Commons statement on Bombardier - Oct 10

Rebecca Long Bailey (Salford and Eccles) (Lab) 

I thank the Secretary of State for advance sight of his statement.

Following a complaint by Boeing, on 26 September the US Department of Commerce ruled that Bombardier had benefited from state subsidies and imposed a 219% tariff, and on 6 October it found engagement in below-cost selling and imposed an additional tariff of 80%. This decision has catastrophic ramifications for Bombardier, the 4,000 staff it employs directly in Northern Ireland and the 20,000 staff employed throughout the UK in supply chains. Not only does this jeopardise the livelihoods of thousands, but the Northern Irish economy also faces a serious threat, as Bombardier represents 8% of Northern Ireland’s GDP and about 40% of manufacturing output, so the danger to jobs, the future of Bombardier and the Northern Irish economy because of these decisions in the US is very real.

Sadly, also very real has been the apparent inaction of the Government thus far. The Opposition have repeatedly sought information from them, but we have so far been disappointed by the response—so today I will try again. First, what was the specific content of, and what commitments were made during, the Prime Minister’s and other Cabinet members’ conversations with the US Administration and indeed Boeing?

Secondly, have the Government had any discussions at all with the European Commission, specifically with the Directorates-General for Trade and for Competition, about the support that it might be able to provide? Thirdly, does the Secretary of State have any plans to target all relevant US legislators to lobby the US Administration, including the Senate Committee on Finance, the House Ways and Means Committee, the Senate Committee on Foreign Relations, and those with constituency interests in Bombardier and its wider supply chain?

Given the devastating impact on the Northern Irish economy and on the already fragile Northern Irish peace settlement, what attempts has the Secretary of State made to urge the Irish Government to apply greater political pressure on the Irish caucus on the Hill to highlight the fact that this is not simply a US-Canada dispute, as the Secretary of State for International Trade has sadly already suggested? Fourthly, what attempts have the Government made thus far to provide evidence to the US independent Trade Commission that Boeing did not compete for the Delta contract and does not manufacture a comparable model to the C Series that would have matched the contract specification?

Finally, does the Secretary of State accept that this whole affair demonstrates the very real security risk of military reliance on one foreign supplier? Ministry of Defence contracts with Boeing total £4.5 billion, but is it correct, as reports suggest, that the Defence Secretary is reluctant to use that leverage because of our dependency on the company? Worse still, the Northern Ireland Secretary and the International Trade Secretary have been somewhat quiet on the issue. Are they afraid of being exposed in Northern Ireland for their failure to protect jobs, or are they so keen to score a sweetheart trade deal with the US that they simply want to wash their hands of this matter? Clearly, politics is being put ahead of the welfare of workers in Northern Ireland. I eagerly await the Secretary of State’s response to my questions, but I fear that Bombardier and everyone who depends on the firm are considered by this Conservative Government to be a fair price to pay for a post-Brexit trade deal with President Trump.

Greg Clark 

I am disappointed with the hon. Lady’s response. If anyone is putting politics ahead of the welfare of workers, the evidence was there. She asked some reasonable questions, which have reasonable answers. I said in my statement that the European Commission had been engaged. Commissioner Malmström has been consulted, as have other member states across the European Union. As for the Irish Government, Simon Coveney, the Irish Foreign Minister, has been engaged as well. On the issue of submitting evidence to the Trade Commission in the United States, that has indeed been provided, and, in response to the initial determination, further information will be provided to make it clear that there are no grounds for demonstrating detriment to Boeing, as this aircraft does not compete with Boeing. That has been addressed in clear terms.

Engagement across Government, the Province of Northern Ireland and the island of Ireland has been consistent and unrelenting right from the beginning. I will not detail all the meetings that have been held and the calls that have been made, but they will continue—no stone will be left unturned. We have had 24 calls or meetings with the US Administration, 12 with Boeing executives, and 20 with the Government of Canada. Every day during this process, we have been engaged in getting rid of this unjustified complaint. I would welcome the support of the whole House in this endeavour. I wish to put on record my gratitude to the trade unions, which have played a very constructive role. When it comes to making the case for this action being totally unjustified, I would like to think that this House is completely united not only in looking to the importance of the Bombardier presence in Belfast, but in underlining our total determination to throw out and see dismissed this unjustified action.

