Oral Answers to Questions
John Denham Excerpts(13 years, 7 months ago)
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The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I would be wise not to over-promote a live bid to the regional growth fund, but my hon. Friend is absolutely right that business-to-business mentoring is the best way forward. That is why we are developing a national scheme, and the contribution in the areas that he mentions sounds eminently sensible.
Mr John Denham (Southampton, Itchen) (Lab)
We would not have destroyed regional development agencies in the chaotic and Maoist manner that the Secretary of State has described, but as a constructive Opposition, we have proposed that RDA assets be transferred to local economic partnerships to promote growth and jobs. Will he confirm that many RDAs, including those in the north-west, the east midlands, the south-west, Yorkshire and Humberside and the south-east have also proposed that assets be transferred to local authorities in LEP areas, which will pay for them as jobs and growth are created? Why has he blocked those transfers?
Vince Cable
In our Dengist phase, the LEPs are doing extremely well in constructing business-led leadership at local level. The process by which RDA assets are allocated is set out in the White Paper. As the right hon. Gentleman will know, some of the RDAs have negative net worth, so the issue of asset distribution does not apply. There will be different allocations, and my departmental officials are working through the RDAs’ legacy carefully.
Mr Denham
The Secretary of State does not seem to know what is on his own website, which makes it very clear that he has blocked the transfer of those assets to local authorities. Will he confirm that the assets of RDAs that will now be sold will be worth more than the investment in enterprise zones? Is not the Conservative leader of Fareham council, who heads the Solent LEP, right when he says:
“Selling them at this time in the economic cycle is the worst possible solution. Treasury is looking for quick wins but that will undermine the growth agenda. We are meant to be focusing on growth but that will undermine the growth agenda”?
Why does the Secretary of State believe that Whitehall knows best, or has he been overruled yet again by the Treasury, who are the people who really run his Department?
Vince Cable
The right hon. Gentleman seems to have forgotten that those are taxpayers’ assets, the disposal of which should be done in a way that produces best value for money for the taxpayer. Some will be disposed of and sold, and some will be transferred when that will produce a good outcome. The process is being carefully worked through at departmental level, and it will produce a sensible outcome that remains supportive of local initiatives through the local enterprise partnerships.
Oral Answers to Questions
John Denham Excerpts(13 years, 9 months ago)
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Mr Hayes
We can learn a lot from the example of other countries. Germany is often held up as a shining example of apprenticeships, and France has also made immense progress with apprenticeships over the last quarter of a century. I hear what the hon. Gentleman says about the link to local businesses and chambers of commerce and, as ever, he makes a thoughtful contribution to our affairs. I will certainly take another look at the issue to see what can be done to borrow that kind of good practice.
Mr John Denham (Southampton, Itchen) (Lab)
Yesterday, I met a number of apprentices at the excellent Fosters bakery in Barnsley, and we welcome any moves to build on Labour’s record, which rescued apprenticeships from 65,000 starts in 1997 to 279,000 last year. Will the Minister confirm four simple facts? Will he confirm that, at a time of rising youth unemployment, this Government have dropped Labour’s guarantee of an apprenticeship for every young person who wants one? Will he confirm that, at a time of rising adult unemployment, this Government plan to cut the total number of adults who get publicly funded training by 500,000 a year? Will he confirm that his Government have dropped Labour’s policy of saying that those who get public money for social housing must provide construction apprenticeships? And will he confirm that he now plans to make adult apprentices pay between £5,000 and £9,000 for the right to do an apprenticeship?
Mr Hayes
Trying to deal with four questions is a bit like being at the Woolworth’s pick ’n mix. I will deal with the first one only. The apprenticeship offer that we are enshrining in law means very plainly that everyone who secures an apprenticeship place will be funded—not the permissive, meaningless offer that prevailed under the last Government. The right hon. Gentleman should know better.
