Oral Answers to Questions

Vince Cable Excerpts

Thursday 24th October 2013 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

14. What steps he is taking to support small businesses.

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

We are doing more than ever to support small business. More than 7,000 start-up loans have been drawn down since the scheme’s launch in September 2012. Over the past year, UK Trade & Investment has helped 31,800 businesses to export, the growth accelerator scheme has supported more than 9,000 small businesses, and the regional growth fund has helped a further 3,000.

[Rehman Chishti]

I am grateful to the Secretary of State for that answer. Will he clarify how many businesses have been backed by the Government’s start-up loan scheme, and are there any plans to extend it further?

[Vince Cable]

We estimate that something of the order of 7,000 start-up loans have been drawn down since the scheme’s launch in September 2012, a significant number of them in the hon. Gentleman’s constituency. To sustain it, we have made available an extra £34 million from September, to bring the total to £151 million.

[Nigel Adams]

Business creation is on the up and unemployment is down by almost 30% in Selby and Ainsty since the election. However, many small companies are struggling with crippling business rates. In some cases, rates are almost the cost of the rent they are paying. What can the Government do to encourage local councils to engage with small businesses to assist them with their rate costs?

[Vince Cable]

The hon. Gentleman is right that the trend is a positive one. Half a million small businesses currently get rate relief and a third of a million pay no rates at all. Under recent changes whereby local councils give discounts, as they are now encouraged to do, half of that will come from the Government.

[Dr Huppert]

Arthouse cinemas such as the Cambridge Arts Picturehouse are much smaller and completely different from massive chain multiplexes. Despite this, the Competition Commission wants to force the sale of the excellent Cambridge Arts Picturehouse. The Leader of the House said in response to a question I asked that

“there is no cause for the Competition Commission to seek to intervene”.—[Official Report, 10 October 2013; Vol. 568, c. 314.]

Will my right hon. Friend the Business Secretary talk to the Competition Commission and encourage it to work on real local monopolies and not this issue?

[Vince Cable]

As an avid cinema-goer and, indeed, someone who used to go to that cinema, I have some sympathy with my hon. Friend, but the process is this: the Competition Commission has come to a resolution and the next step has to be to go to the Competition Appeal Tribunal. I suggest to my hon. Friend that, since the Cambridge law faculty has some of the best minds in the country, including that of his predecessor, it may want to take on this issue on a pro bono basis.

[Mark Pawsey]

Having run a small business, I understand exactly the burden of regulation that small businesses have to deal with, and I know how pleased small businesses in Rugby are about the Prime Minister’s commitment to make this Government the first in history to cut the overall amount of regulation. Will the Secretary of State confirm that his Department will lead the efforts to cut burdens that hold back small businesses from growing and taking on more staff?

[Vince Cable]

We are totally committed to that task. Under the red tape challenge—the one in, two out system that my colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) is leading admirably—we estimate that we have probably already saved business about £1 billion a year, and there is a commitment to extend that process.

[Mr David Hanson (Delyn) (Lab)]

What discussions has the Secretary of State had with his Government colleagues about the impact of energy prices on small businesses? Does he support the Prime Minister’s call for a cut in green taxes? Does he support the call by my right hon. Friend the Member for Doncaster North (Edward Miliband) for a price freeze? Does he support Sir John Major’s call for a windfall tax? Or is he in favour of doing nothing at all?

[Vince Cable]

We have made it clear that doing nothing is not an option. We fully understand the implications of rising energy costs for business, particularly energy-intensive businesses. We have framed compensation arrangements and payments have already been made under the European Union emissions trading scheme, and state aid approval is now being sought for compensation for the carbon price floor for energy-intensive companies.

[David Simpson (Upper Bann) (DUP)]

What more can the Secretary of State do to encourage small businesses to apply for Government contracts?

[Vince Cable]

A great deal has been done at central Government level to ensure that we reach our target of 25% of Government contracts going to small and medium-sized enterprises. Considerable progress has been made in reducing the bureaucracy of pre-qualification questionnaires. The problem remains at the decentralised level—local government, hospitals and so on. Efforts will be made through legislation to simplify that process.

[Bill Esterson (Sefton Central) (Lab)]

The No. 1 issue for small businesses in my constituency is the high level of business rates. I urge the Secretary of State and his ministerial colleagues to support our proposal for a business rate cut, followed by a freeze.

[Vince Cable]

As I have said, there is an extensive programme of business rate relief, which extends to half a million companies. That is a very good programme, but there is an issue with how we will continue to pay for it, given the many other claims on Government spending.

[Paul Blomfield (Sheffield Central) (Lab)]

May I press the Secretary of State further on business rates? Does he not recognise that in his constituency, as in mine, businesses are raising the issue of the rising cost of business rates? Businesses in my constituency welcome the proposal to save them £450 by cutting and freezing business rates. Would that not be welcomed in his constituency?

