Mark Prisk
Main Page: Mark Prisk (Conservative - Hertford and Stortford)Burton’s Foods (Moreton)
Mark Prisk Excerpts(13 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I congratulate the hon. Member for Wallasey (Ms Eagle) on securing the debate. She has raised a number of important questions, which I will seek to answer. I know from looking at the history of the site that this has been a vexed site and plant, so these are not necessarily new problems with this particular business or location; she rightly alluded to that.
I was sorry to hear of the decision, which I first learned about from the media, and then heard about from the hon. Lady when she raised the matter in the Chamber last week. Clearly, the concern that she has rightly shown for the 342 employees will be shared in the House. It is very unwelcome news and it is inevitably a worrying time for both the employees and the families, let alone the community. Having been through that experience myself, I understand how people often take this as very much a personal issue.
Since the company announced the factory closure earlier this month, Jobcentre Plus has been in contact to offer the support of its rapid response service. The company has accepted that offer of help and the details of the tailored support package that will be offered to the work force are currently being worked out. That support will focus on helping Burton’s employees find alternative employment as quickly as possible and will take a number of forms. In addition to offering advice on writing CVs and doing job searches, depending on what is required, the support package might include matching the employees made redundant to known job vacancies and helping individuals to identify their transferable skills and training needs to help them find work in the local labour market.
Ms Eagle
I understand that, but I hope that the Minister has listened with some sympathy to the fact that 17 people are currently chasing every vacancy in Wallasey. It is not a question of writing CVs; it is a question of demand and the existence and supply of jobs. What he describes would be important if the plant were to close, but I hope that he will help us to keep it open.
Mr Prisk
Certainly, and my purpose in elaborating on this is for people to understand the broad packages available. I will then move on to the questions the hon. Lady has raised.
In addition, the support package will set up an action fund to help workers take up a new job, for example by giving help with travel-to-work expenses, which relates to the point made by the right hon. Member for Birkenhead (Mr Field). As I said, redundancy can be a personal tragedy for every individual and their families, so the Government are committed to helping people find alternative employment as soon as possible.
The hon. Lady cited the disappointing GDP figures in support of a claim that the Government are somehow pursuing the wrong economic strategy. In fact, the Office for National Statistics has made it perfectly clear that the fall in GDP was largely driven by the weather late last year, when we experienced the coldest December since records began. In looking at the figures, it is noticeable that the manufacturing sector, which we are talking about today, was in fact performing well.
Ms Eagle
I understand that and thank the hon. Gentleman for giving way. In the spirit of trying to work together to find a positive solution, I did not play politics with the issue and did not mention the GDP figures. I am trying to see whether the Department for Business, Innovation and Skills will be able to offer positive help to save the jobs. We all know what has to happen, and I would wish to discuss that with the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), who is responsible for employment, if the worst happens and the factory closes. However, I wanted this Minister to be here so that we could try to save the jobs, and I deliberately did not mention yesterday’s GDP figures because I did not want to get into a party political argument about economics. I am trying to help my constituents to get by and to save local jobs, and I am a little disappointed that he has claimed that I mentioned the figures.
Mr Prisk
I am trying to set out the context of where we are, because it is important for understanding why some factories are closed and others are prospering. It is important to remember that we are seeing record output levels in manufacturing as a whole, although clearly there will be individual factories, to which the hon. Lady has rightly alluded, where there are specific circumstances, such as the way own-brand goods are damaging the food and drink industry’s manufacturing side, that might lead them to close. We need to understand the reasons behind individual factory closures and why some parts of the manufacturing sector are prospering in the north-west and others are not. That is the context that I am trying to set out.
We feel at this stage that the crucial thing that industry needs more than anything is certainty and clarity on the overall picture. That is why we are cutting the corporation tax rate from 28p to 24p, which will result in the UK having the lowest corporation tax rate of the G7 nations. That matters for an important reason: by 2016 it will unlock £13 billion of investment that industry and business can reinvest. When we look at the past problems of the Moreton plant, which has received £3 million in direct grant assistance from the public sector, we must recognise that if the business itself says that it cannot make the plant viable, there is a challenge as to what the Government can then do to change that.
On the broader picture, I must say that we are focused on investing in programmes such as the manufacturing advisory service, which is expressly designed to help strengthen and improve manufacturers. We are also putting £200 million into an enterprise capital fund, which is good for growth businesses. The hon. Lady referred to Burton’s existing account balance, and that might be relevant, but we would also point to the importance of the enterprise finance guarantee, which seeks to generate up to £2 billion of additional lending—again, an important issue in that sector.
