Employment: Internships
Debate between Lord Mitchell and Lord Popat(9 years, 6 months ago)
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Lord Popat
My Lords, internships are often a very positive thing, particularly in competitive industries. When it comes to pay, we support and encourage employers to pay interns, and quite often we encourage them to pay the minimum wage. However, it is important that someone is given the chance to start in a job with a view to making a career, and sometimes interns are not paid.
Lord Mitchell (Lab)
My Lords, I declare my interest as chairman of a graduate recruitment company called Instant Impact. These days it is really critical for young people to have significant CVs which are padded out with jobs that they have done. It is therefore important that they have internships. However, those who get internships tend to be better connected and wealthier people who can do them without pay. I really think that the Government should reconsider whether there should be a minimum wage after four weeks. Would the Minister agree to this?
Pfizer and AstraZeneca
Debate between Lord Mitchell and Lord Popat
Lord Popat
I agree with the noble Lord that AstraZeneca does some of the best research in this country. This is why it is in our interests to make sure that if the merger does take place, we will scrutinise everything that is being put forward by Pfizer to our Government. As I said earlier, the NHS makes very good use of this company when it comes to research and development.
Lord Mitchell (Lab)
My Lords, we cannot get away from the fact that Pfizer has form. It closed its successful R&D facility in Kent, as was mentioned; it bought and gutted three American competitor companies; and now it plans to set up a tax-inversion wheeze to buy a British gem. Does the Minister agree that this deal is not in the British interest, that it is not even in the American interest and that it is certainly not in the interests of one of our great science-based companies?
Lord Popat
My Lords, as a Government we have a role to play—but a very limited one—when it comes to takeovers and mergers. All takeovers and mergers depend on boards of directors and shareholders. Like all global pharmaceutical companies, Pfizer has faced challenges from many of its drugs going off-patent and having to replace them with new, innovative medicines. Both Pfizer and AstraZeneca have had to restructure major research projects around the world. That is a reality for some of these research and development companies.
Banks: Small and Medium-sized Enterprises
Debate between Lord Mitchell and Lord Popat
Lord Popat
My Lords, the taxpayer had to bail out both RBS and Lloyds Bank under the previous Government and we continue to pay for the mistakes of the past. Both banks are now becoming smaller and safer, but there is a long way to go. Since the launch of the Funding for Lending scheme, RBS and Lloyds Bank are now both lending more money to our SMEs.
Lord Mitchell (Lab)
My Lords, despite what the Minister says, the latest Funding for Lending figures are yet again down on what they were previously, and the high street banks are just not playing their part. Does the Minister agree that peer-to-peer lenders are in many cases much better able to serve small businesses and should receive even greater government assistance?
Lord Popat
My Lords, gross lending has gone up by 16% over the past 12 months. We intend to lend £4 billion per month compared with around £3.1 billion this time last year. We encourage peer-to-peer lending and more is happening in the area. One of the reasons that net lending might have dropped, which is probably the gist of the noble Lord’s question, is that a large number of businesses are either repaying or going for alternative financing, including factoring, leasing and hire purchase. There are also a number of schemes from the British Business Bank.
Small and Medium-sized Enterprises
Debate between Lord Mitchell and Lord Popat(10 years, 8 months ago)
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Lord Mitchell
To ask Her Majesty’s Government what assessment they have made of the level of financing available to small and medium-sized enterprises.
Lord Popat (Con)
My Lords, under this Government credit conditions continue to improve. Survey evidence indicates that more small and medium-sized enterprises are using external finance. Recent data from the Bank of England show that gross lending is continuing to rise year on year and in September reached the highest level since 2009. More broadly, confidence is beginning to return to businesses, which are now more ready to borrow and invest than since before the financial crisis.
Lord Mitchell (Lab)
My Lords, yet again I am asking the Government why much needed financial support is not getting through to SMEs. According to the Bank of England, net lending to SMEs was down £600 million in the second quarter of 2013. The answer to the Question is obvious: financing that should be going to small businesses is in fact being used by banks to build up their profitable mortgage portfolios. Does the Minister accept that banks should be backing small businesses rather than helping to create another property bubble?
Small and Medium-Sized Enterprises: Funding
Debate between Lord Mitchell and Lord Popat
Lord Mitchell
My Lords, we have already heard from noble Lords about the deplorable situation with respect to Funding for Lending. Loans in general to SMEs year on year are down by more than 3%, and Funding for Lending in the last quarter was down by £300 million. Billions of pounds are being drawn down by participating banks, but precious little is getting through to SMEs. It simply is not working. What we really need in this country is a fully fledged business investment bank with a strong regional presence. Does the Minister agree?
Lord Popat
My Lords, the Funding for Lending scheme is working. As I said, we have lent £16.5 billion in the past 12 months. We have also got other banks to join the scheme. Given time, it will prove to be successful. We have £80 billion allocated for that scheme. It is the best scheme available for SMEs. I also said that the banks are risk averse. They do not want to go through the crisis that they went through in 2008. SMEs are partly risk averse too. Not many SMEs are borrowing, which is why there is a little contraction in actual lending.
Small Businesses: Late Payments
Debate between Lord Mitchell and Lord Popat
Lord Popat
The noble Baroness raises an important issue. The department is doing everything it can to speed up prompt payment, both for SMEs and for large companies.
Lord Mitchell
My Lords, the Government have been prolific in announcing new schemes designed to assist small businesses to grow. They all have one thing in common: not one of them is working. The money simply is not getting through. If large organisations could be shamed into paying within 30 days, small companies would benefit immediately. Here is an idea: why not make it compulsory for all organisations, public and private, to include payment performance in their annual accounts?
