Oral Answers to Questions

Vince Cable Excerpts

Thursday 31st March 2011 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

3. What steps he is taking to increase United Kingdom Trade and Investment’s share of world trade.

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

UK trade increased by 55% in real terms between 1998 and 2008. None the less, the relative share of world trade declined from 5.7% to 3.9%. Our recent trade and investment White Paper sets out how we will assist exporters, focusing UKTI and new trade finance products on small and medium-sized enterprises.

[Stephen Metcalfe]

A businessman in my constituency has traded successfully in north Africa for many years, but now does not know when his invoices will be paid, which affects his cash flow and business viability. Will my right hon. Friend consider introducing some form of payment guarantee scheme that will give SMEs the confidence to increase their share of world trade in the knowledge that they will be paid for it?

[Vince Cable]

I am aware of the firm that my hon. Friend describes and of its difficulties in Libya. If companies are operating in difficult markets, such as Libya, they are advised to take out trade insurance. Where the market cannot provide that, the Export Credits Guarantee Department will underwrite it. We are expanding the range of ECGD products and the Treasury has authorised payments to companies in Libya for which insurance is due.

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

Over the next four years, UKTI is set to have its budget cut by some 17%. The schemes most commended by the CBI are passport to export and gateway to global growth. Will the Minister give an assurance that among the budget cuts those services will be protected?

[Vince Cable]

I can assure the hon. Gentleman that UKTI is capable of and committed to providing an increased range of activities and a better service even within its budget.

[Tim Farron (Westmorland and Lonsdale) (LD)]

More than 50% of dairy farms in the UK closed under the Labour Government yet demand for dairy products across the world is rocketing. Will my right hon. Friend the Secretary of State set out what proposals we have to launch an ambitious plan to export dairy products across the world?

[Vince Cable]

Many of the problems of the dairy industry relate to the system of EU common agricultural policy financing, but I will look at the specific issue described by my hon. Friend and see what we can do to promote it.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

4. What discussions he has had with the North Eastern local enterprise partnership on the location of proposed enterprise zones; and if he will make a statement.

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[Mr Peter Bone (Wellingborough) (Con)]

10. What recent discussions he has had with the Secretary of State for Energy and Climate Change on the effects on businesses of trends in the cost of fuel.

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

I recently discussed the rising cost of energy with my counterpart at the Department of Energy and Climate Change to assess the cumulative burden of climate change policies and see what the Government can do to secure the competitiveness of energy-intensive industries as we decarbonise the economy.

[Mr Bone]

We have an absolutely splendid coalition team in DBIS, led by a fantastic Secretary of State. In the past, energy was always the responsibility of the Business Department. Surely it should come back to that Department so that we can send out the message that we do care about business in relation to energy— and I could not think of a better set of people to look after it.

[Vince Cable]

I am very flattered by the suggestion, if a little surprised, but I am already fully employed with my existing duties. In my recent conversation with my counterpart at DECC, we agreed that considerable progress had been made with Ofgem’s recent report on opening up competition and benefiting consumers, both industrial and personal.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Energy-intensive industries in my constituency, of which there are many, are worried about the cumulative impact of regulations relating to a carbon floor price on their competitiveness. Is the Secretary of State having discussions with the Treasury and DECC to ensure that our industries do not lose out to foreign competition?

[Vince Cable]

I am doing just that. On Monday I was in Port Talbot to talk with Tata Steel about that exact question. It is absolutely right that the Government press ahead with our ambition to decarbonise the economy, but the system of tax and regulation is complex and we must structure it in a way that supports our energy-intensive industries.

[Harriett Baldwin (West Worcestershire) (Con)]

11. What steps he is taking to reduce the level of regulation of businesses.

[Gavin Williamson (South Staffordshire) (Con)]

16. What steps he is taking to reduce the level of regulation of businesses.

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

We have introduced the one-in, one-out rule to stem the flow of new regulation. We have also introduced sunset clauses on new domestic regulation, stopped gold-plating EU directives and launched a consultation on tribunals. In the Budget we announced a three-year moratorium on new regulation for micro-businesses. We will shortly launch a public review of the existing stock of over 21,000 regulations.

[Harriett Baldwin]

I welcome all those measures, but spin-offs and start-ups in West Worcestershire are discovering that in order to win Government procurement contracts they need to have accounts for the past two years, and I wonder whether the Secretary of State would urgently review that.

[Vince Cable]

We are taking steps to open up public procurement for the kinds of small spin-offs the hon. Lady describes. There is, of course, an aspiration to increase public procurement from SMEs to 25%. At the beginning of the year the pre-qualification questionnaires, which were appallingly complex, were simplified, and they will shortly be removed altogether from companies trading at over £100,000.

[Gavin Williamson]

Will my right hon. Friend assure the House that he will work very closely with industry to tackle increasing environmental regulation, which has already been touched on, especially that coming over from the European Union, so that we do not have uncompetitive industries?

