Draft Enterprise Act 2002 (Share of Supply) (Amendment) Order 2020

Nadhim Zahawi Excerpts

Monday 13th July 2020 General Committees

[The Chair]

Before we begin, I remind Members about social distancing: spaces available to Members are clearly marked, and unmarked spaces must not be occupied. Our Hansard colleagues would be grateful if notes could be sent to [e-mail].

[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 Enterprise Act 2002 (Share of Supply) (Amendment) Order 2020.

It is a pleasure to serve under your chairwomanship, Ms Nokes. Before we begin, I will take a moment to thank our colleagues in the other place for their scrutiny of these orders. The Secondary Legislation Scrutiny Committee has indeed brought this order and the section 58 order to the special attention of its House, which add a new public interest consideration on the grounds of public health emergencies to the Enterprise Act 2002. The Committee reported on these orders, noting that it

“considers that the policy changes made by the two Orders are potentially very significant.”

I value the continued work of both Houses in considering these legislative changes, and look forward to debating them today.

Investment, particularly overseas investment, is the lifeblood of our economy, and it is more important now than ever as our companies seek a much-needed boost to recover from the impact of covid-19. The UK economy is open to the world. International trade, investing abroad, and welcoming foreign investment at home are all central to our economic approach. The UK is often considered one of the best countries in the world in which to do business, if not the best. This is in no small part down to our educated workforce, world-beating science and sound regulatory framework, supported by an accessible and robust legal system. Last year, inward investment created more than 57,000 UK jobs. The vast majority of such investment raises no national security concerns whatsoever.

However, we need to be alert to the potential risks involved in ownership or control of critical businesses, which can provide opportunities to undermine our national security through espionage, sabotage or exerting inappropriate leverage. In the light of technological advancements, economic developments, changes in the national security threat, and of course the covid-19 emergency, it is now time for reform. Our international neighbours have acted decisively to address similar issues in Europe. Further afield, Australia has also amended legislation and processes. The pandemic has magnified the risks to our national security. We are now more exposed to opportunistic investors due to the depreciating effects of sterling and the financial pressures of a decrease in investor confidence, which has beset equities and the markets more widely.

We in the UK continually review and update the framework of laws and policies that protects our national security. That tradition of refinement and improvement has enabled the UK to remain internationally competitive, and a place where people can invest with confidence. It is time for us to reform again, to send a decisive message to those who would threaten our national security: the UK is open for investment, but not for exploitation.

I will briefly explain the amendments. The changes made by this order relate to the Government’s ability to intervene in mergers and, in the most extreme cases, block them. How and when the Government can intervene in this way is set out in legislation. Section 23A of the Enterprise Act 2002 includes a list of relevant enterprises: sectors where the threshold for Government intervention is lower. The relevant enterprises listed in the Act are all particularly sensitive sectors where there is a public interest or national security case for allowing the Government to intervene more readily. As it stands, there are three such sectors set out in the Act—military or dual-use technologies, quantum technology and computing hardware. However, as many colleagues will know, technology does not stand still. We now need to apply this lower threshold to other sectors too.

That is the effect of the order, which will add three further areas of the economy to the relevant enterprise list: artificial intelligence, cryptographic authentication technologies and advanced materials. Businesses falling within those categories are often at the forefront of research and innovation. They are small, agile businesses that thrive in an open, innovation-friendly economy. Those businesses produce cutting-edge technology, much of which may not yet be commercially viable but could have implications for our national security.

Breakthroughs in artificial intelligence, cryptographic authentication and advanced materials science are fundamental to other areas of social and economic development. They have underpinned advances in the physical and digital world, and continue to do so. Those technologies are critical to a number of our capabilities, including, of course, defence and security. There may be a risk of losing advantage in those areas if UK companies and the intellectual property that they generate are controlled by opportunistic or, dare I say it, malicious investors.

It goes without saying that the Government must be able to mitigate national security risks. Should an opportunistic investor wish to acquire and exploit a business, and if it would pose such a risk, we need to be able to intervene. The order will allow us to do so both by expanding the list of relevant enterprises to sectors where it is likely to be an issue as I have just set out, and by adjusting the test that applies to them.

In 2018, the £70 million turnover test was introduced and was reduced to £1 million for relevant enterprises. In addition, an amended share of supply test was applied. As a result, the Government can intervene where a relevant business that already has at least 25% share of supply is taken over. The acquiring party need not have any share of the supply of the same goods or services for the test to be met. Of course, that is not the case for businesses outside the scope of relevant enterprises.

We now propose to make a second statutory instrument, the day before the commencement of this share of supply test order, by the negative resolution procedure. It will allow the Government to intervene in mergers involving the three additional enterprise categories, if the target relevant enterprise has a UK turnover of more than £1 million, rather than the £70 million currently required by the 2002 Act.

The order has no impact on the forthcoming national security and investment Bill, which the Government intend to bring forward when parliamentary time allows. It is intended as a short-term measure that will apply until more fundamental reforms can be taken forward through the Bill. The provisions are of great importance to our national security and it is vital that the Government should be able to intervene in situations where UK national security is at risk.

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[Nadhim Zahawi]

Let me attempt to address some of the issues raised by the hon. Lady, who is a fellow engineer—we need more of them in Parliament. She rightly asked what will happen after a deal is blocked, and how the Government would intend to support a business that needed liquidity. The first thing to remind the Committee is that the Government have never blocked a deal, although it is important to retain the power to do so, given that some mergers may be such a risk to national security that softer remedies are not possible. It is far more likely, however, that the Government will work with the relevant parties to agree undertakings in lieu of a phase 2 CMA investigation. The UK Government have only ever agreed undertakings and have not yet blocked a deal.

With regard to injecting liquidity and providing urgent liquidity to small and medium-sized businesses by different routes, I hope that the hon. Lady would agree that the coronavirus business interruption loan scheme, the large business interruption loan scheme and the bounce back loan scheme have been truly innovative interventions in the economy to help businesses weather the storm of covid.

The hon. Lady also asked what plans the Government have to expand the concept of the public interest regime. The mergers regime is designed to offer clarity for businesses and build investor confidence, because that confidence makes our economy so dynamic and, as a result, highly regarded the world over. It is based on transparent rules, administered consistently by expert bodies—namely, the Competition and Markets Authority. Our regime restricts Ministers’ ability to intervene to public interest grounds, covering only national security, financial stability, public health emergencies and media plurality, hence why we are making these orders.

[Chi Onwurah]

Just to clarify, I was not asking whether they have plans, or suggesting that they should have plans, to expand the regime. I wanted to understand what additional support, outside of the mergers and acquisition regime, would be given to companies that fell under this provision. Having identified these sectors as being key, what other support, apart from in mergers and acquisitions, is being offered?

[Nadhim Zahawi]

The hon. Lady will forgive me if I strayed into areas that she did not ask about—additional transparency is always good for the Committee. She is right to talk about that, but we should look at the Chancellor’s track record. When many companies in these emerging technologies were deliberately loss making, the Chancellor acted immediately with the future fund to bring liquidity to those businesses, matched by their current investors. That fund has been incredibly successful. I remind the House that this Government are committed to raising investment in research and development from £12 billion a year, where it is today, to £22 billion a year by 2024-25. That is a truly ambitious target to invest in emerging technologies.

I will conclude shortly, but first I will respond to a couple more things, including the question about whether the provision chokes off investment for these firms. I do not believe it will, but rather it will allow us to focus more on becoming an innovative knowledge economy in the future.

[Chi Onwurah]

Can I remind the Minister about my question regarding the £1 million threshold?

[Nadhim Zahawi]

I was about to come to that. Forgive me; that was my final response to the hon. Lady. To remind the Committee, the question was about worries about small companies below the £1 million threshold. We currently have a range of powers to ensure that national security remains protected. The lower threshold of £1 million is considered to be an appropriate level of turnover to capture those businesses that, although small, may have a critical role in matters that may affect national security.

I will end by thanking you, Ms Nokes, and the Committee for its consideration of the statutory instrument and its valuable contribution to this important debate. The amendments contained in the SI are essential. Without this SI, the Government would not have the powers we need to protect our national security in the specific enterprise categories outlined in the order. The order is a proportionate amendment to ensure that the Government can scrutinise the most worrying of mergers in three sensitive areas, at an unprecedented time, and I commend it to the Committee.

Question put and agreed to.

The Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020

Nadhim Zahawi Excerpts

Wednesday 8th July 2020 General Committees

[The Chair]

Before we begin, I remind Members about the social distancing regulations. Members may wish to remove their jackets if they feel very warm or overcome. I also remind Members that if they make speeches, they should email them to Hansard, who would appreciate it. I call the Minister to move the motion.

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

I beg to move,

That the Committee has considered the Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020 (S.I., 2020, No. 627).

The order was made and laid before the House on 22 June 2020 under the affirmative process. As ever, it is a delight to serve under your chairmanship, Mr Paisley. I will explain clearly the rationale behind the order.

Today’s debate focuses on the addition of a public interest consideration to the Enterprise Act 2002—specifically, the need to maintain in the UK the capability to combat and mitigate the effects of public health emergencies. As Committee members know, the Government have done everything in their power to protect UK citizens, UK businesses and the UK economy during the pandemic, but the crisis has exposed a gap in those powers that the order seeks to fill. In short, it helps to ensure that critical public health and crisis mitigation capabilities can be preserved in the United Kingdom to safeguard the welfare of the British people.

