Good Work Plan and Labour Market Enforcement

Greg Clark Excerpts

Monday 17th December 2018 Written Statements

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

Last year Matthew Taylor (Chief Executive of the Royal Society of Arts) published the review of modern working practices, following a commission from the Prime Minister. In February the Government responded to the review, accepting the vast majority of the recommendations. The Government also launched four consultations alongside the response, seeking views on the approach to implementing the review. We received over 400 detailed consultation responses which have been invaluable in informing our policy development.

The industrial strategy set out a long-term plan to boost the productivity and earning power of people throughout the UK. Developing better jobs for everyone in the British economy is at the centre of the industrial strategy. Today the Government are publishing the Good Work Plan, setting out a vision for the future of the UK labour market and how the Government will implement the Taylor review recommendations.

As the industrial strategy set out, the world of work is changing rapidly, becoming more flexible and more connected. Never has it been more important for us to ensure the UK labour market is successful, competitive and ready to embrace the changes that come with technological advancements and the emergence of new business models. An essential part of achieving this is striking the right balance between flexibility and ensuring workers have the rights and protections they need. We also need to ensure that good employers in the UK are rewarded for their efforts, rather than being under-cut by a minority of irresponsible employers seeking ways to circumvent the law.

Today, we have also taken the important first step in implementing the Good Work Plan, bringing forward new legislation to provide further rights to workers and ban unfair practices.

I am proud to be the first Secretary of State to take responsibility for quality work and I have written to the Chair of the independent Industrial Strategy Council to ask for their views on the measures Government could use to measure quality of work in the UK. The Good Work Plan commits to a range of policy and legislative changes to ensure that workers can access fair and decent work, that both employers and workers have the clarity they need to understand their employment relationships, and that the enforcement system is fair and fit for purpose. This includes a commitment to legislate to tackle uncertainty around employment status.

Alongside the Good Work Plan today the Government are also publishing their response to the first full strategy from the Director of Labour Market Enforcement. Sir David Metcalf’s strategy was published on 9 May 2018 and made 37 recommendations on labour market enforcement and raising awareness of employment rights. The Government response accept the majority of the recommendations and sets out the steps the Government will take forward on raising awareness of employment rights, improving intelligence gathering of abuses and strengthening enforcement efforts.

The Home Secretary and I look forward to working with Sir David as the Government seek to implement the recommendations we have accepted and as he prepares to set clear strategic priorities in the 2019-20 Labour Market Enforcement strategy.

Copies of the Good Work Plan and the Government’s response to the Director of Labour Market Enforcement’s strategy will be placed in the Libraries of the House and available electronically on the www.gov.uk website.

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Good Work Plan

Greg Clark Excerpts

Monday 17th December 2018 Commons Chamber

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

I would like to make a statement on the good work plan published today, which sets out the Government’s vision for the future of the UK labour market and how we will implement the recommendations arising from the Matthew Taylor review of modern working practices.

The Taylor review was commissioned by the Prime Minister to examine the current labour market and the employment law framework to help us understand the opportunities of future working practices as well as to identify areas where it is not working for everyone. The Government responded to the review in February, accepting the vast majority of the recommendations. Alongside this response, we also launched four consultations to seek views on how best to implement the recommendations. I am very grateful to everyone who took the time to respond; their insights have been invaluable in informing our policy development.

The good work plan I am publishing today sets out a programme for ensuring the UK labour market continues to thrive in the future. The UK labour market has a very positive record in recent years. Since 2010 we have higher employment and lower unemployment in every region and every nation of the United Kingdom, and wages are now growing at their fastest pace in almost a decade. This success has been underpinned by an employment law and policy framework that combines flexibility with protections for workers.

New ways of working and the rise of new employment models offer great opportunities, including innovative products and services for consumers, as well as new ways in which individuals can find work, earn a living and develop their talents. Our industrial strategy set out a long-term plan to embrace the opportunities presented by these changes and to boost the productivity and earning power of people throughout the UK.

Good work and developing better jobs are at the centre of the vision of the industrial strategy, so I am proud to be the first Secretary of State to take responsibility for promoting the quality of work as well as the creation of new jobs. I have written to the independent Industrial Strategy Council to ask for its participation in considering the best ways to measure the quality of work in the United Kingdom, and I am very pleased that Matthew Taylor serves as a member of the new Industrial Strategy Council.

Another core element of the quality of work agenda is ensuring we address the challenges for employment law and policy that the Taylor review identified. Most UK employers do the right thing and ensure their workers benefit from the rights and protections to which they are entitled. We will not allow these high standards to be breached by a minority who try to deny workers their just entitlements.

Among these reforms are steps to improve clarity for both employers and workers. Matthew Taylor recommended that the Government should do more to help individuals and businesses understand their rights and obligations. He highlighted that the existing employment status tests have contributed to a lack of clarity for both individuals and employers. We agree with this conclusion and will legislate to make improvements to reflect the reality of modern working relationships.

Matthew Taylor also recommended that renewed effort should be made to align the employment status frameworks for the purposes of employment rights and tax to ensure that the differences between the two systems are reduced to an absolute minimum. Again, we agree and will bring forward detailed proposals to align the two frameworks. We are also committed to addressing what Matthew Taylor termed one-sided flexibility, where too much risk has been transferred to the individual, sometimes to the detriment of their financial security and personal wellbeing. We will legislate to give all workers a right to request a more predictable contract and address the obstacles employees can face in building up continuous service. We will also legislate to end the injustice faced by waiters and waitresses and other staff in hospitality whose tips left by customers for them are diverted to their employers.

Another fundamental reform that Matthew Taylor proposed was the repeal of the so-called Swedish derogation, which exempts agency workers from equal pay requirements. Therefore, the Government are today bringing forward legislation to prevent this type of contract from being used to avoid meeting the legitimate rights of agency workers. We are also today laying legislation to extend workers’ rights, including the right to a written statement and making this available to all workers from day one. We are also bringing forward legislation to provide workers with a longer reference period for the calculation of holiday pay and reforming regulations to make it easier for employees to have their voice heard in the workplace. This demonstrates how we are putting the good work plan into action immediately.

We also recognise the vital role effective enforcement plays in ensuring confidence to challenge when the law and regulations are broken and in creating a level playing field between businesses. Matthew Taylor called on the Government to improve access to justice in the workplace. We have already committed to extending state enforcement on behalf of vulnerable workers to the underpayment of holiday pay, and the good work plan sets out how this approach will mirror the tough financial penalties and enforcement approach that already apply to the underpayment of the national minimum wage. We are also taking steps to improve the effectiveness of employment tribunals, quadrupling the penalties that they can impose for persistent breaches of employment law. We want to continue to improve the enforcement landscape further, and in the light of forthcoming policy changes, we will also consider the case for creating a new single labour market enforcement agency, to better ensure that vulnerable workers are more aware of, and can exercise, their rights and that businesses will be able to deal with a single body on matters relating to their workplace.

The good work plan sets out a vision for the future of the UK labour market—a labour market that rewards people for hard work, that celebrates good employers and that is ambitious about boosting productivity and the potential for everyone in the UK to improve their earnings. I am grateful to Matthew Taylor and his panel, as well to the many other individuals and organisations that have contributed to the review of modern working practices and our subsequent consultations. Their input has been invaluable in helping the Government to ensure that the UK labour market is ready to embrace future opportunities without detriment to workers’ rights. I would also like to thank the Business, Energy and Industrial Strategy Committee, the Work and Pensions Committee and the Scottish Affairs Committee for their continued contributions to the scrutiny of the recommendations and for the recommendations that they have made.

Alongside the good work plan, the Government are today publishing their response to the first full strategy from the director of labour market enforcement. Sir David Metcalf’s strategy was published on 9 May 2018 and made 37 recommendations on labour market enforcement and raising awareness of employment rights. The Government’s response accepts the vast majority of the recommendations and sets out the steps that the Government will take forward on raising awareness of employment rights, on improving intelligence gathering on abuses of those rights and on strengthening enforcement efforts. I will be placing a copy of this document in the Library of the House. The Home Secretary and I look forward to working with Sir David as the Government implement the recommendations we have accepted and as he prepares to set clear strategic priorities in the 2019-20 labour market enforcement strategy.

As Matthew Taylor concluded, the British model works. We have high employment, low unemployment and a long-standing and proud record of high standards for workers. We will consistently be in the vanguard of reform to maintain this reputation as new technologies and new opportunities for workers become available. This response to Taylor is in keeping with these high standards, and I commend this statement to the House.

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

I thank the Secretary of State for giving me advance sight of his statement, but behind his declaration on high employment lies a dark truth. Nearly 4 million people are in insecure work, with 1.1 million working in the gig economy. At a time of low wages, stagnating productivity and endemic financial insecurity across the UK, I had hoped for something big today. I was hoping for proposals that would not only make our workforce feel secure but ensure that their human capital was genuinely valued as the linchpin of Britain’s industrial strategy. Proposals for a labour inspectorate, the abolition of the Swedish derogation and ensuring that workers keep their tips were among Labour’s policies to transform our labour market, so I am pleased that, after a hard-fought campaign by Labour Members and our trade unions, these points have finally made an appearance in the Government’s good work plan. However, as the TUC stated today, despite these small victories, the remaining

“reforms as a whole won’t shift the balance of power in the gig economy.”

Let me deal with just a few of the proposals.

First, the good work plan states at the outset:

“The Prime Minister has committed that we will not only maintain workers’ rights as the UK leaves the EU, but enhance them”,

but even that opening paragraph is a little—shall we say?—constructive with reality. The Government’s withdrawal agreement fails to live up to this commitment on workers’ rights, and the Institute for Public Policy Research has stated that

“the non-regression clause will not maintain current protections in full, enforcement procedures would be ineffective and if the EU were to raise standards, there would be no requirement for the UK to follow suit”.

Can the Secretary of State confirm today that if standards on workers’ rights increase within the EU, UK standards will follow suit?

Secondly, it appears that the critical point on employment status is equally ambiguous. People on the margins need to know whether they are employees, workers or neither. Do they qualify for unfair dismissal and redundancy or not? The Government are committing to legislating to improve the clarity of the tests, but there is no detail. Can the Secretary of State confirm the legal principles on which each status is likely to rest?

Thirdly, the Government will allow workers on zero-hours contracts to request a more predictable and stable contract. That all sounds rather lovely, but the Secretary of State must know that an ability to request stable hours exists now. What does not exist is an obligation on the employer to meet such a request. The Government’s paper is silent on that point. Will the Secretary of State confirm that the proposed draft legislation will address that deficiency? If it fails to do so, zero-hours contract workers will—as the TUC so poetically put it today—have

“no more leverage than Oliver Twist”.

The fourth critical issue is enforcement, on which there is again very little detail in the Government’s plan. This is not simply a question of shuffling the deck. The Government need to ensure that the enforcement agency has power and resources. In the light of the already swingeing cuts to bodies such as the Health and Safety Executive, can the Secretary of State confirm what financial commitments are being made to ensure that this proposal is financially supported?

Finally, on the proposal for increased penalties following successful employment tribunal claims, I am not against the principle but I fear that this is just window dressing. The TUC has stated that the current system for enforcing employment tribunal awards is not fit for purpose, with 35% of successful claimants not receiving any compensation. Can the Secretary of State tell us how increasing fines will address this? Will he also tell us what additional action he is taking to address the efficacy of tribunal award enforcement? The horrific tales of insecure workers swirl around us like passages from a Charles Dickens novel, from delivery drivers being forced to urinate in bottles to zero-hours staff giving birth in workplace toilets. The Government’s proposals were an opportunity to improve the lives of those workers, but sadly they fall dramatically short, and those workers face a Dickensian future unless the Government take serious action to protect and enforce the intrinsic value of their human capital within our economy.

[Greg Clark]

I would have thought that the hon. Lady might have congratulated Matthew Taylor, who worked for her party in the past. Along with his panel, he has devoted himself to producing a report that most people conclude is a substantial one. He has made a series of far-reaching recommendations, which we are enacting today. The central basis of his report is to reflect on the fact that we should build on success. He refers to the UK’s successful record in creating jobs, including flexible jobs, that open up work to people with different needs. That is an important step forward that I would have thought the hon. Lady welcomed. When it comes to the condition of employees and workers in this country, Matthew Taylor noted that, far from the Dickensian caricature that she fell into the trap of describing, the average take-home pay for someone in full-time employment in this country, if tax levels and tax credits are taken into account, is higher than in the rest of the G7. We also have higher employment than at any time in our history and lower unemployment than at any time in 40 years, and the hon. Lady should have welcomed that.

The hon. Lady mentioned zero-hours contracts, but what she did not mention—[Interruption.] She mentioned the gig economy, by which I think she was referring to zero-hours contracts. At the moment, 2.4% of workers have flexible zero-hours contracts, and the number is falling. It has fallen from more than 900,000 a year ago. The key thing is that two thirds of those workers do not want an increase in hours. Nearly 20% of them are in full-time education. Matthew Taylor therefore concluded correctly that to ban zero-hours contracts, as the hon. Lady would, would do a disservice to, and go against the interests of, the people who benefit from them.

