British Steel

Debate between Greg Clark and Paul Sweeney

Wednesday 24th July 2019 Commons Chamber

[Greg Clark]

I am grateful to my hon. Friend, because she gives me the opportunity to pay tribute to Stephen Phipson, the director general of Make UK, the manufacturers’ organisation. He serves on the support group and has been present at the meetings, and he has convened a panel of suppliers and customers, to ensure that some of the uncertainty and challenges that they have faced during the insolvency of British Steel have been dealt with. Working with HMRC, the British Business Bank and the official receiver, the panel has had—as I think colleagues on the support group would accept—a positive role in providing help and reassurance to the supply chain across the country.

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

The Secretary of State has acknowledged that the closure of a major steelworks is an intergenerational blight, as we have seen with the closure of Redcar and of Ravenscraig, which is still a wasteland 30 years on. It is therefore critical that we maintain long-term planning in the sector. That is aided by patient finance. Access to patient finance in this country is very poor compared with some of our peer nations, notably Germany. What will he do to improve patient finance access for the huge capital investment needed in the steel industry, in order to improve the attractiveness of British Steel to potential investors?

[Greg Clark]

The hon. Gentleman makes an excellent point. Improving the access to and availability of patient capital in this country is a focus through the industrial strategy and some of the work that the Treasury is doing, but there is more work to be done. He is right—a long-term owner of British Steel needs to have the patience required in an industry that is, and always has been, subject to the ups and downs of the economic cycle and sometimes conditions in international trade. It is often not the most stable of industries, and as I think he would agree, any owner needs to be resilient to that.

Net Zero Emissions Target

Debate between Greg Clark and Paul Sweeney

Wednesday 12th June 2019 Commons Chamber

[Greg Clark]

I am grateful to the hon. Gentleman for conveying the support of the automotive industry, which has a crucial role to play in this transition. He is right about, and in earlier exchanges I have paid particular attention to, the importance of getting that transition right, so that it does not have unintended consequences of depriving of investment an industry that is crucial to making that change. Of course we will look at all the policy components. The plug-in grant was established and has been successful in launching an industry—or, at least, in expanding the early take-up of an industry. It was intended that it should come to an end when its budget was exhausted, but of course, through the spending review, decisions will need to be taken on how the industry can be supported in future.

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

The Secretary of State was correct to refer to the important role that the Clyde shipyards played in the first industrial revolution, but of course they will also have an important role to play in the next green industrial revolution if there is an appropriate industrial strategy. That is why I am dismayed that in respect of the offshore wind sector deal that the Government announced, they buckled to the lobbying by large energy companies and diluted the requirement for 60% of manufactured content to be made in the UK down to 60% of through-life content. As a result, EDF is sending the £2 billion contract for manufacturing a wind farm off the coast of Fife to Indonesia, instead of building it in the BiFab yards that lie 10 miles away on the coast of Fife and employ 1,000 people. Will the Secretary of State address this glaring inconsistency in the offshore wind sector strategy and ensure that we maximise British manufacturing of heavy engineered products in British renewable energy projects?

[Greg Clark]

The hon. Gentleman is absolutely right that our heritage and skills in shipbuilding are now being put to use throughout the country in marine energy and offshore wind in particular, but he will acknowledge that the commitment in the sector deal was to increase UK content. That was the right ambition to establish and it was agreed between the industry and the Government, although it can of course be kept under review. We always want to see content produced in the UK, including in the very shipyards that the hon. Gentleman mentioned that were so important in our first industrial revolution.

British Steel: EU Emissions Trading Compliance

Debate between Greg Clark and Paul Sweeney

Wednesday 1st May 2019 Commons Chamber

[Greg Clark]

I mentioned—it was announced in the spring financial statement—a new industrial energy efficiency fund worth a third of a billion pounds to partner with energy-intensive businesses in changing and upgrading their technology, so that they both consume less energy, and therefore have lower costs, and also produce lower emissions. As I said to the shadow Secretary of State, since 2013 we have provided nearly £300 million to energy-intensive industries in compensation for some of the effects of high costs. However, the way forward is energy efficiency, and that is the commitment that we made and backed in the financial statement.

