House of Commons
Tuesday 30 January 2018
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
Business, Energy and Industrial Strategy
The Secretary of State was asked—
I have set up a taskforce bringing together small and medium-sized businesses, the Government, local government and trade unions to assist with the impact on small and medium-sized enterprises and the supply chain. The taskforce has delivered a range of supportive measures, including assistance from Her Majesty’s Revenue and Customs for those experiencing difficulties and more than £900 million of support from UK lenders.
I thank the Secretary of State for his answer, but, with 30,000 small firms thought to be owed money by Carillion due to late payments and fees, will he look at the idea of project bank accounts that hold money in trust in ring-fenced bank accounts to make sure this situation does not arise again? The Specialist Engineering Contractors Group wants Britain to follow what is already happening in Australia, where such project bank accounts are used in all large public and private building contracts.
The local authority pension fund forum has called for a review of accounting standards, having received opinion that there are substantial legal flaws in international reporting standards. The opinion states that the standards do not enable anyone to make a meaningful assessment of a going concern, which is a highly relevant issue for Carillion. Will the Secretary of State support such a review?
The day that Carillion went into insolvency I wrote to the Financial Reporting Council, and I spoke to its chairman, to ask it to investigate the auditors and those who are regulated as accountants. The FRC has agreed to do that, and it announced yesterday that the investigation is under way. I would expect it to learn the lessons for any changes to the regulations that it applies.
Will the Minister confirm whether the advice to firms that have lost money as subcontractors of Carillion is that they take out a loan? Does he think it is acceptable that those firms should be charged interest on taking out a loan, rather than getting the money they are owed for jobs they completed as supply chain businesses of Carillion?
On the first day of the insolvency, I had in the representatives of all the supply chain organisations. The first request they made was that we get the banks in to make sure that they treat leniently their customers who were caught up in the insolvency. The banks agreed to do that, and they put funds aside to support and assist those customers. Each bank has made commitments that it will apply leniency to any terms and conditions faced by those businesses.
My right hon. Friend has almost answered my question, because I was going to say that cash flow is as important as profitability. The problem with lack of cash flow is when the banks become too heavy and foreclose on smaller firms.
That is exactly the point that the businesses made. That is why I asked the banks to attend in person to meet those businesses, and it is why the banks gave those commitments and guarantees. It is important for Members with constituents who may be affected that the banks have made that commitment and have made a promise that they will deal individually with anyone who is so affected. The measures are on each bank’s website, but any colleague should come back to me if they experience a problem.
This morning, at a joint Select Committee hearing on Carillion, we were told by the chief executive of the Financial Reporting Council that, before and after the collapse of BHS, he had asked for greater powers to regulate companies and take action before things go badly wrong. He told us that there was a lack of Government interest in making the necessary changes. In the light of the collapse of Carillion and the threat to thousands of jobs and suppliers in the supply chain, are the Government interested in taking action now?
The collapse is really bad news for many smaller businesses, many of which will have their capital wiped out. What discussions has the Secretary of State had with banks about forbearance in keeping those businesses going so that there is proper competition in this market for the future?
I apologise to my hon. Friend if he did not receive notice of the grouping—I am sure that is my error.
On engagement with the banks, each of them has responsibilities to its customers to help them through difficult times. The banks have explicitly committed to help them with any cash flow difficulties that they experience, and I expect the banks to deliver on it.
The hon. Lady raises an excellent question, and I want to pay tribute to the CITB, which has been working closely with its Scottish colleagues, for a magnificent response. It has been able to not only contact but offer continuity to all the apprentices—I think I am right in saying that—to give them the ability to continue their training. That was a formidable, agile response to an urgent situation, and it deserves the praise of the House.
In July last year, the Government were warned by the Federation of Small Businesses and the Specialist Engineering Contractors Group that Carillion was transferring risk to its subcontractors. They highlighted that Carillion’s payment period was doubled from 65 to 120 days, that Carillion made money on the back of early payment by charging fees, and that regulation 113 of the Public Contracts Regulations 2015, which relates to 30-day payment, was not being enforced. Will the Secretary of State outline what actions, if any, he took on receipt of that information?
The lessons and the scrutiny of what went wrong in Carillion, both on the part of its directors and its scrutineers, and in the oversight that took place across the whole of the public sector in terms of contracting, need to be looked at and will be looked at, including by Select Committees of this House. Whatever actions are required from that, we will take.
So it is clear that no action was taken and that subcontractors were being mistreated again and again. But that is not all: the FSB and SEC Group also highlighted how retention moneys and project funds due to suppliers were not being protected from Carillion’s potential insolvency. As a result of the Government’s inaction, microbusinesses are now owed on average £98,000, small firms £141,000 and medium-sized firms £236,000, and large businesses are owed on average £15.6 million. Will the Secretary of State therefore explain to the House and all the businesses affected why the Government took no action last July and why many are on the verge of bankruptcy today?
Retentions and project bank accounts have been the subject, in response to those and other concerns, of a consultation on specific measures, which closed very recently. That came out of the recommendations that were made. Part of the taskforce that we have established includes these representative bodies, and they know that they have my commitment to take all the necessary actions to learn the lessons and protect any future concerns against things that could be learned from this case.
The national minimum wage and national living wage rates are recommended to the Government by the independent Low Pay Commission. To ensure that workers are paid fairly and that non-compliant employers are caught, the Government provide £25.3 million to Her Majesty’s Revenue and Customs for minimum wage enforcement —that is an increase from £13 million in 2015-16. Last year, HMRC secured arrears of wages for 98,000 workers, totalling £10.9 million.
I thank my hon. Friend for that answer and welcome him to his deserved new position. I very much welcome the national living wage as a way of boosting the wages of our lowest-paid workers. Does he share my surprise that there are those who criticise its generosity, given that the only international comparator is The Economist’s Big Mac index, under which we have the most generous minimum wage in Europe aside from that of its richest country, Luxembourg?
I completely agree with my hon. Friend on that. The next increase to the national living wage is to be a whopping 4.7%. The introduction of the national living wage was the biggest pay rise for low-paid workers in nearly 20 years. The latest increase will benefit more than 2 million people and is set to cover 3 million by 2020. The average earnings of a 25-plus, full-time worker have increased by £2,000 since 2016.
