Honda in Swindon

Michael Fallon Excerpts

Tuesday 19th February 2019 Commons Chamber

[Greg Clark]

I am grateful to the hon. Gentleman for his remarks and the tone in which he expressed them. I will certainly keep the House informed about the taskforce’s progress. We should bear in mind that there are two years in which the workforce will continue to be employed. It is important that the sales in Swindon should continue so that their jobs can be secure. During that time, I want to find out whether in the first instance Honda, recognising its continued commitment to research and development, will see that it has an ideal facility in Swindon in which to build the next generation of vehicles,

The fact that there is a modern plant and a workforce in Swindon who have an international reputation for being excellent and innovative is a message that we should send out loudly and clearly. At a time when there are skill shortages across manufacturing industry, there is absolutely no reason why the opportunities made available to the workforce should not give them equally promising and rewarding careers in advanced manufacturing, such as they have enjoyed in Swindon. I will certainly update the House on the progress on that.

The hon. Gentleman asked about the trade agreement with Japan. My view is that the best outcome—indeed, the essential outcome—is that we should roll over, and continue to be able to benefit from, the trade arrangement that has been negotiated between the EU and Japan, unless and until we negotiate an alternative that is at least as good.

[Sir Michael Fallon (Sevenoaks) (Con)]

Is not one of the lessons from this about the power and scope of the EU-Japan trade agreement, in contrast to the continuing uncertainty for our businesses here and for overseas investors —two and a half years after the referendum—about what the future terms of our trading relationship with Europe are actually going to be? Will the Secretary of State tell us why it is taking so long to put in place our trade agreements with countries such as Japan, Canada and Australia?

[Greg Clark]

I agree with my right hon. Friend. Although Brexit uncertainty was not cited as one of the factors in the decision, it is evident in investment decisions in the whole industry. I know from regular conversations with investors that it does bear on their minds. Last time I was in the House, I mentioned that Nissan has said that the political uncertainty over a no-deal Brexit, or what kind of Brexit there will be, is “casting a shadow” over its future. When investors that have no political motivation to make such statements issue that advice and warning, we should attend to it. It seems to me that we have the information necessary to conclude these negotiations, and in my view we should do it during the days ahead.

Nissan in Sunderland

Michael Fallon Excerpts

Monday 4th February 2019 Commons Chamber

[Greg Clark]

If the hon. Lady had spent time talking to employers in the automotive sector, she would have come to a different set of conclusions. First, she should welcome the fact that Nissan has committed to Sunderland. After the referendum, before any negotiations had taken place and even before article 50 was triggered, the plant was in jeopardy, and the workforce, the unions and the Government worked closely and hard together to secure its future. At the time, her former colleague, the then hon. Member for Hartlepool and Chair of the Business, Energy and Industrial Strategy Committee, hailed it as

“a welcome example of targeted Government commitment to a successful company in a strategically vital sector”.—[Official Report, 31 October 2016; Vol. 616, c. 684.]

That commitment continues.

The hon. Lady asks whether the financial support that Nissan applied for continues, and I hope that I was clear in my statement that the support is available to the sector and has been for many years. Nissan will be invited to resubmit an application in the light of its changed investment.

The hon. Lady’s second point is that we need to conclude our Brexit negotiations, but what she spectacularly ignores is that Nissan and the UK automotive industry back the deal that the Prime Minister has negotiated. The deal achieves what they need: no disorderly Brexit on 29 March, a transition period and a commitment to no tariffs, no quotas and no rules of origin checks at the border.

The Japan Automobile Manufacturers Association has welcomed both the withdrawal agreement and the political declaration, and it has called for this House and the European Parliament to ratify the agreement swiftly. If the hon. Lady wants to rule out no deal—if that is her concern and her motivation—she should back the calls from the industry to ratify the agreement.

The continued uncertainty I referred to in my statement, as the hon. Lady will acknowledge, is a reflection, in part at least, on the Opposition’s failure to come to a decision and back the deal. During all Nissan’s 30 years in the UK, it has been able to count on constructive support from all parties, yet Labour Front Benchers have evaded having a policy on this vital issue for our country, hiding behind six tests that are a fake and a sham designed expressly to avoid a deal, and they know it. They claim to represent the workers of this country, but the livelihoods of millions of workers are being jeopardised by the machinations of the people occupying the Labour Front Bench.

In a call from Japan yesterday, a senior Nissan executive told me, “Please pass on the view to your Opposition that they need to meet in a way that forms a deal.” I think all of us in this House should act on that.

[Sir Michael Fallon (Sevenoaks) (Con)]

Whatever the complex rationale behind this decision and, despite my right hon. Friend’s considerable efforts to work on it, is it not a stark reminder that our exporters still have no idea whether, at the end of the implementation period, they will require new certification, whether they will carry tariffs or whether, indeed, they will be able to trade frictionlessly? Given the fall off in business investment in each of the last three quarters, is it not now time for us all to come together to end the uncertainty and agree on the terms of our future trading relationship with the European continent?

