Oral Answers to Questions

Debate between Eric Ollerenshaw and Matt Hancock

Thursday 6th March 2014 Commons Chamber

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T2. Will the Minister join me in congratulating Lancaster chamber of commerce and Lancaster and Morecambe college, ably supported by the Lancaster Guardian, on putting on courses for local businesses to demonstrate the benefits of apprenticeships? Does he accept that such local initiatives will build on this Government’s success in putting real apprenticeships back on the career map?

[The Minister for Skills and Enterprise (Matthew Hancock)]

I agree wholeheartedly with my hon. Friend. The Lancaster Guardian, like many local newspapers across the country, plays an important role in changing the culture, supporting apprenticeships and ensuring that young people know the opportunities that are available to them.

Oral Answers to Questions

Debate between Eric Ollerenshaw and Matt Hancock

Monday 10th February 2014 Commons Chamber

[Matthew Hancock]

We have a huge programme of work for that purpose. In my hon. Friend’s own constituency, for example, the number of apprenticeships has risen by 50% since 2010. By promoting tech levels and the technical baccalaureate, we are driving up standards in vocational qualifications, and supporting progression in order to show the value of vocational and technical education and hence increase support for it.

[Eric Ollerenshaw]

May I take up the point made by my hon. Friend the Member for Nuneaton (Mr Jones) about parity of esteem, which has always been the issue when it comes to vocational qualifications? Does the Minister think it is about time that employers associations, industrial associations, and perhaps even local chambers became involved in selling those qualifications?

[Matthew Hancock]

Absolutely. Tech levels need to be signed off by employers in order to be recognised by the Department. In the past, there were too many so-called vocational qualifications that did not help people to get on in an occupation. We are changing that by insisting that employers publish support for a qualification before it is recognised by us, so that when people embark on a vocational course they know that they will get something valuable out of it.

Education Funding for 18-year-olds

Debate between Eric Ollerenshaw and Matt Hancock

Tuesday 28th January 2014 Westminster Hall

[Matthew Hancock]

I am well versed in the VAT issue and recognise the argument. Removing the VAT anomaly would cost £150 million, which is the same amount that we have had to save through the measure we are debating, so I am afraid that I simply have to plead having no money to deal with it. All I will say is that I fully acknowledge the argument.

A sixth-form or FE college has a private sector designation from the Office for National Statistics that leads to the VAT charge, but it also gives the college much more power over borrowing. On the one hand, a sixth-form or FE college has much more power to manage its finances, but on the other hand, it has to pay VAT. I note that in the past couple of years, there have been two new sixth-form colleges. Yes, there have been new 16-to-19 free schools, but there have also been new sixth-form colleges, so some people have taken the decision, even though they know that they will have to pay VAT, to go down the sixth-form college route, because they get extra flexibility in managing their finances. I completely acknowledge the VAT issue, but there is a flip side to the argument, which is why some people go for paying the VAT, even though they might not need to do so.

[Eric Ollerenshaw]

The Minister is explaining himself extremely well, but there is a bit I do not get. Why did he make the commitment to colleges that they could have 540 hours, which they then budgeted for, only to take it away, leaving them with a problem?

[Matthew Hancock]

My life would certainly have been easier had the decisions been taken together, and had that not happened. I am simply putting that forward as an explanation of the context we need to think about when considering the size and scale of the cuts.

We are looking at the individual implications. I am happy to ensure that the EFA and my team talk to any college that is concerned. We need to recognise, however, that the reason for the decision was that savings had to be made across Government. There is also a policy explanation: there is the fit with other things on which there is consensus across the House. I am not looking for adulation over this policy decision; I am looking to explain myself as well as I can. I am happy to talk to colleagues and colleges further, because my goal is to support colleges and education to the best of my ability.

The Economy

Debate between Eric Ollerenshaw and Matt Hancock

Tuesday 6th December 2011 Commons Chamber

[Eric Ollerenshaw]

I am grateful for the intervention. I was going to go on to say that some of these things are actually working.

