Oral Answers to Questions

Mark Prisk Excerpts

Thursday 14th October 2010 Commons Chamber

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

4. What steps he plans to take to ensure that businesses in deprived areas receive support through local enterprise partnerships.

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

First, I congratulate the hon. Gentleman on his promotion to the Opposition Front Bench as a shadow Transport Minister.

Local enterprise partnerships will be a vital element in our new framework for economic development. At the same time, we are planning to modernise business support to improve both access to information and the quality of advice. That will be especially important to firms in remote or deprived areas.

[John Woodcock]

I thank the Minister for that answer and for his kind words. Does he accept that the recovery is currently very fragile? What interim measures will he put in place while the regional growth fund is being established and will he commit to funding the vital marina project in my constituency?

[Mr Prisk]

The hon. Gentleman has astutely got on to the record his local project and I commend him for that, but he will understand that a week before the comprehensive spending review I am not going to pre-empt such matters. I will say, however, that the combination of making sure that we have genuine economic development partnerships that are rooted in the communities and ensuring that they are a genuine partnership between business and civic leaders will enable local areas such as Barrow and Furness to set their own priorities and not have Whitehall telling them what they should do.

[Laura Sandys (South Thanet) (Con)]

Although South Thanet is in one of the richest regions in the south-east, it is the 64th-most deprived district in the country. Does the Minister agree that LEPs must be there to support the most deprived districts even within richer regions?

[Mr Prisk]

One of the great advantages of moving away from the one-size-fits-all general regional development agencies is that local enterprise partnerships can respond to local needs. I know that my hon. Friend, who fights her corner for her constituents well, will make sure that that happens.

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

Yesterday, PricewaterhouseCoopers warned of half a million lost private sector jobs with the Government’s scrapping of schools, hospitals and road contracts. Meanwhile, Ministers from the Departments for Business, Innovation and Skills and for Communities and Local Government continue squabbling about what local enterprise partnerships can do, blocking resources that the private sector says it needs now. Why should businesses believe that the Minister and his colleagues have any plan for local growth or jobs when they are in such a shambles and chaos over LEPs?

[Mr Prisk]

We have inherited a situation in which the funds have run out, as the Labour party has said. That is why we are focusing on the things that really matter—tackling the public deficit to keep interest rates lower for longer, making sure that small businesses see their corporation tax go down and tackling red tape. The Labour party failed to deal with all that, but we will.

[Gordon Birtwistle (Burnley) (LD)]

5. How many apprenticeship places his Department plans to fund in 2010-11.

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[Jason McCartney (Colne Valley) (Con)]

15. What recent representations he has received on access to finance for small businesses.

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

The Government believe that improving access to finance is vital for small businesses. In response to our formal consultation on access to credit, we received more than 170 representations, and we will respond to them shortly. In addition, yesterday the British Bankers Association published its taskforce report on business lending, which has 17 separate recommendations. The Government welcome the progress made by the taskforce to date.

[James Morris]

I thank the Minister for his answer. Many small businesses in my constituency and in the broader black country are still complaining about their inability to get capital to grow their businesses. Does he agree that this is now becoming a vital issue? Will he outline the steps that the Government are going to take to ensure that we get that capital into those businesses, which are absolutely vital to the future of the region and the areas that I represent in generating private sector jobs growth?

[Mr Prisk]

My hon. Friend is absolutely right. That is why, right away, within a month, we extended the enterprise finance guarantee by £200 million to help up to 2,000 more businesses. More than that, we have been actively pressing the banks to sort out the lending code, to deal with information so that it is more transparent, and to ensure that businesses have the opportunity to appeal. Yesterday, the taskforce reported back, and we will study its proposals. Let me make it clear, however, that as far as this Government are concerned, the real test now will be for the banks’ words to be matched by their actions.

[Jake Berry]

Small businesses in my constituency, which includes some of this country’s leading manufacturers, are reliant on credit insurance. What steps are being taken to ensure that such insurance remains available to them?

[Mr Prisk]

My hon. Friend is right to raise that issue, which he has discussed with me in the past. This is a particularly acute problem for those in the construction sector. We have sought assurances from the principal insurers in this area that they have now put in place for the coming year a sufficient risk capability, and they have given us those assurances. As with the banks, we will be closely scrutinising this to ensure that what they have said they have done is implemented in the coming months.

