Oral Answers to Questions

Nadhim Zahawi Excerpts

Monday 21st March 2011 Commons Chamber

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

In short, I would be happy to meet the hon. Gentleman and his representatives. He knows, as does the whole House, that I am a champion for sixth form colleges and FE colleges, and I would be happy to make that clearer when we meet.

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

T9. Has my right hon. Friend read the OECD’s latest report on the state of the UK education system? It says that “educational performance remains static, uneven and strongly related to parents’ income and background”and:“Despite sharply rising school spending per pupil during the last ten years, improvements in schooling outcomes have been limited in the United Kingdom.”Is that not a sad indictment of the past 13 years of Labour?

[Michael Gove]

I read the OECD report with a mounting sense of sadness. It made the case forcefully by the deployment of facts and argument in a remorseless fashion that under the previous Government, for all the welcome additional spending on schools, standards had not risen to anything like the expected level. It was also striking that that report endorsed the case for the coalition’s commitment to spending more on the disadvantaged, the coalition’s commitment to creating free schools, and the coalition’s commitment to overhauling the league table system. For a respected international institution to give such a resounding thumbs-down to the previous Government and thumbs-up to the coalition Government is—

Department for Business, Innovation and Skills (Performance)

Nadhim Zahawi Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Vince Cable]

I will proceed.

I referred to the core problem of the Budget. One difficulty we have had in debating this subject with Opposition Members is the state of denial not just about the big problem, but more specifically about the Business, Innovation and Skills budget. Our preoccupation has been to deliver for the coalition our contribution to deficit reduction. That has been our major task over the last year, and we have done that. There was a 25% cut over the spending period in the BIS spend. What makes engagement in debate with Opposition Members difficult is the fact that we know—because of the ring-fencing decisions made by the last Government and because of the Institute for Fiscal Studies analysis—that they also planned to cut the BIS budget by 25%. Whenever we hear these appeals to have more money for industrial support, more money for the regions, more money for universities and science and more money for further education, we ask this simple question: where would the money have come from in the midst of those 25% cuts? Opposition Members have a basic problem, although I am not quite sure what it is. It is either an acute problem of amnesia or one of fundamental economic illiteracy.

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

Does my right hon. Friend agree that this goes beyond mere deficit denial, as it is political opportunism of the worst kind? It is also irresponsible, because talking down our manufacturing base and all the hard-working businessmen and women in our country does no good in helping us get out of the mess that Labour left behind.

[Vince Cable]

I will come on to manufacturing in a moment. We are trying to recover from a position in which there was active de-industrialisation for the best part of a decade—[Interruption.] I shall come to the figures shortly.

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[Lorely Burt]

In a moment.

There is also the national insurance contributions holiday for the first 10 employees in the first year of business for new companies outside London and the south-east. The regional growth fund has been much maligned today, but I think it will play an important part in stimulating growth.

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

When providing help to business, one of the most important things is to check that it is administered correctly. One need only look at the Export Credits Guarantee Department to see the symptoms of the previous Government’s failures: 90% has gone on aerospace help, which is wonderful for that industry, but the 10% for other industries has dropped by 40%. Such funding is obviously not fit for purpose, compared with other countries where it is going up. That is a perfect example of the previous Government’s failures of administration.

[Lorely Burt]

I totally agree with the hon. Gentleman. The big companies that shout the loudest often benefit disproportionately from Government funding. On that point, I note that the Government have an aspiration to procure 25% from small businesses. With regard to exports, it is important that small businesses receive their fair dues. I also welcome the technology and innovation centres, which will bridge the gap between good ideas and their implementation and the readiness to bring them to market.

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[Mr Binley]

My hon. Friend is right. There were 236,000 cases last year—a record figure. That suggests that something needs to be done. This Government are doing something about it and I am grateful.

The cost burden of regulation on business increased by £10 billion a year under the previous Government. That money could have been used for investment, but instead it had to be spent on complying with regulation after regulation, which the previous Government had gold-plated.

[Nadhim Zahawi]

My hon. Friend has a long and respected record in business. Does he agree that there is a lack of recognition that regulation is one of the major factors that holds back small business, along with access to finance? The lack of the word “regulation” in the motion demonstrates the lack of understanding among those on the Opposition Benches of the pain of small business.

Education Maintenance Allowance

Nadhim Zahawi Excerpts

Wednesday 19th January 2011 Commons Chamber

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

I echo the words of my hon. Friend the Member for Bradford East (Mr Ward) and thank the Opposition for this debate on EMA. Historically, they have been vexed about how to pay for the scheme.

