Vince Cable
Main Page: Vince Cable (Liberal Democrat - Twickenham)Department Debates - View all Vince Cable's debates with the Department for Education
(13 years, 11 months ago)
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Nigel Adams (Selby and Ainsty) (Con)
2. What plans he has for the future of his Department’s provision of business support.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Department’s plans for supporting business are being developed in a growth review looking at all the barriers to private sector investment growth and job creation—in particular, access to finance, planning and regulation. I shall be specifically working to support business through the regional growth fund, establishing the green investment bank and launching technology and innovation centres.
Nigel Adams
In the early 1990s, when I set up my first business, I received a small weekly grant through the successful enterprise allowance scheme. It was only £20 a week—but in those days people could fill up their cars with fuel for £20 a week. It was enormously helpful in supporting the early stage of the business. Can the Secretary of State give me, and constituents of mine who are thinking of setting up a small business, any indication that the Government will introduce a similar scheme?
Vince Cable
I can give my hon. Friend that assurance: indeed, we have already done so. In October my colleague the Secretary of State for Work and Pensions launched a new enterprise scheme to help precisely the category of people that my hon. Friend describes. It will provide mentoring and funding of up to £2,000, including a weekly allowance and access to a start-up loan.
Mr Denis MacShane (Rotherham) (Lab)
Does the Secretary of State agree with Winston Churchill’s formulation that he would
“rather see finance less proud and business and industry”
more confident? Does he think that the grovelling capitulation of his Bullingdon club colleagues to the banks this week really upholds that principle?
Vince Cable
Mr Churchill’s views have much to commend them, and they are still relevant in many ways. Certainly, we wish to see manufacturing promoted and finance working in support of it rather than against it.
George Freeman (Mid Norfolk) (Con)
The Secretary of State shares my view that the life sciences are a key part of the UK small business sector. Does he share my concern that on the basis of the initial representations from the new local enterprise partnerships, there appears to be a lack of appreciation of the importance of joined-up national work on life sciences? Will he agree to meet me and a delegation from the UK life sciences network to talk about how we can ensure that life sciences are properly built in?
Vince Cable
I would certainly be very happy to meet the hon. Gentleman. As it happens, as part of the growth review, life sciences and related activities are subject to close scrutiny, and I know that my colleague the Minister for Universities and Science is giving the matter a very high priority.
Mr Jim Cunningham (Coventry South) (Lab)
3. What steps he is taking to increase employment levels in the manufacturing sector; and if he will make a statement.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Chancellor and I are currently in discussions with the banks and are seeking an agreement for them to lend verifiably more than they were planning to viable businesses, especially SMEs. We want more competition in business banking, which is why we have set up the Independent Commission on Banking and we are supporting alternatives to bank lending, such as the equity-based enterprise capital funds.
John Glen
I thank my right hon. Friend for his reply. My constituent Neil Carden recently visited a Department for Business, Innovation and Skills summit. When giving me feedback, he said that despite my right hon. Friend’s efforts to improve SME access to finance through the enterprise finance guarantee scheme, the more important issue of the continuing risk-averse culture among banks remains unchecked. Given my right hon. Friend’s recent comments about the armoury of weapons he has at his disposal, could he set out which ones he is going to use to tackle that culture and get banks to lend more to small businesses?
Vince Cable
My hon. Friend successfully ran a family business for some years, I believe, so he understands risk management. Clearly, in the banking sector, in many cases banks took extraordinary risks in commercial and domestic property and derivatives. It is right that they should be conscious of risk, but to some extent they have lurched to the other extreme. That is one of the reasons why the Chancellor and I are discussing how to maintain a steady flow of credit to viable enterprises.
Christopher Pincher
May I continue the theme begun by my hon. Friend the Member for Salisbury (John Glen) and tell my right hon. Friend about an SME in Tamworth called Summit Systems? Although that company has never been in debt it is finding it very difficult to access a normal bank loan, and it does not qualify for the £1 million-worth of regional growth fund funding because it does not need that sort of capital. What can my right hon. Friend do to ensure that smaller amounts of funding are made more readily available to organisations such as Summit, and will he encourage the new Greater Birmingham LEP to take these issues very seriously?
