PARLIAMENTARY DEBATE
Bombardier - 22 November 2018 (Commons/Commons Chamber)

Following Bombardier’s announcement that it plans to reduce its workforce by 490 employees at its Belfast aerostructures site, I have this morning spoken to Michael Ryan, the chief operating officer of aerostructures and engineering services, and arranged a follow-up meeting with him later this afternoon. This follows the company’s announcement earlier this month that a further 5,000 staff from its global workforce will need to leave it over the next 12 to 18 months.

I understand that the employee consultation period of 90 days has now been triggered. During this time, Bombardier will be doing what it can to mitigate the number of compulsory redundancies required, including considering the possibility of voluntary redundancy packages. I recognise this is unwelcome news for the Belfast workforce and their families. It is regrettable that they face further uncertainty at this time of year, but Bombardier is a private company and the Government have no role in its commercial decisions. My top priority has been to emphasise our support for Bombardier’s high-quality UK workforce, now and in the future. The Shorts factory in Belfast employs about 4,000 skilled workers, with almost a quarter of those working on the A220, the new joint venture with Airbus. It also supports a supply chain of hundreds of companies and many more jobs in the UK. It is in all our interests that Bombardier’s Belfast facility is successful. Last year, when the joint venture was announced, both Bombardier and Airbus made a number of important commitments to me, including that wing manufacturing will continue in Belfast; that the treatment of UK sites and suppliers will be equal to that of other Bombardier and Airbus suppliers, and that the strategy will be one of building on existing strengths and commitments, not on plant closures, taking opportunities to increase sales of the C Series across the globe. Those commitments still hold true.

The announcement yesterday is part of a five-year transformation plan that covers the global business. It is a long-term strategy designed to increase the competitiveness of the company. It is, of course, deeply unsettling for the workers at the Belfast facility, and the Government will work closely with Bombardier to minimise the uncertainty and help them prepare for the future. The Government are also working closely with the Belfast facility on its longer-term competitiveness. In the global aerospace market, this is driven by embracing new technology. This year, the Government invested more than £20 million of research and development activity at the Belfast plant to develop new products and improve efficiency.

The Government will continue to work closely with the company, the unions and the devolved Administration to support the company, and support manufacturing sectors we can be proud of. In Northern Ireland, the Department for Communities redundancy service offers to support employers, workers and those impacted during a redundancy situation.

I thank the Minister for his statement. I would like to say, “And for advance sight of it”, but, as he will know, that was hardly the case. Indeed, when it was emailed to me less than 25 minutes before the end of business questions, I texted back to my office to ask whether it did indeed end at that point. I was advised, “Yes, that’s it.” That most certainly is not it. Bombardier’s presence is vital to the economy in Northern Ireland, representing 8% of Northern Ireland’s GDP and about 40% of the Province’s manufacturing output. The company employs 4,000 people across Northern Ireland as a whole, so this announcement will be a devastating blow, and not only to the 490 families who will be directly affected by it in the run-up to Christmas, because this involves an estimated 20,000 indirect jobs throughout the UK supply chains and many of those families may also be affected by the company’s decision. Downsizing its UK operations has significant implications for the whole of the UK and this matter is therefore of national public policy importance. For the Minister to say that the Government have no role here is simply unacceptable.

I visited the plant in Belfast last year when the company was under attack from President Trump in his attempt to impose tariffs of 292% on Bombardier aircraft exported to the US. I spoke to the unions there and I know what a relief it was when those unfair tariffs were not applied as a result of a ruling by the International Trade Commission and Commissioner Meredith Broadbent, whom I also met when I visited Washington to argue Bombardier’s case. I pay tribute to the way in which both Unite and GMB worked with Michael Ryan and Bombardier’s management at that time to fight those job losses, but I am sure the whole House will be disappointed that the same spirit of co-operation appears not to have been the case here and that Jackie Pollock, the Unite regional secretary, has indicated that the unions were not made aware of the extent and scale of the job losses that the management were contemplating. The trust and co-operation that was built up last year should have been respected and maintained, particularly when the company reported a 57% rise in its profits only nine months ago.

