Vauxhall/Opel: Proposed Takeover

Debate between Greg Clark and Callum McCaig

Monday 20th February 2017 Commons Chamber

[Greg Clark]

I agree with my hon. Friend. One of the strengths of our automotive sector is that it is particularly international. It benefits from and is strengthened by trade to and from not only the rest of Europe but the whole world. Vauxhall’s being owned by GM for such a long time is a reflection of the fact that the motor industry has long been international beyond Europe. The industry will be very prominent in our discussions.

[Callum McCaig (Aberdeen South) (SNP)]

I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing this urgent question. I welcome the hon. Member for Salford and Eccles (Rebecca Long Bailey) to her Front-Bench position, and I look forward to working with her in that role.

Like every Member of this House, my party’s thoughts are with those affected at the plants in Ellesmere Port and Luton and with all those who work in the supply chain or for the company in other ways. I welcome that the Secretary of State has led from the front in his interactions with the French and others.

What assurances has the Secretary of State sought and/or received from the French Government or from PSA about the plants, employment and, in particular, the terms and conditions of employees and pensions? We cannot ignore the impact that Brexit might have on this issue. If there is direct competition between a German plant and a UK plant—regardless of the undoubted strength of UK plants—given that 75% of a UK plant’s components come from, and 80% of its exports go to, the single market, it will be at a comparative disadvantage with European counterparts.

Given that the Secretary of State has said that he will do everything he can at all times to rule out the hard Brexit that has been proposed, will he reassess single market membership? We can leave the EU, but we do not have to leave the single market, and staying in the single market would protect employees at Vauxhall and right across the economy.

[Greg Clark]

I am grateful to the hon. Gentleman for his kind words. I thought it was important to have discussions immediately with both parties to the negotiations. It is fair to say that, as a deal has not been concluded and discussions are continuing, the prospective purchaser is clearly not in a position to give contractual guarantees. One of the important reasons for meeting was to have a clear understanding of the prospective purchaser’s purpose and to commit to having further meetings as the discussions continue—I will be having a further meeting later in the week. Of course, the conditions for workers and pensioners are uppermost in the discussions.

In the context of Brexit, I made it clear, as the Prime Minister did in her speech at Lancaster House, that we want to negotiate the best possible access to the single market, free of tariffs and bureaucratic impediments. It is also important to reflect on the fact that we have a very strong and successful domestic market, with Vauxhall having a particularly strong share of it. That was mentioned to me by both parties, GM and PSA; they are very aware of that, and we will emphasise it in the days and weeks ahead.

Industrial Strategy Consultation

Debate between Greg Clark and Callum McCaig

Monday 23rd January 2017 Commons Chamber

[Greg Clark]

My right hon. Friend will see in the approach we are setting out a vigorous continuation of many of the measures, such as the northern powerhouse, that he championed in his time in government that are making such a big difference in the north and other parts of the country. I can confirm that with the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), and colleagues in the House of Lords we will drive the reforms that have proved so successful in the past when expanding the institutions that contribute to our excellence in higher education. The standard and standing of higher education in this country have never been higher, which is a reflection of the soundness of the policies that have been pursued in recent years.

[Callum McCaig (Aberdeen South) (SNP)]

I give this proposal a cautious welcome. It is honest in some ways in its reflection of the state of the economy. In many ways it is brutally honest about some problems, including regional disparity and productivity. Likewise, it recognises some successes, such as the automotive and aviation sectors and, on page 90, Aberdeen as an oil and gas hub. The problems are not new, so how will the Secretary of State ensure that the same mistakes are not repeated? How will he ensure that existing industries are not sacrificed in the quest to support new ones?

Will the right hon. Gentleman confirm that the allocation of new research and development money will be in addition to anything that would have come from the European Union and that he will provide long-term commitments to match EU funding? How much of that R and D spend will be outwith London and south-east England? Imagine how much worse regional disparities would have been without EU structural funds. Will he commit to long-term replacements for those funds?

On renewables and carbon capture and storage, the right hon. Gentleman will be unsurprised that I am a little disappointed by the lack of ambition in an industry that will be worth hundreds of billions, if not trillions, of dollars in the near future. Will he consider a sectoral deal for renewables? If so, will he work with the Scottish Government on how that could be done in Scotland? Access to finance is identified as a problem, and I share the concerns about the Green Investment Bank. It is short-sighted to sell it off when this key sector needs access to funding and when the bank is the perfect vehicle for that.