As for the scale of our response, the last set of measures to change and reform employment rights to this extent came over 20 years ago in the Employment Rights Act 1996 and not, coincidentally, under the previous Labour Administration, reflecting the fact that it is always Conservatives in government who put in protections for workers. The Labour party can criticise, but it did not take the opportunity to make the reforms that the hon. Lady mentioned. The hon. Lady also mentioned the alignment of the test for employment and for taxation. Matthew Taylor was clear in his report that it is a complex matter that will take some time to bring into effect and that we should consult carefully on it, and the Select Committees have endorsed that recommendation. We have said that we are committed to ending the disparity and to bringing the difference to a conclusion, and she should welcome that.

Finally, the hon. Lady mentioned the European Union, referring to the fact that we will be able to set our own employment policies once we leave the European Union. The Prime Minister has been clear that not only will we not reduce the protections that workers enjoy, but we will increase them, and today shows that. We are laying legislation this very day that goes far beyond the rights that are currently available in the European Union. The hon. Lady should have confidence in the ability of this House and this country to lead the world in employment rights, and I am proud that our Government are doing it.

[Mrs Maria Miller (Basingstoke) (Con)]

I welcome my right hon. Friend’s statement on how he and the Government plan to take forward the Taylor review. He is right that too much risk has been transferred to the individual in many circumstances, but I am a little puzzled as to why there is still so little action to strengthen protections for pregnant women. That action was promised around two years ago following a Women and Equalities Committee inquiry into maternity discrimination, which highlighted the fact that more than 50,000 women a year leave their jobs because they are pregnant. Will my right hon. Friend update the House on what is being done to enhance such protections and to ensure that more women who are contributing so much to our economy are able to stay in work even when they are pregnant and afterwards?

[Greg Clark]

My right hon. Friend, who is Chair of the Women and Equalities Committee, will be pleased to note that the package announced today is not the first or the only set of powers that will strengthen workers’ protections. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), will respond shortly and enthusiastically to the recommendations made by my right hon. Friend the Member for Basingstoke (Mrs Miller), and I hope that she will welcome the further extension of protections for pregnant women.

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

I thank the Secretary of State for advance sight of the statement, which contained a couple of things to welcome. First, the Scottish National party has long called on the Government to repeal the Swedish derogation loophole and ensure that agency workers are protected and treated fairly. It is therefore welcome news that the Government are closing a loophole that has allowed unscrupulous employers to circumvent equal pay entitlements for far too long. Secondly, we are pleased to see an increase in fines for employers who breach workers’ rights, which has been long in the waiting.

However, there are measures that miss the mark or are missing completely from the statement. There is nothing to tackle zero-hours contracts, but perhaps the most disappointing of all is the absence of any meaningful action. It is extraordinary that this Government say that they have a good work plan and yet they utterly fail to tackle zero-hours contracts. The measures also do not address the damage done to workers’ rights by the regressive Trade Union Act 2016, which was designed to strike at the heart of trade unions’ abilities to organise and support workers. The SNP believes that a modern and progressive approach to industrial relations and trade unionism is at the heart of being able to achieve fair work.

The measures also do nothing to ensure that people are paid a real living wage. In addition to expecting people to work for less than a real living wage, this Government are presiding over a period of wage growth decline. Contrast that with the Scottish Government, who have got behind the real living wage accreditation scheme, which has led to over 1,000 employers now paying the real living wage, covering nearly 82% of workers in Scotland. The Secretary of State also failed to take any action to end the discrimination of young people in the labour market, which my hon. Friend the Member for Glasgow Central (Alison Thewliss) has long called for.

The statement does nothing to tackle unpaid work trial shifts. The Government call this a good work plan, but they still refuse to end the practice of unpaid trials, and the Unpaid Trial Work Periods (Prohibition) Bill of my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald) needs support. The measures also offer no protections for gig economy workers, but the Secretary of State could do that by supporting the progress of the Workers (Definition and Rights) Bill of my hon. Friend the Member for Glasgow South West (Chris Stephens), which would define the status of workers in the law. This Government should be doing much more work on workers’ rights, and they need to bring it forward.

[Greg Clark]

The hon. Gentleman will know that the Scottish Affairs Committee’s inquiry into the future of working practices in Scotland was warm in its endorsement of the Taylor report’s key recommendations that we are implementing today. I therefore hope that he will continue to support it.

The hon. Gentleman mentions zero-hours contracts, which were the subject of one of Matthew Taylor’s central pieces of analysis. On the basis of rigorous and extensive research across all parts of the United Kingdom, he concluded:

“To ban zero hours contracts in their totality would negatively impact many more people than it helped.”

If we commission an independent report that has authority and depth of research and it makes such a clear recommendation, we ought to act on it. That is what we are doing in our response. The hon. Gentleman also mentioned the national living wage, but he did not refer to the fact that 117,000 people in Scotland have gained over £2,750 since its introduction. However, I note of course that the Scottish Government’s decision to increase taxes on working people has meant that over a million Scots are actually receiving less in take-home pay than they otherwise might. If we are looking at the welfare of workers in Scotland, we need to look at what they pay in tax as well.

It gives me no pleasure to point out to the hon. Gentleman that Scotland under the SNP has had the slowest rate of job growth of all the nations and regions of the United Kingdom. Indeed, if Scotland had matched the UK’s rate of job growth, nearly 200,000 more Scots would have a job. It is right to build on Matthew Taylor’s analysis of how to build on the success while extending protections. I look forward to working with Derek Mackay and the Scottish Government, because many aspects of the report, such as education policy, are relevant to people’s ability to earn more. Through our industrial strategy, we will work together, but a little more humility from the hon. Gentleman in his criticisms might be appropriate.

[Robert Halfon (Harlow) (Con)]

Amid all the Brexit fog, I have to say that this is the best news I have heard from the Government for weeks. This is an example of the Conservatives truly being the workers’ party of the United Kingdom, and I strongly welcome what the Secretary of State said about agency workers, because many constituents have suffered as a result of the Swedish derogation.

Turning to apprentices, a fifth of apprentice at levels 2 and 3 were not paid the apprentice minimum wage, which was highlighted by the Education Committee in our report on apprentices. Her Majesty’s Revenue and Customs has prosecuted fewer than five employers, and Sir David Metcalf, the director of labour market enforcement, said that we should increase fines and seek more criminal prosecutions against the companies involved. On top of the excellent work that Sir David has done, will the Secretary of State ensure that apprentices’ rights are first and foremost in his work?

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[Greg Clark]

I am grateful to my right hon. Friend for his endorsement. The great reforms being made in response to, in this case, a very good report are happening at pace—we are tabling legislation this very day—but he, like me, is sometimes frustrated that the reforms do not get the attention they merit, but he gives me the opportunity to draw the House’s attention to them today.

My right hon. Friend is absolutely right about apprentices. A key part of the industrial strategy is to increase the quality and the number of apprenticeships, to which he has made a distinguished contribution. It is vital that apprentices should be paid what they are due in terms of the minimum wages. We have doubled the enforcement budget for Her Majesty’s Revenue and Customs, and the measures we have set out—we are working very closely with Sir David Metcalf—will make sure it is clearly understood by every employer that paying the minimum wages, whether for apprentices or others, is not optional but essential if they are to trade in this country.

[Rachel Reeves (Leeds West) (Lab)]

The Select Committees on Business, Energy and Industrial Strategy and on Work and Pensions concluded that workers frequently rely on employment tribunals to enforce their rights and recommended punitive fines on employers for breaches of law. The Government are increasing the potential payouts for those who get to tribunal, which I warmly welcome, but they are refusing to reduce tribunal fees. Will the Secretary of State pledge to look at that again? Will the Government listen to Sir David Metcalf, the director of labour market enforcement, who said today that he is disappointed that the Government have rejected his recommendation of greater penalties for non-compliance in paying the minimum wage?

Will the Secretary of State tell us how many more cases need to be won against employers like Uber, Hermes and Addison Lee before the Government act, name and shame and properly punish these businesses that wrongly classify their workers as self-employed and deny them the rights to which they are entitled?

[Greg Clark]

I am grateful to the hon. Lady, the Chair of the Business, Energy and Industrial Strategy Committee, for her comments and for welcoming our increase in penalties. It is essential that we send a message that people’s employment rights are non-negotiable and that they must be paid.

We work closely with Sir David Metcalf, a man for whom I have the greatest admiration. The reason for not increasing, at this stage, the penalties available to the authorities for non-compliance with the national minimum wages is that the penalties were increased about 18 months ago. We have not ruled it out, but we have said that we will look at the effect of the increase and consider it.

The hon. Lady will be aware that a big increase in penalties for employers that persistently breach the verdicts of employment tribunals would be very welcome. Again, we will keep under review the employment tribunals regime to make sure that people have access to the justice they need, but when her Committee considers its response to the report I hope it will agree and endorse what is a substantial package that, in many ways and in many respects, goes beyond what was proposed both by Matthew Taylor, important though his contribution has been, and by the Committee. We have gone further than many people expected, which is quite right given the importance of employment rights in this country.

[John Howell (Henley) (Con)]

In 1961, under another Conservative Government, we signed the social charter, a Council of Europe treaty that is still in force and that enshrines workers’ rights. Will my right hon. Friend confirm that the rights he is now talking about follow in that same legal tradition?

[Greg Clark]

I am delighted to have a history lesson from my hon. Friend. I do not think he was there at the time to witness that important breakthrough, but it is important to remind ourselves, as my right hon. Friend the Member for Harlow (Robert Halfon) did, that the Conservative party has always believed that free enterprise should be associated with high standards for consumers, for workers and for members of our community. That is very much in our tradition, and it has not required imposition from outside this Parliament. We embrace our responsibilities with enthusiasm.

[Frank Field (Birkenhead) (Ind)]

As the Secretary of State knows, we have had reports from Select Committees and from Andrew Forsey and myself on how the gig economy works to the detriment of careworkers, Hermes couriers, Uber drivers, DPD couriers, Parcelforce drivers and Deliveroo drivers who are forced into self-employment against their will. When his package of reforms hits the statute book, will he be able to give all those workers a guarantee that no one in this country will be forced into self-employment against their will?

[Greg Clark]

I am grateful to the right hon. Gentleman and the Work and Pensions Committee for their proposals. He and the hon. Member for Leeds West (Rachel Reeves), the Chair of the Business, Energy and Industrial Strategy Committee, have suggested a Bill so that these measures could be enacted straightaway. We have acted in that spirit, and this day we have tabled a large number of statutory instruments to bring them into effect immediately.

My ambition is exactly as the right hon. Member for Birkenhead (Frank Field) says, that the flexibility of the gig economy is offered rather than compelled, and that flexibility, in the words of Matthew Taylor, should be two-sided, rather than one way. That is the intention of this package of reforms. The Work and Pensions Committee will be rigorous in scrutinising the effects, but that is precisely the intention of the reforms.

[James Cleverly (Braintree) (Con)]

The hon. Member for Salford and Eccles (Rebecca Long Bailey) mentioned the Dickensian and Edwardian eras. Does my right hon. Friend agree that, when we consider the Mines and Collieries Act 1842 that took children out of mines and collieries, the Artisans’ and Labourers’ Dwellings Improvement Act 1875 that cleared the slums and paved the way for the Peabody Trust homes that are loved to this day, and the Workmen’s Compensation Act 1897 that imposed a duty on employers to compensate workers injured at work, this is the party—[Interruption.]

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[James Cleverly]

I will not start again from the beginning. The Conservative party, in government, has more than a century of tradition of protecting and enhancing workers’ right. The Secretary of State’s proposals are in a long tradition of looking to the future and realising the importance of the people whose work underpins our economic growth.

[Greg Clark]

My hon. Friend is absolutely right. Continuing the historical theme, I would add Shaftesbury’s Factory Acts, which were foundational to ensuring that the industrial revolution could not trample on workers’ rights and that those rights were protected. To bring it further up to date, I pay tribute to Lord Hague’s Disability Discrimination Act 1995, which is also in this firm Conservative tradition that I am proud to be taking forward today.

[Stephanie Peacock (Barnsley East) (Lab)]

Despite what the Secretary of State says, in the two and a half years since the Prime Minister promised to act on workers’ rights we have had a review, we have had a consultation on the review, we have had a consultation on the consultation and, now, we have a plan but no legislation. The press release refers to building on the Government’s record, but the Government have not yet tabled a Bill. May I offer him my ready-made private Member’s Bill, the Employment and Workers’ Rights Bill, which would immediately end the Swedish derogation, offer insecure workers a proper right to a contract and finally give people in precarious work the security they need?

[Greg Clark]

The hon. Lady is misinformed. The legislation has been tabled today.

