(11 years, 3 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Sir Bob Russell (Colchester) (LD)
1. What assistance his Department provides to UK technology companies with exports; and if he will make a statement.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
My Department helps UK technology exporters through UK Trade & Investment. In 2012-13, UKTI helped more than 3,000 companies with technology-related exports, and it is set to help more than 3,500 in 2013-14.
Sir Bob Russell
I am grateful to the Secretary of State for his answer. He will be aware of my concern that officials in his Department are perhaps not operating a level playing field, in that American companies exporting products from their country are treated more favourably than companies in this country producing exactly the same products. Will he give me some clarification as to what is going on?
Vince Cable
First, I should explain that the Minister for Universities and Science, my right hon. Friend the Member for Havant (Mr Willetts), who might have answered this question, is currently at Chequers for a Cabinet away day. My hon. Friend the Member for Colchester (Sir Bob Russell) is an assiduous defender of his constituents, their companies and their jobs. He has discussed this matter with me, and I have pursued it. It is not the case that Britain is more difficult than the United States when it comes to clearing export licences, but I have none the less established that we should dispense with some procedures relating to quarterly reporting, and we will do so. We will also work with the company in question to try to establish whether an open general licence can operate in this case.
Nick Smith (Blaenau Gwent) (Lab)
A survey by the Federation of Small Businesses has found that only one in five of its members uses UKTI services. What steps will the Secretary of State take to encourage UKTI to work more closely with small businesses?
Vince Cable
The hon. Gentleman is correct to say that our overall export performance would improve considerably if more British companies were exporting. The big contrast with Germany is that roughly twice as many of its small and medium-sized enterprises are involved in exporting. UKTI has been substantially reformed in the past couple of years, and it now has a much more small and medium-sized company focus. It has activities around the country, and we have a lot of evidence that its outreach is substantially improving. I hope that it will reach the companies in the hon. Gentleman’s constituency too.
Mr Iain Wright (Hartlepool) (Lab)
At the last Business, Innovation and Skills questions, the Secretary of State admitted:
“The figures on exports are not great”.—[Official Report, 13 June 2013; Vol. 564, c. 470.]
Since then, the UK trade deficit has widened to the point at which it is now the largest trade gap in the European Union, and the widest it has been since 1989. Following on from the question from my hon. Friend the Member for Blaenau Gwent (Nick Smith), will the Secretary of State tell the House whether he is happier with export performance this month? What changes to policy or priorities will he now make to facilitate an export-led recovery, or does he not think that changes are necessary?
Vince Cable
Monthly variations are not the issue, but there is an underlying problem. British exporters are currently doing extremely well in the big emerging markets. We have rapid export growth to countries such as Russia, China, India and Brazil, for example, but exports to the eurozone are weak, for obvious reasons. We accept that there are underlying weaknesses. We have not had the recovery of export volume growth that we would expect following a substantial devaluation. Much of this relates to the way in which supply chains were hollowed out in the long period of manufacturing decline, but we are trying to rebuild them through the industrial strategy.
Mr Marcus Jones (Nuneaton) (Con)
2. What recent support his Department has given to the automotive industry.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The automotive industrial strategy was launched on Friday by the Department in association with the Automotive Council. In partnership with industry, we will invest around £1 billion over 10 years in a new advanced propulsion centre.
Mr Jones
I met a number of business people from the motor manufacturing supply chain recently, and the main theme of the meeting was skills, and what we could do to help to increase the skills in the sector, in which there is now a real resurgence. Will my right hon. Friend explain a little more about his strategy? Will he tell us what part skills will play in it, and what more we can do to help the supply chain?
Vince Cable
My hon. Friend is absolutely right. The Automotive Council has identified skills shortages as a key problem. As a result of the adoption of the strategy document, the industry has committed itself to a significant growth in the number of apprenticeships. We have already seen a considerable increase, but he is right to suggest that this is an issue not simply for the big original equipment manufacturers but for the supply chains, and a lot more needs to be done to make the car industry seriously competitive through skills.
Mark Pawsey (Rugby) (Con)
Will the Secretary of State comment on the success of the sector and the impact on the supply chain? On Friday, I had the benefit of meeting a small business in my constituency, Automotive Insulations, which supplies products to, among others, Jaguar Land Rover and Bentley. It is looking to move to a new 60,000 square foot building, to employ a further 60 people and to generate £1 million- worth of investment over the next few years.
Vince Cable
This is indeed a very successful industry. Over the last couple of years, we have had commitments to something in the order of £6 billion-worth of new investment. One factor has undoubtedly been the confidence that the Government are fully supportive of the industry and are working with it through the Automotive Council. The confidence factor is indeed spreading into the supply chain. There are very good economic reasons why a significant amount of the supply chain that has been offshored should now be onshored—and that process is beginning. We want to do everything we can to encourage it.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
3. What recent assessment he has made of the performance of the regional growth fund.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
The regional growth fund is a success. Last week, I published our first annual monitoring report, which shows that job creation in rounds 1 and 2 is on track. With our accelerated timetable, we have now completed the contracting process with all but a handful of beneficiaries in rounds 1, 2 and 3. Last week, I also announced that in round 4, 102 selected bidders will have access to over £500 million. Overall, this Government have committed over £2.6 billion to areas that most need private sector-led growth and employment.
Eric Ollerenshaw
We have now had four rounds of the regional growth fund, and the north-west has done very well out of it, for which I am grateful to the Minister. Will he confirm that the Government will continue to use this as a mechanism to narrow that north-south divide, which of course grew so much wider under the previous Government?
