Home Insulation

Jim Cunningham Excerpts

Wednesday 24th October 2018 Commons Chamber

[Sir Mark Hendrick]

I concur with the hon. Gentleman. Whether it is with Northern Ireland authorities or with our own Government, there is no reason why there should not be good co-operation and good insulation schemes. That is what I would have expected with these 387 houses in my constituency.

In the meantime, I requested a meeting with the Secretary of State on the matter, as a matter of urgency. Except for a very brief encounter in the House of Commons Tea Room, when the Secretary of State said that she was looking into the matter as she passed me by, she seemed uninterested in the case and reluctant to discuss the matter. She did, however, refer me to an official, who then assured me that Preston City Council was working with the NEA fuel poverty charity. However, what the Department did not know was that this was the case only because of my direct intervention and contact with the chief executive of Preston City Council at the time, because, as I said earlier, the council officer had sat on the letter from the NEA.

By July 2016, the chief executive was indicating that she needed extra funding in order to carry out surveys to get a “detailed picture of issues”, so clearly the £2.5 million was not enough to deal with the problems, and in fact was only to be targeted at those homes which had complained about the work—62 of the 387 homes. That did not take account of the fact that many of the other homes had problems, but because the residents thought that people in other properties were complaining on their behalf as well, they did not come forward and make their direct complaints. Therefore, the fact that work was to be carried out on the 62 properties only, neglected all the work that needed to be carried out on the other affected properties, whose residents, for a variety of reasons, had not come forward and made their own complaints. That was, in my view, totally unjust and short-sighted.

On 24 November 2016, I emailed the Secretary of State at the Department for Business, Innovation and Skills—the right hon. Member for Tunbridge Wells (Greg Clark)—to ask what assurances and safeguards were in place to ensure that the properties would be safe, dry and warm, and that any installations would be done in a professional manner. In December 2016, BIS responded, asking for more detail. In January 2017, my office contacted BIS to ask what detail it required. My office staff were told that the policy team would get in touch. We waited and waited, and the policy team did not get in touch. However, work was already under way on the 62 properties, which were designated as phase 1. Those properties that were left were designated as phase 2 and the residents were told that they would be surveyed. However, there was no indication from any organisation as to how or if funding would be made available for phase 2.

In the meantime, I received an email from Councillor Martyn Rawlinson of Preston City Council, telling me that the management of the repairs on the 62 houses was as bad as the original work that was carried out. Some of the houses had been left half done for several months. E.ON originally said that all repairs necessary would be done, but E.ON was then saying that homeowners should get their own insurers to get the work completed, which was outrageous—an absolute disgrace—and by then the residents had been putting up with this nonsense for four years, with many of them having work done twice to their property, and still not to their satisfaction.

By 29 November 2017, I was ready to let E.ON know about my concerns over the progression of the remedial works, and asked it for a timescale setting out when all the works would be carried out and completed, and for a point of contact to be established for the residents. My office chased E.ON for a response for over a month, and a month later—January 2018—we finally received correspondence. E.ON confirmed that it was trying to divert attention from its responsibilities in the matter towards Preston City Council, which had no direct responsibility, and still has no direct responsibility, for the work to be carried out. It is E.ON that surveyed the houses in August 2017 for phase 2 of the repairs. I am told that those so-called “surveys” were in fact not proper surveys, but door-knocking exercises to ask people whether they were having problems, or had had problems previously; nothing at all was done of a technical nature, and certainly nothing that could generate a work order to remedy what problems they were having. In addition there is not, and has not been, any indication from the Government or E.ON of how the rest of the work for the 300-plus houses will be financed. We are seeing good will, but nothing in the way of resources to complete the work.

On 11 February I received an email from Councillor Martyn Rawlinson, with photographs of some horrific scenes within houses due to the damp issues. It is inconceivable that people should be left to live in such conditions, with no one apparently willing to rectify the problems as soon as possible.

On 8 March this year, I wrote to the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for South Derbyshire (Mrs Wheeler), describing my disappointment with the then Secretary of State and the Department, and appealing for help. On 27 March I received a response from the Under-Secretary telling me that the responsibility had moved from her Department to the Department for Business, Energy and Industrial Strategy.

I tabled a series of parliamentary questions to BEIS about the use of cladding on properties. That culminated in a letter from BEIS indicating that remedial work on 62 of the properties should be completed shortly, and that E-ON was in discussions with National Energy Action to help other households. In the meantime I received a variety of complaints from the residents, one claiming to have spent £1,500 after a ceiling caved in after wet weather. In a separate case, an elderly homeowner had to leave her property and move in with her son because the damp was affecting her health.