When will the Government accept the need to actually prosecute more firms that fail to pay the national minimum wage? Only when people are prosecuted for breaking the law, rather than being issued with warning notices, are they going to take it seriously.
I gently point out to the hon. Lady that the Government take robust enforcement action against employers who do not pay their staff correctly. We have increased enforcement funding to £25.3 million this year. The total value of penalties has more than quadrupled since 2014-15, and in 2016-17 a record £3.9 million was recovered in penalties, with one penalty of more than £1 million being issued.
I absolutely agree with my hon. Friend: 4 million people have been taken out of paying tax as a result of decisions taken by this Government. The employment rate is 75.3%, which is the joint highest rate since comparable records began in 1971. We have record numbers of people in work, and unemployment is at its lowest for 40 years. This Government are on the side of the worker and the lowest paid.
Low pay stifles investment and holds back productivity. We in the Scottish National party believe that the economy is stronger when a real living wage is paid. The Minister’s own Department has rightly named and shamed 350 companies for failing to pay even the minimum wage. Does he therefore agree that the practice of companies paying no wages at all through unpaid work trials is morally repugnant? Will his Department support the ending of that shameful practice?
I should point out to the hon. Gentleman that more than 160,000 people in Scotland benefit directly from the national living wage. The Government are looking closely at employment practices. We engaged Matthew Taylor to look into employment practices and to come up with new ways to support people, particularly those in the gig economy. We very much value that work and will be coming forward with recommendations in the very near future.
The Government will legislate to require quoted companies to publish and explain the ratio of their chief executive officer’s pay to the average pay of their UK employees. Companies will also have to provide a better explanation of how share price increases affect the value of complex, long-term incentive plans.
The hon. Lady is absolutely right to raise the issue of collective bargaining and how that affects employee pay and the wider pay of executives. I should point out to her one interesting fact: the average FTSE 100 CEO’s pay leapt from £1 million to £4.3 million between 1998 and 2010, but CEOs’ pay fell by 17% in 2016. Interesting.
What private companies pay their directors is ultimately a matter for their shareholders, but the new pay ratio disclosure requirements mean that we will give shareholders and other stakeholders important new information on how pay at the top of companies fits with wider workforce pay. Companies will be forced to explain and defend their pay ratios and account for changes to the ratio over time.
Hardworking people on ordinary incomes are understandably angry at the way executive pay has skyrocketed at a time when ordinary wages have remained flat. When can we expect to see these regulations that the Minister is talking about on publication of pay ratios, and can he confirm that this requirement will be in place for companies by June, as promised?
I have to point out to the hon. Lady that she may have her figures wrong. CEO pay has fallen, not risen. This Government are keen to ensure that there is more accountability and transparency in relation to the pay of top executives. We want to give the shareholders of companies greater power and ensure that there is greater accountability to shareholders and to the workforce.
Since 2010, Carillion has paid out more than £500 million in dividends to shareholders while, over the same period, running up a pensions deficit of £587 million, a deficit that is now threatening the security of thousands of hardworking people. While those people suffer, former Carillion CEO Richard Howson was rewarded with a bonus package worth £1.5 million in 2016. Will the Government join me in condemning this scandal and work with the Labour party to end the failed model of outsourcing using shell companies and in condoning excessive pay, or will it be just business as usual?
Please allow me to assure the hon. Lady that any payments due to directors and executives of Carillion have been stopped; nobody is getting paid and nobody is getting executive bonuses. The moment that the insolvency happened, the Secretary of State wrote both to the Insolvency Service and the FRC to ensure that there was a thorough investigation of all payments to directors. If necessary, PricewaterhouseCoopers and the Insolvency Service have the power to claw back all of those payments. I can assure her that we will be learning the lessons from the Carillion insolvency and ensuring that we do all we can to support businesses going forward.
Seafarers: National Minimum Wage
The Government believe that seafarers should be paid fairly for the work that they do. My Department and the Department for Transport worked with trade unions and employers to publish new guidance that explains the responsibilities of employers to pay the national minimum wage. We are crystal clear that if someone works in UK waters, they are entitled to at least the minimum wage and that all employers—no matter where they are from—must pay it.
I am pleased to hear that, but is the Minister aware that UK seafarers are being undercut by rates of pay as low as £1.75 an hour? That is happening even though the legal working group on seafarers and the national minimum wage, which includes his Department, agrees that legislative change is needed to provide more protection. Will the Minister give a commitment to work with the RMT and Nautilus to end this brazen exploitation, starting with the application and enforcement of the national minimum wage for seafarers working between UK ports and offshore installations?
I reassure the hon. Gentleman that the guidance is clear that the national minimum wage applies on foreign registered ships when they are in UK territory. The new guidance is the first of its kind on the application of the national minimum wage specifically to seafarers, which shows that this is a priority for the Government. UK national minimum wage law must naturally have a limit, but if a person is employed as a seafarer in British waters, they will be entitled to the national minimum wage.
Apprenticeship Levy: SMEs
The Department for Business, Energy and Industrial Strategy and the Department for Education are working together to establish a world-class technical education system, which is vital to our industrial strategy. This includes encouraging businesses, including SMEs, to offer apprenticeships. We are working with all employers to ensure that the apprenticeship levy works effectively and flexibly for industry and supports productivity across the country.
I welcome my hon. Friend to his role on the Front Bench. I have previously had conversations with my right hon. Friend the Member for Putney (Justine Greening) in her former role as Education Secretary about finding new ways to support SMEs in my constituency to get involved in education, particularly through apprenticeships, which are important for my constituency as so few people there go to university. I will continue that approach with the Department for Education, but would my hon. Friend commit to meeting me to discuss how we might further support small businesses to train young people in Mansfield?
My hon. Friend is absolutely right. We are committed to supporting businesses in Mansfield through the D2N2 Growth Hub. Since its launch, it has engaged more than 5,100 businesses. He mentions young people in his constituency. The message from this Government is that we will support those who think university is the best route towards building the future they want and that we will also support those for whom apprenticeships or a non-university route is the best route. We do not want to put a limit on aspiration, whatever that aspiration may be.
