a framework within which to work, so his statement is welcome. Other issues such as electronic balloting are important to the unions. Have they featured in his recent meetings with the unions? How would that demand, and others, fit into his attitude to discussions and communications with the unions in the context of his statement?

[Greg Clark]

I am grateful to the hon. Gentleman for what he says. Of course, I meet the unions—both the TUC and individual unions—very regularly. My responsibilities there go beyond the matters we are discussing today, which are expressly about the European Union. The issue of balloting is outside of discussions on the European Union. It is important to have a good relationship with trade unions. When good ideas are put forward, whether they come from his side of the House or from the trade union movement should not prejudice their ability to be considered fairly and taken forward.

[Jo Swinson (East Dunbartonshire) (LD)]

The Business Secretary knows, as I do, that he has Conservative colleagues who would like to see workers’ rights diluted or swept away in the name of deregulation, and—who knows?—one of them could be Prime Minister before long. Will he therefore confirm that the mechanisms he has outlined could be repealed by a future Government passing primary legislation? Is it not true that exchanging enduring EU protections on the environment and workers’ rights for these flimsy mechanisms is like trading in a car that has a lifetime guarantee for a lemon without a log book just because the floor mats are thrown in?

[Greg Clark]

I disagree with the hon. Lady. I would say that there are far more of my colleagues who recognise the benefits for the UK of being a country and a jurisdiction that is associated with high standards rather than a race to the bottom, and that that is the way we will prosper as a country. I think she should have a little more faith in that.

The hon. Lady talks about the framework that the European Union offers. We are leaving the European Union—I recognise that she would rather we were not—so the choice before us is whether, in leaving, we have no reference to anything that is done, now or in future, in the European Union, or we create a mechanism that allows this House to see what is going on and to be able to act on it, bolstered by the statutory requirements on any Minister, now or in future, to pay due regard to the statements that are made in terms of compatibility.

On the hon. Lady’s point about a future Government being able to repeal the whole lot, she knows enough about the British constitution to know that that is available for every law, in every circumstance, by every House of Commons following every election.

[Melanie Onn (Great Grimsby) (Lab)]

I cautiously welcome the statement by the Secretary of State. I think that we owe it to him to recognise the sincerity with which he has approached the discussions with our Front Benchers, with other Labour Members and with trade unions to try to seek some form of compromise—because that is what this is. It does not meet the gold standard of my private Member’s Bill—I recognise that—but there is much to be welcomed, including the facility of an amendable and votable motion. However, there remains a fundamental issue of trust that he cannot have failed to notice, and I suggest that he may need to do further work to try to reassure more people, specifically, perhaps—this is one of the issues that the TUC has raised—on the fact that statements from the Government might be made only in relation to primary legislation, whereas many employment changes come through secondary legislation. What assurance can he offer to the TUC?

[Greg Clark]

I am grateful to the hon. Lady for what she says. As I said to the hon. Member for Salford and Eccles (Rebecca Long Bailey), most of these rights derive from primary legislation. We will see whether there is an ability to provide the assurance that the hon. Member for Great Grimsby (Melanie Onn) seeks.

I am grateful to the hon. Lady for the contribution made by her private Member’s Bill. She has done the painstaking work of producing a great schedule of directives to which her Bill would apply. I propose—I hope she will not mind—that we plagiarise that and introduce it as the basis for our list of directives so that we can, if not replicate it in all respects, at least capture the spirit of her Bill.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I thank the Secretary of State for saying that he recognises the abuse by “a small number of firms, in a small number of industries”, but I do not agree with the use of “small”. I think that should be “huge”, “large”, or “common practice”. Will he give a level playing field to the workers in these industries by stopping zero-hours contracts?

[Greg Clark]

I will not do that, because one of the conclusions of the Matthew Taylor report was that most people, of the small—and, indeed, shrinking—number of people on zero-hours contracts welcome that flexibility. The hon. Gentleman will know that many Labour councils up and down the country have casual workers on those contracts and say, in terms, that they are an important part of what their workers want.

However, I do agree with the hon. Gentleman on enforcement. A number of firms are doing such things, but they are not typical, by any means. Some of us will have read about some of the abuses in the garment industry in and around Leicester, for example. These simply cannot be allowed to continue without the steps being taken to restore confidence to those workers that their rights will be respected. That is the intention behind what I have set out in terms of strengthening and better resourcing our enforcement mechanisms.

[Louise Haigh (Sheffield, Heeley) (Lab)]

Fresh in the minds of those of us who feel scepticism about the commitments made by the Secretary of State and the Prime Minister will be the fact that his party, in coalition with the Liberal Democrats, introduced employment tribunal fees, which were ruled unlawful by the Supreme Court, largely because of their hugely disproportionate impact on women bringing cases on maternity discrimination. Can the Secretary of State confirm that, contrary to comments made by the permanent secretary at the Ministry of Justice, his Government have absolutely no plans to reintroduce employment tribunal fees?

[Greg Clark]

The hon. Lady is a little churlish in ignoring some other examples. I would have thought she would welcome, for example, the introduction by a Conservative-led Government of the national living wage, which has made a big difference to many low-paid people across the country. Clearly, the judgment that was made by the Court struck down those fees. We will respect the judgment of the Court in the proposals that we make as we respond to it.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I listened to what the Secretary of State had to say, but the fundamental issues remain the same. This Government’s Brexit deal fails to protect jobs, living standards, and workers’ rights. I am sure that he will tell me otherwise, but if he is so confident that this is the right deal for our country, why will he not let the people decide and have the final say on it?

--- Later in debate ---

[Greg Clark]

I can report to the hon. Lady that employers, including in her constituency, are very anxious that we should get on and approve this deal because, as I said, the best right that a worker has is the right to work. The concerns that come from the uncertainty of not agreeing a deal that has been endorsed by employers is giving cause for concern to many workers up and down the country. I hope that in the days ahead, as well as advancing this package, which will provide a means for us to have regard to and take decisions on workers’ rights, and as we see what happens in the rest of the European Union, we will also act to safeguard the jobs of workers in her constituency and mine by approving the deal.

[Stephanie Peacock (Barnsley East) (Lab)]

The Prime Minister previously told the House that one step the Government were taking was to abolish the so-called Swedish derogation, but can the Secretary of State confirm that in the regulations laid before the House today, agency workers will be forced to wait until 2020, at the earliest, for equal rights in the workplace?

[Greg Clark]

Having made the commitment to abolish the Swedish derogation, which previous Labour Governments signally failed to do, we have brought forward, at the earliest opportunity, a statutory instrument to do that. I have had representations from the trade unions as to the timing, and we will reflect on that. However, I think that the hon. Lady, being fair-minded, would acknowledge that we have brought forward the necessary legislation very quickly in response to the policy commitments that we have made.

[Ruth George (High Peak) (Lab)]

As well as echoing other tributes paid today, I would like to pay tribute to Lord Davies of Coity, who died on Monday. He was a doughty champion of workers and workers’ rights for many decades.

Problems with enforcement of employment rights are not just in particular areas, but are widespread and particularly affect young workers, careworkers and catering sector workers, many of whom work in my constituency and have few other options for employment. I welcome the Secretary of State looking again to expand the enforcement of employment rights. Will he commit to group cases being taken to tribunal and to third-party representations being made to HMRC about the minimum wage?

[Greg Clark]

First, I echo the hon. Lady’s condolences. She tempts me to go beyond my jurisdiction. My portfolio is pretty broad, covering energy, industry and the industrial strategy, but she refers to matters that are, properly, for the Ministry of Justice. I am happy to talk to the Lord Chancellor and meet the hon. Lady if she would like to talk about such grouping of cases.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Has the Secretary of State secured the endorsement of any trade unions for his proposed course of action? If not, what does he propose to do to secure it?

[Greg Clark]

My ambition is not to secure the endorsement of trade unions. We have had fruitful discussions. As I said to the hon. Member for Salford and Eccles (Rebecca Long Bailey), I respect the fact that the trade unions would rather things were done in a different way—namely, that we continue to import, as it were, directives and regulations from the European Union and have them enforced by the European Court of Justice. That is their preferred policy; I understand that. It is certainly not our policy. I do not think it is compatible with leaving the European Union. However, leaving the European Union and the opportunity to put in statute various measures, which will allow the House to consider actions that we take on employment rights, does not mean that we cannot establish agreement across the House and take the advice of the trade union movement, even though it might ultimately prefer a different solution.

Capacity Market for Electricity

Greg Clark Excerpts

Thursday 28th February 2019 Written Statements

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

Last week I informed the House that the European Commission had moved on to the next phase in their investigation of the GB capacity market. This is an important first step in restoring state aid approval for the capacity market as soon as possible.

On 19 December 2018, the Government consulted on a range of changes to the capacity market. These changes would allow for a capacity market auction to be held later this year for delivery in 2019-20. The consultation also covered how existing agreements would be managed during the current standstill period.

The Government have today published a response to that consultation. The vast majority of respondents supported the proposals to allow for an auction for capacity for winter 2019-20 to be held, with payments conditional on a positive state aid approval. They also supported the consequential changes to milestones required as a result of the auction being held later in the year than usual. There was also support for the proposed changes to the management of existing agreements to ensure that scheme obligations continue to be enforced in a pragmatic and proportionate way.

In the light of these responses I can confirm that the Government have today laid draft regulations for the approval of the House to enable these changes to be made to allow an auction to be held in summer 2019.

In our consultation, we also covered the issue of how suppliers can make provisions for suspended payments. In their response to the consultation, capacity market agreement holders identified the importance of them having confidence that they will receive their suspended payments in full after the end of the standstill period. They therefore favoured suppliers making adequate provision to make these payments. We have considered the consultation responses carefully and considered how to ensure that we can deliver this ambition in the most effective and timely way.

I can therefore confirm that the Electricity Settlements Company will establish a system to facilitate suppliers’ meeting their supplier charge liabilities during the standstill period. The inclusion of supplier charges within the price cap already means that all suppliers should be factoring this into their variable tariffs during the standstill period and making prudent provision to enable them to be paid immediately after the end of the standstill period. During the standstill period, the Electricity Settlements Company will:

issue a schedule of post-standstill supplier charges on a monthly basis setting out their liabilities apportioned according to the current formula based on suppliers’ demand in 2018-19. This will enable suppliers to manage their finances effectively;

accept payments against that schedule in an interest-bearing account.

Ofgem will continue monitoring the financial resilience of suppliers, including to understand how any suppliers that are not paying into the Electricity Settlements Company system are making suitable provision to cover their supplier charge liabilities.

Following the end of the standstill period the Electricity Settlements Company will:

invoice suppliers at the earliest opportunity for the full amount of outstanding supplier charges;

work with Ofgem to use a range of tools, including enforcement under the regulations, to ensure prompt payment of this invoice;

levy, in line with the existing regulations, interest on late payments;

pay capacity agreement holders their outstanding capacity payments in full.

We will shortly consult on regulatory changes that will be required to hold a T-3 auction in early 2020.

[HCWS1372]

Energy Capacity Market

Greg Clark Excerpts

Thursday 21st February 2019 Written Statements

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

As set out to the House in the statement of 6 December 2018, the European Commission was expecting to make its initial decision regarding the UK capacity market in early 2019. The Commission has today confirmed that it is moving on to the next phase of its investigation into the capacity market. This is an important first step as we work to reinstate state aid approval for the capacity market as soon as possible.

In its announcement the Commission confirms that the General Court of the European Union did not rule that the GB capacity market was incompatible with state aid rules. The Commission has also made clear that the Court ruled on procedural grounds. This was on the basis that the Commission should have opened an in-depth investigation on certain elements of the scheme related to participation by demand side response operators.

In accordance with the Court’s judgment, the Commission has therefore launched a further investigation focusing on particular elements of the capacity market. We understand that this investigation will cover past and future capacity payments, including deferred payments in respect of the standstill period. Since 2014 the Commission has approved state aid for six capacity markets similar to the GB scheme. We will continue to work closely with the Commission as its investigation progresses and will ensure that market participants are regularly updated.

Separately, the Commission has recently chosen to appeal the General Court’s judgment that it did not follow the proper process to conclude in 2014 that the capacity market was compatible with EU state aid rules. I can confirm today that the UK Government will be supporting this appeal. The appeal does not affect the Commission’s separate process for considering state aid approval for the current capacity market scheme.

[HCWS1351]

Honda in Swindon

Greg Clark Excerpts

Tuesday 19th February 2019 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement on Honda. This morning, Honda announced that future models of its Civic car, which are currently made in Swindon, will after 2021 be made in Japan. The Civic is the only vehicle made by Honda in Swindon, so the result of the decision is that the company’s manufacturing plant will close in 2021.

I am not going to understate what a bitter blow this is to the 3,500 skilled and dedicated workers at Honda in Swindon and their families, to the many more people and businesses who supply the plant, and to the town of Swindon, which has been proud to be home for 34 years to one of the best car factories in the world. It is a blow to the whole British economy.

The reason that Honda has given is its decision to accelerate the move to electric propulsion and to consolidate investment in its facilities in Japan. Following the entry into force of the EU-Japan free trade agreement earlier this month, tariffs for cars exported from Japan to the EU will drop from the current 10% to zero by 1 January 2026. Honda will then export from Japan, rather than from Britain, to Europe and the rest of the world. The company has stated that Bracknell will be retained as its European headquarters, that it will continue to base its Formula 1 operation from Britain, and that its research and development centre for electrification and connected and autonomous technologies will continue at Swindon.

Honda has announced an immediate consultation on the plan with the trade unions and suppliers. I have spoken with the trade unions, the local Members of Parliament, the leader of Swindon Borough Council and the chair of the local enterprise partnership. I will shortly chair, in Swindon, the first meeting of a taskforce, comprising those people and others, to do everything we can to ensure that the much valued Honda workforce in Swindon find new opportunities that make use of their skills and experience. We will work with the local community to ensure that Swindon’s justified reputation as a place of industrial excellence in manufacturing, technology and services is maintained and expanded.

In our automotive sector, we will work in close partnership with an industry that is going through a period of technological change and adjustment across the world that is greater than at any time in its history—a period of change that is disruptive and even painful for many, but in which Britain’s industry can emerge as a global leader if we back innovation in new sources of power and navigation. That is one of the four grand challenges of our industrial strategy, and the focus of our automotive sector deal.

I and many other colleagues in the House, of all parties, have worked hard over the past three years to make the case for investing in Britain, to investors in this country and around the world, despite the uncertainty that Brexit has put into the assessments of investors in Japan and around the world. We have secured investments during this time, from Nissan, Toyota, Geely, BMW, PSA, Aston Martin, Williams and many smaller firms. We have an international reputation for being a place to do business, with skilled, motivated staff, with access to innovation, especially in automotive, which is the best on the planet, and with a determination to make those strengths even greater in the years ahead.

This is a devastating decision that has been made today, and one that requires us to do whatever it takes to ensure that in the years to come Honda will once again, building on its continued presence here, recognise Britain as the best place in the world to build some of the best vehicles in the world.

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

I thank the Minister for advance sight of his statement. This morning’s news is absolutely devastating for the 3,500 workers in Swindon, their families and the wider community. It is absolutely devastating for the businesses in Honda’s supply chain and the tens of thousands of workers employed in them. It is a devastating blow to the automotive sector, to UK manufacturing in general and, indeed, to our entire economy.

A worker employed at Honda in Swindon for 24 years summarised the situation last night when he said that the Government are “completely incompetent”. I could not agree more. Honda’s decision is a damning indictment of the Government’s failure to support car manufacturing and ensure business confidence, with regard both to Brexit and to their so-called industrial strategy. Before Members on the Government Benches become too agitated, let me say that I understand that Honda’s CEO said this morning that the decision was unrelated to Brexit. However, the company’s statement specifically says that it wants to

“focus activity in regions where it expects to have high production volumes”,

especially of electric vehicles. The logical question is this: why does Honda no longer believe that the UK will have high production volumes, and why does it no longer have the confidence to invest here to make it so? As the Secretary of State has said, it will in future be exporting to the EU from Japan rather than from Britain.

The reason why the likes of Honda and Nissan began producing in the UK in the first place was that it was a good place to locate their manufacturing, so something must have changed. Could it be the Government’s botched Brexit causing chaos and uncertainty and undermining business confidence? The Secretary of State also alluded to the EU-Japan trade deal, which imposes zero tariffs at a time when we do not know what our tariffs will be. The likes of Airbus, Nissan, Ford and Jaguar Land Rover have all halted investment or slashed jobs as a direct result of that uncertainty. Nissan reversed its decision to build the X-Trail here only two weeks ago, JLR has slashed 4,500 jobs, and Ford has cut 1,000 jobs. Over the weekend, the senior vice president of Airbus said that a no-deal Brexit would be “catastrophic”, adding:

“We will have to look at future investments... There’re many other countries that dearly love aerospace.”

In fact, Honda itself warned last year that leaving the EU without a deal would cost the company tens of millions, so there can be no doubt that the Government’s reckless threats of no deal and prolonged uncertainty are having an impact on business decisions in the here and now, even if that is not in the top line of a press release. No deal must therefore be taken off the table and a firm commitment to a customs union and single market deal agreed.

Honda has also said that global trends and the move to electric vehicles were a factor in its decision. Could it be that the Government’s failure to support the transition to electric vehicles through their industrial strategy has augmented Honda’s decision? It wants to expand its electric vehicle production, which is something we all want, but we need that production to be here in the UK now, not used as a reason to close down plants in the wake of Brexit.

The UK has a world-class automotive sector and could be a world leader in electric vehicles, at the cutting edge of electric vehicle technology and research, but the Government have failed to invest to support the transition. I will give just one example. The Treasury pledged last year to support the switch to zero-emission vehicles with a £400 million fund for charging infrastructure, giving manufacturers the certainty to invest in production. Half of the money was to come from the taxpayer, with the rest matched by the private sector. However, one year on, the money that it was promised would be raised from the private sector has not been secured and no money from the fund has been invested.

The automotive sector is the jewel in our manufacturing crown. It supports highly paid, highly skilled jobs, it contributes enormously to our economy, and it has been an exemplar of the kind of industry that we need in the UK. But its future is in jeopardy, as has been shown so clearly in the decisions of recent weeks. Can the Secretary of State commit now to taking a no-deal Brexit off the table, agreeing a customs union deal and working with manufacturers and unions to support the transition in the market before it is too late? Can he offer Honda any incentives or reassurances that its investment here would be secure? After all, he did offer Nissan a sweetheart deal. Or is he happy to let yet another industry, and the communities who rely on it, fall by the wayside on the Conservatives’ watch?

[Greg Clark]

For over 30 years, Japanese companies investing in our automotive sector have been able to count on a bipartisan commitment to talking about the advantages of investing in Britain: our skills, our commitment to innovation and the efficiency of our operations. Members on both sides of the House know that I and my colleagues have worked intensively, including with trade unions, to ensure that we get investments that recognise those advantages. I hope that we can send to companies considering investment a clear determination, across both sides of the House, that we will continue to keep faith with that tradition of stability.

I think it was evident in my remarks that I share the dismay of the hon. Member for Salford and Eccles (Rebecca Long Bailey) at the decision and the consequences for the excellent workforce in Swindon and their suppliers. We will do everything we can to ensure that they have good opportunities in future.

The hon. Lady asked about Brexit. The company said that the decision was not about Brexit and clearly we must accept that. She asked about its market share. In truth, it has a small market share in Europe compared with the markets in which it said it was expanding. Those are the reasons that it has given. However, I have always been clear with the House that the motor industry, Japanese investors and particularly Honda have made it clear for many months that Brexit is an additional worry at a difficult time. They have been instrumental in shaping the deal that has been negotiated. If there is one message all of us in the House can give that they want to hear it is that the deal should be ratified.

Ford Motor Company said:

“A no-deal Brexit would be a catastrophe…It’s important that we get the agreement ratified that’s on the table at the moment.”

Aston Martin said of the deal,

“it’s obvious that… it meets the needs of all the requests we put forward as an industry and as Aston Martin”.

McLaren said that the withdrawal agreement would

“provide urgently-needed certainty and an implementation period that allows us to plan for the future”.

Toyota said:

“We welcome the announcement of a deal. It would provide business with the certainty”

that it needs. I could go on. The clear message from the automotive companies is that we should get on and ratify the deal.

The hon. Lady asked about the industrial strategy. She will know that our commitment to it, and through it to the future of mobility, has been at the heart of our policy and has been widely recognised. The £250 million investment in the Faraday challenge to make Britain the best place in the world for new battery technology has resulted in the national battery manufacturing centre being established in the west midlands. We already have the biggest-selling electric vehicle in Europe—indeed, one in five electric vehicles in Europe is made in Britain. The fact that Honda’s R&D facility will continue to be in the UK and that companies such as Ford are moving their R&D to the UK underlines the strategy. The London Electric Vehicle Company is making taxis powered by electricity, not just for London but for export around the world. Aston Martin has invested £50 million in its new electric engine facility in Wales. Cummings is investing £210 million in its R&D in the automotive sector.

The hon. Lady asked about the charging network: £200 million is being invested in new, fast-charging networks for electric vehicles. Our reputation for automotive innovation and exports is strong and growing. That is one of the reasons why it is particularly frustrating that Honda has made this decision, when other companies are recognising the fruits of those investments and investing in Britain.

