Asked by
To ask Her Majesty’s Government what discussions they (1) have
had, and (2) propose to have, with Rolls-Royce about that
company’s plans to transfer the manufacture of wide-chord fan
blades to Singapore; and what steps they are taking to ensure
that that company maintains advanced manufacturing jobs in the
United Kingdom.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
My Lords, the Government are in regular dialogue with Rolls-Royce
and will continue to engage to understand what more can be done
to save jobs and capabilities across the United Kingdom. The
Government are supporting the aviation and aerospace sectors with
around £9.5 billion in grants, loans and export guarantees over
the next three years, which will help to create new, well-paid
jobs for decades to come.
(LD) [V]
Do the Government understand that this is a catastrophe for
high-tech manufacturing in the UK; for the retention of a skilled
workforce—some of whom went to Singapore to help set up there on
the promise that it would not affect their own jobs; for the
critical mass of the aerospace industry of east Lancashire, with
some 22,000-plus workers and four to five times as many ancillary
workers; and for the future of the small north-of-England town of
Barnoldswick, which locals call Barlick, which was the birthplace
of the jet engine and is a genuine centre of engineering
excellence? Is it not time for the Government to take more action
and to take back control?
(Con)
I totally understand and sympathise with the points that the
noble Lord is making, but Rolls-Royce is a global company and it
is having to make some very difficult decisions about its
footprint everywhere as demand for its products and services has
fallen significantly in the current pandemic. As I said, we are
offering significant support to it and other aerospace companies.
(Lab)
My Lords, as has already been said, the closure of the plant at
Barnoldswick and the assignment of its activities to a factory in
Singapore would devastate a highly skilled workforce. I fear that
it would also pose a threat to the intellectual property of the
company and the nation. Will the Government take steps to ensure
that that does not happen? Will they also seek to sustain the
company in the face of its financial difficulties by
commissioning high-tech projects that will assist the process of
decarbonisation?
(Con)
The noble Viscount makes a very good point. We are working
closely with the company to ensure that the UK remains at the
heart of its operations, and we are currently supporting the
development of the next generation of engine through the ATI
programme, as well as discussing longer-term possibilities around
new, clean aviation technologies.
(LD)
My Lords, in moving this vital skill to Singapore, Rolls-Royce
was obviously responding to financial inducements. In his Answer
to my noble friend, the Minister threw up his arms metaphorically
and said “There’s nothing we can do. It’s the global market”. The
Government had leverage and are giving support to the company.
Why did the Government not tie that support to the retention of
these jobs and skills in this country?
(Con)
The noble Lord needs to understand the difficult environment in
which Rolls-Royce is operating. Its revenues have fallen off a
cliff, and we all know what has happened to the passenger jet
market. It has to consolidate its operations across two sites,
and that was the commercial decision it took. As I said, we are
offering it extensive support and we are in regular and ongoing
dialogue.
(Con) [V]
Will the Minister include trade union representation in any
discussions and acknowledge the hard work put in by the two trade
unions at Rolls-Royce to maintain in the UK jobs which are vital
to keeping a skilled workforce and helping us to build back
better?
(Con)
I know my noble friend feels strongly about these matters. The
unions are involved in the aerospace growth partnership, which is
our main method of engaging with the UK aerospace industry, and
we continue to have regular dialogues with Unite and other
unions.
(CB)
In the aggregated context of the retention of advanced
manufacturing jobs, the pursuit of clean energy, sustainability
targets, the Government’s future energy White Paper and the
expertise of Rolls-Royce in small modular nuclear reactors, what
plans do the Government have to help Rolls-Royce realise its
potential as a key contributor to our future national energy
requirements?
(Con)
The noble Lord has correctly predicted that the energy White
Paper will be out shortly to provide more details on these
schemes. We are extensively supporting Rolls-Royce. It has
received £300 million from the Covid corporate financing
facility, it has made extensive use of the job retention scheme
for almost 5,000 employees, and we are providing it with large
amounts in R&D support from the £26.8 million in grant
funding for research activities. We think Rolls-Royce is a key
company for the future of the UK, and we are supporting it
extensively.
(Lab) [V]
My Lords, Rolls-Royce is one of the world’s premier engineering
companies. Despite substantial government support, the
Barnoldswick site’s workforce has been slashed from nearly 1,000
two years ago to half that today. Now, 350 more jobs are on the
line, threatening the future of not just the site itself but
local communities, given the impact it will have. Once highly
skilled jobs are gone, they are gone. What is the Minister doing
to protect those important jobs, not just for the current
workforce but as an investment for the workers of the future?
