Coronavirus Business Interruption Loan Scheme
Nadhim Zahawi Excerpts(3 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I thank the hon. Member for Midlothian (Owen Thompson) and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) for initiating this important debate. We have had some very thoughtful contributions from many colleagues, not least my hon. Friends the Members for Thirsk and Malton (Kevin Hollinrake) and for Ynys Môn (Virginia Crosbie) and, of course, the hon. Member for Strangford (Jim Shannon), as well as my hon. Friend the Member for Broadland (Jerome Mayhew), who gave a detailed and forensic explanation of why CBILS was so important to the business that he was involved in, my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill), the Scottish National party spokesman on business and the shadow Minister.
We know how worried people are about their health, the health of their loved ones, their jobs, their businesses and their financial security. That is why the Government’s economic priority remains the same—to protect jobs. To support this, we have announced the following: an extension to the furlough scheme until March; more generous support to the self-employed and paying that support more quickly to them; cash grants of up to £3,000 per month for businesses that are closed—90% of small and medium-sized businesses’ premises in the closed retail, hospitality and leisure sectors, which have been mentioned several times today, should broadly have their monthly rent covered by these grants—plans to extend existing loan guarantee schemes and the future fund to the end of January next year and an ability to top up the bounce back loans as well; and, although we are debating CBILS, there is an extension to the mortgage payment holiday for home owners. These announcements will give businesses—whether they are open or required to close—the flexibility to adjust and plan over the coming months. That comes on top of what I think is an unprecedented £200 billion package of support that we have committed to since the beginning of the pandemic.
Let me turn to the specific subject of this debate. The coronavirus business interruption loan scheme has delivered finance to a wide range of businesses. As of 18 October, more than 73,000 loans worth £17 billion have been approved. The benefits of the scheme have been seen across the nations and regions of the United Kingdom. In Scotland, more than 3,300 coronavirus business interruption loans, worth £759 million, have been offered. In Wales, more than 1,600 loans, worth more than £374 million, have been offered. In addition, businesses in Scotland have been offered more than 76,000 bounce back loans worth £2 billion and Wales 48,000 loans at £1.3 billion.
Since the start of the coronavirus business interruption loan scheme in March, we have responded to feedback from businesses—I have to say that today’s feedback is equally important—and made changes where we needed to. This includes prohibiting lenders from requesting personal guarantees on loans under £250,000. That has reduced the risk to small businesses taking out loans under the scheme and opened access to those who could not afford to offer personal assets as security.
We extended the scheme to all viable small businesses, not just those unable to access commercial finance. Various technical changes were also made to the application process to speed it up for businesses, and we removed the forward-facing viability test to support firms that faced uncertainty regarding their income.
We also recognised that the scheme could not be the answer for all businesses seeking finance and in April we introduced the large business interruption loan scheme, which provides loans of £200 million, with an 80% guarantee from Government. As of 4 May, recognising that some of our smallest firms were finding it difficult to access CBILS or CLBILS, we introduced the bounce back loans. As of 18 October, we have supported 1 million businesses with £40 billion of bounce back loans. These schemes are not without cost. I know that the SNP are advocating the writing off of the loans. There is no Government money; it is taxpayers’ money, which is why we need to be prudent. We cannot save every business and, inevitably, some of these loans will sadly not be repaid, but, as the OBR has said, the cost of inaction would almost certainly have been much higher.
My colleagues in the Department for Business, Energy and Industrial Strategy and I, as well as ministerial colleagues in the Treasury, continue to engage with businesses and representative bodies on a regular basis. We also engage, of course, with the devolved Administrations and I pay tribute to Fiona Hyslop, Ken Skates and Diane Dodds for the deep engagement that we have had since March.
As the Prime Minister announced on Monday, we will adjust the bounce back loan scheme rules to allow those businesses that have borrowed less than 25% of their turnover to top up their existing loans. Businesses will be able to take up this option from next week. They can make use of this option once. To help businesses to repay loans that they have taken out during this intensely difficult period, we have also introduced the pay-as-you-grow measures. Under these measures, businesses will be offered more time and greater flexibility to make repayments on their bounce back loans. Loans can be extended for up to 10 years, as my hon. Friend the Member for Broadland quite rightly shared with us. That would almost halve the rate of payback that a business would have to deliver.
The Government acknowledge that access to debt finance is important, but it can only form part of our approach to supporting businesses through this period. We have already provided the devolved Administrations with unprecedented up-front funding guarantees, so that they have the certainty they need to decide how and when to provide support. The funding guarantees to the Scottish Government are worth £7.2 billion, to the Welsh Government £4.4 billion, and to Northern Ireland £2.4 billion.[Official Report, 10 November 2020, Vol. 683, c. 10MC.]
My hon. Friend the Member for Bromley and Chislehurst made an important point, which was also mentioned by the hon. Member for Midlothian, and that was the question of the bad behaviour of banks. If it is determined that a lender is not passing on the economic benefits of the CBILS guarantee to borrowers, the lender will be required to take such action as is required by the British Business Bank to rectify the situation. That could include compensating the borrower and/or remediating their existing book. Ultimately, the British Business Bank could suspend the lender from new lending or remove its accreditation. Any action will take into account the impact on the underlying SME. I wanted to ensure that we put that point about businesses’ relationships with their banks on record for any businesses that may be listening to the debate today.
The Government fully recognise the tremendous impact that the pandemic has had on businesses across the four nations of our country. The response from the four nations is always much better and greater than that of any individual part of our family. The Government have been there to support them and to protect, create and support jobs via the largest package of emergency support in post-war history, of which the loan guarantee schemes are an important and successful part.
The hon. Member for Manchester Central (Lucy Powell) asked how we will repay this debt. We are focusing support on families and businesses through this difficult period. Although both borrowing and debt will rise this year, the cost of servicing that debt is affordable and sustainable because of the dynamic and resilient size of our economy. We will set out further details on our fiscal policy at the next Budget, when the economic and fiscal outlook becomes much clearer.
Madam Deputy Speaker, thank you for your indulgence. We have had a great debate.
Powers Over the Office for Nuclear Regulation: Annual Report
Nadhim Zahawi Excerpts(3 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
Later today, the annual report to Parliament setting out the use of the Secretary of State’s powers exercised to the Office for Nuclear Regulation during the year will be published.
This is in accordance with section 108(1) of the Energy Act 2013.
[HCWS494]
Alternative Fuelled Vehicles: Energy Provision
Nadhim Zahawi Excerpts(3 years, 7 months ago)
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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 Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
It is a pleasure to serve under your stewardship, Mr Betts. I thank the hon. Member for Warwick and Leamington (Matt Western) for initiating this important debate, as well as other colleagues present: my hon. Friends the Members for Gedling (Tom Randall), for Bracknell (James Sunderland) and for Rother Valley (Alexander Stafford), and the hon. Members for Ceredigion (Ben Lake), for Paisley and Renfrewshire North (Gavin Newlands) and for Bristol East (Kerry McCarthy). Of course, I also thank my hon. Friend the Member for South Cambridgeshire (Anthony Browne) for his eight-point plan. I also thank the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), for the collegiate way in which he tackles this important national endeavour.