Since then, the Minister for Energy and Clean Growth has responded to my parliamentary question, PQ177184, indicating that the retrofit on 62 of the properties was completed in the summer of this year and that work has been carried out to estimate the extent of the work that is necessary to sort out the work required to the other properties. As I said earlier, that resulted in questions being asked on the doorstep. In addition, talks have been taking place between Ofgem, BEIS and the energy suppliers in an attempt to secure funding for the remaining houses.

This saga has been running for six years, from 2012 to where we are now, in October 2018. It has been an absolute tragedy for those living in those 387 houses, who have been trying to put up with substandard housing and great inconvenience. The result has been unsafe properties with associated health risks. In the meantime, I am reliably informed that in many cases the cladding has been removed, but properties have been left with holes in the walls. The landlord has said that they will be finishing off the work, but will only repair the holes and paint the brickwork. They are not prepared to install any new insulation. One of the complainants wonders where the money has gone for the work that should have been done to her property. The landlord has told her that she should speak to E.ON or Preston City Council.

Let me tell the Minister that I recall spending three years in the Department for Environment, Food and Rural Affairs as Parliamentary Private Secretary to the then Environment Secretary, the right hon. Member for Derby South (Margaret Beckett). During that time, when my party was in government, we dealt with fuel poverty issues through the Warm Front scheme, which was applied to about 10,000 homes in my constituency, particularly in the area of Deepdale. The scheme focused on energy efficiency by installing new central heating boilers and providing loft insulation and double glazing for terraced housing that was not too different from the housing that we see in Fishwick ward. It was extremely effective, and popular with residents.

May I ask the Minister why the more recent schemes that are using cladding of the type mentioned in Fishwick are being employed when the detriment to both property and residents is known? Why has it taken six years to get to where we are now for the residents of Fishwick? Are the Government willing to help to direct the residents to a satisfactory and available source of finance to rescue what is, in fact, a Government scheme?

[Mr Jim Cunningham (Coventry South) (Lab)]

I was in that Department during the period of the last Labour Government. One of the things that is absent here is enforcement, but, more important, if there is a Government scheme and the Government are subsidising it, there should be a list of approved quality builders, perhaps with certifications. I have also found, in isolated cases with which I have dealt, that it is mainly elderly people who cannot get redress. They are told to go to the council, but the trading standards offices are undermanned, and they have limited powers under the law. Should we not do something about some of those matters?

[Sir Mark Hendrick]

I agree with my hon. Friend. When I was in DEFRA there were recommended contractors. Those contractors could ensure a certain level of quality and even though we got the odd complaint from people under the Warm Front scheme, we did not get anything like the number of complaints or the state of the work that we get now. Unfortunately, the company in question has gone into liquidation, but the Government should still look at how they can help.

Why have the residents of Fishwick had to endure this substandard work and why has it not been rectified properly despite the fact that the contracting company, Ecogen, went into liquidation soon after that work was completed? Why do the Government not concentrate on energy-efficient boilers, loft insulation and double glazing? The Minister might well tell me that in other areas they are concentrating on those solutions, but then why is there this move towards cladding—an ugly and harmful solution?

I am thankful for securing this debate and look forward to hearing the answers to my questions from the Minister.

Domestic Gas and Electricity (Tariff Cap) Bill

Jim Cunningham Excerpts

Wednesday 18th July 2018 Commons Chamber

[Claire Perry]

I pay tribute to my hon. Friend’s work as a member of the Business, Energy and Industrial Strategy Committee and his doughty championing of consumers. He will be aware that the Government have taken through another piece of legislation, which was required to ensure that the regulator can work with Government datasets in order accurately to pinpoint vulnerable customers. I am sure that the whole House will be pleased to know that if that legislation has not yet received Royal Assent, it will do imminently. I look to my officials to ensure that that is the case.

[Mr Jim Cunningham (Coventry South) (Lab)]

Perhaps I misunderstood the Minister, but will Ofgem carry out a review constantly, or will it be a one-off review with a time limit?

[Claire Perry]

I can reassure the hon. Gentleman that the original provisions in the Bill give Ofgem very broad powers, from the date on which the Bill receives Royal Assent, to implement the cap and then to review it as often as Ofgem feels is necessary. When the cap is operating, it can be reviewed many times. We have instructed Ofgem to conduct a review when the cap ends to ensure that the groups of customers identified can be helped. My understanding is that there is nothing in Ofgem’s existing powers that will prohibit it from doing the same thing in future. The regulator was in the past given extremely broad powers under the gas and electricity Acts, and it would be within its discretion to carry out such reviews. However, across all parties we felt it was important to put on the face of this Bill, which is the first piece of legislation to introduce these sorts of tariff caps and to empower further the regulator to use its powers, the requirement to carry out the initial review.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 17th July 2018 Commons Chamber

[Richard Harrington]

My right hon. Friend will be very aware of the number of meetings we have with the automotive industry and of how closely we are working with it on the sector deal. The Automotive Council met only in the past couple of weeks, and that was one of the top things on the agenda for discussion.