Vince Cable
I hope that the LEP will take this matter seriously. My hon. Friend is right to say that the regional growth fund has a limit of £1 million, which precludes small businesses from applying directly. None the less, the company he mentioned and others do have access to, for example, the enterprise finance guarantee scheme. I think that 37 companies in his constituency have already drawn £4 million from that source.
Mr John Denham (Southampton, Itchen) (Lab)
In September the Secretary of State said:
“If banks are saying to us they have got lots of money to spread out on bonuses…at a time when they are constricting credit to small and medium enterprises, then the government may have to use some form of taxation to change their behaviour”.
The whole House knows, and has already heard this morning, that small businesses are still finding credit too hard to get and too expensive when they do get it. The Government have given up on bonuses. The chief executive of Lloyds is purported to be getting £2 million after he has left his job, so why is taxation on the banks being cut?
Vince Cable
The right hon. Gentleman was present on Tuesday when the Chancellor gave a very clear statement of our current position in dealing with the banks, and made it very clear that nothing was off the table. However, the right hon. Gentleman is quite right: there is an issue for small-scale business in relation to credit supply as well as lack of demand. We are trying to remedy that through the discussions that we are having.
Mr Denham
The truth is that, for all his hollow rhetoric, the Secretary of State has failed small businesses. He promised that the banks would be taxed more if they did not lend. They are not lending, yet taxes are being cut. He has damaged small businesses with the chaotic abolition of regional development agencies, he has excluded small businesses from the regional growth fund, and he promised to publish a growth plan, but could not do so because his civil servants said there was nothing to put in it. The Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) is reduced to telling Members of Parliament that they will have to write to the banks to help their small businesses, and now the Secretary of State has lost the part of his Department that supports small businesses in the digital economy for no other reason than that he is not a fit and proper person to take the biggest competition policy decision we will see for years. Everyone knows that he is hanging on to his job by a thread, waiting for the Prime Minister to cut it.
Vince Cable
The right hon. Gentleman has obviously been trying to polish that intervention for the past three weeks; it is getting a bit stale. The simple truth is that if he had read the latest small business survey, he would have seen that rapid growth is taking place and more jobs are being undertaken—300,000 in the past six months, almost all of which are in the small business sector. That is the sector that will drive the British economy forward and achieve the recovery that this Government have achieved.
Simon Hughes (Bermondsey and Old Southwark) (LD)
Next week I will meet a small business man in my constituency who runs a plumbing business employing 10 people, and whose current finance is under threat of being removed by a bank. If we do not succeed—as I hope we will—in negotiating continued finance, what remedies are there to allow small businesses to get support in their battle, given that the Government are very clear about this, and that we need the banks to deliver?
Vince Cable
My right hon. Friend is absolutely right; many companies are in that position. He will be aware that the banking taskforce recently produced a whole set of remedies for companies such as the one that he described, which have had bad experiences with banks and wish to pursue an appeal.
Andrew Miller (Ellesmere Port and Neston) (Lab)
The Secretary of State will realise that we now have a good opportunity to strengthen the supply chain in the automotive sector. However, unless he comes out with a clearer policy position on longer-term finance for medium-sized businesses, that will not happen. What is he going to do to strengthen the supply of finance?
Vince Cable
I am aware of the importance of the automobile industry in the hon. Gentleman’s constituency, where I have seen the excellent Vauxhall operation. Specifically, we are working through the Automotive Council, of which I think he is aware, and with which all the leading manufacturers in the UK are associated. One of its earliest decisions was on deepening the British supply chain, and several companies have already reported that that process is happening in a positive way.
Mr Sam Gyimah (East Surrey) (Con)
I thank the Secretary of State for his answers so far on bank lending. A lot of risky start-up businesses still rely on business angels and friends and family to invest equity. What are the Government doing to plug that equity gap so that people can start up new businesses, employ people and get the economy growing?
Vince Cable
The hon. Gentleman is an authority on this; I think that he was entrepreneur of the future several years ago. We do have the growth funds that provide equity. He may also have noticed that as a result of our discussions with the banks, they have established an equity fund in order to achieve precisely the aims that he describes.