(Con)
As I said in previous answers, we are supporting Rolls-Royce
extensively, but Covid-19 has had a devastating impact on the
aerospace industry globally—Airbus and Boeing, the two largest
companies, have reduced production by around 40%. We are doing
all that we can to help companies such as Rolls-Royce at this
difficult time—as its chief executive, to be fair, made clear
when making this announcement.
(LD)
My Lords, this pre-Covid decision by Rolls-Royce has an appalling
effect upon the skilled workers in that company and, at the same
time, on those workers who are to follow. Advanced manufacturing
technology is an important part of the apprenticeship programme
and apprenticeship numbers are tumbling. How are the Government
going to rectify that matter and put back into place the sort of
advanced manufacturing skills which the apprenticeship scheme
should provide but is failing to do?
(Con)
We are providing extensive support for training opportunities. I
have already outlined the enormous support that we are giving to
Rolls-Royce and other high-tech manufacturing facilities. I agree
with the noble Lord that we need to do more in this field; we
need to get more people online and more jobs in these sectors.
(Non-Afl) [V]
My Lords, the loss of these jobs to Singapore is short-sighted
and a disaster for that town, the local region and the UK
economy. This decision reflects the crisis facing Britain: a
pandemic and an economic collapse, made worse by uncertainty over
a trade deal with the European Union. Can the Minister explain
further to the House what the Government’s strategy is for
getting such decisions reversed, and outline how they will stop
further jobs in manufacturing being lost to companies moving
their operations abroad?
(Con)
My Lords, when companies announce these decisions it is, of
course, a difficult time for all concerned. We are in extensive
dialogue with Rolls-Royce and other high-technology companies to
do whatever we can, within the limits of what is possible, to
retain those jobs in the United Kingdom. I have already outlined
the massive and enormous support that we are giving to
Rolls-Royce at this difficult time.
(Lab)
My Lords, in August, Rolls-Royce reported a first-quarter
underlying operating loss of £1.7 billion, £1.2 billion of which
was to do with civil aerospace and is Covid related. That is
presumably why it has broken an agreement it had with the UK
Government and moved work promised to UK workers to Singapore.
Rolls-Royce is well placed, looking ahead, to provide low-carbon
power solutions with the support of the UK Government—and that
government support should depend on its benefit to highly-skilled
UK workers. Will the Minister confirm that the Government will
prioritise the work by the UK small reactor consortium—building
on Rolls-Royce’s long history of providing nuclear reactors to
the Royal Navy—thereby ensuring affordable nuclear power
operations, and that this work will take place in the United
Kingdom?
(Con)
I congratulate the noble Lord on getting the Royal Navy, a matter
close to his heart, into his question again. But to be serious, I
agree that we need to develop the next generation of small
modular reactors, and we are providing support to enable that to
happen.
(CB) [V]
My Lords, I declare my interest as in the register. The East
Midlands, where Rolls-Royce has its headquarters, has the lowest
public sector research and development spend in the UK, at £83
per head. R&D and the skilled jobs that it generates are
essential to the levelling-up agenda. What plans do the
Government have to increase R&D spend in the Midlands, making
the most of its strengths in the rail, aerospace, nuclear and
other vital sectors?
(Con)
We are happy to support good R&D projects. Rolls-Royce is a
major beneficiary of our R&D support operations through the
£1.95 billion Aerospace Technology Institute programme. It is
also one of our largest UK investors in R&D.
(Lab) [V]
My Lords, I was working for my noble friend in 2009 during a
similar economic crisis when, as Secretary of State for Business,
he secured assurances from Rolls-Royce that the establishment of
the plant in Singapore would not lead to closure of the UK plant
at Barlick or severe job losses. Given the crucial importance of
Rolls-Royce to the British economy and the financial links
between the Government and the company, why has the Secretary of
State not made a personal intervention to save the Barlick plant?
(Con)
The plant is not closing. Rolls-Royce has made it clear that it
sees it having a long-term future and will continue to invest in
it. However, we have to understand the context: the Covid-19
pandemic has dealt it a devastating blow. In its first
half-yearly results, Rolls-Royce announced that the company’s
revenue fell by 24% to £5.6 billion, while for civil aerospace,
the area in which it operates, revenue fell by 37%. This is a
devastating time for many companies, including Rolls-Royce. We
are doing all that we can to ensure that it survives the pandemic
and can go on to generate secure, well-paid jobs in the future.