[Vince Cable]

I am aware of this problem in the town centres of my constituency, and I am sure that it is a problem across the country. I repeat that there is an extensive programme of business rate relief. The Government have given local councils the freedom to offer discounts on business rates and we provide a 50:50 matching contribution.

[Toby Perkins (Chesterfield) (Lab)]

Labour is the party of small business—[Laughter.] Conservative Members may laugh, but their party believes that a business that has 300 members of staff is not that large. That shows how out of touch they are. Some 99% of businesses are smaller than that.

Under this Government, 1.5 million businesses have seen business rates rise by an average of £2,000. Our plan to shelve the Government’s 1% corporation tax cut in 2015 and direct all that money towards reducing business rates has won support among organisations from the Federation of Small Businesses to the British Retail Consortium. Does the Secretary of State not realise that many businesses are being crippled by business rates? Why does he not just follow our lead and end the business rate nightmare now?

[Vince Cable]

The hon. Gentleman seems to have forgotten the record of the last Government. I distinctly remember that in one of the last pieces of legislation that I dealt with in the previous Parliament, the Government started to impose business rates on empty property. That was a few months before the collapse in the commercial property market.

[Mr Philip Hollobone (Kettering) (Con)]

2. How many and what proportion of employees of Royal Mail opted out of the allocation of free shares.

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

Of the approximately 150,000 employees who were eligible for free employee shares, only 372 opted out of the scheme. Therefore, 99.75% of employees have accepted the shares that we offered them.

[Mr Hollobone]

Is not the number of posties who have opted out of the scheme remarkably low? Despite the threats of industrial action and union militancy, is it not clear that the vast majority of Royal Mail employees have accepted the invitation from Her Majesty’s Government to take part in the biggest employee share scheme of any major privatisation?

[Vince Cable]

Yes, it is a very positive story. The engagement of almost every employee of Royal Mail is extremely encouraging. I seem to remember that under the last Labour Government we lost in the order of 2 million working days through industrial action in every single year. This is a big change for the better.

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

May I remind the Secretary of State that before this privatisation every one of my constituents had a share in Royal Mail? It has been revealed that only a tiny number of people in most constituencies now have any shares at all and that the Prime Minister’s hedge fund friends own a lot of them.

[Vince Cable]

On the contrary, the share register is dominated by large long-term institutional investors, most of whom hold the savings of millions of our citizens.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

This afternoon, I am due to meet for lunch that great Welsh export and one of the world’s best rugby players, George North. As the Secretary of State knows, George North was bought by Northampton from the mighty Scarlets at a very reasonable price during the summer. Does he think that the hedge funds feel the same as Northampton Saints, because they have acquired the Royal Mail crown jewels at a cut price?

[Vince Cable]

No; in fact, the offer was framed in such a way as to ensure that the shares were acquired predominantly by long-term institutional investors. A few hedge funds are involved and, indeed, some hedge funds take a long-term view.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Many small businesses and consumers across the country rely on local delivery offices such as the one in Feltham to pick up parcels and important letters. Will the Secretary of State confirm that there is nothing to prevent Royal Mail from selling off its local properties across the country and moving them to out-of-town locations that will be far more difficult to reach?

[Vince Cable]

I think I know the sorting office that the hon. Lady is talking about, because it is the one that serves my constituency. It was rebuilt and re-equipped three years ago, I believe, so it is wildly improbable that the Royal Mail will now want to sell it.

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

5. What steps he is taking to improve adults’ basic skills.

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[David Mowat (Warrington South) (Con)]

6. What projects will be eligible for funding from the Green Investment Bank.

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

The UK Green Investment Bank has a total of £3.8 billion of funding to finance green projects in sectors within its approved remit, and to date it has committed £714 million, including for waste recycling facilities, energy from waste plant, offshore wind farms and energy efficiency projects.

[David Mowat]

I thank the Secretary of State. It is impressive how quickly the bank has got up and running. However, the scope envisaged during the Committee stage of the Enterprise and Regulatory Reform Bill, and indeed in the Bill’s green purpose, included low-carbon industries such as the nuclear supply chain. I understand that that did not get EU state aid clearance. Are we going to appeal against that so that we can go back to the original mandate?

[Vince Cable]

The hon. Gentleman is right that European state aid restrictions mean that the sectors involved are narrowly defined, and I understand his concern for the nuclear industry supply chain. However, following the announcement of the new reactor this week, and the commitment by the companies involved to provide more than 50% of procurement to British companies, the nuclear supply chain has a really excellent future anyway.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

The UK Green Investment Bank has indeed been a success so far and part of its success is in bringing in co-investors from the private sector for projects that it supports. Although I do not expect the Secretary of State to admit this, he will know that the Prime Minister’s announcement yesterday of a review of green taxes has already thrown up uncertainty about long-term investment in the green economy. Does the Secretary of State recognise that if the Government are prepared to give long-term price guarantees to new nuclear, they should also give long-term security to the whole green economy?

