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?

Apprenticeships

Vince Cable Excerpts

Wednesday 4th February 2015 Commons Chamber

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

I am delighted that the Opposition have chosen apprenticeships as the topic for this debate. The motion’s opening line is an admirable statement of what we are trying to do:

“That this House believes that more high-quality apprenticeships are essential to the future prospects of young people and future success of the economy”.

“Hear, hear” to that. It offers a good definition of what the Government have been doing: the number of apprenticeships has doubled from just over 1 million to 2 million over this Parliament, and as the hon. Member for Streatham (Mr Umunna) has emphasised quality, I should say that the proportion of advanced and higher apprenticeships and longer apprenticeships has risen systematically as a result of our reforms.

We are therefore very comfortable debating apprenticeships. Indeed, the only subject that we would be more comfortable debating is job creation, which I think the Opposition have chosen for next week—the hon. Member for Streatham is very brave. I was trying to understand their thought processes in approaching the question. I suspect that they said to themselves, “Well, the Government actually have a pretty good record on all this stuff, so let’s try to find a negative number to debate. It doesn’t matter what it is, so long as it’s negative.” They did find a negative number. In 2013-14, for one year, and for one age group, there was a slight reduction—4%—in the number of apprenticeship starts. That fact is quite correct, but the argument built around it is utterly specious.

Let us look at that age group—19 to 24-year-olds—because it tells a good story about what has actually happened. I do not want to dismiss older apprenticeships, as the hon. Gentleman did, because many of them are extremely valuable in raising the productivity of the labour force. The time series gives us a good analysis of what has happened during our time in office. In the year before we came into government there were 114,000 apprenticeship starts for that age group, and in the last year for which we have records, 2013-14, the figure was 159,000, which means there was a 40% increase in the age group he defines as the most important. As has already been pointed out to him, there has been a 60% increase in Streatham, and a 75% increase in Hodge Hill.

The number of starts is one way of measuring apprenticeships, but in some ways participation is a better measure, because it captures the benefits of longer apprenticeships and fewer drop-outs. The situation with participation is even stronger. It suggests that over that period the numbers grew from 210,000 to 309,000, which is a 46% increase. Overall, participation in apprenticeships grew by 73%, and for advanced apprenticeships—level 3 and above—participation has grown by 90% under this Government.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I thank the Secretary of State for giving way; he is being characteristically generous. I am glad that he has focused on the fall in the number of apprentices under the age of 25. Does he think that that trend can be reversed with the budget that the Chancellor has set out for his Department, as implied by the fiscal path for the years ahead? He knows as well as I do that if the science budget is protected, that implies a 44% cut for the Department. Does he think that it will be possible to reverse the fall in the number of apprentices with that kind of settlement?

[Vince Cable]

It is certainly possible, as I think we shall see when we get the 2014-15 figures. I agree with the right hon. Gentleman that we should be investing more in apprenticeships, not less. That is certainly my clear objective. He might not have noticed, but the autumn statement included a commitment to £40 million extra for higher and advanced apprenticeships over the next two financial years, so we have every reason to be optimistic about achieving continued growth.

The figures I have cited, which I do not think are disputed, actually understate the improvement achieved, and for precisely the reason that the shadow Secretary of State emphasised: the necessary shift to longer apprenticeships and higher level apprenticeships. When we came into government, the share of level 1 was above 40% for that age group, and it is now only 10%. We decided in 2012 not to include level 1 within the definition of an apprenticeship. As the hon. Member for Liverpool, Walton (Steve Rotheram) pointed out, that was entry level. We now call those traineeships, so there is progression. It is valuable to have level 1, but we no longer describe it as an apprenticeship. If we take out the very short courses, in particular, which tended to dominate in the earlier period, we see that the number of people in the 19-to-24 age group has actually doubled, because of the preponderance of very short courses in the apprenticeship programmes we inherited.

Let us look at the higher level apprenticeships. For level 3 the number of starts has doubled. For higher—level 4, foundation degree and above—we have seen a tenfold increase since we came into government, from 1,700, which was negligible, to 18,000. There is an important point to make about levels. I think that the hon. Member for Streatham dismissed too easily the value of level 2 apprenticeships.

[Mr Umunna]

indicated dissent.

[Vince Cable]

Well, he seemed to imply that they were not quite apprenticeships. Actually, there is a lot of statistical evidence that people who do a level 2 apprenticeship and no more have significantly higher earnings than those who do not—about 11% or 12% over a three to five-year period. There are many important trades, such as bricklaying, in which a level 2 qualification offers valuable progression into a badly needed occupation. The hon. Gentleman is right that we should be moving up the level chain, which we are doing, but I do not want him or anybody else to devalue level 2 qualifications or to seek to eliminate them.

[Mr Umunna]

I agree with what the Secretary of State is saying. I am seeking not to devalue level 2 qualifications but to bring us up to—[Interruption.] Well, Mr Graham says that we want—[Interruption.]

[Mr Umunna]

What we are proposing is to bring us up to the same benchmarks as our competitors, who are more productive than we are.

[Vince Cable]

I hope that is a clarification that level 2 will not be removed from the hon. Gentleman’s definition of an apprenticeship, should he find himself in government. I hope that the Deputy Prime Minister is not right that this is some kind of ploy to reduce the numbers and save money.

[Richard Graham]

My right hon. Friend makes an extremely valid point. It is quite extraordinary that the shadow Secretary of State has not read his own motion, which states very clearly

“so that all apprenticeships are at least level three”.

What is the role for level 2? My right hon. Friend is right to question that.

[Vince Cable]

That is a valid clarification.

[Mrs Caroline Spelman (Meriden) (Con)]

Does my right hon. Friend share my concern about the message that the hon. Member for Streatham (Mr Umunna) is sending to young people in my constituency who are studying hard right now for level 2 qualifications, and about the message he is sending to the colleges and staff who are working hard to ensure that they have the sorts of relationships with employers that can make that happen? Should he not think more carefully about what he says?

[Vince Cable]

The right hon. Lady is absolutely right. Level 2 qualifications are valuable in themselves, as she rightly emphasises, but they are also part of a progression route. Many people who do a level 2 qualification take a break before going back and doing a level 3. I hope that we have now clarified that level 2 is a part of apprenticeships.

[Steve Rotheram]

With regard to proper apprenticeships, it depends on what a person’s qualification is on entry. With a lower qualification threshold, they would do a national vocational qualification level 2, on the way to doing an NVQ level 3. It is not either/or; it is part of an apprenticeship.

[Vince Cable]

That is very helpful. The hon. Gentleman clearly speaks from experience and knowledge, and we respect that.

The figures are very clear: we have seen a big increase in volume and a big increase in quality. That did not happen by accident. It is important to talk through the constraints on the public finances that I inherited, and on which the hon. Member for Streatham elaborated with regard to the problems that will face the next Government. When I came into office, I was told that the previous Government had planned to cut the Department’s budget by 25% had they returned to office. That was clear and explicit. Indeed, we have had to confront that in office. Let us be clear that it would have been no different had he been doing my job.

The Department’s budget is dominated by two items: higher education, including teaching and student support, and adult skills. There are other, smaller items such as industrial support and science. We were therefore faced, in office, with some very painful and difficult decisions. The advice I got from the Opposition, in a particularly shrill and angry way, was that we must give priority to university undergraduates—future graduates. We did the calculations and found that had we followed the advice from the Opposition, and had we introduced the policy that I think—it is not totally clear—they are now considering introducing on tuition fees, we would have had to cut the adult skills budget by about 40%. Within that, we would have had to cut apprenticeships by even more, because, being of higher quality, they are more expensive than other forms of training. Apprenticeships, which the hon. Gentleman described as growing steadily throughout the time of the Labour Government, as they did, would have been emasculated as a result of the public spending cuts that I think his party would have made had it been in government, and that I was being advised to make.

I then made a decision, which I think was one of my better ones, to listen to the advice, to reject it, and to do the exact opposite. We took a serious political hit on higher education, but we did the right thing in ensuring that universities were properly funded and that we got a fair repayment system. We also made the decision to invest more, not less, in apprenticeships. That is how we have got to where we are, with not only the volume but the quality. That is because we followed up getting the volume by taking short apprenticeships of below one year out of the system; by significantly supporting advanced and higher level apprenticeships; and, perhaps most importantly—the hon. Gentleman did not mention this at all—by introducing employer ownership through giving business a greater say in how these funds are allocated. In all those ways, we have improved quality.

Let me deal with some of the other critical comments in the hon. Gentleman’s speech and motion. First, he quoted the figure, as he did when he was on television with me the other day, regarding what he calls the lack of formal training—[Interruption.] Indeed, there was a survey that suggested that some apprentices—

[Mr Umunna]

It was your survey.

[Vince Cable]

There were a substantial number of surveys; I am quoting the one that the hon. Gentleman has highlighted.

[Mr Umunna]

It was your survey.

[Vince Cable]

We have published a survey in which 24% of apprentices said that they had not received formal training. The hon. Gentleman has built his criticism around that.

[Mr Umunna]

It was your survey.

[Vince Cable]

I am not disowning the report; it clearly exists. [Interruption.] Perhaps the Opposition could be a little less silly and just try to follow the argument. The key is in the word “formal”. Many people do good apprenticeships in business that involve informal work in the workplace, and many people define good training in that way. The survey that we conducted, which the hon. Gentleman is having a little giggle about, tells us very clearly that 90% of those trainees are satisfied with their apprenticeships, while 72% are very satisfied. Ninety-seven per cent. said that they had been trained—sometimes informally, sometimes formally—and 90% got a job. Perhaps most crucially, there is a very high earnings premium. I have quoted the figure for level 2, and for level 3 it is significantly higher—about 16% three to five years after graduation. The proof of the pudding in is in the eating: these apprenticeships do provide satisfaction, jobs and higher salaries for the people who do them.

Let me address the minimum wage. The survey shows that 15% of people are not being paid the minimum wage. That figure is clearly too high, and unacceptable. The motion says that it is “one in five”. I am not sure who did the maths on this, but one in five is not 15%. Perhaps we need compulsory maths for Opposition Front Benchers as well as apprentices. The key point is that 15% is way down on the 30% figure that we inherited. As the hon. Gentleman knows, because he has been part of these debates during the past year, we have significantly improved enforcement measures. We have increased penalties from £5,000 per firm to £20,000 per person, we have introduced naming and shaming, and we have increased the enforcement budget by 30%. We do take the minimum wage seriously. We believe that it must be enforced and that it should apply to apprentices as it should to anyone else.

The hon. Gentleman is right that procurement is a lever for the public sector to employ. We already have many examples of good practice in public sector procurement. Crossrail is a company that has really committed itself to high levels of apprenticeships. There are a couple of practical problems, as I hope he recognises; I think he hinted at one of them. First, for small and medium-sized enterprises and social enterprises, where we are trying to increase the share of public procurement, there is a conflict of objectives. Do we regard getting SMEs into procurement as more important than increasing their number of apprenticeships? There is no clear answer to that. Secondly, companies that are required to introduce apprenticeships would simply add that to the cost and it would be passed on to the public sector, so instead of a direct subsidy through our 50:50 payment system we would be providing indirect subsidies. These are not crippling objections. We need to reflect on how we can better use public procurement, but crude legislation and compulsion is probably not the best way. I accept that public procurement is a good vehicle, and we have to work on this.

[Bill Esterson]

I agree that it is a real challenge, given the current situation, to enable more SMEs, particularly the smallest businesses, to take on apprentices. Does the Secretary of State agree that countries such as Germany have cracked this problem over many years, and that there are things we can apply from Germany and elsewhere to achieve the goal of getting more small businesses to take on apprentices?

[Vince Cable]

The hon. Gentleman is right. There is a German model that seems to work for that country, and Austria is another example. Their approach is different from ours, but it has given them consistently high levels of skills in manufacturing industries, in particular. We should learn from that. There is an element of compulsion and levying that we have moved away from in the UK. However, I am certainly happy to learn from Germany on this and other things.

[Andrew Gwynne]

There are also some very good examples here in England. May I commend to the Secretary of State the work of Labour-controlled Tameside council, which covers part of my constituency and which has established a local apprenticeship company from which SMEs can draw down apprentices, even though the local authority is running the company?

[Vince Cable]

Yes, I believe there are lot of good models of that kind, and I commend the one that the hon. Gentleman mentions.

That leads on to another issue that the shadow Business Secretary raised—devolution and how we capture decision making to a local level. He is right that we should have as much devolution as possible. That is what we are trying to do through the city deals and the local deals. There are many good models. Leeds is one, and Manchester is also getting off the ground. Sheffield is pioneering a lot of the local-level commissioning of apprenticeships that is particularly good for getting through to SMEs.

Devolution is not simply about local government or LEPs. One thing we had to do when I came into office was strip away some of the bureaucracy governing further education colleges as leading providers. We had to simplify greatly a very bureaucratic top-down system. Devolution is also about devolving to companies, and one of our major initiatives—employer ownership schemes and the trailblazers, which set industry-level standards—has reduced bureaucracy for small companies and helped them at industry level to formulate standards that they can use. Devolution is not just about local government.

[Mr Robin Walker (Worcester) (Con)]

Does the Secretary of State agree that LEPs can be great champions of apprenticeships when they are given the power to do so? Today, the Worcestershire LEP announced that the ambitious target it set itself of having 10,000 people participating in apprenticeships in the county by 2015 has already been achieved. Is that not an example of how by using the existing structures in our existing counties, rather than creating artificial regions, we can drive forward apprenticeships and skills?

[Vince Cable]

That is one of the examples. The LEPs have demonstrated the success of devolution and there are many other models. I know that my hon. Friend the Member for Eastbourne (Stephen Lloyd) has done brilliant work locally by simply working with local colleges and local authorities. There are many local examples and that is what we should be trying to achieve.

I know that you want to bring more people into the debate, Madam Deputy Speaker, so let me make two points in conclusion.

[Mr Byrne]

Before the Secretary of State concludes, will he update the House on the potentially quite sweeping changes to how we fund apprenticeships in this country? The Minister for Skills and Equalities’ predecessor launched a wide-ranging consultation on direct payment through the PAYE system, but on 13 January the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), told the House that the process was in a state of suspended animation and that no further reform would be made. Will the Secretary of State tell the House this afternoon what on earth is going on?

[Vince Cable]

Our objective is to try to make the system of employer ownership much more extensive. We have had great success with our pilots and are anxious to extend the system. Different models have been canvassed and there has been a ministerial statement describing very clearly where we are. We are keen to do this in a way that creates incentives rather than disincentives for small businesses. The right hon. Gentleman is quite right that we are not rushing into a scheme prematurely, but are consulting. That is exactly what Governments do, and when the Government are returned, if I am still in this post, I am sure that we will see a lot of action in that area.

Let me make my two concluding points. First, the shadow Business Secretary mentioned the importance of the status of apprenticeships. That is absolutely right. For far too long we have had a two-tier system under which supposedly clever people went to university and those who failed went on to vocational courses. We need to break that down. It is being broken down and there is a change in perception. A recent survey suggested that 57% of parents are willing to recommend an apprenticeship course to their children. Many of them can see the economic advantages of such a course and the status is changing.

The big issue is the one the shadow Business Secretary started with. I agree that for the sake of the economy we need significantly increased investment in people and skills. The figure we have in the Department is that every £1 million invested in apprenticeships yields an £18 million return to the economy. It is essential that we extend rather than contract the number of apprenticeships. We have a proud record of doing that and I want to see it continue.

[Several hon. Members]

rose—

Oral Answers to Questions

Vince Cable Excerpts

Thursday 8th January 2015 Commons Chamber

[Kerry McCarthy (Bristol East) (Lab)]

1. What steps the Government are taking to increase the value of the minimum wage and encourage firms to pay the living wage.

