Technical and Vocational Education

Matt Hancock Excerpts

Wednesday 9th July 2014 Commons Chamber

[Tristram Hunt]

We have a proud record of tackling unemployment and youth unemployment. We championed the delivery of young people into work with a future jobs fund which this Government scrapped when they came into office. As this week’s CBI—

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

rose—

[Tristram Hunt]

I would have thought the Minister would want to listen to what the CBI has to say. This week’s CBI survey found that 58% of businesses are not confident that they will have enough highly skilled staff available for their future needs, which is up from 46% last year. [Interruption.] I know the Under-Secretary of State for Education, the hon. Member for South West Norfolk (Elizabeth Truss) is keen on maths, so let me tell her that that is a rise of 12% in a single year under this Government. The Government’s focus has been on tinkering with the curriculum, undermining teaching and introducing a mishandled free schools policy.

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[Tristram Hunt]

My hon. Friend is exactly right.

Talking of political divisions, the Government’s focus, as we have seen, has been not on the vocational demands of our education system but on tinkering with the curriculum and a free schools policy. At the Skills Minister’s favourite school, the Swedish private equity free school IES Breckland, which he has supported so much, Ofsted discovered “inadequate” teaching, poor behaviour and declining student literacy levels. The Swedish for-profit model that the Government were so keen to import has been exposed and discredited in the Skills Minister’s own backyard—responsible for one of the biggest falls in educational standards anywhere in the world.

[Matthew Hancock]

I am grateful that the hon. Gentleman broke away from his overly partisan tone when mentioning the Secretary of State, who apologises for not being able to be here. My right hon. Friend made it clear that if the Labour party had made this the first and most important debate this afternoon, he would have been here at the Labour party’s request. He would have liked to have been here, but the Labour party chose to make this the second debate, and therefore he cannot, and so I shall be responding for the Government.

[Tristram Hunt]

The record will note that the Skills Minister did not want to defend IES Breckland and the free schools policy.

We are beginning to see a widening attainment gap, but it is on vocational education where the Government’s negligence hits hardest. The Government are failing young people who want a gold-standard technical education, and they are not securing our skills base.

Let us be clear about the Government’s record. The number of apprenticeship starts by under-25s has fallen by 11,324 since 2010. The number of STEM apprenticeships for 16 to 24-year-olds has fallen by more than 7,000 since 2010. Too many apprentices in England are existing employees, not new job entrants, and too many are over 25. Let us add to that the Government’s scandalous destruction of careers advice.

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[Tristram Hunt]

I think, Madam Deputy Speaker, that a national baccalaureate might enable the Minister to learn about character, self-control and resilience in these kinds of situations. If he wants to pursue life-long learning, that is an ambition Labour Members absolutely pursue.

[Matthew Hancock]

rose—

[Tristram Hunt]

I am trying to conclude.

The culmination of our vision for young people on a technical or vocational pathway is our new plan, announced by the Leader of the Opposition yesterday, for technical degrees. These courses will be designed by some of our best universities and our leading employers, teaching people the skills they need to prosper in the new economy. Currently, just 2% of apprenticeships are available at degree level. For the first time, those who have excelled in vocational education and training—those who have gained a first-rate tech bacc and completed a level 3 apprenticeship—will be able to take their aspirations further. For the first time, young people will have the chance to earn while they learn at university, with a degree that provides a clear route to a high-skilled technical or professional career.

At the next general election, we have a choice between a Labour party determined to equip an outward-facing Britain with the skills and education it needs to succeed and, on the other hand, coalition parties tinkering with the curriculum here and there, increasing the number of unqualified teachers, and promoting for-profit schooling. It is a choice between more young engineers and more IES Breckland free schools; between a modern curriculum focused on thinking and doing, building character and creativity and harnessing the aspirations of all young people, and the narrow exam-factory model of recent years; and between a low-wage, low-skill, business-as-usual race to the bottom and a high-skill, high-innovation economy that works for all. Only one party is offering this country an economy and an education system fit for the punishing demands of the 21st century. I commend the motion to the House.

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

We heard a regrettable tone from Labour in opening this debate. Before going into the details of the radical reforms of vocational education that we are undertaking to promote apprenticeships and to strengthen vocational qualifications, it is worth going through a couple of points of detail.

The hon. Member for Stoke-on-Trent Central (Tristram Hunt) stated that the number of apprenticeships for those under 25 has fallen by 11,000 since 2010. He refused to take my intervention, probably because he knew I was going to point out that figures show that since 2010 the number of apprenticeships for those under 25 has risen by 49,000. He mentioned careers advice but forgot to mention the new National Careers Service, which has 3,700 careers advisers who have in the past year delivered 1 million pieces of careers advice. He did not even know that education is a devolved area of policy and talked about education across the UK. On the withering away of skills in science, according to Ofsted that is precisely the legacy we were left by the Labour party. On degree-level apprenticeships—I take this one as a personal compliment—he was critical of their representing only 2% of apprenticeships. I introduced degree-level apprenticeships this time last year, and under Labour there were no degree-level apprenticeships. Perhaps now we know why the hon. Member for Streatham (Mr Umunna) left the Chamber halfway through the opening speech—it was to go and cross off another name from his list of leadership challengers.

[Mr Rob Wilson (Reading East) (Con)]

I thank my hon. Friend for giving way, because the shadow Education Secretary would not do so when I tried very hard to get in earlier on. I listened very carefully to the shadow Education Secretary and heard a lot of top-down stuff, but very little about business. Why would he be so afraid of talking about business? Is it because his party is the anti-business party?

[Matthew Hancock]

It is certainly true that Labour is the anti-business party, but it is much more worrying that the Labour party seems to oppose our reforms to bring the world of education and the world of work closer together. We are undertaking the most radical reform of vocational education in Britain for a generation. We have swept aside thousands of qualifications that employers did not value and replaced them with clear tech awards, tech levels and the tech bacc, which the hon. Member for Stoke-on-Trent Central mentioned and which starts in September. We have boosted apprenticeship numbers—there are record numbers under this Government—and introduced higher-quality apprenticeships that reflect the modern economy, and strengthened the requirements for English and maths.

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

I have raised this point before, but I think it would be useful to do so again. The Minister is currently consulting on changing the apprenticeship rules, and 400 businesses, including small and medium-sized enterprises in the north-west, have responded by raising very serious concerns about the future for apprenticeships under his proposals. Why will he not address their legitimate concerns and ensure we can have those apprenticeships in the future?

[Matthew Hancock]

The hon. Lady is absolutely right that we have to ensure that the reformed apprenticeships are super simple, especially for small businesses, but representatives of 500,000 businesses wrote in support of the principle of the reforms and that is why we are going ahead with them.

The reforms are starting to pay off. Standards are starting to rise. Youth unemployment, which rose 40% in the first decade of this century under the Labour Government, is falling—it is down 10% over the past year—and is lower than it was at the election.

[Mr Newmark]

I would almost like two bites of the cherry by asking a question about youth unemployment as well, but I will not do so. The shadow Education Secretary said that our performance on vocational courses was lamentable, but is my hon. Friend aware that the proportion of 16 to 19-year-olds studying at least one of the post-16 level 3 vocational courses available—[Interruption.] I am actually delivering the facts, which might be helpful. Is my hon. Friend aware that that proportion rose from 100,000 under Labour to 185,000 under this Government?

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[Matthew Hancock]

I will have to add that to my list of erroneous facts from the Labour party that need sorting out.

[Mr John Denham (Southampton, Itchen) (Lab)]

Does not a more measured view of the history tell us the following: in 1997, fewer than 20,000 people completed apprenticeships, but by the time the previous Labour Government had finished, 285,000 people were starting apprenticeships each year? That number has continued to grow, but there are legitimate concerns about an increasing number of late starts and a smaller proportion of youthful starts, and those are the issues we need to address.

[Matthew Hancock]

That intervention was rather better than the whole speech given by the hon. Member for Stoke-on-Trent Central. It is absolutely true that modern apprenticeships were started by the great Lord Hunt of Wirral in 1994 and they grew. Under this Government, they have doubled in number and the latest figures show an increase in the proportion of apprentices who are under 25, which I welcome. More apprenticeships are good news, but we have to make sure that they are also of a high quality.

[Steve Rotheram]

Will the Minister give way?

[Matthew Hancock]

I will take this intervention, because I think I know what the hon. Gentleman is going to say.

[Steve Rotheram]

I hope not. When I was first elected in 2010, I took on an apprentice who has turned out to be an absolutely fantastic employee. How many of the Minister’s colleagues on the Tory Front Bench have put their money where their mouths are and taken on apprentices?

[Matthew Hancock]

Plenty have done so, including me. I went out to recruit one apprentice and came away with two because the applicants were so good. They are both absolutely brilliant. There are many more in the Department—there are now 58 apprentices in the Department for Business, Innovation and Skills. I recommend an apprentice to everyone.

[Richard Benyon (Newbury) (Con)]

It might help my hon. Friend to know that, as an employer, I took on an apprentice under the Labour Government. The course he was required to do and the apprenticeship bore no relationship to, and were a disaster for, each other. Quality as well as quantity has improved in recent years, which is a point Labour Members always forget.

[Matthew Hancock]

That is certainly true. I want to address an important point sensibly made by the hon. Member for Liverpool, Walton (Steve Rotheram). He asked whether too many apprenticeships are short courses and whether they are not high enough quality. It is true that the Government inherited a system in which apprenticeships could be less than six months. That was wrong, so we have said that every apprenticeship must be for a minimum of a year. We have increased quality while increasing the number of apprentices.

It is good news for the nation that the Opposition have accepted their failure in office—the wording of their motion shows that they forgot half the population— and now back our reforms. Some say that imitation is flattery, and I suppose they are right. On Sunday, the hon. Member for Stoke-on-Trent Central called for a new elite grade of master teachers. That sounds like a good idea, and we have them. They are called specialist leaders in education—top teachers who get dedicated training and share their expertise with other schools. There are 3,800 of them in England. By next year, we will have 5,000.

