Oral Answers to Questions

Vince Cable Excerpts

Thursday 26th March 2015 Commons Chamber

[Andrew Stephenson (Pendle) (Con)]

1. What plans his Department has to support aerospace engineering in Pendle constituency over the next five years.

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

Government and industry are working together in the aerospace growth partnership to implement a long-term industrial strategy that benefits companies throughout the UK. This is backed by a £2 billion investment over seven years in aerospace research, and a £250 million sharing in growth supply chain improvement programme. ELE Advanced Technologies in Pendle is one company benefiting from that programme.

[Andrew Stephenson]

The aerospace sector is vital to Pendle’s local economy, and as vice-chair of the all-party group for aerospace I have been pleased with the level of support provided to the industry by the Government over the past five years. Although overall the aerospace sector across Pendle is doing well, Rolls-Royce has cut its work force at its two Barnoldswick sites. What more can my right hon. Friend do to support Rolls-Royce to maintain and expand its operations in Pendle?

[Vince Cable]

Perhaps I may preface my answer by reflecting on the fact that I think I have held this job, or its equivalent, for longer than anybody in 60 years, and I thank everybody in the House for their interest in the affairs of the Department for Business, Innovation and Skills over those five years. I thank you, Mr Speaker, for your impartial oversight of our proceedings, but I will stop short of wishing everybody well in the forthcoming election.

The hon. Member for Pendle (Andrew Stephenson) is right to say that the aerospace sector is booming, and I think his constituency contains the headquarters of the North West Aerospace Alliance. He is also right to say that despite its considerable successes, his constituency has lost 100 jobs out of the 1,000 at Rolls-Royce. We are supporting Rolls-Royce in many aspects of the industrial strategy, and in surrounding constituencies such as Burnley there is unalloyed success with Aircelle’s recent big investment supported by the regional growth fund.

[Margaret Beckett (Derby South) (Lab)]

As in Pendle so in Derby great concern followed the Government’s plans for aerospace engineering, following the announcement by Rolls-Royce last year that 800 skilled engineering jobs would be lost in the UK. When many of us, including the Minister, met the company to discuss forward plans in November, did the Government know that Rolls-Royce would be recruiting up to 500 skilled engineers in Bangalore, and does he share my concern for what that implies for the long-term future for skilled jobs in the UK?

[Vince Cable]

I have discussed Rolls-Royce’s long-term strategy with its chief executive on several occasions. We are well aware that it is a global company, and that to maintain its strength it invests internationally, including in India. It is also investing a great deal in the UK, and we work closely with it, not just in the aerospace sector. The talent retention scheme is ensuring that the vast majority of the unfortunate individuals who lost their jobs in the restructuring will be redeployed in high value jobs in the aerospace and related industries.

[Sir Roger Gale (North Thanet) (Con)]

The aerospace industry is important not only to Pendle but to many constituencies in the United Kingdom. With that in mind I welcome the proposal to extend an enterprise zone to cover Manston airport, for aviation-related purposes only. I hope that the Secretary of State will feel able to give every possible encouragement to reopen the airport so that we can take advantage of that.

[Mr Speaker]

Possibly including flights to Pendle—you never know.

[Vince Cable]

I am pleasantly surprised that somebody from the south-east is arguing for an expansion of airports—some of us have expressed doubts about the wisdom of that, but I am well aware of the interest in Kent in that airport, and I am sure it can add to the diversity of the sector.

[Chris Williamson (Derby North) (Lab)]

Rolls-Royce has received hundreds of millions of pounds from the British taxpayer for research and development, yet the company has not paid corporation tax for a considerable time. It is now offshoring jobs to low-wage economies—we have heard about India this morning. I have heard Ministers say that they want to rebalance the economy, so what steps has the Secretary of State taken to try to deter companies from offshoring high-skilled engineering jobs?

[Vince Cable]

There is indeed some offshoring taking place, but there is also a great deal of onshoring, by Rolls-Royce and other engineering companies elsewhere. Indeed, engineering that used to be carried out in India is now carried out in the UK. In particular, Rolls-Royce is investing: I have been to several events and seen the new advanced blades for its engines. The research and development and the production is being done in the UK and Rolls-Royce will continue to make a major contribution to the UK economy.

[Chris Ruane (Vale of Clwyd) (Lab)]

Aerospace is important in Pendle and it is also important in north Wales, with the Broughton site, which has 7,000 workers, and the Filton site near Bristol. Some 70,000 jobs depend on it. Airbus is a joint European venture. What does the Secretary of State think would happen if the Tories took us out of the European Union?