The transport sector is a vital part of our future prosperity. As we recover from the coronavirus pandemic, we have an outstanding opportunity to speed up the development of clean technology, which I guess is the theme of today’s debate. For decades, we have talked about the phasing out of fossil fuels from motoring, and now that is actually happening as we make the transition to alternative-fuel vehicles. This country has led the way in developing clean growth. Between 1990 and 2018, our economy grew by 75% while carbon emissions fell by 43%, faster than any other G7 nation, so anyone who says that it cannot be done is wrong. We followed that by making an ambitious commitment in 2019 to end our contribution to global warming by 2050, making that the law of the land, and countries around the world then began to follow suit. Of course, none of us here underestimates the scale of that challenge. Although battery electric vehicles represent nearly 5% of the new car market in the year to date, transport is still the sector in the UK that emits the largest amount of greenhouse gases, accounting for 28% of emissions in 2018.
It is clear to me that we need to go much further and faster to decarbonise transport. Throughout 2020, we have been working on a new, overarching transport decarbonisation plan, covering all modes of transport, which we expect to publish by the end of this year. That plan will set out the path that we need to take to deliver our net-zero objectives, together with our partners across the transport sector. The need for rapid renewal of the road vehicle fleet with zero-emission vehicles is well understood and will deliver substantial emissions reductions over the long term. We are already investing £2.5 billion to support the transition to zero-emission vehicles, with grants for plug-in vehicles and funding to support charge point infrastructure, which many colleagues from across the country have mentioned today.
If we are to meet our targets, there is no time to lose. That is why we have consulted on bringing forward the end of the sale of new petrol and diesel cars and vans from 2040 to 2035, or earlier if a fast transition appears feasible, as well as including hybrids for the first time. As part of that consultation, we asked for views on what package of support will be required to enable the transition and to minimise the impact on both consumers and, of course, manufacturers—businesses that have invested so much in the United Kingdom. The consultation closed on 31 July, and we will announce its outcome in due course.
Our approach to delivering our transport decarbonisation ambitions is technology-neutral—my hon. Friend the Member for Rother Valley quite rightly reminded us of the need to remain technology-neutral. As the market develops, it is becoming clear that it may be favouring different technologies for different applications. Today, electric vehicles are a small but fast-growing percentage of cars and vans on the road. Such vehicles are being adopted as a key technology for decarbonising road transport, particularly light vehicles, and over 300,000 ultra low emission vehicles are now registered in the UK. A fit-for-purpose infrastructure network is required for the mass uptake of electric vehicles—that is the message I will take away from today’s debate. Many more charge points will be needed, and we want improvements to the consumer experience when using the network.
In fact, our vision is to have one of the best electric vehicle infrastructure networks in the world. That means a network for current and prospective electric vehicle drivers that is affordable, reliable, accessible and secure. The Government and industry have supported the installation of more than 18,000 publicly available charging devices, as colleagues mentioned, including more than 3,200 rapid charging devices, giving us one of the largest networks in Europe. Our home, workplace and on-street charging schemes, and the £400 million charging infrastructure investment fund, will see thousands more electric vehicle charge points installed across the UK.
Nadhim Zahawi
I do not have the time; I have so much to try to get through and to share with the hon. Gentleman. I apologise.
In May, we announced our vision for a rapid charging network. Today, a driver is never more than 25 miles away from a rapid charging point anywhere along England’s motorways and major A roads. By 2023, we aim to have at least six high-powered open-access charge points at motorway service areas—open access is an important aspect of this in England—with some larger sites having as many as 10 to 12 charge points by 2035, which was the challenge that the hon. Member for Warwick and Leamington gave to us. We expect the number to increase to around 6,000 high-powered chargers across the network. This vision will be supported by the rapid charging fund, announced in the March Budget by our excellent Chancellor, as part of a £500 million investment over the next five years.
It is vital that consumers can charge efficiently and safely. We will consult on using powers under the Automated and Electric Vehicles Act 2018 to mandate minimum standards, such as requiring contactless payment for rapid charge points, to improve the consumer experience. While the electrification of transport will increase demand for electricity, we are confident that energy networks will support this transformation. Hon. Members heard from the Prime Minister today about our ambitions for offshore wind. The Government are working with the energy industry to plan for future electric vehicle uptake, to ensure that the energy system can meet future demand efficiently and sustainably. We have set a clear ambition for almost all cars and vans to be zero emission by 2050, in combination with the recent consultation on bringing forward the end-of-sale date. Setting long-term targets ensures that there is enough time to ready the electricity system for the mass transition towards cleaner, more efficient vehicles.
Colleagues mentioned the opportunities of hydrogen. We see a real opportunity, so we will follow up the energy White Paper with an ambitious hydrogen strategy, because hydrogen is a game changer. Hon. Members have referred to the Prime Minister talking about the Tees Valley announcement today. We have a much bigger ambition for both blue and green hydrogen going forward. The role of green hydrogen in transport will be set out in full in the transport decarbonisation plan, which is due for publication at the end of the year.
On low-carbon fuels, which are important to colleagues, we are clear that our transition to zero-emission vehicles does not mean that we can ignore measures to reduce emissions from conventional road vehicles in use today. Increasing the supply of low-carbon fuel will continue to help us to reduce the environmental impact of every journey. It is equally clear that we should not ignore the potential for low-carbon fuels to decarbonise those transport modes that are harder to reach through electrification. Low-carbon fuels have played an important role in reducing emissions already. Through the renewable transport fuel obligation—the hon. Member for Kilmarnock and Loudoun (Alan Brown) asked about this—we have seen average greenhouse gas savings through biofuels increase from 46% in 2008-09 to 83% in the latest available statistics.
The hon. Member for Warwick and Leamington asked about incentives for electric vehicle drivers. We are considering long-term future incentives for zero-emission vehicles alongside our consultation on bringing forward the end-of-sale date. In the meantime, the Chancellor announced in the Budget a further £530 million of extra funding to keep the plug-in vehicle grant for another three years.
The hon. Gentleman also asked what we are doing to ensure that people can access and pay for public charging points. That is a big focus for this Government. The system that we deliver—the system of systems, if I can describe it that way, as someone who was an engineer in a previous life—is important and will ultimately deliver on something that we both want to see happen rapidly.
Health Protection (Coronavirus Restrictions) (Obligations of Undertakings) (Amendment) (England) Reg
Nadhim Zahawi Excerpts(3 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
On 26 March 2020, the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 came into force, imposing restrictions on people’s movements and gatherings, and requiring the closure of certain retail and public premises, in the interest of public health in light of the coronavirus pandemic. A review of these regulations must take place at least every 28 days to ensure the restrictions remain necessary. Those regulations are now referred to as the No.2 regulations, given amendments made. They were last amended on Thursday 24 September 2020. Separately, BEIS’ regulations: the Health Protection (Coronavirus, Restrictions) (Obligations of Hospitality Undertakings) (England) Regulations 2020 came into force on Saturday 18 September, where hospitality sector business had placed on them obligations which had previously only featured in HMG guidance.