[Mike Wood (Dudley South) (Con)]

Flexibility in our labour market is to be welcomed but exploitation is not. Sadly this distinction is too often missed by those on the Labour Front Bench in their pursuit of ideological dogma. What assessment has my right hon. Friend made of the impact of banning exclusivity clauses in zero-hours contracts?

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

I welcome the announcement about the Swedish derogation—it would be churlish not to—but I was surprised that there was no mention in the statement of people with disabilities. If this country is to punch above our weight in an increasingly competitive world, we will have to empower people with disabilities as never before; it would be folly not to use their skills and knowledge in the future. How will the Secretary of State ensure that the 21st century economy works for our disabled people?

[Greg Clark]

I mentioned the Disability Discrimination Act, which was a landmark piece of legislation. One aspect of enforcement and clarity that the new regulations and legislation will bring in is on the right to be free from discrimination, including on grounds of disability, to make sure that that is, first, clearly understood and, secondly, more effectively enforced. This is a further step to promote that very important set of rights for workers.

[Kevin Foster (Torbay) (Con)]

I very much welcome the tone and content of the Secretary of State’s statement. Torbay’s economy is very dependent on the tourism industry, where there are not only many gig workers who literally undertake gigs, but those who do part-time or agency work. How does he see the plans he is setting out today striking the balance between the need to have an industry that can employ seasonally and flexibly, and ensuring that workers can have certainty in their employment?

[Greg Clark]

My hon. Friend speaks from great experience; he knows that the report and these reforms seek to capture the right balance. That includes making sure that the tourist industry, for example—which, to a certain extent, is seasonal—can operate in such a way that it is possible to take people into employment during times of peak demand, and so enable prospering during the year, while recognising that people have a legitimate reason for wanting to build a career in the hospitality sector and giving them the right to request a stable contract.

I want to remind the House of the emphasis that Matthew Taylor puts on good work, looking at how we can increase the level of skills and opportunities for advancement in work. That is an important part of the industrial strategy and of the reforms we are making. As well as the protections for workers, giving greater opportunity is very much the hallmark of this report.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I welcome this long overdue statement and, in particular, the ending of exploitative pay between assignment contracts. I congratulate, in a heartfelt way, Sally Bridge and all at the Communications Workers Union who have campaigned for so long for this. I also thank the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Rochester and Strood (Kelly Tolhurst), and indeed her predecessor, for meeting me about this matter.

But is this not a work in progress? Is there not so much further to go, given that important British employers now use the living wage to reduce people’s terms and conditions? These loopholes need to be ended, so that a fair day’s work gets a fair day’s pay.

[Greg Clark]

I completely agree with what the hon. Lady said at the end about her aspiration, and I am grateful for her endorsement of the reform. Of course, our vision for our economy is that we should see continually rising standards and opportunities for workers; that has been in our tradition and it is strategically in our interest as well. If we want to compete with other nations, that should be based on the quality and excellence of our work, rather than on a competition based on low standards. Now and in the future, we will look to build on these standards, but I am grateful that she recognises that this is a very important step forward today.

[Matt Warman (Boston and Skegness) (Con)]

The good work plan is, in many ways, the first Government document to really wrestle with the changes technology has brought about on workers. I welcome the fact that the Secretary of State has brought in meaningful changes, but he has not imposed things that would limit the future flexibility of both employers and employees, so this country can maximise the opportunities of that industrial revolution rather than have that done unto us by other countries.

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[Greg Clark]

My hon. Friend makes an excellent point. His expertise tells him that when technological changes come about, we want to be in a position to embrace them, rather than keep them at bay. This is the first report, the first investigation in the world, that looks at the changes that technologies are making to the labour market. By getting ahead of the game, it allows us to prepare for that, so that we can embrace those changes with confidence, knowing that they would lead to high standards, rather than, as I am afraid some Opposition Members have advocated, keep them at bay and restrict the deployment of technology. That is not in the interests of workers or consumers.

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

I am not necessarily sure we should take historical lectures from a political party that introduced the Masters and Servant Act 1823, which determined which devices could be used to discipline workers. Does the Secretary of State not agree that the biggest single factor in reducing zero-hours contracts is trade union activity? If he does agree with that, should we not present legislation that says that zero-hours contracts should be allowed only where there is a collective agreement with a recognised trade union, as is sensibly written in the Workers (Definition and Rights) Bill?

[Greg Clark]

I do not agree with that, but I think the ability for workers to be part of receiving information and of the consultation on the practice of their businesses is very important. Part of the reforms we are bringing in will lower the threshold for workers in companies to be included in requirements to be involved in the future direction of their company and to be given information. So there is an increase in participation, and I hope that the hon. Gentleman will at least welcome that.

[Mrs Madeleine Moon (Bridgend) (Lab)]

A young, highly vulnerable member of my constituency who has a long history with mental health services did exactly what the Government ask—she went out and took a job as a cleaner. Unfortunately, at the place she was cleaning the workers had no rights to go to the toilet without losing pay, so they started using the waste paper bins as toilets. When emptying a bin, my constituent found herself covered in urine. When she complained to the management, she faced bullying from the workforce, who were going to lose pay because of the need to go to the toilet. Will the Minister agree to ensure that whatever legislation he brings forward will cover workers’ rights on pay and going to the toilet, so that they are not forced into the humiliating position of having to use waste bins rather than lose pay?

[Greg Clark]

I am shocked at the example the hon. Lady gives; it is a disgraceful example of the kind of practices that have no place in any 21st-century country, let alone the UK. I can confirm to her that as part of the clarity we are bringing to the different categories of workers, employees and the self-employed, we will make it crystal clear that if someone is regarded as self-employed, they cannot be imposed on in terms of the detailed working hours, and if they are an employee, of course they are entitled to breaks, including comfort breaks. The ambiguity has in some unscrupulous examples been used to intimidate and bully in the way that she describes.

[Wes Streeting (Ilford North) (Lab)]

There are proposals to welcome in this statement, but it says an awful lot about this Government that they have to stretch back more than 100 years to find good examples of advancing Conservative employment laws. The Secretary of State could have talked about the doubling of the length of time that employees have to wait to enjoy full employment rights, which was introduced in 2012. He could have talked about the employment tribunal fees introduced in 2013 or about the draconian Trade Union Bill introduced in 2015. Under this Conservative Government, even the Prime Minister’s job security is not all that safe either.

Companies such as Uber are subject to licences awarded by public authorities, so may I ask the right hon. Gentleman to look carefully and seriously at whether licensing authorities such as the Mayor of London, Transport for London and others could take into account employment rights and practices before awarding licences, or indeed—I am thinking across Government here—awarding contracts?

[Greg Clark]

I mentioned some recent examples of legislation, to which I might add the national living wage, which has made a huge difference and led to the fastest growth in the rate of pay for the lowest earners in 20 years. When it comes to the examples that the hon. Gentleman gave, my intention is clear: whoever someone works for in the gig economy, their rights should be clear and fair. Whether they are regulated by the Mayor of London or are not subject to regulation, those rights should be unambiguous, clear and enforced.

[Rachael Maskell (York Central) (Lab/Co-op)]

If an individual’s employment status is established, that individual themselves has the key to unlock different sets of rights. Matthew Taylor recommended that employers should bear the burden of proof; why has the Secretary of State moved that burden on to employees or workers, who will have to establish their employment status?

[Greg Clark]

As of today, the new legislation that we have introduced will give the right to a day-one written statement of the rights of workers. They will be told unambiguously, as of right, what they are entitled to as part of their employment. The separate issue, which the hon. Lady might be eliding with that one, is whether the different rights associated with different categories of employment or self-employment are clear enough. That will require some changes in the law and regulations, to which we have committed, but the combination of the entitlement to day-one clarity and some further changes to reduce some of the ambiguity between the categories will achieve what the hon. Lady intends.

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

Generally speaking, this plan is a step forward for workers’ rights in the UK but, as always, it is a war of attrition. I have particular concern about workers who are in distressed enterprises that face closure, many of whom have seen long-standing issues. For example, in my constituency we have heard in the past couple of days the announcement that a railway works that has been in existence since 1856 is threatened with closure, even though it has been through several owners since 2013 and in the process the workers have surrendered so much of their right to their pension entitlements. The works has effectively been asset-stripped by a company called Knorr-Bremse, which transferred it to a German company, and it then went under the term of a company called Gemini Rail Services.

Will the Secretary of State reflect on the situation facing the workers at that plant, look into the issues facing the heavy maintenance and overhaul of the railway industry in the UK, and undertake to meet me to discuss the particular difficulties faced by the heavy maintenance and overhaul industry in the UK railway sector? It is facing real crisis. We need to take action to protect those jobs and vital skills, particularly in Springburn in my constituency.

[Greg Clark]

It would obviously not be appropriate for me to comment on that particular case at the Dispatch Box without making myself more familiar with it, but I am happy to meet the hon. Gentleman, or for one of my colleagues to do so. More generally, the treatment of workers and pensioners in respect of companies in trouble is subject to a separate set of reforms that the Government are introducing. I would be happy to take the hon. Gentleman through them when we meet.

[Peter Kyle (Hove) (Lab)]

I thank the Secretary of State for his statement, and I thank Matthew Taylor for the work that went into his report, because it was a really fantastic piece of work.

Throughout the course of our inquiries, the Business, Energy and Industrial Strategy Committee heard some really horrific studies of what is happening in the modern workplace. Many of those practices will be outlawed by the proposals in the White Paper and what has been announced today, if it is all implemented in the right way, and I congratulate the Secretary of State on that. He said in his statement that the Government will

“make it easier for employees to have their voice heard in the workplace.”

That is a far cry from having workers on boards, as the Prime Minister announced some years back. Why is there not a more ambitious and clearer plan to include workers’ voices that would give them the voice that the Prime Minister herself said they would get a few years ago?

[Greg Clark]

The hon. Gentleman is absolutely right to commend Matthew Taylor on the quality of his work and the recommendations. On workforce participation, he will know from his work on the Select Committee that we have introduced reforms that give workers a voice in the boardroom, whether through a dedicated elected director, through a non-executive director who is appointed with particular responsibility to provide an outlet for the workforce, or through the establishment of a council that can take workforce opinions. The further expansion of consultation included in the plan is another reinforcement of the fact that the more workers are involved in the affairs of their employers, the better it is for productivity.

[Jo Stevens (Cardiff Central) (Lab)]

In answer to an earlier question, the Secretary of State stressed the importance of access to justice, so will he guarantee today that he will not reintroduce employment tribunal fees?

[Greg Clark]

I think the hon. Lady knows that that is a matter for the Ministry of Justice and the Courts and Tribunals Service, and that I cannot make that commitment from the Dispatch Box. What she can see through the reforms in the plan is that the opportunity to obtain justice and see that enforced, whether through the tribunal system or through employers directly, is substantially advantaged by the plan. I hope she would welcome that.

[Diana Johnson (Kingston upon Hull North) (Lab)]

As my hon. Friend the Member for Ilford North (Wes Streeting) just reminded the Secretary of State, when his party came into power with the Liberal Democrats in 2010, they doubled the length of time that someone had to be in employment to be able to claim unfair dismissal protection. In the light of today’s statement, is the Secretary of State looking again at whether that is fair and whether the time should be reduced to the one year that it was under the Labour Government?

[Greg Clark]

Obviously, we keep the standards that we have under constant review. The appointing of a group, under Matthew Taylor’s chairmanship, to consider all aspects of our labour markets and regulation was an open and transparent way to proceed. We are acting on almost every one of his recommendations. They are substantial reforms. I stand by them and I am proud of them.

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

It is important to have employment rights, but I would argue that an individual’s ability actually to enact those rights is equally important. The Secretary of State said in his statement that he would

“give all workers a right to request a more predictable contract, and address the obstacles employees can face in building up continuous service.”

My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) just mentioned the increase to two years in the length of time required to get full employment rights. How would someone get their rights enacted if they did not have the two years of service? It is clear that in the real world people will just be sacked if they ask for their rights and have less than two years of employment.

[Greg Clark]

Part of the point of making it a statutory requirement that employers should entertain a request for a more permanent contract is to prevent precisely that kind of abuse. That would be unlawful under the proposals.

[Alison Thewliss (Glasgow Central) (SNP)]

It is hugely disappointing that the Secretary of State has chosen to maintain state-sponsored age discrimination against workers under the age of 25, who are not entitled even to his pretendy living wage. Is he aware that the age pay gap between a 16 or 17-year-old and a 25-year-old, starting on the same day in the same job, has increased over the past three Budgets? Has he read the report by the Young Women’s Trust, “Paid Less Worth Less?”?

[Greg Clark]

The Low Pay Commission has been established to advise, on the basis of rigorous research, what the rates of pay should be for different groups. I am surprised that the hon. Lady does not have the respect for the commission that I have. As we expand the opportunities for young people, especially through apprenticeships, it is important that posts are available for them. It is the commission’s task to advise on what is the best balance between pay and opportunities.

