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House of Commons Hansard
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Oral Answers to Questions
12 December 2017
Volume 633

Business, Energy and Industrial Strategy

The Secretary of State was asked—

Royal Mail Privatisation

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1. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. [902879]

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11. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. [902892]

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12. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. [902893]

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13. What assessment he has made of the effect of the privatisation of Royal Mail on employment standards in the postal industry. [902894]

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Almost all Royal Mail’s 142,000 staff are on permanent contracts and earn above the living wage. Employees own 12% of its shares, and it has been a Times top-50 employer for women for four consecutive years. The Government will protect workers’ rights, ensuring they keep pace with the changing labour market.

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Today is postal workers day, and I am sure the House would like to thank all postal workers in Royal Mail and Parcelforce for the good work they do all year round, six days a week, in all kinds of weather across the UK.

Royal Mail was not for sale. Under this Government and privatisation, its employees face worse pay and conditions and attacks on pensions, along with the threat of more job losses. Will the Minister renationalise Royal Mail?

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I heartily agree with the hon. Gentleman’s celebration of our postal workers today. As he says, they will deliver in all weather to 29 million addresses across the country over the festive season. I cannot agree, however, that renationalisation is the answer. Royal Mail is in negotiations with the Communication Workers Union, and progress has been made following mediation by Professor Lynette Harris. I assure the hon. Gentleman that there would be a great loss to the postal workers, who, let us not forget, own 12%—

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Order. I am extremely grateful to the Minister, but we have a lot to get through. We need to be much brisker. Sorry.

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I refer to my entry in the Register of Members’ Financial Interests. As postal workers trudge through the snow this morning, they will have a right to be aggrieved at losing their pensions, while Moya Greene gets paid £1.9 million and gets free flights, paid for by Royal Mail, to Canada. Does the Minister accept that?

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I disagree with the hon. Gentleman. The pension scheme, if left unchanged, would result in virtual bankruptcy for Royal Mail. It would require an injection of £1.3 billion annually, against profitability of approximately £700 million. I think he can do the maths himself.

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Royal Mail is paying out over £200 million in dividends every year to private shareholders. Last year, the chief executive saw her pay increase by 23%. How can the Government stand by a model of ownership that sees postal workers’ pay being frozen and their pensions left unaffordable?

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I understand that Royal Mail’s offer of a pay increase to its workforce is far from frozen. I do not propose to comment much further, however, other than to say that the figures the hon. Gentleman refers to are misleading, because they go way beyond the chief executive’s base salary and include performance-related benefits, which are in line with a position of that stature.

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Order. The Minister may judge that the figures are misleading, but I am sure she would not suggest that the hon. Gentleman would deliberately mislead the House.

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I certainly would not, Mr Speaker.

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In the privatised Royal Mail, 500 jobs have been lost while, at the same time, it has dished out close to £700 million in dividends to private shareholders. Is this a record of privatisation the Minister is proud of?

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As I said earlier, Royal Mail contributes £400 million a year to the pension scheme and, since privatisation, has provided access to capital of £1.5 billion and converted losses of £49 million into profits of £700 million. I would say that that was a pretty successful record.

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Does the Minister agree that, regardless of ownership, Royal Mail needs to continue to modernise and become more efficient, because it operates in an increasingly competitive marketplace?

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My hon. Friend makes a very good point. When Royal Mail was privatised, Amazon was one of Royal Mail’s biggest customers; Amazon is now one of its biggest competitors. So he is absolutely right. More investment in technology and modernisation is required if Royal Mail is to maintain its market position.

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The posties in Kettering work extremely hard all year round and do a tremendous job, especially at Christmas. What is the value of the average postal worker’s individual stake in Royal Mail?

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I can confirm to my hon. Friend that the workforce own 12% of Royal Mail, which is a fact that the leadership of the Labour party should consider as it contemplates a round of nationalisation.

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All the evidence is that employment standards in Royal Mail and more widely are being driven down, including with job losses and cuts to pensions. Is the Minister seriously arguing that employment standards today are higher than they were at the point of privatisation?

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The hon. Gentleman should accept that Royal Mail needs to maintain its position in the marketplace. It already provides employment conditions that are the envy of delivery workers employed by its competitors.

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Royal Mail employs a significant number of people in the north of Scotland. Protecting those jobs, and the universal service that the workers deliver, is vital, especially given that, according to Citizens Advice Scotland, more than 1 million Scots face surcharges or late delivery, or are refused delivery altogether, when they buy goods online. Will the Minister commit herself to protecting those Royal Mail jobs, and will she confirm that there will be a review of the regulation of parcel delivery prices to support our rural communities?

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The hon. Gentleman has made a good point. Royal Mail is regulated by Ofcom, which benefits everyone involved in the service. The universal postal service includes a parcel service. Companies must have regard to fairness in setting delivery charges, and any failure to be clear to customers before bookings breaches consumer protection law.

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Today marks postal workers day, when we thank our posties for their hard work and determination in providing a key public service—not that the Conservatives will take any notice. In a privatised Royal Mail, we have seen 12,000 job losses and proposals to slash pensions by 45%. It is a classic case of “one rule for the rich and another for the rest”. Royal Mail has paid out £70 million in dividends to private shareholders, and that is only in the last six months. Does the Minister still stand by the Government’s decision to privatise Royal Mail?