If we are to have a credible debate today—[Interruption.] I apologise, Madam Deputy Speaker. My tie to support the campaign against bowel cancer was making that noise—it is a musical tie that the campaign was giving out.

[Madam Deputy Speaker]

Order. Perhaps next time the hon. Gentleman will be more selective in the ties that he wears in the Chamber, and then we will not need to have the musical accompaniment.

[Nadhim Zahawi]

Your words of wisdom are taken on board, Madam Deputy Speaker, and I apologise to you.

If we are to have a credible debate, we must look at this issue in the round, and that means that we must look at the economic legacy we inherited from the previous Government. Our structural deficit is one of the largest in the world, and it is simply unsustainable. We are having to borrow £500 million a day. Every time we go to sleep and wake up in the morning, we rack up another £500 million. The debt interest—the money that we have to pay in interest to foreign banks and foreign countries to build their own hospitals and schools with—is £120 million a day, every single day.

I come from a rural constituency with some areas that have no post-16 provision, so I am all too aware of the additional costs that students will have to bear. Shipston high school in my constituency has lobbied me very hard on this subject, as has Martin Penny, the head of Stratford-upon-Avon college—a fantastic institution in my constituency with 5,000 students and 450 staff. I addressed the students during the week of the tuition fees debate, and after we had cut through the misinformation they understood why we were having to make these decisions.

[Charlotte Leslie (Bristol North West) (Con)]

I apologise for missing the beginning of this very important debate.

I thank my hon. Friend for setting out the economic realities. Does he agree that when there is a dire economic reality, the correct moral thing to do is not to bury our heads in the sand and carry on spending unsustainably, which will end up damaging the very people we want to protect because in the long term it will do the country no good, but to be really rigorous and focused in ensuring that the resources that we do have are absolutely focused on the most vulnerable?

[Nadhim Zahawi]

That is exactly right. In fact, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), when he was Prime Minister, hoped to pay for EMA by reducing the debt on the young people of this country.

Transport is an important issue that was raised with me by Martin Penny from Stratford-upon-Avon college and has been aired by Members on both sides of the House. As my hon. Friend the Member for Nuneaton (Mr Jones) said, it is an issue not only for rural constituencies but for urban areas too. I am pleased that the Secretary of State has made some encouraging remarks about opening up the discretionary fund to allow such colleges as Stratford-upon-Avon college—which are best placed to judge because they are closest to students and their families—to target some of that money on those who most need it.

In the spending review, the Government committed to refocus the support, because all the data show that the £560 million spent on EMA every year was not well targeted. I am pleased that the Secretary of State confirmed in his opening remarks that the Government will target the money on those with special educational needs. I was a governor of a special educational needs school that was shut down by the previous Government and I know how important it would be to those families if the money was targeted in that way.

I ran a research company for 11 years, and I am passionate about evidence-based strategy. The National Foundation for Educational Research report commissioned by the previous Government, which we have heard about today, found that almost 90% of young people who receive EMA would have completed their education or training course if they had not received it. In an interview, the shadow Secretary of State admitted that some of the money went towards students buying drinks and partying. He therefore probably agrees with me that the money is not well targeted. I see him leaning forward, and am happy for him to intervene.

[Andy Burnham]

I will intervene, because I did not say that, and I would be grateful if the hon. Gentleman corrected the record. I said that young people should be able to play a full part in the life of the college. If that means trips to musical events, the theatre or political events in the evening, they should be supported to play a full part in them. I would be grateful if he was a bit more careful with his language in future.

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[Nadhim Zahawi]

I thank the shadow Secretary of State, but let me quote him:

“Yes, they may spend some of it on food and even the occasional time out with friends… But part of being in a college means taking part in the whole life of a college, and why should we say to young people from the least well-off backgrounds, well, ‘you can’t have those things’.”

That settles that one. We also know that almost 50% of students are in receipt of EMA. That fact demonstrates that it is not well targeted.

In my old profession, when the research has been done and there is evidence for a strategy, if one does not like the findings, one should not throw them away and go into denial about them. Several Opposition Members have trashed the research because it does not suit their argument. As well as saying that he hoped to pay for the EMA through a reduction in debt, the right hon. Member for Kirkcaldy and Cowdenbeath said that he would pay for it by scrapping post-16 child benefit. I wonder whether that will become Opposition policy.

The Government have demonstrated their commitment, as we heard clearly today, to invest in the young people of our country. They are investing £7 billion in a fairness premium designed to support young people of all ages. The introduction of the all-age careers service will improve the information, advice and guidance that the National Foundation for Educational Research said needed to be improved. The Government are continuing to invest in providing apprenticeships, and have committed to improving the apprenticeship package so that level 3—the A-level equivalent—becomes the level to achieve.