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

On our return to Business questions after the break, may I wish you, Mr Speaker, and all Members a happy new year? I am sure that the thoughts of everybody in the House this morning are with France and, in particular, with the relatives and friends of those who were killed and injured in the appalling terrorist atrocity yesterday.

Last year, the Government announced the first above inflation increase in the national minimum wage since the 2008 banking crisis, benefiting more than 1 million workers. Since 1 October 2014, full-time minimum wage workers have seen an annual cash increase of £355 in their pay packets, and we expect real-terms increases to continue as the economy recovers. We support employers paying the living wage where it is affordable and not at the expense of jobs.

[Kerry McCarthy]

I thank the Secretary of State for that response. He will know that for every £1 that employers pay above the minimum wage to lift workers to the living wage, the Treasury reaps 49p in reduced benefits and increased tax revenues. Why will his Department not consider using that increased revenue to incentivise businesses to pay the living wage for the first 12 months, as Labour is proposing with its make work pay contracts?

[Vince Cable]

It is precisely because of that revenue wedge that the Government have invested so much resource in lifting the threshold so that low-paid workers are not caught in taxation. That has substantially alleviated the pressure on the living standards of low-paid workers.

[Mr Philip Hollobone (Kettering) (Con)]

It is really very important that minimum wage legislation is enforced, as those in receipt of the minimum wage tend to be at the bottom of organisations and among the lowest paid. What sanctions are being used on those at the top of organisations who receive the highest pay—the board directors—when minimum wage legislation is not being followed?

[Vince Cable]

There is a legitimate concern about high pay as well as low pay, which is why the Government introduced reforms of executive pay, with a binding vote on executive pay by shareholders, significantly strengthening the Government’s powers to ensure that shareholders exercise proper responsibility over top pay.

[Mr Frank Field (Birkenhead) (Lab)]

The Secretary of State talks about relieving pressures on the living standards of the lowest paid, but is he aware that the all-party parliamentary group on hunger and food poverty in Britain found, to its surprise, that a number of people using food banks were on the minimum wage? Might he not therefore use whatever powers he can to press those sectors of industry that could pay the living wage, such as banking and finance, to do so?

[Vince Cable]

I suspect that relatively few people are on the minimum wage in the banking and finance sectors, but we support the living wage for those companies that can afford it and are not putting people out of work. My responsibilities are more in respect of strengthening the minimum wage and making enforcement tougher. We are doing that and we are signalling to the Low Pay Commission that we respect its independence but are looking forward to real-terms increases in the minimum wage in the future.

[Paul Blomfield (Sheffield Central) (Lab)]

In a debate in Westminster Hall on the widespread abuse of employment practice for care workers, the Secretary of State’s colleague, the Minister of State, Department of Health, the right hon. Member for North Norfolk (Norman Lamb), said that he was pressing the Department for stronger enforcement against illegal practices. What is the Secretary of State’s Department doing about it?

[Vince Cable]

I worked actively and closely with my colleague in the Department of Health on this issue. There are two issues involved: minimum wage enforcement and ensuring that we have tougher legislation to deal with some of the practices that operate in that sector, such as zero-hours contracts. At the moment, we are looking more widely at employment rights for groups of people who are classified as workers but who do not currently enjoy those rights. The care sector is one such group.

[Yvonne Fovargue (Makerfield) (Lab)]

2. What recent assessment he has made of the effect of copycat websites on consumers.

--- Later in debate ---

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

5. What progress his Department has made on creating a low-carbon economy.

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

The Government have taken strong action to create a low-carbon economy, including setting up the Green Investment Bank and a catapult centre dedicated to new renewables, and electricity market reform. Through the Department’s industrial strategy, we are working with industry to increase green jobs via sector-specific strategies for the offshore wind and nuclear industries.

[Miss McIntosh]

Although I welcome the Government’s commitment to green energy and a low-carbon economy, surely there must be a better way of achieving that than hydraulically fracturing for fossil fuel such as shale gas, which causes huge environmental disbenefits.

[Vince Cable]

I am aware of the hon. Lady’s concern about the areas of outstanding natural beauty in Yorkshire, which she represents. There is indeed an expression of interest, but there are very strong environmental and safety protections around shale gas drilling, and I am sure she will look forward to the extra development that this will produce in her constituency in due course.

[Clive Efford (Eltham) (Lab)]

The Environmental Audit Committee says that our investment in renewable energy is growing at half the rate it needs to grow at to meet our future energy needs. What is the Secretary of State doing about that?

[Vince Cable]

My understanding is that investment in renewable energy is double what it was in the previous Parliament. There are certain aspects of new renewables where we lead the world, including offshore wind.

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

Does the Secretary of State realise that if we are to have a low-carbon economy, he and his Government have to start taking investment in higher education seriously? I chair the Engineering and Physical Sciences Research Council’s committee on sustainable production. If we do not put more money into postgraduate education, and if we do not support higher education and get away from this crazy system where all higher education relies on a mountain of student debt, we are heading for terrible trouble.

[Vince Cable]

That is a rather creative stretch to the low-carbon economy, but specifically on postgraduate education, the hon. Gentleman will be aware that we have just introduced a postgraduate loan scheme for the first time.

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

6. What steps he is taking to increase the number of apprenticeship places through Government procurement.

--- Later in debate ---

[Kelvin Hopkins (Luton North) (Lab)]

9. What recent assessment he has made of the effect of the UK’s EU membership on 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 this country’s exports. There is a clear direct benefit to British businesses from European Union membership.

[Kelvin Hopkins]

Britain has an enormous and persistent trade deficit with the EU, equivalent to about 1 million lost British jobs. The growing crisis in the eurozone will only make the position worse, and there is no end in sight to its economic problems. What are the Government going to do to protect Britain’s economic interests in this dire situation?

[Vince Cable]

I am surprised that the hon. Gentleman does not share the consensus among Opposition Members about the benefits of British membership. I am sure that if he occasionally crosses the border into Luton South and visits the vehicle production institution, he will recognise the EU’s importance to the industry and of its having the European Union negotiate access to bigger markets such as north America, as it currently is.

[Ian Murray (Edinburgh South) (Lab)]

In a recent article in The Times, a host of senior Cabinet members, including the Foreign Secretary, the Chief Whip, and even some Ministers in the Secretary of State’s own Department, stated that they would campaign for an “out” vote in any EU referendum. In the same article, another Cabinet member was reported as saying:

“It would be a continual distraction from…work on the economy”.

Given that, as the Secretary of State said, the EU is one of our largest trading partners, what is his view on the impact on UK trade and jobs in the event of, first, an EU referendum, and, secondly, exit from the EU?

[Vince Cable]

That unnamed member of the Cabinet was probably me; I did take a different view. None the less, I do have common ground with my Government colleagues in believing that the European Union needs to be reformed in quite radical ways. We need to deepen the single market, to reach trade agreements with other countries, and to reduce much of the bureaucracy that surrounds commercial activity.

[Robert Flello (Stoke-on-Trent South) (Lab)]

10. If he will make greater use of Government procurement to increase innovation and develop supply chains.

--- Later in debate ---

[Andrew Jones (Harrogate and Knaresborough) (Con)]

14. What steps he is taking to increase the number of engineers.

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

The Government are making a series of interventions to increase the number of British engineers—from trailblazer apprenticeships in engineering, manufacturing and automotive sectors to national colleges in advanced manufacturing, high-speed rail, nuclear, oil, gas and wind, with £30 million of funding to address employers’ skills shortages in engineering and £200 million of capital investment in science, technology, engineering and maths teaching facilities in higher education.

[Andrew Jones]

I thank my right hon. Friend for that reply. What more is he doing to inspire younger people, particularly younger women, to take up engineering careers?

[Vince Cable]

I am aware of my hon. Friend’s interest in the issue. Harrogate college recently benefited from significant investment in vocational education. He asks how we promote the message about engineering, particularly to women, who are massively under-represented in the sector. I pay tribute to the STEM network of volunteers; there are about 28,000 of them, and 40% are women. We hope that through that process of campaigning, and visits to schools and education institutions, we will gradually turn this unsatisfactory situation round.

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

The UK automotive industry has had another good year, which is welcomed across the House, but it now needs to recruit even more engineers. What is the Automotive Council UK doing to promote the industry to the next generation of engineers?

[Vince Cable]

The Automotive Council UK is one of the success stories of industrial strategy. There is a great deal of commitment from industry and, indeed, on both sides of the House. The talent retention scheme is working well: if engineers are lost in particular sectors of the economy, they are speedily re-employed elsewhere and the skills base—which, as my hon. Friend implies, is inadequate—is maintained.

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

16. What support he is providing to businesses wanting to take on apprentices.

--- Later in debate ---

[Heidi Alexander (Lewisham East) (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.

[Heidi Alexander]

May I press the Minister further on the question of apprenticeships? Not only did the pay survey expose some concerning trends, it also showed that one in five apprentices do not actually receive any training. Given that most people’s idea of an apprenticeship is a placement that combines on-the-job work experience and a specific training programme, I find that deeply concerning. What percentage of the Government’s apprenticeships are not really apprenticeships at all?

--- Later in debate ---

[Mr Chuka Umunna (Streatham) (Lab)]

Following on from the question from my hon. Friend the Member for Coventry South (Mr Cunningham), does the Secretary of State agree that to hear that your job has been put at risk of redundancy not from your employer, but while watching the television news with your family on Christmas day—as was the case with the City Link workers—is an utterly appalling way to be treated?

[Vince Cable]

I certainly agree that for the 2,300 workers involved it was a very sad and dispiriting event. The company can answer for its behaviour, but the fact is that it was no longer viable and was put into administration. [Official Report, 16 January 2015, Vol. 590, c. 9MC.]

[Mr Umunna]

With so many unanswered questions for employees and contractors of City Link, the entire affair stinks. Why, for example, if the firm was technically insolvent on 22 December, as has been reported, was it planning to trade until 26 December? Is it true that contractors were told that rumours of it going into administration were false? Why was a new subsidiary set up on 9 December?

The administrators will do their work and no doubt make a D1 filing with the Department. Given the numbers involved and the public interest in the administration, will the Secretary of State commit to conducting a full and proper inquiry into the matter, as he did with Comet? Those who have lost their jobs and contractors who are owed money deserve nothing less.

[Vince Cable]

The difference with the Comet case is the allegation of serious misconduct by directors, and that may or may not be the case with City Link. In six weeks, the administrator will make a report to our Insolvency Service and, depending on what that says, we may want to initiate an investigation, but let us wait and see the findings of that. [Official Report, 16 January 2015, Vol. 590, c. 10MC.]

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

T6. There have been more than 500 apprenticeship starts in my constituency in the past year, but I want to increase that figure. What more can we do to ensure that businesses support, and schools promote, apprenticeships?

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

T2. Five hundred of the City Link redundancies are in Scotland. Does the Secretary of State share the outrage of the Scottish people at the way the workers have been treated and the fact that the taxpayer is expected to pay for part of the multimillion pound redundancy bill? What is he doing to help the workers and their families, in Scotland and across the UK, who have been devastated by this news?

[Vince Cable]

The taxpayer is, of course, always responsible for statutory redundancy and this case is no different. I have talked to the head of the union and the secretary-general of the Trades Union Congress on how to deal with the implications for the labour market. The labour force is very widely distributed across the UK with no major concentrations, but where there are, and if there are people who really need help with finding employment and reskilling, we are certainly willing to do the maximum we possibly can to help.

[Mr Robin Walker (Worcester) (Con)]

T7. The ringing of tills, especially among small independent shops, should always be welcome in this nation of shopkeepers. In the last week of December, Worcester’s high street saw a 13% increase in footfall. That is very welcome. Small shops in Worcester are looking forward to the £1,500 discount to business rates this year. May I urge the Minister, as the Government consider further reform to business rates, to ensure that small businesses continue to benefit?

--- Later in debate ---

[Philip Davies (Shipley) (Con)]

Given our huge trade deficit with the EU, will the Secretary of State tell us why he is so certain that were we to leave the EU, it would stop free trade with us? Or is it that kind of woolly thinking that has led to his removal as his party’s economic spokesman at the general election?

[Vince Cable]

I actually remain as our economics spokesman, but that is a minor internal matter.

I think that most Conservative Members fully support British membership of the EU; they might wish to see it reformed, as I think we all do, but membership is fundamental. It is difficult to imagine that Britain could independently negotiate trade agreements with the US, India and other countries with the same authority as the EU.

[Roberta Blackman-Woods (City of Durham) (Lab)]

T8. In the Government’s opinion, at what level of RAB—resource accounting and budgeting—charge does the student loan system become unsustainable?

--- Later in debate ---

[Vince Cable]

I happily join the hon. Gentleman in that tribute. I have been to Alstom and seen its advanced electrical equipment manufacturing—it is one of the best in the world—and it is a tribute to the policies we have pursued that it wishes to expand its investment here.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Given that Brent crude has dropped to $50 a barrel—40% of what it was—I am surprised there was not one question on the Order Paper about the effect of that on the supply chain, which is the responsibility of the Secretary of State; I know he knows this. My right hon. Friend the Member for East Renfrewshire (Mr Murphy), the new leader of the Labour party in Scotland, is calling for a summit to cover not just offshore but the supply chain factors affected by this collapse in the oil price. Will the Secretary of State join that summit and help not just the offshore industry but the supply chain, which is also affected?

[Vince Cable]

We understand the importance of that question. One of the sectoral groups in our industrial strategy is specifically concerned with the oil and gas supply chain. The companies around Aberdeen in particular are among the world leaders and could be seriously hit by the contraction of investment. Certainly, we will be getting that group together quickly and making an assessment of what it means. It is important to think long term, of course, as much of the industry does; temporary fluctuations in price are not necessarily as damaging as the hon. Gentleman might believe.

[Mr Philip Hollobone (Kettering) (Con)]

In 2010, the European Union sold to this country £28 billion more in goods than we sold to it. By the end of 2013, this massive figure had risen to £56 billion. Over that period, however, unemployment in this country has fallen significantly. Does that not destroy the Liberal Democrat myth that 3 million UK jobs are dependent on EU membership?

[Vince Cable]

What an extraordinarily primitive view of economics to believe in narrow bilateral balances of trade! One thing that should be said is that we are dealing, of course, not just in goods, but in services, where Britain has a major competitive advantage.

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

Does the Secretary of State approve of, and will he support, the campaign of the all-party group on manufacturing to find a great export in each of the 650 constituencies? Will he back that? It is a cross-party initiative; it has raised the profile of British exports; and I think it is a very good idea.

[Vince Cable]

I am very happy to support it. I remember that a couple of years ago, the hon. Gentleman asked every individual MP to identify companies in their constituencies that had made major manufacturing innovations. I praise the work that this all-party group is doing.

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

The Secretary of State has agreed to see my hon. Friend the Member for Coventry South (Mr Cunningham) and me on Monday on the question of City Link. We are grateful for that and look forward to meeting him. Will he take the opportunity now, at probably the last question of this Question Time, to make clear personally how much he deprecates the cynical and disgraceful behaviour of the owners of City Link and put that on the record? No behaviour like this can be justified in the 21st century—it belongs to the 19th century, if it belongs anywhere at all. Will he make that clear today?

[Vince Cable]

Giving lectures in that way is probably not helpful. I need to establish the facts about what has happened. Very serious allegations have been made, and we need to get them properly investigated. It needs to be said for the record, of course, that this is a company that was losing money under a variety of ownerships for as long as five years, so its future has been in question for a long time.

