GKN Automotive Plant: Birmingham

Lucy Powell Excerpts

Wednesday 28th April 2021 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Dame Angela. I add my congratulations to my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) on securing this extremely important debate on the future of GKN, a vital employer in his constituency, in a vital industry for the UK economy. He is a really energetic champion for the communities he serves, as I know very well first hand, and he gave a passionate and important speech, which set out perfectly the issues before us today and, crucially, the alternative to closure. We have heard some excellent speeches today that also made those points very clearly. I declare that I, too, am a member of Unite the union, which I will be mentioning in my speech today.

I want to express my solidarity with the workers at the plant in Erdington and in the supply chain who are at risk of losing their jobs. Yesterday, I met Frank Duffy, the Unite convener. Like so many others working at the plant, he has decades of service. The announcement of closure earlier this year came as a devastating blow to him and hundreds of families across the region who have given their lives to GKN over the decades.

I put on the record my deep and profound concern about the decision by Melrose; I hope very much that it will think again. The decision flies in the face of assurances Melrose gave to the House via the BEIS Committee only three years ago. I heard what the hon. Member for Rugby (Mark Pawsey) had to say, but I disagree. This is what is wrong with corporate law and public policy in this country; it is about so much more than simply shareholder return—it is about UK plc. I will explain that a little more.

Let us be in no doubt, as tragic as the proposed closure would be for workers such as Frank, this issue is about so much more than this important and historic plant in Erdington. What is happening here is a canary in the coalmine for UK manufacturing, automotive and decent jobs that level up. How the Government respond is a huge test. Its significance cannot be overstated.

What kind of Government are they? Are they one that actively supports and, where necessary, intervenes in British industry; one that has a real and meaningful plan to transition to a green new deal in key sectors such as automotive; one in which global Britain leads the way in the development and production of new electric technologies, providing decent, high-paid jobs for the future; and one for which levelling up is about a lot more than rhetoric and piecemeal pots of cash handed out on mates’ rates? Or are they a Government—which I fear the Business Secretary wants them to be—who are unashamedly free market and laissez-faire, one in which people, place and opportunity are the fall guys for globalisation and free-market forces?

Ministers might talk the talk of sharing prosperity in every part of the country, of a global Britain, of championing manufacturing and of greening our economy, but what actions they take here will show whether they are actually prepared to walk the walk as well. Be in no doubt at all that we are in a high-stakes global race for green jobs, the technologies and the production capacity, a race in which Britain is being massively outgunned and outmanoeuvred by other countries prepared to invest and intervene on an unprecedented scale to ensure that their domestic industries and workers reap the gains of that new drive.

The status quo does not exist, as the GKN situation shows. Either we fight hard to retain the capacity, the jobs and the opportunities, or they go elsewhere. Let us not forget that GKN is a British company, now proposing to offshore its last UK automotive manufacturing base, against the commitments made by Melrose at the time. Do the Government think that Germany, France or even the US would allow the move of one of their key industrial businesses? Not a chance. This is a key test of Conservative industrial strategy—if indeed they have one.

The Government’s actions so far suggest that they do not believe in an active industrial strategy. They scrapped the Industrial Strategy Council. Through covid, they have had an aversion to sector support, and we have seen a rebranded plan for growth that does not appear to create any growth. There can be no growth for communities in Erdington and beyond if Ministers do not press the company to change course and to invest rather than close the plant.

There is an alternative here, as we have heard so well during this debate. Unite and the workforce, with industry experts, have developed a compelling alternative to closure, which involves an improved productivity plan and a major shift to new products for electric vehicles for their main customers, Jaguar Land Rover and Toyota—which, by the way, lead the way in electric and hybrid vehicles. GKN’s only remaining automotive plant specialises in technologies that are critical to the development and expansion of UK vehicle production—here, just in time, domestically produced, which would not get tied up in rules of origin and the new red tape that we are seeing.

Surely it is a no-brainer for a Government committed to British industry, to British car manufacturing and to Britain leading the way in electric vehicles to do whatever it takes to retain that capacity here in the UK. Or do they stand by and watch it move to Poland and France? This is the real test for this Government, and I really hope that it is one that they will not fail. Will the Minister tell us today, will her Government do what it takes and put pressure on the company thoroughly to explore the alternative business plan, or does she think that that is not her role?

This is also a test of what kind of economy the Government want post Brexit. We were promised the freedom to support and intervene in British industry, outside the EU and free of the constraints of state aid rules. What is the point of that freedom if it is not used? We were promised an economy that could be at the forefront of seizing new opportunities, not one in which key assets were being offshored back to the EU. We have the EU trade deal, but there are clearly issues with rules of origin and the fact that the Government’s much boasted tariff-free trade is anything but, particularly for manufacturers caught up in a web of more red tape and bureaucracy. There is no doubt that this is a factor here.

The planned closure of GKN is also a test for the kind of recovery and economy we want post-covid. If the pandemic has taught us anything about industry, it is that we need more than simply ingenuity and leading innovation; we also need domestic and resilient production capacity. We have seen that long supply chains are not resilient, and that the lack of domestic capacity is bad for our country. Automotive production is a delicate ecosystem—once one part of the system is gone, it weakens the entire thing.

That is why GKN is the canary here. If Ministers are going to follow through on creating a more resilient domestic manufacturing sector, they must protect the automotive supply chain. This plant is right next door to one of its main customers, JLR. The plant in Poland that will take over production if these plans go ahead is four and a half days away. We are seeing the impact of long supply chains already, where production at two of JLR’s plants has recently had to stop because of delays in importing microchips.

Furthermore, the economic hit we have taken during the pandemic—one of the worst in the G20—requires more intervention and stimulus to kick-start recovery and seize the opportunity of the green transition for a more productive, higher skilled, technology-driven economy. That simply will not happen by chance or by market forces. The costs and investment required are too high, and the infrastructure and skills needed would never be met by the private sector alone. All the while, our global competitors are pump-priming their recovery; just look at what is happening in the US under Biden.

The situation at GKN also tests whether the Government really do have a recovery plan, or if it is just more rhetoric. If the Government are serious about levelling up, then that has to be about safeguarding good, decent jobs in the midlands and across the country; investing in people and places; and ensuring we see a transition to green which is just and fair. Letting this plant close on the basis of short-term decisions by private equity flies in the face of levelling up.

This plant has a proud industrial heritage, with over 50 years’ history at the site. It is the only British automotive plant owned by GKN, but now it threatens its future. This is a UK company planning to close its only UK automotive plant and move the jobs overseas. Frankly, it is a disgrace. If the Government care about people and places and levelling up, then it starts with anchor industries and companies in places such as Erdington, where unemployment is twice the national average. The Government must stand up for workers in Erdington and across the country in the supply chain, not stand back and let vulture finance destroy jobs and decimate the proud history in this community.

This is also a test of the Government’s commitment to communities and places in levelling up. That is why we need deeds, not words. While the Government are high on ambition, they are low on action. Labour backs our automotive industry, and we have set out an ambitious three-point plan to safeguard the industry’s future through investment in gigafactories and measures to make owning an electric vehicle more affordable.

Make no mistake, the eyes of workers and voters across the midlands are on the future of GKN and our world-leading automotive sector. If the Government allow the plant to close on their watch, so many more jobs and businesses will be threatened going forward, from Vauxhall at Ellesmere Port to the production location of that iconic British car, the Mini, going electric. Many are watching to see whether or not the Government are really serious about their rhetoric. This is a big test for the Government, one that none of us want to see them fail. The consequences are too great.