On improving reforms and driving up standards, the hon. Gentleman mentioned technical degrees, which the right hon. Member for Doncaster North (Edward Miliband) described yesterday. They sound like a good idea, and we have them. More than 200 colleges already teach technical degrees. It is called higher education in further education. I suggest he goes around the country and has a look.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

May I return the Minister to the subject of apprenticeships? Apprenticeships need to be of a decent length, but they also need to be high quality. There have been steps forward on both, but the other vital element of a successful apprenticeship is that it should be income transformative—it should lead to a significant increase in the market value of the person doing it. Has he looked at any mechanisms that could be put in place to ensure that, however worthy in concept apprenticeships are, they are held to account for delivering true market transformation of income expectation for the people who take them, young or old?

[Matthew Hancock]

Absolutely. The evidence shows that apprentices on the existing scheme increase their lifetime earnings, but we are not content to rest, so we are redesigning apprenticeship standards. Four hundred employers from different sectors of the economy are engaged to ensure not only that the training is rigorous, which is important, but that it responds to the needs of employers and gets people into higher-paid jobs. We want to ensure that the money that we, on behalf of taxpayers, put into subsidising apprenticeships, is well spent and that we get value for it. Ensuring that the money helps people to get higher-paid jobs is a vital part of that reform. I welcome any suggestions on how to entrench that link between what is taught to apprentices and the needs of employers. That can lead to higher pay for young people, which is what the policy is all about.

[Mr Newmark]

Does my hon. Friend agree that it is important to have joined-up thinking in government? The Chancellor’s proposal, working with the Million Jobs campaign, to abolish national insurance for young people who get jobs, saves employers about £500 a year, and gives them the extra impetus they need to hire a young person.

[Matthew Hancock]

As my hon. Friend may well know, I am an enormous fan of the work of the Million Jobs campaign. The idea that we should not require national insurance from those who employ young people under the age of 21 is such a good one that the Chancellor put it in the Budget.

[Bill Esterson]

I am happy to withdraw my earlier remarks about the Secretary of State’s absence.

On quality and ensuring that apprenticeships do the job needed for the economy and for the individuals involved, does the Minister accept that we need the same approach as in Germany, where vocational and academic qualifications are of the same quality and have the same status? Does he agree that we need to offer apprenticeships in businesses of all sizes? That happens in Germany, but is it really happening in this country? I do not think it is.

[Matthew Hancock]

It was gracious of the hon. Gentleman to withdraw his remarks about the Secretary of State.

In the hon. Gentleman’s constituency, the number of apprenticeships has gone up by 118% since the election, so I know that he is a supporter of apprenticeships. Of course we must ensure that we drive up their quality. More than half of apprenticeships are in small and medium-sized enterprises, so they can be got in smaller businesses. An important part of the reform is to ensure that they work for small businesses as well as large ones, and that is happening at the moment.

The crucial point is that apprenticeships are based not only on the needs of employers, but on the basics, especially the key vocational skills of maths and English. We are strengthening maths and English at primary and secondary school, but it is shocking that, despite recent improvements, 40% of pupils do not get GCSEs at A* to C in English and maths by the age of 16. It is a national scandal that nine out of 10 of those who do not reach that basic standard by 16 do not achieve it by 19 either.

Under Labour, Britain was the only major country where young people were less numerate and literate than their grandparents, and we became one of the few major countries that did not insist on continued studies of maths and literacy for those who did not get such qualifications the first time around. We are ending that scandal. From September, all students will for the first time have to continue studying maths and English if they do not get a good GCSE, which will improve the life chances of millions.

[Mr Steve Reed]

I am sure that the Minister understands that it is important for many young people who do not gain the qualifications they need at school to be able to go back to college to get them later on. Will he therefore take this opportunity to apologise for trying to impose on Croydon college the largest cuts in the country for 18-year-olds in further education, despite the continuing high levels of unemployment in many parts of the borough?

[Matthew Hancock]

The hon. Gentleman mentions unemployment in Croydon. In his constituency, it has fallen by 29% over the past year, and the number of apprenticeships has increased by 170% since the election, so he should be saying thank you very much. As for the difficulties of managing a tight budget, whose fault is that? It is the fault of the Labour party, which left us with the biggest deficit in modern peacetime history.

[Mr Sheerman]

I apologise for having made a political point earlier. People outside the House are worried about the fact that we get into an argy-bargy between the two parties. [Interruption.] Come on. Surely there must be commonality of purpose in doing something for the young people in this country who do not go down the higher education route. Will the Minister please now give his attention to the further education sector? As hon. Members from either side of the House who care about this know, we must galvanise the FE sector to deliver what we want.

[Matthew Hancock]

Absolutely, and I am happy to work with the hon. Gentleman and the right hon. Member for Southampton, Itchen (Mr Denham), who spoke so powerfully earlier. It is a great pity that the Front-Bench spokesman’s speech was one of unremitting negativity and, crucially, that it was based on an utter misunderstanding of what is happening in vocational education. The reforms we are pushing through are about driving up standards, having higher expectations and ensuring that more young people have the chance to achieve their potential. Instead of saying that 50% should go to university and not caring—indeed, forgetting—about the rest of them, we are making sure that all young people get the chance to succeed.

[Guy Opperman]

Like the hon. Member for Liverpool, Walton (Steve Rotheram), I have hired and trained an apprentice, who I have retained for the past four years. She is outstanding and has been a great success.

To take the Minister back to what he said a moment ago about education funding on a difficult budget, is it not fantastic that the fairer funding formula has been readdressed so that—in these difficult times—Northumberland, for example, will from next April have an extra £10 million for schools that have been so underfunded for so long?

[Matthew Hancock]

Of course it is. Furthermore, in the 16 to 18 sector, instead of providing funding on the basis of how many qualifications young people take, we are providing it on a per pupil basis, with extra support for those from the most disadvantaged backgrounds. That has strengthened the funding for those who take fewer qualifications, and it provides an incentive for FE colleges and schools to do what is right for the young person.

The second part of our reform is about strengthening qualifications and having clearer pathways through tech awards, tech levels and the tech bacc. People must know that, instead of the mushy muddle that went before, we have strong and clear vocational pathways that are endorsed by employers.

The third and final strand is apprenticeships. In the previous Parliament, there were just over 1 million apprenticeship starts. We are on track to deliver 2 million apprenticeships over this Parliament. We have doubled the number of apprenticeships and driven up quality. There are stronger English and maths requirements. Apprenticeships now have a minimum duration of a year. Employers have been given the pen to design apprenticeship standards. We are reforming funding so that the training that apprentices receive follows the needs of employers.

As apprenticeships become more stretching, we are, for the first time, introducing traineeships for young people who need extra help with work experience, maths and English so that they have the skills and behaviour that they need to hold down an apprenticeship or a sustainable job. We are reforming the advice that young people receive so that they can be inspired by work experience, and we are ensuring that there are more mentors. We are reforming league tables so that schools are rewarded not only for exam results, but for where their pupils end up to take account of whether they get to university, get into an apprenticeship or end up not in education, employment or training. That change never happened in 13 years under the Labour party.

It is rapidly becoming the norm across the country that when young people leave school or college, they go into an apprenticeship or go to university. Our job is not to set arbitrary targets, but to ensure that there are high-quality options in both those areas. We must bring together the worlds of work and education, and break down the apartheid between academic and vocational education to give all young people the skills, knowledge and behaviour that they need to succeed. This task is vital. Yes, it is part of our long-term economic plan, but it is more than that—it is a battle for social mobility and a moral mission for social justice. The Government know that social justice is about earned reward and that jobs are created by endeavour, not handouts. There can be no higher justice than economic opportunity for all. That is our policy and these are our tools. We are ending the previous Government’s decade of neglect for vocational education so that every young person can reach their potential.

[Several hon. Members]

rose—

Maths and English (Post-16 Education)

Matt Hancock Excerpts

Wednesday 2nd July 2014 Written Statements

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

I am today setting out the Government’s plans for strengthening English and maths in post-16 education, increasing uptake of reformed GCSEs in these subjects.

A total of 40% of pupils do not get GCSE grades A* to C in English and maths by age 16. Worse still, 90% of those who do not reach this basic standard by 16 do not achieve it by age 19. From August 2014 students who have not achieved a good pass in English and/or maths GCSE by age 16 must continue to work towards achieving these qualifications or an approved interim qualification as a “stepping stone” towards GCSE as a condition of student places being funded.

Reformed GCSEs in English and maths will be available for first teaching in schools from September 2015 with the first examinations being sat in summer 2017. These new GCSEs will both be more stretching at the top, and more practical than existing GCSEs.

These new GCSEs will then be introduced into post-16 education in phases between 2015 and 2020.

With effect from August 2015, we will amend the funding condition, so full-time students aged 16 to 19 with prior attainment of grade D in English and/or maths will take GCSE, rather than any other qualification in these subjects.

We will further revise the funding conditions relating to the teaching of the new GCSEs in English and maths to students aged 16 to 19 enrolling for full-time courses from August 2017. The final requirements will be set nearer the time, informed by the outcomes of Ofqual’s consultation on grading standards for the reformed GCSEs.

For many, reaching GCSE standard requires progressive stepping stones, for example through functional skills qualifications, and a curriculum that suits their needs. We will ensure that such stepping stones are available to support students en route to GCSE and that these are fit for purpose.

GCSE is also a valuable qualification for adults and the reformed GCSEs will assess many of the skills that employers tell the Government they need.

Our ambition is that, by 2020, adults aged 19 and over and apprentices of all ages studying English and maths will be working towards achievement of the reformed GCSEs, taking stepping-stone qualifications if necessary. Functional skills will continue to be part of apprenticeship completion requirements but we will work with apprenticeship providers to enable them to offer GCSEs to their apprentices.

