Leaving the EU: Airbus Risk Assessment

Debate between Greg Clark and Mark Tami

Monday 25th June 2018 Commons Chamber

[Mark Tami (Alyn and Deeside) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy to make a statement following the publication on Friday of the Airbus Brexit risk assessment report and its implications for future investment and job security in the UK.

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

The aerospace sector is one of the UK’s greatest manufacturing strengths. Directly and through its supply chains, it employs in the UK around 300,000 people in high-skilled jobs, with an average salary of £41,000—that is 43% above the national average. Of the sector’s £33 billion turnover, some 90% is accounted for in exports. From Bombardier in Belfast to Airbus in Filton, the supply chain that the sector operates is complex, precise and just-in-time. The industry is in demand around the world and that demand is growing rapidly, with the sector doubling in size every 15 years. Airbus is a very important part of that success, employing 14,000 people across 25 sites, with 110,000 people working in the supply chain of 4,000 small, medium and large companies.

On Friday, Airbus published a risk assessment, in which it stated to suppliers and to the UK and EU member states that if an agreement between the EU and the UK were not reached by 29 March 2019, its production would be likely to be severely disrupted, with a significant impact on the company. It also said that any agreement that involved significant change to customs arrangements would take time to implement through Airbus’s supply chain, and that any agreement that involved new procedures, complexity or frictions would undermine the efficiency of the company’s operations. That is completely consistent with what every part of the industry collectively has been saying directly, as well as through the ADS industry trade body and the international body the General Aviation Manufacturers Association, including in a letter to Michel Barnier at the European Commission earlier this month. Any company and any industry that supports the livelihoods of so many working people in this country is entitled to be listened to with respect.

The Government have been clear that we are determined to secure a deal with the EU that meets the needs of our aerospace firms and the thousands of people whose livelihoods depend on them and that, in particular, products made in the UK can be approved for use across Europe, that there should be no tariffs or any unnecessary friction in the trade between the UK and the EU, and that skilled employees will be able to work across the multiple sites of an integrated operation. Those objectives have been clearly set out by the Prime Minister in public and in our negotiations.

In the months ahead, my colleagues and I will work closely with businesses to ensure that, under the terms of our new relationship, we can continue to enjoy the prosperity that working in aerospace brings to so many people in all parts of the United Kingdom.

[Mark Tami]

I thank you, Mr Speaker, for granting this important urgent question and I thank the Secretary of State for his response.

Does the Secretary of State agree that the continued operation of Airbus in the UK is vital to the UK economy and that we need to take seriously its worries and concerns? Alternatively, does he support the comments of the International Trade Secretary, who said that we should ignore the views of business? Or does he agree with the views of the Health Secretary, who said that it was inappropriate of Airbus to raise concerns? Finally, does he support the more direct approach of the Foreign Secretary, who said, “F*** business”? I know that the Foreign Secretary has to be elsewhere today; I believe that he has gone as far as Afghanistan to avoid the Heathrow vote. Are not those comments indicative of the chaos in Government over Brexit and of the Government’s approach to anyone who dares to raise genuine concerns?

Airbus has been raising those concerns privately for 12 months and getting absolutely nowhere. Can the Secretary of State explain why it is now, when it has done it publicly, that it is shouted down by Cabinet Ministers? Will he meet me and representatives from Airbus to address the serious concerns raised in the report? Does he accept that the lead-in times for investment in aerospace are long and that the sums of money are huge? For Airbus, it is all about securing the next generation of wing work, and these decisions are being taken now.

Is it not the case that, without clarity on Brexit, investment could be placed outside the UK—either in the EU itself or in low-cost producer countries such as China where the company has a plant? Airbus’s concerns are real and shared by many other manufacturers such as BMW and Siemens. The Government need to wake up and listen rather than just address Tory infighting.

[Greg Clark]

I recognise that the hon. Gentleman has more than 6,500 people employed in his constituency in good jobs, and many more in the supply chain. Members from all parts of the House have constituents whose prosperous careers and excellent opportunities come from working in this important sector. Let us be clear: this sector is one of our proudest strengths and it is expanding. The opportunities around the world grow every year and the excellence that we have needs to be nurtured and cherished. I take seriously the representations of all businesses because we are talking about not speculation or visions of the future, but the reality of the lives of many hundreds of thousands of people across the country, which is important.

It is the case that we should listen to businesses. Of course, what Airbus has said was consistent with what it has said before and consistent with what it has said to Select Committees of this House. Very importantly, it was addressed equally to the European Commission and to member states of the European Union. It is very clear that, in order to have the agreement that we seek, it is necessary that both sides of the discussions should participate. Airbus has been clear that it is in the interests of the whole country and the whole company that that should be the case. I hope that that message will be heard in Brussels as well as in this country.

The hon. Gentleman asked questions about listening to business. All Government Members recognise that the livelihoods of millions of people, and the prosperity of our country, depend on business being successful. We will not always agree with everything that businesses say, but they have the right to be heard. The hon. Gentleman was rather one-sided in his representations; I think that he should direct some of his recommendations to his own Front Benchers, who have not been a picture of clarity on what they would like from these negotiations.