The industry is not unused to coping with fluctuations in the workforce. In May 2015, at least 220 jobs were lost. In February 2016, it was announced that about 20% of the Northern Ireland workforce would go, with 580 jobs lost in 2016 and 500 in 2017. In April 2016, those job cuts were revised up from 580 to 630. In September and October 2017, another 375 job cuts were announced. These 490 proposed job losses are just the latest in a long line of redundancies at Bombardier. There have been more than 1,700 since May 2015. Such huge cuts to the workforce, so highly concentrated in one area, will have devastating consequences for entire communities. The company has said that the job cuts are part of a global drive to cut costs, but a disproportionate number of the 5,000 Bombardier jobs to be cut globally are in Northern Ireland, representing more than 10% of the workforce there. Bombardier represents 8% of Northern Ireland’s GDP and 40% of its manufacturing output.

What recent discussions has the Minister had with Bombardier regarding the global restructuring plans? Has he received any suggestion from the company that its restructuring plans have been influenced in any way by Brexit? When will he be travelling to Northern Ireland to meet the unions and the families affected? What discussions has he had with the Secretary of State for Northern Ireland about securing alternative inward investment into Northern Ireland? What provision will be put in place for advice and support for the affected families? Has he spoken yet to Invest Northern Ireland and the officials at the Department for the Economy about the future of manufacturing in the Province? Finally, many ordinary people in Northern Ireland wish to know when the Government will make serious efforts to get the Northern Ireland Assembly back up and running so that issues such as these can be properly responded to at a local level.

I have a lot of time for the hon. Gentleman, and I have many private conversations with him. I know that he is generally a positive person, so I feel disappointed at the way in which he has talked down Northern Ireland and its economy in his response to the statement. There is a lot of good news coming from Northern Ireland. For example, the recent significant investment by Artemis Technologies has shown that the economy of Northern Ireland is expanding. A lot of the expansion is technology-based around aerospace, and Bombardier—we usually call it Shorts, as that is what it was originally—is very much part of that. We have also had the announcement of the Belfast city deal, which is worth about £350 million, so I do not write off what is happening in Northern Ireland at all.

The hon. Gentleman mentioned tariffs. I have broad shoulders—just as you said you had, Mr Speaker—but I disagree with his implication that the Government did not do a huge amount in dealing with the United States authorities. This was not just a trip to Washington with a press release; we had continual meetings with the State Department, and my right hon. Friend the Secretary of State met the Commerce Secretary several times. The outcome was the result of all of us—Bombardier, the Government, the Northern Ireland Office and the unions, as the hon. Gentleman correctly said—pulling together. That was an example of the trust between all of us.

I have jotted down the hon. Gentleman’s questions and I shall try to answer some of them. This is not a Brexit issue. That was confirmed to me this morning in my discussions with Mr Michael Ryan. The hon. Gentleman asked about my discussions with the Secretary of State for Northern Ireland. I have many such discussions, including from a sedentary position today as I am pleased to say that she is sitting beside me on the Front Bench. We discuss Bombardier a lot. The hon. Gentleman also asked what dealings the Government had had with the company, and I can tell him that they are regular and ongoing. Only this week, a team of officials from the Department for Business, Energy and Industrial Strategy visited the company. On the question of whether they discussed what was announced yesterday, I can tell him that that was not the case. Clearly, the company has to deal commercially, and it discussed this matter with us—and, I presume, with the trade unions—when it put out its statutory notice yesterday. As soon as I heard about it, I contacted the company, as did my officials. I spoke to Michael Ryan on the phone this morning and I have arranged to meet him in London this afternoon. This is not something that we take lightly, because we know that—as the hon. Gentleman fairly pointed out—the impact in Belfast of anything that happens to Shorts can be very serious.

I am always delighted to see the unions. In fact, I met them on my first visit, when I had just taken over this job, to Bombardier in Belfast. Although they might not agree with me on some things, I hope they would agree that my door is always open to them—not just in respect of Bombardier, but for aerospace generally and for the automotive sector and all the other sectors that I deal with. I have benefited from the knowledge I have got from speaking directly to unions, not only nationally but at plants when I visit them.

I am not in any way implying or insinuating that this is good news—it is not very good news at all—but I accept the fact, and hope the hon. Gentleman does, that Bombardier’s main concern is that it is dealing in a very competitive international market. It has competition coming up in Russia, China and elsewhere and is fighting hard for every contract it gets, so it has to make sure that the company is efficient.

