Oral Answers to Questions

Mark Prisk Excerpts

Thursday 18th November 2010 Commons Chamber

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

On 28 October the Government announced that 24 of the proposed local enterprise partnerships were cleared to progress, and they are currently preparing their governance arrangements. We continue to engage with other proposed partnerships, and we will report back to the House in due course.

[Charlie Elphicke]

The local enterprise partnership for Kent covers the varying concerns of the Thames Gateway as well as disgracefully neglected coastal towns such as Dover. Will the Minister take on board the idea of more localisation in the governance of LEPs, to ensure that they focus on particular concerns?

[Mr Prisk]

My hon. Friend is a great champion of local businesses, and he knows, and is right to say, that the great benefit of such partnerships is that they are local and can deal with local economic priorities, rather than with the national priorities of Ministers. That is the benefit of such partnerships; that is why we are progressing with them.

[Christopher Pincher]

I am grateful to my hon. Friend for his answer. Although I am pleased that Advantage West Midlands is being replaced by a more business-friendly, accountable and flexible LEP, can he tell us what steps he will take to ensure that the hiatus between the wind-down of the regional development agency and the ramp-up of the LEP does not adversely affect businesses in Tamworth?

[Mr Prisk]

I entirely agree with my hon. Friend about the need to avoid a hiatus. That is why we are already actively engaged in enabling LEPs to begin their work long before the RDAs finally close in 2012.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

As the Minister said, 24 bids were approved, but bids for many areas of the country, including for the black country, were not approved. Local enterprise partnerships will not have the same resources as the RDAs, which are currently spending about £1.5 billion a year in England. How are local enterprise partnerships supposed to help to rebalance the economy if they do not have the resources? Surely setting up these organisations and asking business to lead them is letting those business people down if the Government do not play their part and give them the resources they need to do the job.

[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 Prisk]

This is a great leap forward.

[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?

[Mr Prisk]

No, it does not. We are investing £1.4 billion in the regional growth fund, £10 billion in roads, and £14 billion in the railways, and we are ensuring that Nissan and others have the support that they need. That is why I shall be meeting Nissan on Monday.

[Hugh Bayley (York Central) (Lab)]

4. How much money the regional growth fund will distribute to enterprises in Yorkshire in (a) 2010-11 and (b) 2011-12.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The regional growth fund is a challenge fund for England and is not ring-fenced or pre-allocated, including in terms of location. The fund will run for three years from 2011 to 2014, and the first round of bidding is now open for receipt of project proposals. It will close on 21 January 2011.

[Hugh Bayley]

As investment in jobs, Yorkshire Forward offered the National Railway museum £5 million towards the cost of redisplaying the exhibition in its great hall, but was forced to withdraw the money because of the Government’s withdrawal of support for regional development agencies. Does the Minister agree with his colleague, the Under-Secretary of State for Business Innovation and Skills, the hon. Member for Wantage (Mr Vaizey), who suggested at a meeting with me and his hon. Friend the Member for York Outer (Julian Sturdy) that the regional growth fund could be used to fund the National Railway museum to pick up where Yorkshire Forward was forced to leave off? Will he consider that proposal, and get back to me to talk about how that could be taken forward?

[Mr Prisk]

I have been to the National Railway museum, which is an excellent part of Yorkshire’s tourism and industrial heritage. There are clear rules about the regional growth fund, and they could well include the opportunity for a bid from the National Railway museum. If the hon. Gentleman or his local partners wish to proceed with that, they should look at the White Paper, and if there are any problems, I am happy to help.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

5. Whether his Department intends to sell assets in its ownership to provide finance for the proposed green investment bank.

--- Later in debate ---

[David Rutley (Macclesfield) (Con)]

7. What plans he has to provide support for small and medium-sized enterprises in the next 12 months.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

Among other actions, the Government are cutting corporation tax for small businesses, tackling red tape, helping home-based businesses and ensuring that small firms secure a greater proportion of Government contracts.

[David Rutley]

Is my hon. Friend aware that the recent Barclays business regional impact index shows that the majority of small and medium-sized enterprises in the north-west are looking to expand in the year ahead? Will he tell the House what steps he is taking to help those vitally important SMEs in regions such as the north-west?