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I stand by it 100%. Royal Mail would have had no future had it not been privatised.

Electric and Autonomous Vehicles

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2. What recent steps his Department has taken to support the development of electric and autonomous vehicles. [902880]

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Two weeks ago I announced the location for the new national Faraday battery scale-up facility, which will be built in Coventry. On the same day, Jaguar Land Rover announced its intention to produce battery electric vehicles in the west midlands, thus bringing the region to the forefront of modern mobility in the United Kingdom.

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When it comes to autonomous and electric vehicles, public trust in the exciting technology involved is key to making the most of the opportunities that it presents. What discussions has my right hon. Friend had with industry to combat the Luddites and dispel the mythical fears of that exciting technology that are currently being promoted?

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My hon. Friend has made an excellent point. Part of the programme involves test beds to demonstrate the new technologies. The demonstrations will be open to the public so that they can see for themselves, and they will begin in Milton Keynes, Greenwich, Bristol and Coventry. However, people are already experiencing these technologies through satnav, cruise control and automatic parking, and I hope that increasing exposure will reveal their benefits.

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The Secretary of State mentioned Jaguar Land Rover. As he will know, Ford in Bridgend, which neighbours my constituency and employs hundreds of workers there, is pulling out of the contract early. Has the Secretary of State had any conversations with Ford about the possibility of converging its lines to produce electric batteries for electric cars?

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The hon. Gentleman will be pleased to know that I shall be meeting the head of Ford’s European operations immediately after this session to discuss the fact that Ford has based its new development of electric and autonomous vehicles in Britain.

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Britain has the potential to be a world leader in developing the new regulatory standards that will govern electric and autonomous vehicles. Will the Secretary of State work with industry, and with other Departments, to ensure that Britain leads the world and that other countries adopt our standards?

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I will indeed. The industrial strategy makes it clear that being at the forefront of the regulatory standards for these new technologies gives us a big advantage. The Automated and Electric Vehicles Bill, which is currently before Parliament, is intended to establish—before most other countries—the right regulatory standards, so that we can make progress with those technologies.

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The Secretary of State knows that no assessment of the impact of Brexit on the sector has been carried out by anyone, apart from the RAND Corporation, which told us this morning that this and every other sector will be deeply harmed by Brexit. What does he say in response to that important and thorough investigation?

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I think the hon. Gentleman knows that I have continuous discussions with all the sectors for which I am responsible, including the automotive sector. They lead me to make sure that, as part of our negotiating mandate, we get the best possible deal. The agreement achieved in Brussels last week, including the transitional phase, had been pressed for by the automotive sector in particular.

Industrial Strategy

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3. What assessment he has made of the potential effect on productivity of the Government’s industrial strategy. [902881]

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We know that the best way to improve our productivity is by investing in research and development, improving the level of skills in our workforce, upgrading our infrastructure, creating an attractive environment for new and growing businesses, and making sure that every place in the country can prosper. That is exactly what the industrial strategy does.

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Our productivity growth has been far worse than that of any other G7 country bar Italy. Does the Secretary of State admit that the Government public investment figures in the revised industrial strategy are far below those of leading OECD nations?

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No: if the hon. Gentleman reads the strategy he will see that there is a commitment to the biggest increase in research and development funding, both private and public sector, that we have ever had in this country. It has been the foundation of our success, and I hope the hon. Gentleman will join me in welcoming the progress we are making to be even better at it.

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Productivity in the construction industry is a key requirement of building houses. How will the Secretary of State ensure quality in on and offsite builds for the £1.7 billion investment in construction in the industrial strategy?

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I am glad my hon. Friend mentions that, because the construction sector is one of the areas in which there are big opportunities. It has a sector deal that has been concluded as part of the industrial strategy, and representatives of the sector have said that this represents a major opportunity, especially in offsite manufacture.

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The Secretary of State has just touched on the sector deals the Government are agreeing with different sectors of the economy. Some of the sectors with the lowest productivity, such as retail, hospitality and social care, do not have a sector deal, yet if we close the productivity gap in those sectors, we will help boost productivity overall compared with our main competitors. What are the Government doing to secure sector deals in those sectors?

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I am delighted to hear the hon. Lady’s endorsement of that, and she is absolutely right that there is an opportunity for sector deals for many sectors, including those she mentioned. We are already in discussions with many of those sectors, including the food and drink sector and the hospitality sector; we expect to see early sector deals concluded in them. I am delighted that the hon. Lady supports that.

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I congratulate the Secretary of State on launching the industrial strategy—in particular the life sciences sector deal, which has already triggered £1 billion of new investment. Does he agree that the key now is to negotiate a Brexit deal that avoids a cliff edge but gives us the regulatory freedom to continue to lead in the all-important genomics and data of tomorrow’s medicine?

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I do agree with that, and I commend my hon. Friend as the former life sciences Minister who saw before many people the opportunities of the strategic approach. I think he has been honoured this very week by the learned societies for his contribution to promoting science in Parliament, and I congratulate him on that. He is absolutely right that we need to build on these successes. The life sciences sector deal is a demonstration that a long-term strategy can have immediate benefits; we have had more than £1 billion of investment on the basis of the confidence that the sector has in the strategy we have set out.

