Oral Answers to Questions

Vince Cable Excerpts

Thursday 12th February 2015 Commons Chamber

[Mr Andrew Robathan (South Leicestershire) (Con)]

1. What assistance his Department provides to small farm companies in supply chains.

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

The House legislated to strengthen protection for small farmers and small businesses supplying supermarkets by establishing the Groceries Code Adjudicator. I recently secured Government agreement to enable the GCA to impose fines of up to 1% of turnover on supermarkets found guilty of mistreating suppliers. I was also pleased that the GCA last week launched a formal investigation into alleged breaches by Tesco of the groceries code, and I urge those with evidence to come forward.

[Mr Robathan]

I think the Secretary of State and I are at one on this, but he will know of the plight of the many small dairy farmers driven out of business by the abuse of market position by supermarkets and big buyers, and of its impact not just on the face of our countryside, but through the importation of milk that is probably produced to much lower farm welfare standards than our own. Will he therefore consider strengthening the powers of the GCA so that if market position is abused, farmers and others are not penalised by the strength of supermarkets?

[Vince Cable]

I am aware of the Select Committee report that suggested something very similar. Its main recommendation was that we introduce the power of fines, which we have now done, but there will be a review of the GCA within a year of the legislation, and no doubt in the next Parliament those powers can be taken.

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

I am grateful to my right hon. Friend for referring to the Select Committee report. Unfortunately, one year might be too late for the many dairy farmers going out of business. Will he undertake an immediate and urgent review into extending the remit of the GCA to indirect supply chains, such as those in the dairy industry, as well as direct supply chains with supermarkets?

[Vince Cable]

The hon. Lady rightly touches on the key outstanding issue, and I certainly believe it would be appropriate to consider the indirect supply chains. I am happy to talk to my colleague the Secretary of State for Environment, Food and Rural Affairs about that particular issue, but I think she will find that there is a legislative obstacle.

[Sir Bob Russell (Colchester) (LD)]

Will my right hon. Friend look at the successful local sourcing policies promoted by the East of England Co-operative Society, with the support of Forward East, which are enabling small food and drink manufacturers to get their products into local stores? He and others might wish to know that on Tuesday 24 February, in the Inter-Parliamentary Union room at lunchtime, they will be able to witness that for themselves.

[Vince Cable]

It is always the case that genuinely voluntary efforts to promote local sourcing produce substantial benefits and that legislation is necessarily a blunt instrument. The method my hon. Friend describes is better where it can be applied.

[Jim McGovern (Dundee West) (Lab)]

2. What discussions he has had with ministerial colleagues in the Department for Education and Department for Culture, Media and Sport and with the devolved Administrations on ensuring that their policies meet the skills needs of the technology and video games sectors.

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[Grahame M. Morris (Easington) (Lab)]

5. If he will take steps to increase apprenticeship places and support small businesses through greater use of Government procurement.

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

Under the industrial strategy, we encourage a long-term approach to procurement, including apprenticeships and other forms of training.

[Grahame M. Morris]

May I point out, with respect, that the Labour Government used spending on public procurement to boost apprenticeship opportunities, especially in the case of big projects such as Crossrail and the London Olympics? Given that the European Union procurement rules do not prevent that, will the Secretary of State explain why Ministers are not supporting Labour’s plans to use public procurement to create new apprenticeship opportunities?

[Vince Cable]

I remind the hon. Gentleman that under the last Government the numbers of apprenticeship starts was half the number that we have seen in the current Parliament, and that these are also significantly longer and higher-level apprenticeships. As for procurement, if companies can build in apprenticeships—which we encourage them to do—that is of course desirable, but it is a very crude mechanism which adds to the barriers facing small business and the cost to the Government. The experience of trying to build conditionality into section 106 agreements suggests that many companies regard the process as token, and do not invest in sustainable apprenticeships.

[Charlotte Leslie (Bristol North West) (Con)]

I recently visited Mathias & Sons, a work clothing manufacturer in my constituency. It is hoping to secure the contract to provide clothing for workers at the Hinkley Point C development. What can the Government do to ensure that important small businesses like that obtain contracts for such huge developments?

[Vince Cable]

I believe that congratulations are due to the hon. Lady, who has become engaged—perhaps this morning, but certainly recently.

As for procurement and Hinkley Point, the leading contractors have committed themselves to a substantial UK content, and we hope that that extends to apprenticeships. We are endeavouring to frame the pre-qualification questionnaires in such as way that apprenticeship training is encouraged in UK procurement.

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

Big projects such as Crossrail and HS2 are UK-wide. What steps are the Government taking to ensure that businesses throughout the UK, including small businesses, have an opportunity to benefit from the procurement and Government spending that is associated with that type of work?

[Vince Cable]

I gather that senior politicians, including me, have been queuing to go down into Crossrail to admire its progress. One of Crossrail’s key achievements is to substantially advance apprenticeships and, above all, UK content; there is a wide distribution throughout the UK. If we can replicate the experience of Crossrail with other big infrastructure projects, that would be an admirable step forward.