The announcement comes at a time of disruption and change in the industry. Veterans of the industry say that this is the biggest period of change in most of their careers. That reinforces how right we are to invest in the future and in promoting Britain as a place to develop the next generation of vehicles. I hope that in the weeks, months and years ahead, the whole House will support us in promoting those advantages, not just for Honda, but for other companies that can invest in this country.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I accept, as the Secretary of State does, Honda’s statement that Brexit played no significant role in the decision. We must avoid a childish debate every time there is an industrial announcement, whereby one side or the other leaps on how far Brexit has been involved in complex decisions. However, the fact remains that when I served at the Department of Trade and Industry under Margaret Thatcher, and at the Treasury under John Major, I was involved in pursuing the policy of those Governments to draw foreign investment to this country to revive our manufacturing base by presenting Britain as the most attractive and business-friendly country in the European Union, through which companies could gain access to the single market. The Blair Government pursued that policy with equal vigour. As my right hon. Friend has just said, it is no good people ignoring the warnings of every leader of the car industry, most of our foreign investors and all our business leaders that we must seek to retain that reputation. Will he therefore confirm that, in line with the withdrawal agreement, we are pursuing a customs arrangement and a regulatory alignment that will not put new barriers in the way of trade with our biggest, most important market? If we fail to do that, there will be a succession of announcements of this kind, and Britain will cease to be of any particular attraction to international investors seeking a European market.

[Greg Clark]

I acknowledge my right hon. and learned Friend’s contribution as part of a succession of Ministers on both sides of the House who have given confidence to investors from Japan and around the world. A particular admiration has been accorded to Britain for the stability and predictability of our arrangements. In a turbulent world, the sense of continuity that we have been able to offer, especially to investors who invest for the long term—and any automotive investment is for the long term—is important. It is essential that we recover that.

It is also important that we listen to and respect the evidence of people who employ hundreds of thousands of our constituents. We have consistently done that. In my response to the hon. Member for Salford and Eccles, I set out the almost unanimous view of investors that the deal that has been negotiated meets their needs. That is not a surprise because they have been consulted during the negotiations. However, this is a moment when the House needs to reach a resolution. The Japanese ambassador is very active on these matters. He summarised his views in a letter to the UK and the EU:

“What Japanese businesses in Europe most wish to avoid is the situation in which they are unable to discern clearly the way the Brexit negotiations are going, only grasping the whole picture at the last minute.”

We should heed that advice. We have the opportunity to bring negotiations to an orderly conclusion. I hope that, for the sake of jobs in constituencies throughout the country, we will do that.

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

Our thoughts on these Benches are with the people of Swindon, those whose jobs are at risk and those in the supply chain who face further uncertainty. Unite the union made the point:

“The usual formula is one job in the plant equates to four in the supply chain and the local economy. If closure is confirmed, it will rip the heart out of this area.”

I welcome the taskforce that the Secretary of State has set up. Will he assure the House that he will regularly communicate its outcomes to hon. Members?

We have known for some time that the EU was making tariff-free trade for Japanese car makers possible and shipping from Japan viable. Does the Secretary of State therefore agree that it is important that the Government now communicate a similar zero-tariff ambition for UK-EU car exports?

Some of us are very concerned that no deal will do irreparable damage to the manufacturing sector throughout the UK. What is the Department doing to protect the UK’s manufacturing sector?

[Greg Clark]

I am grateful to the hon. Gentleman for his remarks and the tone in which he expressed them. I will certainly keep the House informed about the taskforce’s progress. We should bear in mind that there are two years in which the workforce will continue to be employed. It is important that the sales in Swindon should continue so that their jobs can be secure. During that time, I want to find out whether in the first instance Honda, recognising its continued commitment to research and development, will see that it has an ideal facility in Swindon in which to build the next generation of vehicles,

The fact that there is a modern plant and a workforce in Swindon who have an international reputation for being excellent and innovative is a message that we should send out loudly and clearly. At a time when there are skill shortages across manufacturing industry, there is absolutely no reason why the opportunities made available to the workforce should not give them equally promising and rewarding careers in advanced manufacturing, such as they have enjoyed in Swindon. I will certainly update the House on the progress on that.

The hon. Gentleman asked about the trade agreement with Japan. My view is that the best outcome—indeed, the essential outcome—is that we should roll over, and continue to be able to benefit from, the trade arrangement that has been negotiated between the EU and Japan, unless and until we negotiate an alternative that is at least as good.

[Sir Michael Fallon (Sevenoaks) (Con)]

Is not one of the lessons from this about the power and scope of the EU-Japan trade agreement, in contrast to the continuing uncertainty for our businesses here and for overseas investors —two and a half years after the referendum—about what the future terms of our trading relationship with Europe are actually going to be? Will the Secretary of State tell us why it is taking so long to put in place our trade agreements with countries such as Japan, Canada and Australia?

[Greg Clark]

I agree with my right hon. Friend. Although Brexit uncertainty was not cited as one of the factors in the decision, it is evident in investment decisions in the whole industry. I know from regular conversations with investors that it does bear on their minds. Last time I was in the House, I mentioned that Nissan has said that the political uncertainty over a no-deal Brexit, or what kind of Brexit there will be, is “casting a shadow” over its future. When investors that have no political motivation to make such statements issue that advice and warning, we should attend to it. It seems to me that we have the information necessary to conclude these negotiations, and in my view we should do it during the days ahead.

[Hilary Benn (Leeds Central) (Lab)]

This is the latest and the most serious in a series of announcements and warnings from the UK car industry about its future operations in this country. I know and the House knows that the Secretary of State fully understands what a dangerous moment this is for the future of that industry. May I therefore simply wish him, and some of his colleagues whom I can see on the Government Benches today, well in persuading the Government to abandon the idea of a no-deal Brexit? He knows probably better than anyone else in this House what a disaster that would be for the future of British car manufacturing.

[Greg Clark]

As I said in my statement, this is a time of change and challenge, but also of opportunity for the automotive sector. I have been proud that in the two or two and a half years since the referendum, notwithstanding the concerns that have always been expressed to me—it is the first thing people have said when I have met boards—we have won every single competitive automotive decision that has taken place in Europe. It is frustrating that this and the X-Trail have gone to Japan, but I think all of us take pride in the fact that the efficiency and the potential of the British manufacturing sector have been recognised in that way. However, it is apparent, as my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) has said, that although a degree of uncertainty was expected after the referendum decision, this has now got to the point—as I am told time and again in boardrooms in this country and around the world—where the time taken is unconscionable and if we do not act, we will see decisions not simply deferred but moved elsewhere.

[James Gray (North Wiltshire) (Con)]

I am confident that I speak on behalf of my hon. Friend the Member for North Swindon (Justin Tomlinson), my hon. and learned Friend the Member for South Swindon (Robert Buckland), my right hon. Friend the Member for Devizes (Claire Perry) and my hon. Friends the Members for Chippenham (Michelle Donelan) and for Salisbury (John Glen). The constituents of all of them may be affected by this matter, but they are all unable to take part in this statement because of their roles as Ministers.

Across Wiltshire, we are deeply concerned about the 3,500 job losses and potentially more in the supply chain. May I therefore volunteer to take part in the excellent taskforce that my right hon. Friend the Secretary of State has announced? I think that is a very useful step forward. Will he join me in rejoicing at the fact that the economy of Wiltshire is actually extremely strong at the moment? The unemployment figures announced this morning are the lowest there have ever been, and we have had huge growth particularly in electric car manufacturing and our high-tech industries across the M4 corridor. I hope he will join me in thinking that we will therefore be able to find useful employment for all these people in good time before the plant closes.

[Greg Clark]

Like my hon. Friend, I pay tribute to our colleagues, my hon. Friend the Member for North Swindon, my hon. and learned Friend the Member for South Swindon and my right hon. Friend the Member for Devizes, whose commitment to the success of the economy in Wiltshire is unflagging.

My hon. Friend the Member for North Wiltshire (James Gray) is absolutely right to refer to the fact that the success of Swindon and the whole of Wiltshire has been notable. In fact, one of the problems that Honda has occasionally discussed with me in the past is its struggle to recruit the volume of labour that has been required. It is a matter of sadness that that will not be a problem for the future, given this decision. He is right to emphasise that the demand for the kind of skilled labour that exists in that county is very strong. Through the taskforce, we will do everything we can to make sure that employers are matched with people with skills.

[Richard Burden (Birmingham, Northfield) (Lab)]

Brexit may not have been the direct cause of Honda’s announcement, but, to echo the wise words of the right hon. and learned Member for Rushcliffe (Mr Clarke), does the Business Secretary agree with me that it is an absolutely key part of the context in which Honda and other major car manufacturers are making decisions on where to invest in the generations of vehicles that will transform this industry? The harsh reality is that Britain’s reputation as a stable place to do business and as the gateway to Europe is being undermined before our eyes.

The Business Secretary mentioned the EU-Japan trade agreement. Will it not be a ludicrous situation if we end up leaving the EU without a deal at the end of March, or if we end up on World Trade Organisation terms after a transition in 2020, and tariffs are put on cars exported from Honda in Swindon to the EU that do not apply to cars exported from Japan to the EU? Does that not indicate that, whatever else happens in the coming weeks, the option of a no-deal Brexit has to be ruled out once and for all?

[Greg Clark]

I agree with the hon. Gentleman when he describes the reality of how the automotive industry successfully trades in this country. It is based on a just-in-time system of production, which has been very well calibrated over the years to make us very efficient. That has been communicated not just to me but to Select Committees of this House. It is clear, and it has been much debated, as the hon. Gentleman will know from his constituency experience. That is what we must agree, and it is what has been agreed—the ability to continue to trade without tariffs, without rules of origin checks, without quotas and with a minimum of frictions—which is why the companies have endorsed the deal. I agree with him that to leave on WTO terms would be a hammer blow to a foundational industry in this country. However, he has it in his gift, as do all Members, to avoid that by coming together in the days ahead to agree a deal.

[Suella Braverman (Fareham) (Con)]

While this is awful news for the employees at Honda and for the communities affected—I have no doubt that the Secretary of State and his team will be doing all they can to support Honda and those affected during this time—does my right hon. Friend agree or disagree, for the sake of those who are failing to understand, with the senior vice-president of Honda, Ian Howells, who has confirmed that this decision has nothing to do with Brexit, is not driven by Brexit and is not because of Brexit?

[Greg Clark]

Of course I completely respect—everyone has to respect—the reasons that have been given for the decision, but I am pretty familiar with this industry and others, and there are a number of factors. I report to my hon. Friend truthfully that on the minds of many investors around the world is an anxiety caused by a lack of knowledge as to what our trading relationships will be with our most important neighbours in just over a month’s time. That is something that we should resolve; if we do, I think we can look forward to a resumption of significant investment and to statements that are happier than the ones I am able to give today.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I thank the Secretary of State for advance sight of his statement. I wish him, and all those with whom he will be working, well as they try to turn this unhappy set of circumstances around. Let us not forget that 3,500 house- holds are facing a pretty bleak future at the moment.

The point the House needs to address today is that this is not a one-off incident—it comes on the back of similar announcements from Nissan and Jaguar Land Rover. It raises serious questions about the future viability of our automotive sector as a whole. This is precisely the sort of thing the Secretary of State’s industrial strategy was designed to address. Why is it that, at the moment, it does not seem to be working?

[Greg Clark]

The decision we took to position this country at the leading edge of the new automotive technologies—battery technology and connected and autonomous vehicles—is evidently the right one, because the pace of change, as has been made clear by Honda today, is faster than even it expected just two or three years ago. If we sustain our commitment through the industrial strategy to make sure that we are the place in the world associated with the leading edge of battery technology and its manufacture—the Faraday challenge and the Faraday Institute are prime examples of that—there is a very prosperous future for that industry. However, it also occurs to me that, in a world in which there is such turbulence and so many changes, we should do everything we can to neutralise other sources of uncertainty. So we need to do both.

[Mr David Jones (Clwyd West) (Con)]

My right hon. Friend will know that, sadly, Honda today also announced the closure of its plant in Turkey. Given that Turkey is, and will remain, part of the customs union, does he not agree that we should be careful about accepting the advice of those such as the hon. Member for Salford and Eccles (Rebecca Long Bailey) that we, too, should join the customs union, as that would clearly have made no difference to Honda’s decision?

[Greg Clark]

My right hon. Friend is correct in pointing that out. As I said in my statement, the company has decided to consolidate its production, in this instance, in Japan, and the consequences for Turkey and the Swindon plant are the same. That also draws attention to the fact that free trade agreements, important though they are, do bring about changes themselves and are associated with decisions that sometimes can be difficult.

[Mr Ben Bradshaw (Exeter) (Lab)]

This is a devastating blow for the south-west, Swindon and the wider UK manufacturing base. Does the Secretary of State not accept that it is a fact that our not being in the new Japan-EU free trade agreement, and therefore not being able to guarantee future tariff-free trade between our country and Japan, puts us at a disadvantage when people are making these sorts of decisions? I was encouraged by the replies he gave to my right hon. Friend the Member for Leeds Central (Hilary Benn), who chairs the Brexit Committee, but when will he and other of the more sensible Ministers in the Government, many of whom are flanking him today, act to stop the Prime Minister pursuing this reckless, crash-out no-deal Brexit strategy?

[Greg Clark]

It is evidently the case that we should be part of a free trade agreement with Japan, and we should avail ourselves of the one that has been negotiated with the EU, unless and until it is replaced by a better one. Notwithstanding the disruption that free trade can sometimes cause, I am strongly of the view that, as a nation, we prosper from being a nation of free trade, and I think the right hon. Gentleman agrees. I think it has been evident in my replies to hon. Members on both sides of the House that I regard it as an urgent requirement to conclude our discussions. That will require compromise on both sides of the House, but that is something that this House has achieved over the years; indeed, the rest of the world has admired this House of Commons for coming to pragmatic decisions that are in the interests of the long-term reputation of this country.

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

The Society of Motor Manufacturers and Traders has said that the industry is on red alert. Will the Secretary of State ensure that his Department is in full dialogue with the SMMT on the issues that it needs to address to reassure the rest of the automotive industry? Although these 3,500 jobs are incredibly important and skilled, there is also a very big supply chain, which involves many other companies, other than just directly Honda. Will my right hon. Friend, in making up his taskforce, ensure that my right hon. Friend the Member for Devizes (Claire Perry), my hon. Friend the Member for North Swindon (Justin Tomlinson), my hon. and learned Friend the Member for South Swindon (Robert Buckland) and my hon. Friend the Member for Chippenham (Michelle Donelan) are very much involved?

[Greg Clark]

I will indeed, and I am grateful to my right hon. Friend. I and my colleagues are in frequent dialogue with the SMMT and all the companies that are part of the industry. It seems to me—he knows this from his time in the Department—that having a close understanding of the requirements of job creators is an essential feature of a successful industrial strategy. We know from them what is required: a commitment both to invest in the next generation of vehicles to make sure that the skills of the workforce continue to be invested in and to work with businesses to ensure that their environmental performance meets increasing international requirements.

[Alison Thewliss (Glasgow Central) (SNP)]

What assessment has the Secretary of State made of the extent of the supply chain? Is he aware of all the companies that supply Honda? What specific support will he put into each of those companies to make sure that people in those industries do not also lose their jobs as a result of this decision? What further support can be put into the local economy, which may also suffer, although that may not necessarily involve supply chain companies?

--- Later in debate ---

[Greg Clark]

The hon. Lady makes an important point. It is, of course, the direct employees of the company who are affected, but also the employees of companies that supply it. I have that very much in mind. In the work of the taskforce, I will strongly recommend that they are—there is no doubt they will be—prominent in its concerns. Through the Automotive Council, which I chair, we work with the supply chain right across the automotive sector, and that will be a prominent part of our discussions, plans and decisions over the weeks ahead.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

May I say that the loss of Honda in Swindon will be keenly felt throughout the whole of Wiltshire? May I also urge the Secretary of State to be very careful about imputing motives to companies that might be relocating from the UK or to the UK? Honda is entitled to be taken at its word, and it has said unequivocally that this decision has nothing to do with Brexit.

[Greg Clark]

I do take it at its word; it is only fair to do so. However, as it departs, I reflect on the words it has given to me and to Committees of this House based on its experience of the requirement to avoid changes in our trading relationship with Europe that would introduce frictions. It has said those words on the record, and they are as valid today as at the time when it said them during the weeks and months past.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

The news confirmed today from Honda will be hugely concerning for the thousands of employees in the automotive industry, as well as its supply chain, across the UK, including those at Nissan in my constituency. The Business Secretary is well aware that the UK automotive industry is facing a number of urgent challenges, including ongoing uncertainty around Brexit and the threat of no deal. There are just 38 days until we leave the EU. When will we have clarity on what the deal will be the day after?

[Greg Clark]

I agree with the hon. Lady that the environment in which investment decisions take place affect all businesses, not just those in the automotive sector. That is why I have taken pains to remind the House of what the leaders of the industry say, which is that we should conclude these matters on the lines of the deal that has been negotiated. It is in her hands to contribute to that resolution.

[Vicky Ford (Chelmsford) (Con)]

It is worth noting that the largest European market for electric vehicles is the Norwegian market, which is outside the customs union but has specific relationships for no rules of origin, tariffs or quotas. The second largest market is of course our own. Will my right hon. Friend confirm that the withdrawal agreement and future partnership would allow British manufacturers to have that same specific relationship with no rules of origin, quotas or tariffs?

[Greg Clark]

It will. This is one of the big advantages of the agreement. The industry and individual firms have been very clear that this is one of the reasons why they have endorsed it.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Today is a human tragedy for 3,500 workers in that great Swindon factory, yet there are those, such as Patrick Minford, who would say that the car industry should follow the coal mines down the path to industrial oblivion; and there are those in this House, such as the hon. Member for North East Somerset (Mr Rees-Mogg), who when confronted by the automotive industry’s concerns about, for example, frictionless trade and the impact of Brexit, say, “Fake news.” Does the Secretary of State agree with me that our 850,000-strong automotive industry is a world-class success story, and that nothing should be done that puts it at risk by those who would be oblivious to the consequences of their actions and take this country crashing out of the European Union on 29 March without a deal?

[Greg Clark]

I am very proud of our automotive industry. It has all the attributes the hon. Gentleman ascribes to it. I am proud of the workforce. I am proud of the workforce in Swindon in particular. This is no reflection on their calibre, their commitment and their ingenuity. Far from the automotive industry being an industry that we can or should do without, it is one of the prime opportunities we have. If we have some of the best brains on the planet looking at connected and autonomous vehicles, and inventing the next generation of batteries, why on earth should we not make the products of that ingenuity in this country? I am determined that we should do so.

[David T. C. Davies (Monmouth) (Con)]

Given that we have decided to ban all their vehicles from our roads by 2040 and that many Members on both sides of the House have called for that ban to be brought forward, what does my right hon. Friend think is more surprising: that some of these companies are thinking of relocating elsewhere or that so many MPs in this House seem to want to put the blame on Brexit?

[Greg Clark]

What I would say to my hon. Friend is that we are talking about Honda’s plant in Swindon and that most of its output is not diesel but petrol vehicles, which go all around the world. Automotive companies are increasingly reflecting the much more rapid global shift to new powertrains than was expected a while ago. I think advantage comes from being in the vanguard of that change, rather than being a laggard. That is why we, in the industrial strategy, are determined to make sure that we are at that leading edge and can be an example to the rest of the world.

[Helen Goodman (Bishop Auckland) (Lab)]

This morning a person who owns a firm in the supply chain wrote to me. He expressed his extreme dismay about the lack of a UK-Japan trade deal and he suggested that Business, Energy and Industrial Strategy Ministers talk to the 56 Japan-based firms in the north-east. He also sought a more active industrial strategy. I know about the Secretary of State’s Faraday initiative, but were we to have some really big infrastructure investment for electric vehicles, we might grow the domestic market, which would enable us to sell more here and leverage more exports on that basis.

[Greg Clark]

As my hon. Friend the Member for Chelmsford (Vicky Ford) said earlier, we are the second country in the EU in terms of take-up of electric vehicles. I do not think the hon. Lady will find anyone in the industry who doubts the commitment my colleagues and I make to our industrial strategy and advancing that leadership. That is noted not just in this country, but around the world. As I said earlier, it is frustrating that the timing of this decision by Honda does not allow it to avail itself of some of the fruits of that strategy.

[John Stevenson (Carlisle) (Con)]

Manufacturing represents about 20% of the Carlisle economy, which is twice the national figure, and many of those businesses export to Europe and to the rest of the world. Probably most important of all, they provide jobs, security and livelihoods for thousands of people who live in my constituency. Does the Secretary of State agree that we must do nothing that endangers that success? Does he further agree that he must ensure we continue to have access to our biggest export market, as well as a domestic environment that is stable and certain?

[Greg Clark]

I agree with every part of what my hon. Friend says. At a time of change and challenge for the industry, this is just the time to provide the certainty, commitment and enthusiasm about the future that will retain and attract investment from this country and around the world.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Those arguing that this announcement is in no way Brexit-related are insulting the intelligence of the workers in Swindon and those in the manufacturing companies along the supply chain. Two of those companies are based in my constituency and they employ hundreds of workers. What discussions will the British Government be having with the Welsh Government to co-ordinate a response to today’s announcement?

[Greg Clark]

I am grateful to the hon. Gentleman for his question. It is important to point to and acknowledge the reasons for the decision that have been given by the company. I have been clear that publicly the automotive sector has strongly advocated the need for supply chains to continue to be effective and uninterrupted. I work very closely with Ken Skates, my counterpart in the Welsh Government. We will make sure that we work together to ensure that the supply chain in Wales is part of initiatives we take.

[James Cartlidge (South Suffolk) (Con)]

I have a sense of déjà vu, because few days after the meaningful vote was lost, Philips announced the closure of the Philips Avant plant—the largest plant in my constituency. It said explicitly that it was not due to Brexit that production was being moved to the Netherlands. The key point is surely this: we know it is bad news, whatever the cause; we now have to get new inward investment and make ourselves competitive and attractive. Will we do that better if we trade on WTO terms, or if we have a deal with the EU, with tariff-free access to our largest market?