Lord Popat
My Lords, government departments are obliged to pay 80% of their invoices within five days. We are promoting a culture of prompt payment. We would not like to bring this in as part of legislation. In many ways, we inherited this particularly important and good legislation from the previous Government. We will now further enhance it by taking the European directive to make sure that UK suppliers are paid by member states of Europe.
EU: UK Trading Deficit
Debate between Lord Mitchell and Lord Popat
Lord Popat
My Lords, just under half our exporting is to the European Union. We are working to continue our trade relations with the European Union, and we really need to ensure that we reform it to make it more competitive and accountable. It is crucial that we continue to trade with it and that we increase our trade with it: hence, we have 27 UKTI offices in those countries.
Lord Mitchell
My Lords, these answers hardly fill one with confidence, do they? UK Export Finance was set up specifically to help all businesses to export more, but let us look at the results. Over one year—2011-12—the number of small and medium-sized companies receiving help from UKEF has been the magnificent total of 21. Cannot we do better than that?
Lord Popat
My Lords, this time last year I asked for an ad-hoc cross-party committee, chaired by my noble friend Lord Cope, to be set up. We had a report in the early part of this year, and received a response from business this week on what we can do to help our SMEs to export more, including how the UK Export Finance scheme can work more effectively for those who export in those countries.
Security: Fake Bomb Detectors
Debate between Lord Mitchell and Lord Popat
Lord Popat
The noble Lord raises a very important issue but I think he misunderstood my answer. UKTI plays an important role within our department to promote exports world wide. It has exhibitions and trade shows. It does not endorse the sale of such items.
Lord Mitchell
My Lords, is it just me, or is there a sense of complacency in the replies that we are getting? This is a very serious issue. With the benefit of hindsight, I accept that it would have been difficult to prevent such a despicable act. However, now that this has happened, what steps are being taken by the Government to ensure that safety equipment that is not classified as military equipment or subject to the same export restrictions has adequate checks?
Lord Popat
My Lords, in February 2010 when this matter came to our attention, the Foreign and Commonwealth Office informed all diplomatic posts of the UK Government of the concern about the effectiveness of certain hand-held bomb detectors and asked posts to share this concern with host Governments. This happened during the time of the noble Lord’s Government. Therefore, everything was done from the time it came to our attention to the time we put the controls in place.
Payday Loans
Debate between Lord Mitchell and Lord Popat
Lord Mitchell
To ask Her Majesty’s Government what assessment they have made of the findings of the Office of Fair Trading’s report on payday loans.
Lord Popat
My Lords, the Government are deeply concerned by the OFT’s evidence of irresponsible lending to people who cannot afford it, and by its findings of fundamental problems with the way the payday lending market works. The Government have worked with the regulators, including the OFT, to announce a strong action plan. Tough enforcement today, combined with the move to a new regulatory regime, equipped to deliver robust consumer protections in the future, will tackle concerns in this market.
Lord Mitchell
I thank the Minister for that reply. The report from the OFT is indeed a hard-hitting document. It says that payday lenders are guilty of widespread non-compliance with the law—not a few of them but most of them. However, I am left with two concerns. The first is that the Government seem to be indicating that they are reluctant to place caps on the interest rates charged. Is this true? Secondly, are payday lenders now sidestepping regulation by going offshore? What are the Government doing to plug this loophole?
Lord Popat
My Lords, that is why last week’s announcement was about the Government and regulators taking strong action together, both to address current problems quickly and to ensure that a more effective regime will be in place next year. A cap is not recommended by the Bristol University report; a cap will reduce access to credit and will mean fewer lenders. As for lenders going offshore, I do not believe that this is the case yet, but if we bring a cap into place there is a good chance that lenders would rather lend from abroad than from this country to avoid the cap regulation.
UK Trade
Debate between Lord Mitchell and Lord Popat(11 years, 6 months ago)
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Lord Popat
I thank my noble friend for those compliments. I am sure there is something that can be done about the Bench. I welcome the noble Lord’s interesting question. We helped to let our pound fluctuate freely in the international market. Although sterling has appreciated by 7% since January 2012, it is still around 23% below the January 2007 peak. All I can say on the exchange rate and the value of sterling is: let the international market decide what the value of our currency should be, rather than it being something we directly influence.
Lord Mitchell
My Lords, on behalf of these Benches I welcome the noble Lord to the Dispatch Box. Even though our politics are different, he and I both come from a business background, and both of us are from north-west London. We also shared the same profession when we studied at night school—we were both waiters. He worked on Kilburn High Street, I worked in Greenwich Village, and I bet I had the better social life.
I want to come back to the BRIC economies—that is, Brazil, Russia, India and China. This country exports more to Ireland than we do to all those countries combined. I ask the noble Lord: what further action we can take to improve our exports to these BRIC countries?
Lord Popat
I thank the noble Lord for those comments. The BRIC countries are very important. As I said earlier, we have a very special relationship with emerging markets, in particular the BRIC countries. Exports to BRIC countries fell by 15% between 2008 and 2009, but grew by as much as 66% between 2009 and 2011. Exports to the BRIC countries now make up 6% of total UK exports. I agree that there is huge potential. My noble friend Lord Green has visited all the BRIC countries twice in the past 18 months to make sure that we have more trade.
The noble Lord is quite right that we do more trade with Ireland than with India. With 1.2 billion customers, we do around £13 billion a year in two-way trade with India. There is huge potential. The Prime Minister himself is putting special emphasis on the BRIC countries and I am sure that over time we will increase our exports to the BRIC countries—which we have already done in the past two years, by 66%, which is pretty good.