I know that the Minister is new in his post, but he needs to wake up, for goodness’ sake. There is chaos and meltdown in the apprenticeship scheme, with a 62% drop in apprenticeship starts and further education colleges in bankruptcy. Small individual employers in the textile industry cannot get their apprenticeships through. Get a move on—do something about it, man!
I welcome the characteristic passion with which the hon. Gentleman delivers his question, and I share his objective in that we both want the best future for young people. As he knows, the apprenticeship system is going through a change. It will now be employer-led with a focus on quality. We are in the first year of the levy operating and we did expect a bit of a dip, but this situation will recover to deliver the future for our young people.
Further education colleges such as Newcastle-under-Lyme College and Stafford College are vital to the provision of apprenticeships, both under the levy and non-levy. But just having the levy on its own is not necessarily sustainable. Will the Minister ensure that all further education colleges have access to funding for non-levy apprenticeships?
Businesses still tell me that there is a skills shortage in my area. FE colleges have continually faced cuts by this Government. Given the introduction of the levy and the other policies that the Government have been talking about, at what point in time does the Minister believe the skills gap will be filled, to meet the needs of business and the wider community?
The Government enjoy a strong partnership with the aerospace sector through the Aerospace Growth Partnership. Since 2010, the sector’s turnover has grown from £24 billion to £34 billion, and exports have almost doubled. Following the excellent and wholly justified ruling of the United States International Trade Commission on Friday night, I am delighted that Bombardier in the hon. Gentleman’s constituency will be able to look forward to a bright future.
Hear, hear! I was overjoyed on Friday night when Bombardier unanimously won its case with the United States International Trade Commission. In paying tribute to the Secretary of State and to the Minister responsible for the aerospace industry, I ask that they stand resolute against any appeal that may be lodged and ensure that the C Series, now that it is finally ready for take-off, is the true success we know it can be.
I will indeed. I pay tribute to the hon. Gentleman for the stalwart way in which he and his colleagues stood up for their constituents and, indeed, the supply chain that covers the whole United Kingdom. Right from the beginning, this has been a joint endeavour between us, the Canadian Government, the company and everyone with an interest in the success of Bombardier.
Since the aerospace sector requires long-term planning and investment, does the Secretary of State not share my alarm at the threatened takeover of the leading tier 1 supplier GKN by a turnaround company specialising in maximising shareholder returns over five years maximum? Is this not a national security issue?
The right hon. Gentleman is a previous occupant of my post, so he knows that the powers that the Secretary of State has over these things have to be exercised in a quasi-judicial way. Therefore, I should not, and cannot, comment on that case. However, he will know, because he has written to me, that I have spoken to both chief executives, and I am keeping it under close review.
It is good to hear my right hon. Friend talk about the importance of aerospace. Will he consider the aerospace initiative that is being proposed in Kinross-shire in my constituency as part of the Tay cities deal, and will he or other colleagues meet me to discuss it?
Keep Me Posted Campaign
Representatives of the Keep Me Posted campaign are dedicated advocates for consumer choice on billing. Neither I nor current BEIS Ministers have met them, but my officials have done so in the past and are familiar with their campaign and the valuable work they do.
In response to the hon. Gentleman’s point about exclusion, I think the House can celebrate the fact that, under this Government, 95% of the country will be covered by our superfast broadband roll-out. However, I take his point on board and will be delighted to meet him.
Will the Minister work with banks and utilities to ensure that charges for paper billing are restricted to the actual cost of providing that service and are not allowed to become a cumulative fee for those who need or choose paper bills?
I welcome the Minister’s commitment to meet the Keep Me Posted campaign. That is a very welcome development, particularly because older people in my constituency have made representations to say that they find it intolerable that they are not able to get paper bills. Will he assure me that he will take this on board for the whole United Kingdom?
Absolutely. I do agree that consumer choice is important. Many suppliers offer paper bills, but they are not cost-free. It is important to recognise that at a time when we are seeking to boost productivity, it is not unreasonable for businesses to incentivise more efficient billing processes. The regulatory framework varies by sector. Where charging differentials exist, we would look at that. I am happy to look at it across the whole United Kingdom.
While recognising the gradual shift away from paper statements and bills as they go online, it must be acknowledged that 16 million people over 15 years old still do not have basic online skills and 5.2 million households still do not have access to the internet at home, and they may face penalisation for requesting a paper bill or statement. What action, exactly, will the Minister take to ensure that people are not penalised for making what should be a legitimate consumer choice? What strategy will he put in place to make sure that people who do not have these skills at the moment can develop them in future?
The hon. Lady makes the very important point that we should make sure that those who need paper bills do receive them and are not unfairly penalised. Any discount made for paperless bills, or charge for paper bills, in sectors where this is allowed must be justified in relation to the relevant administration costs. We do not believe that the Government should intervene to make other customers for whom online billing and payment is perfectly acceptable bear the costs of providing a paper billing service.
Small Business Sector
We are actively supporting small businesses by enhancing the business support helpline and funding growth hubs in every local enterprise partnership area in England. The new Small Business Commissioner will help with payment issues, and British Business Bank programmes support nearly £4 billion of finance to more than 60,000 small and medium-sized enterprises.
I thank the Minister and welcome him to his new position. Sellafield in my Copeland constituency is one of Britain’s biggest single-site employers. It is about to award its multimillion PPP contract. What is he doing to promote the role of SMEs, rather than just large companies, when awarding those contracts?
I clarify to the House that PPP stands for “programme and project partners” and not, as many might have assumed, “public-private partnership”. The programme that my hon. Friend talks about will support Sellafield in decommissioning and contains provisions designed to support small businesses. In November 2015, the Cabinet Office agreed to a target of 31% of spend with SMEs for the Government’s Nuclear Decommissioning Authority. Moreover, as the Small Business Minister, I will look at what I can do to ensure that more is done to help small businesses to win Government contracts.
Will the Minister join me in commending the work of the Erewash Partnership, which helps entrepreneurs in my constituency to start up and grow their own small businesses? Will he consider what more Government can do to help such organisations expand their support services?