I turn briefly to the Act as a whole, which enables the Government to intervene in qualifying mergers and acquisitions on specified public interest grounds. There were three grounds for such interventions in the Act: national security, media plurality and financial stability. The last was added in 2008, following the financial crisis.

The order added a fourth public interest consideration to the list: public health emergency capability. The addition does not change our belief in an open economy or the many benefits that result from investment in the United Kingdom. In 2018 alone, more than 57,000 jobs were created thanks to foreign investment, and such investment will continue to be vital as we power our economy and our recovery from the pandemic.

Our belief in an open economy is reflected in our history of interventions under the Act. To date, there have been 20 interventions: 12 on the grounds of national security, seven on media plurality and one on financial stability. Not one has resulted in a blocked merger. However, the covid-19 pandemic has caused us to step back and review the circumstances under which it is proper for the Government to intervene in takeovers, and that work has led to the order under consideration.

I turn briefly to the detail of the order. All Committee members will recognise the hard work, dedication and commitment of firms in their constituencies up and down the country that have been involved in our covid-19 response. Those companies have helped us to weather the pandemic storm and their capabilities, including their expertise and knowledge, will be just as crucial as we rebuild our economy. However, the very qualities that made those firms critical to our response put them at risk from opportunistic investors. Although the vast majority of investors are an immense boon to the country, a small and unscrupulous minority seek to use UK expertise to advance their own agenda at the expense of the British people.

In the past months, we have seen attempts across the world to buy priority access to vaccines, to control the flow of personal protective equipment or to limit the availability of certain drugs. The Government have been clear that they will not allow that to happen to UK firms as a result of qualifying takeovers. This order creates the legislative framework to allow us to do so.

Companies directly involved in combating public health emergencies, such as drugs companies, are most at risk. However, astute Members will have noted that the order also allows intervention to maintain UK capability in mitigating the effects of a public health emergency. That might be necessary if there were a risk to firms in our food supply chain, for example, or to companies that allow us to work safely during a pandemic, helping slow the spread of the virus while allowing us to mitigate the impact on our economy. Such companies might include internet providers, for example, whose fibre broadband allows people across the country to work from home, order food and essentials from their living room, and keep in touch with their loved ones.

In conclusion, this is a reasonable and proportionate measure, allowing the Government to intervene to maintain the UK’s capability to combat and mitigate the effects of public health emergencies. The need for such a measure has been illuminated by the covid-19 pandemic, but it does not alter our appetite or enthusiasm for genuine investment into this country, which will always be encouraged and welcomed. I hope all Members will support this measure to ensure the UK remains open for business, but not for exploitation, and I commend the order to the House.

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[Nadhim Zahawi]

I am grateful to the shadow Minister for the support of the Opposition. Of course, the National Security and Investment Bill will be coming forward, in which we can look in the round at what we have in place to protect the UK economy from predatory behaviour.

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[Nadhim Zahawi]

I am grateful to colleagues for listening so intently and for their presence. I hope they will see fit to support the order.

My hon. Friend the Member for Gloucester raises an important point about other countries and our experience of how they have dealt with the pandemic. Our European allies, Australia and Japan, have also moved to protect their economies and companies similarly. He also raised scope creep, which would not go down well. Let me be clear: this is not a wider public interest test brought in through the back door. My hon. Friend is rightly concerned about that, and he would want to hold the Government to account if that were true, but it is not. I hope I can allay his fears.

The Government continue to welcome genuine investment from around the world. I repeat this for the last time: our economy can thrive only when the health of the British people is protected.

Question put and agreed to.

De La Rue: Gateshead

Nadhim Zahawi Excerpts

Thursday 25th June 2020 Commons Chamber

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

It is customary to congratulate an hon. Member on securing a debate, but I think “congratulate” is the wrong word in this case, so I am going to commend the hon. Member for Blaydon (Liz Twist). It is nothing to congratulate anyone about given the job losses that we are discussing. I know, Madam Deputy Speaker, that you take a special interest in this because of the De La Rue presence in Epping Forest, and I am grateful to the right hon. Member for North Durham (Mr Jones) for his customary courtesy in letting me know that he was going to speak in this important debate. It is also appropriate to take the opportunity to thank the hon. Lady and other Members, and, importantly, all public, private, community and voluntary sector partners across Tyneside and the north-east, for their outstanding work and support during these challenging times.

Tyneside and the broader north-east is a major industrial and manufacturing hub for the United Kingdom. It is a critical centre for the UK automotive industry, with the region typically producing over 500,000 cars a year. It is also a centre for producing medicines and healthcare products—the right hon. Gentleman mentioned the vaccine manufacturing and innovation centre in Oxford. There is much more work to do, and I am absolutely passionate and focused on working with the north-east on the future of the life sciences sector in that region.

[Mr Kevan Jones]

There were two shortlisted sites, according to the response given to my right hon. Friend the Member for Warley (John Spellar): Oxford and the north-east. If the Minister really wants to level up and actually put investment into the north-east, why did not he not insist on putting it in the north-east?

[Nadhim Zahawi]

I am grateful to the right hon. Gentleman. The VMIC project had already been awarded and was already happening. All I did was bring it forward by 12 months so we can have it ready by summer next year, not the year after. But I am grateful for his passion and for quite rightly holding the Government to account on what we will do in the north-east, which is also a key region for developing offshore and renewable energy technology.

We are committed to ensuring that Tyneside and the north-east remain a key manufacturing development hub. The right hon. Gentleman speaks of life sciences development. Of the £3.4 billion that the Government have committed to growth deals across the northern powerhouse, £379.6 million—almost £380 million—has been allocated to the North East local enterprise partnership area. I am pleased to say that Gateshead has benefited directly from that investment, including just under £1 million for PROTO, a state-of-the-art research and development facility for emerging digital technologies, and £5 million for the development of a new 12,500-seat arena, conference and exhibition centre on a 10-acre site at Gateshead Quays.

I would like to acknowledge the work done by the North East local enterprise partnership. Skills, employment and economic inclusion are at the heart of the North East local enterprise partnership’s strategic economic plan, which was refreshed in 2019.

[Liz Twist]

I thank the Minister for his comments about the PROTO development, which I am familiar with, and the Gateshead quayside development. We are enormously pleased with and proud of both of them, with the councils working in partnership with others. However, we also need to look at our manufacturing base and ensure that those traditional jobs are not left to slide because of new developments. Will the Minister address what can be done to assist on that point?

[Nadhim Zahawi]

I am grateful to the hon. Lady. She is absolutely right. We need to make sure that those traditional jobs are maintained, but also see where we can reskill and upskill into some of the growth industries, such as offshore wind. I know there is a big skills agenda that my right hon. Friend the Education Secretary is taking forward.

The LEP has co-ordinated £18.4 million of capital investment across eight projects, with a further £28.5 million from public and private funding. I thought I should just mention a few of those projects. They include, addressing the hon. Lady’s skills challenge to the Government, the successful delivery of the Gatsby good careers guidance benchmark and the launch of the North East Ambition programme, supporting 170 schools and colleges. Still these are unprecedented times for businesses and communities across the country. I am grateful to have had the opportunity recently to reflect on the challenges faced by the manufacturing sector, to which the hon. Lady quite rightly refers, with trade union representatives, where we discussed what more the Government can do to support the manufacturing sector.

I share the hon. Lady’s disappointment at the news that about 250 jobs will be lost at the De La Rue currency and passport printing facility in Gateshead. I take this opportunity to express my sympathies to those workers and their families who will be impacted. Furthermore, I call on De La Rue to act responsibly in how it approaches the forthcoming redundancies. It is very worrying that, as the hon. Lady mentioned, staff only learned the news from the Chronicle and social media. That is not the way a responsible employer would act.

I understand that there has been much speculation about the decision of Her Majesty’s Passport Office not to grant De La Rue the contract to produce the new British passport. To set the scene, between March 2017 and April 2018, the Passport Office undertook a rigorous, fair and open competition to identify the bidder that will be best able to meet the needs of its passport service and customers until 2029. That included in-depth due diligence to ensure that any bidder was capable of delivering the contract within the quality standards set out. The new contract was awarded to Thales and will deliver significant savings of approximately £140 million compared with the contract awarded in 2009 to De La Rue, which will ensure value for money for the taxpayer.

Since 2009, a proportion of blank passports have been produced in Europe, with no reason why overseas production should not continue. Thales will manufacture passports from multiple secure locations. De La Rue historically operated a blank book passport assembly facility in Malta, to supplement its Gateshead operation. All passports produced by Thales will continue to be personalised with the passport holder’s personal details, such as a named photograph, in the United Kingdom. That continues to ensure that no personal data will leave the United Kingdom.

It also extends Thales’s already significant presence in this country. Thales’s digital identity and security division operates from five sites in the UK and employs over 500 staff in this country. Since the contract was awarded in April 2018, Thales has increased its UK workforce by over 90 posts. Furthermore, it is not outsourcing the manufacturing of the British passport to a third party.

