Oral Answers to Questions

Vince Cable Excerpts

Thursday 8th January 2015 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

1. What steps the Government are taking to increase the value of the minimum wage and encourage firms to pay the living wage.

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

On our return to Business questions after the break, may I wish you, Mr Speaker, and all Members a happy new year? I am sure that the thoughts of everybody in the House this morning are with France and, in particular, with the relatives and friends of those who were killed and injured in the appalling terrorist atrocity yesterday.

Last year, the Government announced the first above inflation increase in the national minimum wage since the 2008 banking crisis, benefiting more than 1 million workers. Since 1 October 2014, full-time minimum wage workers have seen an annual cash increase of £355 in their pay packets, and we expect real-terms increases to continue as the economy recovers. We support employers paying the living wage where it is affordable and not at the expense of jobs.

[Kerry McCarthy]

I thank the Secretary of State for that response. He will know that for every £1 that employers pay above the minimum wage to lift workers to the living wage, the Treasury reaps 49p in reduced benefits and increased tax revenues. Why will his Department not consider using that increased revenue to incentivise businesses to pay the living wage for the first 12 months, as Labour is proposing with its make work pay contracts?

[Vince Cable]

It is precisely because of that revenue wedge that the Government have invested so much resource in lifting the threshold so that low-paid workers are not caught in taxation. That has substantially alleviated the pressure on the living standards of low-paid workers.

[Mr Philip Hollobone (Kettering) (Con)]

It is really very important that minimum wage legislation is enforced, as those in receipt of the minimum wage tend to be at the bottom of organisations and among the lowest paid. What sanctions are being used on those at the top of organisations who receive the highest pay—the board directors—when minimum wage legislation is not being followed?

[Vince Cable]

There is a legitimate concern about high pay as well as low pay, which is why the Government introduced reforms of executive pay, with a binding vote on executive pay by shareholders, significantly strengthening the Government’s powers to ensure that shareholders exercise proper responsibility over top pay.

[Mr Frank Field (Birkenhead) (Lab)]

The Secretary of State talks about relieving pressures on the living standards of the lowest paid, but is he aware that the all-party parliamentary group on hunger and food poverty in Britain found, to its surprise, that a number of people using food banks were on the minimum wage? Might he not therefore use whatever powers he can to press those sectors of industry that could pay the living wage, such as banking and finance, to do so?

[Vince Cable]

I suspect that relatively few people are on the minimum wage in the banking and finance sectors, but we support the living wage for those companies that can afford it and are not putting people out of work. My responsibilities are more in respect of strengthening the minimum wage and making enforcement tougher. We are doing that and we are signalling to the Low Pay Commission that we respect its independence but are looking forward to real-terms increases in the minimum wage in the future.

[Paul Blomfield (Sheffield Central) (Lab)]

In a debate in Westminster Hall on the widespread abuse of employment practice for care workers, the Secretary of State’s colleague, the Minister of State, Department of Health, the right hon. Member for North Norfolk (Norman Lamb), said that he was pressing the Department for stronger enforcement against illegal practices. What is the Secretary of State’s Department doing about it?

[Vince Cable]

I worked actively and closely with my colleague in the Department of Health on this issue. There are two issues involved: minimum wage enforcement and ensuring that we have tougher legislation to deal with some of the practices that operate in that sector, such as zero-hours contracts. At the moment, we are looking more widely at employment rights for groups of people who are classified as workers but who do not currently enjoy those rights. The care sector is one such group.

[Yvonne Fovargue (Makerfield) (Lab)]

2. What recent assessment he has made of the effect of copycat websites on consumers.

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

5. What progress his Department has made on creating a low-carbon economy.

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

The Government have taken strong action to create a low-carbon economy, including setting up the Green Investment Bank and a catapult centre dedicated to new renewables, and electricity market reform. Through the Department’s industrial strategy, we are working with industry to increase green jobs via sector-specific strategies for the offshore wind and nuclear industries.

[Miss McIntosh]

Although I welcome the Government’s commitment to green energy and a low-carbon economy, surely there must be a better way of achieving that than hydraulically fracturing for fossil fuel such as shale gas, which causes huge environmental disbenefits.

