(10 years, 4 months ago)
Commons Chamber1. What steps the Government are taking to encourage firms to pay a living wage.
5. What steps the Government are taking to encourage firms to pay a living wage.
The Government support a living wage and encourage businesses to pay it when it is affordable and not at the expense of jobs. We recognise that these have been challenging times and we applaud companies that have chosen to pay higher wages.
The UK’s largest supermarkets, Tesco, Sainsbury’s, Asda and Morrisons, together make billions of pounds in profits every year, but they still do not pay all their staff a living wage. Will the Secretary of State look at amending the corporate governance code to require all publicly listed companies to report annually the number of individuals they employ who earn less than a living wage?
That is an interesting suggestion for nudging companies in the right direction, and I will certainly have a look at it. I am certainly very opposed to coercive measures because those would simply add to unemployment, but I will reflect on that suggestion, which is a new one.
I am pleased that the Secretary of State says that he supports the living wage, but as he will know—my hon. Friend the Member for Lewisham East (Heidi Alexander) has already pointed this out—that of the 4.8 million people who are paid less than the living wage, many work for multinational, highly profitable companies. What specific steps is he taking to encourage those highly profitable companies to pay the living wage? The people deserve to know that.
The hon. Gentleman’s constituency is a good example of what is happening in the labour market. The claimant count is down to about 2.5%, which is much lower than it was when we took office. Many engineering companies are short of labour and wages are going up. We have been through a difficult period, but one of the success stories is that employment has massively increased—465,000 during the last year. His constituency is a very good example of the policies working.
Does the Secretary of State agree that retailers would find it easier to pay higher wages if they were allowed to open all day on Sunday?
I suspect that it would make relatively little difference. We had a modest experiment at the time of the Olympics. The results did not show a great deal of real economic consequences, but we are always open to new evidence.
Provided that it does not undermine fair trade or UK competitiveness, a significant increase in the minimum wage would clearly be both desirable and the right thing to do. But will my right hon. Friend look particularly at the care sector, where I fear there is a race to the bottom as a result of there simply being a floor where the minimum wage has been set?
I remind my hon. Friend that, based on the recommendations of the Low Pay Commission, the Government announced recently the biggest increase in cash terms since the financial crisis—a 3% increase, which is an increase in real terms. I suspect that with the central problem in the care sector, which is with domiciliary care workers whose travel times are not properly counted, we are dealing with an abuse of the minimum wage system, and it needs to be pursued in that context.
A KPMG study found that the introduction of a living wage increased productivity and reduced sickness absenteeism and staff turnover. In fact, its introduction was cost-neutral for all these firms. As it makes such a good business case, why are the vast bulk of local authorities that have introduced a living wage Labour ones?
The process that the hon. Gentleman described is the right one: if it is good business practice, good businesses will follow it and out-compete their competitors, and I hope that that is what will happen.
2. What recent estimate he has made of the resource accounting and budgeting charge on student loans.
We currently estimate the RAB charge to be around 45%. The estimate changes frequently in the light of new economic forecasts and will continue to change.
Back in the days when the Minister was confidently predicting that the RAB charge would not rise above 32%, writing in The Independent in October 2012 he described an RAB charge of 38% as the worst outcome for the taxpayer. How does he describe an RAB charge of 45%?
What we have achieved with our higher education reforms is significant savings to the taxpayer and extra income going to our universities. That is the right combination.
The whole House will want to join me in congratulating Toni Pearce on her re-election as president of the National Union of Students. Figures this morning from the Sutton Trust and the Institute for Fiscal Studies show that Toni’s generation will now be paying off their student loans into their 50s. Will the Minister get to the Dispatch Box and confess that this student debt system is now not only unsustainable, but unfair? Does the Conservative party have any plans to raise the £9,000 fee in the next Parliament?
Let us be absolutely clear what today’s IFS report shows. It shows that people on lower earnings throughout their working lives are going to pay back less. That is a deliberate feature of our reforms which means that they are fairer and more progressive than the system we inherited from the Labour Government. Meanwhile, people who earn a lot during their working lives as a result of going to university will pay back more. That is what we intended with these reforms, and that is what the IFS shows we are delivering.
3. What progress he has made on rebalancing the economy across the UK.
The regional growth fund plays a key rote in stimulating private investment and employment in areas dependent on the public sector. Today, my right hon. Friend the Deputy Prime Minister has announced 50 further projects and programmes that have been awarded regional growth fund support in round 5. Together they will share £300 million of RGF support and have pledged to deliver £1.9 billion of private sector investment and to safeguard or create 37,000 jobs. We have also increased resources under the strategic direction of local enterprise partnerships to at least £20 billion until 2020-21.
In 2011, Hull voters kicked out the Lib Dem councillors who had delayed setting up the Humber LEP. From then on, the Labour council, MPs, local businesses and the LEP took the lead in working together to bring to the city Siemens, City of Culture, and rail electrification. Does not that show the potential of real devolution to the regions? Why does the Secretary of State block the plans that are set out in the Heseltine review?
