Steel Industry: Contribution to the UK Economy

Stephen Doughty Excerpts

Wednesday 25th January 2023 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I beg to move,

That this House has considered the contribution of the steel industry to the UK economy.

It is a pleasure to serve under your chairmanship, Mr Pritchard, and to lead today’s debate. My hon. Friend the Member for Aberavon (Stephen Kinnock), a Welsh Labour colleague, secured the debate and was due to lead it, but he has been waylaid by his Front-Bench duties on the Economic Crime and Corporate Transparency Bill. He is an excellent chair of the all-party parliamentary group for steel and metal related industries. He represents the UK’s biggest steelworks—in Port Talbot—and I know that he will take a keen interest in today’s debate and wishes that he was here. Before I begin, I declare an interest: I am a member of the Community and GMB trade unions, both of which represent steelworkers in my constituency so ably, as does Unite. I refer Members to my declaration in the Register of Members’ Financial Interests.

I am incredibly proud to represent a steel constituency; for well over a century, the industry has been at the heart of the communities that I serve, and of constituencies represented by Members present. It is good to see interest from Members on both sides of the House. The contribution of the steel industry to the UK economy is the title of the debate, but the immense contribution of this vital strategic industry is, in a sense, undebatable. Our steel sector employs 34,500 people directly in the UK and supports a further 43,000 in supply chains. Steel salaries are 45% higher than the UK national average and 59% higher than the regional median in Wales, Yorkshire and Humberside. It goes without saying, then, that the steel industry should be at the heart of any levelling-up agenda worth the paper it is written on.

The workforce is a winning combination of highly skilled, experienced workers who have honed their expertise over decades of dedicated work, and a healthy influx of younger steelworkers eager to work in an industry that is at the cutting edge of innovation. Even in the face of the considerable challenges that the industry faces, which I will talk about today, steel still has enormous pulling power for young workers who are looking to build up skills that will last them a lifetime. That is clear to see at Tata’s Llanwern steelworks in my constituency, where the average age of the workforce has fallen from 53 to 32 in recent years. There is a new generation of workers who, like so many before them, are hugely proud to be steelworkers. We must look after them.

Directly and through supply chains, the steel sector adds £5.5 billion to UK GDP and makes a £2.4 billion direct contribution to the UK’s balance of trade. It underpins our entire manufacturing base, and steel is an essential material for the construction, energy, aerospace, defence, engineering and packaging sectors. Some 96% of Network Rail’s steel is sourced from British Steel in Scunthorpe; 250,000 tonnes of steel from Celsa in Cardiff will support the building of Hinkley C nuclear power station; and Liberty Steel produces critical parts for aircraft engines and wind turbine gears. Nearly all 1p, 2p, 5p and 10p coins originate from steel made at Tata in Port Talbot, and Tata Llanwern produces world-class automotive steel for the likes of Jaguar Land Rover and BMW.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an excellent speech. She rightly mentions the Celsa plant in my constituency and the critical role that steel plays in so many of our industries and in manufacturing. Does she share my frustration that we seem to have been going round the houses for the last 10 years, particularly on the critical issue of competitive energy pricing? We have seen something like 12 steel Ministers during that time. That is not to disparage the current Minister, whom I like immensely on a personal level, but we need consistency and action on the critical issue of energy prices.

[Jessica Morden]

I thank my hon. Friend, who is a champion for steel in his constituency, where Celsa is based. I wholeheartedly agree that we have been going on about energy prices for so long—it is a theme that I will come to later in my speech—and I thank him for his contribution.

--- Later in debate ---

[Jessica Morden]

I thank the right hon. Member for that very important intervention. She gave an example, as did the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), of how we can use our steel in these projects, and I hope that the Minister will refer directly to that point when she responds to the debate.

These interventions prove that we simply cannot decarbonise the economy without decarbonising steel. As Tata has highlighted, almost every aspect of the UK’s decarbonisation plan is steel-intensive, with 10 million tonnes of steel being required over the coming years for offshore wind, solar, nuclear, hydrogen, and carbon capture and utilisation storage projects. The “Britain, we need our steel” campaign was launched by the Community trade union and union partners in 2020. It is not just a slogan; it is a statement of fact.

Today’s debate comes in the context of the recent worrying news from Liberty Steel, which has announced that it will idle its steel plants in my constituency and at the Tredegar site in the constituency of my hon. Friend the Member for Blaenau Gwent (Nick Smith). The primary production plant in the constituency of my hon. Friend the Member for Rotherham (Sarah Champion), who is also an excellent advocate for steel in her area, and the Performance Steel supplier in the constituency of the hon. Member for West Bromwich East (Nicola Richards), are among the other sites affected.

In a written response to me last week, the Secretary of State for Wales mentioned that he had spoken to Cabinet colleagues about the situation at Liberty and what it means for the workforce, and said that the Government stood ready to provide support. Any updates on that written response that the Minister can provide would of course be welcome to us and, more importantly, all those working at the plants, who are worried about the future. We must not underestimate the uncertainty that they will feel following the news about Liberty.

Of course Liberty has its specific issues, and the Community union is seeking answers from the company about how the latest announcement squares with previous commitments to invest in the business and ramp up production in Newport, Tredegar and elsewhere. It is clear, however, that there is a wider context, and that Liberty’s announcement again demonstrates the precarious outlook for the steel industry more widely. Indeed, the company specifically cited energy costs as a factor in the decision that it made this month.

The same is true for British Steel in Scunthorpe, which is paying nearly £1 million a day for electricity, the cost of electricity having risen tenfold since 2021. There is still real uncertainty about the situation of British Steel, and I am sure that the hon. Member for Scunthorpe (Holly Mumby-Croft), who is here, will speak about that shortly. I hope that the Minister can provide updates. It is imperative that talks between the company and the Government continue, and reach a successful outcome that ensures that steelmaking at Scunthorpe continues and decarbonises.

As Community has highlighted, the cost of Government inaction, in terms of job losses, employment support, and the loss of a vital strategic foundation site, is incalculable. The sky-high energy costs facing the steel sector are by no means a new issue, as my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) said. It is one that I and other Members representing steelmaking constituencies have raised with 12 different steel Ministers since 2010, including six in the last three years alone. It is difficult to establish a long-term relationship when our steel Ministers change so often. I also like the Minister personally, but I make that point.

Over recent years, Opposition Members will have lost track of the number of times we have had to highlight the energy cost disparity, which remains a blight on the competitiveness of UK steel producers compared with their continental counterparts, particularly those in France and Germany. Indeed, UK Steel research shows that British steel producers paid twice as much for electricity last year as German counterparts, hitting competitiveness.

The UK Government’s response to this over the years can be described as piecemeal at best. The energy bills discount scheme announced by the Treasury earlier this month confirmed that there would be at least a continuation of energy price support for businesses until April 2024, removing fears of a March cliff edge—an uncertainty that the Government allowed to fester through the tail end of last year.

However, it is important to note that the support for energy-intensive industries outlined by the Exchequer Secretary to the Treasury falls far short of that provided by competitor countries. That is the point. For example, the German Government have guaranteed their steel industry an electricity price of €130 per MWh for 2023. In contrast, the Treasury’s announcement on non-domestic energy support earlier this month provides our steel industry with a discount only to electricity prices higher than £185 per MWh. That means that UK steelmakers will stump up an estimated 63% more than their German counterparts for electricity.

UK Steel has rightly been critical of what the UK Treasury has on offer, saying that its

“reforms significantly narrow the help that Government will provide”,

and that Ministers are

“betting on a calm and stable 2023 energy market, in a climate of unstable global markets, with the scheme no longer protecting against extremely volatile prices.”

For a decade, British steelmakers have continually been asked to compete with one hand tied behind their back. That is why Labour’s £1 billion contingency fund to help energy-intensive industries, such as steel, deal with energy costs is crucial. It goes far further than this Government’s proposals and is vital.