Michael Fallon
I thank my hon. Friend for his important report on the north, and I congratulate him on his appointment as a small business ambassador. The spending review last month confirmed that there will be further rounds of the regional growth fund in 2015-16 and in 2016-17, totalling over £300 million in each case.
Alison McGovern (Wirral South) (Lab)
If the regional growth fund is to be at all successful, it must not only create jobs but improve the skills base in our country. What checks has the Minister put in place to make sure that this actually happens?
Michael Fallon
The regional growth fund makes grants not simply to projects and individual companies, but to programmes organised by local enterprise partnerships and other private sector organisations, many of which focus on improving the level of skills in these particular areas.
Mr Philip Hollobone (Kettering) (Con)
Would my right hon. Friend be kind enough to accept an invitation to visit the site of the proposed junction 10A on the A14 near Kettering, which has attracted the interest of the Department of Energy and Climate Change, the Department for Transport and the Department for Communities and Local Government? An investment of £30 million in the regional growth fund could trigger private sector investment of more than £1 billion.
Michael Fallon
Happily, I have not fully finalised my summer plans, so I shall add to them this visit to a motorway junction. [Laughter.] My hon. Friend makes a serious point: there is clearly a bottleneck that needs to be removed. I will see if I can accept my hon. Friend’s invitation.
Mark Menzies (Fylde) (Con)
4. What steps he is taking to encourage traineeships.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
Following the spending review, we have extended the traineeships programme to young people up to the age of 24. Yesterday, we published the framework for delivery, and the first traineeships will start next month. We have already had strong interest expressed from employers such as Mercedes and Brompton Bicycle Ltd. We very much look forward to taking the programme forward.
Mark Menzies
Skills delivery is at its best when it is led by employers and by businesses. Can my hon. Friend assure me that that will remain the case throughout?
Matthew Hancock
Absolutely. It is vital to make sure that the skills system is focused on the needs of employers so that people who go through that system go on to get an apprenticeship and a good job. That is exactly what the traineeship scheme is designed to achieve.
Sheila Gilmore (Edinburgh East) (Lab)
The Government suggested that trainees might be eligible for jobseeker’s allowance while they are undertaking their traineeships. Has the Minister sorted out the details with the Department for Work and Pensions because, at the moment, someone studying for more than 15 hours a week would not be eligible for the benefit?
Matthew Hancock
The hon. Lady makes an important point because the link to the benefits system, particularly for those aged over 18 who are in traineeships, is vital. In the framework for delivery set out yesterday, she will have seen the details, ensuring that eligibility for JSA and eligibility to get a traineeship are aligned. Of course, with the introduction of universal credit and changes in the jobcentres, we are making it easier for people to get training while also looking for work. Work experience is a vital part of that and a vital part of traineeships.
Dan Rogerson (North Cornwall) (LD)
Employers are being encouraged to provide travel support for young trainees. Will the Minister look closely at the issue of young people living in remote rural areas, and ensure that they, as well as those who happen to live near their employers, are given fair access to traineeships?
Matthew Hancock
Not only will I look at that issue closely but I have already done so, because it is a vital aspect of traineeships. Traineeships are there because far too many people leave school or college without the skills that they need to secure a job or apprenticeship. Of course we are reforming the school system to sort out that problem, but we must also ensure that everyone has an opportunity to acquire the character traits and skills that they need in order to get a job, and transport is a vital part of the practicalities of making that happen.
Graeme Morrice (Livingston) (Lab)
5. What steps he is taking to protect the universal service obligation under plans for the privatisation of Royal Mail.
Chris Williamson (Derby North) (Lab)
12. What steps he is taking to protect the universal service obligation under plans for the privatisation of Royal Mail.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
The Government’s overarching objective is to secure the future of the universal postal service. The minimum requirements of the universal service are enshrined in primary legislation, which means that the six-days-a-week, one-price-goes-anywhere service to every address in the United Kingdom can only be amended by Parliament. That protection will continue to apply following any sale of shares in Royal Mail.
Graeme Morrice
The Government’s Royal Mail privatisation has been opposed by a broad coalition, including employees of Royal Mail, the Countryside Alliance, the National Federation of SubPostmasters, and even the Conservative think-tank the Bow Group. Moreover, the results of a recent poll showed that the vast majority of the British public oppose it as well. Is it not time that the Secretary of State abandoned his plans for the fire sale of Royal Mail in the face of that overwhelming opposition?
Michael Fallon
Last week’s announcement confirmed our plans to allow this very successful British business access to private capital for the first time, and to deliver what Parliament agreed more than two years ago, namely that 10% of the company should be in the hands of the work force.
Chris Williamson
Despite those assurances, the public have seen that previous ideologically driven and badly executed privatisations have led to substandard services and price increases. The fact is that the polls show that the vast majority of the British public oppose this privatisation. Why is the Minister riding roughshod over the wishes of the British people?
Michael Fallon
Parliament has already decided that Royal Mail should have access to private capital. We are implementing that decision of Parliament, and the decision to put 10% of the shares in the hands of the employees. The level of service is protected under the Postal Services Act 2011, and any change in ownership does not affect control over the price of stamps or the future of the six-days-a-week service.
Andrew Bridgen (North West Leicestershire) (Con)
It is clear that there are none so deaf as those who do not want to hear. My right hon. Friend has stated on many occasions—but perhaps he will reiterate it for the benefit of the House—that, regardless of ownership, Royal Mail will remain the designated universal service provider.