I certainly welcome devolution and the cross-party approach that we have adopted to attracting Siemens. I remember going to Hull in 2010 and 2011, when an excellent Liberal Democrat council was laying the foundations for the bid for Siemens that is now happily realised.
May I praise the Government for the role of agri-tech funds in rebalancing the economy in the north? One of the issues holding back growth in the north is badly congested and unsafe roads such as the A64. Will my right hon. Friend use funds from his Department, working with the LEP, to improve the A64?
One of the joys of the new pots of funding that are available for local enterprise partnerships is that LEPs can decide for themselves what their priorities are. I am aware, because I grew up in the region, that there are serious infrastructure bottlenecks, and I am sure that that will be high in its priorities.
The Secretary of State and the whole House will no doubt welcome this morning’s excellent news that 1,000 new jobs have been created in Belfast by US software company Concentrix. That is very good news in terms of rebalancing the economy. Will he continue to work with the Northern Ireland Executive on matters such as corporation tax to ensure that the number of private sector jobs continues to grow in the Province?
The Northern Ireland Executive is doing an excellent job in attracting inward investment. I have been to see some of these high-tech companies. The Titanic quarter is a good example of the growth that is taking place. I am delighted to hear the news that the right hon. Gentleman has announced. We are certainly happy to continue to work with the Executive.
My constituents in Kettering were very worried when told by the Opposition that 1 million jobs would be lost in this country as a result of the Government’s attempt to rebalance the economy. Does the Secretary of State therefore share my delight in the latest figures from HM Treasury showing that since 2010 an extra 4,800 jobs have been created in Kettering—a massive 11% increase?
My hon. Friend describes a trend that is apparent across the country. As I said a few moments ago, almost half a million new jobs were created last year, and I am delighted that Kettering is sharing in that positive story.
Every week when Parliament is sitting, I get on the train in one of the poorest parts of the European Union and get off in the richest, with a twelvefold difference in wealth per head between west Wales and inner London. Does the Secretary of State acknowledge that the only way to address this record of shame is to fiscally empower the nations and regions of the UK and have a deliberate strategy, as in Germany, to redistribute wealth between the wealthiest and the poorest parts?
In many respects, the Welsh economy is sharing in the wider picture. Its unemployment rate is slightly lower than the national average. My hon. Friend the Member for Ceredigion (Mr Williams), who represents that area of Welsh Wales, is very active in promoting that part of the country, which benefits substantially from European assistance.
The trend across the UK that the Business Secretary has just described is undermined by a report that shows it is 100 times easier to get a job in Cambridge than in Salford and that describes the gap as widening “dramatically”. The Public Accounts Committee exposed the incompetence and delays with the regional growth fund. Does not the Secretary of State know that every Tory Government leads to the imbalance in our economy not shrinking, but growing?
Actually, the Greater Manchester local enterprise partnership is one of the best and most active and it is resulting in considerable improvements in that region. On the regional growth fund as a whole, we now have a formidable accumulation of results. We are talking about approaching £3 billion of commitments, 427 projects, more than 500,000 jobs safeguarded and created and, most important, £16 billion of private sector investment that has been brought in alongside Government money.
4. What recent assessment he has made of the performance of UK Trade & Investment in supporting exports.
The most up-to-date independently audited figures show that in the 12 months to September 2013, UKTI supported nearly 35,000 businesses. The value of additional sales attributed to UKTI support over that period was more than £50 billion. UKTI is on track to meet its target to assist 40,000 businesses in 2013-14.
In export week, I welcome that news, but what concrete steps are being taken by UKTI to reform its structure, personnel and strategy in order to ensure that we meet the Government’s £1 trillion target for exports?
My hon. Friend will be aware, because I know he takes a strong interest in this area, of the reforms to UKTI, which is now working closely with British businesses. This week, I attended the world’s leading trade and industrial technology fair in Hanover and saw UKTI working with the Birmingham chamber of commerce to provide support for 40 UK companies. It is estimated that from that fair alone some £5 million-worth of orders are in the pipeline.
In February, UK exports actually fell. Given the fact that last year only a fifth of the total amount of money available for financing exports was actually used, what more can the Minister do to increase the uptake of UK export finance in order to boost our exports?
The hon. Gentleman makes an important point. There are schemes to assist companies with their export finance, but only large companies have taken advantage of them in the past. We need to do more to market those schemes. I do not think it is fair to take one month’s particular trade figures. We are increasing our trade, particularly with the emerging economies of Brazil, Russia, India and China.
The fact is, though, that exports are at their worst and lowest level since 2010. It is interesting that the chief economist of the British Chambers of Commerce has said:
“We need to match resources committed by our major competitors if we are to compete on a level-playing field when exporting overseas.”