[Vince Cable]

I am aware of the hon. Lady’s concern about the areas of outstanding natural beauty in Yorkshire, which she represents. There is indeed an expression of interest, but there are very strong environmental and safety protections around shale gas drilling, and I am sure she will look forward to the extra development that this will produce in her constituency in due course.

[Clive Efford (Eltham) (Lab)]

The Environmental Audit Committee says that our investment in renewable energy is growing at half the rate it needs to grow at to meet our future energy needs. What is the Secretary of State doing about that?

[Vince Cable]

My understanding is that investment in renewable energy is double what it was in the previous Parliament. There are certain aspects of new renewables where we lead the world, including offshore wind.

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

Does the Secretary of State realise that if we are to have a low-carbon economy, he and his Government have to start taking investment in higher education seriously? I chair the Engineering and Physical Sciences Research Council’s committee on sustainable production. If we do not put more money into postgraduate education, and if we do not support higher education and get away from this crazy system where all higher education relies on a mountain of student debt, we are heading for terrible trouble.

[Vince Cable]

That is a rather creative stretch to the low-carbon economy, but specifically on postgraduate education, the hon. Gentleman will be aware that we have just introduced a postgraduate loan scheme for the first time.

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

6. What steps he is taking to increase the number of apprenticeship places through Government procurement.

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[Kelvin Hopkins (Luton North) (Lab)]

9. What recent assessment he has made of the effect of the UK’s EU membership on businesses and the UK economy.

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

The European single market gives British firms access to 500 million consumers and, as our largest trading partner, is responsible for almost half this country’s exports. There is a clear direct benefit to British businesses from European Union membership.

[Kelvin Hopkins]

Britain has an enormous and persistent trade deficit with the EU, equivalent to about 1 million lost British jobs. The growing crisis in the eurozone will only make the position worse, and there is no end in sight to its economic problems. What are the Government going to do to protect Britain’s economic interests in this dire situation?

[Vince Cable]

I am surprised that the hon. Gentleman does not share the consensus among Opposition Members about the benefits of British membership. I am sure that if he occasionally crosses the border into Luton South and visits the vehicle production institution, he will recognise the EU’s importance to the industry and of its having the European Union negotiate access to bigger markets such as north America, as it currently is.

[Ian Murray (Edinburgh South) (Lab)]

In a recent article in The Times, a host of senior Cabinet members, including the Foreign Secretary, the Chief Whip, and even some Ministers in the Secretary of State’s own Department, stated that they would campaign for an “out” vote in any EU referendum. In the same article, another Cabinet member was reported as saying:

“It would be a continual distraction from…work on the economy”.

Given that, as the Secretary of State said, the EU is one of our largest trading partners, what is his view on the impact on UK trade and jobs in the event of, first, an EU referendum, and, secondly, exit from the EU?

[Vince Cable]

That unnamed member of the Cabinet was probably me; I did take a different view. None the less, I do have common ground with my Government colleagues in believing that the European Union needs to be reformed in quite radical ways. We need to deepen the single market, to reach trade agreements with other countries, and to reduce much of the bureaucracy that surrounds commercial activity.

[Robert Flello (Stoke-on-Trent South) (Lab)]

10. If he will make greater use of Government procurement to increase innovation and develop supply chains.

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[Andrew Jones (Harrogate and Knaresborough) (Con)]

14. What steps he is taking to increase the number of engineers.

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

The Government are making a series of interventions to increase the number of British engineers—from trailblazer apprenticeships in engineering, manufacturing and automotive sectors to national colleges in advanced manufacturing, high-speed rail, nuclear, oil, gas and wind, with £30 million of funding to address employers’ skills shortages in engineering and £200 million of capital investment in science, technology, engineering and maths teaching facilities in higher education.

[Andrew Jones]

I thank my right hon. Friend for that reply. What more is he doing to inspire younger people, particularly younger women, to take up engineering careers?

