Oral Answers to Questions

Matt Hancock Excerpts

Thursday 12th February 2015 Commons Chamber

[Mr David Hanson (Delyn) (Lab)]

7. If he will review the use by banks of the enterprise finance guarantee scheme.

[The Minister for Business and Enterprise (Matthew Hancock)]

The enterprise finance guarantee is an important part of our support for viable businesses looking to get access to finance where they do not have sufficient collateral or a track record. We regularly review its performance and have found that by increasing access to finance it helps jobs and growth.

[Mr Hanson]

For over a year, I have written and tabled parliamentary questions asking for a review of the scheme. On 14 January, the Secretary of State met RBS. On 15 January, RBS announced a review of its scheme. Given that it controls about 40% of the enterprise finance guarantee scheme, that it is calling for a review and is looking at the matter internally, is it not about time that the Minister did that himself?

[Matthew Hancock]

We constantly review the scheme to ensure that we get the best possible deal. The majority of the enterprise finance guarantee goes through other banks, which, as far as we know, are performing impeccably. On the RBS aspect, we have met RBS to discuss that. It is reviewing the matter, and we will make sure that it works in the future. The big picture is that the scheme is working well and helping small firms to access finance.

[Toby Perkins (Chesterfield) (Lab)]

Following a year of my right hon. Friend the Member for Delyn (Mr Hanson) raising this issue, RBS has admitted that there has been mis-selling of the EFG scheme.

Rebuilding confidence in our banking sector will be one of the key tasks facing the next Labour Government. From interest rate swaps to tax evasion and now mis-selling of EFG loans, the Government have been slow to act and slow to investigate whether there are problems. Does the Minister now accept that only through investigating and repairing mis-selling in Britain’s high street banks will confidence in the sector return?

[Matthew Hancock]

The hon. Gentleman has a bit of a cheek, because the investigation required, and the sorting out of confidence in banks, was an enormous issue that we had to take on in 2010. We have regulated and passed legislation throughout this Parliament to ensure that there is more confidence in the banking industry. Of course, there is more to do, but considering how far we have come over the last five years, the hon. Gentleman ought to be saying we have done a good job and be helping us to do that.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

9. What steps he is taking to promote investment in innovation in the manufacturing sector.

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[Valerie Vaz (Walsall South) (Lab)]

10. What recent assessment he has made of the availability of finance for small firms and the level of lending by banks to small businesses.

[The Minister for Business and Enterprise (Matthew Hancock)]

Gross lending by the banks to small and medium- sized businesses has increased by 25% over the last year, and recent net lending figures have been positive. This week, my right hon. Friend the Prime Minister announced Help to Grow, to boost scale-up finance, building on the success of our start-up loans.

[Valerie Vaz]

Fine words, but how does the Minister reconcile that with the Bank of England’s money and credit statistics, which say that lending to small businesses has fallen in the last quarter by £1 billion? Too many schemes and not enough action.

[Matthew Hancock]

On the contrary, the gross lending is up sharply—around a quarter over the past year—and there are also greater repayments as businesses that are becoming stronger are able to pay down some of their debts. That means that the net figure has been increasing in recent months. We need to look through the individual figures and see the bigger picture of the expansion. However, there is of course much more to do to recover from the banking crash that occurred in 2008.

[Andrew George (St Ives) (LD)]

What progress are the Government making to bring justice and recompense to the thousands of small businesses that were mis-sold—and perhaps still are being mis-sold—interest rate swap agreements?

[Matthew Hancock]

I know about this issue very well, not only in a ministerial capacity but because Mr Ian Parker is one of the main advocates for a solution to this, and he is a constituent of mine. It is important to get to the bottom of this issue, but it is complicated. There is work going on across the Financial Conduct Authority and the Treasury, as well as the Department for Business, Innovation and Skills, to ensure that we get to the bottom of it and that people get appropriate recompense.

[Heidi Alexander (Lewisham East) (Lab)]

11. What recent assessment he has made of the contribution of the UK’s EU membership to businesses and the UK economy.

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[Jim McGovern]

The National Union of Rail, Maritime and Transport Workers recently reported that, due to the fall in oil prices, the terms and conditions of people employed in the oil industry have been reduced. Is the Minister aware of that and what steps is he taking to address that exploitation?

[The Minister for Business and Enterprise (Matthew Hancock)]

The fall in the oil price has had a direct impact on those employed in the industry both in Aberdeen and across the whole country, and there is no doubt that it will continue to have an impact. Nevertheless, the safeguarding of jobs, in some cases with reductions of pay, is an important part of the response and we are working closely with the industry and other stakeholders to try to ensure that we get through these difficult times.

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

T4. The Government have a target, signed off at the highest level, I believe, of achieving £1 trillion of exports by 2020, doubling the current figure in five years. When asked at the Business, Innovation and Skills Committee, a UK Trade & Investment representative described it as an “energising aspiration”. Is it an energising aspiration or is it a realistic, achievable target?