The £800 million toward energy costs that the Minister mentioned in previous meetings is not all for the steel sector. In any case, it is not a new package of support. It relates to a package introduced under the coalition Government between 2013 and 2015, which was pushed largely by the Liberal Democrat-operated Department for Business, Innovation and Skills. In any case, the support referenced is significant less than the £1 billion contingency fund that Labour has suggested.

We need a Government who will support the industry in a move towards decarbonisation. We have read the reports of the £600 million that the Government have pledged, or are reported to have pledged, to Tata and British Steel this week to help with lower-emissions technology. I trust that we will get more details on this from the Minister later. I hope the negotiations continue and progress with urgency, and that any plan to decarbonise will be fully consulted on and agreed with the unions to ensure a just transition for the workforce. However, it is important to note that the support arrived significantly later than the support for other European countries did, and is significant lower. For example, the German Government have already spent €8.5 billion towards greening their domestic steel industry, and the French Government have spent €2.2 billion. British Steel Scunthorpe’s multi-union chair, Paul McBean, put it well in his recent interview with The Yorkshire Post, saying:

“We are the only country being told to go green and (with) no help.”

I look forward to the Minister’s response on that point about the adequacy of what is on offer.

It is clear that the steel sector is committed to the transition to net zero, but needs a long-term policy framework to make that a reality without penalising steelmakers with gargantuan carbon prices in the interim years. As things stand, rising carbon costs are eating into any available capital that steel companies may have to invest in decarbonisation. That is completely counterproductive, and we need the Minister to act on it. That is a key point.

The Government have spoken about a roughly £1.5 billion package of support schemes for the industry. However, it is important to note that those schemes are spread across many industries, so £1.5 billion does not translate into very much direct capital support for the steel sector. In particular, the £1 billion carbon capture, utilisation and storage infrastructure fund is not money provided to steel companies to support CCUS on site, but investment in pipelines and storage that may at some point be used by steel companies—it is far from a certainty. For example, Welsh steel plants will not be using that infrastructure even if they opt for carbon capture, as it is all for the North sea. Let us not forget the £250 million clean steel fund promised by the Government led by the right hon. Member for Maidenhead (Mrs May), which disappeared without trace.

Labour’s proposed £3 billion green steel fund represents a potential way forward—not a sticking-plaster emergency bail-out, but a plan to work with industry, investing alongside it over the next 10 years. If this Government will not take action, we will.

I also urge the Minister to look at proposals for a carbon border adjustment mechanism. The costs of the UK’s emissions trading system have spiralled over the past two years. Compliance costs for the sector reached £120 million last year, which is equivalent to 60% of the average annual capital investment of the sector, and are set to get much worse. A carbon border adjustment mechanism would create a level playing field by applying carbon prices at the border equivalent to those faced by domestic producers, ensuring that imported steel does not have a price advantage. The Community union has highlighted that such a mechanism would also support the decarbonisation of steel production, as it would allow steelmakers to produce low-emission steel without being out-competed by high-emission, lower-cost imported steel.

[Stephen Doughty]

I thank my hon. Friend for her generosity in giving way again. I should also put on record my membership of the GMB, and past interests involving the GMB and Community.

On the subject of that transition to green steel, my hon. Friend will know that the Celsa plant uses an electric arc furnace—it is producing green steel from scrap. Does she agree that if we are switching to scrap-made steel, we need to ensure not only that there are adequate supplies of scrap in the UK, but that we do not suddenly all start producing the same product? Celsa predominantly produces rebar; we also need the flats, the sections, and all the other products that the UK currently provides so excellently.

[Jessica Morden]

My hon. Friend makes an excellent point—I cannot top it, really. I hope the Minister has heard it.

Procurement policies also need to be updated. For every 1,000 tonnes of steel produced in the UK, 4.2 direct jobs are created, with a further 6.6 jobs created in the supply chain. It is understandable, then, that Make UK found that 68% of the UK public think that public infrastructure projects should prioritise the use of UK-made steel wherever possible, yet the Government have a pretty poor track record in this area. The most recent example was last month’s announcement that a £1.6 billion contract for steel for three fleet solid support vehicles was awarded to a Spanish consortium. That is just one case, but there have been too many missed opportunities for the steel industry. We cannot let that carry on.

As I mentioned earlier, green infrastructure projects will need literally millions of tonnes of steel by the end of the decade. The UK Government’s own steel public procurement pipeline data, released last June, states that offshore wind projects alone will require some 5.3 million tonnes of steel within five years. We need the Government to commit now to maximising the procurement of British steel for all those upcoming projects, a move that Make UK estimates could boost the UK economy by as much as £4 billion and support 11,000 British jobs in steel companies and their supply chains. As the Community union’s general secretary Roy Rickhuss has rightly said,

“The green energy revolution presents a huge opportunity to build a robust British supply chain based on the supply of top-quality domestic steel.”

The events of the past two years tell us that Britain cannot rely on fragile global supply networks for strategic goods, and that if we want to go green, it is nonsensical to transport steel from the other side of the world.

On that point, I welcome that the Government themselves have acknowledged that, in the area of energy supply, the country has

“drifted into dependence on foreign sources”.

We agree, and I echo Roy Rickhuss by calling on Ministers to not make the same mistake when it comes to steel, a sector of such vital strategic importance to our sovereign capability and our national security. Alun Davies, a stalwart of Community in south Wales, puts it succinctly:

“There is a clear choice facing this Government—either they back our workforce and our industries or they choose to offshore thousands of good jobs to other countries.”

Britain’s Industrial Future

Stephen Doughty Excerpts

Tuesday 15th November 2022 Commons Chamber

[George Freeman]

That brings me to steel, and the hon. Gentleman makes an important point. There has been real pressure on the steel industry in the past 15 to 20 years. Global economic conditions are hugely challenging for all domestic steel sectors. There has been massive overcapacity, unfair overseas subsidies and steel dumping. The real issue is that global steel production has more than doubled since 1995 and China is by far the biggest contributor to that growth. In 1995, China accounted for 13% of the world’s steel production. By 2019, that had risen to 53%. There has been a phenomenal change in the global steel market.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I have been in this place 10 years today and I have worked with my local steel company since I was first elected. It has consistently raised the same issues with me: competitive electricity prices for the green steel it produces and ensuring that the industries of the future, particularly green industries, use UK steel. What exactly have the Government done to ensure that prices are competitive and that UK steel is used in those green industries? They have not done enough.

[George Freeman]

The hon. Gentleman makes an important point about the challenge. We have done a lot—let me share that with him.

[Stephen Doughty]

On the specific point.

[George Freeman]

I will deal with the specific point. Our ongoing support for the steel industry this year includes more than £800 million in relief for electricity costs, in addition to the energy bills relief scheme. The sector can apply for help with all sorts of energy efficiency, with decarbonisation and low-carbon infrastructure. More than £1 billion is available in competitive funding for the industry in that sector alone.

Shale Gas Extraction

Stephen Doughty Excerpts

Thursday 22nd September 2022 Commons Chamber

[Mr Rees-Mogg]

The hon. Gentleman is a wise and good man, but that point is completely fatuous. Paying people for inconvenience is a perfectly reasonable and commercial thing to do.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The truth is that this will not provide any immediate relief for consumers. When in Wales we have taken measures to try to support our energy security, it was the UK Government who pulled the rug out from under tidal power and tidal lagoons, and who failed to make progress on Wylfa Newydd. Will the right hon. Gentleman be absolutely clear on this? The Welsh Government have issued a moratorium on fracking—this is very clear, with 1,900 submissions to consultation. Will he absolutely rule out attempting to undermine that position and that consent—that view from the Welsh Government?

