Business Community

Baroness Neville-Rolfe Excerpts

Thursday 10th December 2015 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, I thank the noble Baroness, Lady Greengross, for her Question. I enjoyed the wide-ranging debate and the range of examples that we have gathered together this evening. Over the past decades, I have been impressed by the noble Baroness’s work addressing so many issues faced by the aged in our society and by her work with Age UK, with BITC and, of course, with Jonathan Djanogly on responsible business practice. That includes companies such as Electricity North West, which was recognised at the Responsible Business Awards this year for having recruited households to its power saver challenge.

I wanted to mention Electricity North West today partly because, of course, it and several other companies, as mentioned by several noble Lords, are wrestling with a difficult challenge as a result of the catastrophic floods in Cumbria. Our hearts are completely with the families, the pensioners and the businesses going through such unbelievable difficulties as the rain continues. As a Government, we are making £60 million available, which will help ensure that affected businesses can get back on their feet.

I was delighted to hear from the noble Baroness, Lady Lane-Fox of Soho, about the practical steps being taken by Marks & Spencer on climate change, such as the revitalisation of British fish stocks. Of course, her own experience and efforts are part of the digital revolution. She is an inspiration in showing how big companies and charities can work together. This is for us all, not just a government matter. I believe that businesses make an enormous contribution to addressing the challenges facing society. The fact is that all the resources available to government for schools, hospitals, housing, welfare and defence ultimately depend on the wealth that the business sector creates and the taxes that it properly pays in the UK. I have found that business is also a great source of innovation. This matters in many of the areas we have discussed today. Companies in the digital world are pivotal to the UK economy and, indeed, to continued small business creation and growth. We made it clear in the Autumn Statement that we were investing £1.8 billion in digital technology. In health and social care, digital devices are making the monitoring of diseases so much easier.

Much the most important contribution the business sector can and does make to our national well-being—probably 95% of its contribution—is to run businesses efficiently, innovatively and successfully so that they take on more staff, pay them more and in most cases—it should be in all cases, of course—pay more taxes. My noble friend Lord Suri is a brilliant example of the contribution that business can make to society with the jewellery firm that he has built up. I was so inspired by his comments this evening. I agree with the noble Lord, Lord Stoneham, that this is not only about skills. As he has often said, better management is vital and is especially important to growing the economy. As he also said, people should pay their taxes. I think that we will come back to his notion of Quaker values in future discussions.

Economic efficiency has a direct read-across to national welfare but, of course, the business sector also has an impact in softer ways. I endorse what was said about the British food industry and the supply of food at great prices. I know that it has worked closely with the Food Standards Agency to reduce fat, salt and sugar, although there is still much more to do. Customer trust is important, as the noble Baroness, Lady Hayter, said. I enjoyed working with her on reforms to consumer rights.

Businesses also directly or indirectly pay for the training of much of the UK workforce, ensuring that the UK can grow and prosper. I agree with the assessment of the noble Baroness, Lady Greengross, of the vital role that older workers play. Workers aged 65-plus bring a unique wealth of experience and skills to many workplaces, not just this one. For example, McDonald’s has reported 20% higher performance in its outlets where workers aged over 60 are employed.

However, as has been said, youth unemployment remains high. My noble friend Lord Taylor said this. The good news is that youth unemployment is at its lowest level since 2006, and the employment rate for young people who have left full-time education is up to 74%—the highest in more than a decade. However, there is more to do, and it has to be everywhere, not just in finance or football, particularly at Aston Villa. Everybody needs to play their part. As my noble friend said, mentoring can make a huge difference. We all have a duty to mentor people, which is actually very enjoyable.

In the last Parliament, more jobs were created in the UK than in all the other EU member states combined, with most of those jobs being created in the private sector. However, there are certainly areas for improvement. It is true that we have performed less well on skills. We know that skills are one of the major drivers of productivity growth, accounting for around a fifth of UK growth over the last 30 years. That is why we have committed to significantly increasing the quantity and quality of apprenticeships in England to 3 million starts. The noble Baroness, Lady Lane-Fox, described the digital challenge in skills. I commend all that she has done and I was interested to hear about Go ON UK. A huge amount needs to be done on digital skills. As she says, they feed start-ups and scale-ups, which is what we need if we are going to stay ahead in global markets.

Frankly, there has been a steady decline in the amount and quality of training undertaken by employers over the last 20 years, so a UK-wide apprenticeship levy will be introduced for all larger employers in the public and private sectors to help fund the increase in quantity and quality of apprenticeships that we need. We are encouraging large businesses to train more apprentices than they can themselves use. We are doing more to help small businesses as well by offering them apprenticeship support. We have made a commitment to address the proportion of apprenticeships started by young people from BME communities and to increase it by 20%, and to encourage employers to think of apprentices from diverse backgrounds as the norm.

Many major companies have put training programmes in place: BAE Systems, for example, opened a new £5 million training academy in north Lincolnshire recently, which will take on more than 60 apprentices. There are lots of examples. I join the noble Baroness, Lady Greengross, in commending the work done by my noble friend Lord Baker and his role in developing university technical colleges. It is an amazing model and obviously links in with household names such as National Grid, Toyota and Siemens, and really helps to get the economy going.

Businesses tend to reflect the local communities in which they operate, and we can be proud of the fact that the UK achieved a female employment rate of 69% in the last year. This is the highest figure ever recorded in the UK. It is also the second-largest annual increase among the G7 and the highest in Europe. The noble Baroness, Lady Lane-Fox, gave us more excellent examples, including Arup and Intel. One of my ministerial priorities is to press ahead with Women on Boards, a successful voluntary initiative supported by government and led by the noble Lord, Lord Davies, who has done a great job doubling female representation on boards since 2011. There are now no all-male boards—unimaginable, frankly, in 2010—and the companies mentioned here have played a part in that. We are now focusing on the talent pipeline to ensure that women are able to move through a company and that skills and talent are recognised.

A start has also been made in addressing BME representation, with Sir John Parker of Anglo American now leading a business endeavour with a view to ending monocultural boards in the FTSE 100 by 2020. I was delighted to hear about the work on Ban the Box and the comments of the noble Lord, Lord Stoneham, about the training and employment of ex-prisoners. John Timpson’s record is amazing, as has been mentioned; there is also Halfords and Virgin. They are all doing more work in this area and we want others to join them. Ex-cons, given a job, are loyal and have learnt to turn up on time.

The noble Baroness, Lady Hayter, talked about the flatlining of productivity. I am delighted that the Government have decided to address this with the launch of our productivity plan in July. Part of this is the productivity leadership group of business leaders chaired by Sir Charlie Mayfield. I listened carefully to her observations and to those of the noble Lord, Lord Stoneham, whose comments about housing, regeneration, skills, apprenticeships and education are all relevant to this cross-cutting productivity work. We need to bring that together and create a sense of momentum. This includes 200,000 starter homes by 2020 and of course the right to buy. There is more to do, but we have five years to do very good things.

To conclude, there is much for the Government and other stakeholders to do, but business can contribute—and I believe is contributing well—to resolving some of the major challenges facing the United Kingdom. We have heard this evening about some more things that we should be doing.

Committee adjourned at 5.59 pm.