[Mr Prisk]

As my hon. Friend will know from his own business experience, one of the best forms of help is business-to-business mentoring. That is why on Monday, to launch global entrepreneurship week, we announced a new national network of more than 40,000 experienced business mentors. That will make a real difference in Macclesfield and across the country.

[Mr Ben Bradshaw (Exeter) (Lab)]

8. What proportion of the population of the south-west is not covered by local enterprise partnerships.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

To date, in the south-west two partnerships have been asked to progress—namely, the West of England partnership and the Cornwall and Isles of Scilly partnership. They cover approximately 30% of the population of the south-west. The Government are engaged in further productive discussions with other proposed partnerships, which we hope will be concluded successfully.

[Mr Bradshaw]

That is a pitiful record. It is no wonder that the Secretary of State described this as a Maoist and chaotic process. May I urge the Minister and the Secretary of State to deploy some Stalinism, and to get those council leaders in a room and tell them to get their act together and stop excluding Exeter, the main economic driver in the region, from the process? If they will not do that urgently, will they just let the business community get on with it themselves?

[Mr Prisk]

I know that the right hon. Gentleman used to be part of Stalin’s last Government, but the most important thing is that he and I, and others, encourage those businesses and local partners that are not engaging in the process. We are making progress, and I hope that we can do that. The prospects are good, and I hope that he will engage with the process in a positive way.

[Duncan Hames (Chippenham) (LD)]

It seems that the bid for a local enterprise partnership including Wiltshire involved such a great leap forward that it has not even landed yet. Will the Minister please tell the House which of his requirements for these bids it has yet to meet?

[Mr Prisk]

Without wishing to stretch the metaphor too far, this involves quite a long march for some. The key is business engagement; that is the crucial part. That is what we are looking for, and I am sure that that will be achieved shortly.

[Mr Gordon Marsden (Blackpool South) (Lab)]

My constituency, like that of my right hon. Friend the Member for Exeter (Mr Bradshaw), is currently sitting in one of the Maoist black holes for local enterprise partnerships. The Department’s new skills strategy says that local enterprise partnerships will lead the transformation of their local economies, yet the Minister is so embarrassed by them that he failed to mention them once when he wound up the debate on growth last Thursday. If he really wants to help local enterprise partnerships, why will he not allow them to retain the assets of the regional development authorities?

[Mr Prisk]

As the hon. Gentleman knows all too well, the White Paper sets out a clear, sensible path for the transfer of assets, and liabilities, from the RDAs. Such transfers might in part be to the local enterprise partnerships, where they exist, and in other parts they might not. I suggest that the hon. Gentleman needs to look more closely at the White Paper; the process is crystal clear.

[Lilian Greenwood (Nottingham South) (Lab)]

9. What steps he is taking to increase lending to small businesses.

[Natascha Engel (North East Derbyshire) (Lab)]

13. What steps he is taking to increase lending to small businesses.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The latest official information shows that more than two thirds of loan applications from small firms are approved. However, the Government are determined to press the banks to ensure that creditworthy businesses have the finance that they need. Among the actions that we are taking are enforcing lending codes, improving customer information and extending the enterprise finance guarantee.

[Lilian Greenwood]

I thank the Minister for his response. Last week I met the Nottinghamshire and Derbyshire Federation of Small Businesses, which was extremely disappointed that the Government had ditched our plans for a Post Office bank. That would not only have provided small businesses with an alternative source of lending, but helped to sustain the post office network that so many of them rely on. I heard what the Under-Secretary of State, the hon. Member for Kingston and Surbiton (Mr Davey), said earlier in response to my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), but will Ministers think again?

[Mr Prisk]

With due respect, the hon. Lady forgets that the banks and the community development finance institutions are a crucial part of this discussion. If the FSB in her area wishes to make representations, I would encourage it, with her support, to do so.

[Natascha Engel]

In spite of what the Minister says, what is he doing to allay the concerns of eBay, which says that banks are still not lending to businesses? His Government did have lending targets for financing small businesses—what happened to them?

[Mr Prisk]

We still have the lending targets. The key thing is enforcement, which, despite the chuntering from those on the Opposition Front Bench, the last Government failed to do. What is important is that we now have a new lending code. The hon. Lady is absolutely right to say that businesses—whether they be eBay-based or real rather than virtual or online businesses—want a lending code and a proper appeal process. We have those, and I am determined to make sure that we enforce them.

