Small Business, Enterprise and Employment Bill
Nadhim Zahawi Excerpts(9 years, 10 months ago)
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Nadhim Zahawi (Stratford-on-Avon) (Con)
In the short time remaining I will make only a few points and post the rest of my speech online. This is an ambitious Bill. The Government have, for the first time, legislated specifically for small business, which will strengthen the recovery and see further support directed to Stratford’s job creators.
On procurement, the Labour party left office with only 6.5% of public procurement going to small and medium-sized businesses. Not only were smaller firms denied a chance to compete on a level playing field, but the taxpayer was denied value for money. The Bill will put that right.
Next, and crucially for businesses in my constituency, the Bill contains important measures on access to finance. Everyone agrees on the need for more competition in the business lending market. The Bill will open that market. Banks will be required to refer businesses to other providers and, crucially, business lending data will be available for new challengers. This is about making sure that finance keeps up with the economic recovery.
Alongside access to capital, the Bill addresses cash flow through, in particular, measures to create a more responsible payment culture. The payment practices of all large companies will now be published, the prompt payment code will be strengthened, and the public sector will lead by example.
Oral Answers to Questions
Nadhim Zahawi Excerpts(10 years, 2 months ago)
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Nicky Morgan
I think the hon. Gentleman ought to ask his own shadow Education Secretary, who himself has been teaching unqualified. Government Members believe that head teachers are the best people to know about the qualifications of those who teach children. We want to look at the outcomes, not to be obsessed always with the structures and the people.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Does my hon. Friend agree that it is a national scandal that under the previous Government an estimated 350,000 young people a year were studying for post-16 qualifications that offered no route into stable employment or higher education?
The Minister for Skills, Enterprise and Equalities (Nick Boles)
My hon. Friend is absolutely right. This Government have got rid of 3,000 poor-quality qualifications allowed in by the previous Government who, in doing so, debased the currency of qualifications and led young people up the garden path with no real prospect of getting a job at the end of it.
Oral Answers to Questions
Nadhim Zahawi Excerpts(10 years, 3 months ago)
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Matthew Hancock
The hon. Gentleman was doing quite well until that last exaggeration. I certainly agree that strengthening access to finance is a vital part of securing our recovery, and of course measures in the Bill announced yesterday will help to do that, but according to the FSB, small businesses’ confidence is at a high since Labour’s great recession. Small businesses in the hon. Gentleman’s constituency are playing their part, because unemployment on the claimant count has fallen by 30% in the past year.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Small businesses in my constituency and around the country tell me that the real struggle when they are supplying large businesses is payment terms. Does my hon. Friend agree that requiring large companies to publish their payment practices is an important step in helping to drive a more responsible payment culture between large and small businesses?
Matthew Hancock
I agree with my hon. Friend so much that we put such measures in the Bill we published yesterday.
Birmingham Schools
Nadhim Zahawi Excerpts(10 years, 3 months ago)
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Michael Gove
That is a fair question. Let me say two things to the hon. Gentleman. First, I have asked the permanent secretary to look at our responses to all the warnings that the Department has received, and I think that it would be premature for me to release anything before he has finished his report. Secondly, I have described—both in my statement and in my response to what was said by the hon. Member for Stoke-on-Trent Central—some of the actions taken by my Department which have provided it with a more robust set of tools to deal with extremism than have been available before.
Nadhim Zahawi (Stratford-on-Avon) (Con)
The Secretary of State has described some shocking behaviour—shocking not only to Muslim parents, but to all parents. Does he agree that the failure of Birmingham city council to deal with this problem over a long period demonstrates the importance of the academies programme, which takes powers away from politicians and bureaucrats and hands them to teachers?