Mr Denham
I am very sorry, but what the Minister has said is not true. If he says that every apprenticeship place will be funded, will he confirm that for adult apprenticeships—those aged over 24—they, not the Government, will have to pay the cost of their training? Is that not the truth about this world? On the one hand, those who have little money are asked to pay for the cost of their own training, while, as the Daily Mail put it, at the “black and white” party the Tory party—fundraisers, millionaire Tory supporters—paid £3,000 to buy internships at top finance companies. The Minister has one world for himself and his friends and for those families who can pay, and a completely different world for others.
Mr Hayes
On the night of the “black and white” party, I was at my desk working, actually, and then I had a half of mild at a working men’s club.
The truth is that, in a very tough spending round, we guaranteed funding for young people, boosted funding for 16 to 18-year-olds and boosted funding for adult apprenticeships, and we are seeing real growth. The right hon. Gentleman is right: people over 24 will borrow to invest in their future, but my goodness, the repayments are income-contingent, there are no up-front payments and, as he knows, it is real value for money.
Department for Business, Innovation and Skills (Performance)
John Denham Excerpts(13 years, 9 months ago)
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Mr John Denham (Southampton, Itchen) (Lab)
I beg to move,
That this House notes that the Business Secretary in June 2010 called the Department for Business, Innovation and Skills (BIS) the department of growth; believes that the overriding priority is growth and jobs; expresses deep concern that after nine months BIS has failed to deliver this promise on growth, that the Growth White Paper is still not published, that the dismantling of regional development agencies is ‘chaotic’, that local enterprise partnerships lack powers and resources, and that regional development funding is slashed and grants for business investment abolished, causing oversubscription to the Regional Growth Fund; regrets the refusal of the Sheffield Forgemasters loan; notes with concern that responsibility for the digital economy has been transferred to another department without consultation with business or rationale, that there has been no progress in securing lending to small businesses, while bank taxes have been cut, and that BIS has failed to persuade departments not to change planning policies and public services which damage jobs and growth; further notes the sharp reductions in adult training, that there is no longer a 10-year science funding strategy, and that BIS is prioritising unfair and damaging reforms to universities instead of enabling them to support growth; notes the lack of strategy or leadership for key sectors vital to rebalancing the economy; shares the CBI Director General’s concern that the Government has no plan for growth and that BIS is a ‘talking shop’; and calls on the Government to take decisive action to remedy the deficiencies in that Department.
On 3 June last year, the Secretary of State for Business, Innovation and Skills said that he wanted his Department to be the Department for economic growth. At that time, growth was running at 1.2%. Britain was emerging from the deepest global recession for two generations. Nine months later, Britain’s economy was shrinking—so much for the Department for growth. The Government blame the snow, but in the USA the snow struck too—and there last quarter growth was 0.8%. We must have had the wrong sort of snow—or perhaps the wrong sort of Government.
People are seeing prices rise, they are worried about their jobs and they wonder where jobs, growth and prosperity are meant to come from. The Business Department has failed to give the leadership on growth and jobs that this country needs. It has made the wrong choices, harming growth and business instead of supporting them. At a time when other Departments needed to be persuaded to put business first, the Business Department has lost the argument.
Julian Smith (Skipton and Ripon) (Con)
I cannot believe that the shadow Secretary of State has started his speech without admitting the appalling inheritance that he gave this Government and without coming clean about the mess in which his party left this country and the debt and deficit that it left behind.
Mr Denham
The hon. Gentleman is wrong: the reason for the large deficit was the global banking crisis, which cut corporation tax receipts by £40 billion in a year. The measures that we took, which got us out of recession quickly and had the economy growing this time last year, were the right measures. There are no deficit-deniers—we are proposing the right measures for tackling the deficit. The point of this debate is that the Business Department has made wrong choice after wrong choice in responding to the economic situation.
The Government have been reckless in their approach to deficit reduction. They are making the wrong choices on growth. By cutting too far, too fast, the Government are putting economic recovery at risk. Shrinking growth and rising unemployment are not only bad news for families, but will make it more difficult to get the deficit down. The economy should be growing by now, not shrinking. Unemployment should be coming down by now, not going up. To make things worse, the Business Department has failed to produce any plan for growth and jobs.
