Industrial Strategy

Paul Sweeney Excerpts

Wednesday 18th April 2018 Commons Chamber

[Greg Clark]

That is very important. One of the commitments in the industrial strategy is to increase the number of visas and studentships for international researchers coming to work in the UK. Nobel prizes were mentioned earlier. I had the privilege, when I was Science Minister, to go the Nobel prize ceremony. What is notable is not just that a lot of Brits receive these awards, but that most Nobel prizes in the sciences are given to teams of researchers and that those teams are usually international. That embodies the fact that the best ideas come from the connections that are made between researchers from different cultures and different countries.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Secretary of State mentions the critical need to attract high-quality education graduates from across the world to British universities. Does he also recognise that that is a critical part of growing our population? In Scotland, we had a declining population. The Labour Administration under Jack McConnell introduced a post-study work visa scheme, which reversed Scotland’s historic population decline. That is why today we have a great legacy of an expanding population in Scotland that is adding value to our economy.

[Greg Clark]

The overall population of the UK is growing, as the hon. Gentleman knows. It is important that our immigration system is set in a sensible way that recognises the needs of the economy and the needs of our society, and that is the approach being taken.

I talked about grand challenges. Let me turn to another important aspect of the industrial strategy, which is, candidly, to address areas of historic relative weakness in the UK economy. I talked about our strengths, but it is well known to every Member of this House that for many years now our productivity performance has not been as good as that of some of our competitors, and since the financial crisis it has been slower to recover. In recent quarters we have seen an acceleration of productivity growth, but I think everyone would recognise that it is the responsibility of this House and those of us in government to act on the foundations of productivity, so that we can maximise the productive capacity of the economy. A big part of the consultation was to consider what we can do to drive up our productivity performance.

There are five areas in which clear commitments and progress are required across the whole economy—indeed, across society, to go back to the comments made by the right hon. Member for Wolverhampton South East (Mr McFadden). This is not simply, if at all, in the gift of the Business Department. It requires a whole-country commitment to investing in the foundations of productivity. We have set out our plans and ideas on research and development, as I mentioned earlier. As new technologies are developed, the skills required by the workforce to make use of them clearly need to change as well. It is no good doing one if we do not do the other, so the skills element of the strategy is very important. It is important to recognise the different needs of different places, as I mentioned in response to an intervention from the hon. Member for Stockton North (Alex Cunningham).

We want to make sure that our business environment is not only competitive and open, but recognises the need to ensure that when companies start up—we have a great record of start-ups—they can attract the funding that they require to grow into medium and larger businesses. We want to make sure that the infrastructure on which our whole economy depends is competitive with the best in the world. Through the industrial strategy, we set out action across all five of those contributors to productivity.

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[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Although it is easy to adopt a declinist outlook about Scotland’s long-term industrial trajectory over the past century, it is important that we do not view the loss of the once iconic staple industries of shipbuilding, steel and coal, which had their genesis in the first industrial revolution, as part of a terminal decline of our manufacturing capability. Indeed, it is a sector that we urgently need to reposition at the heart of our economic future to maximise our country’s productive potential.

Currently, Scotland’s productivity ranks in the third quartile of OECD countries, and although productivity growth has been better than the UK average since 2009, the rate of productivity growth in Scotland lags behind many of our competitors. To catch up, Scotland must expedite a significant increase in that rate. Achieving the required growth would be truly transformational. Increasing Scotland’s productivity to the level of the top quartile of OECD countries would grow GDP by almost £45 billion—an increase of 30%—and annual average wages could be more than £6,500 higher. That would be an increase of 25%, which is a huge prize.

It is in Scottish manufacturing that we can find the prime mover towards any significant realisation of that opportunity for enhanced productivity. The firms in that sector continue disproportionately to drive innovation, investment and international exports.