Oral Answers to Questions

Vince Cable Excerpts

Thursday 20th November 2014 Commons Chamber

[John Stevenson (Carlisle) (Con)]

1. What steps he is taking to support the manufacturing sector.

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

Our industrial strategy sets the long-term direction needed to give manufacturers confidence to invest and compete internationally. We are encouraging technology commercialisation, exports, investment, improving skills, and building UK supply chains. I am sure my hon. Friend will join me in congratulating Cumbria local enterprise partnership, which has been awarded £5 million under regional growth fund round 3 to support specialist manufacturers.

[John Stevenson]

A flourishing sawmill on the edge of Carlisle employs 120 people. Those in the timber industry are concerned that they are not included in the proposed relief scheme for the indirect cost of renewables, despite being accepted as an energy-intensive industry under the climate change agreement. That could give a competitive advantage to imported timber. Will the Minister look at the industry’s case and report back to me?

[Vince Cable]

I will certainly look at that—indeed, we already are. The hon. Gentleman will be aware of the more general issue of energy-intensive industries, and we have sought to achieve relief through compensation under the European Union emissions trading system and the carbon price floor. We have recently consulted on how to extend that relief in respect of renewable obligations and the feed-in tariff. That consultation has just ended and will incorporate industries depending on their energy intensity and trading capacity. We will announce the results shortly.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The steel industry is vital to manufacturing in the United Kingdom. Will the Secretary of State take the opportunity to tell the House exactly what has been happening with Tata Steel’s proposed sale of its long products division?

[Vince Cable]

Members across the House are concerned about the future of the long products division in Tata Steel. As the hon. Gentleman may know, I have had discussions with Cyrus Mistry in India, chief executive of Tata, and I recently met Mr Klesch, who has an interest in taking on that business. We are in close touch with Members across the House on the progress of those discussions, and I will report back when developments arise.

[Mark Pritchard (The Wrekin) (Con)]

While the Secretary of State is right and the Government have set out a national industrial strategy, will he put on record his praise for the job creators, innovators, and entrepreneurs in Shropshire who have created more than 1,000 jobs in the last year in agri-engineering, food manufacturing, car parts manufacturing, and the manufacturing that is being brought back from Europe and put into Shropshire?

[Vince Cable]

The hon. Gentleman describes a powerful trend. I am delighted that it is operating in his constituency and I congratulate the firms concerned. He refers to the process of onshoring production that had gone overseas, and I believe that around one in 10 British manufacturers are now considering that process. I have recently come back from India where I met a company called Amtek that is bringing car supply chain and production back to the UK—it may even be in the hon. Gentleman’s county.

[Mr Iain Wright (Hartlepool) (Lab)]

My hon. Friend the Member for Motherwell and Wishaw (Mr Roy) has already mentioned the importance of the UK steel industry, which underpins much of our manufacturing industry. Is the Secretary of State also aware of cheap imported steel being dumped into domestic markets, failing British standards and raising question marks about quality, traceability and reliability? Reinforcing steel used in the UK is certified under the CARES scheme. Is he confident that that scheme is working as well as it could be? What steps is he taking to ensure that such steel is tested, compliant with British standards, traceable and safe?

[Vince Cable]

That issue has been brought to my attention by British producers and it is a legitimate question. I am in the middle of an inquiry into whether the testing process operates effectively and takes proper account of different standards as between UK producers and those overseas. We have no ideological view on anti-dumping. It is a matter of proof and fact and operates through the European process, as the hon. Gentleman knows.

[Robert Halfon (Harlow) (Con)]

2. What recent support he has provided to small businesses.

--- Later in debate ---

[Heidi Alexander (Lewisham East) (Lab)]

3. What estimate he has made of the contribution net trade will make to GDP over the next four years.

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

In March, the Office for Budget Responsibility expected net trade to make a roughly neutral contribution to growth until 2018. However, since GDP data methodology has recently been revised we will not have a fully updated view until December, with the OBR’s new forecast.

[Heidi Alexander]

Recent statistics from the Office for National Statistics show that the UK’s trade deficit has risen to £2.8 billion in September, up from £1.8 billion in the previous month. In the light of that, will the Secretary of State confirm that since the Government’s direct loan facility was launched a year ago to help businesses to export, only one firm has benefited from such support since it was announced?

[Vince Cable]

The hon. Lady is horribly out of date; dozens of companies are now benefiting from that new suite of credit facilities, which is one of a range of activities we are putting in place to support British exporters. When we entered office, about 27,000 companies were helped by UK Trade & Investment, but that is now up to 50,000, and the impact is already being felt in the big emerging markets, such as China and India, where there is very rapid export growth.

[Ian Swales (Redcar) (LD)]

The Investment Management Association told me last week that Asian investors were increasingly looking to mainland Europe because of the uncertainty over the UK’s membership of the European single market. What effect will this uncertainty have on the Secretary of State’s trade forecasts?

[Vince Cable]

My hon. Friend is right to stress the importance of inward investment to job growth in the UK. Indeed, many manufacturers and banks in the City of London have made it clear that the expectation of being able to export to the European single market is fundamental to their decision to locate here.

[Ian Austin (Dudley North) (Lab)]

Will the Secretary of State welcome the contribution that will be made to trade by the Ladder for the Black Country, a brilliant apprenticeship scheme established by the Vine Trust and the Express and Star, which is working with hundreds of businesses to provide thousands of apprenticeships and give young people the jobs and skills they need to develop careers? Is this not exactly the sort of scheme that should be copied nation-wide?

[Vince Cable]

On the basis of that quick précis, it sounds as if it is. As the hon. Gentleman knows, we have seen a rapid expansion of apprenticeships, which we are very proud of, as they are fundamental to meeting the demand for skills, particularly higher skills. I would be interested to hear more about his local programme and to see what we can do to help.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

Will the Secretary of State join me in welcoming the recent news that record amounts of British food and drink are now being exported—something that I was doing before I came to this place—and that great British food is now available in more than 150 countries?

[Vince Cable]

Yes, it is often forgotten when we talk about manufacturers that the food and drinks sector is the largest by a considerable measure. It is a considerable success and we are supporting it, not just through the work of UKTI, but through our work on agri-tech industries, innovation and the skills strategy.

[Ian Murray (Edinburgh South) (Lab)]

The Government promised an export-led recovery, but as my hon. Friend the Member for Lewisham East (Heidi Alexander) mentioned, the trade gap is widening and exports are going backwards. Why, then, have the Government, mid-year, slashed the budget for the trade show access programme that helps small businesses new to exporting or new to markets to gain access to international trade shows? I have had sight of a private letter from the trade association, the Sponsors Alliance, to the Prime Minister asking him to reverse this dreadful decision. Will the Secretary of State support this plea from small businesses and not slash the funding they desperately need to support their exporting activities?

[Vince Cable]

First, there is no question of the budget being slashed; it has been substantially increased, and the question is how much it should have been increased by. I am aware of the concerns of trade associations, however, and have met them and discussed the matter with them, and we are endeavouring to ensure they have the maximum support.

[Mr Speaker]

I call Mr Chris Ruane. He is not here; therefore, the grouping with Question 12 falls, and questioner 12 will have to come in at that point.

--- Later in debate ---

[Philip Davies (Shipley) (Con)]

10. What his policy is on representation of people from ethnic minorities in boardrooms.

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

We believe that it is in the best interests of business to tap into the widest talent pool, resulting in a diverse and representative business leadership. I have therefore asked Trevor Phillips to start a new private sector-led campaign that will seek to address the lack of ethnic diversity in boardrooms. The purpose of the campaign will be to achieve success similar to our work on addressing gender diversity in boardrooms.

[Philip Davies]

Some people, like me, believe that all appointments should be made on merit. Some believe in political correctness, and think that merit is unimportant and that boardrooms should represent the population at large. The Secretary of State seems to be in a league of his own as a politically correct champion who believes neither in merit nor in representation; instead, he believes that ethnic minorities should be over-represented in the boardroom. Will he explain why that is the case and why he, as a Government Minister, will not give out the message that jobs should be given on merit alone, irrespective of people’s race, religion or any other factor?

[Vince Cable]

I am delighted to see the hon. Gentleman in his place. I thought he might have been in Rochester today, waiting to defect. On his question, I certainly do believe in merit; I do not believe in quotas. I know that he has written 19 letters to Mr Trevor Phillips on the subject of race and political correctness, which leads me to believe that he might have a problem with the concept of racial equality.

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

11. What steps he is taking to ensure that the UK’s system of skills training is relevant to the changing structure of work.

--- Later in debate ---

[Andrew Stephenson (Pendle) (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 plays a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.

[Andrew Stephenson]

The town of Barnoldswick in my constituency won a great British high street award in November, and the town of Colne, where shop vacancies have more than halved in the past two years, has been branded “the capital of cool” by Tourism Lancashire. What recent support has my right hon. Friend’s Department provided to small business to help them to continue to grow and thrive?

[Vince Cable]

I congratulate my hon. Friend on the active role he plays in supporting his local commercial community. As the Minister for Business and Enterprise, my right hon. Friend the Member for West Suffolk (Matthew Hancock), described a few moments ago, we are actively involved in supporting small business through the start-up loan scheme, through credit flows to the business bank and by creating a deregulatory and favourable tax environment.

[Mr Chuka Umunna (Streatham) (Lab)]

It is essential that we give our towns, cities and regions the tools to be the masters of their own economic destinies to drive jobs and growth. The Secretary of State has said that he established local enterprise partnerships to help achieve that, and the LEP network was set up to support them and take forward their shared programme. Will he update us on their progress?

[Vince Cable]

Enormous progress has been made by the local enterprise partnerships since they replaced the regional development agencies, which, by common consent, were remote and wasteful. The most significant recent development was the growth deals, which all the LEPs now have and which have been enhanced by the specific programmes that have been developed for Manchester, Sheffield, Leeds and other centres.

[Mr Umunna]

I am sorry, but the Secretary of State simply does not appear to know what is happening on a supposedly key part of the Government’s programme. I have here a letter from the chair of the LEP network. He says that the network will close in two weeks and that the CEO has resigned because there is no support to do the job. He says that the network is

“seriously under resourced for such a critical role at such an important time”

and that it is

“now officially overwhelmed and preparing to throw in the towel.”

Four years ago, the Secretary of State said that the regional policy was Maoist and chaotic. Does this not demonstrate that very little has changed?

[Vince Cable]

It demonstrates nothing of the kind. The LEP network is working exceedingly well. LEPs are voluntary organisations; some are outstanding and innovative and others struggle, as this one has done. It is much better that we have a regional network that is business-led and is related to the geography of the area, which was manifestly not the case with the regional development agencies.

[Martin Horwood (Cheltenham) (LD)]

T2. Does the Secretary of State share my concern that the family brand name Weetabix is closing its packet printers Vibixa in my constituency, with inevitable consequences for more than 100 employees and their families, after the company was denied the sales force that could have widened its customer base? Does he agree that when a profitable company closes a profitable subsidiary, it should offer the best possible redundancy terms to its employees, some of whom have served Weetabix for more than 35 years, and not something barely above the statutory minimum?

--- Later in debate ---

[Andrew Griffiths (Burton) (Con)]

T6. The decision of this House on Wednesday to vote to scrap the pub tie caused £350 million to be wiped off the share price of pub companies yesterday, and it continues to fall today. That of Punch Taverns in my constituency fell by 17% in one day. Jobs and businesses are at risk. What discussions is the Department having with those companies and what help is the Secretary of State offering? If he is not offering help, why not?

[Vince Cable]

As the hon. Gentleman knows, Parliament has spoken and we respect its views on the subject. All I would say is that the Federation of Small Businesses commissioned a study that pointed in a very different direction from the one he is describing. Of course, there has been extensive consultation with all the different parties on this issue.

[Sheila Gilmore (Edinburgh East) (Lab)]

T7. The Secretary of State has frequently said that he wants fairness for people on zero-hours contracts. Will he now, even at this stage, reconsider the amendments he opposed in this House this week, which would have given greater protection to people on zero-hours contracts, including care workers?

--- Later in debate ---

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Yesterday the Prime Minister had a meeting with north-east Lincolnshire Members of Parliament about the Scunthorpe steelworks site and the wider Tata long products divisional issue. As chair of the all-party parliamentary group for steel, I twice asked to attend that meeting and was twice refused. Will the Secretary of State please talk to the Prime Minister to see whether the APPG for steel can have a conversation with him so that the industrial divisional issue is not missed just because of the geography of Scunthorpe?

[Vince Cable]

A meeting took place with the Prime Minister, me and several steel MPs yesterday. That shows that the Prime Minister, other members of the Government and I are happy to keep Members up to date on this issue. We will establish a link with the community unions so that they can be kept fully informed too.

[Philip Davies (Shipley) (Con)]

The Secretary of State said this morning that appointments should be made on merit, yet to an earlier audience he said that boardrooms should have 20% of people from ethnic minorities, which led Lord Bilimoria to say, “I think for Vince Cable to say 20% is the right target when the ethnic minority population is 14% is going too far.”

I know that the Secretary of State is a Liberal Democrat and therefore used to holding two different opinions at the same time, but may I try to pin him down to one? Does he believe in quotas in boardrooms or appointment on merit?

[Vince Cable]

I do not believe in quotas for ethnic minorities, women or any other group. I have never ever said anything about 20%. If he reads the correspondence from Trevor Phillips, he will acknowledge that I never endorsed that view. However, there is a problem, which I hope the hon. Gentleman acknowledges, that more than half of the boardrooms in the UK have no non-white representation whatever. Only one in 16 senior managers comes from our very talented ethnic minority groups, and they should be better represented.

[Bill Esterson (Sefton Central) (Lab)]

The Secretary of State mentioned earlier the importance of regional networks. I wonder whether he thinks the same when it comes to banks? Regional banks have the advantage of understanding their local community and economy and their customers. When banks are not lending to small businesses in my constituency and others around the country, are not regional banks the answer to the problem of getting the growth and support that small business needs?

[Vince Cable]

We warmly welcome challenger banks offering a service to small business. If they can be organised on a local and regional basis, so much the better. There is an organisation called Cambridge and Counties, which is performing this role in the east of England, and I know that Airdrie bank does so in Scotland. We would like to see many more. The liberalised process of licensing means that these things can come on stream rapidly when they are put forward.

[Greg Mulholland (Leeds North West) (LD)]

Regrettably but inevitably, the pubcos trade association, the British Beer and Pub Association, is providing misleading information to the media and MPs about the London Economics report commissioned by BIS, including presenting figures for an immediate free-of-tie option for all tenants, which clause 2 is clearly not; it is gradual. The association’s presentation is therefore false. What assurances can I get from Ministers that they are aware of this, will scrutinise it and will ensure that civil servants also know that these misleading claims are just that?

[Vince Cable]

I congratulate my hon. Friend on the long and successful campaign that he has fought on this subject. I am inclined to let the matter rest, rather than continue a debate that he has won.

[Mr Mike Weir (Angus) (SNP)]

Yesterday Royal Mail said again that there was a danger to the universal service obligation from increased competition. That is very worrying, especially to people in rural areas. Will the Secretary of State press the regulator to take stronger action to look at the state of competition and take appropriate action to ensure that the USO is not put in danger?

[Vince Cable]

I do not press regulators on this or other issues. The simple truth is that the USO is embodied in law. It would have to be changed by both Houses of Parliament. Royal Mail was put in the private sector to enable it to compete, and although it was little observed at the time, for the first time in decades it has been able to raise hundreds of millions of pounds in the bond market to reinvest. There is a success story there.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

The latest Office for National Statistics bulletin showed that manufacturing production had increased by 2.9% over the same time last year. These are encouraging figures. What more can I tell manufacturers in my constituency about further action that will be taken to support them?