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With a few notable exceptions, I am sure we would all agree that technology has improved the productivity of this House, but the same is not true for our country: productivity has stagnated since 2010, and we produce 25% less in an hour than the Germans and French, crippling business and making us all poorer. Last week the Chancellor tried to blame disabled workers, but his own Budget fails to invest in science and productivity until 2021. Will the Secretary of State admit that the Chancellor’s ideological austerity, meaning we fail to invest in our engines of economic growth, is the real handicap here?

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I do not agree with the hon. Lady, and if she reads the industrial strategy she will see that the biggest increase in science and innovation investment for 40 years has been triggered by this. It is the right way to go, and it has been welcomed by all parties across the country. It would be helpful if the hon. Lady recognised that many other countries have benefited from a strong national commitment to improving investment in productivity, such as through science and innovation, and that gives confidence to overseas investors.

Renewable Energy (Scotland)

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4. What steps he is taking to support the development of renewable energy sources in Scotland. [902882]

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18. What steps he is taking to support the development of renewable energy sources in Scotland. [902899]

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Over a third of projects supported by contracts for difference are located in Scotland. In October, we announced plans to allow wind projects on the remote islands of Scotland to compete for support in the next auction. We have submitted a notification of our plans to the European Commission.

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My constituency has much going for it, including an abundance of wind and water, making it an ideal place for all kinds of renewable energy projects. What will the Government do to provide revenue support to renewable energy companies during the innovation period while they work to bring down costs?

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I am sure that the hon. Gentleman has read the industrial strategy avidly; if he has not, I warmly recommend that he does so, as it covers these matters extensively.

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In the EU, we have benefited from funding from the European Investment Bank, which has contributed to the development of renewable energy generation in Scotland, including through a £525 million loan for the Beatrice wind farm project off the Caithness coast. Can the Minister reassure the House that the UK will continue to participate in and have access to the capital provided by the European Investment Bank after Brexit?

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Like the hon. Lady, I commend what the European Investment Bank has done, but the Government are totally committed to renewables and to our own investment in getting a carbon free environment in the way that has been very successful over the last few years.

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Can the Minister confirm that up to £557 million will be made available for less established renewable electricity projects as part of the clean growth strategy, and that projects in Scotland will be able to compete for their share of that fund?

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My hon. Friend is absolutely right, and that is very much an important part of the industrial strategy.

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Does my hon. Friend agree that the key is policy certainty, to enable our growing green finance industries to come forward to finance these initiatives themselves, so that the initiatives do not need to rely on Government subsidy?

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I agree totally with my hon. Friend. I am very impressed by the way in which the finance industry generally is adapting to the clean projects ahead of us.

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Support from the Government will be required to get marine renewables such as wave and tidal power to the point of commercialisation. Renewables UK has come up with a proposal for innovation power purchase agreements. What is the Government’s view of that?

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As the right hon. Gentleman will know, we are studying that proposition carefully.

Taylor Review

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5. When he plans to respond to the Taylor review of modern working practices. [902883]

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It is important that this much-needed report gets the consideration it deserves and that we take action where needed. In the industrial strategy, the Secretary of State took responsibility for improving quality of work in the UK and continued an important dialogue on this issue. We will publish our full response shortly.

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The TUC reports that 3.2 million people are now in insecure work—an increase of more than a quarter over the past five years. Will the Minister accept Matthew Taylor’s recommendation, endorsed by the Select Committee, that a longer break in service—a month rather than a week, as at present—should be allowed before there is any loss of employment rights?

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That will be something that we consult on as we consult on the vast majority of the other proposals in the Taylor review. Taylor acknowledges the excellent track record of employment in terms of new jobs, but as the right hon. Gentleman rightly points out—and the TUC endorses this—there is an issue with insecure work and far too much risk being transferred to the employee.

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The Taylor review says that the same basic principles should apply to all forms of employment in the UK. Does my hon. Friend see paid time off for women attending antenatal appointments as a basic principle, and does she agree that, for health reasons, the law needs to clearly extend that principle to all female workers?

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I thank my right hon. Friend for her excellent question. We will review the matter that she raises in tandem with the rest of the review of Taylor’s recommendations, but she makes a very good point indeed.

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I welcomed last week the Government’s latest round of naming and shaming employers that have failed to pay the minimum wage—an area where state enforcement has actually had some success—so I urge the Minister to respond positively to the Taylor review’s recommendation that state enforcement of employment rights should be enhanced beyond just the minimum wage.

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We will consult on the remainder of the recommendations, particularly those relating to employment tribunals and the enforcement of awards that go unpaid.

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Insecure working practices at Uber enable the company to engage in a pricing policy that many of my constituents consider to be predatory and designed to drive out competition. What more can the Government do to improve working practices at Uber and ensure fairer competition between taxis and private hire vehicles?

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My right hon. Friend gets to the nub of many of the Taylor review’s recommendations. It is important that decent employment standards are maintained and that consumers are offered new opportunities, and we will be reviewing the proposals.