Ian Austin (Dudley North) (Lab)
9. When he expects the independent advisory panel to meet to consider applications to the regional growth fund.
Mr Chuka Umunna (Streatham) (Lab)
11. What discussions he has had with representatives of the banking industry on payment of bonuses since 21 December 2010.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I meet the banks frequently to discuss a range of issues, remuneration being one of them. As confirmed by the Chancellor on Tuesday, he and I are in discussions with them to see whether we can reach a new settlement in which banks show restraint and pay smaller bonuses than they would otherwise have done, and demonstrate greater transparency and disclosure.
Mr Umunna
On 23 November the Business Secretary said:
“Transparency is key to creating confidence in any commitment from our banks to behave more responsibly on pay”.
Yet his efforts in Cabinet to implement a City pay and bonus disclosure scheme have come to nothing. On 19 December he was still claiming:
“There is much more disclosure in some other Western countries, and this is something we can do, something I can do.”
Yet the Chancellor will not allow him to do anything. Does not the Government’s inaction on this issue demonstrate that we have a Business Secretary in office but increasingly out of power?
Vince Cable
The hon. Gentleman tells a very interesting fictional story about Cabinet discussions. On transparency, we have a system of disclosure in this country for directors of public companies, as I am sure he is aware.
Vince Cable
In relation to banking, we are looking in our discussions at how to strengthen the system in line with international practice.
Mr Edward Leigh (Gainsborough) (Con)
Does the Business Secretary acknowledge the contribution made to the economy by the 1 million people working in the UK financial sector, who contribute £25 billion in taxes every year, on top of the staggering £54 billion contributed to the UK economy by the financial sector. That is essential for schools and hospitals. Will he defend the sector that he is charged with promoting?
Vince Cable
My hon. Friend is absolutely right. That is a massive sector of the UK economy and it makes a major positive contribution. It is unfortunate, in a way, that its reputation has been so damaged by activities in a handful of banks.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Secretary of State has been right to say that as long as the taxpayer acts as a guarantor of the banking industry, the Government have a legitimate interest in remuneration, specifically in banks in which the state has a large stake. Will he therefore tell the House what he and the Chancellor mean when they say that no option will be taken off the table if the bonus round is not agreed to the Government’s satisfaction? In other words, what specific actions will the Government take if they are not satisfied with the outcome of the bonus round?
Vince Cable
The right hon. Gentleman poses the problem absolutely correctly. The reason why bonuses are an issue—they are not one to anything like the same degree in other industries—is that some banks are publicly owned and others are guaranteed. The remedy lies in the work of the Independent Commission on Banking, which reported last year on issues such as generating competition and the possible break-up of particular institutions.
Mr Philip Hollobone (Kettering) (Con)
May I say to the Secretary of State that big bank bonuses are entirely inappropriate when lending to small and medium-sized enterprises is not taking place as it should? Only this week I was told of a business franchisee in Kettering who was told by Barclays bank that his account, which had been in credit for five years, would be closed unless he paid an annual fee of £25,000 because of spurious new audit requirements—which, when he looked into it, were completely false. He has been lied to by Barclays bank, and its chief executive should not get a bonus.
Vince Cable
Indeed, it would help if bonuses, where they exist, reflected performance in lending to the good companies that my hon. Friend describes. That is precisely why the Chancellor and I are discussing how we will ensure a proper flow of credit to those excellent enterprises, which are the backbone of our economy.
Gordon Banks (Ochil and South Perthshire) (Lab)
We have just heard a lot of drivel from the Secretary of State. The coalition agreement said:
“We will bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial services sector; in developing these proposals, we will ensure they are effective in reducing risk.”
Will the Secretary of State use his nuclear option to make that happen, or will he dance away from it, in the same way as the coalition has danced away from the net lending targets that were also in the coalition agreement?
Vince Cable
The coalition agreement is a much more eloquent statement of our position than the hon. Gentleman’s rather tortured metaphors. It states precisely that we will take robust action on unacceptable bonuses, and that remains our position.