In government, tough choices have to be made. We on the Government Benches have made those tough choices. We have chosen to safeguard spending on the national health service and education. I urge the Opposition, if they want to have a constructive debate, also to safeguard the national health service and education.

[Mr George Howarth (Knowsley) (Lab)]

Unfortunately, I do not think I will be able to compete with the hon. Member for Stratford-on-Avon (Nadhim Zahawi) as regards our ties, but I rather hope that I will surpass the arguments that he made.

Before I get into the meat of my argument, I wish to express a debt of gratitude to Frank Gill, the principal of Knowsley community college, of which I am a governor; to the director of children’s services in Knowsley, Damian Allen; and to Jette Burford, the principal of Hugh Baird college in Bootle, which some students from my constituency attend.

The points that I wish to make have been shaped by a number of conversations and briefings that I have had, but also by a very interesting meeting that I had last year with some students at All Saints centre for learning in Kirkby, in my constituency. They talked about their hopes and aspirations and said that EMA had been a help to them and would continue to be. They also expressed their concern about the reduction in spending on Aimhigher, which had inspired some of them to go to university when they had not previously thought it possible.

The Secretary of State seems to have three arguments about EMA and his replacement for it, the pupil premium. The first is that EMA does not have any real impact on participation and on young people staying on in education. Unfortunately, the hon. Member for Stratford-on-Avon cited a piece of research that does not quite indicate what he thinks it does. It was based on a flawed sample, as several of my hon. Friends have said.

[Nadhim Zahawi]

Will the right hon. Gentleman give way?

[Mr Howarth]

I will not. The hon. Gentleman has had his opportunity.

[Nadhim Zahawi]

You have mentioned me twice.

[Mr Howarth]

Okay then.

[Nadhim Zahawi]

The right hon. Gentleman claims that the sample was flawed. Can he explain why he believes that? It was a representative sample of at least 2,000 interviews, taken in a scientific way.

[Mr Howarth]

I do not know how long the hon. Gentleman has been in the Chamber, but several of my hon. Friends have gone through the flaws in the report’s methodology in great detail.

[Nadhim Zahawi]

What are they?

[Mr Howarth]

I am not going to repeat them. I do not want to make a speech about that particular issue, but I raised it because the hon. Gentleman used flawed research to support his argument.

On participation, I know that 80% of those attending Knowsley community college who are in the relevant age range receive EMA, and the figure is 84% for Hugh Baird college. Neither the hon. Gentleman nor the Secretary of State can gainsay that. Since 1997, the number of young people from Knowsley who have gone on to higher education has gone up by 187%. EMA was not in place for all that period, of course, but those figures indicate to me that it was part of the package of things that enabled people to stay on into further and higher education.

The Secretary of State’s second argument is that there are better ways to reward young people and improve attainment. When he first made his announcement about EMA, I was prepared to accept that that might be the case. I have waited patiently since October for him to explain how it might be, but he has failed to do so, including today. I sat and listened carefully to his speech, but as several hon. Members have said, he chose to make a speech that was more about economic policy than about EMA. Other ways of supporting young people might work better, but unfortunately we have not been told what his case is and nobody has yet demonstrated it.

My final point is that some on the Government Benches seem to believe the argument about the 90% dead-weight, but there is something wrong about saying to young people in less favourable circumstances, “You don’t need any support.” Actually, it is a real struggle for families on low incomes. It is a struggle for young people not only to get to college—there has been a lot of discussion of transport costs—but to live anything like a decent life without some support. I find it deeply offensive when people use phrases such as “dead-weight” when we are talking about people who are struggling to realise their potential and to gain academic qualifications and, in many cases, to go on into higher education when that would have been inconceivable a generation ago.

The hon. Member for Blackpool North and Cleveleys (Paul Maynard) said that he regretted the tone of this debate, but I regret how the needs of those young people seem to have been jettisoned without any real thought or debate whatever. The Secretary of State had to prove that the changes would work, but he did not do so, and he should now withdraw his proposals.

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[Gavin Barwell (Croydon Central) (Con)]

The shadow Secretary of State was right to open the debate with his characteristic passion. I come from a borough that is diverse in every sense and in which there is a shocking gap between the educational qualifications and life chances of the haves and have-nots. I cannot think of an issue that is more worthy of being passionate about than widening access to education and closing that attainment gap.