[Greg Clark]

My hon. Friend puts it extremely well. In a world of competitive investment, we need to deploy all the assets and strengths at our disposal. Internationally mobile investments are competed for by many other countries, so we have to get everything right. It seems to me that to have trading relationships that are the bare minimum of international arrangements is a handicap rather than an advantage.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

An analysis of the last Labour Government’s car scrappage scheme revealed that it generated almost 400,000 new sales over a 12-month period at a relatively modest cost. Given the twin challenges of poor air quality and a downturn in the automotive sector, why do the Government not consider a repeat of that strategy?

[Greg Clark]

The hon. Gentleman is very familiar with and experienced in this area, and I understand his point. I would say that the reasons behind this decision and some others have been not so much about demand—in this case—but about an acceleration of a change in technology and how investment can be consolidated, so I am not sure that his proposal is the answer to the reasons that Honda cited, but I take into account the representation he makes.

[James Heappey (Wells) (Con)]

The car industry is having to reset quickly as consumers turn their back on diesel and, increasingly, internal combustion engine cars more generally. Does the Secretary of State share my view that as we compete for new electric vehicle production lines, one way of making the UK more attractive is to show strong domestic demand by accelerating our planned transition from ICE to electric vehicles?

[Greg Clark]

If a country wants want to be renowned as a source of innovation and manufacturing, there is an expectation that people can look to the domestic market to see that the products are consumed there. That is important, but I am always careful to respect the fact that for some years to come conventional vehicles will be manufactured here and will be a perfectly reasonable choice for people to make. An orderly transition rather than an abrupt shift would be best for investment and confidence.

[Dr David Drew (Stroud) (Lab/Co-op)]

Honda’s employment base and supply chain go well beyond Swindon into the Stroud valleys, which remain a major manufacturing area. We have had a double blow with SKF’s announcement that it intends to shut its factory in Stonehouse, and the loss of our last aerospace ball-bearing manufacturer will have a major impact on Rolls-Royce. Is it not about time that the Government looked at which bits of our manufacturing base we must retain in this country and talked to Members about how the Government can do that?

[Greg Clark]

The hon. Gentleman ought to come to talk to me about the automotive sector deal, which has brought investment into research and development from across the industry. He talks about aerospace; there is a sector deal with the aerospace sector that, again, is about positioning Britain at the leading edge of new aerospace technology. These commitments are being made by industry as well as by Government, and I would be very happy to see him to talk him through what we are doing with the industry.

[Richard Drax (South Dorset) (Con)]

My sympathy extends to all those who are going to lose their jobs. I remind the Secretary of State that we are leaving the EU and that we must be able to strike our own trade deals around the world if we are to flourish as a country, as I believe we would, so any deal that we sign with the EU that prevents us from doing that is not acceptable.

[Greg Clark]

My hon. Friend makes an important point. It has been a clear part of our mandate to negotiate in a way that allows us to strike free trade agreements. That is provided for in the agreement that is on the table, but I think the wrong thing to do in furtherance of that would be to lose our ability to trade without tariffs and frictions with, as we might say, our existing customers.

[Chris Elmore (Ogmore) (Lab)]

The announcement from Honda today is devastating for the community of Swindon. Just up the road in Bridgend, which neighbours my constituency, Ford has announced voluntary redundancies. The Jaguar Land Rover contract is ending three months early and there is only one Dragon engine left, which will mean the employment of only 500 people beyond 2021. Going from 1,700 people down to 500 means far more redundancies in the long term. Ford has also supposedly warned the Prime Minister that a no-deal Brexit would be a catastrophe and that it would look to pull all its production out of the UK. First, what more can the Minister to do to support the Bridgend workers, particularly at Bridgend Ford? Secondly, I wish him luck in trying to convince the Prime Minister to take no deal off the table, because that would be catastrophic for the car manufacturing industry in this country, including Bridgend Ford.

[Greg Clark]

The hon. Gentleman mentions Bridgend; I speak to Ford and its VP for Europe, Steve Armstrong, very regularly, and the hon. Gentleman is absolutely right that it is looking to us to resolve this matter. Steve Armstrong says that if we leave without a deal, it would be “pretty disastrous” and that it would

“force us to think about what our future investment strategy for the UK would be”.

However, he also says that the deal that has been negotiated would address these concerns, and I hope that given the hon. Gentleman’s interest in the workers in Bridgend, he will come to resolve this matter by voting for the deal.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

This announcement is very sad news for the workers at Swindon and for the jobs and businesses in the supply chain, but does my right hon. Friend agree that this is much more to do with the EU-Japan trade deal than it is about Brexit? The reality is that free trade deals create winners and losers in the short term, but in the longer term, there are benefits for all from free trade.

[Greg Clark]

Again, I think it is for the company to account for the reasons for the decision, but my hon. Friend is absolutely right to point to the fact that any new free trade agreement adjusts the pattern of trade; that is evident. To me, this seems to underline the case for us to have a free trade agreement with Japan, and unless and until we do so, not to lose the ability to be part of the EU deal.

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

The Secretary of State makes his case very well in response to this devastating news. My real condolences go to Swindon, which I visited as the automotive Minister. However, has not the central problem been displayed in the Secretary of State’s exchanges with some Government Members—namely, that the deal that the Prime Minister is putting forward is an interim deal that defers the big question of whether we have frictionless access or whether there is the freedom to make trade agreements? It is getting towards high noon. I have a lot of respect for the Secretary of State. The position is that there is a natural majority in this House to do the sensible thing. We need to have people like him being statesmanlike and taking the right decision on behalf of the country—that is, to reach a permanent deal on our arrangements with the EU are concerned and to sort this situation out. As a former Minister for the sector, for which I have a great deal of affection, I plead with him to do that.

[Greg Clark]

I am grateful to the hon. Gentleman for his kind words. He embodies the spirit of continuity in understanding and support for the sector, which I said at the beginning of my statement is very important for investors. On the future partnership agreement, in fairness, it was the EU that maintained that those discussions could take place only after we have left the EU. That is part of its negotiating mandate. That is why it has not been possible to agree the final state, but it is the case—I have worked hard to convey the requirements of manufacturing industry—that within those negotiations, the opportunity to have frictionless trading arrangements should be there and be noted, and it is one of the reasons why firms and sectors support the deal.

[Mr Marcus Jones (Nuneaton) (Con)]

This is a very sad day for the people whose livelihoods depend on the Swindon plant. This is a global industry undergoing massive change, with the challenge of car sales volumes falling significantly in many markets. I heard what my right hon. Friend said about Brexit and moving forward. Will he say what more can be done to help British manufacturing companies and manufacturing companies from other countries that are based here to get through this transitional period and the current turbulence, so that these companies can emerge stronger and be world-leading in many of the new technologies?

[Greg Clark]

Companies’ prime requirement is that the uncertainty be brought to an end. It is in the gift of the House to meet that requirement, and we cannot and should not leave it a moment longer. We will have the opportunity in the days ahead to conclude this matter. That is the best thing the House can do for manufacturing and other sectors of the economy.

[Mr Philip Hollobone (Kettering) (Con)]

May I applaud the response of the two hon. Members for Swindon, my hon. and learned Friend the Member for South Swindon (Robert Buckland) and my hon. Friend the Member for North Swindon (Justin Tomlinson), and the Business Secretary for his swift plans to go to Swindon and establish the taskforce, but may I criticise him for not being clear enough that this is not a Brexit-related issue? Had we voted to stay in the EU in June 2016, chances are he would be here today at that Dispatch Box making a statement about the closure of the Honda plant. We know this because Honda is closing its car factory in Turkey, which is a member of the customs union, and because Honda’s chief European officer said on the radio today:

“This is not a Brexit-related issue for us”.

Will the Business Secretary make it absolutely clear that we will offer every support to the Honda workers but that this closure announcement has nothing to do with Brexit?

[Greg Clark]

I am grateful to my hon. Friend for giving me the chance to say on the record that we totally respect the reasons Honda has given. In fairness, he will agree that I have made it clear that the sector is undergoing a big change, not least in technology, but I have to report to him and the House the countless conversations I have with virtually every firm in the automotive sector, large and small, all saying that the uncertainty is a negative factor in their investment decision making and that they want our future relationship to be without frictions, tariffs and rules of origin checks. That is sufficiently consistent that it is fair that I bring it to the attention of the House in a statement about the automotive sector.

[Mark Pawsey (Rugby) (Con)]

A year ago, the Business, Energy and Industrial Strategy Select Committee visited the Honda plant at Swindon. We saw Civics coming off the line, many of them destined for the European market, and the benefits of the substantial overseas investment in our automotive industry, some of which has benefited my constituency through the London Electric Vehicle Company. In its peak year of 2013, investment reached £588 million. Are there any decisions the Secretary of State would suggest the House take in the next few days to encourage future investment to get back to that kind of level?

[Greg Clark]

There are indeed. The context of technological change is common to the motor industry around the world, but as I hope I have made clear, we have the opportunity to be a beneficiary of that change. We cannot be complacent about how competitive the sector is around the world, which means we must do everything we can to give confidence to investors, and that certainly involves agreeing a deal over the next few days that can unleash the optimism that comes from investment up and down the country—investment that I know in many instances is not taking place while people contemplate what our future trading relationship will be.

[Jeremy Lefroy (Stafford) (Con)]

My thoughts are with the workers whose excellent work I saw for myself on a visit to the Swindon plant with the Industry and Parliament Trust last year, and with those at Bridgend and elsewhere—my first job after graduation was as a foreman at Ford in Bridgend. We must not have no deal. Honda’s relationship with the UK car industry goes back much further than the car plant at Swindon to the tie-up with British Leyland and the Rover Group when it was still nationalised. I urge my right hon. Friend to remember that history and to engage with Honda to see in what other innovative ways we can engage with it to the benefit of workers at Swindon and elsewhere, just as the then Government did with Michael Edwardes and British Leyland in the days of the new Rover models.

--- Later in debate ---

[Greg Clark]

My hon. Friend makes an excellent point, drawing on experience that I was not aware of but which is clearly important to him. He is right that this country’s relationship with Honda has been a mutually successful one lasting many years and that we should respect its contribution to the British economy over that time. As I said in my statement, I hope that the fact that its European headquarters will remain here, that its Formula 1 team will still be based just outside Milton Keynes and that it will continue to do research and development there will mean that in the months ahead, when it contemplates new investments, it will think first of a place that has served it and its workforce well for a very long time.

Leaving the EU: Nuclear Energy Policy

Greg Clark Excerpts

Thursday 14th February 2019 Written Statements

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

The Government continue to make progress in putting in place all the necessary measures to ensure that the UK can operate as an independent and responsible nuclear state upon the UK’s withdrawal from Euratom and the European Union.

The UK has now concluded all replacement international agreements required to ensure continuity for civil nuclear trade following exit day. These include new nuclear co-operation agreements (NCAs) with Australia, Canada and the US, and voluntary offer agreement and additional protocol safeguards agreements with the International Atomic Energy Agency (IAEA). All of these have passed in Parliament on 19 December.

In addition to the new bilateral NCAs described above, the UK has an existing bilateral NCA with Japan which has been in place since 1998. This agreement will remain in force following the UK’s withdrawal from the EU. The UK and Japan are holding formal negotiations to put in place arrangements to reflect the UK’s future safeguards arrangements, with both sides confident that appropriate arrangements will be in place for March 2019 if required.

Significant progress has been made in the setting up of a domestic nuclear safeguards regime. Government’s new domestic safeguards regulations are now on track to commence on exit day, having been debated and passed by both Houses of Parliament as of 22 January 2019.

In addition, the state system of accounting for and control of nuclear material (SSAC) has commenced parallel running alongside Euratom, processing and checking reports received from industry through the safeguards information management and reporting system (SIMRS) IT system and producing the decorations required to enable the UK to meet its international obligations. This will provide the opportunity to identify and make any necessary adjustments before 29 March 2019.

Working closely with industry, Government have been putting in place measures to address the issues that may affect the civil nuclear sector in any exit scenario. This includes laying all the necessary statutory instruments (SIs) required for any exit scenario, to minimise civil nuclear business disruption and ensure health and safety standards remain robust. The SIs will also ensure that no inoperabilities are retained in domestic law following the UK’s departure from the Euratom treaty.

Today I will be depositing a report in the Libraries of both Houses that sets out further details on the overall progress on the Government’s implementation of their Euratom exit strategy, including EU negotiations, domestic operational readiness, legislation and international agreements. The report covers the three-month reporting period from 26 September to 26 December and is the second statutory report under section 3(4) of the Nuclear Safeguards Act 2018. The next report on Euratom exit progress is due to be deposited after the start of May 2019.

[HCWS1333]

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 12th February 2019 Commons Chamber

[Karen Lee (Lincoln) (Lab)]

23. What steps he is taking to support people in insecure work.

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

Britain has a very strong record in this area, with the highest level of employment in our history, combined with some of the strongest rights for workers in Europe. Last month, I announced new measures to counter discrimination at work against women returning from maternity leave, and we are one of the first countries in Europe so to do.

[Grahame Morris]

I thank the Secretary of State for that reply, but may I remind him that unemployment in my constituency is up by almost 1,000 on the same period last year, to 2,860? May I also tell him that a fire at Country Style Foods in Peterlee in my constituency has left a number of people looking for work, including one temporary worker employed through an agency? She had worked for the same company for seven years on a zero-hours contract, but a short break in her employment has stopped her accessing contributions-based benefits. In most zero-hours contracts, this “flexibility” is illusory. When would he consider that zero-hours contracts are inappropriate?

[Greg Clark]

Two thirds of workers on zero-hours contracts say that they do not want any more hours and that they are content. On the break in service, the hon. Gentleman will know that that relates to one of the recommendations of the Taylor review that we have committed to implementing.

[Lilian Greenwood]

It has been almost two months since the Minister announced that workers on zero-hours contracts would get the right to request a stable contract. There are 65,000 people in the east midlands whose main job is on a zero-hours contract; our region has the highest percentage of people on these contracts, according to the Office for National Statistics. That means tens of thousands of people vulnerable to unfair treatment at work, uncertain about whether they can afford to get through the next week, let alone plan for the future. In this HeartUnions Week, the TUC is rightly calling for a ban on exploitative zero-hours contracts. When will the Government act to tackle insecurity in the workplace, rather than just tell workers to ask nicely for a permanent contract?

[Greg Clark]

The Taylor report, and indeed the Select Committee, considered the recommendation that has come from some sources to ban zero-hours contracts. The Taylor report concluded that banning zero-hours contracts

“would negatively impact many more people than it helped.”

The joint report by the Business, Energy and Industrial Strategy Committee and the Work and Pensions Committee found that people on zero-hours contracts preferred to have that flexibility, for the most part—[Interruption.] That was the evidence given to the Committee. The hon. Lady will know that we have committed to bringing in the right to request a stable-hours contract.

[Alex Norris]

I refer colleagues to my entry in the Register of Members’ Financial Interests. Last week, the GMB and Hermes struck a landmark deal that proved that secure work is compatible with new and emerging industries. Today, I am writing to DPD, which has a depot in my constituency, to ask it to meet the unions and follow suit. Will the Secretary of State say today that it is important that we establish good laws in this country, but companies can get on with it now? They can get around the table with their unions and secure the jobs for their people in their workplace.

[Greg Clark]

The hon. Gentleman makes an excellent point. I met Tim Roache, the head of the GMB, last week and congratulated him and Hermes on having come to their agreement. It shows that good employers can work with their employees to agree what is the best for them mutually, and it is a very good example of that.

[Karen Lee]

According to the TUC, 3.8 million people are working in insecure jobs with no guarantee of hours, which represents a 36% increase since 2010. One of my constituents in Lincoln, Dan, is struggling to break out of the cycle of precarious work. He told me:

“You cannot support a family”—

and he is doing his best—

“if every morning you’re turning up for a job that might not exist.”

Does the Minister agree that the unacceptable increase in insecure work fundamentally undermines the UK’s high employment levels?

[Greg Clark]

I am glad the hon. Lady mentions our high employment levels—she is right to do so—because for people to have the best opportunities for prosperity we have to ensure that there are jobs available. She will know that we have more jobs and more vacancies in this country than we ever have had. The number of workers on zero-hours contracts is just 2.4% of all employees, and that is falling, as it happens. As I say, two thirds of them prefer that flexibility. The right approach, in line with the recommendations of the Taylor review, is to give workers the opportunity to request a stable, fixed contract, but to allow flexibility for those who want it.

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

My right hon. Friend is right to recognise that zero-hours contracts give flexibility to particular groups of people, many of whom have caring responsibilities and peripatetic work patterns. Without those contracts, they would not be able to enter the world of work and benefit themselves. Does he recall that it was the last Labour Government that had these contracts as exclusive and that we got rid of that abuse?

[Greg Clark]

My right hon. Friend is absolutely right. We made that change, and it was of great benefit. We should be proud of the increase in employment that has taken place. According to the Resolution Foundation, the biggest gainers principally have been women, ethnic minorities, single parents and disabled people. That is something we should be proud of.

[Mr Philip Hollobone (Kettering) (Con)]

Will my right hon. Friend confirm that with the creation of 3 million brand-new jobs since 2010, more people in our country are in secure employment than ever before in our nation’s history?

[Greg Clark]

My hon. Friend is absolutely right. In fact, the number is 3.25 million more jobs since 2010, and 80% of those have been full-time. The number of zero-hours contracts has actually fallen.

[Mark Pawsey (Rugby) (Con)]

Rugby has the second highest rate of people in work in the west midlands, and one reason for that is the flexibility in the local labour market, especially in the growing logistics sector. Does the Secretary of State agree that for many people, the ability to choose the hours they work is important to them?

[Greg Clark]

My hon. Friend is absolutely right. The Taylor report called for two-sided flexibility, so that employers and employees can make a choice as to what the best arrangements are for them both.

[Andrew Bridgen (North West Leicestershire) (Con)]

The hon. Member for Nottingham South (Lilian Greenwood) says that the east midlands has the highest proportion of people on zero-hours contracts, but she failed to add that we also have the highest economic growth outside of London and the south-east. Does my right hon. Friend agree that the best guarantees of improving workers’ rights, conditions and wages are a strong demand for labour, a growing economy and the control of unskilled migration, which is something we will be able to do after Brexit?

[Greg Clark]

I agree with my hon. Friend that having jobs and vacancies available is the best source of security for people in this country. We have a proud record of having secured that over the past eight years.

[Rachel Reeves (Leeds West) (Lab)]

Last week, it was reported that the Government plan to bring forward legislation to commit to guaranteeing workers’ rights outside the EU. Will the Secretary of State confirm that no Government can bind their successors? As easily as legislation can be passed, a future Tory Government could take those rights away, just as this Government have done by introducing tribunal fees, passing the draconian Trade Union Act 2016 and failing to crack down on bogus self-employment. Why would Members on the Opposition Benches trust anything that the Government say about ensuring workers’ rights in law?

[Greg Clark]

The record of this Government has been to extend workers’ rights way beyond what the European Union has offered. In the UK, we have 52 weeks of maternity leave, for example, compared with a requirement of 14 weeks in the EU. This House has chosen to give rights of paternity leave and pay to fathers and partners that are not yet available in the EU. The measures that the hon. Lady knows we are about to introduce for people returning from maternity leave makes us a leader in Europe on the issue. She should be confident in the ability of this House to promote and protect workers’ rights.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

3. What steps he is taking to help ensure fair (a) working conditions and (b) pay for people aged under 25.

--- Later in debate ---

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

11. What recent discussions he has had with the Chancellor of the Exchequer on fiscal support for businesses based in Scotland to prepare for the UK leaving the EU without a deal.

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

The Chancellor and I work closely together to support businesses right across the United Kingdom, but as I said before, the best option for Scotland in facing Brexit is to provide certainty to business by supporting a deal that has been proposed with the European Union.

[Gavin Newlands]

I am not entirely convinced by that answer. With the risk of red meat facing tariffs of around 40%, the president of the National Farmers Union of Scotland, Andrew McCornick, described a no-deal Brexit as “catastrophic” for Scotland’s farmers and crofters. In the event that the Prime Minister is unable to get her deal through the Commons and opts for no deal instead of extending article 50, and given what the Secretary of State has said about no deal, will he resign?

[Greg Clark]

The solution is in the hon. Gentleman’s own hands. The NFU has been clear about this in Scotland and every part of the United Kingdom—it said that we should back the deal that has been negotiated. He has the opportunity to do that.

[Mr Alister Jack (Dumfries and Galloway) (Con)]

21. How will the Government’s industrial strategy support the Scottish economy?

[Greg Clark]

I am delighted to say that we work closely with the Scottish Government and universities and businesses across Scotland. One example is the sector deals that we have struck, including the life sciences sector deal, in which Scotland is strong, which means investment going into Scottish institutions and creating good jobs now and in the future.

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

A recent survey by Ernst & Young found that 92% of Scottish firms do not feel fully ready for Brexit. They are being left adrift by this Government. Given the calamitous collapse of the phantom deal for the ferry company with no ships—the Seaborne Freight fiasco—does the Secretary of State stick by his comment that the contract was “prudent and responsible”?

[Greg Clark]

The Secretary of State for Transport gave a statement on that yesterday and was clear that no Government money had been put into that. When it comes to building confidence for businesses in Scotland, which I hope the hon. Gentleman and I want to do, he will know that the way to allay businesses’ concerns is to ensure that we conclude an agreement. There is one that has the support of businesses in Scotland and across the country, and I hope his party will back it.