[Jason McCartney]

I echo my hon. Friends in pointing out that one of the biggest issues that I am facing in my constituency is the lack of lending to small and medium-sized businesses. In addition, Lloyds TSB has announced in the past month that it is closing the only branch in a market town called Meltham. In stressing to the banks that they need to get lending, will the Minister also stress that they need to start serving our communities?

[Mr Prisk]

This is something that we have raised with the banks. On Monday, however, I want to go further—that is when we will convene our new small business economic forum with the express intention of bringing Government, businesses and the banks together so that we can deal with these issues and start to ensure that credit is available for all businesses, large and small.

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

The Secretary of State has rightly commented on the obligations of state-supported banks to do more to help our small businesses in the interests of the national economy. Will the Minister tell us whether the new growth fund set up by the banking taskforce and announced yesterday will have on its board a Government representative in order to influence policy decisions?

[Mr Prisk]

We met the banks yesterday and are perfectly willing to engage with them on how that could happen. We may well wish to ensure that the Government have a stake in that role, but as we received the recommendations just yesterday, I am sure the hon. Gentleman and the Committee that he chairs will understand that we want to examine them more closely. The new growth fund is a positive step which will deal with the gap that Rowlands identified in the case of mid-cap businesses. It is a welcome step, and the Government want to work with the banks to make it work effectively.

[Andrew Gwynne (Denton and Reddish) (Lab)]

But does the Minister agree with the Deputy Prime Minister, who said on 27 April on Radio 5 Live about state-owned banks not lending enough to small businesses:

“What we’re saying is that the directors of those banks should be held responsible and if they fail to honour those lending targets they should be sacked”?

[Mr Prisk]

I have learned to make a habit of always agreeing with the Deputy Prime Minister.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

I do not believe that the Minister is really focusing his attention on the question. By his own Department’s definition, small enterprises are those with zero to 49 employees, and they have an average turnover of less than £3 million. How will the new business growth fund proposed yesterday by the British Bankers Association help those businesses, given that businesses will have to have a turnover of between £10 million and £100 million to apply and the average turnover of a small business is £3 million?

[Mr Prisk]

May I first welcome the hon. Gentleman to his position? Unfortunately, however, his first question confuses two matters. The growth fund is about investing equity into mid-cap businesses, as I described to the hon. Member for West Bromwich West (Mr Bailey). Micro-businesses, which are very important, are an entirely different animal. That is where bank lending is crucial, and that is what we are dealing with. We are particularly keen to ensure that there is a proper lending arrangement for micro-businesses, and we are talking to the banks about how we can get one, but Members should not confuse capital investment and bank lending. They are two different things.

[Andrew George (St Ives) (LD)]

10. When he intends to introduce an ombudsman to enforce the grocery supply code of practice.

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[Mr John Baron (Basildon and Billericay) (Con)]

19. What recent representations he has received on access to finance for small businesses.

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

I refer the hon. Gentlemen to the answer I gave to a similar question earlier.

[Chris Evans]

Atega Business Solutions, a new business start-up based in my constituency, tells me that part funding is available to it, but that in most cases it has to spend 100% of the cost before it is eligible to claim back 50%, which deters it from applying. What advice would the Minister give to Atega to secure funding when money is tight?

[Mr Prisk]

It is important that businesses not only press their own bank, but shop around, because there tends to be an anxiety that, having been turned down by one bank, they will not be successful elsewhere—I remember that when I started my own business in the last recession. It is also important, if the hon. Gentleman can, to press that case on his constituents’ behalf with the British Bankers Association. If he does so, would he copy me in? If his constituents continue to have problems, I would like to ensure that the banks understand that we take an interest in the plight and prospects of our small businesses.

[Mr Baron]

The measures introduced by the coalition Government to help small businesses have been a vast improvement on what went before under the previous Government. However, in the specific cases bought to the Department’s attention by Members of Parliament in which commercially viable small and medium-sized enterprises are still being denied access to capital, can I have the Minister’s assurance that the Department will do everything it can to help?