I am pleased that the technology that I saw is absolutely first class and that the Government are part of that work. We have support from the local MPs, and I was delighted to deal regularly with the hon. Member for Belfast East (Gavin Robinson), whom I see in his place. I commend him on his work to help with everything that we have done on Bombardier. [Interruption.] Mr Speaker is getting impatient, so I shall sit down.

No, no, it is always a pleasure to listen to the Minister’s mellifluous tones, which are equalled only by those of the right hon. Member for South Holland and The Deepings (Mr Hayes).

Political theorists and practitioners from Benjamin Disraeli to Ernie Bevin understood the relationship between the national interest and the common good, but the Government’s procurement policy, and particularly the policies of their agencies, frequently subsumes both those noble things in all kinds of extraneous qualifications, usually under the title “state aid”. The excellent Minister has said that he will work with Bombardier, and the Government in their industrial strategy have committed £4 billion to the aerospace sector. Will the Minister ensure—perhaps he can tell the House now that he will do so—that the procurement policy of the Government and all their agencies will be amended, reformed and in tune with that support and investment?

As ever, my right hon. Friend is right and as erudite as he always is in explaining the significance of the Government’s procurement role. That is also true for many other sectors in which I am involved, including construction. I think my right hon. Friend was asking me whether state aid policies will change in relation to the procurement of Government contracts and so on. I cannot answer that question, because we will have to see what happens in future, but I can say that my Department is regularly in touch with other Departments that are responsible for procurement, to push continually the advantages of Bombardier and many other companies in the supply chain, in all the areas that we deal with.

I thank the Minister for advance sight of the statement.

In the light of the 57% increase in profits announced earlier this year, the announcement of job losses is clearly a real kick in the teeth for the workforce. Our sympathies obviously go out to the 490 employees and their families. The latest news follows a longer-term pattern, with the 220 jobs lost in 2015, 630 lost in 2016, nearly 400 lost in 2017, and close to 500 lost now. Given that pattern, what discussions have the UK Government had with Bombardier over this period about stemming job losses and about the plant’s long-term future? What money can be made available either to protect these jobs or to help with redeployment? It is not good enough for the Government to say that it is a private company and a commercial decision, because they need to do everything to protect jobs from being lost.

We hear from the Government statistics about record employment and record low unemployment, but such statistics hide serious issues such as this one at Bombardier and the recent announcement of 850 job losses at Michelin in Dundee. What steps are the Government taking to make sure that the industrial strategy is fit for purpose and will protect manufacturing jobs?

One of the Brexit dividends so far has been the plummeting of the pound, which is actually supposed to help manufacturing exports. What assessment has the Minister made of future currency fluctuations and inflationary pressures in the sector and what that can mean for jobs?

Finally, the Minister’s statement confirms that the UK Government provided £20 million of research and development grants to the plant in Belfast, and this was to be used to bring in efficiency measures. Can he confirm that, when the Government give R&D grants for efficiency measures, they do an impact assessment to see what that means for jobs and that the grants are only for protecting jobs? Any job losses must come with transitional arrangements and plans for workforce redeployment.

I will try to answer the hon. Gentleman’s questions as best I can. I was jotting them down quickly as he said them.

First, I did say that this is a commercial decision, and it is a commercial decision. The last time I looked, Bombardier was not a nationalised industry, so it is not at all a question of the Government making people redundant. The Government’s support for Bombardier and for aerospace generally is unmatched by any time in history. Bombardier is an important part of the Aerospace Growth Partnership, which I chair jointly with Colin Smith, an industry veteran and former president of Rolls-Royce. We have channelled about £1.95 billion to support R&D, of which Bombardier is the beneficiary.

The hon. Gentleman mentioned the £20 million that was announced. This is for a number of projects including a reverse thrust project. [Interruption.] It is a reverse thrust for an engine. I know, Mr Speaker, that you will be personally interested in reverse thrusts. I have learned quite a lot about it and would be delighted to brief you personally on the subject if you require it. The serious point is that the whole of the aerospace industry, particularly in passenger jets, is changing. We must make sure that the Government funds that we have help to change our aerospace industry, which has a turnover of £42 billion, of which £38 billion is exported, and shape the business for the future. I am very pleased about the projects that are going on, and I have visited them with the hon. Member for Belfast East to see what was happening. The project itself—the factory that I visited—was opened by Arlene Foster when she was the Minister responsible for that area, so this is very much a cross-party thing.

