Oral Answers to Questions

Vince Cable Excerpts

Thursday 6th September 2012 Commons Chamber

[Simon Kirby (Brighton, Kemptown) (Con)]

10. What assessment he has made of the level of satisfaction of participants and businesses with the apprenticeship system.

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

The Department recently completed the biggest ever survey of apprentices and their employers, which revealed the best ever satisfaction rates. Overall, almost 90% of apprentices were satisfied with their training. Employer satisfaction is also high: 88% are satisfied with the relevance of their training, and 80% remain committed to offering places.

[Richard Graham]

I welcome the evidence from the Holt review that we need to do more to make apprenticeships accessible to small and medium-sized enterprises. I know from my own apprentices’ business and administration non-vocational qualifications that they are not all user-friendly to the smallest businesses, which are the driver of future jobs. Does the Secretary of State agree that employers in, for example, the Federation of Small Businesses should have more say in the content of courses and in the setting of a reassuring series of national standards?

[Vince Cable]

I do agree, but let me preface my remarks by saying what a success story the apprenticeship programme is. Not only has there been a big increase in scale—more than 60% over the last two years—but there is a very high satisfaction rate. Let me also take this opportunity to pay tribute to the work of the former Minister for Further Education, Skills and Lifelong Learning, the hon. Member for South Holland and The Deepings (Mr Hayes)—who has now moved on to higher things—and to welcome his excellent replacement, who is, indeed, part of an excellent BIS team.

The Holt study, which the hon. Member for Gloucester (Richard Graham) mentioned, does acknowledge that there are barriers to SMEs’ access to the apprenticeship programme. We are trying to address them, most notably by channelling resources through employers rather than trainers: that will increasingly be the emphasis of the programme.

[Damian Hinds]

The Jason Holt reforms present great opportunities for the hospitality sector, which has considerable potential for employment export earnings and economic growth, but in which we need to drive productivity gains. As the quantity of apprenticeships continues to increase, how can we ensure that their quality keeps pace with it, or does better?

[Vince Cable]

The hon. Gentleman is absolutely right to say that we need to maintain quality standards. I have asked Doug Richard, an entrepreneur with a background in this area, to give careful consideration to the quality issues and how we can shape the apprenticeship programme around genuine skills training, particularly at skill level 3 and above.

A great deal is happening in the hospitality sector. For instance, Hilton recently offered 100 new apprenticeship places. The Department will shortly hold a round-table discussion about the sector, and apprenticeships will be an important element of that.

[Simon Kirby]

The number of apprenticeship starts in Brighton and Hove was up by 83% last year, with many digital media businesses taking that important first step. Does the Secretary of State agree that that the digital media sector is an important part of the apprenticeship scheme?

[Vince Cable]

Yes. Apprenticeships increasingly cover the service sector as well as the traditional manufacturing and construction sectors, and the digital sector is an important part of that. It depends on high technology and high skill levels, and as a result is absolutely crucial.

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

May I put it to the Secretary of State—as I did on the last occasion when I questioned him on this issue—that while the overall numbers are very good, there are certain problems in individual sectors such as the construction industry? If we do not ensure that the number of apprenticeships in that important sector is much greater than it is now, we shall find when the national infrastructure plan takes off, as it must eventually—indeed, with the new team behind it, it will no doubt do so in the very near future—that we do not have the apprenticeships and the manpower skills in the industry that would enable us to benefit from it.

[Vince Cable]

The hon. Gentleman is right. The programme must be demand-led and business-led. When a sector is struggling, as the construction sector currently is, that affects the demand for training; but, as the hon. Gentleman knows, the sector is well organised, with a levy system and a skills training board. We certainly want to see a substantial number of additional trained specialists in the construction sector, so that we do not have to rely on people coming from overseas to do the work, as we often have in the past.

[Kate Green (Stretford and Urmston) (Lab)]

Although the number of members of ethic minorities who are taking up apprenticeships is improving, there are still patterns of occupational segregation, and ethnic minorities are less likely to be represented in the industry sectors with the best long-term career prospects. What specific steps are the Government taking to ensure that members of ethnic minorities have the chance to take up the best possible apprenticeships?

[Vince Cable]

I have not had that case made to me before. Certainly if there is some element of discrimination, that is unacceptable. I guess there might be a correlation with other patterns in the labour force, but I will undertake to see whether there is any evidence of there being a real problem that we need to address.