[Mr Jim Cunningham (Coventry South) (Lab)]

Some 53% of our exports rely on Europe. What are you doing to protect that market for us?

[Mr Speaker]

I am doing absolutely nothing on the matter.

Insecure Work and the Gig Economy

Jim Cunningham Excerpts

Wednesday 20th June 2018 Westminster Hall

[Stephanie Peacock (Barnsley East) (Lab)]

I beg to move,

That this House has considered insecure work and the gig economy.

It is a pleasure to serve under your chairmanship, Mr McCabe. I declare an interest as a proud member and former officer of the trade union GMB. I thank GMB for its support, and I refer hon. Members to the Register of Members’ Financial Interests.

Today’s debate is predicated on one simple issue: work in the UK is becoming increasingly insecure. A changing economy over the past decade has led to a boom in new jobs, which have combined to create a worrying picture of employment rights across our economy. Often under the pretence of offering flexibility, employers have exploited working practices to maximise profit at the expense of workers. The experience of being trapped in a low-paid job with no guaranteed hours, wages or security of employment, and of being unable to plan past this week’s rota or pay cheque, with fewer rights and lower pay than colleagues, is all too familiar for people across the country.

It is notoriously difficult to measure insecure work, which is in itself part of the problem, but some estimates put the number of people trapped in insecure employment well into the millions. The number of people in zero-hours or agency contracts alone is near the 1 million mark, while nearly 3 million people are underemployed and left seeking more hours than they secure week after week.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate my hon. Friend on securing the debate. We had an instance in Coventry a few years ago with a company called City Link. At Christmas, about 1,000 van drivers were laid off; those drivers rented their vans, and were left high and dry and could not get any redundancy money—so this is a timely debate. I hope that she will touch on the Taylor review, which I think did not go far enough. It could be called a whitewash, quite frankly.

[Stephanie Peacock]

I thank my hon. Friend for his intervention; I will indeed talk about that. He is right that the problem is not confined to small sections of our economy, but spread throughout. From tourism to retail, hospitality and our public services, the economy is dependent on these jobs. It goes far beyond genuine short-term work, such as meeting seasonal demand over the Christmas rush in retail, or the busy summer period at a caravan park. The balance of power is woefully skewed in favour of employers who use short-term contracts to minimise their responsibilities and maximise their profits at the expense of job security for their employees.

Areas such as my own in Barnsley are disproportionately affected. Former industrial towns and coalfield areas are disadvantaged communities that have been left behind by the economy and are taken advantage of. Where average wages lag far behind national levels, unemployment is higher and social mobility is appallingly low. Unscrupulous companies can offer insecure, low-paid work where the alternative is often nothing. In Barnsley, the switch to gig employment and short-term work in areas such as distribution in warehouses and our public sector means that too many people in my constituency simply cannot be certain that their job will last longer than the next rota. No matter how hard they work, their precarious employment leaves them with no chance to save up or plan for the future.

--- Later in debate ---

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend the Member for Barnsley East (Stephanie Peacock) on securing this important debate and the powerful way in which she introduced the subject.

The world of work is evolving rapidly. The plethora of court cases and the growing uncertainty are a reflection not only of how technology is changing the employment relationship, but of how new and unscrupulous employers are seeing that as an opportunity to loosen the relationship further, usually to the detriment of the worker.

I, too, pay tribute to the GMB, which has pushed back against this wild west frontier approach, but it should not just be down to trade unions to try to make the best of 20th-century laws in the 21st century. Parliament should be setting out a new, comprehensive settlement to take us into the new world. We should do it in a way that ensures dignity, certainty and fairness for those who work in the gig economy. That is why it is completely unacceptable that, weak though it is, there has been no progress on the Taylor review a year after it reported.

I am talking about the 21st century, and I have to say that I was rather amused and disappointed by the comments made by the founder of Pimlico Plumbers.

[Mr Jim Cunningham]

The important thing is that we are now creating a new animal in our economy: the working poor. That is what people tend to miss, and it is happening as a result of the gig economy. We had an incident in Coventry a fortnight ago on a Saturday night between black cab drivers and Uber drivers, and it ended in a certain amount of violence. Surely, things cannot go on like this.