[Greg Clark]

My right hon. Friend makes an excellent point. He has experience of dealing with businesses that are making investments in this country. It is the view of investors in this country and around the world that they want to see us live up to the traditions of this House in providing a stable environment for investment to take place. That includes having certainty on our future trading relationship. It is incumbent on us all in this House to deliver that for the investors who are placing faith in our economy.

Hinkley Point

Michael Fallon Excerpts

Wednesday 14th November 2018 Westminster Hall

[Richard Harrington]

I am happy to confirm that. I have already met with one chief executive and one lead councillor from the hon. Gentleman’s area, but I would, of course, be delighted to discuss this with him at any time.

The main point today, which my hon. Friend the Member for Bridgwater and West Somerset expressed so eloquently, is how important the nuclear industry is as an industry in its own right to local economies and to the national economy. As far as I can see, EDF is doing an excellent job. There are many British and Northern Irish employees, some of whom I met down there, of different skill levels, and I was pleased to see the number of young girl apprentices, which is also part of our nuclear sector deal.

I am not at all complacent. I think the deal struck at Hinkley Point C was sensible from the taxpayer’s point of view, as my hon. Friend mentioned, because it completely de-risked the taxpayer. We can do other interesting deals in the future for nuclear. At the moment, nuclear power is roughly 22% to 24% of the power output that we need. By 2030 to 2040, as the original power stations are decommissioned or reach the end of their life, that will drop with Hinkley to—again, these are very rough numbers—5% to 7%. There is a big gap.

[Sir Michael Fallon (Sevenoaks) (Con)]

Does the Minister agree that the true value—that might have been a better title than “cost”—of the Hinkley project will not be known until we see some of the cost savings that will be realised at the second station that EDF has built, and indeed in the sequencing of stations that will be built after that?

[Richard Harrington]

My right hon. Friend makes an excellent point, with which I fully agree. On my first visit to Sellafield I was shown the original Calder Hall reactors that were opened in the ’60s. The then Minister said that the electricity would be so cheap that it was not even worth metering it. We have moved away from that, but I believe that, in the long term, this will be low-cost power. As everyone knows, the up-front costs are significant. After that, the marginal costs are comparatively low. As long as there is a reasonable way to finance the up-front costs—which, as the technology becomes more modular and more commoditised, we will be able to estimate more accurately—I totally agree with my right hon. Friend’s point.

I am pleased to respond to today’s debate. I will not forget Hinkley Point C, which is one of the most significant visits I have ever made. It is calculated that 64% of the construction contracts there—it is a huge project—will go to UK companies, and that £4 billion will go into the regional economy over the lifetime of the project. We will not forget that; it is very important to us. I am extremely grateful to my hon. Friend the Member for Bridgwater and West Somerset for bringing the debate to the Chamber.

Question put and agreed to.

Nuclear Power: Toshiba

Michael Fallon Excerpts

Monday 12th November 2018 Commons Chamber

[Mr Speaker]

The Secretary of State is a most cerebral fellow, and also unfailingly courteous, but there is a bit of pressure on time, so if he can zip through it, with that rapier-like brain of his, that would be greatly appreciated by the House.

[Sir Michael Fallon (Sevenoaks) (Con)]

Does my right hon. Friend agree that if we are to develop a nuclear industry with the skills and the supply chain necessary to deliver baseload electricity that is reliable and cost-effective, it really is essential to avoid the kind of long gaps in procurement—for example, between Sizewell B and Hinkley C—that we saw under Labour? Will he intensify his work to find a financing model that is equally attractive to our long-term funds as it could be to overseas investors?

[Greg Clark]

I pay tribute to my right hon. Friend for his important work in re-establishing the civil nuclear industry in this country. He is absolutely right: it is not just investment gaps that cause problems; we lose the ability to train workers in that industry, and we are having to restart training nuclear engineers. In previous statements to this House, I have said that we have accepted the recommendations of the Public Accounts Committee about looking at new models for financing new nuclear. It is right that we should do so, and in so doing we will proceed with deploying new nuclear power in this country.

Budget Resolutions

Michael Fallon Excerpts

Wednesday 31st October 2018 Commons Chamber

[Sir Michael Fallon (Sevenoaks) (Con)]

I am most grateful, Mr Speaker. I remind the House of the business interests declared in the register.

Unlike the previous speaker, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), I commend the Budget and I look forward to supporting it in the Lobby tomorrow. The Chancellor of course had the advantage of rising tax receipts and lower borrowing, and he has made his choices, but they have been good choices. I look forward to supporting them.

In the end, this Budget should be judged on how it meets some of the bigger challenges: on how it strengthens the resilience of our economy as quantative easing comes to an end and capital might seek a more profitable home in the United States; on how it helps to narrow our still substantial productivity gap with France and Germany, as well as the United States—I commend the Secretary of State for Business, Energy and Industrial Strategy in particular for securing a massive increase in the investment allowance, which really will help our firms to start to narrow that gap; and on how it makes us properly match-fit for Brexit. I applaud the additional resources being given to UK Export Finance and the very significant increase in expenditure on research and development. It is in those areas that we are going to have to grow our capability if we are to succeed as a first-class global economy.