Even with a more measured and responsible approach to deficit reduction, it would be private sector growth and jobs that Britain needs. That means creating the confidence for businesses to invest, to take on people and grow their business, with every aspect of public policy being bent to ensuring the right conditions for a strong, competitive and fair economy. But there is no plan for growth. As Sir Richard Lambert, the outgoing director general of the CBI, said last week about the Business Department, the country needs it to be
“Less of a talking shop, more of an action-oriented growth champion.”
Mr Dave Watts (St Helens North) (Lab)
Does my right hon. Friend agree that if the Government were serious about encouraging private sector investment, they would not have cut the grants to business that poured money into our areas? That money has now been sucked away. Is not that a demonstration of the Government’s inability to encourage investment in our areas?
Mr Denham
Not at the moment.
It is not as though the Government were not warned about what was coming. When the Tory-led Government took over, recovery was strengthening and unemployment falling. Since then, every decision they have made has made things worse. They stopped the loan to Forgemasters, showing that they had no plan to ensure that British companies gained from a new nuclear programme. When the emergency Budget was introduced in June, the Office for Budget Responsibility said that growth would be slower and employment down as a direct result of the Government’s measures. When they chose to make the biggest cuts in the most vulnerable communities, it was clear that the regions would need new growth and new jobs. When the Government published the comprehensive spending review in October, the Office for Budget Responsibility told them that growth would fall and unemployment would rise. Independent organisations from the Chartered Institute of Personnel and Development to PricewaterhouseCoopers and the Local Government Association warned that reckless cuts would destroy jobs in the public and private sectors, yet the Business Secretary did nothing.
We were promised a White Paper on growth in October. Then the civil servants said that there was not enough content to warrant one. Two months later, the Business Secretary was bundled aside and the Chancellor took charge, so now we are promised a Budget for growth on 23 March. This Tory-led Government will have been in office for 10 months and three weeks by then. That will be 321 wasted days of complacency, drift and inactivity. By the time any Budget measures are implemented, we will have had a wasted year that this country cannot afford.
Margot James (Stourbridge) (Con)
The shadow Minister’s accusations of inaction are not borne out by my area of the black country, which has already formed a local enterprise partnership and had it approved, and has submitted four bids to the regional growth fund, with a total of 12,000 jobs protected or created. Things are on their way in the black country, thanks to the policies of this Department.
Mr Denham
A year ago the black country had a functioning regional development agency. That agency has been destroyed. The hon. Lady is clutching at straws when she says that there may come a point when the Black Country LEP is fully functioning, but it will have no resources, no powers and no legal rights. That is not a step forward; it is a step backwards. That is typical of the damage that the Business Secretary and his Department have done to economic policy in the past year.
Mr Dennis Skinner (Bolsover) (Lab)
A week last Friday, together with Bolsover district council, we went to the east midlands region to try to get money for a firm that was going to provide 50 jobs on an old ex-pit site in the Bolsover area. There were quite a lot of applications, but the people there said that they could not deal with them. The net result is that we were talking for hours, but their hands were tied. The region still had some money available, but this Government, through this Department and the Department for Environment, Food and Rural Affairs, were refusing to let them use it to provide the jobs to get the economy to grow. What a shower!
Mr Denham
My hon. Friend is absolutely right, and his experience will be typical of many hon. Members’ experience, because this will have been a wasted year.
When the global banking crisis hit, the Labour Government did not sit by hoping that something would turn up. In the six months after that crisis hit, we cut VAT to boost growth; gave businesses time to pay the Revenue; speeded up payments to small businesses; introduced the scrappage scheme; started the enterprise finance guarantee; invested in key technologies and regionally important sectors; boosted investment in education and health; and reformed training support and expanded apprenticeships. In six months there was real energy and drive; from this Government and this Department there has been nothing in nearly nine months. Worse than that, the Business Secretary has made the wrong choices. Each has made life harder for businesses that wanted to invest to create jobs and grow. Instead of creating certainty and confidence, the Business Secretary has sown doubt and confusion.