We will launch a call for evidence, so that we can draw in advice from a wide range of stakeholders on how to reach this goal for young people, adults and in apprenticeships, and how far the new GCSEs meet the functional skill requirements of all adults and apprentices. In response to this call for evidence, we want stakeholders to advise us on how to ensure that all parts of the sector are ready to deliver against this new ambition.

We are also introducing high-quality new “core maths” qualifications—aimed at the 40% of young people who achieve a C or better at GCSE but do not take A-level maths. They will give some 200,000 students a year the opportunity to study maths in post-16 education, starting in 179 schools and colleges this autumn, before being rolled out nationally in 2015.

The majority of students who do not achieve A* to C GCSE English or maths at 16 go on to further education. As part of our plans to support these changes, we are publishing the FE work force strategy. This will set out the steps we are taking to improve the quantity and quality of teachers to support the delivery of maths and English; to increase business engagement in FE; to improve the quality of leadership and governance; and to enhance the use and effectiveness of technology to support teaching and learning.

We are announcing details of a new “golden hello” scheme for maths teachers recruited after April 2014, as part of a £30 million package to raise the quality of teaching in maths and English in FE. This includes bursaries to attract more graduate teachers and programmes to enhance the skills of existing maths and English teachers so they can teach GCSE. The Education and Training Foundation will play a lead role in implementing this strategy. This extra support for FE sits alongside incentives we have already announced to recruit high-quality maths teachers into schools, alongside significant investment in maths training and support for existing teachers.

From the beginning of academic year 2015-16, providers who teach English and maths GCSE to adults aged 19 and over outside apprenticeships will receive a higher rate of funding through the adult skills budget. In line with the policy outlined above, the Government will cease to fund level 2 qualifications and credit framework (QCF) English and maths qualifications from the same point, so that adults studying at level 2 will either take functional skills or GCSE.

These changes build on wider reforms under this Government to put academic and vocational education on an equal footing. We are reforming apprenticeships to put employers in the driving seat and make apprenticeships more rigorous and responsive to the needs of business. Our new technical awards are as rigorous and demanding as the new reformed GCSEs and will give 14 to 16-year-olds real-life skills in practical subjects. TechLevels for those aged 16 to 19 must be signed off by employers. Technical awards and TechLevels comprise a clear set of high-quality options for students wishing to follow a vocational route, and so help ensure all young people better get the chance to achieve their potential.

Skills and Training Facilities

Matt Hancock Excerpts

Tuesday 1st July 2014 Westminster Hall

[Matthew Hancock (West Suffolk) (Con)]

After that tour de force, I am not sure I can respond other than with trepidation. It is great to see such a strong turnout from hon. Members in support of skills in towns and cities across the country, and particularly in support of apprenticeships. I pay tribute to my hon. Friend the Member for Stevenage (Stephen McPartland), not least for his heartfelt and enthusiastic support for the long-term economic plan, but also for securing this debate and allowing the issues to be aired and discussed so that we can consider where we need to go next. It is undoubtedly true that we have made a lot of progress, but we must always look to the future.

We know that skills are directly responsible for growth, and I am sure that my hon. Friend’s constituents would want me to pay tribute to his work in increasing the prevalence and knowledge of apprenticeships in his area. As he said, there were 830 in the last year for which full figures are available, and I give my wholehearted support to the target of more than 1,000 apprenticeships next year. I am sure that with his energy, he will reach that. In Stevenage, youth unemployment on the claimant count has fallen by 34% over the past year, due in part to the great employers of Stevenage, but also in part to his efforts.

Many important points have been raised in the debate. The doubling of apprenticeships in Dartford is an important element of reducing youth unemployment there; it has been reduced by over 30% in the last year. Many hon. Members, including my hon. Friend the Member for Redditch (Karen Lumley), have had apprenticeship fairs, and I wish her every success with the one that is coming up.

My hon. Friend the Member for Pudsey (Stuart Andrew) correctly identified the false target that was set in the past, which was that 50% of people ought to go to university. Like many hon. Members, I went to university, and it works for some people, but the fact that people felt that they were pushed in one way when it may not have been right for them was a mistake. It also led to a policy focus on those who went to university, rather than on ensuring that all young people, whatever their circumstances, can reach their potential. We have a vision that it should become the norm that as people leave school or college, they go either to university or into an apprenticeship. Our job is to ensure that there are high-quality options for both and that the choice is theirs, according to their circumstances, so I strongly agree with what my hon. Friend said.

Likewise, in order to ensure that those high-quality options are available, it is important that we have high-quality apprenticeships. I pay tribute to the work that my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) has done in supporting that direction of travel. It was a pleasure to go to Lancaster recently with my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) and see the work that is being done there, not least in the local college, on driving up the quality and provision of apprenticeships.

Similarly, there has been a big expansion of apprenticeships in Carlisle. I learned lessons in Carlisle and brought them back to try to improve, in particular, the access of small businesses to apprenticeships. That is an issue across the country, but it was really highlighted to me by the discussions that we had in Carlisle.

None of this is possible without the support of employers. My hon. Friend the Member for High Peak (Andrew Bingham) made the point that the focus on the needs of employers must be front and centre, as did my hon. Friend the Member for Stevenage in his maiden speech. That thread goes through the heart of our skills reforms to ensure that training is both rigorous and responsive to the needs of employers. My hon. Friend the Member for High Peak made a very important point about that. Stafford, for instance, has seen the biggest fall in the youth claimant count over the last year—it has gone down by more than 40% in just one year. We should all congratulate Stafford on that and learn from what it has done—more than most places—to improve the job prospects of young people.

We are making a lot of progress, but we need to do much more. The expansion of higher apprenticeships has mentioned, and it is important. Ensuring that we fill the gap between lower-level training and academic, university-level study is close to my heart. Some of the biggest skills shortages that we have as a country are among higher-level technicians. Higher apprenticeships are a big part of the answer to that, supported by the new national colleges that we are bringing in. We will announce very shortly the location of the first national college—the national college for rail, to support the development of HS2.

I was asked what I thought about retention among apprentices. The statistics are very interesting; they show not only that retention is higher among apprentices, but that retention and morale are higher in workplaces that have apprentices, even among the non-apprentices. I think that is because if employers are putting something into their staff, it increases the morale of the whole work force. People feel that they are building something for the future and have a stronger relationship with their employer. That is something that any employer, whether or not they have apprentices yet, can heed. It is certainly true in my parliamentary office, where we went out to hire an apprentice and came back with two, because the quality of the applicants was so high. They are both brilliant. They are working on casework and constituency issues and learning about the House of Commons and the democratic process, and they are doing a brilliant job for me. I am delighted to put on the record publicly the support they have given me, and I would encourage any hon. Member who is thinking about it to take on an apprentice—in fact, I would encourage an hon. Member who is not thinking about it to think about it and take on an apprentice.

My hon. Friend the Member for Stevenage also mentioned the importance of ensuring that we get the best quality training, and I want to dwell on that for the final couple of minutes. We have to ensure that we make the best use of technology to spread opportunity. Every learner should have the chance to gain from increasingly prevalent and cutting-edge technological solutions for learning. In the same way that in the past, most of the rest of our lives has been changed by technology, so learning can be improved by the use of technology.

We set up a group, the so-called FELTAG—the further education learning technology action group—to investigate the barriers to the use of technology in further education, and we are now looking across the board at the whole of education. We found, for instance, that as many as 80% of colleges were relying on a single broadband connection. Bandwidth is vital, as more and more people bring their own devices and use them while they are learning. We are now helping colleges to install more bandwidth. Some 73 colleges, including Hertford regional college, which serves Stevenage, are being upgraded in the first tranche, and we are stimulating innovation in education technology through the Technology Strategy Board.

I want to put on the record that apprenticeships, in the past, have been in traditional industries, but they increasingly cover the whole range of occupations in the modern British economy. We must be on the front foot in looking at how technology can support the provision of education, especially within the workplace, where it can have the biggest impact, not least by keeping people engaged in learning when they may otherwise have been disengaged. Ensuring that we can bring that to bear on increasing the number of apprenticeships is very important.

Companies in Stevenage have taken an active part in what is called our trailblazer programme for rejuvenating apprenticeships and making sure that the training that is delivered is the training that employers need. Companies such as BAE Systems, which I know has a big presence in Stevenage, have played a vital role, because it is not we politicians who know what training is necessary in any occupation; it is the companies themselves. I am very grateful to the companies that have put in time and effort to get this right. We need to come up with a product that works across the whole sector that the apprenticeship is designed for, but companies large and small that get involved right at the start in designing what the apprenticeship should look like play a particularly important role. They come from all over the country, including from Stevenage, and I want to thank them for their help.

Finally, in the coming weeks, we will be delivering on local growth deals, many of which involve strong skills elements. I hope that I have the support of hon. Members as we roll out those growth deals, so that we can ensure that the training is what is necessary in local labour markets and fits local need, rather than being at the direction of a Minister. It should respond to demand on the ground from employers to make sure that we can truly do what is necessary to build economies and make them stronger right across the country.

Perhaps more important than that being an economic exercise, vital though restoring the economy is, is that it is also an exercise in promoting equality of opportunity, social justice and social mobility. It is ultimately about doing what we can to make sure that everybody in our society has the opportunity to transcend the circumstances of their birth, to make the most of their talents, to have their expectations raised, and to build for themselves a career—and the stability of finances that comes with it—that is rewarding and valuable to them and their families. In that way we can build not only a stronger economy, which so many crave, but a stronger society and sense of purpose. The apprenticeship programme that we in this Chamber all support plays a important role in doing that.

Oral Answers to Questions

Matt Hancock Excerpts

Thursday 26th June 2014 Commons Chamber

[Mr Nigel Evans (Ribble Valley) (Con)]

7. What additional funding for training his Department has provided to support unemployed people and people aged 16 to 24 to get into employment.

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

We have record numbers participating in apprenticeships, new traineeships, maths and English training, which, with the record number of jobs, have contributed to a 98,000 fall in youth unemployment over the last year. We are simplifying vocational education and today publishing a simple slide showing young people their education options between the ages of 14 and 18.

