(9 years, 7 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
What a pleasure it is to serve under your chairmanship again, Mrs Main, and I agree with what the hon. Member for Pudsey (Stuart Andrew) was saying: it is not grim up north—it’s great. It is a fantastic place and I think it has been really interesting in this debate to see how hon. Members can come together and really want to champion the north as an area.
I particularly thank the hon. Member for Macclesfield (David Rutley). We have discussed economic development matters before, and he has always provided consistent support for businesses in wanting to champion them in the House. I commend him for that, and he has done it again this afternoon. He said that Macclesfield is famous for silk, but for my generation, Macclesfield is famous for Joy Division and Ian Curtis. I would be more than happy to talk about them for the next 10 minutes, but I think economic development in the north is equally important.
Our past and our industrial legacy have been mentioned time and again. It is certainly true that industrialisation—the industrial revolution—started in the north. Just to keep hon. Members onside, let us be frank: it started in the north-east. The north-east, the north-west and Yorkshire and the Humber were drivers of innovation, entrepreneurialism and prosperity, and they offered a real counterpoint to the capital of London. Do not forget that London was the capital of the empire—the biggest city in the world—but it was not dominating or eclipsing the fantastic powerhouses of the north. We need to have the model that we had in the 19th century back in a modern, innovative 21st century economy, and this is about working together to make sure that happens. We want to see the north thrive and see the creation and expansion of highly skilled, well-paid jobs in businesses and industries that are innovative, highly productive and selling their goods and services to the rest of the world. I hope that the whole House can share that vision.
The hon. Gentleman and others have talked about devolution and governance of the north. All credit to the Minister; he is very knowledgeable and passionate about this matter. A key offer, which has been mentioned several times in the debate, is to ensure that the north can shape its own destiny. Why should we, as hon. Members, be going cap in hand to Whitehall officials—it is usually officials—who have no knowledge, frankly, of the north and no awareness of the nuances of how the dynamics of local economies work? Why can we not have the tools and powers to realise our potential and shape our own destiny?
Successive Governments have moved in that direction. This Government are continuing to do so, and the next Labour Government, in about 113 days, will be continuing it as well. The Leader of the Opposition has said that he wishes to devolve £4 billion of Whitehall spend directly to city and, crucially for the hon. Member for Macclesfield, to county regions, too. That is about double the sum proposed by the present Government. I am interested in what the Minister has to say about further devolution and further governance arrangements.
In many respects, governance can be a very theoretical issue. Something I admire about the hon. Member for Macclesfield and other hon. Members in this Chamber is their practicality. When we consider Government support for businesses, we have to think about practicalities. If I run a company in Macclesfield or Hartlepool, what does Government support actually do? How does it help me to grow my business? Where do I go? We have heard today about 636 different initiatives from the Government. The situation is far too complex. It is difficult to navigate and it changes far too often. All Governments are guilty of rebranding, of initiative-itis, of wanting to announce something. I can understand that, but we have to recognise that we need continuity, stability and long-termism in business policy to ensure that businesses know where to go, how they access support of different types and how they make sure that support grows and thrives.
Let me put my party political hat on now. The Government are particularly bad at tinkering. We have heard about the abolition of the regional development agencies early on in this Parliament, and a number of reasons were given for that abolition. Chiefly, one of them seemed to be, “The last lot brought them in. We have to get rid of them to effect change.” I do not think that is right, and it has been detrimental to the northern economy. There could be some great debate here, but I think it is recognised that the three RDAs of the north—One North East, Yorkshire Forward and the Northwest Regional Development Agency—worked pretty effectively in trying to regenerate their areas and provide economic development and support to businesses in the regions. The setting-up of their replacements—the LEPs—took a couple of years, and businesses were uncertain about what to do. A gap was left in support, so we have lost two or three years in which we could have really chased ahead in respect of economic growth in the regions.
It is really unfair to say that the reason why the RDAs were abolished was that they were not invented by this Government. They were abolished because they were not focused enough on the north. We have heard that there was one in the south-east and one in London—that is not very regional. The fact remains that the Centre for Cities report states that between 1997 and 2008, for every 10 jobs generated in London, one was generated in the north. That is why the RDAs had to go.