[Mr Rees-Mogg]

As I have said before, there is no plan to change the devolved situation, and that is not a matter for my Department anyway, so I can give the hon. Gentleman that assurance. As regards tidal power, the costings simply were not economic, and that has been a problem with tidal proposals.

Advanced Research and Invention Agency Bill

Stephen Doughty Excerpts

Report stage & 3rd reading
Monday 7th June 2021 Commons Chamber

[Chi Onwurah]

It is a pleasure and honour to follow the right hon. Member for Maidenhead (Mrs May). I am certain that the current Conservative Government could benefit enormously from her championing and promotion of an industrial strategy, and I hope that they are listening.

I thank all those who worked so hard to improve this Bill in Committee, particularly my hon. Friends the Members for Cambridge (Daniel Zeichner), for Brent Central (Dawn Butler), for Luton North (Sarah Owen) and for Sheffield, Brightside and Hillsborough (Gill Furniss), as well as the Clerks and House of Commons staff for their excellent support.

It is vital that we get the Advanced Research and Invention Agency right. Today we will hear many Members—although not as many as we had thought—raise a wide range of important issues such as climate change, regional and national economic development, international development and democratic accountability, but at the heart of this debate is science, which now plays such a critical part in all our lives.

The UK has a proud tradition in science, engineering, innovation, research and development. We are renowned across the world for scientific breakthroughs and discoveries that pushed humanity forwards. From the discovery of penicillin to the invention of Stephenson’s Rocket in my constituency of Newcastle upon Tyne Central, again and again UK scientists pushed forward the boundaries of knowledge, shrinking the vast expanse of ignorance, which, as this pandemic has shown, may threaten humanity’s very existence.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend refers to some of that world-beating research. I chair the all-party parliamentary group on HIV and AIDS. There has been a great degree of concern among some of our global health all-party groups about the cuts that were and are coming to global health research. I totally support the amendments that we have tabled on climate change; there is also a critical link between climate change and global health. Does my hon. Friend agree that we absolutely need to continue that world-beating research, because it has so many benefits for health not just globally, but in this country too?

[Chi Onwurah]

I pay tribute to the work of my hon. Friend’s all-party parliamentary group, with which I am quite familiar. I wholeheartedly agree with him about the importance of that research, and about the link between that important research and this agency. I will develop that point further in a few moments.

As hon. Members have indicated, UK science is not only inspiring; it can also be groundbreaking and is a key economic driver. Our university research base alone contributes £95 billion to the economy, supporting nearly 1 million jobs in scientific institutes, charities and businesses of all sizes. Research by Oxford Economics commissioned by the Department for Business, Energy and Industrial Strategy found that each £1 of public research and development—such as the money to be spent on ARIA—stimulates between £1.96 and £2.34 of private research and development, and we cannot recover from the pandemic without inspiring and initiating more private sector investment in research and development. Together, private and public sector research can help to address the key challenges facing humanity—from climate change to inequality, from pandemics to productivity.

That brings us very neatly to the broken promises of this Conservative Government on overseas development aid, as raised by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty), and how that betrays the poorest among us and the critical challenges faced by us all. With over £4.1 billion slashed from overseas development aid, the £120 million cut from science and research programmes may appear minor, but that has already had a devastating impact on science here and abroad. Cutting funding from global challenges research fund hubs, for example, threatens researchers at Newcastle University in my constituency, as well as scientists in developing countries working together on water security. These cuts are a consequence of the Government’s decision to scrap the legally binding 0.7% of GDP target for overseas development aid.

New clause 4 tabled by the right hon. Member for Sutton Coldfield (Mr Mitchell), which sought to reverse that decision, has not been selected for debate, though a debate on the issue may follow; certainly, the debate is not going away. Particularly in relation to ARIA and the amendments before us, it is really important to emphasise that for UK science, research and credibility, these cuts have a significant impact. The UK has been the only G7 country to cut aid in the middle of a pandemic, and in so doing it has united hon. and right hon. Members across this House who are horrified by the harm done—harm such as, in the world’s worst humanitarian crisis, in Yemen, slashing aid by 60% without conducting an impact assessment, and harm such as cutting bilateral funding on water, sanitation and hygiene—

Employment Rights: Government Plans

Stephen Doughty Excerpts

Monday 25th January 2021 Commons Chamber

[Andy McDonald]

There is a clear and active discussion about working time and the quality of life for working people. Since time immemorial, that discussion has taken place. I have no doubt that it will be a subject for debate and consideration between now and the next election, and way beyond. It is a perfectly proper area of debate.

The Secretary of State has spent a career calling for employment protections to be weakened, so he has a lot of ground to cover if he is to persuade the country’s 30 million-plus workers that he is on their side.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The hard workers my hon. Friend is talking about includes the many British Gas workers in my constituency, GMB members I met last week. I was very surprised to be told by them that the chief executive of British Gas had called personally to put pressure on them to accept new, worse terms. Bizarrely, he suggested that senior Labour figures had endorsed that. Will my hon. Friend confirm that that is absolute nonsense, that we stand in solidarity with them and that British Gas should get back around the table for serious negotiations? Of course, I draw attention to my membership of the GMB and the support that it has provided me.

[Andy McDonald]

I am more than happy and delighted to confirm that that is utter and complete nonsense. Is it likely? I just ask people: is that really likely? Of course it is not.

If the Secretary of State now wants to say that the 48-hour cap, holiday pay entitlements and rest breaks will be protected, and that he will scrap the planned consultation, perhaps he can say so in unequivocal terms here today and vote for our motion.

Today’s motion also calls on the Government to set a timetable to introduce legislation to end “fire and rehire” tactics. It is not a new phenomenon, but it has gained prominence because of the conduct of major employers such as British Airways, Heathrow and British Gas—some in circumstances that they claim to be justified by the covid pandemic. It is about sacking workers and hiring them back on lower wages and worse terms and conditions, including 20,000 British Gas employees who kept working through the pandemic to keep customers’ homes warm and worked with the Trussell Trust to deliver food parcels. I think of the engineer who explained that he was often the only face that people living in isolation were seeing. This is how they are repaid.

--- Later in debate ---

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I just want to make something very clear and unequivocal at the outset: we will not reduce workers’ rights. There is no Government plan to reduce workers’ rights. As the new Secretary of State, I have been extremely clear that I do not want to diminish workers’ rights, and on my watch there will be no reduction in workers’ rights. I do not want there to be any doubt about my or the Government’s intentions in this area. The hon. Member for Middlesbrough (Andy McDonald) and the right hon. Member for Doncaster North (Edward Miliband) were kind enough to send me a letter in my first week in the job asking for reassurances on this matter. I am happy to report that I have provided those reassurances, and I am very willing to provide them every time.

We will not row back on the 48-hour weekly working limit derived from the working time directive. We will not reduce the UK annual leave entitlement, which is already much more generous than the EU minimum standard. We will not row back on legal rights to breaks at work. I will say it again: there is no Government plan to reduce workers’ rights.

The Government have managed to have a record that is unimpeachable on this subject. Our manifesto promised, among other things, to get Brexit done and to maintain the existing level of protections for workers provided by our laws and regulations. We have delivered Brexit, and we will not use this new-found freedom to reduce workers’ rights. In any case, as the hon. Member for Middlesbrough said, our higher standards were never dependent on our membership of the EU. The UK has one of the best employment rights records in the world. It is well known that in many areas the UK goes further than the EU on workers’ protections. We have one of the highest minimum wages in the world, and the Government are increasing this again for workers on 1 April, but in the EU there is no requirement to offer a minimum wage or sick pay. In the UK, people get over five weeks of annual leave, minimum; the EU requires only four weeks. In the UK, people get a year of maternity leave; the EU minimum is just 14 weeks. The EU has only just agreed rights to flexible working, over 15 years behind the UK. The Opposition are simply wrong to hold the EU up as the gold standard. Our equalities legislation, and our maternity and paternity entitlements, are already considerably better than the EU’s. Now we have left the EU, our Government and Parliament are able to decide what rules should apply and make improvements where we believe there is a need to do so.

