The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
The Government have previously considered the case for small businesses to have rights when buying goods and services that are more aligned with consumers, and consulted on this question in 2008 and 2012. We have continued to engage with representatives of small business on this matter. The Federation of Small Businesses will shortly present a report in this area and I have committed to responding and will read it with interest.
Alex Cunningham
I had a visit from the North East Federation of Small Businesses on Friday and was told that it has seen longer and longer delays in getting larger organisations to pay for goods and services, with one—Procter & Gamble—now having payment terms of 180 days. It says the prompt payment code has no teeth and companies just extend their terms to comply. Is it not time for the Government to intervene to put an end to these disgraceful delays and give small organisations a better chance of survival?
Jenny Willott
The hon. Gentleman raises an important point, and the Government take concerns from business about unfair payment terms very seriously. For example, as he says, receiving payments promptly can be critical to the survival of a small business. That is why the Department launched a discussion paper called “Building a responsible payment culture” at the beginning of December. It sought views on what unfair payment terms look like and whether legislative or non-legislative measures should be used to tackle them. The consultation closed at the end of January and we are currently analysing the responses. We will announce shortly what we want to do to tackle the issue.
Mr Jim Cunningham (Coventry South) (Lab)
6. In how many of the last 24 months net lending to business by banks has risen.
The Minister for Skills and Enterprise (Matthew Hancock)
The most recent data from the Bank of England show that net lending to small and medium-sized businesses was positive in March, June and November, and the bank’s most recent trends in lending and credit conditions reports show that confidence is beginning to return, helped by interventions such as the business bank. Gross lending continues to be higher year on year, but there is still much more to do.
Mr Cunningham
When will the Government stop blaming the previous Government and everybody else and get the major banks such as Lloyds and HSBC actually lending to small businesses? Small businesses in my constituency and up and down the country are suffering very badly.
Matthew Hancock
In order to understand the problem that we are having to address, it is important to analyse why it came about. We all know why it came about—because of the under-regulation by the Labour party. It is absolutely true that gross lending increased by £4 billion in October 2013—the highest amount since 2009—so we are moving in the right direction. But there is much more to do to clear up the mess left by the Labour party.
Mr Philip Hollobone (Kettering) (Con)
May I report from Northamptonshire that businesses are not having to go to lending to invest, but generating their own cash? The latest survey from the Northamptonshire chamber of commerce shows that
“44% of manufacturers and 21% of service sector respondents reporting an improvement”
in their cash flow
“with 24% proposing to invest in plant and machinery and 44% in training.”
Businesses are not necessarily dependent on lending from banks.
Matthew Hancock
Of course some businesses are dependent on lending and it is very important to ensure that that problem is sorted out, but my hon. Friend rightly raises the fact that many businesses have an increasing amount of cash on their balance sheets. Encouraging them to get out and spend that cash and invest is an absolutely critical reason for increasing business confidence. I am delighted that business confidence is at record levels. Northamptonshire is one of the most supportive places for business and has recently won an award for exactly that.
Mr David Hanson (Delyn) (Lab)
7. What recent assessment he has made of the number of complaints and the level of consumer detriment relating to estate agents’ practices in England and Wales.
Susan Elan Jones (Clwyd South) (Lab)
16. What recent assessment he has made of the number of complaints and the level of consumer detriment relating to estate agents’ practices in England and Wales.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
Citizens Advice received 2,831 calls on issues concerning estate agents from February 2013 to January 2014. The Office of Fair Trading investigated 114 complaints against estate agents from April 2013 to October 2013. Trading Standards continues to carry out enforcement activity against rogue estate agents. From 1 April, the Competition and Markets Authority will work with other consumer bodies to monitor the level of detriment relating to estate agents’ practices.
Jenny Willott
This particular issue has not been raised with me, but I am happy to take it up with the enforcement authorities and the two redress schemes. I will ask the Office of Fair Trading and the CMA to consider the matter on behalf of the right hon. Gentleman.