[Vince Cable]

I thank the hon. Gentleman for his positive comments. He is absolutely right: for every £1 the UK Green Investment Bank puts in, something in the order of £4 of private funding goes in parallel with it. I agree that if we are going to get long-term investment in renewable energy there has to be stability in policy.

[Robert Halfon (Harlow) (Con)]

7. What changes he is planning to make to the national minimum wage.

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

I am asking the Low Pay Commission to consider what conditions would be needed to allow the minimum wage to rise in the future by more than current conditions allow and without damaging employment.

[Robert Halfon]

As the Government are supporting hard-working people, does my right hon. Friend agree that we should help lower earners more by raising the minimum wage—by adding regional minimum wage top-ups, increasing the threshold for national insurance or taking people who get the minimum wage out of tax altogether?

[Vince Cable]

I commend the hon. Gentleman for the work he has done on low pay. Indeed, I think he is a member of the Prospect union and has campaigned for the work force in his constituency. I think that the best way forward is the one that we have chosen: lifting the personal allowance, which has so far taken 2.7 million people out of tax. As a consequence, almost 40% of adult minimum wage workers have seen real increases in their take-home pay since 2010.

[Steve Rotheram (Liverpool, Walton) (Lab)]

8. What steps he is taking to increase the number of students from Liverpool who go to university.

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[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

10. What representations he has received from manufacturers on the case for continued UK membership of the EU with regard to their business and investment plans.

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

Ministers and the Department frequently receive representations from manufacturers, and others, in support of continued UK membership of the European Union and the single market. A recent example is the report by the Engineering Employers Federation, “Manufacturing: Our future in Europe”.

[Jonathan Reynolds]

Manufacturing is vital to my constituency, the country, and to increasing exports and getting our economy back on stronger ground. Does the Secretary of State agree that the constant doubts cast over our relationship with the EU by Members of his Government are harmful to our manufacturing industry, which wants certainty so that we can invest and grow for the future?

[Vince Cable]

I agree that there should not be any doubt about our continued membership, but evidence suggests that so far that has not done any harm. Britain remains very much the No. 1 country in Europe for inward investment, which last year rose by 22%, despite falling globally by 18%.

[Philip Davies (Shipley) (Con)]

Is it true that what businesses want in relation to the EU is free trade? Given that we have a £45 billion a year trade deficit with the EU, is it not perfectly obvious that whether we remain in or out, we will keep free trade? Does the Secretary of State seriously believe that BMW, Mercedes and such companies will say, “Well, it’s the principle that’s important. We don’t want to export to the UK anymore”?

[Vince Cable]

The car companies the hon. Gentleman has cited, and indeed others, particularly the Japanese, have made it clear that they expect Britain to remain in the single market, and they attach enormous importance to being able to frame its rules.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

The Secretary of State knows the vital role Nissan plays in the north-east economy, but do not recent comments from Nissan on the importance of our ongoing membership of the EU, and the potential impact of any tariffs if we are not in the EU, underline the risk and uncertainty the Government’s policy is creating?

[Vince Cable]

Nissan has been very clear on the subject—on its behalf, the Japanese Government have made exactly the same point that they do not want the re-imposition of tariffs. However, there is no evidence so far that our policy is discouraging Nissan. Its investment in the UK continues at a high level. I continue to welcome that.

[Mr Peter Bone (Wellingborough) (Con)]

Is the House seriously going to believe that the Secretary of State believes that, if this country were not in the EU, we would not have a free trade agreement with it? Does he expect the House to believe him?

[Vince Cable]

I know the hon. Gentleman’s position, but that is the not the issue. The issue is certainty. There is a lot of risk in the business world. Reopening the matter creates massive uncertainty for employers and makes it even more difficult for them to invest.

[Mr Iain Wright (Hartlepool) (Lab)]

The Secretary of State has referred to the publication from EEF, the manufacturers organisation. The report states that 85% of EEF members said that membership of and staying in the EU is good for their businesses. My hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) mentioned the comments of the chief operating officer of Nissan, who has said that the threat of import tariffs between the UK and the rest of Europe in the event of an exit could be an “obstacle” to further investment by the company in this country. Who has more influence over Britain’s manufacturing policy: Britain’s manufacturers or the United Kingdom Independence party?