[Neil Parish (Tiverton and Honiton) (Con)]

A firm in my constituency cannot get money from the banks, which, if they do lend, do so at a 25% interest rate. It is a very successful company, but the banks, in order to gain liquidity, are stopping lending. We really must put more pressure on them.

[Mr Prisk]

I agree with my hon. Friend. Let me make it very clear again that when right hon. and hon. Members find unreasonable behaviour from the banks, they should ensure that it is raised with them and they should copy me in. When we find that evidence, we will challenge the banks vigorously.

[George Freeman (Mid Norfolk) (Con)]

As I know the Minister is aware, the highest of the high-technology growth businesses tend to rely for their early-stage finance not on banks but on early-stage investors, angels and family. Will he agree to make representations to the Treasury to look at anything we can do to incentivise such sources of finance?

[Mr Prisk]

I and my Treasury colleagues are already looking at how to improve business angel finance, not least at how the enterprise investment scheme works. We are also looking to extend a further £200 million in equity funds to the capital enterprise fund.

[Mr Speaker]

I call Dave Watts. Not here.

--- Later in debate ---

[Graham Jones (Hyndburn) (Lab)]

20. What estimate he has made of the number of people and businesses in (a) the north-east, (b) the south-west and (c) Lancashire which will not be covered by local enterprise partnerships following the implementation of his proposals for such partnerships.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

Overall, the 24 partnerships agreed to date cover the majority of businesses and the economy of England. In Lancashire, local disagreements have prevented a credible proposal from being made. As I mentioned in my response to an earlier question, 30% of the population is covered at the moment in the south-west, but I can now confirm to the House that we expect full coverage in the north-east.

[Graham Jones]

I thank the Minister for that reply. Does he accept that Lancashire county council’s LEP proposal is not a pan-Lancashire proposal, but a Swiss cheese proposal, designed to annex east Lancashire? The war of words, to which he has alluded, between the east and the west is extremely divisive. Will he come to a decision that reflects local interests, rather than those of what I see as the gang of six? The gang of four Maoists seemed to resolve such things rather more quickly, so will he come to a quick resolution regarding the east and west?

[Mr Prisk]

I am not sure that either the Swiss cheese metaphor or the Maoist metaphor worked well, but let me deal with the reality of the situation. Three conflicting proposals were made in Lancashire. At the moment, positive discussions are taking place about how those can be rationalised, and officials will continue to work with both business and civic leaders to find a sensible arrangement. I hope that the hon. Gentleman will play a positive role in that, so that we can move on.

[Keith Vaz (Leicester East) (Lab)]

21. What recent discussions he has had with the Secretary of State for the Home Department on the effect of implementation of the immigration cap on recruitment and retention in small businesses.

--- Later in debate ---

[Julian Sturdy (York Outer) (Con)]

23. What plans he has for the future of the regional growth fund.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

As I said earlier, the regional growth fund is a challenge fund for the whole of England and it should not have any ring-fencing or pre-allocations. We expect a number of very positive applications, and the first opening round of those will conclude on 21 January 2011.

[Julian Sturdy]

Businesses in my constituency often impress on me how important reliable modern infrastructure is to their success. Can the Minister confirm that bids to the regional growth fund for capital funding will be considered if they meet the objectives set out in the growth White Paper?

[Mr Prisk]

I can confirm that all bids that meet the criteria of the fund, including bids for projects such as those that my hon. Friend mentioned, will, of course, be considered on their merits.

[Stephen Timms (East Ham) (Lab)]

The Prime Minister two weeks ago supported the idea of a new silicon valley in east London. Is that an initiative that the regional growth fund could be used to support? What else will the Minister’s Department do to support the Prime Minister’s proposal?

[Mr Prisk]

The point of the proposal, and the regional growth fund, is to ensure that in areas where there is a particular reliance on the public sector, or on any other single sector, there will be a diversity of job opportunities. I am sure that the opportunity for a new silicon valley will be an excellent project, and one that will be considered carefully by the independent panel advising Ministers.