Susan Elan Jones
There is no doubt that there are good estate agents out there as well as bad estate agents, but it is surely a very bad practice when both buyers and sellers are charged a fee for the same property. Will the Minister condemn the practice?
Jenny Willott
As the hon. Lady says, this is a potentially worrying and emerging trend that seems to be on the increase. I have already written to the redress schemes to ask them to examine the matter. From 1 April, Powys county council takes over responsibility for the overall enforcement of licensing of estate agents, and I will be writing to it to ask it to examine the practice.
Stella Creasy (Walthamstow) (Lab/Co-op)
The Minister mentions the Government’s intention for Powys county council, which serves a predominantly rural area, to take over the regulation of estate agents from April. Powys has had three different cabinets in as many months, and had to be threatened with intervention by the Welsh Government before it could agree a budget yesterday. Given that it cannot seem to get its own house in order, with practices such as double charging and mortgages by tender being put forward by estate agents, why does the Minister think the council is the right body to get house sales in order?
Jenny Willott
At the moment, both trading standards and the OFT possess enforcement powers relating to estate agents. From 1 April, we are simplifying the landscape by transferring the OFT’s powers to the lead authority, Powys county council. There is a precedent for having a lead local authority effectively to address functions across the nation—for example, illegal money lending teams for England and Wales do this. I have faith in the ability of our trading standards officers who are extremely effective, well trained and very responsive to the needs of members of the public, and I have every faith that Powys county council trading standards department will be able to exercise these functions perfectly adequately.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
8. If he will make it his policy to better use procurement by his Department to increase apprenticeship opportunities.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
9. If he will make it his policy to better use procurement by his Department to increase apprenticeship opportunities.
The Minister for Skills and Enterprise (Matthew Hancock)
We consider opportunities for the provision of apprenticeships on an individual basis. Last month, however, we announced a new college to train the next generation of world-class engineers working on the construction of High Speed 2. We hope that that will create up to 2,000 apprentices. Crossrail is the largest procurement project across government—indeed, it is the largest construction project in Europe—and has a target of 400 apprentices over the life cycle of the project as part of its procurement.
Catherine McKinnell
I thank the Minister for his answer, and note his mention of procurement. In 2010, I introduced a Bill to increase the number of apprenticeships by means of public contract procurement. The proposal was adopted by the official Opposition, and was taken up by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) in his Apprenticeships and Skills (Public Procurement Contracts) Bill. Does the Minister agree that it would be an excellent way in which to mark national apprenticeship week for the Government to adopt the policy officially, and to ensure that it is rolled out across the board?
Matthew Hancock
As I have said, we include apprentices in procurement contracts. Of course procurement must put value for money at the top of the list to ensure that we spend taxpayers’ money wisely—which, these days, we do—but we must also ensure that, in national apprenticeship week, we celebrate the value that apprentices can bring, and the value that they can often add to projects.
Mr McCann
I do not thank the Minister for his answer, because he did not answer the question. When he is considering whether to boost apprenticeships through the use of procurement, what is a higher priority for him: cheaper contracts, or the supply of apprenticeship opportunities to our people?
Matthew Hancock
As I have said, we are including apprentices in procurement contracts through Crossrail and High Speed 2. We will also be establishing a nuclear college, so that it will be local people who, through apprenticeships, ensure that Britain maintains the skills that will enable us to build infrastructure such as the new civil nuclear power stations.
Greg Mulholland (Leeds North West) (LD)
For every pound spent on an apprentice, £18 is invested in the economy. Will the Minister join me in welcoming the £16 million new facility at Leeds College of Building, which will deliver apprenticeships for 7,500 students and will make a huge difference to apprenticeships in the city?