UK Steel Production: Greensill Capital

Lucy Powell Excerpts

Thursday 25th March 2021 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make a statement on the future of UK steel production following Greensill Capital’s recent insolvency.

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

As many right hon. and hon. Members will be aware, it would not necessarily be appropriate for me to comment on commercially sensitive matters at this stage. However, I do appreciate that many Members of this House have expressed concerns to me, individually and in groups, about their constituents working in the steel industry and the families and workers that the industry supports.

Following Greensill Capital entering into administration on 8 March, I and the Department continue to follow developments very closely. As many hon. Members know, I have directly spoken to local management on a number of occasions, and I have also spoken to representatives of the trade unions—as recently, in fact, as yesterday evening. On all those occasions, I have seen a strong and united commitment across management, across the unions and certainly among officials in my Department. I have seen a united commitment to the workforce and our steel industry.

[Lucy Powell]

The Secretary of State has been dragged here to finally say something, because earlier in the week he had nothing to say. I do not expect him to disclose commercial information, but it is in the commercial interests of UK plc and the customers, suppliers and workers in Rotherham, Stocksbridge, Hartlepool, Scunthorpe, Newport and elsewhere to know whether the Government will step in if Liberty fails to refinance.

We have called for a plan B. It is in our national interests for all options to be on the table. Those options should not be blinkered by ideology, because domestic steelmaking is a cornerstone of our national security and economic prosperity. What is more, Liberty Steel businesses are viable and have made the switch to electric arc furnaces, at great cost. Can the Business Secretary confirm that he is considering all options, from immediate support—if due diligence is met—to public ownership, should the business fall into administration? Does he agree that nationalisation could be the best value-for-money option, especially when we look at British Steel, which the Government spent £500 million on and then sold off on the cheap to the Chinese?

Let us be honest: UK steel and steel communities have been betrayed by this Government, because they have no vision nor any plan. There was not a single mention of steel in the Secretary of State’s plan for growth. There has been very little sector support during covid. The clean steel fund keeps being kicked up the road. There has been no action, despite promises, on the crippling issues of high energy prices and business rates. There is no buy-British guarantee in Government contracts. He just scrapped the industrial strategy. It is no wonder that the investment climate in UK steel is so uncertain. Will he finally take this opportunity to set out his vision and plan the future of UK steel?

Oral Answers to Questions

Lucy Powell Excerpts

Tuesday 23rd March 2021 Commons Chamber

[Kwasi Kwarteng]

The hon. Lady will know that in my meetings with management and relevant union leaders, I have always stressed that the management plans need to be worked through. We are monitoring the situation extremely closely. The hon. Lady will know that I have a direct interest in the future of Liberty Steel.

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

Does the Secretary of State accept that, as well as supporting tens of thousands of decent jobs, UK steelmaking capacity is of key strategic importance to our future competitiveness and resilience? If he does, is he as concerned as we are about the future of Liberty Steel, and will he ensure that the Government are working now on a plan B with all options on the table, including public ownership, should the firm fail to secure finance? Or is he ideologically opposed to this, preferring the UK Government either to step aside or to spend huge sums to prop up businesses at risk only to sell them off cheap overseas?

[Kwasi Kwarteng]

The hon. Lady will know that we have a repeated and often stated commitment to decarbonisation in our industry. It was only last week that we published, under the leadership of my right hon. Friend the Minister for Business, Energy and Clean Growth, the industrial decarbonisation strategy. She will also appreciate that the steel industry is a vital part of that decarbonisation strategy.

Vauxhall at Ellesmere Port and Battery Manufacturing Strategy

Lucy Powell Excerpts

Monday 1st March 2021 Commons Chamber

[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.

Oral Answers to Questions

Lucy Powell Excerpts

Tuesday 9th February 2021 Commons Chamber

[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?

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I am glad that the hon. Lady has been listening to the same businesses that I have been listening to for the last year, as they have talked about the cliff edge that they face and their big fixed costs, whether those are business rates, VAT or the rent moratorium, all of which we are recognising. We are continuing our conversations with the Treasury, because it is so important that as we reopen the economy, and look to get customers back to a safe and warm welcome to retail and hospitality, we also have a flexible approach to our financial support in order to tackle this difficult period.

Exiting the European Union

Lucy Powell Excerpts

Tuesday 24th November 2020 Commons Chamber

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

Can I also, at the beginning of this debate, express, I am afraid, my absolute shock and disgust, frankly? This statutory instrument was deemed so important that it was brought to the Floor of the House rather than a Committee. Frankly, I could have been there as well and given a cursory speech and been at home with my children. But, instead, I prepared a proper speech that is fitting of a debate on the Floor of this House on a statutory instrument that has wide-ranging—very wide-ranging—powers.

The Minister and I do not usually stand opposite one another. We did have that pleasure this morning. This morning, in the debate we had in Westminster Hall, I thought to myself that I respected the Minister. It was the first time I had seen her in action, and I really did think what a sound and reasonable Minister she was. But, frankly, she is taking instructions from her Whips. That is her judgment to do. But in time, that will not be very fitting of her ministerial role. I know she will feel deeply uncomfortable with what she is being asked to do and it is pretty embarrassing for her.

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

I am listening to this, and I have to say that the impression I am getting is that the shadow Minister, whom I thank for giving way, is being asked to do the job of the Minister—namely, explaining to the House the basis of the statutory instrument that is before the House. Surely that is not the role of the shadow Minister.

[Lucy Powell]

Absolutely not, and my hon. Friend is right to make that point. It is not just we in this House who need these explanations. Frankly, businesses in particular are being left completely blind at the moment about how on earth they are supposed to prepare for the end of the transition. We are no further down the road with a deal, and they have no idea of the terms under which they are going to be trading in a few weeks’ time. I am sure many of those businesses, notwithstanding the total chaos that they are subject to at the moment as well, are tuning in to the parliamentary channel today to try to shed some light on this issue, and they did not even get a hello or a by your leave from the Minister.

[Hilary Benn (Leeds Central) (Lab)]

On the point that my hon. Friend has just made, anyone who was watching the Public Accounts Committee session yesterday with three permanent secretaries—I had an opportunity as Chair of the Future Relationship with the European Union Committee to guest—would have found that in respect of Northern Ireland, just to take one example of uncertainty, it is impossible at the moment to answer any questions about how the arrangements are going to work. And we are—what?—39 days away from actually leaving the transition period.

[Lucy Powell]

My right hon. Friend is absolutely right. He makes a very important point. Really, if this Government want to have any standing whatsoever with business, which is very shaky at the moment, I have to say—their reputation with business is incredibly shaky—they must do better. Any business tuning in right now would be, frankly, appalled because this has given them no information whatsoever.

[Christian Matheson]

I am now beginning to share the indignation of my hon. Friend on the Front Bench, because we have gone through a process from “eff business” to an “oven-ready” deal that frankly was not oven-ready, and now we have businesses waiting, as my right hon. Friend the Member for Leeds Central (Hilary Benn) says, to find out what is looming upon us in 39 days, and there is still no absolute clarity. Does my hon. Friend agree that the real problem is that the progression is getting steadily worse, with steadily more disrespect for the business that pays the bills of this country?