[Matthew Hancock (West Suffolk) (Con)]

In the past, regional development funds have ignored areas of deprivation in some parts of the country—for instance, those in West Suffolk—because they are surrounded by areas of comparative wealth. Will the Minister confirm that any area of the country can apply for funding under the new regional growth fund, no matter how small the area of comparative deprivation might be?

[Mr Prisk]

All bids will be considered fairly and on merit. That means that when there is an opportunity to transform the economy so that it is less reliant on the public sector, irrespective of location, those applications will be considered with due care and consideration.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Now that we have a local enterprise partnership in Stoke-on-Trent and Staffordshire, will the Minister assure me that we will be able to bid for regional growth funding for applications in respect of ceramics in Stoke-on-Trent and in respect of the new environmental technologies? Will he keep a close watch on ensuring that our deprived area gets that Government funding?

[Mr Prisk]

That is an excellent question, and I shall keep a close eye on the proposals—and, indeed, on the future of the economy in Stoke-on-Trent.

[Several hon. Members]

rose—

--- Later in debate ---

[Michael Ellis (Northampton North) (Con)]

T3. I recently visited the Abington pharmacy in my constituency, where I switched on a robotic dispenser—[Laughter.] It delivers pharmaceutical products, and I switched it on rather than turned it on. Many successful small businesses such as that pharmacy struggle to get the banks to give them loans, and small and medium-sized businesses are suffering as a consequence. What can my hon. Friend do to encourage the banks to lend to small businesses?

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

No. 1: ensure that we enforce the lending commitments. No. 2: extend the enterprise finance guarantee—and the third action that I would encourage would probably be to leave those buttons alone!

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

T2. Thousands of medical students will be crippled by the increased tuition fees, and the submission by the British Medical Association to Lord Browne’s review appears to have been ignored. Does the Minister agree that those increases will deter young people from undertaking medical training?

--- Later in debate ---

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

R3, an insolvency body, recently indicated that one in 10 companies are not prepared for the VAT increase in January. The Federation of Small Businesses in the north-east has highlighted a Kingston university study finding that small and medium-sized companies in the north-east will shed jobs. What action will Ministers take to deal with the VAT increase in January?

[Mr Prisk]

The whole point of making sure that the increase does not come during the Christmas period is that that is the most difficult period for most businesses. The increase is being made at the end of that period so that businesses can make the adjustment. Unlike what happened with the VAT change under the previous Government, we have given businesses a full six months and more to prepare. If there are particular cases to discuss, I am happy to talk to the hon. Gentleman.

[Charlie Elphicke (Dover) (Con)]

T9. It is not too early to say that the ability of further education colleges to innovate has been strangled by targets and the dead hand of bureaucracy. Does the Minister plan to free colleges and make them more responsive to student and employer demands?

--- Later in debate ---

[Karl Turner (Kingston upon Hull East) (Lab)]

The £1.4 billion regional growth fund is clearly grossly underfunded, and if we had taken the advice of Ministers today we would have spent it 10 times over already. Did the Prime Minister give my constituents false hope yesterday, when he suggested to me that they should go to that fund for housing regeneration?

[Mr Prisk]

rose—

[Vince Cable]

rose—

[Mr Prisk]

As you can see, Mr Speaker, we are very keen to answer this question.

Absolutely not. Every area can bid, and the opportunities are clear for every constituency. There are also opportunities for the private sector, but the key point is that when funds are tight, we have to remind ourselves that the reason why is sitting on the Opposition Benches.

[Julian Smith (Skipton and Ripon) (Con)]

May I plead with the employment Minister and his boss to delay the implementation of flexible working, shared parental leave and the expansion of legislation on the right to request training, in order to give British business a holiday from new employment legislation in 2011, and allow it to focus on job creation and growth?

--- Later in debate ---

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I welcome the commitment, given by the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Wantage (Mr Vaizey), in response to my first question, to setting up structures to access European regional development funding. Will the Minister confirm that money will be available to get the projects together to do that?

[Mr Prisk]

The officials are dealing with that issue at this precise moment. Once we have an answer, I will come straight back to the hon. Gentleman.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

In my constituency, small businesses have historically been able to visit our local Crown post office to collect their mail early in the morning. Now the Post Office has informed those businesses that in future they will have to pay £225 per month if they want to collect their post before 8.30 in the morning. Will my hon. Friend encourage the Post Office to drop that additional burden on small business?