Matthew Hancock
I have been to Leeds to see what is being done with apprenticeships. Building colleges for building is an important part of ensuring that we can build our buildings in the future, and using apprenticeships to do that is an important way of improving and retaining skills, but, crucially, it also gives thousands of young people a chance to obtain the skills that they need in order to hold a sustainable job and have a secure future.
Neil Parish (Tiverton and Honiton) (Con)
The building of Hinkley C will create a huge amount of employment in and around not only Somerset but Devon. Apprenticeship schemes will certainly work very well when it comes to building a power station.
Matthew Hancock
I agree with my hon. Friend, and I pay tribute to Bridgwater college, which has put an awful lot of effort into ensuring that we build up the courses that will provide us with new nuclear skills.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
National apprenticeship week provides an extraordinary opportunity to celebrate the amazing work of our apprentices, but it is a matter of concern to all Members that there are now 5,000 fewer young people studying in apprenticeships than there were at the time of the last election. That is why news of huge staff cuts at the National Apprenticeship Service is so worrying. The excellent Nick Linford of FE Week says that they may amount to 20%, and I hear from front-line staff in Birmingham that the figure may be 50%. The Minister refused to answer a written question on the subject, and he dodged a question about it in the House yesterday. Will he now tell us how many staff at the National Apprenticeship Service—which is part of the Skills Funding Agency—will lose their jobs in the next year?
Matthew Hancock
The National Apprenticeship Service does a magnificent job in putting together events such as national apprenticeship week, and it is important to ensure that we run it as effectively as possible. I can tell the hon. Gentleman that a record number of people have participated in apprenticeships in the last year, and that they are doing a fantastic job. It is true that we had to remove some low-quality apprenticeships that were only six months long. The Opposition claim that they want high-quality apprenticeships, but then complain when we remove low quality. I will not take any lessons from them.
John Mann (Bassetlaw) (Lab)
10. On what date he plans to visit Bassetlaw to inspect and meet local businesses.
Mr Mark Harper (Forest of Dean) (Con)
13. What recent assessment he has made of the competitiveness of the retail grocery market.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
Retail is a highly competitive sector, particularly in the grocery market, with multiple companies competing for market share on price, brand and quality. Retailers are quick to respond to changing consumer preferences. The Competition Commission’s 2008 assessment of the groceries sector found that it was generally working well and that consumers were receiving the benefits of competition, such as value, choice, innovation and convenience.
Mr Harper
I am happy to agree with the Minister on that, and I would like to draw to her attention the behaviour of the Co-operative supermarket in Cinderford in my constituency. It is using every trick in the book to behave in an anti-competitive manner to block a planning application that has been approved by my local council and that is popular with local people. Should not it just get on with competing on the basis of price and choice, rather than on the basis of the quality of its legal team?
Jenny Willott
I fully support competition in the retail sector, with its benefits for consumers. The competition regime in the UK is designed to ensure that competition works in the best interests of consumers; it is not intended to protect incumbent businesses from competition. The Government remain committed to a town centre first policy, but that does not mean that shops cannot be built outside town centres where appropriate. It is up to local authorities to ensure that their local plans identify the retail needs of their local communities, and that they provide a firm basis for any planning decisions.
Hugh Bayley (York Central) (Lab)
14. What steps his Department is taking to encourage UK students to study for postgraduate qualifications at UK universities.
Andrew George (St Ives) (LD)
17. What assessment he has made of the effects on businesses of banks’ lending practices.
The Minister for Skills and Enterprise (Matthew Hancock)
Banks’ lending practices—good or bad—can have an impact on the willingness of small businesses to approach their bank. We are alert to any evidence of poor practice, and we take up concerns both with the banks and, where necessary, with the financial services regulators.
Andrew George
While bankers are still happily filling their boots with multi-million pound bungs, thousands of small and medium-sized enterprises across this land are being sucked dry by those same banks. Regulators are offering only woefully limp regulation at the moment, so is it not now time for Ministers to step in to protect SMEs from these mis-sold interest rate hedging products?