[Vince Cable]

Environmental regulation is covered by the moratorium that I have just described. Of course, if it is European Union regulation, we cannot unilaterally disband it, but we can ensure that there is no gold-plating, which is why we are following a minimal copying-out procedure for EU legislation.

[Nick Smith (Blaenau Gwent) (Lab)]

The regulation of business is important for promoting employment. In my constituency, youth unemployment is 30%, which is way too high, so will there be an enterprise zone to look at business regulation and employment in the south Wales valleys?

[Vince Cable]

As I discovered when I discussed the matter with them on Monday, the Welsh Assembly Government have responsibility for designated enterprise zones. I hope they will follow the model we are pursuing in England, and indeed we strongly commended it to them.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

The Secretary of State’s very own figures show that he is not a deregulator but a regulator. It is 53-in, 3-out, not one-in, one-out, but apparently there is hope on the horizon, because he is going to repeal another regulation— one introduced to seize German-owned property after the war. I am sure Chancellor Merkel will be happy about that, but the point will be lost on UK business.

We hear from the Secretary of State about his plans to review 21,000 business regulations, but at this rate it will take more than 7,000 years to achieve that aim—and looking at the Secretary of State I do not think he has the time on his side. When will he ditch his rhetoric and begin practising what he preaches before it is too late?

[Vince Cable]

The regulations that related to my Department were either European or related to the implementation of the minimum wage. I know the Opposition are showing considerable political versatility at the moment, but I did not think that they had got around to demanding the abolition of the minimum wage.

[Margaret Curran (Glasgow East) (Lab)]

12. What discussions he has had with his international counterparts on steps to increase transparency in the reporting of company profits.

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[Stephen Mosley (City of Chester) (Con)]

14. What recent representations he has received on the future funding of science and research.

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

During the allocation of science and research funding, BIS consulted the national academies, business groups and universities and agreed a flat-cash ring-fenced settlement for science and research of £4.6 billion a year for 2011-15. In the Budget, the Government invested a further £100 million in science capital, including £10 million at Daresbury.

[Stephen Mosley]

I welcome the announcement in last week’s Budget of the extra £100 million in capital spending, including the £10 million at Daresbury. Will my right hon. Friend confirm that that £100 million comes from the permanent bank levy, which was introduced by this coalition Government against opposition from Labour Members?

[Vince Cable]

I can confirm that. Of course, the bank levy has a good economic basis because it is the payment that the banks make for the protection that the state provides for banks that are too big to fail. The £100 million is new money—new capital investment—and I am delighted that my hon. Friend’s campaign for Daresbury has borne fruit in this way.

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

In November, the Chancellor took £1.4 billion out of capital investment for science. Last week, he gave back about £100 million—strangely, all of it to Conservative constituencies. Our country’s leading reputation in science deserves better than that. When this week’s Royal Society report, “Knowledge, networks and nations”, spelled out the rise of China, India, Korea and Brazil as science superpowers, it was unable to set out the UK’s long-term plan because there is not one. Will the Secretary of State prevail on the Chancellor to agree a long-term plan for science funding, as we had under Labour?

[Vince Cable]

There is a long-term plan for science funding. The hon. Lady obviously has not followed the comments that were made by the Royal Society and many others in the science community welcoming the flat-cash settlement and the ring-fencing of the science budget.

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

15. How many universities he expects to charge less than £7,500 in tuition fees from 2012.

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

No university wishing to charge over £6,000 yet knows for certain how much it will charge, since no university has yet signed an access agreement with the Office for Fair Access. We expect there to be a wide range of charges, and those institutions discussing higher charge levels all look set to include substantial waivers for students from poorer backgrounds.

[Diana Johnson]

Hull university is reported to be planning to charge up to the £9,000 limit. Combined with this week’s announcement about the slashing by two thirds of the education maintenance allowance support to students, how will this help to attract more students from areas such as Hull to university, bearing in mind the excellent progress that was made under the Labour Government?

[Vince Cable]

As the hon. Lady knows, and as we have discussed many times in this Chamber, the introduction of graduate contributions at the level we have will ensure that universities are indeed properly funded and maintain funding at world-class levels.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Is my right hon. Friend still reminding universities that it is unreasonable of them to charge fees significantly above the cost of providing the course and asking them to make sure that when they set their final fees in the coming weeks, they honour the cost that they said they would charge some months ago?