--- Later in debate ---

[Vince Cable]

I can give the hon. Gentleman exactly that assurance. We should listen to what he has to say. Of course, we are concerned that the British steel industry should succeed.

[Mr David Willetts (Havant) (Con)]

With the extraordinary technical achievement of the Rosetta landing last week and the announcement of crowdfunding for Lunar Mission One this week, will the Minister responsible for science take this opportunity to congratulate the British space community on its scientific excellence and its enterprise?

--- Later in debate ---

[Heidi Alexander (Lewisham East) (Lab)]

In response to my earlier question, the Secretary of State boasted that a number of firms were already benefiting from the Government’s direct lending facility. Will he name the firms, in addition to Carillion, that have benefited to date?

[Vince Cable]

I cannot name the firms, but I am happy to write to the hon. Lady with the names. UK Export Finance, which she asked about, is now providing a substantial range of export finance facilities, which were not available before and are contributing substantially to export growth.

Oral Answers to Questions

Vince Cable Excerpts

Thursday 26th June 2014 Commons Chamber

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

1. What assessment his Department has made of the main causes of insecurity in the workplace.

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

Employees’ views on job security are related to their individual circumstances and underlying economic conditions. Unsurprisingly, insecurity rose in the recession, but the fall in unemployment from 7.9% when we came into office in May 2010 to 6.6% in April 2014 and the creation of 700,000 permanent employee jobs since 2012 will almost certainly have reduced it.

[Tom Blenkinsop]

The national minimum wage gives people at work security and a statutory minimum, ensuring decent wages. In January, the Chancellor advocated a £7 minimum. Was that not just empty rhetoric, given that no action has occurred since? Why are Ministers refusing to back Labour’s living wage plans?

[Vince Cable]

Before I reply directly to the supplementary question, may I thank the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Cardiff Central (Jenny Willott), who comes to the end of her admirable period in office at the end of this week as her colleague returns from maternity leave?

The Chancellor was not advocating a £7 minimum wage; he was explaining the simple arithmetic of what would happen if a real minimum wage were restored. The hon. Gentleman will well know that measures will be coming before the House to introduce much more effective enforcement action on the minimum wage. We should concentrate on strengthening the minimum wage, rather than pursuing the living wage as a mandatory option, about which there is confusion among Opposition Members.

[Sir Tony Baldry (Banbury) (Con)]

Will my right hon. Friend confirm that any employer found not to be complying with the national minimum wage legislation will be prosecuted, and that any employer seeking to use zero-hours contracts to get around the national minimum wage legislation will therefore be prosecuted? If employers seek to exclude people on zero-hours contracts from being able to take work with any other employer, cannot those contracts be declared void as being contrary to public policy?

[Vince Cable]

On the latter point, we shall discuss in the forthcoming legislation how enforcement action might be taken in respect of exclusivity contracts. The answer to the first part of the question is yes, indeed: if the minimum wage legislation has been breached, action is taken, initially by retrieving the sums involved and by naming and shaming, and under the forthcoming legislation it will be by very significant penalties.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does the Secretary of State agree that the Government’s approach to zero-hours contracts has to tread the difficult line between supporting the vast majority of employees who want to continue with those contracts, and limiting the use of such contracts where they are neither necessary nor appropriate?

[Vince Cable]

My colleague is right that this is a difficult line to tread, which is why we must base our policy on evidence and not on dogma. The evidence very clearly shows that a large number of people do appreciate and see value in the current arrangements but that there is also abuse, which needs to be dealt with.

[Mrs Madeleine Moon (Bridgend) (Lab)]

2. What assessment he has made of the implications for his policies of the Office for National Statistics report on zero-hours contracts, published on 30 April 2014.

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

The ONS report was a helpful addition to the debate on zero-hours contracts, alongside the Department’s call for evidence and final consultation. Our policy is that although zero-hours contracts benefit many employers and employees, there is a need to address abuse.

[Mrs Moon]

The ONS study showed that 1.4 million workers were on zero-hours contracts. Those workers are unable to access rented property, because they cannot prove a work record, or mobile phone contracts and hire purchase contracts. What work has the Department undertaken also to identify the status of the 1.3 million people whose jobs were not examined as part of the ONS study? Do we not need to find out more about the people on zero-hours contracts rather than staying where we are?

[Vince Cable]

I thank the hon. Lady for her close interest in this matter and for trying to build up the evidence base. There is some confusion here, because the 1.4 million figure relates to the number of contracts, and individual workers may have several contracts; the best number we have from the ONS for the number of workers involved is 583,000, which represents about 2% of the total labour force.

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

Does the Secretary of State agree that in today’s modern workplace many employees find zero-hours contracts very attractive because of the freedom they give them to combine different jobs, to work from home and be available to work, or to work and study at the same time?

[Vince Cable]

My hon. Friend rightly says that certain groups of workers find these contracts advantageous, the main ones being workers who have passed retirement age and wish to do optional, flexible work, and students, for whom the lack of an obligation to turn up at a fixed time for a fixed period is compatible with their studies.

[Fiona O'Donnell (East Lothian) (Lab)]

Will the Secretary of State clear up the confusion he created during the last debate on this issue in the Chamber and confirm that workers on jobseeker’s allowance who turn down a zero-hours contract job will not face sanctions?

[Vince Cable]

They will not face sanctions. I hope that that clarifies the matter.

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

Employers are trying to steer a course between being flexible and skirting around their legal obligations, but there is concern about the zero-hours contracts for care workers, on whom we are becoming increasingly dependent. Will the Secretary of State’s Department take a careful look at that industry with a view to giving it further guidance if required?

[Vince Cable]

Yes, indeed. We are already doing that, and I am discussing the matter with the Minister with responsibility for care. The problem with domiciliary care is that there is almost certainly an avoidance by companies to pay the minimum wage, and that overlaps with the problem of zero-hours contracts. We recognise that there are some very specific problems for workers in that sector.

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

3. What contribution the regional growth fund has made to rebalancing the economy across regions.

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

Some £765 million of regional growth fund support has been paid to companies throughout England, which has leveraged £1.8 billion of private money. This combined investment of £2.5 billion in areas that need private sector growth has already delivered or safeguarded 97,000 jobs. Round 6 was launched last week and I encourage hon. Members to support companies in their constituencies in applying for funding.

[Diana Johnson]

In paying tribute to the hon. Member for Cardiff Central (Jenny Willott), perhaps the Secretary of State could put in a good word for her to get another job—there are so few Liberal Democrat women Ministers in the coalition Government.

Humber local enterprise partnership has been among the best in showing that it needs to go further than Ministers are with Lord Heseltine’s agenda on devolved funding, distributing £30 million of round 3 RGF funding to more than 80 companies, mainly small and medium-size enterprises. The funding ends in March 2015, and the fact that future rounds will be open only to larger businesses and universities with a minimum bid of £1 million will exclude many SMEs that are vital to the future of Hull. Will Ministers look again at this matter?

[Vince Cable]

On the hon. Lady’s first point about women in senior roles in Government—of course I want to add again compliments to my colleague—she may have noticed that the last of the FTSE companies that did not have a woman on the board, Glencore, has listened to our clear advice that it should proceed, and Mr Glasenberg appointed a woman director this morning. On the £30 million, which is of course the local fund that was hitherto administered through the local enterprise partnership but will come under the local growth fund when it is available from 2015-16, the local enterprise partnership will have discretion over how to use the funding available to it. I am sure that it will, as before, continue to support development in Hull.

[Mr Philip Hollobone (Kettering) (Con)]

For Kettering’s sustainable urban extension to be sustainable, the Department for Transport says that a new junction on the A14 called junction 10A is required at a cost of £39 million. That is supported by both the Northamptonshire LEP and the South-East Midlands LEP. Given that the junction could release economic activity worth up to £1 billion under the Treasury green book rules, will the Secretary of State look favourably at this bid from Kettering for this new road junction?

[Vince Cable]

That is an issue that the Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon), the Department for Transport and I will have to examine. As I understand it, under the arrangements that will prevail in 2015, this is very much a matter for the two LEPs involved to exercise their priorities.

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

Some really good stuff has happened under the regional growth fund, and I am glad to see the next round, but it is still not enough. We are still not getting borrowing for start-ups. New entrepreneurs are not being encouraged enough, and we are not using crowdfunding and crowdsourcing enough. What will the Secretary of State do to increase the number of young entrepreneurs who have access to capital so that they can make a difference?

[Vince Cable]

First, I thank the hon. Gentleman for his constructive remarks at the beginning. On funding, he will be pleased to know that under the StartUp loan scheme, we now have 13,000 loans that have been disbursed. They operate through the Business Bank, which is also funding crowdfunding, and it is operating on a significant scale and accelerating fast.

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

4. What steps he is taking to strengthen vocational training.

--- Later in debate ---

[Mr John Denham (Southampton, Itchen) (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.

[Mr Denham]

In September, the Portsmouth warship yard, where many of my constituents work, will shut. That will leave the Government without a plan B for warships if the referendum goes the wrong way. The work force will be dispersed before there is an alternative user and the shipyard’s role in providing manufacturing apprenticeships across southern England will be lost. Will the Secretary of State look to delay the closure until the referendum is over, until there is a new user and until there is a credible plan for training manufacturing and engineering apprentices in southern Hampshire?

[Vince Cable]

The maritime industries are, of course, crucial in Portsmouth, as they are in the right hon. Gentleman’s Southampton constituency. On the approach we are adopting, a Government group led by the Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon) is as rapidly as possible finding alternative commercial users, working with the Ministry of Defence. I welcome in particular the very exciting Ben Ainslie project and my colleague is working closely with Rear-Admiral Stevens to develop the Solent maritime industries.

[Mark Menzies (Fylde) (Con)]

T2. Fylde has a significant amount of advanced manufacturing companies, including BAE Systems and Westinghouse Nuclear Fuel. May we have an update on what steps are being taken to increase the number of highly skilled apprenticeships in the advanced manufacturing sector?

[Mr Chuka Umunna (Streatham) (Lab)]

Does the Secretary of State think it is acceptable for a Government Department to increase reporting requirements twelvefold for businesses?

[Vince Cable]

I am not sure what the hon. Gentleman is referring to, but as the Minister of State, my right hon. Friend the Member for Sevenoaks said a moment ago, we have taken considerable action drastically to reduce the regulatory burden on business.

[Mr Umunna]

I am talking about the disgraceful burden being heaped on the one in five self-employed people in this country who will be in receipt of universal credit. Those businesses are being required to report their income not once a year, but every single month. Their earnings are being computed on a completely different basis from the assessment carried out by Her Majesty’s Revenue and Customs for tax purposes, and the minimum income they will be assumed to have is for 35 hours a week at the minimum wage. That is unjust and unworkable and it does not reflect how those businesses work. Why has this ministerial team sat back and allowed the red tape baron—the Work and Pensions Secretary—to erect this barrier to aspiration?

[Vince Cable]

I would have thought that most reasonable people would welcome the growth of self-employment and entrepreneurship that is happening under this Government. I think they would also probably welcome the fact that the benefits system demands maximum integrity.

[Neil Carmichael (Stroud) (Con)]

T7. Do Ministers agree that a central part of the long-term economic plan is the delivery of skills to the increasingly innovative and research-oriented manufacturing sector?

--- Later in debate ---

[Julian Smith (Skipton and Ripon) (Con)]

At the Mighty Middle conference held by GE Capital and the Reform think-tank this week, mid-sized companies from across Britain were exceptionally positive about the Government’s long-term economic plan. What more can we do to celebrate and assist those mid-sized companies?

[Vince Cable]

Mid-sized companies are absolutely central to the Government’s industrial strategy. We are working with them to develop supply chains in the car industry, aerospace and the various energy sectors, and to support access to finance, training and innovation. They have a great deal of potential, as they do in countries such as Germany, where the Mittelstand are better developed than they are here.

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

T4. May I draw the Minister’s attention to the excellent “The state of the coalfields” report produced by the Coalfields Regeneration Trust? The report has highlighted particular problems, including a legacy of high and persistent youth unemployment, especially in the NEETs group of those not in education, employment or training. I also draw to his attention an excellent organisation in east Durham, the East Durham Employability Trust. What additional support can be put in its direction?

--- Later in debate ---

[Fiona O’Donnell (East Lothian) (Lab)]

T6. When the Prime Minister returned from the G7, he painted a very positive picture of progress in establishing public registers of beneficial ownership in the overseas territories and Crown dependencies, but the real picture is that only half of them have started or concluded their consultations. This is an opportunity for the Secretary of State to show off his leadership skills, so what work is he doing with the Foreign and Commonwealth Office to make some real progress on this issue?

[Vince Cable]

We will have an opportunity to discuss this in detail, because an open register of beneficial ownership will be one of the elements in the small business Bill. Britain will pioneer work in this area. Of course there are issues with our offshore territories. We are not a colonial power that can send in gunboats to solve these problems; we rely on persuasion, and that is what we will do.

[Mr Philip Hollobone (Kettering) (Con)]

What does the Secretary regard as his finest achievement in office? What is his main goal for his last year in the Department?

[Vince Cable]

There is a very long list of achievements that would bore the House considerably were I to dwell excessively on it, but the set of advances that we have made in giving business a long-term perspective through the industrial strategy, the collaboration with business and the associated work that we have done on access to finance, the build up of apprenticeships and the developments in innovation through the Catapult make up a considerable legacy of achievement.

[Valerie Vaz (Walsall South) (Lab)]

Two thirds of students on disabled students allowances are dyslexic. Cuts to DSAs affect both the students and the institutions, and penalise both. Will the Secretary of State think again about reversing these cuts?

[Barry Gardiner (Brent North) (Lab)]

Every one of the 14 letters that the Governor of the Bank of England has written to the Chancellor explaining why the inflation target has not been met has mentioned the rising input cost of resources. What are the Government doing to tackle the problems of input resource price spikes and to incentivise infrastructure in the circular economy to cope with that?

[Vince Cable]

I think that the hon. Gentleman is referring specifically to energy costs, which has been the main issue in the inflation of raw material inputs. My colleague the Minister of State, my right hon. Friend the Member for Sevenoaks gave a very full answer in explaining the compensation mechanisms that we are introducing to offset them.

[Andrew Bridgen (North West Leicestershire) (Con)]

Will the Minister update the House on the progress made in tackling non-compliance by employers who fail to pay apprentices the rate they should?

Oral Answers to Questions

Vince Cable Excerpts

Thursday 10th April 2014 Commons Chamber

[Chris Williamson (Derby North) (Lab)]

5. What steps the Government are taking to encourage firms to pay a living wage.

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

The Government support a living wage and encourage businesses to pay it when it is affordable and not at the expense of jobs. We recognise that these have been challenging times and we applaud companies that have chosen to pay higher wages.

[Heidi Alexander]

The UK’s largest supermarkets, Tesco, Sainsbury’s, Asda and Morrisons, together make billions of pounds in profits every year, but they still do not pay all their staff a living wage. Will the Secretary of State look at amending the corporate governance code to require all publicly listed companies to report annually the number of individuals they employ who earn less than a living wage?

[Vince Cable]

That is an interesting suggestion for nudging companies in the right direction, and I will certainly have a look at it. I am certainly very opposed to coercive measures because those would simply add to unemployment, but I will reflect on that suggestion, which is a new one.

[Chris Williamson]

I am pleased that the Secretary of State says that he supports the living wage, but as he will know—my hon. Friend the Member for Lewisham East (Heidi Alexander) has already pointed this out—that of the 4.8 million people who are paid less than the living wage, many work for multinational, highly profitable companies. What specific steps is he taking to encourage those highly profitable companies to pay the living wage? The people deserve to know that.