How will the consultation process work with the devolved Governments? However good this industrial strategy may be, we must accept that the biggest threat to the economies of both Scotland and the UK is lack of access to the single market and to skilled people that comes through our EU membership. Will the right hon. Gentleman seriously consider the Scottish Government’s plan that would see Scotland maintain its membership of the European single market?

[Greg Clark]

I thank the hon. Gentleman for his thoughtful remarks. I am impressed that he has reached page 90 already, which shows his diligence. He says that we are brutally honest, but if we are to look forward and have an industrial strategy that reflects the challenges we face, we need to be clear-eyed. On technical education levels and the imbalances, some areas are prosperous and some can catch up, so it is right to be ambitious in that.

The research and development money that the Chancellor announced in the autumn statement is separate from whatever might be decided on the European funds. It was independently granted and is available to universities and research institutions. The consultation on how that money is spent is part of the consultation on this exercise, and the money is for research and development. One of the points we make is that we have often been excellent at producing brilliant new ideas but less successful at commercialising them. Pushing further on how we translate good ideas into practice is an important feature of addressing that.

The hon. Gentleman mentions renewables, which of course are important in Scotland. The emissions reduction plan, which is currently being prepared, will particularly address that but, on the green economy, a chapter of the Green Paper has a big commitment to doing what we can to make sure that we obtain industrial advantage from the investments we are making in green technology.

Finally, the hon. Gentleman says that the biggest threat to the economy is the exit from the European Union. The United Kingdom has been very successful in recent years, and I would say that the biggest threat to that is if the successful alliance of our nations in the United Kingdom were broken up by the independence of Scotland.

Oral Answers to Questions

Debate between Greg Clark and Callum McCaig

Tuesday 13th December 2016 Commons Chamber

[Greg Clark]

I will indeed. I would commend two things to my hon. Friend. First, we want to make sure that small manufacturers can access the extra funding for research and innovation that my hon. Friend the Minister for Universities, Science, Research and Innovation has described. Secondly, we want to address the ability of small and growing firms to obtain the finance to allow them to grow to the next stage, which is very important in having a vigorous competitive market, as my hon. Friend suggests.

[Callum McCaig (Aberdeen South) (SNP)]

From education to research and development, Scotland’s universities play a key role in boosting our economy across all regions and sectors. With that in mind, will the Secretary of State outline what the role of universities will be in his forthcoming industrial strategy? Will the recently announced new money for R and D be available to Scottish universities?

[Greg Clark]

Yes; universities are very important. We have had a number of very constructive sessions with university leaders and researchers. The hon. Gentleman is absolutely right that science does not recognise boundaries. Universities and researchers in Scotland have a fantastic record of success. In fact, with 8.5% of the UK population, Scotland attracts 10% of UK research funding, which shows that it can prosper and thrive with the new changes we are making on funding.

[Callum McCaig]

Science does not recognise boundaries. Universities Scotland estimates that 10% of research funding comes from the EU and that up to 16% to 20% of staff come from EU nations. With that in mind, will the Secretary of State ensure that, as we exit the EU, Scotland’s universities are not hit punitively by immigration sanctions and the withdrawal of EU funding?

[Greg Clark]

It follows from what I have just said—science does not respect boundaries—that the science community is very global and international. Of course, as the hon. Gentleman would expect, we will in the negotiations reflect the importance of that not just for Scotland, but for the whole United Kingdom.

Corporate Governance

Debate between Greg Clark and Callum McCaig

1st reading: House of Commons
Tuesday 29th November 2016 Commons Chamber

[Greg Clark]

We are encouraging a greater role for shareholders in driving behaviour in the boardroom, because this is a matter of concern. It is connected to the point that—to be fair to him—the hon. Member for Norwich South made about long-termism. We want to see a more patient form of capital sustaining businesses that have the capacity to grow, and I hope that this will come out as part of the consultation.

[Callum McCaig (Aberdeen South) (SNP)]

May I start by giving a cautious welcome to the Secretary of State’s announcement? It represents some progress, but there are aspects missing and more clarity is required in some areas. There is general consensus that the pay gap between executives and employees is too large, and we firmly believe that addressing that by properly valuing and investing in employees is a key part of addressing the productivity problem. Companies need to be transparent about pay. If their pay for executives is justifiable, they must justify it to their staff and to their shareholders. In particular, the move to give shareholders greater control and a binding vote on executives’ pay is welcome. Indeed, it is incredible that such a situation does not already exist. What is the timescale for the entire process, and when will the changes be implemented?