Theresa Villiers (Chipping Barnet) (Con) 

Does the Secretary of State agree that successive UK Governments have always been rigorous in compliance with their international legal obligations on state aid, and that, therefore, these punitive tariffs that are proposed are both irrational and unjustified and should be removed?

Greg Clark 

I agree with my right hon. Friend. As she will remember, we do have a very rigorous system for scrutinising state aid, which is why we are totally confident that the system of launch aid that we have applied is compliant with all the international rules. The allegation does not have merit, and I expect to see it thrown out.

John Mc Nally (Falkirk) (SNP) 

I thank the Secretary of State for advance sight of the statement.

The Scottish National party regrets the preliminary ruling by the US Department of Commerce that could put these highly skilled jobs at risk in Northern Ireland, and we sincerely hope that the UK Government are doing all that they possibly can to engage with Bombardier and the trade unions to ensure that the future of all employees is as secure as possible.

These rulings clearly show that no one will be spared Trump’s protectionist agenda of “America first”, with jobs in the UK and Canada—some of the US’s closest allies—being put at risk as a result of the punitive tariffs being imposed on Bombardier.

I am afraid that the Tory Government have been cosying up to Trump with the false illusion—or delusion—that this will help them sign a trade deal with the US after Brexit, without realising that Trump’s Administration will not give in to any demands that may give a competitive edge to the UK over the US.

Leaving the EU means that we will lose leverage in trade negotiations as we will no longer be part of the world’s largest single market of some 500 million people, and we will lose the expertise that the EU has built up over the past 40 years negotiating on our behalf.

Does the Secretary of State not agree that the best way to promote trade and to create jobs across the UK is by maintaining our membership of the single market and the customs union?

Greg Clark 

I am pleased that the hon. Gentleman supports our opposition to the proposed sanctions. If he has studied the form in these matters, he will know that the initial determination was not entirely unexpected by any of the parties, which was attested to by the Government of Canada. We have an outstanding case that there is no detriment to Bombardier, which we expect to prove along with the fact that the launch aid has been compliant. On our relationship with the European Union, he will observe that this dispute has taken place while we are a member of that Union. That justifies our commitment not just with the European Union but globally to seek a rigorous system of free trade in which there is a fair assessment of complaints rather than these punitive and unjustified tariffs.

Mr Laurence Robertson (Tewkesbury) (Con) 

I thank the Secretary of State for his statement and congratulate him on the work that he is carrying out in this matter. It is of course extremely important to Northern Ireland that we get this right and protect the jobs and the industry in the Province. May I also ask him if he will—I am sure that he will—seek to strike a balance here? Boeing is a very important customer to many companies in this country, including some in my own constituency, which is very heavily dependent on aerospace.

Greg Clark 

My hon. Friend makes an important point, which is why many of us in this House are so bitterly disappointed with the actions of Boeing. The company has been the beneficiary of important defence contracts. As many Members know, it is opening an important factory in Sheffield—its first in Europe. A long-term industrial relationship with this country, which it clearly seeks, entails obligations. Those obligations are to treat reasonably and fairly those important parts of our economy that are being attacked without justification.

Gavin Robinson (Belfast East) (DUP) 

In thanking the Secretary of State for his statement, may I just reflect on the fact that this Northern Ireland trade dispute is unprecedented in terms of the political engagement it has had from our Government? As the representative for east Belfast, I greatly appreciate not only the work thus far but the presence today of the Northern Ireland Secretary; the Business Secretary; the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Watford (Richard Harrington); the defence procurement Minister; the Minister of State, Department for Business, Energy and Industrial Strategy, the hon. Member for Devizes (Claire Perry); and, indeed, the Foreign Secretary, whose presence shows just how much support there is politically for us in Northern Ireland, and I greatly appreciate it.