I am delighted to join my hon. Friend in applauding the work of the Erewash Partnership, which she will know was a previous winner of a national enterprise award—well done them. Through our industrial strategy, all businesses in every region will have access to a growth hub. We have announced a further £24 million of core funding over the next two years for growth hubs, including the D2N2, which I understand works with the Erewash Partnership. I am delighted to work with her to do what I can to support businesses in her constituency.
Stability among larger tier 1 suppliers is really important to SMEs in the automotive and aerospace supply chains. Given that, does the Minister agree that if the Melrose bid for GKN splits up and sells off that company, as is anticipated, that cannot be in the interests of either sector or SMEs in this country?
Support for the small business sector will be even more urgent given the findings of the UK Government’s leaked Brexit analysis, which shows that in all current scenarios, businesses across all sectors and all parts of the UK will be hammered with between 2% and 8% reductions in GDP growth. Will the Minister confirm what planning his Department has undertaken in the light of those figures? Is he declining to publish because it is too embarrassing?
Carbon Reduction Targets
If you will indulge me, Mr Speaker, I would like to pay tribute to the hon. Lady’s predecessor, who made an amazing and powerful speech in the other place. It was quite astonishing.
We should all be proud of the excellent progress the UK has made in meeting its carbon reduction targets. The current numbers show that we have met out first budget, are on track to exceed our second and third budgets and are 97% and 95% of the way to meeting our fourth and fifth budgets. The clean growth strategy that I brought forward last year sets out an ambitious set of 50 policies and proposals that will help us to meet those targets.
I thank the Minister for her tribute to my predecessor, Baroness Jowell, who is much loved in Dulwich and West Norwood.
Southwark Council confirmed last week that it has invested its £150 million pension fund in a low-carbon investment, concluding that continuing to hold significant investments in fossil fuels in the context of climate change would present a long-term financial risk to the fund. Will the Minister tell me what conversations she is having with private firms with large pension funds to encourage and facilitate divestment from fossil fuels, which is now clearly the most responsible decision for pension fund members and the future of our planet?
The hon. Lady points out the very powerful fact that the Government can set policy and bring forward achievable targets, such as our renewables ambition, but we also need the private sector and private capital to be involved in financing this transition. I have numerous conversations with companies about what they are doing with their own investments and, equally, about what they will be doing to help other companies to invest in a more sustainable future. I refer her to the Powering Past Coal Alliance, which I launched with my Canadian counterpart last year and which is helping the world to get off the dirtiest form of fossil fuel heating.
Given that more than a year has now passed since the Hendry review reported on the potential contribution of tidal lagoon technology, when does my right hon. Friend think that Ministers will be able to respond positively to that report and give a green light to this important environmental technology?
I am left in no doubt by my right hon. Friend and others about how anxious people are to see this review go forward. We want to get our future investment in renewable energies right. We continue to look very closely at this, and I hope that we will be able to inform the House shortly.
The Minister will have seen the recent report by the Committee on Climate Change about the Government’s clean growth strategy in relation to the fifth carbon budget. Indeed, I know that she has seen it, because she wrote the committee a nice letter thanking it for its report. What plans does she have in place to rectify the shortcomings and omissions in that strategy, as identified by the Committee on Climate Change in its report?
As the hon. Gentleman and I both know, the report basically said there had been a sea change in our ambition for future climate reduction actions. I was extremely grateful to the committee, as I always am, for its scrutiny and information. We were the first country in the world both to pass a climate change Act and to set up an independent scrutineer. As we all know, we have to do more, particularly on business energy efficiency and new homes standards. I am looking forward to working in a consensual way, cross-party, to bring forward those measures.
Pilot Town Deal
I am delighted that the industrial strategy White Paper commits to considering a town deal for Grimsby, which I know has been warmly received by my hon. Friend. I welcome the strong public-private approach to driving forward ambitious plans for the regeneration of Grimsby. The Department and the project board are in close contact on the detail of this deal, and I hope that we will have a proposal for consideration in the very near future.
I thank the Minister for his reply, and I would point out that this deal also includes Cleethorpes—it is for Greater Grimsby. I know that discussions are continuing at official level, but I would welcome an opportunity for the Minister to meet representatives of the project board in the new future, so that we can give some political clout to this deal, which could provide a pilot for many provincial towns up and down the country.
I would be delighted to meet my hon. Friend and members of the Greater Grimsby—including Cleethorpes—project board either as soon as I am able to leave Westminster or in Westminster. I encourage my hon. Friend to organise a meeting here so as not to lose any time in holding this important engagement—and if he wants to bring some local fish and chips, that would be fine.
The hon. Member for Cleethorpes (Martin Vickers) will know that Great Grimsby is obviously the centre of the universe, certainly in northern Lincolnshire. This project is really important, and it is essential to improving jobs, skills, housing and culture in my constituency of Great Grimsby. It does seem to have been ping-ponged between the Ministry of Housing, Communities and Local Government and the Department for Business, Energy and Industrial Strategy. Who is taking the lead, how much will the Government commit to ensuring its success and when will my very patient constituents start to see the change that they deserve?
The taskforce established to tackle the impact of Carillion’s liquidation includes the Department for Work and Pensions, and my right hon. Friend the Business Secretary is in regular contact with my right hon. Friend the Pensions Secretary. Those already receiving their pensions will continue to receive payment at 100% of the usual rate. Anyone worried about their pension situation can contact the Pensions Advisory Service; its dedicated helpline has now responded to over 800 calls since Carillion’s insolvency.
I thank the Minister for that answer, but I think it will be of very little comfort to many Carillion staff, past and present, when they hear that the deficit in their pension fund is approaching £1 billion. Public sector contracts have made some at the top of Carillion very rich indeed, so what action is the Minister taking to ensure that current and future pensioners do not lose out?
The hon. Gentleman will understand that issues in relation to pension schemes are a matter for the independent Pensions Regulator. However, the Pensions Regulator has been in contact with Carillion and the pension scheme trustees for a number of years about the funding of the pension scheme. I can absolutely assure the hon. Gentleman that the work of the taskforce is to look at what happened in relation to the Carillion insolvency, and to ensure that if lessons are to be learned, we will learn them.
The global headquarters of GKN is in my Redditch constituency. It employs 200 people, and concerns have been raised about the pension scheme there as well. The Pensions Regulator is warning that in the event of a takeover, there may be something to look at. What lessons is the Minister learning from Carillion in this case, and what further action does he need to take?
