Industry (Government Support)

Margot James Excerpts

Wednesday 16th June 2010 Commons Chamber

[Margot James (Stourbridge) (Con)]

I must congratulate my hon. Friend the Member for Bracknell (Dr Lee) on his excellent maiden speech, with which I agreed in every respect. I also congratulate the hon. Member for Bolton West (Julie Hilling) on her excellent maiden speech, which was entertaining as well as informative.

I am grateful for the opportunity to contribute to this important debate on support for industry, but we cannot debate support for industry in a vacuum. I do not want to dwell on the past, but none the less we want to learn from it. A lot of the Opposition’s schemes for supporting business when they were in office had a rather half-hearted effect, at best. Many of the schemes, such as the capital enterprise fund, were only subscribed to by 50%. The trade credit insurance fund, which had an original budget of £5 billion, only had a take-up of less than £20 million. Apprenticeships have been hard to fill. A lot of the problems with these schemes are caused by low awareness among industry, eligibility criteria that are far too complex and rule out far too many worthy applicants, and a bureaucracy that small enterprises simply cannot cut through.

[Rachel Reeves]

I thank the hon. Lady for giving way. I am surprised by what she says about apprenticeships, because in my constituency of Leeds West, the number of apprenticeships has gone up from 70 to 210 in the last decade. At Leeds college of building, 400 people started on apprenticeship programmes supported by businesses this year—more than they have ever had before. I am very surprised that she says that people are not taking up places.

[Margot James]

There is a big problem with apprenticeships for a lot of people in my constituency. The college funds NVQ level 2 and 3 training programmes and more and more students are trying to stay in college because they simply cannot get the apprenticeships outside as the employers are too hard up to provide them.

[Andrew Percy]

I am a former schoolteacher, and I am sure my hon. Friend will agree with me that what has happened in education over the last few years is that the gap between the best-performing and the worst-performing schools has widened, the number of children from poorer backgrounds going on to decent and good universities has fallen and more people are leaving school with poorer qualification levels and poorer standards in basic literacy and numeracy than did before the previous Government came to power.

[Margot James]

I thank my hon. Friend for that excellent intervention. I was going to go on to make that point myself, but I shall leave it to Sir Terry Leahy, the chief executive of Tesco, to make the point for me. He employs 41,000 people under the age of 20 in a total work force of 280,000. He said at the end of last year:

“Sadly, despite all the money that has been spent”

on education,

“standards are still woefully low in too many schools. Employers like us…are often left to pick up the pieces.”

That is one of the many problems that industry faces.

Let me go back to the points that I was making that follow on from the apprenticeship schemes. Stourbridge has a great many small to medium-sized enterprises. Indeed, in the metropolitan borough of Dudley, of which we are part, 90% of companies employ fewer than 50 people. It is all very well for business leaders to support regional development agencies, as some of them have in the past, but smaller companies cannot cut through the thicket of bureaucracy and have not benefited from them in any large number. In my constituency, where so much industry is classified as SME, that is a real problem.

Support for industry cannot exist in a vacuum. I must contest the Opposition’s claim, in their motion, about

“supporting businesses through the downturn”.

I have already made the point that a lot of the measures that the last Government took under the umbrella of support for industry had a very limited effect at best when set against the disastrous macro-economic policies that they pursued. The macro-economic environment is really what affects business, not this scheme and that scheme.

Stealth taxes were a cardinal sin of the last Chancellor but one, and in my constituency they had a disastrous effect on industry. Empty property relief was abolished and that had a very negative effect. That, the rise in business rates and the spiralling cost of energy and fuel are the things that really make a difference to business. Business was really let down and was not supported by the last Government, so I strongly contest the wording of the motion. The point on education has already been well made thanks to my hon. Friend the Member for Brigg and Goole (Andrew Percy).

What business needs, first and foremost, is for sanity to be restored to the public finances. My right hon. Friend the Secretary of State made that very clear in his response. A robust deficit reduction plan that will enable us to keep interest rates low is one thing that will support industry far more than this support programme and that support programme. I congratulate the Government on promising us—presumably we will hear more detail next Tuesday—a simpler and lower corporate tax regime, as that is crucial. Tax and regulation are two sides of the same coin, and I also applaud the regulation proposals of the new Business, Innovation and Skills team. My hon. Friend the Member for Banbury (Tony Baldry) mentioned the one in, one out regulation rule that is going to come in. I am hopeful that it might even develop into a one in, two out rule over the next couple of years, and I set that as an aspiration for the new BIS team. I was also delighted to hear the Prime Minister announce this week a review of health and safety regulations, which have got out of hand. They are a burden not just on the private sector but on the public sector.

I make a plea for the protection of our science base and our research and development base, so I am delighted that my right hon. Friend the Minister for Universities and Science is present. I will pay tribute to the last Government in one respect regarding the science base. The shadow Secretary of State, the right hon. Member for Wolverhampton South East (Mr McFadden), mentioned the new patent box tax incentive for drugs and biotechnology products that are researched in the UK. That tax break of 10% in corporation tax is a very useful and proper incentive that might help to stem the tide of research and development that is, tragically, going overseas, despite our having one of the best science and research bases in the world. The last Government belatedly came up with a solution and I very much hope that our Government will continue with that support.

I support the amendment to the motion, particularly in relation to the skills agenda. I am delighted that we will be giving additional funding for apprenticeships to drive business more in the direction of taking them up, as that is badly needed. I am also pleased to see at least some rescue of capital funding for the further education college sector. Stourbridge college in my constituency made a fantastic bid, and was encouraged so to do by the old Learning and Skills Council. It spent a lot of money pursuing that bid in quite a proper manner only to find at the death that all its plans had to be put on hold because the old LSC had over-committed its budget by at least four times. Stourbridge college is pursuing some of those plans, and I wish it all the best. I hope that I can find the right corner of the BIS Department to lobby for our college to get some of the additional £50 million in capital funding that is being made available.

The new skills agenda, the diversion of money from Train to Gain into apprenticeships and the diversion of money from RDAs into local enterprise partnerships will enable small firms and students in my constituency to access that funding directly, to operate under a lighter inspection regime and to get on with the job of training our young people so that they are fit for business. That is what I really applaud about the skills agenda, and I support 100% the amendment to the motion.