The coalition Government have done good things in that regard already, such as introducing the pupil premium and school reform. The English baccalaureate will ensure that children from less well-off backgrounds will study academic qualifications that they will need in the workplaces of tomorrow, and the Government have also taken action on apprenticeships and investment in the early years. However, given the economic situation that we are in, not every budget can be protected, so the Government had to take a painful decision on education maintenance allowance. It was right in principle to examine that budget, but I have several concerns about the detail.

EMA is an archetypal Labour policy. Its aim, objective and principle were absolutely right. It is laudable to attempt to widen participation in education, so the previous Government should be congratulated on trying to do that. However, the execution of their policy was expensive and extremely centralist. People have talked about the impact on the poorest in our society, but EMA is paid to people in households earning up to £31,000, which is significantly above average national earnings.

There is some debate about the exact number of people who would not have gone on to further education if they had not received EMA. We have heard about the two reports that have been produced and there is a dispute about the figures. However, everyone to whom I have spoken accepts that some money is going to young people who would have stayed on in further education anyway.

[Nadhim Zahawi]

Does my hon. Friend agree that if the targeting were somehow linked to those who are closest to the students, the system would be much better?

[Gavin Barwell]

My hon. Friend neatly brings me to my next point, which is about centralism. I tried to make this point to the shadow Secretary of State. One of the points that has been effectively raised in speeches made by hon. Members on both sides of the House is the differences among students. Young people who have a caring responsibility, a special need or a long distance to travel to college, or who are young parents, have much greater needs than some other students, so a national scheme that makes a flat-rate payment to everyone who comes from a household that earns a certain amount is not necessarily the best way to address the problem.

Education Policy

Nadhim Zahawi Excerpts

Monday 18th October 2010 Commons Chamber

[Michael Gove]

It is our intention to ensure that Sure Start is a universal service. That is why we are investing additional money in securing 4,200 health visitors in order better to guarantee that the very poorest benefit from those services. One point that has been borne in on me is the fact that in the early years it is critical that children from poorer homes mix socially and learn the skills that come from being in a genuinely socially comprehensive environment, so we will ensure that Sure Start remains a universal service.

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

This announcement will come as welcome news to my constituents in Stratford-on-Avon, where we suffer from invisible rural poverty. I ask my right hon. Friend specifically what does the announcement mean for the current two-year-old pilot and will it continue until the expansion to all disadvantaged two-year-olds is introduced?

[Michael Gove]

My hon. Friend makes a good point and I know that he is absolutely committed to ensuring that pre-school education is delivered effectively to the very poorest. We will ensure that we move from the 20,000 children who currently benefit to around 100,000 as quickly as possible.

Education Funding

Nadhim Zahawi Excerpts

Monday 5th July 2010 Commons Chamber

[Michael Gove]

Again, I am grateful to the hon. Lady for her question. It would undoubtedly be helpful if she could tell me whether her local authority is in financial close or in close of dialogue. My understanding is that Walsall has not reached financial close, but I believe that her constituency benefits from an academy project.

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

The court of public opinion will judge the shambolic way in which the BSF programme was administered by the previous Government. Does my right hon. Friend have an estimate of the number of teaching hours that were wasted by teachers and schools devoting time to the BSF programme?

[Michael Gove]

We know that thousands of teaching hours were devoted to it. In many cases, deputy and assistant head teachers had to take time out of school—often for as many as two or three days a week—in order to take part in the procurement process. Time that could have been spent on teaching and learning was instead spent entangled in bureaucracy.

Free Schools Policy

Nadhim Zahawi Excerpts

Monday 21st June 2010 Commons Chamber

[Michael Gove]

I am talking to all those schools now to ensure that we can all have as much information as possible about those that have expressed an interest, so that we can celebrate their moves towards greater independence.

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

Will my right hon. Friend tell us what discussions he has been having with teachers? I believe that it was teachers who were the driving force behind the charter school movement in America.

[Michael Gove]

I am grateful to my hon. Friend. One of the most heartening things has been the enthusiasm that teachers have shown for our extension of academy freedoms. Just last Friday I was talking to Jodie King, an inspirational assistant head teacher in Ealing who wants to set up a free school, and I have spoken to the Sutton Trust, which represents the interests of teachers who are keen to promote social mobility, and which wants to see free schools established.

I have talked to Mr Heath Monk, the head of Future Leaders, the programme that has done more than any other to encourage great young people to become head teachers, and found that it wants its alumni to support the extension of the free schools programme. I was also able to talk to Brett Wigdortz and a number of Teach First alumni, all of whom want to join in extending the free schools programme. That is all on top of the more than 2,000 head teachers to whom I spoke at the conference of the National College for Leadership of Schools and Children’s Services last week, who gave me a cordial response.