[Mr Gordon Marsden (Blackpool South) (Lab)]

May I congratulate the Secretary of State on all his new Ministers? I am delighted that he paid strong tribute to the former Further Education and Skills Minister, the hon. Member for South Holland and The Deepings (Mr Hayes). Given his commitment to vocational education and the personal warmth he brought to his task, he will, as I am sure his successor knows, be a hard act to follow.

We now know that over the past year the number of 16 to 18-year-olds starting apprenticeships went down in the south-west, the north-west and north-east England, yet the Secretary of State’s colleagues elsewhere in Government have so far ducked out of doing anything practical to implement Jason Holt’s excellent report to get more small businesses to take on those young people. Will the Secretary of State now change that course, with an active Government response to help small businesses to take on young people for the extra apprenticeships that we desperately need, given the failures to deliver growth by No. 11 Downing street?

[Vince Cable]

The Jason Holt report was published just six days or so ago, so it is perhaps unsurprising that it has not yet been fully implemented. We are certainly going to be working on it, however. There clearly is an issue with 16 to 18-year-olds who need to have a ladder into apprenticeships rather than going straight into a demanding skill course associated with a job. We recognise that there is that transition issue, therefore, and I am working with the Secretary of State for Work and Pensions in particular on how we address it.

[Ann Clwyd (Cynon Valley) (Lab)]

2. What assessment he has made of the effect of the recession on small businesses.

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

These are tough economic conditions for all sorts of businesses, including small and medium-sized businesses, but the small business sector is showing signs of considerable resilience. The number of small and medium-sized enterprises grew to 4.5 million at the start of last year—an increase of over 270,000 since 2008—and the proportion of people involved in setting up and running new businesses has increased to over 7.5% in 2011, up from under 6% in 2009.

[Ann Clwyd]

I am afraid that is not true in the Cynon Valley. Earlier this week I was talking to small businesses, who said the failure of the banks to lend has made it very difficult for them to expand and take on new workers, such as the former Remploy workers in my constituency who were so disgracefully sacked by the Government last month. We have had enough of the donkey talk of carrots and sticks. Is it not time to hold the bankers’ feet to the fire and get some movement on this matter, because it is not happening now?

[Vince Cable]

I have never been shy of criticising bank performance in lending to SMEs, and I am not going to change on that. None the less, I think we should be a little more positive about what is happening. One of the most interesting figures of the last two-and-half years is that the number of private sector jobs has increased by 900,000 in conditions of economic difficulty. Almost all of those jobs are in SMEs, despite the difficulties they face. We are taking action to ensure we get a better flow of funds from the banks, particularly through the new funding for lending arrangements, over and above the guarantee scheme. There are new challenger banks such as Aldermore and Handelsbanken that are specialising in that sector and meeting some of the unmet need.

[Mr Speaker]

Order. I gently remind the House that we have a lot of questions to get through, so some pithiness would be appreciated.

[George Freeman (Mid Norfolk) (Con)]

Does the Secretary of State agree that what the small business sector in this country needs is confidence, not carping from those on the Opposition Benches? The fact that the Government have created over 900,000 jobs since the election suggests they are doing a lot of good. Does he also agree that the World Economic Forum report of this week showing that Britain’s competitiveness has risen from 10th to eighth in the world league, because, it says, of our more efficient labour market reforms, suggests we are doing exactly the right thing?

[Vince Cable]

I thank my colleague for reminding me of that. It is a very positive report, and it is striking that it puts such emphasis on the fact that we have very flexible labour markets, which is one of the reasons why the private sector has been able to take on so many more people. That is publicly appreciated by many of the large manufacturing companies as well as by SMEs.

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

Two and a half years in, this Government still offer no significant support for small, innovative, high-growth businesses, which are exactly the kind that we need to get us out of this double-dip recession made in Downing street. The National Endowment for Science, Technology and the Arts has called on the Government to expand the small business research initiative. Started by Labour, it uses Government procurement to help to turn innovative small businesses into world beaters—we support that call. Is it any wonder that business confidence is low when the Government plan to spend 10 times more on subsidising local weekly bin collections than on innovative small business procurement? Can the Minister tell me whether they will now change—

[Chi Onwurah]

Will the Government now change course and bring forward proper support for small, innovative businesses?

[Vince Cable]

Small, innovative businesses are absolutely crucial, and the CBI, in particular, has focused on what it calls the “gazelles” in that space. One specific initiative that we introduced—I launched it—and which the hon. Lady may not be aware of is the growth accelerator, which is a system of providing high-quality coaching for 26,000 small and medium-sized enterprises of exactly the kind she has described. All our evidence so far suggests that it is appreciated and is working extremely well.