[Vince Cable]

The hon. Gentleman’s constituency is a good example of what is happening in the labour market. The claimant count is down to about 2.5%, which is much lower than it was when we took office. Many engineering companies are short of labour and wages are going up. We have been through a difficult period, but one of the success stories is that employment has massively increased—465,000 during the last year. His constituency is a very good example of the policies working.

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

Does the Secretary of State agree that retailers would find it easier to pay higher wages if they were allowed to open all day on Sunday?

[Vince Cable]

I suspect that it would make relatively little difference. We had a modest experiment at the time of the Olympics. The results did not show a great deal of real economic consequences, but we are always open to new evidence.

[Andrew George (St Ives) (LD)]

Provided that it does not undermine fair trade or UK competitiveness, a significant increase in the minimum wage would clearly be both desirable and the right thing to do. But will my right hon. Friend look particularly at the care sector, where I fear there is a race to the bottom as a result of there simply being a floor where the minimum wage has been set?

[Vince Cable]

I remind my hon. Friend that, based on the recommendations of the Low Pay Commission, the Government announced recently the biggest increase in cash terms since the financial crisis—a 3% increase, which is an increase in real terms. I suspect that with the central problem in the care sector, which is with domiciliary care workers whose travel times are not properly counted, we are dealing with an abuse of the minimum wage system, and it needs to be pursued in that context.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

A KPMG study found that the introduction of a living wage increased productivity and reduced sickness absenteeism and staff turnover. In fact, its introduction was cost-neutral for all these firms. As it makes such a good business case, why are the vast bulk of local authorities that have introduced a living wage Labour ones?

[Vince Cable]

The process that the hon. Gentleman described is the right one: if it is good business practice, good businesses will follow it and out-compete their competitors, and I hope that that is what will happen.

[Paul Blomfield (Sheffield Central) (Lab)]

2. What recent estimate he has made of the resource accounting and budgeting charge on student loans.

--- Later in debate ---

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

3. What progress he has made on rebalancing the economy across the UK.

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

The regional growth fund plays a key rote in stimulating private investment and employment in areas dependent on the public sector. Today, my right hon. Friend the Deputy Prime Minister has announced 50 further projects and programmes that have been awarded regional growth fund support in round 5. Together they will share £300 million of RGF support and have pledged to deliver £1.9 billion of private sector investment and to safeguard or create 37,000 jobs. We have also increased resources under the strategic direction of local enterprise partnerships to at least £20 billion until 2020-21.

[Diana Johnson]

In 2011, Hull voters kicked out the Lib Dem councillors who had delayed setting up the Humber LEP. From then on, the Labour council, MPs, local businesses and the LEP took the lead in working together to bring to the city Siemens, City of Culture, and rail electrification. Does not that show the potential of real devolution to the regions? Why does the Secretary of State block the plans that are set out in the Heseltine review?

[Vince Cable]

I certainly welcome devolution and the cross-party approach that we have adopted to attracting Siemens. I remember going to Hull in 2010 and 2011, when an excellent Liberal Democrat council was laying the foundations for the bid for Siemens that is now happily realised.

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

May I praise the Government for the role of agri-tech funds in rebalancing the economy in the north? One of the issues holding back growth in the north is badly congested and unsafe roads such as the A64. Will my right hon. Friend use funds from his Department, working with the LEP, to improve the A64?

[Vince Cable]

One of the joys of the new pots of funding that are available for local enterprise partnerships is that LEPs can decide for themselves what their priorities are. I am aware, because I grew up in the region, that there are serious infrastructure bottlenecks, and I am sure that that will be high in its priorities.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Secretary of State and the whole House will no doubt welcome this morning’s excellent news that 1,000 new jobs have been created in Belfast by US software company Concentrix. That is very good news in terms of rebalancing the economy. Will he continue to work with the Northern Ireland Executive on matters such as corporation tax to ensure that the number of private sector jobs continues to grow in the Province?

[Vince Cable]

The Northern Ireland Executive is doing an excellent job in attracting inward investment. I have been to see some of these high-tech companies. The Titanic quarter is a good example of the growth that is taking place. I am delighted to hear the news that the right hon. Gentleman has announced. We are certainly happy to continue to work with the Executive.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents in Kettering were very worried when told by the Opposition that 1 million jobs would be lost in this country as a result of the Government’s attempt to rebalance the economy. Does the Secretary of State therefore share my delight in the latest figures from HM Treasury showing that since 2010 an extra 4,800 jobs have been created in Kettering—a massive 11% increase?

[Vince Cable]

My hon. Friend describes a trend that is apparent across the country. As I said a few moments ago, almost half a million new jobs were created last year, and I am delighted that Kettering is sharing in that positive story.

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

Every week when Parliament is sitting, I get on the train in one of the poorest parts of the European Union and get off in the richest, with a twelvefold difference in wealth per head between west Wales and inner London. Does the Secretary of State acknowledge that the only way to address this record of shame is to fiscally empower the nations and regions of the UK and have a deliberate strategy, as in Germany, to redistribute wealth between the wealthiest and the poorest parts?

[Vince Cable]

In many respects, the Welsh economy is sharing in the wider picture. Its unemployment rate is slightly lower than the national average. My hon. Friend the Member for Ceredigion (Mr Williams), who represents that area of Welsh Wales, is very active in promoting that part of the country, which benefits substantially from European assistance.

[Toby Perkins (Chesterfield) (Lab)]

The trend across the UK that the Business Secretary has just described is undermined by a report that shows it is 100 times easier to get a job in Cambridge than in Salford and that describes the gap as widening “dramatically”. The Public Accounts Committee exposed the incompetence and delays with the regional growth fund. Does not the Secretary of State know that every Tory Government leads to the imbalance in our economy not shrinking, but growing?

[Vince Cable]

Actually, the Greater Manchester local enterprise partnership is one of the best and most active and it is resulting in considerable improvements in that region. On the regional growth fund as a whole, we now have a formidable accumulation of results. We are talking about approaching £3 billion of commitments, 427 projects, more than 500,000 jobs safeguarded and created and, most important, £16 billion of private sector investment that has been brought in alongside Government money.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

4. What recent assessment he has made of the performance of UK Trade & Investment in supporting exports.

--- Later in debate ---

[Neil Carmichael (Stroud) (Con)]

15. What steps he is taking to improve productivity.

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

The Government’s approach to raising productivity is to deliver macro-economic stability through a combination of monetary activism and fiscal restraint, while implementing a programme of long-term structural change through the industrial strategy. This is giving firms and individuals the confidence they need to invest.

[Neil Carmichael]

In my constituency, we have several modern and forward-thinking firms, such as Renishaw, Delphi and ABB, which are all keen to make sure that they can recruit skilled engineers and a skilled work force—[Interruption.] The Secretary of State has sat down now. Does he agree that the long-term economic plan is pivotal because it deals with the need to make sure there is a pipeline of well educated young people entering the labour market?

[Vince Cable]

I apologise for remaining standing; I was so gripped by the question, I could not tear myself away.

I commend my hon. Friend for establishing what I think he calls the Carmichael commission in his constituency to look at ways to improve growth. He is right that having a pipeline of skilled staff is essential. I am familiar with Renishaw and I shall see the company tomorrow at the MACH exhibition in Birmingham. The crucial requirement is a long-term train of apprenticeship, at graduate and sub-graduate levels.

[Kevin Brennan (Cardiff West) (Lab)]

Is the Secretary of State at all worried that the current economic picture is being driven so much by consumer spending, and why does our productivity remain so poor?

[Vince Cable]

The Office for Budget Responsibility forecast for 2014 is that business investment will rise by 8%. Given the depth of the crisis to which we have had to respond, this is a slow process, but business investment is now overtaking consumer spending as the driver of the recovery.

[David Mowat (Warrington South) (Con)]

16. What steps he is taking to support energy-intensive industries.

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

The Government have in place several measures to address energy costs for these industries. The Budget announced a further £7 billion package of support including: extending the existing compensation scheme to 2020, under which we have distributed £30 million to 53 companies; new compensation for costs of the renewables obligation and feed-in tariff; qualified exemptions to the carbon price support mechanism for combined heat and power; and capping the CPS at £18 per tonne of carbon.

[David Mowat]

The Secretary of State will be aware that even after the welcome changes in the Budget, the carbon price floor in the UK is four to five times higher than in the rest of the EU, where the emissions trading scheme is more or less defunct. In addition, the EU has a system of more direct subsidy in countries such as Germany for these industries. Can he assure the House that he will be active in ensuring that our industries are supported in the same way as those in the EU are, and that the 900,000 jobs in energy-intensive industries are protected?

[Vince Cable]

Indeed, it is a major industry. My figures suggest that we have some 600,000 jobs directly or indirectly affected. It is a massive industry. We believe in it, and it is important that it is able to compete on a level playing field. That was the purpose of the changes announced in the Budget and we are now actively pursuing state aid clearance to make sure that these compensation mechanisms go through.

[Nic Dakin (Scunthorpe) (Lab)]

Does the Secretary of State now recognise that the Government’s ill-thought-through carbon floor tax was a mistake?

[Vince Cable]

Absolutely not. The only concern from the industrial point of view is that energy-intensive industries should have those costs offset. Under the mechanism the Chancellor has proposed, which we are now pursuing through the European Commission, they will be offset.

[Paul Maynard (Blackpool North and Cleveleys) (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’s objectives are to pursue economic growth and recovery by investing in skills and innovation.

[Paul Maynard]

As we have just heard, the carbon floor price in the UK remains significantly higher in the EU, despite the welcome changes in the Budget. What specific assessment has the Secretary of State made of the investment decisions taken by international energy-intensive companies, such as those that operate in my constituency?

[Vince Cable]

I think I largely answered that question a few moments ago, but the point I would emphasise is that despite the disadvantage of costs, albeit with the compensation we are now proposing, we have had very substantial investment in our energy-intensive industries. The steel industry, in particular, has been an exemplary example of long-term investment by Tata.

[Mr Chuka Umunna (Streatham) (Lab)]

In export week, will the Secretary of State tell us what he is doing to garner support among Cabinet colleagues for our seventh-largest export industry, a sector that generates more than £10 billion of income for our country?

[Vince Cable]

My colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) has given a comprehensive answer on how we are promoting exports across the board. The industrial strategy is, of course, maximising our export potential.

[Mr Umunna]

I am talking about higher education. The fact is that the right hon. Gentleman’s Government’s net migration target has done immense damage to higher education, contributing to a 51% fall in postgraduates coming from India and a 49% fall in those coming from Pakistan. Jim O’Neil, on the Department for Education’s board, agrees, saying that the Government are sending out a message that they are “not serious” about exporting education. The Parliamentary Secretary, Cabinet Office, the hon. Member for Orpington (Joseph Johnson) at No. 10 has argued, as we do, that legitimate students should be taken out of Government net migration targets, but is it not the truth that for all the talk from that Minister and the Business Secretary, both have let the sector down by failing to get their intransigent Home Secretary to see sense?

[Vince Cable]

The simple truth of the matter is that, as a result of discussions across the Cabinet and with the Minister for Universities and Science and myself, there is no cap on the number of overseas students. [Hon. Members: “There is.”] There is not. We want to maximise the number. We actively encourage them, and only this week there was a £1 billion contract signed with Saudi Arabia for higher education training in which we are a participant.

[Neil Carmichael (Stroud) (Con)]

T2. With the excellent news that manufacturing output year on year has increased by 3.8%, and with export week in mind, what steps is the Secretary of State taking to improve productivity so that we can further enhance the innovation of cutting-edge products and penetrate new export markets?

[Vince Cable]

That is a suitable rejoinder to the hon. Gentleman’s earlier question. The key point he made in his earlier question is that to drive productivity we need an adequate supply of trained people. I would add to that the emphasis we are placing on innovation and the establishment of the Catapult centres across the country. This is a new approach based largely on the German model and it is succeeding admirably.

[Mrs Mary Glindon (North Tyneside) (Lab)]

T3. I am concerned that the Secretary of State has been told that the current redevelopment of Swan Hunter’s yard in Wallsend is not appropriate. Will he meet me, the elected mayor of North Tyneside and others from North Tyneside to learn exactly how external funding is being used to develop the site and how his Department could support the creation of thousands of jobs in advanced manufacturing at Swan’s?

[Vince Cable]

I am certainly very happy to give the hon. Lady an assurance to meet her in the House and to visit her constituency. I have been to Tyneside on several occasions and I am aware that it is a centre for advanced manufacturing. In many respects it is doing very well on the back of the growth of the oil and gas industry in the North sea. We clearly need more jobs on Tyneside and I am happy to work with her to deliver them.

[Greg Mulholland (Leeds North West) (LD)]

T5. Twenty-five years ago the then Government intervened in the pubs market, recognising that it was failing consumers and small brewers. However, as a result of industry lobbying, they failed to place a limit on the number of pubs, which led to the development of the large pubcos. Twenty-five years on, will the Secretary of State assure me that he will listen to the majority of MPs in the House of Commons rather than giving in to industry lobbying, and that he will introduce the market-rent-only option which is the solution offered by the Business, Innovation and Skills Committee?

--- Later in debate ---

[Julie Hilling (Bolton West) (Lab)]

In answer to a written question I was told that the Government know next to nothing about the number of jobs they claim to have created, not even how many of them are new jobs rather than simply a transfer from the public sector, so why will the Secretary of State not tell us how many of these jobs are minimum wage, unpaid or zero-hours?

[Vince Cable]

We are perfectly happy to provide information where it is available. It is obviously easy to quantify jobs created in projects. Collecting a vast inventory of information on fluctuating wages is a much more difficult proposition.

[Mr Philip Hollobone (Kettering) (Con)]

May I commend to the Secretary of State “A Blueprint for Britain: openness not isolation” by Iain Mansfield who is a former employee of his Department? It was the winner of the prestigious Brexit prize by the Institute of Economic Affairs, and it concludes that

“if the right measures are taken the UK can be confident of a healthy long-term economic outlook outside the EU.”

[Vince Cable]

To correct the hon. Gentleman slightly, I think the gentleman concerned is employed by UK Trade & Investment, and he wrote this in his personal capacity, and it is perfectly reasonable to do so. I look forward to responding to his essay, which seems to me fundamentally mistaken, but no doubt we will argue about that.

[Jenny Chapman (Darlington) (Lab)]

When I visit schools in my constituency I ask them about the careers information, advice and guidance they receive and, without exception, they say that it is totally dreadful. To be fair to the Government, it was not much better under the previous Government. This is very important for social mobility, so what is the Minister intending to do to make face-to-face guidance available to everybody?

--- Later in debate ---

[Karl Turner (Kingston upon Hull East) (Lab)]

The Minister of State, the right hon. Member for Sevenoaks (Michael Fallon), refused to answer me, but I wonder whether the Secretary of State could estimate how many of the 12 immediate beneficiaries of the fire sale of the Royal Mail are Tory party donors?

[Vince Cable]

It is not my job to collect information on the Conservative party’s funding. All I can tell the hon. Gentleman is what the Minister of State has already told him: that a majority of the shares allocated to priority investors are still held by them and a substantial majority of the shares in Royal Mail that were issued through the initial public offering are being held by long-term institutional investors.

[Julian Smith (Skipton and Ripon) (Con)]

The start-up loan scheme is one of the most inspirational business policies that this Government are pursuing. Can the small business Minister confirm that we are right behind it, we are putting more money into it and we will do everything we can to grow the scheme as much as possible?

Oral Answers to Questions

Vince Cable Excerpts

Thursday 6th March 2014 Commons Chamber

[Robert Flello (Stoke-on-Trent South) (Lab)]

2. What recent assessment he has made of the availability of finance and the level of lending by banks to small businesses.