Michael Fallon
Yes, and my hon. Friend need not take my word for that. It is in the statute. It is a duty of the regulator, Ofcom, to ensure that the service is protected, and that can only be changed by a vote in Parliament.
Andrew George (St Ives) (LD)
I am grateful for my right hon. Friend’s reassurances, but my constituents in the remoter reaches of west Cornwall, and indeed on the Isles of Scilly, want to be reassured about the delivery of not only first and second-class letters and postcards, but packages. They fear that the cost of those services will become prohibitive. What can be done to protect my constituents from exorbitant charges?
Michael Fallon
The best protection that I can offer my hon. Friend is to ensure that Royal Mail’s finances are put on a sustainable, long-term footing, and that it has access to the capital that it needs in order to innovate, compete and respond to changing technologies. Its parcels business is already growing rapidly, but it is in a competitive marketplace, and we need to free it so that it can operate like any other commercial company.
Mr Mike Weir (Angus) (SNP)
As the Minister will appreciate, a universal service depends not only on deliveries but on uplift points, and there are serious concerns about the post office network and in particular whether post office locals will all be able to provide the parcel service. If that comes to pass, what powers do Ofcom or the Minister have to intervene to make sure that service is available?
Michael Fallon
I am proud to be part of a Government who have put an end to the post office closure programme we saw in the last few years. That has been brought to an end, and the post office network is being put on to a better footing, but the regulator Ofcom has all the powers it needs to ensure that the universal, six-days-a-week, everywhere-in-the-UK service is fully protected in the future, irrespective of any change in ownership.
Richard Graham (Gloucester) (Con)
6. What progress he has made on a sale of shares in Royal Mail.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
On 10 July the Secretary of State laid a report in Parliament and made an oral statement setting out our decision to sell Royal Mail shares through an initial public offering in this financial year. Shares will be available to both institutional and retail investors, and 10% of the shares will be available free of charge to eligible employees so that they have a real stake in the business.
Richard Graham
As my right hon. Friend the Minister has already heard this morning—and there are postcard campaigns to confirm it—a large amount of misleading information is being given to my constituents in Gloucester and elsewhere in the country: claims that the Royal Mail and the Post Office are the same entity, and that the Queen’s head will go, the universal service disappear and prices rise. Does my right hon. Friend agree that those of us who want to see Royal Mail succeed deplore this campaign of misleading information and want the innovation from new capital investing in new equipment, such as to track parcels that will enable Royal Mail to succeed in the way all of us in this House want?
Michael Fallon
Given that Parliament has already decided that this is the right future for Royal Mail, I hope the Opposition will now join in dismissing some of the unnecessary scaremongering, and make clear what would happen if there was ever the horror of a future Labour Government: do they intend to renationalise the Royal Mail?
Mr Dennis Skinner (Bolsover) (Lab)
It is not misleading to say that when the share-owning democracy of Mrs Thatcher was launched in the ’80s and ’90s and all those public utilities were sold off and many of the employees received shares—just like the possibility of that on this occasion—the net result is that those public utilities, almost without exception, are now owned by as many as 30 countries. What guarantee has the Minister got that this will not happen to Royal Mail as well?
Michael Fallon
In a public offering it is not possible to prevent others from subscribing for the shares, but we hope that Royal Mail, given now the freedom— later this year, we hope—to access private capital, will be put on to a longer-term sustainable footing and will be able to develop its business not just here in Britain, but overseas.
Mr Jim Cunningham (Coventry South) (Lab)
I remember what happened when Rolls-Royce was privatised and the work force were given shares—I did not accept any, by the way. Within about two years those shares will be sold. This is only a sop to the work force.
Michael Fallon
I have yet to hear whether the Opposition want to renationalise any of these businesses—Rolls-Royce or British Telecom or British Airways. I think they at least owe it to the 130,000 employees of Royal Mail to make clear whether they would renationalise the business.
Mary Macleod (Brentford and Isleworth) (Con)
7. What recent progress he has made on employment law reform.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
We are making good progress on our review of employment law. On Friday the Government published an update including a call for evidence on whistleblowing and outlining that the new employment tribunal rules of procedure will come into effect on 29 July. We are also making changes through the Children and Families Bill to extend the right to request flexible working to everyone and introduce a radical new system of shared parental leave.
Mary Macleod
In the last few weeks two Opposition Front-Bench Members have been to my constituency to talk to businesses, and I am so glad they are taking their lead from the Prime Minister, who was there in 2011 to talk to small businesses about simplifying employment legislation. Will the Minister build on the great work this Government have been doing in simplifying the process of doing business for entrepreneurs by reducing the amount of red tape and admin?
Jo Swinson
I commend my hon. Friend on her work championing small business in her constituency and beyond. She is absolutely right that we need to drive through the implementation of the reforms we have already outlined. She will be pleased to note that the CBI-Harvey Nash employment trends survey shows a significant improvement in employer perceptions of the burden of employment law. That is good for British business and good for job creation, too.
Julie Hilling (Bolton West) (Lab)
According to the OECD, the UK already has one of the most lightly regulated labour markets among developed countries; only the USA and Canada have lighter regulation. Why on earth are we trying to water down employment rights even further?
Jo Swinson
The first thing I would say to the hon. Lady is that our lightly regulated employment market is an asset to the British economy. It helps the economy to grow and it is one of the reasons why, despite the very challenging economic circumstances we have seen and despite the fact that unemployment is still too high, we have seen employment rates bear up rather better than in some other countries. It is important that we simplify employment law—I would have hoped that there would be cross-party agreement on that—but of course it is also important for a functioning economy that we ensure that basic protections remain in place for workers.