Industry (Government Support)

Nadhim Zahawi Excerpts

Wednesday 16th June 2010 Commons Chamber

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

I congratulate the hon. Member for North West Durham (Pat Glass) on her passionate speech about her constituency, and I am pleased to hear how attracted she is to the big society—she is always welcome on the Conservative Benches.

We all know that we are in times of deep economic hardship, but we are now heading in the right direction. A key reason is that we have already begun to fix the wrongs, and our first focus has been on balancing the books. For anyone in any doubt about whether this is the right strategy, I need only point to the commendations that my right hon. Friend the Chancellor received at the G20 summit in South Korea for his efforts in this area. However, although we have made an important start, there are of course many things that we need to do, and for me the importance of business cannot be underestimated. From my experience at YouGov, and from talking to businesses in Stratford, small or large, I know that there are three main areas that people want us to focus on: getting rid of bureaucracy and red tape, simplifying the tax system and giving small and medium-sized businesses tax incentives and easier access to funding. All those areas must be addressed, and I shall endeavour to discuss them today.

It is no coincidence that after 13 years of a Labour Government, business in this country feels bogged down by bureaucracy. I am delighted that one of the first things that we have done is introduce a one-in, one-out policy on regulation. That will change the culture of Whitehall and help those stuck in red tape to free themselves and get on with their business. Next, we need to focus our efforts on the need for a simpler and fairer tax system for business. It is not in our country’s interest for businesses to waste time and resources on decoding the hugely complicated tax system. Someone running a small business is the chief executive officer, the salesperson, the receptionist and the accountant, so the more time they spend on bureaucracy, the less they spend on building up their business.

The abolition of the employer’s contribution to national insurance must be commended. It is an excellent policy, and there are already businesses in my constituency, such as GreenMech, DCS Europe and the brilliant Purity Brewing, applauding this initiative. Even Lord Digby Jones, the previous Government’s adviser, warned against that anti-jobs policy in the other place.

One of the most difficult areas to address is the funding available to SMEs. The previous Government made steps in the right direction, but they did not work. The RDAs have clearly not worked, and they have wasted an enormous amount of taxpayers’ money on bureaucracy. Banks want to lend only when the sun is shining. The previous Administration failed to fix the roof during those times, and it was SMEs that paid a heavy price. However, I am pleased that we have already pledged to ensure that a flow of credit is available to viable SMEs, both by considering a national loans guarantee scheme and by the use of net lending targets for banks. In the future, we must continue to do more to help in that area.

I want to address another matter that is key to strengthening our business sector in this country. We must ensure that our employees of the future are equipped with the skills that can help them and their employers succeed. I for one always looked at the skill and expertise of a potential candidate, rather than just their university education. That is why I am such a strong believer in apprenticeships and the skills that they offer. In a previous life, I did a lot of work with a fantastic charity called Edge, and I applaud the Government’s focus on apprenticeships.

Making things and selling things to the world are going to be vital for our future. That is why we need to support engineering, whether it be mechanical, civil or software engineering. Engineering needs to be seen as an aspirational qualification again. We need only look at Germany, a nation proud of its engineers, to see what can be achieved. For me, we must focus on specific areas of business, in order to create a niche for ourselves as a nation.

[Mr Tom Watson (West Bromwich East) (Lab)]

I am grateful to the hon. Gentleman for giving way—I believe that this might be his first run at active combat in the Chamber, so he is welcome. He talked about software engineering, and his party made a commitment in the election to a tax relief system for the games industry, which is important in the sub-region that he represents. Does he still support that?

[Nadhim Zahawi]

It is important that we look at whatever area we can support, but at the same time—

[Mr Watson]

What do you think?

[Nadhim Zahawi]

I am going to answer the hon. Gentleman. At the same time, we have to remember that we are currently borrowing £500 million, and we have to cut our cloth accordingly.

We must focus on specific areas of business to create our niche. If we look at Britain in relation to our Chinese and Indian counterparts, we see that we can never hope to compete with them on production cost or quantity. That is why we must focus on intellectual property and innovations. We need only look at Formula 1 to see what talent we already have in innovation here in the United Kingdom. As politicians, we need to focus our energy on the recommendations of inventors such as Sir James Dyson. Sadly, however, we are tending to lose our best people to other nations where innovation is better funded. For example, Jonathan Ive, the designer of the iPod—such an iconic brand of our era—is British, but he works for a great American company. We must learn from the USA. Silicon valley is the home of US tech start-ups precisely because of the environment created there by the US Government and because of the support that start-ups receive. We should learn from that and create our own opportunity zones here in the United Kingdom.

