Nadhim Zahawi answers MPs’ questions to the Department for Business, Energy and Industrial Strategy about support for the aerospace sector and support for businesses in Scotland.
This is the last Department for Business, Energy and Industrial Strategy questions before recess and I want to place on record my thanks to you, Mr Speaker, and your staff for the incredible way that they have managed proceedings in the House.
It is Farnborough week and the Government are providing the aerospace industry and its aviation customers with more than £8.5 billion of support, including through UK Export Finance, the covid corporate financing facility, research grants and the job retention scheme. We are discussing further help with the sector.
May I start by thanking the Minister for his personal engagement given some of the difficulties that we have had with the aerospace sector in Northern Ireland, and particularly with Bombardier in my constituency? Given that it is Farnborough Week, let me say that I read with interest the Minister’s comments yesterday on FlightGlobal in the question and answer session, and one of the missing components is the retention of key skills within this high-end engineering sector. Does the Minister accept that, without a clear, bespoke solution to support and sustain jobs beyond the cliff edge of October with the job retention scheme, the aerospace industry is facing a clear and present danger?
I am grateful to the hon. Member for his question and for his comments about our engagement with the sector. We are supporting the aviation and aerospace sector with £8.5 billion and rising. If he looks at support from other countries, which we do, he will see that we will also consider further support as we progress, as the Chancellor has said, through the recovery.
Wolverhampton North East is home to aerospace companies that have seen an unprecedented and sudden collapse of demand. Collins Aerospace is now sadly considering mass redundancies. What further support can the Government offer to limit job losses in Wolverhampton?
We work with the whole aerospace industry. I am the co-chair of the Aerospace Growth Partnership. As well as access to the furlough scheme and the corporate finance scheme, the Secretary of State announced yesterday £400 million in further funding for research and development support for the sector to get to that Jet Zero flight. The Future Flight Challenge is already investing £300 million. We continue to work with the sector to make sure that those skill sets, that ecosystem that has been so brilliant at delivering an incredible industry in the UK, are maintained for the next three to five years, which is the timeline by which the sector looks to recover.
I thank the Minister, on behalf of my office, for his kind words.
Thank you, Mr Speaker, for facilitating these virtual questions for the past few weeks, and long may they continue.
Although yesterday’s announcement was welcome, the Minister and I both know that nearly all the projects have been a long time in coming—from well before the current coronavirus crisis—so, in that sense, the funds announced yesterday were already priced in by the sector. In order to protect the aerospace jobs of today, as others have asked, which are highly skilled and in areas of the country that can ill afford to lose them, we really do need further urgent action today. Will the Minister say more than he has so far, which has been warm words but not much real action, to reassure those working in aerospace that their jobs will be protected in the coming months and years?
I take issue with “warm words and no action” as £8.5 billion has been put to work to protect jobs and to protect the sector. It is great to see that, this week, Airbus has shown confidence in the UK with confirmation that the wings for its latest aircraft, the A321XLR, will be built in the UK at Broughton. That demonstrates our engagement not just with Airbus, but with Bombardier and with other major players in the market and, of course, the supply chain as well. We continue to put the support in place and to look at further support as we progress through the economic recovery.
The Secretary of State and I hold regular discussions with the Chancellor of the Exchequer on the issue of business support, including on the schemes available to support Scottish businesses affected by the covid-19 pandemic.
We are still waiting on the promised aviation sectoral support. Indeed, far from support, in my Adjournment debate the Minister essentially said that workers should be grateful that Rolls-Royce offered voluntary redundancy. Moreover, the Government have not acted to stop companies such as Menzies Aviation and Centrica following the deplorable fire-and-rehire tactics employed by British Airways, which are now being enforced. Will he tell the House whether he thinks it fair that an employer can force an employer on to reduced terms and conditions or face redundancy? Why is that illegal in so many European countries?
We are in constant conversation with Rolls-Royce and other employers, quite rightly. The sector will be impacted for between three and five years. It is right that companies should be able to right-size their businesses and, as the Secretary of State referred to, have a constructive dialogue with their employees about how they arrive at that right size. The Government’s position is to support the industry with more than £8.5 billion of support through the covid pandemic.
Businesses in Scotland have thrived under devolution with the support of the Scottish Government, who are better able to provide tailored policies specifically for Scotland. An independent economics research organisation based at the University of Warwick published figures just yesterday that show that Brexit had already cost Scotland an estimated £736 a head last year alone. With uncertainty over future funding streams such as the so-called prosperity fund, which we were promised details of two years ago, how does he think that the greatest threat to devolution in its history—the current power-grab by Westminster—presents continued membership of the United Kingdom for business and the people of Scotland as a good option?
I have weekly calls with my counterparts in the devolved Administrations, including the Minister for economy and fair work in Scotland. The most successful market is the UK internal market—that is without doubt. That is what the Scottish Government should support. It is a shame that my officials, working with officials from Northern Ireland and, of course, Wales, can move forward, yet the Scottish Government chose to withdraw their officials back in March. I urge my colleague from the SNP to ask the Scottish Government to reintroduce those officials to the system. We would thrive as a United Kingdom.
To protect and rebuild the local economy of Aberdeen and the north-east of Scotland, we need huge investment from the UK Government in the hydrogen economy, carbon capture and underground storage, and an energy transition zone all through an oil and gas sector deal. Will the Minister confirm that his Government intend to sign off an oil and gas sector deal this calendar year—yes or no?
It is a manifesto commitment of this Government to deliver an oil and gas sector deal, and we are working with the sector. My brilliant colleague, the Minister with responsibility for energy, has been engaging constantly with the sector to ensure it can take the opportunities that are before it in offshore wind generation and all sorts of other areas. Of course, hydrogen will be incredibly important to the energy White Paper, which we will publish in the autumn, as the Secretary of State set out.