I was, however, bitterly disappointed by the comments last week by the Commerce Secretary, Wilbur Ross. His comments were not only belligerent, but showed—while the process continues—the political support at this early stage for Boeing in its dispute. There is deep concern about the political overtures tied up with this ongoing issue. May I ask the Secretary of State, having engaged thus far, and seeing that what happened was the inevitable outcome of that engagement, how long it will be until we can assuage the concerns of those in Belfast and Canada that there are meaningful and genuine consequences in store should there not be an adequate and suitable resolution to this case?

Greg Clark 

I repeat my thanks and admiration for the work of the hon. Gentleman, who is standing up for his constituents with vigour and strength. I would like to take the opportunity to pay tribute, too, to the leader of the DUP, and indeed to community leaders across Northern Ireland, for the united response that they have made. We are disappointed not only with the response, in terms of the proposed tariffs, but with some of the words that have been used around this. It seems to me that the case is overwhelming: we can demonstrate that any aid that has been given is not only completely in line with international norms, but consistent with the type of assistance that Boeing has had over time. We expect to be able to demonstrate that in a convincing way.

It also seems to me impossible to establish detriment to Boeing, given that it does not have a competitor aircraft. The process of the hearings is that, following the initial determination, there is a further call for evidence, and the evidence that we, completely hand in hand with the Canadians, will present will demonstrate that. We look to the US to make sure that this is a rigorous process and is not politically influenced.

We have been very clear. The Defence Secretary, on a visit to Northern Ireland, was very clear, as I have been, that this is not the behaviour we expect from a trusted partner, and could have implications for the future relationship between Boeing and the United Kingdom.

Anna Soubry (Broxtowe) (Con) 

I had the great pleasure of going to the wings factory in Belfast, and I pay handsome tribute not just to the 4,000 workers there but to Bombardier in general and to the C series—it is a beautiful and exceptionally fine aeroplane, and we wish it great success. I also thank the Secretary of State and all his colleagues in the Government for the fine work they are doing, but does he share my concern that this decision, which we all hope will be overturned, marks a shift towards a more protectionist policy by the United States Government? Does he agree that that does not bode well, especially as we leave the EU, if we do not get a proper deal with the European Union?

Greg Clark 

In my view, it underlines the importance of securing free trade not just with the European Union but around the world. The essence of a free trade agreement is that we have proper protections and dispute resolution mechanisms on which we can rely, so this issue underlines the importance of continuing free trade. As I say, it is not unusual in the aerospace sector for complaints to be made in one forum or another. I think all parties were expecting the initial determination to be as it was, and said as much. In terms of our work—we will not give up on this—we will fight to secure the legitimate future of this very important part of our aerospace sector, and we will do whatever it takes to do that.

Rachel Reeves (Leeds West) (Lab) 

I join other hon. Members in saying that I hope this dispute is resolved as quickly as possible in the interests of everybody in Northern Ireland who works for Bombardier or in the supply chain. May I just pick up on a couple of points the Secretary of State made in his statement? First, he said that the Prime Minister had discussed the matter twice with President Trump to ask the US Government to do all they could to encourage Boeing to drop its complaint. While we welcome those sentiments, is the dispute not, in the end, with the US Government rather than Boeing, because it is up to the US Government, not Boeing, to impose sanctions? I hope the Prime Minister is also making that clear, and I just wanted some clarification on that point.

Secondly, the Secretary of State said he had

“travelled to Chicago to meet Boeing’s president and chief executive to make absolutely clear the impact”

on our future relationship with the company. Can he say a little more about what he has said to Boeing about that future relationship, which I am sure Boeing values, with our Government?

Greg Clark 

I am grateful for the questions from the Chairman of the Select Committee. In terms of the process, only Boeing can withdraw the complaint. There is an administrative requirement on the part of the Department of Commerce to determine, initially, a complaint, hence the desire—and I think it is highly desirable—that Boeing withdraw this complaint. If it will not—and, so far, it has not—it must be determined in a completely fair and objective way. If it is, it will have no merit, and will be thrown out. Both are therefore important, but it would be in the interests of everyone in the workforce and in the country that the complaint be withdrawn so that this uncertainty can be taken away.