What is the Minister doing specifically to ensure a level playing field for the chemical industry?
The trade deficit actually narrowed in 2013, so I repeat that I do not think it is right to take just the figures from February. We have specifically been helping the chemical sector recently. The energy package announced in the Budget will make a significant difference in freezing the carbon price floor. We are giving the chemical industry more help by exempting it from the renewables obligation and the feed-in tariffs. The energy taxes are being cut, which will significantly help both the chemical and the steel industry.
6. What steps he is taking to ensure that universities remain financially sustainable in the long term.
Our higher education reforms have increased university income and reduced costs to taxpayers. In 2011, universities received £7.9 billion of income for teaching. Next year, they will receive £9.9 billion. Universities are now well funded, on a sustainable basis for the long term.
The Minister will be surprised to hear that I do not agree with relative complacency. I am a member of the Higher Education Commission and we are taking evidence on the long-term financial viability of our higher education sector. Time and time again, the Higher Education Policy Institute, the vice-chancellors, Lord Baker, Charles Clarke and everyone else who gives evidence to the commission say there is a serious, deep problem. We are not getting any British post-graduates as a result of the £9,000 a year. Something is deeply wrong. Will the Minister act before it is too late?
We now have record numbers of people applying to university. The funding is going to the courses that students choose. We are getting rid of controls on numbers of students. This system is financed by graduates—not students, but graduates—paying money back. That is the right way to finance our higher education. It is the system that all three parties have ended up proposing when they had to confront the realities of financing higher education. It is the right way forward for our young people.
Universities in Scotland—in Edinburgh, in particular—contribute substantially to the UK’s research community, as most spectacularly exemplified recently by Professor Higgs. At the same time, universities in Scotland receive 15% of UK research funding, as is right and proper given their achievements. Would it not be a tragedy if that support and co-operation were put at risk by Scotland becoming independent from the rest of the UK?
The hon. Gentleman is absolutely right. Although Scotland has about 8% of the nation’s GDP, it gets about 15% of the public research income that is allocated across institutions, because of the excellence of the research in institutions in Scotland. That works to the advantage of Scotland and to the advantage of the entire United Kingdom, and that is why we are better off together.
7. What recent support he has provided to small businesses.
We passionately support small businesses. Just this week, the new employer allowance has cut £2,000 from the national insurance bill of small companies to help them to grow and create jobs. That builds on the more than 15,000 start-up loans, the £1 billion saved by cutting red tape and the 32,000 businesses helped to export this year alone.
Last Friday, I spent valuable time with some very hard-working high street traders in Chagford, an important town in my constituency. Many of the people there were very worried about the level of business taxation, yet they were unaware of the £2,000 reduction in charges for national insurance contributions and the reduction in rates to which the Minister has just referred. What steps is my hon. Friend taking to ensure that companies up and down the country are aware of these important incentives?
My hon. Friend is a constant advocate for small businesses locally in Devon. He has raised the issue of business rates and business taxation with me. He will know that the £1,000 off business rates for retailers has been welcomed across the board; it is a small step towards addressing the challenges that business rates pose. This is all part of our long-term plan.
Is the Minister aware that one of the smallest businesses in Britain now is the mining industry? There are three pits left, and 1,300 miners are due to be sacked at two of those pits. That will make it a minuscule small business. Instead of helping those pits to stay open and give them tax breaks, as they do to the oil companies, what have this Government done to that small business? They have just stolen £700 million out of the mineworkers pension fund this February. What a story to tell those miners. Come on—help ’em out!
This morning, we announced a package of support for the mining industry, and I am sure that the hon. Gentleman will want to go and look at it before raising any further questions.
Is it not interesting that no Conservatives or Liberal Democrats are standing up to ask a question about small business? I saw a small business in Wrexham and spoke to Mr Phil Jackson of Fotofire, who told me that the Jobs Growth Wales scheme has enabled him to employ young people in a rapidly expanding media business. Will the Minister do something positive by looking at a scheme that is providing jobs for more than 9,000 young people in Wales, with 75% employment for those who go on the scheme in the first place?
I am very glad to say that unemployment is falling throughout Wales as part of our long-term economic plan across the country. I am sure that in Wrexham, as elsewhere in the country, small businesses will be celebrating the fact that they are getting £2,000 off their jobs tax, which the Labour party has proposed to put up.
8. What steps he is taking to promote trade opportunities for UK business in high-growth markets.
UK Trade & Investment’s strategy confirms its continued focus on China, India and other high-growth markets, including some in Africa and central America. UKTI has identified more than 60 high-value opportunities in those markets, and with the help of our trade envoys, it promotes those opportunities to business. The £4 million announced by the Chancellor to support mid-sized businesses will enable UKTI to introduce such companies to those opportunities in high-growth markets.