But why outright abolition rather than reform? I certainly could not justify the idea of a south-east regional development agency, but making sure that there could be reform while trying to have as much continuity as possible would have been best for business and providing Government support.
(11 years, 6 months ago)
Commons ChamberThe hon. Gentleman mentions contracts for difference and he also did so in his speech. That is my major criticism of the Government, because when people are thinking about investing for 40 or 50 years it is important that we try to mitigate the risks as much as possible. That is presumably the rationale behind contracts for difference.
As I have said, I have a power station in my constituency and want another one, but we still have great uncertainty about how CFDs will operate, including about the length of contracts, how contracts will be allocated or paid for and the process for setting the reference and strike prices. In such circumstances, investors who want to invest for the long term are naturally jittery. In its report on planning for economic infrastructure last month, the National Audit Office identified policy uncertainty as a key risk, concluding that such uncertainty
“could result in project sponsors, lenders and contractors deferring or abandoning UK projects in favour of opportunities elsewhere. Financing charges for projects may rise as investors and lenders perceive policy uncertainty as a risk.”
That certainly seems to have happened in the nuclear sector, with the loss in recent years of E.ON, RWE and SSE, and now Centrica.
I mentioned that I was reading the Lex column in the Financial Times this week, and it concluded:
“low-carbon nuclear must be part of the global energy mix. If governments want to attract private capital, they must be more realistic about pricing, cost and regulation.”
That is as true for the UK sector as it is for the global energy mix.
I agree with just about everything the hon. Gentleman has said and would make the point that Hartlepool puts more into the grid than the entire onshore wind sector in this country. He is correct to make his points about up-front investment, but does he agree that the CFD structure, with a strike price lower than that agreed for wind, is the best way of achieving that?
Let me make two points in response. The hon. Member for Cheltenham said that in many respects this is an either/or game and that we choose nuclear or renewables. In my area, which has a long and proud history of engineering, manufacturing and energy production, it is not an either/or game. We can have a fantastic offshore wind-processing facility in my constituency, where we have a great supply chain, as well as having nuclear. We can have a ready supply of school leavers to go into the energy engineering sector. I want the Tees valley to be a centre of excellence for energy.
The second point made by the hon. Member for Warrington South (David Mowat) is valid and goes back to what I was saying earlier. Investors are unclear about what is going on and there is no stability with CFDs. As the investment time scale lasts 40 years with up-front costs, that must be addressed.
The Government must act in a more focused way than they have in the past to provide clarity to investors for the long term. If we do not have that, our competitiveness as a modern economy and our ability to attract large-scale financing for such projects will be undermined still further. We will not be able to keep the lights on and stay competitive as a nation if the Government maintain their current approach and that is why I hope that they will address the risks today.
(11 years, 10 months ago)
Commons ChamberI understand that. The hon. Gentleman will recall that I posed a number of questions in Committee: could the green investment bank invest in forests or in the supply chain for the automotive industry to ensure that we have low-carbon engines? There was a whole range of different debates in Committee, which I thought were useful. As I said, there is a balance to be struck, and that is what new clause 22 is about. Is the aim to achieve what we all want to achieve—igniting, for want of a better term, the green economy—or is the provision too prescriptive? There is a balance between being too broad and too narrow.
I thank the shadow Minister, but I am a bit disappointed by the tone of his remarks. I want to get clarity about the point that was raised a few moments ago about nuclear, so that I can understand the position of those on the Opposition Front Bench. Would Sheffield Forgemasters, for example, which is a nuclear supply chain company, be eligible for assistance from the bank?
The hon. Gentleman will recall that I mentioned this issue at length in Committee, when he quite rightly probed me on it. I reiterate my answer to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) a few moments ago. There is a conflict here. What is the purpose of the green investment bank: is it to ensure that we have innovative technologies where there is current market failure making it difficult to get investment, or is it to ensure that we do as much as possible to tackle carbon emissions, meet low-carbon targets and so forth? Within that, nuclear could be a source of investment.
