Opel/Vauxhall: Sale to PSA Group

Rebecca Long Bailey Excerpts

Monday 6th March 2017 Commons Chamber

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of Opel/Vauxhall to PSA Group.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

This morning the boards of General Motors and PSA Group announced plans for PSA to acquire GM’s Vauxhall/Opel operations. The proposed deal is expected to be completed by the end of this year.

The Prime Minister and I have been engaged in discussions with both GM and PSA, and with the French and German Governments, to ensure that the terms of the agreement can give confidence to Vauxhall’s UK workforce now and for the future. Vauxhall is an iconic, important and successful British car manufacturer. Vauxhall cars have been made in Britain for 113 years, and we are determined that that should continue to be the case for many years to come.

The car plants at Ellesmere Port and Luton have a proud record of being among the most efficient in Europe, with workforces that are skilled, committed and flexible. Both PSA and GM have confirmed to the Prime Minister and me a number of important commitments, including that the company will honour its agreements with the Vauxhall workforce; that Vauxhall pensioners will be in at least as good a position as they are today; that the treatment of the UK division will be equal to that of other countries in the Vauxhall/Opel group; that the identity of Vauxhall will continue to be distinct and prominent; that the strategy of the new company will be one of building on existing strengths and commitments, not on plant closures, taking opportunities to increase sales around the world; and that the company will work with me and the rest of the automotive sector to ensure that it can participate in a substantial programme of research and investment for innovation in areas such as electric vehicles and battery technology, which is part of our industrial strategy.

This morning I had a further conversation with my French counterpart the industry Minister, and my hon. Friend the Minister for Climate Change and Industry spoke again to his German counterpart to agree a consistent approach. I speak frequently with Len McCluskey, the general secretary of the largest trade union at Vauxhall, and I have kept, and will keep, colleagues with particular constituency interests up to date at all times.

It is in everyone’s interests that Vauxhall should look forward to a successful future. A generation ago, the British car industry epitomised our economic woes; today that industry is a beacon of success. Companies invest in Britain because our automotive sector has a high-quality workforce and world-class efficiency, and is part of one of the most exciting places on earth for innovation and research in new technology. The future of the motor industry is bright in Britain, and we will be active at all times in doing everything that we can to make it brighter still.

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[Rebecca Long Bailey]

I thank the Secretary of State for that positive response, but I would like further clarification on a number of issues.

First, although I welcome PSA’s promise to honour existing contracts, I am deeply concerned about the 40,000 workers who are currently employed at Luton and Ellesmere Port and in the wider supply chain, who will be worried about the future of their jobs. What assurances has the Secretary of State personally received about the future of Vauxhall’s plants and the wider UK workforce beyond existing contracts? During his discussions with PSA, did it confirm that the production of the new Astra model would take place in the UK?

Secondly, there has been some discussion about the £1 billion deficit in General Motors’ UK pension scheme, with some commentators stating that it could have jeopardised the deal. The scheme has 15,000 members and is one of the largest in the UK. Can the Secretary of State assure the House that the pensions of the UK workforce are guaranteed in full?

Thirdly, it is increasingly clear that the Government have little power to ensure that certain corporate takeovers are in the public interest and accord with Britain’s industrial strategy. Existing legislation allows intervention only when matters relate to national security or media concentration. Does the Secretary of State have any plans to broaden the definition of public interest, for example to serve stakeholders and not just shareholders? If so, when will he publish the draft legislation?

Finally, what support has been offered to PSA following Britain’s exit from the European Union? We welcomed Nissan’s decision to remain in the UK as a result of assurances provided by this Government. Has PSA been offered the same deal? If so, would it not make sense for the Government to set out their strategy for this sector as a whole, rather than enlightening businesses one crisis at a time?

[Greg Clark]

I am grateful to the hon. Lady for her questions. The last two weeks have been worrying times for the workforce. The statements that have been made by both parties today have been welcomed—not just by me, but by the trade unions—as steps in the right direction. It is important that we should hold the company to account on that.

On the points that the hon. Lady mentioned, PSA has said that it will honour GM’s agreements with the unions, which extend to at least 2021. In the motor industry, as she will know, new models come in at various points. We are fortunate that both the principal models in the UK are at quite an early stage in the cycle. I want, as I am sure she does, both plants to be competitive in expanding their production in the years to come.

I have discussed pensions regularly and in detail with GM and PSA. They have given an absolute commitment that no pensioner—current or prospective—will be worse off in any way. Of course, the Pensions Regulator, which is independent of the Government, is required to confirm any changes in pension arrangements.

In terms of the takeover regime generally, the hon. Lady will know that, in this case, one overseas-owned company is being taken over by another; we are not talking about a listed UK company that falls within the UK merger regime. In discussions with my counterparts in France and Germany, I have agreed that we should take a consistent approach on the assurances that are needed. The trade unions are equally in contact with their opposite numbers in other countries.

In terms of the support available to the automotive sector, as I mentioned to colleagues a few moments ago, that sector has been a great success in this country. One of the foundations of that success is the co-operation that we have had—Government to sector, and within the sector through the Automotive Council—to invest in research and development, particularly for electric vehicles and battery storage, and to make sure that we have institutions to train the future workforce. That has been a great success, and I hope that the future owners of Vauxhall will participate in the same way as other successful UK motor industry players have done.