I strongly believe that it was the correct choice to decide the next UK passport provider through free and fair competition, to ensure the best value for money for the British taxpayer. I also recognise that this year has been especially challenging for De La Rue. In November last year, the company reported that its half-year results had underperformed against market expectations, due primarily to reduced volumes and a reduction in margins in its currency business. That underperformance prompted the board to suspend future dividend payments and to push forward with a turnaround strategy. While we can acknowledge that the loss of the passport contract was disappointing for the business, it is clear that this alone does not account for the challenges that the business has faced.

In response to a challenging and competitive market environment, De La Rue published details of that turnaround plan in February this year. Unfortunately, that plan involved a degree of cost reduction and a concentration on its core currency and authentication divisions. In June last year, De La Rue exited the passporting and identification business by announcing the sale of its identity products division to HID Corporation Ltd. The UK passport contract was not part of the sale, but by this period, De La Rue was aware that it had not won the renewal of said contract.

Unfortunately, as part of its cost-saving programme, De La Rue announced a consultation to reduce the number of roles at the company’s headquarters and to cease all bank note printing and passport production at the Gateshead site. I note that De La Rue has said that it aims to preserve certain core services and roles at the site, and I urge De La Rue to ensure that it retains a presence in the Gateshead community. However, I recognise that this remains a tough and disappointing time for the employees of De La Rue who face redundancy, and I can assure them that the Government will do all they can to support them in this challenging period.

Due to the challenges of operating in the covid-19 environment, the Department for Work and Pensions rapid response service has adapted to ensure that we can continue to support those facing redundancy. People will be able to access redundancy help and job search advice on the Department’s new job help campaign website. There is also information on gov.uk, and updated information packages are provided to employers to help them signpost employees to the support that is available.

[Liz Twist]

I note the reference to the increased speed of Government agencies being able to help people, but will the Minister also acknowledge that the situation with companies such as Debenhams, where a couple of hundred staff have lost their jobs with the closure of the Metrocentre store, is adding to the pressure on the services, and what we need is real support and real action, and real opportunities for all those staff?

[Nadhim Zahawi]

The hon. Lady is absolutely right to say that we need real support. There are three chapters to this challenge of covid. Chapter one was wrapping our arms around the economy and jobs, with schemes such as the furlough scheme and the bounce-back loans. Chapter two is now supporting businesses to restart and reopen; retail reopened in the middle of this month. Of course chapter three is about what stimulus we can inject into the economy, whether fiscal or non-fiscal—and the Chancellor will be saying more about this. The Secretary of State for Business, Energy and Industrial Strategy has conducted a deep dive with business and organisations representing business through a recovery taskforce, because we want to make sure that chapter three, which is about the recovery, is as robust and dynamic as we can make it. I assure the hon. Lady that the north-east will be very much a part of that.

The support for those losing their jobs includes connecting people to jobs in the local labour market in the north-east by helping them with job searches, including CV writing, interview skills, and where to find jobs and how to apply for them. We will also help to identify transferable skills and skills gaps linked to the local labour market, along with advice on what benefits people may get and how to claim them.

Furthermore, I can confirm that the Gateshead local authority is in touch with the company and stands ready to work with the Department for Work and Pensions, the Jobcentre Plus rapid response team and the National Careers Service to provide a package of support for any impacted employee. As I said earlier, the Government will do what we can to support these people and their families, and I believe that the Government can be proud of our record and how we have supported businesses across the north-east during the covid pandemic.

Through the coronavirus job retention scheme, we have so far protected 8.9 million workers and almost 1.1 million businesses; 24,200 people have been supported by the scheme in Gateshead alone, and due to the Chancellor’s announcement to extend the scheme back in May we can continue to support businesses and employees as they return to work over the coming months.

Furthermore, I am pleased to say that, through the various grant schemes the Government established to assist business, £36.8 million in grants has been paid out to 3,142 small businesses in the Gateshead local authority as of 21 June. We also recognise the importance of the Tyne and Wear metro to Gateshead, which the hon. Lady rightly mentioned, and the challenges it faces at present. That is why we have announced a further £7.6 million of support to keep it going on top of the £8.6 million announced on 1 May.

In the longer term, the Government have contributed £337 million of direct grants to provide a new fleet for this vital service. While I acknowledge that these are challenging times for all, I remain confident that there is a bright future ahead for Tyneside and north-east industries.

The Government recognise that this is a challenging time for all businesses. We have provided unprecedented levels of support to help business. For those De La Rue employees who, unfortunately, face redundancy, the Government will do what we can to ensure they receive the support they need.

Finally, I again thank the hon. Lady for securing this important debate, and I thank you, Madam Deputy Speaker, for your patience; I know this subject is important to you, as it is to other Members of this House.

Question put and agreed to.

Oral Answers to Questions

Nadhim Zahawi Excerpts

Tuesday 16th June 2020 Commons Chamber

[Chris Loder (West Dorset) (Con)]

What steps he is taking to support the recovery of businesses in (a) rural areas and (b) market towns during the covid-19 outbreak.

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

Our thoughts are indeed with our colleague who was murdered, Jo Cox, and also with the hon. Member for East Dunbartonshire (Amy Callaghan); we wish her a safe return to this House.

We have introduced an unprecedented package of support for businesses across the country to get through this incredibly challenging period. More than £10 billion in grants—grants—has been paid to over 830,000 businesses of all sizes, including £100 million to over 8,000 businesses in Dorset. I want to thank the local leadership there for delivering that. This has explicitly been targeted at those in receipt of rural rate relief, as well as small business rate relief.

[Chris Loder]

Market towns in West Dorset such as Lyme Regis, Sherborne and Dorchester are thinking ahead, and I am supporting them to look at innovations to boost the local economy following coronavirus. These include virtual high streets and collaborating to improve accessibility of local brands to those who may not be able to get to the town. Will the Minister meet me to look at these concepts and determine how we can support these initiatives going forward?

[Nadhim Zahawi]

I know better than most, with Shipston-on-Stour, Alcester and Bidford—very important market towns—in my constituency, that it is more important than ever at this time to support businesses to adopt innovative business models. I would of course be happy to meet my hon. Friend to discuss those approaches to reopening our economy in West Dorset and the lessons that this may hold for the rest of the country as well.

[Kate Osborne (Jarrow) (Lab)]

What discussions he has had with the Secretary of State for Housing, Communities and Local Government on the effect of the covid-19 outbreak on businesses trading on the high street.

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[Ian Lavery (Wansbeck) (Lab)]

What support he is providing to the manufacturing sector during the covid-19 outbreak.

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

We are committed to ongoing engagement with industry to ensure that our manufacturers have the support that they need. That includes a roundtable that I am holding tomorrow for north-east businesses, which the hon. Gentleman will be interested in. Our support for the industry includes the unprecedented £330 billion package of business continuity support.

[Ian Lavery [V]]

I send my condolences to the family of my dear friend and colleague Jo Cox.

UK workers are much more vulnerable to redundancy than French and German workers because the UK Government have announced that they are already winding down their job retention scheme. That is not my view, but the view expressed this weekend by the chief executive of leading aerospace manufacturer Airbus. In France and Germany, the subsidy schemes are set to last for up to two years. Does the Minister not agree that UK workers deserve at least the same job protections and guarantees as have been introduced in other countries? What more can be done to save these vital UK jobs?

[Nadhim Zahawi]

The hon. Member mentions the aerospace sector, into which the Government have put around £6.5 billion between the Bank of England corporate finance scheme and UK Export Finance, with an additional half a billion pounds of support. We have also put £3.4 billion into the growth deal across the northern powerhouse, with almost £380 million of that going to the north-east local enterprise partnership area, including his constituency of Wansbeck, which is benefiting from that to the tune of around £2.25 million in a science, technology, engineering and maths building at Northumberland College’s Ashington campus. A lot of work is going into this unprecedented package, but we continue to review all our interventions to make sure that UK workers get the benefit of a dynamic recovery.

[Holly Mumby-Croft (Scunthorpe) (Con)]

What progress his Department has made on undertaking a review of the Post Office IT system.

Caravan Industry: Hull and East Riding

Nadhim Zahawi Excerpts

Monday 15th June 2020 Commons Chamber

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

I congratulate the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) on securing this evening’s debate, and I congratulate the hon. Member for Kingston upon Hull East (Karl Turner) on his passionate speech. A number of colleagues were ingenious in their interventions, certainly my hon. Friend the Member for North West Durham (Mr Holden), because of Elddis in his constituency, but also the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Waveney (Peter Aldous) and for North Cornwall (Scott Mann). There is also, however, one Member present who cannot speak as he is the Whip in charge, my hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson), who has Regal in his constituency. As we can imagine, my constituency of Stratford-on-Avon has some wonderful caravan parks and caravan holidays, and I urge anyone looking for a staycation, which the hon. Member for Kingston upon Hull East rightly reminded us about, to visit Stratford, or at least have it on their schedule.



I would like to take the opportunity to thank the hon. Member for Kingston upon Hull West and Hessle for her work, but also those in the public, private, community and voluntary sectors, and partners across Hull and East Yorkshire for all their outstanding work and support during this difficult time. Hull and East Yorkshire, along with north Lincolnshire on the Humber south bank, is one of the UK’s most significant industrial and manufacturing clusters.

The hon. Member for Kingston upon Hull East rightly reminded us of the capabilities of Siemens Gamesa. Of course, there is Ørsted in the offshore wind sector, RB in health and Wren Kitchens in manufacturing, together with a strong small and medium-sized business base in the region. That has enabled the area to make real strides in improving economic performance.