Student Loans

[Paul Blomfield (Sheffield Central) (Lab)]

6. What assessment he has made of the sustainability of the student loan system.

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[Heidi Alexander (Lewisham East) (Lab)]

11. What recent assessment he has made of the contribution of the UK’s EU membership to businesses and the UK economy.

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

The European single market gives British firms access to 500 million consumers and, as our largest trading partner, is responsible for almost half of this country’s exports. A wide range of economic studies demonstrate the benefits to the UK economy from EU membership.

[Heidi Alexander]

It is my strongly held view that a UK exit from the European Union would be bad for British jobs, bad for British exports and bad for the British people. When did the Secretary of State last speak to the Prime Minister about the so-called negotiations with other European leaders about EU reform? Does he know what the deal-breaker is for the Prime Minister that would lead to the Prime Minister campaigning against our continued membership of the European Union?

[Vince Cable]

The Prime Minister and I discuss this frequently, and we agree that there needs to be significant reforms and improvements in the European single market, particularly moving on to a digital single market. The hon. Lady is quite right to say that our exit would be massively disruptive, and a lot of actual and potential foreign investors in this country are making it absolutely clear that they are alarmed by that possibility, should there be a change of Government.

[Philip Davies (Shipley) (Con)]

Can the Secretary of State tell us: how much this country has handed over in membership fees alone to the European Union since it became a member of the Common Market; what our cumulative trade deficit has been since we joined the Common Market; what our trade deficit was last year with the European Union; in how many years we have had a trade surplus with the EU since we joined the Common Market; what proportion of the world economy the EU made up when we joined the Common Market; and what proportion of the world economy the EU is today?

[Mr Speaker]

That sounds like a request for an essay. It needs to be an extremely pithy one.

[Vince Cable]

I will do my best to answer the second, third and fourth of the hon. Gentleman’s six questions, which related to the trade deficit. Clearly, if we look at the trade deficit in terms of services as well as goods, and if we look at capital flows, including inward investment, the position is a very positive one. I do have to record—I am sure he is aware of this—the extreme alarm now being expressed in business circles about the possibility of a Conservative Government, creating a great deal of uncertainty in this area. There is uncertainty about a prolonged hiatus as the conditions which he is seeking have to be negotiated and uncertainty as to the different forms of exit, be it the Norwegian, Swiss or Turkish model. He will have to reflect with his colleagues on the damage now being done by that uncertainty.

[Mr Philip Hollobone (Kettering) (Con)]

I note that the Secretary of State did not answer any of the questions asked by my hon. Friend the Member for Shipley (Philip Davies), because he is embarrassed by the answers he would have to give the House. It is my strongly held view that Britain would be better off out of the European Union, because we would be able to control our immigration and save the £10 billion a year membership fee. Given that we do have a massive and growing trade deficit with Europe—those countries sell us more than we sell them—is it not a complete myth that trade with Europe would stop were we to leave the EU?

[Vince Cable]

Of course it entirely depends what the alternative arrangements are, and I have never been terribly clear what those people who want to leave are actually seeking. If we had a Norwegian solution, we would still have the immigration movements. If we had a Swiss agreement, there would be a substantial degree of integration. I think that what many Members who want to leave the EU are asking for is an arrangement such as that prevailing with Turkey, under which there is minimal commitment to a single market but very few of the benefits of membership.

[Mr Alan Reid (Argyll and Bute) (LD)]

12. What recent discussions he has had with the Secretary of State for Transport on the location of the UK’s first space port.

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[Jim McGovern (Dundee 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 plays a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.

[Jim McGovern]

The National Union of Rail, Maritime and Transport Workers recently reported that, due to the fall in oil prices, the terms and conditions of people employed in the oil industry have been reduced. Is the Minister aware of that and what steps is he taking to address that exploitation?

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[Mr Chuka Umunna (Streatham) (Lab)]

Following their “Maoist and chaotic” abolition of regional development agencies—the Business Secretary’s words not mine—the Government’s flagship regional growth policy this Parliament has been the regional growth fund, which was mentioned earlier. This might be our last Business, Innovations and Skills questions this Parliament, so can the Secretary of State tell me what percentage of those RGF moneys, announced to great fanfare, have actually made it to, and been drawn down by, the businesses concerned?

[Vince Cable]

I am going off later today to talk about the regional growth fund and its latest successes. Most companies that have received RGF awards are highly appreciative of them. The awards have been highly successful in attracting private investment, which might not otherwise have occurred, and a substantial amount of employment. Of course a significant percentage does not go through immediately because of due diligence. Many of the awards are not completed because the projects proceed anyway or are withdrawn, and that is a consequence of the very careful and prudential way in which we manage money under the regional growth fund.

[Mr Umunna]

The fact is that hundreds of millions of pounds of RGF moneys are gathering dust and are nowhere to be seen by many of the businesses that they promised to help. The local enterprise partnerships that were put in place to do the job of the RDAs were left without appropriate budgets or powers, and the local enterprise zones, which we were told would create 54,000 jobs, have so far created less than a quarter of that sum. There has been a lot of grand talk from these Ministers on their plans to rebalance the economy, but as this Parliament comes to an end—never mind the chaos that the Secretary of State talked about—are not the words that best sum up delivery of schemes to boost regional growth, “utter incompetence”?

