Oral Answers to Questions

Vince Cable Excerpts

Thursday 8th July 2010 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

3. What factors he took into account in deciding to withdraw the £80 million loan facility to Sheffield Forgemasters.

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

The decision not to pursue the loan was taken on grounds of affordability.

[Mr Betts]

Will the Secretary of State withdraw the entirely false accusations that were levelled at Graham Honeyman, the chief executive of Sheffield Forgemasters, that he was not prepared to sell any shares in the company? The reality is that the loan facility went alongside a private finance package involving equity release. What Graham Honeyman and the workers, 65% of whom own shares in Forgemasters, did not want to do was sell the company off to an absentee owner, given that they had rescued it from an absentee owner and near-bankruptcy in 2005. Will the Secretary of State withdraw the accusations against Graham Honeyman and recognise that he has resurrected that company and that it would do even better in future if it had the loan alongside a package involving equity release?

[Vince Cable]

The Government’s decision has absolutely nothing to do with the issues that the hon. Gentleman has raised. We regard Mr Honeyman and his team as having produced an excellent project. We have no criticism of him or the company. Officials in the Department are now working to try to help to achieve a private sector solution.

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

I yield to no one in my admiration for Graham Honeyman, having visited Sheffield Forgemasters when I was shadow Minister following the floods that devastated the company. However, will my right hon. Friend explain why, of all the grants and loans issued by Yorkshire Forward, north Yorkshire gets less than the 11% share to which it would be entitled and—

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[Mike Crockart (Edinburgh West) (LD)]

11. What recent steps he has taken to increase access to finance for small businesses.

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

The coalition is committed to ensuring the flow of credit to viable small and medium-sized enterprises. The emergency Budget contained several measures, including the enterprise finance guarantee, the growth capital fund and the enterprise capital fund. However, unlike the previous Government, we are addressing proactively problems in the banking sector before rather than after they irreparably damage the economy.

[Mike Crockart]

I thank my right hon. Friend for his response. Is he aware that, in my constituency, some small businesses that have successfully managed to gain access to finance are now being prevented from using that, because a bank in which the taxpayer has a significant interest has scaled back its willingness to be exposed to joint liability with small, family-run suppliers? Will he agree to take time to meet me to discuss that?

[Vince Cable]

I am very happy to meet my hon. Friend to discuss that problem, which is happening all around the country. As it happens, in his constituency, I believe that nine companies have taken up the enterprise finance scheme—654 companies in Scotland have done likewise—and have drawn more than £1 million from it, but I recognise the problem. Actually, I think I met the chief executive of the bank to which I believe my hon. Friend is referring last week. I am aware of the enormous frustration in many small-scale enterprises, and I will continue to pursue the matter.

[Mr Dennis Skinner (Bolsover) (Lab)]

What help will the Secretary of State give to those small and medium-sized businesses that were hoping to take part in the building of 700 schools, including one in Tibshelf in my constituency? Does he not understand that public sector cuts equals private sector misery?

[Vince Cable]

I think that the hon. Gentleman is conflating two massively different issues. I have many responsibilities—this is a very big Department—but school building, mercifully, is not one of them. However, he raises the more basic question of bank lending. Of course, there is an enormous problem, despite very high approval rates through the banking system. I am discussing with the Chancellor how we can improve the supply of capital, and there will be a paper before the summer on the different streams that we can energise to get capital flowing into good companies.

[Ann McKechin (Glasgow North) (Lab)]

12. What plans he has for the future funding of university-based research.

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

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 responsibilities include helping to drive growth, including by rebalancing the economy; building on the strengths of manufacturing, the knowledge industries, and the science and research base; helping businesses to grow by getting rid of excessive regulation and ensuring that they can access credit; being open to trade and foreign investment; and encouraging the development of a skilled and educated labour force.

[Annette Brooke]

Does the Business Secretary share my concern that, with the ending of the cheque guarantee card scheme next year, the demise of the cheque will be hastened, affecting very small businesses and, of course, the elderly? What action, if any, can he take in conjunction with his Treasury colleagues?

[Vince Cable]

I do share my hon. Friend’s concerns. As she knows, the decision originated last June with the Payments Council, which is an independent body. The decision was based on the fact that there had been a dramatic fall in cheque use, from 11 million a day in 1990 to 3.5 million. However, the Government recognise that there are large numbers of individuals, small companies and charities for whom the cheque is an extremely important way of making transactions. The Payments Council is an independent body, but we are trying to ensure that it has alternatives in place, so that people are not greatly disadvantaged by the change.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

May I ask the Secretary of State about an important area for consumers and businesses—the future of mobile broadband internet? As he will know, it is growing exponentially, and is hugely important for consumers and businesses. Will the Government therefore put an end to the uncertainty on the issue that has been created since the election, and proceed with the statutory instrument on the planned future spectrum option, which can make the sector grow in the UK? That measure, which was put together by the Labour Government, would have ensured fair competition through caps on the amount of spectrum that could be bought by a single operator. There has been great uncertainty on the issue since the election. Do the Government accept that it would be wrong to have that option in place in a way that squeezed out competition, and will they therefore set out their plans?

