Oral Answers to Questions

Debate between Jonathan Reynolds and Greg Smith

Thursday 12th December 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

There is no clearer pointer on business confidence than the Bank of England’s recent survey on employers’ responses to the Budget. Some 59% expect lower profit margins; 54% expect to raise prices; 54% expect lower employment; and 38% expect to pay lower wages than they otherwise would have. Now City AM reports that Labour has carelessly lost all its business backers. Will the Secretary of State show any contrition, admit that business confidence is through the floor, and start standing up for business, rather than the Treasury?

[Jonathan Reynolds]

Well, what can I say? Was it the Conservative party that increased corporation tax from 19% to 25% in one Budget, and that crashed business investment and confidence because of the way it mishandled Brexit, failing to prepare for either outcome of a yes/no referendum? And which Opposition Front Benchers played a role in the mini-Budget? Frankly, it was all of them. With respect to the hon. Gentleman, I will not take advice from him. Since the Budget, I have heard repeatedly from Conservative colleagues that they want to lower taxes and increase spending, even though they cannot account for the promises that they made when in government. That is not credible unless they engage with reality, as this Government are doing. Whether it is the response to the Chancellor’s speech at Mansion House or finally sorting out Marks & Spencer this week, this Government are getting on with the job and looking to the future.

[Greg Smith]

Sorry seems to be the hardest word. [Interruption.] I am talking about the Government’s Budget. Further proof of how low business confidence is getting under this Government was given in evidence to the Employment Rights Bill Committee. Jane Gratton of the British Chamber of Commerce predicted

“a reduced hiring appetite were this legislation to come in, and that”

their members

“would be less likely to recruit new employees due to the risk and difficulty, particularly under the day one rights”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 8, Q2.]

If business confidence is low, employment goes down. We already know that every Labour Government leave unemployment higher than when they took office, but is it not a bit extreme for this Labour Government to legislate for that outcome?

[Jonathan Reynolds]

If the hon. Gentleman googles that statistic, he will find that it is not actually true, but I appreciate that it is demanding being in opposition, and that there may not always be the capacity and resources required. As we heard on the excellent Second Reading of that legislation, the vast majority of employers in the UK already operate to a higher standard than the level to which the floor is being raised in the Employment Rights Bill. I do not in any way pull back from saying that some of the most vulnerable, insecure and low paid members of our society will benefit from the Bill; that is exactly what it is about. Those people may have given up on politics or think that the mainstream political system will not deliver for them. I reject the claim that certain industries require a supply of labour from jobs that do not give people the security and dignity that they need. This is a set of proportionate, reasonable reforms that will make a difference—

Port Talbot Transition Project

Debate between Jonathan Reynolds and Greg Smith

Wednesday 11th September 2024 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

I thank the Secretary of State for giving me advance sight of his statement. I wish I could say that I am surprised by any of its content, but the media and the press have, of course, been relentlessly briefed on it over the last couple of days.

It is also no surprise that, once again, Labour is presiding over the demise of our steel sector. Output fell by 47% under the last Labour Government, and 56% of jobs were lost. Today’s deal means that 100% of output will go at Port Talbot. An electric arc furnace will take five years at best to get up and running; some suggest that it will be eight to nine years before a single new job is created, if we see any new jobs at all. As the statement says, this is a transition, but it is a heartbreaking transition for thousands of people—a transition from being in work to being out of work. In his discussions with Tata, why did the Secretary of State not take steps to ensure that the blast furnace will not be closed before the new electric arc furnace opens? Is this not the New Labour playbook—scrap jobs, scrap production and become reliant on higher-polluting countries for imports? That is not what I call decarbonisation. I must say, I feel a little sorry for the Secretary of State, who has been dispatched here to announce these spending decisions just a day after Labour’s day of shame on winter fuel cuts for pensioners.

In government, the Conservatives provided a grant of £500 million towards the £1.25 billion invested by Tata Steel, one of the largest support packages in the government’s history. At the time of the last Government’s announcement, that support was expected to save at least 5,000 jobs in the company. We worked with the Welsh Government and Tata Steel to establish a dedicated transition board to support affected employees and the local economy, backed by £100 million in total. Will the Secretary of State provide an update on any of those job projections?

Today’s announcement is notable for the absence of any reassurance or plans for the thousands of steelworkers in Scunthorpe who may not have jobs by Christmas. Equally notable is the Government’s failure, once again, to provide any detail on the domestic production of virgin steel. The Secretary of State says that we will have a steel strategy in the spring, but thousands of jobs, along with production capacity, have been scrapped today.

It was no surprise that last week, during the urgent question on steel, four times, the Minister for Industry failed to commit to safeguarding the future of virgin steel production in this country. I am sure that the Secretary of State does not need reminding that if he allows the Scunthorpe works to close, too, we will be the only G7 country unable to produce virgin steel. That leaves us open and vulnerable to cheap foreign imports, particularly from China. To his credit, he has always argued against offshoring our steel industry. He conceded once that it would be a “fundamental political mistake”. What conversations has he had with the Secretaries of State for Transport and for Defence about the impact of the Government’s new steel policy on our national security and ability to deliver infrastructure? Will he assure the House that he is doing everything in his power to ensure that we do not lose virgin steel manufacturing in the United Kingdom?