[Melanie Onn (Great Grimsby) (Lab)]

The Secretary of State says that he has gone further than many expected, but he has not gone far enough for the Government’s own Low Pay Commission, which has written to him with a series of recommendations, including that people have the right to regular contracts if they are working regular hours; minimum notice periods for shifts; and compensation for shift cancellations. Why will the Government not commit to those recommendations, instead of their watered-down right to request?

[Greg Clark]

It is not watered-down. The hon. Lady should see that the changes we are making, including on the ability to request a change from a flexible contract to one that has a fixed number of hours or days, are important reforms. They build on the rights to request, for example, different parental leave, which have proved successful in the past. The hon. Lady should not dismiss reforms that have proved valuable in other contexts.

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

I welcome this report as a starter. I am a proud Member of this Parliament who pays their intern staff a real living wage—£10 an hour—in a modern MP’s office. The Sutton Trust has found that 70% of all internships taken annually in the UK are unpaid. When will this Government take action to end the scandal and exploitation of unpaid internships? May I also ask that we pay modern wages in this Parliament and in this House for all staff who work here so that we practise what we preach?

[Greg Clark]

I am grateful to the hon. Gentleman. He will be aware that we are increasing the resources available for the enforcement of the national living wage, and that applies to people who are employed. They may have the description of interns, but if they are performing paid work, they are entitled to the national living wage.

Limited Partnership Law

Greg Clark Excerpts

Monday 10th December 2018 Written Statements

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

The Government have published their response to their consultation on the reform of limited partnership law.

A key theme of the UK’s industrial strategy is ensuring the UK has a world-leading business environment, which holds the confidence of investors, employees, consumers and the public. An important element of this is the provision of a range of business structures through which a variety of commercial objectives can be achieved.

Limited partnerships play an important role in private fund structures used by private equity, real estate and infrastructure managers. In recent years however it has been reported that limited partnerships in some circumstances have been used for illicit purposes. The Government recognise that robust action is required.

The reforms set out in the Government’s response include: tightening of registration requirements for limited partnerships, ensuring that those applying to register limited partnerships demonstrate that they are registered and supervised by an official anti-money laundering supervisor; requiring limited partnerships to demonstrate a firmer connection to the UK; increasing transparency requirements; and enabling the Registrar to strike from the companies register limited partnerships which are dissolved or which are no longer carrying on business.

The Government have worked closely with industry in developing these reforms and considers that they strike the right balance between preventing the abuse of limited partnerships while ensuring they remain attractive to legitimate commercial activity.

The reforms require primary legislation and the Government will legislate when parliamentary time allows.

The Government response will be deposited in the Libraries of both Houses.

[HCWS1160]

Industrial Strategy: Aerospace Sector

Greg Clark Excerpts

Thursday 6th December 2018 Written Statements

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

As part of the industrial strategy, the Government are committed to making the most of the UK’s strengths, so we can be at the forefront of emerging technologies and industries in the years ahead.

The aerospace sector is a leading industrial sector for the UK with particular strengths in the design, manufacture and support of wings, engine as well as advanced systems such as landing gear and cockpit technologies. These activities are an undoubted strength of our economy; indeed, they are at the heart of the nation’s competitive advantage.

Sector deals are an extension of the Government’s close partnership with sectors such as aerospace and we are building on this through the aerospace growth partnership with this sector deal to ensure the UK maintains its leading position in the global market. This sector deal signals a joint intention to position the UK at the forefront of valuable emerging markets. It will do this by:

boosting innovation through a joint industry and government investment in the future flight challenge, with up to £125 million of funding from the industrial strategy challenge fund, which industry will match. This programme will invest in developing demonstrators of new aircraft (such as drones and other electric aircraft), new models of airspace management, new approaches to ground support infrastructure and new markets for aircraft in local areas.

expanding the successful national aerospace technology exploitation programme with joint funding from government and industry to boost research and development projects led by small and medium sized enterprises (SMEs).

supporting SMEs in the UK aerospace supply chain to boost their competitiveness through a new productivity improvement programme.

committing the industry to embed a women in aviation and aerospace charter to increase diversity and inclusion in the sector.

enhancing the joint working between the aerospace industry and education providers to ensure a strong future pipeline of talented people are available to ensure the UK aerospace sector remains globally competitive.

The aerospace growth partnership has seen us work with industry to tackle barriers to growth, boost exports, and sustain high value jobs across the breadth of the UK. Together we have taken action to develop and implement initiatives to drive innovation, develop new product and manufacturing technologies, and to increase productivity. The sector deal is a key milestone in this relationship. It will position the industry for the future by developing new capability in exciting developments in air transportation for people and goods through the introduction of more electric and autonomous systems.

The aerospace sector has a turnover of £34.9 billion, directly employing 120,000 people, with productivity growth rates of 5% year on year. But we are not complacent. This deal will build on our strengths and set the industry on course for future success.

I will be placing a copy of the document in the Libraries of both Houses.

[HCWS1147]

Industrial Strategy

Greg Clark Excerpts

Wednesday 5th December 2018 Written Statements

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

As part of the industrial strategy, the Government committed to making the most of the UK’s strengths, so that we are at the forefront of new technologies and emerging industries in the years ahead. The life sciences sector is one of the most important pillars of the UK economy, contributing over £70 billion a year and 240,000 jobs across the country.

In 2017, a wide coalition of industry and charity partners, led by the Government’s life sciences champion Professor Sir John Bell, published an ambitious life sciences industrial strategy to set a clear direction for the future economic growth of the sector. The Government’s response came within only 12 weeks of the strategy’s publication with the very first life sciences sector deal. The deal announced nearly £500 million of Government support and over £1 billion of new inward industry investment, bringing together industry partners from across the sector, charities, a range of Government agencies and the NHS to deliver its bold vision at pace.

One year on, the second life sciences sector deal is going even further, announcing additional measures to secure a global lead in the areas of greatest opportunity for the UK. Taken together with the first sector deal, these programmes are building on existing strengths and putting in place the foundations for future growth needed to develop the ecosystem that allows life sciences to continue to thrive in the UK. The second life sciences sector deal sets out:

In early detection of disease and genomics:

Major investments in the last year from Government and sector partners delivering on our commitment to build on our world-leading assets at UK Biobank, further backed by a new, world-first commitment to sequence one million whole genomes in the UK within the next five years, with an ambition to sequence five million in the same timeframe.

A new commitment, backed by up to £79 million of Government funding, to develop a first-of-its-kind, world-leading longitudinal cohort of healthy participants that will enable scientific research into the hidden signs of disease and the development of diagnostic tools to detect and diagnose diseases earlier.

In digital technologies and data analytics we are:

Laying down the building blocks to realise the full potential of NHS data, while maintaining public trust and maximising the benefits for NHS patients.

Setting out further detail on digital innovation hubs which will provide expert clinical research data services with world-leading data analysis and sharing capabilities—a core part of a wider programme to improve health data infrastructure and support digitally-enabled clinical research.

Detailing progress on five centres of excellence in digital pathology and radiology with AI including the announcement of a further £50 million investment in the programme as a first step towards making this a truly national asset to support early and improved diagnosis across the UK and deliver more efficient NHS services.

In advanced therapies:

Significant support has been allocated from the £146 million leading-edge healthcare package (part of the industrial strategy challenge fund) announced in the sector deal last year to build an impressive end-to-end national infrastructure.

Investors have recognised the strength in UK-grown advanced therapy biotechs and UK companies are scaling up their cell and gene therapy manufacturing facilities.

Wider policy measures are supporting the package, including:

Speeding up and streamlining the UK clinical environment.

Developing a regulatory framework that keeps pace with innovative technologies.

Helping the sector access the skills it needs.

The deal also sets out how we are delivering on our commitment to increase R and D spend in the UK to 2.4% of GDP by 2027. We are improving the uptake of innovation in the NHS, implementing the accelerated access review. This year the NHS will set out through its forthcoming long-term plan and the recently announced medicines pricing agreement, how it will be a crucial national partner and beneficiary of innovations flowing from industry.

Industry partners have responded to commitments from Government with a further wave of their own commitments to the UK, generating well over £1 billion in new investment. These include:

A £1 billion investment by UCB, a world-leading pharmaceutical company, in a new discovery research hub in the UK, including a purpose-built R and D facility, early manufacturing and commercial operations which will support around 650 high-value jobs, many in R and D and early manufacturing, enabling further collaborations with UK universities, biotechs and medical research charities.

Over £200 million of further investments from a wide range of companies, including GW Pharmaceuticals, Roche, Celgene Ltd, IQVIA Ltd and Oxford Biomedica Plc.

The strength of the partnership between the Government, the NHS and the life sciences sector is making the UK a global standard bearer for discovery research and advanced manufacturing. We are committed to continuing the hard work of implementation over the coming years because the prize—a globally leading UK life sciences environment —will deliver huge benefits to the people of this country through a stronger economy and a stronger NHS.

Sector deals, where industries are invited to come forward with plans for their future, embody the ethos of our collaborative approach. They show how industry and the Government, working in partnership, can boost the productivity and earning power of specific sectors.

I am placing a copy of the second life sciences sector deal in the Libraries of both Houses.

[HCWS1141]

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 20th November 2018 Commons Chamber

[Trudy Harrison (Copeland) (Con)]

2. What steps he is taking to secure the future of nuclear power in the UK.

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

The Government believe that nuclear power has an important role to play in our energy system as part of a diverse range of low-carbon technologies. Our intent is clearly visible in the form of Hinkley Point C—the first new nuclear power station to be built in this country in a generation—as well as in the launch in June of our landmark nuclear sector deal at Trawsfynydd.

[Trudy Harrison]

I thank the Secretary of State for his response. It is reassuring to me to understand this Government’s commitment to new nuclear, but with Toshiba’s recent decision to wind down NuGen, can he assure me that he will meet any developer who is interested in building their reactors at Moorside in Copeland?

[Greg Clark]

I can indeed give that assurance to my hon. Friend, who is a great champion of one of the bastions of skills and innovation in the nuclear sector in this country. The circumstances behind Toshiba’s wind-down of NuGen are well known—it was because of the move to chapter 11 bankruptcy of its subsidiary—but that site is now available for other investors.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

The future of nuclear power is not just about building reactors; it is about having people with the skills to work in those reactors as well. As we have a skills gap in defence nuclear, can the Secretary of State set out what actions the Government are taking to support the growth of nuclear skills in both defence nuclear and civil nuclear?

[Greg Clark]

I am delighted that the hon. Gentleman takes such an interest in this. He will know that the nuclear sector deal provides for training, new institutions and new apprenticeship and scholarship opportunities for nuclear engineers in both the civil and defence sectors. This is all part of an agreement across the industry with Government to ensure that the next generation of nuclear power is supported by new-generation nuclear engineers and technicians.

[John Stevenson (Carlisle) (Con)]

The Government were very keen to emphasise that the Toshiba-Korea Electric Power Corporation negotiations over NuGen were a commercial matter. If the Chinese nuclear company CGN—China General Nuclear Power Group—agrees to develop Moorside on a commercial basis, with no Government subsidy, would the Government support it?

[Greg Clark]

As my hon. Friend knows, in each case the proposals are developer-led, so it is for proponents to come forward. As I have said to our hon. Friend the Member for Copeland (Trudy Harrison), I am very happy, with my officials, to meet anyone who has an interest in doing so.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The demise of Moorside and NuGen underlines how the Government’s nuclear policy hinges on overseas investment, particularly from energy companies that are owned wholly by other states. Is the Secretary of State having a really good look at the other planned nuclear power stations to make sure that there will be enough nuclear power to maintain energy integrity in the UK in future?

[Greg Clark]

The answer is yes. I am grateful to the hon. Lady’s Public Accounts Committee for examining the model for financing nuclear new build. With her colleagues, she has made some helpful suggestions, which she knows we are committed to taking forward to see whether they can be viable.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

3. What steps he is taking to remind employers of their obligation to pay the national minimum wage.

--- Later in debate ---

[Victoria Prentis (Banbury) (Con)]

15. What progress he has made on meeting the Government’s ambition to make the UK the best place in the world to start and grow a business.

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

Our business environment is among the best in the world for small businesses. We have 16.3 million people employed in small businesses and the British Business Bank is supporting small businesses with over £5.5 billion of finance—and colleagues on all sides of the House will wish to support small business Saturday on 1 December.

[Mrs Murray]

Earlier this year, Ideal Foods, a small business in my constituency, celebrated a huge milestone when it achieved a turnover of £10 million in just one year. Another business, the Cornish Cheese Company, has just been awarded the super gold award for its Cornish blue cheese. Does my right hon. Friend agree that these are shining examples of the importance of embracing global trade after we leave the European Union?

[Greg Clark]

I do indeed, and I congratulate Ideal Foods and the Cornish Cheese Company. Perhaps I can add one of my own: Cornish Charcuterie, based just outside Bude, is one of my favourites, and I know that it has many satisfied customers across the UK and Europe, and increasingly around the world. This shows that, of all the manifold assets that Cornwall has, its food and indeed its drink are something to boast about.