I would like to pick out three particular areas that I think require more attention. The first is infrastructure. Again, I was delighted to see a really significant increase in the roads budget. However, the recent proposal to take an entire motorway in my constituency and turn it into a potential lorry park illustrates just how fragile our roads system is if it can choke up so easily.

It is noteworthy that the three most important wealth-creating regions of our country—the south-east, London and East Anglia—are divided by the Thames. There are 17 bridges in London west of Tower Bridge; there are only two road crossings east of it. Every day, my constituents and thousands of others in Kent and in Essex, on both sides of London, are queuing to get over the River Thames, at untold cost to our economy and our business. That is because successive Governments have been ludicrously slow in giving us the infrastructure we need. It took 70 years to add a second tunnel at Blackwall and 28 years to add a bridge to the Dartford tunnel, and it now looks like taking 18 years to build the third lower Thames crossing. I urge my right hon. Friends to look again at the infrastructure bureaucracy to see how we can speed up the development of the critical infrastructure that we are going to need in future—the airports, the ports and the river crossings that will enable us to make a success of Brexit.

Secondly, there is investment in our schools and skills. I fully understand that education spending for the next spending period will not be determined until the spring, but I think my right hon. Friends are already aware that school budgets are struggling to cope at the moment, with rising pupil numbers and the huge increase in the number of pupils with additional needs, meaning that education authorities such as Kent County Council are continuing to have to divert resources from the main schools funding block to deal with those particular pupils. I do not think I am alone in this House in urging my right hon. Friends to look again at the schools budget, not just for 2021 but for the new financial year for schools beginning in September.

My final point is on savings. The current savings ratio, at 4.9% of disposable income, is the lowest for 50 years. It has been falling year after year and is now the lowest since records began. Coupled with some of the steep recent increases in consumer debt, that should set alarm bells ringing. I am quite struck by the number of constituents I see in my surgeries who are living on the edge, if I can put it like that—who have nothing to fall back on when they hit harder times. We have to return to that in future Budgets.

One of the more painless ways of boosting savings, of course, is to encourage share ownership—not through the mandatory, confiscatory plan put forward by the shadow Chancellor, but by simplifying and incentivising the current share schemes. There are share incentive plans at the moment, but some of them are 40 pages long. There are employee ownership trusts, but they do not apply to companies owned by private equity. We need to look again at all this to simplify it so that it is easier for employees to have a genuine stake in their firms. We must reduce the holding period and improve the tax treatment so that we have genuine share ownership.

With Brexit looming, one might have expected a Budget that was a holding operation. This was much more than a holding operation; it was a very skilful set of choices. But outside the European Union, I believe, we are going to need even more ambition as a Government. We will need further, radical steps to improve our tax competitiveness, to improve our export record, to drive up our productivity, to modernise our infrastructure, and to improve the quality and quantity of our spending on skills and on schools. That said, I commend this Budget.

[Several hon. Members rose—]

Nuclear Power

Michael Fallon Excerpts

Monday 4th June 2018 Commons Chamber

[Greg Clark]

I thank the hon. Gentleman for his comments. On statements to the House, I think all Members would recognise that I have come to the House at the earliest possible opportunity. It was today that the decision was taken to enter into negotiations. Members will know that I always keep the House updated and always will.

It is a bit rich of the hon. Gentleman to complain that new nuclear power will come online later in the 2020s, given that he and his colleagues have resisted the replacement of our nuclear fleet, which we have known needs to be replaced for all this time. It is an act of responsibility on the part of this Government that we are planning ahead for the replacement of the 20% of our electricity that is currently generated from nuclear power. It is important for consumers in Scotland and in the rest of the United Kingdom that we do that.

The hon. Gentleman criticised what he regarded as the value for money of the Hinkley project. He will have heard me say at the time that that represents the highest price we will pay for new nuclear. I expect future new nuclear power stations to come in at a lower price. I have made it explicit today that that is a requirement of the negotiation. However, this is the beginning of a formal period of negotiation.

The recommendations of the Public Accounts Committee and the National Audit Office have shaped the approach we are taking. The value for money test has to be met, and at all the key milestones I will ensure that Parliament has the opportunity to scrutinise the progress of the negotiations.

[Sir Michael Fallon (Sevenoaks) (Con)]

Does my right hon. Friend agree that this welcome announcement and the lower strike price that is being targeted underline the importance, if we want to keep costs falling, of securing continuity in the nuclear programme, so that the supply chain and the skills academy can look beyond Wylfa to Sizewell C, Oldbury, Bradwell and Moorside?

[Greg Clark]

My right hon. Friend is absolutely right. He contributed with distinction as an Energy Minister and therefore recognises that if we are to achieve not only the full cost benefits but the industrial and employment benefits, it is necessary to show that we have a pipeline that is being delivered in a steady and orderly way. If we do that, as we have done with offshore wind, in which he was instrumental, we can establish an industry that not only supplies to UK consumers at a lower cost but offers a big export opportunity.