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[Jack Dromey (Birmingham, Erdington) (Lab)]

Can the Secretary of State clear up the confusion on the future of regional development agencies that has arisen out of conflicting statements? On the one hand, there is an apparent open-mindedness on the part of the Secretary of State; on the other, his counterpart in the Department for Communities and Local Government has taken a more hard-line and ideological approach. If there is a desire in any region, including the west midlands, for the retention of a strong regional structure—albeit with sub-regional arrangements, including local employment partnerships—will the Secretary of State be open to the retention of a strong regional development agency there?

[Vince Cable]

There is absolutely no conflict, dispute or ideological perspective involved in this at all. We have made it clear that all the RDAs will be replaced by local enterprise partnerships. They will have a change in function from the current RDAs. We have also made it clear that if there is a will in a region to operate on a regional basis, a regional structure can emerge. The Minister of State, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), will shortly produce a White Paper setting out how the regional process will develop.

[Dr Julian Huppert (Cambridge) (LD)]

T3. I have been made aware recently of a number of cases of academic visitors coming to the UK, often for only a few days, and being denied visas for their entry. Will the Minister meet the Home Secretary to work out a new protocol for treating these people? Will he also meet me to talk through the issue, so that we can ensure that the reputation of British educational research is supported and not weakened?

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

T4. Does the Secretary of State appreciate the real need of ports such as Hull to upgrade to cope with green energy production? Is the £60 million promised by the Labour Government still on offer, or does he dismiss it as a cynical Labour election ploy, as he has done with Sheffield Forgemasters?

[Vince Cable]

As the hon. Gentleman knows, there was an announcement in the Budget on commercial rates, which was a big issue for those ports. We are anxious to help the development of green investment and, as he will know, we are studying a proposal for the green investment bank, which could well become a vehicle for good projects in that sector.

[Andrew George (St Ives) (LD)]

T5. I was listening carefully to the Minister’s earlier response to the question on penalty charges applied to personal bank account holders who occasionally stray into unauthorised overdraft. Bearing in mind the Supreme Court’s decision last year, which has resulted in a very unsatisfactory situation, does the Department intend to review the situation and, indeed, intervene to protect those personal account holders who find themselves in difficulty?

[Vince Cable]

There certainly was a problem of serious overcharging, and it was pursued through the courts by the Office of Fair Trading. I am going to meet the director general of fair trading very soon, and I shall try to establish whether any action needs to be taken by the Department, as opposed to through the legal channels that have been pursued so far.

[Yvonne Fovargue (Makerfield) (Lab)]

What assessment has been made of the impact of front-line services in local citizens advice bureaux, such as my own in Makerfield, of the £2.5 million cut to Citizens Advice?

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[Toby Perkins (Chesterfield) (Lab)]

The Secretary of State will be aware that of all the important things for small businesses, the most important of all is that people have enough money to buy their products. In that light, what impact does he think the increase in VAT will have, particularly on the retail sector, which relies so much on people having the money to purchase products?

[Vince Cable]

The Budget made it very clear that the value added tax increase is part of an overall process of reducing our enormous deficit, and it will lead to the strengthening of the British economy in due course. Those who criticise the VAT increase have to explain whether they are recommending that we make even deeper cuts in public spending instead.

[Laura Sandys (South Thanet) (Con)]

T8. Will the Secretary of State meet a group of seaside MPs whose constituencies face very specific challenges both in job creation and in new business start-ups? Could we further discuss how to boost domestic tourism, which plays such an important part in the economy of my South Thanet constituency?

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

Will the Secretary of State confirm whether he will go ahead with previous plans to introduce financial incentives of about £5,000 for people buying new electric vehicles?

[Vince Cable]

No, I cannot confirm that because the decision is still awaited, and it lies with the Department for Transport. Only last week, I attended a major series of events with the automotive industry, which impressed on me the importance of this decision in order to promote electric power. I fully understand the rationale behind it, but I cannot confirm the decision today.

[Gordon Birtwistle (Burnley) (LD)]

The university campus at Burnley college has developed what it believes to be the most advanced wind turbine in the world. The previous Government were asked to fund further research on it, which they refused, so will the Minister visit this project and look at the possibility of helping to develop it further?

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[Vince Cable]

I met Dr Ratan Tata when he came through London. We have not had detailed discussions on the future of the steel project—we remember the consequences of the closure on Teesside—but we support the continuation of training for those redundant workers who require it and have not found their own way following redundancy.

[Mr Marcus Jones (Nuneaton) (Con)]

The Minister may be aware that the selections for the UK WorldSkills squad are due to take place in anticipation of the 60th WorldSkills competition, held in London next year. One of the selection events is taking place in my constituency at the excellent North Warwickshire and Hinckley college during November. Will the Minister consider accompanying me on a visit to the college during that week, to see the excellent work that the students are doing?