Mr Speaker
Order. In conformity with long-standing convention, the hon. Gentleman cannot come in a second time on substantive questions. His enthusiasm and appetite are appreciated and he can try his luck during topical questions.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
8. In how many of the past 24 months net lending by banks to British small businesses has (a) risen and (b) fallen.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Bank of England now publishes monthly estimates for lending by UK banks to small and medium-sized companies. Those figures show for the 24 months up to May 2013 an increase in net lending in two months and a decrease in the others. The Government are working to increase the lending available to SMEs through the new business bank and, with the Bank of England, through the funding for lending scheme.
Tom Blenkinsop
Does the Secretary of State agree with the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), that there is no evidence that the funding for lending scheme is helping small business?
Vince Cable
The funding for lending scheme primarily benefits mortgage lending, but changes were made in April to make it accessible to asset-based finance, for example. Several of the new challenger banks are now taking advantage of it, and it is beginning to make an impact on SME lending.
Mr David Nuttall (Bury North) (Con)
I visited the bank recently and was told that all people who come to it are given a fair hearing and that small business men are getting the loans they need. Is it not the case that what got the banks into this mess was irresponsible and over-optimistic lending and that what we need now is prudent and responsible lending to small businesses?
Vince Cable
Of course, we need prudent, responsible lending, but I subscribe to the view, which I hear frequently around the country, that many SMEs find it difficult to access finance from the banks and that we cannot just let the situation remain as it is. That is why we are in the process of establishing the business bank, which is currently marketing £300 million. There is substantial interest in investing in that project.
Jim Shannon (Strangford) (DUP)
In the last period of time, it has been quite understandable that there have been problems with getting loans from banks, but another problem has been with small and medium-sized businesses being paid in time. It has been suggested that some £30 billion is outstanding in payments from big business to small business. What steps are being taken by the Secretary of State to help small business get moneys paid on time by big business?
Vince Cable
My colleague the Minister of State has launched an initiative to ensure rapid settlement, particularly down the supply chain. We name the big companies that do not settle their debts properly in that way. We also have a programme of supply chain financing, the advanced manufacturing supply chain initiative, which will help the settlements to which the hon. Gentleman refers.
Toby Perkins (Chesterfield) (Lab)
Two years ago, there was a crisis in small business lending. We have just heard from the Secretary of State that in 22 of those 24 months, it has got worse. The Institute of Chartered Accountants in England and Wales is the latest to acknowledge that the Government response to the SME funding crisis is totally inadequate, using a British investment bank that funnels existing inadequate schemes through our uncompetitive banking system. Is it not time that the Secretary of State admitted that the Government will never deliver the scale of change needed and threw his weight behind Labour’s plan for a new generation of local banks with local decision making, based on the key features of the German Sparkasse model? Let us get the real change that British small businesses desperately need.
Vince Cable
I am a great fan of the German Sparkasse system, and it is a pity that we never had it in Britain. If the hon. Gentleman looks back on the record of the previous Labour Government, he will recall that in 2000, they had a report prepared for them on the inadequacies of British business lending and the enormous problems created by the fact that four banks accounted for all the business. The Government of the day, despite urging from myself and others, did absolutely nothing about the problem. As a result, we went into the banking crisis with massively over-concentrated ownership and damaged banks that are no longer able to perform properly. We are seeking reform, supporting new challenger banks though the business bank, and dealing with a problem that should have been dealt with a decade ago.
Mr Laurence Robertson (Tewkesbury) (Con)
9. What recent assessment he has made of the take-up of apprenticeships.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
There were 520,000 apprenticeship starts in the academic year 2011-12. That is almost double the number in 2010. Our priority is to make apprenticeships both widely available and the very best quality, rooting out poor provision and enforcing a minimum duration. As we speak, 750,000 people are on an apprenticeship, which is a record: it is more than at any time in our history.
Mr Robertson
I am grateful to the Minister for that response. As he knows, I have a lot of engineering companies in my constituency, the largest being GE Aviation, which has more than 100 apprentices. Nevertheless, those companies find it difficult to recruit young people. Is the Minister satisfied that schools have adequate incentives to promote the concept of apprenticeship schemes, and will he consider awarding them recognition status marks for each apprenticeship that is taken up?
Matthew Hancock
We introduced a new duty on schools to provide independent and impartial advice in September, and Ofsted is looking at, and will report on, how well that is being implemented. I pay tribute to my hon. Friend, who brings together companies in his constituency to promote skills and working together, so that even though companies compete locally and nationally with their products, they come together on the skills issue to make sure that they give new skills to young people, rather than poaching from each other.
Kerry McCarthy (Bristol East) (Lab)
The Minister’s Department has found that one in five apprentices currently receives no training. There has also been a reported rise in employers’ non-compliance with the national minimum wage for apprentices. Does he agree that for apprenticeships to be of value, apprentices need decent training, and need to be paid a decent wage? What is his Department doing to ensure that that happens?
Mr Robin Walker (Worcester) (Con)
Will the Minister join me in welcoming the initiative of Worcestershire housing associations, which created an 18-to-30 apprenticeships and job fair, bringing together local employers and the National Apprenticeship Service? Does he agree that the huge increase in apprenticeship take-up is one of the reasons why youth unemployment in Worcester is down 30% from its peak under Labour?
Matthew Hancock
It is very good news that youth unemployment is falling—there was a 20,000 fall announced yesterday—but it is still too high, and there is still much more to do. I pay tribute to my hon. Friend’s work, and the work of others across the House, to make sure that apprenticeships and traineeships are available in future to help with that.
