Oral Answers to Questions

Vince Cable Excerpts

Thursday 10th April 2014 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

5. What steps the Government are taking to encourage firms to pay a living wage.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The Government support a living wage and encourage businesses to pay it when it is affordable and not at the expense of jobs. We recognise that these have been challenging times and we applaud companies that have chosen to pay higher wages.

[Heidi Alexander]

The UK’s largest supermarkets, Tesco, Sainsbury’s, Asda and Morrisons, together make billions of pounds in profits every year, but they still do not pay all their staff a living wage. Will the Secretary of State look at amending the corporate governance code to require all publicly listed companies to report annually the number of individuals they employ who earn less than a living wage?

[Vince Cable]

That is an interesting suggestion for nudging companies in the right direction, and I will certainly have a look at it. I am certainly very opposed to coercive measures because those would simply add to unemployment, but I will reflect on that suggestion, which is a new one.

[Chris Williamson]

I am pleased that the Secretary of State says that he supports the living wage, but as he will know—my hon. Friend the Member for Lewisham East (Heidi Alexander) has already pointed this out—that of the 4.8 million people who are paid less than the living wage, many work for multinational, highly profitable companies. What specific steps is he taking to encourage those highly profitable companies to pay the living wage? The people deserve to know that.

[Vince Cable]

The hon. Gentleman’s constituency is a good example of what is happening in the labour market. The claimant count is down to about 2.5%, which is much lower than it was when we took office. Many engineering companies are short of labour and wages are going up. We have been through a difficult period, but one of the success stories is that employment has massively increased—465,000 during the last year. His constituency is a very good example of the policies working.

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

Does the Secretary of State agree that retailers would find it easier to pay higher wages if they were allowed to open all day on Sunday?

[Vince Cable]

I suspect that it would make relatively little difference. We had a modest experiment at the time of the Olympics. The results did not show a great deal of real economic consequences, but we are always open to new evidence.

[Andrew George (St Ives) (LD)]

Provided that it does not undermine fair trade or UK competitiveness, a significant increase in the minimum wage would clearly be both desirable and the right thing to do. But will my right hon. Friend look particularly at the care sector, where I fear there is a race to the bottom as a result of there simply being a floor where the minimum wage has been set?

[Vince Cable]

I remind my hon. Friend that, based on the recommendations of the Low Pay Commission, the Government announced recently the biggest increase in cash terms since the financial crisis—a 3% increase, which is an increase in real terms. I suspect that with the central problem in the care sector, which is with domiciliary care workers whose travel times are not properly counted, we are dealing with an abuse of the minimum wage system, and it needs to be pursued in that context.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

A KPMG study found that the introduction of a living wage increased productivity and reduced sickness absenteeism and staff turnover. In fact, its introduction was cost-neutral for all these firms. As it makes such a good business case, why are the vast bulk of local authorities that have introduced a living wage Labour ones?

[Vince Cable]

The process that the hon. Gentleman described is the right one: if it is good business practice, good businesses will follow it and out-compete their competitors, and I hope that that is what will happen.

[Paul Blomfield (Sheffield Central) (Lab)]

2. What recent estimate he has made of the resource accounting and budgeting charge on student loans.

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[Diana Johnson (Kingston upon Hull North) (Lab)]

3. What progress he has made on rebalancing the economy across the UK.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The regional growth fund plays a key rote in stimulating private investment and employment in areas dependent on the public sector. Today, my right hon. Friend the Deputy Prime Minister has announced 50 further projects and programmes that have been awarded regional growth fund support in round 5. Together they will share £300 million of RGF support and have pledged to deliver £1.9 billion of private sector investment and to safeguard or create 37,000 jobs. We have also increased resources under the strategic direction of local enterprise partnerships to at least £20 billion until 2020-21.

[Diana Johnson]

In 2011, Hull voters kicked out the Lib Dem councillors who had delayed setting up the Humber LEP. From then on, the Labour council, MPs, local businesses and the LEP took the lead in working together to bring to the city Siemens, City of Culture, and rail electrification. Does not that show the potential of real devolution to the regions? Why does the Secretary of State block the plans that are set out in the Heseltine review?