Taking into account scientific advice, and taking into consideration the Government’s assessment, we now require further amendments to the regulations to give effect to changes as announced by the Prime Minister on 23 September 2020 to take effect at midnight on Sunday evening-Monday morning 28 September 2020.
The changes coming into effect are:
That where relevant premises are identified by the Health Protection (coronavirus, wearing of face coverings in a relevant place) (England) regulations 2020, that businesses will have to display signage or use other means to remind people of their legal obligation to wear face coverings;
That in cafés, restaurants, bars and public houses, that singing, dancing and loud music are not permitted, save for specific exceptions being permitted;
That provisions which were included in BEIS original coronavirus regulations regarding respecting the rule of six in relation to taking bookings, admitting parties or allowing mingling of groups, this has been extended beyond hospitality as it was originally drafted, to mirror the scope of the Health Protection (coronavirus, collection of contact details etc and related requirements) regulations 2020.
These regulations should come into force after midnight on 28 September 2020. The hope was to have laid before Parliament on 25 September 2020 but we were timed out as Parliament rose at 15:00hrs.
These regulations follow the made affirmative procedure. These changes are being made under the emergency procedure, approved by Parliament, because it is necessary for Government to respond quickly to the reduced rate of transmission and our assessment of the current situation. While any restrictions and requirements imposed by law place a significant burden on business, the rising R number in England, and other more restrictive measures elsewhere, mean that it is incumbent on Government to act swiftly to prevent more onerous restrictions or closures being required.
The provisions outlined in these new regulations are necessary to prevent, protect against, control or provide a public health response to the incidence or spread of infection in England with the coronavirus. These additional restrictions offer an opportunity for businesses to operate with restrictions, rather than close. These amendments have been prepared urgently. In order to provide urgent clarity and certainty to the public and businesses of the changes being made and what activity is and is not allowed, I have decided that it is necessary for these regulations to come into force on 28 September 2020 and to then be laid before Parliament forthwith.
Under section 45R of the Public Health (Control of Disease) Act 1984, the relevant instrument may be made without a draft having been laid and approved by Parliament if it contains a declaration that the person making it is of the opinion that, by reason of urgency, it is necessary to make it without a draft being so laid and approved.
I have included such a declaration in these amending regulations.
I hope you understand why we proceeded in this way, and stand ready, as ever, to answer any questions you may have.
Publicly available Government guidance on www.gov.uk is being updated to ensure it fully corresponds with the amended regulations. These remain strict measures, but they are measures that we must take in order to protect our NHS and to save lives.
[HCWS478]
Oral Answers to Questions
Nadhim Zahawi Excerpts(3 years, 7 months ago)
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David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
My Department is working closely with the Department for International Trade to secure a swift settlement of the ongoing aerospace dispute to the benefit of all UK industries, including Scotch whisky, and demonstrating our commitment to free and fair trade.
David Mundell
Does the Minister recognise that it is very important to resolve this issue within the current presidential term? Will his Department therefore take forward urgent measures to resolve, bilaterally, the Airbus-Boeing dispute so that we can get these damaging tariffs removed from Scotch whisky, as I say, during the current presidential term?
Nadhim Zahawi
I reassure my right hon. Friend that the Government are urgently seeking a negotiated settlement of this dispute and are exploring all options. The imminent award of retaliatory rights should incentivise the US to engage in discussions to reach a fair and balanced settlement.
Neil Parish (Tiverton and Honiton) (Con)
Nick Fletcher (Don Valley) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
My hon. Friend will know that we continue to support the transformation of the sector towards zero-emission vehicles. Last autumn, we announced up to £1 billion of new funding for the next generation of innovative, low-carbon automotive technologies. A competition, as we speak, is under way.
Joy Morrissey
As we recover from the economic effects of the coronavirus, it is vital that we build back greener. Can my hon. Friend reassure me that he is backing the innovators who are working on decarbonising our automobile industry—companies such as Gridserve Sustainable Energy—and who can get their cutting edge ideas on to the market, supporting green jobs along the way?
Nadhim Zahawi
Green recovery is an absolute priority for my Department. We have brought forward funding to restart innovation, support business and deliver our decarbonisation ambitions. This includes £10 million through the Advanced Propulsion Centre and £12 million from the Office for Low Emission Vehicles.
Karl MᶜCartney [V]
I thank my hon. Friend for his earlier answer. Vehicle regulations regarding electric vehicles, I am told, now come under the auspices of the electricity at work regulations. Not many garages realise that and as electric cars have the equivalent to domestic three-phase electricity amounts of stored energy that can kill very easily, what is he doing to ensure that we do not lead the world in deaths in this sector?
Nadhim Zahawi
There are 182,000 vehicle technicians in the UK, of which 21,000 are EV qualified. Last year, we endorsed the Institute of the Motor Industry’s TechSafe professional standards, which will help to ensure that staff are properly trained and qualified to work on electric vehicles.
Nick Fletcher
My hon. Friend may be aware that Elon Musk, the chief executive officer of Tesla Motors, recently landed at Doncaster Sheffield Airport and has seen the land ready for development. Will the Minister work with me to put a case forward to encourage this automotive giant to build its next gigafactory in Don Valley?
Nadhim Zahawi
I thank my hon. Friend for his question. I am very keen to secure battery manufacturing capability in the United Kingdom, and I am very supportive of discussions with potential investors about their requirements. As he knows, we are currently calling on industry to put forward investment proposals for gigafactories.
Dr Alan Whitehead (Southampton, Test) (Lab)
The Minister of State has mentioned the production of electric vehicles as a key element of sustainable economic recovery in the automotive sector, and we want that production to be supported by the phasing out of new internal combustion hybrid vehicles by 2030. He, I think, wants 2040 to be the date, but we will agree, I am sure, that that must be accompanied by an appropriate national charging infrastructure. Its development, however, is seriously lagging. A recent report by the International Council on Clean Transportation found that as few as 5% of the chargers that will be needed by 2030 are currently installed. What is he doing to ensure that charging infrastructure can meet future demands placed on it?
Nadhim Zahawi
We have, as the hon. Member rightly mentioned, consulted on bringing forward the end to the sale of new petrol and diesel cars and vans from 2040 to 2035, or earlier if a fast transition appears feasible, as well as including hybrids for the first time. We will announce the outcome in due course. I remind him that we are investing £2.5 billion in grants for plug-in passenger commercial vehicles and more than 18,000 publicly available charging devices, including 3,200 rapid devices: one of the largest networks in Europe. I want to see him supporting that endeavour rather than talking it down.
Mrs Emma Lewell-Buck (South Shields) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
The UK is fast becoming an exciting place for developing small and advanced nuclear reactor technologies. That is why we have recently invested over £130 million to support their development. We will shortly be undertaking a comprehensive assessment of siting requirements, including suitability, safety and security.
Nadhim Zahawi
We are on record saying that we will publish the energy White Paper this autumn.