[Drew Hendry]

That answer is simply not good enough. Even the former head of the civil service, Bob Kerslake, said that the fiasco will

“just confirm the view of many that this country is in a mess”.

If the UK Government cannot put in place their own services, will the Secretary of State support the SNP’s demand for the Chancellor to use the spring statement to provide firms with the fiscal support they need to put in place their own measures to get them through this Tory Brexit mess?

[Greg Clark]

I am surprised that the hon. Gentleman would raise fiscal matters, when some of the fiscal decisions taken in Scotland recently have further diminished investors’ confidence. For Scotland to be the highest-taxed part of the United Kingdom is a terrible signal to not only workers but businesses.

[John Grogan (Keighley) (Lab)]

12. What recent discussions he has had with Cabinet colleagues on support for economic development in Yorkshire.

--- Later in debate ---

[John Spellar (Warley) (Lab)]

14. What steps he is taking to support the motor manufacturing sector in the UK.

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

The UK automotive sector is a vital part of our economy, generating £78 billon of turnover and directly employing 160,000 people in manufacturing alone. We are working with the sector through our industrial strategy and, in particular, the automotive sector deal, to make sure that our industry leads in the technologies of the future.

[John Spellar]

The Secretary of State knows that diesel efficiency helps to reduce carbon dioxide emissions, he knows that new diesel engines are also much cleaner and he knows the importance of diesel production for our motor industry as it makes an orderly transition to new propulsion systems, so why is he letting his fellow Cabinet members the Secretaries of State for Transport and for Health and Social Care grandstand in demonising diesel, and why is he not standing up for our car industry and our car workers?

[Greg Clark]

I say to the right hon. Gentleman, who I know takes an interest in this, that I have always been clear, and indeed the “road to zero” strategy is very clear, that having a new diesel engine is a perfectly reasonable choice as we move towards zero-emission vehicles in the future. That is very clear: I have said it, my colleagues have said it and I am happy to repeat it to the House.

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

Our car industry is a global success story facing existential challenges—climate change, technology change, market change and Brexit. As 80% of our imported parts come from the European Union and 80% of cars made are exported, including half to the European Union, motor manufacturers say a no deal could mean £4.5 billion in tariffs, affecting hundreds of thousands of jobs. The Secretary of State and the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington) are known to favour a customs union in private, but with 45 days to go, do they not have a duty to make the private public, to take no deal off the table and to stand up for a permanent customs union and British jobs?

[Greg Clark]

I would say that the hon. Lady and her colleagues have a duty to listen to what the employers that she mentions have to say. I could mention Ford, which said:

“It’s important that we get the agreement ratified that’s on the table at the moment”.

Aston Martin has said that it is “obvious” that the deal

“meets the needs of all the requests we put forward as an industry”,

and that its needs it to be ratified. McLaren has said that the withdrawal agreement would provide urgently needed certainty. If the hon. Lady wants to follow the representations of our employers, she should do what they say and back the deal.

--- Later in debate ---

[Mrs Pauline Latham (Mid Derbyshire) (Con)]

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

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

Since our last departmental questions, we have been continuing to implement the industrial strategy. We are doing more, for example, to protect businesses and consumers from online threats, with the Industrial Strategy Challenge Fund backing research to make hardware more secure. As we leave the EU, we are determined to continue to be a pioneer in setting the highest standards, including proposals—currently being consulted on—to expand protections for pregnant women and new parents returning to work after having children.

[Mrs Latham]

Could the Secretary of State tell us what assessment he has made of the effectiveness of the creative industries sector deal?

[Greg Clark]

I am grateful to my hon. Friend for her question. It was one of the first sector deals. We were very determined to act on the report of Sir Peter Bazalgette, which celebrated the potential for new jobs to be created. It is going extremely well. Investments are being made in virtual reality, creating new opportunities for small businesses to benefit from the technology that larger ones have.

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

Since the start of the year, the Financial Times, The Observer, The Times, POLITICO and The Spectator, as well as many specialist publications, have described the looming energy crisis facing the UK following the collapse of plans to develop three nuclear power stations at Wylfa, Moorside and Oldbury, but back in November 2018, the Secretary of State announced that the energy trilemma—the challenge of providing energy that is green, cheap and secure—was coming to an end. Is he still of this view?

[Greg Clark]

Yes.

[Rebecca Long Bailey]

That was straight and very to the point. The Secretary of State may have pointed to the falling cost of renewable energy, but he cannot disown his Government’s policies, unfortunately, which are plunging that industry from crisis to crisis. New deployment of solar has fallen 90% since 2016. New onshore wind deployment has fallen 80%, so that certainly does not sound like the end of the energy trilemma. With people getting nervous about how we are going to keep the lights on, will he describe in detail where exactly he expects the UK to source low-carbon electricity from by the end of the 2020s?

[Greg Clark]

We have a proud record of being one of the world’s leaders in renewable energy. The proportion of renewable energy on the grid at the moment has hit 33% for the first time in our history. We are the world’s leader in offshore wind. The challenges that the hon. Lady identifies come from the fact that energy sources are falling in price. They are more abundant than ever before and we have established ourselves as the place in the world with the technology to be able to deploy them on the grid. She should welcome that.

[James Duddridge (Rochford and Southend East) (Con)]

T2. Jaguar Land Rover in Southend struggles to recruit trained mechanics. As we move towards electric vehicles and more technical vehicles, what more can the Government do to make sure that we fill this skills gap?

--- Later in debate ---

[Louise Haigh (Sheffield, Heeley) (Lab)]

T6. It was concerning to hear the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Rochester and Strood (Kelly Tolhurst), join the International Trade Secretary just now in failing to rule out zero tariffs in the event of a no deal. Does the Secretary of State not agree that such a move would leave us open to a flood of cheap imports, drive down wages and cost jobs?

[Greg Clark]

Of course we need to consult—and we are consulting—with businesses and sector organisations to ensure that the right decision is made, but no decision has yet been taken.

[Peter Heaton-Jones (North Devon) (Con)]

T9. In North Devon, we are passionate about doing our bit to tackle climate change. Will the Minister update me on where we are with reducing carbon emissions?

--- Later in debate ---

[Dan Jarvis (Barnsley Central) (Lab)]

Central to economic development in Yorkshire will be the design of the new UK shared prosperity fund. What work is the Secretary of State doing across Government to ensure that the fund works to the maximum benefit of the Yorkshire economy?

[Greg Clark]

We are having conversations across the UK, including with local leaders, of whom the hon. Gentleman is a distinguished example, and I look forward to continuing those discussions so that we can set out the prospectus.

[Anna Soubry (Broxtowe) (Con)]

My right hon. Friend was right to tell the Business, Energy and Industrial Strategy Committee that business was crying out for clarity on Brexit, but we cannot have that clarity until we have a meaningful vote. Will my right hon. Friend therefore confirm that the Government will bring that meaningful vote back to the House as a matter of urgency? It would be wholly irresponsible for it to be held within a matter of days before we are due to leave the European Union.

[Greg Clark]

My right hon. Friend is right to say that we need to bring certainty and enable businesses to plan for the future, but she is also fortunate, in that the Prime Minister is about to make a statement on the matter.

[Gloria De Piero (Ashfield) (Lab)]

The mineworkers’ pension scheme has boosted Government coffers by billions while ex-miners and their widows receive an average pension of £80 a week. Will the Secretary of State meet miners’ representatives and the trustees of the scheme to hammer out a fairer pension deal?

Nissan in Sunderland

Greg Clark Excerpts

Monday 4th February 2019 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement about Nissan. The House should know the background to the decision that the company announced yesterday. In July 2016, the allocation decision for the next model of the Nissan Qashqai was about to be made, and it was set to be awarded to a European plant other than Sunderland.

Nissan had located in Sunderland in 1986, having been persuaded by Mrs Thatcher that the combination of British engineering excellence and tariff-free access to the European Union made Britain an ideal location. So it proved, and the Sunderland plant grew to be the largest car plant in the history of Britain. The firm invested nearly £3.7 billion in it, and it currently employs about 7,000 people, with approximately another 35,000 in the supply chain.

The prospect of losing easy access to the EU market was the principal concern of the company at the time. It was clear that if Sunderland lost the Qashqai, which accounted for over half its production, mostly for export, the medium and long-term prospects for a plant losing scale would be bleak. Determined not to see the 30-year success of the plant come to an end, we set out over the coming months a strong case for backing Sunderland that centred on four areas, all of which were about highlighting the success of, and our strategy for, the British motor industry.

First, we would continue our successful and long-standing support for the competitiveness of the automotive sector, which has been available to all firms for skills and training the local workforce and for innovation. The regional growth fund has supported over 30,000 companies—large, medium and small—since 2010, with £2.6 billion of public support. Some £335 million of that has been invested in the automotive sector via the regional growth fund since 2010. All proposals are assessed independently by the Industrial Development Advisory Board and are subject to UK and EU rules. In 2016, Nissan initially considered applying for a total of up to £80 million in support over nine years for skills training, research and development, and environmental improvements, and it was eventually awarded £61 million—around £7 million a year over nine years.

The second commitment was that we would work with the automotive sector to ensure that more of the supply chain could locate in the UK, in close proximity to manufacturing sites. Since 2016, as many hon. Members know, our automotive sector deal has established with the industry an ambitious programme to do just that.

The third was that we would make a strong commitment to research and development, particularly to the development of new battery technology and its deployment in connected and autonomous vehicles. Our joint industry-Government £1 billion advanced propulsion centre R&D programme, along with our £250 million Faraday challenge, is putting Britain at the leading edge of battery technology and manufacturing. We have introduced testbeds for autonomous vehicles across the country. Indeed, the longest autonomous car journey in the UK will take place in November this year from the Nissan site at Cranfield to its site in Sunderland, covering more than 200 miles on public roads.

Our fourth commitment was that, in our negotiations to leave the EU, we would always emphasise the strong common ground that exists between the UK and other EU member states and pursue a deal that could ensure free trade unencumbered by tariffs or other impediments.

These commitments proved persuasive, as they have subsequently for investments by Toyota at Burnaston, BMW Mini at Oxford and PSA at Luton. Indeed, every competitive allocation decision taken since 2016 in this industry has gone to Britain. Although the discussions had been around the Qashqai, Nissan proposed towards the end of the discussions to add a further model, currently produced only in Japan—the X-Trail—to Sunderland. On 27 October 2016, Nissan announced that both the Qashqai and the X-Trail would be built in Sunderland, securing the plant’s future and adding 741 new jobs.

Last Friday, I was informed by Nissan that following a global review of its capital investment, future capital was needed to accelerate the shift in Europe from conventional to lower-emission vehicles. The Qashqai and the Juke will in future have petrol and plug-in hybrid variants made in Sunderland, and as a result, more capital will be invested in Sunderland than was originally planned in 2016. However, this was accompanied by a decision to maintain Japan as the sole production location for the X-Trail model, rather than to establish a new production line in Europe. The consequence of this is that the existing jobs in Sunderland will be maintained by the increased investment, but that the 741 additional jobs that would have been created in Sunderland will not now be available. Nissan confirmed that production of the new Qashqai, Juke and Leaf will continue at Sunderland, and that the decision has no implications for the existing jobs at the plant.

Nissan also pointed out, as it as done consistently since 2016, that the risk of a no-deal Brexit was a source of damaging uncertainty. While I am pleased that the decision taken in 2016 to build the Qashqai and secure the Sunderland plant is unchanged, it is deeply disappointing to me and to the workforce that the extra jobs that would have come from the X-Trail will no longer be created. I told the House that I would publish the correspondence with Nissan at the time of its original decision, as soon as the company advised that it was no longer commercially sensitive. I have previously shared it with the then Chair of the Business, Energy and Industrial Strategy Committee, but I have now agreed with Nissan that it is reasonable to publish it in full today. Colleagues will see that it sets out exactly what I told the House in October 2016.

Grant support for training and development and for environmental improvements were applied for and approved by the Industrial Development Advisory Board on the basis that both the Qashqai and the X-Trail models would be built in Sunderland. Given yesterday’s announcement, if the company seeks to participate in those industry funding schemes—as I hope and expect it will—it will submit new applications in the standard way and undergo a process of independent assessment.

I am disappointed that the new jobs associated with the X-Trail will not now come to Sunderland, but I am pleased that the plant will benefit from substantial new investment in the existing models and that the decision to continue with the vital investment in the Qashqai, Leaf and Juke, and the jobs associated with them, is unaffected. These decisions were made on broader business grounds, but Nissan has commented on the need for us to come together to resolve the question of our future trading relationship with the EU. I believe that its advice should be listened to and acted upon, so that our automotive industry—which will undergo more change through innovation in the decade ahead than it has for most of the past century, in areas such as battery technology and artificial intelligence—can seize the opportunities for Britain to be a world leader in state-of-the-art car making, providing great jobs and careers for hundreds of thousands of people across our country during the years ahead. I commend this statement to the House.

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

Yesterday’s announcement by Nissan that it has reversed its decision to build the X-Trail at its Sunderland plant and move it to Japan instead is a bitter blow to the north-east, the automotive sector and Britain’s industrial strategy. Of course, Brexit was not the only reason for that, but it was pretty prominent in Nissan’s decision. To quote its initial statement,

“the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”

The Secretary of State’s opposition to a no-deal Brexit is, of course, well known, but still the Government juggernaut chaos hurtles on. Even he must be suitably frightened today by the uncertainty being created by his Government’s negotiating strategy.

This week, Nissan has reversed commitments to invest in the UK. Last week, we saw that car production is down 9% to its lowest level in five years, and fresh investment in the sector halved in 2018, according to the Society of Motor Manufacturers and Traders.

When Nissan made the commitment to produce the X-Trail and Qashqai models in Sunderland, the Government provided certain assurances, as the Secretary of State has outlined. After the Government’s refusals to publish the letter, even in response to freedom of information requests, today we have finally seen a copy. The letter acknowledged the

“uncertainties as the UK prepares to leave the EU”,

and in particular the

“fear that potential future trade arrangements could affect the business case for…investments”,

and it promised that Nissan would not be “adversely affected”.

Although the letter made no firm commitment to a customs union or single market deal, there was a pretty strong assurance that manufacturers would still be able to trade without barriers. However, Nissan clearly does not have any confidence in those assurances today. Can the Secretary of State confirm why those assurances no longer stand and what has changed in the Government’s approach since those commitments were made? Is it now Government policy to accept that there will be significant trade barriers as we leave the EU and potentially a no-deal situation? If not, can the Secretary of State rule out the possibility of no deal?

The letter went on to offer support of about £80 million towards Nissan’s investments at its Sunderland site, in return for the expansion of SUV production. The Secretary of State noted that £61 million was eventually applied for. Can he confirm whether any of the conditions surrounding that £61 million were written into any formal agreement? Can he also confirm whether Nissan will still receive the £61 million, despite the move? He intimated that it may have to reapply for certain forms of grant funding. What assessment has he made of the impact of yesterday’s decision on the wider supply chain, particularly those companies that might already have decided to start investment?

The Government’s letter to Nissan also said:

“It will be a critical priority of our negotiations to support UK car manufacturers, and ensure their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU.”

Yet it is important to note that Nissan’s announcement came days after a free trade agreement was signed between the EU and Japan whereby tariffs on Japanese car exports to the EU will begin to taper towards zero over the next 10 years. What assurances can the Secretary of State give today to British automotive sector companies that there will be no tariffs on British-made vehicles entering the EU?

Similarly, in relation to cars exported to non-EU countries where the EU currently enjoys preferential trading terms, the International Trade Secretary has suggested that we can simply replicate those terms and Tipp-Ex out “EU” and replace it with “UK” on the front page of nearly 40 free trade agreements. How is he getting on with that? What assurances can the Business Secretary provide that Britain will continue to enjoy those trading terms?

Furthermore, what assessment has the Secretary of State made of the real risks of a temporary, Brexit-induced slowdown in British manufacturing? Has he examined any temporary support measures he could offer, such as examples in the German industrial sectors following the financial crash?

Finally, it is clear that we have reached a tipping point. I know that the Secretary of State agrees with me that a real industrial strategy is designed to give businesses the confidence to invest for the long term, but his Government’s handling of Brexit is undermining our industrial strategy. Businesses are no longer speaking out simply to highlight the future dangers of a badly handled Brexit; they are now losing confidence in the Government and taking real action to protect their businesses. Without real assurances from the Secretary of State and a firm commitment to take no deal off the table, it is hard not to think that managed decline is indeed the Government’s plan.

[Greg Clark]

If the hon. Lady had spent time talking to employers in the automotive sector, she would have come to a different set of conclusions. First, she should welcome the fact that Nissan has committed to Sunderland. After the referendum, before any negotiations had taken place and even before article 50 was triggered, the plant was in jeopardy, and the workforce, the unions and the Government worked closely and hard together to secure its future. At the time, her former colleague, the then hon. Member for Hartlepool and Chair of the Business, Energy and Industrial Strategy Committee, hailed it as

“a welcome example of targeted Government commitment to a successful company in a strategically vital sector”.—[Official Report, 31 October 2016; Vol. 616, c. 684.]

That commitment continues.

The hon. Lady asks whether the financial support that Nissan applied for continues, and I hope that I was clear in my statement that the support is available to the sector and has been for many years. Nissan will be invited to resubmit an application in the light of its changed investment.

The hon. Lady’s second point is that we need to conclude our Brexit negotiations, but what she spectacularly ignores is that Nissan and the UK automotive industry back the deal that the Prime Minister has negotiated. The deal achieves what they need: no disorderly Brexit on 29 March, a transition period and a commitment to no tariffs, no quotas and no rules of origin checks at the border.

The Japan Automobile Manufacturers Association has welcomed both the withdrawal agreement and the political declaration, and it has called for this House and the European Parliament to ratify the agreement swiftly. If the hon. Lady wants to rule out no deal—if that is her concern and her motivation—she should back the calls from the industry to ratify the agreement.

The continued uncertainty I referred to in my statement, as the hon. Lady will acknowledge, is a reflection, in part at least, on the Opposition’s failure to come to a decision and back the deal. During all Nissan’s 30 years in the UK, it has been able to count on constructive support from all parties, yet Labour Front Benchers have evaded having a policy on this vital issue for our country, hiding behind six tests that are a fake and a sham designed expressly to avoid a deal, and they know it. They claim to represent the workers of this country, but the livelihoods of millions of workers are being jeopardised by the machinations of the people occupying the Labour Front Bench.

In a call from Japan yesterday, a senior Nissan executive told me, “Please pass on the view to your Opposition that they need to meet in a way that forms a deal.” I think all of us in this House should act on that.

[Sir Michael Fallon (Sevenoaks) (Con)]

Whatever the complex rationale behind this decision and, despite my right hon. Friend’s considerable efforts to work on it, is it not a stark reminder that our exporters still have no idea whether, at the end of the implementation period, they will require new certification, whether they will carry tariffs or whether, indeed, they will be able to trade frictionlessly? Given the fall off in business investment in each of the last three quarters, is it not now time for us all to come together to end the uncertainty and agree on the terms of our future trading relationship with the European continent?

[Greg Clark]

My right hon. Friend makes an excellent point. He has experience of dealing with businesses that are making investments in this country. It is the view of investors in this country and around the world that they want to see us live up to the traditions of this House in providing a stable environment for investment to take place. That includes having certainty on our future trading relationship. It is incumbent on us all in this House to deliver that for the investors who are placing faith in our economy.

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

I thank the Secretary of State for advance sight of his statement. I echo the sentiment that our thoughts should be with the workers at Nissan and elsewhere who are unsettled by this news.

The Secretary of State has put a brave face on this bad news. We all know that the issue of diesel and the change to petrol is part of it, as is the global review, but the cancellation of X-Trail has his Government’s handling of Brexit at its heart. Brexit, in itself, is bad enough, but it is being bungled beyond belief by a Government who have failed to listen to business. He talks about business wanting to back a deal, but he omits to say that they all say that any deal is worse than what we already have with the EU. Professor David Bailey, from Aston University, is an expert in the car industry, and he has pointed out:

“The Japanese carmakers came to the UK to access the single market”.

He went on to say that Brexit is

“a big shock for the Japanese producers.”

Nissan’s European chairman has been clear:

“The continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future”.

Nissan’s decision shows that international investors have no faith in this Government’s assurances about the economic impact of the Prime Minister’s rotten Brexit deal. If Brexit uncertainty is too great for one of the world’s best resourced manufacturers, what hope is there for small and medium-sized businesses, which are the backbone of the economy? This Government’s continued failure can be demonstrated by the failure to top up the Tay Cities deal to support Michelin workers, so will the Secretary of State urge the Chancellor to make the spring statement a fiscal event that increases funds to support businesses impacted by Brexit? Will the Secretary of State, once and for all, rule out participation in the foolish game of failing to rule out no deal?

[Greg Clark]

First, let me remind the hon. Gentleman that a greater amount of financial investment is going into Sunderland than was anticipated in 2016; this is a long-term commitment that has been made by the firm. He should welcome that and reflect that the future jobs of those employed in Sunderland have been secured by that investment in the Qashqai. That is a welcome factor.

The hon. Gentleman is right to point out that the company has expressed an urgent concern that we should resolve the question of Brexit, but he is wrong to say that the deal the Prime Minister has negotiated does not command the positive confidence of the industry. I have talked about Nissan, but let me mention the head of Ford in Europe, who said:

“It’s important that we get the agreement ratified that’s on the table at the moment”.

The chief executive of Aston Martin has said that it is “obvious” that the deal that we see

“meets the needs of all the requests we put forward as an industry and as Aston Martin.”

Toyota has said that it welcomes the announced deal, which

“would provide business with the certainty of a transition period and help avoid the significant production disruption a ‘No Deal’ outcome would have for ‘Just in Time’ supply chains in the automotive industry.”

