Magnox Decommissioning Contract: Holliday Inquiry

Kwasi Kwarteng Excerpts

Thursday 4th March 2021 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

On 27 March 2017, the then Secretary of State for Business, Energy and Industrial Strategy, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), informed the House of the defective procurement between 2012 and 2014 of the contract for the clear-up of the 12 Magnox sites, of the decision taken to settle with unsuccessful bidders following a successful legal challenge, and the Nuclear Decommissioning Authority’s decision to terminate the contract on the grounds that a material change had arisen to the specification on which bidders were invited in 2012 to tender.

The Secretary of State undertook to investigate fully and expose the reasons behind these failures so as to avoid the same mistakes being made in the future. In order to achieve this, he appointed Mr Steve Holliday to chair an independent, non-statutory inquiry. Mr Holliday’s report, copies of which have been laid in the House today, delivers on that commitment.

I am grateful to Mr Holliday and his team for the comprehensive and rigorous work of this inquiry, which is reflected in this report. The team has reviewed tens of thousands of documents to get to the truth, and it is only through this diligence that we can now confidently learn from the mistakes of the past.

The Nuclear Decommissioning Authority is charged with the delivery of a range of challenging, complex and safety-critical activities, across Magnox and the other sites in its estate. Since it was established under the Energy Act 2004, the Nuclear Decommissioning Authority has driven a significant step-change in the decommissioning of the UK’s legacy nuclear sites.

The Nuclear Decommissioning Authority has already acted upon the inquiry’s interim findings that were published in October 2017 and significant improvements have been put in place. This includes strengthening of its commercial and legal capabilities and the introduction, with Government support, of a board-level programme and projects committee. My Department has already taken action to improve its own oversight of the Nuclear Decommissioning Authority by strengthening the capacity and capability of the team in BEIS that provides the sponsorship function and also by appointing a director from UK Government Investments on to the board as a Government shareholder representative.

The Nuclear Decommissioning Authority will need to continue to develop to become a more efficient, effective and resilient organisation that continues to drive transformation on the ground and to deliver value for money for the taxpayer. I will be looking to the organisation’s chair, chief executive and the other board members to demonstrate that, where they have not already done so, they will respond fully, effectively and in a timely manner to the findings of this report. There are also findings and recommendations for my Department and UK Government Investments as well as for the Government more widely which we will consider with great care.

It is my intention that the Government and the NDA will publish formal responses to the inquiry chair’s recommendations later this year.

[HCWS820]

National Security and Investment: Mandatory Notification Regime Consultation Response

Kwasi Kwarteng Excerpts

Tuesday 2nd March 2021 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

Today, the Government published their response to the consultation on secondary legislation to define the sectors subject to mandatory notification under the National Security and Investment Bill.

This Government are a champion for free trade, recognising that inward investment is economically highly beneficial. Investment in UK plc boosts productivity by backing businesses to create good jobs and develop skills and will help support our economic recovery from covid-19. The UK is open for investment, but not for exploitation.

An open approach to international investment must also include appropriate safeguards to protect our national security and the safety of our citizens. The UK and our allies face continued and broad-ranging hostile activity from foreign intelligence agencies and others, who seek to compromise our national security. When it comes to investment, we are seeing novel means to undermine the UK’s national security that go beyond traditional mergers and acquisitions and also go beyond the reach of our current powers, such as structuring deals to obscure who is behind them. Such behaviour, left unchecked, can leave sensitive UK businesses vulnerable to disruption and espionage. It is crucial that the Government are able to fully combat these threats.

The National Security and Investment Bill creates a new screening mechanism enabling the Government to intervene in acquisitions resulting in control over entities and assets that may pose a risk to national security.

Proposed acquirers of certain shares or voting rights in specified qualifying entities in the most sensitive sectors of the economy will be required to notify the Secretary of State and receive clearance before completing their acquisition. This is to ensure that the Government are informed of potentially sensitive acquisitions before they take place and are thus able to take action ahead of time to address any risk to national security that would arise on completion. This “mandatory regime” is supported by a voluntary notification option for relevant acquisitions across the rest of the economy and a power for the Secretary of State to scrutinise qualifying acquisitions that have not been notified.

The overwhelming majority of transactions will, though, be unaffected by these new powers. We estimate that less than 1% of all mergers and acquisitions and asset transactions will result in a notification to Government.

The consultation invited views on the sectors in scope of mandatory notification, sought responses on whether the definitions provided sufficiently clear parameters to inform businesses and investors of the need to notify, and whether the definitions were proportionate. The consultation set out the draft definitions of 17 sectors in which national security risks are more likely to rise than in the wider economy.

These sectors are:

Advanced materials

Advanced robotics

Artificial intelligence

Civil nuclear

Communications

Computing hardware

Critical suppliers to Government

Critical suppliers to the Emergency Services

Cryptographic authentication

Data infrastructure

Defence

Energy

Military and dual-use

Quantum technologies

Satellite and space technologies

Synthetic biology

Transport

Responses to this consultation suggested that many of the sector definitions were broad in scope and would require further specificity to enable acquirers to identify whether they would be in scope of mandatory notification. After careful consideration of all the responses, the Government intend to refine the definitions and have produced the next iteration of the definitions in today’s publication.

The Government intend to carry out further, targeted engagement with certain sectors to finalise these definitions. The final definitions will be set out in regulations following Royal Assent to the Bill.

This approach will ensure that the regime is targeted and proportionate and keeps Britain firmly open for business. It will bring us into line with other countries, such as the USA, whose Committee on Foreign Investment also operates a mandatory notification model that investors will be familiar with, and build on the best practice established around the world by like-minded countries.

In summary, it will deliver a balanced regime that provides the Government with the flexible powers they need while keeping our country firmly open to investment.

I will place a copy of the consultation response in the Libraries of both Houses.

[HCWS815]

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Kwasi Kwarteng Excerpts

Monday 1st March 2021 Commons Chamber

[Greg Clark (Tunbridge Wells) (Con)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the future of car manufacturing by Vauxhall at Ellesmere Port and the Government’s strategy for battery manufacturing.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I pay tribute to my right hon. Friend for the great work he did as Secretary of State. He was the first Secretary of State for Business, Energy and Industrial Strategy, and I think that we can all say that we appreciate the outstanding work he did at that time.

The Government are absolutely committed to ensuring the future of manufacturing at Ellesmere Port and to secure the jobs and livelihoods of the workers at the plant. Since I was appointed Business Secretary last month, I have held a number of meetings with both Vauxhall and its new parent company, Stellantis, to support the company to make a positive investment decision. Only last week, I also held a constructive meeting with the general secretary of Unite, Mr Len McCluskey. Over the coming days and weeks, I, fellow Ministers and officials at BEIS will continue this intensive dialogue with the company.

More widely, the Government are continuing their long-standing programme of support to keep the British automotive sector at the forefront of technology and maintain its competitiveness, building on the work that my right hon. Friend did through the automotive sector deal.

It is my priority as Business Secretary to ensure that the UK continues to enjoy the benefits from our transition to ultra low and zero emission vehicles by continuing to build an agile, innovative and cost-competitive supply chain, which we need to secure vital international investment. With that in mind, we remain dedicated and absolutely committed to securing UK battery manufacturing. As part of the Prime Minister’s 10-point plan, we have already announced £500 million to support the electrification of vehicles and their supply chains, and other strategically important technologies, through the automotive transformation fund over the next four years. We continue to work with investors through the automotive transformation fund, and to progress plans for manufacturing the batteries that we will need for the next generation of electric vehicles here in the UK.

The Government and industry have jointly committed almost £1.5 billion through the Advanced Propulsion Centre and Faraday battery challenge to support the research, development and manufacture of zero and low emission technologies. Between 2013 and 2020, the Advanced Propulsion Centre has funded 67 collaborative R&D projects, creating and safeguarding nearly 47,000 jobs, with projected CO₂ savings of 244 million tonnes.

I repeat: we are 100% committed to making sure that the UK continues to be one of the best locations in the world for automotive manufacturing, and we are doing all we can to protect and create jobs while securing a competitive future for the sector here in the UK in particular, including at Ellesmere Port.

[Greg Clark]

I bring it to the House’s attention that I am a vice-chair of the all-party parliamentary motor group and the chemical industry all-party parliamentary group.

I am grateful to the Secretary of State for his response to my urgent question and for his kind words. The industrial strategy made a number of commitments. One was to make Britain a home for vaccine development and to build vaccine manufacturing capability. Another was to make Britain a leading manufacturer of electric vehicles, including the batteries that power them. I mention them both not to claim special prescience, but rather the opposite; both are obviously required if our industrial strengths are to continue in the future.

In the case of electric vehicles, there are three important facts. First, we have one of the most important, diverse and efficient car industries in the world, employing over 800,000 people in all parts of Britain. Secondly, by 2030 no new car will be sold in Britain with simply a petrol or a diesel engine. Thirdly, unless the batteries for vehicles made in the UK are manufactured in Britain within five years, the cars that they power will no longer be able to be exported tariff-free to the EU. We therefore urgently need to install the manufacturing capacity in the UK. That means not just one gigafactory, but many. It all needs to be planned, built and operating at scale within five years.

In the case of Vauxhall at Ellesmere Port, as the Secretary of State says, a decision is imminent as to whether a new electric model will be built there. The same is true of Jaguar Land Rover in the west midlands and supply chain companies such as GKN. A laissez-faire approach will not do it, and neither will just general encouragement. It requires sleeves-rolled-up concrete action to be taken now between Government and industry, just as was the case with vaccines. Will the Secretary of State, for whom I have a high regard, make this commitment today and do whatever it takes urgently to ensure that Britain is a global force in manufacturing electric vehicles long into the future?

[Kwasi Kwarteng]

My right hon. Friend is quite right. The issues raised by his question are of critical strategic importance, and I fully appreciate the work that he did on driving the industrial strategy. As he pointed out, the industrial strategy set the foundation for vaccines and the success of the vaccine roll-out. He is quite right to point out that we need the same rigour and focus in ensuring that the United Kingdom continues to be an attractive place in which to invest for the manufacture of electric vehicles, in order to meet the Prime Minister’s 10-point plan. Electric vehicles were a key part of that 10-point plan.

[Lucy Powell (Manchester Central) (Lab/Co-op) [V]]

I thank the right hon. Member for Tunbridge Wells (Greg Clark) for securing this urgent question and agree wholeheartedly with him. Labour stands ready to do all we can to secure the future of Ellesmere Port. The plant has been a major employer in the north-west for decades and is highly efficient and productive. It would be a travesty if it did not have a long-term future. That is now in the Government’s hands.

The uncertainty facing Ellesmere Port and other car plants speaks to a deeper problem caused by the Government’s inaction on automotive. They have been asleep at the wheel. First, automotive has had no sectoral support during covid, despite the worst trading levels in 50 years, while it has received billions of euros in France and Germany. Secondly—[Inaudible.] The green transition for car makers is not underpinned by any meaningful investment or strategy. They need more than the platitudes of the 10-point plan. They need a world-leading gigafactory plan.

Thirdly, Ministers said that the Brexit deal would unleash Government to back British industry, but it has not. Instead, our EU competitors are unashamedly pumping support into their car makers, while ours are left hamstrung by new red tape. It is no wonder that international companies such as Stellantis are looking at their long-term investments and wanting more from our Government.