For the benefit of new colleagues, the Government, when in opposition, were committed to £28 billion a year of borrowing to fund their decarbonisation plans—a price tag that has magically disappeared, although the target has not. The Secretary of State made promises about that to the steel industry, but where are those promises now? Where is that money? Is he still battling the Chancellor? We know that Labour’s unions are quite successful in squeezing money from the Treasury, so maybe he can send them to stand up to the Chancellor if he is having problems.

The Government have our support in ensuring that the future of steelmaking in this country is sustainable. That goes beyond Tata and South Wales. Only in Labour’s world can the word “improved” mean fewer jobs and higher-polluting imports. When he returns to the Dispatch Box, I hope the Secretary of State will do better for UK steelmaking.

[Jonathan Reynolds]

I have been a Member of Parliament for 14 years, in which I have seen some interesting political events, but I do not think I have ever heard a contribution with such brass neck. That is quite something, because there is quite a menu to choose from.

Let me explain what I was doing during polling week, in the lead up to 4 July. Parliament was not sitting, and I was shadow Secretary of State. I was going between key seats, as would be expected, negotiating with unions, Tata, my colleagues in the Welsh Government and every relevant body to prevent action that would have resulted in the entire closure of the Port Talbot works on polling day. It was as though the Government had already gone; they were not on the pitch. The first thing I had to do, before I even became Secretary of State, was ensure that there was something there to save, because it would have gone under the Conservative party. [Interruption.] Conservative Members really need to listen, because my contributions are factually accurate, and I will help them to understand the real situation.

The point of the new investment is to save jobs. There will be better terms for the people who are unable to get the new jobs, including better cushioning during their retraining for entry into the rest of the economy. I have explained why it is a better deal, as I hope the shadow Minister has seen. He mentioned media reports; they have not come from my Department, but I appreciate that there were lots of interested parties. The unions and the Welsh Labour Government recognise that this is a better deal. I hope that the Conservative party recognises, on taking a step back from the statement, why the deal will make such a difference.

The shadow Minister mentioned virgin steel. Let me talk about my frustration about that. He will understand that the two blast furnace sites, Scunthorpe and Port Talbot, lose a great deal of money every day. The managers are so fed up with the lack of action under the last Government that they have put timescales on their closure. The simple truth is that I do not have the timeframe that was available to the Conservative party. Moreover, when it comes to Scunthorpe, I do not yet have the carbon capture infrastructure in place that will be necessary for the ideal solution. I would love to be a position to look at the hybrid solution that the shadow Minister put forward—keeping the blast furnaces open while we bring the electric arc furnaces online—but all the time that could have been used to work on that was during the Conservative Government, and they did not do that work. There are therefore far fewer options available to us, and the situation is far more challenging.

Since I became Secretary of State, I have had many meetings with the UK management about Scunthorpe, and have had three meetings, I believe, with Mr Li, the principal shareholder. I also met him when I was shadow Secretary of State. We have been clear that we want a transition in Scunthorpe, and want to put up Government money alongside what the company may offer, but that has to be part of a transition to the future. The workforce and the route that is offered to them has to be part of that.

Even if we are successful in doing that, my frustration is that the options available are very difficult for the area. The solution I would ideally deliver, which could have been delivered by the Conservatives in those 14 long years, is not available. When Conservative Members leave the Chamber today, I hope they reflect on the mistakes they made, their lack of action, the legacy they bequeathed us and, fundamentally, the improvements we have been able to make in such a short time.

Automotive Industry

Debate between Jonathan Reynolds and Greg Smith

Wednesday 12th July 2023 Commons Chamber

[Jonathan Reynolds]

I thoroughly agree—the scale of ambition that I see around the world daunts me when I compare it with this Government’s ambition. There are some incredibly exciting technologies out there, including sodium-ion batteries that would reduce our dependence on lithium and almost certainly cut costs in battery production. Hydrogen is clearly going to be extremely exciting, as are fuel cells, and there are markets for off-road vehicles that could be huge potential markets for the UK. We should also not forget buses: that is an area in which new technology could contribute to things like cleaner air, as well as better transport.

[Greg Smith (Buckingham) (Con)]

Does the shadow Minister agree that on top of battery innovation and hydrogen innovation, the UK is leading in another field: that of synthetic fuels? However, giving the automotive sector a really strong future in this country involves a whole-system analysis, not just of how the vehicle is manufactured but how the energy that will run it is manufactured. That involves looking again at the zero tailpipe standards that are coming in, because if we have that whole-system analysis, we will get to green technology and greener transport but with a whole-picture effect.

[Jonathan Reynolds]

I agree with part of what the hon. Gentleman has said. I agree about the whole-system analysis: many parts of the decarbonisation journey that industry will need to take on will be a much bigger question than simply unplugging one form of old fossil fuel technology and plugging in another. For instance, the steel industry will have to think about scrap if it is to make the conversion to electric arc furnaces; and if we are to move towards synthetic fuels, we will clearly have to look at where the feed stocks are coming from.

However, one of the most defining features of the past 13 years—I say this without any kind of partisanship—has been a series of very ambitious targets from this Government in areas that relate to decarbonisation, but with no real means to deliver them. That target is then pulled away, and confidence in the British state to decarbonise falls apart. I am thinking particularly about the famous “cut the green crap” comments from the former Prime Minister, David Cameron, regarding home insulation. When we talk about changing existing Government policy, we should not underestimate just how little confidence the international business community has in this Government’s promises at times. Broadly, the approach has been very ambitious targets but with no means to actually deliver them, which undermines the case.