In export week, will the Minister congratulate Worcester firm Waste Spectrum, which is exactly one of those mid-sized companies that has recently achieved its first sale to China and will be dispatching one of its specially designed incinerators, built in Worcester, to that high-growth market at the end of this month?
I congratulate Waste Spectrum and the Worcester ambassadors, and I thank my hon. Friend for his work to promote trade with China. I know he visited China with the trade mission and was involved with an inward delegation from China, and understand that he is planning to visit China again. We need to thank him for his work in promoting links with that particular country.
Yesterday I held a meeting with a range of British businesses on their experience of support for trade in India. They did not have a good story to tell about the signposting and advice of UK Trade & Investment and other agencies. Is the Minister concerned about UKTI’s budget plans and the support that it provides if the experience of British businesses is not positive?
I am sorry to hear that. If the hon. Lady lets me have the details, I will certainly ensure that that is followed up with UKTI. We have allocated a bigger budget to UKTI and it has sharpened its focus. If there are improvements that we can make to the service that UKTI offers, I would be happy to consider them.
Does the Minister agree that our future prosperity as a country depends on trading with China, India, south America and emerging economies in Africa—that is where all the future growth in the world economy will be—rather than being part of a backward-looking, inward-facing protection racket called the European Union?
I do not wholly agree with my hon. Friend. There are high-growth opportunities the world over, but the single market to which our businesses have access through our membership of the European Union is still an important part of our trading relationships.
It may not be a high-growth market, but we had a reception here last week that introduced the fishing, oil and construction opportunities in the Falkland Islands. Has the Minister had an opportunity to discuss those matters with the Falkland Islands to develop those areas and give job opportunities to people from the United Kingdom of Great Britain and Northern Ireland?
In my capacity as Minister responsible for oil and gas, I am aware of the opportunities for developing the oil and gas fields off the Falklands. The hon. Gentleman will know that a considerable amount of initial exploration is taking place in the waters just to the north of the Falkland Islands, and of course we stand ready to help the Falkland Islands if that exploration can be turned into significant production.
9. What recent steps he is taking to support women in business and encourage more women to enter business.
The Government offer a wide range of support to new businesses, for example through the growth accelerator, the new enterprise allowance and mentoring. The latest figures show that over 37% of start-up loans have gone to female entrepreneurs and one in five FTSE 100 board members are now women. We will continue to work closely with the Women’s Business Council and others to help ensure that more women see starting and growing their own business as a real option.
I thank the Minister for that answer. Over the past couple of years, we have seen one of the fastest rates of new business creation. Does she agree that we need to encourage more female entrepreneurs such as Tracy Wilson and Emma Brown in my constituency who have launched their new child product business, Dribble Stop Tops? What support are the Government giving to help to sustain such businesses in the short and long term?
As the hon. Gentleman highlights, record numbers of women are setting up their own businesses. Female self-employment is growing at four times the rate of male self-employment. More than 6,000 female mentors are available to support entrepreneurs, such as his constituents, who want to set up and grow their own business. The Government have a wealth of information and advice available on gov.uk and the great business website to support people in the situation that he highlights.
The Minister mentioned in passing the latest figures on women in boardrooms. In responding to those figures, the former Minister for Women, the right hon. Member for Basingstoke (Maria Miller), said that we need to be honest that the culture in Britain is not neutral to women and is still “white, male and heterosexual.” Does the Minister agree? If so, what message does she believe the reshuffle sends about changing the situation?
We would probably all agree that the gender and ethnic balance in boardrooms is not as we would like. However, significant progress is being made. At the start of this Parliament, about 12% of FTSE 100 board members were women. The figure is now more than 20% and we are on target to make that a quarter by the election. The Government are taking the matter seriously and working hard to change the culture throughout companies by introducing measures such as flexible working and shared parental leave, which send out the message that the Government think this issue is extremely important. We are working with employers to change the culture in businesses from top to bottom.
10. What estimate his Department has made of the contribution of life sciences to the UK economy.
The life sciences industry contributes more than £13 billion a year to the UK economy. Since the launch of our life sciences strategy, industry has been investing £1 billion a year in Britain.
Sutton is home to the Institute of Cancer Research and the Royal Marsden. Together, they have a formidable global reputation in the fight against cancer. As part of its Opportunity Sutton programme, my council has a shared plan with those two organisations to develop a life science cluster. Will the Minister meet me and representatives of those organisations to discuss how the Department can facilitate the co-ordination of policy across Government to secure that vision and the 4,000 extra jobs that will come with it?
I would be happy to meet my right hon. Friend. That is exactly the kind of initiative that the Mayor of London envisaged when he launched his MedCity initiative earlier this week. We look forward to a golden triangle that links Oxford, Cambridge and Sutton.
11. What steps he is taking to help small and medium-sized businesses to export.
17. What steps he is taking to help small and medium-sized businesses to export.
Last year, we supported more than £4 billion of export finance, which is more than in any other year for a decade. This week, we announced additional funding to enable UKTI to support 3,000 more medium-sized businesses.