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

3. What steps he is taking to ensure that young people leave further and higher education with the skills that employers need.

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[John Pugh (Southport) (LD)]

15. What support his Department is providing to the port of Liverpool; and if he will make a statement.

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

I understand the importance of the port of Liverpool to the city region’s ambitions for growth. Under round 2 of the regional growth fund, the Government are supporting the port’s bid to build a terminal capable of handling the largest container ships. Key features of the city region deal have regard to the local potential for logistics and offshore technologies.

[John Pugh]

Liverpool port is thriving under the management of Peel Holdings. What can the Government do to ease transport arrangements to and from the dock?

[Vince Cable]

The starting point is the recognition that Liverpool docks, having declined for many decades, now have enormous potential as a result of the £35 million that has been put in to dredging for the deep-water terminal and the support for offshore technologies. There is a major problem of access. A report has been carried out and is being followed through as part of the city region bid. We are working with the Department for Transport. We recognise that there are transport bottlenecks and there is a commitment to act on that.

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

16. What recent assessment he has made of the health of the British automotive sector; and if he will make a statement.

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[Ian Swales (Redcar) (LD)]

17. What recent assessment he has made of the future of the UK bioethanol industry.

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

The Government’s bioenergy strategy makes it clear that sustainable first-generation biofuels such as bioethanol are cost-effective in reducing carbon emissions and are an important source of renewable energy. We have sent a clear signal to the industry that there is a market for biofuels in the UK by setting it a target of creating 10% of road transport fuel from renewable energy by 2020.

[Ian Swales]

I thank the Secretary of State for the work that he has done to help with the restarting of the Ensus plant in my constituency, which supports 2,000 jobs. Will he continue to work with his colleagues in the Department for Environment, Food and Rural Affairs, the Department for Transport and the Treasury to ensure that conditions remain right for that exciting, sustainable growth business?

[Vince Cable]

I would like to reciprocate by congratulating my hon. Friend on the work that he has done on campaigning for the Ensus plant, which was mothballed but has now been reopened, creating substantial employment. I believe that a significant number of other bioethanol plants are also in gestation, encouraged by the clarity of policy. One key element was the success that we had in persuading the European Union on the subject of unfair competition from overseas. That loophole has now been closed and there is a good business environment.

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

18. What discussions he has had with the Secretary of State for Communities and Local Government on the effects on business of city deals.

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

Local enterprise partnerships were at the heart of the eight deals with the core cities that were concluded in July, to ensure a strong focus on the growth priorities of business. An estimated 175,000 jobs over the next 20 years, and 37,000 apprenticeships, could result from those deals.

[Rehman Chishti]

When will the second round of city deals open, so that excellent local authorities such as mine can apply?

[Vince Cable]

The cities Minister, who is now in the Treasury, has been discussing with me and the Secretary of State for Communities and Local Government how we will launch the second phase and the criteria that should be employed. I believe there will be an announcement very soon.

[Harriett Baldwin (West Worcestershire) (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 has a key role in supporting the rebalancing of the economy and supporting business to deliver growth while increasing skills and learning.

[Harriett Baldwin]

The whole new ministerial team will already be aware that Malvern is the capital of cyber-valley owing to the cluster of private cyber-security firms that are located there, close to GCHQ. Will the Minister update me and the rest of the House on the steps that the Department is taking to encourage growth in that important sector, and will he visit Malvern?

[Mr Chuka Umunna (Streatham) (Lab)]

May I first welcome the Secretary of State’s new team of minders to their positions on the Front Bench? I note that he is so irrepressible that he needs not one but three minders to keep him in check. His new minder of state, the hon. Member for Sevenoaks (Michael Fallon), told the Financial Times yesterday that he would

“make sure business feels it has a senior champion in the department.”

Does the Secretary of State not feel that he himself has been a sufficient champion of business across Government of late?

[Vince Cable]

I certainly regard myself as a champion of business, and the success that we have had in private sector job creation and in some of our main strategic industries, such as the car and aerospace industries, with both of which I have worked closely, is evidence of that. I very much look forward to working with my colleague, and we have exactly the same aspirations for British business.

