Oral Answers to Questions

Vince Cable Excerpts

Thursday 18th July 2013 Commons Chamber

[Sir Bob Russell (Colchester) (LD)]

1. What assistance his Department provides to UK technology companies with exports; and if he will make a statement.

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

My Department helps UK technology exporters through UK Trade & Investment. In 2012-13, UKTI helped more than 3,000 companies with technology-related exports, and it is set to help more than 3,500 in 2013-14.

[Sir Bob Russell]

I am grateful to the Secretary of State for his answer. He will be aware of my concern that officials in his Department are perhaps not operating a level playing field, in that American companies exporting products from their country are treated more favourably than companies in this country producing exactly the same products. Will he give me some clarification as to what is going on?

[Vince Cable]

First, I should explain that the Minister for Universities and Science, my right hon. Friend the Member for Havant (Mr Willetts), who might have answered this question, is currently at Chequers for a Cabinet away day. My hon. Friend the Member for Colchester (Sir Bob Russell) is an assiduous defender of his constituents, their companies and their jobs. He has discussed this matter with me, and I have pursued it. It is not the case that Britain is more difficult than the United States when it comes to clearing export licences, but I have none the less established that we should dispense with some procedures relating to quarterly reporting, and we will do so. We will also work with the company in question to try to establish whether an open general licence can operate in this case.

[Nick Smith (Blaenau Gwent) (Lab)]

A survey by the Federation of Small Businesses has found that only one in five of its members uses UKTI services. What steps will the Secretary of State take to encourage UKTI to work more closely with small businesses?

[Vince Cable]

The hon. Gentleman is correct to say that our overall export performance would improve considerably if more British companies were exporting. The big contrast with Germany is that roughly twice as many of its small and medium-sized enterprises are involved in exporting. UKTI has been substantially reformed in the past couple of years, and it now has a much more small and medium-sized company focus. It has activities around the country, and we have a lot of evidence that its outreach is substantially improving. I hope that it will reach the companies in the hon. Gentleman’s constituency too.

[Mr Iain Wright (Hartlepool) (Lab)]

At the last Business, Innovation and Skills questions, the Secretary of State admitted:

“The figures on exports are not great”.—[Official Report, 13 June 2013; Vol. 564, c. 470.]

Since then, the UK trade deficit has widened to the point at which it is now the largest trade gap in the European Union, and the widest it has been since 1989. Following on from the question from my hon. Friend the Member for Blaenau Gwent (Nick Smith), will the Secretary of State tell the House whether he is happier with export performance this month? What changes to policy or priorities will he now make to facilitate an export-led recovery, or does he not think that changes are necessary?

[Vince Cable]

Monthly variations are not the issue, but there is an underlying problem. British exporters are currently doing extremely well in the big emerging markets. We have rapid export growth to countries such as Russia, China, India and Brazil, for example, but exports to the eurozone are weak, for obvious reasons. We accept that there are underlying weaknesses. We have not had the recovery of export volume growth that we would expect following a substantial devaluation. Much of this relates to the way in which supply chains were hollowed out in the long period of manufacturing decline, but we are trying to rebuild them through the industrial strategy.

[Mr Marcus Jones (Nuneaton) (Con)]

2. What recent support his Department has given to the automotive industry.

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

The automotive industrial strategy was launched on Friday by the Department in association with the Automotive Council. In partnership with industry, we will invest around £1 billion over 10 years in a new advanced propulsion centre.

[Mr Jones]

I met a number of business people from the motor manufacturing supply chain recently, and the main theme of the meeting was skills, and what we could do to help to increase the skills in the sector, in which there is now a real resurgence. Will my right hon. Friend explain a little more about his strategy? Will he tell us what part skills will play in it, and what more we can do to help the supply chain?

[Vince Cable]

My hon. Friend is absolutely right. The Automotive Council has identified skills shortages as a key problem. As a result of the adoption of the strategy document, the industry has committed itself to a significant growth in the number of apprenticeships. We have already seen a considerable increase, but he is right to suggest that this is an issue not simply for the big original equipment manufacturers but for the supply chains, and a lot more needs to be done to make the car industry seriously competitive through skills.

[Mark Pawsey (Rugby) (Con)]

Will the Secretary of State comment on the success of the sector and the impact on the supply chain? On Friday, I had the benefit of meeting a small business in my constituency, Automotive Insulations, which supplies products to, among others, Jaguar Land Rover and Bentley. It is looking to move to a new 60,000 square foot building, to employ a further 60 people and to generate £1 million- worth of investment over the next few years.

[Vince Cable]

This is indeed a very successful industry. Over the last couple of years, we have had commitments to something in the order of £6 billion-worth of new investment. One factor has undoubtedly been the confidence that the Government are fully supportive of the industry and are working with it through the Automotive Council. The confidence factor is indeed spreading into the supply chain. There are very good economic reasons why a significant amount of the supply chain that has been offshored should now be onshored—and that process is beginning. We want to do everything we can to encourage it.

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

3. What recent assessment he has made of the performance of the regional growth fund.

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

8. In how many of the past 24 months net lending by banks to British small businesses has (a) risen and (b) fallen.

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

The Bank of England now publishes monthly estimates for lending by UK banks to small and medium-sized companies. Those figures show for the 24 months up to May 2013 an increase in net lending in two months and a decrease in the others. The Government are working to increase the lending available to SMEs through the new business bank and, with the Bank of England, through the funding for lending scheme.

[Tom Blenkinsop]

Does the Secretary of State agree with the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), that there is no evidence that the funding for lending scheme is helping small business?

[Vince Cable]

The funding for lending scheme primarily benefits mortgage lending, but changes were made in April to make it accessible to asset-based finance, for example. Several of the new challenger banks are now taking advantage of it, and it is beginning to make an impact on SME lending.

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

I visited the bank recently and was told that all people who come to it are given a fair hearing and that small business men are getting the loans they need. Is it not the case that what got the banks into this mess was irresponsible and over-optimistic lending and that what we need now is prudent and responsible lending to small businesses?

[Vince Cable]

Of course, we need prudent, responsible lending, but I subscribe to the view, which I hear frequently around the country, that many SMEs find it difficult to access finance from the banks and that we cannot just let the situation remain as it is. That is why we are in the process of establishing the business bank, which is currently marketing £300 million. There is substantial interest in investing in that project.

[Jim Shannon (Strangford) (DUP)]

In the last period of time, it has been quite understandable that there have been problems with getting loans from banks, but another problem has been with small and medium-sized businesses being paid in time. It has been suggested that some £30 billion is outstanding in payments from big business to small business. What steps are being taken by the Secretary of State to help small business get moneys paid on time by big business?

[Vince Cable]

My colleague the Minister of State has launched an initiative to ensure rapid settlement, particularly down the supply chain. We name the big companies that do not settle their debts properly in that way. We also have a programme of supply chain financing, the advanced manufacturing supply chain initiative, which will help the settlements to which the hon. Gentleman refers.

[Toby Perkins (Chesterfield) (Lab)]

Two years ago, there was a crisis in small business lending. We have just heard from the Secretary of State that in 22 of those 24 months, it has got worse. The Institute of Chartered Accountants in England and Wales is the latest to acknowledge that the Government response to the SME funding crisis is totally inadequate, using a British investment bank that funnels existing inadequate schemes through our uncompetitive banking system. Is it not time that the Secretary of State admitted that the Government will never deliver the scale of change needed and threw his weight behind Labour’s plan for a new generation of local banks with local decision making, based on the key features of the German Sparkasse model? Let us get the real change that British small businesses desperately need.

[Vince Cable]

I am a great fan of the German Sparkasse system, and it is a pity that we never had it in Britain. If the hon. Gentleman looks back on the record of the previous Labour Government, he will recall that in 2000, they had a report prepared for them on the inadequacies of British business lending and the enormous problems created by the fact that four banks accounted for all the business. The Government of the day, despite urging from myself and others, did absolutely nothing about the problem. As a result, we went into the banking crisis with massively over-concentrated ownership and damaged banks that are no longer able to perform properly. We are seeking reform, supporting new challenger banks though the business bank, and dealing with a problem that should have been dealt with a decade ago.

[Mr Laurence Robertson (Tewkesbury) (Con)]

9. What recent assessment he has made of the take-up of apprenticeships.

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[Martin Vickers (Cleethorpes) (Con)]

14. What recent assessment he has made of the prospects for economic growth in the Humber sub-region.

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

We are working hard to support the Humber local enterprise partnership to deliver the priorities for growth set out in their plan for the Humber. In round 4 of the regional growth fund £21.3 million was allocated to two successful bids from the Humber, one of them from the local authority in my hon. Friend’s constituency.

[Martin Vickers]

The local economy is experiencing something of a renaissance. Only yesterday, I and colleagues from neighbouring constituencies met a representative from Scunthorpe-based Wren Kitchens, which is looking to take over the former Kimberley Clark factory at Barton-upon-Humber, which closed earlier this year with the loss of 500 jobs. The hope is that, within two or three years, those jobs will be replaced one-for-one. It is a major site and there were fears that it would turn into a rusting hulk. Will my right hon. Friend, or one of his ministerial team, commit to visiting the factory when it opens in the near future?

[Vince Cable]

I praise my hon. Friend for the work that he has done. He has already taken me to his constituency and shown me the plans for the area. The Kimberley Clark closure was a major blow and it is good to hear that it is being replaced. Last week I was with the Humber local enterprise partnership when it met in Hull. We discussed some of these plans, particularly the enormous potential of the energy sector in the North sea. I am certainly very happy to visit that factory in due course.

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

15. What steps he is taking to promote sustainable economic development in the North East.

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[Hazel Blears (Salford and Eccles) (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.

[Hazel Blears]

The Secretary of State will be aware that legislation is in place, supported by the Government, to ensure that when commissioning public services we seek social value as part of a wider value-for-money framework. That means local jobs, local supply chains, apprenticeships and local labour. How will the Secretary of State ensure that in his area, through the regional growth fund and massive investment in infrastructure, we get the same kind of social value to support our regional and local economies and get young people back to work?

[Vince Cable]

I recognise the considerable value of the Public Services (Social Value) Act 2012, and I acknowledge the right hon. Lady’s role in promoting its take-up. The Department has a unit that is currently promoting social enterprise, which lies at the core of this issue. Some 68,000 such enterprises now employ 1 million people, and I was at the launch of that unit last year. For our overall policy, we try through the industrial strategy to ensure that procurement is strategic and takes into account long-term training and innovation requirements.

[Guto Bebb (Aberconwy) (Con)]

T2. My right hon. Friend is well aware of the scandal of mis-selling interest rate derivatives to small businesses, but despite the establishment of the Financial Conduct Authority redress scheme in January, not a penny has yet been paid out to small businesses. On Tuesday, one small business was offered a redress package for a technical fault of £1.3 million, but the offer was made on condition that no payments would be made by the bank in question unless the business also settled the consequential loss claim. Will my right hon. Friend take up that issue with the FCA and ensure that technical redress is paid prior to any agreement on consequential losses?

[Vince Cable]

My hon. Friend is right that this is a major scandal and it is being pursued through negotiation with the banks. As he rightly says, there are major anxieties about the terms of the settlement and some of the products currently excluded from it. I will see the head of the FCA next week to pursue the matter in some detail on behalf of my hon. Friend and his colleagues, and I acknowledge the enormous work he has done in the background to bring these problems to proper attention.

[Mr Chuka Umunna (Streatham) (Lab)]

Businesses, particularly on the high street, have found the trading environment very tough while the economy has flatlined for three years under this Government. Does the Business Secretary agree that increasing parking enforcement charges at this time would be nonsensical and drive customers away from businesses in our town centres at the very time they need that custom?

[Vince Cable]

Of course there has been a major problem in many of our high streets as a result of the recession, and particularly as a result of the development of internet commerce, which has changed the pattern of shopping. As the hon. Gentleman knows, parking charges are primarily an issue for local authorities, but the Department has developed a strategy with the retail sector to help it develop areas of growth, including export business.

[Mr Umunna]

The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), said this week that the Government are consulting on proposals to increase the maximum parking enforcement charges that local authorities may levy outside London—a competence for which they are responsible. Apparently, the Secretary of State for Communities and Local Government thinks that would be a bad idea, but he is in no position to lecture given that Conservative councils impose higher parking charges than others. We are clear that massively hiking parking enforcement charges at this time for businesses and their customers amounts to a stealth tax on our high streets. Why does the Business Secretary not stand up for our businesses and kill off that proposal?

[Vince Cable]

I already have responsibility for one of the biggest Departments in Government, and taking over responsibility for parking charges from my colleagues and local councils would be an exercise in departmental imperialism that I will not embark on. I note the hon. Gentleman’s question and I am happy to talk to my colleagues in government about it, but he is missing the bigger picture of how we help the retail sector adapt to the massive technological changes that are taking place, and the perverse fiscal incentives that currently operate.

[Mark Menzies (Fylde) (Con)]

T3. What efforts are the Minister and his Department taking to support small and medium-sized businesses in Lancashire in the export market?

[Dr Alan Whitehead (Southampton, Test) (Lab)]

T7. Does the Business Secretary agree that the target, set by the Treasury on a moving basis, to be met before the UK Green Investment Bank can actually become a green investment bank—that public sector debt must be falling as a percentage of GDP—presents serious challenges for people planning green and low-carbon investments for the future? If so, will he take the opportunity of the recess to seek an urgent meeting with the Chancellor to see whether he can change that formula, so that the UK Green Investment Bank can actually become a green investment bank in the not-to-distant future?

[Vince Cable]

I think the hon. Gentleman might have missed some recent announcements. The UK Green Investment Bank is now succeeding and expanding rapidly, having already committed £700 million or more. In the spending reviews for 2015-16 and 2017-18, the Treasury has committed to providing an extra £800 million of funding and to beginning borrowing, initially through the national loans fund, in order to meet the objective I think he wishes to achieve.

[Christopher Pincher (Tamworth) (Con)]

T4. Boomerang Plastics is an innovative recycling start-up based in Tamworth and looking to expand, but one of its challenges is finding the right space to expand. What are Ministers doing with the Department for Communities and Local Government to encourage developers to construct the right sorts of business parks and to encourage local authorities to offer the right sorts of planning rights to allow firms such as Boomerang to find the space to grow and expand?

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[Mr Bob Ainsworth (Coventry North East) (Lab)]

Does the Secretary of State have any plans to look at the Insolvency Act 1986? Hedge funds appear to have the ability to acquire companies, to empty them of their assets, to appoint administrators of their choosing and to proceed without fear of being pursued vigorously. That certainly seems to be what is happening at Coventry City football club. Will he look at the situation and the framework of the law?

[Vince Cable]

Yes, we are doing just that. I spoke on Monday about that question in the general context of trusted business. We are, indeed, looking at the insolvency provisions. We are looking at insolvency practitioners’ fees, at some of the potential conflicts of interest that arise in that industry and at the regulatory framework.

[Fiona Bruce (Congleton) (Con)]

T6. Small businesses in Congleton and across the country struggle with the burden of regulations from Brussels. Will my right hon. Friend update the House on the work of the business-led taskforce on EU regulation, which he is chairing?

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

HSBC has shut its branch in Masham and is now doing the same in Pateley Bridge, deep in the Yorkshire dales, in one of the most rural counties in England. In discussions with senior bank executives, will my right hon. Friend make the case for rural areas, lest we get into a banking-free, financial services-free zone in our most remote locations?

[Vince Cable]

I note what my hon. Friend has said. Of course, it is worth recalling that banking services are being disseminated through the post office network, and one of the consequences of our being able to save that network from large-scale closures is that banking services are available now even in the most remote rural areas.

[Paul Blomfield (Sheffield Central) (Lab)]

Will the Secretary of State say what discussions he has had with the Home Office about the introduction of cash bonds for student visas, which has had a lot of negative press coverage overseas? Does he agree that the introduction of such bonds, either for student visitor visas or for tier 4 visas, would further damage international student recruitment?

[Vince Cable]

I am in constant contact with the Home Office about such matters. It is worth pointing out that the concept involves offering the possibility of a bond to people who have otherwise been rejected in the course of a visa application, so if it operates according to that spirit, it should ease, rather than make more difficult, access to visas.

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

May I thank my right hon. Friend for his Department’s decision to locate the world’s first Transport Systems Catapult centre in Milton Keynes? Does he agree that it will help to establish this country as one of the world’s leading development centres for transport systems?

[Vince Cable]

The Government have every reason to be proud of the catapult programme, which is now expanding quite rapidly. We are thereby able, through the Technology Strategy Board, to concentrate research excellence in particular locations. Some, such as those for renewable energy and advanced manufacturing, are now at an advanced stage of development, and I am delighted to hear that my hon. Friend is pleased with the location of the automotive centre.

[Mr Jim Cunningham (Coventry South) (Lab)]

Will the Secretary of State get together with the Secretary of State for Culture, Media and Sport to have a look at the way in which the Football League applies its regulations to private ownership of football clubs, because there is a diabolical mess at Coventry at the moment?

[Vince Cable]

Coventry seems to have some problem in that area. I come from the city of York, which went through this misery, as many towns have done in the English league. I can certainly have a look at that; it is not immediately clear to me where I fit into the picture, but I am interested in football and want to see it healthy.

[Mark Pawsey (Rugby) (Con)]

On employment law reform, does the Secretary of State agree that there would be a significant boost to our country’s small businesses if the cost of attending employment tribunals was reduced, given that, according to his Department, the average cost of successfully responding to and defending a claim is £6,200?

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

This morning the Globe group of parliamentarians held a seminar highlighting the risk of financial instability as a result of the overvaluation of fossil fuel reserves internationally and nationally without taking account of international climate change commitments. Will the Government contact regulators to ensure that they take into account the risks of instability and ensure that we do not see the bursting of a carbon bubble in the way we saw dotcom bubbles burst and other collapses in the markets?