[Lucy Powell]

I absolutely agree. I said at the Dispatch Box a few weeks ago that the Conservative party was no longer the party of business. The Government are doing themselves no favours whatsoever. I do not know what shenanigans are going on or why the Whips are telling the Minister to speak for only a minute or two. I thought that such shenanigans would depart when Dominic Cummings left No. 10, but it seems that they are going to continue. If this is about curtailing debate, well, I am very sorry but I have news for the Government, because we are not going to be curtailing this debate.

[Chris Bryant]

I was particularly irritated by the Government’s cursory presentation of the measure before us because, although clause 1(2) states that the regulations

“extend to England and Wales and Scotland only”,

there has not, as I understand it, been a full consultation with the Welsh Government or the Scottish Government, and I was looking forward to having an opportunity to explore precisely where we are going on this with the Government Minister—she is the only person who can really answer that—not least because one of my biggest anxieties is that in this whole process the Government’s relations with the devolved Governments have been so bad that they are tearing at the structure of the Union.

[Lucy Powell]

My hon. Friend is absolutely right. I have not even started my substantive speech yet, which I intend to make, but I will come on to make some of those points. Time and again this Government show disregard not only for business but for devolution and power sharing. I think we have made our point about our real—[Interruption.] The Minister is now taking further instructions from the Whips, and I have no doubt that her winding-up speech will be even shorter than her opening remarks. She might want to maintain a bit more social distancing while she is doing this, because that is nowhere near—[Interruption.] Oh, are you allowed to sit that close together?

[Christian Matheson]

There is another possibility, of course, which is that the Government Whip on the Treasury Bench is explaining the basis of this statutory instrument to the Minister because she was not aware of it.

[Lucy Powell]

I don’t know what is going on, but I want to put on record my huge disappointment on behalf not just of those of us who have spent time preparing for this debate but of all those watching these goings-on. If this statutory instrument is important enough to be brought to the Floor of the House, it is important enough to be debated. I can see that there are decent, honourable Conservative Members who have not withdrawn and who are here to make a substantive speech for themselves, and I hope that the right hon. Member for Wokingham (John Redwood) will take his time in doing so.

I will now get on to my speech, as I have perhaps taken up a lot of the time that the Minister might have used to explain the statutory instrument to us. We do not oppose this statutory instrument today, because we recognise that it is a natural consequence of leaving the EU and an end of the transition period.

[Chris Bryant]

The Opposition Front Benchers might not be opposing this measure, and there might be things in it that we quite like, but if the Minister does not reply properly and fully and explain the measure before the House, I cannot see how the House can possibly support her, in which case we would have to force a Division.

[Lucy Powell]

My hon. Friend makes a good point, and I agree with him. I am beginning to change my mind as we stand here discussing this. Well, I say “discussing” it—we are discussing these issues, but discussion in a vacuum is not really proper discussion at all, is it?

This statutory instrument leaves more questions than answers, as we still have no idea what, if anything, will replace aspects of the current EU framework for the movement of goods in a future trade deal. Any deal is almost certain to make arrangements for the continued market in goods across the UK-EU border. Even with no deal, there would still be a number of implications for trade within the UK, as has already been mentioned by the hon. Member for Kilmarnock and Loudoun (Alan Brown). We want the Government to get such a deal, and we want them to do so urgently. As each day passes, the uncertainty for UK businesses is prolonged at a time when many of them are coping with unprecedented uncertainty due to the covid pandemic and the ensuing economic crisis.

The Prime Minister promised us an “oven-ready” deal, but it seems that in reality it is anything but. He promised us a future relationship, which included

“no tariffs, fees, charges or quantitative restrictions across all sectors.”

I have not seen much sign of that today. He promised that he would safeguard workers’ rights and consumer and environmental protections, and keep people safe with a

“broad, comprehensive and balanced scrutiny partnership.”

[Hilary Benn]

My hon. Friend mentions tariffs, and of course we are all hoping for an agreement that means no tariffs are charged. The Government have already made clear to the motor industry and to car manufacturers that they have failed to get a satisfactory agreement on rules of origin, and therefore for some exports of the British car industry. We send, I think, just under 2,000 cars a day to the European Union. If they do not meet the rules of origin requirements, given the Government’s failure in the negotiations, they will face tariffs.

[Lucy Powell]

Absolutely. My right hon. Friend makes an excellent point, and that is why this debate is so important. It coincides with worrying rumours—I hear that they are rumours, but rumours can cause a great deal of worry—about the future of the Nissan car plant in Sunderland.

[Alex Cunningham (Stockton North) (Lab)]

The shadow Minister took the words from my lips. Nissan is in the north-east, and although we are 30 miles away, businesses in my constituency and throughout Teesside rely on it to buy their products. Within the last few days we have heard Nissan say that if we do not get a good enough deal, it will be off. That must be a terrible blow to any region, but to the north-east, where unemployment is nearly double the national average, it simply does not wash.

[Lucy Powell]

My hon. Friend makes an excellent point, and those are the real risks that we currently face. There is real uncertainty around the deal. Many of the previous commitments made are now undermined, and that will have a devastating impact on particular sectors, such as the automotive industry and the aerospace industry—perhaps my hon. Friend the Member for City of Chester (Christian Matheson) wants to come in on that. Both those sectors are particularly powerful when it comes to the so-called levelling-up agenda, and I worry about that.

[Christian Matheson]

I was going to talk about the automotive sector, but since my hon. Friend tempts me, I will mention the aerospace sector, which is a major employer in my area and the region that we share. Aerospace jobs with prime contractors or first-tier members of the supply chain have a jobs multiplier effect of four, five or six jobs for every one job in that prime or first-tier supply chain. It is not simply about the aerospace companies; the manufacturing industry right across is holding on, dangling, and waiting for some kind of hope of a deal, but we are not getting it.

[Lucy Powell]

My hon. Friend makes a powerful point. Those big manufacturing businesses are waiting every hour that passes for some news on a deal, and today they will be tuning into the Parliament channel to find out what will happen with the movement of goods after we end the transition period. Those cornerstone companies are what communities are built on, and when they go, they are gone. That is why this debate is so important, and frankly the Government’s disregard for it is embarrassing.

[Alan Brown]

The hon. Lady and her colleagues are making important points. She mentioned the levelling-up agenda. Is it ironic that although the UK Government talk about levelling up across the regions and nations of the UK, the areas that will be hit hardest by no deal and by a lack of preparation are the very areas that the Government pretend they are trying to level up? They speak with a forked tongue every time. Should not the Minister be giving us more information from the Dispatch Box?

[Lucy Powell]

Absolutely. This agenda could not come at a more critical time, because these same sectors and industries have been left on their knees as a result of covid-19. They just cannot cope with all these things coming at once.

[Alex Cunningham]

My hon. Friend will realise that businesses from Nissan to the chemicals industry on Teesside rely on a just-in-time supply chain. They need things to be crossing borders almost daily in order to complete the process of manufacturing goods. If there is any further delay in that process, some of these companies will say, “Well, we may as well manufacture in Spain.”

[Lucy Powell]

My hon. Friend is absolutely right. That is one of the reasons we wanted to support this statutory instrument today. Businesses have no resilience left anymore. Any money or time that they set aside for end-of-transition preparations and so on has all disappeared because of the coronavirus pandemic and the ensuing economic crisis.

It is important to remind the House of the things that the Prime Minister promised as the negotiations with Brussels enter their endgame, because I really am not sure that the results are going to match the initial promise that we were given at the election last year. A deal that fails to deliver on the commitments made in the political declaration and to the British people at the general election risks making life considerably harder for jobs, businesses and communities already grappling with the economic challenges of covid-19, as so many Members have already raised.