Following the question from my hon. Friend the Member for Shipley (Philip Davies), will the Minister agree that the best way to exploit emerging markets is often through EU free trade agreements? In the light of that, will he support the all-party parliamentary group on European Union-United States trade and investment to ensure that small and micro businesses are front and centre in the proposed free trade agreement with America?
I am a strong supporter of the transatlantic trade and investment partnership. The trade deal between the EU and Canada is a big step forward and provides a basis on which we can build TTIP. The involvement of small businesses in TTIP will provide them with extremely valuable support in creating jobs.
We have some excellent exporters in north Oxfordshire, such as Norbar Torque, E. P. Barrus, Crompton Technology and Prodrive to name but a few. Those companies generate jobs themselves and through the contracts that they give to local SMEs. What is my hon. Friend doing to support SMEs in the export supply chain?
Across the Department, we work to support supply chains. Specifically, UKTI’s high value opportunities programme targets 100 projects that are based globally. That programme supports not just the primes, but their supply chains in Oxfordshire and across the country.
One area of export growth has been in recyclate of glass and plastics. Unfortunately, that has had a perverse effect because the packaging recovery note system, which is supposed to direct money into the creation of infrastructure for our own recycling industry, has been denied the feedstock that the industry needs if it is to grow. Will the Minister look at what more he can do to expand our recycling industry, rather than export it?
I would be delighted to speak to the hon. Gentleman to understand more about the packaging recycling industry and to see whether we can tackle that problem.
If we are to grow the economy and increase exports, we need to ensure that there is support for SMEs. In the last quarter, net lending to small and medium-sized enterprises fell by more then £1 billion. When will Ministers get a grip and start backing our wealth creators to take on employees and develop greater opportunities for exports?
Of course, the economy is growing, jobs are being created and the amount of gross lending is rising, but we are recovering from an extremely difficult situation. We all know what the causes of that were, and many of them came from those on the Labour Front Bench. Turning around our economy to support small businesses, whether through access to finance, support for exports, which are going up, or otherwise, is the Government’s central task. It is a huge job, because we were left in a huge hole.
It is absolutely essential that we encourage more small and medium-sized businesses to export, but does the Minister agree that the term “SMEs” is often unhelpful? There is a huge difference between the needs of medium-sized and small businesses, and between the range of small businesses, from the largest to single proprietor? Will he recognise those differences and tailor accordingly?
I strongly support my hon. Friend. In fact, as part of our long-term economic plan I am trying to banish the term “SMEs” and instead use “small businesses”. A business with, say, 10 employees is very different from a business with 249 employees, so an end to the acronym “SME” would be a valuable step forward.
12. What assessment he has made of the value for money for the public purse of the recent sale of shares in Royal Mail.
13. What assessment he has made of the value for money for the public purse of the recent sale of shares in Royal Mail.
The National Audit Office’s report on the Royal Mail share sale published last week confirms that we achieved our key objective of achieving the sale and allowing Royal Mail access to the private capital it needs to invest and thrive. It was a successful transaction, raising £2 billion for the Exchequer, and has reduced the risks to the taxpayer of having to provide future financial support to the universal six-day-a-week service.
The Secretary of State recently described me as “tribal” for my opposition to the fire sale of the Royal Mail. What does the Minister say about Peter Davies of Lansdowne Partners, the Chancellor’s best man and best pal, who is set to rake in millions from this dodgy deal? Will he say how many of the 12 lucky immediate winners are Tory party donors?
More than half the shares allocated to priority investors are still held by those investors, and six of them remain among Royal Mail’s largest shareholders.
Most people listening to the Minister’s response will think that it was particularly lame, to put it mildly. Can he justify the fact that consumers and businesses have faced hikes of up to 30% in stamp prices, while hundreds of millions of pounds have been squandered because of the Secretary of State’s disastrous decision at a time when families are really struggling?
Nobody has lost anything. Britain has gained a top-100 company in which 10% of the shares are owned by the staff themselves. Nearly three quarters of a million individual investors also have shares in Royal Mail. We achieved our objective of realising nearly £2 billion of receipts for the Exchequer, ensuring that Royal Mail has been put on a sound commercial footing.
The Minister can spin this as much as he likes, but he shamefully lost the taxpayer £750 million from the sale of Royal Mail. At that time, the Business Secretary dismissed the loss, saying:
“We wanted to make sure that the company started its new life with a core of high-quality investors who would be there in good times and bad”.
Given that the core long-term investors that the Business Secretary championed have used the good times to sell the majority of their shares at huge profit, is it not right that the Government tell us who those priority investors are, so that the taxpayers know where their lost millions went?
Nobody has lost anything from the sale of Royal Mail. More than half the shares allocated to priority investors remain with those investors, and the share price has fluctuated wildly. I do not think the hon. Gentleman has been in touch with his broker recently; otherwise he would know that the share price closed last night at 17% down on its post-float peak.