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

Gross lending to small businesses for the 12 months to January was 14% higher than in the same period a year ago, although net lending continues to contract. The Bank of England’s credit conditions survey reported, however, that:

“The overall availability of credit to the corporate sector increased significantly”

in the final quarter of 2013.

[Robert Flello]

I am really surprised by the answer that the Secretary of State has given, because small businesses in my constituency tell me that they are finding it almost impossible and often totally impossible to access the finance that they need. Lending to business is down after the failure of the Government’s Project Merlin, credit easing and funding for lending schemes. It now emerges that the business bank is just a rebadging of existing schemes. Why has the Secretary of State failed to learn from the Department’s mistakes and failures?

[Vince Cable]

Of course, there is a continuing credit problem for many small companies. That is very clear. There is a very different pattern among the significant banks. Lloyds is greatly expanding its lending, as is Santander. Some of the new banks, such as Shawbrook and Aldermore, are beginning to make an impression. That has been cancelled out by RBS, although its new management have indicated that they wish to expand its net lending considerably. The business bank is beginning to make a significant impact. It is not a rebadging. It is already out in the market, supporting new forms of non-conventional business finance.

[Andrew Bridgen (North West Leicestershire) (Con)]

Business intentions rely on confidence, and with business confidence at a 22-year high, figures from the Office for National Statistics show that business investment is up 8.5% on the previous year. Does that not show that business is not only confident about the economy, but about the policies of this Government?

[Vince Cable]

Yes, there is a high level of confidence, and it is reinforced by fact. Indeed, the output and spending figures are reinforcing the trend that the hon. Gentleman describes. There is, however, a continuing problem regarding credit to the small and medium-sized business sector. We are not complacent about that, and the interventions we are making will help.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Many businesses in my constituency tell me that their biggest problem is the withdrawal of overdrafts, and they are sometimes offered big and unwanted loans instead. Is the Secretary of State monitoring that trend, to ensure that banks are not fiddling the system to benefit themselves, and to attack small businesses that have cash-flow issues but do not need big loans?

[Vince Cable]

One positive thing is that we are now getting a growth of specialist institutions that provide small businesses with a type of finance—Aldermore provides asset-based financing or new kinds of invoice financing to deal with cash flow or investment as required. However, the hon. Lady is right to say that there is a particular problem in that area of the market.

[Lorely Burt (Solihull) (LD)]

I recently had the privilege of opening the first bank in my constituency to be approved under the new Government fast-track system—Paragon bank—and it was full of praise for the help it received from my right hon. Friend’s Department. Does he share my aspiration that that will herald the beginning of much greater diversity and choice in the banking sector, and particularly help for small businesses?

[Vince Cable]

My hon. Friend is right and I thank her for her kind words. Ultimately, what will change the problem is breaking the traditional monopoly of the big four banks. Many new banks are now coming into existence, and the more flexible licensing regime operated by the regulators is playing a significant part. I believe that 20 new banks have recently been licensed and, within a few years, I think we will see real competition and diversity.

[Toby Perkins (Chesterfield) (Lab)]

The Secretary of State says that he is not complacent, and he has good cause not to be. Net business lending was down in eight of the past 12 months, and businesses will hear that in the past year, lending is down by £11.6 billion on the year before. How does he think those businesses will respond to the news that in the past year, Barclays and Lloyds made 508 people millionaires due to the bonuses they paid, at the same time as many small businesses are struggling to get access to finance? Is there a discrepancy between the Government’s performance on small business lending and the bonuses that continue to be paid by those banks?

[Vince Cable]

There are often bonus levels that are extreme, but it is important to recall that at the peak of the financial crisis when the Labour party was in charge, there was a bonus pool of well over £12 billion. That has now shrunk to a tiny fraction of that, and at least one bank to which the hon. Gentleman referred—Lloyds—is making a significant improvement in the supply of small business lending.

[Bob Blackman (Harrow East) (Con)]

3. What steps he is taking to reduce the amount of EU regulation which affects businesses.

--- Later in debate ---

[Karl Turner (Kingston upon Hull East) (Lab)]

4. How many firms have been prosecuted for non-payment of the national minimum wage since May 2010.

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

Since 2010-11, Her Majesty’s Revenue and Customs has identified £11.3 million in arrears of wages for 66,000 workers through civil powers, which are sufficient in the majority of cases. However, for the minority that are persistently non-compliant, criminal investigation is appropriate. Two employers have been prosecuted since 2010, with nine prosecutions in total since 2007.

[Karl Turner]

Does the Secretary of State agree that paying Portuguese seafarers working on P&O Ferries in and out of Hull £3.96 an hour risks the employment of British seafarers? Will he make sure that the national minimum wage enforcement team investigates the maritime sector?

[Vince Cable]

The maritime sector is subject to the national minimum wage if it is operating within the UK jurisdiction. I will happily take up the case that the hon. Gentleman mentions and, indeed, I was aware of accusations of abuse in this sector.

[Ian Murray (Edinburgh South) (Lab)]

We know that the Government do not want to admit that the country is engulfed by a cost of living crisis, but that denial is made worse when the Chancellor is exposed as giving a hollow and empty promise to raise the national minimum wage to £7 an hour. Indeed, only a few days after he made that promise, the Conservative party issued a memo, under the heading “Common Sense Guide”, advising on how to avoid paying the national minimum wage. Rather than false promises for the lowest paid in our country, would it not be helpful to utilise the Secretary of State’s naming and shaming policy to expose the national minimum wage deniers in his Government and back Labour’s plans for a living wage?

[Vince Cable]

I thought that the Labour party was still committed to supporting the national minimum wage. This is an interesting new evolution of policy, which seems to have been made on the stump. The naming and shaming policy has now come into effect and the first five companies were named at the end of last week.

[Alex Cunningham (Stockton North) (Lab)]

5. What recent representations he has received from small businesses on their consumer rights.

--- Later in debate ---

[John Mann (Bassetlaw) (Lab)]

10. On what date he plans to visit Bassetlaw to inspect and meet local businesses.

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

I have provisionally booked a ministerial visit to Bassetlaw and to neighbouring areas in Nottinghamshire for early June.

[John Mann]

I will parlay with the devil to get jobs and investment into my constituency, and I can guarantee the Secretary of State my personal protection from my constituents and their anger with the coalition. Perhaps we shall be able to have, for the day, a healthier coalition promoting jobs and investment in Bassetlaw.

[Vince Cable]

I am not sure I shall need much protection because the firms in the hon. Gentleman’s constituency are already beating their way to my door. I believe 14 companies have availed themselves of the enterprise finance guarantee scheme, there have been five start-up loans and 17 other companies are using the growth accelerator, all in his patch.

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

11. What his policy is on the future level of the national minimum wage.

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

Our aim is to maximise the wages of the low-paid without it costing jobs and ensure the benefits of the recovery are shared by everyone. We fully support an independent Low Pay Commission and are currently considering this year’s recommendation to increase the national minimum wage by 3% to £6.50. This would represent the first real increase since the financial crisis. In addition, we are considering the Low Pay Commission’s response to how we can restore the real value of the national minimum wage, which has not kept pace with inflation since 2008.

[Andrew Selous]

I am looking forward to many of my constituents seeing a pay rise shortly as the minimum wage rises, but what is the Secretary of State doing to address the worrying productivity gap so that future wage rises are based on increases in productivity and earned output?

[Vince Cable]

My hon. Friend is right that if we are to sustain real increases in wages whether at the minimum level or above, there have to be productivity increases and many of the problems in the low-paid sectors like catering and care are to do with the fact that productivity levels are very low. I gather, for example, that in some of the lowest paid sectors the minimum wage is already 90% of the median. That reflects the low productivity in those industries.

[Nic Dakin (Scunthorpe) (Lab)]

21. With families £1,600 a year worse off, has the Secretary of State got any plans to follow Labour’s lead and incentivise employers to pay the living wage?

[Vince Cable]

We have already made it clear that we would encourage companies to pay the living wage if they could afford it, but we need to be very clear that this is not a mandated system. Indeed, the Low Pay Commission has expressed considerable care in its recommendations to be sure that in promoting a higher level of wages at the bottom, which we want to see, we do not force large numbers of workers out of work.

[Mark Garnier (Wyre Forest) (Con)]

12. What steps he is taking to support businesses affected by recent floods.

--- Later in debate ---

[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.

[Mr Cunningham]

Will the Secretary of State say what the latest position is regarding Hibu, as he met a small delegation of MPs some months ago to discuss the situation? He will know that many of the shareholders have lost a lot of money, especially those in Coventry.

--- Later in debate ---

[Mr Chuka Umunna (Streatham) (Lab)]

In the last annual report and accounts of his Department, the Secretary of State said that the Department remained

“on track to deliver against our spending review settlement.”

However, the head of the National Audit Office said in the same report that there are significant uncertainties relating to billions of pounds’ worth of the Department’s assets, which will affect its financial position. Can the Secretary of State explain the discrepancy?

[Vince Cable]

I think the hon. Gentleman is referring to the significant assets that were left with the dissolution of the regional development agencies. In fact, the job of managing that complex process has been extraordinarily successful.

[Mr Umunna]

No, I refer to the student loans worth billions of pounds. Subsequent to the publication of those accounts, the NAO published a report that revealed that because Ministers have dramatically overestimated the number of graduates who will be able to repay the loans to pay for the Secretary of State’s higher tuition fees, he has, in effect, blown a hole in the Department’s budget. In fact, the Library estimates that from 2015-16 an extra £600 million a year will have to be found. Will the Secretary of State now explain how he will fix the problem without putting under threat the country’s scientists, students, universities and colleges?

[Vince Cable]

This is an absurd misunderstanding of what is called the resource accounting and budgeting—RAB—charge system, which depends on long-term predictions of earnings growth. I assure the hon. Gentleman that if the recovery of the economy continues as it is, the RAB charge estimates will be substantially revised down and the imaginary black hole will very soon disappear.

[Mark Menzies (Fylde) (Con)]

T4. What steps is the Department taking to support small and medium-sized businesses in Lancashire that are keen to export their goods and services?

--- Later in debate ---

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

Bogus self-employment continues to spread through the construction industry, in part because the number of HMRC employer compliance inspections has halved in four years. Does the Secretary of State regret that?

[Vince Cable]

Of course we want to see maximum compliance. We realise that there are abuses in the construction industry and I can assure the hon. Gentleman that we are committing to stepping up enforcement action.

[Mr Robin Walker (Worcester) (Con)]

I am very pleased with the Government’s rapid response in providing support for businesses that were directly affected by the floods, but evidence is emerging in Worcester of substantial indirect effects from transport disruptions, particularly to small businesses. I understand that Worcester received around £57,000 of funding in the first tranche of the floods fund. Can the Minister confirm that as more evidence emerges, there may be more money to support local SMEs?

--- Later in debate ---

[Gordon Birtwistle (Burnley) (LD)]

I thank my right hon. Friend for visiting Burnley last week to open a new industrial estate and visit a number of rapidly expanding companies that are embracing the Government’s economic policy. Does he agree that if the success being achieved in Burnley was replicated across the country, our economic position would be growing much better?

[Vince Cable]

Yes, I had a very rewarding visit to my hon. Friend’s constituency and I think there were broader lessons. Much of the gloom about the economy that is being spread by the Opposition is not reflected in many manufacturing towns such as Burnley, which has an unemployment rate well below the national average and highly successful manufacturing companies, particularly in aerospace and the car supply chain. Many other towns and cities across the UK are now sharing that experience.

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

The Secretary of State will be aware that business growth in the UK is dependent not just on exports but on investors. Recently I went on a visit to India and I discussed with businesses, including a Confederation of Indian Industry round table here, issues concerning UKTI. How successful does he believe UKTI is at creating investment opportunities for medium-sized businesses from abroad, particularly in our regions, so that we can see growth and investment partnerships?

[Vince Cable]

UKTI is now regarded as an excellent service for business. It has a dedicated unit devoted to high-value opportunities and big inward investment in the UK. I visited India recently and met a substantial number of Indian companies, both in the service sector, such as call centres, and in manufacturing, such as aerospace, that are targeting the UK to re-shore production here from India.

[Mr Philip Hollobone (Kettering) (Con)]

Tomorrow in Kettering, with local employers, Tresham institute will launch Experience Kettering, a workplace experience scheme for hard-to-place young people aged 18 to 24. Would the Skills Minister congratulate Tresham institute on this initiative and send some words of encouragement?

[Barry Gardiner (Brent North) (Lab)]

What impact and what offence does the Secretary of State believe have been caused to Jewish and Muslim businesses by the statement from the chief veterinary officer today, threatening to ban the practice of shechita and halal?

[Vince Cable]

I confess that I have not yet absorbed the significance of that statement. We will certainly consider it.

[Greg Mulholland (Leeds North West) (LD)]

The House is awaiting the response to the BIS consultation on pub companies, but now that the London Economics research has been exposed as fundamentally flawed and does not follow the brief given to it by BIS, and the firm has charged £26,000 for fieldwork that did not take place, will my right hon. Friend ignore this bunkum and listen to the Federation of Small Businesses’ research, which shows that the market rent-only option would benefit the UK economy by £78 million?

Oral Answers to Questions

Vince Cable Excerpts

Thursday 23rd January 2014 Commons Chamber

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

14. What steps he is taking to encourage more people to become engineers.

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

The Government are working with employers, professional bodies and higher and further education institutions to implement the Perkins review of engineering skills and boost careers in engineering, particularly for women. In September we announced a £400 million boost for STEM—science, technology, engineering and maths—teaching in universities.

[Stephen Metcalfe]

In a recent Science and Technology Committee report “Educating tomorrow’s engineers”, we recommended that

“learned societies, professional engineering institutions and trade bodies put an obligation on their members to systematically engage in promoting engineering and technology as a career through a structured programme of educational engagement.”

What progress, if any, has been made in making that come to fruition?

[Vince Cable]

There is a recognition of the seriousness of the shortage of engineers, and we are trying to address that in a variety of ways. On the particular programmes that my hon. Friend has described, we are working with the professional associations on work experience for students and industrial placements for teachers, because we have to change the perceptions of young people in schools.

[Mr Turner]

I welcome my right hon. Friend’s initiatives to encourage more people into engineering. I founded the Isle of Wight Technology Group to help engineering and technology companies work together on training, recruitment and other issues. Will he say how many new engineers are being grown on the island, and will he come to the Isle of Wight to see for himself the good work that technology companies are doing?

[Vince Cable]

I cannot give my hon. Friend a precise number, but I know that a depth of engineering talent is arising from the island’s successful companies, both in the maritime sector and in aerospace. We want to build on that, and I would be absolutely delighted to meet him and his engineers on the Isle of Wight—I always enjoy a walk on Tennyson down.

[Oliver Colvile]

As my right hon. Friend knows, Devonport dockyard is the only naval dockyard in the country that refits and refurbishes our nuclear submarines. How have the Government helped—and how can we help—to make sure that we protect Britain’s nuclear engineering skills base and ensure that the work force are not lured away to Hinkley C, just up the peninsula?

[Vince Cable]

My hon. Friend is right to say that in an environment where there is an acute shortage of professional engineers and craftsmen, there is a tendency to poach skills. We see that happening in other sectors, like the motor car industry, oil and gas and so on. The answer is to produce more engineers, and he will be aware that in his constituency, or certainly in the city of Plymouth, we have the 600-place university technology college, which is growing with support from the Government. That is a very positive step forward, and I am sure he will be pleased with it.

[Richard Burden (Birmingham, Northfield) (Lab)]

Does the Secretary of State agree that today’s good news from the automotive sector should encourage more people to become engineers, but that there is still a real issue to address to ensure that the automotive supply chain gets the engineers it needs and that young people are encouraged to go into it? Does that not involve doing more to ensure that training meets the needs of the supply chain and that small businesses in that sector get the investment they need, which requires a different approach from finance houses?