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Recent reports uncovered the fact that people driving on behalf of Amazon were forced to deliver up to 200 parcels a day while earning less than the minimum wage. With impossible schedules that left little to no time for breaks and no access to paid holidays or sick pay, many drivers experienced conditions that could be described as Dickensian. As yet another high-profile employment case emerges, why are the Government not taking robust action to crack down on bogus self-employment and to enforce employment rights?

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The hon. Lady puts her finger on precisely why the Prime Minister commissioned the Taylor review in the first place. When employers are indulging in practices such as those the hon. Lady outlines there will definitely be a deleterious effect on employees’ health, and they should be roundly condemned.

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The Government keep hiding behind their forthcoming response to the Taylor review, but Sir David Metcalf, the Government’s director of labour market enforcement, stated this year that even the Government’s existing powers have not been used to protect workers, despite numerous official statements that the Government have taken abuse by employers seriously. Only last week, the Government identified 16,000 workers who were paid less than the minimum wage, and yet the Low Pay Commission believes that the true figure is between 300,000 and 580,000. Does the Minister agree with Sir David Metcalf that the Government’s enforcement of basic employment rights is wholly inadequate?

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I await the publication of Sir David’s strategy for dealing with labour market enforcement, which we expect to see in the first quarter of next year. I am pleased with his appointment, and he is doing a great job so far of bringing together the enforcement agencies at the Government’s disposal to ensure that they work even more effectively in the pursuit of non-compliance with the law.

Carbon Savings

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6. What estimate he has made of the potential carbon savings due to result from phasing out the use of unabated coal from electricity generation by 2025. [902885]

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We are leading the world by ending unabated coal generation in Great Britain by 2025, and our consultation document published last year set out our estimate that that could guarantee savings of up to 124 million tonnes of carbon dioxide between 2016 and 2030.

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Further exploration of the North sea for oil and gas was given a boost in the Budget. Gas is a lower emitter of greenhouse gases and is a better alternative to coal, so will the Minister focus on oil and gas in particular when developing the industrial strategy?

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We absolutely will. While the move towards clean growth is clear, the White Paper sets out that oil and gas remain one of the economy’s most productive sectors and refers to the intelligent use of its assets and expertise. I thank my hon. Friend for joining me on a visit to Aberdeen; we saw the prospects for the green economy, where sweating the assets is already leading to innovation.

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Unlike Wales’ ambitious targets for moving towards low carbon generation in onshore wind, the lack of ambition shown by the UK Government is startling. Will the Minister confirm whether Welsh wind projects will be eligible in any future contract for difference pot 1 auction, which he has already confirmed for projects in Scotland?

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The hon. Lady should be aware that this country is leading the world in the development of green energy.

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21. The good people of Frome are leading the way in moving to a low-carbon economy. We have ambitious plans to be carbon neutral by 2046, when all the energy needed to live, work and travel will be provided by renewable sources. May I invite the Minister, or indeed the Secretary of State, to Frome in sunny Somerset to hear this story first hand and see how these ambitions are being realised? [902902]

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My hon. Friend should be reassured that nothing would please me more than coming to Frome in Somerset to see the work that he has done locally. The clean growth strategy sets out how the UK is leading the world on carbon emissions, and we have set out how the Government will invest more than £2.5 billion in low-carbon innovation between 2015 and 2021.

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I am sure that Frome will roll out some sort of carpet for the hon. Gentleman.

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Major banks have lent £630 billion to build new coal-powered stations across the world, many of them in our competitor countries. What assessment has the Minister made of the cost of electricity for the competitiveness of businesses in the UK and does he not recognise that our attempts to save the world while the rest of the world is gaily building power stations fuelled by coal only damage our economy?

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The hon. Gentleman is probably aware that we commissioned the Helm review of all the different costs of energy. We believe in a mixed use strategy for energy, and he must also understand the employment and economic advantages of the development of alternative energy sources, quite apart from the carbon-free advantages.

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16. Does my hon. Friend agree that, notwithstanding his comments, wind energy requires a subsidy, realignment of the national grid and extra money for back-up sources when the wind is not blowing? Does that not mean that the electricity will be far more expensive than that which is produced by gas or coal? [902897]

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The facts are that the—

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Tell him he is wrong.

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There is a lot of chuntering from a sedentary position, which I will not take any notice of. I would like to answer the question if Opposition Members will allow me.

My hon. Friend should know that the cost of renewable energy is coming down. The cost of electricity from offshore wind farms, for example, has halved in price since they were first introduced. The Opposition may interpret this to mean that my hon. Friend is wrong. I would say that he is not wrong but he needs further education on this subject, and I will be delighted to meet him at any time to discuss it.

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What an enticing prospect for the hon. Member for Monmouth.

Small Business Sector

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7. What steps he is taking to support growth in the small business sector. [902886]

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Through the industrial strategy we will drive over £20 billion of investment in innovative and high growth businesses. We will increase the national productivity investment fund to £31 billion. We are working to ensure that small and medium-sized enterprises win more public sector contracts to enjoy the benefits of that investment.

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My hon. Friend the Minister will know that many local authorities have reliefs, including small business relief, which they could use. Unfortunately, not all local authorities are using them. Will my hon. Friend say what the Government could do to encourage local authorities to use those reliefs so that all small businesses benefit?