More needs to be done about boardroom diversity. I was given very short notice of the statement, and it remains unclear what is to be done about diversity in the boardroom. Will the Secretary of State expand on that aspect of the proposals? I think we would all like to see boardrooms reflecting society more completely. That would be good for business and it would send a clear message to everyone across the country that business is a place for them.

Let me turn finally to the question of workers on boards. In the Prime Minister’s party conference speech, she said:

“Too often the people who are supposed to hold big business accountable are drawn from the same, narrow social and professional circles as the executive team.”

From my reading of the proposals and from what the Secretary of State has said, it appears that that will remain the case, but with one person from those same narrow social and professional circles designated to speak to the employees or consumers. That does not go far enough; it is a missed opportunity. When the Prime Minister said, “We are the party of workers,” was that post-truth or was it never true at all?

[Greg Clark]

I am grateful for the way in which the hon. Gentleman started his remarks, at least. He struck the right tone in welcoming the proposals as a sensible way to proceed, as I believe all business organisations, consumer groups and others have done. I hope that he will contribute to the consultation. He made a point about the value of transparency, and that is very much what we are proposing. We do not want to specify the appropriate pay for a chief executive—I do not think he does either—but it is right that companies should justify their decisions to shareholders and to employees. They should make their case for the pay and the package that they are choosing to offer.

The hon. Gentleman asked about the timing of the consultation. It will close in three months’ time, in February, and we will respond as soon as possible after that, depending on the number of responses. He also asked about diversity on boards and remuneration committees, and he will see that both questions are addressed in the Green Paper. It is important that remuneration committees are advised by and have a greater connection with the workforce, and that they should be less insular in their approach. There has been some criticism that the overlap of remuneration committees in public companies has excluded outside voices. The consultation refers to particular reviews of gender and ethnic diversity on boards, and it is important that we continue to make progress in that regard. We have further to go. Finally, the Prime Minister was very clear that we should have consumers and workers represented on company boards and that is what the proposals will do. This is a big advance and it has been warmly welcomed. I hope that the hon. Gentleman will support it too, when he makes his response to the consultation.

Oral Answers to Questions

Debate between Greg Clark and Callum McCaig

Tuesday 8th November 2016 Commons Chamber

[Greg Clark]

My right hon. Friend does not need to make a plug for that. It is free markets and the knowledge that this is a competitive place to do business that accounts for our world-beating status in the G7 at the moment.

[Callum McCaig (Aberdeen South) (SNP)]

The Government regularly, and in my view rightly, promote the aviation and automotive sectors as future areas of growth in the UK economy. The world-class oil and gas industry, and particularly the exceptional supply chain, which, while centred in Aberdeen, stretches the length and breadth of the UK, is another area ripe for international development and diversification. When developing his industrial strategy, will the Secretary of State make sure that oil and gas is right at the heart of it?

[Greg Clark]

I will indeed. I have visited Aberdeen already, as the hon. Gentleman knows, and I had a very fruitful conversation with not only the oil and gas industry there, but the Aberdeen chamber of commerce. It is important that this area of great strength for the UK is built on and that we extend those strengths, so that the industry can be competitive in the future.

[Callum McCaig]

I thank the Secretary of State for that answer, and I look forward to progress on that issue. However, whether it is oil and gas, food and drink, or the financial services sector, the attraction and retention of talent, much of which comes from elsewhere in the European Union, is absolutely central to that future. Businesses, I am sure, are saying the same things to me as they are to him. Will he ensure that we protect the status of EU nationals in discussions about leaving the EU?

[Greg Clark]

Yes. The Prime Minister and my colleagues have been very clear about that. Of course we want people from the European Union who are here to continue to stay, but it is important that this is part of the discussions that we have to make sure that the rights of UK residents overseas are also recognised.

Hinkley Point C

Debate between Greg Clark and Callum McCaig

Thursday 15th September 2016 Commons Chamber

[Greg Clark]

I welcome overseas investment of £18 billion in the UK economy. I hope that, as we develop our nuclear programme and skills and as the supply chain prospers, British companies will invest in the various parts of the new nuclear supply chain. In fact, we expect that to happen, with 64% of the value going to UK companies. However, it is an important part of the deal that the consumer and taxpayer will not pay a penny for construction costs unless and until the plant generates electricity. Knowing the record of cost overruns and delays to new nuclear power stations, I think it is prudent that that risk be held by the investors, rather than the taxpayer.