[Vince Cable]

I would hope that all parties continue to support the industrial strategy, which has been a considerable success, particularly in the aerospace industry, and Airbus has been one of its beneficiaries. To be frank, when I came into office I was warned by the industry that it was gradually drifting away overseas and that we would no longer be able to claim that we were the second aerospace power in the world, but with the big, long-term commitment we have made its future is secure, including that of Airbus.

[Mr Nigel Evans (Ribble Valley) (Con)]

2. What steps his Department is taking to support small businesses.

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

We have established the British Business Bank, which is supporting more than £1.8 billion of finance to 43,000 smaller businesses. More than 26,000 start-up loans have been drawn, totalling more than £136 million. The greatbusiness.gov.uk website brings together expert advice for businesses in one place, and the new Business Growth Service provides joined-up support to firms with growth potential. Some 48,000 businesses have been helped by our UKTI support—90% were small businesses.

[Mr Evans]

My constituency is next door to Pendle, funnily enough. It is very similar, but we do not have and do not want an airport. What we do have are many small businesses, from the butcher to restaurants, bars, hotels and independently owned stores that tend to employ local people and source locally whenever they can. Does the Secretary of State agree that we have to bend over backwards to ensure the vibrancy of those businesses so that they continue to be the lifeblood of our communities?

[Vince Cable]

I absolutely agree with the hon. Gentleman, and one of the success stories of this Government has been the massive expansion of small business, with hundreds of thousands of start-ups, many of them now employing people. However, I would caution against attempts to make some distinction between big and small businesses. They are interdependent through supply chains, and the excellent announcement today from Jaguar Land Rover, with its big investment in the west midlands in the new Jaguar, is an example of its confidence in the country, but it will also provide a substantial amount of business for its suppliers, small and large.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

Many small engineering companies would have liked the opportunity to apply to the £10 million fund to support women engineers, but the design of the fund meant that they could not afford to do so. Unfortunately, less than £200,000 was spent of the £10 million. In his last few days in office, will the Secretary of State look again and ensure that the rest of the money is specifically designated to support women engineers, especially women returning to work, and that small businesses can afford to apply for it without the barriers that were previously put in place?

[Vince Cable]

I will certainly undertake to look at that with the Minister for Skills and Equalities, my hon. Friend the Member for Grantham and Stamford (Nick Boles). We are aware of the issue that has arisen. The issue the hon. Lady surfaces—the shortage of women engineers—is severe, and we underperform much of Europe in that respect, with only one in 10 of our engineers being women. We are doing a lot to try to change the trend, but a substantial deficit remains.

[Mr David Nuttall (Bury North) (Con)]

Small businesses in rural areas are increasingly reliant on access to the internet. In the light of the Chancellor’s announcement in the Budget on using satellites to improve broadband internet access in rural areas, can the Secretary of State set out what steps he is taking to safeguard the radio spectrum that is essential for delivering that and other satellite services?

[Vince Cable]

Sadly, I am not responsible for telecommunications and related activities, but I am sure that the Secretary of State for Culture, Media and Sport has heard what my hon. Friend has said. The positive point in his question that I would emphasise is that our satellite industry is one of our most successful. We have a Catapult that invests in its activities, it is expanding rapidly and there is no reason why it should not fit alongside land connections in improving broadband speed.

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

The Secretary of State and I have worked on manufacturing matters and other matters quite well over these five years. I have enjoyed it and we have co-operated well. Small businesses, like big businesses, depend on finance and a good banking system. Is he as worried as I am about the takeover of TSB? The bank employs a lot of people in the area I represent, and it is a very important taxpayer investment. Are we getting value for money in this takeover, from a country and a company that has a big question mark over its economy?

[Vince Cable]

I had an opportunity to discuss the TSB takeover on the day it was initially announced. One of the first questions I asked was: what would be the implications for business lending? The Spanish bank conducting the takeover has expertise in this field. This is its major area of activity in Spain. I understand that TSB will be pushed in that direction, which is surely positive. There are many other outlets now opening up through challenger banks, and the Business Bank has made a major contribution to increasing diversity, as well as the supply of finance to small businesses.

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

Will my right hon. Friend join me in welcoming the record number of business start-ups in sunny Brighton and Hove?

[Vince Cable]

There has been a record number of start-ups across the country, but Brighton is a particular growth centre. The creative industries are very much at the heart of that, and I am sure the hon. Gentleman would like me to congratulate him on his own contribution to that.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

If women set up businesses at the same rate as men there would be 1 million extra entrepreneurs in this country, adding about £60 billion a year to our economy. What is stopping the Secretary of State putting into practice the Liberal Democrat Burt report recommendations on monitoring whether the Government are buying from women in their own supply chain to help to bridge that gap?