[Vince Cable]

May I first thank my right hon. Friend for the extraordinarily useful work that he has been doing on social mobility? On his question, the Browne report estimated that universities would need to charge something in the order of £7,500 simply to replace their income, but no more, and that if they made the kind of efficiencies that other institutions are effecting, it could be as little as £6,000.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

We have had the damaging row over student visas—still not sorted—and a Treasury growth paper that largely ignored the central role that universities have to offer for our economic future. However, the most serious problem is the considerable hole the Government are now staring at in their higher education budget—all because they ignored the many independent experts who warned, even before the tuition fees vote, that universities would charge close to the maximum fee level. Given the huge uncertainties facing university finances, all of them Government-created, does the Secretary of State not recognise that this House is entitled to know how that funding gap will be plugged?

[Vince Cable]

First, the hon. Gentleman is terribly behind the times. He may not have listened to the Home Secretary’s statement on student visas, but she made it absolutely clear that there is no cap on student visas and that the study to work route is still available for overseas students. The universities have acknowledged that. There is no hole in the finances. If he had followed the public announcements that universities have made, he would have seen that of the 36 that we are aware of, 13 propose to charge up to the maximum. That is well below the 80% quoted by the Leader of the Opposition yesterday. Of those universities, many will have substantial fee remission on the Oxford model.

[Mr Rob Wilson (Reading East) (Con)]

I have discussed on many occasions with the Minister for Universities and Science my view that Governments should avoid unnecessary interference in universities. The enhanced role given to OFFA is causing great unease in the sector and among some Government Members. Will the Secretary of State clarify the powers that OFFA has and how it will be expected to deploy them in relation to universities that set fees above £6,000?

[Vince Cable]

I think that there is complete clarity. I set out the position in a letter that I sent to OFFA some weeks ago, which is available and which I can certainly make available to the hon. Gentleman. It is absolutely right that, in return for being allowed to charge the higher fee levels, universities should make the maximum possible access available to people from disadvantaged backgrounds. There is a particular problem with traditional universities, where social mobility declined in the last decade. We are determined to overcome that.

[David Rutley (Macclesfield) (Con)]

17. What plans he has to increase levels of employment in small and medium-sized enterprises.

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[Kevin Brennan (Cardiff West) (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 has a key role in supporting business to deliver growth, rebalancing the economy, bringing enterprise, manufacturing, training, learning and research closer together and, in the process, creating a stronger, fairer British economy.

[Kevin Brennan]

On tuition fees, has the Secretary of State read the reports of the Deputy Prime Minister’s visit to Mexico, where he was humiliated first by a Mexican student who said that he could no longer afford to come and study in Britain, and then by the Mexican President, who said that British students should go to study in Mexico instead? Is the Secretary of State in any way embarrassed by the fact that his policy on tuition fees has become a laughing stock across the world?

[Vince Cable]

I was not in Mexico, I was in another country—Wales—discussing the issue. The simple truth is that, as I am sure we have communicated to the Mexican authorities, Mexican students are welcome to come to this country and there is no cap on the number of overseas students.

[David Rutley (Macclesfield) (Con)]

T3. The Macclesfield, Richmond and Wandsworth chambers of commerce are developing local mentoring schemes to help better support smaller businesses, and have submitted a related bid to the regional growth fund. Does the Minister agree that such approaches deserve serious consideration and will provide important insights to other local communities?

[Mr John Denham (Southampton, Itchen) (Lab)]

We would not have destroyed regional development agencies in the chaotic and Maoist manner that the Secretary of State has described, but as a constructive Opposition, we have proposed that RDA assets be transferred to local economic partnerships to promote growth and jobs. Will he confirm that many RDAs, including those in the north-west, the east midlands, the south-west, Yorkshire and Humberside and the south-east have also proposed that assets be transferred to local authorities in LEP areas, which will pay for them as jobs and growth are created? Why has he blocked those transfers?

[Vince Cable]

In our Dengist phase, the LEPs are doing extremely well in constructing business-led leadership at local level. The process by which RDA assets are allocated is set out in the White Paper. As the right hon. Gentleman will know, some of the RDAs have negative net worth, so the issue of asset distribution does not apply. There will be different allocations, and my departmental officials are working through the RDAs’ legacy carefully.

[Mr Denham]

The Secretary of State does not seem to know what is on his own website, which makes it very clear that he has blocked the transfer of those assets to local authorities. Will he confirm that the assets of RDAs that will now be sold will be worth more than the investment in enterprise zones? Is not the Conservative leader of Fareham council, who heads the Solent LEP, right when he says:

“Selling them at this time in the economic cycle is the worst possible solution. Treasury is looking for quick wins but that will undermine the growth agenda. We are meant to be focusing on growth but that will undermine the growth agenda”?

Why does the Secretary of State believe that Whitehall knows best, or has he been overruled yet again by the Treasury, who are the people who really run his Department?

[Vince Cable]

The right hon. Gentleman seems to have forgotten that those are taxpayers’ assets, the disposal of which should be done in a way that produces best value for money for the taxpayer. Some will be disposed of and sold, and some will be transferred when that will produce a good outcome. The process is being carefully worked through at departmental level, and it will produce a sensible outcome that remains supportive of local initiatives through the local enterprise partnerships.