[Stephen Doughty]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress because lots of people want to speak in this debate.

We have already set out plans to make workplaces fairer. Our manifesto contains commitments to create a new single enforcement body for labour market abuses to give greater protections for workers, as well as plans to encourage greater flexible working. It is totally disingenuous for Labour to claim that we do not stand on the side of workers when our manifesto clearly says the direct opposite.

We will not take lectures on employment rights from Labour, because, as I said, our track record speaks for itself. It was a Conservative-led Government who introduced shared parental leave and pay in 2014, giving parents flexibility in who takes time away from work in the first year of their child’s life. It was a Conservative Government who introduced the national living wage in 2016, giving the lowest-paid workers the security of a higher wage to provide for themselves and their families. Ten years of progressive Conservative reforms pushed unemployment to a 45-year low. Before coronavirus hit, our employment rate was at a record high, with over 33 million people in work. By March last year, workers across the UK had enjoyed 26 consecutive months of real pay increases, and women and workers from black, Asian and minority ethnic backgrounds made up a larger proportion of the workforce than ever before.

[Stephen Doughty]

On fire and rehire specifically, will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress.

I know at first hand through my work as Energy Minister the importance of making sure that we have a high-wage, high-protection, high-skilled labour market to ensure that we can deliver the net zero transition and seize the opportunities of the green industrial revolution. The times have moved on. We have a new net zero focus, and clearly high wages and high skills are really at the centre of what we are trying to do as a Government.

That will be more crucial than ever as we rebuild our economy from the devastating impact of coronavirus. From the outset, the Government have acted decisively to provide an unprecedented package of support to protect our workers’ and our people’s livelihoods. The coronavirus job retention scheme, the first intervention of its kind in UK history, delivers countrywide support to protect millions of British workers. The scheme has helped 1.2 million employers across the UK to furlough 9.9 million jobs and has now been extended until April 2021.

Enforcement bodies are continuing to protect vulnerable workers and to work with businesses to promote compliance throughout the epidemic. We are concerned about reports suggesting that threats about firing and rehiring are being used as a negotiating tactic. We have been clear—

[Stephen Doughty]

The Secretary of State is speaking about fire and rehire, and his colleague the Chief Secretary to the Treasury told me that those tactics were completely unacceptable. Does the Secretary of State agree with those comments and does he share my concern? In September of last year, I met the chief executive of British Gas about that specific dispute and he tried to suggest that they were not using those tactics, despite having written to members in July to do just that. Does the Secretary of State agree that that is completely unacceptable in our labour market?

[Kwasi Kwarteng]

I think it is unacceptable. I will go further—as a constituency MP, I have a large number of constituents in Spelthorne who work for British Airways and I spoke directly to the old CEO, Alex Cruz, who has since left the company, and made exactly the points that the hon. Gentleman has just made to me. It is not acceptable.

Exiting the European Union

Stephen Doughty Excerpts

Tuesday 24th November 2020 Commons Chamber

[Lucy Powell]

My hon. Friend makes an important point. I hope the Minister has taken note of that and that we can hear about it when she responds, because it is especially important at this time of year—not to keep on with the Christmas puns, Madam Deputy Speaker.

If the Minister is allowed to, will she update us on what the EU-UK trade regime will look like and what rights and protections will be in place at the end of the implementation period? When will we get the details? More importantly, will businesses have plenty of time to prepare for the regime’s implementation? Ministers have repeatedly said that in many policy areas the rights and protections that we have enjoyed inside the EU will be maintained and improved on when we are outside the EU. Will the Minister set out where she thinks we might diverge from EU standards and requirements in future? How will she ensure that divergence benefits British businesses, instead of putting in place new barriers to trade that could cost them dear?

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is talking about the import of different foods, as my hon. Friend the Member for Stockton North (Alex Cunningham) just mentioned. Is she aware of the specific situation for the UK overseas territories and whether or not they are being properly considered in the transition arrangements? I am aware of serious concerns from the Falkland Islands in particular in respect of their squid industry, which provides much of the calamari in European markets. They are concerned about whether those concerns are being heard in the negotiations and about whether or not at the end of December they will face a cliff edge that could be devastating to their economy, which relies so heavily on fish products. Does my hon. Friend agree that the UK Government ought to be standing up for the Falkland Islands and their fishing industry and ensuring that they are able to continue the excellent trade that they have with other parts of the EU?

[Lucy Powell]

My hon. Friend makes an excellent point about squid in the Falkland Islands that I was not aware of. It is important to bear that in mind. We are talking about the Conservative party losing its reputation, whether on business or agriculture; those of us who are halfway through the new series of “The Crown” will also be reminded of the importance of the Falkland Islands to Conservative Members. One would have thought that that would be at the forefront of their minds.

[Stephen Doughty]

I hope that the Minister will be able to address this point when she responds, because my understanding is that the Falkland Islands have been raising their concerns. There are meetings this week with the Minister for the Overseas Territories, but the Falkland Islands have written to the Prime Minister about this issue several times and my understanding is that there has not yet been a formal reply to the substantive concerns that they have raised. That is very concerning, because it leaves them in a great deal of uncertainty about what will happen post the end of December.

[Lucy Powell]

My hon. Friend is absolutely right. This statutory instrument should and could be an opportunity to clarify those matters but, as I said at the beginning of my speech, it will take provisions away without any of us understanding what will replace them. That is causing a huge amount of uncertainty, not just here in the UK but, as my hon. Friend says, in the UK territories. I am sure that, given its closeness to the EU, Gibraltar will be worried as well.

--- Later in debate ---

[Lucy Powell]

As always, my right hon. Friend makes an incredibly powerful point. Although on the face of it the statutory instrument looks like it is fairly narrow, it is actually of huge significance and importance. It is inextricably linked to the current negotiations. That is why, as the shadow Minister, I thought—foolishly maybe—that the Government had decided to bring it to the Floor of the House. As I say, there are aspects that look narrow, but it is a hugely significant statutory instrument. That is why I was flabbergasted at the beginning of the debate that the Minister did not seem to have anything much to say about it.

As other colleagues have pointed out in other statutory instruments and through the passage of the United Kingdom Internal Market Bill, it is still unclear what checks, controls and processes will be put in place on qualifying Northern Ireland goods, which are also implicated in this statutory instrument, moving from Northern Ireland to Great Britain. Despite the Government’s protestations at the time about the very real dangers, as they saw them, of EU attempts to blockade NI-GB movement and goods, there was absolutely nothing to deal with that apparent clear and present danger in the Bill, as we discussed at the time. We support unfettered access for Northern Ireland businesses to the rest of the UK market. However, there are a number of issues that stand relating to the breadth of the definition of qualifying Northern Ireland goods. My right hon. Friend the Member for Leeds Central (Hilary Benn) is across that matter as well. The Government appear to acknowledge that it is problematic, but it remains unclear what they are going to do about it.

Today’s statutory instrument sheds no further light on that. In fact, it probably makes it even more complicated. We need further clarification, because the definition is not sufficiently tightly drawn to provide the protections intended. The wide drafting of the definition of “qualifying goods” is the problem, because it includes anything that is in circulation within Northern Ireland without being subject to customs control while there. However, it also includes goods processed in Northern Ireland from Great Britain-derived goods, which are themselves subject to customs control in Northern Ireland. I hope people are keeping up, as this is quite a complex subject, which is why I hope the Minister will properly respond. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) has said, that could include whisky imported from Scotland to Northern Ireland, which might be in duty suspension in Northern Ireland but then is used to make mince pies in Belfast. That would leave those mince pies as qualifying Northern Ireland goods, despite the whisky used to make them being subject to customs controls. So we have argued that the definition of qualifying Northern Ireland goods is not sustainable in the longer term. It appears that Ministers agree, but will the Minister let us know today what plans the Government have in place to resolve this?