[Rachel Maclean]

More than 355 new businesses have been started up in my constituency since 2010. Many of them are microbusinesses with only one or two employees, and their needs are very different from those of the larger small and medium-sized businesses. What additional support can the Department give to those microbusinesses to help them to thrive?

[Greg Clark]

My hon. Friend is absolutely right to suggest that microbusinesses, and indeed start-ups, sometimes face challenges in accessing finance. The British Business Bank has a programme to focus on microbusinesses. Start-up loans, from which 44 businesses in her constituency have benefited, are also important.

[Victoria Prentis]

Late payments are a real problem for small businesses. What steps is the Secretary of State taking to tackle that?

[Greg Clark]

My hon. Friend is absolutely right, and she will know that we are taking steps to reinforce in statute some of the measures that have been good practice across the industry. Indeed, the small business commissioner has been appointed to the prompt payment code compliance board to help with that.

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

Does the Secretary of State truly believe that what has been negotiated with the European Union will be better for jobs and business than the deal we have now?

[Greg Clark]

If the hon. Lady was at the CBI conference yesterday, and if she has read the responses from businesses small and large up and down the country, she will know that they are very clear that this deal will help to create the confidence that will allow investment to be made and jobs to be created and preserved across the country.

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

The small businesses and manufacturers in my constituency are telling me that their biggest challenge right now is recruiting skilled labour. That challenge is set to get worse for them as we approach Brexit. Will the Secretary of State explain to them how stopping freedom of movement is going to help them with access to skilled labour for their manufacturing and their research and development?

[Greg Clark]

One of the reasons why companies up and down the country sometimes find it a struggle to recruit people is that we have such a low level of unemployment in this country. I would have thought that the hon. Gentleman would recognise that. He knows that one of the benefits of leaving the European Union is that our migration policy will be set in this country according to the needs of our economy—so it’s over to us.

[Bill Esterson (Sefton Central) (Lab)]

The Prime Minister’s botched Brexit deal creates uncertainty for business. The lack of any commitment to permanent customs arrangements means that there is no guarantee of tariff-free, frictionless trade. Frankly, I am amazed that any Business Secretary would put their name to this deal. Without any commitments to frictionless trade, how can the Government claim to be helping business?

[Greg Clark]

I do not know whether the hon. Gentleman has read the proposed agreement, but business leaders certainly have, and they have been warmly supportive of it. There are good reasons for that. One of the things that businesses have asked for is a transition period leading up to an agreement that we should be able to trade without tariffs, without quotas and without frictions. This agreement provides for that, which is one reason why it has been endorsed by businesses up and down the country.

[Several hon. Members rose—]

--- Later in debate ---

[Theresa Villiers (Chipping Barnet) (Con)]

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

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

The recent Budget confirmed our unwavering commitment to the technologies of the future. We have set up a national quantum computing centre and five new technology centres in Leeds, Oxford, Coventry, Glasgow and London. At the national level, the Prime Minister joined the first meeting of the Industrial Strategy Council. Internationally, I travelled to Japan to discuss how we can work together on our industrial strategy.

[Theresa Villiers]

Has any estimate been made of the number of businesses on local high streets that can benefit from the business rate cut announced in the Budget, including businesses in my constituency of Chipping Barnet?

[Greg Clark]

My right hon. Friend will be aware that up to 90% of retail properties in England could be eligible, and I understand that up to around 3,000 properties in her borough could qualify for the relief made available in the Budget.

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

Brexit cannot result in a race to the bottom for workers’ rights and protections but, sadly, the EU withdrawal agreement does not guarantee that it will not. Thompsons Solicitors says that the non-regression clause will be “ineffective” and the Institute for Public Policy Research states that it is

“not sufficient to maintain current protections”.

Individuals will not even be able to bring about proceedings, and if the EU raises standards, the UK is permitted simply to fall behind. When the Secretary of State called stakeholders after agreeing the deal last week, were trade unions on that call? Will he confirm exactly how he intends to maintain current standards and enforceability and to prevent Britain from falling behind the EU’s standards?

[Greg Clark]

I note that the hon. Lady dismissed the withdrawal agreement on the airwaves before she had even read it, so it does not surprise me that her question is so misplaced. As for the trade unions, I met Frances O’Grady, the general secretary of the TUC, to discuss the provisions of the agreement in person. When it comes to our record of protecting employees’ rights, the hon. Lady should have more confidence in this country and in this House. We are perfectly capable. We have been leaders in protecting and promoting workplace rights for many generations. We do not need to be required to do so by the European Union; this House can do that itself.

[Rebecca Long Bailey]

The trade unions were not on that call, which is telling. However, many workers are being treated shamefully even before we leave the EU. There is a bank branch where male workers were expected to urinate in a bucket, and cleaners and security staff are on poverty wages with few rights and protections. The first case was highlighted by Unite yesterday, but the second can be found in the Government’s own Departments under the watch of this Secretary of State, who is responsible for employment rights and protections. Given that the Taylor review was published nearly 500 days ago and yet we still have no update on Government policy and that two months have passed without action since I wrote to the Secretary of State about the treatment of his own staff, how can we trust him to protect workers in the UK now, let alone stop a race to the bottom?

[Greg Clark]

We value highly the colleagues in our Department and across Government who do important work in public service, and I have made a commitment that we will always treat them well, including on pay and conditions. I am glad that the hon. Lady is looking forward with anticipation to the publication of the response to the Taylor review. It was a landmark report to which this Government committed, and I look forward to her endorsing this Government when we enact Taylor’s recommendations in the weeks ahead.

[Giles Watling (Clacton) (Con)]

T3. I have recently had the honour of visiting many of our businesses in Clacton. Some of them are searching for business overseas, but they remain concerned about Brexit. What can my right hon. Friend do or say to reassure them?

[Greg Clark]

Businesses up and down the country have been very clear: they want an agreement; they want a deal so that they have the certainty to be able to make investments; they want a transition period so that they are able to make the necessary adjustments; and they want frictionless trade. The proposed deal comprises all those qualities, which is why it has had such a warm endorsement. It will give businesses in my hon. Friend’s constituency and elsewhere the confidence to invest.

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

T2. Which?, the consumer champion, points out that large suppliers need to install 30 smart meters a minute every day for the next two years to meet the Government’s 2020 roll-out target. How does the Minister think this is going?

--- Later in debate ---

[James Frith (Bury North) (Lab)]

T7. After the capital shortfall warnings issued by Interserve this week, what assurances can the Secretary of State give the House that Interserve will not go the way of Carillion? Will he commit to press Interserve to make sure that subcontractors are paid up to date and are not at risk of carrying the can for another outsourcing collapse?

[Greg Clark]

As I said in response to an earlier question, prompt payment is very important for businesses large and small, and supply chains rely on that. My colleagues across the Government and in the Cabinet Office have close relationships with all the suppliers to the Government so that we can be aware of the prospects, and we have nothing further to report.

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

The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Watford (Richard Harrington), has given us a welcome update on progress on the tourism sector deal, and I was wondering whether we could get a similar update on the oil and gas sector deal.

--- Later in debate ---

[Dominic Raab (Esher and Walton) (Con)]

I welcome my right hon. Friend the Secretary of State’s Green Paper “Modernising consumer markets”. When is a Government response expected? Does he agree that, from mobile phone bills to foreign currency exchange, we should use transparency and competition to end consumer rip-offs?

[Greg Clark]

I agree with my right hon. Friend and I welcome his distinguished contribution to that consultation. We will be responding during the weeks ahead. It is very important that we build on our tradition of being one of the most open markets in the world, in which incumbents should not be protected from competition.

[Melanie Onn (Great Grimsby) (Lab)]

T9. The Minister for Energy and Clean Growth mentioned that it is Offshore Wind Week this week, and her comments will be welcome news. What are the Government doing to increase local employment opportunities in this very innovative sector?

--- Later in debate ---

[Greg Clark]

I am familiar with Immingham from numerous dealings with my hon. Friend. It is a very enterprising port that is already doing well, but I am happy to meet him to explore further possibilities.

[Several hon. Members rose—]

--- Later in debate ---

[Dan Jarvis (Barnsley Central) (Lab)]

It was good to see the Secretary of State in South Yorkshire, where we have a strong advanced manufacturing offer. Will he continue to work with us in future?

[Greg Clark]

I certainly will. It was a delight to be with the hon. Gentleman and others to celebrate the opening of Boeing’s first European manufacturing facility. It is in South Yorkshire because there is a thriving hub of advanced manufacturing there. The industrial strategy is all about reinforcing that.

[James Cartlidge (South Suffolk) (Con)]

I welcome the tax on tech giants that was announced at the Budget, but will my right hon. Friend liaise with the Chancellor to ensure that it does not have a wider detrimental impact on investment in our tech start-ups?

[Greg Clark]

I will indeed. It is important that the tech sector maintains the progress that it has made in recent years, and I will do everything I can, with the Chancellor, to secure that.

[Lisa Nandy (Wigan) (Lab)]

For 134 years, Wigan Crown post office has been the anchor of our high street and the beating heart of our community. It survived two world wars and one global financial crash; why can it not survive eight years of Tory Government?

Nuclear Power: Toshiba

Greg Clark Excerpts

Monday 12th November 2018 Commons Chamber

[John Woodcock (Barrow and Furness) (Ind) (Urgent Question)]

To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on Toshiba’s decision to withdraw from the development of a nuclear power plant at Moorside in Cumbria.

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

At its board meeting last Thursday, the Japanese company Toshiba confirmed that it proposed to wind up its subsidiary NuGen following an earlier decision to exit the overseas nuclear power business. This followed the well known financial difficulties of Toshiba’s US subsidiary, Westinghouse. Following that, Toshiba considered the sale of NuGen, but, having failed to agree terms, the Toshiba board decided that the company will instead be wound up. I met board members of Toshiba in Tokyo on Wednesday, and they confirmed that the board’s decision was a commercial one. The decision is ultimately a matter for Toshiba and we fully understand the challenging circumstances that that company has faced over the past 18 months.

The Moorside site in west Cumbria is owned by the Nuclear Decommissioning Authority and the land will revert to the NDA. It remains a potential site for nuclear new build and the NDA will consider a range of options for its future. The Government are fully committed to new nuclear being part of a diverse supply of energy. The EDF-led Hinkley Point C is under construction and future potential projects include Wylfa, Sizewell C, Bradwell and Oldbury. All projects are developer-led and can proceed if, and only if, they satisfy the most stringent safety and regulatory approvals process and if, at the point of a contract being issued, they demonstrate value for money compared with alternative sources of electricity generation available at the time.

I recognise that last week’s announcement will be a disappointing but not an unexpected one to the people of west Cumbria. One thing is certain: west Cumbria will continue to be a centre for excellence in civil nuclear. It is of huge strategic importance to the UK and a source of large numbers of highly skilled and well-paid jobs and will be for many decades to come.

[John Woodcock]

And so the people of Cumbria are thrown under a bus. I thank the Secretary of State for that statement, but I have to say that it is extraordinary that he has had to be dragged to the Chamber to make it rather than offering it proactively on a project that will affect up to 21,000 jobs in the constituency of the hon. Member for Copeland (Trudy Harrison) and many, many in my constituency and across Cumbria.

In his initial statement, the Secretary of State did not even commit to a new civil nuclear power plant in the Cumbrian area. It is just not good enough. It is not good enough for the Government to hide behind the idea that this is simply a commercial decision, because he knows that if the Government had offered terms to NuGen, to Kepco, to Toshiba that were on a par with those that they have offered on other sites in the country, this deal could have been salvaged.

I would like to hear from the Secretary of State this afternoon. Surely this is not the end. Will he commit to working with the people of Cumbria, their MPs, their council, and their local enterprise partnership to salvage the prospect of new civil nuclear in Cumbria? Does he recognise the hole that losing Moorside will create for the UK’s ability to generate low-carbon energy, and does he see the potentially irreversible decline in absolutely essential nuclear skills in Cumbria for the nation if civil nuclear is not allowed to go ahead on the site?

[Greg Clark]

I am grateful to the hon. Gentleman for his question. I know that the nuclear industry is very important to his constituents, as it is to those of my hon. Friend the Member for Copeland (Trudy Harrison).

The hon. Gentleman knows that no one is more committed than I am to the future of nuclear power in this country. It is this Government who have revived nuclear power following more than 25 years in which no new nuclear power station was inaugurated. He knows that the approach that we have taken to new nuclear power stations is that they should be developer-led. That has always been the case since the right hon. Member for Kingston and Surbiton (Sir Edward Davey) was Secretary of State and established this approach and this policy.

The hon. Gentleman knows very well, because he talks to the executives himself, that the problems that Toshiba has encountered during the past 18 months, since the entry into chapter 11 bankruptcy proceedings of its Westinghouse subsidiary, have made for a fundamental review of its strategy. It has decided, for commercial reasons, which the board of Toshiba told me, in person, on Wednesday, that it wants to concentrate on its activities away from international nuclear. The announcement is a consequence of that. Obviously, it is not possible to enter into negotiations with a counter-party that is exiting the business and does not have the financial opportunity to be able to take on this project. That has been clear, as he knows, for some time.