[Vince Cable]

That falls well outside my area of competence, but I have a personal interest in it. One thing I learnt from my years in the oil and gas industry is that it is very unwise to predict movements in the price of oil, whether up or down. The hon. Gentleman raises an important and fundamental question that I am interested in and will pursue if it is relevant to my Department.

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

Brompton Bicycle Ltd in Brentford is a brilliant example of British manufacturing and engineering. It has been growing at 25% a year over the past three years, sells 40,000 bikes a year and exports 80% of what it makes to 44 countries. Will the Minister meet me and Brompton Bicycle Ltd to talk about how it can find the funding to buy new premises in order to grow even further?

Oral Answers to Questions

Vince Cable Excerpts

Thursday 21st March 2013 Commons Chamber

[Glyn Davies (Montgomeryshire) (Con)]

1. What progress his Department has made on developing trade links with non-European Union countries.

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

We have increased UK Trade & Investment’s focus on growth markets and we are championing ambitious EU trade agreements to help stimulate an export-led recovery. Over three years, our goods exports to Brazil are up by half; to India, by over half; to China, they have almost doubled; and to Russia, they are up by 130%.

[Glyn Davies]

We learned yesterday from Office for Budget Responsibility figures that the eurozone economy shrank by 0.6% in the last quarter, and the economies of the United States and Japan are flat. Does my right hon. Friend agree that if we are to return to sustained growth in the United Kingdom, we have to increase the business we do with high-growth economies such as Brazil, Russia, China and India?

[Vince Cable]

Yes, I absolutely agree. The Prime Minister and I, and other Ministers, spend a lot of our time trying to develop exports in these growth markets and to attract inward investment from them; that is clearly where the growth is. That does not mean that the EU market is not important; it clearly is, and that is why we are pressing for improvements to the single market.

[Andrew Gwynne (Denton and Reddish) (Lab)]

In his autumn statement 2010, the Chancellor stated that he wanted to see an export-led recovery. Given that last year exports fell and the current account deficit was the greatest for a quarter of a century, how does the Minister responsible for exports think his Department is doing?

[Vince Cable]

We are being extremely energetic in promoting that agenda. It is certainly true, as the Office for Budget Responsibility has made clear, that the slow-down in the British economy was primarily due to the failure in net exports. In our major export markets, zero or negative growth has been a significant factor. As I said in my first answer, we have very rapid growth in exports to some of the big emerging markets. A lot of that is due to the supportive efforts that are being made not only by British business but by Ministers, including me.

[Mr Philip Hollobone (Kettering) (Con)]

Is it not a serious source of concern that while we have a £20 billion trade surplus with the rest of the world, we have a £48 billion trade deficit with the European Union?

[Vince Cable]

Yes, it is a source of concern. We now have the benefits of a much more competitive exchange rate, and given the efforts that we are making to promote British exports and import competing industries, I would expect that deficit to narrow.

[Mr Iain Wright (Hartlepool) (Lab)]

As the Secretary of State and the hon. Member for Montgomeryshire (Glyn Davies) have said, the UKTI strategy recognises the need

“to increase exports, especially to the high growth and emerging markets of the new global marketplace”.

Yet despite this objective, and as well as sterling’s dramatic weakening in recent months, which should help exports, the Bank of England has described export performance as “disappointing”, the OBR has described it as “weak”, and yesterday’s Budget revealed forecasts of net trade rising by a paltry 0.1% until 2017. Why are we not experiencing an export-led recovery, and what will the Secretary of State now do differently to boost exports?

[Vince Cable]

I would have thought it was fairly obvious that when there is an economic slump in the markets that constitute half our exports, it is rather difficult to expand into them, despite the competitive advantage that we have. There are deep structural problems. Many exporters genuinely have problems in getting access to bank finance or difficulties in getting access to trained workers. These are long-term structural problems that we inherited and are now trying to deal with.

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

2. What steps he is taking to reduce business regulation for start-ups and small businesses.

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[Chris Williamson (Derby North) (Lab)]

8. What recent assessment he has made of manufacturing activity and future capacity in that sector.

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

After years of manufacturing being in relative decline we are seeking to bolster manufacturing capacity and drive the transformation to a skilled economy. On Monday we launched an aerospace strategy with £2 billion Government-industry funding for an aerospace technology institute. Rounds 2 and 3 of the advanced manufacturing supply chain initiative opened for applications today.

[Tristram Hunt]

One of the major problems affecting ceramics manufacturing in my constituency is, after yesterday’s Budget, no longer the climate change levy, but is security of supply when it comes to gas. We have dangerously low levels of gas storage capacity in this country, and in recent weeks we have come close to energy cut-outs. Will the right hon. Gentleman meet the Secretary of State for Energy and Climate Change as a matter of urgency so that we can have proper energy security for our ceramics industry?

[Vince Cable]

I congratulate the hon. Gentleman and his fellow potteries MPs on putting ceramics on the agenda. We recognise that because ceramics institutions are driven by gas rather than electricity it is more difficult to compensate them under the Government’s scheme. He is right to raise the issue of gas storage, which goes back many years. Compared with France we have relatively little strategic storage and I would be happy to talk to the Energy Secretary about that.

[Chris Williamson]

I hope the Secretary of State supports early-day motion 1185 which calls for the 600 taxpayer-funded carriages for the Crossrail project to be built at Derby’s Bombardier factory, safeguarding more than 10,000 jobs. Given that the Mayor of London will have a big say in where those trains are built, will the Secretary of State tell the House whether he is making the socio-economic case to the Mayor for building those trains in the UK, and specifically in Derby?

[Vince Cable]

We will certainly make the case for tendering to be conducted in a proper, strategic way. One lesson we have learnt over the years is that the rather opportunistic approach that used to happen in public sector tendering for public transport was not helpful, and we will certainly make the strategic case directly with Government and public agencies.

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

Manufacturing is very important to my constituency. Will my right hon. Friend update the House on the outcome of the third annual manufacturing summit, which took place in February 2013?

[Vince Cable]

It was a very productive session at Gaydon and we were able to see successful British car manufacturing—Jaguar Land Rover and Aston Martin were just across the road. It was the largest summit we have had so far, and a celebration, as well as a serious business discussion, of the progress we are making on apprenticeships, innovation and other support for manufacturing.

[Graham Evans (Weaver Vale) (Con)]

9. What steps he is taking to promote advance manufacturing.

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

16. What progress he made on the adoption of an industrial strategy for the UK.

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

We are developing long-term partnerships with business across a variety of sectors and policy areas. On Monday, I announced £1.6 billion of new Government funding over the next 10 years—well beyond this Parliament—to back our industrial strategy, concentrating initially on aerospace, automotives and agri-food.

[Jonathan Reynolds]

In recent weeks, the former director general of the Institute of Directors, Sir George Cox, in his excellent review of tackling short-termism in the British economy, added his voice to the call for a proper industrial strategy to support long-term growth. Since he took office and abandoned much of what the last Labour Government were doing, the Secretary of State has delivered many good speeches on delivering an industrial strategy, but we do not yet seem to have one. When will we get this sorted?

[Vince Cable]

We already have one. We are reversing much of the damage done with the decline of manufacturing industry under the Labour Government. I applaud the George Cox study. It follows, and in many ways echoes, the survey of long-termism and short-termism that I did through Professor John Kay.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

17. What support his Department is providing to small businesses to compete in global markets.

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[Nick Smith (Blaenau Gwent) (Lab)]

19. Which measures in the Government’s growth plan his Department has not yet implemented; and if he will make a statement.

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

Yesterday, the Government published a progress report on implementation of the plan for growth and the autumn statement 2011. All measures are being implemented and almost two thirds of the measures are now complete—up from a quarter at Budget last year. We are on track for delivery.

[Nick Smith]

The Government have announced the electrification of the Ebbw Vale to Cardiff line, but in advance of that we need to redouble the line to improve train frequency. Will the Government work with the Welsh Government to ensure that the finance for this shovel-ready project is delivered before the next election?

[Vince Cable]

I am delighted to hear an acknowledgement that after many decades of decline in the railway system we now have a major investment in railways and a rail revolution taking place. The hon. Gentleman raises a specific point that I am happy to follow up with the Welsh Government.

[Mr Speaker]

Steve Baker, not here. Sir Bob Russell, not here. I call Chris Williamson.

[Chris Williamson (Derby North) (Lab)]

T3. 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 Williamson]

A recent report by the respected consumer group Which? highlighted the extent of irresponsible lending in the high-cost credit market. Do Ministers think that the Office of Fair Trading’s recent threat to revoke the licences of 50 payday lenders goes far enough to stamp out bad practice in the sector?

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[Mr Chuka Umunna (Streatham) (Lab)]

Last year this Government presided over a double-dip recession. The Office for Budget Responsibility has just halved its forecast for what growth will be on the Government’s watch this year, so the situation is urgent. Yesterday the Government announced a number of measures that the Secretary of State says will help—the employment allowance for employers in respect of national insurance, an increase in capital spending by £3 billion a year and the establishment of Lord Heseltine’s single local growth fund. Which of these measures will help struggling businesses in 2013?

[Vince Cable]

There is a long answer, but I will give a short one. Let us start with the employment allowance, which will provide substantial support for micro-companies, building on considerable success with job creation— 1.25 million new jobs over the two and a half years of this Government and 600,000 forecast by the OBR.

[Mr Umunna]

The answer is that none of those measures will help businesses in 2013, because they do not kick in for at least a year, when what the economy needs is a stimulus now. What confidence can we have that the Government will actually deliver? Let us take Budgets 2011 and 2012. The Secretary of State and others boasted about their infrastructure plan, but two years on, less than 2% of the projects are completed or operational and now he says that Budget 2013 will get business investing. If that is the case, why, having accounted for this Budget, has the OBR revised down its forecasts for business investment this year, next year and in the following three years? It is not exactly a vote of confidence, is it?

[Vince Cable]

The OBR was quite clear about the reason for its downward revision of growth: it was explained in terms of net trade. That was the overwhelming factor, but if the hon. Gentleman wants evidence of projects that are now going through, he should look at some of the increases in capital investment approved in the autumn statement—and happening in my Department with my colleague the Minister for Universities and Science—big R and D projects going ahead in partnership with the private sector and many others now going ahead under the regional growth fund, creating jobs across the country.

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

T6. I believe it is Lord Heseltine’s birthday today. I wish him congratulations. Large rafts of money are going to city regions such as Leeds and Sheffield for transport infrastructure and other projects. We feel that we will be left in the lurch, so may I ask the team what support will be given to rural areas of North Yorkshire to improve the roads and other infrastructure?

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

T4. I do not want to use my topical question to talk about the obscene Barclays bonus; I want to ask whether the Secretary of State is aware of the fine example of CEEP—clean and energy efficient production—and sustainable manufacturing in our country’s industrial production. We are a world leader and we have amazing markets in China and India for this product. Will he put even more effort behind CEEP—he has done well up to now—so that we can conquer those markets?

[Vince Cable]

Yes, absolutely. I appreciate the hon. Gentleman’s acknowledgement that we have done well up to now. I have visited Huddersfield twice to see some of the successful companies there, and I am very happy to see more.

[Mr Robin Walker (Worcester) (Con)]

T7. I welcome the appointment of Andrew Witty to lead a review of how universities can support local growth. The university of Worcester has already delivered exciting regeneration projects, including Europe’s first joint university and city library, the Hive, and the new Worcester Arena. As it sets out to look into a new university business park, may I encourage my right hon. Friend to come to Worcester to meet representatives of the university, which has already become a powerful engine of local growth?

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

T10. The Secretary of State has often told us of his plans to rebalance the economy. Is he as worried as I and many commentators are that a huge plank of the Chancellor’s growth strategy seems to be predicated on a policy that could reinflate the housing bubble?

[Vince Cable]

We certainly would not want to see that happen again. I have to say that I am a little surprised to be given a lecture on this, having seen the housing bubble that developed 10 years ago and got completely out of control and did so much damage. Clearly, the intention of the stimulus announced yesterday is to provide supply as well as demand in the housing market.

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

T9. Lancaster is an excellent university town, and we have a high number of creative and innovative entrepreneurs. What additional help can we get from the Department to provide them with the right marketing, financial and manufacturing advice to help them to get their products to market?

[Mr Dennis Skinner (Bolsover) (Lab)]

The Secretary of State is fond of talking about rebalancing the economy. A walk down the high street in any town or city will show that the growth industries are payday loans, betting shops, pawnbrokers and food banks. Is not that a really sad, evil commentary on these three wasted years?

[Vince Cable]

Perhaps the hon. Gentleman will come back with me to Markham Vale in his constituency, which I visited at his suggestion—[Interruption.] Real regeneration is taking place there with Government support.

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

I have raised the issue of interest rate swaps with my right hon. Friend the Secretary of State before, and I am grateful for the action he has taken. However, the problem is still hurting businesses in my constituency, so will he keep the issue firmly on his radar and work with colleagues across government to bring it to a conclusion as swiftly as possible? [Interruption.]

[Vince Cable]

I am sorry; I did not catch the hon. Gentleman’s question.

[Mr Speaker]

I am sorry if the hon. Gentleman’s words were lost; let us hear them.

[Andrew Jones]

I have raised the issue of interest rate swaps with Ministers before and have been grateful for the action taken, but this issue is still hurting businesses in Harrogate and Knaresborough. May I ask the Secretary of State to keep this issue on his radar and to work across government to try to resolve this as quickly as possible?

[Vince Cable]

Yes, the hon. Gentleman is right: interest rate swaps were a major scandal. The Financial Services Authority has, as he knows, already set in train a process for remedies. I am working very actively with it, but it is very much in the hands of the FSA and the banks to produce a just solution. [Interruption.]

[Mr Speaker]

I gather that the hon. Member for Bolsover (Mr Skinner) was banging on about car salesmen and his disapproval of the answer. If he would like to apply for an Adjournment debate, there is always a sympathetic ear; let us see what is available for him.

--- Later in debate ---

[Neil Parish (Tiverton and Honiton) (Con)]

Recently, Axminster Carpets, a great local company, went into administration. Its bankers were less than sympathetic. The Government have capital funds in place for banks to lend; can the Secretary of State do much more to make sure banks properly lend to business?

[Vince Cable]

There are a great many initiatives taking place. Apart from the advanced manufacturing supply chain finance announced this morning, we will be talking tomorrow about a new raft of initiatives for non-bank lending. The hon. Gentleman will have seen this morning’s ministerial statement on the future role of the business bank. He is right that the closure of the carpet factory is a serious blow, but it relates more to the viability of the company than to the ability of getting credit from banks.

[Emma Reynolds (Wolverhampton North East) (Lab)]

As chair of the all-party parliamentary group on aerospace, I want to welcome the announcement earlier this week of the aerospace technology institute. Will the Secretary of State or the Minister say more about the timetable for its creation and what types of investment it will support?

[Neil Carmichael (Stroud) (Con)]

In welcoming the industrial strategy being supported by £1.6 billion, I ask whether the Secretary of State agrees that we need to encourage our SMEs to start thinking about investing in tooling for components, especially in the automotive sector, because that is how we will further boost the values of our already impressive exports in cars?

[Vince Cable]

My hon. Friend is absolutely right that the issue in the industrial strategy is promoting not simply the prime contractors but the supply chains. These have been badly hollowed out in recent years, but there is quite a lot of evidence of re-shoring, and we want to support that with the advanced manufacturing supply chain initiative.

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

The Secretary of State has just cut by half the consultation period for large-scale redundancies. Does he imagine in his wildest dreams—I imagine he has some pretty wild ones—that this will do anything to foster economic confidence?

--- Later in debate ---

[George Freeman (Mid Norfolk) (Con)]

On the day of Lord Heseltine’s birthday, I have no idea what presents he might have been expecting, but I am sure that the Government’s acceptance of his report’s recommendations will have been a strong gift. I invite the Secretary of State, on behalf of the House, to pay tribute to Lord Heseltine’s tireless work for British business over a long career and to encourage the Government to implement his reforms with the radicalism and speed demanded.

[Vince Cable]

Yes, I would be delighted to pay tribute to him. Quite apart from this major report, large parts of which we are accepting, Lord Heseltine has played a major role in chairing the group of business people overseeing the regional growth fund and has led the initiative, now being taken in Birmingham, to mobilise chambers of commerce. Indeed, he makes a contribution far bigger than that of many Ministers in this and previous Governments.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Last year the Business Secretary wrote to the Prime Minister complaining that his Government lacked “a compelling vision” to drive up growth and provide business confidence. Given that the growth forecast has been cut to 0.6%, and given that the economy is at best flatlining and at worst teetering on the edge of a double-dip recession, does the Business Secretary still think that the Government lack a compelling vision?

[Vince Cable]

The compelling vision has been manifest in the industrial strategy. As the hon. Gentleman will have noted on Monday, the Chancellor and the Prime Minister are fully behind it, and are providing financial support to make that vision a reality.

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

Will the Secretary of State comment on the progress that has been made in Europe on the introduction of transparency to the extractive industries?

Oral Answers to Questions

Vince Cable Excerpts

Thursday 7th February 2013 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

1. What steps his Department plans to take to increase the number of women in the workplace.

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

The number of women in work is higher than at any time in British history. We propose a new system of shared parental leave and extending the right to request flexible working to all workers, which will further promote female participation in the workplace by increasing flexibility and choice. We are also committed to seeing more women in senior positions in the UK’s top companies, initially focusing on board representation.

[Harriett Baldwin]

In the last tax year men paid £92 billion in income tax whereas women paid £36.8 billion, which is 60% less. Normally I am in favour of lower income taxes, but in this case will the Secretary of State explain what else he is doing to help to equalise those figures and, most importantly, bring an extra £55 billion into the Exchequer?