Industrial Strategy

Debate between Greg Clark and Mark Tami

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

I would incur your displeasure, Madam Deputy Speaker, if I went into the European negotiations. Suffice it to say that if the hon. Gentleman reads the Prime Minister’s Mansion House speech, he will see a reference to chemicals. We take the advice of the Chemical Industries Association, which I meet regularly, into those negotiations so that we can continue to trade successfully in that very important sector.

I want to say a word about sector deals. As the right hon. Member for Wolverhampton South East mentioned, we know of the success of long-standing arrangements whereby major manufacturers, supply chains and the Government can work together—for example, in the automotive sector and the aerospace sector. These important institutions have taken a lead and boosted jobs and prosperity. In the industrial strategy consultation, therefore, we asked whether we should offer and engage in more sector deals with sectors that have not benefited from those arrangements. We asked business whether that proposal had merit, and the answer was an emphatic yes. These deals are about the Government working with sectors, but also about the sectors working with each other, in exactly the way that the right hon. Gentleman mentioned.

We have made significant progress. In December, I launched the life sciences sector deal with my right hon. Friend the Secretary of State for Health and Social Care. This deal for the long term is already attracting immediate investment, including from MSD, which is supporting nearly 1,000 jobs in the UK.

[Mark Tami (Alyn and Deeside) (Lab)]

The Secretary of State is talking about the long term, which is very important. For a company such as Airbus, the relationship with its suppliers, which is not a short-term relationship but a long-term one, is also very important. It is because such a relationship is so important that there are fears about how long Melrose will actually invest in GKN and keep hold of that company.

[Greg Clark]

The hon. Gentleman is absolutely right about the importance of long-term relationships. I have said that I cannot make an appraisal of that particular bid, since I have a decision to make, but it is on the record that I requested and obtained commitments from the bidder to investment in research and development, and indeed to the continued ownership of that aerospace business. I hope he will therefore recognise that I regard commitments to the long term as important.

I have mentioned the life sciences sector deal. We launched the automotive sector deal in January, and I launched the creative industries sector deal with my right hon. Friend the Secretary of State for Digital, Culture, Media and Sport just last month. We have in the pipeline a number of other sectors where great progress has been made, and we expect to make more announcements soon.

I hope it is evident that in the industrial strategy—whether looking to the future, harnessing our resources to make sure that we capitalise on our existing strengths, or looking objectively and candidly at areas in which we need to do better and in which we need to invest for the foundations of future productivity—the approach we have taken is to set out a strategy for the long term to which all parts of the United Kingdom can contribute.

We are not the only country in the world to recognise that a technological revolution is taking place. Wherever I travel I find similar concerns, and similar appraisals of the future are being undertaken by other countries. Our industrial strategy has already, in the few months since it was published, attracted widespread attention and respect around the world. We have already translated it into several languages because of demand, so any colleagues travelling around the world who want copies of it can approach my office for a translation in most languages, and we will have other translations made according to demand.

Our industrial strategy is a calling card for the future of the United Kingdom economy, and I hope Members on both sides of the House recognise that in pulling together our strengths and opportunities through it, we have a chance to tell the world, as well as our fellow countrymen and women, that this country has a great future ahead of it, just as we have had a very successful past. I commend the motion to the House.

Oral Answers to Questions

Debate between Greg Clark and Mark Tami

Tuesday 13th March 2018 Commons Chamber

[Greg Clark]

I am delighted that the Committee went to see the electric taxi company. The opening, at which my hon. Friend accompanied me, was a fantastic event. Having such compatibility is a very important matter. The recently introduced Alternative Fuels Infrastructure Regulations 2017 set minimum standards for publicly accessible charge points. In addition, the Automated and Electric Vehicles Bill, which is currently before Parliament, will give the Government new powers to regulate these technical standards.

[Mark Tami (Alyn and Deeside) (Lab)]

Many supply companies are worried that if there is a high uptake, which I think we would all support, the infrastructure will not be there to support it. It is just not true that electric vehicles do not use a great deal of power, so there are concerns about strain on the system as a whole.

[Greg Clark]

I am grateful to the hon. Gentleman for those comments. Our access to the network is one of the best in the world, especially for fast chargers. He is absolutely right that electric vehicles can contribute to the electricity grid’s resilience, because their batteries can store electricity generated by renewables for a time when it is needed, which is very much part of the smart systems plan.

International Investment

Debate between Greg Clark and Mark Tami

Tuesday 17th October 2017 Commons Chamber

[Greg Clark]

It is important that investors, especially those starting up a firm for the first time, should reflect on the fact that the UK is the best place in the world to establish new scientific and technological companies. They can invest with confidence. The ability to scrutinise investments should not put anyone off establishing a firm in this country. It is often possible to deal with security concerns through conditions and undertakings, and getting that framework clear and in place will give confidence to investors in the future.

[Mark Tami (Alyn and Deeside) (Lab)]

I welcome the Bombardier announcement—it is very good news. However, future Airbus investment in the UK will depend on a Brexit deal that allows the company to operate as it does now. The company has been very clear about that, and it will mean having a deal rather than no deal. For example, if a wing leaves Broughton but then needs further work, British Airbus employees can leap on to a plane and follow it. They might be away for days or even weeks. Will that be able to continue post Brexit?