Michael Gove
My hon. Friend has made an important point. Some of the most outstanding schools in Birmingham are currently academies and free schools. Indeed, the hon. Member for Stoke-on-Trent Central has previously praised Liam Nolan, the head teacher of Perry Beeches school, who runs an academy chain and has opened free schools. I think that the hon. Gentleman’s attempt to conflate the growth of academies and free schools—and the consequent improvement in school standards—and a risk of extremism constitutes an attempt to jump on an opportunistic bandwagon, which, sadly, is becoming a characteristic of his approach to opposition.
Oral Answers to Questions
Nadhim Zahawi Excerpts(10 years, 6 months ago)
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Elizabeth Truss
I thank the hon. Gentleman for his question. I think that we are at about 90% of our target for this year. It is vital that we get more people into maths teaching, so we have removed the cap on maths teacher recruitment and we are awarding the highest level of scholarships and bursaries to maths. Importantly, we also need more people doing maths at A-level, and we now have record numbers under this Government. We also have record numbers doing further maths at A-level and doing maths degrees. That will increase the supply of maths teachers in future.
Nadhim Zahawi (Stratford-on-Avon) (Con)
6. What progress has been made on the Shakespeare schools festival.
The Secretary of State for Education (Michael Gove)
I am delighted to be able to support and fund the Shakespeare schools festival. We have provided nearly £500,000 to give students the opportunity to prepare and perform an abridged version of a Shakespeare play. More than 1,000 schools—over 62,000 students—have already benefited, and 50,000 more students should benefit this year.
Nadhim Zahawi
In this special anniversary year, the Shakespeare Birthplace Trust’s fantastic Shakespeare week has brought the works of the great bard to thousands of children across the country. Will the Secretary of State join me on 29 April to watch the talented students of Stratford-on-Avon mark the 450th anniversary of the bard’s birth in a special performance in the Speaker’s state apartments?
Michael Gove
Mr Speaker, to visit your apartments,
“Let me not to the marriage of true minds
Admit impediments.”
Yes is the short answer to my hon. Friend.
Oral Answers to Questions
Nadhim Zahawi Excerpts(10 years, 7 months ago)
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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?
The Minister for Universities and Science (Mr David Willetts)
My hon. Friend is absolutely right. To encourage more women into science, we have specifically said that when universities bid for the new capital funding we are allocating to them, they will be required to show what they are doing to attract women into those essential subjects.
Oral Answers to Questions
Nadhim Zahawi Excerpts(11 years, 11 months ago)
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Matthew Hancock
I certainly do agree. It is important to include English and maths in apprenticeships for all those who do not have level 2, and we must do more to make sure we inspire young people to look not only at the academic route, but at apprenticeships which combine work and training at the same time.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I commend my hon. Friend and his predecessor for their work on the apprenticeship programme. My hon. Friend will be aware that the Business, Innovation and Skills Committee published its report on apprenticeships. Can he say a little more about the drive for quality, as opposed just to quantity, of apprenticeships?
Matthew Hancock
I welcome the Select Committee’s report. The focus on quality in apprenticeships is important. We have already said that almost all apprenticeships must be longer than a year, and we have taken action to close down some low-quality provision, so this is a direction that I very much want to go in. I will be studying the recommendations of the report extremely carefully.
Higher and Further Education
Nadhim Zahawi Excerpts(12 years ago)
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Shabana Mahmood
Not at the moment.
That is set against a backdrop of a worsening economic outlook as a result of the Government’s failed economic policies. The economy is in a double-dip recession made in Downing street. We know that there is a strong link between periods of recession and interest in higher education, as people seek to enhance their employability and competitiveness in difficult economic circumstances, but this year that is not the case. There is a massive drop that, combined with cuts in the number of places, will result in tens of thousands fewer students entering higher education in 2012. It indicates straight away the impact of the Government’s trebling of tuition fees. Students are being put off and are basing decisions not on whether a university education is right for them, but on whether they can afford it. That is a tragedy for both the person making the decision and the country as a whole, because if they miss out on higher education, we miss out by failing to capture their full potential.
Nadhim Zahawi (Stratford-on-Avon) (Con)
On affordability, will the hon. Lady at least admit that a graduate earning £21,000 will pay £45 less than they would have done under the system we inherited from her Government?