What further guarantees can the Secretary of State give to Stellantis and others that he will back the switch to electric with real support? What is he demanding from the Budget for automotive? Will he bring forward plans to create green jobs today by raising his ambition on gigafactories and other infrastructure? Finally, will he actually do whatever it takes to help British industry post Brexit, to ensure the bright future that our businesses and workers deserve?

[Kwasi Kwarteng]

I do not recognise some of the premises of the hon. Member’s question. The Prime Minister’s 10-point plan, far from being full of platitudes, is a world beater. I saw a story in The Guardian yesterday about the UN saying that other countries are struggling to meet our targets and our performance on decarbonisation and net zero, so I do not recognise that. She is right to suggest that we are 100% focused on securing these vital jobs. We are totally committed to net zero. I was lucky enough to be the energy Minister who landed the energy White Paper—the first energy White Paper that the Government published in 13 years. We are very focused on trying to land investment to drive the green industrial revolution here in this country.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]]

The Secretary of State is fully aware of the remarkable site we have down here in Somerset at Gravity, where we could put not only a megafactory but a battery factory. We would welcome his support for the Gravity site, because it is one of the best sites in the United Kingdom. We have just applied for freeport status as well, to help the situation with Bristol port. Will the Secretary of State stand up and say that this is one of the sites in Britain that should be considered for the very important future of car manufacturing and battery manufacturing in the United Kingdom?

[Kwasi Kwarteng]

I would be delighted to make a statement that we are considering and looking at these sites. My hon. Friend will know that I have visited Hinkley Point in his constituency and seen the great work there. I have no doubt that the manufacturing skill and competence of his constituents and his area will be able to sustain an excellent gigafactory.

[Mr Speaker]

I call the SNP spokesperson, Stephen Flynn, who has one minute.

[Stephen Flynn (Aberdeen South) (SNP) [V]]

I commend the right hon. Member for Tunbridge Wells (Greg Clark) for securing this urgent question. The reality is that this matter depends on two key issues facing the UK right now: the disaster that is the Tory Brexit deal, but also, as has been said, how this Government intend to save and create jobs in the UK while driving through the changes necessary to reduce vehicle emissions.

On Brexit, the mess is clear for all to see. Indeed, the owner of Ellesmere Port said last month that it might make more sense to invest in Europe because

“the biggest market is on the continental Europe side”.

The Tories need to own their mess, as indeed does the Labour party, which has happily pushed a deal over the line. Does the Secretary of State now, even grudgingly, accept that the deal is not fit for purpose?

On vehicle emissions, the shift towards electric and, perhaps even more so, hydrogen is vital to deliver the reductions necessary, but we need to ensure that we create a supply chain at home that supports vehicle manufacturers to make an affordable transition. The Secretary of State will likely accept this point, but does he not agree that his Government need to go further and faster in their financial support?

[Kwasi Kwarteng]

The hon. Gentleman raises two issues. I think the Brexit deal is a success. Given the fact that we had two general elections in that period and five years in which we spoke about nothing other than Brexit, to reach a deal in the time we did was successful, and clearly Nissan committed itself to Sunderland on the back of this very good deal. He is quite right: I think we can go further and faster in driving the transition—the energy transition—and my right hon. Friend the Prime Minister’s 10-point plan and the energy White Paper, which I have referred to, point the way in that regard.

[Mark Pawsey (Rugby) (Con) [V]]

The rules of origin requirements to continue selling vehicles tariff-free to the EU and the high proportion of the cost of batteries in electric vehicles make providing gigafactories urgent. The Secretary of State will be aware of proposals for the Coventry airport site, which are already at an advanced level. It is close to the UK Battery Industrialisation Centre and it is of course in the historic home of the motor industry, making it an obvious location. Does the Secretary of State agree that this development in Coventry would place the UK at the heart of electric vehicle manufacturing?

[Kwasi Kwarteng]

Yes, my hon. Friend is quite right. There are lots of sites that have potential in the field of gigafactories, and we remain absolutely committed to securing UK gigafactory capacity. There is a range of factors, as my hon. Friend will appreciate, that will influence the decision of any location of gigafactory investment, but I would be very happy to discuss further plans with him, alongside officials, and have further discussions about our strategic future in this important area.

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

Last Sunday, my constituents woke up to newspaper headlines saying a decision was due to be made on the future of Vauxhall Motors on Tuesday. Tuesday came and went, and the media speculation increased, but by the end of the week those whose livelihoods depend on the plant were none the wiser. I am sure it is clear to all just how much anxiety all this speculation has generated, but it will be worth it if it focuses the Government’s attention on the urgent need to deliver on a plan to ensure our great British car industry gets all the support it needs to move to electric vehicle production. Does the Secretary of State understand the importance of getting the right decision—not just for the people of Ellesmere Port but for the signal it sends out about where securing the future of the automotive sector stands in the Government’s priorities?

[Kwasi Kwarteng]

I think the hon. Gentleman is quite right. There are two issues here: there is a local issue, and I can only imagine the uncertainty under which the excellent workers in his constituency and at that site are working; and there is of course a national issue. The question we must ask ourselves is whether we are committed to having gigafactories in this country. We are 100% committed to that, and I am very hopeful that we can reach a satisfactory conclusion about the continued investment and support for Stellantis in his constituency.

[John Howell (Henley) (Con) [V]]

I am grateful for what the Secretary of State has said about the amount of investment being made in batteries, but may I ask him for his support for companies such as those at the Culham Science Centre, which he recently visited, that are undertaking groundbreaking research in batteries, including in aviation?

[Kwasi Kwarteng]

I am very pleased that my hon. Friend has raised that question. I had an excellent visit a few months ago, as he remembers, in his constituency in Culham. I spoke to many business people who are driving the net zero agenda, and, alongside him, I am very happy to support those efforts.

[Sarah Olney (Richmond Park) (LD) [V]]

Increasing demand for electric vehicles can help to create the green jobs that we need, as we transition away from carbon-emitting industries. Will the Secretary of State agree that cutting VAT to 5% on electric vehicles can help to stimulate that demand?

[Kwasi Kwarteng]

The hon. Lady is right. We are considering many ways to stimulate the demand to drive this critical agenda. It was a big step for the Prime Minister to announce that we would try to phase out the purchase of internal combustion engine cars by 2030. There was some opposition to that, but it was clearly the right move and we are looking at all sorts of other measures to promote the demand that she wants to see.

[Andrew Selous (South West Bedfordshire) (Con) [V]]

Many of my constituents make the highly successful Vivaro van at the plant in Luton. Can the Secretary of State say what the Government are doing to encourage electric van manufacture here in the United Kingdom?

[Kwasi Kwarteng]

That is a critical point. My hon. Friend understands about Stellantis as well, because he refers to the successful plant in Luton. What we want to see is a successful renewed commitment to Ellesmere Port, such as that which is found in Luton. He will know that the fourth point of the Prime Minister’s 10-point plan was all about driving up electric vehicle take-up and, obviously, that includes vans.

[Sammy Wilson (East Antrim) (DUP)]

It is now clear that the policy of phasing out the production of petrol and diesel cars will have an impact on employment in some areas of the United Kingdom where we have higher than average unemployment. What impact assessment have the Government done on the effect of this policy on revenue from fuel duty? What impact assessment have they done on the environmental impact of the mining of earth metals, one of the dirtiest industries in the world? What impact assessment have they done on the impact on poor families who will now face higher capital costs when it comes to purchasing cars? Would it not be a far more Conservative policy to allow manufacturers and consumers to make the choice as to which cars they make and which cars they drive?

[Kwasi Kwarteng]

Clearly, the right hon. Gentleman and I may have a different view on the threat of climate change, including, in particular, the drive to net zero. I suggest to him that the Prime Minister’s 10-point plan has been well received. There has been huge support across the United Kingdom to see cleaner technology and electric vehicles and many people are very supportive of the Government’s measures in this regard.

[David Johnston (Wantage) (Con) [V]]

Last month, I met representatives from Johnson Matthey, which is opening a new flagship site at Milton Park in my constituency, where it will develop and test advance batches, working both to lengthen the driving distances and shorten the charging times. Does my right hon. Friend agree that this is a very welcome development that supports the Government’s ambition to transition us to electric vehicles as well as to help us meet our 2050 net zero goal?

[Kwasi Kwarteng]

I am delighted to answer that question, because it relates to an earlier answer that I gave. There are new jobs and opportunities in this push towards net zero. I would be very pleased to visit the Johnson Matthey site in Wantage and I think that it is an excellent development that we are all extremely pleased about.

[Kim Johnson (Liverpool, Riverside) (Lab)]

A thousand jobs are at risk if the Ellesmere Port plant closes, and a further 6,000 in the supply chain. Does the Minister agree that the future of the Vauxhall Ellesmere Port plant and the GKN plant in Birmingham could be secured if the Government commit to investing in a green recovery for the automotive sector to produce a new electric model and, in that way, they could protect thousands of jobs, because actions speak louder than words.

[Kwasi Kwarteng]

As I said to my right hon. Friend the Member for Tunbridge Wells (Greg Clark), the Government are 100% committed to making sure those jobs stay. We are in conversations—negotiations, if they may be called that—with the company. We are also very committed to the Prime Minister’s 10-point plan and driving the energy transition, which will have economic impacts, secure jobs and be a great thing not only in the fight against climate change but for the economic development of our country.

[Mark Jenkinson (Workington) (Con)]

The transition to electric vehicles is essential if we are to hit our world-beating commitment of net zero emissions by 2050. Will my right hon. Friend set out his plans to support the wider roll-out of vehicle charging points in places such as my constituency, where our rurality has necessitated the slower uptake of electric vehicles?

[Kwasi Kwarteng]

My hon. Friend raises a crucial point. Clearly, without a successful roll-out of charging points we will struggle to meet the targets we have set ourselves. We have committed £90 million already to facilitate the roll-out of larger-scale charge point infrastructure projects across England for local areas, and we will continue to support that. I would be very happy to have a conversation with him about how we can best do that.

[Lilian Greenwood (Nottingham South) (Lab) [V]]

The Chair of the Select Committee on Science and Technology could not have been clearer: for the British car industry to succeed in the growing electric vehicle market, protecting thousands of jobs, including here in the midlands, we must have UK gigafactories manufacturing electric batteries by the time the rules of origin change. How many UK gigafactories will we have by 2024? What specific steps is the Secretary of State taking to secure them?

[Kwasi Kwarteng]

As the hon. Lady will have seen from these questions, we are looking at a number of sites. We are absolutely committed to having at least one gigafactory site, if not more—I think we need more than one—before the next election. I could not be clearer about our commitment to the transition and ultimately to reaching net zero by 2050.

[Jeremy Wright (Kenilworth and Southam) (Con) [V]]

I am sure my right hon. Friend will agree that the best sites for gigafactories are those where the automotive sector is strong, transport connections are good and battery technology development is already a feature of the local economy. In that regard, I am entirely with my hon. Friend the Member for Rugby (Mark Pawsey) in saying that the Coventry airport site is an excellent one—coincidentally, it is, despite its name, in my constituency. My right hon. Friend would be very welcome to visit at any point, and I am grateful for his encouraging words about it. May I ask him also to accept that sites, however good, are no good without occupants? Will he use the resources he has talked about, and his time and that of his officials, to identify the right sites early and work with those promoting them to secure occupants—companies that manufacture batteries on site—as soon as we can?