Alok Sharma (Reading West) (Con)
The right hon. Gentleman talks about a wasted year. Does he not acknowledge that he was part of a Government who wasted 13 years, increasing taxes on businesses, national insurance, regulation and the complexity of the tax system, and doing everything to stifle jobs and growth? Does he not agree that he should be congratulating this Government on reversing many of those excesses and thanking us for putting in place a policy that will lead to growth and jobs?
Mr Speaker
Order. May I gently point out to the House, first, that interventions should always be brief, and secondly, that there are time constraints? A lot of Members want to get in, so over-long interventions are not just ineffective; they are damaging to colleagues, whatever the intention, and that is of wide application.
Mr Denham
Thank you, Mr Speaker, and given what you have said, the House will understand if I do not take too many more interventions. However, I would simply point out that I was proud to be part of a Government who created 3 million jobs. After we had been in office, there were 1.1 million more small businesses than there were when we came into power.
Mr Denham
No, I am afraid that I have tried a few interventions from the Government Benches, and they have not really added to the quality of the debate.
The Secretary of State himself described the abolition of regional development agencies as “chaotic” and “Maoist”. In June he gave a perfectly sensible interview, saying that regions that wanted to keep their regional development agencies could. He was overruled. He lost. The Communities Secretary beat him. Now no part of England has a fully functioning local economic partnership or a fully functioning regional development agency. It is the last thing that business needed. The Secretary of State let the Communities Secretary tear up regional planning policies and put nothing in their place. Some 160,000 planning permissions for new homes have been lost to the building industry already. That is a blow to construction, which is already struggling and reeling from the cancellation of Building Schools for the Future. Businesses have no idea how planning applications for new developments will be treated in different parts of the country under the new policies. It is the last thing that business needs.
The Business Secretary has failed to ensure that the migration cap does not prevent growth. Just yesterday, Airbus UK told the Select Committee on Business, Innovation and Skills that it could not access tier 2 immigration visas and that the Home Office was not responding or answering telephone calls on the matter. The Business Secretary lost that argument. The Home Office’s student visa policy threatens the income of further education colleges and universities. The UK’s seventh biggest export industry is now being put at risk because the Business Secretary has lost that battle too. Our universities are huge drivers of growth. This year above all years, the Business Secretary should have told every vice-chancellor to concentrate every effort on promoting growth and their business links in the regional, national and international economy. Instead, every university is preoccupied with working out how the shambolic, unfair and unnecessary new fees system is meant to work. That is a complete diversion from what business needed.
In September, the Business Secretary promised tough action on banks, arguing that there was a “compelling case” for taxing them if they continued to pay out bonuses when businesses cannot get access to finance. He has obviously lost that battle, too. Project Merlin has still not reported. Small businesses are still struggling to get finance. The Tory-led Government whom the Business Secretary supports are desperately casting around for face-saving measures while tax on the banks is being cut. Grants for business investment have stopped. Nissan says that those grants helped to safeguard or create 1,600 jobs in the north-east. Indeed, Nissan told the Business, Innovation and Skills Committee:
“The UK has a clear choice of whether it chooses to fight for new business, new jobs, and rebalance the economy or allow the opportunity of this business to go elsewhere.”
We should all be concerned that the Business Secretary has made the wrong choice.
The funding for English regional development has been slashed from about £1.4 billion a year from the regional development agencies to the £1.4 billion in the regional growth fund over three years. That is funding for the whole of English business, which, to put it into perspective, is about the same amount that the Government are planning to spend on sub-post offices. Predictably, because the regional growth fund has been told to include bids for transport and housing, it has been over-subscribed tenfold. The Business Secretary is in a panic, because the future jobs fund has been scrapped and unemployment is rising. Businesses were promised that the fund would support sustainable private sector growth and help to rebalance the economy. Will he confirm that he has changed the rules at the last minute, discouraging bids that will not create short-term sticking-plaster jobs, and that plans to expand Birmingham airport and regenerate Longbridge, which were going to be put into the regional growth fund, have been put on hold, because it is said that they have no chance of succeeding? There are many projects with private sector commitment, which could lever in huge sums of private investment, that are not going ahead. They will not even be considered, because this Tory-led Government are not prepared to tax the banks fairly to invest in jobs and growth.