Shabana Mahmood
If the hon. Gentleman’s party took on board our £6k proposal, there would be an even more progressive system for future generations of students.
Cost is the real problem. The Centre for Economic Performance recently surveyed 12,000 teenagers and found that all the indications are that the hike in fees in late 2010 increased the perception that going to university is simply too expensive. That perception was significantly higher in comprehensive schools, compared with independent and selective state schools, and among children eligible for free school meals. If these perceptions influence effort at school or behaviour post-16, they will increase future socio-economic inequality.
Mature students are one of the worst affected groups, as many more are choosing not to go to university this year. The Government failed to take into account the effects of their policies on that group, and we have seen an 11.3% drop in such applications, making them the biggest group affected. There are around 30,000 fewer older applicants this year than last year.
Shabana Mahmood
My hon. Friend makes an extremely powerful point. I agree with her comment and endorse it entirely.
Too often we in this House consider higher education issues through the prism of the 18-year-old undergraduate going to university for the first time. Although the experience of such undergraduates is of course incredibly important, we know from the figures that in 2009-10 more than a third of undergraduates entering university for the first time were 21 or older. The impact of the trebling of tuition fees on that group is particularly interesting, as their perspective and actual experience of debt and finance are very different. These are people who often have significant financial and family commitments, with mortgages to pay and child care costs. If they are making a decision to walk away from enhancing their skills by obtaining a degree, they are doing so on the basis of cost.
There is a much higher rate of withdrawals from the application process this year than last year—16% higher. At this stage, 13,138 students who are holding offers from universities have decided to withdraw from the process. That is an extremely worrying sign that students who had already made the decision to go to university are now being put off. Having attended open days, filled out applications and gone to interviews, they are now saying “No thanks.” Where will they end up? What are their prospects for the future given the record levels of youth unemployment and the ongoing recession?
Shabana Mahmood
Not at the moment.
Reading the Government’s amendment, one would think that there were no problems with their policy whatsoever and that it has had hardly any impact—further proof, if any were needed, that they are complacent and out of touch.
Shabana Mahmood
The hon. Lady makes a very powerful point, and she is entirely right in her conclusions.
The Independent Commission on Fees found that in Scotland, Wales and Northern Ireland the number of applicants aged 20 or over increased between 2010 and 2012 while, by contrast, in England they fell by 12%. The number of younger applicants—those aged up to 19—fell by 7%, but by only 1% to 2% in the other home countries. Although population size could be a factor, the report found that the relative decline in English applications was much higher. That raises concerns about the impact of fees, because there are falls in the number of applicants both in absolute terms and relative to the rest of the UK.
Shabana Mahmood
I am glad that I gave another hon. Gentleman an opportunity to make a mini-speech. If only the experience of the whole of the higher education sector was the same as that in Winchester.
Shabana Mahmood
I am afraid not; I have no desire to respond to a Whips’ question.
The trebling of fees is not the only thing that this Government have done to destabilise and put at risk the quality of our higher education sector.
Economic Growth and Employment
Nadhim Zahawi Excerpts(12 years, 10 months ago)
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Mr Umunna
I agree with my hon. Friend. We all know what is holding back business in taking on workers: the forecast economic projections for this country. That is the real problem. What has been the centrepiece of the Business Secretary’s alternative offer? How will he turn things around? The answer is the regional growth fund. The aim of the fund is to unlock private sector investment, support areas that are dependent on the public sector and help them become more balanced economies. Good. We take no issue with those objectives. We want that money to get to business and to create the jobs that will support growth, yet the scheme has been managed shambolically. It has been an utter fiasco. The fund is a third of the size of the moneys distributed through the regional development agencies, which have been scrapped without effective replacement, so it has been hugely over-subscribed, which demonstrates businesses’ craving for capital. Of the 956 bids received, only 50 were successful in the first round and 119 in the second round. There have been many more losers than winners. It is difficult for the losers, but what of the winners?