In terms of the points that I put to Dennis Muilenburg, who is the chief executive of Boeing, we were very clear that Boeing has a reputation in this country that was beginning to grow in a positive way through the investment in Sheffield and elsewhere, and to jeopardise that reputation and relationship by doing something that is completely unjustified is something that I do not regard as in the strategic interests of Boeing, and I said that very explicitly in terms.

Mims Davies (Eastleigh) (Con) 

I thank the Secretary of State for the statement and for his balanced comments this afternoon. Our airports and our aerospace sector really matter to many communities represented across this House in terms of local jobs and prosperity, and particularly to Southampton in my constituency, which is No. 1 in Europe and No. 2 in the world. What estimates has my right hon. Friend made of the potential for growth in this sector, despite this mighty challenges?

Greg Clark 

I am glad my hon. Friend asked that question, because, as the whole House knows, the aerospace sector in this country is one of our proudest success stories. It is growing. It is a huge source of exports—over 90% of the product of our aerospace sector is exported. Productivity growth, which is much debated in the House at the moment, is six times the rate in the economy as a whole. A quarter of a million very highly paid jobs are in aerospace, and we are absolutely determined—those colleagues who are familiar with our industrial strategy will see this in advanced manufacturing and in aerospace in particular—to build on those strengths and advance them. That is why the Boeing investment in Sheffield was welcomed, but to see that relationship jeopardised by this complaint is a huge setback and a bitter disappointment.

Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP) 

I welcome the Secretary of State’s condemnation. What has happened is condemned not just in Northern Ireland, but across these islands, including by the Irish Government, as the Secretary of State said. I hope Bombardier will accept my invitation, as Chair of the International Trade Committee, to help combat this. However, on the wider issue—the World Trade Organisation aspects—is it not concerning that disputes outside the EU, which might be a WTO issue, and where the efficient European Court of Justice will not, and cannot be, used in a post-Brexit situation, the UK may see itself picked off by friend and foe all the more frequently in the future? Surely it has to be a concern to the Secretary of State that interactions with more states will be at WTO level by definition if the UK has changed status.

Greg Clark 

I am grateful for the support of the hon. Gentleman. The more we can be absolutely clear that the whole United Kingdom, all parties and both sides of the House share this view that the complaint should be withdrawn and the dispute settled, the better, and that has been emphatically the case here. Again, I make the point that it is clearly in all our interests to have free trade. In a sector where 90% of products are exported, that is obviously the case. But that trade needs to happen in a way that gives us confidence that disputes, which will happen from time to time, are resolved in a fair and objective way. We play by the rules—we always will—and all we want is a system that respects that. We are confident that we will gain from that scrutiny.

Maria Caulfield (Lewes) (Con) 

Will the Government consider stepping in to support the workers in Northern Ireland who are affected by Boeing’s decision in the same way as they stepped in to support the workers during the Tata Steel dispute?

Greg Clark 

We will of course always be behind the workers in every part of the country, but my determination is not only to save those jobs in Northern Ireland but to see the number of jobs increase and the company prosper and grow. As has been said, the C Series is gaining orders—it is an aircraft that fills an important position in the market. I would like to see the Belfast success story continue to grow in the years ahead.

Tom Brake (Carshalton and Wallington) (LD) 

This situation is a tragedy for Northern Ireland and for Bombardier, and particularly for Northern Ireland industry, which, as I know from when I visited last week, is clearly reeling from the impact of Brexit and the concerns about our leaving the customs union. I welcome the steps the Government are taking, but I wish to press the Secretary of State on the punitive tariffs. What does he think such tariffs imply for the prospects of a beneficial future UK-US trade deal? It is true that this is all happening while we are in the EU, but does he think we will be more or less vulnerable to this sort of bullying in future if we are in or out of the EU?