[Vince Cable]

If the shadow Secretary of State is so critical of the regional growth fund, is he proposing to abolish it? I suspect not. The reason why some money is not spent is that tests of due diligence have not been satisfied. I am sure that he will acknowledge the fact that, under the regional growth fund, public money is spent a lot more efficiently and effectively in drawing in private investment than ever happened under the regional development agencies, which were wasteful and ineffective.

[Charlotte Leslie (Bristol North West) (Con)]

T3. Many people say that LEPs have been a huge improvement on the regional development agencies, but some small businesses that I talk to in Bristol are concerned that their priorities are not always reflected in local growth funds. Will the Minister work with his colleagues to ensure that the priorities of small businesses are reflected in LEPs, and that LEPs are not unduly influenced by major business interests?

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

May I ask the Secretary of State and his merry men and women to pay attention to an important problem? Many of us across the House are in favour of apprenticeships and university technical colleges, but we would be conning the British public if we led them to suppose that apprenticeships and university technical colleges on their own will help us get rid of the dreadful skills shortage in this country. Will the Secretary of State look at this again? The real secret of solving this problem is in the further education sector, in universities having more applied courses, and in making graduates and the people coming out of colleges more fit and ready to work in industry.

[Vince Cable]

The hon. Gentleman is absolutely right. This calls for across-the-board treatment. The suggestion that has come from some sources that it would be sensible to cut the fees for engineering and science courses to £6,000 would, of course, massively undermine that, because it would no longer be possible to cover the costs of those courses.

[Sarah Newton (Truro and Falmouth) (Con)]

Will the Secretary of State confirm that he has asked Barclays to defer the closure of the St Agnes branch until the new protocol on last bank closures in communities where the post office is not a viable alternative has been agreed, which I understand will be next week?

[Vince Cable]

I have indeed discussed that directly with the chief executive of Barclays, in response to my hon. Friend’s very persistent campaigning and that of her Liberal Democrat opponent, who has been equally assiduous. We recognise the need in St Agnes for a bespoke solution, since the post office is not the ideal vehicle, and I think we are working towards a satisfactory outcome.

[Nic Dakin (Scunthorpe) (Lab)]

As the hon. Member for Cleethorpes (Martin Vickers) pointed out, there is an announcement today about restructuring by Total of its facility at Lindsey oil refinery. In addition there is uncertainty about the future of Tata Steel Long Products in Scunthorpe. Will the Government ensure that the necessary support is given to manufacturing industry in north Lincolnshire, so that it has a strong and prosperous future?

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[Philip Davies (Shipley) (Con)]

When the Secretary of State’s Department was called the Department of Trade and Industry, he called for it to be abolished, saying:

“The DTI should be wound up because it doesn’t perform a function. It has no real role anymore”.

Interestingly, his solution was not to reform the Department and rename it BIS; his solution was to split the duties of the Department between existing Government Departments —he cited the Department for Work and Pensions and the Department for Education and Skills. Which of his duties does he think should be handled by other Government Departments, or what has changed his mind? Was it a ministerial salary, perhaps?

[Vince Cable]

I am delighted to have yet another contribution from the leader of my parliamentary fan club. He has failed to observe that since I made my comments on the DTI a decade ago, we have acquired responsibility for universities, skills, science and much else.

[Mr David Heath (Somerton and Frome) (LD)]

A business in my constituency received a communication from Royal Mail the week before Christmas, saying that with effect from four business weeks later, the business reply and freepost service that it had used for 10 years was to be discontinued and it would have to re-register. The business was told that if the old address was used, there would be a 20p penalty per item and the item may not be delivered. It will cost the business £10 per customer and £10,000 in lost stationery. Is that reasonable? Should not the Royal Mail respond to my letter? Will the Minister intervene?

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[Andrew George (St Ives) (LD)]

I congratulate the Government on the support that they have given to satellite communications and space research companies based at Goonhilly earth station in my constituency, and also on their excellent science and research consultation, which has an excellent section on space research. May I urge Ministers to ensure that Goonhilly is placed at the centre of the development of space research infrastructure in future?

[Vince Cable]

I met my hon. Friend and a delegation yesterday to discuss that. I congratulate him on the stamina he has shown in pursuing the Goonhilly project, which is now part of the regional growth fund. He has raised wider issues about how the space policy can be developed to bring in the private sector, and I shall discuss with my right hon. Friend the Minister for Universities, Science and Cities how we can progress that.

[Sir Bob Russell (Colchester) (LD)]

Unemployment in my constituency has fallen by 54% since the last general election. In respect of business, innovation and skills, will my right hon. Friend get his officials to look at the success story that is the Colchester business enterprise agency, a not-for-profit voluntary organisation which has about 50 starter workshop units helping new and innovative fledgling businesses?