[Chris Bryant]

I used to have a farm in the Rhondda. One of the issues that I know is facing Welsh farmers in particular at the moment is that tupping has already happened for the spring flock. A pregnancy in a sheep takes roughly 152 days, so lots of commercial decisions have already been made by lots of farmers. How are they to proceed when they do not have the faintest idea what tariffs may or may not apply to Welsh lamb, 50% of which is sold in the rest of the European Union, on 1 January?

[Lucy Powell]

My hon. Friend’s knowledge of sheep gestation periods is far superior to mine, but I very much take his point about planning and the need for certainty. Not only is there all the uncertainty around tariffs and the trade in goods and services that we are now facing; add to that the fact that I am sure some of those Rhondda farmers had been planning for a bumper Christmas with some of their lambing earlier in the year, but that will no longer be the case. That is the double whammy that most businesses are facing, whether they are agriculture or manufacturing businesses.

With time running out, the Government really do need to get on with it and get a good deal for the British people and British businesses. I know that the Minister and her colleagues are in touch with businesses as much as I am. Businesses have real concerns that they will not have the bandwidth for Brexit alongside the pressures of dealing with the pandemic, nor will they have the time to implement whatever is expected from a deal, should one be struck.

Presumably, the Government’s argument today—not that we have heard it, so I have no idea what it is—is that they need to bring forward this legislation now, without knowing what will replace it, because time is running out to pass all the necessary legislation ahead of the transition. Why do they not recognise—perhaps the Minister might respond to some of these things in the 30 seconds that her Whips have given her—that the same applies to businesses up and down the country? They need time to do these things ahead of the Christmas period too.

Businesses have real concerns that the Government will blame them for any disruption and make them the fall guys. I wondered whether the new No. 10 internal arrangements might have changed its attitude towards business, but after today’s performance I am not sure that businesses will have that reassurance. [Interruption.] The Minister’s Parliamentary Private Secretary, the hon. Member for Bolsover (Mark Fletcher), moans from a sedentary position. He is more than welcome to speak in the debate, but I see that all his colleagues have withdrawn.

[Mark Tami (Alyn and Deeside) (Lab)]

Is not it ironic that at the election we were all promised certainty? Where are we now? We have no certainty in this process at all.

[Lucy Powell]

We do not even have certainty about what we are going to do at Christmas, do we—let alone any of the certainty that we were hoping for beyond the new year? As I said earlier, the Conservative party really is losing face with business. It used to be the party of business, but right now I am really not sure that it is.

[Hilary Benn]

My hon. Friend the Member for Rhondda (Chris Bryant) mentioned a moment ago a farm in his constituency. I do not know whether my hon. Friend the Member for Manchester Central (Lucy Powell) saw the comments of the Secretary of State for Environment, Food and Rural Affairs on “Marr” the week before last. When he was asked about the impact that tariffs, in the event of no deal, would have on lamb farmers, he said, “Well, they’ll just have to diversify into beef.” Is she aware that the chief executive of the National Sheep Association, Mr Phil Stocker, said:

“Mr Eustice’s comments will have angered many of our nation’s sheep farmers”?

Does not that reinforce the point that she has just made—that the Government are, frankly, losing face in the business community?

[Lucy Powell]

My right hon. Friend makes a good point. It is not only the business community, but the farming community—communities that have historically both been the base of the Conservative party. I am not sure whether that was the same interview in which the Environment Secretary also made false claims about Lurpak butter which had to be rectified by the company afterwards.

[Alan Brown]

The hon. Member is absolutely right. It is quite clear that the Tories are no longer the party of business. As she correctly says, they are alienating the farmers with their attitude. Laughably, they call themselves the party of workers. Is it not the case that it is the workers who are going to be shafted most by Brexit? Many workers in the UK, including the 3 million, are currently excluded from any support from the UK Government whatever, so the Government are actually doing a good job of alienating the entire population.

[Lucy Powell]

The hon. Member is absolutely right. Company directors who have not had any support during this crisis are particularly aggrieved, and they are part of the 3 million excluded, who he rightly mentions. I know that he has been making these points consistently, so maybe the Minister will respond to that point; you never know.

[Chris Bryant]

Will my hon. Friend give way?

[Lucy Powell]

I was just going to get on to the detail of the statutory instrument. I have not actually started the substance of my speech yet, but I will give way.

[Chris Bryant]

My hon. Friend mentioned Christmas and the former vicar in me sort of bubbled up, and I remembered all those terrible years when I had to sing “Hark the Herald Angels Sing” 77 times before we even got to Christmas eve; lots of vicars will not be upset if they do not have to sing it quite that often.

Let me turn to the serious point. As I understand it, the delay in getting any kind of deal with the European Union almost certainly means that the European Parliament may have to sit on 28 December. Is it not perfectly possible, given that we do not even know the Christmas recess dates for this House yet, that we too may have to sit on 28 or 29 December? There is nothing in this measure that makes it clear what would need to change, whether a deal is sorted or is not.

--- Later in debate ---

[Lucy Powell]

Thank you very much, Madam Deputy Speaker. Of course, my hon. Friend the Member for Rhondda (Chris Bryant) is very good at writing books. He has one out—I think for Christmas, actually—at the moment, but the book that we are all waiting for is his diaries. I am not sure when they will be published, but maybe they will be a Christmas bumper when they do.

 As the Minister said briefly in her opening remarks, this statutory instrument will end the application in the UK of the rights derived from articles 34 to 36 of the treaty on the functioning of the European Union. The removal of these provisions will ensure that there is no barrier to divergence from EU rules should the Government choose to diverge. As the memorandum that accompanies the statutory instrument sets out, the Government plan for the UK to have its own regulatory regime for goods after the end of the implementation period.

[Alex Cunningham]

One of the things that will be covered by that regime is the movement of food, which does not just go from this country to Europe but comes in the opposite direction as well. Many businesses in this country are extremely worried that food for which there might be a lead time of three weeks could end up sitting on the docks for hours on end if we do not get the agreement that we need.

[Lucy Powell]

My hon. Friend makes an important point. I hope the Minister has taken note of that and that we can hear about it when she responds, because it is especially important at this time of year—not to keep on with the Christmas puns, Madam Deputy Speaker.

If the Minister is allowed to, will she update us on what the EU-UK trade regime will look like and what rights and protections will be in place at the end of the implementation period? When will we get the details? More importantly, will businesses have plenty of time to prepare for the regime’s implementation? Ministers have repeatedly said that in many policy areas the rights and protections that we have enjoyed inside the EU will be maintained and improved on when we are outside the EU. Will the Minister set out where she thinks we might diverge from EU standards and requirements in future? How will she ensure that divergence benefits British businesses, instead of putting in place new barriers to trade that could cost them dear?

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is talking about the import of different foods, as my hon. Friend the Member for Stockton North (Alex Cunningham) just mentioned. Is she aware of the specific situation for the UK overseas territories and whether or not they are being properly considered in the transition arrangements? I am aware of serious concerns from the Falkland Islands in particular in respect of their squid industry, which provides much of the calamari in European markets. They are concerned about whether those concerns are being heard in the negotiations and about whether or not at the end of December they will face a cliff edge that could be devastating to their economy, which relies so heavily on fish products. Does my hon. Friend agree that the UK Government ought to be standing up for the Falkland Islands and their fishing industry and ensuring that they are able to continue the excellent trade that they have with other parts of the EU?