[Stephen Doughty]

My hon. Friend is making an important point. She will know that I raised these issues in the statement the other day on Northern Ireland-related issues and trade with Wales. Is she aware of the concerns raised today on BBC Wales by hauliers, who are describing how they fear mayhem at the port of Holyhead in Ynys Môn—Anglesey? The Irish Road Haulage Association fears that the processes are not ready and in place. For example, it is concerned that the IT systems to deal with these changes are not ready. Does she agree that the Government have not answered a whole series of questions, which will have impacts on ports and trade in Wales, and of course on goods transiting the Republic of Ireland to Northern Ireland and back and forth? This is far, far more complex and people are simply not convinced by the answers they have had from the Government so far.

[Lucy Powell]

My hon. Friend makes an extremely important point about the impact on ports, including Holyhead. That is why, as things stand, this statutory instrument is at best making the situation worse; all it is doing is pulling away some of the existing frameworks, without our understanding what they are going to be replaced with. That is probably the worst of all worlds for anyone following these issues and having to try to plan around them. Road hauliers are at the forefront of that. I was talking to businesses about this the other day. It beggars belief that in the current situation, with the pandemic and what is going to be happening over Christmas, we could even be countenancing lorries stacking up on motorways and other roads, and gridlock at our ports, with all the paperwork that has not yet been agreed and sorted out. I just do not know what Government, at any time, would actively seek that, but that is what this Government seem to be doing.

--- Later in debate ---

[Stephen Doughty]

I raised a serious point in an intervention on my hon. Friend the Member for Manchester Central (Lucy Powell) about the Falkland Islands. Does the right hon. Member agree that the UK family is a large one, including our overseas territories, and we ought to be backing the fishing fleet in the Falkland Islands that are trying to export squid and calamari to the EU? Will he join me on a cross-party basis in urging the UK Government to address the concerns of the Falkland Islands?

[John Redwood]

Of course I hope we can do things to help the Falkland Islands, as we have over many years. They are clearly part of our family, and blood and treasure have been shed to ensure that they are part of our family, so I above all think that we should do all we can.

From 1 January, we in this House can do the things that are in the power of an independent country. We cannot instruct the EU when we are out of it any more than we could when we were in it. There have been a glittering array of failed issues that we put to the EU on which it did not sympathise with us. We had a series of Governments who were so broken backed that they only ever accepted things that the EU wanted to do and did not try to do anything that we wanted to do, which is why it got so frustrating as a member of that body.

It is about taking back control, and I urge everyone here to be more optimistic about the powers of this House. What is the point of someone being a Member of Parliament if they do not believe that they can improve on anything in the inherited corpus of EU law? Why do the Opposition, on the whole, say, “Everything EU perfect, everything generated in this country rubbish”? It is not plausible, and it is against the spirit of the Brexit majority in this country. They want us to get a grip and do better. If we do not do better, they will change us. That is the joy of Brexit—they, at last, will get back control over us. If the law went wrong in the European Union, it did not matter who was in the Government. Even if they threw the Government out, nothing changed, because the EU would not change the law, whereas if we get the laws wrong, the public will know what to do—they can throw Ministers out.

UK Steel Industry

Stephen Doughty Excerpts

Monday 14th September 2020 Commons Chamber

[Jessica Morden]

I thank the hon. Member for that intervention and agree entirely.

There are significant opportunities for UK steel as we begin to build back greener. The Prime Minister spoke earlier this year of a new age of opportunity in making the UK a world leader in, for example, electric vehicles. Steel will also play a vital role in the production of other green technologies, such as wind turbines, rail electrification, renewable projects, solar panels and more. If the Prime Minister wishes for the UK to be a world leader in those things, we must have an industrial strategy that puts steel at its centre.

Before its tragic closure earlier this year, Tata’s Orb steelworks in Newport was the only manufacturer of electrical steel in the UK. With the right strategy and the right investment, Orb could and should have played an instrumental part in a move to electric vehicles. We need vision from the Government to work with the industry to do that. While it may be too late for Orb, it is not too late for the Government to produce a Budget that incentivises automotive demand, so that the plants at Llanwern, with world-class steel for the automotive sector, can get involved. Steel that is manufactured in Britain also enjoys a significantly lower carbon footprint than imported steel. Not only does imported steel take more carbon dioxide than sourcing a tonne of steel domestically, but steel produced in Britain is subject to higher environmental standards than steel produced abroad.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I absolutely agree with that point. Does my hon. Friend agree that offshoring carbon emissions to China, Turkey and Iran is exactly the way we do not want to go, when we can make that steel in this country in green ways?

[Jessica Morden]

My hon. Friend is absolutely right, and I agree entirely.

It is also vital that the Government recognise developments such as Liberty’s Greensteel hub in Newport, which uses renewable and low-carbon energy to recycle scrap steel to meet the challenges of decarbonisation and growing consumption of steel globally.

Steel can play a vital part in rebuilding Britain after the pandemic. Despite the significant challenges posed by coronavirus, the Government have a unique opportunity to create a 21st-century manufacturing sector that has a revitalised steel sector at its core, so that we can build back. However, the Government must act—something that they have been slow to do in the past. I look forward to the Minister’s comments tonight.

Corporate Insolvency and Governance Bill

Stephen Doughty Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 3rd June 2020 Commons Chamber

[Alok Sharma]

Once the filing requirements are enacted, as my hon. Friend says, companies can make filings up to the extension dates. As was mentioned earlier, if there is a need to extend temporary provisions, we will look to see if that is required. While we recognise that these and other support measures will not, sadly, be able to save every business and every job, the Bill delivers commitments that will give businesses in difficulty due to the pandemic a fighting chance of eventually bouncing back.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

There are indeed some important measures in the Bill, and we will undoubtedly scrutinise them in more detail in due course. I thank the Secretary of State for the work of the officials in his Department to support a number of businesses in my constituency, and I thank the Welsh Government for the support that they have provided through the economic resilience fund.

We have not had enough support from the banks, some of which have not only struggled to make themselves available to businesses seeking support through the loan schemes that the Government have set up but seem to be trying to push off their books businesses that could make it through the crisis. What does the Secretary of State have to say to the banks?

[Alok Sharma]

When we first launched CBILS there were a lot of concerns about how quickly the process was moving. I have been talking to banks individually and to senior managers in the banks, and I think that we are beginning to see movement. CBILS has had over 40,000 loans out of the door, and over 450,000 bounce-back loans have been made. If there are specific banks about which the hon. Gentleman has concerns—he, like all colleagues, is concerned about retaining employment in his constituency—I would be happy to take up those issues with him individually.

--- Later in debate ---

[Edward Miliband]

I certainly agree with the hon. Gentleman that it is very important that the approach is UK-wide, and I welcome that.

Let me say something about the temporary measures in the Bill. We think it makes sense to remove the threat around winding-up orders, for example, to deal with the issue around landlords. We welcome the measures that the Secretary of State put in place, but there is another way around, as it were, which is a landlord issuing a statutory demand followed by a winding-up order. We think that the suspension of personal liability for wrongful trading while insolvent makes sense as a measure, but for a strictly time-limited period. It is important, as I think is clear, that other duties continue to apply to directors.

In addition, easing the requirements on company filing deadlines and AGMs makes sense. Indeed, given proceedings yesterday in this House, the facility in the Bill for virtual proceedings at AGMs carries a certain irony. If only the Business Secretary had told the Leader of the House, perhaps we would have been spared a lot of trouble and a lot of queuing yesterday.