The broadband infrastructure is vital for business, but it has been delayed and delayed again. Labour had a costed commitment to achieving universal broadband by 2012 and high-speed broadband by 2015. The Government have put back universal broadband by three years, putting the UK in the broadband slow lane.
There is no coherent approach to the use of tax policy to support business growth. Corporation tax has been cut, rewarding the banks, while capital allowances for manufacturers have been slashed. There is total confusion about the future of research and development tax credits. At one moment, the Government rightly back Labour’s patent box for the pharmaceutical industry; the next, Labour’s support for the video games industry is dropped, causing a predicted loss of 25% of jobs in that sector. The Government trumpet an additional 75,000 apprenticeships over the next three years, yet Labour increased the number from a planned 200,000 to 279,000 in the last year alone. This Government are slowing the growth in apprenticeships, and their own figures show that, each year, 500,000 fewer adults will get public support to improve their skills.
The Government’s record of failure in regional policy, higher education, bank lending and bankers’ bonuses is lengthy. It is hard to identify a single pro-business, pro-growth policy that BIS has successfully championed against opposition from the Treasury, the Department for Communities and Local Government and other Departments. There is no strategy for growth, and no one knows where the Government expect it to come from, how they will support it or how it will be achieved.
Today, Sir James Dyson, the Conservatives’ own innovation champion, has referred favourably to President Obama, who said:
“In America, innovation doesn’t just change our lives. It’s how we make a living.”
Sir James commented:
“That might seem like political rhetoric to some people, but I wish this philosophy was shared by the British Government.”
That is from the Government’s own innovation champion.
Sir Richard Lambert has said that the Government have
“taken a series of policy initiatives for political reasons, apparently careless of the damage that they might do to business and to job creation.”
We saw that happening just before Christmas. For no other reason than the Business Secretary’s personal unsuitability to make a competition judgment, the Prime Minister transferred responsibility for an entire critical industry, the digital economy, to the Department for Culture, Media and Sport. There was no public policy reason for doing that. There was no consultation with business. The media and the creative industries have a great interest in the digital economy, but so do advanced manufacturing, the IT industry, the service sector and retail. The years that were spent bringing industrial sponsorship together within Whitehall so that business could work better with the Government were swept aside in the crudest possible act of media management, to save the Secretary of State’s face.
The same is true when we look forward. For all the words about rebalancing our economy and supporting key sectors, there is no sign of that happening. Governments cannot create private sector growth, but they can create the conditions in which the private sector is most likely to grow. In the areas in which we hope to compete with the best in the world, such as advanced manufacturing, business services, the creative industries and the low-carbon economy, every part of Government policy, from fundamental research to export support, needs to be properly aligned and working together. This Government cling to a different view, however. They believe that if they simply cut the public sector and cut corporation tax, the private sector will rise up of its own accord to fill the gap. That will not work. Sure, the Government will make the odd eye-catching announcement to hit the headlines and make it look as though they are doing something, but, fundamentally, they do not believe in an active role for the Government.
Yesterday, Pfizer said that it was closing its plant at Sandwich, affecting 2,400 employees and many more in smaller companies. That is one of the industries in which Britain should be leading the world. We have a huge advantage in fundamental and applied research and the NHS has huge potential for properly regulated clinical trials, yet one of the world’s leading manufacturers is closing a major plant here, in Kent. Only a few weeks ago, the Prime Minister told us how he had personally been on the phone to the leadership of Pfizer to encourage them to invest and employ people in the UK. The truth is that the Prime Minister has been snubbed. The Government and the Business Department were not players in that huge decision. Whatever the immediate reason for Pfizer’s action, this warns us all that nothing can be taken for granted if this country is to remain strong in this global industry.
In the past year, the Business Department has done nothing apart from implementing Labour’s patent box tax relief. Science spending has been cut in real terms, with capital investment down by 40%. The Government have not set out a clear vision of the future of the pharmaceutical and bioscience industries. They have not said how they will support them, or made it clear to the rest of the world that we will fight tooth and claw for the largest share of this global industry.