The Secretary of State, I think, has already outlined the approach with which the Government are handling the takeover of GKN, but I can assure my hon. Friend that the implications of business actions, and particularly takeovers, in relation to pension schemes are a priority for the Government. We will continue to proceed with care and caution to protect the interests of all members of pension schemes.
The Government work to ensure that our labour markets work for everyone. That was why the Prime Minister asked Matthew Taylor to carry out an independent review on modern working practices. The Government are considering the issues that the review has raised, including rules governing the use of agency workers. The review is comprehensive and detailed, and we have been giving the report the careful consideration it deserves. We will respond shortly.
Two thousand workers in BT call centres, some of whom handle 999 calls, are paid up to £500 less per month than permanent staff because BT uses the loophole known as the Swedish derogation under agency workers regulations. Taylor recommended its abolition; when will the Minister get on with it?
As I have outlined, the Matthew Taylor report does, in some depth, look at the Swedish issue. I am meeting Matthew Taylor this afternoon, and that issue will be one of those that we shall discuss. I can reassure the hon. Gentleman that in 2017, the employment agency standards inspectorate dealt with more than 800 complaints from agency workers. EAS investigations have protected an estimated 303,000 agency workers, and we will continue to defend their interests.
The development of renewable energy is a tremendous UK success story. Thanks to our significant investment and the support of all of us, renewable capacity has quadrupled since 2010. Last year, 30% of our electricity generation came from renewable sources.
Yesterday, 10 UK trade associations wrote to the Secretary of State to express serious concern about delays to the long-awaited feed-in tariff consultation. Will he or Ministers agree to meet them to address both those concerns and the uncertainty facing small-scale low-carbon energy projects?
More than half of Scottish energy consumption is met by renewable sources, including the Whitelee wind farm, based near Eaglesham in East Renfrewshire, which is the largest onshore wind farm in the UK, but can the Minister confirm that less-established renewable energy projects in Scotland will be able to compete for the £557 million of funding that is available as part of the clean growth strategies?
As my hon. Friend knows, because we have discussed it several times, we are looking hard at how we use that committed £557 million of support for renewable energy in a way that brings forward projects when there is significant local support. I look forward to continuing the discussion with him.
Scotland benefits from some fantastic geographical advantages that mean that it is a world leader in many of these things, but it is, of course, UK bill payers across the nation who are investing in the introduction of renewable energy, whether that is in England, Scotland, Wales or Northern Ireland.
Electric Vehicle Charge Points
We have a range of grant schemes to support the installation of charging infrastructure—on-street, off-street and at workplaces. At the autumn Budget, the Chancellor announced a £400 million joint public and private charging infrastructure investment fund.
My constituency is already home to the new electric London taxi, and we have recently heard the announcement of £80 million of investment in a new electric battery development facility in Coventry. Does the Minister agree that this presents opportunities for my constituency and the wider area to establish leadership in the electric vehicles sector?
It certainly does, and I have had the honour of visiting my hon. Friend’s constituency. On the day we announced the battery facility he mentions, the CEO of Jaguar Land Rover declared:
“We also intend to produce battery electric vehicles in the region, bringing the West Midlands to the forefront of modern mobility in the UK.”
That is the industrial strategy in action.
Chichester District Council has invested in 20 new electric vehicle charging points in carparks throughout the district. However, a constituent recently told me that it took him six and a half hours to get from Chichester to Oxford in his electric car because there were insufficient charging points during the journey. What is the Minister doing to join up individual council initiatives to ensure that there is a comprehensive network of charging points nationwide?
We are pressing hard on this. The Government are taking powers under the Automated and Electric Vehicle Bill to ensure that the infrastructure is rolled out. Government leadership, along with local authority engagement and a growing private sector, means that the UK now has more than 11,500 publicly accessible charge points. The Government have committed £15 million to ensuring that there will be one every 20 miles on the strategic road network. That is coming, and it will be coming soon.
Since our last Question Time, it has been my pleasure to introduce my new colleagues, my hon. Friends the Members for East Surrey (Mr Gyimah) and for Burton (Andrew Griffiths), to the Department and to see our agenda progressing. We announced the automotive sector deal, supporting British innovators and manufacturers with a joint commitment of millions of pounds of investment from industry and Government. The Society of Motor Manufacturers and Traders said that the deal would place the UK at the forefront of electric, connected and autonomous vehicles. I am delighted to announce that Lotus Cars has announced its intention to invest significantly to expand its production, creating 300 new jobs at its plant in Norfolk. Production will increase fivefold in the years ahead.
Energy distribution network operators charge obscenely high prices on our energy bills and make absurdly large profits for running safe, low-risk monopoly businesses that get energy to our homes. Does the Secretary of State agree that Ofgem has been far too soft on these firms for ages, allowing them to get fat and lazy at customers’ expense? Will he join me in urging Ofgem to get a great deal tougher in future?
Order. May I gently remind colleagues that at topical questions progress is expected to be much quicker? We need short, sharp inquiries; people should not simply seek to bring into topicals what they would have asked had they been called—which they were not—in substantive questions. Pithy questions; pithy answers.
I shall try to be pithy, Mr Speaker.
GKN is a great British engineering company, forged in the first industrial revolution with strengths in defence, aerospace, automotive, batteries and the internet of things, which should place it at the heart of our future economy—high skills, high productivity and high wage—but the debt-driven hostile takeover threatens 6,000 UK workers, pension funds and the supply chain. The Secretary of State has said that he will not comment on individual cases, so may I ask him a general question? Does he believe that it is in the national interest for City investment houses to use debt to dismantle our industrial base?
The hon. Lady understands the constraints that I have in any particular takeover. As a feature of our economy, it is very important that we have investment into our companies from those with the capital to do so. That is why we have a regime that limits the grounds for intervention, but there are certain grounds that I will have to consider during the time ahead.
The sector has huge growth potential. The Government support the industry through the aerospace growth partnership and have committed £3.95 billion for it, which already supports 200 companies, including Safran and GE Aviation in my hon. Friend’s constituency.