[Mr Prisk]

We can and we will, and I will be happy to support any Member who wants to press that case. This is a very important issue, and it should be cross party. We can make a difference.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

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

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[Alison Seabeck (Plymouth, Moor View) (Lab)]

T4. What action is the Minister taking, alongside his colleagues in the Department for Communities and Local Government, to prevent the regional economy of the south-west from entering a slump because of the parochial disagreements in the region? Or are DCLG and businesses unable to agree, in the same way that the Conservatives and Liberal Democrats seem unable to agree in the south-west?

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

I will ignore the flim-flam at the end. What matters to the hon. Lady is ensuring an effective partnership in her area. There is squabbling in Somerset and Devon, which the people concerned have to sort out. If they do not, they will fall behind. That is the message for them, and I hope she will support me on that.

[John Glen (Salisbury) (Con)]

T2. Odstock Medical Ltd in my constituency was the first commercial entity to be set up under the NHS. It does vital work developing medical devices alleviating the condition of people with multiple sclerosis. Unfortunately, it is unable to access the SME support from the Department. Given that its major shareholder is the local hospital, will the Minister meet me to discuss how it can be reclassified as an SME so that it can access that support and grow its business, which does vital work?

[Mr Prisk]

This is a peculiar glitch in the way the law works, and I would be pleased to meet my hon. Friend and the business in his constituency to see whether we can wrinkle it out.

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

T5. Can the Minister explain what he will do to ensure that our universities stay at the leading edge of research and innovation? That is especially important as, for many universities, the Browne proposals will mean only replacement income, not growth and investment money, despite the quite disgraceful hike in tuition fees proposed.

[Philip Davies (Shipley) (Con)]

T3. Further to the excellent question from my hon. Friend the Member for Kettering (Mr Hollobone), given the volume of regulation that comes from the EU, does the Minister accept that unless the one-in, one-out policy applies to EU regulation as well, it will have only a limited impact? I understand that the Minister said that the policy would apply to EU legislation in due course, but can he give us a time scale for that?

[Mr Prisk]

There are two steps. One is to ensure that the practice that we follow deals with the gold-plating, which has quite rightly been raised by Members on both sides of the House. That is our first step, but as my hon. Friend has pointed out—and as my hon. Friend the Under-Secretary of State, the hon. Member for Kingston and Surbiton (Mr Davey) pointed out in his answer earlier—we are ensuring that we deal with domestic legislation first. We will then ensure that we look to include EU legislation. [Interruption.] I love this coming from the Opposition, who allowed 14 new working regulations every working day. We are tackling regulation; they funked it.

[John Mann (Bassetlaw) (Lab)]

T10. If the Business Secretary had been able to accept my invitation to open the world’s most advanced plastics recycling factory in my constituency two weeks ago, he would have learnt that the decision to invest in this country was based on a £1 million grant from the regional development agency. How much will be available through such grants to attract other overseas businesses to invest in my constituency in the next three years?

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[Mr Mark Spencer (Sherwood) (Con)]

T7. The Minister will be aware of the thousands of companies that in the past have supplied Departments, an example of which is F. J. Bamkin in my constituency, which used to supply socks to the Ministry of Defence. Can he say what progress his Department has made in achieving the manifesto commitment to deliver “25 per cent of government research and procurement contracts through SMEs”?

[Mr Prisk]

The key to changing the system is to ensure that we open up the contracts. That is why we have already started to publish those contracts online, so that every business, large or small, can see what is on offer. Then we need to remove the barriers that exist, which is why we are tackling things such as the repeated pre-qualifications that are necessary for the same work in neighbouring areas. Removing those barriers, opening up the contracts—that is how we are going to hit the targets.

[Lilian Greenwood (Nottingham South) (Lab)]

Yesterday I spoke to Dr Paul Greatrix, registrar of the university of Nottingham. He described the Government’s immigration cap as wrong-headed and perverse, because it will hamper the free trade in ideas and prevent our world-class international university from recruiting the brightest and best minds to join its highly skilled research team. What will the Minister do to ensure that our university’s excellent reputation is maintained?

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[Mr Prisk]

You are very kind, Mr Speaker. There will be a sub-regional White Paper in due course.

[Ian Austin (Dudley North) (Lab)]

The deep-seated structural challenges facing the west midlands economy mean that our region has been hit harder by the downturn than anywhere else in the country, and the recovery will take longer, too. Is the Secretary of State prepared to meet a cross-party delegation of Members of Parliament from the west midlands and business leaders from the region so that we can discuss plans to bring new industries and new jobs to the region?