[Vince Cable]

I certainly welcome devolution and the cross-party approach that we have adopted to attracting Siemens. I remember going to Hull in 2010 and 2011, when an excellent Liberal Democrat council was laying the foundations for the bid for Siemens that is now happily realised.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

May I praise the Government for the role of agri-tech funds in rebalancing the economy in the north? One of the issues holding back growth in the north is badly congested and unsafe roads such as the A64. Will my right hon. Friend use funds from his Department, working with the LEP, to improve the A64?

[Vince Cable]

One of the joys of the new pots of funding that are available for local enterprise partnerships is that LEPs can decide for themselves what their priorities are. I am aware, because I grew up in the region, that there are serious infrastructure bottlenecks, and I am sure that that will be high in its priorities.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Secretary of State and the whole House will no doubt welcome this morning’s excellent news that 1,000 new jobs have been created in Belfast by US software company Concentrix. That is very good news in terms of rebalancing the economy. Will he continue to work with the Northern Ireland Executive on matters such as corporation tax to ensure that the number of private sector jobs continues to grow in the Province?

[Vince Cable]

The Northern Ireland Executive is doing an excellent job in attracting inward investment. I have been to see some of these high-tech companies. The Titanic quarter is a good example of the growth that is taking place. I am delighted to hear the news that the right hon. Gentleman has announced. We are certainly happy to continue to work with the Executive.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents in Kettering were very worried when told by the Opposition that 1 million jobs would be lost in this country as a result of the Government’s attempt to rebalance the economy. Does the Secretary of State therefore share my delight in the latest figures from HM Treasury showing that since 2010 an extra 4,800 jobs have been created in Kettering—a massive 11% increase?

[Vince Cable]

My hon. Friend describes a trend that is apparent across the country. As I said a few moments ago, almost half a million new jobs were created last year, and I am delighted that Kettering is sharing in that positive story.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Every week when Parliament is sitting, I get on the train in one of the poorest parts of the European Union and get off in the richest, with a twelvefold difference in wealth per head between west Wales and inner London. Does the Secretary of State acknowledge that the only way to address this record of shame is to fiscally empower the nations and regions of the UK and have a deliberate strategy, as in Germany, to redistribute wealth between the wealthiest and the poorest parts?

[Vince Cable]

In many respects, the Welsh economy is sharing in the wider picture. Its unemployment rate is slightly lower than the national average. My hon. Friend the Member for Ceredigion (Mr Williams), who represents that area of Welsh Wales, is very active in promoting that part of the country, which benefits substantially from European assistance.

[Toby Perkins (Chesterfield) (Lab)]

The trend across the UK that the Business Secretary has just described is undermined by a report that shows it is 100 times easier to get a job in Cambridge than in Salford and that describes the gap as widening “dramatically”. The Public Accounts Committee exposed the incompetence and delays with the regional growth fund. Does not the Secretary of State know that every Tory Government leads to the imbalance in our economy not shrinking, but growing?

[Vince Cable]

Actually, the Greater Manchester local enterprise partnership is one of the best and most active and it is resulting in considerable improvements in that region. On the regional growth fund as a whole, we now have a formidable accumulation of results. We are talking about approaching £3 billion of commitments, 427 projects, more than 500,000 jobs safeguarded and created and, most important, £16 billion of private sector investment that has been brought in alongside Government money.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

4. What recent assessment he has made of the performance of UK Trade & Investment in supporting exports.

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[Neil Carmichael (Stroud) (Con)]

15. What steps he is taking to improve productivity.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The Government’s approach to raising productivity is to deliver macro-economic stability through a combination of monetary activism and fiscal restraint, while implementing a programme of long-term structural change through the industrial strategy. This is giving firms and individuals the confidence they need to invest.

[Neil Carmichael]

In my constituency, we have several modern and forward-thinking firms, such as Renishaw, Delphi and ABB, which are all keen to make sure that they can recruit skilled engineers and a skilled work force—[Interruption.] The Secretary of State has sat down now. Does he agree that the long-term economic plan is pivotal because it deals with the need to make sure there is a pipeline of well educated young people entering the labour market?

[Vince Cable]

I apologise for remaining standing; I was so gripped by the question, I could not tear myself away.