[Callum McCaig (Aberdeen South) (SNP)]

I thank the Secretary of State for an advance copy of the statement, and I thank his Energy Minister for the courtesy call this morning to explain the Government’s decision. I welcome the fact that we have had the statement before the recess to allow the opportunity for questions. It is unfortunate, however, that the Government have decided to take the gamble with Hinkley. The Secretary of State has outlined improvements, but the deal remains a rotten one; it will cost the bill payer £30 billion. He may say that the risk is with EDF and the construction companies, but, as Barclays outlined, if Hinkley Point C is 25% over-budget and four years late, EDF will still make a profit, at the expense of the bill payer.

If we do not pay a penny until Hinkley is built, or if it is built late, what will fill the gap? We know that coal is due to come off the system by 2025, when this project is meant to come on. If the gap is five years, what will fill it and at what cost? The cost of the project—Hinkley Point C will possibly be the most expensive object in history—is too much.

The opportunity cost is also a concern: we cannot spend the money twice; we cannot have the engineers working on things twice; and we cannot have the grid producing the electricity to be consumed twice. We could spend the money better. We could use our expertise better to develop an industrial strategy. The Government have said that that is part of their new policy, but that industrial strategy will mean foreign ownership, investment and profit. Instead we could develop the home-grown industries, which would see our country flourish, by investing in clean carbon capture, offshore wind, storage and solar. It would be better to invest in those things. I ask the Secretary of State to invest in the energy of the future, not the energy of the past.

[Greg Clark]

I am grateful for the courteous words with which the hon. Gentleman started his remarks. He talks about investing in energy sources of the future, rather than those of the past. I gently point out to him that, given the SNP’s record on energy forecasts in recent months, SNP Members might keep their crystal balls to themselves, if I can put it that way.

On the hon. Gentleman’s injunction to invest in renewables, that is very important. He will know that Scotland has a high proportion of renewable investment. However, I am confused by his party’s position. As I understand it, the SNP has stood on a platform of a nuclear-free Scotland but, it seems to me, with its fingers crossed behind its back, because it is happy to rely on the two nuclear power stations functioning in Scotland—Hunterston B and Torness—that are producing low-carbon electricity. Indeed, a former leader of the SNP wrote to EDF to say that he was happy to extend the life of the two power plants well into the 2020s. Therefore, he wants to condemn his cake and eat it, and then have another slice.

We do want to attract overseas investment into this country. It is a vote of confidence in this country that investors are working with us to have this major uprating of our infrastructure. We welcome that across different sectors. The hon. Gentleman is wrong that that is at the expense of other opportunities in this country. One of the features of the deal is that it does not burden the public balance sheet. The Chancellor of the Exchequer and the Chief Secretary to the Treasury have wisely ensured that the UK balance sheet remains able to support other investments, because this will be provided through private investment.

Oral Answers to Questions

Debate between Greg Clark and Callum McCaig

Tuesday 13th September 2016 Commons Chamber

[Greg Clark]

As my hon. Friend knows, I am a frequent and enthusiastic visitor to Cambridge. One of the important features of our industrial strategy is to have a clear recognition of the contribution and local leadership that different places bring. I have appointed the Minister for Universities, Science, Research and Innovation, my hon. Friend the Member for Orpington (Joseph Johnson), as the lead liaison for Cambridge, but I will of course be very happy to visit myself.

[Callum McCaig (Aberdeen South) (SNP)]

I, too, welcome the Secretary of State and his team to their positions. I agree that there are some challenges, one of which is the ballooning trade deficit that, in quarter 2 of this year, increased to £12.3 billion. This is a problem that is unlikely to be solved by withdrawal from the single market. Scotland voted to remain. Scottish business wants unhindered access to that single market. Will the Secretary of State support that, or is he in favour of the full English Brexit?

[Greg Clark]

I welcome the shadow Minister to his place. I think many of us on the Government Benches were impressed by his contribution to the debates last week—a clear rising star. He will know that I will work very closely, and the Prime Minister has committed to working closely, with the devolved Administrations to make sure our negotiating mandate reflects the needs of all parts of the United Kingdom. It was a United Kingdom decision to come out of the European Union and we will make the most of it together.

[Callum McCaig]

I thank the Secretary of State for that answer. The Scottish Government analysis of UK withdrawal from the European Union is that it could cost the Scottish economy at best £1.7 billion a year and at worst £11.2 billion a year. I repeat: will he make the case from his Department for continued membership of the single European market?

[Greg Clark]

I made clear in my earlier answer that free trade is what we want to see in this country. In furthering our discussions not only with the leaders of the devolved Administrations but with our business investors around the world, we will ensure that the negotiating mandate we have is ambitious and will secure the brightest possible future for the whole of the United Kingdom.