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The Department for Communities and Local Government has issued clear advice to councils that will enable them to calculate the relief that is payable to businesses in the current year. I urge them to pay heed to that advice and implement it. My hon. Friend may be interested to know that Merton council has been allocated £459,000 of business rates discretionary relief in the current year.

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Many small businesses are in catering and hospitality, and we of course wish them well, but when we leave a tip for staff we expect it to be paid to them, so when will the Minister publish the report on fair tips so that we can ensure that workers get paid properly?

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The hon. Lady rightly raises an important issue. Following the commissioning of the work on tipping, we have issued guidance and publicised the issue. What was happening was grossly unfair. I am glad to report that there has been a significant improvement since we commissioned the review.

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Unfair trading practices used by big retailers have been identified as a factor in limiting the growth of small and new businesses supplying to the groceries sector. Will the Minister therefore reassure me that the Department will be bringing forward proposals to widen the remit of the Groceries Code Adjudicator in its response to this year’s consultation?

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We will be publishing our response to this year’s consultation on the future of the Groceries Code Adjudicator early next year. I have already committed to meeting my hon. Friend to discuss this with the Minister for Agriculture, Fisheries and Food, my hon. Friend Member for Camborne and Redruth (George Eustice), and I look forward to that meeting.

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Small business growth has been made more difficult due to the decision of the Royal Bank of Scotland to close 269 branches, which has been described as a “hammer blow” by the Federation of Small Businesses policy convenor in Scotland, who says that

“these changes will make it more difficult to run a business in much of Scotland”.

Will the Minister commit to working with the bank and her colleagues in the Treasury to ensure that the businesses and communities these branches serve are not left without the banking services they require?

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The hon. Gentleman raises a crucial point of concern to communities across the country. Although there is limited action the Government can take on how banks run their businesses, we have worked with the Post Office to enable it, through its 11,600 branches nationwide, to run a full complement of services

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Despite having the fifth biggest economy in the world—soon to be the sixth—the UK is ranked only 48th in the global enterprise league; 48th out of five really takes some doing. But this is not just about the lack of support for start-ups. Among small and medium-sized enterprises business confidence is falling and costs are rising, and, as the Bank of England’s figures show, access to finance is still at its lowest level since 2010. Do the Government have any excuse for their woeful failure to support our smallest businesses?

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The hon. Gentleman really should stop talking small businesses down, and he is absolutely wrong in his estimate. The UK is No. 4 in the world for being the best place to start a business, and the OECD figures show that we score highly on enterprise. He does raise a valid point about growth, and we need to improve our record in supporting small businesses to grow, which is precisely why the Chancellor has made available a vast amount of money in this year’s Budget to support the growth of small businesses.[Official Report, 8 January 2018, Vol. 634, c. 2MC.]

UK Automotive Sector

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8. What steps he is taking to support the UK automotive sector. [902888]

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The UK’s automotive industry is a great British success story and, building on the success of institutes such as the Advanced Propulsion Centre, we have agreed an automotive sector deal to ensure that we continue to reap the benefits from the transition to ultra-low and zero-emission vehicles. Our ambition is to build innovative and competitive supply chains to increase the value of UK content from about a third in 2011 to more than half by 2022.

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What more is the Department doing to encourage further investment in UK car plants, particularly in my constituency with Honda and BMW?

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Both Honda and BMW have been part of the sectoral council that has helped to create institutions that have trained people, and developed research and development; they are a very valued part of the sector deal, which has been so warmly welcomed by the industry.

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My constituency contains many small businesses involved in the supply chains for the motor industry. These chains stretch right across Europe and are largely regulated by European Union law. Will the Secretary of State make a commitment that these will not be disrupted by Britain’s exit from the EU?

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Given what he said, I hope the hon. Gentleman will welcome the supply chain initiative, which is at the heart of the sector deal to increase the level of UK content. But one way or another the motor industry, like so many others, is based on its good relations, not just across Europe, but around the world, and it is essential that the deal we do allows that to continue and indeed to prosper in the future.

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The west midlands has a proud heritage in the automotive sector, and I welcome the Government’s recent announcements, which will see the region be a global leader in the sector. Does my right hon. Friend agree that supporting innovation and new technologies is key to addressing productivity and creating higher-skilled, well-paid jobs?

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My hon. Friend is absolutely right on that, and the commitment we have made to being the world centre for research in new battery technology, through the Faraday challenge, is already commanding attention right around the world. The investment in skills that accompanies this strategy will make sure that her constituents and others in the region will benefit from the jobs that result.

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Every day, around £35 million-worth of components are imported to the UK from the EU for “just in time” delivery to plants. Many of those components help to build more than 6,500 cars and nearly 10,000 engines to be re-exported back into the EU. As we saw from the Operation Stack debacle a couple of years ago, it does not take much for disruption at the channel ports to completely clog up the south-east, losing millions and millions of pounds. What guarantee can the Secretary of State give the automotive sector that Brexit will not result in any extra customs checks that will clog up the industry?

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The hon. Gentleman is right to highlight the importance of ensuring that the agreement we reach will be free not only of tariffs but of the types of frictions he describes. It is important for our successful industry, and not just the automotive sector, that that is the deal we conclude. I hope he will welcome the progress that was made towards that deal last week.

