Budget Resolutions

Sharon Hodgson Excerpts

1st reading: House of Commons
Tuesday 14th March 2017 Commons Chamber

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

I want to focus on the need to boost skills and jobs in our country, especially in manufacturing, following last week’s Budget. That is especially pertinent as we begin the process of leaving the EU.

It is unsurprising that, in a constituency-wide Brexit listening exercise I conducted, Nissan, which is based in my constituency, dominated, especially in terms of trade, investment, jobs and skills. Last week’s Budget was the perfect opportunity for the Chancellor to lay the foundations for strong economic growth that is resilient to any storms we may weather during the EU negotiations, but, sadly, we were left wanting. The announcements we did get on skills did not go far enough, and they must be placed in the context of the Government’s wider approach to education and skills.

Since 2010, we have seen the further education budget cut by 14% in real terms. That is a cash reduction from £3.18 billion in 2010-11 to £2.94 billion in 2015-16. That is compounded by the fact that the non-apprenticeship adult skills budget has been depleted by 54%. However, that negligent approach by the Government has not scuppered the innovative work by great employers in my constituency. Only last Friday, I was honoured to open Unipres’s new training academy, which will help to boost the skills of our local workforce by offering much-needed apprenticeship opportunities in engineering and manufacturing. It goes without saying that manufacturing is symbiotic with the north-east. We are the country’s makers and builders—I am pleased that Stoke colleagues are not here to shout me down—due in part to the innate talents of the people in our region and the skills we inherently have within us to manufacture with high quality and high productivity.

I like to call my constituency the manufacturing hub of our region, perhaps the country, with the likes of Nissan, BAE Systems, Rolls-Royce, Unipres, Rayovac and Gestamp, to name but a few, all based there. The manufacturing presence in our region will only be strengthened with the creation of the IAMP—International Advanced Manufacturing Park—which will be based not only in my constituency but that of my neighbour, my hon. Friend the Member for Jarrow (Mr Hepburn). However, the success of the IAMP and manufacturers in my constituency—from the large, some of which I have mentioned, right down to small and medium-sized enterprises such as AdFab Ltd, Washington Components, and PFF Packaging—depend on the Government strengthening their approach to skills and jobs. This is especially important with Brexit on the horizon.

There is one way in which Ministers could easily help to bolster our manufacturing, not only in the north-east, but across the country—through catapults. I am not talking about the ancient war machines but instead

“a network of world-leading centres designed to transform the UK’s capability for innovation in specific areas and help drive future economic growth.”

A number of catapults have been started across the country, yet there seem to be none for materials. This means there is no support for the innovation and development of materials such as steel, ceramics, glass and plastics, all of which are crucial to the dominant industry in Sunderland—the automotive sector. If we were to see a catapult for materials like the industry-supported proposal by the Materials Processing Institute in Redcar that received cross-party endorsement in January from the all-party parliamentary group on steel, this could have a positive impact on the whole of the manufacturing industry. However, it would especially help the Nissan supply chain, which Nissan has said needs re-powering.

[Anna Turley]

I appreciate my hon. Friend mentioning the fantastic institute in my constituency. Does she share my concern at a story on WalesOnline last week saying that Swansea is predicted to receive £80 million for a steel science centre that would almost directly duplicate the work that is happening at the MPI in Redcar and could then impact on the Nissan supply chain that she mentions?

[Mrs Hodgson]

I do not want to take anything away from Wales, especially with colleagues from Wales in the Chamber, but duplication does not make any sense, especially when there is so little funding around, and we definitely do not want to take any support away from Nissan. I am pleased that my hon. Friend made that point.

Currently, only a minority of parts used to build a Nissan car are made here in the UK, through a 38,000-strong supply chain workforce across the UK, with 27,000 of those jobs based in the north-east.

[Graham Evans]

What an exciting constituency the hon. Lady represents! My understanding is that one of the reasons Nissan decided to stay in her constituency is the cluster of battery technology companies. Is that true?

[Mrs Hodgson]

Yes—I am pleased that the hon. Gentleman makes that point. Electric battery technology is going from strength to strength. I was very pleased to see that there was an announcement on electric vehicles and battery technology in the Budget.

However, we see a predicament looming on the horizon as we begin to leave the EU—WTO tariffs. Ministers have given countless reassurances that we will strike a deal with the EU that does not mean we have to fall back on the 10% WTO tariffs. Yet only this weekend this was blown out of the water when a leaked document showed the Prime Minister’s willingness to fall back on those terms, regardless of the economic impact they may have. That was then reiterated by the Foreign Secretary on TV, also over the weekend. This would be catastrophic not only for the country but for my constituency and the businesses there. In the case of Nissan, falling back on to WTO tariffs and crashing out of the customs union would cause significant delays on products coming into the country that they rely on.

Another issue is that overseas parts currently used to build Nissan cars would have to be reduced significantly to meet the WTO rules of origin. The Society of Motor Manufacturers and Traders has said that cars need to have 50% local content to meet the rules of origin and be classed as British-made, and that could prove a major problem for Nissan. This is where the materials catapult comes into play. Not only would it reinvigorate the supply chain with innovation, especially in skills and jobs, but it could act as a way to mitigate the issues arising from the potential impact of WTO tariffs on manufacturing. I cannot make this point strongly enough the House: this catapult could also mean potential jobs growth. If we take the case of reducing overseas content in Nissan cars, it could significantly boost the UK supply chain and create tens of thousands of new UK jobs, which could seriously transform the manufacturing sector in the UK. Catapults could help in part to achieve the resilience I have talked about, and I hope the Government will listen and look again at the potential of a materials catapult.