[Matthew Hancock]

The target of £1 trillion of exports by 2020 is the target, and a realistic one. It is an energising target, an aspiration, an ambition and a goal. We can get there as a country and we can reach it, but it will require a huge amount of effort. That is why trade deals such as the EU-US trade deal known as TTIP, the Transatlantic Trade and Investment Partnership, are so important in reaching that aspiration, goal and achievement.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

T5. The Minister responsible for life sciences will be familiar with Daiichi Sankyo, an innovative drug company based in Chesham and Amersham. It is launching a novel oral anticoagulant to help prevent strokes more effectively in people who suffer with atrial fibrillation. The uptake of such drugs has been repeatedly blocked by the NHS despite guidance from the National Institute for Health and Care Excellence that calls for their use. What can the Minister do to clear that blockage so that the drugs can be used to benefit our patients?

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[Martin Vickers (Cleethorpes) (Con)]

The economy in northern Lincolnshire has had much good news in recent weeks, but a bit of a damper was put on that this morning by the announcement from Lindsey oil refinery that there will be 180 redundancies. That follows 90 redundancies announced last week by Cristal Global. Will the Minister assure me that everything possible will be done by his Department and Government agencies to support the workers at this difficult time?

[Matthew Hancock]

Absolutely. I met Total yesterday and it told me of its planned announcement today. We are working with the company to ensure that if any redundancies occur, those made redundant are supported. They will often be people with skills that are in short supply across the nation, and I look forward to going to my hon. Friend’s constituency to discuss this with him and to working with him.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

May I ask the Secretary of State and his merry men and women to pay attention to an important problem? Many of us across the House are in favour of apprenticeships and university technical colleges, but we would be conning the British public if we led them to suppose that apprenticeships and university technical colleges on their own will help us get rid of the dreadful skills shortage in this country. Will the Secretary of State look at this again? The real secret of solving this problem is in the further education sector, in universities having more applied courses, and in making graduates and the people coming out of colleges more fit and ready to work in industry.

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[Nic Dakin (Scunthorpe) (Lab)]

As the hon. Member for Cleethorpes (Martin Vickers) pointed out, there is an announcement today about restructuring by Total of its facility at Lindsey oil refinery. In addition there is uncertainty about the future of Tata Steel Long Products in Scunthorpe. Will the Government ensure that the necessary support is given to manufacturing industry in north Lincolnshire, so that it has a strong and prosperous future?

[Matthew Hancock]

Absolutely we will. I understand that the changes announced today by Total are set to take place over a number of years, so there will be time to ensure that we get the systems in place to support people who are affected, whether they stay within Total or are looking for jobs elsewhere or are seeking early retirement. We will do all we can to help.

[Mr Alan Reid (Argyll and Bute) (LD)]

I welcome the introduction of big fines for supermarkets that breach the groceries supply code of practice, but I urge the Government to bring forward the review. We need to extend the code to indirect suppliers such as dairy farmers, who are suffering greatly at the moment. They cannot wait another year. May we have the review much sooner, please?

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[Matthew Hancock]

We now put all procurement online. Also, from this month, a new rule is coming into place: not only must all procurement from Government be paid within 30 days, but the whole supply chain must be paid within 30 days. It is a big step forward to help small businesses engage in Government procurement.

[Mr David Willetts (Havant) (Con)]

Will the Minister confirm that one of the best ways of getting funding into innovative life sciences companies is for them to get contracts from the NHS earlier? He just referred to his very important early access review. What are the ambitions for that, and the timetable?

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[Tim Loughton (East Worthing and Shoreham) (Con)]

The Minister gave a progress report on the Government’s dealing with late payment, but, according to a recent small business seminar in my constituency, it remains a bugbear. One international telecommunications company was cited which not only charges a fee to be a supplier, but has 180-day payment terms. What more can we do to name and shame and make transparent these obscene practices, which clobber small businesses?

[Matthew Hancock]

The single best thing we can do about that is to pass before the end of this Parliament the Small Business, Enterprise and Employment Bill, which is still going through the other place. That brings in transparency measures which mean that we will not name and shame just on an ad hoc basis, but have league tables of late payment performance, celebrating the best and admonishing the worst.

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[Sir Bob Russell (Colchester) (LD)]

Unemployment in my constituency has fallen by 54% since the last general election. In respect of business, innovation and skills, will my right hon. Friend get his officials to look at the success story that is the Colchester business enterprise agency, a not-for-profit voluntary organisation which has about 50 starter workshop units helping new and innovative fledgling businesses?

[Matthew Hancock]

Yes, absolutely. The fall in unemployment across the land, in Colchester and beyond, is a vital sign that the long-term economic plan is working. I very much look forward to visiting Colchester soon and look forward to taking up the hon. Gentleman’s proposal.