[Justin Madders]

I thank my hon. Friend for that intervention. Whole ways of working are being disrupted in ways that really are undermining the economy. I go back to the Pimlico Plumbers judgment, which found that someone who had worked for the company for six years was entitled to some basic workplace employment rights. The founder of Pimlico Plumbers said:

“We had five judges in the top court in the country and an opportunity to bring our employment law into the 21st century and unfortunately they missed the point.”

I have to say that he has rather missed the point, if he thinks that in the 21st century it is acceptable for someone to work at the same company for six years and not be entitled to any basic workplace protections. That sounds like something out of the 19th century, not the 21st.

I had rather more sympathy with him when he said:

“We can’t get our heads around this word ‘worker’ and what it means.”

I am sympathetic to that, because the truth is that the worker category has always been an unsatisfactory halfway house between employed and self-employed. If we leave aside the question of agency workers, there should be no halfway house—a person is either employed by someone or not. If we can offer a bold and clear legislative framework, with the presumption of employment if someone is carrying out the work personally, we can end the uncertainty and hopefully begin to end the exploitation that we see in the sector.

Those who advocate these new relationships often present them as providing a choice to those who work under them, but it is an utterly false choice. It is a choice that is no choice at all. A choice is ordering food from a menu or choosing to have gammon and deciding whether to have egg or pineapple with it. The choice here is whether someone accepts what is served up or does not eat at all. That is not a real choice. It is a business model and a culture that says people are as disposable as coffee cups. It says, “If we don’t have enough work, tough. If you fall ill, tough.” And, crucially, it says, “If you question our methods or challenge any of our payments, you should not expect to get any more work from us in the future.”

Without job security, people have no security. How can they plan for the future, look to buy a house, have a family, save for retirement or maybe even start their own business if the labour market is so cutthroat, insecure and parasitic that it takes everything that they have got just to keep their head above the water? I think we can do better than that. We need to enter a new world where people are valued as much as the product that they are producing. At the moment, we are in a world where exploitation is all. It has to come to an end.

Rolls-Royce Redundancies

Jim Cunningham Excerpts

Thursday 14th June 2018 Commons Chamber

[Greg Clark]

My hon. Friend makes an important point. In fact, the demand for engineering skills is increasing right across the country, including in both the east midlands and the west midlands. Rolls-Royce itself plays an important role in training engineers. I met some of the young engineers in Derby, and they can look forward to a wonderful career in engineering.

Through the industrial strategy, as my hon. Friend is aware, we are placing greater emphasis on science, technology, engineering and maths skills in schools and colleges, and we are creating institutes of technology. With the aerospace and automotive sectors in the east midlands and west midlands, we are now creating more places for apprentices through those joint initiatives so that we can supply the growing order books, based on the skills that are needed.

[Mr Jim Cunningham (Coventry South) (Lab)]

I worked at Rolls-Royce when the company collapsed in 1971, and I can tell the Secretary of State that a lot of people at Rolls-Royce will be very worried indeed about their future. We have a plant just outside Coventry, as the hon. Member for Nuneaton (Mr Jones) mentioned. What will be the impact on, for example, the Ansty plant in Coventry and the Bristol plant, and on other plants across the country? Equally, this will have an impact on the supply chain, because I do not believe Rolls-Royce has 4,000 managers.

[Greg Clark]

The announcement was made at 7 o’clock this morning that there is a proposal to reduce the headcount. Rolls-Royce has specified that the reduction will be in the management and support functions, rather than in the engineering and operational aspect. When further information is made available, I will make sure the hon. Gentleman, as the Member for a constituency with a great interest in the matter, shares in that information.

It is important to emphasise that the aerospace sector is characterised by growth. The proposed redundancies at Rolls-Royce—I make no bones about it—are clearly devastating news for those who may be affected but, overall, aerospace, including Rolls-Royce in this country, is enjoying higher order books. We will work together to make sure that, including in the test beds we have established together, we are at the forefront of the latest technologies in the future, as we have been to date.

UK Automotive Industry: Job Losses

Jim Cunningham Excerpts

Tuesday 22nd May 2018 Westminster Hall

[Matt Western]

I totally agree with my hon. Friend. The business rates situation handicaps the industry in this country and puts it at a significant disadvantage to competitors on the continent. Added to that are the energy costs that it faces: on average, there is a 74% premium on the energy costs on the continent.