[Kwasi Kwarteng]

I am happy to give my right hon. and learned Friend that assurance—that is exactly what we are trying to do. We are talking to local communities and local leaders about various sites up and down the country where we can site gigafactories. I am very conscious of the fact that Coventry, given its history and that of the midlands, would be an excellent place in which such a factory could be located.

[Jack Dromey (Birmingham, Erdington) (Lab) [V]]

For half a century, the GKN plant in Erdington has manufactured world-class components—the drive shafts and the prop shafts—for our 800,000-strong automotive industry. Melrose, which took over GKN three years ago, has now announced its intention to close the Erdington plant and to export the 519 highly skilled jobs in the plant to continental Europe, in breach of assurances given at the time of takeover. Will the Secretary of State, who has agreed to meet us on Thursday of this week, work with us—the workforce, their union, Unite, and myself—on alternatives to closure? Any strategy for the transformation of the industry to an electric future will vitally require high-value components, and those high-value components should be built here in Britain.

[Kwasi Kwarteng]

I recall that I gave that pledge during questions on the Floor of the House, and I am delighted that I will be seeing the hon. Gentleman, and others, on Thursday, to see what can be done on this critical issue.

[Steve Double (St Austell and Newquay) (Con) [V]]

I draw the House’s attention to my role as chair of the all-party group for critical minerals. All the batteries for these electric vehicles will require a reliable supply of critical minerals, particularly lithium. The Secretary of State will be aware that a significant deposit of lithium has been identified in Cornwall, and its commercial extraction is being developed by two companies. Will he confirm that the Government recognise the huge potential benefit to the UK of having a secure domestic supply of lithium? Does he agree that it would make sense for battery manufacturing to be located as close as possible to the extraction and processing of lithium, and will he meet me to discuss the potential opportunity of a gigafactory being built in Cornwall?

[Kwasi Kwarteng]

I would be happy to meet my hon. Friend to discuss the potential siting of a gigafactory. He will appreciate that through the getting building fund the Government have already committed to supporting a lithium extraction pilot plant in Cornwall, and our Faraday battery challenge already supports work to find and use lithium across the United Kingdom. This is a critical issue. We fully understand the importance of the security of the supply chain, and I would be happy to discuss that, and more specific Cornwall-related issues, with my hon. Friend at a time convenient to us both.

[Bill Esterson (Sefton Central) (Lab) [V]]

The Secretary of State mentioned his 10-point plan a number of times, but that will not mean much unless the Government support existing manufacturing, including Vauxhall at Ellesmere Port. Will he do whatever it takes for Cheshire and Merseyside, and Vauxhall in particular, rather than just talking about it, so that low-carbon vehicles really can be made in Britain?

[Kwasi Kwarteng]

We are talking about it—we are talking with the company directly to secure vital investment. We want those jobs, and we have said time and again that we are 100% committed to the energy transition and to having world-class automotive manufacturing in the UK.

[Peter Gibson (Darlington) (Con) [V]]

A key component of battery manufacturing is rare metals. Will my right hon. Friend outline what support he is giving to British businesses that seek to harvest polyhalite nodules from our sea bed?

[Kwasi Kwarteng]

The Government are committed to exploring opportunities that will support the next generations of clean technologies, and we are looking very much at the field of critical raw materials. My hon. Friend will remember that when I was Minister for Business, Energy, and Clean Growth, I was particularly committed to that form of technology. It is an exciting development, admittedly in its early stages, and I am always looking to drive innovation in that area.

[Alison McGovern (Wirral South) (Lab) [V]]

I support everything that my neighbour, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), said about this, and specifically about the impact of this issue on people in our area, and I support what he said about needing to move quickly. Whatever the strategy or plan, it must be about jobs and opportunities, particularly for young people who could be facing a serious unemployment situation. What discussion has the Secretary of State had with the metro Mayor for Merseyside about how we ensure that, whatever the plan is for automotive, it has the fortunes of young people at its heart?

[Kwasi Kwarteng]

On the specific question, I have met Steve Rotheram a number of times in previous ministerial roles, and I believe I am setting up a meeting with him soon. He has great knowledge of the area, and is interested not only in Ellesmere Port but in the possibilities of the HyNet industrial cluster, and decarbonising that. I am sure I will speak to the Mayor very soon.

[Jacob Young (Redcar) (Con)]

I appreciate that I am the fifth Member to stand up and ask for it, but as regards the gigafactories, my right hon. Friend should look no further than Redcar and Cleveland. In Teesside we have a fantastic workforce. May I invite him to come to Redcar and Cleveland to see a potential site for a gigafactory?

[Kwasi Kwarteng]

I would be delighted. I am clearly going to be a much-travelled Secretary of State investigating all these potential sites for gigafactories. I pay tribute to my hon. Friend for the excellent work that he has done in his short time in the House of Commons. He has really made an impact and got his voice heard, and the people of Redcar are very well served. I would be very happy to visit the constituency, as I have done in the past, to look at the opportunities for the energy transition.

[Christian Matheson (City of Chester) (Lab)]

The workforce and the management at Ellesmere Port have done everything that has been asked of them to keep that plant productive and efficient, but as my hon. Friend and next-door neighbour the Member for Ellesmere Port and Neston (Justin Madders) said, they are on tenterhooks waiting for a decision. I pay tribute to the right hon. Member for Tunbridge Wells (Greg Clark) for his excellent opening remarks. When he was Secretary of State, he kept all the parties involved, including MPs and the local council, Cheshire West and Chester. Will the Secretary of State do the same? We want to help him to get the right results?

[Kwasi Kwarteng]

I really appreciate those words of support and help. This is a cross-national issue and a cross-party issue, and I would be very happy to engage with the hon. Gentleman. He knows that I have already made a commitment to visit the HyNet industrial cluster near his constituency. I am very much committed, as previous Secretaries of State have been, to doing all I can to make sure that we get the right investment and the right result.

[Alun Cairns (Vale of Glamorgan) (Con) [V]]

The Secretary of State will be familiar with my long-standing ambition to see a battery valley—or a battery vale—established in Wales, so I was delighted when Britishvolt prioritised St Athan in the Vale of Glamorgan, my constituency, as its preferred site for its gigafactory, although I was later disappointed when it decided to shift its priority elsewhere, possibly because of the lack of capacity or expertise within the Welsh Government in order to serve its needs in bringing such a large, major investment project to Wales. Does my right hon. Friend agree that his Department needs to play an active role in co-ordinating such large, complicated investment projects for the UK, wherever they may be in any nation within the UK, so that my constituency will not necessarily lose out as it has now?

[Kwasi Kwarteng]

There are huge opportunities in Wales for the siting of gigafactories, and also, particularly, in terms of the net zero challenge. I spoke to Ken Skates of the Welsh Government only this morning. There is a huge appetite in Wales to drive the net zero agenda. I would be very happy, as my right hon. Friend knows, to have a conversation with him on how best we can work together to do that.

[Margaret Greenwood (Wirral West) (Lab) [V]]

I have listened very carefully to the Secretary of State’s responses with regard to Vauxhall’s Ellesmere Port plant, but I am sure that my constituents who work there would really like some detail from him, so could he provide us with some details about the actions that he will take to secure the future of their jobs and the thousands of jobs in the local supply chain?

[Kwasi Kwarteng]

I am fully aware and conscious of the difficult time that we are going through, but the hon. Lady will appreciate that these are ongoing conversations —ongoing sensitive negotiations—and I am not going to be prepared to enter into the details on the Floor of the House. Once we have a reached a decision—a conclusion—with the company, we can then have a fuller discussion. I am very committed to landing the right result in this conversation.

[Mike Wood (Dudley South) (Con) [V]]

JLR is leading the way in committing to an all-electric future, boosting our strong manufacturing base in the west midlands, so it was disappointing that Labour discounted the west midlands from its plans. Will my right hon. Friend demonstrate his superior judgment by backing the campaign by west midlands Conservative MPs and our fantastic Mayor, Andy Street, for a west midlands gigafactory so that the west midlands truly can be the engine for growth?

[Kwasi Kwarteng]

I am not sure whether that was a yes or no question, but yes to my hon. Friend’s point. Andy is doing a great job. MPs in the region, my right hon. and hon. Friends, are really driving progress in this area. I would be very happy to help them and support them in that endeavour.

[Mick Whitley (Birkenhead) (Lab) [V]]

Having spent 27 years on the shop floor of Vauxhall in the paint shop and as a union convenor, I am just one of the thousands of people who have benefited from the highly skilled work and training opportunities that the plant has provided over its many decades in operation. By making the necessary investment now, the Government would be able to secure vital employment opportunities for generations to come and help to make the UK a world leader in the production of electric vehicles. Does the Secretary of State accept that not doing so would, frankly, undermine the Government’s commitment to a green recovery and betray the very communities the Prime Minister has promised to level up?

[Kwasi Kwarteng]

I think the hon. Gentleman is quite right. Levelling up is clearly heart and centre of what the Government are trying to do. We are doing all we can to get the right result for the people of Ellesmere Port and also for the UK. It is a hugely significant investment.

[Felicity Buchan (Kensington) (Con)]

Does my right hon. Friend agree that we not only need additional battery capacity but battery recycling facilities, so we can sustainably re-use the batteries and, if necessary, dispose of them?

[Kwasi Kwarteng]

My hon. Friend is quite right. The UK Government are absolutely committed not only to the manufacturing of these critically important batteries, but to recycling. We want to see a circular economy for electric vehicles. If we attain that, we will surely maximise the economic and environmental opportunities of the transition to zero emission vehicles.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP) [V]]

We of course welcome ending new petrol and diesel car sales by 2030, but we are dismayed by the absence of a UK Government strategy to support the industry to transition, meaning that this factory’s business model is under threat.

More widely, we have heard great rhetoric from this Government on electric vehicles, but the action is lagging. For example, we have seen nothing from the £3 billion zero emission bus fund, while the Scottish Government power ahead. When will a sustainable strategy be delivered to support factories like Ellesmere Port to not only survive but thrive?

[Kwasi Kwarteng]

We are absolutely committed to that. When I was energy Minister, people like the hon. Member were saying, “When is the energy White Paper going to come out? What is the plan?” We have a 10-point plan, which has been widely accepted and welcomed. We also have an energy White Paper that sets out the path and we are developing strategies for how we get to net zero at a record pace. The Government are delivering. We have a very clear direction, and the industry has broadly welcomed that.

[Mr Philip Hollobone (Kettering) (Con)]

Existing electric vehicle batteries are too big, have a too limited range and take too long to recharge. I welcome the Government’s £318 million investment in the Faraday battery challenge. Will the Secretary of State tell the House how the Faraday battery challenge will lead to smaller batteries with a longer range that do not take very long to recharge?