Since 2010, the employment rate in the Humber has increased by 4.7%. There is undoubtedly a bright and optimistic future for Hull and East Yorkshire and the wider Humber economy. The caravan manufacturing industry, with its long and proud history in Hull and east Yorkshire, can be an important part of that future. That is certainly how the Department sees it.

Thousands of people are employed directly in the caravan manufacturing industry and its associated supply chain, as we heard from the hon. Member for Kingston upon Hull West and Hessle. Theirs are important, skilled jobs, which make a significant contribution to the local and national economy. There is no doubt in my mind that the medium to long-term prospects for the industry are strong. The British public have a long-standing love affair with their caravans, which transformed the holiday habits of generations of families following the post-war boom in the 1950s and up to the present day.

I believe that there are exciting new opportunities for the industry, with the prospect of more families holidaying in the UK. The industry has shown that it can diversify its products to meet the changing demands of a new generation that wants to have that wonderful caravan holiday. There are new, modern luxury caravans and mobile homes that can provide higher-quality, safe-distancing accommodation as we transition out of the current crisis. They can also provide flexible and environmentally friendly leisure experiences, tailored to different tastes and pockets for decades ahead.

The industry is also a major exporter, as we heard from the hon. Lady, and it is well placed to exploit new potential overseas markets. However, I recognise that it faces challenges in the immediate future. I am well aware that large parts of the caravan sector have been furloughed and, regrettably, some people have been forced into redundancies. For caravan workers and their families, along with many others throughout the country who may have been furloughed or made redundant, I recognise that that must be deeply unsettling and worrying. The hon. Lady made a powerful point about the interventions that we are making in the economy.

However, in 2008, the caravan industry in Hull and the East Riding of Yorkshire was severely impacted by the financial crisis, as the hon. Member for Kingston upon Hull East said. It bounced back. Backed by the Government’s determination to do all we can to support the industry and its workers, it can bounce back again. There are early positive signs. Coachman Caravans in Hull recently reopened its factory following a temporary closure due to covid-19. It has followed the Government’s guidelines to restart production while keeping its staff safe. It is not alone. East Yorkshire-based Victory Leisure Homes is investing in immersive visitor experiences as it looks to capitalise on the future staycation.

We are listening to the industry, too. The Chancellor’s decision to take action on the rise in vehicle excise duty on new motor homes in the Budget demonstrated that the Government are determined to maintain a vibrant caravan and motor home industry in the UK. Members of Parliament, including the hon. Member for Kingston upon Hull West and Hessle, should be congratulated on highlighting the impact the proposed increase would have had on the industry.

I would like briefly to set out the Government’s business support package, which already supports the caravan industry and its workers. The Government are committed to doing all we can to support UK business through the current crisis. The Chancellor has announced an unprecedented package of support. To help firms continue to keep people on the payroll, the Government introduced the job retention scheme, more commonly referred to as the furlough scheme. Since it opened on 20 April, it has protected touching on 9 million workers and 1.1 million businesses, including in the caravan industry, through the crisis. On 12 May, the Chancellor announced that the scheme will continue until the end of October. It will continue in its current form until the end of July, and then changes to allow more flexibility, which many colleagues appreciate, will come in from the start of August. That flexibility will help to support furloughed workers as they return to work.

[Emma Hardy]

As I said in my speech, I am aware of and grateful for the furlough scheme that the Government introduced, but I would really like to know from the Minister whether he will go to the Treasury and ask for the flexible furlough scheme that I mentioned in my speech, with the ability to continue to furlough workers right through until spring 2021 so that the industry can be ready to take off again with the new summer orders.

[Nadhim Zahawi]

The Chancellor has already announced the plans for the furlough scheme to come to an end in October, but we have designed all our interventions to wrap our arms around the economy and jobs. As we come out of this crisis, the interventions have to be reviewed, which is why the Chancellor reviewed the furlough scheme and why we review the other schemes—whether it is the coronavirus business interruption loan scheme, the coronavirus large business interruption loan scheme or the bounce-back loans scheme—to make sure that the recovery is as robust and dynamic as we can make it.

The Government have also provided extensive financial support to small and medium-sized enterprises through the bounce-back loans scheme that I just mentioned. More than 830,000 loans worth £35 billion have gone out of the door and into the bank accounts of the smallest businesses in our country. We have provided significant grant support to small businesses through the small business grant fund and the retail, hospitality and leisure grant fund. Since the launch of those grant schemes, more than £10 billion has been paid out to businesses throughout the country, and there is more to come. Small businesses across Hull and East Riding have to date benefited from nearly £180 million of grant investment.

On flexible furloughing, I am aware that the hon. Lady, together with her fellow Hull MPs, has written to the Chancellor, as she rightly highlighted in her speech. She is rightly pushing for a sector-focused approach to the job retention scheme; she will be aware that, as I have mentioned already, the Chancellor has extended the furlough scheme until the end of October and it is being made more flexible. From 1 July, employers will be able to bring back to work employees who have previously been furloughed for an amount of time, and on any shift pattern that they like, while still being able to claim the JRS grant for their normal hours not worked. After July, we will introduce more flexibility to the furlough scheme so that we move out of it in a measured and orderly way to protect people’s incomes.

[Emma Hardy]

I thank the Minister for giving way; he is being very generous—as I remember he was on the Education Committee. I just want him to fully recognise the specifics of the caravan industry. The point at which the furlough scheme is going to end is the point when the caravan manufacturing industry normally goes into a slower period, because it is a seasonally based manufacturing industry. The industry has more orders and does more business through the summer months; the winter months have always been quieter and slower. The reason why we are asking for sector-specific support is that, as things currently stand, the furlough scheme will end just as the caravan manufacturing industry enters its usual period of low orders and less production. That is why it needs to be sector-specific and why the caravan industry needs to be looked at separately from other industries: because it is seasonally based.

[Nadhim Zahawi]

The hon. Lady repeats powerfully the point that she made in her excellent speech, but the furlough scheme is only one of the interventions that we are making across the economy. As I said, we review all our interventions because, as she will know, the profile of interventions is very different when we are asking people to stay at home, protect the NHS and save lives, and therefore businesses are closing and furloughing people. The profile of interventions as we come out will be different, which is why we have reviewed them all and continue to do so, and why we continue to stay close to the industry as well. I reassure her of that.

On dealerships, which the hon. Lady mentioned in her speech, the House will know that we reopened them on 1 June to support them to get back on their feet. While residential caravan parks have remained open throughout the lockdown period, holiday parks have been closed in line with the wider restrictions on overnight stays for leisure purposes. Our ambition is to reopen caravan parks in step 3 of the Government’s recovery strategy. All decisions on reopening will, of course, be based on the latest scientific evidence and public health assessment. The Government have engaged very closely with the holiday and home parks sector to prepare guidance, as we have done with all other sectors. It was great to see non-essential retail open today, with so many wonderful stores in Stratford-on-Avon and around the country having such wonderful vibrant window displays and, of course, applying all the safe working practices. Hopefully, this will allow the sector to reopen safely and as quickly as possible.

On business rates relief, an important point, the Government have provided enhanced support to the retail, hospitality and leisure sectors through the rate relief system given that covid had such a direct and acute impact on them. It is worth reminding colleagues that it is up to the local authority to determine eligibility for relief, having regard to guidance issued by the Government. Local authorities have the power, therefore, to offer business rates discounts beyond the pre-defined reliefs at their discretion. I have spoken to, I think, 69 chief executives of local authorities. Many of my colleagues in the Department have been making phone calls to talk directly to them about the discretionary funds available to them. Other businesses affected by covid-19 that are not eligible for business rate relief, such as caravan and leisure vehicle manufacturers, will benefit from the wider business and employment support packages that I have set out.

[Karl Turner]

I am very grateful to the Minister for giving way. I do not expect an answer on the two chief asks immediately, because the Minister will, of course, have to make representations to the Treasury. None the less, will he be prepared to meet the National Caravan Council and perhaps some of the manufacturers to discuss those specific asks?

[Nadhim Zahawi]

I would be delighted to meet them. I am happy to arrange it as soon as possible. After the debate, I will ask my officials to reach out to the hon. Gentleman to make sure that we get that done. The hon. Member for Kingston upon Hull West and Hessle is equally welcome to join the meeting, as are all colleagues here.

The Government have introduced the business rates holiday for businesses in the retail and leisure sector, irrespective of rateable value, which means that all eligible businesses will pay no business rates for 12 months. That means that properties used by caravan parks and sites are eligible for that relief. This support is worth almost £10 billion to business, and an estimated 350,000 businesses have benefited from it. For the billing authority of Hull and East Riding, this support is worth £82 million to business, and about 3,500 businesses have benefited. I must pay tribute to the leadership of the local authority for getting that money out of the door. They have done a phenomenal job, and I thank all those in the authority for it.

The hon. Lady mentioned a range of other stimuli, and we can look at what is happening in other parts of the world, including perhaps a caravan scrappage scheme, the accelerated capital write-down and the value added tax measures that she mentioned. Those are all interesting proposals, but the hon. Lady will understand that I cannot give any policy commitments now, or indeed speculate on or prejudge any further Budget announcement by the Chancellor. She will, I am sure, agree that that is way above my pay grade.