I was certainly very clear in my response to the hon. Gentleman that I regard the site, when it returns to the NDA, as available for further projects, and I will work very closely with those in the industry, including his predecessor. Of course I will meet the hon. Gentleman, my hon. Friend the Member for Copeland, and other people who take the same interest that I do in the future of nuclear in this country, and particularly in west Cumbria.

[Trudy Harrison (Copeland) (Con)]

Will the Secretary of State reassure my community that this Government do back nuclear through the nuclear sector deal, that he recognises the strategic importance of nuclear to meet our energy and our environmental requirements, and that he values the highly skilled workforce in my constituency and, indeed, across Cumbria, who stand ready to design, build, commission and operate Moorside in Copeland?

[Greg Clark]

I pay tribute to the workforce and the community that my hon. Friend represents, and indeed to her leadership and her advocacy for the case for recognising the strategic importance of that, as well as to that of her neighbouring MPs. I enjoyed spending time with her during the summer visiting Sellafield, as I have done before, and in particular looking at the opportunities in the supply chain for new nuclear, in which Cumbria has clearly a lot to offer, given not just the heritage but the actuality of the skills there.

We continue our programme of new nuclear builds; it is important that they should be developer-led. As I said, there is a pipeline of proposed new projects, but it is important in every case that the regulatory conditions are met and that each proposal offers value for money. There is a very bright future for the highly skilled workforce in my hon. Friend’s constituency, now and in the future. Through the sector deal that was agreed enthusiastically between the industry, the Government and local partners, we are investing in the future, including in those skills.

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

Toshiba’s decision to withdraw from Moorside is a blow to the UK’s energy security, its decarbonisation goals, and the economy of Cumbria. But let us be clear where the real responsibility lies. The Cumbrian chamber of commerce, and the GMB and Prospect trade unions, among others, have all laid the blame with this Government for their lack of clarity over funding and their ultimate failure to take a direct stake in Moorside—something that Labour has repeatedly committed to do.

So, first, will the Secretary of State reaffirm a promise made to the people of Copeland during last year’s by-election when they were told that voting Conservative would ensure a new nuclear plant at Moorside, and will he describe his plan for salvaging the development? Secondly, Moorside was projected to provide about 7% of the UK’s electricity. If the Secretary of State cannot commit to the future of Moorside, can he describe the contingency plans the Government have in place to guarantee the UK’s energy security?

Thirdly, the electricity produced by Moorside would be low-carbon, which is key to meeting the UK’s future carbon budgets, so if the Secretary of State cannot commit to the future of Moorside, can he describe what additional measures the Government will take to reduce the UK’s greenhouse gas emissions? Finally, what contingency plans does the Secretary of State have in place for the economic development of west Cumbria, to which Moorside would have brought a reported 6,000 jobs in the construction phase and 1,000 permanent jobs thereafter?

[Greg Clark]

I am rather surprised by the statement and questions of the hon. Member for Salford and Eccles (Rebecca Long Bailey). First, it is widely known that Toshiba has had to engage in a corporate restructuring because its major nuclear subsidiary, Westinghouse, had to enter bankruptcy proceedings. That is what has happened. When I met the board of Toshiba last week, it was clear that that was the reason it is retreating. That is the central fact and the reason it is moving out of NuGen.

The hon. Lady asked about the Government’s approach to new nuclear. The policy of this Government is clear: we are in favour of new nuclear as part of a diverse and low-carbon energy mix. We are the first Government for 25 years actually to deliver a new nuclear power station. As my hon. Friend the Member for Copeland mentioned, the sector deal we have struck with the industry has been very widely supported. For the first time, we are training a new generation of nuclear engineers through the nuclear apprenticeship programme. It is an important industry now, and it will be an important industry in the future.

One of the things I find when I talk to investors in the nuclear industry is some concern at the complete absence of a united policy on nuclear on behalf of the Labour party. We would think from hearing the hon. Member for Salford and Eccles that the Labour party was in favour of nuclear power, whereas the leader of her party, who I assume has some influence on policy, has said:

“I stand here as somebody who is passionately opposed to nuclear power and nuclear weapons in equal measure.”—[Official Report, 13 December 2011; Vol. 537, c. 699.]

The shadow Chancellor has said that he would end nuclear power

“in the first 100 days of a Labour Government”.

It is no wonder that the trade unions the hon. Lady refers to have said that her own party’s energy plans would not leave the lights on.

Our approach is to continue with the programme of nuclear new build that we have. It is subject to being developer-led and, as is strictly necessary, to the safety case being made in each example, as well as to establishing value for money. It is, after all, the taxpayers or consumers who pay the bills, and we will always have that in mind as we continue our programme.

[Several hon. Members rose—]

[Sir Michael Fallon (Sevenoaks) (Con)]

Does my right hon. Friend agree that if we are to develop a nuclear industry with the skills and the supply chain necessary to deliver baseload electricity that is reliable and cost-effective, it really is essential to avoid the kind of long gaps in procurement—for example, between Sizewell B and Hinkley C—that we saw under Labour? Will he intensify his work to find a financing model that is equally attractive to our long-term funds as it could be to overseas investors?

[Greg Clark]

I pay tribute to my right hon. Friend for his important work in re-establishing the civil nuclear industry in this country. He is absolutely right: it is not just investment gaps that cause problems; we lose the ability to train workers in that industry, and we are having to restart training nuclear engineers. In previous statements to this House, I have said that we have accepted the recommendations of the Public Accounts Committee about looking at new models for financing new nuclear. It is right that we should do so, and in so doing we will proceed with deploying new nuclear power in this country.

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

The Secretary of State should indeed have come to the House with a statement on this matter, because it demonstrates clearly that nuclear plants are not economically viable. Will this failure finally lead the UK Government to realise that they must scrap plans to set up new plants for the declining, dangerous nuclear sector? Will the Secretary of State now commit to ruling out increased subsidies to other nuclear developments?

With the inevitable impact on the UK’s ability to meet its carbon reduction targets, does the Secretary of State regret his Government’s decision three years ago to cut investment in green technologies vastly, for ideological reasons, including the infamous betrayal of the £1 billion Peterhead carbon capture and storage project? The latest failure of nuclear is yet more evidence that renewables, growing cheaper and more reliable, are the future of low-carbon energy. Will the Secretary of State now finally properly commit to investing in renewables, including carbon capture and storage, to avoid falling even further behind the rest of the world?

[Greg Clark]

There is no one more committed than I am to the role of renewables in decarbonising our electricity supply. In fact, I am proud that the UK has delivered the fastest rate of decarbonisation in the G20 in the last years. We have created more than 400,000 jobs —many of them in Scotland—in low-carbon businesses and the supply chain. Renewable capacity in this country has quadrupled since 2010, and 30% of our electricity comes from renewables. Our record on renewables stands comparison with that of anyone else in the world.

However, my belief is that we should have a mix of low-carbon energy sources, and it is important that we should have low-carbon power from nuclear as part of that mix. I am surprised that the hon. Gentleman does not recognise and pay tribute to Scotland’s proud nuclear tradition. Many people are employed now, and have been employed in the past, in nuclear—at Chapelcross, Dounreay, Hunterston and Torness. The former leader of the hon. Gentleman’s party actually wrote to EDF to request and support the extension of the life of Hunterston and Torness well into the 2020s, so that they could continue to provide those jobs and that power. The hon. Gentleman talks a different game from his party’s correspondence.

[John Stevenson (Carlisle) (Con)]

From where I am standing, it appears the Government do not have a coherent energy policy, particularly with regard to nuclear, and that has clearly had an impact on the Cumbrian economy. Given what has happened at Moorside, what does the Minister intend to do to support the Cumbrian economy?

[Greg Clark]

My hon. Friend is a great champion of the nuclear sector in Cumbria. It has a bright future. As he knows from the sector deal, there is investment in the supply chain and in reducing the cost of new nuclear, which will be essential if it is to compete with other sources of power. There are also great opportunities through decommissioning, not just in this country, but in selling expertise around the world. Cumbria is the centre of that expertise; it has a strong strategic role in our economy; and we will back it all the way.

[Rachel Reeves (Leeds West) (Lab)]

We are now entirely reliant on foreign investment to support new nuclear build in our country. If businesses abandon their plans, as Toshiba has done, that will affect the generation of new electricity supply and the costs borne ultimately by consumers. What is the Government’s alternative plan if foreign investors do not support the new nuclear build we need in the UK?

--- Later in debate ---

[Greg Clark]

I am grateful for the comments from the Chair of the Business, Energy and Industrial Strategy Committee. She will know that it is only very recently that it has been possible to invest in new nuclear. The Labour Government she supported had no future new nuclear build programme. She will know from her visits to Sellafield and other nuclear installations that we are taking forward the recommendations of the Public Accounts Committee, including at Wylfa in north Wales, to look, where we do have a counterparty with which we can negotiate, at new financial models, and it is right that we should do so. However, as the hon. Lady would expect, that depends on being able to demonstrate value for money for bill payers and taxpayers.

[John Redwood (Wokingham) (Con)]

How likely is it that the Secretary of State will find an alternative developer for a nuclear project in Cumbria? If we do not, how will we generate the power we are missing?

[Greg Clark]

We have a substantial pipeline of new energy projects, as a number of hon. Members have made clear. When it comes to the Moorside site in Cumbria, it was always available to developers to leave it. It will now revert to the Nuclear Decommissioning Authority. It will be open to developers to come forward to make proposals. However, whether with nuclear or other sources of clean power, we have a substantial pipeline of new projects coming forward to add to our energy supplies.

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

When I was doing the Secretary of State’s job, there were plenty of such setbacks and delays to new nuclear, and they really worried me. I was worried about how we would keep the lights on in the 2020s and 2030s, given that the forecasts were reliant on so much new nuclear, so I looked at contingencies, particularly tidal lagoon power. Will he now reverse his views on tidal lagoon power and look at it quickly, because it can provide the firm reliable power that new nuclear offers and be built much more quickly than a new nuclear power station?

[Greg Clark]

The right hon. Gentleman is correct in noting that the scale of such projects means the companies proposing them need to have a plan that is financeable and, in this case, a source of technology that is available. I repeat what I said at the beginning, which is that the Westinghouse subsidiary of Toshiba went into chapter 11 bankruptcy. On the tidal lagoon project, I am in favour of diverse sources of energy—that is clear—but we have to recognise value for money for taxpayers and consumers. The Swansea tidal lagoon proposal was so far off being able to be financed that it was not value for money for either the taxpayer or bill payers.

[Rachel Maclean (Redditch) (Con)]

Does my right hon. Friend agree that smaller nuclear reactors can be an innovative heart of the mix to provide the country’s future energy needs?

[Greg Clark]

I do indeed. The sector deal to which I referred emphasises the role that small modular reactors can play, including on some sites of decommissioned nuclear power stations. That is an important area for the future.

[Mike Gapes (Ilford South) (Lab/Co-op)]

This decision means that this country will be more dependent on co-operation with France and our European Union partnership. Does the Secretary of State agree that it is important we sustain that?

[Greg Clark]

I think the hon. Gentleman knows very well that I think we should have a good trading relationship, including in energy, with the rest of the European Union, as we have had in recent years.

[Paul Masterton (East Renfrewshire) (Con)]

The UK is the home of civil nuclear technology. One reason for that is the thousands of very highly skilled apprenticeships the nuclear sector provides. What is the Secretary of State doing to ensure that that legacy continues, so we can continue to bring through very highly skilled well-paid jobs?

[Greg Clark]

My hon. Friend makes an excellent point. We have established the new nuclear college to ensure that the gap in skills, to which my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) referred, can be filled. Apprentices are now being trained for the first time in new nuclear build—an important way our historical strength in new nuclear can be projected forward into the future.

[Martin Whitfield (East Lothian) (Lab)]

I thank the Secretary of State. What consideration has been made of the wider impact of Toshiba’s decision on the UK nuclear industry and its supply chain? Does Toshiba’s decision put in doubt any other projects coming down the line?

[Greg Clark]

I was very clear and Toshiba was very clear that there were particular circumstances relating to the financial difficulties of its Westinghouse subsidiary. All these projects are promoted by a particular investor. It has made a decision. It is one that I think was widely expected, given those financial difficulties, but it has no implications for any other promoter.

[Vicky Ford (Chelmsford) (Con)]

I understand that the shadow Chancellor said last year that he would end all nuclear power within 100 days of a Labour Government. Given that nuclear energy accounts for about 20% of our energy production, how would they keep the lights on?

[Greg Clark]

This is the point the trade unions have made. The failure of the Labour party even to support the policy described at the Opposition Dispatch Box by the hon. Member for Salford and Eccles (Rebecca Long Bailey) concerns investors in new nuclear. In the past, we have been able to establish a common approach in this area so that investors can take a long-term approach with certainty. It would be helpful if we returned to that.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for his replies so far. Toshiba’s decision to withdraw from the nuclear plant leaves a clear gap in the energy market. It has been stated today that there will be a 7% deficit in energy provision as a result; how will that deficit be filled and by whom?