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

I welcome this measure but, again, it is a reaction to potential failure, rather than a proper, coherent plan for the industry. That needs to be gripped robustly. Does the Minister accept that there is insufficient capacity within the European emissions trading scheme to provide free credits to companies subject to anti-competitive measures, dumping and distortions caused by firms trading outside the ETS? We need to increase the level playing field available to British Steel operating in that sphere, in which it is subject to distortions caused by firms outside the ETS.

[Greg Clark]

The hon. Gentleman is right that we need to be vigorous in our trade defence mechanisms. Steel is a sector that all Members know is subject, and has been over the years, to dumping by global competitors. Through the G20 forum in particular, at which I have represented our country, we have been vigorous in pressing for the strongest measures against anti-competitive practices such as that, and we will continue to do so in the future.

Leaving the EU: Protection for Workers

Debate between Greg Clark and Paul Sweeney

Wednesday 6th March 2019 Commons Chamber

[Greg Clark]

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

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

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

[Greg Clark]

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

Nissan in Sunderland

Debate between Greg Clark and Paul Sweeney

Monday 4th February 2019 Commons Chamber

[Greg Clark]

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

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

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

[Greg Clark]

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

Nuclear Update

Debate between Greg Clark and Paul Sweeney

Thursday 17th January 2019 Commons Chamber

[Greg Clark]

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

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

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

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

[Greg Clark]

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

Good Work Plan

Debate between Greg Clark and Paul Sweeney

Monday 17th December 2018 Commons Chamber

[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.

Rolls-Royce Redundancies

Debate between Greg Clark and Paul Sweeney

Thursday 14th June 2018 Commons Chamber

[Greg Clark]

I will certainly do that. My hon. Friend characterises the situation well; this company has issued profit warnings in the past and has committed to take action to be efficient. These are the decisions of the management, but I think every Member of the House would acknowledge that it is important that our companies are competitive. He is right to say that the skills of the people employed in Derby, whether in management or in other supporting roles, are in great demand in the expanding economy there; unemployment has halved since 2010 in the east midlands. I will work with the neighbouring LEPs to make sure they have every support and that businesses that want to employ those people have every support in identifying what could be talented and welcome additions to their workforce.

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

Rolls-Royce is an iconic industrial asset for Britain, and its relationship with Glasgow goes back as far as the second world war. Even to this day it drives huge innovation in the city, from the Advanced Forming Research Centre to supply-chain companies such as Castle Precision and East Kilbride Engineering Services, all of which benefit from the huge industrial presence of Rolls-Royce. One difficulty that the company has had in recent years is the development of new products, particularly for the small airliner market, which is restricted because of this country’s lack of capacity for long-term industrial investment through state investment banks. Will the Secretary of State consider how we can support industrial development in the longer term by developing such capacity in the UK through a state bank for new product development?

[Greg Clark]

Part of the reason for the development of the industrial strategy, which prominently includes the aerospace sector, is so that we can have the long-term support that is required. When I talk about support, I mean for research and development programmes, which can take many years to come to fruition. We are known as and have a reputation for being one of the best places in the world for that, and that is a deliberate policy objective. It is exactly the same with skills.

On what the hon. Gentleman describes as a state bank, we have various means, including the British Business Bank and UK Export Finance, which have been set up to support businesses in pursuance of our industrial strategy. Rolls-Royce is an active participant in that.

GKN

Debate between Greg Clark and Paul Sweeney

Tuesday 24th April 2018 Commons Chamber

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

Takeovers are a good thing where they are likely to enhance value, but it is clear that this highly leveraged takeover by Melrose is likely simply to load GKN with £8 billion of debt. We know what will happen, as we have learned the lessons of history: the company will be broken up and sold off piecemeal to recoup the debt raised by Melrose to create false value.

We have also seen a lukewarm commitment on R&D. GKN’s current R&D is at only half to two thirds that of its main competitors. Why did the Minister not seek a more ambitious undertaking that the takeover will enhance value and increase GKN’s R&D spending target to that of its main international competitors? I echo the sentiments of other Members on the need to amend our shareholder takeover rules to ensure that short-term interests of people with no industrial knowledge or understanding of companies are not permitted to distort the interest of stakeholders in the long-term value of this company.