Mr Gordon Marsden (Blackpool South) (Lab)
Does not the Minister’s rhetoric on apprenticeships hit the buffers in reality? No amount of his crowing or tweeting alters the latest facts: there is a 13% drop in 16 to 18-year-olds starting apprenticeships, and a 6% drop across the board. He has failed to take up our plans to create thousands of new apprenticeships via Government procurement, and he has also failed to get a deal with Department for Work and Pensions Ministers. The Association of Colleges said yesterday that 14 to 19-year-olds taking up his new traineeships, so that they can move on to apprenticeships, are not likely to have any money to live on. When will he stop dithering and start delivering?
Matthew Hancock
We are delivering the new traineeships from next month. Given the need, after years of inaction, to bring together support for work experience and skills for those approaching the job market, I would have thought that the hon. Gentleman would welcome that. I would have thought that the Opposition would have supported the rise in the number of apprenticeships to record levels since the election.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
10. What the outcomes were of his Department’s summit meeting with payday lenders on 1 July 2013; and if he will make a statement.
Ann McKechin (Glasgow North) (Lab)
11. What the outcomes were of his Department’s summit meeting with payday lenders on 1 July 2013; and if he will make a statement.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
The Government’s payday lending summit provided an excellent opportunity to deliver a strong message to the payday industry to get its house in order. It focused particularly on the Financial Conduct Authority’s priorities for reducing consumer harm when it becomes the regulator in April, ahead of its consultation on its credit rulebook this September.
Jonathan Reynolds
I welcome the Minister’s answer and the summit, but let us be honest—the Government have consistently ducked clamping down on predatory pricing and extortionate interest charges, despite the amendment secured last year in the House of Lords that gives the regulators the ability to control costs and loan duration. Notwithstanding the spin of holding a payday lenders summit, when is the Minister going to promise to act so that families across the country can be protected from these predatory activities?
Jo Swinson
Significant action is being taken. The Office of Fair Trading has referred the industry to the Competition Commission because of widespread non-compliance. It is taking its own enforcement action, which has already resulted in a third of the lenders that have responded so far—the rest are due to do so this month—leaving the market altogether as a result of the tough action being taken. We have given the FCA stronger powers to enable it to ban products, impose unlimited fines and order money to be paid back to consumers who have been ripped off. That is a pretty comprehensive package of action to clamp down on this unscrupulous and irresponsible lending behaviour.
Ann McKechin
If other jurisdictions, such as Florida, already have effective real-time recording systems that stop borrowers accumulating unpayable debts, why cannot we have such a system here, now?
Jo Swinson
Such systems rely on the industry to be able to update them. The industry is looking at and working on that. We have credit reference agencies, which work well in many of the credit markets, but the real-time issue that the hon. Lady raises is a genuine one and more difficult to set up than the systems in place. We are encouraging the industry to address that, because it will help to improve affordability assessments.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Is this issue not also about the level of household debt—households running into debt and not knowing how to manage a household budget? Much more information should be available to take people away from payday lenders.
Jo Swinson
My hon. Friend makes an extremely important point. We are introducing financial education in schools, which is an important development to make sure that people have the tools to make decisions, but it is also important to note that half of the people who take out a payday loan are already showing signs of financial stress. So although we need to tackle the problems of payday lending, we also need to tackle the problems that get people there in the first place, and make sure that they have good access to the free and confidential debt advice available. I encourage anyone in financial difficulty to seek help sooner rather than later.
Ian Murray (Edinburgh South) (Lab)
A recent report by the Office of Fair Trading accused payday lenders of causing “misery and hardship”. The Minister herself said that
“the scale of unscrupulous behaviour . . . and the impact on consumers is deeply concerning”
and that the Government
“wants to see tough action”.
Despite an amendment in the other place last year, to which my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) referred, to give the regulators the ability to curb costs, the Minister is still failing to act. The public will note with interest that a major donor to the Conservative party, Adrian Beecroft, has a significant interest in this industry. Is that what is holding the hon. Lady back from stronger regulation? She is in severe danger of becoming known as the Minister for APR.
Jo Swinson
The short answer to the hon. Gentleman’s question is no, because the Government are taking significant action. I think he misunderstands; the OFT report shows the biggest set of problems in the industry. I know that much of the focus ends up on the APR headlines, but the surveys and the consumer organisations working with the issue day in, day out show the problems around issues such as affordability assessments, continuous payment authority abuse and abuse of the way in which roll-overs are used. The FCA has said specifically that it is looking to plug any gaps in regulation in all those areas when it takes on the role of regulator next April. We do not have to wait very long to see its draft rule book, which will be published this September.
Neil Carmichael (Stroud) (Con)
13. What recent assessment he has made of the value of supply chains to the UK economy.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
In the UK and across the world, supply chains are diverse, complex and global. Their value is huge and their importance is vital. Support for supply chains is studded through our policy and underpinned by the industrial strategies.
Neil Carmichael
In contrast to the Labour Government, this Government are clearly doing something to build capacity in our supply chains. I welcome that and I see evidence of it in my constituency. May I stress the importance of making sure that supply chains are developed in our regions to ensure that we have a truly balanced economy, not just between manufacturing and services, but across our regions?
Matthew Hancock
Absolutely. I pay tribute to my hon. Friend’s work on promoting the importance of supply chains, not least because of the high proportion of manufacturing in his constituency. We will make sure that they stay at front and centre of what we do in the Department.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
One of the biggest infrastructure projects in this country over the next 20 years will be the construction of High Speed 2. That, through the supply chain, has potential benefits for businesses and workers not just along the route of HS2, but throughout the entire UK. What steps is the Department taking to engage in discussion with the Department for Transport to ensure that those supply chain benefits are indeed available throughout the entire UK?