--- Later in debate ---

[Kwasi Kwarteng]

The Faraday battery challenge is a key part of the industrial strategy, which my right hon. Friend the Member for Tunbridge Wells (Greg Clark) had a key role in implementing. It has made extraordinary progress in the past two or three years. I would be very happy to pick this issue up with my hon. Friend. Over the next 10 years, I think we will see a complete transformation in the battery technology he talks about.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

As a proud electric car owner, I am glad that to support our automotive manufacturing industry and to boost its competitiveness, Labour has called for an ambitious investment in electric vehicle technology, including the electric battery supply chain, through a £30 billion green economic recovery. Does the Secretary of State agree that that strategic investment would support manufacturers like Vauxhall and give them the long-term confidence they need to build new electric models right here in the UK?

[Kwasi Kwarteng]

I agree with a lot of what the hon. Gentleman says. What I would say, and how I would slightly re-tilt the emphasis, is that there is Government investment, which we have—and we are committed to £12 billion through the 10-point plan—but also private investment. If we look at the success of offshore wind, we see that it was driven largely by the investment of private capital. Exactly the same thing will happen in respect of the net zero challenge. That is why we are in conversations with the private company to secure that investment.

[Marco Longhi (Dudley North) (Con) [V]]

One of this Government’s priorities is to protect and support jobs and livelihoods across the country as we recover from the pandemic. With Dudley and the Black Country having a pivotal role in the car manufacturing supply chain, will my right hon. Friend confirm that supporting the automotive sector and boosting battery cell manufacturing is an integral part of our plans to build back better and greener from the pandemic?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. The midlands, the Black Country and his constituency are a key part of this story. I have mentioned the 10-point plan many times. It was launched only in November—four months ago—and it has really set the path and set the direction in this area. He is absolutely right: we are 100% committed to success, and I hope that he and his constituents will benefit greatly—I am sure they will—from the transition to a greener and cleaner economy.

[Rachel Hopkins (Luton South) (Lab) [V]]

Vauxhall has made cars and vans in my constituency since 1903. The plant’s loyal and efficient workforce and the Unite union reps have worked flexibly with the company over many years to maintain production at that site, including of the successful Vivaro electric van.

The continued and future success of electric vehicle manufacture, including good skilled jobs for my constituents, is reliant not only on battery production and gigafactories but on investment in rapid charging infrastructure, so will the Secretary of State confirm the Government’s commitment to securing investment in this much-needed green infrastructure?

--- Later in debate ---

[Kwasi Kwarteng]

The hon. Lady is absolutely right. I pay tribute particularly to the hard work of her constituents to make the Vivaro vehicles; they have ensured that the Vauxhall plant in Luton has been a great success. It is exactly because of that, among other reasons, that we are keenly committed to making sure that Ellesmere Port enjoys equal support and success.

[Alexander Stafford (Rother Valley) (Con) [V]]

This Government have shown a welcome commitment to bringing electric vehicle production to the UK, with all the benefits to the economy and the environment that that entails, and I hope that we will have that in Rother Valley.

However, electric vehicle components are different from those of petrol and diesel cars and include rare minerals, such as cobalt, that are mined overseas. What discussions has the Secretary of State held about developing a strategy for sourcing rare minerals in an environmentally sustainable and ethical way, particularly by supporting domestic extraction and imports from our safe, reliable, democratic allies?

[Kwasi Kwarteng]

I commend my hon. Friend for that question, which is of great importance. As I have said in earlier answers, we are absolutely committed to exploring and developing lithium mining here in the UK. We fully understand the threats, or dangers, to the supply chain.

My hon. Friend will also appreciate that the Faraday battery challenge, which we have mentioned a number of times, is funding research to reduce our dependency on raw mineral supply and make better use of global resources. That obviously will involve looking at how we can reduce and replace critical raw materials.

[Matt Western (Warwick and Leamington) (Lab) [V]]

As chair of the all-party parliamentary motor group and the APPG on electric vehicles, I am afraid I have to say that the Government have been slow to move on this, particularly by comparison with the Governments of Germany and France, in attracting investment in battery gigafactories. In addition, through the pandemic, vehicle manufacturers have received consumer support to encourage sales in those countries.

My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) is leading the charge to attract private sector investment in a gigafactory in Coventry. Does the Secretary of State not see and support that move? It would supply both Luton and Ellesmere Port, but also Halewood and the Jaguar Land Rover factories in the midlands. Would that not be a great outcome?

[Kwasi Kwarteng]

It would be a great outcome, and I am not going to make a partisan point about it. There are MPs of different political stripes across the hon. Gentleman’s region, as we have seen in these questions, who are very keen to develop this kind of technology.

I am always very happy to engage with colleagues across the House in order to get the right outcomes. It is not just a question of the right hon. Member for Birmingham, Hodge Hill (Liam Byrne); there are MPs in his area across the House representing midlands seats very ably, and I am very happy to engage with them on this.

[Chris Elmore (Ogmore) (Lab)]

Happy St David’s day, Mr Speaker. If you will indulge me, may I thank you on the record for the letter that my wife and I received on the birth of our son, Henry? He was a month old yesterday, and I am pleased to say that he is thriving.

[Chris Elmore]

Thank you, Mr Speaker. Dare I say that face make-up keeps me going?

The Secretary of State has had lots of bids from Members across the House, from all parties, on battery development. I think that I can go one better. On 10 February, the Prime Minister announced to the House that Bridgend would have a world-beating battery development plant; it was later clarified by No. 10 that perhaps the Prime Minister misspoke or mixed up his Bs—Bridgend and Blyth, two very different parts of the country.

May I ask the Secretary of State whether he would agree to meet me and, indeed, the hon. Member for Bridgend (Dr Wallis), to discuss the options for a battery plant for the Bridgend borough? My constituents have lost the Jaguar Land Rover contract with Ford, which has now gone, and Ineos has run away to France with the Brexiteer who runs that company, so we need the Government to look at bringing in real investment to keep those highly skilled jobs in my borough.

[Kwasi Kwarteng]

My view is that that issue, which is critical for the United Kingdom, is something on which I am willing and happy to engage with Members across the House of Commons. It is too important an issue for narrowly partisan views, and of course I am happy to meet the hon. Gentleman and discuss opportunities to drive investment to power the net zero transition.

[Mr Speaker]

The Secretary of State has had a lot of requests—I will put Chorley on his list as well.

I am suspending the House for three minutes to enable the necessary arrangements for the next business to be made.

Advance Research and Invention Agency

Kwasi Kwarteng Excerpts

Monday 22nd February 2021 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

The UK has a proud history of scientific excellence and invention. Charles Babbage, Ada Lovelace and, later, Alan Turing pioneered early predecessors of the computer. Thomas Newcomen and James Watt gave us the steam engine, and Michael Faraday gave us the modern battery.

This Government are committed to continuing this tradition and cementing our role as a science superpower. That is why our manifesto committed to creating a new funding agency, focused on high-risk, high-reward research. I am pleased to update the House that we will be fulfilling this commitment through a new Advanced Research and Invention Agency (ARIA), and we will also be introducing a Bill as soon as parliamentary time allows to create this body.

ARIA will have the sole focus to fund ground-breaking research—research that sparks transformational societal change through the creation of new technologies and new industries.

With £800 million committed to ARIA up to 2024-25, ARIA will form a central part of delivering on our R&D road map, published in July 2020, to ensure the UK is the best place for scientists, researchers, and entrepreneurs to live and work, while helping to power up the UK’s economic and social recovery.

As we have developed ARIA, we have sought best practice from international partners. Success stories include DARPA in the US, whose predecessor, ARPA, was instrumental in creating transformational technologies like the internet and GPS. More recently, DARPA has been behind precursors to technologies such as Apple’s SIRI.

We have also listened to the scientific community about how these models can best be adapted for the UK to enhance our R&D offer. This includes ensuring ARIA complements existing funders and makes a distinct contribution to the wider R&D landscape. To this end, ARIA will have a bespoke purpose and structure, and will work in partnership with UKRI and across the ecosystem.

ARIA’s key features will be:

A singular focus on high-risk, high reward research funding. ARIA will provide support for transformational, long-term science and technology. ARIA will not be restricted in whether it funds pure science, applied science, or technological development—in fact, often it will do aspects of each within a single programme.

A high tolerance for risk and failure. Failure is part of the scientific process, and particularly central to finding the technological breakthroughs that have the potential to create the industries and jobs of the future. ARIA will not shy away from high risk, in the pursuit of high rewards.

Minimal bureaucracy. The recent approach to covid-19 rapid response funds and the vaccine taskforce has led to a cultural shift around funding and decision making, towards a more lean and agile system, and ARIA will continue this trend. It will have an innovative approach to funding, with the ability to use mechanisms such as seed grants and prizes to ensure the best support for the best ideas. ARIA’s programme managers will be able to pull in scientists on projects within in a matter of weeks.

To empower exceptional talent. ARIA will be run by exceptional scientists who have the expertise to identify the most exciting and ground-breaking research to invest in. Government will invest in these exceptional individuals, empowering them to use their expertise to identify what research to back rather than providing a research focus for the organisation, and giving them the freedom to start and stop projects quickly and redirect funding efficiently.

Alongside the Bill, we will recruit a visionary CEO and experienced chair. They will develop ARIA by setting the agenda, shaping the culture, and building an exceptional team for the agency.

ARIA will further diversify our rich and dynamic R&D system, taking us to the next level of scientific and technological advances. Its successes stand to have an impact on how we fund R&D in the future, and ensure we maintain our outstanding global reputation for innovation and discovery.

[HCWS787]

Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 9th February 2021 Commons Chamber

[Mr Speaker]

I call the Secretary of State—and congratulations.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

Thank you very much, Mr Speaker.

We announced at the spending review an investment of £14.6 billion in R&D for 2021-22. This will no doubt cement our status as a science superpower here in the UK. We are taking forward the ambitious commitments in the R&D road map, which was published only last year, and we are of course continuing co-operation with the EU through association with the Horizon Europe programme.

[Jack Lopresti [V]]

Apprentices have played a key role throughout this pandemic, including working on the Oxford-AstraZeneca vaccine, which is helping the country overcome this virus. Can my right hon. Friend confirm that, in National Apprenticeship Week, he will be working with and encouraging more R&D-based businesses to provide apprenticeship opportunities so that more young people can gain the skills they need to progress in this field?

[Kwasi Kwarteng]

Absolutely. I thank my hon. Friend for the great work he is doing as co-chair of the all-party parliamentary group on apprenticeships. He will know that apprenticeships are a key part of this Government’s plan for jobs as we build back better from the pandemic, and that is why we are offering employers cash payments of up to £2,000 when they hire a new apprentice, until 31 March this year.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]]

We are all grateful to Britain’s world-leading scientists for blazing a trail of hope in this terrible pandemic, but how are Government protecting science’s future? Medical charity research is predicted to fall by over £4 billion after Government refused support. University research has only been offered loans to cover losses from international students, while 90% of UK researchers are excluded from support, even though the virus prevents them from finishing their research. Postgraduate research students from the nine doctoral training programmes have written to demand action, given the escalating scale of the crisis, and there is a massive reduction in funding for early career researchers. Why are Government not protecting the future of the science that is protecting us?