One of the biggest employers in Lancaster, Northern Tissue Group, is halfway down the line of achieving extra support from the regional growth fund. That will lead to extra jobs. Oaktec, a small company that is developing innovative energy recovery from vehicles, has just got a grant from the Technology Strategy Board to take that innovation further. Those are small beginnings, but the innovation is there.

I want to suggest how we can develop that through the local enterprise partnerships and the new enterprise zones that hon. Members have talked about. One problem that my part of the north-west has had with all Governments is that every time they look at the north-west, they look at Greater Manchester or Merseyside. Although I welcome Lord Heseltine’s intervention, or should I say re-intervention, in the north-south divide and his talk of city hubs, which we are all behind, my part of the north-west also has businesses that have potential, as you will understand, Mr Deputy Speaker. With a bit of extra investment, which I hope is coming following the Chancellor’s announcements in the autumn statement, those businesses could provide a good return. I have cited two small examples—Northern Tissue and Oaktec—but there are many other possibilities in the area.

My area also has two universities, Lancaster university and the university of Cumbria, and Lancaster university does a great deal in terms of innovation. My suggestion draws on two developments that we already have. The first is technology innovation centres, which are planned for Warwick, Strathclyde, Bristol, Rotherham and Sedgefield. In 13 years, the Labour Government delivered none of them. At least we are now getting five. Germany has 59 of them. Their mission is to bridge

“the gap between research findings and outputs, and their development into commercial propositions”.

The second development is enterprise zones, the mission of which is

“to support genuinely additional growth and create new businesses and new jobs”.

The original concept envisaged only one zone per local enterprise partnership. Perhaps that idea was developed by some Treasury mandarin who had to calculate the hypothetical loss in taxes due to the hypothetical creation of the new businesses and jobs. As they will be new, I am yet to understand how they can calculate that. Obviously, I am just a simpleton when it comes to the Treasury.

In a nutshell, my suggestion is that we should allow all universities to bid to designate mini-enterprise zones on their campuses. Perhaps not all universities would take that up, but it might fulfil the other Government objective of ensuring that there are more direct outcomes for the economy from universities. It seems to me that there is nothing in the practical definition of an enterprise zone that most universities cannot fulfil.

I suggest that there would be savings to the taxpayer, because universities would not need all the investment that is required for the planned enterprise zones. By their nature, the zones would be incubators for new start-ups that would eventually have to move off campus on reaching a certain size. A mini-enterprise zone on a university campus would therefore create a quicker turnover than the planned enterprise zones. The hypothetical loss in taxes calculated by the Treasury mandarin would therefore be far less, because once a business on a campus got to a certain size, it would feel restricted and would have to move off quicker than those in the planned enterprise zones.

[Matthew Hancock]

I am interested by my hon. Friend’s proposal. Does he recognise that it is similar in structure to what happened at Stanford in the United States from the 1960s onwards, where the cheap start-up costs for IT firms led to the creation of Google and many other world-beating companies?

[Eric Ollerenshaw]

I thank my hon. Friend for that intervention. My suggestion is a hybrid scheme for which universities could bid. As part of a technology strategy, the universities could make some money out of the start-up companies through joint ventures with them, which could then be reinvested. I believe that it would cost the taxpayer less in the long run if we just let such zones happen.

To use Lancaster as an example, I can think of two or three innovative businesses on campus that are struggling to find extra funds, but that had to start paying taxes straight away. Just a little bit extra would allow them to move. By the nature of a university campus, the businesses will not be there for ever. By definition, they will have to move on and there will be a swifter turnover.

To put it simply, let 100 university zones bloom. The hon. Member for Blaydon is not in his place, but he would have liked that phrase. There is potential for growth and for new jobs. This could apply to most universities. It would be a simple thing to do, provided that we could get it through the Treasury mandarin.