Matthew Hancock
There are continual discussions between the Department and the Department for Transport about making sure that great benefits accrue not only when we build important infrastructure, but during its construction. We must ensure that there is good value for money, but value for money should be considered in the broadest possible sense.
Martin Vickers (Cleethorpes) (Con)
14. What recent assessment he has made of the prospects for economic growth in the Humber sub-region.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
We are working hard to support the Humber local enterprise partnership to deliver the priorities for growth set out in their plan for the Humber. In round 4 of the regional growth fund £21.3 million was allocated to two successful bids from the Humber, one of them from the local authority in my hon. Friend’s constituency.
Martin Vickers
The local economy is experiencing something of a renaissance. Only yesterday, I and colleagues from neighbouring constituencies met a representative from Scunthorpe-based Wren Kitchens, which is looking to take over the former Kimberley Clark factory at Barton-upon-Humber, which closed earlier this year with the loss of 500 jobs. The hope is that, within two or three years, those jobs will be replaced one-for-one. It is a major site and there were fears that it would turn into a rusting hulk. Will my right hon. Friend, or one of his ministerial team, commit to visiting the factory when it opens in the near future?
Vince Cable
I praise my hon. Friend for the work that he has done. He has already taken me to his constituency and shown me the plans for the area. The Kimberley Clark closure was a major blow and it is good to hear that it is being replaced. Last week I was with the Humber local enterprise partnership when it met in Hull. We discussed some of these plans, particularly the enormous potential of the energy sector in the North sea. I am certainly very happy to visit that factory in due course.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
15. What steps he is taking to promote sustainable economic development in the North East.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I welcome the most recent reduction in unemployment in the north-east. Across the region we have offered support of £330 million to 101 projects and programmes through the regional growth fund with the potential to safeguard or create 66,000 jobs. We are also working with the North Eastern local enterprise partnership to agree a local growth deal based on Lord Adonis’s recent report.
Chi Onwurah
The north-east has real strengths in sustainable process energy and transport industries, but lacks the funds and the skills to support them. Since the demise of the regional development authority, there has not been an effective champion to bring this about. The regional growth fund is not getting the money through quickly enough. What is he going to do to change that, so that the skills and the finances are available to industry in the north-east?
Michael Fallon
If I may say so, the hon. Lady is taking a rather pessimistic view of her region. There is plenty of money flowing from the regional growth fund to projects, two of which I have visited on the Tyne. There is plenty more support to come through the structural fund allocation, which has also gone to the local enterprise partnership, and through the invitation that has gone to the region to bid for the single local growth fund from 2015-16.
Hugh Bayley (York Central) (Lab)
16. What outcomes his Department is seeking through its science and society budget.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
Our science and society programme successfully engages people of all ages and backgrounds with science. It includes 25,000 science, technology, engineering and mathematics ambassadors providing positive role models for students to increase and widen participation in science; the biggest ever Big Bang Fair in March this year; and public dialogue supported through Sciencewise to inform public policy.
Hugh Bayley
The Science Museum Group, which includes the National Railway museum in York, has had its budget cut by a quarter over the last two spending reviews. It does immensely important work in encouraging young people to take an interest in science, leading to careers in science. Will the Minister meet people from the museum to consider how the science and society budget could be used to fund some of their outreach work, especially with young people?
Jo Swinson
As the hon. Gentleman knows, the science budget has been protected because we absolutely recognise the importance of science and research to the future economy and in encouraging people to take on science. The lead sponsor Department for the Science museum and museums generally is the Department for Culture, Media and Sport, and colleagues in DCMS will have been engaging significantly with the Science museum and others. I am sure that the relevant Minister will be very happy to meet—
Jo Swinson
I will happily do so. I am answering on behalf of a colleague, but I will happily have that meeting.
Mr Speaker
Order. We are ahead of ourselves, notwithstanding the sedentary chuntering. All relevant personnel are present and correct so we will proceed with topical questions.
Hazel Blears (Salford and Eccles) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
My Department plays a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.
Hazel Blears
The Secretary of State will be aware that legislation is in place, supported by the Government, to ensure that when commissioning public services we seek social value as part of a wider value-for-money framework. That means local jobs, local supply chains, apprenticeships and local labour. How will the Secretary of State ensure that in his area, through the regional growth fund and massive investment in infrastructure, we get the same kind of social value to support our regional and local economies and get young people back to work?
Vince Cable
I recognise the considerable value of the Public Services (Social Value) Act 2012, and I acknowledge the right hon. Lady’s role in promoting its take-up. The Department has a unit that is currently promoting social enterprise, which lies at the core of this issue. Some 68,000 such enterprises now employ 1 million people, and I was at the launch of that unit last year. For our overall policy, we try through the industrial strategy to ensure that procurement is strategic and takes into account long-term training and innovation requirements.
Guto Bebb (Aberconwy) (Con)
T2. My right hon. Friend is well aware of the scandal of mis-selling interest rate derivatives to small businesses, but despite the establishment of the Financial Conduct Authority redress scheme in January, not a penny has yet been paid out to small businesses. On Tuesday, one small business was offered a redress package for a technical fault of £1.3 million, but the offer was made on condition that no payments would be made by the bank in question unless the business also settled the consequential loss claim. Will my right hon. Friend take up that issue with the FCA and ensure that technical redress is paid prior to any agreement on consequential losses?