I know that the hon. Gentleman is a keen advocate of manufacturing in this country, but we require policy certainty. I hope that he will address the point made in an excellent article by Camilla Cavendish that appeared in The Times last month. She wrote that
“instead of building the equipment in England”,
companies were building offshore wind turbines elsewhere:
“These companies remain uncertain about investing in the UK… the impression that the coalition is split has spooked companies whose boards need to commit capital for 20, 30, 50 years, whether in wind or nuclear power, biomass or solar.”
Is not the lack of the long-term certainty that is so necessary undermining the chances of jobs and growth in this crucial area?
I thank the shadow Minister for telling me what I should say in my intervention. What I was going to say was that, although I did not catch the name of every company in the list that he read out, I am pretty sure that the headquarters of all of them are outside the UK—as, by the way, are those of the major manufacturers of offshore wind. And, yes, it is a problem.
That is why I am pleased that the hon. Gentleman will be supporting our amendment 77—which is intended to promote the growth of small and medium-sized enterprises in the supply chain and to ensure that we can realise the great potential of the green economy—and will object to the Government’s amendments 1 and 3, which state that investment can take place not in the UK but elsewhere. As someone who wants to support manufacturing in the UK and the ability of home-grown businesses to provide jobs, growth and export potential for our companies, he will doubtless be supporting us in the Lobbies.
(12 years, 5 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing the debate. It was evident, during his passionate and emotional contribution, that he has steel—Teesside steel—coursing through his veins. He is a massive champion of the UK steel industry.
I shall concentrate on two broad things, and I hope that the Minister responds positively to both. First, I am keen for the Minister to set out the role that he anticipates the steel industry will play in the modern British economy. It is evident that we Opposition Members believe that a productive, thriving and competitive steel industry is an essential part of a modern, prosperous British economy. Steel is a vital component of the industrial sectors in which Britain currently has a competitive advantage and through which we hope to lead the world in future, such as oil and gas exploration, chemicals, aerospace, offshore wind technology and automotives.
It would be unsatisfactory to believe that we in the UK could rely wholly on imported steel from overseas because, somehow, it can be sourced at much cheaper cost. Such reliance would make us vulnerable to supply difficulties, quality concerns and price shocks and in the long run would undermine British competitiveness. In addition, the UK would miss out on valuable research and development opportunities. Tata’s Teesside technology centre at Grangetown, for example, focuses on long product research, which helps our nation retain our valuable manufacturing expertise. Similarly, Tata’s automotive engineering group, again, based in the UK, is essential for developing new generation steel for the automotive industry.
It is strategically important that we in Britain make steel. I hope that the Minister agrees and states what I hope is his strong belief, which we in the Opposition would support, that a thriving steel industry in the UK is a necessary part of a balanced economy based on manufacturing. As we have heard in this debate, we would also expect him to ensure that, as part of active and intelligent government, the Government provide an effective industrial strategy in partnership with business. That is not to pick winners, not to protect lame duck companies and not to embrace protectionism, but to recognise the vital role that British-made steel plays in our economy and to use the power of Government to help support that.
We have heard that the steel industry is notoriously cyclical and subject to difficulties. Cost pressures, especially in raw materials, are increasing. Demand for the product is falling, especially in Europe, and even in China in the last quarter, and steel manufacturers around the world are running down inventories rather than boosting output, and Thamesteel has been an obvious victim. I understand that this is a global matter, but the Government have real power here. What has the Minister done to ensure that he can intervene to stimulate demand to provide support for our steel industry?
We have heard time and again in today’s debate how measures such as the carbon floor price are impacting on energy intensive industries such as steel. It is estimated that British industry and British producers are paying up to 50% more in energy costs than their counterparts in France, the Netherlands or Germany. I anticipate, or at least hope, that the Chancellor will say something about this matter in his statement this afternoon.
I hope the hon. Gentleman will forgive me if I do not. I have a lot to get through in only seven minutes.