I applaud the approach taken so far by the coalition Government, and it is important that we continue to do all we can to encourage growth in the private sector, so that we can continue to create jobs that are sustainable. That will be an important move away from the previous Government, whose policies led to an unsustainable and unrealistic bloating of the public sector. Our future lies in business and, for me, specifically in innovation. What we do now will affect the course of our business future, and I am confident that, with the coalition Government in place, we will succeed.

Let me end by saying that I support the amendment tabled in the name of the Prime Minister and colleagues.

[Several hon. Members]

rose—

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[Rachel Reeves]

Thank you, Mr Deputy Speaker. I am sorry for my enthusiasm.

I welcome the clarification from the hon. Member for West Suffolk that regions will be able to make their own decisions, but that was not my understanding of what the Secretary of State for Business, Innovation and Skills said earlier. [Interruption.] If he did say that, I think that everyone on the Opposition Benches would welcome that. If our regions will be able to make the decisions about our regional development agencies and their future, I welcome that. I am grateful for that clarification, but that was not my understanding of what the Business Secretary said in his statement.

I know that Conservative Members will disagree with this, but I am sorry to say that we do not hear enough from them about growth. They cite the G20 advice about reducing deficits while consistently forgetting about or ignoring the advice in the G20 communiqué for

“credible, growth-friendly measures, to deliver fiscal sustainability”.

That omission on growth is worrying from the perspective of industry and jobs—the subject of today’s debate—because the greatest risk we face is that of a double-dip recession, with the job losses, business failures and higher budget deficits that that would bring.

On Monday, the Chancellor dismissed the possibility of a second recession, but businesses in my constituency are less certain that we are out of the woods. Key to the recovery and to bringing down the budget deficit—we hear a lot about that from Conservative Members—are growth and having a regionally strong and diverse economy. That will not happen by chance; it depends on a strategic Government policy supporting industry in all our regions.

[Nadhim Zahawi]

What does the hon. Lady think about scrapping the national insurance hike for employers? A lot of employers in my constituency will say that the really harmful thing to do to growth is to add to the cost of employing people, thus reducing the net income of a business. What does she think about that?

[Rachel Reeves]

I thank the hon. Gentleman for that intervention. What he describes perhaps comes up less in my constituency than in some others, because average earnings in my constituency are £16,000 a year and the national insurance increase proposed by the previous Labour Government was to apply only to wages of more than £20,000 a year. So that was less of a concern in my constituency.

Britain is the sixth largest manufacturer in the world. If one believed some of the statements made by those on the Government Benches, one would think that the UK did not have a manufacturing industry at all—that is not the case. People in Yorkshire have huge pride in our industrial past. From wool to coal and steel, and to retail and finance, our industries have enriched the region—more than that, jobs and industry in Leeds and Yorkshire have helped to power the UK economy.

The true test of this Government’s strategy and their woolly words about local economic partnerships will be whether they can give local people and businesses a true sense of control over their economic future. That is what Yorkshire Forward and other RDAs have been doing; they have been promoting enterprise and driving economic growth across Britain.

We now know—I am reading what I wrote before the intervention by the hon. Member for West Suffolk—that the RDAs are to be scrapped. Or are they? That wind-down has already started in Yorkshire. The Yorkshire Evening Post today revealed that the proposed cuts to Yorkshire Forward mean that no fewer than 109 projects will see their support slashed and that that will affect 24,160 separate companies our region. Some £1 million that would have been used to help small and medium-sized enterprises to access finance is to be cut. Some £1.4 million that would have helped businesses and universities with research and development is to be cut. Some £2.4 million that would have been spent on Tower Works in Leeds to support the digital and creative industries in my city is to be scrapped.

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[Claire Perry (Devizes) (Con)]

Thank you, Mr Deputy Speaker, for your tutorial on how to be a good parliamentarian. I fear that many of us will let you down before we have learned to do our jobs properly.

I came into this debate to listen, not to speak, but I have found myself compelled to get up and speak on what I think is an incredibly important matter. I apologise for being in and out of the Chamber. I have had a huge visit from the 3rd Regiment Royal Military Police, who I then took for tea. They were marking the maiden speeches out of 10. I am not going to say who did well, but they were quite impressed by some speeches on both sides of the House.

I felt compelled to speak because I have a business background. I went to that bastion of capitalism, Harvard business school, but that was 20 years ago and I have been somewhat cleansed since then. I have had many years of working in consultancy, finance and running my own small business. Then I lived in the countryside and raised my children. On my campaign, I had a reputation for speaking from notes on the back of a fag packet. As this is a no-smoking zone, I have had an upgrade and am speaking from scribbles on the back of some very nice House of Commons paper.