Vince Cable
My hon. Friend is right that this is a major scandal and it is being pursued through negotiation with the banks. As he rightly says, there are major anxieties about the terms of the settlement and some of the products currently excluded from it. I will see the head of the FCA next week to pursue the matter in some detail on behalf of my hon. Friend and his colleagues, and I acknowledge the enormous work he has done in the background to bring these problems to proper attention.
Mr Chuka Umunna (Streatham) (Lab)
Businesses, particularly on the high street, have found the trading environment very tough while the economy has flatlined for three years under this Government. Does the Business Secretary agree that increasing parking enforcement charges at this time would be nonsensical and drive customers away from businesses in our town centres at the very time they need that custom?
Vince Cable
Of course there has been a major problem in many of our high streets as a result of the recession, and particularly as a result of the development of internet commerce, which has changed the pattern of shopping. As the hon. Gentleman knows, parking charges are primarily an issue for local authorities, but the Department has developed a strategy with the retail sector to help it develop areas of growth, including export business.
Mr Umunna
The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), said this week that the Government are consulting on proposals to increase the maximum parking enforcement charges that local authorities may levy outside London—a competence for which they are responsible. Apparently, the Secretary of State for Communities and Local Government thinks that would be a bad idea, but he is in no position to lecture given that Conservative councils impose higher parking charges than others. We are clear that massively hiking parking enforcement charges at this time for businesses and their customers amounts to a stealth tax on our high streets. Why does the Business Secretary not stand up for our businesses and kill off that proposal?
Vince Cable
I already have responsibility for one of the biggest Departments in Government, and taking over responsibility for parking charges from my colleagues and local councils would be an exercise in departmental imperialism that I will not embark on. I note the hon. Gentleman’s question and I am happy to talk to my colleagues in government about it, but he is missing the bigger picture of how we help the retail sector adapt to the massive technological changes that are taking place, and the perverse fiscal incentives that currently operate.
Mark Menzies (Fylde) (Con)
T3. What efforts are the Minister and his Department taking to support small and medium-sized businesses in Lancashire in the export market?
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
My hon. Friend might know that more resource has been made available to UK Export Finance. It is important now to ensure that more and more SMEs understand that export finance assistance is not just something for the large companies, such as Rolls-Royce and BAE, but available to SMEs up and down the country. We will market our efforts there more intensively.
Dr Alan Whitehead (Southampton, Test) (Lab)
T7. Does the Business Secretary agree that the target, set by the Treasury on a moving basis, to be met before the UK Green Investment Bank can actually become a green investment bank—that public sector debt must be falling as a percentage of GDP—presents serious challenges for people planning green and low-carbon investments for the future? If so, will he take the opportunity of the recess to seek an urgent meeting with the Chancellor to see whether he can change that formula, so that the UK Green Investment Bank can actually become a green investment bank in the not-to-distant future?
Vince Cable
I think the hon. Gentleman might have missed some recent announcements. The UK Green Investment Bank is now succeeding and expanding rapidly, having already committed £700 million or more. In the spending reviews for 2015-16 and 2017-18, the Treasury has committed to providing an extra £800 million of funding and to beginning borrowing, initially through the national loans fund, in order to meet the objective I think he wishes to achieve.
Christopher Pincher (Tamworth) (Con)
T4. Boomerang Plastics is an innovative recycling start-up based in Tamworth and looking to expand, but one of its challenges is finding the right space to expand. What are Ministers doing with the Department for Communities and Local Government to encourage developers to construct the right sorts of business parks and to encourage local authorities to offer the right sorts of planning rights to allow firms such as Boomerang to find the space to grow and expand?
Michael Fallon
My hon. Friend raises an important point. It will be for his local enterprise partnership, as part of its local growth strategy, to ensure sufficient space for the development of business parks, so that companies can grow successfully without constantly having to move from their premises and can expand next door.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
There is considerable concern among the further education college sector about the potential low take-up of the post-24 advanced learning loans and the impact that that will have on people’s finances. What assessment has the Minister made of this issue, and what help will he give to those colleges, if indeed there is such a low take-up?
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
Since we launched the loans in April, there has been a robust take-up, and we are working hard to ensure not only that colleges are aware of the opportunities presented by loans to help over-24s to learn at higher levels, but that people are aware of the opportunities available to improve their skills.
Greg Mulholland (Leeds North West) (LD)
It has now been confirmed that the chief executive of the British Beer and Pub Association, the lobbyist for the large pub companies, made two false statements to the Business, Innovation and Skills Committee and said on television that the Government had figures for pub closures, which they do not. The opponents of much needed reform are conducting a campaign of misinformation. What assurances can I get from the Minister that the claims being made, which are simply not backed up by evidence, will not be taken into consideration when the decision is made?
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
My hon. Friend, who has been a strong campaigner on this issue, will know that the Government have conducted a consultation on the proposed statutory adjudicator and code for pubs, which has had more than 1,100 written responses, while we have had more than 7,000 responses to the online survey. Clearly, ploughing through and analysing all that information is taking a little time. He raises concerns about the issues with the Select Committee, but obviously Select Committees can ask further questions of witnesses, if they have concerns. I am happy to meet him, however, to discuss his concerns further.
Mr Bob Ainsworth (Coventry North East) (Lab)
Does the Secretary of State have any plans to look at the Insolvency Act 1986? Hedge funds appear to have the ability to acquire companies, to empty them of their assets, to appoint administrators of their choosing and to proceed without fear of being pursued vigorously. That certainly seems to be what is happening at Coventry City football club. Will he look at the situation and the framework of the law?