Sarah Champion (Rotherham) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
We are committed to ongoing engagement with industry to understand the impact of the pandemic on manufacturers and to ensure that they have the support they need. My right hon. Friend the Secretary of State and I have regular meetings with manufacturers, including one yesterday with more than 100 manufacturers and major businesses, including Make UK.
Sarah Champion [V]
Manufacturers in Rotherham have faced huge disruption as a result of covid-19. It is now becoming increasingly likely that Britain may exit the transition period without a deal in place with the EU. Will the Minister please outline what steps he is taking to ensure that manufacturers in my constituency and across the country have the certainty and support they need from the Government to sustain their businesses in the face of unprecedented challenges?
Nadhim Zahawi
My right hon. Friend the Secretary of State addressed refreshing the industrial strategy, and, of course, manufacturing absolutely remains central to our industrial strategy. Some 65% of research and development is delivered by manufacturing in the UK. We remain the ninth largest manufacturer in the world, so manufacturing will be front and centre of our long-term investment in our green, sustainable recovery.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Virginia Crosbie (Ynys Môn) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
Nuclear power, which is a safe, reliable and low-carbon source of power, has a key role to play, alongside other technologies such as renewables, as we transition our energy system to achieve net zero greenhouse gas emissions by 2050.
Mr Speaker
Order. These are meant to be short questions. Minister, pick anything out of that.
Nadhim Zahawi
I want to add one more person to that list for her work, and that is my hon. Friend. We recognise that Hitachi’s decision will be disappointing news for the people of north Wales. We remain willing to discuss new nuclear projects with any viable companies and investors wishing to develop the site. It is a great site that has a great amount of backing from the community.
Claire Coutinho (East Surrey) (Con)
Draft European Structural and Investment Funds Common Provisions and COMMON PROVISION RULES ETC. (AMENDMENT) (EU EXIT) (REVOCATION) REGULATIONS 2020
Nadhim Zahawi Excerpts(3 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I beg to move,
That the Committee has considered the draft European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) (Revocation) Regulations 2020.
It is a pleasure to serve under your chairwomanship, Dr Huq. The draft regulations were laid before the House on 13 July 2020. The European Union regulations for structural funds and the cohesion fund are designed to reduce social and economic disparities in the EU. The funds are the main funding tools designed to deliver the EU cohesion policy and come under the wider family of European structural and investment funds, or ESIF. The EU regulations set out the rules governing those funds and give powers to the member states to ensure the operability of eligibility projects. More than half of EU funding is channelled through the European structural and investment funds, which are jointly managed by the European Commission and EU member states.
The Department for Business, Energy and Industrial Strategy sets the policy for and co-ordinates the management of four of the funds across the United Kingdom: the European regional development fund, or ERDF, which includes the European territorial co-operation fund, or ETC; the European social fund, or ESF; the European agricultural fund for rural development; and the European maritime and fisheries fund. Under the structural funds, the UK was allocated about £9.5 billion of funding for the 2014 to 2020 period. The funds support growth, low carbon, transport, research innovation, small business, employment opportunities and social inclusion.
Structural fund programmes are managed and delivered by Government organisations designated as “managing authorities”. In essence, they are the delivery bodies for the funds in England and in the devolved Administrations and are responsible for drawing up operational programmes. The programmes set out the levels of funding for certain activities, and how the programmes will be run within the parameters set by the EU regulations.
BEIS is the co-ordinating body for the ESIF in the United Kingdom. In England, the managing authorities for the European regional development fund and the European social fund are, respectively, the Ministry of Housing, Communities and Local Government, and the Department for Work and Pensions. The devolved Administrations and Her Majesty’s Government of Gibraltar administer ERDF and ESF in their respective areas. The Department for Environment, Food and Rural Affairs manages the agricultural funds in England, and the devolved Administrations in their areas, apart from the EMFF, which is run across the UK by the Marine Management Organisation, a non-departmental Government body sponsored by DEFRA.
Gibraltar receives a small allocation of about €10 million, or £8.8 million, from the ERDF and ESF for 2014 to 2020. It has agreed operational programmes with the European Commission to implement those. It also takes part in two transnational programmes.
The need for continued regional investment in the event of a no-deal exit, and the nature of the projects supported by those funds, led to the introduction of legislation so that the funds could operate domestically under no deal until their planned closure, even though they would cease to be funded by the EU. Since the UK signed the withdrawal agreement document, which maintains the EU regulations for European structural and investment funds until programme closure—which might not be until 2026, given that programmes run until 2023 and generally take two to three years to wind up—that statutory instrument, the European Structural and Investment Funds Common Provisions and Common Provision Rules etc. (Amendment) (EU Exit) Regulations 2019, or SI 2019/625, contradicts the intent and purpose of the withdrawal agreement.
The draft regulations are therefore being made to revoke SI 2109/625, which was made on 18 March 2019. That SI disapplied retained EU law in relation to the European regional development fund, European social fund and European territorial cooperation fund, in order to ensure that the programmes could continue in a no-deal exit scenario. Under the withdrawal agreement, the regulations can still apply to the UK, despite the UK not being a member state.
Now that the withdrawal agreement has been signed by the UK and made into law through the European Union (Withdrawal Agreement) Act 2020, SI 2019/625 is no longer required and should be repealed in order not to confuse the statute book. The Act allows the UK to continue to apply EU regulation 1303/2013, the supplementary fund-specific regulations and associated delegated, and implementing legislation for European structural and investment funds, until the end of the current programmes. It is proposed that the UK shared prosperity fund will be set up as the domestic successor to European structural investment funds for new programmes.
It is necessary to revoke the original no-deal statutory instrument 2019/625 to remove conflict with the provisions of the European Union (Withdrawal Agreement) Act 2020. The United Kingdom will continue to participate in European structural investment fund programmes until their closure, and delivery continues through the management authorities and devolved Administrations. In order to remove any confusion from the statute book, as the no-deal guarantee for funding is not required, I commend the draft regulations to the Committee.
Nadhim Zahawi
I thank the Shadow Minister for her remarks, and I will attempt to address those in my closing comments. I thank my colleagues for listening so intently to such an enthralling statutory instrument.
Now that, obviously, the UK has left the European Union we are able to design and implement our own regional funding programmes that I mentioned. Just a couple of small typos to mention, I do not want Hansard to get it wrong: I think the hon. Lady meant that businesses benefitted from the funds from 2014 to 2020, I think maybe she mistakenly said 2030 in her opening remarks, and she talked about US businesses, and I think she meant UK businesses.
Chi Onwurah
If I said 2030, I meant 2014 to 2020. I am pretty sure I said UK businesses.
Nadhim Zahawi
Absolutely. I will touch on the hon. Lady’s remarks about what the UK shared prosperity fund will look like. The 2019 Conservative manifesto commits to creating the UK shared prosperity fund, a programme of investment to bind together the whole of the United Kingdom. I take slight issue with her final remark about our in some way discriminating; the Prime Minister is absolutely committed to levelling up all over the United Kingdom and, of course, binding the four nations together, tackling inequality and deprivation in each of our four nations. Through the UK shared prosperity fund the Government can cut out bureaucracy and create a fund that invests in UK priorities, at least as much as the current European fund has done, and is easier for local areas to access.