[Mr Evans]

I have a BAE Systems plant at Samlesbury in my constituency, and my hon. Friend the Member for Fylde (Mark Menzies) has one in Warton. BAE Systems took on a record number of apprentices last year, giving young people an opportunity to learn new skills to use in highly paid jobs when they are later taken on. What are the Government doing to encourage many more smaller firms to understand that apprenticeships can also benefit them?

[Matthew Hancock]

I pay tribute to the work that BAE Systems does with its apprenticeships. It not only has hundreds of apprentices, many of whom I have met, but offers more and more higher apprenticeships, which provide the very best available training on the job. We have to make sure that smaller businesses get the message that apprenticeships can help them too; in fact, the majority of apprentices are in smaller businesses. We have made the apprenticeship grant for employers focused on smaller businesses to help them with the extra costs they have in taking on apprentices.

[Mr Jim Cunningham (Coventry South) (Lab)]

15. When are the Government going to put an emphasis on quality apprenticeships? Why do we need 47 different streams of funding for skills generally? When are we going to sort out on-the-job training from actual apprenticeships? Are the Government lumping on-the-job training into the figures for apprenticeships, when apprenticeships are totally different?

[Matthew Hancock]

No, the figures for apprenticeships show the number of apprenticeships. They also show that we are on track to achieve 2 million apprenticeships in this Parliament—in fact, figures published at 9.30 this morning show that there have been 1.8 million apprenticeships since the election. We are simplifying the funding structures and putting more money through employers, so that they can buy the apprenticeship training they need.

[Kate Green (Stretford and Urmston) (Lab)]

I believe that the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), and I are both due to attend the Royal London Society for Blind People’s youth forum launch of “Let’s Work It Out”, which seeks to identify the barriers to visually impaired young people getting into employment. What more can the Government do to encourage employers to see the potential of visually impaired young people and to make them more aware of the technological assistance that can enable them to function in the workplace?

[Matthew Hancock]

Making sure that those who are visually impaired can fulfil their potential in the workplace is a vital part of the training we support. My right hon. Friend the Minister of State is the president of the organisation that the hon. Lady mentions. Apprenticeships are one option, and there are specific mechanisms to ensure that those who are visually impaired can complete an apprenticeship, but more broadly we need to make sure that the whole skills system works as much for those with disabilities as for those who are fully able.

[Bill Esterson (Sefton Central) (Lab)]

8. What assessment he has made of the effect of the Government’s policies on small businesses and the self-employed.

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

The Government are making it easier to start, finance and grow small businesses. There are now 400,000 more small businesses than in 2010. The total number stands at a record 4.9 million, with a record 4.5 million people in self-employment. Yesterday, we introduced in the House the first ever small business Bill.

[Bill Esterson]

The Federation of Small Businesses index has highlighted that small businesses are still struggling to get the finance they need to expand—something confirmed by small businesses in my constituency to a very large degree. The FSB also calls for greater competition and choice in business banking. Does the Minister accept that the Government’s failed schemes, including Project Merlin and credit easing, have had no impact whatsoever?

[Matthew Hancock]

The hon. Gentleman was doing quite well until that last exaggeration. I certainly agree that strengthening access to finance is a vital part of securing our recovery, and of course measures in the Bill announced yesterday will help to do that, but according to the FSB, small businesses’ confidence is at a high since Labour’s great recession. Small businesses in the hon. Gentleman’s constituency are playing their part, because unemployment on the claimant count has fallen by 30% in the past year.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Small businesses in my constituency and around the country tell me that the real struggle when they are supplying large businesses is payment terms. Does my hon. Friend agree that requiring large companies to publish their payment practices is an important step in helping to drive a more responsible payment culture between large and small businesses?

[Matthew Hancock]

I agree with my hon. Friend so much that we put such measures in the Bill we published yesterday.

[Julie Hilling (Bolton West) (Lab)]

I recently held a listening event for businesses across Bolton West. A major concern for them, and a definite barrier to success for micro-businesses, is business rates. As they have gone up by £1,500 already in this Parliament and by another £270 in April, will the Minister support a cut in business rates in 2015 and a freeze the year after?

[Matthew Hancock]

It is interesting to hear another Labour proposal that is uncosted and unfunded. We have instead taken action to reduce by £1,000 the business rates on retail premises. We are clear that business rates need reform, and that reform will happen, but what we need are sensible contributions to the debate, given the enormous hole in the public finances that we are still having to fill.

[Mr Henry Bellingham (North West Norfolk) (Con)]

9. What plans he has to encourage foreign direct investment.

--- Later in debate ---

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

12. What support his Department is providing to apprenticeships.

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

The number of apprenticeships has doubled and we are on track to deliver 2 million over this Parliament—this morning’s figures show that there are 1.8 million so far. It is all part of our long-term economic plan.

[Jack Lopresti]

I thank my hon. Friend for that answer. There are exciting plans to develop an aerospace apprenticeship training centre as part of the iAero proposals for the former Filton airfield land, which are being discussed by his Department and aerospace businesses in my constituency. Can he assure me of his support for those plans?

[Matthew Hancock]

I am enthusiastic about those plans. We are working closely with my hon. Friend and colleagues in the aerospace industry to see whether we can make them happen. The number of apprenticeships in Filton is up by 60% since 2010, so it is clearly a success story and we want to build on that success.

[Andy Sawford (Corby) (Lab/Co-op)]

13. What resources have been allocated for enforcement action against employers who do not pay the national minimum wage.

--- Later in debate ---

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

16. What recent support his Department has provided to small businesses.

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

The Small Business, Enterprise and Employment Bill builds on a record of 42,000 businesses helped to export by UK Trade & Investment over the past year and 15,000 small businesses supported by the growth accelerator scheme. As the Secretary of State said earlier, the number of start-up loans approved has reached 18,000.

[Stephen Metcalfe]

As my hon. Friend will be aware, large businesses still owe small businesses over £30 billion in overdue invoices. Only yesterday, a company in Basildon contacted me to say that one of Essex county council’s main contractors owes it well over £100,000 past the due date. Will he expand on how we will use the small business Bill to resolve this issue and pump billions back into the economy?

[Matthew Hancock]

The Bill contains two elements on prompt payment, the first of which is to increase the amount that Government pay quickly. BIS pays almost all its invoices within 30 days and the vast majority within five days. We will also bring transparency so that when small businesses enter into contracts with large businesses they know their payment performance and can negotiate on that as part of the contract.

[Several hon. Members]

rose—

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I am very grateful, Mr Speaker.

I am pleased that the Government have finally produced a Bill to deal with late payments to small businesses by large companies. It includes some of the recommendations from my inquiry last summer into late payments. However, it does not go far enough and will give little comfort to the small businesses whose viability is threatened. Why are these measures so timid?

[Matthew Hancock]

I pay tribute to the hon. Lady for the work that she has done on this subject. We consulted on all the potential options, including statutory maximums for payment terms. We put the consultation out with an open mind and a wide range of options. In fact, the small business groups that came forward with proposals in response to the consultation favoured transparency, not a statutory limit. We followed the evidence and the response to the consultation. Like her, I am determined to do everything we can to tackle this problem while not getting in the way of freedom of contract between businesses. We have taken these measures because of what the evidence demonstrated, and I think they will have a big impact. That is all part of our long-term economic plan.

[Mr John Denham (Southampton, Itchen) (Lab)]

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

--- Later in debate ---

[Mark Menzies (Fylde) (Con)]

T2. Fylde has a significant amount of advanced manufacturing companies, including BAE Systems and Westinghouse Nuclear Fuel. May we have an update on what steps are being taken to increase the number of highly skilled apprenticeships in the advanced manufacturing sector?

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

Absolutely. Through the trailblazer process, we are putting employers in charge of the training involved in apprenticeships, to make sure that, in addition to the big increase in numbers we are seeing, we increase the quality of training so that all young people have the opportunity to use an apprenticeship as an alternative to university in order to reach their potential.

[Mr Chuka Umunna (Streatham) (Lab)]

Does the Secretary of State think it is acceptable for a Government Department to increase reporting requirements twelvefold for businesses?

--- Later in debate ---

[Neil Carmichael (Stroud) (Con)]

T7. Do Ministers agree that a central part of the long-term economic plan is the delivery of skills to the increasingly innovative and research-oriented manufacturing sector?

[Matthew Hancock]

Yes. As my hon. Friend may know, I am a fan of the long-term economic plan. In fact, I have found a copy in my pocket if he wants one. Skills are a vital part of our long-term economic plan, because there is no doubt that, if we are not only to maximise our economic capacity in the future, but to make sure everyone in this country fulfils their potential, we have to deliver on the skills that employers need.

[Mrs Madeleine Moon (Bridgend) (Lab)]

T3. Britain has a crisis in finding young people willing to study engineering, yet I have received an e-mail about a 19-year-old who has been offered a place on a pathways to apprenticeships engineering course. He will get access to £30 a week living allowance, but he will lose his unemployment allowance and he cannot access student grants. He may well not be able to take up the course. What are the Government doing to ensure that there is joined-up action across Departments for young people who want to study crisis employment subjects?

[Matthew Hancock]

I recognise the problem that used to exist. The introduction of traineeships has tackled that. It is now possible for someone to go on a traineeship while still receiving their jobseeker’s allowance, because we have tackled the 16-hour rule for traineeships. If the hon. Lady writes to me about the individual case, I will make sure it is taken into account.

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

At the Mighty Middle conference held by GE Capital and the Reform think-tank this week, mid-sized companies from across Britain were exceptionally positive about the Government’s long-term economic plan. What more can we do to celebrate and assist those mid-sized companies?

[Grahame M. Morris (Easington) (Lab)]

T4. May I draw the Minister’s attention to the excellent “The state of the coalfields” report produced by the Coalfields Regeneration Trust? The report has highlighted particular problems, including a legacy of high and persistent youth unemployment, especially in the NEETs group of those not in education, employment or training. I also draw to his attention an excellent organisation in east Durham, the East Durham Employability Trust. What additional support can be put in its direction?