--- Later in debate ---

[Lucy Powell]

My hon. Friend makes an excellent point about squid in the Falkland Islands that I was not aware of. It is important to bear that in mind. We are talking about the Conservative party losing its reputation, whether on business or agriculture; those of us who are halfway through the new series of “The Crown” will also be reminded of the importance of the Falkland Islands to Conservative Members. One would have thought that that would be at the forefront of their minds.

[Stephen Doughty]

I hope that the Minister will be able to address this point when she responds, because my understanding is that the Falkland Islands have been raising their concerns. There are meetings this week with the Minister for the Overseas Territories, but the Falkland Islands have written to the Prime Minister about this issue several times and my understanding is that there has not yet been a formal reply to the substantive concerns that they have raised. That is very concerning, because it leaves them in a great deal of uncertainty about what will happen post the end of December.

[Lucy Powell]

My hon. Friend is absolutely right. This statutory instrument should and could be an opportunity to clarify those matters but, as I said at the beginning of my speech, it will take provisions away without any of us understanding what will replace them. That is causing a huge amount of uncertainty, not just here in the UK but, as my hon. Friend says, in the UK territories. I am sure that, given its closeness to the EU, Gibraltar will be worried as well.

[Christian Matheson]

My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) is absolutely right. I was grateful to visit the Falkland Islands during the squid-fishing season as a guest of the Falkland Islands Government. Squid fishing is a major part of their economy. It is an utterly inevitable consequence of what has happened that our overseas territories—my hon. Friend the shadow Minister mentioned Gibraltar as well—will feel out on a limb. We need to be able to assure them, as soon as possible, that they are not out on a limb. That assurance is still not forthcoming with, as my right hon. Friend the Member for Leeds Central (Hilary Benn) has said, 39 days to go. These are territories that choose to be British and they are not getting the kind of reassurance that they desire.

[Lucy Powell]

My hon. Friend makes a powerful point. Perhaps next time he goes on a delegation there he can see whether I want to join them, as the shadow business Minister. It sounds like a good trip, and I am partial to a bit of calamari, so I would enjoy that.

This statutory instrument relates not just to UK-EU trade, but to the requirement for a new framework for UK-wide trade, as we have been debating through the United Kingdom Internal Market Bill—now in the other place—because current treaty provisions also govern trade in goods across the UK. Will the Minister update us on where these issues are now up to, as we need to know before stripping away all the trade regulations that currently apply across the UK? As has been raised, any divergence needs to be agreed with the devolved Administrations, and that is why we are hoping that common standards for trading agreements will be agreed via the common frameworks put on a statutory basis. Ministers herald this approach yet refuse to put them on a statutory footing. There have been many long discussions on this in the Chamber and in the other place. The Government recently lost votes on this aspect of the internal market Bill, so we are hoping that the Government will accept these amendments when they return. Can the Minister confirm that?

[Alex Cunningham]

My hon. Friend posed the question of where there is likely to be divergence. We know already that there has been divergence on food standards, paving the way for importing chlorinated chicken, hormone-fed beef and all manner of things. Those goods are going to end up in the stomachs of the poor people—the people on low incomes—in my constituency and in my hon. Friend’s. Does she not agree that we need to tighten this up and make sure that all our people are protected with proper standards and proper regulations?

[Lucy Powell]

My hon. Friend is absolutely right. That is why it is such an important issue, and we really are hoping and expecting that the Minister will confirm today that the Government will accept the amendments on this that were passed in the other place, because it is about how we as a country are coming to an agreement about standards. I am sure that these issues will be raised later in the debate.

The Government must respect the devolution settlement and work collaboratively, in good faith, with the devolved Administrations to build that strong and thriving internal market with common standards underpinning it. Not doing so would threaten our precious Union by putting rocket boosters under the campaign for independence in Scotland. I know that the Prime Minister is very keen to talk about Christmas at the moment, but he seems to be giving the Scottish First Minister all her Christmases at once by his constant undermining of devolution recently. He seems to have made another blunder on that recently, propelling her campaign for Scottish independence by, as I said, putting rocket boosters under it.

On that point, I wonder whether the Minister would also explain to us the status of this statutory instrument. It is my understanding that her colleague, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stratford-on-Avon (Nadhim Zahawi), wrote to his counterparts in the devolved Administrations to seek their consent for him to lay this statutory instrument, which she is taking on his behalf, as some goods potentially affected by this instrument fall under devolved competence. I understand that consent has been received from the Welsh Government, but not yet from the Scottish Government—I do not know whether the hon. SNP spokesman wants to come in on this. I am not sure whether we can lay and agree to this statutory instrument today on that basis. What happens if the Scottish Government do not consent to it but Parliament already has? I do not know whether anyone knows the answer to that or if the Minister wants to rise to clarify that.

[Christian Matheson]

rose—

[Lucy Powell]

Maybe my hon. Friend knows.

[Christian Matheson]

We can do better than that, of course, because we had word from the Prime Minister last week, who described devolution as “a disaster”. Conservative Members are playing fast and loose with the Union. They are playing fast and loose with the United Kingdom. They are playing fast and loose with devolution, and their attitude to devolution was shown from the very top by the Prime Minister. That surely answers my hon. Friend’s question.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We will stick to the terms of this statutory instrument, which is fairly narrow.

[Lucy Powell]

Thank you, Madam Deputy Speaker. The point is important to the statutory instrument, because I am not sure of its status. As my hon. Friend says, is it just another example of a total disregard for devolution and power sharing, further undermining that at such an important juncture. It is important to know whether, in writing to the devolved Administrations before laying the statutory instrument, the Government decided just to plough on anyway and totally disregard that consent, or whether consent is required on a retrospective basis. I really am at a loss on that and it makes me wonder whether we are discussing this statutory instrument on the basis on which we all thought we were discussing it, so I think that is an important point for the Minister to address.

[Hilary Benn]

Paragraph 2.2 of the explanatory memorandum reminds us that the provisions, which, as I understand the regulations, the Government are proposing to disapply, are the part of the EU treaty that encourages the free movement of goods by avoiding quantitative restrictions. The whole purpose of the negotiation, according to the Prime Minister’s word, is to achieve a deal that does not involve quantitative restrictions, yet we are being asked to disapply them. Furthermore, in the next paragraph it states:

“For clarity, as the GB intends to have its own regulatory regime after the transition period, these rights are being disapplied as it is no longer appropriate for them to coexist”—

coexist with what?—

“and pose some risk of challenge if we decide to diverge from EU law.”

Would it not be helpful to the House if the Minister, in replying, were to give us some explanation of the potential risk of challenge to something that the Government say is their objective in the negotiations—the free movement of goods without quantitative restrictions?

[Lucy Powell]

As always, my right hon. Friend makes an incredibly powerful point. Although on the face of it the statutory instrument looks like it is fairly narrow, it is actually of huge significance and importance. It is inextricably linked to the current negotiations. That is why, as the shadow Minister, I thought—foolishly maybe—that the Government had decided to bring it to the Floor of the House. As I say, there are aspects that look narrow, but it is a hugely significant statutory instrument. That is why I was flabbergasted at the beginning of the debate that the Minister did not seem to have anything much to say about it.