As the hon. Members for Dudley South (Mike Wood) and for North Antrim (Ian Paisley) have both said, there is clearly a case for a longer period than to 30 June. This is no disrespect to the people writing the Bill, but I think we can agree across the House that the temporary measures will need to be in place for longer. We would be happy to see an amendment that puts the end of September in the Bill, and one of our amendments would do that. I accept the Secretary of State’s point that the change can be made by statutory instrument.

Having given the Bill a broad welcome, I want to raise some issues.

[Stephen Doughty]

I agree with all that my right hon. Friend has said. Does he agree that some extension will be needed for some of the sectors that may be hit for longer, such as the creative industries? Many in my own patch will be affected for longer because they will be closed down for longer, and they need special assistance.

[Edward Miliband]

My hon. Friend is a brilliant champion of those industries and other industries in his constituency, and I agree with him. I will come on to the particular sectoral challenges that the Secretary of State and the Government are facing.

Let me mention the areas where we would like to see improvements made to the Bill. First and most importantly, the Government’s case on the restructuring plan provision is that it could have benefits in enabling companies to restructure and not go into liquidation and in stopping large creditors from forcing companies to do so. I accept the case. I think I am right in saying that the cross-class cram-down provisions—it is not a very beautiful phrase—apply across the EU under EU law and apply in the United States as well. What is important about the provisions is that they mean that even if a class or classes of creditors object to a rescue plan, it can still go ahead providing they are better off than in the other most likely scenario, which is often going to be liquidation. That is why protecting those without power—creditors and others—is so important.

What cannot be allowed to happen—I know the Secretary of State agrees with this—is for the RP provision, which has wide scope and is not just for companies that are insolvent, but for those who fear they might become so, to be used to ride roughshod over the rights of employees, including their pensions. Given the nature of the crisis we are in, it is essential that there are proper safeguards.

To give an example, the Secretary of State will have heard earlier the deep concerns across the House about the actions of British Airways, including sacking its employees and apparently offering worse terms and conditions. The RP provision cannot become a charter for more of that sort of action, and it is our mutual responsibility to make sure it does not become so. I know the Secretary of State shares that view.

--- Later in debate ---

[Edward Miliband]

I believe I am right in saying that the hon. Gentleman knows a lot about this, and I congratulate him for his work on the all-party group dealing with the whole range of these issues, but I am talking about the situation after secured creditors and others have been dealt with. There is currently a provision for 20%, but up to a limit of £800,000. Our amendment seeks to make that 30%, and to raise the proportion, but remove the limit. We must ensure that we do all we can for employees and small businesses—my hon. Friend the Member for Manchester Central will correct me if I have got those figures wrong, but I think I am broadly right.

Two sets of issues are not in the Bill, although we would have liked them to have been included, as I believe they are missed opportunities. First, in 2018 the Government consulted on a set of corporate governance safeguards in the wake of the scandal at Carillion, and indeed at Thomas Cook, which came after that. I understand that the Bill relates to the immediacy of the coronavirus crisis, but it would have been better if the Government had acted on those vital corporate governance issues in the Bill, and we would have supported them in doing so. Given that this crisis makes corporate distress more likely, it is strange that the Government have not chosen to introduce such measures. The risk is that we will get more Carillions and Thomas Cooks, with all the consequences of that for employees.

In 2018 the Government were committed to greater accountability of directors in group companies, legislation to enhance powers for insolvency practitioners, and further raising standards by ensuring an explanation about the affordability of dividend payments. Labour supports all those measures—indeed, we have tabled amendments to insert them into the Bill—and we do not think they cut across the need to protect businesses through the coronavirus crisis. Will the Government explain what plans there are for those improvements to corporate governance? I understand that the Bill must go through at speed, but it would have been better if it contained those measures.

Secondly, like the hon. Member for North East Bedfordshire, I wish to mention late payments to small businesses, and the important role of the Small Business Commissioner. If larger companies do not make good on their payments to small businesses, that could be the thing that pushes them over the edge. We believe that the Bill could be used to strengthen the powers of the Small Business Commissioner to help businesses that are struggling with cashflow and liquidity, and such a measure would have improved the Bill.

As I have said, we want to facilitate the passage of the Bill as it is important to protect businesses up and down the country, and we hope it can be improved in the ways I have set out. Having dealt with its specific provisions, however, let me deal with the wider context. The measures in the Bill can play a part in preventing insolvencies, but as the House knows, the number of businesses that go out of business depends on the external environment and on what the Government do in response to that. I welcome the action taken by the Government so far. There are lots of measures that we support, but we also believe there are gaps and other areas where the Government need to act.

I wish briefly to outline four sets of issues that go directly to the question of insolvency. First, I fear that the support system introduced by the Government is still not working sufficiently for our SMEs, and it risks worsening the insolvency problem. We called for the 100% underwriting of loans six weeks ago for smaller firms, and we welcomed the bounce back loan. Clearly, however—the hon. Member for Thirsk and Malton (Kevin Hollinrake) made this point—those loans do not do enough for SMEs that need more than £50,000 of liquidity.

The bounce back loan was intended to improve the working of the CBIL scheme, but I am afraid that has not happened. I have the figures for what happened to the CBIL scheme in the past few weeks—I am sure the Secretary of State is as in touch with them as I am—and the number of facilities approved each week is going down, and the gap between the total numbers of applications and approvals is widening. Somebody contacted me the other day who will not be counted in those figures. He waited two months to be told by his high street bank that he was not eligible and that there was no point in him applying for a loan under the CBIL scheme. He will not be counted in those statistics, and hon. Members across the House will have heard of similar experiences.

I know that the Secretary of State is dealing with a range of issues to do with companies in distress. As I understand it, the idea was to get rid of the forward credit check for the CBIL scheme, but that does not seem to be doing the business and we need to understand why. I personally would be open to having 100% underwriting slightly higher up the scale, but we need a solution.

Secondly, beyond SMEs, I am deeply concerned about particular sectors, with manufacturing top of the list. We have seen thousands of redundancies at Rolls-Royce, real problems in the aerospace sector, issues in the car industry and massive issues facing steel. In France, steel received support within a fortnight of lockdown, whereas here our companies are still waiting. We read stories in the Financial Times about public equity stakes being considered—the so-called “Project Birch. It sounds like an interesting idea, but I say to the Secretary of State that this is taking too long, both for larger companies and for the SMEs in the supply chain.

[Stephen Doughty]

My right hon. Friend is right to mention steel and aerospace in particular, as they are crucial providers of jobs in south Wales, and we have the situations with BA and with the steel industry. Does he agree that we need to get support to them as soon as possible?

[Edward Miliband]

My hon. Friend has been powerfully advocating for the steel industry, along with other hon. Members in all parts of the House, and there is real urgency in this respect.

Let me just say something about the CLBIL—Coronavirus Large Business Interruption Loan—scheme, which is for larger loans. We are talking about more than £45 million. I fear that this is Treasury orthodoxy, so I will not expect the Secretary of State to comment. We all know Treasury orthodoxy—I do, as I used to work there. The good news is that the Chancellor raised the limit to £200 million for the amount that companies can get, but the bad news for companies is that the CLBIL loan has to become their most senior loan—it has to be top of their list. The problem is that that means companies then have to renegotiate their other most senior loan, so they are caught in a Catch-22 situation. I suspect the Secretary of State agrees with me, but he cannot say; perhaps the Chancellor is watching. I say to the Secretary of State that companies such as McLaren have said, “We have tried to get this loan but we cannot get it because of this Catch-22 situation.” This is urgent and I urge him to get it sorted. We have had only £1 billion paid out under this scheme; 191 firms have got loans, but that is out of 579 that have applied. This is about manufacturing largely; it is about lots of large manufacturers across our country who are really in distress. There is more to be done in advancing some of the money that is already in the budget for low carbon. That is true in relation to aerospace, where I believe there is a fund—I am hoping that can be advanced— and to steel.