[Vince Cable]

I pay tribute to my hon. Friend for the work she has done through the Working Families charity to promote shared parental leave and on female participation in the finance sector. It is not entirely a problem that women are paying less income tax; raising the tax threshold will help low-paid women in particular to pay less tax, which is one of our objectives. Female participation and promotion and women rising to the top in business are also key objectives of our policy, and that will produce the equality for which my hon. Friend strives.

[Sheila Gilmore (Edinburgh East) (Lab)]

Warm words butter no parsnips. The cost of child care holds women back from entering the work force. Does the Secretary of State regret his decision to support the reduction in child care tax credits and will he now push for that to be reversed?

[Vince Cable]

The Government are supporting women with young children, and families in general, to the tune of about £5 billion through the child care element in tax credit and free early years tuition, which for low-income families has been extended to two-year-olds, as well as tax relief on employers’ schemes. That amounts to very substantial support for child care.

[Alison McGovern (Wirral South) (Lab)]

The number of women in the workplace has been increasing for some time, of course, but in Wirral women public servants faced with the threat of redundancy and women leaders of small business tell me the cuts to Wirral council are threatening their job security. Will the Secretary of State ask his colleagues in the Department for Communities and Local Government to have a rethink about some of the heaviest cuts that are falling on places such as Merseyside?

[Vince Cable]

It is never good when people lose their jobs, and I always regret that, but the simple fact is that in Wirral, as in other parts of the country, the number of public sector local and national Government jobs lost is far outweighed by the number of jobs created in the private sector; over 1 million have been created over the past two years.

[Mike Gapes (Ilford South) (Lab/Co-op)]

2. In how many months net lending to businesses has (a) increased and (b) fallen since January 2011.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

12. In how many months net lending to businesses has (a) increased and (b) fallen since January 2011.

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

Figures from the Bank of England show that between January 2011 and December 2012 lending to businesses by UK banks increased in six months, and decreased in the others. The Government and the Bank of England are working to increase lending across the economy, for example through the funding for lending scheme and the new business bank.

[Mike Gapes]

Over the last two years net lending has gone down by £28 billion. What is the Secretary of State doing about that, apart from his various failing piecemeal initiatives, which do not get to the nub of the problem? The problem is a lack of consumer confidence and the banks’ failure to lend enough because of their lending criteria. What is he going to do about that, so that he will have a better record in two years’ time?

[Vince Cable]

Certainly, the decline in net lending to SMEs is a serious issue, which I frequently refer to. It is a genuine problem and Government schemes have provided support in a variety of ways, including about £7 billion of net lending and £1 billion alone from the enterprise guarantee scheme.

Before we are lectured on this, we need to go a little further back and remember who was in charge when the banks collapsed and the lending crisis erupted. The hon. Gentleman may recall, given that, like me, he has been a Member of the House for some years, the Cruickshank report of 2000, which pointed out that the banks were overcharging their business customers, providing a poor service and making excess profits. The last Government had an opportunity to reform the banking system then. They did absolutely nothing about it, which is why we are in this mess today.

[Debbie Abrahams]

Small and medium-sized enterprises in Oldham have told me how they are struggling to access finance. We now know from Bank of England data that bank lending fell by £18.6 billion last year. On top of this, SMEs were owed more than £36 billion in late payments in 2011. Will the Secretary of State back an inquiry I am launching as part of my Be Fair—Pay on Time campaign to investigate the issues associated with late payments?

[Vince Cable]

I would like to acknowledge the contribution the hon. Lady has made through debates in the House to this very important issue. The Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon), has launched a significant initiative with business in order to reduce that problem. We also have a trade financing scheme, working with Kingfisher to try to ensure that credit flows through the supply chain. The key point is that credit does not depend solely on banks; it also depends on the big primes, whether in the retail sector or in manufacturing, and we are providing substantial support to small companies caught up in that problem.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Businesses in Huntingdonshire are reporting to me that access to credit has significantly improved over the last year, which is very good news indeed. The complaint I am increasingly getting is that banks are becoming detached from their customers—that, because of regionalisation and formulaic processes, they still cannot get to the right people. Are the Government addressing this issue?

[Vince Cable]

Yes, the decline of relationship banking has been a long-standing problem and it underlines the difficulties my hon. Friend describes. The factual position is that last year a third of all applications to the banks for loans were declined, according to SME Finance Monitor. When appeals were made to an independent arbitrator, some 40% were successful, which shows how bad the banks are in sifting good credit from bad.

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

Does my right hon. Friend agree that the new business bank is not the silver bullet solution for all firms’ financial needs? What is he doing to diversify the sources of finance for business, particularly SMEs?

[Vince Cable]

No, it certainly is not a silver bullet but it will make a significant difference in increasing diversity in the system, in providing wholesale financing for some of the new entrants into the market, and in making Government support more concentrated and easy to access. It will be an important contribution, and the plans are already under way. The expert committee met for the first time a couple of days ago, and we are already looking at products and projects that hopefully will provide some £300 million, geared substantially with private money, over the course of this year.

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

Banks tell me that small businesses will not ask for money because of their lack of confidence in a flatlining economy. Small businesses tell me that banks will not lend to them because of the risk factor and the desire to increase their capital balances. The Government say they are going to introduce a business bank. When will the business bank be up and running to address these problems, and in what different way will it operate to overcome them?

[Vince Cable]

The business bank has already been organised and as I just mentioned, the expert committee met for the first time a couple of days ago and its products are already being prepared. As the hon. Gentleman will know, we have to go through the state aid process before it can operate fully. In the meantime, it can operate within constraints—pari passu lending, for one thing—and I can assure him that it will make a significant contribution.

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

Will the Secretary of State join me in welcoming the news that in the third quarter of 2012 there was a record number of company formations in Gillingham?

[Vince Cable]

Yes, and I think my hon. Friend makes an important point, which is that although we frequently hear from the prophets of doom on the Opposition Benches, a large amount of entrepreneurial activity is taking place. The percentage of the population engaged in business has increased from about 6% to 9% in the past two years, and what is happening in Gillingham is an example of that.

[Toby Perkins (Chesterfield) (Lab)]

Once again, anyone listening to the recent exchanges will not have the slightest confidence that this Government are taking any meaningful steps that will make a difference. Six weeks ago, in the last Business questions, the Secretary of State told us that after the expert group had met he would come here to tell us the timeline and what was going to happen. He keeps telling us that this bank is going to make a significant difference, but nobody really believes we will see any meaningful progress in the next two years. Certainty and responsibility are very important, so can he unequivocally confirm today that the Government are following the policies that he is advocating on access to finance for small businesses? If not, can he explain what the Government should be doing to make a difference on that?

[Vince Cable]

Of course I can confirm that we are pursuing the policies I have described. I get a sense that the hon. Gentleman has not the faintest idea about the issues involved in establishing a new bank. This Government have established, through government, two new banks, one of which is already operating on a significant scale— the green investment bank. The other is the new business bank, which is going through the necessary processes. [Hon. Members: “When?”] Opposition Members ask when, but do they have the slightest idea what is involved in running a bank and doing due diligence, having presided over the collapse of the banking system ignominiously and having allowed the banks to get totally out of control, with the disastrous consequences that we are now dealing with?

[David Rutley (Macclesfield) (Con)]

3. What support his Department is providing to the life sciences sector.

--- Later in debate ---

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

4. What assessment he has made of the need for business certainty for firms to secure investment and long-term growth.

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

Industrial strategy sets out a long-term approach to deliver greater certainty and growth in partnership with business. We will publish 10 sector strategies jointly with business throughout 2013.

[Stephen Doughty]

Whether it is on energy, infrastructure or Europe, the Government are sending out confused signals, no signal or the wrong signal to business. On the latter point, what representations has the Secretary of State had from businesses on the impact on investment and growth of his Government’s decision to hold an in/out referendum on EU membership in 2017?

[Vince Cable]

Inward investors always make it clear that they want certainty and clarity in that matter. TheCityUK recently did a survey which suggested that the stability of our membership of the single market accounted for roughly 40% of decisions to commit to the UK.

[Zac Goldsmith (Richmond Park) (Con)]

I am sure my right hon. Friend agrees that it serves no good purpose at all in the context of certainty to delay airport decisions until way after the next election. Will he confirm that he has put pressure on his colleagues in government to use the opportunity of the interim report at the end of this year to provide clarity for businesses, residents and communities?

[Vince Cable]

I know that the hon. Gentleman shares many of my concerns about airport expansion. The wider national interest must be safeguarded and we have commissioned Sir Howard Davies to do a proper and thorough investigation into the extremely difficult issues associated with Heathrow expansion.

[Mr Iain Wright (Hartlepool) (Lab)]

Tomorrow marks the first anniversary of the leaked letter from the Business Secretary to the Prime Minister, in which he acknowledged the need for

“a compelling vision of where the country is heading…Where we know big investment decisions are going to be made…we need to…provide certainty to business.”

In only the past few weeks, Bloomberg New Energy Finance stated bluntly:

“Investors have made clear to the UK government that policy uncertainty has undermined investment”,

and the National Audit Office said in its report on infrastructure that

“uncertainty over government policy might lead project sponsors, lenders and contractors to defer or abandon projects in the UK for opportunities elsewhere.”

One year on from his letter, why has nothing improved?

[Vince Cable]

A great deal has changed. There is now a great deal of support not only in government but across business for the industrial strategy. If the hon. Gentleman had been following the news he would have seen that some sectors, particularly the car industry and aerospace, have highly impressive growth and a long-term commitment to Britain. That is what we are trying to achieve.

[Ian Swales (Redcar) (LD)]

Will the Secretary of State look again at the sudden change in the combined heat and power regime announced in the 2012 Budget? The CHP provisions are expected to last until 2023 and the change has resulted in a severe financial penalty to energy investors, such as Sembcorp in my constituency.

[Vince Cable]

My hon. Friend’s question more directly relates to the responsibilities of my colleague the Secretary of State for Energy and Climate Change. On the broader point about energy policy, however, there is much greater clarity with the electricity market review. Particular sectors and their treatment under it, such as those involved in CHP, perhaps need to be reconsidered and I am sure that my hon. Friend will talk to my colleague about that.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

5. What recent assessment he has made of the effects of his reforms to higher education and student fees; and if he will make a statement.

--- Later in debate ---

[Stuart Andrew (Pudsey) (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.

[Stuart Andrew]

A number of businesses in my constituency that I have visited have reported welcome news of an increase in orders from abroad. However, they have raised concerns about the time it takes to get export licences. In order to help those companies to remain competitive, what is my right hon. Friend’s Department doing to try to speed up efficiency in that respect?

[Mr Chuka Umunna (Streatham) (Lab)]

The EU Council is gathering as we speak. From the common agricultural policy to the absurdity of the European Parliament sitting in two places, it is clear that the EU needs reform. It is also clear—to the extent that any reform involves a significant transfer of power from Parliament to the EU—that we all agree there should be a referendum. Does the Secretary of State agree that, although reform is crucial, the immediate priority for British business is to grow our economy, and that continued membership of the EU is fundamental to that goal?

[Vince Cable]

I agree. The way the hon. Gentleman phrased the question suggests that, despite some of the drama, there is a lot of common ground. As I understand it, all three party leaders want us to remain within the EU. We all support the need for radical reform and for a referendum on the conditions set out in recent parliamentary legislation.

[Mr Umunna]

To pick up on a question asked by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) earlier, I have spoken to many businesses—large and small—that believe that the Prime Minister’s approach to the EU risks Britain stumbling out of the EU. Companies in numerous sectors—from Virgin to Siemens, and from BMW to BT—that account for 170,000 direct jobs, never mind indirect jobs, have reiterated the importance of our continued membership of the EU to their businesses. In the Secretary of State’s leaked letter to the Prime Minister, he said the Government must build more certainty and confidence for business to invest. Does the Secretary of State believe the Prime Minister’s EU policy has helped or hindered that process?

[Vince Cable]

The Prime Minister’s pressure for EU reform is necessary. I work with like-minded Ministers in other European countries to help to deliver that reform. We are all agreed that we need a minimum of uncertainty to attract inward investment. It is incumbent on all who want jobs in Britain to sound that positive message.

[Julian Sturdy (York Outer) (Con)]

T2. With youth unemployment falling—sadly, it is still too high—is it not more important than ever that we prepare young people to enter work properly with the right skills, on which York college and Askham Bryan college in my constituency are doing great work? How will the proposed traineeship scheme support that?

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

T3. This week the British company Centrica withdrew, along with RWE and E.ON, from investments in nuclear power following its investment of £1 billion. That proves that nuclear electricity is now unaffordable unless the Government invest £20 billion of subsidy in a French company. Will the Secretary of State follow his commendable initiative on Greencoat UK by investing in what is Britain’s greatest unused source of power, which is tidal power—clean, green, British and eternal.

[Vince Cable]

We are certainly promoting research on new generations of renewable energy, and the hon. Gentleman will be aware of the new centre in Glasgow established specifically to look at tidal and wave power. I do not recognise his figure of £20 billion of subsidy for the nuclear industry. I am sure we are not going there.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

T4. Will the Secretary of State join me in congratulating Sam Davies from Whitland in Carmarthenshire for doing so well in the “We Made It” competition recently? Will he also get behind that competition, as it encourages so many young people into STEM-based jobs?

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

T6. The Secretary of State is aware of concerns about anti-competitive practices in the waste electrical and electronic equipment recycling market. What will he do to protect the position of small and medium-sized recycling companies such as Mercury Recycling in my constituency? Will he meet me to discuss this issue and wider concerns?

[Vince Cable]

We have a tough, respected and effective system of competition and anti-cartel policy. If the hon. Lady is concerned about anti-competitive practices, I will certainly raise this with the Office of Fair Trading, but it is an independent agency that makes its own decisions on which cases to investigate.

[John Stevenson (Carlisle) (Con)]

T5. I, like many, welcome the substantial increase in apprenticeships. However, it is equally important to encourage as many employers as possible to take on apprentices. Does the Minister agree that giving employers a national insurance holiday during the period of an employee’s apprenticeship would encourage more employers?

[Hugh Bayley (York Central) (Lab)]

T7. The Secretary of State was briefed about the York central site next to York railway station when he was in my constituency last year, so he knows well its potential to generate growth and jobs, a potential improved by the Government’s welcome decision to join High Speed 2 with the east coast main line at York. Will he meet me and representatives of York city council to discuss what the Government can do to help the council bring the site into use?

[Vince Cable]

Yes, I am familiar with the site. It was strategically important for childhood trainspotting, as I recall, quite apart from its potential for housing and regeneration. I am happy to meet the hon. Gentleman. I have already discussed this matter with the council leader and the chief executive. They need some support for infrastructure, although the scale of that is not terribly clear, but we are certainly keen to take this forward.

[Guto Bebb (Aberconwy) (Con)]

T8. Does the Secretary of State share my concerns that the Financial Services Authority redress scheme for businesses mis- sold interest rate swap products excludes those businesses that have a life swap value in excess of £10 million, despite the fact that those businesses would otherwise be characterised as “unsophisticated” by the FSA’s own rules?

[Vince Cable]

First, I congratulate the hon. Gentleman on his work on behalf of the up to 100,000 companies that have been mis-sold these swaps. It is a terrible scandal and he was one of the first people to highlight it. I think the position is now much better, but he is right to say that there are some anomalies at the borderline. The definition of “sophisticated companies” is not simply confined to scale, which I think is the point he is trying to make. I will continue to make that point to the FSA and the banks.

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

The Secretary of State knows that Nissan is vital to the north-east’s long-term economy and provides much-needed jobs and investment. Is there not a significant risk that the uncertainty about Britain’s future in Europe, which will continue for many years, could jeopardise this?

--- Later in debate ---

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

Does the Secretary of State agree that, if the United Kingdom stayed in the European Union and completed the single European market, our growth could increase by 7% within a decade, but that if we left the EU and had a relationship with it such as that of Norway or Switzerland, our exports could be as much as 14 times lower over the same period?

[Vince Cable]

I certainly agree that it is desirable, for reasons of economic growth, that we remain part of the European Union and single market. The hon. Gentleman may not be aware, however, that both Norway and Switzerland observe the rules of the single market as well.

Oral Answers to Questions

Vince Cable Excerpts

Thursday 20th December 2012 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

2. What recent discussions he has had with the Secretary of State for Energy and Climate Change on investment in green manufacturing jobs.

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

I regularly meet the Secretary of State for Energy and Climate Change to discuss energy and climate change policies, including investment in green manufacturing jobs in the north-east and elsewhere. We are committed to supporting green technologies including offshore wind, for which a sector strategy is to be published in the spring.

[Alex Cunningham]

On Teesside and elsewhere in north-east England we have seen tremendous investment in green industries, but we have also seen billions of pounds-worth of contracts for British offshore wind farms placed abroad in Germany and Holland. I had hoped there would be provisions in the Energy Bill, which had its Second Reading yesterday, to ensure that British firms got British jobs. There are no such provisions. Has the Secretary of State suggested any amendments to the Energy Bill to ensure that we get British jobs?

[Vince Cable]

We are pursuing this not through legislation but through practical action and we are working with the developers’ forum to try to ensure that at least 50% of supply chain work comes back to the UK. We cannot do that unless we have the capacity, which is why we have established the catapult centres in the north-east and Glasgow to develop basic technology as well as the six renewable engineering centres, which will develop our engineering capacity.

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

A small business in my constituency conveyed to me that it has considerable doubts about the implementation of the green deal and is therefore reluctant to invest in training for new employees and to make any other investment that might be appropriate to meet the demands of the green deal. What reassurance can the Minister give that the green deal will be implemented and that those opportunities will be there for small businesses?