The hon. Lady asked about clarity. The Government recognise the importance of providing clarity on the UK shared prosperity fund. Decisions on the design of the fund will need to be taken after the cross-Government spending review. In the meantime, we will continue to work closely with interested parties. On the hon. Lady’s question about consultation on the fund, the Government recognise the importance of reassuring local communities, including her own constituency, on the future of local growth funding and providing clarity on the UK shared prosperity fund. I can confirm that Government officials have held 26 engagement events in total, including 25 across the United Kingdom and one in Gibraltar. They were attended by more than 500 representatives from a breadth of sectors and designed to aid the development of the fund.
The hon. Lady asked about how the Government would set up the fund. Obviously, leaving the European Union provides us with fresh opportunities to create a fund that invests in UK priorities and targets funding where it is most needed, which was her point, while maintaining support for our businesses and communities.
The findings from the Scottish and Welsh Governments’ consultations are certainly welcome. We want to ensure that the UK Government and their institutions are working effectively to realise the benefits of four nations working together as one United Kingdom. UK Government officials have held 16 engagement events across Scotland, Wales and Northern Ireland designed to aid policy development.
On devolution and the future of funding, clearly the House will recognise that international arrangements are a reserved matter and that it is for the United Kingdom Government to negotiate a future relationship with the EU for the whole of the United Kingdom. The programmes in which the UK is considering participation are those that represent benefits to the UK, provided the terms reached in negotiations are fair and appropriate. Those programmes were selected based on business cases that the devolved Administrations had the opportunity to feed into, as far as possible. BEIS has ensured that the views of the devolved Administrations were reflected.
The UK Government remain committed to engaging with the devolved Administrations on the negotiations, including on the discussions about participation in those EU programmes that were considered as listed in the UK’s approach.
Chi Onwurah
I thank the Minister for his responses to my questions. I agree with him about much of what he says that the shared prosperity fund should do, but does he recognise that we have left the European Union and yet we still have no detail on that fund? There is nothing stopping the Government designing that fund now, now that we have left the European Union, so why do we still not have any detail on that fund? Can he please let us know when we will have some information on that fund, which, as a sovereign nation, we have the power to design?
Nadhim Zahawi
I am grateful to the shadow Minister for her question, and maybe I should have repeated what I said in my opening remarks; I thought she had actually got it the first time. Although we have left the European Union, the funding for business will carry on through 2021 all the way to 2023, so this idea that somehow we are being negligent is incorrect. The right thing to do is to go through the spending review and to design the UK shared prosperity fund correctly, so that it benefits the whole of the United Kingdom.
There have been some queries about future participation in EU programmes, and if that is the hon. Lady’s point, I am happy to address it, because we will continue to take part in the PEACE PLUS Programme, which is so important to the people of Northern Ireland.
Chi Onwurah
I did listen to the Minister’s opening remarks with rapt attention, and I acknowledge that he said that the funding and subsequent winding-up of funding could go on until 2025-26. However, we now have the power to design the shared prosperity fund and as I made numerous references to, businesses, business organisations and local authorities have been crying out for two or three years now for some indication of what will happen to that fund. The barrier is not the European Union; the barrier is the Government getting on with it and designing the fund.
Nadhim Zahawi
I am grateful to the hon. Lady for her intervention. I do not think there is a lack of focus or seriousness in wanting to design the fund and get it right. However, I hope that she will agree that it is important that we deliver that once we have the spending review delivered. I will not dwell any further on this matter, but clearly, decisions on the design of the fund will need to be taken after the cross-Government spending review. In the meantime, we will continue to work closely with interested parties, while developing the fund.
Dr Huq, I do not want to take up any more of your time, so I will finally conclude my remarks. In the context of the current pandemic, I will just add that managing authorities and devolved Administrations have made use of the flexibilities provided by the European Commission’s coronavirus response investment initiative, as well as working with partners to provide assurance on business survival and job protection in the most exposed sectors of the economy.
I commend this draft regulation to the House.
Question put and agreed to.
Draft Professional Qualifications and Services (Amendments and Miscellaneous Provisions) (EU Exit) Regulations 2020
Nadhim Zahawi Excerpts(3 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I beg to move,
That the Committee has considered the draft Professional Qualifications and Services (Amendments and Miscellaneous Provisions) (EU Exit) Regulations 2020.
It is a pleasure, Ms Eagle, to serve under your chairmanship. I will give a brief overview of the rationale behind the regulations, which relate to the recognition of professional qualifications and the provision of services. They form part of the Government’s preparations for the end of the transition period.
As members of the Committee know, the Government have signed agreements with the EU, the three European economic area and European Free Trade Association states, and Switzerland. They contain arrangements regarding the UK’s withdrawal from the EU. The agreements include provisions that protect the rights of EEA and Swiss nationals living and frontier working in the UK, and vice versa. The regulations will give effect to certain provisions in the agreements relating to the recognition of professional qualifications—or RPQ, as I will now refer to them—that are held by EEA and Swiss nationals. By doing so, the regulations will ensure that the decisions made by UK regulators to recognise the professional qualifications of EEA and Swiss nationals before the end of the transition period will be grandfathered after the end of the transition period. Such individuals will be able to continue to practise their profession in the UK. The regulations also make various changes to the domestic framework for RPQ and services, including in respect of regulations made in anticipation of EU exit, which will ensure that they function effectively after the transition period.
I can tell the Committee that professionals from the EU make a significant contribution to the public and private sectors in the United Kingdom. Between 2007 and 2016, the UK gave 148,000 recognition decisions to EU professionals. I will also remind the Committee of the background to RPQ. The mutual recognition of professional qualifications system is derived from EU law. It allows UK professionals to get their qualifications recognised in the EEA and Switzerland, and vice versa, with minimal barriers. Across the whole of the EEA and Switzerland, there are approximately 570 different professions under the system.
After the transition period, the EU system will cease to apply to the United Kingdom. Last year, in preparation for the UK leaving the EU, the Government made various RPQ EU exit regulations to amend the domestic law that implements the current EU system for RPQ, in order to fix deficiencies caused by exit. The existing EU exit regulations include provisions that protect recognition decisions already made, allow applications for recognition submitted before exit day to be concluded after exit day, allow providers of temporary and occasional service one year from exit day to complete their service provision, and retain aspects of the recognition system to provide a route for certain EEA and Swiss qualification holders to apply for recognition of their qualifications after exit day.
I should say that the retention of part of the existing recognition system is not covered by the agreements with the EU, EEA or Switzerland, or by these new regulations, but it forms part of the Government’s plans to ensure that the UK is prepared to leave the single market. The Government have decided that the system should remain in place temporarily after the transition period in the event that there are no satisfactory arrangements from the EU free trade agreement negotiations.