What active role are the Minister and other Department for Business, Innovation and Skills Ministers taking to mitigate some of these additional costs for industry, as is happening on the continent, where the French and German Governments are helping to mitigate such cost pressures?
My hon. Friend the Member for Scunthorpe (Nic Dakin) mentioned the supply chain. What are the Government doing to help establish and nurture a UK supply chain, particularly for the renewable energy sector? We have the biggest market anywhere in the world for offshore wind, and steel is a large part of the manufacturing process. However, the industry estimates that only about 10% of the components going into offshore wind installations are British-made. Tata Steel is investing £9 million in its world-class pipe mills in my constituency to increase the possibility of winning contracts for offshore wind component manufacturing, but the company needs the Government’s active support to ensure not only that there is a level playing field for British steel manufacturers, but that those manufacturers get on the pitch in the first place.
The Teesside offshore wind farm is a good example. It is a major contract that involves 27 turbines off the coast of Redcar, each requiring a monopile using approximately 400 tonnes of steel plate. Tata Steel could have manufactured that plate in the UK at its Scunthorpe plant and used pipe mills in my constituency and elsewhere across the UK to process the plate. However, as we have heard, the contracts have been awarded wholly to Dutch and German steel manufacturers. Why is this allowed to happen? Clearly, the Government are not doing enough to support the creation of a UK supply chain to help steel.
Unless BIS takes a more active role and interest in this matter, the economic benefits in moving to a low-carbon economy will be exported to foreign competition at the expense of British-based jobs. The Minister needs to explain how he will help to create and support the supply chain, which would benefit the likes of Thamesteel and Tata. For example, why do not the licences for such wind farms require a certain proportion of components to be British-made? Why should not at least one British-based manufacturer be invited to bid for every contract? What are BIS Ministers doing to ensure that steel jobs and steel companies based in Britain can benefit from the transition to a low-carbon economy?
Secondly, I want to ensure that Thamesteel and its workers have as positive a future as possible and that the Government are working hard and energetically to support that end. Thamesteel is not a lame duck or an obsolete company whose time has passed. It was regarded as one of the fastest-growing steel manufacturers in the UK. In 2010, which was a difficult year for the construction industry, Thamesteel sales stood at £200 million, and it produced more than 100 tonnes of steel an hour, which was a plant record. There seems to be a strong prospect of a viable business. In that light, will the Minister outline what he, his Department, including other Ministers, and the wider Government are doing to secure a buyer for this business that is not focused on asset stripping? What brokerage is his Department providing, between the administrator and potential buyers, as a means to send out a message to the market that the Government value the steel industry and its component firms, such as Thamesteel? How have Ministers been directing the approach to this matter? Specifically, I should like the Minister to tell us what meetings BIS Ministers have had in this regard.
As my hon. Friend the Member for Middlesbrough South and East Cleveland said, the previous Government rolled up their sleeves and got their hands dirty trying to negotiate a deal, thanks to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden). In respect of the Thamesteel workers, are the Government not only not getting their hands dirty, but merely washing their hands and saying that the company is no longer viable? That would be a tragedy, not just for the 400 workers, but for the local businesses and the supply chain that rely on the firm and for the wider steel industry in this country.
How is the Department linking up with Kent county council, which I understand has set up a taskforce? Is BIS providing a co-ordinating role to ensure that the local authority, good trade unions such as Community, local chambers of commerce, further education institutions such as MidKent college, and local businesses are all co-ordinated and pulling together in the same direction to help Thamesteel be viable? Is there any waiving or deferral of business rates to encourage people who want Thamesteel as a going concern to make that happen? Why do Ministers not have more of a sense of urgency or imagination about this matter?
The workers have rightly been a key concern for hon. Members. Many workers have not been paid since a couple of days before Christmas and are now, as we have heard, having to resort to receiving food parcels. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) made the point in BIS questions last Thursday, and he rightly did so again this morning, that when a company goes into administration, the wages owed to its staff should be the top priority. In his response to the hon. Gentleman, the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for North Norfolk (Norman Lamb), said that he agreed
“that the interests of workers should absolutely take priority” —[Official Report, 15 March 2012; Vol. 542, c. 376.]