As we come through the current crisis, as we will, I have no doubt that the caravan industry in Hull and East Yorkshire, and the rest of the United Kingdom, can look to a bright future. It will be important that the sector innovates and responds to customers’ high standards and aspirations, as it has done in the past. It will do so again to fully exploit that market potential. I have no doubt that the industry will rise to that challenge.

Finally, I thank the hon. Lady and other colleagues for engaging in this very important debate on a very important sector.

Question put and agreed to.

9.44 pm

House adjourned.

Rolls-Royce (Redundancies)

Nadhim Zahawi Excerpts

Wednesday 10th June 2020 Commons Chamber

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

I thank the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) for securing this important debate today. I note that my hon. Friend the Member for Pendle (Andrew Stephenson), whose two sites in Barnoldswick are impacted—I know that some of those workers actually live in your constituency, Mr Deputy Speaker—and my right hon. Friend the Member for Sherwood (Mark Spencer), the Chief Whip, have both made representations to me on behalf of their constituents.

I would like to begin by stating that Rolls-Royce is one of our most important manufacturers in the United Kingdom. It is the world’s second largest manufacturer of large civil aerospace engines and our largest civil aerospace company, and it accounts for about 2% of all UK exports of manufactured goods. On 18 May, the Business Secretary spoke to Warren East, the chief executive of Rolls-Royce, who advised that he would be making an announcement on restructuring plans involving job reductions globally. Warren East explained that this latest restructuring was a difficult but necessary decision to respond to the changed medium-term market conditions for civil aircraft resulting from the covid-19 pandemic and, of course, to ensure the long-term sustainability of the company. Although still uncertain of the number of job reductions at any particular location, he indicated that all of its civil aerospace sites were likely to be impacted, and assured us that Rolls-Royce would notify the MPs in the constituencies that would be affected. Warren East was grateful for the Government’s covid-19 business support measures, which are helping the company in the short term. However, he made it clear that no Government support could replace the lost global customer demand and reduced flying hours. Rolls-Royce made a public announcement on the restructuring plans on 20 May. It said that it would reduce its global workforce by at least 9,000, and that about two thirds of the job reductions would be in the United Kingdom.

[Alan Brown]

Did the Minister challenge Rolls-Royce on why the UK is losing workers so disproportionately, what the reasons are for that and what it could do to reverse that decision?

[Nadhim Zahawi]

I am grateful for the hon. Gentleman’s question, and I will come to that a little later in my speech. Essentially, the number reflects the proportion of civil aerospace jobs here compared with Rolls-Royce’s global footprint.

Rolls-Royce has now commenced its statutory consultation process, and on 3 June it opened a voluntary severance scheme that will reduce the number of compulsory redundancies. The Government fully appreciate that this news will come as a crushing blow—a crushing blow—to the Rolls-Royce workforce. We understand what a worrying time this is for its proud and talented workers who, through no fault of their own—and we heard the hon. Member for Paisley and Renfrewshire North eloquently describe the workers in his own constituency—will now be affected by this decision.

We now know that reductions are planned across all Rolls-Royce’s UK civil aerospace sites, and last week Rolls-Royce confirmed that at least 700 workers will be affected in Inchinnan in the hon. Member’s Paisley and Renfrewshire North constituency. The site in Inchinnan currently has about 1,300 employees, who manufacture compressor blades for civil aerospace and defence products, as well as performing maintenance, repair and overhaul services. I would like to use this opportunity to assure the hon. Member that my officials are in regular dialogue with colleagues in Scottish Enterprise, and will continue to work with them to support not only the Scottish Government’s effort to help those affected, but the broader aerospace industry that he spoke about in Scotland.

[Sara Britcliffe (Hyndburn) (Con)]

Over 200 job losses are proposed at Rolls-Royce in Barnoldswick. Rolls-Royce is a jewel in the crown of manufacturing in east Lancashire, and it is important to everyone, not least my hon. Friend the Member for Pendle (Andrew Stephenson), who has worked extremely hard on this. Does the Minister agree that supporting the small modular reactors programme would help protect jobs at Rolls-Royce?

[Nadhim Zahawi]

I thank my hon. Friend for her question. I was going to come to small modular reactors later on. Supporting that programme will mean that Rolls-Royce will have another product line which could become a world beater in a market that we estimate to be worth about £300 billion a year.

[Gavin Newlands]

I hear what the Minister says about liaising with Scottish Enterprise and so forth, and I am aware of the engagement that Rolls-Royce has had with Scottish Enterprise and the Scottish Government, but what are this Government doing, other than warm words with Scottish Enterprise? What are the Government doing to keep the jobs in this country?

[Nadhim Zahawi]

I thank the hon. Gentleman for his intervention, and I hope that as I make some headway in my speech he will recognise what we are doing. I can tell him, because he asked about this earlier, that in terms of financial support the corporate finance facility from the Bank of England has provided £1.8 billion of support to airlines, and £300 million to Rolls-Royce—I will come back to that—and £60 million to Meggitt as well.

[David Linden]

I want to press the Minister further on the point made by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). The Minister speaks about dealing with Scottish Enterprise and officials in Scotland, but I am afraid that that sounds to me like looking at the impact of this and thinking about the pace and so forth. Every time I visit a Government Department there are posters up all over the place saying “Britain is GREAT”, “Britain is open”, and “Britain is great for manufacturing”. The Minister mentioned that the Secretary of State had a conversation with Rolls-Royce on 18 May; has the Secretary of State picked up the phone to Rolls-Royce since then, or is it the UK Government’s view that it is just inevitable that this is going to happen, and in fact Britain is not open and Britain is not good for manufacturing? That is the message that I am getting at the moment.

[Nadhim Zahawi]

It is exactly the opposite of what the hon. Gentleman says, and I hope that when he listens to the words that I am about to deliver he will recognise the support we are putting into the aviation industry; I hold calls with the whole of the sector and I hope he will see after I have completed my speech to the House that this Government are committed to the sector.

[Mark Pawsey]

The Minister is about to talk about the financial support that the Government are providing to the sector, but he has also spoken about the catastrophic fall in demand for both air travel and new aircraft. Could the Government bring forward any measures to stimulate demand for air travel?

--- Later in debate ---

[Nadhim Zahawi]

I thank my hon. Friend for his question, and, again, he anticipates my speech. We are looking at all of this, as I hope he will recognise from some of the things I will be saying soon.

[Patricia Gibson]

I am very interested in what the Minister has just said about looking at ways to facilitate an improvement and an increase in air travel given the crisis we have just gone through. Does he agree with me and probably all his own Back Benchers that not having the quarantine, which has been brought in with no real medical evidence to support it at this late stage in the game, would help, and that to impose it will in effect deliver a hammer blow to some of the industries that he says he is trying to help?

[Nadhim Zahawi]

With respect to the hon. Lady, I completely disagree. At the beginning of this epidemic, when we were in the contain phase because the number of incidences was low, we had a triage at ports and airports for passengers coming from hot countries and places such as Wuhan and the rest of China, northern Italy and then the whole of Italy, Japan and of course Iran as well. But as we moved from contain to delay, because the virus began to spread in our communities, the scientific advice was very clear that having that sort of triage at airports was making very little difference. Now that we have the virus under control, and the numbers are reducing every single day and the spread in our communities is becoming very low, it is dangerous not to have a quarantine, because we could easily import the virus from other countries. We are reviewing this every 21 days, and, of course, working on the air bridges that we have heard the Prime Minister and the Secretary of State for Transport talk about for the future. That is important; lives are incredibly important, but so are livelihoods.

[Alan Brown]

Will the Minister give way?

[Nadhim Zahawi]

I will try to make headway, without abusing your patience, Mr Deputy Speaker. I have given way before, so now let me try to make some headway with my speech.

We will do all we can to support every worker affected at each location, including through the Department for Work and Pensions, Jobcentre Plus and, of course, the Partnership Action for Continuing Employment in Scotland.

Rolls-Royce has confirmed that it will work with those bodies and other regional organisations, such as local enterprise partnerships, local authorities and the unions, to help those who will be affected to get back into employment as quickly as possible.

I have also kept in close contact with my counterpart in the Scottish Government, Fiona Hyslop and Ken Skates in the Welsh Government, and Diane Dodds and the Northern Ireland Executive. During these challenging times, we have a weekly call as a team looking at the shocks of covid-19. I will be meeting with the Minister for Business, Fair Trade and Skills next week to have an in-depth discussion on the Scottish aerospace sector. At a national level, we are working closely with the aerospace industry, particularly through the Aerospace Growth Partnership. My colleagues were asking what support we will be delivering to assist companies through the pandemic and into recovery—

[Darren Jones]

With all due respect, all of us are having those types of meetings on a daily basis, and we understand the challenges facing the sector. The difference is that the Minister is in a position to do something about it, and the clock is really ticking now for many, many workers, including small and medium-sized enterprises in the supply chain that supply Rolls-Royce. Redundancy notices are being handed in to trade unions now. We are losing workers, we are losing skills and we are losing production capacity. May I gently encourage the Minister in his summing up perhaps to give us some dates and some announcements about action that will be taken, ideally, in the coming weeks?

