UK Automotive Industry
Debate between Michael Fallon and Iain McKenzieWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Michael Fallon
I am certainly happy to write to the hon. Gentleman about that. The Government have committed our side of the £500 million funding, but we cannot commit expenditure through and beyond the next Parliament. Perhaps the hon. Gentleman will allow me to write to him about that specific point.
Although there has been recent growth and expansion in the centre, and a lot of positive news, we should not become complacent. There is much more to be done to ensure that the growth we have seen in recent years is sustainable, particularly in building the capability and capacity of the supply chain, and I will turn to that now.
My hon. Friend the Member for South Staffordshire is right in saying that there is much more to do to strengthen the supply chain. Currently, only about 40% of the components of a UK-built vehicle come from a UK supplier, so there is clearly an opportunity for us to capture more of the supply chain. Through the strategy and the council, the Government and industry are working together to boost the competitiveness of the UK’s supply chain growth. We are investing some £129 million to strengthen advanced manufacturing supply chains that will create around 1,400 jobs, and we are supporting a Society of Motor Manufacturers and Traders-led project with £13.4 million of funding to help to improve the competitiveness and capability of 38 automotive supply chain companies.
The sector is also benefiting from Government funding worth more than £56 million for a total of nine AMSCI bids across four rounds of the competition. Between them, the projects aim to create more than 3,700 jobs and to safeguard a further 3,800 jobs. The Automotive Council has identified a potential £3 billion of opportunities for UK-based vehicle and engine manufacturers, where components are currently sourced from overseas.
The sector has also been successful in gaining funding from the regional growth fund, and has secured some £236 million in awards from that funding in rounds 1 to 4. To marry the opportunity with investor appetite, the automotive investment organisation, to which several hon. Members referred, aims to double the number of jobs created or secured in the automotive supply chain through foreign direct investments over the next three years to 15,000, and is currently on target to achieve that. It has had some early wins and has many investment opportunities in the pipeline.
The hon. Member for Inverclyde (Mr McKenzie) asked about the supply chain and what I have been doing to help to promote supply chain events. I have attended and spoken at events in London, Detroit and Milan for suppliers in the Po valley, and I have done the same in Tokyo and Nagoya, where tier 1 and 2 component suppliers already have some interest in the UK. I have been working very hard with UK Trade and Investment, and now the automotive investment organisation, to persuade suppliers to increase their presence in the UK and to do more closer to the prime producers.
Mr McKenzie
Does the Minister agree that encouraging a green supply chain would enable more manufacturers to source in the UK, and to get round what is always put up as an excuse—the idea that EU procurement legislation does not allow them to source as close to home as they would like?
Michael Fallon
I will certainly consider that and draw it to the attention of the Automotive Investment Organisation. It is an intriguing thought. We are obviously working closely on procurement issues in preparing to help manufacturers here with negotiations under the transatlantic trade and investment partnership with the United States, and we are looking at EU procurement rules in that context.
We know that the industry has concerns about the skills levels in the supply chain, and we share those concerns. To capitalise on the growth of the major manufacturers in the UK, we must tackle those skills gaps, so that we can build a strong UK supplier network. We are providing significant support through the employer ownership pilot. In the west midlands, for example, £1 million will support the Telford manufacturing partnership, led by DENSO, in assisting in pre-employment activities and in upskilling employees. We are working with the industry through the Automotive Council to ensure that we target the next phase of support where it is most needed.
Apprenticeships are at the heart of our approach to improving work force skills. In 2012-13, we supported over 66,000 apprenticeship starts in the engineering and manufacturing technologies sector subject area. Trailblazers are leading the way in implementing new apprenticeships and in helping to design the first apprenticeship standards.
Manufacturing in the UK
Debate between Michael Fallon and Iain McKenzie(10 years, 6 months ago)
Westminster HallRead Full debate Read Hansard Text
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I join in welcoming you to the Chair this evening, Mr Streeter. I also congratulate the hon. Member for Inverclyde (Mr McKenzie) on securing this important debate and on the participation and audience that he has attracted from among both Opposition and Government Members.