On some measures, Scotland’s innovation performance is improving. However, performance still significantly lags behind many other countries on key innovation measures. Despite some signs of improvement, Scotland’s research and development performance continues to be below that of the UK and most OECD countries. Although business enterprise R&D increased by 45% to £905 million per annum between 2010 and 2014, which was faster than the OECD and UK average, Scotland’s performance is near the bottom of the third quartile of OECD countries. To reach the top quartile, Scottish R&D investment would need to be 200% higher—an increase of £1.8 billion. The need to close that gap is critical. Although 2,790 businesses in Scotland invested in R&D in 2014—an increase of 23% since 2012—R&D remains heavily concentrated, with just 10 businesses accounting for 45% of the total investment in R&D in Scotland. Almost 70% of R&D investment is by non-Scottish-owned businesses.

Labour plans to support the growth of Scottish engineering and manufacturing in a number of ways. It would create a national investment bank that would see £20 billion of capital structured in Scotland for industrial strategy and investment. The SNP has recently announced the creation of a Scottish investment bank, but it will be capitalised to the tune of a mere £322 million. If the SNP is so inspired by our policies, it might as well do it properly and ensure that the Scottish investment bank is appropriately and properly scaled, so that funding is made available in this vital area.

It is also Labour policy to set up a national transformation fund, which would see £40 billion of capital investment in Scotland, in areas such as infrastructure and house building, creating jobs and boosting the economy. In total, Labour policy in Scotland would see £70 billion of investment in industry in Scotland. That is the scale that is needed—it needs to be to the tune of billions of pounds of investment, not just millions of pounds.

The country stands on the cusp of a great disruptive opportunity with a new industrial revolution emerging. It is therefore imperative that the nation’s industrial base is encouraged to adopt the characteristics required to advance growth by being more innovative and international, while investing adequately in the most advanced plant and processes. These are not alien ideas; they are some of the very same ones that originally drove Scotland’s capacity to lead the world in industrial development through the 19th century.

We must seize the opportunity to issue a clarion call to reindustrialise Scotland. The country does have one distinct advantage over most others, in that it has done most of this already, albeit quite some time ago, although it may have failed to learn the most challenging lessons about its weaknesses as well as its many strengths. The trick now is to learn from both and do it all over again.

GKN: Proposed Takeover by Melrose

Paul Sweeney Excerpts

Tuesday 27th March 2018 Commons Chamber

[Greg Clark]

These are all precisely the issues on which Melrose is required to reach agreement with the Ministry of Defence, for all the reasons that the hon. Gentleman states.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Secretary of State perhaps has a somewhat nostalgic view of what shareholders might do in the interests of this company. From the litany of disastrous takeovers in years gone by, it is clear that shareholders often do not act in the best long-term operational and industrial interests of British industry, and we need to challenge that in this House in redefining company law. Given that Melrose’s practices are at odds with the ambition of GKN, will the Secretary of State consider whether the five-year time limit is long enough? Does he agree that we should consider reforming company law to ensure that shareholders genuinely act in the long-term industrial interests of British industry?

[Greg Clark]

I hope the hon. Gentleman will reflect that this is the first time a set of concerns outside a Secretary of State’s statutory powers has been laid before a bidding company, with the ability to discharge them through legally binding undertakings. I was very clear that section 172 of the Companies Act embodies a range of commitments that go beyond those just to shareholders. I hope the hon. Gentleman would agree that, by taking the action I have, I have reflected the wider concerns that exist.

Unpaid Trial Work Periods (Prohibition) Bill

Paul Sweeney Excerpts

2nd reading: House of Commons
Friday 16th March 2018 Commons Chamber

[Dr Whitehead]

Obviously, £2 billion has been lost since I last looked. That underlines the big picture. Unite the Union says that there has been a sixfold increase in complaints about the practice in the past three years. Indeed, the personal stories of exploitation collected by the hon. Gentleman chime with many of us, as we have heard today, through the experiences of our constituents, our own children and our local communities.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

As the second youngest Labour Member in the House, I can speak from relatively recent experience. My first experience of the world of work was an unpaid trial shift against four other candidates for a job. It was a full day’s shift and unpaid. That was combined with a zero-hours contract and unfair tipping practices whereby we were never given our tips and they were used to subsidise the minimum wage. Moreover, young people are unaware of trade union rights, how to join a trade union or how to engage in that sort of security in employment. That is the root cause of the problem. It is the duty of this Parliament to legislate for and protect our young people and others who are exploited by such nefarious practices.