The hon. Gentleman mentioned the ups and downs of the currency. He is right that it has changed significantly, but businesses such as Bombardier are used to dealing with changes in currencies. It has happened in cycles throughout history, and when companies such as Bombardier—I cannot speak for them, but this is what happens in my experience—get an order, they take hedging positions on the currency so that they do not face currency risk.

The most serious and significant point that the hon. Gentleman made, among the many points—[Interruption.] I will try. There has been a lot of chuntering about me going on too much, Mr Speaker, but the hon. Gentleman made a very important point about industrial strategy. Aerospace is a critical part of it. It is really about place, which is ideal for Bombardier because it is in Northern Ireland. It is about skills. Again, these are very highly skilled and very highly paid jobs, I am pleased to say. It is about channelling the partnership between the Government and the industry to produce a business for the future, and I am certain that Bombardier in Belfast will be part of that.

I say to the Minister: my cup runneth over with excitement. Little did I know that service as Speaker entailed a personal briefing on reverse thrust, but one learns something new every day.

If we are in the business of reverse thrusts, may I suggest that a bit of reverse thrusting be done in the direction of Bombardier? Although my hon. Friend the Minister is absolutely right in that it is a private company and he has no power over it, he should not underrate his own degree of influence. He will meet the company, as he says. Let him do a bit of thrusting and let him thrust it in the right direction.

Mr Speaker, I think you will soon consider declaring “thrusting” comments completely out of order and unparliamentary language. As you might imagine, the sentiments of what my right hon. Friend says are absolutely right. We are in continual touch with Bombardier. I am proud of the factory; I am proud of the workers there; and I am proud of the Government’s role.

I recognise the Minister’s sincerity on Bombardier and thank him for his continued sincere efforts over the past three years. It would be very easy to consider this as a solely Northern Ireland issue or a localised Belfast issue, but I have been heartened over the past three years that parliamentarians from across the Chamber have recognised its significance to our economy and to high-level engineering, as well as the future benefits associated with Bombardier’s success. The workforce have been through an incredibly difficult time over those three years, and this is a further disheartening blow for a workforce who saw the clouds shifting from above the plant, in Belfast, in Newtownards and in Newtownabbey. Recognising the constraints of private business but knowing the contribution that the Government have made to date, may I ask the Minister to continue to explore every avenue of financial support and to engage with the Department for International Trade and other Whitehall colleagues to ensure that prospects for future growth, sustainability and security are not only explored but delivered for the workforce in Northern Ireland?

I am delighted to be able to give the hon. Gentleman the assurances he asks for. This is critical to my Department, and we hope that Bombardier’s model will be part of our future industrial strategy. The political stability that will, I hope, return to Northern Ireland in a field beyond my remit can only help the future of the workforce there. We work closely with trade unions and politicians of all political parties, and I am pleased to say that the aerospace part of my portfolio is to me the most exciting. I look forward to having many more models of wings produced in Belfast on my office desk.

Having spent three of the past 12 years living in Northern Ireland, I know just how important Bombardier is to the economy there and what brilliant aeroplanes they make. Does my hon. Friend the Minister agree that there is an opportunity to work with Bombardier on the research and development of a new generation of aircraft using hybrid and electric propulsion, so that Bombardier can be in the vanguard of the future aviation industry and so that we can make a positive out of what is undoubtedly a setback today?

I absolutely agree with my hon. Friend. Hybrid technology is the nirvana for the future of jet engine propulsion and much of the money we have put in with industry for research and development is for hybrid technology. I am sure that Bombardier will be at the centre of that. This is about not just Bombardier but other companies in Northern Ireland that are in the supply chain. Northern Ireland is a significant hub. At the air shows I visit, the Northern Ireland exhibition stand is prominent and visited by companies from all over the world.