[Matthew Hancock]

I have seen the report on the future of the coalfields. On the issue of NEETs, I would point out that yesterday’s figures show that the number of people not in education, employment or training is at a record low since the series of statistics began in 1994. I have no doubt that there is much more to do, because any young person not in education, employment or training is one NEET too many. The fact that the number of NEETs is at a record low shows that the economic plan is working.

[Mr David Nuttall (Bury North) (Con)]

On the issue of new EU legislation, does my right hon. Friend agree that it would benefit British business if the EU adopted the same one-in, two-out rule that the UK Government apply?

--- Later in debate ---

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

Like a number of MPs, I have taken on an apprentice, something that has been recommended by the Minister, but as a small employer this has only been made possible by the Liverpool chamber of commerce, which provides all the training, development and support for James, my apprentice. Under his proposed reforms, how does the Minister expect MPs to take on apprentices and provide the same high standard of training and support and administer training budgets? How much time does he expect us to take on this?

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

I am delighted to hear that the hon. Lady has an apprentice. I now have two apprentices and the House has an apprenticeship scheme that the Clerk has been instrumental in bringing forward. Under the new system we will make sure that small businesses and small employers, including MPs, can take on apprentices, and training providers will have a role to play just as they do now in helping with bureaucracy.

[Luciana Berger]

How much time?

[Matthew Hancock]

I do not expect it to take any more time than it does at the moment and I am sure that it will be just as valuable for the hon. Lady and for other MPs as it will be for small businesses across the land.

British Values: Teaching

Matt Hancock Excerpts

Wednesday 25th June 2014 Westminster Hall

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

Mr Bone, I hope that you, like me, have found this to be an enlightening, well thought through and extremely reasonable debate. It has been positive, and I congratulate the right hon. Member for Southampton, Itchen (Mr Denham) on securing it. I will try to address his five points and some of the points raised by other Members, but we need to set the debate in context. The question of the values that tie us together as a country is a crucial point that has been raised and relevant through the ages. This debate is not on a new subject, but one that has been raised throughout history.

It is best to start on the point about universal values and the question of what British values are. As has frequently been stated, the Government have set out that British values are

“democracy, the rule of law, individual liberty and mutual respect and tolerance of those with different faiths and beliefs”.

The right hon. Gentleman said that we could all unite behind those values, and I certainly hope that we can, but as my hon. Friend the Member for Hexham (Guy Opperman) rightly pointed out, we are complacent if we say that that is easy or natural. British values are not universal around the world, and we should be proud that they are very widely, if not universally, accepted here at home. Those universal values flower in Britain because of the protection of our strong democratic state, defended through liberty—with blood, in times gone by—by our forefathers and the forefathers of those from many different backgrounds.

To seek to defend those values, and the British polity that protects them, is a valuable task. In that, I thought that many of the comments made by the right hon. Member for Southampton, Itchen were astute, but it was a sad irony that in arguing that we should come together in many of these things, he sought to find points of division where none exist. The argument for a conscious focus on nation building is one that we support. He argued not for a legal basis in that space, but for providing teachers with the powers and resources to enable them to deliver. While it is crucial to ensure that we defend British values by specifying what is not acceptable, that inevitably ends up with a legal basis for intervention. As my hon. Friend the Member for New Forest East (Dr Lewis) pointed out in describing the paradox of tolerance, if we are to ensure that we promote British values—including ensuring that we take action against extremist ideologies that are anathema to them—there need to be legal elements. There is, however, much, much more to the issue. For example, the broadening of the history curriculum is one part of a response to a need to strengthen the underpinning of British values that has been under way over the past few years.

On the promotion of citizenship and British values in the curriculum, the right hon. Member for Southampton, Itchen made an odd critique about citizenship and Ofsted. Of course Ofsted inspects on the teaching of spiritual, moral, social and cultural education. That is a core part of its framework, and the argument that it did not inspect for that is, frankly, wrong. His point on involving young people in debate is important. Having listened to his speech very closely, I argue that there is much more that unites than divides us.

There is another crucial point, which everyone in the debate has touched on: British values are not simple and British identities are often multiple. I did not even know that my hon. Friend the Member for New Forest East had a Jewish background. Being Jewish and British is a widely held identity, much like being Scottish and British, English and British or Welsh and British. Once we get to Ireland it is slightly more complicated, because Northern Ireland is part of the United Kingdom, rather than Great Britain. As my hon. Friend the Member for Reading West (Alok Sharma) set out, however, identities expand to being Indian and British and many other different backgrounds. Nevertheless, the reticence with which some express British values, and the argument that it is rather British to be reticent about expressing British values, which I recognise, should not prevent us from setting out expectations on shared values. British values are a core set of beliefs that support and ensure freedom, liberty and tolerance and underpin the way we want our society to function.

The debate rightly touched on the issues in Birmingham schools. We are clear that we need to learn lessons from what happened there. I will deal with a couple of technical details before going on to the broader point. In 2008, when concerns were expressed, the schools were maintained schools. Much progress has been made in maintained schools. They must promote the spiritual, moral, social and cultural development of pupils so that they can participate in wider society, and they must promote community cohesion. The strategy for creating the conditions for integration recognises the critical role that local organisations, including schools, can play in bringing communities together. Existing advice on teacher misconduct confirms that misconduct includes:

“Actions or behaviours that undermine fundamental British values, democracy and law, promote…extremism, or demonstrate deliberate intolerance and/or lack of respect of the rights, faith and beliefs of others”.

Maintained schools are also required under the citizenship curriculum to teach pupils about subjects including democracy and human rights.

Those requirements are only part of the wider answer to the question on British values, of which the teaching of history is also part. Here I come to the point made by my hon. Friend the Member for Dover (Charlie Elphicke), because he, in his eloquent articulation of British values, warned against those who would try to divide us and pointed to the special role of Dover and its white cliffs in the British story. We should pay heed to his words. Having said that, we will take further action, in addition to the action taken since 2010, to strengthen guidance to schools to set out more clearly our expectations. That follows the publication of the Government’s Prevent strategy, which focuses not only on tackling directly violent extremism, but extremism more broadly. That is necessary to tackle the roots of violent extremism, and the Secretary of State has set out that we will consult on further action.

On Monday, we launched a consultation on strengthening the wording of the independent school standards, which apply to independent schools, academies and free schools, to require schools actively to promote principles that encourage fundamental British values. That builds on the change made last year to include a requirement to encourage pupils to respect fundamental British values. In addition, we will also require teaching

“on the strengths, advantages and disadvantages of democracy and how democracy works in Britain, in contrast to other forms of government in other countries”.

The guidance also describes the outcomes that independent schools, including academies and free schools, will be expected to demonstrate. That shows that the accountability of academies and free schools is stronger than that of maintained schools, not least because of inspection by the Education Funding Agency as well as by Ofsted.

Finally, I want to pick up on one point made by the shadow Minister. He said that there was no accountability whatsoever in academies. I would say that—

[Mr Peter Bone (in the Chair)]

Order. I am afraid that time has beaten us. I would like to thank all hon. and right hon. Members for co-operating to get everyone in, and for an interesting debate.

Technical and Vocational Qualifications

Matt Hancock Excerpts

Wednesday 18th June 2014 Written Statements

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

A successful economy needs qualifications that are of a high quality, benefit the young people that take them and are valued by employers. We are linking the whole education system more closely to the world of work: with more relevant, respected qualifications, more emphasis on the development of useful practical and technical skills, and greater employer influence over the design, delivery and assessment of qualifications.

In March we released “Getting the Job Done: The Government’s Reform Plan for Vocational Qualifications”. Today, I am announcing the introduction of two new categories of technical and vocational qualifications for 14 to 19-year-olds. We expect new qualifications to be brought forward in each category, and existing qualifications to be categorised where they meet the required level of rigour and responsiveness to employer demand.

In the past employers knew that a young person who held, for example, a City and Guilds bricklaying qualification could be relied upon to construct a wall to a high standard. These qualifications then started to get lost among thousands of others. The introduction of tech levels, and now substantial vocational qualifications at level 2 for 16 to 19-year-olds and technical awards for 14 to 16-year-olds will restore confidence in the technical and vocational qualifications available for young people.

From September 2015, technical awards will sit alongside GCSEs for 14 to 16-year-olds, and mark the final stage of reform at key stage 4. At the same time, substantial vocational qualifications at level 2 will be introduced for students aged 16 to 19. Qualifications in each of these categories will be reported in school and college performance tables from 2017.

Technical awards will inject rigour into practical, technical and more skills-based qualifications for 14 to 16-year-olds. Developed in partnership with employers they will provide an opportunity to develop knowledge and practical skills that are essential in our growing economy, without restricting a student’s opportunities for progression at 16. These highly-valued qualifications, equivalent to GCSEs, will give students the opportunity to develop real-life practical skills, at the same time as studying reformed GCSEs in academic subjects.

Substantial vocational qualifications at level 2 provide students aged 16 to 19 with a route into a skilled trade or occupation, where employers recognise entry at this level (most construction trades, care work and hairdressing, for example). They will also provide access to tech levels. All of these qualifications will require public backing from employers, giving students confidence that the qualification they are taking is genuinely valued.

The Department for Education will publish today technical guidance for awarding organisations that sets out the requirements for technical awards and substantial vocational qualifications at level 2, as well as further quality requirements for tech levels and applied general qualifications at level 3.

In addition to the new types of technical and vocational qualifications, I am also announcing the first tech bac trailblazers. These are high performing schools and colleges that will deliver the three components of the technical baccalaureate (tech bac) performance tables measure to talented students from September 2014. The tech bac measure will recognise the achievement of students completing a tech level, level 3 mathematics (including AS level mathematics or the new core maths qualification) and an extended project qualification. It will be reported for the first time in school and college performance tables in January 2017.