[Kwasi Kwarteng]

The hon. Lady seems to be living in a parallel universe. If we look at the vaccine roll-out—we have seen 12.3 million, or nearly 12.3 million, people vaccinated as of this morning—we can see that the strength of the UK science base is really impressive. It is looked on throughout the world as something to aspire to. We are a world-leading science power—a science superpower. I have already mentioned the £14.6 billion that we have committed to R&D, and this is an area where we are confident and world-beating.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

What assessment his Department has made of the effect of the closure of post offices operated by CJ Lang & Son Ltd on the post office network in Scotland.

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[Patrick Grady (Glasgow North) (SNP)]

What discussions he has had with the Chancellor of the Exchequer on increasing support to businesses affected by the covid-19 outbreak.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

It is well known that we spent over £280 billion on an unprecedented package of support for businesses, including the job retention scheme, support grants and Government-backed loans. I speak regularly with my right hon. Friend the Chancellor of the Exchequer on all the support measures available for businesses, including in the next stage when we try to lead and help them through the pandemic and towards recovery.

[Jason McCartney [V]]

Hundreds of my local hospitality businesses are extremely grateful for the Government support grants they have received. As the success of the vaccine roll-out allows those businesses to start planning reopening, will my right hon. Friend continue to speak with the Chancellor about helping hospitality businesses, including the wedding industry, as they get back on their feet, perhaps by extending help with VAT and business rates?

[Kwasi Kwarteng]

As my hon. Friend knows, we speak all the time not only to my right hon. Friend the Chancellor of the Exchequer but to the sector; indeed, ministerial colleagues spoke to the sector just yesterday and I have dipped in on roundtables as well. We are very concerned about this; we fully recognise the great efforts my hon. Friend is making on behalf of his constituents, but we are in regular contact with our colleagues in the Treasury.

[David Linden]

Almost 24,000 retail, hospitality and leisure businesses in Scotland are currently supported by 100% rates relief. That support has been extended until the end of July, but the Scottish Government want to go further and Scottish businesses need us to go further. However, due to borrowing constraints placed on Scotland’s Parliament, the funding necessary to extend further can only come from the UK Government, so does the Secretary of State agree that his Government should step up and fund this relief for another year?

[Kwasi Kwarteng]

What I do agree with is the fact that we have extended an unprecedented range of support and measures. I am in regular contact with my right hon. Friend the Chancellor; he has taken a nimble approach, and I look forward to engaging with him on what further support we can supply.

[Selaine Saxby [V]]

The hospitality supply chain has remained open despite a significant loss of earnings to continue supplying the NHS and schools that have to be open. Here in North Devon, Philip Dennis and Savona delivered to people’s homes and operated pop-up click and collect venues when many vulnerable households struggled for supermarkets slots. However, these companies are not eligible for the same support as the hospitality businesses they normally service; will my right hon. Friend ensure that they have the support they need so they are still trading when our hospitality sector reopens?

[Kwasi Kwarteng]

As my hon. Friend knows, in January the Chancellor announced an additional £500 million in grant funding to local authorities for the additional restrictions; this discretionary funding enables local authorities to support businesses, including, as she pointed out, those in supply chains that have been adversely impacted by restrictions but are ineligible for other measures. This funding comes on top of the £1.1 billion allocated in November 2020.

[Allan Dorans [V]]

If the furlough scheme is not extended beyond April, Scotland, like the rest of the UK, will face mass unemployment, with the consequent damage to businesses, communities, families and the mental health of hundreds of thousands of people. Will the Secretary of State therefore urge the Chancellor to take urgent action to ensure that this is avoided by extending furlough?

[Kwasi Kwarteng]

I am absolutely mindful of the immense pressures our businesses right across the UK are suffering under at the moment. I am in regular contact with my right hon. Friend the Chancellor, who has acted in an unprecedented way; as I have said, he has put £280 billion into the economy to help our struggling businesses. But of course we are looking at the situation as it evolves, and we are very keen to help our economy through this.

[Joy Morrissey [V]]

May I congratulate my right hon. Friend again on his new position and on behalf of the 3,700 businesses across Beaconsfield that have benefited from the £200 million-worth of Government-backed loans since the start of the pandemic? Will he join me in paying tribute to Buckinghamshire Council for its excellent work in ensuring that businesses are supported during the pandemic, and confirm that he will continue to offer all the support he can to protect jobs and keep businesses afloat so that we can look to not only restart our economy but build back better from the pandemic?

[Kwasi Kwarteng]

Throughout this crisis, as I am sure my hon. Friend is aware, the Government have stood by businesses, as she mentioned, and worked tirelessly to protect people’s jobs and livelihoods across the entirety of our country. As we emerge from the pandemic, we will ensure that we seize the initiative, as she put it, to build back better, greener and faster from this pandemic.

[Patrick Grady]

Does the Secretary of State not accept that, if people who are excluded from support packages are forced to wind up their businesses and move to universal credit or social security, that is more costly to the Government and damaging to the economy in the long run? Surely it is better to bring the excluded in from the cold now than to pay the long-term costs of exclusion in the future.

[Kwasi Kwarteng]

I fully appreciate—this is our key message as a Government—that jobs and employment are a No. 1 priority. That is exactly why my right hon. Friend the Chancellor extended the furlough scheme. I am in constant conversation with him about how better to provide support for our economy under this distress.

[Edward Miliband (Doncaster North) (Lab)]

Businesses are facing a £50 billion bombshell in less than two months as Government support packages are due to end, and there is still no clarity about the future. The Secretary of State must realise that the Budget is too late. Businesses are making decisions now about their future and that of their workers. The CBI director general said a week ago:

“Businesses are currently completely in the dark when planning for the weeks and months ahead and this is hindering investment.”

The Secretary of State’s job is to stand up for our businesses, so can he explain to them why, yet again, they are being left completely in the dark?

[Kwasi Kwarteng]

What I will explain is the fact that, in four weeks in the job, I have seen 200 business leaders. I meet the BROs—the business representative organisations —constantly, and I am in constant dialogue with them to ensure that the Government provide the support. We have provided £280 billion so far, which is beyond any precedent that we have seen. We are in constant conversation not only with our stakeholders but with the Chancellor of the Exchequer.

[Edward Miliband]

Excuses are no substitute for a plan. Businesses need clarity and certainty, and they are not getting it from the Government. Let me turn to another critical issue facing them. We want them to succeed in our new trading relationship with the EU, but according to Make UK, 60% of manufacturers are experiencing disruption, the fashion industry says it faces “decimation”, and hauliers are warning of a permanent reduction in trade. What personal, tangible action is the Business Secretary taking to get a grip and deal with the mountains of red tape now facing our businesses?

[Kwasi Kwarteng]

Of course, Mr Speaker, you will remember that, ahead of the Brexit deal, we were told that there was never going to be a deal and that we were going to crash out with no deal. We were told all sorts of scare stories about what would happen with Brexit. I fully accept that there are issues on the border, and I fully accept that many of the business leaders I have spoken to have raised issues, but I think the situation is far better with a deal—ask Nissan in Sunderland—than was the case, certainly, only three months ago.

[Stephen Flynn (Aberdeen South) (SNP) [V]]

I have been listening closely, and so far the Secretary of State has failed to give a long-term commitment to the furlough scheme, he has failed to provide any certainty whatsoever on business rates, and he has failed to back support for the excluded. As was just referred to, businesses are not just dealing with the damage caused by the pandemic; they are also facing the chaos of Brexit. Exports from the UK to the EU are reportedly down by 68%, and just 10,000 out of 50,000 customs agents are in place. Can the Secretary of State confirm just how bad things need to be before his Government set aside their dogma and instead ask the EU for a grace period in order to protect Scottish businesses?

[Kwasi Kwarteng]

I remind the hon. Gentleman that the Brexit debate is over; he, for his own purposes, wants to rekindle this. The business leaders I have spoken to have been extremely grateful for the fact that we got a deal, which he and others opposed—they also predicted that we would not get one. We are moving forward with an active plan and active engagement with the economy. Some £280 billion has been proffered so far. That is a picture that he fails to recognise.

[Stephen Flynn]

It is probably helpful to advise the Secretary of State that in Scotland the Brexit debate is far from over—in fact, we are just getting started. But I will take it from his answer that there will not be any grace period for Scottish businesses. However, there is one area where I hope he can provide some positive news: in relation to the North sea transition deal. The perfect storm of the pandemic and price crashes has seen 12,000 jobs associated with the North sea go already—and sadly, more are expected to follow. Can the Secretary of State confirm that he still expects the deal to be signed by the end of March, as his predecessor stated in the House? Will he agree to meet me and my colleagues in the city to discuss this hugely important matter?

[Kwasi Kwarteng]

The hon. Gentleman is quite right. He will be courteous enough to acknowledge that, as Energy Minister, I was directly involved in the conversations ahead of the North sea transition deal. I was very much in favour of bringing forward the completion of the deal. I am hopeful that we can manage to reach a really good deal, in which the sector accepts the need for decarbonisation very quickly.

[Christine Jardine (Edinburgh West) (LD) [V]]

The UK is a key player in supporting the research happening in developing countries that will be essential to putting an end to the pandemic and allowing our businesses to recover. Is the Secretary of State aware of the devastating blow that overseas development aid cuts will be to businesses and could be to our position as a global science leader, sending a message that the UK is not a reliable partner in long-term science advancement and business across the world?

[Kwasi Kwarteng]

I do not accept that any change in overseas development aid money will undermine our position as a global science superpower. As I said earlier, the science community around the world has been extremely impressed with how we are proceeding with the vaccine roll-out and the great innovation that takes place in this country.

[Rachel Hopkins (Luton South) (Lab)]

What steps his Department is taking to support the hospitality industry during the covid-19 outbreak.

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

What recent discussions he has had with representatives of the automotive sector on the adequacy of Government fiscal support for that sector.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

Since becoming Secretary of State, I have met a number of representatives of our highly successful automotive sector to discuss future opportunities for the UK and to emphasise our Government’s commitment to the continued growth of the sector.

[Justin Madders]

As the Secretary of State will know, a decision is due soon on whether a new vehicle will be built at Vauxhall Motors in Ellesmere Port. Does he agree that if the Government are truly ambitious about investment in the post-Brexit world, securing green growth and the levelling-up agenda, they will do everything in their power to make sure that we get the right decision for the Ellesmere Port plant?

[Kwasi Kwarteng]

I recognise the importance of the Ellesmere Port plant locally and fully appreciate the work that the hon. Gentleman has done to keep it open. I want to see its future secured. We are committed to ensuring that the UK continues to be one of the best global locations for automotive manufacturing. I am happy to meet the hon. Gentleman, should he wish, and I have met representatives from Vauxhall as well.

[Mrs Pauline Latham (Mid Derbyshire) (Con)]

What steps his Department is taking to help businesses support victims of domestic abuse.

--- Later in debate ---

[Saqib Bhatti (Meriden) (Con)]

If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

In my first four weeks as Secretary of State, I have met with more than 100 businesses —virtually, of course—up and down the country. I have been hugely impressed by the positivity, determination and sheer grit that our businesses have shown in spite of the immense challenges they are facing. I am pleased that we can now offer lateral flow testing to businesses with 50 or more employees, providing new support to small and medium-sized enterprises across the UK. As we have seen with the vaccine roll-out, it is thanks to our brilliant scientists and our brilliant science base that more than 12 million people have now received their first dose of a covid vaccine.