He resolved to look into the matter.
Given the urgency of the situation, will the Minister update hon. Members about what can be done to ensure that amounts owing to workers are the top priority and that they are paid? What are the Government doing to ensure that workers receive redundancy packages? Will the Minister update us about on the current situation? Three months after many workers were last paid, the need to ensure that redundancy packages are provided immediately is urgent. Can he confirm and reassure me that all Thamesteel workers have now been provided with their redundancy packages?
The Department needs to act with a greater sense of determination for the wider good of the UK steel industry and for the welfare of 400 workers at Thamesteel. The Minister needs to have listened to the debate; he needs to act; and he needs to act now.
(12 years, 6 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
It is a pleasure to serve under your chairmanship, Mr Turner. This debate is important, and I congratulate the hon. Member for Macclesfield (David Rutley). I have a lot of affection for Macclesfield. My big hero is Ian Curtis of the band Joy Division, who lived, died and is buried in Macclesfield. I also congratulate the Minister on his new position. I wish him well in his role. Given the turnover of Liberal Democrat Ministers, I am confident that he will be Secretary of State by Christmas.
Today’s debate has shown that there are huge opportunities for British export, but that we do not tap into our full potential. The world’s economy is expected to double in size by 2050. Much of this debate has focused on BRIC countries. There is some scope to expand our opportunities into BRIC countries, especially as China moves from an export-led production and manufacturing model towards internal domestic consumption, but I think that the second tier—the N11 or next 11 countries such as Indonesia, Turkey, South Korea, Nigeria and Vietnam—are exactly where we need to focus. I agree with the hon. Member for Penrith and The Border (Rory Stewart) that we have often missed the boat. We need to be at the forefront of trade with N11 countries.
The UK has world-class sectors. Our automotive sector, which has been mentioned, contributes about £40 billion of turnover, and 80% of its production is exported. The oil and gas sector, which is strong in my area, exports about £32 billion of goods, services and project management skills. Just this morning, I was at a breakfast meeting with ADS. The UK aerospace, defence and security sector exports about 70% of its output, or about £23 billion of products. The quality, reliability and innovation of those products are seen throughout the world, and we should be proud of them.
However, this is not just about traditional manufacturing sectors. The UK video games and interactive entertainment sector is worth £3 billion to the national economy at the moment, and global demand is expected to rise by about 10% year on year. We lead the world in that sector. “Batman: Arkham City”, produced by Rocksteady Studios in north London, sold 2 million copies in its first week of release. No CD or record—not even by Joy Division—has ever achieved that. We should be exploiting it as much as possible.
We have much to be proud of, but we cannot be complacent in this modern, competitive world. We cannot say that our exports have performed to their full potential in the post-war era. Given the intense competition of this arms race—I do not think that that is too strong a term, considering the issue’s importance and intensity—Britain needs to compete with optimum efficiency.
I agree with the CBI when it says:
“We are not alone in seeking growth through exports—other advanced economies are facing similar constraints and are looking to boost their export performance. We cannot spend another decade simply playing catch-up: we need to be bigger and bolder in our ambitions.”
The CBI concludes:
“We are not being ambitious enough with our choice of markets and our decline in goods exports is unsustainable if we want to lead an export-orientated economic recovery.”
It has been mentioned that the UK is far too dependent on traditional, slow-growing economies. Some two-thirds of all UK exports go to the US and the EU, but in the next decade, those markets will probably not grow at all. There has been much talk of balancing the economy. I hope that the House would agree that it is necessary to rebalance trade policy towards new and emerging companies.
I stress that exports and trade policy do not operate in a domestic or an international vacuum. We cannot consider exports and trade performance in isolation from the rest of Government policy. I urge the Government to implement an active, co-ordinated industrial strategy. I fear that we are a long way from that at the moment, but everything that the Government do must be considered in terms of its impact on our trade performance.