[Nadhim Zahawi]

I thank the hon. Gentleman for his intervention, and I hope that, as I make some headway, he will see some of the action that we have already taken to help the industry. I have held several meetings with groups of senior industrialists from the sector during this period. I am pleased that aerospace companies have been able to draw on the Government’s extensive financial support package, which includes £330 billion of loans and guarantees, the tax deferrals and the furlough scheme for workers. Rolls-Royce has benefited from £300 million of support from the Bank of England’s Covid Corporate Financing Facility. My Department is working with an industry-led UK aerospace supply chain taskforce, set up by the ADS Group, the national aerospace trade association, in consultation with Airbus. The taskforce, led by Tom Williams, the former chief operating officer of Airbus, is looking at supply chain vulnerabilities within the industry and at potential remedies, including around financing. That will ensure that ongoing covid-19 Government support is co-ordinated with the actions of business to support supply chains and employment.

We are continuing to back the sector strongly. Our Aerospace Technology Institute, the ATI programme, is providing £1.95 billion of Government funding for aerospace R&D by 2026, which will be matched by industry. The programme has been a game-changer for the UK aerospace industry since 2013, providing real long-term certainty about the availability and the level of public funding, giving industry the confidence it needs to invest. From Broughton in north Wales, to Derby in the east midlands and Inchinnan in the constituency of the hon. Member for Paisley and Renfrewshire North, we are at the cutting edge of global aerospace innovation. We manufacture the most advanced parts of an aircraft here in the UK, and we want to maintain our position for many years to come. Indeed, creating this positive business environment helped to give Rolls-Royce the confidence to build its new large engine testbed in Derby, the largest indoor facility of its type in the world.

[Chris Stephens]

Will the Minister give way?

[Nadhim Zahawi]

If the hon. Gentleman will give me a couple more minutes, I will come back to him.

The facility is capable of testing large engines and, crucially, the next generation of UltraFan engines. Looking to the future, we recently opened the £300 million feature flight challenge, which will award £125 million of grants to small and medium-sized companies investing in future aviation systems and vehicle technologies, which will enable new classes of electric or autonomous air vehicles. We are supporting SMEs through innovation and productivity programmes, and we are looking at what scope there is to refocus some of these to assist with the short-term needs of businesses. That is what we are doing currently with those SMEs. We are making sure that Rolls-Royce and others can sustain investment in cutting-edge technology so that they are competitive when the markets actually recover. Our joint research projects funded through our ATI programme, which I referred to earlier, are supporting the development of the next generation of cleaner and quieter aero engines.

[Chris Stephens]

I thank the Minister for his generosity in giving way. He rightly talks about the support the Government have given to industry and the aviation industry, but with that we expect some corporate social responsibility. Will he outline what that means? Does it mean the Government are going to have to and will review redundancy legislation so that companies that are not engaging in CSR and are getting taxpayers’ money are told by the Government, “Sorry, you can’t make people redundant.”?

[Nadhim Zahawi]

I hope to address the hon. Gentleman’s point in my concluding remarks. Suffice it to say that the most valuable resource in any organisation—I have spent more years being in business than I have as a Member of Parliament and a Minister—is the human resource and that any leader, and chief executive, would be minded to think long and hard before behaving in a way that makes their people, the family who make up their business, feel as though their leadership are not listening to them.

In addition, we are supporting investments in new green aviation technologies, which will not only help us to deliver on our net zero commitments, but keep the UK at the forefront of the aerospace sector globally. We continue to back Rolls-Royce’s export campaigns, including, where needed, through UK Export Finance. The recovery of the aerospace sector is, of course, dependent on the wider aviation sector, as has been mentioned in this debate, and on getting aircraft flying again. The Government are committed to getting this crucial sector restarted. Led by my right hon. Friend the Transport Secretary, we are in active discussions with industry through an expert steering group, as part of an international aviation taskforce. The group has been instrumental in the development of the health measures guidance for passengers and operators, which my Department for Transport colleagues will be publishing as soon as possible. The border health measures that we spoke about earlier will be subject to review—currently this will be every three weeks—to ensure that they are in line with the latest scientific evidence, and remain effective and necessary. We are examining the possibility of alternatives to the international passenger self-isolation rules, including air bridges, where countries have managed the virus and we are confident in their measures for departing passengers—I spoke about that earlier. We will continue to work with industry on this concept and, ultimately, we will be guided by the science. I am sure the House will appreciate that the health of the public will always come first.

[Alan Brown]

I thank the Minister for giving in and giving way. Let us go back to the welcome support he outlined, which he is saying the Government are putting in for the future of aviation and cutting-edge technology, and being ahead of the world. If the UK is going to be so far ahead of the world and the Government are providing all that long-term certainty, can he explain why Rolls-Royce is still laying off so many workers in the UK? That still does not square. Let us go back to back the earlier intervention about small modular reactors. This is an unproven technology and good money is being thrown after bad. If we are looking at diversification, should it not be into green renewable energy? Should we not be looking to throw money into this in that way, to help sectors diversify, instead of looking at more nuclear energy?

[Nadhim Zahawi]

The hon. Gentleman makes a powerful point, but I did address it earlier in my speech—I hope he will read it in Hansard tomorrow morning.

I know that workers at Rolls-Royce who risk losing their jobs will be in a state of shock at the way events have unfolded. Just a few months ago, the sector was thriving. Apart from the financial impacts and worries, this news will take its toll on the overall wellbeing and health of individuals and families. I know that Rolls-Royce will act in a responsible way—colleagues mentioned corporate social responsibility—in assisting those affected and, as I have committed, we will also do all we can to support them.

I started by speaking about the importance of Rolls-Royce to the UK. Although this restructuring is hugely painful, it is intended to make sure that the company remains competitive and can return to growth in civil aerospace as we come out of the covid-19 challenge. Rolls-Royce remains committed to the UK, evidenced by their investment of over £2 billion in UK infrastructure over the past five years. We will continue to support the company and the wider UK aerospace industry to get back on its feet and back it into a position of growth, protecting high-paid jobs across the length and breadth of the United Kingdom.

The workforce was mentioned. The leadership at Rolls-Royce have made it very clear to us that they are being sensitive to their workforce, which is why they have introduced the voluntary scheme first of all. I will end by saying that we continue to look at what other countries are doing around the world in supporting aerospace and aviation, and we will review our support in the light of the global environment.

[David Linden]

On a point of order, Mr Deputy Speaker. I do not know whether the Minister perhaps did not hear, but my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) was seeking to intervene. Given that there are 55 minutes left for the debate, is it in order for him to make his point to the Minister, who would not let him in?

Oral Answers to Questions

Nadhim Zahawi Excerpts

Monday 4th May 2020 Commons Chamber

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

What discussions he has had with the Chancellor of the Exchequer on providing financial support for workers ineligible for the Coronavirus Job Retention Scheme.

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

My Department is working closely with the Treasury on the coronavirus job retention scheme and the wider Government response. In developing the scheme, the Government have prioritised helping the greatest number of people as quickly as possible.

[Hannah Bardell [V]]

While the additional flexibility is welcome, the job retention scheme does nothing for those outside its arbitrary limits, such as my Livingston constituent, stonemason Jason Hoffman, who has a small limited business and makes up a modest salary with legal and tax-efficient annual dividends. Jason does not qualify for the scheme, is not eligible for universal credit and cannot furlough himself because he could not bid for work and his business would collapse. How many small businesses like Jason’s will be destroyed before this Conservative Government finally listen and include them in the scheme? What comfort can the Minister give to my constituent today?

[Nadhim Zahawi]

As I said, we have tried to prioritise helping the greatest number of people as quickly as possible. To make sure that other people can be helped, including those who are self-employed, a scheme for them is also available. We have tried to do as much as we can through grants, as well as through local government, including £617 million in discretionary grants for businesses that may not be registered for business rates, which can get the additional help that was announced in the past 48 hours.

[Gavin Newlands [V]]

I am not entirely sure whether the Minister or the Secretary of State are listening. The truth is that the coronavirus business loan scheme is not working, partly because some lenders do not trust the Government to stand foursquare behind their loan guarantee without moving the goalposts at a future date. Loganair is just one of many businesses in my constituency with an urgent need to access the scheme through an overly cautious and risk-averse lender. What can the Minister and his colleagues in the Treasury do about that?

[Nadhim Zahawi]

I am sorry that the hon. Gentleman feels that way. My right hon. Friend the Secretary of State’s counterpart in the Scottish Government, Fiona Hyslop, to whom I speak every week, as I do to Ken Skates in Wales and Diane Dodds in Northern Ireland, thinks that the schemes are working well. We have improved them as we have reviewed them. We have also launched the bounce-back scheme, which is much simpler, of between £2,000 to £50,000, and can get money in the bank within 24 hours.

[Clive Efford (Eltham) (Lab)]

What steps he is taking to ensure that businesses do not profiteer from shortages of personal protective equipment in the health and social care sector.

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

Profiteering in PPE is completely unacceptable, and I want to be clear that no one should seek to exploit this health emergency for financial gain.

[Clive Efford]

That is a disappointing answer. The problem has been exacerbated by the Government’s failure to stockpile PPE. There are numerous examples of people exploiting this situation, so it will only get worse if the Government do not act quickly. Will the Minister commit to legislating to take power to act against operators who exploit the situation?