I share the hon. Gentleman’s view that we should bring the uncertainty to an end, but the only way to do that is by backing a deal, and I commend to him the deal that has the support of every one of the employers in the automotive sector that I have quoted to him today.

[John Redwood (Wokingham) (Con)]

The big increase in vehicle excise duties, the squeeze on new car loans, and the general tax and regulatory attack on new low-emission diesels has had a predictable effect, in greatly reducing the demand for and sales of new diesel cars in the UK. Will the Government reconsider these damaging policies, given the strong bias in our industry to produce those Euro 6 diesels?

[Greg Clark]

I say to my right hon. Friend that, in fact, the extra investment is going into new Powertrains—cleaner Powertrains. Far from being critics of this, Nissan, as people who know the industry well know, is among the principal advocates for more ambitious environmental standards and has been a pioneer in establishing electric vehicles in this country. It is recognising that that is the way consumer demand is going, but it recognises that this is a positive step.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

Nissan in my constituency, together with the supply chain, employs almost 40,000 people, many of whom will be extremely concerned at this decision. This Government’s chaotic approach to the Brexit negotiations, concerns about diesel and a new free trade agreement between Japan and the EU have created a perfect storm. With just 53 days until we are due to leave the EU, no Brexit parliamentary business scheduled for two weeks, the Prime Minister currently engaged in fantasy politics over the backstop and the sweetheart deal on the rocks, what immediate steps is the Secretary of State taking to reassure the whole UK automotive industry?

[Greg Clark]

One of the pleasures of dealing with the automotive industry in the UK is that it is one of the most advanced and most capable in the world in innovation. We are working with the sector, through our industry strategy, to be the leading place in the world, and our work not just for the discovery of new battery technologies, but for manufacturing, and the testbeds that we have put in place for connected and autonomous vehicles make Britain the place in the world that people come to for innovation. This Government back that, and I know it enjoys support across the House; it is a source of confidence around the world. However, it is true that an international business such as an automotive one wants to know, perfectly reasonably, what its trading relationships will be with the rest of the European Union in the years ahead. That is why these companies have been so clear that this House should come together and back the deal. I hope that the hon. Lady, with the care for her constituents that I know she always has in mind, will see fit to do so too in the days and weeks ahead.

[Nicky Morgan (Loughborough) (Con)]

In 2016, my predecessor as Chair of the Treasury Committee, who now sits in the other place, wrote to the Chancellor asking what money had been promised to Nissan in order for it to make its commitments. Today we find out that a letter was sent to the former Chair of the Select Committee on Business, Energy and Industrial Strategy, but it has only been released today, after the press had got hold of it. First, does the Secretary of State think it right that the company should decide that something is still commercially sensitive two years after the event? Secondly, how much of the £61 million is not going to be paid over?

[Greg Clark]

I am grateful to my right hon. Friend for her question. What I said in my statement and what I said at the time was that the programme of support for the automotive sector is very long standing and has been very successful. As it happens, the application that Nissan made was concluded relatively recently; it was putting forward a case, through the independent scrutiny processes, for funding. I shared the letter with the previous Chair of the BEIS Committee, and the Comptroller and Auditor General had also seen it at that time. I said in my statement that because the terms of the application, which is independently assessed and reviewed, have now varied, the company will of course need to resubmit on the grounds of the new information that it has. However, this remains a programme that has been very effective in supporting the skills in the wider workforce, environmental improvements and the research and development for which our automotive industry is now so renowned.

[Julie Elliott (Sunderland Central) (Lab)]

After the announcement at the weekend by Nissan—for the first time publicly saying that the insecurity around Brexit was impacting business decisions, which in real terms means jobs—what assurances can the Secretary of State give the workers not only at Nissan, but in the supply chain and wider manufacturing, that the Government will come up with an agreement that will secure jobs as we leave the EU? As he knows, the Prime Minister’s deal is not going through this House, and we need real decisions and real movement on the customs union and the things that will protect jobs.

[Greg Clark]

I say to the hon. Lady, whose constituents depend on successful future investments, as well as the ones that have been secured, which she rightly welcomed when they were first made, that this whole House has a responsibility to come together, put its differences aside and find a deal that can be agreed and ratified, and can be ratified by the European Parliament, so that we can have precisely that certainty that Nissan and other investors have called for.

[Sir William Cash (Stone) (Con)]

Will my right hon. Friend accept that, rather than being about Brexit, a fundamental reason for the decline in demand for diesel cars—not only in Sunderland, but elsewhere in the UK and throughout the whole of Europe—is the imposition of EU regulations, which will continue in UK law under the European Union (Withdrawal) Act 2018, to reduce emissions and diesel particulates, which are harmful to health? So what on earth are the anti-Brexiteers complaining about?

[Greg Clark]

First, the company sells most of its output into the rest of the European Union so will need to maintain its ability to meet the requirements to which my hon. Friend refers. Secondly, as I said to my right hon. Friend the Member for Wokingham (John Redwood), Nissan in particular has been among the prime advocates of the drive towards cleaner vehicles. That has often been to this country’s benefit, because the Leaf, which is made in Sunderland, is the best-selling electric vehicle in Europe.

[Sir Vince Cable (Twickenham) (LD)]

I thank the Secretary of State for his comprehensive statement. May I follow up on the question from the Chair of the Treasury Committee, the right hon. Member for Loughborough (Nicky Morgan), about the £61 million? In view of the statement apparently made by the Department an hour ago, which contradicts what the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington), said this morning, apparently in good faith, will the Secretary of State clarify how much of the £61 million was actually paid to the company and how much is now due to be repaid?

[Greg Clark]

I made it clear that the £61 million was approved by the independent process, with which the right hon. Gentleman is very familiar. To date, there has been a payment of £2.6 million, about half of which was for training of the workforce and the community, and half of which was for environmental improvements to the plant. So £2.6 million has been paid to date.

[Dame Caroline Spelman (Meriden) (Con)]

A matter of minutes before I came to hear this statement, I had the wife of a car worker on the telephone and she was very distressed by the threat to her husband’s job. Does the Secretary of State agree that, for the long-term security of the car industry, the political declaration needs to secure a stable customs arrangement with the EU and the House needs to get behind the deal?

[Greg Clark]

I do agree with my right hon. Friend that the House needs to come together and enter into a deal that can provide that confidence. When it comes to the customs arrangements, as she well knows, the motor industry has been absolutely clear, as I set out in my statement, that it wants to make sure that the agreement involves no tariffs, no rules-of-origin checks and no frictions added to what has been a spectacularly successful trading relationship.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Nissan has been clear that uncertainty around our future trading relationship with the European Union has been a factor in this decision. Is it not the case that even if the Government’s deal is passed, we will still face years of uncertainty and negotiation, which will put jobs and investment at risk at Nissan and throughout the country?

[Greg Clark]

No. The industry has been clear that the deal that has been negotiated meets its requirements to continue what has been a very successful investment programme. One of the opportunities that we have and one reason I really do think it is in the country’s interest to come together on a deal is that I am familiar with investment plans into what is a very successful environment of innovation and excellence on the part of the workforce, and people are poised to make investments if we can settle the question of the terms of our exit and our future relationship. That is why I hope that in the weeks ahead the House will come together to provide that certainty.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I agree completely with what the Secretary of State has said about the need to provide certainty as soon as possible, but I take issue with those who want to turn this all into an issue of Brexit. The House should be clear that there has been a 14% reduction in the sale of Nissan products into Europe over the past year, which explains a lot of the context of this decision. Will my right hon. Friend clarify that no jobs are being lost as a result of this decision and, crucially, that production of the Juke, the Leaf and the Qashqai is entirely unaffected?

[Greg Clark]

My hon. Friend is absolutely right, but it is also right to reflect that for more than two and a half years now the industry, and Nissan in particular, has been worried about the consequences of Brexit. That is why many Members, both Government and Opposition, as well as the trade unions, made such a determined effort to ensure that we got the investment that was so vital. That investment is there, it continues, it has been made, and it has saved the plant in Sunderland and ensured that the more than 40,000 jobs—people’s livelihoods—that depend on it are there and secure. I want to see more investment in future, which is why I want the House to agree a way forward with the rest of the European Union.

[Ian Mearns (Gateshead) (Lab)]

The Nissan Washington plant is less than 5 miles from the edge of my Gateshead constituency, where we have 3,325 people unemployed—1,000 more than at the same time last year. Nissan has laid off many hundreds of agency workers in the past 12 months, so will the Secretary of State commit to do something tangible for the north-east of England? The north-east of England is in danger of being left behind, but parts of it, like my constituency, are being left behind already. In the light of this very harmful decision, will he do something tangible and work with Members from the region to establish a taskforce to rescue the north-east economy?

[Greg Clark]

I am a north-easterner myself by birth and upbringing. We should celebrate the resurgence of industry across the north-east in recent years, including the expansion of Nissan. The hon. Gentleman should know—Members from all parties certainly know—that I worked closely with Members on both sides of the House to pursue investment opportunities. Had we not done so, we would not have had the investment that Nissan made two and a half years ago that secured those jobs for the future. I will continue to do that, all the time.

[Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

I have many constituents who work at Nissan in Sunderland. They are highly trained and committed workers who do a long commute every day to work in such an extraordinary and fabulous place. As my hon. Friend the Member for Stone (Sir William Cash) said, the changes to the EU rules—and therefore the UK rules, too—on diesel emissions have put real pressure on Nissan to move away from diesel engines in the longer term. Will the Secretary of State set out clearly what the Government will do to support not only Nissan but the car manufacturing industry as a whole to move fully to electric vehicles over the next 20 years?

--- Later in debate ---

[Greg Clark]

In my statement I mentioned the Faraday challenge, which we established as part of the industrial strategy. Not only is there a quarter of a billion pounds to fund the latest research on the future of batteries, but we have established in the west midlands the national battery manufacturing centre to make sure that we not only invent the technology but deploy it. We have a reputation as one of the places in the world with the greatest prospects for the new types of propulsion that the industry is moving to rapidly. Nissan is of course one of the prime exponents of that and one of the prime beneficiaries.

[Mr Kevan Jones (North Durham) (Lab)]

Many of my North Durham constituents work at Nissan or in the supply chain and were very disappointed by the announcement at the weekend. Will the Secretary of State refute the allegation in yesterday’s Sunday papers that because of this decision the Government will somehow penalise Nissan in respect of future Government grants? Also, will he be an advocate for the clean diesel engine? That would help not only Nissan, but the entire UK motor industry.

[Greg Clark]

I am grateful to the right hon. Gentleman for what he said, and I can certainly refute that. He knows that I have given particular attention to the expansion of prospects for the automotive industry, including by establishing the programme for battery technology and connected and autonomous vehicles. I travel the world to make the case for Britain as the home of the vehicles of the future. Of course, Nissan is a hugely valued investor, employer and innovator in this country, and we will work closely with it in future.

On clean diesel, I have said to Members from all parties that the country will undergo a transition to fully electric and zero-emission vehicles, and a new-generation clean diesel is a perfectly reasonable choice for people to make, especially those who, for example, use it regularly for long journeys. People should be clear about that.

[Mark Garnier (Wyre Forest) (Con)]

My right hon. Friend has very clearly shown his enthusiasm for the future with the Advanced Propulsion Centre and the Faraday challenge. On the issue of diesel, however, changes in diesel legislation have resulted in a significant slowdown in the second-hand car market for diesels. That market is incredibly important to the financial sector that finances the car market in the whole of the UK. Has he done an analysis of what is going on in the second-hand diesel car market and its implications for the whole of the financial market in the UK?

[Greg Clark]

My hon. Friend is absolutely right; as the House knows, there has been a slowdown in the market for new diesels. People are hanging on to their existing ones and values have fallen in the second-hand market. It is something that is reflected across the whole of Europe, and indeed in many other parts of the world. We need to make sure that we are clear that the next generation of diesel is a perfectly reasonable choice for people, and that we accelerate the deployment and the uptake of electric and zero-emission vehicles. That has been our determination in the past two and a half years, and that is recognised by the industry right across the world.

[Anna Turley (Redcar) (Lab/Co-op)]

I was at Nissan just recently meeting the fantastic workforce, some of whom are my constituents who had lost their jobs in the steelworks and subsequently been recruited by Nissan. It was made very clear to me when I was there just how important the EU market and the integrated cross-border just-in-time supply chains were. In their letter to Nissan, the Government say that they fully recognise

“the significance of the EU market to your presence in Sunderland.”

Why then are the Government keeping no deal on the table and playing fast and loose with my constituents’ jobs again?

[Greg Clark]

Everyone in this House has a responsibility: we need to protect the jobs of our constituents and to give them opportunities for the future. One way or another that involves this House agreeing on a plan for our relationship with the rest of the European Union. It might involve Members from all parts of the House leaving their comfort zone and being willing to compromise. Internationally, we have had a reputation for being willing and able to do that—to be a pragmatic and dependable place in which to do business. Now is the time to demonstrate that to the rest of the world.

[Anna Soubry (Broxtowe) (Con)]

I say to the Secretary of State that many people would compromise. If a customs union were put to the vote, some of us would vote for it, but the Prime Minister has made it very clear that that is not available. I suggest to the Government that they might start the compromising in Cabinet and with the Prime Minister. I had the great honour—and it was an honour—to go to Sunderland and visit the Nissan plant shortly after the EU referendum result. Having spoken to the management and workforce, this decision comes as no surprise, as there were very serious concerns then about Brexit. I gently say to him that, in my opinion, this Government, far from allaying those fears, have exacerbated them, because they refuse to take no deal off the table. Given the catastrophe of a no-deal Brexit, I would have expected the Cabinet to have discussed it, based on a careful assessment of the risks of a no-deal Brexit by officials. If it has not, why not? If those discussions have taken place, when will this House see the documents that have been made available to the Cabinet so that we can all understand the dangers of a no-deal Brexit, and so that the next time it comes to a vote, Conservative Members, who are supposed to represent the party of business, will vote overwhelmingly against no deal instead of, like last time, voting overwhelmingly in favour of a no-deal Brexit?

[Greg Clark]

I say to my right hon. Friend that no deal is fully acknowledged—certainly by me and the industry—as being ruinous for our prospects, but in order to avoid no deal, we need to come to an agreement in this House in the weeks ahead. She is right that this is something that affects all parts of the House. To put off the decision, or not to come to a conclusion, would be to continue the uncertainty. We need to bring it to an end, because that is what the investors are looking for.

[Phil Wilson (Sedgefield) (Lab)]

Does the Secretary of State agree that big multinational companies want to enter the transitional period detailed in the withdrawal agreement to work out whether they are going to stay or leave? They can make that choice—the transitional period is their breathing space—but the small and medium-sized companies and our constituents do not have that choice. They have to stay and suffer the consequences of whatever Brexit brings. Is it not about time that the issue was put back to the people so that they can decide whether what is on offer today measures up to the promises that were made back in 2016?

[Greg Clark]

The views of businesses up and down the country—not of all of them, but of the majority of them—are clear that having a transitional period is something that they regard as important. The small businesses as well as the large businesses have called for that. It is one of the features of the withdrawal agreement that has been negotiated and it is why businesses specifically and through their representative organisations have called on this House to back it.

[Vicky Ford (Chelmsford) (Con)]

My first experience of Westminster politics was as the parliamentary candidate for Birmingham Northfield when Rover closed the Longbridge works and 6,000 people lost their jobs. It takes years to build a car factory, and one phone call to close it. Our car manufacturers benefit from frictionless trade with Europe and being part of the cumulative rules of origin regime. The withdrawal agreement keeps those. Does the Secretary of State agree with me that those who seek to vote against the withdrawal agreement or to try to rewrite large swathes of it are playing a deeply dangerous game?

[Greg Clark]

I do agree with my hon. Friend. She knows the industry well and she knows that, time and again, the leaders—the chief executives—of the players, big and small, in the industry have called on us to back the deal for precisely the reasons that she gives.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Many of my constituents work at Nissan, and many more at the Port of Tyne in my constituency, which is a large part of Nissan’s supply chain. The Secretary of State has failed to answer what assessment he has made of the impact of this decision on the wider supply chain, but he keeps saying to us, “Back the deal”. He and the Government are offering zero clarity on the true impact of that very deal, so will he share that with us now?

[Greg Clark]

I think that I have been clear that the investment that is being made into the Qashqai is an expanded investment, which will have opportunities for the supply chain, but that the supply chain will lose the prospects of supplying the new model that we had hoped would be there—that is clearly understood. Again, I say to the hon. Lady that I want, as much as she does, to resolve the question of our future relationship. The leaders of the automotive sector have said that the deal that has been negotiated would do that and they have urged us in this House to get on and approve it.

[Mr David Jones (Clwyd West) (Con)]

Nissan itself has noted a significant decline in demand for diesel-powered vehicles due in no small part to changing EU regulations over emissions in the wake of the VW scandal. Is it not the case that it is that decline in demand that was the primary reason why Nissan decided that it was simply uneconomical to expand the production of the X-Trail outside Japan?

--- Later in debate ---

[Greg Clark]

The company gave its reason, and it said that it was owing to business conditions. One was the accelerating take-up of low-emission vehicles for which it has been one of the strongest proponents, and indeed it has an advanced position in that. It has been clear about that, but it did comment, as my right hon. Friend knows, that the context of uncertainty around Brexit was a negative factor. When an employer communicates that information as clearly as it has done, I think that we should act on it.

[Helen Goodman (Bishop Auckland) (Lab)]

The jobs of many of my constituents will be affected by this decision. We all know that the Secretary of State is a man who does not want to see a no-deal Brexit, so can he explain to the House and the country why it is that in this morning’s Financial Times he said that the crunch point was the end of February when the big votes will be on 14 February?

[Greg Clark]

I do not quite understand the hon. Lady’s point, but I think that she might be referring to the fact that we should not regard the period until 28 March as the time available to us to negotiate. Manufacturers place orders for components with suppliers and they are doing so now. They have to buy components now and these decisions are being taken at the moment. Manufacturers that are exporting to the far east, for example, have to make decisions about what they are going to ship during the weeks ahead. We therefore do not have the luxury of waiting until 28 March; we need to conclude this matter very quickly.

[Grahame Morris (Easington) (Lab)]

The Secretary of State has some historical connections with my region, so he will be aware that we have lost the coalmining industry, the steelworks and the shipyards. I hope that he is also acutely aware of how vital the car industry and the supply chain are not just to Sunderland, but to the whole region. Given that many thousands of my constituents work in the supply chain and directly at Easington, has the Minister considered introducing some incentives to drive the take-up of all-electric vehicles also manufactured by Nissan on Wearside, such as a car scrappage scheme? That would help to reduce emissions and promote employment in my constituency and in the region.

[Greg Clark]

The hon. Gentleman will know that there is no one in this House more familiar with the importance of the car industry across the country and in the north-east. Within 10 days of having been appointed Business Secretary, I flew to Japan to meet the chief executives not just of Nissan, but of the other investors. I have always had a clear understanding of their requirements regarding future prosperity, and I have always applied that. If he looks at the automotive sector deal that I negotiated with the whole industry and at the investment that we have made in the Faraday challenge, he will see that we are working well and closely with the industry to do what it says is necessary to drive the take-up and innovation in the sector that will secure the future of the motor industry in the north-east and right across the country.

[Dr Paul Williams (Stockton South) (Lab)]

North East England chamber of commerce tells me that, as the Prime Minister’s deal does not nail down our future trading relationship, Brexit uncertainty could continue for years. What certainty can the Secretary of State give now to the 600 workers in the Nissan supply chain at Nifco in my constituency, for whom this decision is a massive missed opportunity to improve their job security?

[Greg Clark]

The hon. Gentleman should, in fairness, reflect—as I have done—on the renewed commitment that Nissan has made to Sunderland by putting more cash into the plant than was originally intended in 2016. It has made a decision not to expand out of Japan the production of a model that does not have any other production lines around the world, and I regret that, but it has made a big commitment to Sunderland. That is something that we should respect and recognise the importance of.

[Mike Hill (Hartlepool) (Lab)]

I thank the Secretary of State for referencing my predecessor, the former Member for Hartlepool, who was quite right in his observations at the time. Specialist companies in Hartlepool, such as Helios Precision Engineering, have invested heavily in new technologies as part of the supply chain. What will the Secretary of State do to protect local manufacturing suppliers to Nissan and the wider automotive industry post Brexit?

[Greg Clark]

The hon. Gentleman will know that the automotive sector deal, in which Nissan was an important partner, has a significant programme of investment in the skills and capabilities of the supply chain. In fact, the increase in opportunities for the supply chain domestically is one of the principal components of the sector deal that was so widely welcomed by the automotive industry.

[Alex Cunningham (Stockton North) (Lab)]

Unemployment in my constituency is double the national average, and there are hundreds of people in the constituency who are employed at Nissan and at supply chain companies. These supply chain companies also provide goods to other car makers and across the EU. What is the Minister going to do about a customs union that will protect those jobs in the longer term?

[Greg Clark]

To protect those jobs in the longer term, we need to secure our ability to trade without tariffs and without impediment across the whole of the rest of Europe. As I have stated very clearly to the House, it is my view that the House needs to come to a decision within the next few weeks. We need to make compromises with each other to be able to provide that certainty and security to important employers.

[Richard Burden (Birmingham, Northfield) (Lab)]

When it could soon cost less, in terms of tariffs, to import a car to the EU from Japan than it will to export a new car from the UK to the EU in the event of a hard Brexit, is it not easy to see just what impact Brexit uncertainties have on decisions like this? Could not the Government minimise those uncertainties—first, by jettisoning the customs union as a red line for the Government and, secondly, by ruling out no deal?