A strong manufacturing sector remains crucial to the UK economy, now and in the future. It contributes disproportionately to our overall productivity growth. It drives innovation and business research and development; it accounts for 72% of all our business R and D. Manufacturing accounts for more than half of all our exports, and it provides skilled and well-paid jobs and employment opportunities for people of all educational attainment levels throughout our country, and particularly in the less affluent regions. The recent Foresight report, “The Future of Manufacturing”, pointed out that it is also one of the keys to resilience. It is one of only two sectors able to drive growth right across the economy through cross-sectoral supply chain linkages.
Of course, some manufacturers have not had an easy time during and after the recent financial crisis, but there has been some encouraging news of late. We know from the Office for National Statistics that manufacturing output rose by 0.6% in the three months to November, and industrial production rose by 0.3%. Two weeks ago, an executive survey by the Engineering Employers Federation and Aldermore told us that 2014 looks set to be better for the UK and for manufacturing than each of the past two years. Projected manufacturing expansion of 2.7% will put us top of the European Union growth league. The Deloitte chief financial officer survey, published on 6 January, reported that business optimism was at a three-and-a-half-year high. It is true that macro uncertainty and capital constraints, two of the biggest blocks to business activity, have begun to recede.
Mr McKenzie
We welcome the statistics that the Minister is rehearsing. Will he advise us of the spread of manufacturing across the length and breadth of the UK?
Michael Fallon
I do not have a figure on that immediately to hand, but perhaps the hon. Gentleman will allow me to write to him to fill in the picture across the regions. We have some statistical knowledge of that through the regional growth fund and our other funding instruments.
We have significant strengths in key manufacturing sectors, including automotive manufacturing, aerospace and pharmaceuticals. We need to make more of those competitive advantages and to sustain them. That is why we have a long-term plan in the shape of our industrial strategy, enabling Government and industry to work together to support the long-term direction that is needed to create more opportunities and jobs and to make this country more competitive. One of the most encouraging things about the industrial strategy has been the consensus that has built up around it, not simply among all parties in this House and in the all-party group on manufacturing, but between the CBI, the TUC, Lord Heseltine and others.
The strategy has five main strands: the sectors themselves, procurement, skills, technologies and access to finance. Through those strands, we are planning 10, 20 or even 30 years ahead. For example, with industry we are jointly funding the Aerospace Technology Institute to enable us to meet the challenges ahead and respond to the demand for up to 27,000 new civil aircraft between now and 2030.
Mr McKenzie
The Minister referred to the all-party group on manufacturing. What are his thoughts on that group’s call for a hotline to Government and a go-to man for manufacturing needs?
Michael Fallon
I was rather hoping that I was the go-to man and the contact figure within Government. Not only have I had the pleasure of addressing the group in this place, but the group has been to see me at the Department for Business, Innovation and Skills, and although titles vary, if there is a Minister for Manufacturing, I suggest that it is probably me. I am certainly happy to add to that a specific hotline, or an official with whom the group can have contact.
I have already mentioned the Aerospace Technology Institute. Through the construction strategy, we are trying to make the UK the global leader in sustainable construction by 2025, in a market that will grow by 70%. As part of the automotive strategy, we are investing around £1 billion over 10 years in a new advanced propulsion centre to develop, commercialise and manufacture advanced propulsion technologies in the UK. That strategy, too, looks 20 or 30 years ahead.
Hon. Members have referred to the renaissance of our motor manufacturing industry. There is the success of Jaguar Land Rover and Nissan, and also of the MINI plant at Cowley, which I have visited.
Royal Mail
Debate between Michael Fallon and Iain McKenzie(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Michael Fallon
No, it is not possible to change the six-day service through a statutory instrument. That can only be changed by this House. As I have said, we have absolutely no plans to change that obligation.
Mr Iain McKenzie (Inverclyde) (Lab)
In his statement, the Minister gave some commitments on the future of the Royal Mail. Will he go one step further and give some guarantees that there will be no job losses, no move to increase part-time working, no closures of sorting offices, and a continuation of the much-loved Saturday delivery?
Michael Fallon
Let us be clear: there have been 50,000 job losses in the last 10 years of public ownership, so public ownership is no guarantee of job security. The best guarantee of job security is to be able to work for a company that is growing and investing in its future, and able to access the finance it needs. The management of Royal Mail have put on the table a series of assurances about future terms and conditions, which they hope the union will come to agree before we get to the point of privatisation.