As other colleagues have pointed out in other statutory instruments and through the passage of the United Kingdom Internal Market Bill, it is still unclear what checks, controls and processes will be put in place on qualifying Northern Ireland goods, which are also implicated in this statutory instrument, moving from Northern Ireland to Great Britain. Despite the Government’s protestations at the time about the very real dangers, as they saw them, of EU attempts to blockade NI-GB movement and goods, there was absolutely nothing to deal with that apparent clear and present danger in the Bill, as we discussed at the time. We support unfettered access for Northern Ireland businesses to the rest of the UK market. However, there are a number of issues that stand relating to the breadth of the definition of qualifying Northern Ireland goods. My right hon. Friend the Member for Leeds Central (Hilary Benn) is across that matter as well. The Government appear to acknowledge that it is problematic, but it remains unclear what they are going to do about it.

Today’s statutory instrument sheds no further light on that. In fact, it probably makes it even more complicated. We need further clarification, because the definition is not sufficiently tightly drawn to provide the protections intended. The wide drafting of the definition of “qualifying goods” is the problem, because it includes anything that is in circulation within Northern Ireland without being subject to customs control while there. However, it also includes goods processed in Northern Ireland from Great Britain-derived goods, which are themselves subject to customs control in Northern Ireland. I hope people are keeping up, as this is quite a complex subject, which is why I hope the Minister will properly respond. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) has said, that could include whisky imported from Scotland to Northern Ireland, which might be in duty suspension in Northern Ireland but then is used to make mince pies in Belfast. That would leave those mince pies as qualifying Northern Ireland goods, despite the whisky used to make them being subject to customs controls. So we have argued that the definition of qualifying Northern Ireland goods is not sustainable in the longer term. It appears that Ministers agree, but will the Minister let us know today what plans the Government have in place to resolve this?

[Stephen Doughty]

My hon. Friend is making an important point. She will know that I raised these issues in the statement the other day on Northern Ireland-related issues and trade with Wales. Is she aware of the concerns raised today on BBC Wales by hauliers, who are describing how they fear mayhem at the port of Holyhead in Ynys Môn—Anglesey? The Irish Road Haulage Association fears that the processes are not ready and in place. For example, it is concerned that the IT systems to deal with these changes are not ready. Does she agree that the Government have not answered a whole series of questions, which will have impacts on ports and trade in Wales, and of course on goods transiting the Republic of Ireland to Northern Ireland and back and forth? This is far, far more complex and people are simply not convinced by the answers they have had from the Government so far.

[Lucy Powell]

My hon. Friend makes an extremely important point about the impact on ports, including Holyhead. That is why, as things stand, this statutory instrument is at best making the situation worse; all it is doing is pulling away some of the existing frameworks, without our understanding what they are going to be replaced with. That is probably the worst of all worlds for anyone following these issues and having to try to plan around them. Road hauliers are at the forefront of that. I was talking to businesses about this the other day. It beggars belief that in the current situation, with the pandemic and what is going to be happening over Christmas, we could even be countenancing lorries stacking up on motorways and other roads, and gridlock at our ports, with all the paperwork that has not yet been agreed and sorted out. I just do not know what Government, at any time, would actively seek that, but that is what this Government seem to be doing.

[Bambos Charalambous (Enfield, Southgate) (Lab)]

My hon. Friend mentions paperwork. One issue with organic materials is the SPS—sanitary and phytosanitary —checks, which require certificates. We currently have a shortage of vets to carry out these certifications. Is that not another problem that will lead to our ports being blocked and further delays?

[Lucy Powell]

I really am learning some things today, and, yes, I very much think that that would lead to that. My hon. Friend raises another important point. These are the wide-ranging implications of what we are seeing and the huge uncertainty. Can the Minister tell us today whether a more refined definition of qualifying Northern Ireland goods will be introduced? When will we have the clarity we all need on that?

We are also concerned about the impact on standards across the UK. Given that Northern Ireland is, in essence, within the EU single market for goods, any good allowed to be sold within the EU as complying with the EU single market must be allowed to be sold in Northern Ireland. So if, for example, Wales decided to extend the EU environmental standards applicable to vehicle emissions, the combinations of regulations would mean that Wales could not succeed, because a lower standard vehicle would be on sale lawfully in Northern Ireland and would be a qualifying Northern Ireland good. The mutual recognition principle in the United Kingdom Internal Market Bill would override that desire of the Welsh Government. Given that processed goods from Northern Ireland may include components originating outside the country, does the approach outlined in the statutory instrument for qualifying goods have wider implications for the UK’s approach to the rules of origin with the rest of the world? I do not know whether the Minister wants to take this opportunity to respond—she may have had a chance to brief herself a little more during my speech while considering her closing remarks. As she will have understood, the statutory instrument, far from being a cursory, quick bit of legislation, has massive implications for businesses and others who, I am afraid, have been left wanting, given what we have heard today.

As this debate has shown once again, there are—[Interruption.] You are nodding, Madam Deputy Speaker; I am on my peroration, you will be pleased to hear. As the debate has shown, there are huge uncertainties still facing businesses that trade in goods and services, even those whose markets are mainly internal. Given that that now comes on top of the biggest economic crash that we have seen probably for 300 years, and the huge uncertainty still surrounding businesses, not least our manufacturers, as we have heard, due to the covid-19 crisis, the Government really need to step up and get a Brexit deal done, allow time for businesses to prepare and absorb the consequences of that deal, and get on and sort out all of these outstanding issues relating to the UK internal market. The House has expressed huge disappointment and shock that the Government have not taken this very important opportunity of its own making to come to the House today to explore and update us all on these very important matters facing business. The Minister will have an opportunity shortly to respond, and I hope that she will answer the many, many questions that we have raised today.

--- Later in debate ---

[John Redwood]

I am not giving way, because I have a couple of points to make, and I am conscious that many Members wish to make speeches.

[Lucy Powell]

Where are they then?

[John Redwood]

There are clearly Members on the Opposition Benches wishing to catch Madam Deputy Speaker’s eye.

The second point I want to make is that this is about our balance of trade and our balance of payments. One of the tragedies of our membership of the European Union over nearly 50 years was how we transformed ourselves from an industrial country with a strong farming and fishing industry into one that had been badly damaged by the rules and tariffs that the EU imposed on us and our trade with the rest of the world. It was asymmetric and very cruel.

We lost a large chunk of our motor industry in the first decade of our membership—I think it halved—and we lost a lot of our steel industry. We moved from being a net exporter of fish to being a heavy net importer, with much of our fish taken by foreign vessels and foreign industry. We have lost a lot of our self-sufficiency in temperate food, because the common agricultural policy did not suit us. State aid, cheap energy and so forth on the continent helped places such as the Netherlands to outcompete us on salads and flowers, for example.

We have a big job to do to rebuild ourselves as an industrial, farming and fishing country that is capable of cutting the food miles, cutting the fish miles and delivering more to ourselves and to our own plates through import substitution. I hope that from 1 January, if not before, Ministers will use these new powers to review all the restrictions and rules about trade and tariffs and create a British model that is better and fairer to Britain, so that “made in Britain” means something, and more is made in Britain and willingly bought by British people. It is very difficult for the Opposition to oppose that, although they will doubtless try to, because they always want to sell Britain short and to build the EU up to greater heights. None the less, outside this Chamber there will be great relief to know that at least some people in Parliament wish to see a revival of British fishing, British farming and British industry and to understand that the rules of trade and the skewed subsidies and tariffs against the rest of the world have been extremely damaging to people who want to build businesses and farming activities in the UK and that it is time for a reversal. I wholeheartedly support this measure. I want to take back control and I urge more MPs to get into the spirit of it, and, instead of cavilling and criticising every move that this country wishes to make to be independent, contribute to the debate about how we can be better.