On diesel, is it not the case that the problem is not with the latest emissions standards, but that Government vehicle excise duty rates hit the newest, cleanest diesels hard and leave the oldest, dirtiest diesels untouched? Will the Secretary of State have a word with the Treasury to do something about that in the spring statement?

[Greg Clark]

The hon. Gentleman makes an important point about the importance of tariff-free trade. The European Union has agreed, and put into operation last week, a free trade agreement with Japan that provides advantages for companies in being able to import and export directly with Japan. In my view, it also increases the urgency that we face to conclude our agreement with the European Union that should allow us to continue to trade with it and with other countries, without interruption.

We have had many conversations about diesel. It is the case that companies, including Nissan, are accelerating their investment; they are investing more than they previously intended to in ultra-low emission vehicles. This is giving the supply chain opportunity. I agree with the hon. Gentleman that we should not send a message that the current generation of diesel engines is a choice that needs to be avoided by consumers thinking about their next car.

[Liz Kendall (Leicester West) (Lab)]

While the Conservative party tears itself apart over the Irish backstop and border, the fundamental problem that we face is that we still have absolutely no clarity about our long-term relationship with the EU. Is it not the truth that it is this uncertainty that is causing huge problems for companies such as Nissan, that the Prime Minister’s withdrawal agreement does not solve that uncertainty—it just prevents us from immediately falling off a cliff—and that, if we go ahead with the Government’s blindfold Brexit, we will back here with more damaging statements and announcements that hurt people’s jobs and livelihoods for years and years to come?

[Greg Clark]

The policy that the Prime Minister has proposed has commanded the support and endorsement of the employers that the hon. Lady is concerned about. I am not aware of any policy proposal from the Labour party that commands any degree of consensus across the Opposition Benches. I have said very clearly today and previously that all Members of this House who were elected in 2017 following the referendum the previous year always knew that this was going to be the most important decision that we would take. It is time to find common ground and to settle on an agreement that commands a majority of support in this House that will provide the confidence and stability that the rest of the world looks to.

[Albert Owen (Ynys Môn) (Lab)]

The Nissan decision is sadly following a developing trend of disinvestment by foreign companies not just in the north-east of England, but north Wales. I appreciate the Secretary of State meeting me later to discuss that. I am a proud member of the all-party parliamentary group on Japan, of which the Minister for Asia and the Pacific, the right hon. Member for Cities of London and Westminster (Mark Field), is also a regular member, and Japanese representatives say clearly to me that there are two strengths to investing in the United Kingdom: the loyal and unionised workforce, and a strong single European market. I ask the Secretary of State to urge his Cabinet colleagues, for a start, to ensure that we have that strong unionised workforce and a strong European single market?

--- Later in debate ---

[Greg Clark]

I gently correct the hon. Gentleman when he talks about disinvestment in Sunderland. It is very important that the House understands that far from being a disinvestment, the commitment that has been given actually involves an increase in the capital investment into the plant. Given that that comes from a company that has other uses for its capital, we should recognise that it is putting more money into Sunderland and into securing its future. With regard to the future, he is right to draw attention to the fact that the reason companies have located very successfully here in this country is partly because of the excellent workforce that we have, partly because of our track record of innovation, and partly because they have had access to a large market that has come from the European Union. It seems to me that we need to continue with all of those.

[Frank Field (Birkenhead) (Ind)]

Have any of the other large car manufacturers in this country sought and gained similar-sized packages of support—I am thinking about Vauxhall—and if they have been refused, why?

[Greg Clark]

As I said in my statement, there has been a regular and long-standing programme of support for companies right across the automotive sector. It is conducted independently. Companies make applications either through the Advanced Propulsion Centre or through the scrutiny of the Industrial Development Advisory Board. This has been a success. Nissan has applied for it, and many other companies have done so as well. For example, I commend the investment that Toyota made in its Burnaston facility. I had the pleasure of opening the production line for the new Corolla there a few weeks ago.

[Mr Ben Bradshaw (Exeter) (Lab)]

I thank the Secretary of State and his like-minded colleagues for what we read they are trying to do to avert a ruinous no-deal Brexit, as he just described it, but I gently suggest to him that when the moment of truth arrives again in 10 days’ time when the votes come back, they will be judged on their deeds and not just their words. I say to my own Front Benchers that if we have a Whip that ignores the unanimously agreed policy of our own party in opposing a no-deal Brexit, they will be judged just as harshly.

[Greg Clark]

I cannot speak for the right hon. Gentleman’s Front Benchers, but he has heard me say that it is incumbent on the whole House to keep the national interest in mind and to reflect our traditions of doing that. I recently looked at the speech that Margaret Thatcher gave when she opened the Nissan plant in Sunderland. She commented that Nissan had chosen the UK because

“within the whole of Europe, the United Kingdom was the most attractive country—politically and economically—for large scale investment and offered the greatest potential.”

That political stability, confidence and pragmatism, which was so important then, is important now, and we should return to it.

[Peter Kyle (Hove) (Lab)]

In his speech in the European Union (Withdrawal) Bill debate, the right hon. Member for Sevenoaks (Sir Michael Fallon), who has just left his place, said that the political declaration was “vacuous”, so I gently point out to the Secretary of State that opposition to his Government’s withdrawal arrangements is not confined to the Opposition Benches. When a country like Japan is looking to invest, and when companies such as Nissan export up to 80% of their products into the single market, will he just acknowledge that being within the single market provides an advantage over the countries that are outside it?

[Greg Clark]

Of course, it depends on the terms of trade that are negotiated. Clearly, being a member of the European Union unquestionably allowed Nissan and others to trade without thinking about tariffs or impediments. We need to secure a deal that allows us to continue to offer Britain as a place of innovation and skills, and a place that can be confident in exporting to the rest of Europe.

[Lilian Greenwood (Nottingham South) (Lab)]

This weekend’s news clearly demonstrates the damage of continued uncertainty about our future relationship with the EU. The Society of Motor Manufacturers and Traders has been warning for many months about the very grave dangers of a no-deal Brexit, but in recent weeks numerous Nottingham employers, including Paul Smith, East Midlands airport and Siemens, have all contacted me to raise exactly the same concerns. The Secretary of State has just admitted that a no-deal Brexit would be ruinous, so when does he think the Prime Minister is going to recognise the damage that she has done by insisting that no deal remains a real option, and instead act to protect jobs and investment by ruling it out?

[Greg Clark]

I hope that when the hon. Lady has been having her discussions with those employers, she has listened to what they have said. The SMMT, for example, has been very clear that in order to avoid the consequences that she talks about, it is necessary to accept the deal that has been agreed. The SMMT said that it is “a positive step” that should be backed. The chief executive of Siemens in the UK has also commended the deal. So if she wants to avoid the disruption that I agree would be caused, she needs to listen to the other part of what people say to her and follow their advice in that respect too.

[Catherine West (Hornsey and Wood Green) (Lab)]

Given the uncertainty that the announcement by Nissan has caused, the job losses announced at Jaguar Land Rover, the worries expressed by Honda, and the Hitachi decision when the Prime Minister of Japan had barely taken off following his visit to our Prime Minister, what worries does the Secretary of State think have arisen in his Department? Does he agree with his junior Minister, the hon. Member for Watford (Richard Harrington), that we are going from

“a crisis into a catastrophe”?

[Greg Clark]

I visit Japan a lot and speak both to the leaders in the Government and the leaders of important investors there. They regard Britain as a place with which they have enjoyed good relationships and in which they have invested with prosperity. They admire the ingenuity of our scientists and our engineers. They are keen to work even more closely together in future. But is true to say that they look at the uncertainty around Brexit and think that after two and a half years it is time that it is resolved and comes to a conclusion. When they say that, we should listen to them and act on their advice.

[Chris Bryant (Rhondda) (Lab)]

The Secretary of State is a nice man, but I honestly feel as if we are going to hell in a handcart. The only people who can genuinely stop this conveyor belt towards a no-deal Brexit in a few weeks’ time are people like him sitting in the Cabinet. They have got to go back to the Cabinet and say to the Prime Minister, “We will not put up with this. This will do lasting damage to our country, to our people, to our jobs and to our standing around the world, and we must put a stop to it; otherwise we will resign.” I suggest that he does that before next week’s votes.

[Greg Clark]

I am grateful for the hon. Gentleman’s advice. I think it is matter of public record that I have constantly and consistently advocated the need for us to be able to secure the trading relationship that we need to make sure that the jobs in his constituency and all around the country continue. It is important that I should do that.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The automotive industry, employing 850,000 workers, is the jewel in the crown of manufacturing excellence. We have had 4,500 jobs going at Jaguar Land Rover and we now have the news about Nissan. The Society of Motor Manufacturers and Traders is warning that the industry is now “on red alert” as a consequence of Brexit uncertainty. Does the Secretary of State agree, on the one hand, that we should rule out any question of a no-deal Brexit, and crucially, on the other hand, that this House needs to come together at the next stages to negotiate a deal that will provide much greater and longer-term security, at the heart of which must be the customs union?

[Greg Clark]

The success last week of the amendment that the hon. Gentleman tabled with my right hon. Friend the Member for Meriden (Dame Caroline Spelman) demonstrated that the majority of Members of this House are determined not to see a no-deal Brexit. Indeed, to avoid that, we need to come together in just the way that he says to reach a deal, making compromises with each other that can provide the certainty that investors need to continue the period of great success that we have enjoyed in this magnificent industry.

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

In response to the 2008 world economic crisis, the Labour Government tasked the Automotive Council, which they had established, with putting together emergency measures to sustain our important automotive sector. We are in a similar situation, and we need action. The Labour Government introduced the scrappage scheme, which led to me, as the last Labour automotive Minister in 2010, announcing the Nissan Leaf going to Sunderland—that is the type of action we need. Will the Minister task the Automotive Council with putting together emergency measures that it will support to sustain not only Sunderland but all the other plants, including at Bridgend, Dagenham and Ellesmere Port, to ensure that the strong automotive sector we have all built—Labour, Liberal Democrat and Conservative—over the past 15 years is maintained at this dangerous time?

--- Later in debate ---

[Greg Clark]

It is important for the hon. Gentleman to recognise that the investment being made in Sunderland is greater than was planned two and a half years ago. The company is investing more of its capital in Sunderland than it originally intended. That is significant because the pace of change in the sector means that there are great opportunities for investment right across it. We have a reputation because of a long-term commitment to the sector that started before this Government for being at the leading edge of innovation. If we can resolve the question of our future relationship with the European Union, I believe that substantial investments will be made very quickly, to the great benefit of this country and the people who work across it.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

When I started my career in manufacturing, I had the great benefit of being taught by experts in lean manufacturing from Nissan, Toyota Burnaston and Airbus. One thing that was drilled into me from a young age was the concept of the seven wastes: transportation, inventory, motion, waiting, over-production, over-processing and defects. The worst of those wastes was inventory. As a result of the uncertainty facing British industry, inventory levels are increasing, putting British industry at a permanent competitive disadvantage. Does the Minister recognise that the absence of a customs union will put British industry at a permanent strategic competitive disadvantage?

[Greg Clark]

I am impressed at the hon. Gentleman’s recall of the principles that he was taught. He is right that one of the benefits and sources of efficiency in our production system is that companies do not need warehouses or inventory. It is clearly a matter of huge regret that companies are having to invest in inventory and warehouses and divert capital from more productive uses. I agree that we need a deal and an agreement that allows just-in-time production to continue. I strongly share his analysis of that.

[Matt Western (Warwick and Leamington) (Lab)]

This is clearly a terrible decision for not only Nissan Sunderland and the whole north-east but the entire automotive industry, given how much of it depends on scale and component suppliers working to scale. The Secretary of State understands this sector particularly well. Does he accept that the industry wants a customs union and a single market? Does he accept that the Government have a responsibility to remove the diesel levy that they introduced two years ago?

[Greg Clark]

Obviously the hon. Gentleman has great familiarity with the industry, from his constituency perspective. The industry has consistently expressed itself satisfied with the deal that has been proposed. It has said so in terms at the overall level, through the Society of Motor Manufacturers and Traders, and individual companies have said so. The industry is concerned that this House has not come to a resolution to turn that agreement into something that it can depend on. I hope he will join colleagues from across the House in advocating the kind of compromise that will enable the whole House, not just by a slim majority but wholeheartedly, to agree a deal that can send confidence to investors in this industry and others around the world.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

There is no doubt that this is bad news. At Vauxhall in Ellesmere Port, we have had more than our share of bad news in recent times—we have lost over half the workforce in the last year. Now that we know what the Government are prepared to offer to encourage investment in car manufacturing, can the Secretary of State confirm that the same or very similar terms will be available to any other applicants?

[Greg Clark]

When I first made the statement to the House on 31 October 2016, I described the programme of support that has been operated for many years, in which investment in training the workforce, environmental improvements and R&D can be applied for, and those applications are subject to independent scrutiny. We have a good record of providing that. It is available to large, medium and small firms and is well known in the sector.

Nuclear Update

Greg Clark Excerpts

Thursday 17th January 2019 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement following Hitachi’s announcement this morning that it intends to suspend development of the proposed Wylfa nuclear power project, as well as work relating to Oldbury.

The economics of the energy market have changed significantly in recent years. The cost of renewable technologies such as offshore wind has fallen dramatically, to the point where they now require very little public subsidy and will soon require none. We have also seen a strengthening in the pipeline of projects coming forward, meaning that renewable energy may now be just as cheap, but also readily available.

As a result of the developments over the last eight years, we have a well-supplied electricity market. Our electricity margin forecast is more than 11% for this winter, having grown for each of the last five years. While that is good news for consumers as we strive to reduce carbon emissions at the lowest cost, that positive trend has not been true when it comes to new nuclear. Across the world, a combination of factors, including tighter safety regulations, has seen the cost of most new nuclear projects increase as the cost of alternatives has fallen and the cost of construction has risen. That has made the challenge of attracting private finance into projects more difficult than ever, with investors favouring other technologies that are less capital-intensive up front, quicker to build and less exposed to cost overruns.

As I made clear to the House in June, the Government continue to believe that a diversity of energy sources is the best way of delivering secure supply at the lowest cost and that nuclear has an important role to play in our future energy mix. In my June statement, I therefore reaffirmed the Government’s commitment to nuclear. I also announced that we would be entering into negotiations with Hitachi over its project at Wylfa. Given the financing challenges facing new nuclear projects, I made clear to the House that we would be considering a new approach to supporting Wylfa that included the potential for significant direct investment from the Government.

As I am sure the House will understand, while negotiations were ongoing the details were commercially sensitive, but following Hitachi’s announcement I can set out in more candid terms the support for the project that the Government were willing to offer. First, they were willing to consider taking a one-third equity stake in it, alongside investment from Hitachi, agencies of the Government of Japan, and other strategic partners. Secondly, they were willing to consider providing all the debt financing required for the completion of construction. Thirdly, they agreed to consider providing a contract for difference, with a strike price expected to be no more than £75 per MWh. I hope the House will agree that that is a significant and generous package of potential support, which goes beyond what any Government have been willing to consider in the past.

Despite that potential investment, and strong support from the Government of Japan, Hitachi reached the view that the project still posed too great a commercial challenge, particularly given its desire to deconsolidate it from its balance sheet and the likely level of return on its investment.

The Government continue to believe that nuclear has an important role to play, but, critically, it must represent good value for the taxpayer and the consumer. I believe that the package of support that we were prepared to consider was the limit of what could be justified in this instance. I was not prepared to ask the taxpayer to take on a larger share of the equity, as that would have meant taxpayers’ taking on the majority of construction risk, and the Government’s becoming the largest shareholder with responsibility for the delivery of a nuclear project. I also could not justify a strike price above £75 per MWh for this financing structure, given the declining costs of alternative technologies and the financial support and risk-sharing already on offer from the Government, which were not available for Hinkley Point C.

Let me reassure the House that Hitachi’s decision to suspend the current negotiations on the project was reached amicably between all parties once it became plain that it was not possible to agree a way forward. Hitachi has made clear that while it is suspending project development at this stage, it wishes to continue discussions with the Government on bringing forward new nuclear projects at both Wylfa and Oldbury, and we intend to work closely with it in the weeks and months ahead. We will also continue to strengthen our long-standing partnership with the Government of Japan on a range of civil nuclear matters; and, importantly, we will continue to champion the nuclear sector in north Wales, which is home to world-leading expertise in areas such as nuclear innovation and decommissioning and which offers ideal sites for the deployment of small modular reactors.

If new nuclear is to be successful in a more competitive energy market—I very much believe that it can be—it is clear that we need to consider a new approach to financing future projects, including those at Sizewell and Bradwell. Therefore, as I said initially in June, we are reviewing the viability of a regulated asset base model and assessing whether it can offer value for money for consumers and taxpayers. I can confirm that we intend to publish our assessment of that method by the summer at the latest.

Through our nuclear sector deal, we are exploring the possibility of working with the sector to put the UK at the forefront of various forms of nuclear innovation. We are looking into whether advanced nuclear technologies such as small modular reactors could be an important source of low-carbon energy in the future, and we are considering a proposal from a UK consortium led by Rolls-Royce that would result in a significant joint investment.

I began my statement by outlining the challenges that the nuclear industry faces as the energy market changes. I will set out a new approach to financing new nuclear in the planned energy White Paper in the summer. I know that the future of the nuclear sector is of great interest to many Members, and I will ensure that those on both sides of the House, and its Select Committees, have an opportunity to consider the proposals.

I understand the disappointment that the dedicated and expert staff at Wylfa and Oldbury will feel as a result of today’s announcement by Hitachi. New commercial nuclear investments around the world are experiencing the same challenges as new sources of power become cheaper and more abundant. Nuclear has an important role to play as part of a diverse energy mix, but it must be at a price that is fair to electricity bill payers and to taxpayers. We will work closely with Hitachi and the industry to ensure that we find the best means of financing these and other new nuclear projects.

Our commitment to Anglesey—with its nuclear, renewables and deep expertise, it is a real island of energy—will not be changed by this decision. I will work with the hon. Member for Ynys Môn (Albert Owen), the Welsh Government and the local community to ensure that its renown is supported and strengthened, and I will do the same with my hon. Friend the Member for Thornbury and Yate (Luke Hall).

I pay tribute to the staff of Horizon and Hitachi and to my own officials, those in the Department for International Trade and our embassy in Japan, and those of the Government of Japan, who spent many months doing their utmost to support a financing package. I know that they left no stone unturned in seeking a viable commercial model for this investment, and I very much hope that their work and professionalism will lead to a successful partnership following this period of review. I commend this statement to the House.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I thank the Secretary of State for his statement, but he must recognise that the Government’s new nuclear strategy, adopted by the Conservatives and spearheaded by their Liberal Democrat coalition partners in 2013, is now in complete meltdown. The Government have reacted far too slowly to ongoing concerns from nuclear partners, such as Hitachi’s UK nuclear arm Horizon, which have been raising concerns over funding mechanisms since purchasing the project from RWE and E.ON back in 2012. Today’s decision to withdraw from the Wylfa nuclear power plant lays a significant blow on our economy.

The company’s statement reads:

“Horizon Nuclear Power has today announced that it will suspend its UK nuclear development programme”.

That sounds very much like not only is Wylfa on the chopping block, but so, perhaps, are plans for Hitachi’s other nuclear project—the Oldbury nuclear power plant in Gloucestershire. The Secretary of State has stated that Hitachi wants to work on new projects at Wylfa and Oldbury. What does that mean in the light of the clear statement Horizon has made this morning?

Only two months ago, the Government’s lack of clarity over funding for new nuclear led Toshiba to withdraw from its new nuclear project in Moorside. With the three reactors expected at Moorside and two each in Wylfa and Oldbury, that makes a total of 9.2 GW of new nuclear energy that will not now be built. Can the Secretary of State tell us where he will find this power—not only through the next winter, but over the next 10 years?

The long-term coherence of the UK capacity arrangements is now significantly disrupted. With the capacity market also falling foul of legal challenge, these elements add up to a strategic energy sector that is now being grossly mishandled by this Government. Now that their nuclear plan has gone up in smoke what plan can the Secretary of State spell out to us for finding new backers for these projects? Given the apparent capacity constraint, is he intending to uprate the coming contracts for difference auction, removing the caps on capacity and funding that he has imposed to provide further opportunity to build new renewable energy capacity to replace what has been lost?

For this plant at Wylfa alone, Hitachi had planned to invest £16 billion. Does the Secretary of State have contingency plans, rather than warm words, that he can announce today for the economies of Anglesey and north Wales, where Wylfa was projected to create up to 10,000 jobs at peak periods of construction and 850 permanent jobs? For that matter, what about Moorside and the plant it lost two months ago? Government dithering leading to the cancellation of that plant has seriously undermined the UK’s energy security, its decarbonisation goals and the economy of Cumbria. The people of Moorside expected the plant, and roads, infrastructure and even apartment blocks had been built in preparation, all of which will now go to waste.

I come back the issue of Wylfa. Given that it is the Welsh economy that has lost £16 billion of inward investment, will the Secretary of State think about the £1.3 billion—less than a tenth of the price—required to build the Swansea tidal lagoon?

Given that energy is one of the sectors that creates the most carbon, today’s news deepens our profound concern about the Government’s ability to meet their own climate targets. The Labour party is proud to have announced our goal of reaching net-zero greenhouse gas emissions before 2050 and we congratulate the Government on attempting to catch up with our green ambitions. But given that the clean growth plan was already falling short and the Government were already failing to meet those targets, can the Secretary of State give us some detail today on how he expects to meet UK carbon budgets in the light of today’s developments? Can he assure us he is not intending to replace the low-carbon power that has been lost with new fossil fuel plants?