The same challenge is true for the other key sectors of the economy—the areas in which, if we do not succeed, we will not be able to pay our way in the world. The truth is that where there should be action, there is a talking shop. There is no plan, no strategy and no vision. There is no leadership and no urgency. The Government are drifting, and making the wrong choices. They are buffeted by events, but not in control of them. For all our sakes, it is time they got a grip.
Vince Cable
I seem to remember that an independent report established very firmly that responsibility lay with Ministers.
Mr Denham
I am grateful to the Secretary of State for giving way, because he referred to me personally in this connection. I think that he is missing the point. Part of the business of being a Minister, or a Secretary of State, is sorting out problems that arise—[Interruption.] Let me tell Members that things will go wrong for this Government, as they occasionally went wrong for our Government. It is part of a Secretary of State’s job to sort those things out, but this Secretary of State is using that as an excuse for having done nothing about the really big challenges involved in promoting growth. It is no good his telling the House, “We couldn’t do anything about growth because I was sorting out the Student Loans Company.” That is a ridiculous argument.
Vince Cable
I am glad to hear it acknowledged that we began by having to sort out a mess. That is a good starting point for discussion.
Let me now deal with the further education sector, in which I became engaged, with the Minister for Further Education, Skills and Lifelong Learning. We began visiting further education colleges, many of which were utterly demoralised and unable to fulfil their function because their capital work had been stopped as a result of a process of utter incompetence. They had been authorised to spend nine times the amount that was actually available.
Let us examine the underlying trends, to which the motion refers. In the last five years of the Labour Government, adult learning—involving people over 19—fell by 1.1 million to 3.5 million. At a time when Government money was being thrown at problems, the Government’s priorities were such that a key area was neglected and declined. We have sought to refocus that energy on apprenticeships, with the consequences that I have already described.
Oral Answers to Questions
John Denham Excerpts(13 years, 10 months ago)
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Vince Cable
I hope that the LEP will take this matter seriously. My hon. Friend is right to say that the regional growth fund has a limit of £1 million, which precludes small businesses from applying directly. None the less, the company he mentioned and others do have access to, for example, the enterprise finance guarantee scheme. I think that 37 companies in his constituency have already drawn £4 million from that source.
Mr John Denham (Southampton, Itchen) (Lab)
In September the Secretary of State said:
“If banks are saying to us they have got lots of money to spread out on bonuses…at a time when they are constricting credit to small and medium enterprises, then the government may have to use some form of taxation to change their behaviour”.
The whole House knows, and has already heard this morning, that small businesses are still finding credit too hard to get and too expensive when they do get it. The Government have given up on bonuses. The chief executive of Lloyds is purported to be getting £2 million after he has left his job, so why is taxation on the banks being cut?
Vince Cable
The right hon. Gentleman was present on Tuesday when the Chancellor gave a very clear statement of our current position in dealing with the banks, and made it very clear that nothing was off the table. However, the right hon. Gentleman is quite right: there is an issue for small-scale business in relation to credit supply as well as lack of demand. We are trying to remedy that through the discussions that we are having.
Mr Denham
The truth is that, for all his hollow rhetoric, the Secretary of State has failed small businesses. He promised that the banks would be taxed more if they did not lend. They are not lending, yet taxes are being cut. He has damaged small businesses with the chaotic abolition of regional development agencies, he has excluded small businesses from the regional growth fund, and he promised to publish a growth plan, but could not do so because his civil servants said there was nothing to put in it. The Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) is reduced to telling Members of Parliament that they will have to write to the banks to help their small businesses, and now the Secretary of State has lost the part of his Department that supports small businesses in the digital economy for no other reason than that he is not a fit and proper person to take the biggest competition policy decision we will see for years. Everyone knows that he is hanging on to his job by a thread, waiting for the Prime Minister to cut it.
Vince Cable
The right hon. Gentleman has obviously been trying to polish that intervention for the past three weeks; it is getting a bit stale. The simple truth is that if he had read the latest small business survey, he would have seen that rapid growth is taking place and more jobs are being undertaken—300,000 in the past six months, almost all of which are in the small business sector. That is the sector that will drive the British economy forward and achieve the recovery that this Government have achieved.