I shall move on to explain how the regulations will implement the RPQ provisions of the agreements to which I referred earlier. The agreements contain similar but slightly different provisions from those contained in the existing RPQ provisions. These new regulations will make amendments to EU exit regulations introduced by my Department, the Ministry of Housing, Communities and Local Government, and the Department for Environment, Food and Rural Affairs, to give full effect to the RPQ terms of the agreements.
That is because the agreements were finalised after the existing EU exit legislation was passed. The provisions in these regulations relating to the agreements will protect recognition decisions made before the end of the transition period, allow applications for recognition submitted before the end of the transition period to be concluded, ensure that UK regulators co-operate with their EEA and Swiss counterparts to facilitate the completion of applications ongoing at the end of the transition period, and ensure that professionals whose professional qualifications are recognised are treated on the same basis as UK nationals.
In respect only of Switzerland, these regulations give effect to provisions in the Swiss agreement that provide for a longer transition period for certain individuals. In particular, they will allow a further four-year period for certain Swiss nationals to apply for recognition under current EU rules, and allow certain Swiss service providers to continue to provide their services in accordance with their contract for up to five years after the end of the transition period.
The RPQ provisions of the agreements will be reciprocated by EU member states, the EEA/EFTA states and Switzerland respectively. I remind hon. Members that these regulations do not cover certain legal or health care provisions, which are being covered in separate statutory instruments.
To ensure the frameworks for RPQ and services function as intended after the transition period, these regulations will also make various other changes, which can be separated into four categories. First, retained treaty rights in respect of RPQ will be disapplied. These are overarching rights derived from the treaty on the functioning of the European Union and the EEA agreement in respect of free movement of workers, and retained treaty rights for RPQ derived from the Swiss free movement of persons agreement. After the transition period, the default position is that these rights will become retained EU law under the European Union (Withdrawal) Act 2018. These regulations disapply these treaty rights insofar as they relate to RPQ, to ensure legal clarity about the post-transition period system for recognition of EEA and Swiss qualifications.
Secondly, a retained delegated regulation on ski instructors’ qualifications and two delegated decisions that update annexes to the EU directive on RPQ will have no practical effect in the UK after the transition period. These regulations will therefore revoke them to tidy up the statute book. Thirdly, these regulations will make minor corrections to RPQ EU exit regulations and technical amendments, with references to exit day changed to IP completion day in the existing RPQ and service EU exit regulations. This will be done so that the regulations will function effectively after the end of the transition period.
Lastly, consequential amendments and a minor correction to a transposition error will be made to the 2015 EU RPQ regulations. I should point out to colleagues at this stage that the UK regulators have been consulted on an informal basis throughout the process of developing RPQ EU exit legislation and these regulations.
To conclude, I reiterate that these regulations are vital to the Government’s preparations for the end of the transition period. It is imperative that they are made so that professionals and businesses are equipped to be ready for the end of the transition period. I commend these regulations to the Committee and look forward to hearing the views of hon. Members.
Nadhim Zahawi
I thank the shadow Minister for his support today and members of the Committee for listening so intently. Let me conclude by emphasising that the changes in these regulations are essential for precisely the reason that the hon. Member has just pointed out: the importance to the UK economy of professional services. We are committed to protecting citizens who benefit from rights under the agreements, many of whom make valuable contributions to the UK workforce, and we are absolutely committed to negotiating in good faith to ensure that we conclude a deal.
Although these regulations are mainly focused on protecting existing rights and not, obviously, future arrangements, it is important that the regulations make changes to ensure that the UK’s existing EU exit regulatory framework for RPQ and services function effectively at the end of the transition period. If the rights were not disapplied, they could be used to undermine the provisions of the RPQ EU exit legislation, potentially leading to legal challenges.
It is worth noting that the continuation of the recognition system after the end of the transition period is a temporary measure. Obviously, the future RPQ policy will depend on the outcome of the negotiations. I can give the hon. Gentleman one guarantee: we will negotiate in good faith and want this to work, and the outcomes in this area should be a win-win for both sides.
The call for evidence that the Department is currently conducting, to which the hon. Gentleman referred, is quite important. I work with the sector all the time. I co-chair the professional business services council, and I know how valuable that engagement is from both sides. The call for evidence is helping us both to gain insight on what our approach should be for the future recognition of professional qualifications from other countries and to consider our approach to the regulation of professions more broadly. To close, I underline once more that these regulations are a vital part of the Government’s preparations for the end of transition period, and I commend them to the Committee.
Question put and agreed to.
UK Steel Industry
Nadhim Zahawi Excerpts(3 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I congratulate the hon. Member for Newport East (Jessica Morden) on securing this evening’s debate. She has been a passionate advocate for the UK steel industry, including in her role as co-chair of the all-party group on steel and metal-related industries. Clearly, this sector is important to the United Kingdom and testament to that is the number of colleagues who are present in the Chamber at 11 pm on a Monday night. One colleague who is unable to intervene or speak tonight is my hon. Friend the Member for Corby (Tom Pursglove). Although he cannot make his voice heard in this place, he certainly does on behalf of his constituents who work in the important steel industry in his constituency.
This debate represents a welcome opportunity to discuss the UK steel sector, which will continue to play a critical role as a foundation industry as we secure our economic recovery and long-term prosperity following the impact of the coronavirus. Madam Deputy Speaker, you will know that the steel sector provides well-paid, highly skilled jobs, as we have just heard from the hon. Lady. It also plays a key role in critical UK supply chains across many important parts of the UK economy, including automotive construction, power generation and, of course, defence.
Earlier this year, we welcomed the acquisition of British Steel by Jingye following a period of insolvency.
Holly Mumby-Croft
I just want to say that the constituents in Scunthorpe regularly mention to me the support that they receive from the Government. Does my hon. Friend agree that support for other steel plants such as Celsa is vital?
Nadhim Zahawi
It certainly is and I hope that I can cover that in the time that I have left to me.
Both officials and Ministers invested considerable time and effort in closing the deal with Jingye and the planned £1.2 billion investment that will go into the operations of British Steel. I hope the hon. Lady agrees that this represents a huge vote of confidence in the UK steel industry and the high-quality steel produced here in the United Kingdom. Notwithstanding this positive outcome for British Steel prior to the pandemic, the global steel industry was already facing significant headwinds. This included demand slowing across developed economies and persistent global excess production capacity, which depresses prices and harms the profitability of UK steel producers.
In the past few days, Tata Steel has published its accounts, which show a challenging position across its UK and European operations. While it is not appropriate for Ministers to comment on the performance of individual companies, I wish to reassure the hon. Lady that we continue to work very closely with the entire UK steel sector and the trade unions, and that we understand the challenges facing the industry in the UK.
While the coronavirus has come at a challenging time for the industry, we have been working intensively over this period to ensure that the UK steel industry has been able to access the support that it needs since the start of the covid-19 pandemic The Government have set out a far-reaching package of support to protect jobs, incomes and businesses across every part of the economy. Those working in the steel industry have been among the 9.6 million individuals across the country who have been able to access the job retention scheme. The scheme has protected people’s livelihoods in the industry and ensured that steel manufacturers have been able to retain high-skilled staff while managing the impact of reduced demand caused by the pandemic.