[Dr Whitehead]

My hon. Friend makes an important point. He seems to have personally experienced all the various aspects of this problem: they came together on one occasion, in one place and happened to one person.

Many people have talked about their own experiences. One example comes, in fact, from Scotland. K from Kilmarnock says:

“My son was asked to do a trial shift in our local restaurant. The manager who was on shift did not even speak to him when he was in! He was left in the bar with no direction and when he tried to help the others he was told to get back behind the bar! He wasn’t paid a penny for his time. The same restaurant had already done the same thing to a friend of mine’s son except it was for a kitchen porter and he did 4 hours, no pay and again at end of his shift he just left waited over a week with no job offered.”

The use of unpaid trial shifts is a real problem under the current legislation. The concept of “shadowing” has been used by employers to justify bringing in unpaid workers to cover staff shortages, sickness, or particularly busy periods and events. There is a need to clarify the legal position for employees and employers with legislation, and the Bill seeks to do that by closing current legislative loopholes to ensure that workers are paid for every hour they work and every shift they do.

--- Later in debate ---

[Dr Whitehead]

Of course there is a difference, and this Bill does not fundamentally change that position: it is my understanding that it seeks to clarify what it is to actually do work and, following that definition, get paid for that work. The principle is that if someone does work—defined as serious work, which I am sure the hon. Lady agrees the arrangements she mentions would not be—they should get paid for it. It is as simple as that.

[Mr Sweeney]

There is a world of difference between an exploitative unpaid trial shift in a casualised context such as I experienced in my first job, and going to a controlled and time-bound assessment centre, which took a full day, as I did for my first graduate job, where it was controlled and defined. The Bill seeks to define that difference, and the Government should support it.

[Dr Whitehead]

If, indeed, methods are being sought not to support the Bill because of quibbles about what is work and what is not work, and what are trials, and when someone is just doing a practice, that would be a great shame. We need to make it clear that this is about a principle and an area of bad practice that needs to be shut down.

There has been widespread public anger about the practice of unpaid trials. We have heard about the two Mooboo Bubble cafés in Glasgow, which sparked this Bill and campaign, and 13,000 people signed the petition objecting to that. Indeed, the petition calling on MPs to support the Unpaid Trial Work Periods (Prohibition) Bill has 137,000 signatures. It is therefore clear that the practice of unpaid work trials goes against the sense of natural justice that most people have.

There is also widespread public support to remedy this issue as soon as possible, through the clarification of the contractual relationship between the worker and the employer, and the amendment of section 54 of the National Minimum Wage Act 1998 to require the minimum wage to be paid to those who participate in work trials.

Of course, as I stated at the beginning of my contribution, the abuses associated with work trials are part of a much broader picture. The serious, long-term remedy for this all-too-common exploitation is a raft of worker protection measures. Right at the head of Labour’s manifesto commitment at the last election to a fair deal at work is our pledge to

“give all workers equal rights from day one, whether part-time or full-time, temporary or permanent—so that working conditions are not driven down.”

After years of diminution of workers’ rights, that will be no easy task, and we will be faced with many similar loopholes to close and abuses to tackle. I am pleased to offer Labour’s full support for this Bill, to deal with this particularly unjust form of exploitation, which, as my hon. Friend the Member for Midlothian (Danielle Rowley) mentioned, affects so many young people across the country at the start of their working lives. It gives them the impression that the world is perhaps stacked against them in their working career. If only for that reason, we need to ensure that this Bill progresses today.