Just a few weeks ago, I visited the Bombardier plant in east Belfast with the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe), just to see it. There was no indication at that stage that there would be any job losses, so the announcement of 490 will affect my constituents in Newtownards. Northern Ireland has 10% of the cut to the workforce of 5,000 jobs globally, at a time when the company made a 57% increase in profits in February. The Minister will understand our angst. Will he outline the discussions he has had about investment in the Northern Ireland branches of Bombardier, which reflect the importance the Government have placed on Bombardier and on funding it in Belfast, at Newtownabbey and, in my constituency of Strangford, in Newtownards? Has the Minister had discussions with Bombardier about its intentions to bring back from Mexico and Morocco the work on parts that were once made successfully in Belfast to reflect the high level of investment the Government have made?

I commend the hon. Gentleman—I know Newtownards is part of his constituency—as well as the hon. Member for North Antrim (Ian Paisley) for their work and the support they have given to the aerospace industry in their constituencies. The hon. Member for Strangford (Jim Shannon) mentions the parts that are being made in Mexico, and I was not aware of that but will bring it up at my meeting this afternoon and at every contact between my Department and the management.

Does my hon. Friend agree that we must ensure that all parts of the country can benefit from the industrial strategy? What support is being given to Northern Ireland, in particular, as part of this?

I can answer my hon. Friend’s question in two ways. On the aerospace sector, I have already explained how much money has been committed—about £1.8 billion in total—but Northern Ireland is also a very important part of this because it is one of our most important aerospace clusters. As regards Northern Ireland itself, I would particularly point to the recently announced Belfast city deal, which involves investment, again on a partnership basis, of about £350 million, of which aerospace will be a significant beneficiary—not just big companies but many small companies are involved. There is also the multiplier effect of those companies for the economy of Northern Ireland.

Not one single constituency is not impacted by this. The supply chain in terms of engineering and advanced engineering in Northern Ireland relies on Bombardier. To put this into perspective for Members in this part of our nation, this would be the equivalent of the Minister standing at the Dispatch Box and announcing more than 15,000 redundancies. That is the sobering reality of what we are facing. Will the Minister speak to the Northern Ireland Administration with regard to the monitoring round and release some of that money into the manufacturing side of business, and will he have an impact assessment carried out with regard to the supply chain in Northern Ireland?

The real answer to the hon. Gentleman’s question is that we really do need devolved government enabled to distribute this money with the specific targeting that he refers to. Generally speaking, our policy is very much to support the supply chain. Obviously, manufacturing is very much part of that because it is where the high-quality, skilled jobs that are part of our industrial strategy come from. I will absolutely make sure that that is the case. I will do my best, in my dealings not just with Bombardier but with many of the other companies involved, to reflect the admirable sentiments that he has expressed.

I understand that the aerospace industry supports over 200,000 jobs across the whole UK. What more can the Government do to help us increase our share of the global market?

As I said, the aerospace growth partnership that I jointly chair is responsible for precisely what my hon. Friend asks for—the development of the industry in a high-tech manner using the skills in research and development that we have. We are very supportive of the industry, because apart from the high-level employment, the exports are very significant. As I say, out of £42 billion in turnover, the industry has £38 billion of exports, so it is absolutely critical to us.

Like my hon. Friend the Member for Brent North (Barry Gardiner), I was appalled by the Minister’s statement that as Bombardier is a private company the Government have no role in its commercial decisions—the “not me, guv” approach to government. It mirrors the blinkered approach of the Ministry of Defence, which has been shovelling contracts towards Boeing, often without competition, while Boeing is trying to crash Bombardier. What sort of message does the Minister think that that sends? Is it really too much to hope for a whole-of-government, active approach to back an industrial strategy, and back British industry and British workers?

I rarely disagree with the right hon. Gentleman, but I must remind him that what I said about this being a commercial decision is a question of fact. It is not subjective; it is not a value judgment. This is a private, independent company that is quoted on the Canadian stock exchange. He is very well aware of that, being very experienced. [Interruption.] The Government can influence it, as I heard in a typically erudite chunter from the hon. Member for Sefton Central (Bill Esterson). We influence it by the investment we put into research and development, as he quite correctly said. That is very important. I know from my discussions with Bombardier management centrally that they do regard Northern Ireland as a central part of their developments in future. As I said in my statement, the company gave us various undertakings. The future of the plant in Northern Ireland—in Belfast—is absolutely critical to them.