Charity-funded Medical Research

Lucy Powell Excerpts

Tuesday 24th November 2020 Westminster Hall

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

It is, as always, a pleasure to serve under your chairmanship, Ms McVey. I congratulate the hon. Members for Vale of Clwyd (Dr Davies) and for Bolton West (Chris Green), my near neighbour, on securing this extremely important and well-timed debate. We have heard some good and compelling speeches from across the board, from my hon. Friends the Members for Blaydon (Liz Twist) and for York Central (Rachael Maskell), and the hon. Members for Bath (Wera Hobhouse) and for Kirkcaldy and Cowdenbeath (Neale Hanvey). We are all making similar arguments.

By way of opening, we have heard many debates over recent weeks, both here and in the main Chamber, about the sectors and parts of our society that have been drastically hit by the consequences of the covid-19 crisis. I congratulate the hon. Member for Vale of Clwyd on bringing forward the debate because it is an area that has had a lot less attention than some others.

As others have said, as we are all making similar arguments, medical research charities carry out vital work that helps us to understand diseases and find new ways to treat, manage and prevent conditions. They provide that hope and support for many that would otherwise not be there. As the hon. Member for Vale of Clwyd clearly outlined, we have a world-class sector in the UK. From state-of-the-art brain imaging, which helps us learn more about the earlier stages in diseases such as Alzheimer’s, to the development of novel techniques to help revive and repair donor kidneys before transplantation, and to the study of data to help speed up cancer diagnosis, medical research is changing lives, especially with some of the rare diseases that we have discussed today.

During the covid crisis, charity funding has plummeted, which has had a stark and immediate knock-on impact on medical research, as we have heard. Charities are projecting that it will take more than four years for spend to return to pre-crisis levels. With a big chunk of around half of all medical research coming from charities, we must not underestimate the impact that will have and continue to have on the health and wellbeing of our country for many years to come.

The UK sector is facing an existential crisis, yet, like so many other sectors, it has unfortunately so far been excluded from specific Government support. Medical research charities predict a shortfall in spend over the next year of at least £310 million. Research by the IPPR reveals that medical research charities expect this year to lose 38% of fundraising income, and over 25% next year. The thinktank estimates that there will be a cumulative £7.8 billion shortfall in health research and development investment between now and 2027, or 10% of all UK health R&D.

What does that mean in practical terms? As we have heard in the debate, there is, first, the immediate impact on medical trials and research and on patients and all those affected by disease. Almost three quarters of clinical trials and studies funded by AMRC charities were either scrapped or mothballed during the first lockdown, and although some have been picked since, many have not. Medical studies to be cancelled or stalled include those tackling the UK’s biggest killers—dementia, coronary heart disease and cancer—which could have long-term consequences. The Stroke Association states that three quarters of its funded research projects have been suspended because of the pandemic.

In the long term, less money for medical research means fewer trials and studies and fewer patients able to participate in this life-changing work. Last year, 213,000 people took part in 1,200 clinical trials or studies funded by medical research charities. Medical research charities have played a key role in breakthroughs over the past century, and we heard about some of them today.

The second impact is on researchers and the skilled workforce. Medical research investment is used to fund PhD students, fellowships and other early career researchers. Last year, 17,000 researcher salaries were funded by AMRC charities. Less money simply means fewer of them; fewer of them means losing out on their skills and talents, and on the important scientific progress that they could make in the years ahead. It will also further accelerate the unemployment crisis we face. Sadly, a recent AMRC study found that four in 10 are considering leaving research altogether, owing to funding concerns. The same survey found that 61% of charities have had to cut or cancel support for early career researchers and the skilled research roles.

The third impact is on health R&D funding and the wider economy. Nosediving research and development will affect the whole economy. As we have heard, every £1 invested in medical research delivers a return equivalent to roughly an extra 25p on that investment.

Charity research funding stimulates investment from the private sector, as we have heard, and from universities, further boosting our economy and research sector. It is an ecosystem and it relies on all the system being able to play its part. As my hon. Friend the Member for Bolton West (Chris Green) said, it can and does play a key role in reducing some regional inequalities and, with more than half of medical research coming from charities outside London and the south-east, in the so-called levelling up agenda by contributing to regional economic growth. Charities have a better record in this respect than Government research funding, under which about 80% goes to the golden triangle. There is definitely an opportunity to switch that balance.

Despite the importance of medical research charities to scientific progress and to people’s lives, and despite the significant role they play in our economy, unfortunately the Government have not given them the support they needed during this difficult time. I understand that there are many pressures on the Government’s finances and many calls for help, but only 3% of the country’s medical research charities were eligible for the Government’s charity support package—just five out of the 152 medical research charities. More than 150 were ineligible, and that included those researching conditions such as motor neurone disease, Parkinson’s, breast cancer, hearing loss, bone cancer, liver disease, meningitis, Crohn’s, diabetes, multiple sclerosis and many more. This is a huge blow to patients who rely on breakthroughs in those treatments.

Fortunately, given the well-timed nature of this debate and where we are today, there is an opportunity tomorrow for the Government to rectify that. The Opposition hope that, in the spending review, the Government will consider the proposal for the life sciences charity partnership to help plug the funding gap. This is now critical and urgent, and in the week when the Oxford vaccine for coronavirus has made such brilliant progress, what better way to support the life sciences in this country and recognise their contribution than to support this partnership fund? It would be a partnership arrangement and there would be matched funding. In the grand scheme of things, £310 million would be an investment well made. It is not a huge amount of money.

[Rachael Maskell]

I am grateful for the powerful points that my hon. Friend is making. In the light of the amount that has been spent on covid-19 and the fact that people have not been able to access regular services in the NHS, does it not bring into scale how £310 million could make a significant difference?

[Lucy Powell]

It really does, and my hon. Friend makes a powerful point. I urge the Government to see it, not as day-to-day spend, but as an investment in the future health, resilience, wellbeing and economic viability of the country. I look forward to the Minister’s response and hope that we hear some good news from her today.

Oral Answers to Questions

Lucy Powell Excerpts

Tuesday 10th November 2020 Commons Chamber

[Nadhim Zahawi]

The Government have put forward a comprehensive package of support, as we heard from the Secretary of State, for both individuals and businesses. The self-employed income support scheme has also been extended. The support package is not only about the welfare system, which has had an additional £9 billion put into it to help people, but about the bounce back loans, the tax deferrals and the rental support, which are all important parts of it, as well as mortgage holidays and other business support grants through local government.

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

Today’s unemployment figures are a sobering reminder of the scale and pace of the economic crisis now upon us. It is becoming increasingly clear that, despite the Government’s initial early action, their slowness and constant indecision are making the jobs crisis worse. Will they now get ahead of the curve, as France, Germany and Spain have done, not only to protect our key industries such as aerospace and automotive, but to bring forward an ambitious plan for their green renewal at a scale and pace to match the crisis? As we are seeing at Rolls-Royce and elsewhere, once decent jobs go, they are gone for good; and communities across the north and midlands can ill afford to lose them.