Industrial Strategy

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9. What steps he is taking to develop sector deals as part of the Government’s industrial strategy. [902890]

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The industrial strategy White Paper highlighted the emphatic support for sector deals, encouraging any sector to come forward with proposals on how, working in partnership with the Government, that sector can grow and increase its investment, productivity and earning power. A number of sectors have signalled their interest in developing a sector deal, including, as my hon. Friend knows, the ceramics sector.

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I thank the Secretary of State for that response. Will he please update the House on the progress that has been made in developing a sector deal for ceramics?

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Very good progress is being made with the leaders of the ceramics sector, of which there is a significant cluster in north Staffordshire and Stoke-on-Trent, where Dr Laura Cohen leads the sector. In the months ahead, we hope and expect to be able to conclude a deal with the sector that will capitalise on the enormous opportunity, especially given the new uses of ceramics in, for example, the medical sector.

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The Government are not just a funder and a regulator; they are also a customer. Would it help if national and local government acted like they do in every other country and bought vehicles built in this country by British workers, thereby supporting the companies and British workers?

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The most important thing is that we have excellent products here, and I am proud to say that we do in the automotive sector. The right hon. Gentleman will be aware that the Government changed the procurement guidelines to allow the importance of local impact to be taken into account. I hope he welcomes that.

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Thanks to the actions of this Government, it is widely recognised that the UK now has the most fiscally attractive regime in the world for investment in oil and gas. Does my right hon. Friend agree that a good sector deal would build on that and would mean that the north-east of Scotland could look forward to a future in which it is not only Europe’s energy capital, but the world’s?

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I completely agree with my hon. Friend. I had the privilege of leading a trade delegation to India that included many companies from Aberdeen and the north-east of Scotland that are selling their wares and expertise right around the world. That is one of the big opportunities in the deal that is being negotiated.

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The steel industry met the criteria for a sectoral deal, it wanted one and applied for one, but it did not get one. Will the Secretary of State please explain why?

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The discussions with the steel sector are continuing and I fully expect to conclude an important and ambitious deal for this foundational industry.

Carbon Reduction Targets

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10. What recent assessment he has made of the UK’s progress towards meeting its carbon reduction targets. [902891]

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The UK was the first country to introduce legally binding emissions reduction targets through the Climate Change Act 2008. We have made excellent progress towards meeting our targets: we met our first carbon budget and are on track to exceed the second and third.

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Does the Minister agree that the clean growth plan will not meet the fifth carbon budget on its own? Does he therefore agree that the plan is wholly inadequate and that, as the Committee on Climate Change has said, it should not be the plan?

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The clean growth plan has been broadly and warmly welcomed. Low-carbon innovation is at the very heart of our approach to our industrial strategy, with more than £2.5 billion of Government investment from 2015 to 2021.

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We have some very shy Government Back-Bench Members at this point, so I call Graham Jones.

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The Labour manifesto in the summer committed to 60% of our heat and power being produced from zero-carbon or renewable energies. When will the Government match that ambition from the Opposition?

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Our clean growth strategy is rightly ambitious, and the Climate Change Act allows us to be flexible in our means of achieving the goals that we have set out. As I have just said, we are ahead of our targets on the second and third carbon budgets.

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In the recent Budget the Treasury, I assume following consultation with the Minister’s Department, pulled the plug on all future support for renewable energy deployment except for the already allocated near-term support for offshore wind. Does the Minister himself support such action, and does it help or hinder the UK’s progress towards meeting its carbon reduction targets?

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As I have said, our position is that we have met our first carbon target, and we are on track to exceed the second and third. The Government are taking this agenda exceptionally seriously. In fact we are leading the world on it, having legislated with the Climate Change Act and put clean growth at the very heart of this country’s industrial strategy.

Industrial Strategy (Wales)

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14. What assessment he has made of the potential effect on Wales of the Government’s Industrial Strategy. [902895]

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Our industrial strategy is for the whole United Kingdom. I was pleased to hear from, and work with, people, businesses and institutions in Wales and colleagues in the Welsh Government as we developed the strategy. I have held important discussions with Welsh businesses from a range of sectors, including life sciences, steel and nuclear. Welsh innovators are well placed to benefit from the second wave of the industrial strategy challenge fund.

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In the past 10 years of successive Westminster Governments, productivity in my county of Gwynedd has fallen by 10%, while productivity in central London has risen by more than 5%. Such regional inequality is evidence that Westminster is not working for Wales. Does the Minister agree that we should be seeking the tools to build our own future?

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The hon. Lady is right in identifying that there are big regional disparities in productivity, and the long-term purpose of the industrial strategy is to work together with our leaders right across the country, with industries, and with universities and colleges to make sure that the drivers of improved productivity are in place. I know that the Government in Wales have participated in and endorsed the approach that we are taking, and I take her endorsement of our direction as further encouragement.

Offshore Wind Industry

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15. What steps he is taking to support the offshore wind industry. [902896]

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The UK is the world’s largest offshore wind market and will remain so for the foreseeable future. The contracts for difference announced in September will support more offshore wind deployment in the UK than Denmark and the Netherlands have in their last four auctions combined.

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I am grateful to the Minister for his reply. Offshore wind has been of significant benefit to my constituency, but will he outline the work that the Government are doing to ensure that UK fabricators, such as Sembmarine SLP in Lowestoft, have every opportunity to participate in this great British success story?

