Oral Answers to Questions

Mark Prisk Excerpts

Thursday 8th July 2010 Commons Chamber

[Mark Menzies (Fylde) (Con)]

1. What steps he plans to take to encourage inward investment to the north-west.

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

UK Trade & Investment works with local partners to support inward investors, and in 2008-09 it helped to create or safeguard more than 10,000 jobs in the north-west. The Government intend to publish a White Paper later this year, which will provide more detail on how inward investment can best be supported by UKTI and the Government as a whole.

[Mark Menzies]

I thank the Minister for his answer. I am sure that many businesses in Fylde will welcome his response. In his recent speech, the Chancellor of the Exchequer said that Britain was open for business. Can the Minister give an example of a business that is taking that on board?

[Mr Prisk]

That is an excellent question; let me give an example. The Chancellor’s decision to simplify and reduce corporate tax rates will directly help to attract more investment. Indeed, by 2014, this country will have the lowest corporation tax rates of any major western country. That is good for investment and good for jobs.

[Derek Twigg (Halton) (Lab)]

Is the Minister aware of the huge Mersey Gateway project in my constituency to build a second bridge across the Mersey? Independent examination shows that it would probably create 4,000 to 5,000 new jobs as well as hundreds of construction jobs. Will he remind the Transport Secretary of the importance to inward investment and jobs of that project, which is currently postponed, pending review?

[Mr Prisk]

I am more than happy to talk to my right hon. Friend the Secretary of State for Transport. The hon. Gentleman is right that in order to encourage investment we need to look at longer-term projects, and investment is an important part of that.

--- Later in debate ---

[Roberta Blackman-Woods (City of Durham) (Lab)]

The Minister will know that businesses in the north-west are very concerned about the loss of investment that could result from the abolition of the Northwest Regional Development Agency. Will he answer a question that I asked a few weeks ago? Is the £1 billion of additional growth money from the regional growth fund in addition to or instead of money that has already been allocated to RDAs and local authorities for economic growth?

[Mr Prisk]

The regional growth fund is entirely separate from the RDA changes. We are keen to strengthen local economies, hence our move on local enterprise partnerships, but the regional growth fund will bring £1 billion to the hon. Lady’s region and the other selected regions. It will start in 2011 and I think it is good news.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

2. When he last met the Deputy First Minister in the Welsh Assembly Government to discuss policy to support businesses in Wales.

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

As I gallop to Wales from the north-west, let me make sure that I give the hon. Gentleman the right answer.

My right hon. Friend the Secretary of State has not yet had the opportunity to meet the Deputy First Minister to discuss business support in Wales, but, as the hon. Gentleman will know, business support is a devolved activity.

[Jonathan Edwards]

I am sure that the Minister would like to join me in congratulating the One Wales coalition in Wales on reaching its third anniversary this month, with the Deputy First Minister’s Department having developed innovative strategies such as ProAct and ReAct. The Department is also publishing, this week, its new economic renewal programme, which focuses efforts on improving business infrastructure, such as broadband provision, in Wales. Will the Minister make representations to his colleagues in the Department for Culture, Media and Sport to ensure that the money that would have been spent for the benefit of Wales, through the independently funded news consortiums pilot, is released directly to the Welsh Assembly Government to help them to achieve their broadband objectives?

[Mr Prisk]

The economic renewal programme, which I have had an opportunity to look at, has considerable merit, not least because it moves away from the tinkering and meddling of the last Labour Government and towards infrastructure. Broadband investment is very important and the Ministers who deal with broadband will have heard his representations. The issue is important and we want to act on it promptly.

[Mr Clive Betts (Sheffield South East) (Lab)]

3. What factors he took into account in deciding to withdraw the £80 million loan facility to Sheffield Forgemasters.

--- Later in debate ---

[Mr William Bain (Glasgow North East) (Lab)]

4. What recent assessment he has made of trends in levels of investment by manufacturing industry; and if he will make a statement.

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

In 2009, the volume of manufacturing investment in the UK declined by 21%, the largest annual fall on record, and it declined in 10 of the last 11 years. This Government believe that that trend can be reversed. In developing our plans to rebalance the economy, we are keen to ensure that we provide the best long-term environment in which manufacturing can grow.

[Mr Bain]

I am grateful to the Minister for that reply, but will he reflect on the comments from the Institute for Fiscal Studies and the manufacturers’ organisation the Engineering Employers Federation that the biggest beneficiaries of the Government’s changes to capital and investment allowances and corporation tax are low-investment and high-profit firms—

“Banks and supermarkets rather than manufacturers”,

as the IFS put it? What practical help can the Minister offer to manufacturing industry today?

[Mr Prisk]

I must correct the hon. Gentleman and give him the facts. We have had to reduce capital allowances to enable us to fund the corporate tax cuts, but the net result of the changes is that manufacturing—and not the industries to which he referred—will still be better off. Indeed, by 2014-15, it will be better off by £250 million per annum. I think that that is a very good policy, although I detect that the Labour party may now be opposed to it.