Rehman Chishti (Gillingham and Rainham) (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 is the Department for growth, and has a key role in supporting business to deliver growth, in rebalancing the economy by bringing enterprise, manufacturing, training, learning and research closer together, and in the process creating a stronger, fairer British economy.
Rehman Chishti
Business leaders in my constituency are concerned about the effects of rising costs, such as fuel prices. What support is being given to businesses to help them with such pressures in these difficult times?
Mr Tom Watson (West Bromwich East) (Lab)
T4. The House will have noticed in recent weeks the Secretary of State’s remarkable transformation from Chairman Mao to Mr “Has Been”. Will he tell me how he is enjoying the long march of government?
Vince Cable
That must be about the 10th repetition of that joke. It was nothing like as good as my original.
Tom Brake (Carshalton and Wallington) (LD)
T2. Over the Christmas and new year period, some of my constituents received no post for up to a fortnight. Does the Minister agree that this is not acceptable, and could he talk to the Royal Mail about whether residents should be allowed to present themselves at a sorting office, providing they have identification, to collect mail that has been stockpiled there?
Nick Smith (Blaenau Gwent) (Lab)
T5. The new enterprise tsar, Lord Heseltine, said in Cardiff this week that 400,000 new jobs will be created in the private sector in the next five years. Will the Minister tell us how many of these jobs will be created in Wales?
Vince Cable
The Welsh position with respect to regional development is different from the position in England, but I will be going to Wales shortly, together with the Secretary of State for Wales, to talk about how we can promote manufacturing and enterprise there.
Paul Maynard (Blackpool North and Cleveleys) (Con)
T3. Last night I had the pleasure of meeting three community learning champions from Blackpool at an event promoted and organised by NIACE—the National Institute of Adult Continuing Education—but funded by this Department. Does the Minister of State agree that money spent on informal adult learning needs to be valued and assessed for the benefits that it brings, because of its life-changing impact, and that money spent on informal adult learning is money that does not need to be spent on either the welfare system or social care?
Mr Chuka Umunna (Streatham) (Lab)
T7. The Business Secretary campaigned under the slogan “A fair banking system—change that works for you”. Eric Daniels, the outgoing CEO of the part-publicly owned state banking group Lloyds, will reportedly be taking home a package of £4 million in the current pay round—£2 million by way of bonuses and £2 million by way of incentives. Does the Business Secretary regard that as acceptable, and if not, what action will he be taking?
Vince Cable
I am amazed that Opposition Members keep dragging up issues relating to the contracts of senior executives in the semi-nationalised banking sector that they negotiated without proper support for the companies to which they are due to lend.
Stephen Barclay (North East Cambridgeshire) (Con)
T6. Phoenix trading, whereby directors in financial difficulty set up a new business and then buy back their assets at a knock-down rate—that is, for less than the bad debts that they walk away from—is a serious issue for small businesses that supply those goods in good faith, both in my constituency, and, I am sure, those of many other Members. In reply to my parliamentary question, the Government said that no legislation was planned, but what comfort can they provide to small businesses? Will the Minister meet me to discuss the various tools that his officials could use to provide such comfort?
Kelvin Hopkins (Luton North) (Lab)
My hon. Friend the Member for Luton South (Gavin Shuker) and I have been in correspondence with the Secretary of State about the future of the General Motors van plant in Luton. I thank him for his reply, which we received this week. It seems from press reports that, as of yesterday, there are still uncertainties about the future of the van plant. Will he now intervene directly with the company to ensure that a new vehicle comes to Luton for the period after 2013?
Vince Cable
Yes, I know that this is an extremely important part of the British car industry; indeed, it is a highly productive and successful one. I have spoken to Mr Reilly about the issue, and I think that this part of the industry has a very good future.
Andrew Bridgen (North West Leicestershire) (Con)
T8. Does the Secretary of State agree that although the 50p rate of tax may be necessary in the short term, it will have a detrimental effect on economic growth in the UK in the medium to long term? It scares away foreign investors, acts as a disincentive for home-grown entrepreneurs to start businesses and offers a massive incentive for some of our brightest and best business brains to leave this country and pay less tax elsewhere.