Oral Answers to Questions
John Denham Excerpts(14 years ago)
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Mr Prisk
We are in negotiations with the black country, and I hope that there will be a positive outcome, but the point of the partnerships is to remove the local barriers to growth and ensure that planning in local areas is addressed, that red tape is tackled and that local transport projects are dealt with jointly by business and civic leaders. That is what LEPs can do. It is not all about subsidies; it is about real action on the ground.
Mr John Denham (Southampton, Itchen) (Lab)
But the director general of the CBI described local economic partnerships as
“a bit of a shambles”.
Indeed, the Minister himself wrote to the Business Secretary, who is sitting next to him, to say that many LEPs were
“undermining our agenda for growth,”
and now the Business Secretary has told people in Birmingham that the abolition of RDAs is
“a little Maoist and chaotic”.
Can the Minister now tell the House: is he responsible for the Maoism or just for the chaos?
Mr Denham
Yesterday, Mr Speaker, the Prime Minister told you and the House that whatever the Business Secretary had said, it was not what he believed. I know that Ministers have just come back from China, but I thought that public humiliation for incorrect thought went out with the cultural revolution.
Nissan told the Select Committee that the now abolished grant for business investment was vital to bring new investment and highly skilled jobs to the north-east. Was Nissan not right to say:
“The UK has a clear choice of whether it chooses to fight for new business, new jobs, and rebalance the economy or allow the opportunity of this business to go elsewhere”?
Does that not show that the Government have no plan for growth?
Oral Answers to Questions
John Denham Excerpts(14 years, 1 month ago)
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Vince Cable
That is a constructive suggestion. I am happy to do exactly what my right hon. Friend has said. To reinforce the point, yesterday the principal—the vice-chancellor equivalent—of Glasgow university, where I know my right hon. Friend is a rector and with which I have an association, said in relation to the growing funding crisis in Scottish universities:
“I believe we need to adopt a graduate contribution model that is properly designed, progressive and one which requires those who earn more during their lifetime to pay back more to society in order to fund higher education.”
That is exactly what we are doing.
Mr John Denham (Southampton, Itchen) (Lab)
On Tuesday, the Social Market Foundation published an analysis of how the Business Secretary’s £7,000 a year minimum fee will hit different graduates. It shows that the hardest hit will be graduates who earn £27,000 a year, while students who get help from the bank of mum and dad to pay off early will get a £12,000 discount on the cost of their degree. Is that fair?
Vince Cable
It would not be fair, if that were the outcome. That particular analysis does not properly consider the true present value of the payments that people will have to make. There has been some excellent research on the operation of different interest rates in order to produce a genuinely fair and progressive outcome, which Government Members want and which I hope the right hon. Gentleman still wants.
Mr Denham
When my building society starts asking me to pay my mortgage in net present value, I will do so. Until then, I will talk pounds and pence like everybody else.
Does the Business Secretary recognise that if he allows universities such as Oxford and Cambridge to charge £10,000 or £12,000 a year, the gap between the few and the many will get wider? The Higher Education Minister has said that it is not possible to stop people paying their fees up front. Will that not create the unfair situation in which those born into privilege, such as the Prime Minister and the Chancellor of the Exchequer to pick two at random, can get a huge discount for paying up front, while the bright child from a poor background who makes it to Oxford or Cambridge will pay even more? How is that fair?
Vince Cable
We are anxious to ensure a fairer solution than the existing graduate contribution system that we inherited. The right hon. Gentleman has used the analogy of mortgage payments, which is interesting. No building society or bank that I am aware of would exempt people from any payments until they were earning £21,000 a year, which is the progressive element that we are trying to introduce. He has rightly referred to the difficulties that would arise if certain Russell group institutions were allowed to charge very large variable contributions. That is why I made no commitment on Tuesday on how we would deal with that problem, on which we need to reflect further. He is right that there is an issue of fairness, which we will address.