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I am delighted that companies in Lowestoft, such as Sembmarine, are benefiting from offshore wind projects off the east coast. I met several of them earlier this year, thanks to my hon. Friend’s invitation, at the East of England Energy Group event in October. Developers must submit a supply chain plan before entering into a CfD auction.

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The north Wales coast is one of the key offshore wind sectors in the whole world, never mind the United Kingdom. Ministers announced £557 million for renewable energy in the Budget a few weeks ago. How much of that will go towards renewable offshore energy?

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As the right hon. Gentleman will know, the system of CfD auctions is very efficient in allocating money, and I have every reason to believe that the north Wales coast will be a major beneficiary of it.

Civil Nuclear Police Authority (State Pension Age)

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17. What assessment he has made of the potential merits of serving officers in the Civil Nuclear Police Authority being exempted from the planned increase in the state pension age for public servants in April 2019. [902898]

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The pension age for civil nuclear constabulary officers was agreed by Parliament in 2013. I have met both the chief constable and the chair of the Civil Nuclear Police Authority to hear their concerns about the planned increase to the pension age. After listening to their concerns, my officials are preparing an equality impact assessment. Additionally, I have arranged to meet the Civil Nuclear Police Federation early in the new year.

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Stuart, a firearms officer in the Civil Nuclear Constabulary who works in Torness in my constituency, asks, like many such officers, why he is any different from the police who protect us from terrorists on the street when he is protecting a cornerstone of our power industry.

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I have heard the hon. Gentleman’s point before. It is a valid one and, as I said, I am looking into it.

Topical Questions

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T1. If he will make a statement on his departmental responsibilities. [902903]

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Since we last met, my ministerial colleagues and I have launched the industrial strategy White Paper, and we can already see it in action. Last week we launched the first sector deal with the life sciences sector, which has attracted significant investment in the UK from companies including MSD and GlaxoSmithKline. We are determined to do even more, and to make the UK the best place to start and grow a business.

Many colleagues from both sides of the House joined us in celebrating Small Business Saturday on 2 December. I congratulate the organisers of that great event, which saw more than three quarters of a billion pounds spent with small businesses.

I attended the global forum on steel excess capacity in Berlin, which agreed actions by all G20 nations to tackle unfair subsidies. Today, colleagues will have noticed that the Minister for Climate Change and Industry is accompanying the Prime Minister to President Macron’s One Planet summit in Paris.

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We all know that rapid advances are being made in self-driving cars. Does the Secretary of State agree that now is the time to adapt our regulatory framework to ensure that it is fit for the future?

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My hon. Friend is absolutely right. That is why we have the Automated and Electric Vehicles Bill before Parliament. We are taking a lead in ensuring not only that we invest in research and development, but that we are ahead of the world in having the right regulatory system to support the adoption of this technology.

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T4. Recent Government figures show that UK funding from Horizon 2020 dropped significantly last year. Will the Secretary of State tell us what he is going to do to address that alarming fall in funding, and will he commit to participating in Horizon 2020 beyond March 2019 should the UK leave the EU then? [902906]

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UK participation in Horizon 2020 has held up remarkably well since June 2016. We remain one of the strongest performers across the EU system. As the hon. Lady will have seen, last Friday’s joint report between the Commission and the UK Government painted a very positive outlook for our continued participation in this valuable programme.

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T2. Given the importance of the automotive industry to the UK, and particularly to the west midlands, does the Secretary of State agree that it is essential to invest in test environments for self-driving cars to ensure that the UK can compete with other countries that want to become the world’s test bed for new vehicle technologies? [902904]

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I agree with my hon. Friend. That is one reason why we have established a series of test beds between London and the west midlands, including the motorsport cluster. They are already attracting huge interest from around the world, reinforcing our reputation in the field.

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T5. Onshore wind has been Scotland’s success story, with the Scottish Government still on track to meet 100% of electricity generation coming from renewables. The UK Government are the possible blocker. As we approach the point of zero-subsidy onshore developments, will the Government find a way to allow Scottish onshore developments to bid in the next CfD auction? [902907]

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The renewables strategy that we have set out has been remarkably successful in bringing down the price of onshore wind and creating jobs, including in Scotland. As the hon. Gentleman knows, I have discussions with the Scottish Government, which have resulted in the remote islands policy that we have adopted. I will continue to have those discussions with his colleagues.

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T3. Does the Minister agree that retaining full sovereign control of our regulation is essential to getting the most out of our economy, 88% of which does not relate to the EU? [902905]

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Sound regulation is crucial to businesses, workers and consumers. Approximately 1.4 million small and medium-sized enterprises export directly or indirectly to countries in the EU, and they will have a keen interest in the outcome of our trade negotiations.

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T7. Northern Ireland has people with very good basic digital skills, but a quarter of business owners in England lack confidence in their basic digital skills. What is the Department doing to provide help for smaller businesses to fill this skills gap on the UK mainland? [902909]

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We are working with the Department for Education, which is investing hugely in lifelong learning, skills and employability. We are prioritising the digital skills capability within that mission, which I am sure will be of great benefit to SMEs.