Greg Clark 

The right hon. Gentleman describes this as a tragedy; I am absolutely determined that these jobs will be saved, and I never give up. I am determined that this will not be a tragedy; indeed, as I said to my hon. Friend the Member for Lewes (Maria Caulfield), I am determined that Bombardier will go from strength to strength. On future free trade agreements, I repeat my earlier point: we want free trade agreements that provide for a rigorous dispute resolution mechanism on which we can rely. That is something we would hope to negotiate with the US. The credibility and rigour of that process is essential to our agreeing it.

Huw Merriman (Bexhill and Battle) (Con) 

Many of my constituents, like those of the Secretary of State, work in Gatwick, and I am sure they would send their solidarity to the hon. Member for Belfast East (Gavin Robinson) for the work he is doing to support workers in his constituency. The Secretary of State mentioned that aerospace industry turnover has grown to £30 billion; with respect to Boeing’s position, can more be done to use financial leverage for the future?

Greg Clark 

The aerospace sector is a good example of how taking a strategic approach, bringing together the industry firms with universities and research establishments, makes it attractive for small firms in the supply chain to establish themselves. That has been the basis of the aerospace sector’s success, and it is the approach we take in the industrial strategy. As the Minister of State, Department for Business, Energy and Industrial Strategy, my hon. Friend the Member for Devizes (Claire Perry) said in response to the urgent question earlier, an aerospace sector deal will build on that existing reputation and further advance the industry’s prospects.

Mr Kevan Jones (North Durham) (Lab) 

Bombardier is a UK success story; I congratulate the workforce and management in Belfast. I agree with the Secretary of State that the relationship with Boeing is important, not only from a commercial point of view but from a military view. Does he agree that if Boeing does not relent on this issue, it will put at risk its plans for both technology enhancements and commercial opportunities in the UK?

Greg Clark 

Yes.

Mr Clive Betts (Sheffield South East) (Lab) 

As I understand it, the Secretary of State has said that the preferred solution would be a negotiated settlement with Boeing—an all-out war between the UK and Boeing is clearly in no one’s interest. He rightly referred to the development of Boeing’s first manufacturing output facility in Europe—it is in my constituency and work has started on it—but Boeing has been an essential and original player in the development of advanced manufacturing facilities in Sheffield and Rotherham for the past 10 years. It is crucial that we do everything we can to defend and protect the jobs at Bombardier, while doing nothing to compromise the possibility of further development and jobs from Boeing in Sheffield.

Greg Clark 

The hon. Gentleman makes an important point, and I know from having attended the meetings in Sheffield just how important and welcome that investment has been. Nevertheless, we need to be absolutely clear that although advanced manufacturing institutions such as those in and around Sheffield are being established, we expect, just as the Canadian Government do, that if companies participate in institutions that promote the UK aerospace sector, they must not at the same time recklessly damage another important part of that sector.

Lady Hermon (North Down) (Ind) 

I am enormously grateful to the Secretary of State for his valiant efforts to save the Bombardier jobs in Northern Ireland. In his statement, he emphasised the fact that the British Government are working jointly and collectively with the Canadian Government; nevertheless, I am really curious—as are, I am sure, people in Bombardier and in Northern Ireland—to know how effective he reckons the diplomatic efforts between the British and American Governments have been. This is our closest ally: how effective have the diplomatic efforts been?

Greg Clark 

As I say, we are making a joint effort. It is important that we co-ordinate completely our approach with the Canadian Government, and we have done that. The intensity of our engagement and the actions that we have taken have been completely agreed with the Canadian Government. They obviously have an important relationship with the US, as we do, and we want to make use of that to communicate, as we have done, the importance of Bombardier in Belfast and the importance of applying fairness in this situation, and we will continue to do that. As I have said—my Canadian counterparts are on record as saying exactly the same—this is the first, initial determination. There is some way to go and we, and I personally, will not relent until these jobs are saved and Bombardier can continue its progress in Belfast.