[Vince Cable]

I know that my colleague the Secretary of State for Energy and Climate Change attaches enormous importance to the green deal. It is, as I understand it, completing its state aid clearance in Brussels. When it is launched there will be a major incentive for people to improve their homes and to develop jobs on the back of that.

[Mr Iain Wright (Hartlepool) (Lab)]

The Minister of State tells the Institute of Directors that his Secretary of State sometimes escapes his electronic tag, while the Energy Secretary has to slap down his Minister of State over wind energy, so investors no longer know what Government policy is and Business, Innovation and Skills Ministers are too busy tracking the Secretary of State to help create clarity and green manufacturing jobs. Given that this is the season of good will, cannot the hostilities cease? Will the Secretary of State ask for permission from his Minister of State at least to undo his electronic tag a notch or do, and will not BIS and DECC Ministers snuggle up together to watch “Strictly”, eggnog in hand, and promise to come back in 2013 determined to focus on British enterprise and industry, not departmental infighting and ministerial surveillance?

[Vince Cable]

While we are on our links with the criminal underworld, perhaps I should explain to the House that I have responsibility for offender learning, and one of my plans for the new year is to lay on a basics economics class for the hon. Gentleman and his colleagues.

[Mr John Baron (Basildon and Billericay) (Con)]

3. What plans the Government have to make it a requirement that more than 50% of the eligible membership must approve strike action for it to take place.

--- Later in debate ---

[Mr David Amess (Southend West) (Con)]

5. What recent progress he has made on the establishment of a business bank.

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

The statement I have laid before the House today details recent progress, including the appointment of individuals to chair the bank’s advisory group and lead work on the institution’s design. Good progress is also being made on designing the bank’s interventions. To that end, my officials have been engaging closely with challenger banks, non-bank lenders, the main high street banks, financial advisory firms and financial services representative bodies.

[Mr Amess]

Although I welcome the Chancellor’s commitment to funding the business bank quickly, in contrast to the 13 years of boom and bust under the last rotten Labour Government, will the Secretary of State reassure me that this measure, together with others, such as lending funds to businesses, will do much to reassure local businesses, given the challenges they currently face?

[Vince Cable]

Of course I recognise that the borrowing position for many small companies dealing with the banks remains difficult. The evidence suggests that the funding-for-lending scheme that the Chancellor introduced is having a significant impact, and the British business bank will significantly improve the level of finance available to British businesses, especially SMEs.

[Valerie Vaz (Walsall South) (Lab)]

My constituent Sally Hares runs a business, Hare’s Moor, which repackages fresh products for making curries. She cannot access a loan of £5,000 for a repackaging machine. Will the Secretary of State meet her to find out which fund she can access so that she can grow her business?

[Vince Cable]

I will certainly ensure that the hon. Lady and her constituent get good advice on the range of opportunities available to them. This is somewhat removed from the immediate concerns in establishing the bank, but she legitimately raises an important issue; many small companies cannot get credit.

[Toby Perkins (Chesterfield) (Lab)]

The small business bank provides the last chance for this Government to take meaningful action that could ensure the vital flow of cash to Britain’s small businesses. The reality among the small businesses that I speak to is that they do not have any of the confidence that the Secretary of State seems to be exuding about the access to finance that is out there. There is a worrying lack of urgency and clarity about the Government’s plans. Will he publish a timetable for the establishment of the business bank and update us on progress with all the main elements that will need to be in place, such as when it will apply for a banking licence, when lending will begin, and when state aid approval will be sought?

[Vince Cable]

There is certainly no complacency. We recognise that there is a very serious problem that ultimately resulted from the collapse of the banks in 2008-09, which has had devastating long-term consequences, and we are seeking to address that with a variety of interventions. There are positive things, including the emergence of challenger banks. When the advisory group meets early in the new year we will set out a detailed plan of action, including dates and objectives. I am happy to brief Labour Members when we have concrete detail.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

6. What steps his Department is taking to ensure that further education colleges provide a modern learning environment.

--- Later in debate ---

[Kelvin Hopkins (Luton North) (Lab)]

7. What assessment he has made of the latest construction output figures; and if he will make a statement.

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

The latest Office for National Statistics figures show that the seasonally adjusted volume of construction output fell by 2.5% in the third quarter of 2012. The volume of new construction orders, however, rose by 5.4% in the third quarter of 2012.

[Kelvin Hopkins]

I thank the Secretary of State for his answer, but the fact is that construction is in deep recession, with output falling by 10% between the fourth quarter of 2011 and the third quarter of this year. Industry is, indeed, in crisis. Is it not time for the Government to boost construction, including a programme of local authority house building to house the almost 2 million households on waiting lists?

[Vince Cable]

Certainly, the construction industry has had a torrid time ever since the collapse of the bubble in residential and commercial property. I know that there is a lot of distress in the sector, but there is some indication of orders improving. As the hon. Gentleman knows, the Government have taken action in the past few months. In September, we launched the programme of guarantees for social housing bodies to proceed with construction and raise capital for that purpose, and the autumn statement announced £5.5 billion-worth of new commitments, mainly through guarantees, for infrastructure projects.

[Mr Philip Hollobone (Kettering) (Con)]

The Government themselves procure construction projects. A local business in my Kettering constituency is the sub-contractor on a major Ministry of Defence contract, yet its payment terms from the principal contractor have gone up from 60 days to 90 days to 120 days. Will the Secretary of State work with other Government Departments to make sure that sub-contractors are paid on time?

[Vince Cable]

The hon. Gentleman raises issues in respect of late payment and the sub-contracting chain. One of the things that we are doing as part of the industrial strategy is, perhaps for the first time, bringing together the construction industry as a whole to work through supply-side issues, including late payment.

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

Will my right hon. Friend look at the high level of regulation, particularly with regard to construction sites? Does he have any news on how we can deregulate further in order to allow construction to proceed more rapidly once planning permission has been given?

[Vince Cable]

The red tape challenge is designed precisely to look at areas where regulation is excessive and inappropriate. On health and safety, however, construction sites are notoriously dangerous and we need to maintain basic standards.

[Andrew Rosindell (Romford) (Con)]

9. What steps he plans to take to protect and support the work of the British Antarctic Survey following his decision not to merge that body with the National Oceanography Centre.

--- Later in debate ---

[Mr John Whittingdale (Maldon) (Con)]

12. What steps he plans to take to reform the law on copyright; and if he will make a statement.

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

I am taking a number of steps to reform copyright law, in response to the Hargreaves review. Today, I am publishing the Government’s decision on changes to copyright exceptions, which I believe will achieve the right balance between creators, rights holders and users. The document, “Modernising Copyright: A modern, robust and flexible framework”, has been placed in the Library.

[Mr Whittingdale]

Does the Secretary of State agree that intellectual property rights and copyright underpin the success of our creative industries, which are so important to the economy? Is he concerned that many in those industries feel that the Government, on the back of the Hargreaves report, will dilute their intellectual property rights, not least in the area of exceptions to copyright law?

[Vince Cable]

The hon. Gentleman is right that the creative industries sector, which is crucial to the economy, depends heavily on intellectual property rights. However, we are dealing with a body of law that is extremely old—I believe that it goes back to Queen Anne. It certainly needs modification in the digital age. He is right that we need to move extremely carefully. That is why, over the last few weeks, we have been in discussions on some of the sensitive issues in relation to copying music and photography. When he studies the report in the Library, he will see that we have got the balance right between rights holders and liberalisation.

[Mr Edward Leigh (Gainsborough) (Con)]

13. What estimate he has made of the costs incurred by businesses due to regulation since May 2010.

--- Later in debate ---

[Ann McKechin (Glasgow North) (Lab)]

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

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

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

[Ann McKechin]

Given the acknowledged need to get finance quickly to the SME sector, does the Secretary of State share my concern that the British business bank will not be fully operational until the autumn of 2014? Given that private sector models such as Aldermore have been up and running to a much quicker timescale, can he give an assurance that he will try to speed the process along at his end?

[Vince Cable]

The business bank has already been established, and it will be up and running next year. Of course, the full clearance of European state aid, which is a necessary formality for certain kinds of lending, will take longer. I acknowledge the role of Aldermore and other banks, such as Metro and Handelsbanken, which is very important. This bank will complement and support them.

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

T3. Does the Minister agree that it is the wide range of educational provision in the higher education sector that really benefits young people, and if so, what is he doing to increase the diversity of that provision?

[Mr Chuka Umunna (Streatham) (Lab)]

This has been a sad week for British retail. Comet has closed its doors after 79 years of trading. I am sure that the whole House will want to convey our deepest sympathies to the 6,900 employees who have subsequently lost their jobs at the worst possible time of year. Given that in less than a year the owners appear to have lost the £50 million dowry they received to buy the business and left the taxpayer with a £49.4 million bill, will the Secretary of State commit to publishing the findings of the inquiry he has set up into this affair?

[Vince Cable]

The hon. Gentleman is absolutely right that the collapse of the Comet chain has caused great distress, not only through direct job losses but through the effect on the supply companies. There is also a large amount of unpaid credit—£230 million, I think—and not least the taxpayer stands to lose £50 million. He repeats some of the very serious allegations that are being made about the people involved in the company. I take the allegations very seriously and that is why I have asked my Department to conduct a thorough inquiry under the powers it has.

The hon. Gentleman asked about publication. As it happens, under the law I am not allowed to publish the report, but I will try to ensure that he and his Front Bench colleagues are properly briefed whenever information becomes available.

[Mr Umunna]

I am grateful for that reply. In the case of Comet, OpCapita has very serious questions to answer. Cases such as these are also raising questions about our insolvency regime in general, which—in spite of being one of the best in the world—needs to be improved. For example, the number of reports of directors being unfit to hold office has increased, but the percentage of directors being disqualified has fallen massively. The pre-pack procedure has been heavily criticised, and we could adopt elements of the US chapter 11 procedure here.

The Department has said that it is reviewing the overall insolvency framework to see whether it is fit for purpose. For the benefit of the House, will the Secretary of State outline who is to do that review? Will there be a call for evidence, and when may we expect to be told the results?

[Vince Cable]

The hon. Gentleman is absolutely right that this episode reveals wider possible failures in the system. There may well be better ways to handle insolvency—although it is fair to say that in general the British insolvency regime is regarded as one of the best internationally—and we should be open-minded about other approaches. The American chapter 11 system may well be better and I want to have a proper look at that. We are specifically going to have a look initially at a narrow issue concerning insolvency practitioners and their fees. The Insolvency Service is being looked at as part of the red tape challenge, which is examining the regulatory system and how it can be improved. I also want to review more broadly whether we can adopt better practices across the piece.

[Mr Speaker]

I call Richard Graham. Not here. That is the second time this has happened in a few days. The fellow has got to get himself sorted.

--- Later in debate ---

[Mr Christopher Chope (Christchurch) (Con)]

Do the Government believe in the right of each individual and business to choose the bank they wish to have operating on their behalf, and if so will the Government guarantee that no existing customer of Lloyds bank, whether a business or an individual, will be forced to transfer their account to the Co-op without their express consent?

[Vince Cable]

The general principle of account portability and its being voluntary is absolutely right. I am aware that some banks are currently discharging their customers against their will, which is bad business practice but not something we can stop. I am not sure what particular objection the hon. Gentleman has to the Co-op. It is one of the new challenger banks that we welcome.

[Bill Esterson (Sefton Central) (Lab)]

I send my sympathy to the Comet staff who have lost their jobs today, just five days before Christmas. When the Secretary of State carries out his review of what happened at Comet, will he look at how staff have lost bonuses and how staff who have served loyally for many years will not get their full redundancy packages, in spite of the fact that the Government are stepping in with £50 million?

[Vince Cable]

The inquiry that the Department is now carrying out will be into the conduct of the directors, and various consequences will flow from that. We cannot investigate the wider social consequences, but the hon. Gentleman is quite right that severe loss has been suffered, not just by the workers but by the Government, who are having to make up the redundancy pool.

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

Companies in my constituency have contacted me about how interest rate swap product mis-selling is threatening their very futures. May I urge my right hon. Friend to work with colleagues across the Government to try to resolve this issue as quickly as possible?

[Vince Cable]

I have already been working closely with the Bully-Banks group and the Federation of Small Businesses, which is deeply concerned about the problem. The scale of the scandal is becoming larger by the day, as more cases are uncovered. It is clear that the banks—or some of them—behaved extremely badly in the sale of such products. I am not fully satisfied that they are yet conforming with the spirit of the FSA’s advice on the matter; indeed, yesterday I met the chairman of the new regulatory authority to discuss with him how we can support small business more actively.

[Natascha Engel (North East Derbyshire) (Lab)]

Further to that point, the banks and the FSA are dragging their feet, making a decision and then not making a decision on interest rate swaps. Meanwhile, perfectly viable small and medium-sized businesses are going to the wall. What is the Secretary of State doing to ensure that the banks and the FSA make a decision quickly, so that businesses do not go under unnecessarily?

[Vince Cable]

In relation to the speed of the process, I was assured yesterday that the FSA will complete early in the new year a pilot it has undertaken to identify the range of companies that might be assisted. That will then be rolled out to all companies. There is a genuine problem of definition. Some companies are sophisticated and took on these swaps quite conscious of the risks involved; others were mis-sold them. The borderline between the two is not absolutely clear, but I agree with the hon. Lady’s general proposition—a view that other Members share—that a lot of small businesses have been severely mis-sold products and need to be assisted.

[George Freeman (Mid Norfolk) (Con)]

The rising world population means that by 2050 we will need to double world production, albeit with half as much water, land and energy. Does the Minister agree that British agricultural science, not least at the Norwich research park, has a potentially huge role to play in helping the world to feed itself? May I welcome the agricultural science strategy and ask that it look to draw in as much investment from around the world into Britain’s science base as possible?

Oral Answers to Questions

Vince Cable Excerpts

Thursday 8th November 2012 Commons Chamber

[Chris White (Warwick and Leamington) (Con)]

1. What steps he has taken to increase the amount of information available to people who wish to start their own business.

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

In January we launched the Business in You campaign to highlight the support available to start-ups. It gives access to online tools, such as a finance finder to help identify local sources of finance. Since then, we have made simple, easy to use information on starting a business available at the GOV.UK website. New businesses have access to 22,000 mentors offering advice on starting and growing a business.

[Chris White]

At the start of the year, Leamington Spa set a new record for the number of companies formed in the first quarter, with 164 new start-ups registered—a 10% increase on the previous record. Will the Secretary of State look at how we get information out to our new entrepreneurs and collaborate with important local bodies, such as the Federation of Small Businesses and the chambers of trade, so that we can capitalise on this new wave of entrepreneurship?

[Vince Cable]

We will do just that and I congratulate the hon. Gentleman on his role in promoting local companies. I was in Leamington Spa recently to meet some video game companies that have started up and he has played a useful role in promoting all that. Last year, encouraged by the overall improvement in the business climate, half a million new companies were established in this country, which is a major indication of the growth of entrepreneurial commitment.

[Anas Sarwar (Glasgow Central) (Lab)]

The Secretary of State will be aware that with the number of university and college places falling and youth unemployment increasing, now, more than ever, we should be encouraging young people to set up their own businesses. Will the Secretary of State be willing to come and visit the Entrepreneurial-Spark scheme in my constituency and see the innovative ways in which Glasgow is helping to encourage young business people to come forward in the city?

[Vince Cable]

As the hon. Gentleman knows, I take a particularly close interest in positive news in Glasgow and I would be happy to come and see that project. Suffice it to say that there is a new start-up loan scheme for young entrepreneurs, of which large numbers of young people are taking advantage. I am delighted to see that it is happening in Glasgow, too.

[Robert Halfon (Harlow) (Con)]

2. What recent steps he has taken to increase the number of apprenticeships.

--- Later in debate ---

[Glyn Davies (Montgomeryshire) (Con)]

8. What assessment he has made of the effect on jobs of the extra costs of energy arising from subsidising wind farm development.

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

There are 94,000 people employed in the development and construction of wind farms. We are seeking to develop the supply chain to create more jobs. We are separately preparing a compensation scheme for energy intensive industries to offset the higher electricity costs in order to maintain their competitiveness.

[Glyn Davies]

Some businesses in Montgomeryshire tell me that the greatest impediment to their growth and job creation is the rapidly rising cost of energy. Does my right hon. Friend agree that controlling energy costs, including by dealing with the unsustainably high subsidies to the onshore wind farm industry, must be the aim of the coalition Government if they are to achieve their ambitions of job creation and economic recovery?

[Vince Cable]

We do accept that proposition. That is why we have introduced the £250 million programme to provide compensation for energy intensive industries. I may have to disappoint the hon. Gentleman on the wider issue because the coalition Government are absolutely committed to the 30% target for the generation of electricity from renewable sources by 2020. Onshore wind is one of the cheaper renewables and its costs are falling. I notice that a few days ago, the hon. Gentleman tweeted that there is a big lesson here:

“If my party loses in 2015 they’ll say ‘It was wind farms wot done it’”.

All parties in the House, particularly mine, may have to brace themselves for the return of Lembit Öpik.

[Wayne David (Caerphilly) (Lab)]

It is true to say that there are differences within the Government on the importance of wind power. When will the Government speak with one voice so that there is a clear strategic approach, rather than the alternatives that we have before us today?

[Vince Cable]

We very much speak with one voice on this subject. I encouraged the Minister of State, Department of Energy and Climate Change, the hon. Member for South Holland and The Deepings (Mr Hayes) aggressively to promote apprenticeships. I am sure that when he has settled into his new job, he will be an enthusiastic advocate of wind farms.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

9. What steps his Department is taking to encourage participants in further and higher education to gain experience and training in business and industry.