The Government’s economic policy is having an effect on business confidence and growth. The business confidence index published this week shows that confidence in negative territory. By all accounts, we are back in official recession. Turnover is depressed, there are no export growth areas and exports are not bouncing to take up the slack left by subdued domestic demand. I hope that the Government will address that.
The shadow Minister is discussing the present lack of industrial policy. In the decade between 2000 and 2010, we went from being the fifth biggest exporter in the world to being the 13th, way behind countries such as Italy. In his judgment, why did that happen?
That is a consequence of the world growing in different ways and a symptom of the long-term decline in our export performance. As I said, we need to make a concerted effort to do something about it. Many of the invisibles kept up well during that decade and levels stayed similar. However, the thrust of my argument is that we need to raise our game.
Every Minister—not just Business Ministers—and every aspect of Whitehall should be charged with promoting British exports, but all too often, policies are not joined up. The immigration cap indicates that Britain does not want to act as a beacon for the world’s best and brightest, and there is a perception among foreign businesses that it will act as a brake on export growth.
Aviation policy was mentioned. A recent report suggests that a lack of direct flights from the UK to emerging markets might be costing our economy £1.2 billion a year in lost trade. Firms naturally trade where there are good and co-ordinated transport links. In my area of the north-east, the Emirates service between Newcastle and Dubai has tripled trade between the two areas in the four years since it started. The hon. Member for Macclesfield mentioned Chengdu. There are no direct flights from the UK to Chengdu, but there should be. British Airways does not run a service from the UK to Seoul in South Korea, although I admit that other carriers do. The Government should work closely with airlines to address that.
I turn to last week’s disappointing announcement that the Indian Government might place an order for fighter jets with French manufacturer Dassault, rather than with Eurofighter Typhoon, in which the British BAE Systems plays a huge part. The Prime Minister paid a lot of political capital with regard to that. The Opposition do not want to do anything to compromise the deal. We will support the Government in ensuring that Britain can be successful, and we think that there is still considerable scope to succeed, but I hope that lessons are being learned within the Government. Frankly, as has been touched on in this debate, the Prime Minister jetting off for a one-off PR stunt is no substitute for deep and meaningful Government-to-Government relations.
The French are particularly adept at this, and President Sarkozy’s courting over many months of Prime Minister Singh seems to have reaped rewards. Will the Minister outline the steps that are being taken to ensure that the Eurofighter stays in the game? On a wider point, what will the Government do differently to ensure more meaningful and therefore more successful contact to secure trade for Britain?
On UK Trade & Investment, I do not want to focus on cuts, but the context is important. UKTI’s budget over the next four years has been cut by 17%. In contrast, Ubifrance’s budget saw an increase of 14.2% in 2011, while that of Germany Trade & Invest increased by 10%. The Minister, fresh with his red box, will no doubt spout the lines that tough choices need to be made and that austerity is required to clean up the mess that we left behind, but does he really believe that reductions to this country’s foreign trade organisation, at a time of acute global competitiveness and when our main competitors are increasing their budgets, are sensible and will not hurt Britain’s export drive?
In the time remaining to me, I want to touch briefly on one of the key barriers to trade, particularly for small and medium-sized enterprises, namely access to finance. Will the Minister update us on progress made on the actions outlined in the plan for growth, which was published almost a year ago? How many SMEs have been helped as part of the UKTI’s passport to export initiative? How many firms have taken advantage of the export enterprise finance guarantee? The plan for growth produced three new products designed to mitigate the risks for exporters and potential exporters. How many have taken that up?
Britain has a long history of trade across the globe over many centuries. I liked what the hon. Member for Penrith and The Border (Rory Stewart) said about the need to look not to our Victorian past, but to think further back to our buccaneering in Elizabethan times. We need to address the intense competition. I would hate to see our successors in 50 years’ time lamenting the failed and missed opportunities of the first half of the 21st century in relation to the expanding global economy. The Minister is fresh in office and could make his mark by ensuring a competitive and co-ordinated policy across the Government and with business, so that we can sell British goods and services across the world, thereby creating jobs and wealth for this country.