Let me refer to some other sectors, as one of my hon. Friends did earlier. With the public health measures that are necessary, it is obvious that sectors such as hospitality, tourism and the arts will face much greater pressures for longer; they are going to take longer to reopen and recover. To give the House a sense of the scale, I should point out that the British Beer and Pub Association has warned that up to 40% of Britain’s pubs cannot survive beyond September with the current level of financial support; that one third of jobs in tourism-related areas are estimated to be at risk; and that the Society of London Theatre and UK Theatre estimate that 70% of the 290,000 jobs in that sector are at risk. Those are dire warnings we are being given.

That brings me on briefly to the furlough scheme. It has been a really good innovation, but I do not understand why the Chancellor is pursuing a one-size-fits-all policy on that scheme, because the public health measures mean that some sectors will take longer to reopen and recover. Whether through the furlough scheme or a second wave of support, these sectors are going to need extra help. I know the Secretary of State is working on this, but I underline its importance: we are talking about thousands of pubs across our country, hundreds of theatres and arts venues, and jobs in tourism. These things are the lifeblood of our constituencies.

Thirdly, I want to raise with the Secretary of State the issue of the “month 13 problem” of insolvency. This is a bit further off, but it is still an issue. Even if the Government fix their loan schemes and provide the sectoral support required, the more debt there is weighing down companies, the greater the danger of insolvency down the line—this debt overhang is also bad for our economy when it comes to recovery. [Interruption.] I hear the hon. Member for North East Bedfordshire muttering about borrowing from a sedentary position, but I am talking about private debt. The Federation of Small Businesses has been suggesting for some time that loans need to become income contingent. It has suggested a student loan-type approach. In other words, when businesses get to a certain level of financial health, they can start repaying the loans. There may be other ways forward, such as converting the loans into equity, but we are going to need solutions for these firms.

Draft Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019

Stephen Doughty Excerpts

Monday 21st October 2019 General Committees

[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 Freedom of Establishment and Free Movement of Services (EU Exit) Regulations 2019.

May I say what a pleasure it is to serve under your chairmanship, Mr Hanson, and congratulate you on becoming a grandad for the first time? [Hon. Members: “Hear, hear!”]

The regulations, which were laid before the House on 11 July, will disapply directly effective rights of establishment and the provision of services derived from article 49, on freedom of establishment, article 56, on free movement of services, and article 57, the definition of “services”, of the treaty on the functioning of the European Union—TFEU—if the UK leaves the EU without a withdrawal agreement. Certain directly effective rights, derived from article 18 of the TFEU, prohibit discrimination on grounds of nationality within the scope of application of the EU treaties. For completeness, the regulations therefore also disapply article 18 of the TFEU in so far as it relates to the disapplication of rights of establishment and provision of services.

The regulations also disapply equivalent or similar articles derived from the European Economic Area agreement between the EEA countries, the free movement of persons agreement with Switzerland, and the Ankara agreement and the additional protocol with Turkey. Henceforth those will be referred to as countries with associated agreements.

Directly effective rights of establishment and free movement of services ensure that nationals from EU member state territories can be self-employed, own and manage a company and provide services on a temporary basis in another member state under the same conditions as that state’s own nationals, and that they can receive services without facing certain restrictions in the EU single market. Rights derived from the TFEU are based on reciprocal relationships between EU member state territories; and rights derived from EU bilateral and multilateral agreements are based on reciprocal relationships between EU member state territories and certain non-EU territories.

The rights are retained in UK domestic law on exit day by virtue of section 4 of the European Union (Withdrawal) Act 2018. The Government have decided to disapply the rights as part of their preparations for Brexit on 31 October. The decision was taken for three primary reasons. First, the rights will no longer be reciprocated. The rights apply only to nationals of one EU member state or country with an associated agreement operating in the territory of any other EU member state or country with an associated agreement. As a result, once the UK ceases to be a member state of the EU, the rights will automatically no longer be reciprocated.

The second reason is sovereignty. Given that the rights will no longer be reciprocated, failing to disapply the rights in UK law would leave a lack of clarity as to whether EU nationals and nationals of countries with associated agreements had additional rights, compared with nationals of other countries, to challenge the laws and decisions of UK authorities after Brexit. In turn, that could restrict the Government’s future ability to regulate, particularly when UK nationals will no longer have the benefit of these rights in the EU.

The third reason is compliance with international law. Disapplying the rights will facilitate the UK’s compliance with international trade law and specifically the World Trade Organisation’s general agreement on trade in services—GATS—ensuring that the UK is not in violation of the most favoured nation principle.

I want to move on to impact. The Government were keen to ensure that the regulations received proper scrutiny before being brought before the House. I can confirm that the Government sought and received the consent of the devolved Administrations in Scotland and Wales to legislate on this matter, as the treaty rights being disapplied could, in a domestic context, impact on both reserved and devolved policy. This included agreement from the Scottish Parliament’s Economy, Energy and Fair Work Committee. The Government also notified the Northern Ireland civil service of our intention to legislate.

In addition, the Government engaged fully with the Joint Committee on Statutory Instruments. The Committee considered the regulations at its meeting on 4 September and chose not to report them to either House. The instrument was also considered by the Secondary Legislation Scrutiny Committee at its meeting on 23 July, and it drew the instrument to the special attention of the House on the grounds that it gives rise to issues of public policy likely to be of interest to the House.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I appreciate that I have not been selected as a member of the Committee, but I understand that I have the right to speak and ask questions on behalf of my constituents. The Minister is obviously getting his defence of this highly controversial measure in early. Does he not accept that it has caused great alarm to many self-employed EU citizens who have been operating legitimate and important businesses in our communities up and down the country? I was contacted by a constituent today who was simply unaware of this and is deeply alarmed.

[Nadhim Zahawi]

That is precisely why I am going into some detail on why the regulations will have no impact at all on the work or services provided by EU nationals or nationals of Turkey or Switzerland.

Let me make some more headway on the reasoning given by the Secondary Legislation Scrutiny Committee. For example, the Committee noted that the instrument seeks to ensure that the UK is compliant with WTO law and that it will make it an offence to dishonestly use illicit satellite decoder cards from the EU. I will attempt to address both of those points momentarily. However, I want to reassure the House on a number of aspects of the regulations: the practical impact that we expect from the disapplication of these rights; the interaction between these rights and EU citizens’ rights, which I think was essentially the thrust of the concern of the hon. Member for Cardiff South and Penarth on behalf of his constituents; and the impact of the disapplication of these rights on the immigration regime.

First, with respect to the practical impact of the regulations, they do not impose any additional restrictions on EU nationals or EU-based businesses, or on the nationals and businesses of the countries with associated agreements, at the point at which we exit the EU. This is because existing UK legislation is expected to be compliant with these rights. The Government have prepared as thoroughly as possible to identify policy areas that are reliant on the establishment and free movement of services treaty rights, and therefore have a good understanding of where direct policy impacts can be expected as a result of disapplying these rights today. With the exception of an impact on the use of satellite decoder devices, no direct policy impacts were identified during that preparation. The regulations will impact on the use in the UK of satellite decoder devices intended for EU audiences in order to dishonestly receive a programme with the intent of avoiding a charge. This is as a result of aligning the law with that already applied for satellite decoder devices intended for non-EU audiences.

Secondly, on citizens’ rights, the rights disapplied by the regulations should not be confused with the citizens’ rights of EU citizens currently resident in the UK, which are being protected separately. The UK’s guarantee to EU citizens is that those who are resident in the UK by exit day will still be able to work, study and access benefits and services, whatever the scenario. This is separate to, unrelated to and unaffected by these regulations.