[Vince Cable]

I can cite a couple of examples of where we have consciously and successfully sought to promote women in business. The start-up loans scheme has a very high proportion of women entrepreneurs—off the cuff, I think it is 40% or more. Yesterday we launched, with the Cranfield business school, the report on the successful efforts to get women on the boards of our top companies. The target was set and it is very, very close to being achieved. I am sure the hon. Lady is happy to work with us in continuing a very important campaign.

[Sir Peter Luff (Mid Worcestershire) (Con)]

3. What recent assessment he has made of the effectiveness of steps taken by his Department to encourage more young people to obtain qualifications leading to careers in engineering.

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[Kelvin Hopkins (Luton North) (Lab)]

12. What assessment he has made of the effect on the balance of trade of depreciation of the euro.

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

In the latest Office for Budget Responsibility forecast, while sterling is assumed to be stronger against the euro, the balance of trade is forecast to improve. I recognise that a strengthening pound can create pressure for some exporters, but any discernible impact on the balance of trade has been more than offset by other factors, such as demand conditions in overseas markets.

[Kelvin Hopkins]

The UK has a trade deficit of about £1 billion a week with the rest of the EU, equivalent to 1 million jobs lost, and the significant depreciation of the euro rate against sterling, while bringing a short-term benefit to the trade balance because of the J-curve effect, will cause serious longer-term damage to the economy. What discussions has the Secretary of State had with the Chancellor and the Governor of the Bank of England about this worrying matter?

[Vince Cable]

I have had a lot of discussions with both of them about this issue, but since the hon. Gentleman is an expert on the subject he will know that what really matters is the real effective exchange rate. We have devalued substantially against the dollar, by more than 10%, and that must be put into the mix. One lesson we learned from the 2008 financial crisis, when we had sterling devaluation of 25%, is that that does not automatically translate into improved trade.

[Alex Cunningham (Stockton North) (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 and has played a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.

[Alex Cunningham]

The Secretary of State has kindly met me several times, along with local companies from my constituency, to discuss development. In most of the cases, I have been grateful to him for a positive outcome. Jobs are good, but I would ask for his comments on the so-called drop in unemployment in Stockton where just over one third of those no longer claiming jobseeker’s allowance have found a job. Does he have any idea where his Tory colleagues have hidden the hundreds of people from Stockton who have not been that fortunate?

[Vince Cable]

As it happens, I am going to Teesside today on my last ministerial visit. I look forward to hearing more about the detail on the ground. There is a very positive story in the adjacent seat of Redcar, which is what I shall be celebrating.

[Jeremy Lefroy (Stafford) (Con)]

T3. Alstom in my constituency has announced that it will build its replacement automation research and development and manufacturing centre on the new business park in Stafford, which is a far-sighted investment both by Alstom and by the county council, which constructed the park. Does my right hon. Friend the Minister agree that that demonstrates the importance of providing the infrastructure and incentives so that we retain manufacturing investment in the west midlands at the same time as attracting it from overseas?

[Mr Chuka Umunna (Streatham) (Lab)]

This is indeed the last departmental questions of this Parliament and, Mr Speaker, it has been good to see you in your place at all of them. I have enjoyed my exchanges with the Secretary of State and note that during his time no fewer than nine Conservative minders have been sent to ensure, as his former deputy, the Defence Secretary, has intimated, that he does not slip his electronic tag. In all seriousness, despite all the efforts to promote certainty for business, does he agree that the biggest uncertainty facing business in this country is his Tory Prime Minister’s decision to flirt with EU exit and that the biggest mistake for his party would be to go along with it?

[Vince Cable]

I thank the hon. Gentleman for his courteous question on the last day of this Parliament and, for once, I agree with him. It would indeed be disastrous if we were to leave the European Union. There would be a prolonged hiatus before the referendum was held and many options could follow it, all of which would be very damaging for employment in this country. I and my party will certainly not go along with that.

[Mr Umunna]

I know that the Secretary of State does not think that his party’s former president and current foreign affairs chief, the hon. Member for Westmorland and Lonsdale (Tim Farron), has much credibility, but I think that that hon. Gentleman was right to say that an in/out referendum at the arbitrary date of 2017 would

“damage the national interest, compromise our negotiating position and be bad for the economy and jobs”.

Both the hon. Gentleman and the Business Secretary fear that their leader will once again sell out his principles, this time on the EU, and they are worried about our future membership. There are many other reasons to do so, but is not the truth that the best and only way to clear up this uncertainty for business and the country is to vote Labour in 42 days?