Of course, due diligence is needed to ensure the proper use of public funds. The permanent secretary at the Department for Business, Innovation and Skills told the Business, Innovation and Skills Committee that due diligence on successful bids tends to take between two and six weeks, and that until it is complete the successful bidder is not given its money. Yet, clearly, very few successful bidders have received what was promised, because it has taken so long for due diligence to be completed.
I have written to the Secretary of State and tabled parliamentary questions, and in fact the Minister of State, the hon. Member for Hertford and Stortford, who has continually chuntered from a sedentary position today, provided the answers. I tabled those questions to get the answers, to get the facts and to get to the bottom of the delays and mess.
On Monday I received answers to those parliamentary questions, indicating that 30 weeks—30 weeks—after the original announcement just nine of the 50 first-round winners have completed due diligence. When I asked why due diligence has taken so long, I was told:
“It is for successful bidders to initiate due diligence upon receipt of a conditional offer letter from the Department.”—[Official Report, 21 November 2011; Vol. 536, c. 154W.]
Usually, the Government blame us for all the mistakes; now, it seems that they are seeking to pass on blame to the very businesses that they claim to want to help—and the bidder has to pay for the due diligence cost, too.
As it happens, I met—[Interruption.] Ministers shake their heads—
Mr Umunna
I will in a moment.
Last week I met one of the first-round bidders, who told me that on learning of their successful bid in April they immediately sought to progress due diligence but, despite chasing the Secretary of State’s Department, received no further documentation for four months. When they got it, they immediately responded but, again, heard nothing for another three months—until around the time that my right hon. Friend the Leader of the Opposition raised the issue of the regional growth fund at Prime Minister’s questions. I am sure that the timing was totally coincidental.
Even now, formal due diligence is not complete, and the matter is due to go to the permanent secretary’s committee for approval on 2 December.
Mr Umunna
My hon. Friend is right, and when the Chartered Institute of Personnel and Development looked at the economic effects of the proposal to increase the service requirement from one to two years, the chief economist, Dr John Philpott, said that
“any positive effect on hiring is likely to be offset by a corresponding increase in the rate of dismissals. Increasing the qualifying period for obtaining unfair dismissal rights thus runs the risk of reinforcing a hire and fire culture in UK workplaces. Although the policy change will undoubtedly be welcomed by the de-regulation lobby, it isn’t the way to boost growth and jobs.”
Nadhim Zahawi
The hon. Gentleman is now quoting selectively. Will he tell us what the Federation of Small Businesses, which he quoted earlier, or the chambers of commerce think of that policy?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman has had his intervention, and he should please wait for the answer. We do not need comments from the side.
Mr Umunna
I withdraw that comment.
The hon. Gentleman asked whether business organisations were in favour of increasing the unfair dismissal service requirement from one to two years. That policy may sound good on the face of it, but what will happen—I say this as a former employment lawyer—is that we will simply end up with more employees making spurious discrimination claims, because there is no service requirement for them. When we put that to businesses, they take quite a different point of view of the policy.
Vince Cable
It is certainly a last resort in a major economic crisis. I am sure he appreciates that we are living through an economic crisis that is unparalleled in our lifetimes. That is why not only Britain, but the United States and other countries are having to resort to unorthodox monetary policy. That is a reflection of the desperation of many western countries. Our Bank of England has been comfortable with our fiscal policy and, to that extent, has been willing to support it through monetary means.
Those are two of the three elements of the strategy. The third is rebalancing the economy. We inherited an economy that was horribly unbalanced in favour of debt-supported consumption and banking, and we are now rebalancing the economy towards exports and trade. Rapid growth is taking place at the moment in British exports. That is the strategy on which we will proceed and on which we will be judged. The alternative we have been offered is something called plan B, which I think has been renamed the “Antiques Roadshow” in respect of the shadow Chancellor. No serious business organisation is arguing that such financial irresponsibility has any prospect of success.