--- Later in debate ---

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

I regularly meet the Secretary of State for Energy and Climate Change to discuss energy and climate change policies, including investment in green manufacturing jobs. We are seeking to exploit opportunities for growth through green technologies, and I have recently announced that the UK Green Investment Bank is operational, which will support investment in green manufacturing.

[Alex Cunningham]

Companies such as Tag Engineering Services on Teesside, and many others, have invested millions of pounds to create capacity to build monopiles and other components for the offshore wind industry. They have some of the best facilities in the world, yet they see multi-million pound contracts go out to Europe. What is the Secretary of State doing to get British wind farm contracts placed with British firms?

[Vince Cable]

I share the hon. Gentleman’s frustration that supply chains in that sector are not as well developed as they should be, not just in respect of the components, but also of the steel that contributes to the masts. That is why the Secretary of State for Energy and Climate Change and I are bringing together the renewables supply chain to develop the capacity that the hon. Gentleman wishes to see.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend agree that there is considerable potential for new, green manufacturing jobs in new housing systems? In Bicester, which has an eco-town project and aspires to become a new garden city, we are keen to have a green-collar cluster of companies manufacturing new housing systems.

[Vince Cable]

That is a very constructive suggestion. To put it in a wider context, there are already something in the order of 1 million green economy jobs, which is about 8% of our economy. The construction sector is potentially an important and big component of that, and I would be happy to talk to and work with the hon. Gentleman to encourage it.

[Peter Luff (Mid Worcestershire) (Con)]

12. What steps his Department is taking to encourage young people to take up careers in engineering; and if he will make a statement.

--- Later in debate ---

[Jane Ellison (Battersea) (Con)]

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

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

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

[Jane Ellison]

Schools routinely measure the number of youngsters going on to higher education, but not necessarily those who go on to apprenticeships—something that was picked up on in the report published this week by the Select Committee on Business, Innovation and Skills. Does the Minister think that more can be done in this area?

[Mr Chuka Umunna (Streatham) (Lab)]

There are more than 1,200 people claiming jobseeker’s allowance in the Secretary of State’s constituency. Under his proposed “shares for rights” scheme, employers in his constituency will be allowed to make the acceptance of job offers conditional on people agreeing to give up their basic rights at work for shares. Can the Secretary of State guarantee that JSA claimants in Twickenham will not lose their benefits for refusing the offer of a job because it is conditional on them giving up their rights for shares?

[Vince Cable]

In a statement in the Commons a couple of days ago, I think, the Minister in the Treasury who is responsible for taxation made it absolutely clear that the scheme was voluntary. While the hon. Gentleman hunts for the ghost of Beecroft in this proposal, I will put a simple proposition to him. If employers were seriously interested in trying to set up an arrangement that had minimum job protection for employees, why would they go to the trouble of establishing a complex employee ownership scheme when they could do that so much more easily through an agency workers agreement, which would have far lesser employment rights than this proposal?

[Mr Umunna]

There was no answer to my question in what we have just heard from the Secretary of State. He cannot answer it because this has not been properly thought through. He has said that the scheme has had a mixed reaction. That is a gross understatement: it has been described as “awful” by the National Center for Employee Ownership. He has said that it is not intended for most ordinary businesses. It would be interesting to know which businesses have lobbied him to introduce this nonsense. While we support strongly employee ownership, it is beyond me to think why that must be tied to giving up rights at work. Is it not the case that, just as the Secretary of State was forced to consult on proposals to fire employees at will by the Treasury, he has now been forced to do the same on this crazy proposal? This is a Secretary of State in office but without the power to say no to the Chancellor.

[Vince Cable]

There is no proposal to fire employees at will, as the hon. Gentleman well knows. I will repeat what I said: the scheme is entirely voluntary. He should perhaps reflect in a little bit more detail on some of the comments of both businesses and trade union stakeholders. Businesses have said that this is an interesting proposal that many are unlikely to take up. The trade unions have said, similarly, that they do not like it, but they do not expect it to have a significant impact on the labour market.

[Mr Robin Walker (Worcester) (Con)]

T3. Having recently taken a trade delegation of Worcestershire businesses to China, as per my entry in the register, I was impressed by the support from UK Trade & Investment that was available to small and medium-sized enterprises, many of which received sponsorship towards the cost of the trip. What is the Minister doing to ensure that the message gets out about the help that the Government are providing to smaller companies to export to the world’s fastest growing markets?

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

T2. Jaguar Land Rover and Tata have committed to Birmingham and Britain, transforming the Jaguar plant in my constituency into a world-class success story. Just when the plant is taking on 1,100 workers, the High Speed 2 route unnecessarily threatens its rail terminal, which would have serious implications for the company and the community. Will the Secretary of State intervene with his counterpart in the Department for Transport and meet me, because nothing must be done to put at risk the success of the biggest plant in Birmingham?

[Vince Cable]

I am happy to meet the hon. Gentleman and anyone else concerned about this problem. I meet regularly with Jaguar Land Rover, as does the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon). This is not an issue that it has raised with us so far, but we are happy to pursue the matter. I want to reinforce what the hon. Gentleman said, however. This is a magnificent company investing £2 billion over this decade and creating high-level employment. The Government have made a substantial contribution to support it through the regional growth fund, support for the engine plant in Wolverhampton, which is now getting off the ground, and in other respects.

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

T8. Chester has seen record numbers of new businesses being set up in the past year, with 305 being registered during the first six months of the year—a 323% increase on the year before. Does the Minister agree that these and other recent figures show that the work that the Government are doing to encourage private sector growth and redress the north-south imbalance is beginning to deliver results in the north-west of England?

[Alex Cunningham (Stockton North) (Lab)]

T4. I am grateful to the Secretary of State for meeting my hon. Friend the Member for Sedgefield (Phil Wilson) and me to discuss the rejection of the bid for a regional growth fund grant by Durham Tees Valley airport and for his offer to meet representatives from the airport and the local enterprise partnership. Will he reaffirm his support for regional airports as drivers of economic development, and tell the House what he can do to help our Durham Tees Valley airport to deliver on its development plan and ensure that the airport is sustained well into the future?

[Vince Cable]

Yes, I did indeed meet the hon. Gentleman and his colleagues. It was a good meeting, and they have followed it up with a very good submission explaining the link between the regional airport and the growth fund bid. We are now analysing that. I hope that he would acknowledge that there has also been some good news, however, in the sense that the Tees Valley LEP has just won a substantial programme bid through the regional growth fund, which will contribute to development in his area.

[George Freeman (Mid Norfolk) (Con)]

Next week is global entrepreneurship week. May I welcome the work that the Government are doing to support entrepreneurship, particularly their support for the national student entrepreneurship union, for silicon valley coming to the UK next week and for the launch of the important Cambridge cluster portal, which highlights that in Cambridge there are now 1,400 technology companies employing 53,000 people and more than 10 billion-dollar companies? Does that not suggest that our policy for an innovation economy is working?

--- Later in debate ---

[David Mowat (Warrington South) (Con)]

Earlier the Secretary of State gave us an update on the good progress we are making on the green investment bank. Can he confirm, however, that EU state approval specifically excludes the nuclear supply chain, which is a major low-carbon industry, and that organisations such as Sheffield Forgemasters will be excluded if we do not appeal that?

[Vince Cable]

We have indeed got state-aid approval for the green investment bank. There are no plans for it to invest in the nuclear supply chain, but we have not ruled that sector out. As it happens, a working party is being assembled to develop a strategy for the nuclear supply chain, which my colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), will be co-chairing, and we expect to give it substantial support.

[Mr Clive Betts (Sheffield South East) (Lab)]

T6. Polestar, a major printing works in my constituency, has created hundreds of well-paid jobs through its investment in recent years. However, its bid to the regional growth fund to create hundreds more jobs has been turned down. Will the Minister look at how such firms can get good quality feedback, so that hopefully they can submit successful bids in future and create those jobs?

--- Later in debate ---

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

Perhaps the most valuable long-term economic legacy of the Olympics will be a boost in UK tourism. To achieve that we will need a few high-profile attack brands. London will of course be one of them; another must surely be the Lake district. What plans do the Government have to make the Lake district an attack brand for UK tourism?

[Vince Cable]

I had an opportunity recently to meet my hon. Friend and his local enterprise partnership, which is one of the most dynamic and is dominated by small business, most of it focused on the tourism industry. He is absolutely right that one of the key legacies of the Olympics is attracting people to come to the UK, and I am happy to talk to him even more frequently than I do at the moment about tourism.

[Mr Speaker]

I call John Mann. Not here.

--- Later in debate ---

[Mr Marcus Jones (Nuneaton) (Con)]

I was disappointed that I could not join my right hon. Friend the Secretary of State on his recent visit to the MIRA technology park. Despite my personal disappointment, will he join me in celebrating this world-class project, which will create 2,000 jobs in the midlands region, and does he agree that it has been facilitated by the regional growth fund and the enterprise zone policies of this Government?

[Vince Cable]

Indeed, I have now been twice to MIRA. It is a magnificent institution and one of the most successful in the UK at promoting advanced technology. MIRA has benefited from the regional growth fund and a successful enterprise zone, and could well expand to become a world-class centre for transport technology.

[Barry Gardiner (Brent North) (Lab)]

The growth of businesses in rural areas is being constrained by the lack of access to broadband. Even where businesses can achieve the Government’s target of 2 megabits, they are finding that that is the download speed, and they are still constrained by the greatly inferior upload speed. Will the Government consider reassessing the 2015 target of 2 megabits?

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

I think that most of us in the House would admit that the Secretary of State is passionate about manufacturing and business, and he exhibited that last Thursday when he came to Huddersfield to visit our textile training centre of excellence. Why cannot we have more all-party agreement on some of the challenges that we face? The recommendations in the Heseltine review give us an opportunity to adopt a common strategy across the House. Is that a challenge that the Secretary of State is willing to take up?

[Vince Cable]

I am absolutely willing to take up that challenge. There is an enormous amount of wisdom in the Heseltine report and we will of course respond to all 89 of its recommendations in due course. I was particularly enthusiastic about his strong endorsement of the industrial strategy, an important part of which could well be the resuscitation of the textile industry of which the hon. Member for Huddersfield (Mr Sheerman) has been a prominent advocate and which I was happy to visit in Huddersfield a couple of weeks ago.

Oral Answers to Questions

Vince Cable Excerpts

Thursday 6th September 2012 Commons Chamber

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

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

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

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

[Richard Graham]

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

[Vince Cable]

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

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

[Damian Hinds]

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

[Vince Cable]

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

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

[Simon Kirby]

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

[Vince Cable]

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

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

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

[Vince Cable]

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

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

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

[Vince Cable]

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

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

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

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

[Vince Cable]

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

[Ann Clwyd (Cynon Valley) (Lab)]

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

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

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

[Ann Clwyd]

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

[Vince Cable]

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

[Mr Speaker]

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

[George Freeman (Mid Norfolk) (Con)]

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

[Vince Cable]

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

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

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

[Chi Onwurah]

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

[Vince Cable]

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

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

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

--- Later in debate ---

[John Pugh (Southport) (LD)]

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

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

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

[John Pugh]

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

[Vince Cable]

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

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

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

--- Later in debate ---

[Ian Swales (Redcar) (LD)]

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

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

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

[Ian Swales]

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

[Vince Cable]

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

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

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

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

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

[Rehman Chishti]

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

[Vince Cable]

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

[Harriett Baldwin (West Worcestershire) (Con)]

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

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

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

[Harriett Baldwin]

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

[Mr Chuka Umunna (Streatham) (Lab)]

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

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

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

[Vince Cable]

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

[Mr Umunna]

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

[Vince Cable]

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

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

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

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

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

[Vince Cable]

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

[Richard Graham (Gloucester) (Con)]

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

--- Later in debate ---

[Dr Sarah Wollaston (Totnes) (Con)]

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

[Vince Cable]

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

[Nick Smith (Blaenau Gwent) (Lab)]

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

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

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

[Vince Cable]

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

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

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

[Vince Cable]

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

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

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

[Vince Cable]

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

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

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

[Vince Cable]

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

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

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

[Kevin Brennan (Cardiff West) (Lab)]

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

[Vince Cable]

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

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

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

[Vince Cable]

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

[Paul Blomfield (Sheffield Central) (Lab)]

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

[Andrew Stephenson (Pendle) (Con)]

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

[Vince Cable]

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

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

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

[Vince Cable]

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

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

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

[Vince Cable]

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

[Mr Speaker]

Last but not least, I call Ann McKechin.

Oral Answers to Questions

Vince Cable Excerpts

Thursday 2nd February 2012 Commons Chamber

[Mr Wayne David (Caerphilly) (Lab)]

12. For what reasons he does not plan to implement all the recommendations of the High Pay Commission.

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

I welcome the High Pay Commission’s valuable contribution to this debate. The proposals that I announced to the House last week drew on its analysis, and we are taking forward 11 of its 12 recommendations either in full or in spirit. We have chosen not to implement its recommendation requiring workers to be put on all remuneration committees.

[Gregg McClymont]

Most people in this country would consider £180,000 a year to be high pay. Will the Secretary of State tell the House who signed off the special dispensation with Her Majesty’s Revenue and Customs regarding the extraordinary tax arrangements of Mr Ed Lester, the chief executive of the Student Loans Company?

[Vince Cable]

I understand that there is to be an urgent question shortly, when hon. Members will be able to go into that issue in detail if they wish. I simply say that this concerns an exceptionally useful individual who has helped to turn around that organisation. The arrangements under which the negotiations took place involved substantial value for money for the taxpayer and a tax cut by the individual. We will pursue matters of public concern on the tax issues, and the answers will be given by the Chief Secretary to the Treasury in response to the urgent question.

[Mr David]

Further to that point, may I ask the Secretary of State who on earth signed it off? Answer!

[Vince Cable]

These issues will be answered, and the mechanics dealt with, in the urgent question in an hour’s time.

[George Freeman (Mid Norfolk) (Con)]

Does my right hon. Friend agree that, as we all share an ambition to put the employee’s voice on the board, the best way to do that is to encourage employee share ownership?

[Vince Cable]

It is indeed. Employee ownership is an expanding movement, and a popular one. It allows employees to become involved in the companies in which they have a share, and we wish to see it encouraged. We also wish to see workers properly consulted; there are powers to achieve that under existing legislation, but they are not being sufficiently used.

[Lorely Burt (Solihull) (LD)]

Does my right hon. Friend agree that it is better to force companies to consult all employees, rather than consulting one individual? How would that individual be chosen, especially in a company that might be located in many parts of the world?

[Vince Cable]

My hon. Friend is absolutely right. That is why we are stressing employee participation in remuneration discussions. There are powers under existing regulations and we want to encourage people to take more advantage of them. As she rightly says, there are enormous practical difficulties involved in choosing one employee who can properly represent the whole of an international labour force.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

rose—

[Ian Murray (Edinburgh South) (Lab)]

You can waste me first, Mr Speaker.

The Secretary of State will be aware of the performance targets set down in the Project Merlin agreement. One of the agreed measures to determine the bonuses of bank chief executives was to examine whether banks were providing the promised credit to businesses and, in particular, to small and medium-sized enterprises. The agreement also clearly stated that there would be no rewards for failure. Why, then, did the Government wave through the bonus for the Royal Bank of Scotland chief executive before the Bank of England had published the annual Project Merlin lending figures?

[Vince Cable]

The chief executive was on a contract, which I think was negotiated when Labour was in government. It had five separate metrics, of which that was one. It is certainly true that, according to the provisional data, RBS has not quite met its gross lending targets, but the Merlin agreement has not yet run its course, and we shall await its findings with interest.

[Huw Irranca-Davies (Ogmore) (Lab)]

3. What assessment he has made of the prospects for growth in 2012.

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

The Office for Budget Responsibility produces independent forecasts for the economy and for the public finances. The OBR’s November 2011 economic and fiscal outlook predicts that the UK economy will grow by 0.7% this year and by 2.1% in 2013.

[Huw Irranca-Davies]

I thank the Secretary of State for that answer, but consumer confidence is plummeting, the retail sector is struggling, the growth in jobs in the private sector is not matching the losses in the public sector, and in my constituency scores of people are chasing every single job. So if not Labour’s five-point plan for jobs and growth, what? This Government are not working.

[Vince Cable]

If the hon. Gentleman actually read the analysis produced by the Bank of England and, more recently, the Institute for Fiscal Studies, he would understand why the economy is growing slowly. The combination of higher commodity and oil prices last year and, more recently, the crisis in the eurozone is affecting all developed countries, many of them much more than the UK.

[Mr Brian Binley (Northampton South) (Con)]

As confidence in growth continues to diminish among members of the small business community, does the Secretary of State share my view that the Chancellor should use more than one tool to get the economy moving? Many people think that he has lost the tool box. What influence is the Secretary of State bringing to bear on behalf of small businesses to nudge the Chancellor into creating greater private sector demand?

[Vince Cable]

My hon. Friend is absolutely right to stress the crucial importance of small business. As he well knows from the autumn statement, the Chancellor has come forward with ideas about credit easing to make credit more easily available at lower rates to small companies, and we will wait for the Budget to see how that will be elaborated.

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

Our economy contracted in the last quarter, with small business confidence at rock bottom in the latest Federation of Small Businesses survey, and we teeter on the edge of recession, yet Ministers have lost control of the levers that active government has for growth. Why, 10 months after the first regional growth fund winners were announced, do a third still wait for their money while £1 billion from Europe lies idle? With national apprenticeship week about to start, why are Ministers not, as we have urged them, taking unused money from the growth and innovation fund to expand local schemes for small businesses to take on thousands more young people? Is it not true that today, under this Government, growth is just as glacial as the weather?

