Trade, Exports, Innovation and Productivity

Debate between Stephen Kinnock and George Kerevan

Wednesday 13th January 2016 Commons Chamber

[George Kerevan]

Thank you, Madam Deputy Speaker. I am always willing to bow to the Chair. If ever I am found to have made erroneous remarks in this Chamber, I will always withdraw them. We can come back to that.

The Minister intervened because she wishes to continue to say that those of us who raise serious points about our poor economic performance are talking down British industry. Far from it. I am passionate about British industry. I want industry to grow. It is the fact that the Government are not doing their job that is the problem. I have a profound respect for Rolls-Royce, its history and what it has contributed to this country. During world war two, Rolls-Royce’s main aero engineering factory was in Glasgow. The engines that powered the Spitfires that saved western Europe and democracy in 1940 were produced in Glasgow by Rolls-Royce. I am second to none in my admiration for the company and its engineering history, but I am worried that we are now talking about it being taken over by American aerospace companies because of the situation it is in. I am now worried that the Government may have to consider taking over parts of Rolls-Royce—this has been a matter of press comment in recent weeks—in particular its nuclear engineering division. If anything went wrong and, God forbid, Rolls-Royce were taken over by a foreign company, the Government would be talking about nationalising bits of the company. That is quite a serious pass to have come to.

[Stephen Kinnock (Aberavon) (Lab)]

The hon. Gentleman is making an interesting and important point about foreign takeovers, particularly hostile takeovers. One of the important ones recently was Pfizer’s attempt to take over AstraZeneca. I am sure he agrees that that case concluded in absolutely the right way, by protecting one of the great British assets and enabling it to continue its long-term strategies of investment in innovation and technology. Does he agree that this issue should perhaps be seen as a case for reform of the Companies Act 2006, so that we see far more long-termism built into the UK’s corporate culture and a move towards investing in innovation, R and D, and skills? If we do not do that, we will never change to a more sustainable business model.

[George Kerevan]

I could not agree with the hon. Gentleman more. One of the things that has led to the short-termism over the last 20 to 30 years is precisely the fact that companies are not in a position to think long term themselves, because the way that the City of London and the casino economy work means that their shares are always in play. We need company reform to allow investment to take place without it being subject to shares being shorted and without share buyback activity by Rolls-Royce or other companies when the money should be going into real investment.