Nadhim Zahawi
In the document that I have in my hand the shadow Business Secretary says, regarding the new economy, that we need to build an economy that is
“less vulnerable to global shocks”.
How does the Secretary of State think that building an economy based on £100 billion of extra borrowing by 2015 will deliver that?
Vince Cable
I can give a bit of substance in answer to that. The National Institute of Economic and Social Research, which has been critical of the Government in some respects, has done its own simulation. On the use of fiscal policy to support growth, which I think is what the Opposition plan B is all about, it says that in order to stimulate growth from 1% to 2% we would need to have a Government borrowing account of about 12% of GDP. Is that actually what the Opposition are proposing, because that is what their plan B—fiscal stimulus—means?
Vince Cable
UKTI has been radically reformed, thanks to the Minister for Trade and Investment, Lord Green. I think that it will perform an excellent function. What I found was that British export activity in the big emerging markets, which is clearly where future growth lies, had been sorely neglected for many years. As somebody put it to me, when we turned up on the beach the Germans were already in the deckchairs. They have dominated the market in these countries and we are a marginal player. It will take years to turn that around, but that is where our emphasis lies.
Nadhim Zahawi
Does the Secretary of State agree that under the previous Government we exported more to Ireland than we did to Brazil, Russia, India and China put together?
Vince Cable
I thank the hon. Gentleman for reminding me of one of my best lines. It is partly a compliment to Ireland that we trade with it so extensively, but that fact is an appalling commentary on our neglect of the big emerging markets.
Export growth is one key focus for us. The second is people and apprenticeships. The Minister for Further Education, Skills and Lifelong Learning will say more about this in his summary. Despite a severely curtailed budget, we have increased apprenticeships—actual people doing training—by 50% over the past year. There are now 350,000 people in such training. We do not accept that that is the end of the road. We have to improve the quality and refocus as much as possible on younger apprentices, thereby addressing in part the problem of youth unemployment. This is a major success story and we are proud of it.
On access to finance, one of the major themes of my analysis has been that what we are dealing with is a collapsed and non-functioning banking system. It is right for Members to continue to cross-question us on the Merlin agreement, because that is at the heart of the problem. We have stopped, at least in relation to small and medium-sized enterprises, a process of rapid deleveraging. We are using Government funding through the regional growth fund and, from next year, the Green investment bank to co-finance private capital so that there is access to finance for British industry. We are taking initiatives to support equity finance. The business growth fund is not Government owned or controlled, but it is a major initiative that should have been taken decades ago to get equity finance functioning. Access to finance is a critical issue—of course we accept that. It is a consequence of the banking crisis that we are focused on it.
I want to give one final concluding thought. When I hear the Opposition speaking about the economy, I think that lying at the back of their world view is the idea that what we are currently in the middle of is a cyclical problem—we had a boom, we had a bust, we will press a few buttons, spend a bit more money, and we will get back into a boom again. This is not a cyclical problem; it is a profound, long-standing structural problem. We had the wrong model. Growth was based on fundamentally the wrong principles, it was not sustainable and it collapsed. We are now having to repair the damage.
Oral Answers to Questions
Nadhim Zahawi Excerpts(12 years, 11 months ago)
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Vince Cable
Certainly we should be doing all we can to support disabled workers. My understanding is that those decisions lie with the Department for Work and Pensions, but I would be happy to engage or help if there is a problem.
Nadhim Zahawi (Stratford-on-Avon) (Con)
UK Trade & Investment has just completed a trade mission to Iraq for the Erbil international trade fair, of which I was privileged to be a part. We had 86 businesses, companies and educationalists at the British pavilion at the trade fair, whereas three years ago we had only one. Will the Secretary of State join me in congratulating the UKTI team and our consul-general on their great work during the mission?
Vince Cable
Yes. UKTI does an excellent job. Like all other parts of the Government, it is having to do more with less, but it does so through refocusing and strategy. I have not yet been to that country, but I look forward to doing so.