[Saqib Bhatti [V]]

In recent years, the Greater Birmingham and Solihull area has seen the setting up of the highest number of start-ups in the country outside London. Will my right hon. Friend set out his plans to support start-ups in my constituency of Meriden, so that they can continue to set up, thrive and survive after covid?

[Kwasi Kwarteng]

My hon. Friend is utterly committed to supporting growth and entrepreneurship in his area. I am fully aware that he was a director of business support for four years for the Greater Birmingham and Solihull local enterprise partnership. He will know that our Government continue to back growth and recovery across the UK. I think, in his own constituency of Meriden, we have done this through £90.9 million of covid loan scheme support.

[Lucy Powell (Manchester Central) (Lab/Co-op) [V]]

Well, I have listened to the Secretary of State’s answers so far, and I am afraid that he is all mouth and no trousers. Let’s try again, shall we? Businesses face a £50 billion bombshell in April, yet many in hospitality, retail and services will not even be open by then. Councils are sending out business rates bills as we speak and difficult decisions are being made now. Does the Minister agree personally with Labour’s plan to extend the business rates holiday for at least six months as well as the furlough while public health measures remain, in order to deal with this bombshell before it blows a big hole in our economy?

[Darren Henry (Broxtowe) (Con)]

With local authorities such as that in Broxtowe responsible for distributing grants to struggling businesses, will my hon. Friend tell me what flexibility can be provided to allow grants underspent in one area of business support to be used for support in other areas?

[Kwasi Kwarteng]

Local authorities, as my hon. Friend knows, receive funding to support closed businesses through grants of up to £3,000 for each four-week period of closure. In addition, closed businesses can receive up to an extra £9,000 as a one-off payment for the current period of national lockdown. Local authorities, as I am sure he is aware, are also in receipt of discretionary funding, sharing £1.6 billion of the additional restrictions grant.

[Dan Carden (Liverpool, Walton) (Lab)]

British Gas engineers and staff are key workers who, in addition to their responsibilities heating people’s homes, have been delivering food and essentials during the pandemic. Ministers have said that fire and rehire is unacceptable, so will the Secretary of State call on Centrica and Mr O’Shea to stop the bullying tactics of trying to force new contracts on to their workers cutting pay, terms and conditions, and ask them to get round the negotiating table with the union, GMB?

[Kwasi Kwarteng]

I am very pleased to announce that I and my ministerial colleagues have stated again and again that fire and rehire is completely unacceptable. I was in regular contact with British Gas—Centrica, as it is now called—as Energy Minister, and I have impressed upon it the need to engage with its workforce and treat them with utter integrity and fairness.

[Andrea Leadsom (South Northamptonshire) (Con)]

May I start by congratulating my right hon. Friend on his new job? I very much enjoyed working with him in what is now his Department, and I wish him well. I have constituents who run a very successful hotel business. They have appreciated all the support given to them by the Government, but they recognise that they are still using every last penny of their reserves to keep their golf course maintained, keep the swimming pool clean and keep the place secure, and they have no income. So can my right hon. Friend tell me, when they ask their bank, as they have, to provide them with rolled-over quarterly interest and the bank says, “We’ll do it, but we need to put you under forbearance”, is that a regulatory requirement or is it the bank making it even more difficult for them to recover once lockdown ends?

[Kwasi Kwarteng]

I am very pleased to be responding to my right hon. Friend. I very much enjoyed working with her in the Department and I am pleased that she is taking such an interest in our activities. In answer to her question, I would suggest that this is about policy, not regulation. The Government expect lenders to be constructive in their dealings with businesses in difficulty. I am glad to hear that in this instance her constituents are getting the support that they need from the bank, but bank regulations on forbearance are a matter for the independent Financial Conduct Authority.

[John Spellar (Warley) (Lab)]

When asset-stripper Melrose was allowed to take over GKN, the then Secretary of State said that Melrose had to honour its commitments to stay UK-based. Now that it has torn that up with its disgraceful behaviour and decision to close Birmingham’s GKN Driveline, with the loss of 500 skilled engineering jobs, what is the Secretary of State going to do about it?

[Kwasi Kwarteng]

As the right hon. Gentleman well knows, my door is always open, and I am very happy to meet him to discuss this issue. I recall that when my right hon. Friend the Member for Tunbridge Wells (Greg Clark) was in my place, it was a very delicate situation, but I am happy to discuss with the right hon. Gentleman ideas on how we can ameliorate it.

[Kevin Hollinrake (Thirsk and Malton) (Con) [V]]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. In my parliamentary work I have seen a number of examples of council landlords being unreasonable with tenants who are facing eviction or, potentially, insolvency when the right of forfeiture is restored on 31 March. Will my right hon. Friend set out his plans for this, but also send a message to local authorities that they should set a good example when it comes to helping businesses through this crisis?

[Carol Monaghan (Glasgow North West) (SNP) [V]]

Since the US imposed tariffs on single malt whisky, the loss of exports has cost the industry more than £500 million. Will the Secretary of State detail the discussions that have taken place with the new Administration and update the House on the progress of those talks?

[Kwasi Kwarteng]

The hon. Lady is absolutely right: we have to look after the interests of our whisky exporters. It is a key interest. I have spoken to Karen Betts I think twice in my first month precisely on that issue, and I am very hopeful that we can get it resolved.

[Marco Longhi (Dudley North) (Con) [V]]

  Vaccinating our most vulnerable first, and as quickly as possible, is clearly the right strategy. My wife and I volunteered throughout the weekend and witnessed an amazing effort at the Black Country Living Museum, but does my right hon. Friend agree that having secured 400 million doses nationally puts us in a strong position to save the most lives and will, with workplace testing, save our economy from a longer recovery period?

[Kwasi Kwarteng]

Dare I say it, that was an excellent question, which goes to the heart of what this whole period has taught us. The fact that we managed to procure, develop and distribute so many vaccines has been a great story for not only our science base, but UK innovation. I am sure that it will be studied in years, even decades, to come. Finally, my hon. Friend is absolutely right to say that the surest way of helping our businesses is to ensure that we can reopen our economy in a safe way.

[Julie Elliott (Sunderland Central) (Lab) [V]]

Hand hygiene and mask wearing are most effective when accompanied by surface disinfection, especially in shared work spaces. Recent changes to the Health and Safety Executive guidance are welcome, but the Secretary of State’s Department’s guidance needs to be radically updated to provide specific guidance on the EN standard of disinfectants needed, and on the frequency of surface disinfection. Can he commit to doing that as a matter of urgency?

[Caroline Ansell (Eastbourne) (Con) [V]]

The Government have provided life support to the hospitality sector, but my hoteliers are flagging that we are moving into a potential perfect storm of deferred payments coming into focus and the support scheme set to close. The weekend’s announcement on bounce-back loans has been met with huge relief in my constituency for the 1,800 businesses that are in that place. I ask the Minister to look also at extending the 5% VAT rate, furlough and the business rates holiday, so that the hospitality sector in my constituency of Eastbourne, and across the country, can come back all the stronger.

[Kwasi Kwarteng]

My hon. Friend is right, and I fully appreciate how key the hospitality sector is to her constituency of Eastbourne, which I have visited many times, even before I was elected to this place. The Government have introduced pay as you go measures, as I am sure she is aware, which give borrowers flexibility when repaying their bounce-back loans. In terms of the other measures that she mentions, I am in constant dialogue with the Chancellor. We are looking at the economy and the situation as it evolves daily—minute by minute, almost—and we hope that we can provide the flexible support that we have in the last year.

[Dan Jarvis (Barnsley Central) (Lab) [V]]

Here in South Yorkshire, we used the local growth fund to create 2,800 jobs and attract £92 million of investment from world-leading businesses such as Boeing and McLaren. Now that funding has ended, will the Secretary of State work with us on our plan to create 6,000 new jobs and attract £600 million of investment over the next two years? [R]

[Kwasi Kwarteng]

I am absolutely open and prepared to work with the hon. Member. I have visited him in my capacity as Under-Secretary of State in the Department for Exiting the European Union. I think we also met when I was Minister of State. I am very happy to work with him and discuss his ideas about regeneration and growth.

[Jeff Smith (Manchester, Withington) (Lab) [V]]

The Climate Change Committee says that the UK’s contribution to international aviation and shipping emissions should be included in our carbon budgets. As hosts of COP 26 later this year, would this not be a good time to set an example to the international community by doing so?

[Kwasi Kwarteng]

I am absolutely aware of that issue. It is almost inevitable that we will be asked by the CCC to include those contributions in our budgets. As COP26 hosts, we will obviously want to hold ourselves to the highest standards, in terms of carbon emissions.

[Mr Speaker]

I am suspending the House for a few minutes to enable the necessary arrangements for the next business to be made.

Subsidy Control: Designing a New Approach for the UK

Kwasi Kwarteng Excerpts

Wednesday 3rd February 2021 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

The Government are today publishing a consultation on “Subsidy control—Designing a new approach for the UK”. The consultation period will last for eight weeks.

Now that we have left the EU, the UK has the freedom to design our own subsidy control regime that is tailored to the UK’s national interests. The new system, which will be the long-term replacement for the EU’s prescriptive state aid regime, will be designed to be more flexible, agile and tailored to support business growth and innovation as well as maintain a competitive market economy and protect the UK internal market. It will better enable the Government to deliver on key priorities such as levelling up economic growth in the regions, tackling climate change, as well as supporting our economic recovery as we build back better from the covid-19 pandemic.

Unlike the EU’s state aid rules, which were designed for the particular circumstances of the EU, our own bespoke regime should work for the specific needs of the UK economy whilst also meeting our international commitments. Under the proposed UK system, local authorities, public bodies and the devolved Administrations in Edinburgh, Cardiff and Belfast will be empowered to design taxpayer subsidies by following a set of UK-wide principles. These principles will ensure subsidies are designed to deliver strong benefits and good value for money for the UK taxpayer, while being awarded in a timely and effective way.

This consultation invites views from businesses, civil society, think tanks, academics, public authorities, and the devolved Administrations to ensure our new approach works for the UK economy and supports businesses and jobs in every part of the country. The Government are seeking views on any additions to the subsidy control principles that will underpin the regime, the appropriate role for an independent body within the new system and how best to ensure that subsidies deliver strong benefits, while minimising the risk from potentially harmful and distortive subsidies.

Subject to the outcomes of this consultation, the Government will bring forward primary legislation to establish in domestic law a system of subsidy control that works throughout the UK.

I will place copies of the consultation in the Libraries of both Houses, and it can also be found on gov.uk.

[HCWS754]

Employment Rights: Government Plans

Kwasi Kwarteng Excerpts

Monday 25th January 2021 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I just want to make something very clear and unequivocal at the outset: we will not reduce workers’ rights. There is no Government plan to reduce workers’ rights. As the new Secretary of State, I have been extremely clear that I do not want to diminish workers’ rights, and on my watch there will be no reduction in workers’ rights. I do not want there to be any doubt about my or the Government’s intentions in this area. The hon. Member for Middlesbrough (Andy McDonald) and the right hon. Member for Doncaster North (Edward Miliband) were kind enough to send me a letter in my first week in the job asking for reassurances on this matter. I am happy to report that I have provided those reassurances, and I am very willing to provide them every time.