Finally, there appears to be some confusion about what was and was not said about nuclear power when the Prime Minister met Japanese Prime Minister Shinzō Abe last week. Did she raise Wylfa nuclear power station when she met the Japanese Prime Minister? It is an odd coincidence that this decision from Japan-based Hitachi has come so close to those meetings. Either they talked about the project and what was said was unsatisfactory, and the project was cancelled, or the Prime Minister did not think it worth mentioning, and it was still cancelled.

Confidence in the Government is a very live question today. The people of north Wales and Moorside have every reason to have none in this Administration.

[Greg Clark]

I will respond to the hon. Gentleman’s points, but I will start by saying one thing about nuclear investment. I have been clear in maintaining my support and that of the Government for new nuclear, but, for investments of over 60 years, a degree of cross-party support is required for those commercial investments, which, as we have seen, are difficult to secure.

The hon. Gentleman expressed disappointment that the investment was being suspended, but he himself has said we do not need nuclear power. The Leader of the Opposition has said he is passionately opposed to nuclear power and nuclear weapons in equal measure, the shadow Chancellor said he would end nuclear power within the first 100 days of a Labour Government, and the new Welsh First Minister said:

“I think the attitude to nuclear power we have here in Wales is to be sceptical about it”.

If we in this House want to encourage international investors to invest in new projects, it behoves us to express solidarity and consistency of purpose.

I have been very clear about why Hitachi made this decision. We understand it. It is was commercial decision. The hon. Gentleman did not say whether he would have gone further than we were willing to go. Is he proposing that we take more than one third of the equity—in effect, take Government control and all the risk attached to such an investment? He did not say whether we should be providing a contract for more than £75 per MWh, which would go straight to the bills of customers—both industrial and residential. It is hard to say how we can go beyond financing all the debts. I think, then, that fair-minded Members would accept that we have made a substantial and generous offer, but unfortunately it has not been possible to achieve the outcome that all sides wanted.

The hon. Gentleman asks how we can continue discussions and why the company has suspended, rather than cancelled, the proposals. It is for the reasons I have said. We are going to look at new financing models, including the regulatory asset base model recommended by the Public Accounts Committee. I think it makes sense to do that.

On our future energy needs, the hon. Gentleman was wrong to talk about the next 10 years, because we are talking about supplies beyond that. There is no issue with the future security of supply; National Grid itself has said that. Plans for Wylfa are long term and there is time for the market to react to this announcement. In many ways, the challenge of financing new nuclear is one of falling costs and greater abundance of alternative technologies, which means that nuclear is being out- competed. Far from there being a difficulty with future supply, those are the reasons why the competitiveness of nuclear is more difficult.

The hon. Gentleman mentions the other projects, including at Moorside in Cumbria. As I said, that decision was taken for different reasons, but in the review and the White Paper we will publish, that model will be available to all such sites. Finally, in the case of other renewables, we have seen a great expansion in renewable capacity, and that will continue. He mentioned the case of the Swansea tidal lagoon. No one is more enthusiastic than I about innovation and new technologies, but the truth is that the costs of the proposed project were three times that of Hinkley Point C, and a full programme would make a tiny contribution to our energy supply for a much greater cost.

I hope that we can work together in the weeks and months ahead. The hon. Gentleman is an expert and a dedicated student of energy policy. In considering the White Paper, I hope that we can agree an approach that will command the support of international investors, so that this country can continue to be a nuclear nation.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I thank my right hon. Friend for his statement and for the extraordinary lengths that he was willing to go to in trying to create the right conditions for this important north Wales project to happen. However, given Hitachi’s decision, given the decision on Moorside and, in fact, given the failure of a whole swathe of Japanese nuclear projects around the world, are the days of relying on mammoth nuclear power stations that make huge demands of taxpayers’ cash over? Should we not be putting more energy into examining smaller nuclear reactor technology?

[Greg Clark]

My right hon. Friend is right that small modular reactors have significant potential. The nuclear sector deal that we agreed with the sector and published last year contains a substantial commitment to small modular reactors, many of which would be deployable on the sites of existing and recently decommissioned nuclear reactors. However, even large new nuclear reactors can make a useful contribution. There is a challenge in every country, and this is by no means just a feature of Japanese investors. I have described clearly and, I hope, candidly the challenges that exist given the abundant availability and falling prices of alternatives. That is why we will take forward a serious assessment of whether a different financing model might make the economics more competitive. Again, the sector deal that we struck contains a programme to reduce the build costs of new nuclear, which would of course also help its financeability.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

This statement confirms that the UK Government’s nuclear programme is in tatters, yet the Secretary of State comes to the House, commends this statement, and says that he will carry on regardless, which makes absolutely no sense whatsoever. The National Audit Office confirmed that the Hinkley Point C strike rate of £92.50 per MWh was a bad deal. We know that offshore wind is currently £57.50 per MWh, but that is based on a 15-year concession, as opposed to a 35-year concession for the nuclear deal.

The Secretary of State has confirmed that the Government were so desperate for Wylfa that they would take something like a £6 billion stake and provide £9 billion of debt financing, yet he pretends that they were being prudent by limiting the 35-year contract to £75 per MWh. His use of the word “generous” in the statement could not be more appropriate. When Toshiba pulled out of Moorside with the loss of £100 million, its share price increased. At the time, the Secretary of State said, “Don’t worry. The circumstances are unique.” With this latest setback from Hitachi, the UK Government need a proper re-evaluation of their nuclear policy; they should not look just at alternative funding mechanisms.

Four existing nuclear power stations are due to close by 2024, taking more than 4 GW of capacity out of the grid, so what is the Government’s plan for replacing that capacity? New nuclear power stations are clearly not an option that could be completed by 2024. When will we know how much money is going to be thrown at Rolls-Royce for the small modular reactors that the Secretary of State mentioned? Why are the Government still blocking onshore wind in Scotland when it is clearly the cheapest mode of generation? When is the cut-off date for the ongoing discussions with Hitachi? When will the plug finally be pulled? When did the Government first find out about Hitachi pulling out? It was already being reported in the press, so how long before coming to the House to make this statement did the Secretary of State find out? When will nuclear power be properly benchmarked against onshore and offshore wind? When will the Government wake up and end their ideological obsession with nuclear?

[Greg Clark]

Given the hon. Gentleman’s suggestion that the strike price for Hinkley Point C was excessive, I would have thought he would welcome and approve of my statement, which sets a limit on what it is possible to provide to finance a private investment. He asks when the decision was made by Hitachi. My understanding is that it was made in Japan at 9 o’clock this morning, and I hope he would accept that I have come to the House as soon as possible.

The hon. Gentleman is critical of the nuclear industry, but I would have thought that he might want to pay tribute to Scotland’s proud tradition in the nuclear sector and to the people that have worked and contributed to our energy supply and still do. Chapelcross, Dounreay, Hunterston and Torness have for decades provided good jobs and employment both directly and in the supply chain across Scotland and continue to do so today. My determination to continue our tradition of being a nuclear nation offers continuing opportunities to Scotland, and I would have thought that he would welcome that.

Far from being at the expense of renewable energy, our energy policies have supported Scotland to become a world leader in securing energy from renewable sources. In fact, we heard earlier this month from WWF Scotland that wind output in Scotland has broken through the barrier of 100% of demand for the first time. That comes as a result of the policies that this Government have put in place to bring down the costs of wind, which is highly competitive. As a result, that is causing some competitive challenges for other technologies, including nuclear, but I would have thought that the hon. Gentleman would welcome the progress that has been made on renewables.

[Mr David Jones (Clwyd West) (Con)]

This announcement, although widely anticipated, will be greeted with dismay in north Wales, where Wylfa was and remains an important part of the vision for the future of the north Wales economy, as expressed in the north Wales growth bid. My right hon. Friend will know that the all-party parliamentary group on Mersey Dee North Wales has been working closely with both central and local government in connection with the growth bid. Will he or one of his Ministers be prepared to meet the group to discuss Wylfa, its future and the potential for other means of energy generation in north Wales?

[Greg Clark]

I pay tribute to the role that my right hon. Friend played in the earlier stages of discussions for the Wylfa site. As is evident, such matters are complex and difficult to secure, but he laid the groundwork for some of the progress that has been made, and I hope that the process might ultimately be successful. Of course, I have complete commitment to the north Wales growth deal, and I would be delighted to have a meeting with him and my ministerial colleagues. The Secretary of State for Wales will be in Anglesey tomorrow and will be meeting members of the local community.

As I said in my statement, we regard Anglesey and north Wales as having exceptional strengths in our energy future. Bangor University, for example, contributes exceptional world-leading innovation, and we have backed that in the sector deal. Colleagues across Government and I will work closely with colleagues in north Wales to ensure that that potential is realised.

[Albert Owen (Ynys Môn) (Lab)]

I thank the Secretary of State for coming to the House at the earliest opportunity to give this statement. He will know the importance of this matter to my local community, to the Welsh and UK economies and, indeed, to the Government’s nuclear policy. With 10 years of planning, a lot of work has gone into this project, as he rightly acknowledges. It started off under the Labour Government and was continued by the coalition Government and, indeed, the current Government. Wylfa is the best site in the United Kingdom for a new nuclear build, but Hitachi’s announcement puts the jobs of 400 people at risk, many of whom are my constituents. There is the potential for some 8,000 to 10,000 construction jobs, hundreds of operational jobs and, importantly, 33 apprenticeships, so I hope that we can work to ensure that we save as much of that as possible. The supply chain and small and medium-sized enterprises are important as well, and they have been planning for this for years.

So I ask the Secretary of State: can we work together to keep this project alive and ensure that we create the momentum so that it can be ready for a future developer, or indeed this developer, with the right mechanism? We need a better mechanism for financing, not just in the nuclear sector but for all large energy construction, including the tidal lagoon. I pay tribute to my hon. Friend the Member for Southampton, Test (Dr Whitehead) in this regard, because I feel that an opportunity for innovation has been lost with the tidal lagoon, and the Welsh economy needs it. We know that £16 billion has been taken out of the Welsh economy as a result of that announcement, and we need to redistribute that.

I echo the right hon. Member for Clwyd West (Mr Jones) in saying that we need extra help and extra resources to plug the gap following this announcement today. We have a mechanism through the north Wales growth deal whereby the Welsh Government work with the UK Government to create jobs, and I urge the Secretary of State to work with the new First Minister and the Economy Minister on this. The north Wales growth bid can be successful. I will be meeting the Secretary of State for Wales as well, but I want to ask the Secretary of State to work closely with us on this. Will he host a delegation involving myself, key stakeholders and his officials to look at a funding mechanism for the future that will work not just for new nuclear but for all large projects? North Wales is a centre of excellence for low carbon, nuclear, renewables and marine energy. It has the potential; let us work together to make this happen.

[Greg Clark]

I repeat my commendation of the hon. Gentleman. He has been a consistent and passionate campaigner not only for the interests of his constituents but for the excellence of the industry in north Wales, and in Anglesey in particular. I can give him that wholehearted commitment. My officials will certainly meet him, but they will also come with me and my nuclear Minister and we will work together in a completely open-book way on all the options. The hon. Gentleman serves with distinction on the Select Committee, which I think will also want to scrutinise the options and the potential for financing. I repeat the commitment I gave to my right hon. Friend the Member for Clwyd West (Mr Jones) that we continue to regard the north Wales growth deal as an excellent base to reinforce the strengths of the area, and I will work very closely with him on this.

The hon. Gentleman also mentioned marine energy, which is one of the opportunities that we have in his constituency and around north Wales. Far from having closed the door to marine technologies, we want to continue to invest in innovation. When it comes to deployment, the technologies need to demonstrate value for money, but we will work with them, as we did with the offshore wind sector, to bring costs down so that they can win at auction alongside other technologies.

[Mr John Whittingdale (Maldon) (Con)]

Does my right hon. Friend agree that it remains highly desirable to have a diversity of providers and technologies in civil nuclear generation? Will he therefore confirm, particularly in the light of recent concerns expressed about some Chinese investments, that the Government will remain fully supportive of the proposal from China General Nuclear to invest in a new power station at Bradwell-on-Sea in my constituency, subject of course to a generic design assessment and other permissions being obtained?

[Greg Clark]

As my right hon. Friend knows, CGN is an investor in the Hinkley Point C nuclear power station, which is being built as we speak. That is proceeding at pace. When it comes to Bradwell, CGN is again making successful strides through the approval process. All investment is subject to that process, but I can confirm that it has our full support as it goes through the regulatory approvals.

[Chris Ruane (Vale of Clwyd) (Lab)]

I, too, thank the right hon. Gentleman for coming to the House today to deliver his statement. I also thank him for his openness to meeting north Wales Members on the issue of Wylfa Newydd. In his statement, he said that central Government were now relying more on renewables. May I put the north Wales picture to him? I can tell him that 1,500 wind turbines—sea turbines—were planned for the Rhiannon field off the coast of north Wales, but those plans have been cancelled by the private sector. The tidal lagoons for Wales were key to the development of the Welsh economy, yet the Government pulled their support for the Swansea Bay tidal lagoon. That had a knock-on effect for the huge lagoon planned for off the coast of north Wales, and we have heard today about the cancellation of a £16 billion investment in the north Wales economy. This will devastate the north Wales economy. The people of north Wales need to know that the Prime Minister is batting for them and for the UK. Will the right hon. Gentleman ask the Prime Minister to place in the House of Commons Library the minutes of her meeting with the Prime Minister of Japan, to ensure that we know that that is what she has been doing on behalf of the people of north Wales?

--- Later in debate ---

[Greg Clark]

The Prime Minister has repeatedly discussed nuclear investment with the Prime Minister of Japan, as have I with my opposite number there. In fact, in November, I flew to Tokyo to discuss the negotiations going on here, given the difficulties that the investor was having, and I met my opposite number at the Japanese Ministry of Economy, Trade and Industry. This has been a substantial, and cordial, Government-to-Government relationship, and the hon. Gentleman has my assurance that we will continue that. I mentioned in my statement the work of our embassy in Tokyo, which has been an excellent and expert source of advice. That will continue to be available.

When it comes to investment in renewables, the hon. Gentleman will know that Wales is a substantial and proud leader in renewable energy. I think Gwynt y Môr is the second largest wind farm already deployed in Europe. I mentioned in my statement the rising availability of alternative technologies. To put this in context, in 2017 we procured more than 3 GW of offshore wind in a single contract for difference auction at £57.50 per MWh. That is more in a single auction than this plant was going to provide. As I have said, the challenge is the competition coming from other technologies, and Wales is a beneficiary of some aspects of that.

[Zac Goldsmith (Richmond Park) (Con)]

In his statement, my right hon. Friend said that the economics of the energy market had changed significantly in recent years, meaning that renewable energy could now be not only cheap but readily available. Does he share my concern that consumers will not see all the benefits of the reduced prices, given that we are bound into these exceedingly long-term and hugely expensive contracts? An example is Hinkley, whose strike price means that it will probably be the most expensive form of energy in the history of energy generation. Can he give me an assurance or commitment that nuclear power will not result in consumer bills skyrocketing in the years to come?

[Greg Clark]

That is demonstrated in my statement today. We were talking about a strike price substantially less than that of Hinkley, and I said when I made my statement to the House on Hinkley that we would do that. I say gently to my hon. Friend, who is a lifelong environmentalist, that exactly the same arguments were advanced against the initial contracts for offshore wind—namely, that they would be burdensome and that we should not enter into them. We have now seen substantial capacity becoming available at prices that will shortly be free of subsidy entirely. That is an excellent development for consumers, for the reasons that he has given, but it is also the case that the manufacturers in the supply chain are located right across the UK, which is a further industrial benefit of the strategic policy.

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

I agree with the Secretary of State that Britain has had huge success in renewables, especially with cheaper offshore wind, thanks to the Liberal Democrat policy that he has kept in place. However, I also want to express astonishment at the generosity of the offer to Hitachi. With the equity stake and the debt finance, it appears to be even greater than that offered to Hinkley Point C, yet Hitachi—like Toshiba at Moorside—is still unwilling to build new nuclear in Britain. What does the Secretary of State blame most for this setback to his nuclear strategy? Is it the fact that renewables are becoming much cheaper than nuclear, is it Japan’s fears about Brexit, or is it something else?

[Greg Clark]

I am disappointed in the right hon. Gentleman who, as a former Secretary of State, I would have thought knows the changing economics of the energy market, which I set out pretty clearly. I gently remind him that, as Secretary of State, he was responsible in his time for the negotiation of the terms of the Hinkley Point C agreement, so it is surprising to hear him being so critical of it.

The right hon. Gentleman wants to take credit for one of the policies for which he was responsible but not the other, which I might uncharitably say is characteristic of his party. As with Hinkley Point, there was a recognition that financing such significant projects—£16 billion from a private company—is hard to do through the conventional channels of private investment. It is desirable to have nuclear as part of a diverse energy mix. If I might put it this way, having a substantial mix of technologies has an insurance quality. We should recognise that, but there is a limit to what we can pay for the benefit, which is reflected in my statement.

[Peter Aldous (Waveney) (Con)]

Sizewell C is an important component of the world leading low-carbon energy sector emerging along the north Suffolk coast. Can the Secretary of State confirm that the Government remain committed to Sizewell C and to negotiating a value-for-money deal with EDF?

[Greg Clark]

I can confirm that to my hon. Friend.

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

Can the Secretary of State confirm what the Prime Minister said to the Prime Minister of Japan when she raised the issue of Wylfa with him last week?

[Greg Clark]

Sadly, when the Prime Minister was meeting the Prime Minister of Japan, I was in this Chamber winding up the debate on the meaningful vote. I would otherwise have been in their company, but I was doing my duties in this House. I was not at the meeting, but I can put the hon. Gentleman’s mind at rest. The involvement of the Prime Minister in this and other joint investments with Japan has been consistent and very long standing. As I said to the hon. Member for Vale of Clwyd (Chris Ruane), I have visited Japan many times to discuss this at the highest level with the Government and with the parties.

[Luke Hall (Thornbury and Yate) (Con)]

I thank the Secretary of State for coming to the House to set out his discussions in such detail. He will appreciate the level of concern in south Gloucestershire this morning, especially among the people who rely on the jobs at Oldbury and its supply chain, because of the uncertainty following this announcement. There are localised issues, such as the properties bought up around Oldbury that now lie vacant. People are unsure about the future of those properties and about some of the more specific, niche issues. Will the Secretary of State come to Oldbury and meet me to discuss the issue with local councillors, workers and stakeholders to make sure we can find a route forward?

--- Later in debate ---

[Greg Clark]

As I said to the hon. Member for Southampton, Test (Dr. Whitehead), I recognise that this is a sad time for the staff, who are expert and well respected in their fields. This is a financing decision, and it is no reflection on the quality of their work. They are of the highest calibre.

Of course I will come to meet my hon. Friend and his constituents to discuss how we can make sure that his part of the world, as well as north Wales, continues to have the reputation for excellence in energy that it has long enjoyed.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Secretary of State made some very supportive comments in his statement about small modular reactors, which I welcome. I thank him for meeting me recently to discuss the ideas put forward by Professor Keith Ridgway and others at the nuclear advanced manufacturing research centre in Sheffield for ways in which we can develop capacity to produce the parts for SMRs in Sheffield. The Secretary of State has issued supportive words about that, but will he now go further and get his officials to work with Professor Ridgway and others to develop these plans, which would be good for both our energy policy and our industrial strategy?

[Greg Clark]

The hon. Gentleman is quite right. I visited the nuclear advanced manufacturing research centre, as he knows, and I was impressed with the facilities. The sector deal makes a commitment to new nuclear technologies, and a consortium has made an application to the industrial strategy challenge fund. He understands that the operation of that fund, as with all science and innovation investments, is correctly scrutinised by a panel of global experts. They have given the application a positive assessment, but it has further due diligence to complete. Of course, I will update him and the House when that process has finished.

[James Heappey (Wells) (Con)]

I welcome what the Secretary of State said in his statement about the decreasing costs and increasing availability of renewables. If we are to embrace a renewables-heavy energy mix, does he agree that we need to look at what changes we must make to the capacity market to allow demand response, storage and other types of digital flexibility to play their part fully in that energy system?

[Greg Clark]

My hon. Friend is quite right, and he has great experience and expertise in energy matters. We have talked a bit about offshore wind today, but one of the big changes that is taking place in the energy market, and affecting the economics of energy, is in the technologies and ways of working such as demand-side response and storage. We have not mentioned those, but they are contributing to how our energy system can be both more resilient and lower cost than was dreamed possible even 10 years ago.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

The Secretary of State rightly points to the fact that renewable energy is a Scottish success story, and such events vindicate the Scottish Government’s decision not to join the UK Government’s vision for the UK as a nuclear nation. Will he please outline the Government’s sunk costs in terms of civil service time and any other development costs incurred as a result of this project?

--- Later in debate ---

[Greg Clark]

The model we have pursued is one in which these proposals are private sector-led. I place on record my respect and gratitude for the time, effort and financial investment that Hitachi has made in working with us to develop the proposal to this stage. Of course there have been discussions with my officials, but the vast majority of the costs have been with the proposed developer.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

I declare an interest as a council member of the Institution of Engineers and Shipbuilders in Scotland, which recently published a report by Professor Iain MacLeod of the University of Strathclyde entitled, “Engineering for Energy: A proposal for governance of the energy system”.

This is a major issue because of the risk of blackouts increasing from hours to days, particularly in Scotland. If that does occur, and we are talking about a lengthy delay in restarting the bid, there will be negative consequences for the supply of food, water, heat, money and petrol. It would be a disastrous situation for the Scottish economy and could lead to civil unrest. The root cause of that risk is the closure of large-scale coal and nuclear power stations, and the grid has not been reformulated and replanned to deal with the intermittency of renewables. That is a massive risk that the Scottish Government have not done anything to address. What will the Secretary of State do to reduce this massive existential risk to the national security of this country?