Having just taken over the diversity portfolio in the Department, I share the hon. Lady’s extreme disappointment at companies failing to report. I will take this matter forward and perhaps work with her as a matter of urgency.
I will make three quick points: the Government are investing £70 million in the agri-tech catalyst and £80 million in four centres for agricultural innovation through the 2013 agri-tech strategy; and I pay tribute to Rothamsted Research as a key partner in agrimetrics. We are working together to deliver integrated solutions for the agricultural community.
I take on board the very important question that my hon. Friend asks. The Government have invested over £2 billion to ensure that the Post Office is able to meet the needs of our constituents and the small businesses that rely on it. That means that 99% of UK personal bank accounts and 95% of small business accounts can be accessed to withdraw cash, and that customers can deposit cash over the counter or cheques in any one of the 11,600 post offices across the UK.
I am sure that the hon. Lady will be delighted to know that I opened Britain’s first subsidy-free solar farm last year. The great success of the policy framework and the investments that we have all made through our bills means that we are able to bring forward renewable energy without substantial subsidies. I would have thought that she would welcome the idea of getting more renewable energy for less investment.
Given that the Keep Me Posted campaign has pointed out that those who cannot or do not use the internet pay £440 a year more in household bills, will the Minister consider extending the provisions that already exist in banking to energy and telecommunications bills?
I congratulate my hon. Friend on his tenacity in campaigning on behalf of his residents. Following his representations on the impact of the proposed redundancies, I am happy to confirm that there will be additional flexibility in how the rapid response service can be used. That means that, while there is no additional funding, all workers made redundant from Cleveland Potash will benefit from the same flexibilities for job-focused training as have been made available to ex-SSI and supply chain workers.
I think that my hon. Friend is inviting me, as a fellow south-west MP, to agree with him. Network costs vary regionally because of different costs in serving customers. Ofgem took more than £15 billion out of network costs in its last price control framework, and I look forward to introducing various measures such as the price cap Bill, which I shall be introducing shortly, that I hope will be supported by all Members of the House. We want to ensure that we have energy bills that consumers can afford and that we protect the most vulnerable in the process.
I will see what I can do.
The universal service obligation for superfast broadband will be good news for businesses across the country, but the fact that the announcement has been made with no date makes it counterproductive, as that is slowing down broadband. Will the Government announce a date and say that registration can start immediately?
Infrastructure is a major pillar of the Government’s industrial strategy White Paper, and local input is essential. I welcome Transport for the North’s input, and I am sure that my right hon. Friend the Secretary of State for Transport will welcome this, too.
The hostile takeover of GKN by Melrose threatens break-up, sale and closures. The Secretary of State has powers under section 58 of the Enterprise Act 2002 to intervene. Will he intervene to block this hostile takeover, which is not in the national interest?
Thank you, Mr Speaker. It is great to be back.
We have ambitious plans on Teesside to create 20,000 jobs on the former SSI steel site. The biggest issue holding us back is, obviously, the ownership of the site. Can the Secretary of State update us on what conversations he is having with the official receiver and the Thai banks to enable us to fulfil our potential, create jobs, and bring investment back to the site?
I welcome the hon. Lady back to the House and commend her for her commitment to ensuring that we secure the best possible future for that site. I shall visit Teesside shortly to continue our discussions. There is great commitment on the part of both the Government and the local development corporation to finding the right solution. The ownership is not in the Government’s hands, but everything that can be done is being done.
A constituent of mine is a director of Tower Supplies, one of the leading small and medium-sized enterprises in the personal protective equipment sector, whose bid was recently rejected by Transport for London in the first round of the process with no explanation. The practice is for feedback to be given, but that does not always happen. Will the Minister work with the Ministry of Housing, Communities and Local Government and other Departments to ensure that the system does not hinder SME growth?
The Government are committed to ensuring that more small businesses are able to bid for such contracts. We want to support SMEs through the procurement process, and to ensure that they can be competitive and win such contracts. I shall be happy to meet my hon. Friend and representatives of the company that she mentioned in order to find a solution.
When I met the Minister last week, I was told that the Carillion headquarters would continue to operate in the interim. What steps are the Government taking to safeguard jobs for the employees who work in my constituency?
I think that the hon. Lady and I spoke on the telephone on the day of the insolvency, and I think I have met her twice since then, along with other Wolverhampton colleagues, to ensure that she is kept fully updated. We are working closely with PricewaterhouseCoopers and the Insolvency Service in the best interests of not just the creditors but all those employed in the Carillion network. To date, things have been positive, but I will seek to update the hon. Lady further as more information becomes available.
Leaving the EU: Economic Analysis
To ask the Secretary of State for Exiting the European Union to make a statement on the Government’s analysis of the long-term economic impact of Brexit on the economy.
I will begin by setting out our approach to publishing economic analysis, I hope once and for all.
I can confirm that—I think the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) will want to listen to this. I can confirm that when we bring forward the vote on the final deal that we agree with the European Union, we will ensure that the House is presented with the appropriate analysis that the Government have carried out, so that the House can make an informed decision. All Members must surely agree, however, that the Government cannot be expected to put such an analysis into the public domain before it has been completed. That would misrepresent our views. Furthermore, the Government cannot be expected to publish the analysis while the negotiations continue, which would surely harm the national interest. Parliament has rightfully agreed that Ministers have a duty not to publish anything that could risk exposing our negotiating position.
Let me now turn to the article that prompted the urgent question. It is a selective interpretation of a preliminary analysis. It is an attempt to undermine our exit from the European Union. As I have told the House before, the Government are undertaking a wide range of analysis on our exit from the EU. The next stage of that analysis, summarised in a draft paper presented to Ministers this month, has been a cross-Whitehall effort to support our negotiating priorities. It has not been led by my Department, and it is not yet anywhere near being approved by Ministers. Even the ministerial team in my Department has only just been consulted on the paper, in recent days, and we have made it clear that it requires significant further work. In fact, I saw this report myself only this morning. The analysis to which I believe this article refers is a preliminary attempt to improve on the flawed analysis around the EU referendum. It is there to test ideas and to design a viable framework for the analysis of our exit from the EU. At this early stage, it only considers off-the-shelf trade arrangements that currently exist; we have been clear that these are not what we are seeking in the negotiations. It does not yet consider our desired outcome: the most ambitious relationship possible with the EU, as set out by the Prime Minister in her Florence speech.