Hospitality Sector: Tipping

Paul Sweeney Excerpts

Wednesday 7th March 2018 Westminster Hall

[Laura Pidcock (North West Durham) (Lab)]

I declare an interest as a member of Unite the union.

The practices at Bristol-based Aqua Italia, which have been so methodically exposed by my hon. Friend the Member for Bristol North West (Darren Jones)—I thank him very much for raising this important issue with the Government—and, of course, the Bristol Post are, sadly, part of a much bigger picture of exploitation in our low-pay economy. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) outlined so eloquently the multitude of issues in the hospitality sector.

When I was a waitress and then when I worked in a pub, it was quite a regular practice for tips to be used to balance the till if it was under what it should have been at the end of the night. The worker would feel like a culprit because their tips were being used; they would feel that they were somehow being accused of defrauding their employer out of that money. But with thousands of transactions, there will be mistakes, and of course it was clearly very unfair to ask the workers to provide the money out of their hard-earned tips.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

My hon. Friend shares a very typical anecdote about something that many low-paid workers will experience; I speak as one whose first job was as a waiter in a well known Glasgow pizzeria. The typical practice was to be paid a pound under the minimum wage and then to have a tip allocated as a wage per hour to bring the person up to the minimum wage, so patrons of the restaurant were unknowingly contributing to subsidising the basic wage of the staff. I would often tell them that by giving us a tip, they were simply subsidising the employer to pay the wages. This practice is absolutely disgraceful, and that is why the work of people such as Better Than Zero is critical to addressing the massive inequalities that we see in employment.

[Laura Pidcock]

That is absolutely right. My hon. Friend gives a terrible but, I am sure, quite common example of what is happening in the hospitality sector. I implore everyone in that sector—and in all sectors, of course—to join a trade union, because only through a trade union can they have greater workplace rights. Also, consumers will become more aware and ask questions about what is happening to the tips when they are in an establishment.

What happened at Aqua Italia has been very well set out. Most striking was the case of the woman who had to go to a cashpoint at the end of her shift. How draconian is that? What century are we in when somebody has to pay just to be at work? Of course, the mantra of this Government is that for people to get themselves out of poverty, they must be in work. That is clearly a story to the contrary.

It is astonishing that this practice is legal, and it is more commonplace than people imagine. Although it remains within the law to treat people in such an extraordinarily exploitative way, it certainly cannot be said to be moral. The problem in the hospitality sector was and is the chronic lack of regulation, which has meant that exploitation—especially of young people, who perhaps are unaware of their rights and of the benefits of being in a trade union—has been allowed to flourish. That shows that we cannot rely simply on self-regulation in that sector.

Trade unions have taken a special interest in the sharp practices used in the hospitality sector since at least 2008. In May 2015, after it emerged that restaurants such as Pizza Express, Bill’s and Strada were taking tips and service charge payments intended for staff, Unite the union launched a summer campaign against these practices. For example, Pizza Express claimed an 8% so-called “admin fee” from any tips paid on a card. That is a huge problem, which has been repeated. There was public outcry as the endemic nature of the problem was displayed and publicised via social media. The huge public reaction forced the Government to act. They launched this call for evidence into tipping practices, followed by this consultation. However, as has been repeated consistently: nearly two years on from the consultation, what action has been taken?

In June, Unite campaigners handed a 6,500-signature petition to the Business Secretary, urging him to release the Government report into tips, but it still has not been published. The petition called on the Business Secretary to give staff 100% of their tips with complete control over how they are shared, to ban the bogus tronc schemes and make the code of best practice mandatory. For every single day that goes by, more abuses come to light. The so-called “pay to work” schemes are part of this broader set of practices, which cynically exploit restaurant workers and customers, who are none the wiser.