[Vince Cable]

The hon. Gentleman is right to say that the key challenge now faced by the car industry, which is a great success story, is to progress the success of OEMs—original equipment manufacturers—which are expanding, down through their supply chains, which were hollowed out in earlier years. We are addressing that issue through the Automotive Council and the industry strategy. That is progressing well, but it does need a great deal of support for the training base and the training of engineers, which is what we are doing through our apprenticeship programme.

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

Young people across Plymouth are telling me that they feel as though they are little more than walking pots of money when it comes to careers advice and that schools are almost harassing them at times to keep them in school. That obviously militates against some of them going to do engineering apprenticeships, as my neighbour the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) has pointed out. What more can the Secretary of State do to set up an independent careers advice arrangement, so that these young people can get broader advice, not specific and closed advice from their schools?

[Vince Cable]

Yes indeed. The all-age careers service that we have put in place is now generally acknowledged to be giving successful advice through the age range. On schools, we recognise that there is an issue to address on the career paths of the non-academic—the more vocationally trained. We shall shortly be issuing guidance to schools on how to access independent advice.

[Jim Shannon (Strangford) (DUP)]

The aerospace industry has shown marked improvement in the past few months. Just last week, Magellan Aerospace in Belfast announced a new job contract through the Prime Minister, and jobs and opportunities were created. Is it now time for higher education and for industry, particularly aerospace, to work together to make sure that those jobs are taken by young people from universities and colleges at this time?

[Vince Cable]

I am sure that the hon. Gentleman is absolutely right. I was in Belfast recently and met a combination of Northern Ireland universities and industry. They are working together and realise that a recovery is taking place, despite the problems of the traditional industries around Belfast. Such work requires the kind of collaboration he has described.

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

Will the Secretary of State reassure me that he regards the excellent John Perkins review of engineering skills as the irreducible minimum necessary to address the urgent shortages in engineering skills in our country, and that his Department will remain open to ideas better to market engineering to young people, and to address the appalling gender stereotyping that is frustrating so many women’s ambitions to get into engineering?

[Vince Cable]

Yes, it is an exceptionally good report. The challenge is a massive one. There is an acute shortage of engineers, and the problem is particularly serious among women. I believe that something in the order of one in 10 professional engineers is a woman, and about one in 20 in advanced apprenticeships. We are actively seeking to address that with the professional institutions.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I too wish to ask the Secretary of State about the engineers of the future. The mismanaged free-for-all that gave private students unfettered access to the student loan system has now cost his Department so dear that big cuts are being discussed. On top of the huge cuts for educating 18-year-olds in college, we now hear rumours that the student opportunity fund that helps poorer future engineers will be completely axed. Will the Secretary of State take this opportunity to promise the House that he will not sacrifice social mobility to pay for the chaos in his Department’s budget?

[Vince Cable]

The right hon. Gentleman could perhaps do a little better than rely on rumours that have very little foundation. The substance of the matter is that in the autumn statement, we were committed to additional investment of £400 million in STEM teaching to provide modern facilities that were neglected during the years he was Financial Secretary to the Treasury.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

7. Whether net lending to businesses by banks has risen in any of the last 24 months.

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

The answer is yes. The most recent data from the Bank of England show that net lending to small and medium-sized enterprises was positive in March, June and November, and the Bank of England’s most recent “Trends in Lending” and “Credit Conditions” reports show that confidence is beginning to return, helped by interventions such as the British business bank.

[Alex Cunningham]

According to the chamber of commerce, unemployment in the north-east has gone up by 1,000 in the past quarter and by 16,000 in the past year, of whom 13,000 are women. We agree that small and medium-sized businesses should be driving the economy up and unemployment down, but I am told that many in my region see confusing Government schemes and the banks as failing to give them the help and resources they need. What specific things will the Secretary of State do to help people in the north-east and let our people share in the so-called upturn?

[Vince Cable]

Anybody who looks at yesterday’s employment figures will realise that we are in a very positive trend on employment—far in excess of what was predicted. Specifically in relation to the north-east, the hon. Gentleman will know that the main mechanism the Government use to support jobs and companies is the regional growth fund, and I think that the north-east has received more regional growth fund support than almost any other part of the country.

[Mr Peter Bone (Wellingborough) (Con)]

Does the Secretary of State agree that as businesses expand and get more sales, they generate more cash, so we would not necessarily expect net lending to go up?

[Vince Cable]

That is certainly a factor. Indeed, many individual companies—quite apart from the banks—have become highly risk-averse, but I do not doubt that the supply of credit is a serious problem. That is why we have made interventions, such as the British business bank, that are already making a significant difference.

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

19. May I tell the Secretary of State that in Yorkshire, too, small and medium-sized businesses in particular find it difficult to borrow money from conventional banks, which is why they increasingly look to crowdfunding for finance? Has he seen that Nicola Horlick has set up a new organisation to get into the crowdfunding market, because she too believes that conventional banks do not respond fast enough or efficiently enough?

[Vince Cable]

The hon. Gentleman is quite right. Indeed, one of the more encouraging signs over the past year is that unconventional forms of lending, such as crowdfunding, are becoming increasingly common. The Government are supporting two of the main schemes that operate on a peer-to-peer lending basis. Lending is expanding very rapidly in that sector for the small and medium-sized companies that need it.

[Julian Sturdy (York Outer) (Con)]

8. What support he is providing to the life sciences sector.

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[Sir Tony Baldry (Banbury) (Con)]

15. What his policy is on the national minimum wage.

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

Our aim is to maximise the wages of the low paid without damaging their employment prospects. We fully support the work of the independent Low Pay Commission in framing the pay rate recommendations for 2014. I have also asked it to consider the conditions that would be needed for faster, above inflation, increases in the national minimum wage.

[Andrew Griffiths]

I warmly welcome the Chancellor’s announcement of his support for raising the national minimum wage, which would be of huge benefit to the lowest paid in Burton and Uttoxeter, and across the country. Does the Secretary of State accept that it would also place extra costs on business, particularly on small business? Will he consider what could be done to reduce business taxes and regulatory burdens to help those businesses pay for an increase in the minimum wage?

[Vince Cable]

Yes, of course we are conscious of the extra cost that would fall on business. That is why the Low Pay Commission tries to make a balanced judgment between the impact on employment and the increase in earnings for workers. It must be left to make its judgments and its independence must be respected. On the tax implications, given that the Chancellor is now heavily involved in this proposal and supportive of it, I am sure that he will be helpful on that front as well.

[Sir Tony Baldry]

Some 14 million people are on the minimum wage, most of whom work in retail, hospitality or cleaning. They earn just over £12,000 a year and are hard-working people. It is rightly the ambition of the coalition to make work pay more than benefit. Does my right hon. Friend imagine that anyone thinks that an above-inflation increase in the minimum wage would not pay for itself and should not be available to help those who are working hard?

[Vince Cable]

My right hon. Friend reflects the thinking that framed the advice I gave to the Low Pay Commission. Indeed, such thinking is not merely attractive in that it gives an incentive for people to work and improve their earnings, but it has positive implications for public finances.

[Heidi Alexander (Lewisham East) (Lab)]

The Government would have us believe that they are now great supporters of the national minimum wage, yet we know that many sitting on the Government Benches today voted against it in 1997. If the national minimum wage is so important to the coalition, why have the Government allowed its value to fall by 5% since the election?

[Vince Cable]

The real value of the minimum wage started to fall under my predecessors in the wake of the financial crisis, and on each occasion, I, like my Labour predecessor, have followed the advice of the Low Pay Commission. The levels that have been set reflect that independent advice.

[Lyn Brown (West Ham) (Lab)]

13. What recent estimate he has made of the number of female entrepreneurs.

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[Karen Lumley (Redditch) (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 is concerned with the promotion of growth, recovery and a rebalanced economy.

[Karen Lumley]

Will my right hon. Friend join me in congratulating Bee Design Consultancy, which I visited last Friday in my constituency? In the past few years, it has gone from having two employees to 19, and it now exports its skills all over the world, recently to Lamborghini in Italy. I invite him to come to Redditch to visit the company next time he is in the west midlands.

[Vince Cable]

I would be delighted to come to my hon. Friend’s constituency and share that success. It is not just about mainstream car producers, but specialists, as she describes.

[Mr Chuka Umunna (Streatham) (Lab)]

The Secretary of State talked about the importance of strengthening the national minimum wage, which Labour established in office to secure a fairer deal for workers. With that in mind, does he agree that for an employer to mislead workers into purchasing personal accident insurance, the charges for which would take workers’ pay under the minimum and the purchase of which is not necessary given employers’ own insurance cover, would be completely indefensible and possibly unlawful?

[Vince Cable]

Yes, I agree that that would be indefensible and I think it is unlawful. I have been advised that this practice has happened. The relevant body, the employment agency standards inspectorate, is investigating individual cases and will take enforcement action. If it proves to be a widespread practice, there will clearly be a case for a broadly based inquiry.

[Mr Umunna]

I asked the question because it is precisely what employment agencies employing workers on, or close to, the minimum wage appear to have been doing. I have been passed evidence that suggests Blue Arrow, Staffline, Acorn, Taskmaster, Randstad and Meridian, employment agencies employing more than 100,000 workers, have been mis-selling personal accident insurance to workers which they arguably do not need and from which those agencies have been profiteering. There is even a company, Gee 7 Group, which specialises in putting together these dubious arrangements for agencies. Further to my questions on this topic since October last year, will the Secretary of State now commit to holding a full inquiry into this shabby practice?

[Vince Cable]

I will commit to ensuring that we have proper enforcement procedure. The hon. Gentleman has listed more companies today. We will investigate them and that may well merit a more broadly based inquiry. I will say that the information he has made available, which I think has already been publicised, depends on the information that has been obtained from a whistleblower in a company. The Government’s reforms will strengthen the rights of whistleblowers and put them and others in a stronger position. The hon. Gentleman has identified a legitimate case of abuse and I recognise that we have to deal with it.

[Peter Aldous (Waveney) (Con)]

T2. Will the Minister outline the work the Government are doing to increase the number of engineers who will be needed to work in the energy sector in Suffolk and Norfolk, and to build on the excellent work being done by Lowestoft college?

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[Ian Lavery (Wansbeck) (Lab)]

T4. Blacklisting is a scourge of any civilised society. Will the Secretary of State guarantee to the House that the confidential documents currently being withheld by the Government relating to the Shrewsbury 24 dispute in 1973 do not include extensive details relating to individuals who have been blacklisted and the companies operating this very sharp practice?

[Vince Cable]

We have debated this issue in the House before—I think the hon. Gentleman spoke on it, and I responded—and we take it very seriously. I have had conversations with the Information Commissioner to ensure that the injustices of the past are properly dealt with, and as I have said to the hon. Gentleman and the Opposition spokesman, if Members have more concrete evidence that has not been properly investigated, they should bring it directly to me.

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

T3. Suppliers to top-tier Government contractors still complain that payments made under the prompt payment code are not forthcoming. What more can the Government do to improve the situation and release billions of pounds back into the economy to support our long-term economic plan?

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

T7. Will the Secretary of State confirm that business investment has flatlined over the last year and that this is one of the major causes of Britain’s worsening productivity problem? What are he and the Government going to do about it?

[Vince Cable]

As everybody acknowledges, business investment has been badly hit since the financial crisis, but with the economy rapidly recovering, I think we all expect—and the surveys suggest—that there will be a movement forward in terms of business investment, once capacity has been fully utilised.

[Bob Blackman (Harrow East) (Con)]

T5. The number of students coming from India has dropped by 25% since the new restrictions were introduced, which means we have fallen below the United States as destination of choice. What is my right hon. Friend doing to ensure that we attract the brightest and the best to our universities for the best education in the world?

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[Ann McKechin (Glasgow North) (Lab)]

T8. The Financial Times this morning quotes a Treasury spokesman as saying that an interest rate rise is “not something we are worried about” and a “sign of success”. Does the Secretary of State concur with that view?

[Vince Cable]

Fortunately, my many responsibilities do not include the setting of interest rates. I am happy to leave that to the Governor of the Bank of England, who has made an admirable impression.

[Harriett Baldwin (West Worcestershire) (Con)]

T6. Did the science Minister hear the excellent Radio 4 programme about Malvern’s cyber-security hub, and will he clear his diary to come and open the private sector-led national cyber-skills centre in Malvern?

[Mrs Mary Glindon (North Tyneside) (Lab)]

T9. Is the Secretary of State aware that all the new oil and gas platform construction projects for this year have been either cancelled or postponed, which will have a devastating effect on employment in my constituency and others in the north-east, as well as those in Scotland? Will he, together with the Secretary of State for Energy and Climate Change, take immediate steps to address this matter?

[Vince Cable]

There is an enormous amount of investment in the North sea—about £13 billion last year, which was a big increase. One of my and my colleagues’ objectives, through the industrial strategy, is to ensure that as much of the supply chain as possible originates in the UK, and we are working with the industry on that. I frequently meet oil companies and fabricators to try to progress that.

[Stephen Lloyd (Eastbourne) (LD)]

I wholly support the Government’s move to increase the education leaving age to 18, but while the Department for Education budget is protected, the further education budget, which comes under the Department for Business, Innovation and Skills and which will now be educating far more people up to 18 than schools, is not. This will put a huge strain on FE budgets. Will the responsible BIS Minister talk to the Secretary of State for Education to ask for assistance?

[Jack Dromey (Birmingham, Erdington) (Lab)]

Queen Victoria was on the throne when the Dunlop Motorsport factory first produced wooden wheels and then rubber tyres in Erdington. Now, 125 years of history and 300 highly skilled jobs are at risk. Jaguar Land Rover needs the land for its welcome expansion. Birmingham city council has identified an alternative site about three miles away. But the global board, based in Ohio, has yet to commit to Birmingham and Britain—with only nine months left before the lease runs out. In thanking the Secretary of State for the welcome steps he has already taken, may I ask whether he will convene a top-level meeting with Goodyear Dunlop, involving both him and me, so that we can get a decision made that a great piece of our manufacturing history remains part of a great manufacturing future in this country?

[Vince Cable]

I am well aware of this issue and its importance to British manufacturing, and, indeed, to Birmingham. I would be happy, as I am sure would the Minister of State, to meet the key people in order to make sure that we get the right decision.

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

Given the enthusiasm of both the public and employees for buying shares in Royal Mail, will the Secretary of State look at what other assets in the public sector could be successfully transferred to the private sector?

[Vince Cable]

Asset sales are an important part of Government economic policy. They have been very successful in raising cash and enabling the Government to invest more than would otherwise be the case. We approach this on a practical basis, aiming to get value for money for the taxpayer.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Will the Secretary of State update us on his latest decision on article 7 of the proposed EU consumer products safety regulations on origin marking, which, if agreed, would mean that quality ceramics made in Stoke-on-Trent would be labelled “Made in the UK”? Is it not time that we put an end to misleading consumer product marking?

[Vince Cable]

I thank the hon. Lady and her colleagues from the potteries who have been to see me about this specific issue. Apparently, there was a meeting of what I think is called COREPER on Monday, but no agreement was reached. There is a divided view on the role of mandatory regulation to deal with this problem. I take a close interest in this matter, and I will follow it up.

[Mr Philip Hollobone (Kettering) (Con)]

For the 150,000 posties who are now shareholders in Royal Mail, will the Secretary of State or the Post Office Minister tell us what the average value of their individual shareholdings was at flotation and what their average value is now?