Matthew Hancock
Of course, we have strengthened the regulation of the banking system enormously in the past three years. As yesterday’s figures from the Financial Conduct Authority show, 62% of businesses that might have been mis-sold interest rate swaps have now been told by the banks whether they are owed compensation under the scheme regulated by the FCA, and all businesses owed redress will have been made offers by the end of June.
Stephen McPartland (Stevenage) (Con)
18. What support his Department is providing to apprenticeships.
The Minister for Skills and Enterprise (Matthew Hancock)
We are well on our way to delivering the agenda of apprenticeship reform. This is national apprenticeship week and, as we know, across the country participation has increased by about 80% since the election. In Stevenage, participation in apprenticeships since the election has more than doubled.
Stephen McPartland
Apprenticeships are a great opportunity to reduce the gap between education and employment, and in Stevenage last year more than 800 young people took up the opportunity of an apprenticeship. Yesterday, I launched a jobs fair so that we can push towards 1,000 young people taking up the apprenticeship opportunity this year. Will the Minister join me in congratulating all the local partners—the jobcentres, employers, schools and colleges—on the work they are doing?
Matthew Hancock
I add to those in that list, all of which I congratulate, my hon. Friend, who has obviously played an important role in bringing people together. Apprenticeships, especially high-quality ones, can happen only as a partnership between training providers and employers, and of course the Government, with some of their funding, to give young people the opportunities they need.
Julie Hilling (Bolton West) (Lab)
On Monday, I had the pleasure of hosting a group of apprentices from MBDA here in Parliament. The group included Anna Schlautmann, the manufacturer apprentice of the year, and Jade Aspinall, Semta’s apprentice of the year. MBDA has a fantastic apprenticeship programme, so what is the Department doing to promote best practice in apprenticeships?
Matthew Hancock
These apprentices clearly had an interesting time, because they met not only the hon. Lady, but the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon)—and indeed, I also met them. They were extremely impressive, and showing the highlights of the best apprentices is something we should all celebrate across this House.
Mike Thornton (Eastleigh) (LD)
Figures released this week show that every time a local company hires an apprentice their bottom line gets an average boost of £2,100. In Eastleigh, that means that new apprenticeships alone provided a local boost of more than £2 million in 2012-13. Will the Minister join me in praising local businesses in Eastleigh, such as GE Aviation and Arlington Rail, which have a great track record in delivering high-quality apprenticeships? Will he also join me in praising the work of my hon. Friend the Member for Burnley (Gordon Birtwistle), who is leading the charge on this?
Matthew Hancock
Yes, of course I will join my hon. Friend. I also join him in paying tribute to my hon. Friends the Member for Burnley and for Harrogate and Knaresborough (Andrew Jones), who are apprenticeship ambassadors and do enormous work, in this House and beyond, to promote apprenticeships.
Ann McKechin (Glasgow North) (Lab)
19. If his Department will make an assessment of the main causes of insecurity in the workplace.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
The 2011 workplace employment relations study measured insecurity. It showed that job insecurity is related to three factors: whether a workplace had been subject to recent redundancies; if managers felt that the recent recession affected the business; and the number of changes to working terms and conditions experienced by employees.
Ann McKechin
The Minister will be aware that research from the Chartered Institute of Personnel and Development shows that approximately 1 million people in this country are currently employed on zero-hours contracts. We know that many of these are exploitative, so will the Minister confirm whether the Government will use the opportunity of the forthcoming Queen’s Speech to legislate to end the misery that is suffered by so many in our communities?
Jenny Willott
The hon. Lady will know that the Government looked at zero-hours contracts last summer, and are currently consulting on related issues such as exclusivity clauses and so on, which are just some of the problems that people have highlighted. Following on from that consultation, we will look at what measures need to be taken to ensure that such contracts are used positively and not to cause problems for those who are being exploited by them.