Such an agreement is in the interests of both the UK and the EU. Therefore, the scenarios in this analysis continue to suffer from the flaws we have seen in previous analyses of this type. Such analyses have been proved to be wrong in the wake of the referendum, not least because there is huge uncertainty around any forecast, especially in the long run and especially in the context of a major strategic choice.
It is the Government’s job to improve on this analysis, but to do so we first have to understand where it went wrong previously. That is what the analysis to which this article refers is: it is not a forecast for our preferred outcome of the negotiations; it does not yet properly take account of the opportunities of leaving the EU.
Finally, on 23 June 2016 the people of this country took a decision to leave the EU in the context of a wide range of economic information. The purpose of this analysis is not to question that decision, which this House voted overwhelmingly to uphold. I hope all Members of this House will agree that we should continue to respect the result of the referendum.
Not good enough.
Here we go again: Brexit impact assessments, take two. For the past year, we have called on the Government to publish Brexit impact assessments. It is a simple argument: on decisions of this significance, Parliament is entitled to know the likely impact of the Government’s approach to Brexit and thus to hold the Government to account. The Government have repeatedly refused our requests.
Last year the Secretary of State initially insisted that these reports existed in “excruciating detail”, but were so sensitive that nobody else could see them. After this House passed a binding Humble Address, the Secretary of State changed tack, telling the Brexit Select Committee just last month that no “economic forecast of outcome” had ever existed. Yet last night we learn that an analysis has been produced after all.
This is now piling absurdity upon absurdity, and there are some pretty obvious questions. When was this new analysis commissioned? In particular, was it before or after the Secretary of State gave evidence to the Brexit Select Committee last month on this issue? Is this the only report that has been prepared on the Brexit scenarios? If not, what other analysis has been done? Does this new analysis model the Government’s Brexit approach? If not, why not? If so, will it lead to changes in Government policy? Finally, and most importantly, will the Secretary of State publish this now—not in nine months, but now, so that we can hold the Government properly to account?
We have been here before. It took a great deal of time last year and the use of a Humble Address to force the Government to release documents relating to Brexit. The Secretary of State has the chance today to avoid a repeat of that exercise if he commits to publishing this new analysis in full; will he do so?
The right hon. and learned Gentleman raises the question of impact assessments, and what I can say to the House is that we have always been absolutely clear that we have a wide-ranging programme of analysis, which is evolving continually, but this economic analysis is not what is formally known as an impact assessment. [Interruption.] What I would say to the House—[Interruption.]
The right hon. and learned Gentleman and the Labour party are completely neglecting our duty to safeguard the national interest in the course of these negotiations. I can understand why he and those behind him would want the reports in the press to be accurate. Fundamentally, they do not wish to leave the European Union. For them, good news is a disaster and bad news is a welcome confirmation of their world view. They await each set of employment figures with eager anticipation, only to have their hopes dashed when every set shows an ever-increasing number of people in work. They gleefully celebrate warnings from banks about the possibility of jobs moving to the continent, then they have to retreat when, a few months later, the banks assert the supremacy of the City of London. I do not blame them. They care passionately about remaining in the European Union and they want to overturn the result, but their strategy is becoming clear: demoralisation, delay and revocation. However, that is not what our parties stood for at the last election. Our parties were clear that we would respect the result of the referendum, and that requires the Government to deliver the best possible Brexit. That is what we are trying to do.
As I said in the opening words of my reply, when the time comes for a meaningful vote, the Government will ensure that the House is appropriately informed. However, we can see what some of this economic analysis could be worth. Let us take as an example the respected Bank of England. What institution could be more respected for its analysis? In August 2016, it made a quantitative forecast of the impact of Brexit, saying that exports would go down by 0.5%, but they went up 8.3%. It said that business investment would go down by 2%, but it went up by 1.7%. It said that housing investment would go down by 4.75%, but it went up by 5%. It said that employment growth would be zero—flat—but it went up to a new all-time high. The public deserve to see the national interest protected in these negotiations and to have a House of Commons of representatives who exhibit a healthy scepticism about economic forecasting.
It is perfectly obvious to everyone on both sides of the channel that if the United Kingdom leaves the largest and richest multinational free-trade area in the world and constructs new barriers by way of tariffs, customs or regulatory barriers between ourselves and that market, future generations will to some degree be poorer than they would otherwise have been. Does the Minister not accept that the Government should feel themselves under a duty to have the best-informed debate in this House and in the country on the possible consequences of likely scenarios now, when the Government are deciding what their ultimate policy is going to be, and continuously throughout the vital next 12 months when the final picture will start to emerge? Will the Minister stop pretending that this is something to do with defending our negotiating position or that it is some kind of perverse attempt to reverse the referendum decision, and accept that he has failed, actually, to protect the Government from political embarrassment?
The public have made a profoundly important strategic choice, which is to leave the European Union. That means that the Government need to deliver free trade on a new basis: on the basis not of political integration but of a new deep and special partnership with the European Union. It is the Government’s intention to deliver the best possible and most frictionless trading with our friends in the European Union, which it is in all our mutual interests to do. My right hon. and learned Friend talks about our duty, and he knows well that our duty is to look after the national interest of our constituents and of our country. That is exactly what we are seeking to do as we take these negotiations and this analysis forward.
Just yesterday, I was commenting in this Chamber that the only constants in the Government’s Brexit position are chaos and confusion. Far be it from me to get in the way of the Government undermining themselves, or of Tory feuding, but this situation counts, and their bluff and bluster just will not cut it any more. It is striking that the figures that have been released are very similar to the figures that the Scottish Government produced on Scotland’s place in Europe. If the Scottish Government can produce their figures, why can this Government not do so?
I reassure the hon. Gentleman that we are not copying the Scottish Government’s analysis and that we are doing our own homework. The Scottish National party’s position is clear: it wants to break up the United Kingdom and have a Scotland within the European Union. The actions that he describes must be understood in that context.