Budget Resolutions

Paul Sweeney Excerpts

1st reading: House of Commons
Tuesday 28th November 2017 Commons Chamber

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

I am grateful for the opportunity to contribute to this important debate on the Chancellor’s autumn Budget, which has truly exposed the appalling reality of the Tory party’s failed austerity experiment. The UK economy is now forecast to be £72 billion smaller than under the spring 2016 forecast, and average earnings are not expected to recover to pre-crisis levels until 2025.

In a major shift in their assessment of the UK’s growth outlook, the OBR has forecast that growth will remain below trend until 2022. This is the first time in recorded economic history that growth projections have been so low. That in turn significantly weakens the UK’s fiscal position, because it reduces revenue forecasts, household incomes and therefore the ability to reduce the deficit, which let us not forget was the Tory party’s primary test of economic success on coming into government in 2010. That now will not happen until 2031.

The reality could not be more stark now: austerity is a vicious cycle of self-defeating decline. Real wages are lower than they were in 2010, and the Budget confirmed a further hit to living standards, with disposable income set to fall in 2017. Working age benefits have been frozen since 2015. Meanwhile, prices measured by CPI have risen by 6.9%. Under this Government, it is clear that the poor are getting ever poorer, while an increasing share of national wealth flows to the richest in our society. That is a betrayal of my generation, which is the first in recorded history in which people are seeing their living standards falling below those of their parents.

The key reason for this downward revision in growth was the major shift in the OBR’s outlook for productivity. In the past, its prediction was that productivity growth would return to pre-crisis rates, but it now believes that the slowdown is evidence of structural weakness. That structural weakness is a result of the Government’s self-defeating policies, which have created a cycle of weak earnings and cheap labour, with firms using low-cost labour rather than investing in more efficient processes and plant that would drive productivity growth.

The industrial strategy White Paper that was published yesterday demonstrates that the Conservatives have once again missed the opportunity to take the radical action that is needed to meet the UK’s productivity challenge. Raising research and development investment to 2.4% of GDP by 2027 will only bring the UK in line with the OECD average, after years of lagging behind, but we need to be above the average, not below it. World leaders such as South Korea and Japan spend over 3% of their GDP. That is why Labour is committed to that target.

There is the key question of ensuring that UK firms are leading this effort and that it is balanced across all UK regions. In Scotland, for example, 70% of R and D activity is undertaken by overseas-owned companies, but there is nothing in the industrial strategy to address that. The country stands on the cusp of a great disruptive opportunity as the fourth industrial revolution emerges, but this lacklustre Budget and industrial strategy prove beyond doubt that the Government are simply not up to the huge economic challenges facing the country. Only the Labour party has the true ambition and vision to harness our nation’s industrial potential.

BAE Systems Military Air & Information Sites: Job Losses

Paul Sweeney Excerpts

Tuesday 10th October 2017 Commons Chamber

[Claire Perry]

As I said, we are keen to work closely with the company as it goes through this process. The offer is there for the hon. Lady and others who have important companies in their constituencies to work together, speaking to workers and the unions to ensure that we minimise the number of job losses and maximise skills retention both in this company and in the supply chain.

[Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)]

When I worked at BAE Systems, more than 1,700 of my colleagues across the British shipbuilding industry were made redundant in 2013. At the time, that was predicated on investment to create a world-class industry, but that investment is no longer happening. We see the same across these cuts. Every time it happens, a major plank of British industrial capability is lost, whether it is the ability to build tanks or carry out the final assembly of the F-35 aircraft. We cannot compete in shipbuilding internationally or in submarine manufacturing to the same extent that we could. Will the Government commit to reviewing how they finance capital infrastructure investment in defence and ensure that we are doing this in the best possible way?

[Claire Perry]

The hon. Gentleman raises the point—I defer to his considerable knowledge of the company—that companies need to be competitive in order to thrive and export, and we are told that that is the reason for today’s announcement. But we are spending £60 billion over the next 10 years on shipbuilding in the UK. That is one of the biggest investments in shipbuilding that I can remember. We are doing what we need to do domestically but, equally, we need to support the export opportunities for these companies right across the world.