[Greg Clark]

I do not agree with the hon. Gentleman, but I note his interest and his experience in this field. National Grid is undertaking a substantial programme of transformation to make the grid smarter and able to accommodate intermittent renewables. Again, progress has been made. The amount of renewable energy being deployed is vastly in excess of what the right hon. Member for Kingston and Surbiton (Sir Edward Davey) was advised was possible when he was in office. Great strides are being made. A smarter grid is a more effective and more resilient grid.

[Dr David Drew (Stroud) (Lab/Co-op)]

Will the Secretary of State call together the MPs who are affected by the supply chain implications? In my case, Berkeley was predicated on both Wylfa and Oldbury. People with potential are being retrained in the nuclear industry. Does he understand the knock-on effects that that will have, and will he meet us to see how we can try to mitigate them?

[Greg Clark]

I would be delighted to do that. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), who is responsible for the nuclear industry, and I regularly meet the representatives of the industry, including the supply chain. I emphasise that it was Hitachi’s decision to suspend the development of the project but, as the hon. Member for Stroud (Dr Drew) knows, a bit further down the road from him is Hinkley Point C, one of the most significant pieces of civil engineering being constructed in the world.

People are being trained in construction and in nuclear engineering in a way that has not happened in this country for more than a generation, giving opportunities to many suppliers. Nearly two thirds of the value of the Hinkley Point C contract goes with domestic suppliers. He knows that there is a renaissance of the suppliers of nuclear expertise, and I am happy to meet him and the companies that we regularly meet.

[Martin Whitfield (East Lothian) (Lab)]

I am grateful for the speed with which this statement arrived at this House today, and I compliment the Secretary of State on that. Part of EDF’s fleet is at Torness is my constituency, and Members have pointed out the many skilled jobs involved and contributions that these workers make. Some of the answers to the problems that will come in 2030, which is, unfortunately, not too far away, lie in not only bigger issues, such as the small modular reactors that have been discussed today, but with smaller, simpler decisions. I am thinking of things such as the simplicity of being able to move apprentices around the fleet in the UK, which is impossible for EDF at the moment because of the differentiation in approach taken by the Scottish Government north of the border and the Government down here. Will the Government confirm that they will continue to work with EDF in particular—I say that on behalf of my constituency—and all suppliers to try to solve all the small problems, as well as the big ones, to facilitate a better, stronger future for the nuclear industry, which we require in order to keep the lights on in the UK?

[Greg Clark]

I am grateful to the hon. Gentleman for such a constructive contribution. He raises an excellent point, and I would be happy to meet him and EDF to solve that problem, of which I was not aware. It seems to me that if we are to benefit from the opportunities that exist across the UK to develop skilled work and make it available to residents of all parts of the UK, we should not put obstacles in the way of that.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 8th January 2019 Commons Chamber

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

2. What steps he is taking to maintain cross-border supply chains after 29 March 2019.

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

Supply chains between the UK and the EU are vital—they support at least 200,000 UK traders and around 55,000 manufacturing jobs in Scotland alone. The deal the Government have negotiated with the EU, by avoiding customs checks, will protect supply chains and jobs right across the UK.

[Jamie Stone]

I ask this question against the background of yesterday’s unthinkable dry run for a no-deal Brexit— 80 lorries is hardly the same as 6,000. I represent the furthest-away part of the UK mainland. I have mentioned before in the Chamber Mr William Calder, who runs a fish food company in Scrabster. Half a day’s extra delay in getting his fish products to the European market will ruin the gentleman. Does the Minister see just how dangerous the future could be for my constituents?

[Greg Clark]

I agree with the hon. Gentleman. That is why there has been consistent support, especially in Scotland, from organisations such as the National Farmers Union of Scotland and the Scotch Whisky Association. Those who depend on the export trade, including the logistics he describes, have urged the House to back the deal, and I hope he joins us in doing that.

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

The importance of Dover-Calais is unquestionable. What estimates has the Department made of the implications for the supply network of any reduction in capacity between Dover and Calais?

[Greg Clark]

My right hon. Friend knows that much of the just-in-time production goes through the strait of Dover, and estimates suggest an impact of a reduction of about 80% of capacity between the narrow strait. In my view, it is essential that we avoid that disruption, which would have implications right across the United Kingdom, including in Derbyshire and indeed Scotland, as we have heard.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

This week, I received correspondence from a small business owner and constituent of mine who shared his fears about the issues Brexit could cause his chemicals business. The EU is where the majority of his sales are made and where he sources his raw materials. Can the Secretary of State tell us why his Government will not rule out a no-deal Brexit now, which is putting so many businesses in my area and across the country at risk?

[Greg Clark]

The hon. Lady is right that the chemicals industry is a good example of a very integrated industry across Europe. I met the leaders of the chemicals industry in the week before Christmas, and they were very clear that what has been negotiated in the withdrawal agreement and political agreement achieves what they need, which is, first, to avoid no deal and, secondly, to be able to continue what has been a very successful industry, including in the area she represents.

[Michael Fabricant (Lichfield) (Con)]

With the worrying news that German output has fallen by 4.7%, what can Britain do, post Brexit, to help the German economy with a thriving British economy?

[Greg Clark]

It has always been my view, and I know it is my hon. Friend’s view, that the more we can trade on what has been a very successful model the better. He represents a west midlands constituency and knows how important it is in the west midlands that we have flourishing trade, to the benefit of our economy and those of our neighbours and friends on the continent.

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

From Airbus in Bristol to Nissan in Sunderland, millions of British jobs depend upon supply chains that crisscross the channel. Ministers fantasise about replacing them with American or Australian ones, and then, as they did yesterday, hire 80 trucks to drive around Kent in a ghost of Brexit future pantomime of the chaos to come. The Minister for Business, Energy and Industrial Strategy has acted honourably in saying he will not be part of a Government who allow a no-deal Brexit, so will the Secretary of State reassure Aston Martin, Brompton the bicycle manufacturer, and the other businesses stockpiling parts—spending money that could be spent creating jobs—by saying he understands the requirements of business and geography and rule out a no deal now?

[Greg Clark]

I completely understand the requirements of business, including the manufacturers the hon. Lady mentions. It is essential that we be able to continue to trade, which is why I have always been clear—representing very strongly the views of small business and large business—that no deal should not be contemplated, but the way to avoid no deal is to do what the motor manufacturers, the Institute of Directors, the Federation of Small Businesses, the British Chambers of Commerce and all the business organisations say we should do, which is vote for the agreement that will come before the House next week.

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

Lang may yer lum reek, Mr Speaker.

One way the Government are looking to maintain cross-border supply chains is by Government tender to shipping companies, but is the Secretary of State happy about the precedent set for UK businesses? His colleague the Secretary of State for Transport has awarded a £14 million contract to a company with negative assets of nearly £400,000, no ships and terms and conditions copied from a takeaway, while the contract itself seems to have been awarded on questionable legal grounds. Is this the standard he expects for all UK businesses tendering for UK Government contracts?

[Greg Clark]

It is evident that avoiding no deal is an essential task for all of us in the House, and I hope that in the days ahead the hon. Gentleman and other hon. Members will take the opportunity to obviate the need for those contingencies. The Secretary of State for Transport has an opportunity to come to the House later today, but it seems to me prudent and responsible for every Department to prepare, on a contingency basis, for no deal, while also being firmly resolved to avoid it.

[Drew Hendry]

The Secretary of State has not answered the question. Will all UK businesses see such largesse from the Government in respect of procurement contracts? One of Seaborne’s directors ran a business that went into liquidation owing HMRC nearly £600,000, using employee benefit trust tax avoidance schemes. According to the director, the Government did not even consider the money owed to Her Majesty’s Revenue and Customs to be relevant. Is that a sign of a Government who are out of control over Brexit?

[Greg Clark]

I hope the hon. Gentleman will agree that, as I have said, every Department should make preparations against the avoidable contingency of no deal. The Secretary of State will describe the procurement processes for which the Department for Transport opted, but it is fair to observe that not a penny of Government money has been paid to the company, and I understand that it will be paid only on receipt of services provided.

[Mr Philip Hollobone (Kettering) (Con)]

Given that nearly all the roll-on/roll-off lorry traffic between the Irish Republic and the EU travels across the UK motorway network to Dover, what co-operation has been offered by the Republic to mitigate a no-deal Brexit?

[Greg Clark]

My hon. Friend is right to point out that the impact of the Dover strait extends to our trade across the Irish sea. He knows that the negotiation has been with the European Commission and the European Council rather than through bilateral negotiations with individual member states, but I agree with him that the disruption that would occur would affect our trade across the Irish sea as well.

[Several hon. Members rose—]

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[Janet Daby (Lewisham East) (Lab)]

14. What steps he is taking to support people in insecure work.

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

The Government’s good work plan represents the largest reform to employment rules in over 20 years. It includes measures to boost transparency and tackle one-sided flexibility for those in insecure work, and I have already tabled legislation in Parliament to take forward the programme.

[Stephen Morgan]

A recent Resolution Foundation report shows that barely half of agency workers remain in one job beyond six months, making the Government’s arbitrary timeframe of 12 months before the right to request a direct contract kicks in totally meaningless. Labour has committed to giving all workers equal rights from day one; why have the Government not committed to doing the same?

[Greg Clark]

The hon. Gentleman will welcome the reforms that have been made to deal with insecure work and, in particular, to do something that has been campaigned for by the trade union movement and supported by many employers, which is to remove the Swedish derogation that has provided a loophole for employers to avoid those rights. That legislation is now before the House, and I hope he will support it.

[Janet Daby]

Does the Secretary of State agree that the recently introduced right to request guaranteed working hours is not sufficient to protect workers on zero-hours contracts?

[Greg Clark]

No. This is a very important extension of the rights of people on zero-hours contracts. It is important to recognise, first, that the number of employees on zero-hours contracts remains very small and, secondly, that most of those on zero-hours contracts want to have that flexibility. Those who do not want that flexibility and prefer a longer and more stable contract will now have the right to request one.

[Rachel Reeves (Leeds West) (Lab)]

25. Only days after the Secretary of State published his response to the Taylor review, Uber was once again found by the courts to be denying basic rights to its workers. When will the Government bring forward legislation to clarify workers’ status so that they do not have to go through the courts and tribunals system to get the rights to which they are entitled?

[Greg Clark]

The hon. Lady will recognise that our package immediately introduced legislation for those rights that can be legislated for with secondary legislation. Primary legislation will shortly be brought forward for the Business, Energy and Industrial Strategy Committee, which she chairs, and the Work and Pensions Committee to scrutinise.

[Frank Field (Birkenhead) (Ind)]

rose—

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

I wish you and the Secretary of State a happy new year, Mr Speaker, but the sad fact is that the good work plan does little to change the lives of precarious limb (b) workers, who will still not be entitled to statutory sick pay, maternity pay or the right to claim unfair dismissal. For those on a zero-hours contract, all the requests in the world will not legally oblige their employer to provide more stable employment. I have asked this question time and again to no avail: can the Secretary of State confirm what happens when an employer refuses a request for more stable working hours?

[Greg Clark]

It is very clear that we are not making it mandatory for people not to have a zero-hours contract. Such contracts are available to employers, but employees will have the right to request. Reasonable employers have offered more stable contracts to employees, but the Taylor report is very clear that the flexibility that zero-hours contracts offer is valued by many of the people who use them.

[Rebecca Long Bailey]

I am glad the Secretary of State has clarified that the right to request a more stable contract is, in fact, a meaningless proposal on paper. What is worse is that the Government also rejected recommendations from their own director of labour market enforcement to increase fines for companies that breach the minimum wage and for that money to be used to increase enforcement resource. The Government also rejected his recommendation that public procurement contracts should compel compliance with labour market regulations. With reports that the average employer can expect an investigation once in every 500 years, does the Secretary of State really think he is being serious about enforcing workers’ rights?

[Greg Clark]

I am working closely with Sir David Metcalf, the director of labour market enforcement. On his particular recommendation about increasing penalties, we just have increased the penalties and it is reasonable to look at their effectiveness. I have made the commitment to the House that, of course, we will increase them if that proves necessary, but one of the other reforms that we are making is to boost the enforcement of workers’ rights by bringing together the different enforcement bodies so that such employers—the minority that do play fast and loose with the rights to which employees are entitled—should expect justice to be brought about. This will be part of the package that we have tabled.

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

8. What assessment he has made of the potential effectiveness of the Paris rulebook agreed at COP24 in meeting the Paris agreement goal of holding the increase in global average temperature to less than 2° C.

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

I have regular discussions with the Chancellor of the Exchequer. The best outcome for Scotland is to deliver the deal that we have negotiated with the EU. That will provide the certainty that Scottish businesses need and protect jobs and prosperity.

[Tommy Sheppard]

A recent report by the Fraser of Allander Institute found that three quarters of Scottish businesses felt that they did not have adequate information to prepare for Brexit. Given that, do the Government now regret rejecting the Scottish National party’s proposal for a £750 million small business support scheme to help them prepare for the eventuality of Brexit?

[Greg Clark]

Advice and support is available to businesses right across the UK, but it remains the case that the best certainty that business can have is to know that the agreement that has been reached with the European Union, which rules out no deal and involves a substantial transition period, will be approved next week in the House of Commons. I hope that the hon. Gentleman will support that.

[Jeremy Lefroy (Stafford) (Con)]

15. What steps his Department has taken to promote youth entrepreneurship.

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[Alison Thewliss (Glasgow Central) (SNP)]

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

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

Since we last met, I have been delighted to be in Bristol, a hub of brilliant technological innovation, to launch the aerospace sector deal with a commitment from business and Government to invest a quarter of a billion pounds in the aircraft of the future. I announced a life sciences sector deal, featuring £1 billion of industry investment from the global biopharmaceutical company UCB. My right hon. Friend the Minister for Energy and Clean Growth has been in Katowice representing the UK at COP 24. At home, we published our Good Work Plan, and, just last week, the energy price cap came into effect, ensuring that all customers get a fair deal.

[Alison Thewliss]

I thank the Secretary of State for that answer.

A meeting of stakeholders was recently held in Pollokshields in my constituency to discuss the problems of fireworks in the community, as they really cause local residents a huge amount of distress. The Minister wrote to me last year saying that a meeting would be set up with me and other MPs to discuss the matter further. Will he give me more information as to what progress has been made to set up the meeting, as my constituents do not want to be forgotten about?

[Greg Clark]

The hon. Lady is quite right that the issue is a matter of concern not just in her constituency, but in others. I will ensure that the meeting happens in the next two weeks.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

T3. The Financial Reporting Council identified six areas that warrant further inquiry in PwC’s administration of Premier Motor Auctions, but delegated that inquiry to the Institute of Chartered Accountants in England and Wales—a trade body with limited powers. Will the Minister agree to meet me to ensure that this and any other insolvency practitioner issues are properly investigated?

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[John Spellar (Warley) (Lab)]

T5. I am sure Ministers understand that the new Euro 6 diesel engines are considerably more efficient and cleaner, and that encouraging uptake of diesel vehicles would be good for the environment, with both cleaner air and less carbon dioxide emissions. However, production of vehicles is down, partly because of the downturn in China and uncertainty over Brexit, but also because of the damaging, self-promoting anti-diesel campaign by the Secretary of State’s ministerial colleagues at the Departments for Transport and for Environment, Food and Rural Affairs. What is he going to do to get Government policy back on track in support of the British motor industry?

[Greg Clark]

In the “Road to Zero” strategy document, it is very clear that diesel engines, especially the new generation, are a perfectly acceptable choice environmentally as well as economically. The right hon. Gentleman will know that diesel sales are falling across the whole of Europe, but we have been very clear in this country that it can play an important role in the transition to zero-emission vehicles.

[Mark Pawsey (Rugby) (Con)]

T10. Following on from the previous question, maintaining an uninterrupted supply of components for just-in-time manufacturing and the ability to sell tariff-free into European markets, both of which are enabled by the Prime Minister’s deal, is vital to the continued success of the UK auto industry. Forty constituents of mine, all of whom work at Jaguar Land Rover, have reminded me of that through their emails. Will the Secretary of State welcome that approach?

[Greg Clark]

I do indeed welcome the representation from my hon. Friend. The automotive sector is one of our most successful, and it is globally admired. Its success depends on having the just-in-time production that makes it so competitive. In my view, it is vital that we pose no threat to that in our new relationship with the European Union.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

T7. The Minister will be aware of the rising cost of the smart meter programme for dual-fuel households. What is she going to do to curtail those costs, make transparent the true cost to households, and ensure that any benefits that eventually accrue are actually passed on to consumers?

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[Martin Docherty-Hughes (West Dunbarton- shire) (SNP)]

T8. The Scottish Government’s draft 2018-19 budget means that 90% of firms will pay lower rates than those based anywhere else in the UK. So, for the second time, why will the Secretary of State and his Government not support Scottish industry and back the call from the SNP and the Institute of Directors for a £750 million SME Brexit advice service?

[Greg Clark]

As I said to the hon. Member for Edinburgh East (Tommy Sheppard), that advice is available to businesses right across the country. But in supporting business confidence, the hon. Member for West Dunbartonshire (Martin Docherty-Hughes) should reflect on the fact that Scotland has now become the highest-taxed part of the United Kingdom, and that is, in itself, undermining the confidence that investors have in Scotland.

[Andrea Jenkyns (Morley and Outwood) (Con)]

Associated Waste Management is a successful business based in my constituency. It has recently been acquired by Beauparc, one of Ireland’s leading waste management companies, but it is keeping its head office in my constituency. The new arrangements have secured the long-term growth of this locally founded business. Does my right hon. Friend agree that such investments are a vote of confidence in the UK economy and send a clear message that we are open for business post-Brexit?

[Greg Clark]

My hon. Friend is right that the fundamental attractions of the UK economy are as strong as ever. We have some of the best skills in the world, some of the most innovative people and some of the best scientists and researchers, but we also have access to a substantial European market that has proved attractive to businesses from around the world. We should continue with that, and we should have both.

[Christine Jardine (Edinburgh West) (LD)]

T9. Given that the European Union is the biggest regional market for whisky—worth £1.4 billion last year—and that no deal would force significant label change costs on independent producers, which currently do not have to display an EU importer address, what are the Government doing to reassure and compensate producers that are already incurring significant costs due to this Government’s dither, delay and uncertainty?

[Greg Clark]

I might ask the hon. Lady what she is doing to address that. The Scotch Whisky Association has been very clear; it has said that the withdrawal agreement is a compromise but a positive step towards much needed business certainty. If she cares about the industry, she should vote for the deal.

[Bill Grant (Ayr, Carrick and Cumnock) (Con)]

Sadly, my constituency has an unemployment rate of 6%, which is twice the UK average. What progress has been made or can be made on the Ayrshire growth deal, which is essential to Ayrshire’s future prosperity?

[Greg Clark]

I know that my hon. Friend has been a vociferous champion of the Ayrshire growth deal, which was referred to in the Budget. I hope that we will see some progress on it in the next few weeks. For Cumnock in particular, the prospects will be very attractive. For a town that has contributed significantly over the years, including to UK energy supplies and industrial goods, it will be a fitting tribute—

[Mr Speaker]

Order. We are extremely grateful to the Secretary of State.

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[Frank Field (Birkenhead) (Ind)]

Last week I wrote a letter to the Secretary of State about the taskforce in Liverpool and Birkenhead that wishes to save Cammell Laird from any further redundancies. Will he meet us this week, as a matter of urgency?

[Greg Clark]

I am grateful for the right hon. Gentleman’s advice and his advocacy for a solution to the difficulties that Cammell Laird faces. We are meeting the trade unions and others on Thursday, and I hope he will be able to come to that meeting.

[Laura Pidcock]

On a point of order, Mr Speaker.

Brydon Review of Audit Standards

Greg Clark Excerpts

Tuesday 18th December 2018 Written Statements

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

Today, Sir John Kingman has published the final report of the Independent Review of the Financial Reporting Council (FRC) and the Competition and Markets Authority (CMA) has published an interim report on its market study into the audit market.

The independent review of the FRC is a comprehensive analysis of the effectiveness of the regulator for audit and accounting, and the Government will take forward the recommendations set out in the review to replace the FRC with a new independent statutory regulator with stronger powers.

The CMA’s interim report on its study into the statutory audit market makes recommendations to improve competition and increase capacity in the audit market. This is central to improving audit quality and I now look forward to the publication of the final report.

There is also a need to consider the standards expected of audits, including whether auditors are assessing the right information, and utilising the right technologies. This question was first raised by industry itself, who proposed a review to look at the future of audit. However, audit reports are prepared for the benefit of shareholders and investors, and it is critically important that they are involved in shaping the future of audit.

This is why I am today announcing a Government-commissioned independent review to consider how to improve audit effectiveness. I have asked Donald Brydon, chairman of the London Stock Exchange Group and Sage Group, to chair this review.

This new review, building on the work of the FRC and CMA reviews, will now consider audits as a product and what the future, standards and requirements should be for audits in the future. To ensure the UK’s audit sector remains world leading by constantly looking to upgrade standards, the Brydon review into UK audit standards will consider:

How far audit can and should evolve to meet the needs of investors and other stakeholders, putting the UK at the forefront;

How auditors verify information they are signing off;

How to manage any residual gap between what audit can and should deliver; and

What are the publics expectations from audit.

The new review will also test the current model and ask whether it can be made more effective as well as looking at how audit should be developed to better serve the public interest in the future, taking account of changing business models and new technology.

[HCWS1193]