Vince Cable
When I was in opposition I spent quite a lot of political energy arguing against a 50p tax rate. However, in the present context we have to understand that the burdens of the very difficult period through which we are passing have to be shared fairly, and that is why the tax remains in place.
Stephen Timms (East Ham) (Lab)
What assessment has the Department made of the impact on competitiveness, particularly in rural areas, of the delay, from 2012 to 2015, in the target date for a universal broadband service?
Vince Cable
I think that that is a question that the right hon. Gentleman may now wish to direct to my colleagues in the Department for Culture, Media and Sport.
Michael Ellis (Northampton North) (Con)
T9. The competition for university places becomes more intense every year, as increasing numbers of young people apply for university. The Minister visited Northampton college in my constituency during the recent election campaign. Can he elaborate on any plans that would allow students to study for a degree or do a vocational course at their local college, such as Northampton college, rather than applying for university?
Kevin Brennan (Cardiff West) (Lab)
I was a former competition Minister in the Department for Business, Innovation and Skills, so will the Secretary of State tell me whether he regards the conversation he had with journalists before Christmas about the BSkyB case as a serious breach of the ministerial code?
Vince Cable
I did indeed express regret for the comments made, but they were not considered to be a breach of the ministerial code.
Mary Macleod (Brentford and Isleworth) (Con)
The businesses of London play a key role in building a strong economy for the future. Will my right hon. Friend meet me and a west London business to talk about challenges and priorities and how to create new jobs and growth for the future in west London?
Steve Rotheram (Liverpool, Walton) (Lab)
In a letter to the Prime Minister, my right hon. Friend the Member for Southampton, Itchen (Mr Denham), the shadow Secretary of State for Business, Innovation and Skills highlighted the confusion relating to ministerial responsibilities, following the comments by the Secretary of State on the issue of BSkyB. Does the right hon. Gentleman regret the loss of these responsibilities to his pro-Murdoch colleague?
Vince Cable
I can indeed explain the allocation of responsibilities. The responsibility for competition and policy relating to media broadcasting, digital and telecoms lies with the Secretary of State for Culture, Olympics, Media and Sport. Our two Departments have worked together very closely in the past and will continue to do so. The precise allocation of responsibilities will be set out in a written ministerial statement very soon.
Jake Berry (Rossendale and Darwen) (Con)
Will the Minister update the House on what steps his Department is taking to encourage investment in industrial small and medium-sized enterprises in east Lancashire, which are so vital to job growth in my Rossendale and Darwen constituency?
John Cryer (Leyton and Wanstead) (Lab)
The Business Secretary continually tells us that the economy is steaming along very nicely and that everything is wonderful. If that is the case, why are wage settlements running at a rate far below price inflation?
Vince Cable
The British economy is indeed recovering. It was in an appalling state, but economic growth is now strong. It will become stronger as a result of the work that the Government are doing in stabilising finances, and real wages will appreciate on the back of that.
Fiona Bruce (Congleton) (Con)
We have heard today about some excellent initiatives involving skills training, apprenticeships and mentoring for business. What concerns me is that many owners and managers of small and medium-sized enterprises spend their days with their heads down, concentrating on their businesses. What we need to do is communicate the opportunities to them. What can the Minister do to reassure me that the 4,000 SME owners in my constituency will hear about those initiatives?
Chris Leslie (Nottingham East) (Lab/Co-op)
It is clearly embarrassing for the Business Secretary that he has failed to deliver robust action on banker bonuses and to deliver the net lending targets. If he cannot persuade the Chancellor to fulfil those coalition agreement promises, will he resign?
Vince Cable
That is an utterly absurd question. The hon. Gentleman knows that after the massive banking crisis that happened under the last Government as a result of poor supervision of an overweight banking sector, this Government are trying to introduce measures to make it more stable and to contribute to the real economy. That will happen; it did not happen under the last Government.
Zac Goldsmith (Richmond Park) (Con)
Following the coalition’s commitment to phasing out fossil fuel subsidies via the Export Credits Guarantee Department, has any progress been made on agreeing a definition of such subsidies?