Richard Graham (Gloucester) (Con)
22. What steps he is taking to raise awareness of export support services among small and medium-sized businesses.
Mr Cunningham
Will the Secretary of State say what the latest position is regarding Hibu, as he met a small delegation of MPs some months ago to discuss the situation? He will know that many of the shareholders have lost a lot of money, especially those in Coventry.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
The hon. Gentleman is right that many people have lost significant amounts of money, and they are clearly keen to see action. The administrator has a statutory duty to report on the behaviour of Hibu’s directors, and that report is due before the end of May. At that point, the Secretary of State and the Insolvency Service will look at whether action needs to be taken to disqualify the directors.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
T2. Will the Minister join me in congratulating Lancaster chamber of commerce and Lancaster and Morecambe college, ably supported by the Lancaster Guardian, on putting on courses for local businesses to demonstrate the benefits of apprenticeships? Does he accept that such local initiatives will build on this Government’s success in putting real apprenticeships back on the career map?
The Minister for Skills and Enterprise (Matthew Hancock)
I agree wholeheartedly with my hon. Friend. The Lancaster Guardian, like many local newspapers across the country, plays an important role in changing the culture, supporting apprenticeships and ensuring that young people know the opportunities that are available to them.
Mr Chuka Umunna (Streatham) (Lab)
In the last annual report and accounts of his Department, the Secretary of State said that the Department remained
“on track to deliver against our spending review settlement.”
However, the head of the National Audit Office said in the same report that there are significant uncertainties relating to billions of pounds’ worth of the Department’s assets, which will affect its financial position. Can the Secretary of State explain the discrepancy?
Susan Elan Jones (Clwyd South) (Lab)
T3. I know that many of us were waiting with a great deal of interest for the Financial Conduct Authority’s new rules on payday lending, but does the Minister share my disappointment that it did not come up with a much tougher action plan on advertising?
Matthew Hancock
We were clear in our consultation on payday lending that we had put all the options for change on the table. We have taken the consultation seriously and that has included my meeting many of the stakeholders. We will do what it takes, but we will do what works—and what works for businesses large and small, focusing especially on the needs of small businesses—but we will not make changes just to satisfy calls and headlines. We will make sure that the system works as properly as possible.
Andrew Stephenson (Pendle) (Con)
T5. Pendle businesses were delighted when the Government published the draft assisted area status map back in December, proposing to include part of Pendle for the first time. The current map, drawn up under the previous Government in 2007, did not include a single part of Pendle, yet the new map will include about 50% of the borough. Will my right hon. Friend update the House on the progress in bringing the new map into force?
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
T7. A major hotel chain in my constituency employs a conveyor belt of young people. They are all on zero-hours contracts, tips are pooled and loosely accounted for and if workers have the audacity to question anything they are rewarded —punished—with fewer shifts. When will the Secretary of State stop consulting and start doing something about exploitation through zero-hours contracts?
Jenny Willott
As I said in answer to a previous question, we are in the process of consulting. It is important that we get this right so that we do not penalise employees by getting the rules wrong. Many employees benefit from zero-hours contracts and we need to ensure that we take the right action rather than hasty action. We will respond to the consultation and make proposals to get rid of the exploitative factor in zero-hours contracts.
Mel Stride (Central Devon) (Con)
T6. Agriculture matters in my constituency yet the average age of my farmers is about 60, so we have a desperate need to encourage young people to go into farming. I know that my hon. Friend the Minister for Skills and Enterprise made a statement to the House yesterday about the reforms to the apprenticeship scheme, but will he outline how his reforms will encourage young people to use apprenticeships to go into farming?
Matthew Hancock
Of course, apprenticeships increasingly cover the whole economy, including farming and agriculture. The number of apprenticeships in agriculture has increased by a quarter and I am pleased to say that we are working with farmers in our trailblazer reforms of apprenticeships to get them and the agriculture sector to write the rules on what training is needed to ensure that apprenticeships work better for them in future.