14. What recent steps he has taken to encourage young people to get involved in business.
Building links between the worlds of education and employment is a vital part of our reforms. I can announce to the House today that we are publishing the revised statutory guidance for schools on careers guidance and inspiration. This will drive links between schools and colleges and employers to inspire and mentor pupils, and there will be no excuse for schools and colleges not to open their doors to employers and no excuse for employers not to engage with schools and colleges. I will place a copy of the guidance in the Library.
I thank the Minister for that response and very much welcome the Government’s commitment to increasing access and exposure to, and experience of, business in schools, because it is through business and enterprise that people access social mobility, jobs and opportunity. Does he agree that we need constantly to seek better ways of connecting businesses with schools and ensuring that proper careers advice is provided by people with experience of business, rather than merely from teachers?
Exactly. I pay tribute to the work that my hon. Friend does in bringing together employers and schools and colleges so that young people know what it takes to succeed in work. The strengthened statutory guidance that we are publishing today will help to drive that, alongside league tables that include not just exam results, as before, but pupils’ destinations.
15. What steps he is taking to improve productivity.
The Government’s approach to raising productivity is to deliver macro-economic stability through a combination of monetary activism and fiscal restraint, while implementing a programme of long-term structural change through the industrial strategy. This is giving firms and individuals the confidence they need to invest.
In my constituency, we have several modern and forward-thinking firms, such as Renishaw, Delphi and ABB, which are all keen to make sure that they can recruit skilled engineers and a skilled work force—[Interruption.] The Secretary of State has sat down now. Does he agree that the long-term economic plan is pivotal because it deals with the need to make sure there is a pipeline of well educated young people entering the labour market?
I apologise for remaining standing; I was so gripped by the question, I could not tear myself away.
I commend my hon. Friend for establishing what I think he calls the Carmichael commission in his constituency to look at ways to improve growth. He is right that having a pipeline of skilled staff is essential. I am familiar with Renishaw and I shall see the company tomorrow at the MACH exhibition in Birmingham. The crucial requirement is a long-term train of apprenticeship, at graduate and sub-graduate levels.
Is the Secretary of State at all worried that the current economic picture is being driven so much by consumer spending, and why does our productivity remain so poor?
The Office for Budget Responsibility forecast for 2014 is that business investment will rise by 8%. Given the depth of the crisis to which we have had to respond, this is a slow process, but business investment is now overtaking consumer spending as the driver of the recovery.
16. What steps he is taking to support energy-intensive industries.
The Government have in place several measures to address energy costs for these industries. The Budget announced a further £7 billion package of support including: extending the existing compensation scheme to 2020, under which we have distributed £30 million to 53 companies; new compensation for costs of the renewables obligation and feed-in tariff; qualified exemptions to the carbon price support mechanism for combined heat and power; and capping the CPS at £18 per tonne of carbon.
The Secretary of State will be aware that even after the welcome changes in the Budget, the carbon price floor in the UK is four to five times higher than in the rest of the EU, where the emissions trading scheme is more or less defunct. In addition, the EU has a system of more direct subsidy in countries such as Germany for these industries. Can he assure the House that he will be active in ensuring that our industries are supported in the same way as those in the EU are, and that the 900,000 jobs in energy-intensive industries are protected?
Indeed, it is a major industry. My figures suggest that we have some 600,000 jobs directly or indirectly affected. It is a massive industry. We believe in it, and it is important that it is able to compete on a level playing field. That was the purpose of the changes announced in the Budget and we are now actively pursuing state aid clearance to make sure that these compensation mechanisms go through.
Does the Secretary of State now recognise that the Government’s ill-thought-through carbon floor tax was a mistake?
Absolutely not. The only concern from the industrial point of view is that energy-intensive industries should have those costs offset. Under the mechanism the Chancellor has proposed, which we are now pursuing through the European Commission, they will be offset.
T1. If he will make a statement on his departmental responsibilities.
My Department’s objectives are to pursue economic growth and recovery by investing in skills and innovation.
As we have just heard, the carbon floor price in the UK remains significantly higher in the EU, despite the welcome changes in the Budget. What specific assessment has the Secretary of State made of the investment decisions taken by international energy-intensive companies, such as those that operate in my constituency?
I think I largely answered that question a few moments ago, but the point I would emphasise is that despite the disadvantage of costs, albeit with the compensation we are now proposing, we have had very substantial investment in our energy-intensive industries. The steel industry, in particular, has been an exemplary example of long-term investment by Tata.
In export week, will the Secretary of State tell us what he is doing to garner support among Cabinet colleagues for our seventh-largest export industry, a sector that generates more than £10 billion of income for our country?
My colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) has given a comprehensive answer on how we are promoting exports across the board. The industrial strategy is, of course, maximising our export potential.