Major manufacturers have told me that their greatest concern is that there seems to be little concern from the Government. It is disheartening that this apparent lack of interest flies in the face of the industry’s importance to our overall economy. The financial services sector is held up as the great driver of UK national wealth, but it is worth remembering the increasingly important contribution of the UK motor vehicle manufacturing industry. According to the Library, it generated £15.2 billion of value to the economy in 2017, which is 0.8% of total output. More relevantly, it represents 8% of manufacturing output. Likewise, it employed 162,000 people across the UK in 2016, equating to 1% of all UK employees.

In UK manufacturing, the automotive industry is the second most investment-intensive sector for total investment as a proportion of gross value added, although it is top in value terms, investing £3.6 billion in 2015. The west midlands has the largest number of people employed in the manufacture of vehicles in any UK region or country—perhaps that is why this subject is so close to my heart. The 54,000 employees in our region represent around a third of all motor industry employees in the UK.

[Mr Jim Cunningham (Coventry South) (Lab)]

I thank my hon. Friend for bringing this timely debate. Not only are there direct employees, but for every direct employee there are probably two or three indirect employees—we are talking about the supply chain. There could be a massive effect if the problem is not handled properly. We need a transitional period, with electrification on the one hand and diesel on the other hand.

My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) and I met the trade unions about this issue some months ago, and there is a lot of concern that it could affect jobs. With business rates, the Government are shifting expenditure away from proper funding through the taxpayer to local government. That creates a major problem for local government and for the efficiency of these industries.

[Matt Western]

My hon. Friend makes an important contribution. He is quite right about the multiplier effect on supplier industries—component manufacturers and so on. I totally agree with him about the importance of establishing a very clear pathway for the transition between where we are and where we have set ourselves to be in future. I will speak about that at some length.

The employment statistics are significant by anyone’s measure. The concern voiced by the industry is that direction is needed from policymakers, in particular with regard to Brexit and the UK’s future trading relationships, as well as to support for the transition to clean fuels. Without that clarity, it is inevitable that investment decisions will be placed on hold.

People will cite recent announcements at Luton and elsewhere as great news about the future of the industry, but many of us will understand that those sorts of decisions are taken many years in advance—those were taken way before the EU referendum. Without clarity, there will be a recruitment freeze or job losses, as we have seen. One example of the recruitment freeze is in the constituency of my hon. Friend the Member for Dagenham and Rainham, where Dagenham has recently announced that it will have to put on hold 150 planned jobs.

Just over a year ago, in March 2017, Lloyds bank conducted a survey of the UK automotive manufacturing sector. It summarised that the vast majority—some 87%—of automotive manufacturers planned to create new jobs in the next two years. It estimated that, if those plans were replicated across all the UK’s automotive firms, a further 85,000 new jobs would be created. What a difference a year makes.

In the context of Brexit, there are concerns that there may be job losses in the industry in the long term. The Business, Energy and Industrial Strategy Committee conducted an inquiry into the impact of Brexit on the industry and stated that, should the UK leave the customs union and single market, hundreds of thousands of jobs could be lost. It reported that

“it is difficult to see how it would make economic sense for multinational volume manufacturers—the bulk of the UK automotive sector—to base production in the UK in a no deal or WTO tariff scenario. The shift of manufacturing to countries within the customs union and single market would be inevitable; the cost in UK jobs could be in the hundreds of thousands, and inward investment in the hundreds of millions. For the automotive sector, no deal would undoubtedly be hugely damaging. The Government should not seriously contemplate this outcome.”

Carlos Tavares, the chief executive of the PSA Group, which manufacturers Peugeot and Citroën vehicles, said:

“We cannot invest in a world of uncertainty. No one is going to make huge investments without knowing what will be the final competitiveness of the Brexit outcome.”

That sentiment was echoed by others, including the chief executive of Jaguar Land Rover, Dr Ralf Speth, who said:

“Uncertainty is really challenging us very much and not only us, it’s for the complete industry. You hardly see inward investment any more.”

Perhaps that should come as no surprise. Some have explained that job losses in manufacturing are an inevitability, and that we should embrace the loss of manufacturing in the post-Brexit era. One such voice is that of Professor Minford of Cardiff Business School, who has advocated “running down” the UK auto industry. In evidence to the Foreign Affairs Committee in 2012, he said:

“It is perfectly true that if you remove protection of the sort that has been given particularly to the car industry and other manufacturing industries inside the protective wall, you will have a change in the situation facing that industry, and you are going to have to run it down. It will be in your interests to do it, just as in the same way we ran down the coal and steel industries. These things happen as evolution takes place in your economy.”

He echoed that statement in The Sun ahead of the EU referendum, writing:

“Over time, if we left the EU, it seems likely that we would mostly eliminate manufacturing, leaving mainly industries such as design, marketing and hi-tech. But this shouldn’t scare us.”