Importantly, we have worked closely with the steel industry representatives over this period to ensure that the furlough scheme—the job retention scheme—was sufficiently flexible to accommodate some of the real key asks from the industry and from the unions to meet the changing requirements of the industry as the wider situation evolved. I have been engaging personally on a regular basis with companies, trade associations, and, of course, the trade unions to gather their feedback. Direct input from the steel sector has helped to shape a number of our covid-19 support schemes. The coronavirus large business loan interruption scheme, the tax deferrals and the trade credit reinsurance scheme, which we launched with £10 billion, clearly came through as a result of that particular engagement with the industry. They were developed rapidly in response to that particular challenge faced by companies in the industry.
In addition to those far-reaching economy-wide schemes, we have committed to consider bespoke support on a last-resort basis where a viable company of strategic importance has exhausted all other options available to it. The House will be aware—the hon. Member for Newport East mentioned it—that such circumstances apply to Celsa Steel, which is a critical supplier to our construction industry. Government support in that case secured over 1,000 jobs, including 800 positions at the company’s principal site in south Wales. Commercial confidentiality prevents me from setting out further details on that case, or indeed from commenting on any discussions we have had with individual steel companies over this period. However, I hope that hon. Members agree that that is a clear signal from the Government of our continued commitment to the UK steel industry and the 30,000 individuals who are employed in the sector.
Stephen Kinnock
The support to Celsa was absolutely welcome and we certainly appreciate that, but what about Tata Steel? The Minister says he is looking for strategic importance and a viable business that will play a critical role in the future of our manufacturing sector. Surely, Tata Steel qualifies on all three counts?
Nadhim Zahawi
The hon. Gentleman will know, because he is deeply involved with Tata Steel in his constituency, that that is absolutely right with regard to the strategic importance of Tata Steel. I hope he will forgive the fact that I will be unable to go any further at this stage because of the need to protect commercial confidentiality. Suffice to say that he is absolutely right that it ticks all those boxes.
As we transition from managing the immediate challenges presented by covid-19 to securing the long-term recovery of the UK economy, we will continue to work with representatives of the steel industry, the unions and the devolved Administrations to address the strategic challenges faced by the sector. We are committed to working collectively with those partners to shape a steel industry that is sustainable, productive and innovative. To that end, we are taking action in key areas. I want to outline a few of the priorities for UK steel companies, including on energy prices, procurement, research and innovation, and international trade.
Jacob Young (Redcar) (Con)
On energy pricing, it obviously still remains an inhibitor to our steel industry and to bringing steelmaking back to Teesside. What steps are the Government taking to improve innovation in the energy sector to bring about cleaner steelmaking?
Nadhim Zahawi
My hon. Friend’s timing is impeccable, because I am just about to come on to our focus on energy and the clean steel fund. As we set out our focus on the recovery, our objective is both to boost the sector’s short-term competitiveness and to support the longer-term transformational investment that colleagues have spoken about that will drive productivity and efficiency, and support our net zero goals.
On energy prices specifically, the ability of our steel industry to compete internationally is a priority for the Government. We remain committed to minimising energy costs for business. Since 2013, the Government have provided £480 million in compensation to the steel sector to make energy costs more competitive. Moreover, we are investing £315 million in the energy transformation fund to help energy-intensive businesses such as steel companies to cut their bills and transition to a low-carbon future.
On innovation, supporting our steel industry in the UK to decarbonise and make the most of clean growth opportunities is a key priority for us. This is part of our wider agenda to put the UK at the forefront of research and innovation in the coming years. Last year, we announced two important new research and innovation programmes, which will help the steel industry in its effort to reduce emissions and support the decarbonisation of the UK economy to achieve our ambitious 2050 net zero target.
Nadhim Zahawi
I will come back to anti-dumping at the end of my remarks.
To finish my point on innovation, another £250 million —a quarter of a billion pounds—of clean steel fund will support the sector’s transition to new low-carbon technologies and processes. A £100-million low-carbon hydrogen production fund will support the deployment of low-carbon hydrogen in industry to help decarbonise a range of sectors, including steel.
Nadhim Zahawi
I want to make some headway. If there is time at the end, I will come back to the hon. Gentleman.
The hon. Member for Newport East rightly mentioned procurement. It is a priority for the Government to ensure that UK steel producers have the best possible chance of competing for and winning the contracts associated with our domestic infrastructure investment. We have published a steel pipeline on national infrastructure projects worth about £500 million over the next decade. For the first time, we have also published data on public sector steel procurement, which will be refreshed in the coming weeks and on an annual basis thereafter. That information serves as a testament to our ambitious plans for UK-sourced steel within our pipeline of major infrastructure projects. It will also serve as an accountability mechanism. We will work with the sector to achieve this shared aim.
We recently welcomed the commencement of construction work on the largest of these infrastructure projects, which the hon. Lady mentioned—HS2. We are keenly aware of the opportunity it represents for our domestic steel sector. The Department’s steel pipeline update from last year indicated that HS2 will require more than 2 million tonnes of steel over phases 1 and 2.
We are mindful that there are mechanisms by which we can actively support the sector to realise this opportunity and future ones within the parameters of our legal framework. To take just one example, the Department for Business, Energy and Industrial Strategy has signed up to the UK steel charter, which has been mentioned several times tonight. We recognise it as an important initiative, developed by industry, and we are actively encouraging other Departments to sign up. We look forward to making continued progress on the issue of procurement over the coming months.
International trade and EU exit, which were both mentioned in the debate, are huge areas of strategic significance for the UK steel industry. Overcapacity in steel production remains a global systemic challenge for the sector. We continue to work as part of the G20 global forum on steel excess capacity to address this problem. Unfair market-distorting practices have been partly to blame for the situation. We want all countries to act on and implement the recommendations agreed by G20 Ministers, and we will maintain pressure on them to do so.
In preparation for the end of the transition period, the Government have legislated for the full suite of tools permitted under the WTO to address unfair trading practices. We are working closely with the Department for International Trade to ensure that the UK has a suitable trade remedies system in place for the future to maintain the protection of our steel industry. We are also engaging with our European Commission colleagues to discuss how the steel safeguards should operate after the transition period, with the aim of preserving traditional trade flows and providing as much continuity to the industry as possible. We are committed to transitioning the definitive safeguard measures on those steel products and categories where there is a UK interest. We continue to make a strong case to the EU on behalf of the UK steel sector to ensure that appropriate tariff rate quotas are provided to UK exporters as soon as is practicably possible following the end of the transition period.
These are unprecedented times and the challenge for the UK steel industry is big. I have half a minute left, but I will take the hon. Gentleman’s intervention.
Stephen Kinnock
Will the Minister underline our commitment to blast furnaces as a central part of the steel-making process? With the right investment, we can make the transition to hydrogen and so on, but blast furnace production is absolutely central.