We will not row back on the 48-hour weekly working limit derived from the working time directive. We will not reduce the UK annual leave entitlement, which is already much more generous than the EU minimum standard. We will not row back on legal rights to breaks at work. I will say it again: there is no Government plan to reduce workers’ rights.

The Government have managed to have a record that is unimpeachable on this subject. Our manifesto promised, among other things, to get Brexit done and to maintain the existing level of protections for workers provided by our laws and regulations. We have delivered Brexit, and we will not use this new-found freedom to reduce workers’ rights. In any case, as the hon. Member for Middlesbrough said, our higher standards were never dependent on our membership of the EU. The UK has one of the best employment rights records in the world. It is well known that in many areas the UK goes further than the EU on workers’ protections. We have one of the highest minimum wages in the world, and the Government are increasing this again for workers on 1 April, but in the EU there is no requirement to offer a minimum wage or sick pay. In the UK, people get over five weeks of annual leave, minimum; the EU requires only four weeks. In the UK, people get a year of maternity leave; the EU minimum is just 14 weeks. The EU has only just agreed rights to flexible working, over 15 years behind the UK. The Opposition are simply wrong to hold the EU up as the gold standard. Our equalities legislation, and our maternity and paternity entitlements, are already considerably better than the EU’s. Now we have left the EU, our Government and Parliament are able to decide what rules should apply and make improvements where we believe there is a need to do so.

[Stephen Doughty]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress because lots of people want to speak in this debate.

We have already set out plans to make workplaces fairer. Our manifesto contains commitments to create a new single enforcement body for labour market abuses to give greater protections for workers, as well as plans to encourage greater flexible working. It is totally disingenuous for Labour to claim that we do not stand on the side of workers when our manifesto clearly says the direct opposite.

We will not take lectures on employment rights from Labour, because, as I said, our track record speaks for itself. It was a Conservative-led Government who introduced shared parental leave and pay in 2014, giving parents flexibility in who takes time away from work in the first year of their child’s life. It was a Conservative Government who introduced the national living wage in 2016, giving the lowest-paid workers the security of a higher wage to provide for themselves and their families. Ten years of progressive Conservative reforms pushed unemployment to a 45-year low. Before coronavirus hit, our employment rate was at a record high, with over 33 million people in work. By March last year, workers across the UK had enjoyed 26 consecutive months of real pay increases, and women and workers from black, Asian and minority ethnic backgrounds made up a larger proportion of the workforce than ever before.

[Stephen Doughty]

On fire and rehire specifically, will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress.

I know at first hand through my work as Energy Minister the importance of making sure that we have a high-wage, high-protection, high-skilled labour market to ensure that we can deliver the net zero transition and seize the opportunities of the green industrial revolution. The times have moved on. We have a new net zero focus, and clearly high wages and high skills are really at the centre of what we are trying to do as a Government.

That will be more crucial than ever as we rebuild our economy from the devastating impact of coronavirus. From the outset, the Government have acted decisively to provide an unprecedented package of support to protect our workers’ and our people’s livelihoods. The coronavirus job retention scheme, the first intervention of its kind in UK history, delivers countrywide support to protect millions of British workers. The scheme has helped 1.2 million employers across the UK to furlough 9.9 million jobs and has now been extended until April 2021.

Enforcement bodies are continuing to protect vulnerable workers and to work with businesses to promote compliance throughout the epidemic. We are concerned about reports suggesting that threats about firing and rehiring are being used as a negotiating tactic. We have been clear—

[Stephen Doughty]

The Secretary of State is speaking about fire and rehire, and his colleague the Chief Secretary to the Treasury told me that those tactics were completely unacceptable. Does the Secretary of State agree with those comments and does he share my concern? In September of last year, I met the chief executive of British Gas about that specific dispute and he tried to suggest that they were not using those tactics, despite having written to members in July to do just that. Does the Secretary of State agree that that is completely unacceptable in our labour market?

[Kwasi Kwarteng]

I think it is unacceptable. I will go further—as a constituency MP, I have a large number of constituents in Spelthorne who work for British Airways and I spoke directly to the old CEO, Alex Cruz, who has since left the company, and made exactly the points that the hon. Gentleman has just made to me. It is not acceptable.

[Andy McDonald]

I am grateful to the Secretary of State for his unequivocal indication that he condemns this practice. If that is so, will he legislate to outlaw it once and for all? We will support him if he does.

[Kwasi Kwarteng]

As I was saying, we have been very clear that this practice is unacceptable and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), who is the Minister responsible for labour markets, has condemned the practice in the strongest terms on many occasions in this House. We have engaged ACAS to investigate the issue and it is already talking to business and employee representatives to gather evidence of how fire and rehire has been used. ACAS officials are expected to share their findings with my Department next month and we will fully consider the evidence that they supply.

The House should be left in no doubt that the Government will always continue to stand behind workers and stamp out unscrupulous practices where they occur. The Government have worked constructively with businesses and unions throughout the pandemic to ensure that our workers remain safe and we will continue to do so as the UK looks towards economic recovery. I am proud of the constructive relationship I had with trade unions in my former role as Minister of State for energy and I fully intend to continue in this vein as the newly appointed Business Secretary. I have already reached out to the union leaders and I spoke to the TUC general secretary, Frances O’Grady, only last week.

I want to conclude by reassuring employees across the country that we in Government continue to acknowledge the immense efforts our workers—our workforce, our people—have contributed to the effort against coronavirus. These are unprecedented times, and we fully understand the pressures that we are all labouring under. We will use the opportunities created by leaving the EU to build back better and maintain a world-leading position on employment rights. The House should be in no doubt that we are the party on the side of the hard-working people of this country.

[Justin Madders]

In his rather selective recollection of what the Government have done on workers’ rights over the past 10 years, the Secretary of State forgot to mention the reduction of consultation periods, the increase of qualifying periods for unfair dismissal and the introduction of employment tribunal fees. Will he mention those things, because they were certainly detrimental to working people in this country?

[Kwasi Kwarteng]

What I will mention is the introduction of the national living wage—[Interruption.] I will also mention the fact that we have doubled the personal allowance, which was at £6,450 when we came to office in 2010 and is now hitting £12,000. We take no lessons or lectures from the Labour party on helping the most vulnerable people in our society. This Government have a proud history of protecting and enhancing workers’ rights, and we are committed to making the UK absolutely the best place in the world to work.

Before I open the Floor to other Members for their contributions, I can confirm to you, Madam Deputy Speaker, that the amendment in the name of the Prime Minister will not be moved this evening.

[Madam Deputy Speaker (Dame Eleanor Laing)]

For the avoidance of doubt, the Secretary of State has not moved the selected amendment, as he has just said, and therefore the question before the House remains the question already proposed, as on the Order Paper. We now go to the Scottish National party spokesman, Drew Hendry.

UK Hydrogen Economy

Kwasi Kwarteng Excerpts

Thursday 17th December 2020 Westminster Hall

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

It is a real pleasure to conduct this debate with you in the Chair, Ms McDonagh. I am very pleased to be taking part. I am conscious that we have to revert back to my hon. Friend the Member for Rother Valley (Alexander Stafford) at the end, so I have only about eight minutes—that shows how full of content and well informed the speeches were. It is a real pleasure, as Energy Minister, to take part in a debate in the House of Commons with so many right hon. and hon. Members participating at such a high level. It is the House of Commons at its best.

We heard a range of opinion, but we broadly agree about the way forward and the potential dynamism of the hydrogen economy. I pay special tribute to my hon. Friend for the tireless, indefatigable way in which he pushes hydrogen at every opportunity. Even though my officials might not agree, I hope he continues to do so, because it is absolutely necessary for Members of this House to hold the Government to account. I am very happy to take part in these debates and express the Government’s point of view, share some of our thinking and respond to points that Members of the Opposition parties make.

The first thing I want to talk about is investment. One hears all the time about the German strategy—I have read the German strategy and the EU strategy this year. Ours will be different because we are looking at blue hydrogen, which the hon. Member for Southampton, Test (Dr Whitehead) alluded to, and green hydrogen. The EU and German strategies talk almost exclusively about the production of renewable hydrogen. We in this country, given our North sea heritage and the assets there, want to do both. Ours will be a very interesting strategy. It is the first ever hydrogen strategy that the Government have produced. When it is published in the first half of next year, I look forward to having more debates and answering more questions about it.

This has been an extremely busy time for the energy industry. The Government have had the Prime Minister’s 10-point plan, the second point of which was all about hydrogen. It outlined our ambition for a 5 GW capacity. Subsequent points in the 10-point plan referred to the use of renewables and decarbonised sources of fuel in jet propulsion and marine transport. A number of Members mentioned the role of hydrogen in transportation. It is absolutely right that we should be focusing on HGVs, for which it is particularly suited.

I can say to my hon. Friend the Member for Warrington South (Andy Carter) that I have been in a hydrogen car. I was not driving it—I was there in a ministerial capacity, so someone else was driving—but I look forward to taking that step in the imminent future.

My hon. Friend the Member for Rother Valley and the hon. Member for City of Chester (Christian Matheson) have done a great job in this debate of highlighting the strengths of the HyNet industrial cluster. Everyone has said, “Let there not be a beauty contest,” yet they have been very good at presenting the particular attractions of their areas. They have done a very good job on that. I am on the record as having pledged to visit HyNet, hopefully in the next few months. I have spoken to representatives of the cluster on Zoom and in various other forums, and they are doing a fantastic job in pushing this agenda.

On deployment, the hon. Member for Kilmarnock and Loudoun (Alan Brown) said that we should be going faster. We can always be going faster, and he is absolutely right to be holding the Government’s feet to the fire. We should seek to deploy a lot of these business and financial incentives earlier, and I am working closely with officials to do that. However, I cannot stress enough that the success of the hydrogen deployment will involve a substantial degree of private capital and private investment. If we look at the deployment—the success—in making the offshore wind industry in this country the biggest installed capacity of any country in the world, we see that the reason it happened was that something like £94 billion has been spent since 2010—the vast majority of which was private capital. It was not merely a function of the Government writing cheques; it was a function of the Government creating a framework and creating a CfD process, which private capital could participate in and spend and deploy the resources to develop the capacity. So I have to stress—it always comes up, and it is quite right for Opposition Members to push the Government on it—that ultimately the strength of the investment and the vast majority of the capital that will be deployed will come from private sources, which is a recipe for success.

I should mention the fact that we have hydrogen trials and that the Prime Minister announced in his 10-point plan that we want to see a hydrogen town. The hon. Member for Kilmarnock and Loudoun rightly raised the issue of the gas standards needing to catch up with the potential of hydrogen deployment. I have a conversation on that subject with colleagues in the Department of Health and Social Care on a regular basis, because ultimately that is their responsibility, given the health impact and the relevance to health and safety.

There are so many other points that I want to raise. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who is no longer in her place, made a very good point about how we should try to bring the public with us. Even today, there is not much knowledge or engagement from our constituents or from people across the country with regard to hydrogen issues. It is quite legitimately a job of Government to improve that situation. However, it is also the job of all of us as MPs to try to get that message out, because it is not simply the Government who have the platform—the bully pulpit. Each and every one of us here, as individual MPs, can also make the case.