[Vince Cable]

On the specifics, as the hon. Gentleman will know, a third of regional growth fund projects have already started. I am surprised that he picks up apprenticeships as a theme, because we have increased their number by 50% in the last year from the rather depressed levels we inherited. In terms of broad policy, I understand that the hon. Gentleman is standing in this morning for my opposite number, the hon. Member for Streatham (Mr Umunna), who wrote to tell me that he has gone to Germany looking for inspiration. I think the first thing the Germans will tell him is that if he wants sustainable growth, there has to be fiscal discipline.

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

In these difficult times, the food and drink sector is an example of success with year-on-year growth. I commend the report by the Department for Environment, Food and Rural Affairs and UK Trade and Investment entitled “Driving Export Growth in the Farming, Food and Drink Sector”, but trade barriers still exist. Will the Secretary of State ensure that such trade barriers are broken down so that this sector can go from strength to strength?

[Vince Cable]

My colleague is right to stress the importance of the food sector, including food manufacturing. We often talk about advanced manufacturing, but some of the most sophisticated industries are often in those traditional product areas. He is right about the importance of opening barriers. In the European Union context, my team is actively pursuing trade liberalisation with a variety of Asian countries, the Mercosur countries and others. We hope that those agreements will be delivered soon.

[Hugh Bayley (York Central) (Lab)]

6. What his policy is on the Daylight Saving Bill; and if he will make a statement.

--- Later in debate ---

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

8. What steps he plans to take to address executive pay and reduce rewards for failure.

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

Last week I announced a comprehensive package of measures to tackle the disconnect between executive pay and company performance. These proposals will increase simplicity and clarity, give shareholders more effective power through binding votes, increase the diversity of boards and remuneration committees, and encourage employees to be more engaged.

[Simon Hughes]

In the last few weeks the chief executive of Lloyds TSB, then the chairman of the Royal Bank of Scotland, and then its chief executive appear to have got the message that huge bonuses are not acceptable in this time of austerity. Given that this month we expect both banks to announce significant losses amounting to millions of pounds, how can Government, Parliament and constituents such as mine in Southwark convey the message to the rest of the directors and investment bankers in the publicly owned banks that they too should not have huge bonuses in times of austerity?

[Vince Cable]

Those two individuals are symbolically very important, but what is much more important is that we have a proper system governing executive pay over the long term, and that is what my proposals were designed to achieve. Bonuses in the banking sector as a whole are now running at roughly a third of the level at which they operated at the peak of the boom when Labour was in power. As for the state-owned banks, my right hon. Friend will know that a set of disciplines is being introduced through United Kingdom Financial Investments Ltd.

[Ann McKechin (Glasgow North) (Lab)]

Does the Secretary of State agree with Will Hutton, the chair of his High Pay Commission, that there should be a definite risk to the basic pay of executives who fail to meet their targets?

[Vince Cable]

Yes. I have talked extensively to Will Hutton about that. In the proposals that I will bring forward next week, we will introduce the principle of a clawback; that clawback can operate in different ways, and we are certainly looking seriously at one of the ways that Will Hutton has recommended.

[Neil Parish (Tiverton and Honiton) (Con)]

To get to the dizzy heights of executive pay, one must first get a job. What are Ministers doing to reduce the red tape and bureaucracy relating to apprenticeship schemes for small and medium-sized businesses?

[Mr George Mudie (Leeds East) (Lab)]

In view of the Secretary of State’s answers, will he assure the House that he has made representations to the Chancellor and United Kingdom Financial Investments Ltd to make sure that in the RBS last year’s practice of giving 323 bankers bonuses in excess of £1 million is not repeated, and that the anticipated payment of £4.5 million to John Hourican, a senior banker in RBS, does not go ahead?

[Vince Cable]

Of course there is a continuing issue with the scale of bonuses in RBS, but they are vastly reduced from their former level. We are conscious of the issues involved. Many of those people are American traders operating in the United States, but we are conscious that every amount that goes out in bonuses is money that could otherwise have gone to small businesses.

[Henry Smith (Crawley) (Con)]

9. What plans he has to facilitate the provision of higher education in further education institutions.

--- Later in debate ---

[Lilian Greenwood (Nottingham South) (Lab)]

11. What recent assessment he has made of prospects for economic growth and their effect on business confidence.

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

As I noted earlier, the independent Office for Budget Responsibility forecasts that the UK economy will grow at 0.7% this year and 2.1% in 2013. The OBR states that the intensification of the European sovereign debt crisis has

“doubtless helped to reduce confidence”.

[Lilian Greenwood]

One of Nottingham’s Work programme providers recently told me not only that she was disappointed that the future jobs fund had been scrapped, but that local employers were reluctant to invest in apprenticeships because they simply were not confident they would have jobs for the apprentices to fill at the end of the process. Is it not time that this Government admitted that their economic plan has failed dismally, and that they need to adopt Labour’s plan for growth and jobs?

[Vince Cable]

I am very surprised that the hon. Lady gives apprenticeships as the central example of failure, given that apprenticeship numbers have risen by 50% and apprenticeships are extremely popular with young people and employers. This is a success story, and I am surprised she is denigrating it.

Perhaps I should also point to the most recent indicators, which were published yesterday. In the manufacturing sector, which is absolutely critical for recovery, the purchasing managers index suggests a significant recovery in the short run.

[Andrew George (St Ives) (LD)]

The Government had the good sense to award a grant under the regional growth fund to the Goonhilly radio astronomy project in my constituency. That is very welcome, but the implementation of the decision seems rather slow. Will the Secretary of State look into the matter and accelerate the implementation of that project, which will generate many jobs in our local community?

[Vince Cable]

I am aware of the difficulties associated with that project, which relate to the fact that we are trying to integrate two separate bidders. My hon. Friend knows the practical difficulties, but we will certainly do the best we can to expedite the project.

[Mr Iain Wright (Hartlepool) (Lab)]

The Secretary of State will be aware of the chorus of disapproval at the manner in which the Government have handled the decision on solar power feed-in tariffs. Both the CBI and the Environmental Audit Committee have stated that it has wrecked supply chains and undermined confidence. Erica Robb of Spirit Solar told the Prime Minister last month that “weeks of chaos” have resulted in her having to lay off more than a third of her work force. As the Minister charged with responsibility for growth and co-ordination of industrial policy, what role did the Secretary of State and his Department have in this debacle, and how does the Government’s decision help the establishment of a long-term, credible and co-ordinated industrial strategy that supports fledgling sectors and provides the environment for business confidence and economic growth?

[Vince Cable]

This Department certainly does wish to promote the renewables sector and the supply chains. However, given the history of this problem, the hon. Gentleman will know that the level of subsidy—which I think his Government fixed—was totally unsustainable, and action had to be taken to cap it.

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

Has the Business Secretary had the opportunity to assess the implication of the growing places fund for infrastructure projects such as that relating to the A64 in North Yorkshire? What criteria will apply to selecting such projects, and how can we guide the local enterprise partnership in the right direction?

[Mr Speaker]

Order. I know that the Secretary of State’s reply will relate to economic growth and business confidence.

[Vince Cable]

That infrastructure fund, which relates specifically to small projects, has proved very valuable and the local enterprise partnerships have an important role in working up those projects. There are set criteria, of which they are well aware, that they must meet.

[Jim McGovern (Dundee West) (Lab)]

13. What recent discussions he has had with the Scottish Government on promoting job creation in Scotland.

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[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch 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 has a key role in supporting the rebalancing of the economy and business to deliver growth while increasing skills and learning.

[Gregg McClymont]

A moment ago, the Minister for Universities and Science referred to student loan repayments, which the right hon. Gentleman will know are deducted at source, which is more than can be said for the extraordinary contract awarded to Mr Ed Lester of the Student Loans Company. Will the Minister explain why he signed off those extraordinary tax avoidance arrangements?

[Mr Peter Bone (Wellingborough) (Con)]

T3. Last Sunday I attended Indian republic day at the Wellingborough Hindu Association, yet the same week we learn that a £20 billion fighter contract has been lost to, of all people, the French. We now know that the lead bidder was not the British Prime Minister or the British Government, but the Germans. What on earth do they know about cricket and curries? Why was the British Government not leading on that? How did the Secretary of State allow such a cock-up?

[Vince Cable]

As was explained earlier, the Prime Minister, the Trade and Investment Minister, I and others have made strong representations to the Indian Government on the merits of BAE Systems for this contract. The hon. Gentleman will know that the contract was narrowed down to two companies on the basis of quality. The Indian Government appear to have made a narrow decision based on price, but this is by no means the end of the process. BAE Systems will have plenty of opportunities to restate its case on quality and life-time costs and we shall reinforce it.

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

The Secretary of State has leapt to the defence of the tax deal by which a public servant running the Student Loans Company avoids tax of £40,000 a year. It is a pity that the right hon. Gentleman is not as vigorous in defending the interests of small businesses when it comes to bank lending. Can he confirm, as the Minister implied earlier, that this arrangement will end immediately? Does he agree that when his Government say, “We’re all in this together”, they mean the tax avoiders and the excessively paid, not the people in businesses who desperately need support in order to get our economy working again?

[Vince Cable]

My colleague, the Minister for Universities and Science, has already given a very full answer on this issue. When I spoke about it earlier, I should have made it clear that Mr Lester had accepted a pay cut, not a tax cut. In addition, there will shortly be an urgent question on the matter, when any further details can be pursued. As for the wider policy questions, we made it very clear last week that we believe that our reforms of executive pay will radically reduce the rewards for failure and mediocrity in business.

[Mark Menzies (Fylde) (Con)]

T4. I welcome the Government’s plan to set up catapult centres. Will the Minister update the House on what progress has been made in setting these centres up?

--- Later in debate ---

[Ian Lavery (Wansbeck) (Lab)]

T2. The Secretary of State is aware of the imminent closure of the Rio Tinto Alcan plant in my constituency. Rio Tinto Alcan said recently that it puts the blame firmly on the Government because of the lack of investment. The £250 million for energy-intensive industries is too little, too late, and there are also the green taxes. Would he care to comment on those allegations?

[Vince Cable]

Those were certainly not the allegations Rio Tinto Alcan made to me when I met representatives of the company. They made it clear that this was part of a global downsizing of their operations and that many countries are affected by it. I have visited the site and met the hon. Gentleman to discuss this. We are concerned about the future of the labour force, and we sought to help the company through the support for energy-intensive industries. Now that the company has decided to go ahead with closure, we will see what we can do to help the people in the area.

[Tony Baldry (Banbury) (Con)]

T7. What can the Department for Business, Innovation and Skills do to support the more than 1,500 community-led work clubs across the country to help young adults to recognise the apprenticeship opportunities that exist, ensure that further education colleges can provide training opportunities for those out of work, and link in the national careers service?

--- Later in debate ---

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

T6. The Government have been sending out mixed messages recently about the extent of their financial commitment to the proposed green investment bank. Will the Secretary of State confirm that the proposed public contribution will be £3 billion as promised and not up to £3 billion, and that the bank will assume its borrowing powers in 2015?

[Vince Cable]

I can confirm the first part of the hon. Gentleman’s question: the £3 billion is fully committed to and there are no mixed messages. On borrowing, it is not merely a question of the date, but of the fiscal position of the country.

[Damian Hinds (East Hampshire) (Con)]

T10. This week’s National Audit Office report on apprenticeships shows that for every pound of public money that is invested, there is a return of £18. Will my hon. Friend reassure us that he is taking all reasonable steps to continue the successful growth of apprenticeships?

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

How hard did Ministers press the case for British business with their colleagues in the Ministry of Defence, who yesterday produced a written ministerial statement which said that the Government will no longer prioritise UK suppliers when purchasing defence equipment? That is another kick in the teeth for all of us who are fighting to prevent British BAE Systems jobs from being exported, at a cost of £100 million to British taxpayers.

[Vince Cable]

Of course we have discussed those issues extensively with the Ministry of Defence, and if the hon. Lady actually reads the statement, she will see that it is absolutely clear that in defence, as in other areas, public procurement will operate on a strategic, long-term basis, not as it did under the last Government when narrow contractual arrangements involved purchases off the peg.

[Esther McVey (Wirral West) (Con)]

Will the Minister support me in establishing a pilot scheme on Wirral bringing female business role models into schools and thereby working towards the coalition’s intention of practical, real-life role models?

[Nic Dakin (Scunthorpe) (Lab)]

What is the Secretary of State doing to stimulate growth in manufacturing industries, particularly the steel industry, which is so important to UK plc and my constituents?

[Vince Cable]

As the hon. Gentleman will know, because I have visited his constituency and discussed these issues with him, the steel industry is going through an extremely difficult time not just in the UK, and steel makers have made losses. We are helping them through energy-intensive support, and there are other forms of help such as the regional growth fund and enterprise zones. We are doing what we can to help steel areas that are affected by the current contraction.

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

The one seemingly hopeful part of the Government’s otherwise dreadful response on pub companies was the unfortunately named PICAS—the pub independent conciliation and arbitration service. However, hope soon faded when it was revealed that it was to be pubco-funded, and this week it has been announced that it will be chaired by a Punch Taverns surveyor. Does the Minister think that licensees will want to use that supposedly independent body?

[Mr Jim Cunningham (Coventry South) (Lab)]

Will the Secretary of State clarify what is actually happening to the Typhoon contract? There was an implication that it could be renegotiated. If he fails to renegotiate it, will he blame the previous Government?

[Vince Cable]

There is no question of renegotiation. The Indians have had a pre-selection process, from which the French bid has gone ahead on the basis of price. There is a lot of experience of contracts being reconsidered at the final stage, and at that stage BAE Systems has a very good case to make as part of its consortium. We will support it thoroughly.

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

Although I understand that the Minister does not want to be unfair to other cities, does he agree that Brighton would make a fantastic choice of location for the green investment bank?

--- Later in debate ---

[Richard Fuller (Bedford) (Con)]

With no pressure from the Secretary of State for a cut in the jobs tax, no meaningful roll-back of job-destroying red tape, no pressure from him for a cut in enterprise-sapping tax rates and his lauding as a good example the pillorying of people for fulfilling their Government contract, can he advise me of what he is doing to encourage enterprise rather than to discourage it?

[Vince Cable]

I think my ministerial team have given an extremely good account of the many things that we are doing in that area, starting with an extraordinary cut in the amount of red tape, which I think is the issue that most concerns my hon. Friend.

[Several hon. Members]

rose—

Oral Answers to Questions

Vince Cable Excerpts

Thursday 8th December 2011 Commons Chamber

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

1. What recent steps his Department has taken to support the manufacturing sector.

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

The Government are taking action to support and grow modern manufacturing in the UK by encouraging higher levels of innovation exports, business investment and technical skills.

[Tristram Hunt]

In the last few weeks, five ceramic and brick companies have gone bust in the UK, including the Jesse Shirley bone china works in my constituency. The energy-intensive industry measures announced in the autumn statement did little for our pottery industry. Can we now have some movement from the Government on capital allowances for the ceramic sector, which is a vital part of our manufacturing industry?

[Vince Cable]

I will look at the specific issue of the ceramics industry. I know that the hon. Gentleman was involved in promoting an anti-dumping action. We considered the matter carefully, and there were not sufficient grounds to support the rather disproportionate action advocated by the European Commission. Indeed, the Chinese market share has remained pretty unchanged over the past decade. However, we will certainly consider what else can be done to help the industry.

[Mr Laurence Robertson (Tewkesbury) (Con)]

Is the Secretary of State aware of the excellent cutting-edge technology in my constituency in the aerospace industry? Is he also aware that one of the biggest problems that the industry has is attracting young people into manufacturing? What can he do to encourage that?

[Vince Cable]

I was in the west country just over a week ago looking at the aerospace industry, which is a considerable success story. My hon. Friend is quite right that one of the constraints is the need for skilled manpower, which is why in our rapidly growing apprenticeship programme we are setting aside funding specifically for advanced apprenticeships in engineering skills of the kind that firms in his constituency need.

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

There is an increasing body of evidence to show that small manufacturing companies are not only having difficulty in accessing finance to expand but are discouraged from applying for it because of a lack of confidence in the ability to sell any increased production. What is the Secretary of State doing to persuade the Chancellor that the time is right for a stimulus in the demand side of the economy as well as provisions for the supply side?

[Vince Cable]

A stimulus to demand is coming from two sources. One is rapidly growing export markets in emerging markets, where our export growth is very substantial. Manufacturers, including small and medium-sized enterprises, are taking a substantial part of that. In addition our monetary policy, which is supported by the Bank of England, with low short and long interest rates, quantitative easing and credit easing, is supporting demand.

[Matthew Hancock (West Suffolk) (Con)]

In his efforts to support manufacturing, will the Secretary of State agree that high executive pay that rewards not success but failure can inhibit growth, and that dealing with it is an important part of supporting manufacturing, financial services and other parts of the economy?

[Vince Cable]

My hon. Friend is absolutely right, and the point is very well made. There is now a remarkable consensus. We have had evidence to the inquiry that I initiated into executive pay from, among others, the CBI, showing a high level of social responsibility and an acknowledgment that much executive pay has been disproportionate and unrelated to performance in the past. We intend to reform that.

[Mr Iain Wright (Hartlepool) (Lab)]

Mr Speaker,

“Germany has had an industrial strategy as well as an economic strategy. Applied with huge consistency of purpose. This has greatly helped German industry plan for the future. Let us compare this with the position in the UK…In terms of industrial policy there are serious deficiencies.”

Those are not my words, but those of Lord Heseltine in a speech only a couple of weeks ago. Given yesterday’s dire figures from the Office for National Statistics, which showed the biggest output drop in manufacturing since April, and three times the fall forecast by analysts, is it not time the Secretary of State listened to Lord Heseltine and provided a comprehensive well-planned industrial strategy for the long term that supports British manufacturing and helps it become more competitive?