[Nadhim Zahawi]

The hon. Lady makes an important point about the labour market statistics released this morning. The Government are committed to helping the most vulnerable, as was demonstrated with the £2 billion kickstart scheme for young people, who have in many ways been heavily impacted by the challenge of covid. She will see from this Government a green industrial strategy. As the Secretary of State has already set out—judge us by what we do—36% of the world’s offshore energy is produced by this country, and we will go much further.

Coronavirus Business Interruption Loan Scheme

Lucy Powell Excerpts

Thursday 5th November 2020 Commons Chamber

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

It is always a pleasure to follow the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), although I do not agree with his last sentiment. I thank the hon. Member for Midlothian (Owen Thompson) and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) —that is my best Welsh—for securing this important debate. It could not come at a more opportune moment, given that today marks the first day of the second lockdown and given the Chancellor’s statement earlier.

The coronavirus pandemic has hit our economy hard and continues to do so. Unfortunately, until the Government get a handle on the public health measures to control the virus, particularly sorting out test, track, trace and isolate, it will continue to have more far-reaching economic consequences than it needed to. We have already seen hundreds of companies going to the wall, tens of thousands of businesses shuttered, hundreds of thousands of redundancy notices handed out, and millions more workers worried about whether they will have jobs in the future. At least some will have been given respite today, but unfortunately, for way too many, it has come too late.

None of that was inevitable. The failure of the Government to act earlier on a circuit breaker means that the economic pain of this lockdown will be greater and more far-reaching. Having said that, we have supported the Government’s actions to control the virus and to protect the economy, as it is right for us to do in these difficult times. Much more needs to be done, however, especially for those who have been excluded from support again and again, and for those businesses that seem to have been deemed non-viable, when they are perfectly viable in normal times.

We welcomed the CBIL scheme when it was introduced and we support its extension. The provision of loans with state-backed guarantees was essential in the early phase of the crisis to prevent a liquidity and insolvency crisis among UK firms, but as the long-term nature of the public health crisis and the resultant economic one become clearer, there needs to be some review, alongside some other measures.

As well as loans, we have supported the furlough scheme in its various incarnations and the grant schemes. There were also legal protections in the Corporate Insolvency and Governance Act 2020 that we supported through the House. That support was right in March. The question is, why were Ministers not prepared to accept earlier that if those schemes were right in March, they were right today too? The recent sharp rise in infections was predictable—in fact, predicted—yet the Government always seem to be playing catch up. The Chancellor has repeatedly acted late. His economic plans do not seem to last a week, let alone the winter.

When Greater Manchester was asking in September for the same support that its workers and shut-down businesses received in March, the Chancellor said no, only to change his tune now. He should never have tried to lock down the north on the cheap. The row with the north was misplaced and wasted valuable time. Andy Burnham, Steve Rotheram and other metro Mayors were right, and the Chancellor has now confirmed it.

It is welcome news that the Chancellor has extended the furlough scheme, but if businesses go bust, there will be no companies for those workers to be furloughed from. The grant schemes have become less generous just as businesses face particular cash-flow problems after months of the crisis. Typically, they are now worth a third per week of what they were in March, so how can that be right? For medium-sized businesses, the grants were not enough, which is why they were so reliant on the CBIL scheme in the first place.

Now is the moment for a long overdue long-term reset plan, because it is clear that we will be living with this virus for longer and many of the provisions previously put in place, including the CBIL scheme, need to be looked at in that context. Many businesses will have already taken a loan thinking that it was for two or three months of the first lockdown. They will have been struggling for many months with reduced demand and trade hit by social restrictions through the various tiers and things that came before that. Any long-term plan needs to include more support now for cash flow. Businesses cannot and should not rely on loans to pay fixed overheads during a period of enforced Government closure. That is morally wrong.

We need a six-to-12-month plan—or at least a six-month plan—to support the economy, with a flexible and sufficient package, not all the chopping and changing we have seen. The support available needs to match and reflect the plight of businesses that have suffered many months with fixed costs and little income. Alongside that, the Institute of Directors has said that the Government must expand and extend the measure suspending wrongful trading in line with other measures in the Corporate Insolvency and Governance Act, and we agree with that. That would go some way to prevent the predatory sort of behaviour that others have mentioned.

The measures introduced to support businesses in the first phase of the pandemic must now rise to the challenge the economy faces now and for the medium term. A debt-laden economy will make any recovery more difficult and longer. As we have heard from hon. Members on both sides of the House, there are several outstanding issues with the CBILS loans, and they should be looked at as a matter of urgency. We need more transparency about who is getting the loans. We need to look at fraud, misuse and mis-selling, and we need to look at how lenders are setting their own interest rates, because wide discrepancies have crept in between banks and other lenders. The Government paid more than £65 million in interest to lenders between April and June. Ministers should have got a better deal, and the costs will soon fall to business.

The Office for Budget Responsibility has estimated that one in 10 business loans may default, and I suspect the number will be even higher than that. That is why it is so important that the Government do all they can to stop viable businesses—previously viable businesses—going bust in the lockdown. As we have heard, the concern is the effect on the economy of that huge debt burden of between £70 billion and £100 billion, weighing down the recovery. It would result in continuous waves of business insolvencies, especially as we see the end of the tax breaks, tax deferrals and business rate holidays and all the costs that that will cause to our economy. What is more, a debt-laden recovery is no recovery at all, as it is investments that pay the price—investments in people, in technology, in research and development, in new business plans and in infrastructure, all not happening because businesses need to pay down debts from a covid crisis that was no fault of their own.

The Government need to set out a clear package of support: sufficient grants, some loans and rates relief and other measures for businesses of whatever capacity to operate in. Crucially, we need a plan for reopening businesses working in weddings, events, live music, the arts and other forums, as well as those that are now affected by the second lockdown. I am sure the Minister will agree that when we speak to businesses, they say that most of all they want to trade. They want the certainty of when they can trade, and they want a clear timetable to give them that certainty. At the end of the day, it will be hard-working, decent business people who spent years and years of their lives and their life savings building up businesses that could now go bust through no fault of their own. Not only do we have an economic obligation to support those businesses through this crisis, but we have a moral one too. The Government need to step up to the plate and do more to support them.

Oral Answers to Questions

Lucy Powell Excerpts

Tuesday 29th September 2020 Commons Chamber

[Paul Scully]

The Government have put in £160 billion-worth of support, wrapping our arms around as much of the economy as we can. We have put off business rates for these businesses. We have extended the VAT cut for another few months for the hospitality sector in particular. We will continue to see what more we can do to keep our economy open.

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

I am afraid that talking and engagement is all well and good, but what we need is some action. Does the Minister think that Deer Park in Devon, which was fully booked for weddings next year, or the conference business in Manchester, which was 90% booked for next year, are unviable businesses? The Government have thrown those and thousands of other thriving businesses on the scrapheap this week—businesses that were very much viable and will be so again when the restrictions are lifted. They have taken the loans. They will not qualify for the job support scheme. They were promised that track and trace would allow them to reopen, yet the Government have now turned their back on them. The Conservatives are no longer the party of business. As a very small measure, will the Minister reallocate the cash grant underspend to ensure that we do not see thousands of businesses go bust on his watch?

[Paul Scully]

We have handed out £11 billion-worth of cash grants to businesses across the country. In terms of the underspend, the under-allocation varied by local authorities and how much money they could get to those businesses, which is why we need to have it in to reconcile. I work with the wedding sector. At the moment it is impossible to work through a system that makes it viable for those businesses to open beyond a certain number. However, they will be viable businesses in the future.