We have here some London-centric remoaners—that could be a way of describing the shadow Brexit Secretary—in the civil service who did not want us to leave the European Union in the first place and put together some dodgy figures to back up their case. They still do not want us to leave the European Union and are regurgitating some dodgy figures to try to reverse the result of the referendum. Does my hon. Friend agree with that analysis? If so, does he agree that this really is not a news story?
My hon. Friend makes a point that is very much in line with his long-held views. I should reaffirm that I am proud of the officials with whom I work. Irrespective of how they voted, they are demonstrating commitment to delivering on the decision of the British people. The intention of our current analysis is to improve on what has gone before and, as I set out in my initial response, we recognise that there were flaws in the previous approach.
A lack of transparency is not in the national interest. On 6 December, I asked the Brexit Secretary,
“have the Government undertaken any impact assessments on the implications of leaving the EU for different sectors of the economy?”
He replied, “Not in sectors.” Now we learn that that work has been done, and it is reported that chemicals, clothing, manufacturing, food and drink, cars and retail will be the hardest hit sectors. Will the Minister offer the House an explanation for the discrepancy between what the Exiting the European Union Committee was told and what we now know?
As I have explained, we have always said that our economic analysis was continually evolving across a wide range of activities—[Interruption.] Opposition Members laugh, but what else would they expect but for the Government to work continually on a developing analysis? As I may not have said in my opening remarks, I know that the Secretary of State only saw this particular document last night—I saw it this morning—and I think that that will explain the answers he has given.
Does my hon. Friend agree that businesses up and down the country, including in Redditch, will wonder whose side the Labour party is on when its Members take great pleasure in forecasts that predict doom and gloom? People may conclude that Labour is not on the side of this country’s hard-working businesses and entrepreneurs.
My hon. Friend is exactly right. Now that the decision has been taken, the vast majority of right-thinking people in the United Kingdom will expect it to be carried through with a good heart as a matter of choice. Time and again, we see a foot-dragging reluctance from the Labour party, which increasingly seems not to be respecting the choices of its own voters.
It is reported that the analysis shows that the north, the midlands and Northern Ireland will be hardest hit in all the scenarios. Will the Minister confirm that that is because all the scenarios assume that Britain is outside the customs union? Will he confirm, too, that the Government appear to have undertaken no analysis of the different customs union options and of the impact on our economy? Given how significant the situation is for northern manufacturing and for Northern Ireland and given that the CBI has said this is irresponsible and is letting down northern manufacturing, will he commit to conducting and publishing analysis before the customs Bill completes its passage through Parliament?
I am grateful to the right hon. Lady because she has given me the opportunity to reassure her that there is economic growth under all the scenarios in the economic assessment. The only question is to what extent and how fast, but there is projected to be economic growth across a 15-year period in all the scenarios.
Does my hon. Friend understand that many businesses in my constituency are already nervous about the apparently cavalier attitude of some Brexiteer opinion towards their continued success? Will he therefore confirm that the Government will seek to negotiate an arrangement and get a result that does not damage the long-term economic success of our country and the national interest of our people?
I can give my right hon. Friend that assurance. The Government are not cavalier. It is precisely because we take our duties seriously that we are continuing to develop our economic analysis, and I can of course reassure him that we are seeking to establish a free trade agreement and other partnership arrangements that are of unprecedented scope and ambition.
For the Minister basically to excuse his not publishing the information because he has not yet had the chance to edit, twist or distort it or to redact the information within it is a total and utter disgrace. The public have a right to know about their livelihoods and their futures, and it is deeply irresponsible and dishonest for the Government not to publish the information. It is a cover-up, pure and simple, and it stinks.
I congratulate the hon. Gentleman on going for the hardest possible hit that he can manage, but it is not good enough. The truth is that the hon. Gentleman has made it perfectly clear through his words and his actions that he does not accept the referendum result. It is perfectly clear that he is among those who wish to seek a revocation of the democratic decision of the British people, and he is acting in that spirit.
I am extremely grateful to my right hon. Friend. I can confirm that I will read Professor Minford’s work, and the transparency register will also show that I have met Professor Minford. I will continue to meet Professor Minford and to look at the work of Economists for Free Trade.
As the Cabinet squabbles in the middle of these tough negotiations, the Minister has no right to talk about the national interest. He must stop treating parliamentarians like chumps. He knows, we know and this analysis confirms that Brexit will cause huge damage to British jobs and British families. Will the Government and, indeed, the Leader of the Opposition now allow a vote on the deal so that the people can decide whether they want to pursue this damaging approach or to stay in the European Union?
The right hon. Gentleman reminds me that I did not answer the other point of my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). I have been to see “Darkest Hour” and the right hon. Member for Carshalton and Wallington (Tom Brake) does a good job of reminding me that some people do approach our current circumstances in an unnecessarily bleak spirit. I say to him once again that the economic analysis is clear that there is to be economic growth in all scenarios. I encourage him to go back to the report published by the Treasury Committee, on which I served, during the referendum campaign and look at the documented abuse of figures by the remain campaign. I urge him not to repeat that abuse of figures.
According to this analysis, the car manufacturing, chemical and food sectors, all of which are vital for my constituency, will clearly be adversely affected. Quite frankly, Minister, I take exception to being told that it is not in the national interest for me to see a report that would allow me to best represent my constituents. Parliament needs access to the best possible information on which to base our decisions.
I have great faith in my hon. Friend, and we of course appreciate the importance of cars, chemicals and food. As I said at the beginning of my response, when the time approaches for us to have a meaningful vote in Parliament, we will put appropriate economic analysis before both Houses to assist the choices that they make. However, we do not expect the European Union to publish all its analysis in a transparent manner, and we do not propose to go into the negotiations having revealed all our thinking.
I wonder whether the Minister thinks that perhaps the person in the Whitehall establishment who leaked this document would be better off moving, and working in Brussels. Was the methodology used in this report, or whatever it is, the same methodology that said the country’s financial future would tank if we did not join the euro?
We are carrying out the usual inquiries into who leaked the report. The hon. Lady is absolutely right that past economic predictions have been very poor, and poor for good reasons on which I would love to elaborate on another occasion. I have set out that particular critique of even the Bank of England’s forecasts, and she is absolutely right that, as I said earlier, we should have a healthy scepticism.