[John Spellar]

RTFOs?

[Kwasi Kwarteng]

The right hon. Gentleman has wonderful timing; I was just coming to the points that he made. He made some very good points, particularly—if I may say so—about town gas. He is quite right, and the hon. Member for Southampton, Test made this point as well, that the transition from town gas to natural gas that happened in the 1960s and 1970s was a whole-country endeavour. He is also right to point out, as I think the hon. Member for Southampton, Test also did, that town gas was largely composed of hydrogen. So in a way, having hydrogen in the gas network is not so novel an idea; it has happened before. Of course it was a much dirtier gas then, but hydrogen as the basis of a heating system is something that we can certainly achieve.

The last thing I will say before I conclude—

[John Spellar]

RTFOs?

[Kwasi Kwarteng]

We can discuss that issue at another time; I am afraid that I am limited by time constraints today.

The last thing that I will say in conclusion is that this is not a beauty contest; there is huge opportunity for every part of the country to benefit from the hydrogen revolution. I look forward to speaking to right hon. and hon. Members about how we can best deploy capital in the levelling-up agenda. The fact that HyNet is represented by Members on both sides of the aisle, and also other areas, is a really good sign. We can work together to bring about the hydrogen revolution.

Border Carbon Adjustment Tariffs and Decarbonisation

Kwasi Kwarteng Excerpts

Wednesday 16th December 2020 Commons Chamber

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

My hon. Friend the Member for Broadland (Jerome Mayhew) gave a compelling and fascinating speech. He elucidated many of the technical difficulties associated with imposing unilaterally, as he was arguing, a carbon border tax. My hon. Friend the Member for South Cambridgeshire (Anthony Browne) hit the nail on the head when he asked, “Should we do this unilaterally?” I am going to start by saying that, in my view and in the Government’s view, this is an important subject but it has to be treated as part of a multilateral effort. We are responsible for 1% of carbon emissions globally, and if we impose a tax unilaterally on carbon-emitting products coming into this country, we may well be disadvantaging our own consumers if others around the world are not placing such a tax. The Government feel that multilateral co-operation in this regard is by far the best way to prevent carbon leakage.

Another thing I would say to my hon. Friend is that by focusing on carbon emissions, he is really discussing the thorny issue of carbon accounting. Ultimately, the intellectual difficulty of accounting for carbon is the broader problem of whether the carbon is produced abroad or at home. In that respect, I would like to refer him to what my right hon. Friend the Chancellor of the Exchequer said in his announcement in this Chamber a little more than a month ago. I am proud that he announced that the UK would become the first G20 country to make Taskforce on Climate-related Financial Disclosures-aligned climate-related financial disclosures fully mandatory across the economy.

I am not saying that my hon. Friend said this, but I do not think it is right to say that we are somehow laggards on the issue of carbon accounting. In fact, I would say that we are taking a leadership role on this subject. He alluded to the fact that the EU is looking at how it can implement a carbon import regime with a tax on carbon-emitting products coming into the EU, and we are absolutely engaged with the EU in discussing that. We feel that that is part of the multilateral approach.

If my hon. Friend takes a broad view of this subject internationally, he will see that 2020 has seen far greater progress than any previous year. Only a couple of months ago the Chinese Government pledged to achieve a net zero carbon target in 2060, and that is incredibly significant. I remember when I was first appointed to this job, someone said to me that what we did in the United Kingdom would make no difference if China continued along its present path. I am pleased to say that China has changed its path and said very clearly that it has set a net zero target for 2060. The Japanese followed suit soon afterwards, adopting our target of 2050, as did the South Koreans. So the auspices for international co-operation on the measure that my hon. Friend has described are actually very good, and there is a chance that if we cannot reach an agreement at COP26 next November, we may well be advancing along the lines that he suggests in the not-too-distant future. I have to stress that multilateral co-operation on how we price carbon and how we account for carbon in the round is far more constructive than placing a unilateral tax in the way that he has described.

One thing I would say about the figures that my hon. Friend very ably quoted in regard to the benefit to the Treasury is that there would obviously be behavioural impacts, so it would be difficult for me to model the consumer demand for products that had been taxed in the way that he has described. I would be interested to have a conversation with him about the assumptions behind the analysis that he very ably referred to in his excellent speech.

[Sir Bernard Jenkin]

My right hon. Friend has said something that I regard as significant. Yes, we are going to try to achieve a multilateral approach at COP26, but if we do not succeed, we will consider a more unilateral approach. I am bound to say at this particular juncture, when the term “level playing field” is so commonly spoken about in respect of a certain negotiation, that it would surely be a distortion of international competition for some countries to be doing their best to deal with climate change and for other countries to be exploiting those efforts. If that is not a distortion of genuine free trade, I do not know what is. I think that the unilateral approach is justified.

[Kwasi Kwarteng]

This is an interesting debate. My hon. Friend suggests that a unilateral approach, punishing other countries for not adopting the climate change agenda—that is effectively what we would be doing—might work. As I have had to say repeatedly, I think that a multilateral approach is the best way forward. There is an open debate about the effectiveness of a unilateral approach when every other country in the world would not be disadvantaging these products.

[Barry Gardiner]

Does the Minister recognise that at the moment, £10.5 billion of public money goes from the Treasury as subsidy to fossil fuels in this country? That is more than any other country in the EU, where the average is about £6.5 billion. Therefore, if we are to go down the route suggested by the hon. Member for Broadland (Jerome Mayhew) and his colleagues on the Government Benches, it is important that the UK shows good faith and does not punish other countries for what it is doing worse itself. To punish those countries for the carbon encapsulated in their industries while subsidising our own fossil fuel industries more than all the rest would seem rather ridiculous.

[Kwasi Kwarteng]

The hon. Gentleman makes a fair point. That is exactly what I was trying to say with regard to TCFD disclosures. We have to look at carbon accounting and carbon pricing in the round. It is a global market and we have to look at what we are doing on discouraging carbon-emitting behaviour in the wider context of international trade. That is a fair point.

[Barry Gardiner]

So will the Minister speak with the Chancellor about how we can reduce the subsidies to fossil fuels in this country—domestically—so that some of the innovative ideas that the hon. Member for Broadland (Jerome Mayhew) has put forward this evening might be taken forward with credibility? [Interruption.]

[Kwasi Kwarteng]

Sorry—I was just respectfully pointing out to my hon. Friend the Member for South Cambridgeshire that he cannot intervene on an intervention.

I am very happy to take up that point. Of course, I discuss with my right hon. Friend the Chancellor all the time how we can capture carbon accounting more effectively in order to pursue the goal that we all seek, which is a net zero world and certainly a net zero British economy.

[Sir Bernard Jenkin]

Will my right hon. Friend give way?

[Kwasi Kwarteng]

No, I have to make some progress.

Ahead of COP26, obviously, as the hon. Member for Brent North (Barry Gardiner) mentioned, we have to look at carbon accounting in the round, and we have to look at how we reduce incentives for carbon-emitting activity here in the UK and in the context of the imported carbon that we bring in from other countries. All these issues have to be addressed in the round.

What I wanted to say, and have said very clearly, is that we are actual leaders in this subject. We are actually driving ahead mandatory TCFD financial disclosures. There are no other countries in the G20 that have done that. We passed the net zero amendment to the Climate Change Act 2008 last year. Again, even though other countries have made public statements supporting that policy, they have yet to enshrine it in their in their legal codes. We are showing leadership. We intend fully to continue showing leadership and providing that sort of steer at COP26 in Glasgow.

[Jerome Mayhew]

The Minister has repeatedly said that the best way to proceed is by multilateral agreement, and I absolutely agree. It is wonderful that we have COP26 coming up next year, and it is the perfect opportunity to show multilateral leadership. Will the Minister therefore commit to the House that we will make border carbon adjustments a core objective of COP26?

[Kwasi Kwarteng]

It is not in my power to make that commitment to the House. As my hon. Friend knows, I am not the COP26 president, and I suggest that he directs that question to my right hon. Friend the Business, Energy and Industrial Strategy Secretary, who is the president of COP26. However, I can assure my hon. Friend that the issue is absolutely at the centre of the wider debate about climate change and of what I might call international energy diplomacy, and I am sure it will discussed very seriously at COP26 next year.

[Sir Bernard Jenkin]

I just want to put something on the record. The hon. Member for Brent North (Barry Gardiner) quoted a £10 billion subsidy figure for fossil fuels. Will the Minister confirm that the Government do not accept that figure? It is based on things such as the fact that we charge only 5% VAT on domestic fuel instead of 20%. It is typical of the EU to regard a low tax to help poorer households afford their fuel bills as a subsidy. One of the reasons we are leaving the EU is that it puts out rubbish propaganda such as that. We do not subsidise fossil fuels, and I hope the Minister will make that clear.

[Kwasi Kwarteng]

My hon. Friend is right. It is pretty extraordinary to say that we are somehow the laggards on this subject. When a country such as Germany is phasing out its coal dependency only in 2038, it is a bit extraordinary for Opposition Members to make that claim. We are very much the leaders in this arena, and my hon. Friend was quite right to point that out.

[Barry Gardiner]

rose—

[Kwasi Kwarteng]

I am not going to take any more interventions, I am afraid.

As my hon. Friend the Member for Broadland has ably demonstrated, this is a fascinating subject, and it will continue to exercise many minds and much passion. In fact, no more serious subject could be debated here, and I commend him for bringing it to our attention, for debating it in a very open and, dare I say, friendly way, and for giving one of the best speeches I have heard from the Back Benches this Parliament in terms of the thoroughness with which he presented his material and the passion with which he stated his arguments.

Question put and agreed to.

Business, Energy and Industrial Strategy

Kwasi Kwarteng Excerpts

Wednesday 16th December 2020 Ministerial Corrections

The following is an extract from a Westminster Hall debate on 19 November 2020.

[Kwasi Kwarteng]

The hon. Member for Greenwich and Woolwich (Matthew Pennycook) was good enough to mention the warm home discount, which was not referred to in any of the speeches by SNP Members. Of course, the warm home discount that he was good enough to mention is a critical part of the Government’s fight against fuel poverty. It provides financial assistance to more than 3 million low-income and vulnerable households each winter, and each one of those households benefits to the tune of £140 a year roughly, which represents £3.5 billion of public money and is a significant contribution.

[Official Report, 19 November 2020, Vol. 684, c. 233WH.]

Letter of correction from the Minister for Business, Energy and Clean Growth, the right hon. Member for Spelthorne (Kwasi Kwarteng):

An error has been identified in my response to the hon. Member for Greenwich and Woolwich (Matthew Pennycook).

The correct response should have been:

[Kwasi Kwarteng]

The hon. Member for Greenwich and Woolwich (Matthew Pennycook) was good enough to mention the warm home discount, which was not referred to in any of the speeches by SNP Members. Of course, the warm home discount that he was good enough to mention is a critical part of the Government’s fight against fuel poverty. It provides financial assistance to more than 2 million low-income and vulnerable households each winter, and each one of those households benefits to the tune of £140 a year roughly, which represents over £3 billion of direct assistance over the last 10 years and is a significant contribution.