[Harriett Baldwin (West Worcestershire) (Con)]

T5. The funding for technology innovation centres is extremely welcome. Will the Secretary of State update me on any representations he has received on a bid from Malvern to the Technology Strategy Board?

[Vince Cable]

Technology innovation centres are proving extremely welcome in the research community because they represent a bridge between academic research and business application. The first of those—the advanced manufacturing TIC—has been launched, and I went to Rotherham at its outset. Others are being prepared, and I am sure that the one in my hon. Friend’s constituency will be carefully considered by the TSB.

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

T2. On enterprise zones, do the Government agree that it is important that subsidies are not simply given to jobs and development that would have happened anyway? It is fairly easy to see how the Government could stop, and take measures to prevent, a firm from simply transferring to an enterprise zone with public money, but if a firm decides to expand into an enterprise zone, or if a new firm is created in one, how can the Government ensure that money is not simply given to a development and jobs that would have existed without the subsidy?

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[Alex Cunningham (Stockton North) (Lab)]

T7. The proposed changes to the feed-in tariff for solar energy projects has dealt the industry a massive body blow and left in tatters plans by Norton sports and social club in my constituency to build one to finance their community work. How many more projects have been deferred, and what does the Secretary of State have to say to this job-creating industry?

[Vince Cable]

As the hon. Gentleman knows, the feed-in tariff consultation is being conducted by the Department of Energy and Climate Change, but I will certainly communicate his concerns to it.

[Jason McCartney (Colne Valley) (Con)]

T10. I am very lucky to have many successful manufacturing businesses in my constituency, and I am always one to talk up our manufacturing expertise, whether it is David Brown Engineering in Lockwood, Thornton and Ross pharmaceuticals in Linthwaite, Equi-Trek horseboxes in Meltham or any one of many others. However, some of my smaller businesses are still reporting problems with bank lending. How aware is the ministerial team of this problem, and what can we do to help such businesses to achieve multimillion pound turnovers?

[Vince Cable]

The hon. Gentleman is right that manufacturing is a success story. It is now growing at double-digit levels annually, in stark contrast with what happened in the period after 1997, when we had a hollowing out of manufacturing more rapid than anywhere else in the world. However, he is right that there is a threat to small and medium-sized enterprises in particular from bank lending practices. We have secured commitments to 15% more lending from the banks, but much more needs to be done.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

T8. Given that demand for student places was always going to exceed supply this coming year, is the Secretary of State surprised that universities are charging as much as he has allowed them to charge?

[Vince Cable]

The hon. Gentleman might be confusing the coming year with the year for which fee levels are being announced. However, as I said earlier, there is a wide distribution of proposed charge levels by the universities that have already made announcements—less than a quarter of all universities—and this reflects the policy that we introduced.

[Margot James (Stourbridge) (Con)]

Will my right hon. Friend assure the House that the Government will not attempt to reduce the number of places at universities charging the full rate of £9,000 a year in order to oblige a greater proportion of students to attend universities that charge less?

[Vince Cable]

We certainly wish to encourage providers that charge highly competitive fee levels, but we also wish to encourage high-quality universities of the kind my hon. Friend described. I do not think that the two are in any way incompatible.

[John Cryer (Leyton and Wanstead) (Lab)]

Will the three-year moratorium that the Secretary of State mentioned earlier apply to health and safety legislation? I ask that question in view of the fact that two people are killed every week in construction.

[Mr James Clappison (Hertsmere) (Con)]

In the light of the excellent question from my hon. Friend the Member for Reading East (Mr Wilson), surely it is a matter for universities to decide who to admit on individual merit, not for us to have a central Government control model—a command and control model—that inevitably produces unfair discrimination. We are trying to build a big society, not recreate the Soviet Union, are we not?

[Vince Cable]

There is no command and control. Indeed, we are seeking to free universities from the complex, rather Stalinist system that we inherited. None the less, it is right that the Office for Fair Access should judge universities that wish to charge the top rate according to its access criteria.

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[Mr David Lammy (Tottenham) (Lab)]

Given that Leeds Met is the latest university to announce fees of £8,500, does the Minister think, in advising parents, that an English degree at Leeds Met is the same as an English degree at Oxford?

[Vince Cable]

I would not presume to make that kind of differentiation: it is their choice and they will both be considered by OFFA in due course. I would, however, single out Oxford for compliment, because of its ambitious programme for fee remission.

[Amber Rudd (Hastings and Rye) (Con)]

Although I am irrepressibly optimistic about future growth in Hastings, I was stunned to find last week that, on the index of multiple deprivation, we had fallen from 31 to 19. May I therefore urge the Minister to give careful consideration to stimulating areas of the south-east that have particular deprivation problems, and not to concentrate all the tools from his toolbox on the north-east region?