[Greg Clark]

For the first time in British corporate history, we have secured a commitment to spend, as a minimum, what the incumbent is already spending on research and development—that should be welcomed. Obviously, the reports of accounts and the disclosures that will need to be made to the markets will shine a light on the debt, but it is striking that it has been suggested today that £150 million was accounted for by unpaid suppliers’ bills at the end of the last quarter—I gather that is in the filings that have been released today—so I imagine the hon. Gentleman will want to study very closely with a beady eye the reports of accounts as they are published in the months ahead.

Industrial Strategy

Debate between Greg Clark and Paul Sweeney

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

That is very important. One of the commitments in the industrial strategy is to increase the number of visas and studentships for international researchers coming to work in the UK. Nobel prizes were mentioned earlier. I had the privilege, when I was Science Minister, to go the Nobel prize ceremony. What is notable is not just that a lot of Brits receive these awards, but that most Nobel prizes in the sciences are given to teams of researchers and that those teams are usually international. That embodies the fact that the best ideas come from the connections that are made between researchers from different cultures and different countries.

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

The Secretary of State mentions the critical need to attract high-quality education graduates from across the world to British universities. Does he also recognise that that is a critical part of growing our population? In Scotland, we had a declining population. The Labour Administration under Jack McConnell introduced a post-study work visa scheme, which reversed Scotland’s historic population decline. That is why today we have a great legacy of an expanding population in Scotland that is adding value to our economy.

[Greg Clark]

The overall population of the UK is growing, as the hon. Gentleman knows. It is important that our immigration system is set in a sensible way that recognises the needs of the economy and the needs of our society, and that is the approach being taken.

I talked about grand challenges. Let me turn to another important aspect of the industrial strategy, which is, candidly, to address areas of historic relative weakness in the UK economy. I talked about our strengths, but it is well known to every Member of this House that for many years now our productivity performance has not been as good as that of some of our competitors, and since the financial crisis it has been slower to recover. In recent quarters we have seen an acceleration of productivity growth, but I think everyone would recognise that it is the responsibility of this House and those of us in government to act on the foundations of productivity, so that we can maximise the productive capacity of the economy. A big part of the consultation was to consider what we can do to drive up our productivity performance.

There are five areas in which clear commitments and progress are required across the whole economy—indeed, across society, to go back to the comments made by the right hon. Member for Wolverhampton South East (Mr McFadden). This is not simply, if at all, in the gift of the Business Department. It requires a whole-country commitment to investing in the foundations of productivity. We have set out our plans and ideas on research and development, as I mentioned earlier. As new technologies are developed, the skills required by the workforce to make use of them clearly need to change as well. It is no good doing one if we do not do the other, so the skills element of the strategy is very important. It is important to recognise the different needs of different places, as I mentioned in response to an intervention from the hon. Member for Stockton North (Alex Cunningham).

We want to make sure that our business environment is not only competitive and open, but recognises the need to ensure that when companies start up—we have a great record of start-ups—they can attract the funding that they require to grow into medium and larger businesses. We want to make sure that the infrastructure on which our whole economy depends is competitive with the best in the world. Through the industrial strategy, we set out action across all five of those contributors to productivity.

GKN: Proposed Takeover by Melrose

Debate between Greg Clark and Paul Sweeney

Tuesday 27th March 2018 Commons Chamber

[Greg Clark]

These are all precisely the issues on which Melrose is required to reach agreement with the Ministry of Defence, for all the reasons that the hon. Gentleman states.

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

The Secretary of State perhaps has a somewhat nostalgic view of what shareholders might do in the interests of this company. From the litany of disastrous takeovers in years gone by, it is clear that shareholders often do not act in the best long-term operational and industrial interests of British industry, and we need to challenge that in this House in redefining company law. Given that Melrose’s practices are at odds with the ambition of GKN, will the Secretary of State consider whether the five-year time limit is long enough? Does he agree that we should consider reforming company law to ensure that shareholders genuinely act in the long-term industrial interests of British industry?

[Greg Clark]

I hope the hon. Gentleman will reflect that this is the first time a set of concerns outside a Secretary of State’s statutory powers has been laid before a bidding company, with the ability to discharge them through legally binding undertakings. I was very clear that section 172 of the Companies Act embodies a range of commitments that go beyond those just to shareholders. I hope the hon. Gentleman would agree that, by taking the action I have, I have reflected the wider concerns that exist.