Thirdly, with regard to immigration, these regulations will not in themselves have any impact on the immigration regime applying to EEA, Turkish and Swiss nationals in the UK. The Government have announced that free movement as it stands under EU law will end on 31 October if we leave the EU without a deal. A new points-based immigration system will be introduced from January 2021. Until then, much of the free movement migration framework will remain until the UK Parliament passes legislation to repeal the Immigration (European Economic Area) Regulations 2016.

The regulations that we are considering today carve out the rights in so far as they fall within the scope of the immigration regime applied to Swiss nationals and Turkish nationals. This is to ensure that changes to the immigration regime applied to Swiss nationals and Turkish nationals come into force via primary immigration legislation. These regulations are an important part of the Government’s preparation for Brexit. They facilitate the UK’s compliance with international trade law and they preserve the UK’s freedom to regulate, should this Government or a future Government choose to do so—after we have left the EU, of course.

I commend the regulations to the House.

[Bill Esterson (Sefton Central) (Lab)]

It is an even greater pleasure than usual, Mr Hanson, to serve under your chairmanship. I congratulate you on becoming a grandad for the first time and I hope we will not detain you for too long from visiting your new grandchild, which I know you are keen to do—but I apologise that I will detain you for a little while.

Before we consider these regulations, we should consider the comments of the3million, the organisation representing the more than 3 million EU and EEA citizens resident in the United Kingdom. The organisation has described this measure as not being what was promised by the Government and says that it undermines promises made by the Government, which, of course, is something that the Democratic Unionist party has been only too familiar with in recent days.

What is it that we are considering today? We are considering the removal of the rights of EU, EEA, Swiss and Turkish nationals who are self-employed or business owners or operators in the United Kingdom. Who are these people and how will they be affected? They are thousands—potentially hundreds of thousands —of people who are working in professional services, entrepreneurs, people who operate start-up businesses, people who operate in IT and in professional and financial services, architects, or self-employed workers in the gig economy. There are serious potential consequences not just for them but for their staff, their customers and their suppliers—both for businesses and the self-employed—as well as for their families and the local economies in which they operate.

The Minister talked about the impact of the regulations; in fact, at one stage, he said that he was keen to move on to the impact. But there is no impact assessment, so how can we possibly know? This is a perennial discussion—it seems that we have been dealing with the issue long enough for it to be perennial and not just something of a repeated nature. Every time we have a set of these regulations, the impact assessment is lacking. Because this measure affects so many people, it is impossible for the Minister to say that it will not have a significant impact on the economy. He simply has no way of knowing that, because that investigation—that impact assessment—has not been carried out.

[Stephen Doughty]

My hon. Friend is making strong points, with which I completely concur. He will note that the Minister used very careful words: he said “no further restrictions at the point of exit”. The fact that this matter is being considered in this way, rather than through the immigration Bill, will raise significant concerns about these rights changing in due course. We on the Select Committee on Home Affairs have looked at the subject many times. This issue did not come up, and we have discovered all sorts of problems with the existing EU settlement scheme, let alone with this provision, which many people were unaware of.

[Bill Esterson]

I am grateful to my hon. Friend for those remarks, which I will address in some detail later.

--- Later in debate ---

[Nadhim Zahawi]

It is incumbent on us all to be sensible and to reflect on today. Let us not add fuel to the flames of division. Let us come together. Hon. Members heard in my opening remarks that we have consulted thoroughly with our colleagues in Scotland and Wales, so I ask everyone to please act responsibly.

[Stephen Doughty]

I gently say to the Minister that it is certainly not my intention, or that of many hon. Members, to scaremonger in any way. The fact is that we are representing our constituents who are scared and who have concerns. I was not aware of this issue until my constituents raised it with me. I have to say that I do not agree with his characterisation of the EU settlement scheme. The Home Affairs Committee, on which I sit, has repeatedly found serious concerns and problems with how it operates, and indeed with the entire immigration system. That is why people have those concerns and are scared. It is genuine; it is not us scaremongering.

[Nadhim Zahawi]

I am grateful to the hon. Gentleman for that thoughtful intervention. I only ask that he shares the debate with his constituents, so that they can read, in black and white, what I have outlined as the true position of the legislation.

I again thank you, Mr Hanson, and Committee members. The regulations form an important part of our preparations to leave the EU, hopefully with the great deal that the Prime Minister has negotiated. They help to preserve our freedom to regulate after we have left the EU with respect to the establishment and carrying on of business in the UK, and the provision of services. They also facilitate our compliance with international trade law, which is important. We pride ourselves on being a country where people obey the rule of law—a subject that has been widely debated in this place and across the media. I commend the regulations to the Committee.

Question put.

Net Zero Carbon Emissions: UK’s Progress

Stephen Doughty Excerpts

Thursday 28th February 2019 Commons Chamber

[Layla Moran (Oxford West and Abingdon) (LD)]

I beg to move,

That this House has considered the UK’s progress toward net zero carbon emissions.

I am incredibly grateful to the Backbench Business Committee for allocating time for this debate, and I thank my co-sponsor, the hon. Member for Brighton, Pavilion (Caroline Lucas), as well as the hon. Member for Cardiff North (Anna McMorrin) and all those who contributed to our application for this debate. Those included MPs from every political party across the House, and I hope that will be the spirit in which we debate these issues today.

I mainly, however, want to thank young people, and particularly the 2,000 young people in Oxford who decided that this issue was so urgent that they would take time off school to protest in Bonn Square in the centre of Oxford, and try to force us into action. If it were not for that protest I would not have applied for this debate. This is an opportunity for their voices to be heard in this place, and about time too.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The hon. Lady is making an incredibly important point, and I completely support the actions of those young people. Many young people did the same across Wales, and it was disappointing to see the attitude of some Ministers who dismissed their actions—[Interruption.] I accept that that did not include the Minister for Energy and Clean Growth, but other Ministers dismissed the behaviour of those young people as being in some way irresponsible. No, it was responsible behaviour, because they care about our future.

[Layla Moran]

I thank the hon. Gentleman for that point. As a former teacher, I am here because I want to prevent young people from having to do that again. We are coming up to exams, and it would be better if they stayed in school, but it is incumbent on us to ensure that action is taken.

--- Later in debate ---

[Mary Creagh]

I wonder whether the hon. Member for Camborne and Redruth has resigned so that he does not have to answer the letter that my Committee has just drafted, which asks him about our progress towards becoming a so-called independent coastal state and how the negotiations with various regional fisheries organisations are going.

Let me now turn to the subject of the debate. Securing a sustainable future for the planet and our children is a responsibility that we simply cannot ignore. I welcome the chance to discuss this issue, because we have spent far too long discussing Brexit in the Chamber and not enough time discussing the thumping alarm that is being sounded all around us on our planet.

To achieve net zero, we must reduce our emissions rapidly and at scale in every area of our economy and in every area of our lives. Our Committee has talked about some of the personal changes that we can make, whether that means turning our backs on single-use plastics or considering how we can achieve, for example, a net-zero fashion industry. The report that we published last week took climate change into areas where it may not previously have gone.

[Stephen Doughty]

Does my hon. Friend agree that one of the personal things we can all do is look into where our pensions are invested and establish, for instance, whether they are invested in fossil fuels or renewables? I have been doing that, and I hope that we will give some thought to where our moneys are going in the context of the parliamentary pension scheme.

[Mary Creagh]

I thank my hon. Friend for that intervention. One of the things we did in our green finance reports last year was talk to the top 25 pension funds in the country and ask them what they were doing in this area, and of course we talked to our own parliamentary pension fund as well, and we ranked them as engaged, moderately engaged and less engaged. We need to shape and bend the entire financial system to invest in this new green economy and to ensure a just transition, because in areas such as mine, Wakefield, which were dependent on coal, we must not have thousands of people just being left on the dole. We need to skill up the current generations to meet the green future we want to see.