Nadhim Zahawi
The hon. Gentleman is absolutely right that we have to make sure that, as a foundation industry, steel continues to innovate. Whether it is electric arc or other emerging technologies, such as hydrogen, which we are seeing the adoption of, we are absolutely committed to that.
Oral Answers to Questions
Nadhim Zahawi Excerpts(3 years, 9 months ago)
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Jane Stevenson (Wolverhampton North East) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
This is the last Department for Business, Energy and Industrial Strategy questions before recess and I want to place on record my thanks to you, Mr Speaker, and your staff for the incredible way that they have managed proceedings in the House.
It is Farnborough week and the Government are providing the aerospace industry and its aviation customers with more than £8.5 billion of support, including through UK Export Finance, the covid corporate financing facility, research grants and the job retention scheme. We are discussing further help with the sector.
Gavin Robinson
May I start by thanking the Minister for his personal engagement given some of the difficulties that we have had with the aerospace sector in Northern Ireland, and particularly with Bombardier in my constituency? Given that it is Farnborough Week, let me say that I read with interest the Minister’s comments yesterday on FlightGlobal in the question and answer session, and one of the missing components is the retention of key skills within this high-end engineering sector. Does the Minister accept that, without a clear, bespoke solution to support and sustain jobs beyond the cliff edge of October with the job retention scheme, the aerospace industry is facing a clear and present danger?
Nadhim Zahawi
I am grateful to the hon. Member for his question and for his comments about our engagement with the sector. We are supporting the aviation and aerospace sector with £8.5 billion and rising. If he looks at support from other countries, which we do, he will see that we will also consider further support as we progress, as the Chancellor has said, through the recovery.
Jane Stevenson
Wolverhampton North East is home to aerospace companies that have seen an unprecedented and sudden collapse of demand. Collins Aerospace is now sadly considering mass redundancies. What further support can the Government offer to limit job losses in Wolverhampton?
Nadhim Zahawi
We work with the whole aerospace industry. I am the co-chair of the Aerospace Growth Partnership. As well as access to the furlough scheme and the corporate finance scheme, the Secretary of State announced yesterday £400 million in further funding for research and development support for the sector to get to that Jet Zero flight. The Future Flight Challenge is already investing £300 million. We continue to work with the sector to make sure that those skill sets, that ecosystem that has been so brilliant at delivering an incredible industry in the UK, are maintained for the next three to five years, which is the timeline by which the sector looks to recover.
Mr Speaker
I thank the Minister, on behalf of my office, for his kind words.
Nadhim Zahawi
I take issue with “warm words and no action” as £8.5 billion has been put to work to protect jobs and to protect the sector. It is great to see that, this week, Airbus has shown confidence in the UK with confirmation that the wings for its latest aircraft, the A321XLR, will be built in the UK at Broughton. That demonstrates our engagement not just with Airbus, but with Bombardier and with other major players in the market and, of course, the supply chain as well. We continue to put the support in place and to look at further support as we progress through the economic recovery.
Catherine West (Hornsey and Wood Green) (Lab)
Stephen Flynn (Aberdeen South) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
The Secretary of State and I hold regular discussions with the Chancellor of the Exchequer on the issue of business support, including on the schemes available to support Scottish businesses affected by the covid-19 pandemic.
Gavin Newlands
We are still waiting on the promised aviation sectoral support. Indeed, far from support, in my Adjournment debate the Minister essentially said that workers should be grateful that Rolls-Royce offered voluntary redundancy. Moreover, the Government have not acted to stop companies such as Menzies Aviation and Centrica following the deplorable fire-and-rehire tactics employed by British Airways, which are now being enforced. Will he tell the House whether he thinks it fair that an employer can force an employer on to reduced terms and conditions or face redundancy? Why is that illegal in so many European countries?
Nadhim Zahawi
We are in constant conversation with Rolls-Royce and other employers, quite rightly. The sector will be impacted for between three and five years. It is right that companies should be able to right-size their businesses and, as the Secretary of State referred to, have a constructive dialogue with their employees about how they arrive at that right size. The Government’s position is to support the industry with more than £8.5 billion of support through the covid pandemic.
Allan Dorans
Businesses in Scotland have thrived under devolution with the support of the Scottish Government, who are better able to provide tailored policies specifically for Scotland. An independent economics research organisation based at the University of Warwick published figures just yesterday that show that Brexit had already cost Scotland an estimated £736 a head last year alone. With uncertainty over future funding streams such as the so-called prosperity fund, which we were promised details of two years ago, how does he think that the greatest threat to devolution in its history—the current power-grab by Westminster—presents continued membership of the United Kingdom for business and the people of Scotland as a good option?
Nadhim Zahawi
I have weekly calls with my counterparts in the devolved Administrations, including the Minister for economy and fair work in Scotland. The most successful market is the UK internal market—that is without doubt. That is what the Scottish Government should support. It is a shame that my officials, working with officials from Northern Ireland and, of course, Wales, can move forward, yet the Scottish Government chose to withdraw their officials back in March. I urge my colleague from the SNP to ask the Scottish Government to reintroduce those officials to the system. We would thrive as a United Kingdom.
Stephen Flynn
To protect and rebuild the local economy of Aberdeen and the north-east of Scotland, we need huge investment from the UK Government in the hydrogen economy, carbon capture and underground storage, and an energy transition zone all through an oil and gas sector deal. Will the Minister confirm that his Government intend to sign off an oil and gas sector deal this calendar year—yes or no?
Nadhim Zahawi
It is a manifesto commitment of this Government to deliver an oil and gas sector deal, and we are working with the sector. My brilliant colleague, the Minister with responsibility for energy, has been engaging constantly with the sector to ensure it can take the opportunities that are before it in offshore wind generation and all sorts of other areas. Of course, hydrogen will be incredibly important to the energy White Paper, which we will publish in the autumn, as the Secretary of State set out.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Contingencies Fund Advance
Nadhim Zahawi Excerpts(3 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)
I hereby give notice of the Department for Business, Energy and Industrial Strategy’s intention to seek an advance from the Contingencies Fund of £5,070,000,000 to provide funding for the Nuclear Liabilities Fund (NLF).
The funding will be used to increase the NLF’s public sector assets, by making £5.07 billion available to the NLF in the form of a deposit in the national loans fund. This offers an alternative investment opportunity to the NLF, which otherwise would re-allocate moneys within the next month into investments in its privately held asset portfolio. Such re-allocation would increase public sector net debt, and so this alternative funding arrangement avoids this immediate negative fiscal impact. The payment to the NLF is fiscally neutral.
The trustee directors of the NLF have a fiduciary duty to ensure the NLF remains on track to be sufficient to meet certain future decommissioning liabilities. Parliamentary approval for additional capital of £5,070,000,000 will be sought in a supplementary estimate for the Department for Business, Energy and Industrial Strategy. Pending that approval, urgent expenditure estimated at £5,070,000,000 will be met by repayable cash advances from the Contingencies Fund.
The cash advance will be repaid upon receiving Royal Assent on the Supply and Appropriation Bill.
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