[Nadhim Zahawi]

The Competition and Markets Authority has already written to the small number of firms suspected of profiteering, and the Secretary of State has recently met business and consumer representatives to discuss what further action might be necessary to address the issue. I have to put on record that the vast majority of firms are acting responsibly. So many across the UK, such as BrewDog, Diageo and hundreds of small operators, are supporting the national effort to tackle covid-19. As I said, the Secretary of State always keeps the options open for tackling profiteering.

The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office was asked—

Contingencies Fund Advance

Nadhim Zahawi Excerpts

Monday 27th April 2020 Written Statements

[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 having drawn advances from the Contingencies Fund totalling £12,409,000,000 to enable expenditure on covid-19 support packages for business to be spent ahead of the passage of the Supply and Appropriation Act. The schemes are:

Small business grant scheme

Grant scheme for retail, hospitality, and leisure sectors

Oral Answers to Questions

Nadhim Zahawi Excerpts

Tuesday 3rd March 2020 Commons Chamber

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

3. What plans he has to support innovation in the aerospace sector.

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

The hon. Gentleman, as chair of the all-party parliamentary group on aerospace, will know that aerospace is a high-value growth sector driven by innovation, which is why the Government and the industry are co-investing £3.9 billion up to 2026 in aerospace research and development, and a further £300 million in the future flight challenge.

[Christian Matheson]

I am grateful to the Minister for that answer. The UK leads the world in aerospace technology, but it faces the same pressures as other sectors with regard to environmental sustainability, so may I urge him to increase long-term funding for the industry so that we can retain our global lead while meeting the challenge of net zero?

[Nadhim Zahawi]

The hon. Gentleman raises an important question. The Prince of Wales and I co-chaired a deep dive at the Whittle laboratory, with the whole industry around the table, to consider how we can deliver on net zero for the industry. We were targeting a fully electric aircraft that, at 500 miles, could cover most of Europe and take 180 passengers, and of course we are looking at other technologies for longer haul flights. We are also creating the innovators of the future with 500 additional master’s level postgraduate places for aerospace.

[Simon Fell (Barrow and Furness) (Con)]

4. What steps he is taking to increase the number of new jobs in clean growth industries.

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[Jack Brereton (Stoke-on-Trent South) (Con)]

19. What support his Department is providing to help energy-intensive industries decarbonise.

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

We have schemes worth nearly £2 billion operating, or in development, to support our vital energy-intensive industries to decarbonise. We will also invest in building the UK’s first fully deployed carbon capture, usage and storage cluster, and we are progressing carbon capture and hydrogen business models, both of which are crucial technologies in decarbonising our industry.

[Jonathan Gullis]

Achieving net zero is a considerable challenge for energy-intensive industries like ceramics, given the twin requirements of decarbonising without reducing international competitiveness. However, it is a challenge the sector can and will rise to, provided the UK puts supportive policies in place. Are the Government prepared to work actively with the ceramics industry, like Churchill China and Steelite, to help incentivise decarbonisation without, critically, undermining its international competitiveness?

[Nadhim Zahawi]

We must work together with industry to help our vital manufacturing regions benefit from clean growth opportunities. Stoke-on-Trent North is lucky to have such a Member championing its cause. We have a number of schemes in place, such as the transforming foundation industries challenge fund, the industrial heat recovery scheme and climate change agreements, to support industries like ceramics to cut bills and save carbon. In addition, we will be opening the industrial energy transformation fund to applications for phase 1 this spring.

[Jack Brereton]

Manufacturers in Stoke-on-Trent rely on energy-intensive processes to create their world-class products. What assistance can the Government give to help innovation in reducing the amount of carbon emissions generated in those processes?

[Nadhim Zahawi]

I am grateful to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) and, of course, the south is as lucky as the north to have such a fantastic champion in this House.

We have a number of schemes, as I have already mentioned, particularly the transforming foundation industries challenge fund, which will support energy-intensive industries to work with each other to innovate in reducing carbon emissions. This is a joint Government and industry fund. The first competition for projects closed at the beginning of February, and applicants are due to find out later this month whether they have been successful.

[Alex Cunningham (Stockton North) (Lab)]

Teesside is a major centre for high-carbon, energy-intensive industries, which are nervous about high energy costs, the future of the REACH regulations and carbon costs. It is good to have my near neighbour, the hon. Member for Stockton South (Matt Vickers), also supporting the CCUS campaign, but how can the Minister reassure the industry that the Government will address the high cost issues and, in particular, the REACH regulations that he is about to ditch?

[Nadhim Zahawi]

I am grateful to the hon. Gentleman for his question. We engaged with industry constantly throughout this process: when I took this job on last year, we engaged with industry over REACH, and we are looking at a UK REACH. Most importantly, we are looking at the energy-intensive industries and how we can innovate, for example, in steel and in the steel cluster. We have had good news today for British Steel, and we can use the investment that the Minister for Business, Energy and Clean Growth is making in carbon capture, usage and storage to turn the industry into the greenest steel industry in Europe.

[Chris Bryant (Rhondda) (Lab)]

Will the Government help to decarbonise the Rhondda? I ask because following the flooding we have seen significant landslides on former coal sites. I do not want to overstate this, but there is some anxiety about what that might mean for the future and stability of some of these tips. Will the Minister make sure that the Secretary of State meets me and other MPs in affected areas to make sure that the Coal Authority is doing everything in its power to make sure everybody is safe?

[Nadhim Zahawi]

I am grateful to the hon. Gentleman for his question. The Secretary of State will certainly meet him and other concerned MPs, and make sure that the Coal Authority is doing everything it can. I would also like to visit to see for myself what is happening, so that we can work together on this. Getting to net zero by 2050 is a joint effort by the whole of this House, not just this Government.

[Robbie Moore (Keighley) (Con)]

6. What recent steps he has taken to support small businesses.

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[Steve Double (St Austell and Newquay) (Con)]

T5. Lithium is set to become one of the most sought after minerals in the world. Recent confirmation of significant deposits means that Cornwall is well placed to enable the UK to have its own secure domestic and sustainable supply of this vital mineral. Not only will that help to level up the Cornish economy, but it will put the UK at a global competitive advantage. Will the Minister ensure that the Government do everything possible to enable us to make the most of this opportunity, and would he like to come to Cornwall to see the work that is going on?

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

I had the pleasure, with my hon. Friend, of meeting Cornish Lithium recently, and it was made clear that lithium extraction provides an excellent opportunity to contribute to our efforts to level up Cornwall, as well as securing our net zero objectives. I thank him for the invitation. I would be delighted to visit Cornwall.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

T2. In Scotland, 204 free cash machines closed last year. Alongside access to local banks and post office services being cut, that is having a hugely detrimental impact on high streets and small businesses in our towns, which are already struggling. Will the Secretary of State ensure that the Government act now and introduce legislation to protect access to cash, local banking and post office services on our high streets, so that our small businesses and high streets can survive and thrive?

--- Later in debate ---

[Nadhim Zahawi]

I thank the hon. Member for his question, but he is wrong. We have stood up a very important group within the Department that is working with the automotive sector, the retail sector and others that are impacted by China’s supply chain problems. We continue to monitor the situation closely, as well as the critical infrastructure that keeps the UK’s lights on and the UK economy powering ahead.

[Harriett Baldwin (West Worcestershire) (Con)]

Does the Minister agree that one of the best ways to level up the great British high street with the internet would be to allow our high street shops to choose when they open?

--- Later in debate ---

[Mark Pritchard (The Wrekin) (Con)]

In 2016, the United States became a net exporter of liquefied natural gas. In 2019, the United States became a net exporter of all oil products: both crude and refined. In order to diversify the UK’s energy risk, is it not time that the Government started to interact with the United States, perhaps as part of a trade deal, to import both gas and oil from the United States?

[Nadhim Zahawi]

I thank my hon. Friend for his question. I met the newly appointed US Energy Secretary a couple of weeks ago and we work very closely with the United States. Of course, this week we published our terms for our negotiation for a free trade agreement with that great country.

Construction Industry: Cash Retentions

Nadhim Zahawi Excerpts

Thursday 27th February 2020 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr McCabe. I thank the hon. Member for Kilmarnock and Loudoun (Alan Brown) for initiating this important debate. I also thank my hon. Friend the Member for Waveney (Peter Aldous) for his excellent contribution, and thank the right hon. Member for Warley (John Spellar) and my hon. Friend the Member for Kettering (Mr Hollobone) for their interventions.

The construction industry is vital to our future prosperity. Its turnover in 2018 was £413 billion, it accounts for 9% of the UK economy and it employs around 9% of the UK workforce, which is about 3.2 million people. The industry also builds and maintains our places of work, our schools, our hospitals, our economic infrastructure and, of course, our homes.

My hon. Friend the Member for Waveney asked me three questions. In answer to the first, which I will refer to as the Harrington question, the Government are committed to tackling the problems of late and unfair payment that burden businesses. That is why we have introduced a number of measures, including requiring large firms to report on their payment performance, the power to exclude firms that consistently pay late from Government contracts, and the prompt payment code.

Prompt and fair payment has long been a problem within the construction industry. Payment has traditionally cascaded down supply chains, as we have heard from a number of colleagues. As a result, smaller firms in the supply chain carry a disproportionate amount of project and payment risk, through late or non-payment; my hon. Friend the Member for Kettering gave Griffiths Air Conditioning and Electrical Contractors as an example of that.