Well, I am afraid it scares me, and I think it scares many of us—for good reason.

A while back, the BEIS Committee stated that

“it is difficult to see how it would make economic sense for multinational volume manufacturers—the bulk of the UK automotive sector—to base production in the UK…The shift of manufacturing to countries within the customs union and single market would be inevitable”,

and it would cost hundreds of thousands of jobs, as I said. The Committee concluded:

“Overall, no-one has argued there are advantages to be gained from Brexit for the automotive industry for the foreseeable future. We urge the Government to acknowledge this and to pursue an exercise in damage limitation in the negotiations. This involves retaining as close as possible a relationship with the existing EU regulatory and trading framework in order to give volume car manufacturing a realistic chance of surviving in this country.”

The Committee is not alone in voicing its fears. The automotive industry’s trade body, the Society of Motor Manufacturers and Traders, stated:

“There is no escaping the fact that being out of the customs union and single market will inevitably add barriers to trade, increase red tape and cost. Settling for ‘good’ access to each other’s markets is not enough as it will only damage the UK’s competitiveness and reduce our ability to attract investment and the high quality jobs that go with it.”

It is worth noting that in 2017, 86% of the UK’s imports came from the EU, while only 41% of the UK’s exports went to the EU.

Many say that the UK runs a widening trade surplus in motor vehicles with non-EU countries and a widening trade deficit with EU countries, and that leaving the EU and the customs union is therefore a positive thing. That is true, but the industry has responded by using its strength through the renaissance that I mentioned to reduce that deficit considerably. Importantly, the industry shows a determination to grow in other markets—it seeks to retain its strong position in Europe, but want to build elsewhere too. Other countries’ domestic manufacturers are doing that, and we can do so too. It is not a choice between one and the other—they are complementary.

Our remaining in a customs union is critical to the sector’s future. We must avoid at all costs losing tariff-free access to the EU. In the worst-case scenario, under World Trade Organisation rules, a 10% tariff on finished vehicles and a 2.5% to 4.5% tariff on components would be introduced. Those tariff rates would cost the automotive sector at least £2.7 billion on imports and £1.8 billion on exports. Just imagine what would happen to the sticker price of vehicles in this country.

Ford has stated that rules of origin would “add a significant cost” to its business if UK-manufactured products were no longer considered to have originated in the EU. Similarly, Vauxhall has stated that any rules of origin changes

“will have a drastic impact on UK trade with any countries outside the EU”.

It is critical that a future UK-EU trade deal includes provision for full bilateral cumulation, which would ensure that components produced in the EU were considered local UK content for the purpose of rules of origin, and that the automotive sector was able to benefit from preferential trading relationships established with not only the EU but third countries.

It is worth noting that the majority of Ford’s Bridgend output goes to the EU. Without a comprehensive UK-EU free trade agreement, engines sent to European assembly plants would attract a 4.5% tariff, increasing the cost to the consumer. In an industry where margins are wafer-thin, that sort of tariff may cause significant damage to the sector. The SMMT’s position is clear. It has stated:

“Should the UK and the EU no longer have a customs union arrangement, UK businesses exporting to EU27 countries would need to submit information about the origin of the product, the destination country, relevant commodity codes, Customs Procedure Codes, product value, a unique consignment number, as well as relevant safety and security information. This would represent a significant increase in bureaucracy, and undermine the competitiveness of British business. Compliance with these new requirements would be particularly challenging for SMEs that make over 90% of the automotive supply chain.”

The components industry and the highly integrated supply chain are crucial to this debate. Currently, an estimated 1,100 trucks from the European Union deliver components worth £35 million to UK car engine plants every day. The movement of those vehicles and the timeliness of their departure and arrival is crucial—every minute counts. However, about 78,000 people are employed in the supply chain here in the UK, supplying not just the UK but Europe. The sector is highly integrated with the rest of Europe in the case of both finished cars and component parts. For instance, the UK imported just under £14 billion of vehicle engines and other components in 2017, 79% of which came from the EU. Some may ask, “Why can’t we transfer more of that back to the UK?” The complication is in scale, the strength of businesses and where they need to be located, and the geography of supply.

The manufacturers’ trade body, and the automotive trade body, the SMMT, have both called on the Government to protect that close integration. The financial reality of the chain’s fragility is underlined by the fact that some manufacturers face costs of up to £1 million an hour if production is stopped due to a delay in the supply of components to the assembly line. The SMMT estimates that a 15-minute delay to parts delivered just in time can cost manufacturers just under £1 million a year.