--- Later in debate ---

[Greg Clark]

There will not be a deficit. We have a substantial—in fact, increasing—pipeline of new investment. One of the features of the energy industry in the UK is that we have not only a pipeline of proposed new nuclear power stations—as I said, they need to meet the value for money threshold—but a substantially increasing volume of investment in renewable energy coming from and reflecting the fact that the price of offshore renewables has halved in the past two years.

[Mr Nigel Evans (Ribble Valley) (Con)]

The northern powerhouse has just taken a huge dent to its power generation for the future. The Secretary of State knows how important those jobs would be to the north-west of England, including in the Ribble Valley, which I represent. Where Toshiba has failed, will his Department not re-energise its efforts to ensure that the nuclear experts that he relies on can work with embassies and high commissions throughout the world, where some of this expertise lies, to give at least some hope that, where Toshiba has now pulled out, somebody else can come in within a short time?

[Greg Clark]

My officials and I, and my ministerial team, talk regularly to countries and companies across the world. When I was in Japan last week, I had discussions with Hitachi, which is actively engaged in negotiations on the Wylfa project. Now that Toshiba has taken its decision, for reasons that everyone understands, and I make no criticism of it—it has been very transparent in the reasons for this—that site is now available. Other developers will know that and be able to engage.

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

Despite losing £100 million on this venture, Toshiba’s share price went up when it pulled out, yet the Secretary of State stands there and tells us that nobody is more committed to nuclear than he is. It is quite obvious that renewables are the future, yet this Government are blocking onshore wind development in Scotland. They are looking at pulling the export tariff, and as my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) said, they have already pulled CCS funding. When will they provide proper investment in renewables and end this nuclear obsession?

[Greg Clark]

The first part of the hon. Gentleman’s question makes my point for me. The reason that Toshiba took the decision that it did was to restore robustness to the financing of the company following the chapter 11 bankruptcy proceedings that Westinghouse went into. It has grasped that nettle. On the deployment of renewables, he will know that when it comes, for example, to wind in the remote islands of Scotland, I made sure that we were able to take that opportunity, and as a result, investment is going into those communities. [Interruption.] He says that it is small, but the performance of offshore wind is creating jobs all around Scotland and the United Kingdom and is a reflection of the commitment that this Government have given to it.

[Mark Menzies (Fylde) (Con)]

This decision is not just about west Cumbria. Springfields nuclear fuel, which is based in my constituency and employs 1,200 people, was hoping to make the nuclear fuel for this plant, as the Secretary of State knows, because he visited it. What assurances can he give that workforce, and what measures are the Government taking to make sure that Springfields can make nuclear fuel for some of the other plants that he has outlined this afternoon?

[Greg Clark]

Springfields is very successful and has an active programme of supplying the nuclear industry generally. It will be one of the beneficiaries of the fact that we have restarted the build programme for civil nuclear power in this country. My hon. Friend knows that I will work closely with it and him to make sure that it can bid into those projects when they mature.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

The Secretary of State says that he is talking to other investors in UK nuclear. Will he name which alternative companies he and the Department have approached since Toshiba’s decision, and will he follow up on the exploration by my hon. Friend the Member for Workington (Sue Hayman) of a positive intervention by CGN—China General Nuclear Power Group—to prevent the loss of skills, jobs and equities at Moorside?

[Greg Clark]

We have regular discussions with investors in nuclear. The decision was taken only last Thursday and has some way to go to be implemented, but the hon. Gentleman has my assurance that prospective investors in this site and others will be able to talk, in the first instance, to the NDA, which owns the land, but are also free to discuss these matters with my officials.

[James Heappey (Wells) (Con)]

The Secretary of State has championed the development of battery technologies, through the Faraday challenge, and his Department is also looking closely at demand response technologies. Can he say whether these renewables plus storage/flexibility options are quickly replacing the need for centralised thermal plant, and whether we should be looking at those options alongside the new nuclear programme as a priority for our future energy mix?

[Greg Clark]

My view is that we should have a mix of energy sources. It is true that storage, and the progress being made in storage, plus renewables is increasing the possible contribution to our electricity generating system, but, as I say, we are always wise to have a diversity of sources, which is why nuclear has an important role to play.

[Bob Stewart (Beckenham) (Con)]

When NuGen hands back the Moorside site to the NDA in January, will it be the taxpayer who pays for the clean-up, or—I hope— its preparation for a new tenant?

--- Later in debate ---

[Greg Clark]

If my hon. Friend visits the Moorside site, he will see that it is pretty clean already. The site was available for development but has not had substantial work on it that would require any remediation.

[Mr Philip Hollobone (Kettering) (Con)]

As foreign energy companies look to develop new nuclear build around the world, with Her Majesty’s Government’s nuclear sector deal, how attractive is the UK electricity market compared to those of other countries?

[Greg Clark]

It is an attractive market. That is one reason there is interest from several companies in the new nuclear opportunities available. Our market has always been open to overseas investment, and our commitments have attracted interest, not least in the next in the pipeline, which is Hitachi’s proposed investment in Wylfa in north Wales.

[Matt Warman (Boston and Skegness) (Con)]

Small nuclear reactors have already been mentioned briefly today. May I invite the Secretary of State to go fractionally further than he did in his previous answer and say that when it comes to these smaller, cheaper, more efficient reactors, we should be looking not just at existing nuclear sites, but at other sites being decommissioned in the near future?

[Greg Clark]

My hon. Friend is absolutely right. One of the advantages of small modular reactors is that they can be deployed in a wider range of locations than the larger traditional reactors, and that is part of the attraction recognised in the sector deal.

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

I have considerable sympathy for the Secretary of State’s position in this matter. Does he agree that Toshiba’s much-publicised problems in this area are not of his making and that had Toshiba been willing to keep open its troubled subsidiary on the basis of this one contract, he could have been accused of getting poor value for money for the taxpayer?

[Greg Clark]

It is up to the company, as a commercial investor, to decide its future strategy. It has had a major financial problem as a result of the problems experienced by Westinghouse. We have always been clear that these projects need to be commercially backed, and Toshiba has taken a commercial decision to exit from overseas nuclear. That is a matter for it.

Budget Resolutions

Greg Clark Excerpts

Wednesday 31st October 2018 Commons Chamber

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

The measures taken in the Budget position Britain as one of the nations on earth that can take advantage of the extraordinary opportunities that are transforming every economy, every trade and every industry in the world. During the past few years, much of the economic debate has centred on two big subjects. The first is how to repair the economy from the ravages of the financial crisis and the previous Labour Government, when borrowing soared to 10% of national income and nearly one in every four pounds of what the Government spent was borrowed. Through eight years of fiscal discipline, involving sacrifice by the British people but backed in three general elections, the public finances have now been transformed so that this year borrowing will be not 10% but 1.9% of national income, and our national debt will fall in every year ahead, falling over the period of the forecast by over 10% of our national income. Sound money is the foundation of a sound economy, and the Conservative party has once again restored it to Britain.

Secondly, much of the recent debate has of course been about Brexit, and the Chancellor was clear that we are looking to secure a good deal with the European Union in the weeks ahead, and that achieving that will provide a further boost to the economy as growth will be revised upwards and, with it, revenues, jobs and wages. Our modern industrial strategy, reinforced by measures in the Budget, can see us enhance the prosperity of every part of the United Kingdom.

[David Hanson (Delyn) (Lab)]

The Secretary of State mentioned Brexit. Has he seen the Office for Budget Responsibility document that says that because of the uncertainty caused by his Government’s handling of Brexit, the economy was between 2% and 2.5% smaller by mid-2018 than it would have been otherwise?

[Greg Clark]

If, as I hope and expect, we secure a good deal, those figures will be revised upwards, with consequent benefits right across the economy.

This is one of the most exciting times in the history of business, technology, science and commerce. From farming to retail, from manufacturing to the creative industries, the analysis of previously unimaginable quantities of data is changing lives. Doctors can diagnose diseases and treat them successfully even before we display any symptoms. As Members with interests in the automotive sector will acknowledge, there will be more change in the cars we drive in the 10 years ahead than since the invention of the internal combustion engine, as electric motors replace engines and navigation by satellite and sensor replace human control.

[Mr Jim Cunningham (Coventry South) (Lab)]

As the Secretary of State knows, a lot of developments are taking place in the automobile industry, for example in Coventry on electric cars. He will also know that there are a lot of concerns in companies including Jaguar Land Rover in relation to the diesel tax on the one hand and Brexit on the other, and the Secretary of State has been very good in meeting us on those subjects.

[Greg Clark]

I am grateful to the hon. Gentleman for what he says. I am a regular visitor to the west midlands and to Coventry, and of course it is vital for one of our proudest and most successful industries that we should be able to build on that success by seizing the initiative in the years ahead. Every country in the world is moving to electric and autonomous vehicles and, including in the hon. Gentleman’s constituency, we have some of the best brains on the planet in developing that new technology. I am absolutely determined that we will not do what happened in the past—we invent the technologies yet see them deployed elsewhere—but that instead we will manufacture these batteries and these vehicles, and that we will do so in every part of the country.

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

rose—

[Albert Owen (Ynys Môn) (Lab)]

rose—

[Greg Clark]

I will give way first to another west midlands MP, the hon. Member for Birmingham, Northfield (Richard Burden).

[Richard Burden]

Will the Secretary of State recognise the real concerns expressed to him by the automotive industry about the contradictory and confused signals coming out of Government in relation to fiscal policy and vehicle excise duty? Is there not something wrong when the system as it is at present penalises most the cars that are the cleanest and most CO₂ efficient? In the next few months, as he and his colleagues consult the industry on the introduction of the worldwide light vehicle test procedure, will he ensure that such perverse incentives do not continue into the next financial year?

[Greg Clark]

The hon. Gentleman makes an important point. The next generation of diesel engines are much more environmentally friendly and fuel-efficient than their predecessors, so to replace an existing old-style engine with a new one is a step in the right direction, and I have been very clear, as I think he knows, that diesel will have a role to play as we transition to a 100% emissions-free world. That is captured in the “Road to Zero” strategy on which we consulted the industry, and I know that he was involved in those discussions.

[Albert Owen]

The Secretary of State talked about not losing our ideas. He will know that there are great ideas now in the marine energy technology sector, but they are at an early stage and companies need help and support before they can manufacture in this country. Will he have a word with the Chancellor so that we can have proper ring-fenced finance for this industry, as we had for wind energy under a Labour Government and for solar? Those sectors are now successful, but marine energy is lagging behind.

[Greg Clark]

We have an expanding innovation budget and we will have more to say about that in the weeks ahead, because our industrial strategy recognises the importance of seizing the opportunities that we have in clean growth, in which we are a world leader in many cases. I want to do with clean growth just what we are doing in the automotive sector, and marine and tidal energy is an important part of that.

[Steve Double (St Austell and Newquay) (Con)]

This is not just about manufacturing. If we are going to be successful, we are going to need the raw materials. As the Secretary of State will be aware, there is great potential in Cornwall for lithium mining, which will become ever more important with all the electric vehicles we are going to have. So does he share my enthusiasm for that potential, not just for the Cornish economy but in securing a domestic supply of this ever more important metal for the UK?

[Greg Clark]

My hon. Friend makes an excellent point, and it is his second chance in the space of an hour to talk about Cornwall’s place in our industrial future, whether through lithium for batteries or as a centre for the launch of satellites and space vehicles. He makes his case passionately, and of course we want to make sure we can source the materials for this new technology. Cornwall is a good place for that.

On clean growth, last year was the first time since the industrial revolution, forged in this country, in which a day passed in Britain with no coal being used to provide our power supply. This revolution is gathering pace, and the most exciting thing about these transformations is that Britain—British businesses, British scientists, British designers, British inventors, British workers—can lead the world in every one of them. Of the satellites that gather and transmit information for cars to navigate, a quarter—[Interruption.] I am surprised that the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who I thought had an interest in science and technology, would not want to acknowledge the fact that a quarter of all the communications satellites orbiting the Earth today were built in Britain. We have over half the entire world market in the booming small satellite market. As my hon. Friend the Member for St Austell and Newquay (Steve Double) pointed out to the Prime Minister today, we will have the first satellite launch pad in Europe. We are not just manufacturing and inventing the technology, therefore; we will be the go-to place to launch it as well.

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

The Secretary of State mentioned satellites. May I point out that 100% of the glass used in space technology and satellites around the globe is built in my constituency by Qioptiq?

[Greg Clark]

I did not know that, but I will add it to my repertoire of boasts about our national capability, and I am very pleased to learn it.

We are now the leading country not just in Europe but in the world for deploying offshore wind energy. The cost of production has fallen by half since 2015, and factories and jobs are springing up all around our coasts, from Belfast to Hull, from Machrihanish to the Isle of Wight. I see that my right hon. Friend the Member for Sevenoaks (Sir Michael Fallon) is present; he played an important role in setting the strategy that has resulted in that investment.