I commend my hon. Friend for establishing what I think he calls the Carmichael commission in his constituency to look at ways to improve growth. He is right that having a pipeline of skilled staff is essential. I am familiar with Renishaw and I shall see the company tomorrow at the MACH exhibition in Birmingham. The crucial requirement is a long-term train of apprenticeship, at graduate and sub-graduate levels.

[Kevin Brennan (Cardiff West) (Lab)]

Is the Secretary of State at all worried that the current economic picture is being driven so much by consumer spending, and why does our productivity remain so poor?

[Vince Cable]

The Office for Budget Responsibility forecast for 2014 is that business investment will rise by 8%. Given the depth of the crisis to which we have had to respond, this is a slow process, but business investment is now overtaking consumer spending as the driver of the recovery.

[David Mowat (Warrington South) (Con)]

16. What steps he is taking to support energy-intensive industries.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

The Government have in place several measures to address energy costs for these industries. The Budget announced a further £7 billion package of support including: extending the existing compensation scheme to 2020, under which we have distributed £30 million to 53 companies; new compensation for costs of the renewables obligation and feed-in tariff; qualified exemptions to the carbon price support mechanism for combined heat and power; and capping the CPS at £18 per tonne of carbon.

[David Mowat]

The Secretary of State will be aware that even after the welcome changes in the Budget, the carbon price floor in the UK is four to five times higher than in the rest of the EU, where the emissions trading scheme is more or less defunct. In addition, the EU has a system of more direct subsidy in countries such as Germany for these industries. Can he assure the House that he will be active in ensuring that our industries are supported in the same way as those in the EU are, and that the 900,000 jobs in energy-intensive industries are protected?

[Vince Cable]

Indeed, it is a major industry. My figures suggest that we have some 600,000 jobs directly or indirectly affected. It is a massive industry. We believe in it, and it is important that it is able to compete on a level playing field. That was the purpose of the changes announced in the Budget and we are now actively pursuing state aid clearance to make sure that these compensation mechanisms go through.

[Nic Dakin (Scunthorpe) (Lab)]

Does the Secretary of State now recognise that the Government’s ill-thought-through carbon floor tax was a mistake?

[Vince Cable]

Absolutely not. The only concern from the industrial point of view is that energy-intensive industries should have those costs offset. Under the mechanism the Chancellor has proposed, which we are now pursuing through the European Commission, they will be offset.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

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

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department’s objectives are to pursue economic growth and recovery by investing in skills and innovation.

[Paul Maynard]

As we have just heard, the carbon floor price in the UK remains significantly higher in the EU, despite the welcome changes in the Budget. What specific assessment has the Secretary of State made of the investment decisions taken by international energy-intensive companies, such as those that operate in my constituency?

[Vince Cable]

I think I largely answered that question a few moments ago, but the point I would emphasise is that despite the disadvantage of costs, albeit with the compensation we are now proposing, we have had very substantial investment in our energy-intensive industries. The steel industry, in particular, has been an exemplary example of long-term investment by Tata.

[Mr Chuka Umunna (Streatham) (Lab)]

In export week, will the Secretary of State tell us what he is doing to garner support among Cabinet colleagues for our seventh-largest export industry, a sector that generates more than £10 billion of income for our country?

[Vince Cable]

My colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) has given a comprehensive answer on how we are promoting exports across the board. The industrial strategy is, of course, maximising our export potential.

[Mr Umunna]

I am talking about higher education. The fact is that the right hon. Gentleman’s Government’s net migration target has done immense damage to higher education, contributing to a 51% fall in postgraduates coming from India and a 49% fall in those coming from Pakistan. Jim O’Neil, on the Department for Education’s board, agrees, saying that the Government are sending out a message that they are “not serious” about exporting education. The Parliamentary Secretary, Cabinet Office, the hon. Member for Orpington (Joseph Johnson) at No. 10 has argued, as we do, that legitimate students should be taken out of Government net migration targets, but is it not the truth that for all the talk from that Minister and the Business Secretary, both have let the sector down by failing to get their intransigent Home Secretary to see sense?

[Vince Cable]

The simple truth of the matter is that, as a result of discussions across the Cabinet and with the Minister for Universities and Science and myself, there is no cap on the number of overseas students. [Hon. Members: “There is.”] There is not. We want to maximise the number. We actively encourage them, and only this week there was a £1 billion contract signed with Saudi Arabia for higher education training in which we are a participant.