I am talking about higher education. The fact is that the right hon. Gentleman’s Government’s net migration target has done immense damage to higher education, contributing to a 51% fall in postgraduates coming from India and a 49% fall in those coming from Pakistan. Jim O’Neil, on the Department for Education’s board, agrees, saying that the Government are sending out a message that they are “not serious” about exporting education. The Parliamentary Secretary, Cabinet Office, the hon. Member for Orpington (Joseph Johnson) at No. 10 has argued, as we do, that legitimate students should be taken out of Government net migration targets, but is it not the truth that for all the talk from that Minister and the Business Secretary, both have let the sector down by failing to get their intransigent Home Secretary to see sense?
The simple truth of the matter is that, as a result of discussions across the Cabinet and with the Minister for Universities and Science and myself, there is no cap on the number of overseas students. [Hon. Members: “There is.”] There is not. We want to maximise the number. We actively encourage them, and only this week there was a £1 billion contract signed with Saudi Arabia for higher education training in which we are a participant.
T2. With the excellent news that manufacturing output year on year has increased by 3.8%, and with export week in mind, what steps is the Secretary of State taking to improve productivity so that we can further enhance the innovation of cutting-edge products and penetrate new export markets?
That is a suitable rejoinder to the hon. Gentleman’s earlier question. The key point he made in his earlier question is that to drive productivity we need an adequate supply of trained people. I would add to that the emphasis we are placing on innovation and the establishment of the Catapult centres across the country. This is a new approach based largely on the German model and it is succeeding admirably.
T3. I am concerned that the Secretary of State has been told that the current redevelopment of Swan Hunter’s yard in Wallsend is not appropriate. Will he meet me, the elected mayor of North Tyneside and others from North Tyneside to learn exactly how external funding is being used to develop the site and how his Department could support the creation of thousands of jobs in advanced manufacturing at Swan’s?
I am certainly very happy to give the hon. Lady an assurance to meet her in the House and to visit her constituency. I have been to Tyneside on several occasions and I am aware that it is a centre for advanced manufacturing. In many respects it is doing very well on the back of the growth of the oil and gas industry in the North sea. We clearly need more jobs on Tyneside and I am happy to work with her to deliver them.
T5. Twenty-five years ago the then Government intervened in the pubs market, recognising that it was failing consumers and small brewers. However, as a result of industry lobbying, they failed to place a limit on the number of pubs, which led to the development of the large pubcos. Twenty-five years on, will the Secretary of State assure me that he will listen to the majority of MPs in the House of Commons rather than giving in to industry lobbying, and that he will introduce the market-rent-only option which is the solution offered by the Business, Innovation and Skills Committee?
As my hon. Friend knows, we have had a number of debates about this issue in the House, and the House has expressed its view. The Government recently held a consultation, to which thousands of responses were received. We are now considering those responses, and will issue our own response as soon as we can.
T4. Last week, the Prime Minister said on the BBC that he would do everything he could to keep the pits at Kellingley and Thoresby open. This morning, the Minister of State issued a written statement confirming that the Government were facilitating a “managed closure”. Given that people will begin to lose their jobs on 23 May, there is now a very short period in which it is realistically possible to secure alternative investment to keep the pits open. Towards the end of last week, a private operator suggested that it might be interested. Has the Minister of State, or his officials, had any discussions with it about whether it is possible to find a way of securing a commercial future for those pits and those communities?
In my ministerial statement, copies of which are available in the Vote Office and the Library, I confirmed that we were prepared in principle to contribute a £10 million loan—alongside contributions from other private sector investors—to support a managed closure of the two collieries, which would avoid the significant losses and liabilities that would have materialised in the event of the immediate and uncontrolled insolvency of UK Coal. That does not exclude any further private sector interest, and I have been meeting others who have expressed an interest, as has UK Coal.
T8. Given that sales increased by 2.8% in London and by 6.2% outside London during the Olympic games as a result of the relaxation of the Sunday trading laws, will the Minister consider a further relaxation—perhaps during the World cup, the Commonwealth games and the run-up to Christmas—or, better still, abolish the restrictions altogether, in order to help bricks-and-mortar retailers to compete with those that trade online?
We now live in a world in which an increasing amount of trade is carried out online at times that are convenient to consumers and others. We relaxed the rules during the Olympics, and said at the time that we would assess the impact of that relaxation. A debate about the issue is undoubtedly taking place.
T6. The latest report from the Higher Education Funding Council for England shows for the first time in 29 years a decline in the number of overseas students studying in the United Kingdom. Let me now give the Secretary of State another opportunity to admit that the inclusion of students in the net migration target is hindering the growth and international competitiveness of our British universities.
There is no cap on the number of legitimate overseas students coming to Britain, and we will not introduce any such cap. The Secretary of State and I work with the Prime Minister and others on trade missions around the world to encourage young people with the necessary aptitude and qualifications to benefit from study in Britain to apply to come here. We can be proud of our universities.