The first tech bac trailblazers are:

Archbishop Holgate’s school, a high performing school in York, which will deliver tech level qualifications in art and design, IT and engineering as part of the tech bac trailblazer.

Barnet and Southgate college, one of the largest colleges in north London, where students will study tech levels in engineering, motorsport vehicle technology, IT and construction.

Blackpool Sixth, which will offer tech bac programmes in three key vocational areas: engineering, IT and creative media production.

Blessed George Napier Catholic school and sixth form in Oxfordshire, which will deliver tech level qualifications in travel and tourism and IT as part of the tech bac trailblazer.

Brockenhurst college in Hampshire, which offers a tech level in engineering that is publicly recognised by a number of professional bodies, including the Engineering Council, the Engineers Professors’ Council, the Royal Academy of Engineering and the employer Leibherr.

South Cheshire college, which will offer full tech bac programmes to all students studying tech levels in IT and engineering.

Warwickshire College, which will focus its tech bac trailblazer activities on a tech level qualification in manufacturing engineering.

Further details of the four categories of technical and vocational qualifications for 14 to 19-year-olds and the technical baccalaureate measure, which have been the subject of previous announcements, are available on gov.uk.

Business Loans Appeals System

Matt Hancock Excerpts

Tuesday 17th June 2014 Westminster Hall

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

It is a great pleasure to serve under your chairmanship, Ms Dorries, I think for the first time. I am grateful for the opportunity to reply to the debate of my right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell) and to answer his questions about bank finance.

The context is of course that the economy is recovering from the biggest financial crisis in generations and, while bank finance is important—most of my response will be on bank finance and the specific points made—sometimes too much focus in the UK is put on it, as opposed to other sources of finance. As we recover from the financial crash, the use of new technology to allow peer-to-peer lending, the growth of crowdsourced finance, the increased private placements market and the development of challenger banks increasingly offer a positive and long-term solution to some of the problems that my right hon. Friend outlined. Alongside the strategy for deficit reduction, of course, turning around the banks is a mission-critical part of the economic recovery, to ensure that small businesses can obtain the finance necessary for investment and growth.

The business lending appeals process is an important part of the answer. In 2011, the banks agreed to give businesses with a turnover of less than £25 million the right to appeal if turned down for credit. As my right hon. Friend said, appeals are to the same bank, but they have to be handled fairly, promptly and transparently—I will come on to that point in more detail later—and the whole process is subject to external audit by Russel Griggs. I want to pay tribute to his work over three annual reports, with the latest one published recently. It is important that that process takes place internally to the banks, because an external appeals process would leave an external decision-maker de facto in charge of a bank’s decision-making. People may ask questions about whether that is a good thing when bank loans are good, but when loans are bad, the question of who takes the hit would be a real one.

The report from Russel Griggs shows an improving picture. Over the past year, there have been more than 3,500 appeals and in 32% of cases the original decision has been overturned. It shows that the process is robust, but, as my right hon. Friend says, that means that since 2011 more than 9,000 small businesses have appealed a bank’s decision and, of those cases, 36% on average have been overturned, so nearly £42 million in additional lending to small businesses has occurred that would not have occurred otherwise.

Equally important has been the increased attention that the appeals process has given to lending processes and improving dialogue between banks and their business customers. The decline in the overturn rate is an indicator that things are moving in the right direction.

As my right hon. Friend said, there is a concern that some businesses do not or might not appeal when they could have secured finance if they had decided to do so. The fact that only between 2% and 5% of declined borrowers would have succeeded in obtaining finance if they had chosen to use the appeals process suggests that that is not a significant problem. It affects some borrowers, but those figures are relatively low.

[Sir Andrew Stunell]

I appreciate that 2% does not sound very large, but in the case of bank A, which I quoted, it would double the number of people who came into the appeals system and more than double the number of people who would have succeeded.

[Matthew Hancock]

If 2% of the total proportion of those applying for finance are in a position where they could have succeeded had they chosen to appeal, that will be relatively small in terms of the process’s macro impact. Of course the situation has an impact on the companies affected, but out of the 100% applying for finance only between 2% and 5% chose not to appeal but would have been able to obtain finance had they done so. There may be other reasons for their choosing not to appeal that we do not know of.

Awareness of the appeals process among the small business population at large is still too low. The latest SME Finance Monitor figures, for the first quarter of this year, show that awareness is at only 12%, a decline of 2% on the previous quarter’s results. There has been discussion about whether the right population to measure is the small business population that is actively seeking finance or a broader set of businesses that may not be seeking finance because they suspect that they will be turned down. Clearly we need to make inroads into the broader small business community. The banks have started to take steps to raise awareness of the appeals process, and launched an industry-wide campaign in January. But those efforts need to be sustained and picked up by individual banks.

Introducing a lending appeals process and raising awareness of it is just one part of our broader efforts to improve access to finance for small businesses. Recently we published research showing that 37% of businesses appear to give up their search for finance and cancel their spending plans after their first rejection, without looking elsewhere—a problem that my right hon. Friend mentioned. That figure of 37% is far too high for us to be comfortable with it, so we have recently launched a consultation on whether to mandate banks to refer businesses that are declined finance to alternative providers. That would be good for the businesses concerned, which would be able to explore a wider range of alternative financing options, and good for the development of a more diverse sector with challenger banks and a competitive market for business finance, as well as augmenting the current appeals process. The consultation closed at the end of April and the Government will respond shortly. Although I cannot possibly prejudge that consultation, my right hon. Friend may have noticed my enthusiastic tone.

The Government are also committed to legislating through the small business, enterprise and employment Bill that was announced in the Queen’s Speech to require banks to share credit data on their small and medium sized business customers with other lenders through credit reference agencies, a measure that I think will have a big impact. Again, it is designed to help challenger banks and alternative providers by helping them to conduct accurate risk assessments on borrowers, so making the market for access to finance more competitive.

Another measure to improve the situation, announced by the Chancellor of the Exchequer on 28 May, is the decision to commission a survey of banks to measure how more than 5,000 businesses rate their banks against factors such as value, appetite for lending and how well they keep their customers informed. The survey is being taken forward by the Federation of Small Businesses and the British Chambers of Commerce. The first results were published in May, and the survey will be repeated every six months. The idea is to develop a tool that over time will help businesses choose the best lender for them, based on the opinions of their peers. It is similar to a ratings system that small business borrowers can use to rate their bank.

A further area allied to the problem of access to finance is late payment, which continues to have a serious effect on the cash flow of some small businesses. Professor Griggs’s report yesterday pointed to 48% of declined loans over £25,000 being declined on grounds of affordability. Late payment squeezes cash flow and has a direct effect on the ability to repay loans. Through measures in the small business Bill, we will require large businesses to report on their payment practices and performance. We consulted broadly on the options for those measures, which will give small businesses the opportunity to judge better which companies they should trade with and to plan for external finance.

We will also introduce legislation that will override contractual bans on the assignment of receivables. That sounds rather technical, but it will allow companies to make effective use of their trade debt as an asset in access to external finance. If a company is engaged in international trade, that will give it more assets that it can use to access finance.

Finally, the British business bank has been established to make finance markets work better for smaller businesses. One of its key objectives is to help create a more diverse market for small business finance, with greater choice. That is reflected in its combined investment programme, which has a current portfolio of 10 commitments to nine finance providers totalling £172 million. It will support lending capacity of over £800 million through leveraging in other finance. That will support a whole range of alternative finance providers. Those include direct lending funds, peer-to-peer lenders, to make sure they can get up to scale, and supply chain finance providers.

To date, over £280 million of lending to smaller businesses has been supported as a result. We hope that the bank will also help to accelerate the development of competitors and alternative providers in this space. There is clearly further to go on that, and the British business bank is working hard to seek options to continue to expand competition in this market.

In conclusion, overall credit conditions are starting to ease. Gross lending to small businesses is ticking up, but repayments by small businesses are also increasing. There was £12 billion of new lending in the last quarter, up 18% on the same period a year before. New financial technologies such as crowdsourcing, the support of the business bank and Government policy changes mean that the position is more encouraging than it has been for some time, but I have no doubt that vigilance is required. We stand ready to take action as necessary to make sure that small businesses get appropriate access to finance. That is necessary to ensure that we can continue to finance the recovery, so that small businesses can create prosperity and jobs and ultimately work to strengthen the financial security of families around the country, which of course is central to the successful pursuit of our long-term economic plan.

Question put and agreed to.

New Businesses: Loans

Matt Hancock Excerpts

Tuesday 17th June 2014 Ministerial Corrections

[Michael Fallon]

All loan recipients in all regions receiving a start-up loan are offered mentoring, although take up of support services is not a mandatory condition of making the facility available. The number of loans made in each region will be placed in the Libraries of the House.

The correct answer should have been:

[Matthew Hancock]

All loan recipients in all regions receiving a start-up loan are offered mentoring, although take up of support services is not a mandatory condition of making the facility available. The number of loans made in each region will be placed in the Libraries of the House.

Oral Answers to Questions

Matt Hancock Excerpts

Monday 16th June 2014 Commons Chamber

[Ian Mearns (Gateshead) (Lab)]

1. What steps his Department is taking to support schools in the provision of career guidance.

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

From September, new statutory guidance for schools will strengthen the requirements for schools to build relationships with employers to inspire and mentor pupils and deliver careers advice.

[Ian Mearns]

The fact that careers advice has been completely delegated to schools is leading to growing evidence of a postcode lottery in provision. Unfortunately, Ofsted appear to be inspecting that aspect of provision with a light touch. That is leading to light-weight and inappropriate advice, lacking in impartiality and independence, with many youngsters ending up on courses that will not properly help them fulfil their ambitions and, in some areas, to increased drop-out rates. How will the Minister ensure that young people have their needs met through access to good quality, independent and impartial careers advice and guidance?

[Matthew Hancock]

It is true that in the past careers advice was not particularly well delivered as a policy, but the new statutory guidance, which will be in place from September, is all about strengthening the relationship with people in careers they are passionate about. Information is widely available: the issue is inspiration—

[Ian Mearns]

indicated dissent.