On the broader issue of adult apprenticeships, the additional investment of £250 million is very important, because, as the north-west economy restructures and we see good success—for example, in the aerospace and automotive sector—the need for more adult apprenticeships will be crucial. That is why we are seeking to expand their number, so that the opportunity for the hon. Lady’s constituents and those in neighbouring areas is significant, enabling them to retrain where other businesses cannot prosper.
Mr Field
One key point that my hon. Friend made was that, in the situation under discussion, we have a very specific group of employers who are very clever at managing public sector support for their industry; and one question that she asked was whether the Minister knows whether the Welsh Assembly Government or the Scottish Government are issuing support to entice the firm away from Moreton, because it enjoys taxpayer support. If they are, can the Government—the English Government—match what the Welsh and Scottish Governments are offering?
Mr Prisk
I am going to address the specifics of the hon. Lady’s questions, but I wanted to ensure, as the right hon. Gentleman rightly points out, that we looked at the context, because there are good manufacturing stories to be told in the north-west, and it is important to stress that.
The hon. Lady referred, first, to the alternative proposals, in which I know she is actively engaged, and she asked what might happen if they were successful. We have a problem, because Burton’s has decided to wind down its business and to reinvest elsewhere. I shall turn to the Scottish numbers in a moment, because we have made specific inquiries. It is therefore very difficult, at this moment, for the Government to try in any way to override a decision if the company wishes to move from that location to elsewhere—however frustrating I am sure that will be for the hon. Lady. If the company does not wish to remain on that site, it is very difficult for the Government to change the fundamentals of that particular business.
On the Scottish Government grants that have been allegedly applied for, we have made specific inquiries to try to help the hon. Lady, and at the moment we understand that no detailed discussions have taken place between the company and the authorities. There has been an initial discussion, but no business plan, details or finance plan have been discussed. The location in question in Scotland would not qualify for regional selective assistance, however, so we wait to find out what the discussions may or may not be about between Burton’s and the Scottish authorities. I have asked my officials to monitor the situation closely, and if we receive that information we will of course share it with the hon. Lady, so that she is able, in her local discussions, to deal with it. She will appreciate, however, that at this moment and at this Dispatch Box it is very difficult and, indeed, probably inappropriate for me to second guess what may or may not be offered.
On the question of the company’s accounts for last year, which show a credit of £418,000 for, as the hon. Lady put it,
“the release of Government grants”,
we have spoken to the Northwest Regional Development Agency, and I am disappointed to tell her that, as of an hour ago, it has not been able to provide us with that information. I have pressed upon the RDA the need for it, and the moment I receive a reply I shall of course share it with the hon. Lady, so that she can understand the background to the situation and what
“the release of Government grants”
actually means.
The hon. Lady referred to two other businesses, Typhoo Tea and Manor Bakeries. She asked whether there is a danger of a domino effect because the security and amenities on the site are shared. I am concerned that the closure of the plant should not have unreasonable adverse effects on the neighbouring businesses. I am not familiar with the exact site and with what those effects might be, and I am not sure whether it would be £1.5 million, £2 million or £3 million. However, we are in direct contact with the RDA to establish the specific facts and itemised numbers on that. She said that the data centre that the company offered is not yet operational. If we get that information from the other companies through the RDA, we will bring it to her. It is difficult for me, in the circumstances, to make a commitment at this moment, but I am happy to come back to her in due course when we have more information on that issue.
The hon. Lady said that the Moreton site was effectively the only land in the area that is suitable for industrial development and zoned for that use. She asked what the situation would be if there was a closure, because it could be serious. A number of avenues are open, and I urge her to work with business and civic leaders in this area, as I know she already is. She mentioned the regional growth fund, the first round of which closed today.
Mr Prisk
We are in the last minute of the debate, so I will not give way.
The £1.4 billion regional growth fund has been set up. The first round has closed, but the second has not. The hon. Lady might want to consider that. In addition, there is the £1.5 billion business growth fund that the banks have established to deliver investment. As I said, if things do not work out, Jobcentre Plus help is available.
I appreciate the difficulties in the hon. Lady’s area, and it is important that we remain in conversation and contact on this matter. It is early days, but I hope that a satisfactory conclusion can be reached. At this moment, it would be unwise of me to make a carte blanche offer of help in monetary terms, because we are not fully conversant with the facts. When we are, I will be happy to have further conversations with her, or her neighbouring colleagues if that is appropriate. On that note, I will draw my remarks to a—