[Vince Cable]

I often wonder which Opposition Front Bencher will be courageous enough to talk about manufacturing, reminding the House that we lost 1.7 million jobs in manufacturing in 13 years of a Labour Government, and manufacturing’s share of the economy shrank from 18% to 10%. We are addressing that, and I certainly listen to Lord Heseltine, who has an office in my Department. We frequently interact, and he has some very good suggestions.

We are pursuing support for innovation through the advanced technology innovation centre, pursuing support for advanced apprenticeships, on which we are doing a great deal, and co-financing private investment through the regional growth fund and the Green investment bank, which is due to start. As I announced yesterday, we are also considerably increasing support for supply chains using a new £125 million fund.

--- Later in debate ---

[Esther McVey (Wirral West) (Con)]

8. What assessment he has made of the effect of the regional growth fund on private sector investment.

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

In April we announced that the regional growth fund would conditionally support 50 projects, amounting to £450 million of Government investment and leveraging an estimated £2.7 billion of private sector investment. In October we announced that 126 projects would receive conditional funding of £950 million, leveraging an estimated £6 billion of private sector investment.

[Esther McVey]

I welcome the regional growth fund, in rounds 1 and 2 of which, companies on Merseyside, including Stobart, Pilkington, Liverpool Vision and Trinity Mirror, have done very well. Wirral Investment Network, a business network for smaller companies, wants to know by what routes it can apply to the regional growth fund.

[Vince Cable]

Our estimate is that roughly a third of all regional growth fund money is going to SMEs, and there are several routes through which it goes. First, there are packets of SME loans, one of which was in Liverpool, while another is in Plymouth. Indeed, I saw that one a couple of weeks ago, and it is going extraordinarily well. There are specifically tailored schemes—for example, the RBS-HSBC scheme linked to asset finance—and programme bids, as in Manchester, all of which are targeted at SMEs.

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

The Secretary of State will be aware that in the last round an SME in Coventry was turned down for a major investment from the regional growth fund. Despite the fact that the council and, more importantly, the local enterprise partnership were in full support, the company was turned down—I am not particularly grumbling about the decision, disappointed though we were, of course—on the grounds that the ownership was wrong. Will the Minister put in place better criteria for sifting schemes locally and regionally? The company wasted an awful lot of time and money in preparing its bid.

[Vince Cable]

I would certainly be happy to look into the background of that particular case. As the hon. Gentleman knows, we have an impartial process. Applications come to Ministers and then go through Sir Ian Wrigglesworth and Lord Heseltine, who sift and assess them properly. There is a new round for the regional growth fund, and if the project that the hon. Gentleman mentions can be reworked, we would certainly be very happy to look at it.

[George Freeman (Mid Norfolk) (Con)]

9. How he proposes that his Department’s investment in graphene will be spent. [R]

--- Later in debate ---

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

12. What recent progress he has made on the Green investment bank.

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

The development of the Green investment bank is making good progress. Prior to its establishment, the Government are planning to invest in projects from April 2012, including in renewable energy and the non-domestic energy efficiency and waste sectors. We will announce the process for deciding the location of the bank shortly.

[Glenda Jackson]

There are reports that the Government have dramatically lowered their funding for this potentially innovative venture, so when, if ever, will what threatens to become a mere piggy bank be open for business?

[Vince Cable]

Those reports are simply incorrect. The Government’s commitment was for £3 billion, and that remains the case. We expect the bank will have leveraged in another £15 billion by the end of this Parliament. That is our commitment, which we will stick to. I am relieved that Hampstead and Kilburn are not adding their names to the list of cities hoping to attract the Green investment bank.

[Mike Crockart (Edinburgh West) (LD)]

I welcome the Secretary of State’s statement of a few moments ago. May I press him to tell me and the poised Edinburgh Green investment bank bid team when he will publish the criteria for deciding the location for the bank and what those criteria are likely to contain?

[Vince Cable]

We shall set out the process in the next few days. There are a great many bids from different cities and, indeed, some quite small towns around the country, all of which must be assessed properly and fairly.

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

Will the Secretary of State confirm that investment in wind turbine technology is a potential recipient of Green investment bank funding? Gamesa has been considering locations in various parts of the United Kingdom for a major scheme with which it is proceeding, and has identified Leith, which is in my constituency, as a possible location. Will the Secretary of State work with the Scottish Government to try to bring this important facility to Scotland and to the UK?

[Vince Cable]

That is exactly the kind of project that the bank will be considering, and a team of people are already preparing projects for submission.

[Robert Halfon (Harlow) (Con)]

15. What steps he is taking to ensure that apprenticeships offer a route to higher-level skills.

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[Mr Edward Leigh (Gainsborough) (Con)]

19. What assessment he has made of the effect on the growth of small and medium-sized enterprises of planned reductions in the level of taxation; and if he will make a statement.

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

Many SMEs will benefit from lower corporation tax, reforms to research and development tax credits, relief of business rates, increases in employer national insurance contribution thresholds and tax advantages in the 22 new enterprise zones.

[Mr Leigh]

We already have the longest tax code in the world. Does the Secretary of State accept that what business wants are not more allowances from the Government but across-the-board tax cuts so that they can get on with running their own business in their own way?

[Vince Cable]

Many businesses, as I have just said, receive substantial tax cuts, which is absolutely right. As the economy progresses, there will be more, and there is also an exercise in tax simplification, the results of which will be announced at the beginning of next year.

[Sajid Javid (Bromsgrove) (Con)]

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

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

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

[Sajid Javid]

May I thank the Minister for Further Education, Skills and Lifelong Learning for visiting my constituency of Bromsgrove and opening a £3.5 million extension to North East Worcestershire college? Will he update the House on what other investment plans he has for colleges up and down the country, and how that will promote young people’s life chances?

--- Later in debate ---

[Mr Dennis Skinner (Bolsover) (Lab)]

T4. When the Secretary of State was talking about the running down of British industry, he failed to mention that, in the 1980s, the Thatcher Government employed MacGregor to come over here and close large parts of the steel industry, and he almost destroyed the whole mining industry. Does the Secretary of State not realise that, surrounded by all those Tories, he is a mini-MacGregor of his day, carrying out the dirty work of the Tories and overseeing the demise of the rest of British industry? He does it not for the money that MacGregor got but for a ministerial car and a red box.

[Vince Cable]

After the hon. Gentleman’s previous contribution, I set up a visit to his constituency, which will take place, I think, in the first quarter of next year. I can discuss these matters in depth with him then, which I think is rather more than my Labour predecessor did. The hon. Gentleman has been a Member for a long time, but he has overlooked the fact that in the 13 years of Labour Government there was a decline in manufacturing output averaging 0.5% a year.

[David Rutley (Macclesfield) (Con)]

T3. Returning to 2011, what steps is my right hon. Friend taking to create the conditions for the pharmaceutical and life sciences sectors in the United Kingdom, including AstraZeneca in Macclesfield, to be able to compete more strongly in the global marketplace?

--- Later in debate ---

[Gordon Banks (Ochil and South Perthshire) (Lab)]

T8. Last week we heard how Project Merlin had failed and was going to be bailed out by credit easing. How many banks have signed up to credit easing, how many small businesses will be helped by that, and will it be more successful than the business growth fund was?

[Vince Cable]

The Merlin project certainly did not succeed in its central objective, which was to achieve growth in gross lending by banks. There has been a contraction in net lending for a variety of reasons, not least the fact that many companies are holding more cash. Credit easing will be commenced soon. The Treasury will maintain a metric of performance by individual banks, and this will lower the cost of capital for many of their customers. The cost of borrowing and covenanting, as much as access, has now become the central concern.

[John Pugh (Southport) (LD)]

Will the Minister explain how revising TUPE will actually create more jobs, as opposed to facilitating outsourcing?

[Mr John Denham (Southampton, Itchen) (Lab)]

May I draw the Secretary of State’s attention to the £150 million worth of entirely private investment that Associated British Ports wants to spend now to equip Southampton for the next generation of container ships? Instead of creating and supporting 2,000 or more jobs, this project is mired in red tape in the Department for Environment, Food and Rural Affairs and its agencies. Will he speak to his colleagues to try to get this vital project under way?

[Vince Cable]

Yes, I will certainly do that—that seems a very helpful intervention. As the right hon. Gentleman knows, logistics, including ports, were a major part of our work in the growth review. A lot is now happening to open up British ports and invest in them, and I will certainly pursue his inquiry.

[Neil Carmichael (Stroud) (Con)]

I am very much looking forward to welcoming the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), who is responsible for business and enterprise, to the festival for manufacturing in my constituency to celebrate what we have achieved in the constituency, and to promote more investment and employment. But one area that we need to focus on is the supply chain, so what are the Government planning to do to help with that?

--- Later in debate ---

[Chris Bryant]

The Secretary of State.

[Vince Cable]

I believe it will go ahead; I have made further inquiries since the hon. Gentleman’s original question.

[Martin Vickers (Cleethorpes) (Con)]

The Secretary of State visited my constituency in July, closely followed by the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Tunbridge Wells (Greg Clark), clearly recognising the need to boost the local economy. Since that time, we have had two enterprise zones, regional growth fund successes, a new road scheme and the halving of the Humber bridge tolls. My constituents are asking: what next?

[Vince Cable]

I think there is an expression that goes, “post hoc ergo propter hoc”. It is not just a coincidence.

[Mr Speaker]

I once used that on “Any Questions”. I say to the Secretary of State that it does not work.

Economic Growth and Employment

Vince Cable Excerpts

Wednesday 23rd November 2011 Commons Chamber

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

I should like to respond to the motion, which actually bears only a passing resemblance to the speech made by the hon. Member for Streatham (Mr Umunna). I will start with issues of fact that I hope we can agree on.

The motion makes perfectly legitimate points about the state of the economy. It is certainly true that there is slow growth across Europe and in the UK. We fully understand that. We have not had the double-dip recession that has been predicted since the very first day of this Government, but yes, we do have slow growth. We accept that we have a worrying level of youth unemployment, although the largest component of that, the NEETs—those who are not in education, employment or training—were actually at their peak level before the financial crisis occurred. It is correct to say, as the motion does, that we have a high, and we would argue excessive, level of borrowing. That makes it all the more perverse that the single policy that the hon. Gentleman is offering to us is to increase that level of borrowing, which he considers so toxic.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

The Prime Minister’s constituency has 1.8% unemployment and mine has 7.9%, yet the Secretary of State’s Government have chosen to leave a full employment service in Witney and to close down the jobcentre in Deptford. Does he agree, and will he support me, in asking his colleague to return an employment service to Deptford to help the 1,000 young people who are out of work now?

[Vince Cable]

Obviously, I do not know the particular position in Deptford, but I am very happy to take up the specifics if that helps.

The particular question that the hon. Gentleman started with was fair: why did the economic slow-down occur? He quoted my colleague in the upper House and others of varying views about why we have lower growth than was predicted by independent forecasters 18 months ago.

[Bill Esterson]

Will the Secretary of State give way?

[Vince Cable]

Let me try to deal with this issue. We would all probably accept—I hope that the hon. Member for Streatham would accept—that the Governor of the Bank of England is an independent, non-partisan, non-political analyst of what has occurred. Let me read to him the Governor’s account given a week ago on why the slow-down in growth has occurred. He said:

“This reflects the impact on the United Kingdom of the deterioration in prospects internationally, working through weaker net trade, higher credit spreads and the likelihood”

of elevated uncertainty. He goes on to describe the impact of world energy and commodity prices, and the 35% increase in the sterling price of oil, none of which was mentioned in the hon. Gentleman’s speech.

[Bill Esterson]

Will the Secretary of State give way?

[Vince Cable]

Let me just finish this argument. Some of us have argued for a long time that the underlying problem is that, since the beginning of the crisis, the British economy has suffered—I use my own metaphor— the economic equivalent of a heart attack. There is a profound problem, and what lies behind it is the fact that, more than any other developed country, we have quite extraordinary levels of debt.

There are different kinds of debt. Household debt is 160% of gross domestic product and, after the boom that took place under the previous Government, it is higher than in other developed countries. Banks’ balance sheets are more than 400% of GDP, after they were allowed to run out of control. Government debt is 180% and rising as a result of the deficit financing we had to undertake. If we put those things together, as McKinsey has done, they show that the position we inherited is one where total debt in the UK is approaching 500% of our GDP. The only other country with a problem of that scale is Japan. That is the inheritance we are now seeking to manage.

[Mr Umunna]

First, on borrowing, does the Business Secretary accept that the average of the independent forecast that his Government published last week shows that, for all his claims to be working to a strategy to reduce our debts, his Government could end up borrowing more in every single year remaining of this Parliament than under Labour’s more sensible deficit reduction plan? Secondly, does he accept that confidence indicators when he took office and took charge of his Department were not too bad and were improving until the comprehensive spending review was announced, after which it nosedived?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We must have shorter interventions.

[Vince Cable]

On the level of borrowing, let us wait until next week and see what the independent forecast is in the Chancellor’s statement. Of course, the reason why borrowing rises when the economy slows down is the flexibility that is built in—the so-called counter-cyclical stabilisers that we employ as part of our fiscal policy. Unlike the United States and other countries, we allow slow-downs to be accommodated in that way, supporting the economy.

The hon. Gentleman asked me what our strategy is to deal with this problem. I will summarise it. There are three parts. First, we have to stick to fiscal discipline to maintain the confidence of the people who lend to us. That is a very simple proposition that is very difficult to realise and it is something we have done. He quoted various comments from business organisations around the country. I keep in touch with such organisations regularly and go around the country to the regions and nations of the UK. I have yet to meet a single representative of the business community who has asked us to slacken our process of deficit reduction—not a single one. They all make it absolutely clear, including the CBI, that they regard plan A, as it is called, which is deficit reduction, as an absolutely necessary pre-condition to stabilising the economy.

The second element relates to the first. Precisely because we have a large amount of debt in our economy, the priority for Government has to be to preserve an environment in which there are low interest rates. The stimulus we get in our economy—the source of demand—comes primarily through monetary policy. Through the Bank of England acting on short-term interest rates, through long-term interest rates related to bond yields, through quantitative easing at the Bank of England—now credit easing—and through a competitive exchange rate, we have a monetary policy that supports growth and demand. Given the massive debt we have inherited, it is only through monetary policy—relatively low interest rates—that we can possibly support the economy.

[Mr Umunna]

On that point, the Business Secretary talks about monetary policy as if it is somehow a good thing that we are having to resort to quantitative easing. Does he agree that quantitative easing is a last resort of a desperate Government?

[Vince Cable]

It is certainly a last resort in a major economic crisis. I am sure he appreciates that we are living through an economic crisis that is unparalleled in our lifetimes. That is why not only Britain, but the United States and other countries are having to resort to unorthodox monetary policy. That is a reflection of the desperation of many western countries. Our Bank of England has been comfortable with our fiscal policy and, to that extent, has been willing to support it through monetary means.

Those are two of the three elements of the strategy. The third is rebalancing the economy. We inherited an economy that was horribly unbalanced in favour of debt-supported consumption and banking, and we are now rebalancing the economy towards exports and trade. Rapid growth is taking place at the moment in British exports. That is the strategy on which we will proceed and on which we will be judged. The alternative we have been offered is something called plan B, which I think has been renamed the “Antiques Roadshow” in respect of the shadow Chancellor. No serious business organisation is arguing that such financial irresponsibility has any prospect of success.

[Nadhim Zahawi]

In the document that I have in my hand the shadow Business Secretary says, regarding the new economy, that we need to build an economy that is

“less vulnerable to global shocks”.

How does the Secretary of State think that building an economy based on £100 billion of extra borrowing by 2015 will deliver that?

[Vince Cable]

I can give a bit of substance in answer to that. The National Institute of Economic and Social Research, which has been critical of the Government in some respects, has done its own simulation. On the use of fiscal policy to support growth, which I think is what the Opposition plan B is all about, it says that in order to stimulate growth from 1% to 2% we would need to have a Government borrowing account of about 12% of GDP. Is that actually what the Opposition are proposing, because that is what their plan B—fiscal stimulus—means?

[Mr Dave Watts (St Helens North) (Lab)]

The Secretary of State is very good at talking about the support he gets for deficit reduction. When he is travelling around the UK, do people support his growth policies, because I have not met a business man who does?

[Vince Cable]

I have tried to explain that wherever I go, not just in the business community, there is an understanding that, given our inheritance, we have to pursue fiscal discipline. It is as simple as that. We will support that with economic growth measures that I will develop, responding to the comments of the hon. Member for Streatham, in a moment.

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

The Secretary of State knows that some of us, even on the Labour Benches, have always admired his grasp of economics, and his analysis is impressive. I also know that he gets around the country; he has recently been to my constituency. However, what people are telling me when I go around the country is that they understand the analysis but want to know where is the imagination that is needed when a Government see 1 million young people unemployed. Where is the charismatic leadership? Where is the air that something is really being done fundamentally to help these young people?

[Vince Cable]

I will describe in more detail, as will the Minister for Further Education, Skills and Lifelong Learning, some of the initiatives that we are taking on apprenticeships, for example, which reflect real imagination and real change.

Let me try to respond to some of the points that the hon. Member for Streatham made. First, he wholly misunderstands what is happening with the regional growth fund. More than half the projects are under way in the first wave of the regional growth fund. The factories have been built and the jobs are being created. Because of due diligence, the disbursement—I have had this confirmed—is still taking an average of three to six weeks. I am happy to pursue the individual cases that the hon. Gentleman raised. As I understand it—I may be wrong—the case that he dwelt on at some length is the result of the applicant having radically changed the status of their application, and we will happily look at that. However, I am not going to take lectures on the disbursement of Government money. I do not know whether he is aware of this, but the previous Government set up a £5 billion trade credit insurance scheme which, after two years, has managed to disburse £81,000. The regional growth fund is proceeding as predicted and suggested by Lord Heseltine and his team. We are following those processes. The factories are being built and the jobs are being created, and that is what matters.