Bombardier employs many people across many constituencies in Northern Ireland, and I know that those employees and their families will be deeply worried today. In trying to support them and in the absence of devolved government in Northern Ireland, how will the Department work with others, including the likes of Invest Northern Ireland, to ensure for those employees a quick transition into good jobs elsewhere?

The hon. Lady cares deeply for her constituents, and so do I. On the intricacies of devolved government in Northern Ireland, the relevance to my Department is that it makes it more difficult for us to communicate. We have to communicate directly with companies, which is a pleasure, but it is important that we ensure a democratic element to the process as well. We do all we can, however, and have to make the best of the situation. There is certainly no lack of effort or will from my Department. We want more skilled jobs in Northern Ireland, and Bombardier is very much a part of that, so we are not writing the company off because of these redundancies, although I accept that they are significant and a serious issue for her constituents.

More than 30% of the Bombardier workforce has been cut since 2015. In my experience working with Scottish Enterprise, first-tier aerospace companies, particularly Bombardier, have quite a shallow penetration into second and third-tier supply chain companies in the UK. Will the Minister redouble his efforts and ensure a proper industrial strategy that maximises the inputs from first-tier companies such as Bombardier into second and third-tier companies so that we can mop up some of the jobs that have been lost?

I cannot speak for the hon. Gentleman’s experience in his constituency, but it is my impression, from my dealings with Bombardier and other companies in the Northern Ireland cluster, that they are well integrated and co-ordinated with each other. He asks me to redouble my efforts, however, and I certainly will do. I will bear in mind his point in every visit I make and every conversation I have.

The hon. Gentleman is a decent man sent to the House to do a dirty job. I say in the nicest way that he should not try to bamboozle the House. Michael Ryan is a good chief executive—indeed, he is a “Make it in Great Britain” industry champion for the Government—and Bombardier is a damned good company. We know it. I have just been to Northern Ireland, and I know how proud Northern Ireland is of it, but the reality is that it is an integrated global business, and the disturbance created by our leaving the EU is having a deep effect, including on Airbus and supply chains. Michael Ryan and his team are very unsettled by what the Government are doing in coming out of Europe and upsetting the supply chains. Behind all this is our leaving Europe. The Minister should take that on board.

I hope you would agree, Mr Speaker, that I am not a bamboozler by nature, and it is certainly not my intention to bamboozle the House or the hon. Gentleman. On the serious point, the company has said this is not a Brexit-related decision.

It would do.

It has said that very clearly. As I think the hon. Gentleman knows, aerospace is a truly international business and frictionless trade is an important part of it, and I believe that the deal the Prime Minister has been negotiating, which will provide for frictionless trade to help manufacturing industry in the future, will help Bombardier and all other companies remain strong. The Irish trade unions have issued a statement urging the deal to happen.

I have worked in the aerospace industry, so I have a rough idea of what is happening. It was mentioned that direct jobs are being affected, but hon. Members have mentioned the supply chain. In my experience, for every direct job lost, three indirect jobs could be lost. Can the Minister give us the actual figures and set out the impact on the supply chain?

I think the hon. Gentleman is correct about the multiplier effect. I cannot say exactly, but it is about three to four indirect jobs for every one direct job.

I visited Bombardier last month, along with my hon. Friend the Member for Sefton Central (Bill Esterson), in a visit organised and paid for by the Industry and Parliament Trust. Bombardier is making fantastic products. The danger is that these cuts upon cuts will lead to the loss of the critical mass of skills, meaning that the next set of products cannot be made there. Does the Minister share that concern, and if so, what is he doing to protect skills?

I share the hon. Gentleman’s concern, which is common to industry generally, including steel and other sectors. The Northern Ireland aerospace hub is very solid. Although orders will not come through until 2020, the deal that Bombardier did with Airbus means that the company can plan for the future, and it is very aware of the need to maintain skills.

One area where Government can help is retraining. Will the Minister consider an endowment or individual learning account for workers who have been made redundant, to enable them to get training and secure positions elsewhere?

That is very interesting. I believe that it is a devolved matter, but I will look into it with interest.