I want to make a couple of specific points and to say why I felt compelled to get up and speak. I am really worried, because I do not think that Opposition Members understand the fundamental reason why we are here today or how Government should support business. We hear lots about micro-interventions and RDAs. Everybody knows that if one visits one’s RDA one will find that they have wonderful and often overlapping agendas with many other parts of the public and private sectors, but they are not lean, honed, efficient and joined-up mechanisms. In many cases, they are the worst bastions of the unaccountable and unelected public sector. They might, in many cases, be doing good work, and that is why they might well have a role to play in many places, as the hon. Member for Sedgefield (Phil Wilson) suggested, but they are not the best way in which to spend precious pounds of taxpayers’ money. However, the Opposition appear to think that that is the right thing to do.

The Opposition also think that micromanaging the economy is the right thing to do. Let me just reference a couple of the myriad schemes that were put in place to support business during the recession. The £10 billion working capital guarantee scheme was designed to underwrite portfolios of loans held by banks, which is such an important part of unlocking the crunched credit system, but it made only £2 billion-worth of guarantees in the time that it was operational. It lent only 20% of its capacity, which suggests that it was not doing what business needed.

Then we had the £75 million capital for enterprise fund, which was designed to do what we would all like to do—get high-tech, high-grade start-ups off the ground—but it lent only half of that money in the time that it was operational. That again suggests that there was a disconnect between what the then Government wanted to do and what business really needed.

[Nadhim Zahawi]

Does my hon. Friend agree that the real problem with these quangos is accountability? A very good local charity in my constituency was the beneficiary of some money from Advantage West Midlands, and it was very grateful for that money. When it asked, “How would you like us to report on our achievement?” the RDA said, “Oh, just write a report; it doesn’t really matter.” So there is no real accountability. Will she expand on that point and on how the coalition’s policy will bring to local people the accountability that will make the difference in terms of efficiency of delivery?

[Claire Perry]

I thank my hon. Friend for that important intervention. The whole issue of accountability and transparency in the public sector is key. One phrase that I love to say is that sunlight is the best disinfectant, and that can be applied to the spending of central Government, local authorities or these unelected, unaccountable quangos, which in many cases are not even consolidated into departmental accounts. It is very easy to pay for junkets to the south of France if one knows that nobody is looking at the books. He raises an incredibly important point on an issue that we have pledged to improve with a far more rigorous and accessible system of transparency in public spending, which I wholeheartedly support.

Let me return briefly to the other schemes that were meant to make such a difference. Do hon. Members remember the £2.3 billion automotive assistance programme—the former Government’s flagship scheme that was going to support the entire vehicle manufacturing system and supply chain? It made only three offers of loan guarantee schemes and only two companies decided to go ahead with them.

Then we had the other enormous underpinning of the British export industry—the £5 billion trade credit insurance scheme, which sought to underwrite firms doing the incredibly valuable job of earning pounds by exporting. Well, it underwrote 109 policies. That sounds reasonable, but they were worth £18.5 million. That sort of micro-meddling and initiative-itis bedevilled the former Government, and as a business person, I feel they do not get what British business needs. But we do.

British business needs three things. First, it needs transport and broadband infrastructure. If my memory serves me right, Labour Members only recently started to get to grips with the concept of high-speed rail, which will do so much to rebalance economic growth across the regions.

As for broadband infrastructure, in rural Britain we are extremely deficient in what will give us a living and working countryside. Instead of grinding through additional taxes, more changes and a digital switchover fee, the Government have a plan to get the broadband network in place. That is incredibly important.

Secondly, British business needs a decent low-taxation environment. On corporate competitiveness, we have gone from 10th in the world to 26th over the last 10 years. We can all give examples from our constituencies of companies that have left the country to move to more benign taxation environments. I am talking just about the headline rate, not the taxation complexity to which my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) referred earlier. Have Members seen the size of our tax code list? The list reaches my waist and I am 6 feet 1 inch. It is a lot of paper and we have developed a whole industry employing lots of people to interpret tax codes for small businesses. The Conservatives’ aspiration is to have the lowest tax rate in the G20 and that is what British business needs.

Thirdly, we need to get regulation out of the way. My hon. Friend the Member for West Suffolk (Matthew Hancock) described the health and safety madness that bedevils businesses of all sizes. Indeed, we have gone from fourth in the world for business regulation benignness to 86th over the last 10 years. We have become a country where people have to wade through acres of red tape to do what they need to do every day.

Over the last 13 years, Labour Members did not get, and still do not get, what British business needs. We are the party that will deliver our promises, which is why I am pleased to speak in support of the amendment for which I shall vote tonight.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said at the beginning of the debate, we stand on the brink of a new industrial revolution.