[Lorely Burt (Solihull) (LD)]

We accept that the coalition Government have put many good things in place to help industry generally, but I have a specific question about manufacturing. Will the Minister say whether the Government are planning any particular help for manufacturing to restore it to its rightful place, which is leading the world?

[Mr Prisk]

Indeed we are, and our plans include the changes to corporation tax that mean that manufacturing industry is better off by £250 million, the reduction of the burden of red tape and the removal of many regulators, and the £150 million that has been set aside to fund up to 50,000 more apprentices. The Government’s stronger long-term approach contrasts with the pick ‘n’ mix tactics and the tinkering and meddling that we had from the last Labour Government.

I remind the House that manufacturing investment declined in 10 of the last 11 years. That is the record of the Labour Government, and Labour Members should be ashamed of it.

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

I want to return to the issue of capital allowances. The Minister and the Secretary of State have said that they want to rebalance the economy, but the Budget proceeded with plans to cut £3.1 billion from capital allowances and the investment allowance by 2013. The IFS has said that

“cutting capital allowances is not a good way to raise money because they are an efficient way to promote investment”.

In addition, the Engineering Employers Federation has said that the cuts

“make the investment needed to rebalance the economy more expensive”.

Labour’s Budget in March doubled the investment allowance for manufacturers, but this Government have cut that by 75%. We are all saying that we want to rebalance the economy, so how can the Minister justify these cuts of £3 billion a year in our support for manufacturers?

[Mr Prisk]

As I told the hon. Member for Glasgow North East (Mr Bain) earlier, the net balance is that manufacturing will be £250 million better off. That is the point. The right hon. Gentleman refers to the annual investment allowances but, even after these reforms take effect, the vast majority of businesses—over 90%—will still have all their investment costs covered by the Association of International Accountants. The key point is that the record of the Labour party is one in which manufacturing investment declined in 10 years of 11. We are changing that environment by taking the long-term approach. Is the hon. Gentleman proud of his record of investment down and jobs cut? Is he proud of that?

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

5. What the eligibility criteria will be for further education colleges for funding from the recently announced renewal and enhanced renewal grant schemes.

--- Later in debate ---

[Jeremy Lefroy (Stafford) (Con)]

18. What recent steps he has taken to increase access to finance for small businesses.

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

I refer my hon. Friend to the answer my right hon. Friend the Secretary of State gave to the hon. Member for Edinburgh West (Mike Crockart).

[Jeremy Lefroy]

Many small businesses, including those in my constituency, face much higher facility fees, even when they can get access to finance. Does the Minister agree that banks should not use the current situation to hike up fees, and will he take this up with them?

[Mr Prisk]

Indeed, we already are. I want to stress and put clearly on the record the fact that we are not willing simply to allow the situation to continue. Small businesses are crucial to our economy. We want to ensure that banks understand that. My right hon. Friend the Secretary of State and I meet regularly with the banks. If we find that they are clearly pushing such charges up, we will make them come to see us in the Department and ensure that they understand that we are not happy and that we will act to ensure that they change their behaviour.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

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

I think that there is cross-party consensus that major infrastructure projects such as high-speed rail and new nuclear and renewable energy schemes are essential not only for the future of our economy but for the greening of the economy. However, they often attract local opposition. There is huge concern within the business community about the proposed abolition of the Infrastructure Planning Commission. What representations is the Minister making to ensure that the successor planning regime does not allow nimbyism, masquerading as local democracy, to strangle those schemes at birth?

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

What we are changing is the quango that will report on the final decision. We are not changing the streamlined system that will sit behind it—we think it is good; for business and for infrastructure—but we do think it important that when a final decision is made on a major infrastructure programme, it is made by a Minister standing at this Dispatch Box who is accountable to this House. I think that is an important principle; it will not undermine business investment and it is good for democracy.

[Mark Pawsey (Rugby) (Con)]

T7. Last week, I joined students at Rugby high school in my constituency, who were taking part in a business partnership event, in which they learned the principles of running a business. Does the Minister agree that it is vital to encourage and support such entrepreneurs of the future?

--- Later in debate ---

[Laura Sandys (South Thanet) (Con)]

T8. Will the Secretary of State meet a group of seaside MPs whose constituencies face very specific challenges both in job creation and in new business start-ups? Could we further discuss how to boost domestic tourism, which plays such an important part in the economy of my South Thanet constituency?

[Mr Prisk]

The hon. Lady, if I may say so, is a very good advocate—possibly even a champion—of tourism and so forth. [Interruption.] My largesse does not go quite that far. I would be more than happy to meet my hon. Friend and her colleagues. It is important to recognise some of the special problems in particular locations, and start-ups are crucial in that respect.