Also, having been the place where the genome was sequenced, we are the place where the secrets that it unlocked are being discovered and applied to the benefit of patients.

Our modern industrial strategy reinforces Britain’s future as a place of competition, innovation and challenge where new ideas can take flight and where any incumbent can be challenged by the newest start-up. Monday’s Budget pressed home the advantages and continued the progress we are making, including in addressing areas in which we need to improve. We have the biggest increase in public investment in research and development that this country has had in its history, with £1 billion more for the industrial strategy challenge fund.

[Vicky Ford (Chelmsford) (Con)]

This morning, leaders in genomics met in the House of Commons. They are world leaders based in Britain, and they told us how cures and treatments are being delivered to patients in the NHS today. Does my right hon. Friend agree that it is this Government’s investment in science and research that has led to us being a world leader in this area?

[Greg Clark]

I agree with my hon. Friend. I had a good meeting with the global chief executives of some of the most important life sciences companies around the world, in which it was readily acknowledged that the strength of our science base, and the visibility of our commitment to reinforce it, to invest in it and to apply it in manufacturing, is causing investment to be made here. The global pharma and life sciences company MSD has announced that its new research centre is going to be here in the UK, and I had the pleasure of opening the Novo Nordisk facility just a few months ago. It is evident that there is more to come. One of the benefits of a long-term strategy and commitment is that it can have short-term results because people invest on the back of it.

[Daniel Zeichner (Cambridge) (Lab)]

The Secretary of State is talking positively about the future of the life sciences sector, but does he recall that just last week the head of the Association of the British Pharmaceutical Industry told the Select Committee on Exiting the European Union that without full membership of the European Medicines Agency, the future of the life sciences industry was not tenable in this country?

[Greg Clark]

I do not agree. I think that the future of the industry is strong in all scenarios. I regard our ability to participate in institutions and research networks as being of great importance, and that is why I hope that the deal that is being negotiated will succeed and that we will be able to move forward based on that confidence.

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

Does my right hon. Friend welcome our ranking in the climate change performance index? The UK is fifth in that index, ahead of Finland, France and Germany.

[Greg Clark]

I do recognise that. The combination of a rigorous commitment to emissions reduction targets and an industrial strategy that makes it possible for us to glean the benefits of that is being admired by many countries around the world.

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

Does my right hon. Friend agree that carbon capture, utilisation and storage has enormous potential? I had a meeting with the Carbon Capture and Storage Association this morning, in which it emphasised clearly that a development pathway in 2019 would have enormous benefits for our ability to deliver a net zero target by mid-century.

[Greg Clark]

I agree with my hon. Friend. That is a good example of how a strategy to integrate different strands of policy and work can be of great benefit to many of the industries on Teesside that he represents so well. We will have more to say about that.

Building on the success of the Faraday challenge, which aims to make Britain a place for the design and manufacture of new battery technologies, the Stephenson challenge referred to in the Budget will support innovation in electric motors. We are emphasising the “D” side of R&D: development as well as research. The “Made Smarter” review, which was championed and led by Juergen Maier, the chief executive of Siemens in this country, is spreading the take-up of new manufacturing technologies to businesses small and large. A national quantum computing centre will scale up quantum systems into workable machines. An industrial energy transformation fund will help many energy-intensive businesses to reduce their energy costs as they transition to a low carbon future, at the same time as making them more competitive.

New fellowships in artificial intelligence will attract the world’s best research talent to our shores, building on our success with institutions such as the Turing Institute. On infrastructure, the Budget ensures that the digital revolution will extend to all parts of the country, through new funding for new ways of deploying full fibre broadband in rural locations.

[John Howell (Henley) (Con)]

The one thing that goes across all the areas that my right hon. Friend has been talking about is our investment in fusion technology. He might be about to say something about that, but I was really pleased to see £20 million being given to that area in the Budget. Will he confirm that the Euratom issue is now over, and that we can look forward to a successful fusion technology industry continuing in this country?

[Greg Clark]

I am grateful to my hon. Friend for his question, which gives me the chance to confirm that there will be £20 million of investment—and it is investment—in the centre of excellence in fusion research. It will pay dividends for many years to come. The discussions on the successor arrangements to Euratom have gone as I hoped they would—that is, cordially and expeditiously—and good progress has been made on all the issues under discussion. We have made the necessary agreements with most of our major counterparts.

On places, the Budget announced extra funding for the Strength in Places fund, supporting local collaborations between business and research across the UK. This was also an important Budget for Britain’s small businesses. Extending the start-up loans programme will help more aspiring entrepreneurs to take the plunge. Further funding for the knowledge transfer partnerships will place graduates in smaller firms across the United Kingdom. The fivefold increase in the annual investment allowance will help to support firms as they invest and grow, and the £1.5 billion boost to small high street retailers, including £900 million in business rates relief, will support small businesses right across the country.

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

The post office in our high street has been downgraded from a Crown post office and its services are being reduced. Our retailers in our high street are worried that this will mean fewer people coming into the community. What can the Minister say to reassure the retailers in our high street?

[Greg Clark]

One of our proudest achievements in Government has been to halt the destruction of the post office network—[Interruption.] It is substantially the same in numerical terms across the country as it was when we came into office. That is very important, for exactly the reason that the hon. Lady has set out. Post offices are crucial to many high streets and to the many small businesses that make use of their services.

We are in the early days of a period of spectacular opportunity for Britain. The truth is that none of the achievements that are within our grasp would be possible without the willingness of investors and entrepreneurs to take a risk in backing new ideas.

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

Notwithstanding the attractions of Cornwall, the vertical take-off site for the UK is going to be in my constituency, and I would be churlish if I did not express my thanks to Her Majesty’s Government for that decision. In Caithness, we have exactly the kind of skills and knowledge in Thurso and Dounreay that the Secretary of State is referring to. Will the Government ensure that those skills and that knowledge are transferred and used to boost the laudable scheme for the space launch in my constituency?

[Greg Clark]

I am glad to hear that from the hon. Gentleman. I had a great visit to his beautiful constituency and he is right to say that it has skills that can be deployed in the space industry now. It also has the opportunity, working with local colleges, to develop and grow the skills that the space industry will need if it is to create good, well-paid jobs there in the future. This decision is great news for the north of Scotland and for the whole of the United Kingdom.

[Stephen Kerr (Stirling) (Con)]

I welcome the £200 million more that is to be given to the British Business Bank as part of the Budget, and also the announcement that a team from the bank is to be based in Scotland. The Secretary of State knows that I have an ongoing concern about the availability of quality patient capital, especially for small and medium-sized enterprises. What is his assessment of the current availability of that kind of capital?

[Greg Clark]

My hon. Friend highlights a piece of advocacy that he has made personally and as a member of the Business, Energy and Industrial Strategy Committee to ensure that we give growing businesses the ability to expand. That investment by and through the British Business Bank, particularly through its regional focus on Scotland, Wales and Northern Ireland, is very important. It should be close to the people in whom it is investing.

By investing in new equipment and employing new people, it is businesses that create jobs, not the Government. Businesses provide people with the earnings they need to live good lives. After the family and education, it is businesses that provide most of us with the best opportunity to develop and make the most of our talents. It is businesses that pay for every single one of our public services, both directly and by employing people. Governments cannot do such things, but they can stand in the way. There is no successful society anywhere in the world that is not based on successful businesses.

However, at a time when we need national determination to invest in future business success through a long-term approach, we have an Opposition whose would-be Chancellor describes business as the “real enemy”. A month ago in Liverpool—a city that drove out business when the hard left last seized power, taking a generation to recover—a chilling warning was sounded to the world: “If you dare to invest in Britain, 10% of your value will be seized forever without compensation. You’ll be taxed at the highest level in the peacetime history of this country. You’ll be trapped in a nightmare economy where, at a stroke, the state goes a third of a trillion pounds more into debt. The would-be Government fully expect a run on the pound and capital flight.” Whatever uncertainty there is over Brexit, businesses tell me time and again that their biggest nightmare would be to have the Leader of the Opposition and the shadow Chancellor in Downing Street.

The choice could not be clearer. Britain has the chance to be in the vanguard of the most exciting developments in the history of global commerce and innovation, or to be shunned by investors as one of the most left-wing, anti-enterprise, ruinously indebted nations in the developed world. The aim of this project is to build a country in which our children and grandchildren can look forward with confidence to ever-stronger security and ever-growing opportunity. That choice has never been more vital for Britain, and I commend the Budget to the House.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 16th October 2018 Commons Chamber

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

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

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

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

[Peter Grant]

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

[Greg Clark]

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

[Patrick Grady]

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

[Greg Clark]

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

[Gavin Newlands]

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

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

and

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

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

[Greg Clark]

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

[Stephen Kerr (Stirling) (Con)]

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

[Greg Clark]

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

[James Heappey (Wells) (Con)]

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

[Greg Clark]

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

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

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

[Greg Clark]

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

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

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

[Greg Clark]

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

[Carolyn Harris (Swansea East) (Lab)]

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

--- Later in debate ---

[Mohammad Yasin (Bedford) (Lab)]

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

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

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

[Mohammad Yasin]

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

[Greg Clark]

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

[Theresa Villiers (Chipping Barnet) (Con)]

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

[Greg Clark]

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

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

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

[Greg Clark]

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

[Mr Philip Hollobone (Kettering) (Con)]

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

[Greg Clark]

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

[Jim Shannon (Strangford) (DUP)]

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

[Greg Clark]

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

[John Stevenson (Carlisle) (Con)]

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

--- Later in debate ---

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

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

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

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

[Neil Gray]

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

[Greg Clark]

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

[Mr Speaker]

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

[Greg Clark]

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

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

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

--- Later in debate ---

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

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

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

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

[Sir Edward Davey]

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

[Greg Clark]

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

[Derek Thomas (St Ives) (Con)]

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

[Greg Clark]

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

[Nic Dakin (Scunthorpe) (Lab)]

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

[Greg Clark]

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

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

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

[Greg Clark]

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

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

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

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

“The…system is stifling growth and investment”,

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

[Greg Clark]

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

[Rebecca Long Bailey]

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

[Greg Clark]

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

[Daniel Zeichner (Cambridge) (Lab)]

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

--- Later in debate ---

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

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

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

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

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

[Ian C. Lucas]

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

[Greg Clark]

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

[Several hon. Members rose—]

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[Dame Caroline Spelman (Meriden) (Con)]

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

[Greg Clark]

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

[Jessica Morden (Newport East) (Lab)]

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

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[Peter Kyle (Hove) (Lab)]

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

[Greg Clark]

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

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

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

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

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

[Greg Clark]

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

[Several hon. Members rose—]

Energy Policy

Greg Clark Excerpts

Wednesday 10th October 2018 Written Statements

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

The Government remain committed to 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.

We remain on track to have all the international agreements that the UK requires to ensure uninterrupted co-operation and trade in the civil nuclear sector ready for the end of March 2019. Significant progress in this area is marked by the signing of a new bilateral nuclear co-operation agreement (NCA) with Australia on 21 August. This is the second NCA to be signed with a priority third country in preparation for the UK’s withdrawal from Euratom, following the new bilateral agreement with the United States signed on 4 May.

The Government have completed their consultation on the draft nuclear safeguards regulations which set out the detail of a new domestic civil nuclear safeguards regime. We are analysing responses to the consultation and will publish a formal response to the consultation in the autumn. We expect to lay draft regulations before Parliament by the end of this year. The regulations, to be made under powers in the Energy Act 2013 and Nuclear Safeguards Act 2018, will enable a domestic nuclear safeguards regime to be established before the end of March 2019.

In July, we set out details of our ambition to seek a close association with Euratom—specifically, through the negotiation of a nuclear co-operation agreement (NCA) between Euratom and the UK that is more comprehensive and broader than any existing agreement between Euratom and a third country.

Simultaneously, we are ensuring that the necessary legislation is ready, and the civil nuclear industry is prepared for all potential scenarios, including the unlikely event that the UK leaves the EU and Euratom at the end of March 2019 without an agreement (a no-deal scenario). We have laid a number of statutory instruments before Parliament on Euratom-related issues and have published a technical notice on civil nuclear regulation to support businesses and other interested parties in making informed plans and preparations for a no-deal scenario.

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. This report is being laid in accordance with section 3(4) of the Nuclear Safeguards Act 2018 and follows two voluntary quarterly updates to Parliament.

The initial commitment to quarterly reporting on a voluntary basis was set out in my written ministerial statement of 11 January 2018, Official Report, column 9WS. Section 3(4) of the Nuclear Safeguards Act 2018 provides for four statutory quarterly reporting periods in respect of which the Secretary of State must lay a report before Parliament. This is the first such report and covers the three-month reporting period from 26 June until 26 September. I plan to lay the next report on Euratom exit progress in January 2019.

[HCWS983]