[Vince Cable]

I am aware of my hon. Friend’s interest in the issue. Harrogate college recently benefited from significant investment in vocational education. He asks how we promote the message about engineering, particularly to women, who are massively under-represented in the sector. I pay tribute to the STEM network of volunteers; there are about 28,000 of them, and 40% are women. We hope that through that process of campaigning, and visits to schools and education institutions, we will gradually turn this unsatisfactory situation round.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

The UK automotive industry has had another good year, which is welcomed across the House, but it now needs to recruit even more engineers. What is the Automotive Council UK doing to promote the industry to the next generation of engineers?

[Vince Cable]

The Automotive Council UK is one of the success stories of industrial strategy. There is a great deal of commitment from industry and, indeed, on both sides of the House. The talent retention scheme is working well: if engineers are lost in particular sectors of the economy, they are speedily re-employed elsewhere and the skills base—which, as my hon. Friend implies, is inadequate—is maintained.

[Rehman Chishti (Gillingham and Rainham) (Con)]

16. What support he is providing to businesses wanting to take on apprentices.

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[Heidi Alexander (Lewisham East) (Lab)]

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

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

My Department plays a key role in supporting the rebalancing of the economy through business to deliver growth, while increasing skills and learning.

[Heidi Alexander]

May I press the Minister further on the question of apprenticeships? Not only did the pay survey expose some concerning trends, it also showed that one in five apprentices do not actually receive any training. Given that most people’s idea of an apprenticeship is a placement that combines on-the-job work experience and a specific training programme, I find that deeply concerning. What percentage of the Government’s apprenticeships are not really apprenticeships at all?

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[Mr Chuka Umunna (Streatham) (Lab)]

Following on from the question from my hon. Friend the Member for Coventry South (Mr Cunningham), does the Secretary of State agree that to hear that your job has been put at risk of redundancy not from your employer, but while watching the television news with your family on Christmas day—as was the case with the City Link workers—is an utterly appalling way to be treated?

[Vince Cable]

I certainly agree that for the 2,300 workers involved it was a very sad and dispiriting event. The company can answer for its behaviour, but the fact is that it was no longer viable and was put into administration. [Official Report, 16 January 2015, Vol. 590, c. 9MC.]

[Mr Umunna]

With so many unanswered questions for employees and contractors of City Link, the entire affair stinks. Why, for example, if the firm was technically insolvent on 22 December, as has been reported, was it planning to trade until 26 December? Is it true that contractors were told that rumours of it going into administration were false? Why was a new subsidiary set up on 9 December?

The administrators will do their work and no doubt make a D1 filing with the Department. Given the numbers involved and the public interest in the administration, will the Secretary of State commit to conducting a full and proper inquiry into the matter, as he did with Comet? Those who have lost their jobs and contractors who are owed money deserve nothing less.

[Vince Cable]

The difference with the Comet case is the allegation of serious misconduct by directors, and that may or may not be the case with City Link. In six weeks, the administrator will make a report to our Insolvency Service and, depending on what that says, we may want to initiate an investigation, but let us wait and see the findings of that. [Official Report, 16 January 2015, Vol. 590, c. 10MC.]

[Mary Macleod (Brentford and Isleworth) (Con)]

T6. There have been more than 500 apprenticeship starts in my constituency in the past year, but I want to increase that figure. What more can we do to ensure that businesses support, and schools promote, apprenticeships?

[Mr William Bain (Glasgow North East) (Lab)]

T2. Five hundred of the City Link redundancies are in Scotland. Does the Secretary of State share the outrage of the Scottish people at the way the workers have been treated and the fact that the taxpayer is expected to pay for part of the multimillion pound redundancy bill? What is he doing to help the workers and their families, in Scotland and across the UK, who have been devastated by this news?

[Vince Cable]

The taxpayer is, of course, always responsible for statutory redundancy and this case is no different. I have talked to the head of the union and the secretary-general of the Trades Union Congress on how to deal with the implications for the labour market. The labour force is very widely distributed across the UK with no major concentrations, but where there are, and if there are people who really need help with finding employment and reskilling, we are certainly willing to do the maximum we possibly can to help.