Nigel Dodds (Belfast North) (DUP) 

I thank the Secretary of State and his Cabinet colleagues for all the work they are doing on this issue, and I pay tribute to the workforce, the trade unions and the management of Bombardier in Belfast for the way they have approached this crisis. Does he agree that, not only today but going forward, everybody in this House should be united behind the workforce and the management? They should not seek to use this issue to score petty political points or as a battering ram against the Government. Our focus should be on the workers: that is what they want to see and they want everybody to be united behind them.

Greg Clark 

The right hon. Gentleman speaks eloquently and strongly, and I think that is the mood of the House. Whatever the resolution, which we are determined will secure and sustain Bombardier’s future, the workforce is currently going through a torrid time, with people wondering about their livelihoods. That is why the earlier this situation can be brought to a conclusion by Boeing withdrawing its action, the better. It is important that we in this country show complete solidarity. Our debates about Brexit and the American Administration can continue, but every single Member of this House should recognise that this is an unjustified complaint against an important part of the economy. We should be united in standing up for the Bombardier workforce.

Douglas Chapman (Dunfermline and West Fife) (SNP) 

I express my sympathy with Members from Northern Ireland, who have spoken eloquently on the issues that face them directly and the workforce that they are trying to protect. The Secretary of State in his statement said that, earlier in the year, the Minister for Energy and Industry, the hon. Member for Watford (Richard Harrington) met Boeing about the future relationship with the company. The Secretary of State will be well aware that there are huge and strategic contracts for P-8 maritime patrol aircraft, based at Lossiemouth, which will be important for the UK’s future strategic position and its position in NATO. What specific discussions has the Department had with Boeing about other contracts? How do we square the circle when it comes to what is happening with Bombardier in Northern Ireland and other Boeing contracts that we might have to rely on in future?

Greg Clark 

The hon. Gentleman allows me to re-emphasise the conversation that I had with Boeing, which is that if there is to be a continuing relationship, we need the confidence that Boeing will deal fairly with the United Kingdom. If this is to be a strategic partnership, it needs to be a partnership, and partners do not take the kind of action against important United Kingdom interests that Boeing is seeking to take.

Ian Paisley (North Antrim) (DUP) 

Does the Secretary of State agree that many workers at Bombardier and in the supply chain across County Antrim, and indeed all of Northern Ireland, will find it despicable that some people would come here— indeed, outside this Chamber—and use the peace process, the spectre of the border and the plight of workers as a critique of how the Government are dealing with this issue? We must stand together, united in our approach to this. Will he also give the House the assurance that when it comes to crunch time—and crunch time is coming—the British Government will not be found wanting in how they defend British workers in Northern Ireland?

Greg Clark 

I can give that complete assurance to the hon. Gentleman. I think this does unite everyone in the House and across all parts of Northern Ireland, and indeed the island of Ireland. My right hon. Friend the Secretary of State for Northern Ireland has again been assiduous in ensuring that no stone is unturned in making the case, as have the leader of the hon. Gentleman’s party and others in Northern Ireland.

A point on which I did not answer the hon. Member for North Down (Lady Hermon)—I apologise—was about our contacts with other people in the US system: congressmen, senators and governors. That has been carried out, again in complete co-ordination with the Canadian Government, and it has been significantly helped by the cordial relations that exist between the United States and many people in Ireland.

Christian Matheson (City of Chester) (Lab) 

These events put me in mind of those in the 1970s, when the American aerospace industry ran an aggressive campaign against sales of Concorde, spiking any sales of that plane at the time. Does the Secretary of State agree that the motivation for Boeing is not about a trade dispute, but about wiping out a competitor? This situation on its own would be serious enough as it is, but does he also agree that, taken with the statement earlier about the problems at BAE Systems, this is a defining moment for the British aerospace sector as a whole and that we need strong Government support across the sector?

Greg Clark 

I think these are separate issues. This is a trade dispute—an unjustified complaint that Boeing has brought against Bombardier. It is important that it should be thrown out and the case dismissed. As for the motivation for it, that is for Boeing to describe. It has alleged that this is unfair competition. All I would observe is that it is difficult to point to competition when the product does not compete with an existing Boeing product, so Boeing’s longer-term motivations will need to be justified to the International Trade Commission.