John Cryer (Leyton and Wanstead) (Lab)
Bogus self-employment continues to spread through the construction industry, in part because the number of HMRC employer compliance inspections has halved in four years. Does the Secretary of State regret that?
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
My constituent, Mr Rundell, paid for an additional guarantee scheme from a high street retailer for an electrical item on the basis that he would get a replacement. It later turned out that that was not the case. What assessment has the consumer affairs Minister made of the way in which these policies are sold to constituents and to people across the country, because very often such a policy turns out not to be what they have been promised?
Jenny Willott
As the hon. Gentleman will know, the Consumer Rights Bill is in Committee and a number of Members here today are on that Committee. One of the issues we are looking at is warranties and guarantees and ensuring that consumers are aware of their statutory rights. There is protection for consumers. I recommend that the hon. Gentleman’s constituent contact the Citizens Advice helpline, which will be able to point him in the right direction to ensure that if he has been mis-sold something, he can get the remedies due to him under the law.
Gordon Birtwistle (Burnley) (LD)
I thank my right hon. Friend for visiting Burnley last week to open a new industrial estate and visit a number of rapidly expanding companies that are embracing the Government’s economic policy. Does he agree that if the success being achieved in Burnley was replicated across the country, our economic position would be growing much better?
Mr Philip Hollobone (Kettering) (Con)
Tomorrow in Kettering, with local employers, Tresham institute will launch Experience Kettering, a workplace experience scheme for hard-to-place young people aged 18 to 24. Would the Skills Minister congratulate Tresham institute on this initiative and send some words of encouragement?
Matthew Hancock
I would be delighted to congratulate Tresham institute on what it is doing to help young people into work. Work experience is a vital part of getting a job and I hope it is also working on the new traineeship programme, which is designed to help people into an apprenticeship or a sustainable job.
Barry Gardiner (Brent North) (Lab)
What impact and what offence does the Secretary of State believe have been caused to Jewish and Muslim businesses by the statement from the chief veterinary officer today, threatening to ban the practice of shechita and halal?
Greg Mulholland (Leeds North West) (LD)
The House is awaiting the response to the BIS consultation on pub companies, but now that the London Economics research has been exposed as fundamentally flawed and does not follow the brief given to it by BIS, and the firm has charged £26,000 for fieldwork that did not take place, will my right hon. Friend ignore this bunkum and listen to the Federation of Small Businesses’ research, which shows that the market rent-only option would benefit the UK economy by £78 million?
Jenny Willott
As my hon. Friend knows, responses to last year’s Government consultation numbered in the thousands. We are looking at all the evidence that was put before us, including the research he mentioned. We also received evidence from thousands of individual tenants who contacted us to tell us about their circumstances and the impact the proposed measures could have on their business. We are looking at all of that and will bring forward proposals shortly.
Julie Hilling (Bolton West) (Lab)
Apprentices in Bolton West have told me that teachers tried to dissuade them from undertaking apprenticeships, particularly if they were high-flying students. What is the Department doing to educate teachers and ensure that proper careers guidance is in place?
Matthew Hancock
That is properly a matter for the Department for Education but, as I am also a Minister there I will take this opportunity to explain that we are introducing stronger statutory guidance. There was no guidance for schools before, so we have introduced a new legal requirement on them to secure independent and impartial advice, and we are introducing stronger statutory guidance to ensure that they do so, alongside the new National Careers Service, which this Government introduced.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I will meet representatives of Jaguar Land Rover tomorrow to discuss their vision for their Gaydon headquarters. As it is international women’s day on 8 March, I will also be discussing the work they do to encourage women and girls to take up science, technology, engineering and maths. The Secretary of State is passionate about getting more women on boards and, importantly, into all sort of industries, so will he join me in celebrating international women’s day and reminding businesses that they need to do their bit to encourage more women into the sciences?