[Matthew Hancock]

The hon. Gentleman shakes his head, but the evidence around the country is that more and more schools are getting in employers and those who have careers to offer, and lifting pupils’ eyes to the horizon.

[Steve Baker (Wycombe) (Con)]

What did the Wolf report, which was welcomed by the Opposition, have to say about work-related learning?

[Matthew Hancock]

Work-related learning is an attempt to pretend that young people can be given a feel of what it is like to be in the workplace without putting them in the workplace. We care about high-quality work experience, because all the evidence shows that the more work experience young people do, the more likely they are to get a job.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Does the Minister agree that learning to network and to make connections is also important? He did agree to come to Hackney to see some of the best networking and careers advice, and I hope that he will honour that commitment.

[Matthew Hancock]

I am keen to come to Hackney. We have been working on some dates, but we will renew our effort. I agree with the hon. Lady, not least because those who do not have natural networks through their family links often find it harder to break into high-quality jobs, and networking and mentoring can do an enormous amount to break down those barriers and improve social mobility.

[Mr Robin Walker (Worcester) (Con)]

2. When he plans to publish the results of the recent consultation on fairer funding for schools; and if he will make a statement.

--- Later in debate ---

[Mrs Mary Glindon (North Tyneside) (Lab)]

8. What steps his Department is taking to strengthen relationships between local employers, schools and further education colleges.

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

We are in the middle of a big culture change, with more and more employers—

[Mr Speaker]

Order. Before the Minister gets ahead of himself, with characteristic enthusiasm and gusto, I think he will want to confirm to the House his intended grouping of Questions 6 and 8, which I think his briefing folder will tell him.

[Matthew Hancock]

I would be absolutely delighted to do so.

As I was saying, more and more employers are engaging with schools and colleges to inspire young people. As discussed earlier, we have strengthened statutory guidance for schools so that those relationships can help to inspire students into their careers.

[Julie Elliott]

I thank the Minister for his answer, but a recent report from the university of Bath showed that 60% of school and college governors said that employers were not proactive enough about becoming school governors and thereby taking a formal role in education. Given the importance of employers in improving the employability of our young people, what are the Government going to do about that?

[Matthew Hancock]

Absolutely—strengthening the role of employers in governance and on careers advice, and inspiring pupils are vital, and a whole programme of work is under way to encourage more employers. One thing we can do is make it easier and bring about a brokerage so that employers who want to get involved can do so without too much bureaucracy and with the support of their local schools.

[Mrs Glindon]

Churchill community college has been judged outstanding by Ofsted, and the inspector said that the school prepares young people well for their future. Will the Minister say how his Department will get employers directly involved in curriculum support so that young people at Churchill—and elsewhere—can capitalise on their excellent education and be successful in the world of work?

[Matthew Hancock]

Yes, absolutely. One example is the introduction of tech levels for those between 16 and 19 who want to go into vocational education, which will get them into a job. These qualifications have to be signed off as valuable by an employer before we will accept them as tech levels, thus demonstrating the line of sight from work that exists in all educational vocational education.

[Caroline Dinenage (Gosport) (Con)]

As the Minister said, it is vital for schools to forge strong links with businesses to ensure that school leavers are not just numerate and literate, but employable. Does he agree that organisations such as the Education Business Partnership can often play a significant role in building these links?

[Matthew Hancock]

Yes, I do. There is a huge array of organisations. Only this morning, I was launching Careers Lab with Steve Holliday, who runs National Grid. That is another organisation, like the one my hon. Friend mentioned, that can help to broker links between employers and education, which are so important after the systems were separated for far too long.

[Stephen Mosley (City of Chester) (Con)]

Following on from that, one way to enthuse young people in engineering is to give them first-hand experience and use role models. What is the Minister doing specifically to encourage engineering companies to go into schools and enthuse young people?

[Matthew Hancock]

I am delighted to say that there are over 20,000 ambassadors from engineering who go into schools under the STEMNET—the science, technology, engineering and mathematics network—programme. It is just one example of the organisations that can help to bring employment and education together.

[David Mowat (Warrington South) (Con)]

7. What steps he is taking to adopt a revised funding formula for schools.

--- Later in debate ---

[Mr Graham Stuart (Beverley and Holderness) (Con)]

10. What steps he is taking to obtain data from HM Revenue and Customs to improve the development of destination measures for school leavers.

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

Data from HMRC can potentially help to show where young people go from educational institutions. We are consulting on how destination data should be used in the league tables, and we know that some of our changes will require changes to legislation.

[Mr Stuart]

During the last Session, an attempt at change was made in a private Member’s Bill. I hope that the Minister is telling us today that he will make it a Government priority to strengthen destination data, as the Select Committee recommended, so that we can give schools an incentive to take account of not just short-term exam results, but the long-term interests of the child.

[Matthew Hancock]

The use of destination data in league tables is one of the biggest changes that the education reforms will bring about. It will require legislative change. The clauses that were proposed during the last Session are about to find their way into legislation, which will be published soon.

--- Later in debate ---

[Margot James (Stourbridge) (Con)]

In my borough of Dudley, young people leave school at 16 to pursue A-levels and other forms of post-16 education at local colleges. Does my hon. Friend agree that we need a system of destination measures that will enable us to track the progress of students back to the school that they attended before reaching the age of 16?

[Matthew Hancock]

Holding schools and colleges to account for their exam results is important, but it is equally important to be clear about where young people end up. That, I hope, will give schools an incentive to provide a broader education, emphasising knowledge, skills and behaviour, so that school leavers will be able to do what everyone wants them to do, and fulfil their potential.

[Graeme Morrice (Livingston) (Lab)]

11. What steps he is taking to ensure that admissions processes in free schools and academies are fair.

--- Later in debate ---

[Jason McCartney (Colne Valley) (Con)]

13. What progress his Department has made on increasing the number and quality of apprenticeships for 16 to 18-year-olds.

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

We are on track to deliver 2 million apprenticeships over this Parliament. We will continue to focus on raising quality, insisting that all apprenticeships are jobs, have a minimum duration of a year, include on-the-job training and meet the needs of employers. As a result, the number of full apprenticeships—those with a planned duration of a year or more—for 16 to 18-year-olds has doubled.

[Jason McCartney]

Since 2010, an average of 433 workplaces in the Colne and Holme valleys and Lindley employ apprentices, many of which are supported by the excellent local Kirklees college. What are the Minister and his Department doing to support our wonderful further education colleges in helping to deliver these fantastic apprenticeships?

[Matthew Hancock]

More than ever, companies are involved in delivering apprentices and having apprentices. Colleges are increasingly providing the training for apprenticeships, but it is also important that we raise quality by ensuring that employers write the training that is required for young people to learn the skills necessary to get a good job.

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

Sadly, some young people and their parents still see apprenticeships very much as an easy option, so what are the Government doing to better sell the benefits of apprenticeships, and to increase the number of higher and advanced-level apprenticeships, as an alternative pathway to that provided by degrees?

[Matthew Hancock]

Our vision is that when young people leave school or college, they have the opportunity to go to university or into a high-quality apprenticeship. We have a programme of reform to increase the quality of apprenticeships, including offering more English and maths and a minimum duration. Undoubtedly, there is more to do to persuade people that apprenticeships are of high quality and that apprenticeships can get them anywhere.

[Nick de Bois (Enfield North) (Con)]

24. For too long, young people have been encouraged to take vocational qualifications that are below par. Does the Minister agree that, to rectify that, we must focus on the quality of apprenticeships and vocational training, because that is exactly what employers are desperate for?

[Matthew Hancock]

I agree very strongly with my hon. Friend. In fact, we have defunded more than 4,000 qualifications for under-18-year-olds in order to concentrate scarce resources on the qualifications that are valuable. Within apprenticeships, all the evidence shows that training while in work increases young people’s life chances, because it gives them the skills, as well as the knowledge and the behaviour needed to get a good start in a career.

[Valerie Vaz (Walsall South) (Lab)]

Will the Minister say what support he will give care leavers to access high-quality apprenticeships?

[Matthew Hancock]

Through care to work, we have a specific programme to support care leavers to get into apprenticeships. Apprenticeships are part of our programme of ensuring that every young person in our country has the opportunity to reach their potential.

[Sir Bob Russell (Colchester) (LD)]

If the Minister is looking for an example of best practice, I draw his attention to the scheme launched in Colchester earlier this year to recruit 100 apprentices in 100 days. Through a partnership of the Colchester Institute, the Colchester Daily Gazette, and the National Apprenticeship Service, 160 apprentices were recruited.

[Matthew Hancock]

I pay tribute to the Colchester Institute and the Colchester Daily Gazette. Many local papers get involved in promoting apprenticeships, because they are part of a culture change in our country. When young people leave school or college they can go to university or into an apprenticeship, both of which can help them reach their potential.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Small and medium-sized businesses provide almost 60% of all private sector jobs, but they are saying that the Government’s reforms on apprenticeship funding will make it much harder to offer up-front training and create opportunities. With only 8% of all employers in the UK currently offering apprenticeships, when will the Government admit that their rhetoric does not match the reality on apprenticeships?

[Matthew Hancock]

I am slightly surprised to hear that question. In the hon. Lady’s own constituency, the number of apprentices over the past few years has increased by 85%, giving more chances to people. Recently, representatives of half a million employers, mostly small employers, wrote in to our consultation to support the direction of travel, which is supported by the shadow Chancellor.

[Alex Cunningham (Stockton North) (Lab)]

14. How many disadvantaged two-year-olds received the 15-hour free entitlement to child care in the latest period for which figures are available?

--- Later in debate ---

[Nigel Adams (Selby and Ainsty) (Con)]

The rise in the number of apprenticeships in my constituency has contributed to a 52% fall in youth unemployment since the last election. Will the Minister join me in congratulating local employers who are taking those youngsters on, and colleges such as Selby college and York college whose work in that area is doing so much to provide life chances and career prospects for those young people?

