Oral Answers to Questions

Debate between Greg Clark and Lucy Allan

Tuesday 12th June 2018 Commons Chamber

[Greg Clark]

The hon. Gentleman is right that we need to see a managed change. Earlier, my right hon. Friend the Minister for Energy and Clean Growth pointed out that the next generation of diesel can play a big part in not only reducing greenhouse gas emissions, but improving air quality. We will shortly be setting out our proposals on how we make the important transition to zero emissions across our vehicle fleet.

[Lucy Allan (Telford) (Con)]

Hundreds of jobs in my constituency rely on the Jaguar Land Rover supply chain. Will the Secretary of State tell the House what he is doing to help car manufacturers to deal with the uncertainty of Brexit and the fall in demand for diesel vehicles?

[Greg Clark]

I will. My hon. Friend is right to comment on the supply chain. A big part of the automotive sector deal, which we concluded with the sector, is to boost the proportion of components that are sourced in the UK. This is a joint commitment that we make, as part of the industrial strategy, but she is also right to draw attention to the importance of our continued ability to trade with the rest of the European Union, free of tariffs and with low friction, so that we can maintain the just-in-time model, which is so crucial to our automotive sector.

GKN

Debate between Greg Clark and Lucy Allan

Tuesday 24th April 2018 Commons Chamber

[Greg Clark]

I am grateful to the hon. Gentleman for his questions. He will know that one undertaking that has been given is a commitment to at least five years of research and development investment, including participation in the joint industry bodies, which have been a successful part of our arrangements in the aerospace and automotive sectors and are an important part of our industrial strategy. That is a valuable commitment that I would have thought the hon. Member for Salford and Eccles (Rebecca Long Bailey) and he would welcome.

The previous GKN management criticised the commitment to retain the aerospace business, saying that it should not have been entered into given that the sell-off of GKN’s automotive business had already been agreed to. It constitutes a longer-term commitment than was made during the latter period of the previous ownership.

The hon. Gentleman will understand that in obtaining commitments from a bidder, I have to bear in mind commitments that the incumbent management have or have not made. No commitments had been made on the total number of jobs, and indeed the sale programme involved a majority of the business. One of the features of today’s results announcement was that the debt of the previous business was higher than anticipated, and the plans that the new management have set out include paying it down.

[Lucy Allan (Telford) (Con)]

I thank the Secretary of State for his statement and welcome the undertakings that he has secured.

The future of GKN was determined by speculators who came on to the share register in the final weeks of the bidding process to make a quick profit. Does the Secretary of State agree that that is no way to determine the future of a great British manufacturing company, and will he now conduct a review of the takeover code to ensure that speculators cannot participate in that way in a vote to decide a company’s long-term future?

[Greg Clark]

I understand my hon. Friend’s concern, and a number of hon. Members have raised that point before. There are a couple of things to say about it. First, most people who have bought shares latterly during the takeover process bought them from longer-term shareholders, and one way in which a bid can be backed is for people to sell before the end point of that bid. That situation was looked at, appropriately, by Professor John Kay, who published a substantial review. His panel noted that one suggestion was that voting rights should accrue only if people had been on the share register for a specified period. The Kay review concluded:

“We were persuaded that the introduction of such provisions by legislation or regulation would involve practical difficulties and would be unlikely to achieve the intended effect.”

That was an expert review by a serious person, but of course in all circumstances such as this we keep our corporate governance arrangements under review, and I will certainly do that now.

GKN: Proposed Takeover by Melrose

Debate between Greg Clark and Lucy Allan

Tuesday 27th March 2018 Commons Chamber

[Greg Clark]

The hon. Gentleman, who formerly chaired the Select Committee, went through the experience of Cadbury and Kraft and knows there is no ability to extract commitments on these matters. I know from speaking to him about this that he thinks the use of the new powers is a step forward in that respect. When it comes to investment in the future, it is for shareholders to compare the approaches offered by the management. He knows very well the powers I have and the regime I operate under, but, as I have told the House, on the grounds that I can consider, I will look very carefully at the advice I am given on the question of national security.

[Lucy Allan (Telford) (Con)]

I welcome the statement from the Secretary of State and the undertaking he has secured from Melrose in the event of a successful bid. GKN has long been an important employer in Telford and many of my constituents are GKN pensioners, so does my right hon. Friend feel comfortable with Melrose making special dividend sweeteners to shareholders of over £1 billion while making only a small contribution to the pensions deficit?

[Greg Clark]

It is paramount that the interests of pensioners should be secured. I have said very clearly that I expect the Pensions Regulator and the trustees to be satisfied in relation to both camps—GKN or Melrose—that pensioners’ interests are being considered and protected, and that must of course come before the pay of executives.

Oral Answers to Questions

Debate between Greg Clark and Lucy Allan

Tuesday 14th March 2017 Commons Chamber

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

Last week, we published the midlands engine strategy. It is further demonstration that this Government are committed to investing in the midlands, a region that has seen over 180,000 more people in employment since 2010.

[Lucy Allan]

I thank the Minister for his reply. Telford is seeing increasing inward investment from businesses in the automotive supply chain such as Polytec and Magna’s Cosma, bringing real jobs and growth to Telford. Does he agree that Telford, with its reputation for innovation and advanced manufacturing, is set to play a key role in the midlands engine strategy, and will he congratulate those businesses on helping to build a successful future for Telford?

[Greg Clark]

I will indeed. My hon. Friend’s constituency, which includes Coalbrookdale, has a good claim to be the cradle of the first industrial revolution—[Interruption.] It is perhaps a disputed claim, but I think Abraham Darby, in 1709, was fairly early. However, now, Telford is at the heart of the fourth industrial revolution, as my hon. Friend says. The T54 site is proving to be a very important location for automotive sector supply chain.