[Vince Cable]

I have a longer memory than the hon. Gentleman; I first became involved in debates on the European Union in the mid-1970s, when I was campaigning in favour and the Labour party was against it. I am glad that it has finally seen the light, but my party has been consistent throughout.

[Mr Dominic Raab (Esher and Walton) (Con)]

T4. Last week Len McCluskey set out plans for illegal strikes. The Conservatives condemned it and the Leader of the Opposition said nothing—Labour is bankrolled by Unite. I just wonder whether the Secretary of State and his party condemn the threat to the rule of law or sit on the fence.

[Vince Cable]

Of course we condemn threats to the rule of law. I simply point out that the level of strikes in this country is the lowest it has been for a generation.

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

T2. Has the Secretary of State seen this week’s report by Open Europe, which indicates that unless rights at work in this country were to be completely destroyed, leaving the European Union would cause permanent damage to the British economy? Is not the real risk to businesses and workers at the next election the United Kingdom Independence party-Tory alliance that would destroy our place in the European Union?

[Vince Cable]

I am beginning to recognise a theme, albeit a very welcome one. I do not wish to spoil the harmony on the Government Front Bench, having worked very well with my Conservative colleagues on restoring the economy, but we happen to disagree fundamentally on the future of Europe.

[Sir Bob Russell (Colchester) (LD)]

T6. I pay tribute to my right hon. Friend for his excellent stewardship of the Department over the past five years. Greater attention must be given to Britain’s defence industry when placing orders. Price and competition are all very well, but in the defence interests of the UK, and to support the skilled jobs we have, does he agree that in a changing world we should not put at risk the skills, supply, maintenance and servicing of our defence capability?

[Vince Cable]

My hon. Friend is absolutely right. He refers to a recent decision by the Ministry of Defence to award a contract to a British company in Germany, rather than a German company in Britain. In general our industrial strategy has been widely adopted across Government, but we probably have not gone as far in integrated defence procurement in that process.

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

T5. The Secretary of State will know that the north-east is the only region with a balance of trade surplus, so he will appreciate the importance of exports to the regional economy. Is not it a major cause of concern that rhetoric from Ministers pushing Britain towards an EU exit risks damaging jobs, investment and exports in the north-east?

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[Mr David Hanson (Delyn) (Lab)]

T8. Over 9,000 people have phoned the RBS telephone helpline on the enterprise finance guarantee scheme. Does the Secretary of State—not the Minister—agree that whoever holds his position after the election should order an urgent investigation into the use of the enterprise finance guarantee scheme by RBS?

[Vince Cable]

That process is already under way. I have met representatives of RBS to discuss it. They have acknowledged that there are failings in the way in which they operated the scheme, and they have given assurances that anyone who was a recipient of the loan and who has been disadvantaged by the way RBS handled it will receive recompense.

[Mr David Willetts (Havant) (Con)]

May I warmly congratulate the Secretary of State on his very substantial record during his five years in office, and invite him particularly to welcome the agreement across all three parties on the importance of Government support not just for science and research, but for innovation and the eight great technologies?

[Vince Cable]

I thank the right hon. Gentleman for his kind comments. We worked extremely well together and I thank him for his contribution to that. One of the legacies was the creation of the catapult network. We built on the initial foundations of the Advanced Manufacturing Research Centre. It has now become internationally recognised as an excellent way to promote innovation.

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

T9. Newcastle United football club and City Link share an owner, and the fans of the one and the workers of the other have suffered as a result. Indeed, the Scottish Affairs Committee recently berated him for his attitude to this House. Following the publication of its report, will the Secretary of State follow the example of my hon. Friend the shadow Secretary of State and call for steps to tackle false self-employment, which damages workers and leaves them without proper protection and support?

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[Duncan Hames]

Amen to that, Mr Speaker. The Secretary of State will know that advanced manufacturing businesses have exceeded the Government’s expectations with their high value bids for the supply chain initiative for their sector. Will he ensure that the over-programming necessary to accommodate those bids does not cause any further unwelcome delay in enabling those businesses, including one in Chippenham, to make great strides in creating jobs in this valuable sector?

[Vince Cable]

We are just missing the baby, and the family will be complete. I am aware of the difficulties that my hon. Friend has had with the AMSCI bid. I have taken a close personal interest in it and I hope it will be resolved within the next few weeks.

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

The Skills Minister seems reluctant to answer questions about cuts in adult learning opportunities amounting to 35%, so there are a million fewer adults receiving such training. East Durham college in my constituency has warned that if the Government continue, adult further education will, in effect, be a thing of the past. Why are the Government undermining lifelong learning and hindering opportunities for adults to retrain and obtain qualifications that they need to meet the demands of the labour market?