[Mr Robin Walker (Worcester) (Con)]

T7. The ringing of tills, especially among small independent shops, should always be welcome in this nation of shopkeepers. In the last week of December, Worcester’s high street saw a 13% increase in footfall. That is very welcome. Small shops in Worcester are looking forward to the £1,500 discount to business rates this year. May I urge the Minister, as the Government consider further reform to business rates, to ensure that small businesses continue to benefit?

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[Philip Davies (Shipley) (Con)]

Given our huge trade deficit with the EU, will the Secretary of State tell us why he is so certain that were we to leave the EU, it would stop free trade with us? Or is it that kind of woolly thinking that has led to his removal as his party’s economic spokesman at the general election?

[Vince Cable]

I actually remain as our economics spokesman, but that is a minor internal matter.

I think that most Conservative Members fully support British membership of the EU; they might wish to see it reformed, as I think we all do, but membership is fundamental. It is difficult to imagine that Britain could independently negotiate trade agreements with the US, India and other countries with the same authority as the EU.

[Roberta Blackman-Woods (City of Durham) (Lab)]

T8. In the Government’s opinion, at what level of RAB—resource accounting and budgeting—charge does the student loan system become unsustainable?

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[Vince Cable]

I happily join the hon. Gentleman in that tribute. I have been to Alstom and seen its advanced electrical equipment manufacturing—it is one of the best in the world—and it is a tribute to the policies we have pursued that it wishes to expand its investment here.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Given that Brent crude has dropped to $50 a barrel—40% of what it was—I am surprised there was not one question on the Order Paper about the effect of that on the supply chain, which is the responsibility of the Secretary of State; I know he knows this. My right hon. Friend the Member for East Renfrewshire (Mr Murphy), the new leader of the Labour party in Scotland, is calling for a summit to cover not just offshore but the supply chain factors affected by this collapse in the oil price. Will the Secretary of State join that summit and help not just the offshore industry but the supply chain, which is also affected?

[Vince Cable]

We understand the importance of that question. One of the sectoral groups in our industrial strategy is specifically concerned with the oil and gas supply chain. The companies around Aberdeen in particular are among the world leaders and could be seriously hit by the contraction of investment. Certainly, we will be getting that group together quickly and making an assessment of what it means. It is important to think long term, of course, as much of the industry does; temporary fluctuations in price are not necessarily as damaging as the hon. Gentleman might believe.

[Mr Philip Hollobone (Kettering) (Con)]

In 2010, the European Union sold to this country £28 billion more in goods than we sold to it. By the end of 2013, this massive figure had risen to £56 billion. Over that period, however, unemployment in this country has fallen significantly. Does that not destroy the Liberal Democrat myth that 3 million UK jobs are dependent on EU membership?

[Vince Cable]

What an extraordinarily primitive view of economics to believe in narrow bilateral balances of trade! One thing that should be said is that we are dealing, of course, not just in goods, but in services, where Britain has a major competitive advantage.

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

Does the Secretary of State approve of, and will he support, the campaign of the all-party group on manufacturing to find a great export in each of the 650 constituencies? Will he back that? It is a cross-party initiative; it has raised the profile of British exports; and I think it is a very good idea.

[Vince Cable]

I am very happy to support it. I remember that a couple of years ago, the hon. Gentleman asked every individual MP to identify companies in their constituencies that had made major manufacturing innovations. I praise the work that this all-party group is doing.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Secretary of State has agreed to see my hon. Friend the Member for Coventry South (Mr Cunningham) and me on Monday on the question of City Link. We are grateful for that and look forward to meeting him. Will he take the opportunity now, at probably the last question of this Question Time, to make clear personally how much he deprecates the cynical and disgraceful behaviour of the owners of City Link and put that on the record? No behaviour like this can be justified in the 21st century—it belongs to the 19th century, if it belongs anywhere at all. Will he make that clear today?

[Vince Cable]

Giving lectures in that way is probably not helpful. I need to establish the facts about what has happened. Very serious allegations have been made, and we need to get them properly investigated. It needs to be said for the record, of course, that this is a company that was losing money under a variety of ownerships for as long as five years, so its future has been in question for a long time.