Let me declare two interests. Newcastle was at the leading edge of the first, high-carbon industrial revolution, so we have an interest in seeing a resurgence of industry and manufacturing. As an engineer, I too want to see manufacturing and industrial resurgence. But it is not my interests that lead me. There are five global challenges that require a new industrial response.

First, population and economic growth across the world are stoking demand. Secondly, the global financial crisis has made it extremely important that we grow other sectors. Thirdly, climate change is making many of our ways of building and manufacturing things inefficient. Fourthly, the population of the western world is ageing. That is a good thing; it is good that people are living longer, but it requires different markets and goods— for example, more automotive goods. Finally, globalisation means global markets and global industries.

On the Opposition Benches, we believe that we need to grow our way out of the global financial crisis. The challenges I have enumerated give us many opportunities for growth in the UK, in the north-east in particular; for example, in renewable energies such as wind power, which is why the previous Government invested in NaREC—the New and Renewable Energy Centre—a world-class testing facility for wind turbines in Blyth. Sustainable transport provides another opportunity for growth, which is why the previous Government invested in it by giving grants to enable Nissan to build the electric car facility in the constituency of my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson).

Some months ago, I visited Newcastle university’s electrical engineering department, where I saw the world-leading research into electric motors that is taking place as a result of the previous Government’s increased funding for research and development. Another example relates to ageing with dignity, as promoted by the centre for ageing and vitality in Newcastle.

We stand at the brink of enormous industrial change and the potential for enormous industry growth. The Government have two possible responses. They can leave things to the market, get out of the way—such a well-loved phrase—and let the existing capital and goods markets figure everything out, or they can put in place the economic and active industrial policies that will support industry. The Government seem to have decided to do the former; or having listened to the words of the Secretary of State for Business, Innovation and Skills, I would say that they have decided to do the former while professing to do the latter. I want to say why that is not in this country’s or even the coalition Government’s interests.

As I have said, I am engineer by profession. I also spent three years getting an MBA to hone my business and management skills. I have worked in France, the US, Nigeria and the UK, as well as travelling extensively for my work. I have seen many different combinations of private and public sector involvement, including the raw entrepreneurship of Lagos street markets. Having listened to Conservative Members expressing their contempt for all regulation, including that on health and safety, I now understand that that is the kind of market economy that they want to bring to this country. I have also worked in the highly regulated labour markets of Germany. I have helped to build small businesses, to grow medium-sized ones and to expand multinationals. I have also helped to set up the framework for the public sector regulation of the telecommunications industry. So I know from bitter experience just how difficult it is to create the virtuous cycle of investment, innovation and job creation.

Let me tell hon. Members what I have found that works. The role of the private sector is crucial—it mobilises investment, creates jobs, innovates and takes risks—but the public sector is equally important. The right regulatory environment gives investors the confidence to invest and helps smaller companies to compete on a level playing field. By providing grants and incentives for innovation and investment and using the public sector procurement process intelligently, the public sector can help emergent industries to flourish. By directing funds to build the right infrastructure, the public sector helps ideas to become businesses. Conservative Members are right: the public sector does not create jobs, but it can provide the soil and fertiliser to enable them to grow. So we need active individuals, partnered by industrial activism. A proactive partnership between the public and private sectors is essential if the UK is to take a leading role in the world’s low-carbon future.

[Nadhim Zahawi]

I am pleased to see a fellow engineer on the Opposition Benches. I recall the hon. Lady not wishing to be here for the election of the Speaker and wanting to go back to play bingo in Newcastle. Is she proposing that the Government give further subsidies to the bingo industry in her constituency?

[Chi Onwurah]

I would thank the hon. Gentleman for his intervention if I could understand the line that he is drawing between bingo and the huge questions that we face. I support the bingo industry—I support all service industries—but he may not have followed today’s debate, which is about Government support for industry, particularly manufacturing and engineering industries. I would appreciate being able to stick to that subject for the rest of my contribution.

Labour’s industrial activism means that there are appropriate grants to support industry across the country. Under Labour, the regional development agency One NorthEast was able to take strategic regional decisions and support new technologies and the complex supply chains necessary to make them successful. I share the utter confusion of my hon. Friend the Member for Sedgefield (Phil Wilson) about Government policy with regard to the RDAs, which are to be abolished but allowed to re-grow in some form that is not entirely clear. That uncertainty is damaging jobs and industry in Newcastle and across the north-east, and I urge the coalition to provide clarity and send signals that a regional strategic decision-making authority will continue to exist.