[Mr Umunna]

The fact is that business simply does not believe that the Government are doing enough. Last month, the head of the British Chambers of Commerce said that he would give key politicians—presumably the Secretary of State is one of them—three out of 10 for delivery. A couple of weeks before, members of the Institute of Directors went further, stating that Government policies to support business were ineffective in every single area, and who can blame them? The Government have failed to deliver on their infrastructure plan, they have failed to get finance to businesses that need it, and they have failed to meet the delivery targets in their 2011 plan for growth. The Government are ridden with indecision. Three marks out of 10 was generous. How many marks would the Business Secretary give the Government given their litany of failure?

[Vince Cable]

Whenever I talk to business groups—which I do frequently—they unreservedly support the Government’s emphasis on financial stability That is something that the Labour party takes lightly, although we have emphasised it. There is a major agenda to revive the British economy, but in his question the hon. Gentleman made no reference to this morning’s housing statement. At the moment, construction is the most difficult sector in the British economy, because of the collapse that took place in the wake of the boom that his party created when in office. This morning, the Government have proposed a series of businesslike initiatives to free up sites for private development, to put substantial guarantees and resources behind social housing, and to revive a sector that was destroyed in the false bubble created by the hon. Gentleman’s Government.

[Andrew Selous (South West Bedfordshire) (Con)]

T2. How much does the UK earn from overseas students, and what assessment has the Minister for Universities and Science made of the potential for further export growth from that sector?

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

T3. This morning the OECD predicted that the British economy will shrink by 0.7% this year. When will the Secretary of State get on and set up a proper British investment bank, and follow the example of institutions in Germany and Brazil that between them invested nearly £100 billion last year?

[Vince Cable]

The hon. Gentleman is being a little churlish in not even acknowledging that on Sunday, the Chancellor made it clear that we wished to proceed with a business bank. We are discussing the range of its activities and the resources that will be available. The hon. Gentleman knows well that growth prospects in all European countries are extremely depressed at the moment, not only in the UK.

[Richard Graham (Gloucester) (Con)]

T4. As secretary of the all-party group for post offices, I strongly support the Government’s commitment to ensuring that there are no further post office closures, as well as the ambition to develop post offices to carry out more front-office Government services. I am, however, slightly concerned about the pace of progress in making new services available through post offices, and sub-postmasters in Gloucester are concerned about the possibility of losing the DVLA contract. I appreciate that the Minister has only just arrived in her post, but will she give that issue priority in the future?

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[Dr Sarah Wollaston (Totnes) (Con)]

T5. I know the Front-Bench team are totally committed to promoting growth in our economy. Will the Minister set out how he will boost employment and growth in rural areas while balancing the need to protect the environment from unrestricted development?

[Vince Cable]

Several local enterprise partnerships are specialising in developing the rural economy—the hon. Lady’s LEP is one of them. Such development should be dealt with properly at that level. At my level, I look forward to talking to the new Secretary of State for Environment, Food and Rural Affairs about how we integrate economic development and rural development.

[Nick Smith (Blaenau Gwent) (Lab)]

Three hundred and sixty of my constituents have told me that they value our local post offices. May I press the Minister to allow the post office network to allow the DVLA to have that contract for the future? Why will she not commit to doing that?

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T6. What is being done to assist exporters, particularly in the north-west, to achieve results that match those of the best, such as Fisherman’s Friend in my constituency, which exports 97% of its products to more than 100 countries?

[Vince Cable]

Until I heard the hon. Gentleman’s question, I thought Fleetwood was primarily famous for its football team, which has just got back into the Football League. I will make an effort to visit Fleetwood. I am delighted to hear of the success of Fisherman’s Friend, which I consume a great deal of. I had not realised it was an export firm, but we will do everything we can to promote it overseas.

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

The Enterprise and Regulatory Reform Bill will, in effect, introduce no-fault dismissal by the back door through the system of protected conversation, which was debated extensively in Committee. Monitoring will be difficult, but what plans do the Government have to monitor the system to ensure that it is not abused by bad employers?

[Vince Cable]

There is no question of introducing no-fault dismissal by the front or the back door. The proposal in the Bill relates to settlement agreements. We are proceeding in consultation with both employers and the trade unions—there is a wide area of consensus on the matter.

[Mr Robert Buckland (South Swindon) (Con)]

I am delighted that my right hon. Friend is going to Honda Swindon today to help to mark 20 years of investment of more than £2 billion. Will he take the opportunity to discuss how trade barriers between the EU and Japan can be further removed and improved so that Honda’s position can be strengthened?

