Oral Answers to Questions

Michael Fallon Excerpts

Thursday 6th September 2012 Commons Chamber

[Ian Mearns (Gateshead) (Lab)]

9. When he expects all bidders from the first round of the regional growth fund to receive the funds allocated to them.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

The regional growth fund is a three-year fund and we expect all the £2.4 billion allocated to be fully spent in that time. In round 1, 44 of the 67 contracts awarded have been finalised, totalling some £340 million, of which £220 million has already been drawn down. Of the other 23, 11 have been withdrawn and the remaining 12 are being processed.

[Ian Mearns]

I welcome the Minister of State to his new role. Having formerly been the MP for Darlington, at least he knows where the north-east is.

The regional growth fund has been mired in delay, chaos and confusion and, for some companies, no little uncertainty. How can we be certain, despite yet more reassurances, that winning bidders will receive their long-awaited awards?

[Michael Fallon]

My predecessor, the hon. Member for Hertford and Stortford (Mr Prisk), can be proud that rounds 1 and 2 of the fund now involve some 149 projects and programmes, delivering about 330,000 new jobs and drawing in nearly £5 billion of private investment. The bid for Gateshead college in the hon. Gentleman’s constituency was successful in round 2. A final offer letter was sent to the college at the end of July, and the money is there waiting for the college to take it up.

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

I welcome the Minister to his new role and look forward to having the opportunity to question him at some stage in the BIS Committee. May I draw his attention to the fact that in the black country some companies that were successful applicants in round 2 of the RGF have still not had contracts issued, with some waiting for as long as 10 months, and that business opportunities are being lost as a result? Will he undertake to look at this rigorously in order to speed things up?

[Michael Fallon]

I certainly look forward to appearing in front of the hon. Gentleman’s Select Committee.

I am happy to look at any specific examples of delay that the hon. Gentleman can produce. I want in round 3 to accelerate the process—in particular, to shorten the gap between announcement and conditional offer and between conditional offer and completion of due diligence. He will understand that it is necessary, when public money is involved, for those due diligence checks to be carried out. However, I will look at what he has said and we will do everything we can to accelerate the approval process.

[Sarah Newton (Truro and Falmouth) (Con)]

11. What steps he is taking to protect and promote access to community learning.

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

20. What recent steps he has taken to support small and medium-sized businesses.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

In total, 450,000 new businesses were registered last year compared with 360,000 in 2009-10. We have cut corporation tax rates to an all-time low, we continue to cut red tape, we are incentivising bank lending, and we have a range of other schemes to support high-growth businesses in particular.

[Christopher Pincher]

I welcome my hon. Friend to his post and I welcome his answer. One of the concerns that SMEs in my constituency have is that, whereas previously they had access to overdraft extensions, which represent cheap credit, banks now insist on collateralised loans, which are repayable over a term at a rate over base, which represents more expensive credit. Will the Government’s innovative reforms result in not just an extension of credit, but a reduction in its price?

[Michael Fallon]

I am grateful to my hon. Friend. He is exactly right: cheaper credit is the key for many small companies. The whole aim of the funding for lending scheme is to ensure that banks pass on the reduction in the cost of the money that they themselves are accessing. The Bank of England will monitor that, but my Department will check that each bank continues to do it.

[Annette Brooke]

I welcome the Minister to his post. Undoubtedly, many small firms are getting a raw deal from the banks, with increased charges and limited credit. The board of Wimborne business improvement district is exploring the possibility of setting up a “bank” of Wimborne in conjunction with a local credit union, the idea being to go back to old-style banking with strong local relationships. What comment would the Minister make about that?

[Michael Fallon]

I know that my right hon. Friend the Secretary of State has already met my hon. Friend’s constituents to discuss the issue, and I believe that he has already met the founder of the Bank of Dave as well. One of the recommendations of the Independent Commission on Banking was that the Financial Services Authority should look again at the requirements for a banking licence, to see whether they are too onerous and disproportionate for the providers of very small credit. We expect the FSA to publish its recommendations shortly and I would be very happy to discuss them with my hon. Friend.

[Mr Mike Weir (Angus) (SNP)]

Many small businesses in my constituency run a post office as part of their business, and they are very worried about the chipping away of business and, particularly, the threat of losing the DVLA contract. What is the Minister’s Department doing to encourage the DVLA to stick with the Post Office?

[Michael Fallon]

I cannot comment on any specific contract that may be up for renewal. Of course, the Post Office has to live in a competitive world, but I will certainly look at what the hon. Gentleman has said.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Late payments affect the confidence of SMEs to make purchases and to pay bills and even staff salaries. In this time of a double-dip recession, does the Minister agree that implementing the European Union directive on late payments would be a great help to SMEs?

[Michael Fallon]

It is extremely important, particularly for small companies, that their bills are paid promptly. In Government, we have taken steps to encourage Government Departments and public agencies to pay their suppliers promptly. It is also important that we look very carefully at any specific target that may encourage people to pay on the final day set in the target, rather than earlier as they would otherwise have done. I will certainly have a look at what the hon. Lady has suggested.

[Heidi Alexander (Lewisham East) (Lab)]

14. What recent discussions he has had with his ministerial colleagues on the UK Border Agency’s decision to revoke the licence held by London Metropolitan university to teach international students.

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

16. What recent assessment he has made of the health of the British automotive sector; and if he will make a statement.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

The British car and truck industry is strong and growing. More than £6 billion of investment has been committed to it by global investors including BMW, Nissan, Jaguar Land Rover and, as we have heard today, Honda. More than 80% of the vehicles made here are exported, and exports now exceed imports in value for the first time since 1975.

[Stephen Mosley]

I welcome my hon. Friend to his post and thank him for the welcome news that he has just given. Will he assure us that he will use his new post to encourage exports by taking every opportunity to talk up and promote UK plc, unlike Opposition Members, who seem to delight in constantly talking down the success of British industry and talking down our economy?

[Michael Fallon]

I will certainly do what my hon. Friend suggests. I met some of the key players in the industry yesterday. The Government provide significant support for research and development, training, and improving the UK’s sourcing of the supply chain in this important industry. I announced a further £9 million yesterday for a research and development centre for energy storage to capitalise on the growing electric and hybrid vehicle battery market. The Secretary of State will today visit Honda to welcome the 500 new jobs that it is creating in Swindon. I hope that the Labour party will welcome that vote of confidence in what the Government are doing.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

21. Automotive companies and many other companies rely on skilled engineers. Whenever I raise the issue, the Government talk a great deal about the importance of getting women engineers into such companies. However, they have entirely cut the grant to the UK Resource Centre for Women in Science, Engineering and Technology, which was ensuring that good engineers got into jobs, and have given a minuscule amount of their budget to the royal societies and the Royal Academy of Engineering. I welcome the Minister and the rest of the team to their posts. Will he ensure that this matter is looked at again so that some of the jobs in these companies go to women engineers?

[Michael Fallon]

I am grateful to the hon. Lady for what she says, and I am happy to look again at the matter. The Government are working with the Royal Society to see what can be done to encourage more women into engineering, and specific help is available from Government to help with engineering training, particularly for the automotive industry.

[Mr Speaker]

The hon. Member for Sheffield, Heeley (Meg Munn) has provided an object lesson to new Members in how to shoehorn one’s own question into someone else’s, and we are greatly obliged to her.