Let me give two examples. The manufacture of a single Delphi fuel injector takes more than 35 components, requiring 100 processes, and the elements for that come from 15 countries. The injector goes through 39 UK-EU border crossings and five UK-customs union border crossings. Another example is the Mini crankshaft, which crosses the channel three times in a 2,000 mile journey before a finished car rolls off the production line. The casting is made in France before being transferred to Hams Hall back in the midlands, where it is crafted into shape. Those pieces are then sent to Munich and inserted into an engine, which is then sent to Mini’s plant in Oxford, where it is installed in a car.

Related to all of that is the importance of type approvals, a much overlooked area that can add significant cost. One engine supplier—I will not mention its name—has estimated that, if we do not have harmonisation with Europe, it will cost between £300,000 and £500,000 per vehicle certification. In fact, the CBI noted that the two areas where convergence with the EU is of the greatest importance are the rules that determine how and by whom vehicles can be approved as safe for the road, and the Vehicle Certification Agency maintaining its ability to approve vehicles for the European market. It also mentioned maintaining pan-European rules on carbon dioxide and other air pollutants to ensure that international targets on clean air and climate change are met.

That brings me to diesel. In the early 2000s, the drive to achieve climate change goals led to the rapid uptake of diesel: from 17% of the total car market, it grew to 50% in just eight years. The manufacturers responded. Ford set up its Dagenham diesel centre, which I think employs 3,000 staff and provides for 50% of all of its global diesel production. Then came the Volkswagen dieselgate scandal and subsequently the demonisation of diesel, which has led to a 33% drop in diesel sales so far this year. Once more, manufacturers have sought to respond where they have seen a lack of leadership, in this case perhaps from policy makers. Ford introduced a diesel scrappage scheme, as certain other manufacturers have done, and since September it has taken 21,000 vehicles off the road. The programme has been so successful that it was extended beyond December, when it was due to close, and is still running.

A tax on diesel was announced in the November 2017 Budget, with an increase in vehicle excise duty by one band and on benefit in kind by an additional 1% for all diesel vehicles. Some would say that that is kicking an industry when it is already struggling. The taxing of vehicles based on such a legislative standard has yet to be finalised or introduced by the EU; it is unprecedented and unrealistic. I suggest that the measure is counter- productive and merely makes worse the problem it seeks to solve. People are holding off buying new diesel vehicles and keeping on using older, polluting vehicles. Of course, the reduction in—or lack of—support for the diesel industry does not take into account the many hundreds of millions of pounds that it has already invested in manufacture, responding to the Government’s policy direction of five to 10 years ago.

Today’s diesels are the cleanest yet, having the same nitrous oxide and particulate emissions as petrol and 20% lower CO₂ emissions. To put it into context, it would take at least six of today’s new diesel cars to emit the same nitrous oxides as one vehicle put on the road just two years ago. The focus should therefore be on getting older vehicles off the road, not on penalising customers who wish to buy newer, cleaner diesels. Of course, the swing to petrol means a collective failure to meet our carbon dioxide targets. Hon. Members will know that we are now seeing an uptick in carbon dioxide emissions for the first time in 15 years.

We see challenging issues in our deliberations over Brexit and the trading arrangements we face. That is best exemplified by the profound challenges faced by the automotive industry, one of our most successful industries. The industry has seen a renaissance, which was seriously damaged by the global financial crash, but it managed to sustain itself, and since then we have seen huge inward investment by various manufacturers, which has contributed to a 50% increase in manufacturing share, almost 10 years of steady growth and a consequent almost 30% increase in direct manufacturing employment in the sector, notwithstanding the growth in component suppliers.

The industry also faces the challenge of transitioning to cleaner fuels and a super-low-carbon future, and that is being disrupted by the uncertainty of Brexit and Government policy that seeks to penalise cleaner diesel-powered vehicles. It is currently one of the great paradoxes that, in seeking to improve air quality, the Government have managed to reverse the progress achieved over many years in reducing carbon dioxide emissions. As Mike Hawes, the chief executive of the SMMT, put it:

“The industry shares Government’s vision of a low-carbon future and is investing to get us there, but we can’t do it overnight; nor can we do it alone. The anti-diesel agenda has set back progress on climate change, while electric vehicle demand remains disappointingly low amid consumer concerns around charging infrastructure availability and affordability.

To accelerate fleet renewal, motorists must have the confidence to invest in the cleanest cars for their needs, however they are powered. A consistent approach to incentives and tax and greater investment in charging infrastructure will be critical. Now more than ever, we need a strategy that allows manufacturers time to invest, innovate and sell competitively, and which gives consumers every incentive to adapt.”