[Vince Cable]

I pay tribute to the hon. Gentleman’s work, and to the workers and managers in Swindon who have made a success of the plant. As many of us remember, many of them went on to part-time working and long vacations to keep the plant alive, and it is now succeeding. I have discussed trade barriers with the Keidanren in Japan and with others. There are a lot of non-tariff barriers in the automotive industry. We must deal with them if we are to have a genuine free trade agreement with Japan.

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

The green investment bank was first announced in the coalition agreement. Why, two and a half years later, is it not up and running properly?

[Vince Cable]

The green investment bank is up and running properly. The parliamentary legislation is being put in place, and the hon. Lady has the opportunity to debate it. The team in my Department that is overseeing the bank has already disbursed significant amounts of money to energy conservation and waste projects. The bank is a success, and it will expand considerably over the next few years when it has achieved state aid approval.

[Roger Williams (Brecon and Radnorshire) (LD)]

Business investment in research and development is absolutely essential for growth, and yet UK business invests less in R and D than our international competitors. What can the Department for Business, Innovation and Skills do with the Treasury to encourage more investment in R and D in our businesses?

[Kevin Brennan (Cardiff West) (Lab)]

The Secretary of State mentioned the importance of growth in his Department’s mission, and yet, as we have heard, the OECD has this morning revised its growth forecast for the UK economy from plus 0.5% to minus 0.7%. Does he not see the need to change course?

[Vince Cable]

We recognise the economic difficulties faced by most of the western democracies, including our own, and the hon. Gentleman knows the reason for them. We had a boom in this country that got out of control and left a substantial legacy; we have broken banks; we have a very serious consumer debt problem; and we have major problems in our export markets. Those are the factors that contribute to the current difficulties, but we have a range of policies, several of which have been announced today, that are designed to counter those areas of weakness in growth, especially in construction.

[Alun Cairns (Vale of Glamorgan) (Con)]

UK Trade and Investment has scored some excellent results in attracting foreign direct investment, with a particular upturn over the last two years, but the spread of that investment is not necessarily equal. What action can we take to ensure that all parts of the UK benefit from UKTI activity?

[Vince Cable]

As my hon. Friend says, there has been a considerable increase in inward investment, much of it as a result of the hard work done by UKTI and indeed by Ministers. There was a particular success at the British embassy alongside the excellent Olympic games, which is attracting more inward investment to this country. In terms of regional distribution, we are drawing up agreements between the local enterprise partnerships and UKTI on how to ensure that parts of the country that currently do not receive very much inward investment get a proper opportunity to lobby for it.

[Paul Blomfield (Sheffield Central) (Lab)]

I am pleased that the Minister of State has had the opportunity to spell out the importance of international students to the UK economy, and his Department has estimated that the contribution could double. I am sure that he will share my frustration at the way those prospects are being undermined by the Home Office. What is he going to do about it?

[Andrew Stephenson (Pendle) (Con)]

There has been a series of positive announcements from the aerospace industry in the last few months, especially from companies such as Rolls-Royce, which employs more than 1,000 people in my constituency. Will my right hon. Friend say more about what he is doing to support the aerospace sector?

[Vince Cable]

Within the last few months I have been to Sheffield to open a new centre developing frontier research on materials. There is in addition work on aerodynamics, which we developed through a new grant under the leadership programme that we have in relation to the aerospace sector. Aerospace is an excellent example of how Government and industry can work together to create growth and world-leading industries.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I welcome the new team, who will be very aware that the Government’s stated policy is to improve UK growth through exports. Will they therefore explain why there is only one UK delegate to the NATO delegation supporting British defence industry and exports to that particular market? The US have got 40, the French and Germans have several—can we please have a bit of joined-up government and will he talk to his colleagues in the Foreign and Commonwealth Office?

[Vince Cable]

I can explain what happened at that conference. My ministerial colleagues and I spend a great deal of time promoting defence exports, which are one of the main success stories in the rapid growth of our exports and one of the main features of the rebalancing that is taking place.

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

In my constituency, 3,000 people are waiting desperately for a council house. Perhaps one answer to that problem, both in my area and across the country, might be to consider quantitative easing through social housing bonds, to ensure that there is an explosion in council house building in this country.

[Vince Cable]

I know how passionately my colleague feels about this. I was with him a few weeks ago in his constituency and there is an acute shortage of affordable housing. The issue he raises of how to get resources into affordable housing was partly met this morning by the substantial increase in guarantees of £10 billion to housing associations, which is direct funding support for social housing. I am sure that he will see a good deal of activity in the wake of this.

[Mr Speaker]

Last but not least, I call Ann McKechin.