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T6. A recent report from Intel identified £2 trillion of global opportunities in artificial intelligence and driverless cars. Will the Minister outline what steps the Government are taking to invest in the skills that Britain will need to capitalise on that huge opportunity? [902908]

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I am delighted that my hon. Friend draws attention to this area, and he is a great expert in it. He will know that, in the industrial strategy, we established as one of the four grand challenges leadership in the world in artificial intelligence and the analysis of big data. A crucial part of that is making sure that our young people and people retraining have the skills to take up those jobs.

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T8. Rumours abound that the Westminster Government are seeking to change the policy on nuclear decommissioning. Will the Minister indicate whether he has any plans to introduce a policy of continuous decommissioning for the UK’s ageing nuclear estate, and whether such a policy would apply to Trawsfynydd? [902911]

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I can assure the hon. Lady that nuclear decommissioning is a very important part of the scenery and will be for many years to come.

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T9. What recent discussions has my right hon. Friend had with the Secretary of State for Transport about increased investment in road and rail projects to improve productivity, particularly in the north of England? [902912]

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I have regular and fruitful conversations with the Transport Secretary. My hon. Friend will know that, in Greater Manchester, as part of the industrial strategy, there was an investment of a quarter of a billion pounds in improving connections in and around the city. That is on top of the investment in connections across the north of England.

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Given the time that has passed since the promise of an energy price cap, will the Secretary of State confirm that he remains committed to implementing the cap for 17 million households, and will he outline the process by which the Conservative party is expected to introduce it?

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We have published an important Bill, and we have requested Ofgem to develop proposals as we progress with it. The Business, Energy and Industrial Strategy Committee is scrutinising our draft legislation, which we intend to bring to the House at the earliest opportunity.

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Last week I was pleased to welcome a delegation from Taiwan to my constituency to meet businesses in the offshore renewables sector, and the delegation regarded the way the sector has developed in the UK as a model. Will the Minister outline what support is available to small and medium-sized businesses involved in the supply chain in this country that want to extend to countries abroad?

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I can assure my hon. Friend that our industrial strategy, and particularly our discussions on the sector deal, have been very much based on skilling up small businesses with a view to their expanding in this country and exporting.

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The Secretary of State may know that Unite the union officials from the Belfast Bombardier plant are in Washington and Montreal pressing the case against the egregious US tariff situation. Is the Secretary of State continuing to engage in this process and working towards a sensible resolution?

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I certainly am. As the hon. Gentleman knows, throughout this process we have been absolutely determined to send a clear message to Boeing and to the US Administration that this action is unfair. Its effects on Belfast are intolerable. I will have further conversations later this week to continue to press the case with all the parties concerned.

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I recently visited the Cambridge biomedical campus, which brings together academia, business and healthcare. Does the Minister agree that this is important collaboration, which will help boost productivity, improve our economy and create jobs for the future?

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Yes, indeed. Cambridge is leading the way in this respect, as in many others. We want to see more collaboration between our universities and the world of business to drive commercialisation and to make the most of the R and D we are investing in.

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It is good news that the Prime Minister is attending President Macron’s summit on climate change in Paris today, but may I warn the Secretary of State that President Macron is positioning Paris as the world’s leader in green finance? To tackle that threat and to protect London, Ministers must back the Bank of England’s taskforce on climate-related financial disclosures and bring in new mandatory corporate requirements on fossil fuel assets.

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Britain leads the world in climate finance, and one of the major contributions the Prime Minister and the Minister for Climate Change and Industry are making is in promoting the availability of green finance in the UK—that includes Edinburgh as well as London. That is getting a very good reception.

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The Secretary of State has already spoken about the great news for the west midlands on electric vehicles. He will remember the all-new electric taxi being manufactured at Antsy Park in my constituency, and the taxi was certified for use in London this week. Does he agree that the opportunity for a platform for a delivery vehicle is also very important?

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I do agree with my hon. Friend. I congratulate the London Taxi Company on having the first electric taxi, manufactured in the west midlands, on the streets of London this very week—again, a big vote of confidence in our world-beating motor industry.

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Access to finance is critical for small businesses, but the protection in place when things go wrong is non-existent. Do the Government agree, and will they look at extending the role and remit of the Financial Conduct Authority in that regard?

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I am meeting the chief executive of the FCA before Christmas, and I will be raising the issue of unregulated small business lending, which the hon. Gentleman mentions.

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Does the Secretary of State agree that the key to a successful industrial strategy is that it focuses on all areas of the UK, obviously including North Warwickshire and Bedworth?

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I do indeed. One of the features of our industrial strategy, which takes an approach that previous business policies have not taken sufficient account of over many decades, is the importance of the skills and clusters of industries in local places. As my hon. Friend knows, that is very much at the heart of the industrial strategy that we have published.

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On 8 March, the Chancellor announced a full review of business rates. On 14 March, the Minister responsible for small business said:

“The review will report in due course and in the not-too-distant future.”—[Official Report, 14 March 2017; Vol. 623, c. 178.]

Yet the industrial strategy barely mentions business rates, which are having a massive impact on businesses in York. When will this review start?

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The Chancellor has announced considerable business rate relief for small businesses, including making small business rate relief permanent, retrospective redress for SMEs caught by the staircase tax ruling, and more besides.