Cash retention is an example of a payment practice vulnerable to both insolvency and abuse. Many construction contracts include provision for cash retention. Holding retention money is a long-established way of providing insurance against defects in an industry that is highly fragmented and operates on a project-by-project basis and in which defective work can be common. However, the practice does not offer protection to contractors against the loss of their retention due to upstream insolvency, as we have heard, including in the examples given by the right hon. Member for Warley. It can be subject to late, partial or non-payment for the supply chain. I reassure you, Mr McCabe, that Ministers acknowledge that there is a strong case to reform the practice of cash retentions, which is why we committed to review retention payments.

It may be helpful to outline the work that my Department has undertaken on this issue to date. We have consulted on the introduction of a retention deposit scheme, and produced an independent research paper on the issue, and we have looked at other solutions to the abuse of retentions. Following the consultation, we have worked with firms in the industry and with public and private sector clients to gather further information and to discuss possible solutions.

Further work has been undertaken to analyse the design, operation, costs and wider implications, including costs for the industry, of both a retention deposit scheme and a statutory ban on retentions. That work included ministerial roundtable meetings, which my hon. Friend the Member for Waveney mentioned, with key representatives from across the sector and from clients to tackle the abuse of retentions. While most people in the construction industry favour change, there is no consensus on the solution.

[John Spellar]

Quite frankly, has this issue not been researched and consulted on to death? As with most things in life, it will always be the case that there will not be unanimity. However, is it not the role of Government, and particularly that of Ministers, to make a decision, drive it through and make it happen? Without that we will keep going round in an endless cycle, while the industry, in all its various manifestations, is in a negative cycle of mutual abuse, which is dragging it down.

[Nadhim Zahawi]

The hon. Gentleman makes a powerful point. He is right that we have to make a decision, but it is complex and we do not want to create perverse incentives in a different direction. Consensus is necessary, as costs are driven by the extent to which industry adopts or resists change. If the industry does not adopt it, one sees a perverse incentive. It is clear that cash retentions in construction are a complex issue. I may be new to this job, but I spent many more years in business than I have spent being a Member of Parliament or a Minister. Sometimes the wrong decision can create a perverse incentive.

[Alan Brown]

As the right hon. Member for Warley (John Spellar) pointed out, are the Government not incentivising companies to dig their heels in and keep saying no? If the Government wait for consensus, that incentivises the wrong behaviour for contractors. As has been outlined in this debate, this situation has been going on for decades. We are not getting anywhere because the Government are waiting for a magic, 100% consensus.

[Nadhim Zahawi]

I opened by saying that the Government are committed to tackling the problem of late and unfair payments, so I hope that answers the question whether we are going to do something about the issue.

To respond to other points that were raised, the hon. Member for Kilmarnock and Loudoun and my brilliant hon. Friend the Member for Waveney both mentioned their private Members’ Bills. It is important that any action we take is robust, proportionate and evidence based, which is where we are at the moment. Several policy options are under consideration, including the retention deposit scheme. It would be premature to commit to anything at this stage while several policy options are under consideration.

[Bill Esterson]

The Minister is right to look for evidence. We have a tenancy deposit scheme that works. We have evidence from New Zealand, Canada, Australia, France and New Mexico that such a scheme is possible in construction. The evidence of best practice from around the world is in front of him. The evidence is also there from the construction industry in this country that it is desirable and needed. This has gone on for far too long; can the Government just get on with it?

[Nadhim Zahawi]

I am grateful to the hon. Gentleman for his encouragement. The hon. Member for Kilmarnock and Loudoun talked about a clear majority supporting the retention deposit scheme. I take issue with that, and not as a party political matter. There is no clear majority supporting any solution at the moment. It is right for the Government to begin to distil opinions and come to a view.

The hon. Member for Kilmarnock and Loudoun also mentioned that significant parts of the industry have called for the scheme and asked why the Government will not legislate for it. Given the evident complexity of the policy issues, as we have discussed, it would be premature to commit to introduce a retention deposit scheme. In addition, costs are driven by what the industry wants to adopt and what it wants to resist. Unfortunately, the lack of consensus to date means that a preferred solution has not yet emerged. We will continue to work with stakeholders and I would like to think that we can get to a place where we have that consensus.

[John Spellar]

Let me try to help the Minister out of this—we would even be prepared to call it the Zahawi scheme if he wants to do it. Waiting for unanimity and overall consensus is a recipe for eternal inertia. The Government have a real interest, not just from the point of view of the economy as a whole but as a client, so let me ask him the straightforward question: when is he going to come to a conclusion and decide the way forward? I am not asking for an exact date, but how about a month?

[Nadhim Zahawi]

The temptation is great, but the issue is complex, as I have said—

[John Spellar]

It is not.

[Nadhim Zahawi]

I do not agree. I hope I have built a reputation over the past decade of being someone who is evidence led; it is important that we do that. My hon. Friend the Member for Kettering talked about the inability of small firms to pursue unpaid moneys because they do not have the time or the resources. The 2011 amendments to the Housing Grants, Construction and Regeneration Act 1996 were introduced to ensure fair and prompt payment through facilitating better payment, adjudication and arbitration processes, particularly for small businesses. I wanted to put that on record as well.

[Alan Brown]

Going back to timescales, the Minister is not willing to commit to a month—forget that—but surely to goodness he could give us an idea of a programme and also explain why it took two years, following the responses to the consultation, for them to be published? That does not give confidence that there is any clear programme for the Government.

[Nadhim Zahawi]

I refer the hon. Gentleman to the answer I gave earlier. We are absolutely committed, but it is a complex issue. My hon. Friend the Member for Waveney rightly asked the Government to agree that action should be taken. It is important to remind ourselves that we have now published the summary of responses to the consultation on the practice of cash retention. We will continue to work with him, with others and with industry on these issues and on policy options to address the problem. We are committed to addressing it.

My hon. Friend’s final question was about a pilot scheme. My officials have met with representatives of Pay2escrow on several occasions to discuss the proposal for a deposit retention scheme, and the meetings have been helpful in clarifying and understanding its work. We remain in dialogue with industry to try to build consensus on the future policy. As I said, given the complexity, it is important that we make the commitment when we think it is the right thing to do. I want colleagues to understand that we are committed to that process.

[Margaret Ferrier]

In the Government consultation, 82% of respondents thought that existing measures were ineffective in addressing the challenges of prompt release and security of retentions. The Minister mentioned an independent research paper. Can he tell us how long that research paper is going to take? Is this not, frankly, a matter of kicking this issue into the long grass once again?

[Nadhim Zahawi]

I think it is unfair and wrong to say that—we are not kicking the matter into the long grass. I have repeated over and over again that we are committed to dealing with this issue.

[John Spellar]

When?

[Margaret Ferrier]

When?

[Nadhim Zahawi]

I will answer the hon. Member for Sefton Central (Bill Esterson), because he asked an important question—why will the Government not expand the remit for the Small Business Commissioner to include the construction industry? The honest truth is that the Government do not intend to extend the scope of the Small Business Commissioner’s activity to the construction industry. Section 4(5) of the Enterprise Act 2016 states that where,

“the complainant has a statutory right to refer the complaint for adjudication by a person other than a court or tribunal,”

that complaint is excluded from the commissioner’s complaint scheme.

The Government believe that that is the correct approach to considering the complexity of construction contract disputes, which tend to be incredibly technical, and we do not intend to extend the scope of the commissioner.

In answer to the question from the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), the research was published during the consultation process. I hope that that sets her mind at rest.

[Peter Aldous]

I am grateful to my hon. Friend for looking into this issue in such detail, and I appreciate that he has been in his role for only two weeks, but can he confirm that the status quo is ruled out completely and that he will be coming forward with alternative proposals?

[Nadhim Zahawi]

I think that my stating clearly and repeating over and over again that we are committed to dealing with this issue should give my hon. Friend the comfort he seeks that we are absolutely committed to dealing with this. Part of that process, as he can see, is the publication that we have made, and we will move forward to ensure we deal with it.

I will conclude by saying that there is no simple solution to the abuse of retention. Any changes would need to be implemented correctly and require consistent support from industry. I am clear that any solution must work for the industry and its clients, must be sustainable and must address all the issues and the need for both surety and fair payment.

Industry and clients need to work together to develop that alongside Government, as they are doing, and to define what the solution might be and how we create a process that gets us to that solution. I hope that that information offers some comfort to colleagues and some reassurance that the Government are committed—I say it one more time—to addressing the problems associated with the practice of cash retention.

[Margaret Ferrier]

The Minister has been very generous in giving way. He has said again that he is committed to tackling the issue, but do we have any idea of a timescale for this, or are we going to be back here in 2022 saying, “We were in Westminster Hall debating this issue”? Could we maybe get an idea of some sort of timescale?

[Nadhim Zahawi]

The hon. Lady is right to continue to push on this issue; I agree that the process has been far slower than I would have anticipated or the Government would have liked. That is partly due to the complexity of the issue and one should not—[Interruption.] The right hon. Member for Warley may laugh, but it is complex, because we do not want to intervene and create perverse incentives, and of course a wide range of interested parties are watching this space. I promise that we will continue to work with the construction sector and its clients to achieve a solution to this problem.