That is all the industry seeks: a controlled, orderly, managed transition from one system to the other. Regarding Brexit, it simply wants both clarity and certainty urgently.

Many are calling on the Government to act now to reduce the effects of diesel taxation on the newest, cleanest diesel vehicles and amend the carbon dioxide bands to reduce the impact of new emissions standards on consumer vehicle excise duty. Failure to do so will threaten the future success and sustainability of businesses and the significant contribution that the sector makes to jobs and the UK economy. The orderly, managed transition I described is essential to enable the manufacturers to use their revenues today to invest in our tomorrow. Without that support, the sector could be seriously damaged in its need to compete with the likes of China who have the scale and state backing to invest in newer technologies.

We have grown used to having a successful industry that contributes greatly not just to our international trade but to our global manufacturing prestige. We would be fools not to support it.

Oral Answers to Questions

Jim Cunningham Excerpts

Tuesday 1st May 2018 Commons Chamber

[Mr Gyimah]

The Government have been clear that we are unconditionally committed to European security and want to continue working together to develop defence and space capabilities. We feel that the Commission’s approach runs counter to what has been agreed as part of article 50, where a shared intent was agreed for strong UK-EU co-operation on defence in the future.

[Mr Jim Cunningham (Coventry South) (Lab)]

The Minister will know that I have Jaguar Land Rover in my constituency. What will be the impact on Jaguar Land Rover of the changes to tax on diesel engines?

[Greg Clark]

The hon. Gentleman knows, and the House knows, that there has been a fall in sales of diesel engines, not just in this country but across Europe. That has been the reason for some of the termination of the contracts there. We will be setting out, as a Government, the future regulatory path to clean up our roads of emissions. In doing that, we will be consulting with the industry.

Higher Education

Jim Cunningham Excerpts

Monday 23rd April 2018 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

I am sure that the right hon. Gentleman knows as well as I do what it means when we talk about further education. For example, in Coventry there have been 27% cuts to further education budgets. What impact does that have on apprenticeships? More importantly, if we take that further and look at university education, UCU is in dispute with the Coventry University because it cannot get recognition. To come back to the point, it cannot get recognition in further education or in university education.

[Robert Halfon]

It is true that for a number of years FE funding was neglected. It has been stabilised, and I welcome the £500 million extra announced by the Government for the technical education reforms in a recent Budget, but further education needs a lot more funding. People say that it is the Cinderella sector, but I say that Cinderella became a princess and we should banish the ugly sisters of snobbery and intolerance.

Industrial Strategy

Jim Cunningham Excerpts

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

I do indeed. In using that expression, as I think was evident from the context, I was praising the contribution that has been made from all parts of the United Kingdom. I am looking forward to being in Edinburgh tomorrow to give evidence on the industrial strategy to the Scottish Parliament. The work that we have done with the Government in Scotland has been very important. We had a very effective consultation session in Edinburgh. Many colleagues in Scotland contributed to it, and they see the results of it there.

[Mr Jim Cunningham (Coventry South) (Lab)]

The Secretary of State talks about an industrial strategy, which, in general terms, we welcome, but running alongside that we need to have an investment strategy, particularly in new technological developments and in energy areas such as electric cars. Will he say something about an investment strategy as well, because the regulator plays a big part in this?

[Greg Clark]

I am coming on to talk about that, but I will say now that one of the major breakthroughs in the industrial strategy is to recognise the utmost importance of investment in research and development, not only on the part of the private sector but on the public sector side as well. All around the world, advanced nations are investing in the future through R&D, and we have in the industrial strategy the biggest increase in research and development that we have ever seen in this country. It is a matter of pride that we were able to achieve that.

GKN: Proposed Takeover by Melrose

Jim Cunningham Excerpts

Tuesday 27th March 2018 Commons Chamber

[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.

[Mr Jim Cunningham (Coventry South) (Lab)]

Has the Secretary of State received a commitment from this particular company, which is well known for short-term investments, on longer-term investments? In the defence industry and in manufacturing in general, everybody—and I have worked in the defence industry—knows that any project runs beyond five or possibly 10 years, so such a commitment is needed to guarantee employment in this area. Has he been given any such commitments?

[Greg Clark]

I agree with the hon. Gentleman, who knows the industry well and with whom I have discussed this matter. That is why I consider it important to request and advise the company to be clear about its commitment to research and development. In its reply to me, it has made some statements about that, which he and others can evaluate, along with some specific commitments about the level and nature of R&D. His description of the need for such a commitment to research and development is absolutely right.