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

The increase in apprenticeships across the country is helping to tackle youth unemployment. There has been a sharp fall in youth unemployment in many parts of the country—including that of my hon. Friend— with a fall of more than 50% over the past year, which is seriously good news. There are many contributory factors to that, not least colleges that work extremely hard to ensure that young people get jobs, as well as employers who create that prosperity, thanks to our long-term economic plan.

[Jenny Chapman (Darlington) (Lab)]

What will the Government do about the fact that there are more than 4,000 infant school children in classes of more than 30 in the north-east and North Yorkshire?

--- Later in debate ---

[Robert Halfon (Harlow) (Con)]

The number of apprentices in Harlow has increased by more than 80% during the past year. Will the Minister look to increase the prestige of apprentices and create a royal society of apprentices, which would improve their status and encourage more people to do apprenticeships?

[Matthew Hancock]

I am delighted that, like many other places in the country, the number of apprentices in Harlow is increasing, and the number of employers taking on apprentices is increasing. During the last year, the increase in those applying for apprenticeships through the apprenticeship vacancy website rose by 50% to 1.5 million, not all of them in Harlow, but many. The culture of apprenticeships is on the rise again in Britain.

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

Has the Secretary of State noticed the groundswell of opposition to the proposal that the Government might privatise child protection services in local authorities? Has he clearly got the message from people as diverse as Professor Eileen Munro and Caitlin Moran in The Times that that is an unacceptable place for privatisation?

Small Business Start-ups (Scotland)

Matt Hancock Excerpts

Wednesday 14th May 2014 Westminster Hall

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

It is a pleasure to respond to this debate. The hon. Member for Inverclyde (Mr McKenzie) thanked me for being here, but that is my duty, not least because, as the Minister for Skills and Enterprise, I am responsible for small business. I take particular umbrage at his criticism that nobody in the Government is responsible for small business. Indeed, rather than small business being supported through an independent agency separate from Government, it is at the heart of the Government’s agenda here in the UK, hence the plethora of measures over the past couple of years to make life easier for small business.

I start by reflecting, acknowledging and supporting the figures that the hon. Gentleman mentioned on the growth of small businesses. There are more entrepreneurs in Scotland than ever before, and they are building on Scotland’s historical strength in exporting entrepreneurs the world over. It is good to hear that that, which has been going on for centuries, continues.

As someone from a family with a small business background, I am passionate about strengthening the small business environment across the whole UK. Of course, some of these issues are devolved, but the UK Government have been taking steps to strengthen the position in Scotland. I will set out some of those steps, and I will also respond to some of the points that the hon. Gentleman raised.

The hon. Gentleman called for a British investment bank, and I am delighted to say that in the past 12 months we have opened the British business bank. Of the £782 million of loans to and investments in smaller businesses, £35.4 million was in Scotland—a £20 million increase in support compared with the previous year. The British business bank brings together the management of all Government lending and investment programmes into a single, commercially minded institution that includes some of our most popular schemes.

The hon. Gentleman mentioned the new enterprise allowance, which is important in helping unemployed people to start businesses. The start-up loans and the enterprise finance guarantee schemes have been benefiting start-ups and small businesses across the country, including in Scotland. We launched the start-up loans programme in Scotland in March, and it has already helped nearly 300 entrepreneurs to set up their own businesses, with a total investment of just under £1 million. In the Inverclyde constituency, nine individuals have benefited, with more sure to follow.

Likewise, since May 2010, 850 Scottish businesses have been supported by the bigger enterprise finance guarantee scheme to the tune of £109 million, with just under £1 million of that sum going into the Inverclyde constituency. The enterprise finance guarantee is for slightly bigger businesses, whereas start-up loans are targeted at people at the very start of building their business. Some 7,500 people have signed up to the new enterprise allowance in Scotland.

Those are targeted schemes. We have also improved the tax system for small business that applies across the whole UK. That includes the launch of the seed enterprise investment scheme, which incentivises people to invest in smaller and growing businesses. We have also expanded the enterprise investment scheme for slightly bigger businesses. Those schemes are hugely popular, and we announced in the Budget that the seed enterprise investment scheme will be made permanent—we introduced the scheme for a few years as a trial—in part because of its popularity and its impact on ensuring that Britain is the best place to start and grow a business. That is our goal.

The hon. Gentleman talked about the breadth of sectors—an important point—and growing home-grown businesses and businesses that come from the communities that serve as their customer base. The best thing that the Government can do in that is support the ideas that people have, rather than trying to give direction, by supporting all small businesses to start and grow—not only by reducing regulation, taxes and barriers to growth, but by putting in place the infrastructure, skills and support necessary to help them.

[Mr McKenzie]

Will the Minister not also say something about the mentoring factor, which I have already highlighted? A lot of small businesses need that in the initial stages of set-up and afterwards, to take them past the many pitfalls and hurdles that they will encounter.

[Matthew Hancock]

The hon. Gentleman is absolutely right. The start-up loans scheme has mentoring built into every loan. The reports we get back show that the mentoring is as important as the money in helping businesses to expand. There are mentoring schemes on a local level—he mentioned his local authority—at the level of the Scottish Government and at a national level.

Ensuring that there is simplicity in the communication of the available schemes is important, and we are bringing those schemes together to try to ensure that the various offers that the Government have to support businesses to grow are clear. Smaller businesses in particular do not have time to navigate through the large bureaucracy inevitably involved in government. It is our job to ensure that the offer is consumer-focused and focused on and responsive to the needs of individual small businesses.

The hon. Gentleman mentioned the industrial strategy, and it is a great credit to this country that we now have an industrial strategy that covers many different sectors and brings together the players across the country, including the Government and various Government agencies, as well as businesses large and small in different industries.

For too long, Britain was an outlier in not having a proactive approach to industrial strategy, with the view that the Government should not have a say. That was in the heady days of new Labour and seemed to be the religion of the Department for Business, Innovation and Skills and its various forerunners. That has changed over the past few years, and there is now strong cross-party support for industrial strategies that actively support the growth of businesses and sectors and that try to improve the links between Government and business—they are inevitable in almost any sector—to support growth and jobs.

The hon. Gentleman mentioned prompt payment, a vital part of the effectiveness of the business environment. We have recently consulted on strengthening prompt payment to improve transparency and on putting the prompt payment code on a statutory footing. We have also asked whether we should go further and say that there should be a statutory limit on the length of payment terms. We will publish the results of that consultation shortly.

We put all options on the table and we had a large number of responses. The goal is to improve not only the length of payment terms, but the certainty around them. There are two slightly different issues with prompt payment: one is how long payment terms are and the other is how frequently payments are made on the agreed terms. In both cases, failure by a client can have a negative impact on a small business.

[Mr McKenzie]

Does the Minister agree that some of the larger, more household high street names have been pushing out their payment terms? Although they have signed up to prompt payments, they have now pushed their terms well beyond that and are taking advantage of being associated with it.

[Matthew Hancock]

That is exactly what was looked at in the consultation, and we will publish the response to it shortly. The hon. Gentleman also mentioned small business Saturday. We saw the success of small business Saturday in the USA. The President of the United States is a passionate advocate of it, and we listened to him and introduced small business Saturday last year. I can tell the hon. Gentleman that it will take place on the first Saturday in December. I very much hope and fully expect that there will be cross-party support, as there was last year, to strengthen the institution and take it on to a higher level with even broader awareness. The awareness of small business Saturday in its first year was pretty amazing. It was high last year, and I hope that it can be higher still.

[Mr McKenzie]

Perhaps the Minister would consider holding two or three small business Saturdays a year.

[Matthew Hancock]

It could be said that too much of a good thing might be a problem. One for the time being is probably the right approach. The date was chosen because it is the busiest shopping day of the year. The run-up to Christmas is an important time, especially for retailers.

There is one important issue that the hon. Gentleman did not directly mention, although I am sure we are on the same page on it. The Union is an extremely important element in the support of small business across Scotland, not only in supporting exports—UK Trade & Investment supports exports right across the world—but because ensuring that we can trade within the United Kingdom without international borders is a huge strength to the Scottish economy just as it is a huge strength to the economy of England, Wales and Northern Ireland.

Other parts of the UK buy 70% of Scottish exports, which is more than Scotland exports to the rest of the world and four times as much as Scotland exports to the European Union. Borders matter. They reduce trade and labour migration and disrupt economic and cultural links. I very much hope that the hon. Gentleman is as supportive as I am of the larger UK economy, which provides Scotland with jobs, stability and security. The Union is absolutely vital and we will be passionately arguing for it in September.

[Mr McKenzie]

I share the Minister’s commitment to keeping the United Kingdom together and to having that larger trading area for businesses, be they small, large or even bigger enterprises. Does he believe that one of the benefits might be the linking up of supply chains from larger organisations in the rest of the UK with smaller businesses in Scotland? That would be put in jeopardy if the Union was not preserved.

[Matthew Hancock]

There are huge advantages to the Union in supply chains. I put it in a positive light: this great trading union has been very successful over a long period, and we want that success to be built on, rather than put at risk. When we think about small businesses in Scotland and how we can support them, an important element of that is supporting free trade within the United Kingdom.

The economy is growing and unemployment has come down throughout the country in the past year. There was good news today with the Bank of England’s forecasts for the UK, which were increased again. That shows that there is growing confidence in small business in Scotland and across the country. We know that the people of Scotland are passionate and tenacious in their support for and execution of business, whether large or small. We are equally passionate about helping them achieve their ambitions.

Whether businesses are large or small, they are all driving in the direction of trying to increase prosperity and jobs. It is not right to try to split off large and small businesses and propose tax increases for one part. It is far better to support the growth of all businesses and the incomes, jobs and economic security they bring to the people who run them and the people who are employed because of them.

I hope that this debate has been an effective airing of the support that the Government have for businesses in Scotland, as well as in the rest of the United Kingdom. Finally, I have no doubt that although we have done a lot to improve the environment for business in Scotland, there is much more to do.