Oral Answers to Questions
Debate between Michael Fallon and Iain McKenzie
Michael Fallon
I will certainly see whether that is possible. I am already aware of—how can I put it—the power of Skye hospitality, and I would certainly like to see for myself exactly the potential for Skye to contribute to the offshore wind power that we need.
Mr Iain McKenzie (Inverclyde) (Lab)
I, too, represent a former shipbuilding community. I believe that Inverclyde has the skills and the infrastructure to play a full part in offshore wind generation. In that context, I have a meeting next Tuesday with RenewableUK. I extend an invitation to the Minister or the Secretary of State to attend that meeting with me and help to promote Inverclyde in playing a full part in that wind power generation.
Michael Fallon
Our diaries are filling up. I want our shipyards to reap the full benefit of the work that is now becoming available in offshore wind. I saw for myself recently on a visit to Cammell Laird on Merseyside just how much of that yard’s work now contributes to the Gwynt y Môr field in the Irish sea, and I am sure that there are opportunities for the Clyde as well.
UK Manufacturing Sector
Debate between Michael Fallon and Iain McKenzieWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr McKenzie
On skills and innovation not only in products but into new markets, Promedics in my constituency has taken the existing skills of sewing machine technicians and moved them into a totally new market, supplying the NHS and others across Europe with surgical supports. It has taken that skill and applied it to a new market. What recognition or support can the Minister give such businesses?
Michael Fallon
I am delighted to hear that and would certainly like to hear more details and to see whether there are ways in which Government can recognise that kind of development more officially.
A skilled work force is the key to providing the innovation that business needs. Apprenticeship starts in engineering and manufacturing have increased from 26,000 10 years ago to more than 49,000 last year. There were more than 2,000 apprenticeship starts in the constituency of my hon. Friend the Member for Gosport last year. The number was up by 18% on 2010-11. She will be interested to know that nearly 900 of those apprenticeship starts were in the engineering and manufacturing sector—an increase of 32% on 2010-11, so we are making changes.
The Daedalus enterprise zone members group, which I think my hon. Friend chairs, includes the provision of a new skills training centre that is due to be built on the site from 2013. The first students are due through the doors in September 2015. That is a major achievement in my hon. Friend’s area and shows that the enterprise zone there is open for business.
I thank all hon. Members who have attended the debate and those who have contributed to it through their questions. I thank again my hon. Friend for raising this subject for debate. Let me assure her and you, Mr Robertson, that this Government are fully committed to realising the growth of manufacturing through innovation, which we see as essential to building a better balanced, more resilient economy for the future.
Growth and Infrastructure Bill
Debate between Michael Fallon and Iain McKenzie(11 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr McKenzie
My hon. Friend makes a very good point; I could not agree more.
The Chancellor proclaimed that the proposal represented
“owners, workers and the taxman, all in it together,”
but the measure is divisive, goes against the spirit of one nation and risks creating a two-tier labour market across the country.
Offering employee owner contracts, where employees effectively sell their employment rights for shares, is unlikely, if ever, to deliver the highly motivated, engaged work force employers need. Ministers should be making it easier to hire employees, not easier to fire them.
Labour’s jobs plan includes tax breaks for small firms taking on extra employees. Labour supports employee ownership, but not coupling it with slashing employment rights. The US National Centre for Employee Ownership, one of the world’s leading groups promoting share ownership, has also criticised the scheme. The proposal smacks of fire at will. Although Ministers, including the Business Secretary, have claimed they are not going to take forward Mr Beecroft’s fire at will proposals, in practice they are introducing them by the back door. Ministers are trying to introduce the scheme without proper consultation or discussion, or indeed any real support.
The way the scheme will operate in practice and its ramifications are unclear. There are concerns about other ways in which the scheme could have an adverse impact on employees. Will jobs be advertised as being only employee owner and will employers be able to impose the scheme on individual employees or groups of employees? What safeguards will there be to ensure that the scheme is voluntary for existing employees, as Ministers claim?
The clause is a disaster for all, be they employees or employers, and it will not deliver growth in our economy. Businesses that utilise the scheme in recruiting will be recruiting from a smaller pool of talent, which will risk their not being able to take advantage if ever a real recovery comes about.