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[Mr Peter Bone (Wellingborough) (Con)]

On the Secretary of State’s undoubtedly enjoyable trip to meet my hon. Friend the Member for Redditch (Karen Lumley), will he break his journey in Wellingborough so that I can show him the success of local businesses? More importantly, this would not cost the taxpayer a penny because both Wellingborough council and East Northamptonshire council have free car parking, which encourages local business. If possible, I look forward to seeing him soon.

[Vince Cable]

I should be delighted to go to Wellingborough. Indeed, I should like to make the visit a political one as well, and, on behalf of my Department, to express my appreciation of someone who has given so much support to the coalition. [Laughter.]

[Paul Blomfield (Sheffield Central) (Lab)]

Last year, Sheffield Hallam university received £6.9 million as part of its share of the student opportunity fund. That not only helped it to recruit 30% of its undergraduate intake from low-income households—a commendable achievement—but to engage in critical retention work with the most disadvantaged learners. Yesterday, in the Business, Innovation and Skills Committee, the Secretary of State agreed with me that the fund’s work would be damaged if its resources were cut. Can the Minister reassure the House that that will not happen?

[Julian Smith (Skipton and Ripon) (Con)]

As the Prime Minister’s recent excellent trip to China has shown, there are phenomenal opportunities for Britain to trade with the Chinese. May I urge the Department to continue to lobby for the simplification of visas for Chinese visitors and entrepreneurs?

[Vince Cable]

Yes, and we will do so. I understand that my colleague the Home Secretary has already introduced a revamped system which is much faster and which gives those who have secured British visas speedy access to the Schengen countries. We are very conscious of the importance of Chinese visitors, and we will do our best to make it clear that they are welcome.

Oral Answers to Questions

Vince Cable Excerpts

Thursday 5th December 2013 Commons Chamber

[Jason McCartney (Colne Valley) (Con)]

7. 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 10,000 StartUp loans have been drawn down since the scheme’s launch in September 2012. Over the past year, UK Trade & Investment has helped 32,000 businesses to export, the growth accelerator scheme has supported 10,000 small businesses and the regional growth fund has helped a further 3,200.

[Miss McIntosh]

I shall support small businesses in Helmsley this Saturday. Will the Secretary of State use his good offices to encourage the local enterprise partnership for North Yorkshire to make funds available to improve the A64 corridor, because its safety record and its terrible congestion are holding back growth for all businesses along its route?

[Vince Cable]

I will certainly make sure that the local enterprise partnership is aware of my hon. Friend’s priorities. In relation to small business Saturday, I praise the activities that she is undertaking in Helmsley. That council is one of 25 that will offer free parking that day, and I hope that a few more will sign up to that in the next 48 hours. I shall be in Twickenham to support my small businesses.

[John Howell]

I will support small business Saturday by literally putting small businesses in my constituency on the map on my website. What will the Secretary of State do to improve access to finance and mentoring to ensure that Oxfordshire businesses continue to thrive?

[Vince Cable]

I think we all agree that small business Saturday is a positive, cross-party initiative, and hon. Members on both sides of the House will be out there backing it. I praise the originality of my hon. Friend’s approach.

On small business funding—I am sure this issue will be raised many times—I have drawn attention to the StartUp loans scheme that is helping large numbers of start-ups to get going, and the business bank is supporting both new and original forms of funding, as well as a rapid expansion of guarantees for existing companies.

[Jason McCartney]

I, too, will support small business Saturday, as I have done in the build-up to this weekend. Will my right hon. Friend join me in congratulating the Holmfirth Hullabaloo and Totally Locally Slaithwaite campaigns, which have engaged local shopkeepers with innovative reward and prize schemes to encourage local communities to shop locally?

[Vince Cable]

I do not know what those exciting schemes involve, but they sound fun. The basic underlying theme is that we are all being urged to support our local shops and to shop locally. I am sure that is a very good theme around which we can all unite.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Across my constituency, small businesses are being forced out by big developers who want to redevelop them for luxury flats. The local council is supporting that, and in the case of Shepherd’s Bush market, has even issued compulsory purchase orders to drive out small businesses. The Tory party will always prefer big business over small business. What will the Secretary of State do about this situation?

[Vince Cable]

This distinction between big business and small business is seriously unhelpful—most big businesses have supply chains—and we should support both.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Many small and medium-sized enterprises in my constituency—including in Shoreditch, which the Prime Minister calls tech city—are keen to bid for Government contracts, thereby growing, employing more people and becoming larger businesses. What is the Department doing to support them, because they face many hurdles in trying to become Government contractors?

[Vince Cable]

The hon. Lady will find that the trend in Government procurement is very much on track to meet the 25% target for small business. It is much more difficult with devolved bodies, such as health authorities and local government, but we are working on that with the relevant Departments.

[Mr David Hanson (Delyn) (Lab)]

Less than seven days ago, the Secretary of State said to a small business forum in Bath that solar energy

“had a part to play in powering the nation”.

Will he tell me whether Government is actually joined up, given that small businesses in my constituency are complaining to me about the cuts announced yesterday?

[Vince Cable]

Enormous numbers of homes use solar power. The major technological advances in that area are driving down costs. We need to see that happen across renewable energy. The Government of course had to cut the subsidy when it became clear that the industry was more sustainable.

[Toby Perkins (Chesterfield) (Lab)]

Without wishing to show off, I am going to 20 small businesses on Saturday across Chesterfield and Staveley—my wife is bringing her purse.

The urgency of small business Saturday seems all the more serious after a recent report by the Association of Convenience Stores which shows that 55% of its owner members earn less than the minimum wage on an hourly basis. Is the Secretary of State really telling those people that further cuts to corporation tax for big companies are a higher priority than cutting their business rates, which are the most expensive commercial property tax in Europe?

[Vince Cable]

I am very sympathetic to the business groups that have consistently made representations over the past few months to say that business rates are a major burden. This Department has certainly made it clear that we regard it as a major issue. The hon. Gentleman will have to wait for an hour or so to find out what the Chancellor is doing about it.

[Mr Philip Hollobone (Kettering) (Con)]

5. How many regulations affecting small businesses the Government have (a) introduced and (b) removed since May 2010.

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[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

10. What assessment he has made of the potential opportunities for manufacturers in onshore construction of offshore wind turbines.

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

In August the Government launched their offshore wind industrial strategy, which aims to build a thriving UK supply chain. Currently, there are 1,375 offshore wind turbines operational or under construction and, on average, half of the capital value of those projects comes from other parts of the supply chain in which the UK has leading expertise. Yesterday’s announcement on the electricity market reform makes clear the Government’s commitment to developing offshore wind in the UK.

[Mr Kennedy]

I thank my right hon. Friend for that detailed reply, and I too welcome yesterday’s news, not least given the market uncertainty recently when RWE was forced, for geological reasons, to pull out of the proposed £4 billion north Devon offshore wind farm. The Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), knows that I have raised the potential of the Kishorn site on the west coast of my constituency previously and yesterday’s news will give added confidence to those who are looking at the potential there, but what forms of further support might such a site be able to attract? Given the weather today, I cannot repeat my invitation to my right hon. Friend to visit, but I hope to do so in future, more clement times.

[Vince Cable]

I would be delighted to visit the site, and the mountains, in my right hon. Friend’s constituency. The site to which he refers is extraordinary and in its prime, in the North sea oil boom, it built the largest mobile structure on the planet at 600,000 tonnes. It has great potential, and if this supply chain development takes place, 2,500 new jobs will be created. We want to do everything we can to make that possible, and the announcement yesterday certainly helps. He will know that the Catapult in Glasgow is working on the technology behind offshore wind developments, and we will do everything we possibly can to make sure that Kishorn and other UK ports develop on the back of that rapidly growing industry.

[Barry Gardiner (Brent North) (Lab)]

The Secretary of State speaks of a rapidly growing industry, but the commitment by the Government three years ago was to 40GW of offshore by 2020. The commitment yesterday was for 10GW. Why has that commitment shrunk to 25% of what it was?

[Vince Cable]

The hon. Gentleman seems to have forgotten that Britain has by far the largest offshore wind industry in the world, and under the guarantees that we gave yesterday it now has the incentive to expand—and will do so, both onshore through the supply chain and offshore in the wind farms.

[Stephen Timms (East Ham) (Lab)]

11. What progress he has made in setting up a business bank operating regionally and locally.

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

The British business bank is being established to increase the supply of capital to smaller businesses throughout the UK, resulting in increased competition in the banking sector from alternative lenders, such as peer-to-peer lenders and challenger banks. It is being established with £1 billion of new capital, with another £250 million announced on Monday for new small business programmes.

[Stephen Timms]

The Secretary of State will know that Bank of England figures show that small business lending fell by £1.5 billion over the past quarter. Can he reassure us that this new institution will be more than simply rebranding the previous schemes that have proved so unsuccessful?

[Vince Cable]

The right hon. Gentleman is right that there is a negative trend in net lending. It has been sustained and is worrying, although gross lending is now beginning to recover quite rapidly. The interventions of the business bank will do two things. They will support existing schemes—in fact the take-up under the guarantee schemes has risen by 85% over the last year since they came under the business bank—and they will provide new funding. He will know that, under agreements we have already reached, new debt funds have been supported, and those will find their way into support for small businesses in his and other constituencies.

[John Stevenson (Carlisle) (Con)]

In north Cumbria, we already have the very successful Cumberland building society. Does the Secretary of State agree that such societies should be supported and, most importantly, smaller financial organisations should not be overburdened by regulation?

[Vince Cable]

The hon. Gentleman is right that the building societies have a crucial role, primarily of course in mortgage lending, which is their traditional business, but some of them are moving into small business lending and that is very welcome. One of the reasons why the Chancellor and I did not support the recommendations of the parliamentary commission on leverage ratios was to protect building societies and enable them to expand.

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

Given the failure of successive well-intentioned but ineffective Government schemes to boost lending for small businesses, including £78 million of unallocated resources for the funding for lending scheme, will the Secretary of State outline what extra measures he will take to ensure that the business bank succeeds where other schemes have failed?

[Vince Cable]

The bank is already succeeding. As I said to the right hon. Member for East Ham (Stephen Timms), there has been a very big increase in the lending being made available under the existing schemes and a big growth in equity-related activity. I think he will find that, as the business bank moves forward, we will use the £1.25 billion of new capital from the Treasury to do exactly what it was designed to achieve. I am very positive about the bank’s future.

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

The Secretary of State admits that there have been problems with the Government’s plans. One area of lending at a local level that has been picking up the pieces and expanding is payday lending to businesses. Does the Secretary of State now accept that his Department was wrong to oppose capping the cost of credit, given that businesses have been ripped off by legal loan sharks as much as consumers?

[Vince Cable]

The evidence from Bristol university among others, which we support, suggested genuine potential problems with a cap on interest rates, but we have been persuaded, on the balance of evidence, that we should do it. There are good experiences, in places such as Florida in the United States, that we will now seek to apply in the UK. I congratulate the hon. Lady and others on their persistent campaigning on this subject. I think we have now achieved a good outcome.

--- Later in debate ---

[Julian Sturdy (York Outer) (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 plays a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.

[Julian Sturdy]

Portakabin, the world-class modular building company which is based in my constituency, has raised the possibility of supporting British exports through assistance with the translation of foreign regulations. What steps is the Secretary of State taking to deliver that vital service, which could break down barriers to trade and boost United Kingdom exports?

[Vince Cable]

I know that the Prime Minister visited the hon. Gentleman’s constituency recently and was very impressed by the Portakabin initiative. We have a concrete proposal for the establishment of a single market centre to help companies to negotiate overlapping regulations, particularly those relating to export controls. Translating regulations into a common language would make the process easier.

[Mr Chuka Umunna (Streatham) (Lab)]

We had black Friday last week and cyber Monday at the beginning of this week, but, as many Members have already pointed out, the only day that really matters is small business Saturday. I am sure that you will be visiting small independent local shops in Buckingham this weekend, Mr Speaker. Will the Business Secretary join me in thanking the huge coalition—including organisations representing more than 1 million businesses, AmEx, the Ingenious Britain campaign, and, above all, the national campaign co-ordinator for small business Saturday, Michelle Ovens—that has made this day possible?

[Vince Cable]

I am happy to do that, and to acknowledge the collegiate, cross-party approach adopted by the hon. Gentleman. Small business Saturday is a very good initiative, and we should support and sustain it as much as we can.

[Mr Umunna]

The owners of the businesses to which I referred will have heard about the Tomlinson report, which accuses RBS of artificially distressing successful businesses in order to seize assets and make a profit. That is a very serious allegation about a bank that we, of course, own. Tomlinson says:

“Banks must ensure…that robust processes are in place to…avoid conflicts of interest.”

It has transpired, however, that he is an RBS customer, and that he has a complaint about the bank pending. Was the Secretary of State aware of that before he allowed the report to be published, and does it not call the report’s independence into question? It is not independent, is it?

[Vince Cable]

I was well aware that Mr Tomlinson was an RBS customer. He has been very public in his comments about the bank for a long time. He was appointed as entrepreneur in residence at my Department —we seem to have a team of entrepreneurs—and has contributed valuable insights. I have referred his report to the regulator and the bank. Crucially, his accusations are echoed in the report published by Sir Andrew Large, who was appointed by RBS.

There are serious problems in the banking system, and in RBS in particular. Those problems need to be investigated, and I think that Mr Tomlinson has performed a useful service in making them public.

[Andrew George (St Ives) (LD)]

T4. I am grateful to my hon. Friend the Under-Secretary of State for her earlier reply in respect of the review of zero-hours contracts, but does she agree that driving out shady employment practices and improving wages, including the national minimum wage, would have the additional advantage of reducing the welfare benefits budget?

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[Rushanara Ali (Bethnal Green and Bow) (Lab)]

T3. In the light of the revelation that the Government have failed to act to close a tax loophole that has cost the public some £500 million a year, what discussions has the Secretary of State had with Treasury Ministers about the concern that some large firms are failing to pay the correct amount of tax while smaller ones are making their contribution?

[Vince Cable]

There is a general concern about tax avoidance and there are some very public issues relating to certain companies. However, as the hon. Lady knows, in an hour’s time the Chancellor will be making the autumn statement, and I would be very surprised if a substantial part of that were not devoted to the issue of tax avoidance.

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

The Gangmasters Licensing Authority does terrific work in dealing with one particular vulnerable group of employees. Is there any scope for extending that way of working to protect other sectors, such as the care and hospitality sectors, in which there is at least the implication of abuse of employees and very low wages?

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[Caroline Lucas (Brighton, Pavilion) (Green)]

T9. The Secretary of State will be aware of the mechanism in the transatlantic trade and investment partnership that will allow global corporations to sue Governments before secretive arbitration panels that bypass domestic courts. As his own Department’s research says that nothing would insulate the UK from becoming subject to costly and controversial arbitration claims in the future, will he work to ensure that investor-to-state dispute settlements are removed from that agreement?

[Vince Cable]

The overall context is that the transatlantic agreement between the European Union and the United States, if it materialises, would be of enormous economic benefit. We realise that there are some tricky negotiating issues, and the hon. Lady has highlighted one of them. We will try to ensure that the interests of our economy are properly protected.

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

Will my hon. Friend keep pushing for the teaching of enterprise in our schools, so that we can inspire a whole new generation of entrepreneurs?

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[Vince Cable]

The hon. Gentleman is adding his name to the roll call. Perhaps we could simplify this process, whereby if everybody in the House who does not support small business Saturday puts up their hands.

[Bill Esterson (Sefton Central) (Lab)]

I shall enjoy supporting small business Saturday, too. Many young people take their first job in retail and gain vital experience and training that stands them in good stead for the rest of their working lives. Given the problems that retail faces, what steps will the Government take to support retail, especially to deal with the scourge of youth unemployment?

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?

--- Later in debate ---

[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?