Vince Cable
Yes, we are doing just that. I spoke on Monday about that question in the general context of trusted business. We are, indeed, looking at the insolvency provisions. We are looking at insolvency practitioners’ fees, at some of the potential conflicts of interest that arise in that industry and at the regulatory framework.
Fiona Bruce (Congleton) (Con)
T6. Small businesses in Congleton and across the country struggle with the burden of regulations from Brussels. Will my right hon. Friend update the House on the work of the business-led taskforce on EU regulation, which he is chairing?
Michael Fallon
Yes, the Prime Minister and I met the taskforce last week, and I will be meeting it again tomorrow. We have issued a call for evidence, which gives companies large and small the opportunity to provide us with concrete examples of European rules and regulations, including new proposals, that pose unnecessary barriers to the growth of British businesses and need reform. I encourage all hon. Members to ask businesses in their constituencies to submit examples and evidence to the taskforce.
Kate Green (Stretford and Urmston) (Lab)
Ministers are considering responses to the consultation on the recasting of the waste electrical and electronic equipment directive. There are real concerns that the interests of large producers will prevail, so would Ministers be prepared to meet me and representatives of the independent recycling organisations, which have deep concerns, to discuss their concerns?
Michael Fallon
Yes, I would be happy to do that. I know that the consultation has instigated a number of concerns across the sector. I have spoken at one of the conferences involved, and I would be happy to meet the hon. Lady.
Julian Smith (Skipton and Ripon) (Con)
HSBC has shut its branch in Masham and is now doing the same in Pateley Bridge, deep in the Yorkshire dales, in one of the most rural counties in England. In discussions with senior bank executives, will my right hon. Friend make the case for rural areas, lest we get into a banking-free, financial services-free zone in our most remote locations?
Vince Cable
I note what my hon. Friend has said. Of course, it is worth recalling that banking services are being disseminated through the post office network, and one of the consequences of our being able to save that network from large-scale closures is that banking services are available now even in the most remote rural areas.
Paul Blomfield (Sheffield Central) (Lab)
Will the Secretary of State say what discussions he has had with the Home Office about the introduction of cash bonds for student visas, which has had a lot of negative press coverage overseas? Does he agree that the introduction of such bonds, either for student visitor visas or for tier 4 visas, would further damage international student recruitment?
Vince Cable
I am in constant contact with the Home Office about such matters. It is worth pointing out that the concept involves offering the possibility of a bond to people who have otherwise been rejected in the course of a visa application, so if it operates according to that spirit, it should ease, rather than make more difficult, access to visas.
Iain Stewart (Milton Keynes South) (Con)
May I thank my right hon. Friend for his Department’s decision to locate the world’s first Transport Systems Catapult centre in Milton Keynes? Does he agree that it will help to establish this country as one of the world’s leading development centres for transport systems?
Vince Cable
The Government have every reason to be proud of the catapult programme, which is now expanding quite rapidly. We are thereby able, through the Technology Strategy Board, to concentrate research excellence in particular locations. Some, such as those for renewable energy and advanced manufacturing, are now at an advanced stage of development, and I am delighted to hear that my hon. Friend is pleased with the location of the automotive centre.
Mr Jim Cunningham (Coventry South) (Lab)
Will the Secretary of State get together with the Secretary of State for Culture, Media and Sport to have a look at the way in which the Football League applies its regulations to private ownership of football clubs, because there is a diabolical mess at Coventry at the moment?
Vince Cable
Coventry seems to have some problem in that area. I come from the city of York, which went through this misery, as many towns have done in the English league. I can certainly have a look at that; it is not immediately clear to me where I fit into the picture, but I am interested in football and want to see it healthy.
Mark Pawsey (Rugby) (Con)
On employment law reform, does the Secretary of State agree that there would be a significant boost to our country’s small businesses if the cost of attending employment tribunals was reduced, given that, according to his Department, the average cost of successfully responding to and defending a claim is £6,200?
Jo Swinson
The hon. Gentleman is right to raise that issue. It is fair to say that employment tribunals are costly in terms of time, money and stress for everybody involved, both employers and employees, so what we are trying to do through our employment law reforms is reduce the number of cases going to tribunal. We are streamlining the rules of procedure, which should also help to reduce costs, but the really important savings will come from getting more cases resolved through early conciliation, which is what the Government are pressing ahead with.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
This morning the Globe group of parliamentarians held a seminar highlighting the risk of financial instability as a result of the overvaluation of fossil fuel reserves internationally and nationally without taking account of international climate change commitments. Will the Government contact regulators to ensure that they take into account the risks of instability and ensure that we do not see the bursting of a carbon bubble in the way we saw dotcom bubbles burst and other collapses in the markets?
Vince Cable
That falls well outside my area of competence, but I have a personal interest in it. One thing I learnt from my years in the oil and gas industry is that it is very unwise to predict movements in the price of oil, whether up or down. The hon. Gentleman raises an important and fundamental question that I am interested in and will pursue if it is relevant to my Department.
Mary Macleod (Brentford and Isleworth) (Con)
Brompton Bicycle Ltd in Brentford is a brilliant example of British manufacturing and engineering. It has been growing at 25% a year over the past three years, sells 40,000 bikes a year and exports 80% of what it makes to 44 countries. Will the Minister meet me and Brompton Bicycle Ltd to talk about how it can find the funding to buy new premises in order to grow even further?
Michael Fallon
I would be happy to meet my hon. Friend and Brompton Bicycle. I am already aware of how successful and ambitious a company it is. We will do what we can to help it expand further.