[Vince Cable]

It is fair to say that our manufacturing companies have a great deal more influence and we agree with them. I would add one point: it is not just about manufacturing. A recent survey by CityUK suggested that 60% of banks in London are here because we are part of the single market.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

11. What plans he has to publish the Government’s planned register of companies’ beneficial ownership.

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[Chris Bryant (Rhondda) (Lab)]

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

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

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

[Chris Bryant]

One of the biggest difficulties for all businesses in the country, whether a small retail outlet or a major manufacturer, is the cost of energy. The Secretary of State is a bit of a leftie. [Laughter.] I say that as a compliment, obviously, and he seems to be taking it that way, although the gentleman with the jumper on, the Minister for Skills and Enterprise, who is protecting everybody from the cold over there, seems to disagree. Does the Secretary of State agree with the Prime Minister, with the former Prime Minister or with us about what we should do about energy prices?

[Vince Cable]

I do not think that either the Leader of the Opposition or the former Prime Minister has quite got it right, but I have stressed that, for industry, which is our concern in this Department, the way forward is to ensure that energy-intensive industries are properly compensated and enabled to compete on a level playing field, and we are pursuing that.

[Sir Bob Russell (Colchester) (LD)]

T2. Can the Minister give the House a progress report on how the Government are dealing with the scourge of the payday loan companies?

[Mr Chuka Umunna (Streatham) (Lab)]

The Secretary of State has said that growth must be better balanced and less reliant on rising house prices, but this week he has warned of dangerous and unsustainable house prices in London and extreme problems of affordability across the country on his Government’s watch. Does he therefore not agree that it would make sense to review how the second part of his Government’s Help to Buy scheme operates now, as opposed to in a year’s time, given the attendant risks posed to more balanced growth?

[Vince Cable]

I am delighted to see that the hon. Gentleman has progressed beyond his recent role as a share tipster and is now returning to more important and central concerns. The central point is that the growth we are experiencing is balanced. We are now beginning to see serious growth in manufacturing and the construction sector, and the next big step will be to see improvements in investment. As far as the housing market is concerned, the Chancellor has acknowledged that the Bank of England needs to watch the process very carefully.

[Mr Umunna]

But the right hon. Gentleman promised an export and investment-led recovery, yet as growth returned over the summer, exports fell, and the Office for National Statistics says that growth has been concentrated in household expenditure, rather than investment, which is £2 billion lower than it was a year ago. We all know that he is a keen dancer. In failing to prevail over the Treasury, is not the risk that, rather than marching to the tune of the makers, he is dancing to the Chancellor’s new song of house inflation?

[Vince Cable]

I am sure the hon. Gentleman would agree that there is no harm in the trend we are observing, which is that consumers are now more confident and are therefore spending and generating demand—I think we have both agreed over the last three years that the generation of demand is a key part of recovery. As far as exports are concerned, there is rapid growth in British exports to the big emerging markets, such as Russia, China, India and Brazil—indeed, I am going to Russia next week to pursue this course.

[Christopher Pincher (Tamworth) (Con)]

T3. Tamworth borough council is doing its bit to back small business Saturday by promoting “created in Tamworth” and offering free market stalls to business people and free parking to customers. Do the Government agree that local authorities have a hugely important role in helping rather than hindering small business growth, not least by offering more free parking?

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[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Last week, I attended the Hounslow enterprise showcase, organised by Dawn Edwards and Isabel King from the Real Business Club, which was run with the support of the local jobcentre and Hounslow chamber of commerce. I spoke to three women from my constituency who were looking for advice on how to start or grow their businesses. Does the Secretary of State think that we need to do more to support women-led businesses, particularly as research shows that the UK has a higher gender gap in entrepreneurship than many of the OECD countries?

[Vince Cable]

Yes, we acknowledge the importance of women in business. Indeed, one of the initiatives that we are leading involves ensuring that women are properly represented on the boards of our leading companies, thereby creating role models for people starting their own companies. I agree that there is a gender gap and I agree that we need to do a lot more about it.

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

In the past three years, the UK car industry has gone from strength to strength, but there is always more to do. Will the Secretary of State tell the House what further work is planned, in conjunction with the Automotive Council, particularly with regard to new engine and powertrain technologies?

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

What assessment has the Secretary of State made of the impact of the funding for lending scheme on investment in small businesses?

[Vince Cable]

The funding for lending scheme has had a very significant impact on the mortgage market. It has had a much lesser impact on small business, but it has recently been adapted, and I believe it has been used by some of the new competitor banks such as the Aldermore. We certainly welcome that.

[Iain Stewart (Milton Keynes South) (Con)]

Yesterday evening, I had the pleasure of attending the formal launch of the transport systems catapult, which is going to be based in Milton Keynes. Does my right hon. Friend agree that this will be an important innovation to reaffirm the UK’s leading role in transport technology development?