[Neil Carmichael (Stroud) (Con)]

T2. With the excellent news that manufacturing output year on year has increased by 3.8%, and with export week in mind, what steps is the Secretary of State taking to improve productivity so that we can further enhance the innovation of cutting-edge products and penetrate new export markets?

[Vince Cable]

That is a suitable rejoinder to the hon. Gentleman’s earlier question. The key point he made in his earlier question is that to drive productivity we need an adequate supply of trained people. I would add to that the emphasis we are placing on innovation and the establishment of the Catapult centres across the country. This is a new approach based largely on the German model and it is succeeding admirably.

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

T3. I am concerned that the Secretary of State has been told that the current redevelopment of Swan Hunter’s yard in Wallsend is not appropriate. Will he meet me, the elected mayor of North Tyneside and others from North Tyneside to learn exactly how external funding is being used to develop the site and how his Department could support the creation of thousands of jobs in advanced manufacturing at Swan’s?

[Vince Cable]

I am certainly very happy to give the hon. Lady an assurance to meet her in the House and to visit her constituency. I have been to Tyneside on several occasions and I am aware that it is a centre for advanced manufacturing. In many respects it is doing very well on the back of the growth of the oil and gas industry in the North sea. We clearly need more jobs on Tyneside and I am happy to work with her to deliver them.

[Greg Mulholland (Leeds North West) (LD)]

T5. Twenty-five years ago the then Government intervened in the pubs market, recognising that it was failing consumers and small brewers. However, as a result of industry lobbying, they failed to place a limit on the number of pubs, which led to the development of the large pubcos. Twenty-five years on, will the Secretary of State assure me that he will listen to the majority of MPs in the House of Commons rather than giving in to industry lobbying, and that he will introduce the market-rent-only option which is the solution offered by the Business, Innovation and Skills Committee?

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[Julie Hilling (Bolton West) (Lab)]

In answer to a written question I was told that the Government know next to nothing about the number of jobs they claim to have created, not even how many of them are new jobs rather than simply a transfer from the public sector, so why will the Secretary of State not tell us how many of these jobs are minimum wage, unpaid or zero-hours?

[Vince Cable]

We are perfectly happy to provide information where it is available. It is obviously easy to quantify jobs created in projects. Collecting a vast inventory of information on fluctuating wages is a much more difficult proposition.

[Mr Philip Hollobone (Kettering) (Con)]

May I commend to the Secretary of State “A Blueprint for Britain: openness not isolation” by Iain Mansfield who is a former employee of his Department? It was the winner of the prestigious Brexit prize by the Institute of Economic Affairs, and it concludes that

“if the right measures are taken the UK can be confident of a healthy long-term economic outlook outside the EU.”

[Vince Cable]

To correct the hon. Gentleman slightly, I think the gentleman concerned is employed by UK Trade & Investment, and he wrote this in his personal capacity, and it is perfectly reasonable to do so. I look forward to responding to his essay, which seems to me fundamentally mistaken, but no doubt we will argue about that.

[Jenny Chapman (Darlington) (Lab)]

When I visit schools in my constituency I ask them about the careers information, advice and guidance they receive and, without exception, they say that it is totally dreadful. To be fair to the Government, it was not much better under the previous Government. This is very important for social mobility, so what is the Minister intending to do to make face-to-face guidance available to everybody?

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[Karl Turner (Kingston upon Hull East) (Lab)]

The Minister of State, the right hon. Member for Sevenoaks (Michael Fallon), refused to answer me, but I wonder whether the Secretary of State could estimate how many of the 12 immediate beneficiaries of the fire sale of the Royal Mail are Tory party donors?

[Vince Cable]

It is not my job to collect information on the Conservative party’s funding. All I can tell the hon. Gentleman is what the Minister of State has already told him: that a majority of the shares allocated to priority investors are still held by them and a substantial majority of the shares in Royal Mail that were issued through the initial public offering are being held by long-term institutional investors.

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

The start-up loan scheme is one of the most inspirational business policies that this Government are pursuing. Can the small business Minister confirm that we are right behind it, we are putting more money into it and we will do everything we can to grow the scheme as much as possible?