People giving up their hard-fought employment rights in return for a few shares beggars belief and takes this country back to the dark ages of employment practice. I ask that the clause be dropped.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
We have had a good and reasonably balanced debate about the merits of the new employment status created by clause 25. I fully accept that there are concerns about it. Some of them are genuine and I hope to address them a little later. Some are based on a misunderstanding of the intent behind the new employment status and others take no account of the Government amendments that have already been tabled.
I will try to address all the points raised by hon. Members, but I first want to resist the casting of the hon. Member for Edinburgh South (Ian Murray), who suggests that I represent Scrooge in “A Christmas Carol.” Perhaps I could refer him to a better character, Scrooge’s older employer, Fezziwig, who was noted for the magnanimity he displayed towards apprentices and young workers and for the generosity of his Christmas party. Such generosity, I suggest to the House, is reflected in the new opportunities we are extending for share ownership and in the very generous tax relief that comes with it.
Clause 25 creates a new employment status—employee shareholder—in addition to the existing employment statuses of worker and employee. The United Kingdom already has differing types of employment status with different levels of rights and different obligations, to allow businesses and individuals to choose the right type of contract that suits their particular circumstances. It is important, therefore, before we come to consider the new status, that the House understands the differences between existing employment statuses, because each has different employment rights.
Employees, for example, have all employment rights, whereas workers do not have unfair dismissal rights, do not enjoy the right to statutory redundancy pay and do not have other statutory rights. Workers, however, do have the right to the national minimum wage and do have protection against unlawful deductions from their pay, paid annual leave, rest breaks and protection against discrimination, including on the ground that they work part-time. The statuses of worker and employee are distinguished by the level of control and obligation that the employer has over the individual. The employer has a higher level of control over an employee—he can dictate how, when and what an employee does, whereas an employer cannot dictate in the same terms how a worker carries out his work.
The new status that we are considering carries the same level of control as an employee, but links employment with shareholding in the company. Individuals in the new status will have similar rights to employees, but they will not have the right to statutory redundancy pay, the statutory right to request flexible working unless they have returned from parental leave, time off to train, or unfair dismissal rights except for automatically unfair reasons. The new status is designed to give companies more choice in the type of employment contracts they can use to structure their work force. But the flexibility that businesses have is not restricted to different types of employment status. Businesses may already choose to take on somebody as part-time, full-time, permanent or for a fixed period. The important principle underlying the Government’s approach is flexibility. We want to allow businesses a choice of which type of employment contract to use. This new status gives companies an additional option, should they wish to use it. They do not have to use it if it does not fit their business model.
We consulted in October and November on how we could best implement the new employment status. Our consultation lasted for three weeks and we received more than 200 responses. Those were very helpful, along with the discussions that we had on Second Reading and in Committee, and helped us address the areas of the policy that need improving with the set of Government amendments before us. Before I deal with those, let me consider the points raised on the other amendments.
The hon. Member for Hayes and Harlington (John McDonnell) tabled amendments 37 and 60, which would limit how companies can use the new employment status so that, in effect, they could offer it only to existing employees with at least two years’ service. The Government are creating a further employment status to provide additional flexibility and choice for companies in managing their work force. Allowing businesses greater flexibility in how they manage their work force encourages growth and confidence, and the difficulty that I have with the hon. Gentleman’s amendments is that they are restrictive and remove choice from employees and employers.
The employee shareholder status is a novel way for companies to arrange their work force. From its inception, it was principally intended—I think this was the point made by my hon. Friend the Member for Burnley (Gordon Birtwistle)—for fast-growing new companies. The amendment to limit the new status to existing employees would deter or even prevent many newer companies from making use of this innovative and flexible model. It would also prevent new or newly recruited employees from taking advantage of the status that existing employees might already enjoy. As I have just reminded the House, we decided to create a new employment status to give companies additional choice about the contract types they can use for those who work with them and for them.
Amendment 61 would cause inflexibility in the decision-making process for companies by giving their existing work force a veto over the type of employment status which the company may choose to use. The result of the inflexibility caused by amendment 61 would come at a time when companies need to be agile and innovative to respond to changing economic circumstances. Furthermore, we do not force companies to consult in this way if they decide to take on people as workers or as employees. I suggest to the hon. Gentleman that the new status should be no different. The decision on how to structure a work force is for companies to make. They are the ones best placed to determine how they go about employing staff, and the responsibility for deciding which employment status to offer should rest with them. Nor would the amendment be fair to employees in the work force who may wish to take up the option.