Will my right hon. Friend congratulate Elekta Oncology Systems, a leading manufacturer and exporter of oncology systems which is based in my constituency, on its plan to expand by about a fifth in Crawley, and also on its involvement in the Government’s regional growth fund?
I do congratulate that company. As part of our life sciences strategy, we are supporting high-tech medical companies large and small, and it is great to hear that they are prospering.
T7. The Secretary of State said earlier that investment in businesses would go ahead next year, but today we have heard about the closure of coal mines. Will the Minister explain why, according to figures from Bloomberg New Energy, investment in clean energy in the United Kingdom is due to hit a five-year low this year? What is happening to that investment?
There has been a wave of investment in energy, not least the commitment last week by Siemens to invest £300 million in two plants on the Humber that will create 1,000 new jobs. We have seen a series of projects come forward for assistance under our renewables regime, and we will be running a capacity market later this year to secure more energy investment in four years’ time.
The Budget invited universities and others to bid to develop the new Alan Turing institute for big data, an invitation enthusiastically embraced in Wiltshire and Swindon’s economic plan. How can we now work with the Minister to make this bright idea a reality?
My hon. Friend indeed represents an area with, shall we say, some very distinctive skills in cyber and big data, and yes, absolutely, it is very important that places like his have the opportunity to apply to have the Turing centre. We will be running a consultation on its best location.
In answer to a written question I was told that the Government know next to nothing about the number of jobs they claim to have created, not even how many of them are new jobs rather than simply a transfer from the public sector, so why will the Secretary of State not tell us how many of these jobs are minimum wage, unpaid or zero-hours?
We are perfectly happy to provide information where it is available. It is obviously easy to quantify jobs created in projects. Collecting a vast inventory of information on fluctuating wages is a much more difficult proposition.
May I commend to the Secretary of State “A Blueprint for Britain: openness not isolation” by Iain Mansfield who is a former employee of his Department? It was the winner of the prestigious Brexit prize by the Institute of Economic Affairs, and it concludes that
“if the right measures are taken the UK can be confident of a healthy long-term economic outlook outside the EU.”
To correct the hon. Gentleman slightly, I think the gentleman concerned is employed by UK Trade & Investment, and he wrote this in his personal capacity, and it is perfectly reasonable to do so. I look forward to responding to his essay, which seems to me fundamentally mistaken, but no doubt we will argue about that.
When I visit schools in my constituency I ask them about the careers information, advice and guidance they receive and, without exception, they say that it is totally dreadful. To be fair to the Government, it was not much better under the previous Government. This is very important for social mobility, so what is the Minister intending to do to make face-to-face guidance available to everybody?
That is a very fair question. It is true that careers guidance has not been good enough in Britain for an awfully long time under Governments of all stripes and the new publication today, which I am sure the hon. Lady will want to get a copy of and I am happy to send to her, will strengthen the statutory duty on schools and also, crucially, open schools and colleges up to employers and encourage, and make it easier for, employers to get involved in schools, to inspire and mentor and give guidance to young people.
Farmers are the backbone of the £97 billion agriculture and food sector. How are the Government helping them take advantage of the latest science and innovation supporting our world-class agricultural technology sector?
My hon. Friend is absolutely right about the significance of this sector, and that is why we have a £160 million agri-tech strategy, which is aimed at promoting exports and investment in high-tech agriculture for the future.
The Minister of State, the right hon. Member for Sevenoaks (Michael Fallon), refused to answer me, but I wonder whether the Secretary of State could estimate how many of the 12 immediate beneficiaries of the fire sale of the Royal Mail are Tory party donors?
It is not my job to collect information on the Conservative party’s funding. All I can tell the hon. Gentleman is what the Minister of State has already told him: that a majority of the shares allocated to priority investors are still held by them and a substantial majority of the shares in Royal Mail that were issued through the initial public offering are being held by long-term institutional investors.
The start-up loan scheme is one of the most inspirational business policies that this Government are pursuing. Can the small business Minister confirm that we are right behind it, we are putting more money into it and we will do everything we can to grow the scheme as much as possible?
Yes, I will. Only this week, we took through the statutory instrument to expand the start-up loans scheme and ensure that the funding is available. Fifteen thousand people have now had the benefit of using the scheme, but it is not just about the money; it is about the mentoring and the wider support that come with a start-up loan, and I commend everyone to have a look at the scheme and commend it to their constituents.
Does the Secretary of State share my concern that, following the closure of the Insolvency Service office in Hull, there will be a gap between Newcastle and Ipswich with no Insolvency Service offices between those two areas? Will he agree to meet me to discuss this matter?
I am happy to meet the hon. Lady to discuss this issue. The Insolvency Service is having to look at the way in which it manages its estate. The number of insolvencies has been dropping significantly year on year, and it has to make the best use of its resources.