The hon. Gentleman challenged me on procurement. I have been to Derby and talked to the people involved. Obviously, we are very concerned about what has happened in that case. The problem with procurement is that for a decade or more the public procurement policies pursued in this country were unbelievably short-sighted and legalistic. In the case of the Thameslink contract, we inherited a contract procedure based principles that did not allow for the wider effects on the British economy. However, that particular decision has been made. I have made it absolutely clear, and my right hon. Friend the Minister for the Cabinet Office made it clear two days ago, that we are going to approach public procurement in a different way. We are going to do it strategically and take account of supply chains. Of course we will operate within the law and will not be protectionist, but a lot can be done through public procurement that we are now going to pursue. My only question is why on earth Labour Members did not do this when they were in office if they care so much about it.

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

Is the Secretary of State now in a position to give me an answer that he could not give when I questioned his departmental report a couple of weeks ago—namely, exactly how many jobs have been created by the regional growth fund so far?

[Vince Cable]

No, I cannot do that, because the projects are under construction. When they are fully completed and fully staffed and their supply chains are established, it will be possible to come up with a meaningful number.

The third area of criticism and questioning of the hon. Member for Streatham related to the banks. The motion recycles the idea of a bank bonus tax, so let us go over what that involves. The current estimate from the CBI, which has carried out research on this in the City, suggests that the yield from bonuses this year—the bonus pool—is likely to be something in the order of £4.2 billion. Of that £4.2 billion, £2.5 billion goes to Her Majesty’s Revenue and Customs in tax because of high tax rates on bonuses, and rightly so. That leaves £1.7 billion in bonuses paid out, assuming that the projection is correct. The Opposition are suggesting that they will have a £2 billion tax on bank bonuses. Where is this £2 billion going to come from? It is considerably more than the total bonuses paid out. Even if they applied 100% tax, which is implausible, what would happen, obviously, is that pay would be consolidated. They have not thought this through. Perhaps that is why the hon. Gentleman did not bother to raise it. Can he can tell us how it will work?

[Mr Umunna]

I am happy to do so. I am slightly bemused that the Secretary of State should quote those figures from the CBI. It represents all the banks, so would he expect it to say anything different? Of course, the bonus round has not yet been completed, so we have absolutely no idea what the final figure will be.

[Vince Cable]

I see that the hon. Gentleman is playing for time.

Apart from this slightly mysterious bank bonus tax, what is extraordinary is that we are being lectured on the banking system by a party which in government allowed the banking system to run completely out of control. There was no regulation on cash bonuses. Despite the fact that the banks had an implicit Government guarantee, they were not required to pay any tax for it. We have introduced the banking levy. Labour allowed tax avoidance on an industrial scale and did absolutely nothing about it, yet the hon. Gentleman now presumes to lecture me on banking. I really do think that Labour Members need to reflect a little on what happened in the banking system.

Finally, the hon. Gentleman made various references to spending commitments—or our damaging spending cuts, as he saw them—and tax cuts. This is the time of year when my grandchildren write letters to the north pole addressed to Santa Claus. I have to say that compared with what we are hearing, those letters from my five-year-old grandson are a model of financial discipline and economic literacy. The hon. Gentleman’s predecessor was very eloquent in criticising the cuts to the university teaching grant. The hon. Gentleman has adopted other targets—for example, he has criticised the cuts in the regional development agencies. He has also criticised cuts in the science budget. Last week, he made a very eloquent statement on this, despite the fact that the scientific establishment had been very complimentary about the fact that we had protected the cash budget for science.

When I came into my current job, the one thing I knew was that my Labour predecessors were planning to cut the Department’s budget by 25%, and that is what we have done, because that was the economic reality. I am therefore left with a question to which I have been trying to get an answer. Perhaps the hon. Gentleman can be more forthcoming and economically rounded than his predecessor in telling me how the Opposition are going to achieve their plans. Where is the money going to come from? We have a whole lot of spending commitments in every area of our Department, but not a single suggestion about where those heroic cuts are going to come from. Of course we would like to spend more money on science and other things, and of course some of the tax cut proposals are very attractive, such as the VAT rate on building repairs, which would cost £1 billion, but where does the money come from? This gets to the heart of the problem, which is that the Labour Opposition’s proposal is financially irresponsible. It deals with the problem of Government borrowing by adding to it and deals with the problem of Government debt by adding to it.

[Mr Umunna]

The various commitments that we have made are all costed and fund themselves. The Business Secretary has said a lot about banking. If he is so fiscally responsible, will he join us in committing to use all the proceeds from the sales of the public stakes in the banks towards reducing the deficit?

[Vince Cable]

The hon. Gentleman’s numbers may have been costed but they do not add up—that is the problem. As for the banks, it will be quite some years before the sales take place. The Northern Rock sale has gone ahead—that is a small bank—but for the major banks, it is likely to be some years ahead. We do not know whether it will be in this Parliament or the next; we have no idea what the economic conditions will be. It would be ludicrous for me to hypothecate about revenue receipts at this stage.

I will move on to my final passage, because I would like colleagues to have an opportunity to speak. I will summarise some of the positive things that we are doing, albeit within a very constrained budget, to support growth. Of course, fiscal discipline and monetary policy have to be supported by interventions. The hon. Gentleman is absolutely right that there is a role for state intervention. I am not in favour of laissez-faire. There are things that we can do.

Our concentration is on export growth. There has been 13% export growth over the past year. We are outward looking. The motion does not even mention trade. It is unbelievably parochial. I spend a lot of my time in emerging markets with British exporters—I have been to all of them—to support export growth. I do not claim personal credit for the growth, but we have acted as a catalyst for export growth in Brazil, Russia, India and China—the BRIC countries—of 26%, in India of 34% and in Turkey of 30%. I keep in touch with our exporters by working with them and alongside them to deal with overseas Governments. That is where the recovery is going to take place. It is on the back of those exports that we are getting rapid growth in manufacturing in certain sectors such as the automobile sector, which has attracted big inward investment from Jaguar Land Rover and others.

[Julian Smith]

Will the Secretary of State tell us what situation he found exports in when he arrived in his post? What sort of condition was UK Trade & Investment in and what great suggestions did the previous Government have in this area?

[Vince Cable]

UKTI has been radically reformed, thanks to the Minister for Trade and Investment, Lord Green. I think that it will perform an excellent function. What I found was that British export activity in the big emerging markets, which is clearly where future growth lies, had been sorely neglected for many years. As somebody put it to me, when we turned up on the beach the Germans were already in the deckchairs. They have dominated the market in these countries and we are a marginal player. It will take years to turn that around, but that is where our emphasis lies.

[Nadhim Zahawi]

Does the Secretary of State agree that under the previous Government we exported more to Ireland than we did to Brazil, Russia, India and China put together?

[Vince Cable]

I thank the hon. Gentleman for reminding me of one of my best lines. It is partly a compliment to Ireland that we trade with it so extensively, but that fact is an appalling commentary on our neglect of the big emerging markets.

Export growth is one key focus for us. The second is people and apprenticeships. The Minister for Further Education, Skills and Lifelong Learning will say more about this in his summary. Despite a severely curtailed budget, we have increased apprenticeships—actual people doing training—by 50% over the past year. There are now 350,000 people in such training. We do not accept that that is the end of the road. We have to improve the quality and refocus as much as possible on younger apprentices, thereby addressing in part the problem of youth unemployment. This is a major success story and we are proud of it.

On access to finance, one of the major themes of my analysis has been that what we are dealing with is a collapsed and non-functioning banking system. It is right for Members to continue to cross-question us on the Merlin agreement, because that is at the heart of the problem. We have stopped, at least in relation to small and medium-sized enterprises, a process of rapid deleveraging. We are using Government funding through the regional growth fund and, from next year, the Green investment bank to co-finance private capital so that there is access to finance for British industry. We are taking initiatives to support equity finance. The business growth fund is not Government owned or controlled, but it is a major initiative that should have been taken decades ago to get equity finance functioning. Access to finance is a critical issue—of course we accept that. It is a consequence of the banking crisis that we are focused on it.

I want to give one final concluding thought. When I hear the Opposition speaking about the economy, I think that lying at the back of their world view is the idea that what we are currently in the middle of is a cyclical problem—we had a boom, we had a bust, we will press a few buttons, spend a bit more money, and we will get back into a boom again. This is not a cyclical problem; it is a profound, long-standing structural problem. We had the wrong model. Growth was based on fundamentally the wrong principles, it was not sustainable and it collapsed. We are now having to repair the damage.

[Several hon. Members]

rose—

Oral Answers to Questions

Vince Cable Excerpts

Thursday 27th October 2011 Commons Chamber

[Graham Evans (Weaver Vale) (Con)]

15. What steps he is taking to support manufacturing.

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

As part of rebalancing the British economy, we are taking steps to support manufacturing in the UK by encouraging high levels of business, innovation, investment, exports and technical skills. I set out our strategy for achieving that in a talk to Policy Exchange yesterday.

[Mr Jones]

From recent discussions with several representatives of our largest manufacturing companies, it is apparent that they are now looking actively to bring more UK supply manufacture back to our country, but they seem to question whether some of our small and medium-sized enterprises have sufficient capacity or investment to meet the growth in demand in this area. What can the Government do to help facilitate the right conditions to help some of our SMEs meet this increasing demand?

[Vince Cable]

The hon. Gentleman is right to say that there is a supply chain issue. We are hearing good news from the automobile and aerospace sectors, with the large primes, such as Tata, Rolls-Royce and Airbus, making large investments. However, we also need to attract back the supply chains, which is already happening, particularly in the car industry. We have bodies that co-operate with industry in both those sectors: the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) chairs one of them and I chair the other. We are therefore working actively with industry to attract the supply chains back to the UK.

[Nigel Mills]

Will the Secretary of State join me in congratulating the work of the high-value manufacturing technology and innovation centre, which has had a display in Parliament for the past two days, and especially a business in my constituency, Advanced Composites, on the work that it does as part of that? Does he agree with the strategy and aims that it has set out, especially on having a strategy for how we can get manufacturing back to being 20% of gross domestic product by 2020?

[Vince Cable]

Yes, we are fighting a historical trend, because, under the previous Government, and certainly over the past decade, manufacturing contracted as a share of the economy more rapidly than in any other western country and we lost a third of the work force. We have to retrieve that, and one of the main ways of doing so is through promoting innovation. The first innovation centre, as my colleague rightly points out, is the manufacturing technology innovation centre, which has seven campuses. Composites is one of those core technologies being developed, which I very much welcome.

[Graham Evans]

Does my right hon. Friend agree that if we are effectively to support manufacturing, we need to ensure that our future work force have the necessary skills? Will he join me in welcoming the approval of Sandymoor free school in my constituency, which is receiving support from the nearby Daresbury science and innovation campus and which will help to achieve this goal?

[Vince Cable]

Skills are obviously critical, and no doubt my hon. Friend the Minister for Further Education, Skills and Lifelong Learning will say more about the big increase in the number of apprenticeships shortly. I am sure that the school in my hon. Friend’s constituency will contribute to this at an early stage of development. Apprentices are a real success story and we are certainly going to build on it.

[Mr Dennis Skinner (Bolsover) (Lab)]

One way to increase manufacturing growth would undoubtedly be for the Business Secretary to turn his attention to Markham Vale. I cadged about £32 million off the then Chancellor of the Exchequer in the Labour Government to flatten the pit tips and build a vast industrial estate straight off junction 29A on the M1, and what has happened? There have been grey, miserable clouds hanging over Markham Vale ever since this tin-pot Government came to power. Why don’t you pull your finger out? We were spending money while the sun was shining; there is none being spent now.

[Vince Cable]

I would certainly be happy to visit Markham Vale at some point and talk those things through with the hon. Gentleman. His area has a local enterprise partnership and has had an opportunity to put in a bid for an enterprise zone or the regional growth fund. I do not know what it has done, but I am certainly happy to talk to him.

I know that the hon. Gentleman is a long-standing Member and I am sure that he has followed the changes in attitudes towards manufacturing in this House under different Governments. He will be interested in the leader of the Labour party’s new distinction between “predators” and “producers”. What is troubling a lot of us on the Government Benches is why a party of dinosaurs is so opposed to predators. Perhaps the hon. Gentleman can explain.

[Mr David Hanson (Delyn) (Lab)]

Companies in my constituency that manufacture construction products, quarry materials for concrete or build materials for the construction industry have very much welcomed the plan announced by my right hon. Friend the Member for Morley and Outwood (Ed Balls) to bring forward infrastructure projects in order to increase employment and build manufacturing capacity in the United Kingdom. Given falling growth and rising unemployment, would it not be prudent for the Business Secretary to support that plan?

[Vince Cable]

Infrastructure is certainly a key to recovery, and it is absolutely right to put it on a sustainable basis. The Chief Secretary announced a programme for urgent modest-scale infrastructure projects a few weeks ago, and other infrastructure projects will be announced in the regional growth fund imminently.

[Mr Iain Wright (Hartlepool) (Lab)]

In answer to questions to his Department in June, the Secretary of State said:

“There is rapid growth now beginning to take place in manufacturing and exports.”—[Official Report, 9 June 2011; Vol. 529, c. 276.]

Given that figures from the Office for National Statistics confirm that manufacturing output fell last quarter and given that yesterday’s CBI industrial trends survey showed sentiment from manufacturers deteriorating, order books emptying and export prospects sharply declining for a second successive quarter, will the Minister update his assessment of four months ago? Does he think that any aspect of Government policy needs to change to ensure that manufacturing drives forward economic recovery and growth?

[Vince Cable]

The hon. Gentleman is right to say that business conditions are difficult, but over the last two years manufacturing has increased significantly faster than the rest of the economy, as have exports. That is the direction that we need to pursue. Given that manufacturing is predominately an export-based industry, he will understand that the difficulties facing our major export markets in the European Union are creating problems for manufacturers and manufacturing confidence, but we will hit our way through them.

[Ian Swales (Redcar) (LD)]

I thank the Secretary of State for visiting SABIC Petrochemicals in my constituency to hear about the cost issues for energy-intensive manufacturing industries. When can those industries expect an announcement about a mitigation package?

[Vince Cable]

I think they expect an announcement very soon. The visit was extremely constructive, and my colleague and others have rightly emphasised to us that energy-intensive industries are a key part of manufacturing recovery. It would be totally counter-productive economically and environmentally if they were driven overseas. We are determined that that should not happen, and a package of measures will be announced soon.

[Phil Wilson (Sedgefield) (Lab)]

3. What recent assessment he has made of the level of science funding over the comprehensive spending review period.

--- Later in debate ---

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

13. What steps he is taking to promote British exports.

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

My Department is supporting British exports through UK Trade & Investment. Its strategy, which was launched in May 2011, sets out plans to provide practical support to exporters over the next five years. I have undertaken a number of visits overseas to promote British business to countries including China, India, Brazil, Japan, South Korea, Turkey and Romania, and next week I shall be in south-east Asia promoting British trade.

[Pauline Latham]

Britain is increasingly becoming a centre of excellence for high-tech, high-value manufacturing exports. In Derbyshire, we have some great high-tech exporters ranging from Rolls-Royce, which my right hon. Friend knows all about, to Pektron, an innovative, family-owned electronics manufacturer. What more can my right hon. Friend do to showcase those exceptional firms and remind people up and down the country and internationally that high-tech British goods are in demand everywhere, and that that needs to continue?

[Vince Cable]

Yes, there are many successful British exporters. Over the past year, exports have grown on a year-to-year basis by about 9%. Where we have fallen down historically is that British small and medium-sized companies have not been as involved in exporting as the larger enterprises such as Rolls-Royce. One of the main commitments in the UKTI strategy is to concentrate help and resources on those companies, which would undoubtedly help the specialist company in my hon. Friend’s constituency.

[Alun Cairns]

It is good to note that exports have risen to their highest level since records began, and I note the Government’s plans to double our exports to Brazil by 2015. Following the Foreign Affairs Select Committee report, what specific action is my right hon. Friend taking to help British exporters to overcome the language issues and bureaucratic barriers that might stand in the way of achieving that?

[Vince Cable]

I went to Brazil precisely to answer that question. My hon. Friend is quite right to say that we are starting from a weak position. As a result of neglect in the past, Britain’s share of imports into Brazil is far lower than those of Germany, France and Italy, for example, and we must remedy that. We are putting in a major effort in Brazil, through UKTI, to capture some of the opportunities, particularly those that are arising from the expansion of the oil and gas industries there.

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

The Secretary of State has mentioned some exotic locations, but he did not mention the fact that he came to Huddersfield two weeks ago. Did he learn from that visit that export manufacturing is at the heart of getting the biggest bang for our buck, and that manufacturing for export counts for more in regard to the balance of trade? He talks about innovation and universities, but we do not want just seven—we want 133 innovation units.

[Vince Cable]

As a Yorkshireman myself, I would hesitate to call Huddersfield an overseas market, but it is certainly an outstanding centre of excellence. I enjoyed my visit there. We visited David Brown, one of the recipients of regional growth fund money and a very successful manufacturing exporter. I would also commend going further up the valley to Todmorden, where there is a brilliant British casting and forging company working flat out in our major export markets.

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

UKTI has no presence in Wales, so what discussions has the right hon. Gentleman had with the Welsh Government to ensure that UKTI is doing its best to promote Welsh exports?

[Vince Cable]

Of course the Welsh Government, as a devolved Government, have more responsibilities of their own in this field, but Wales is part of the UK and I will do my best to work with my Welsh Government colleagues to promote exports. I have already talked to the Secretary of State about getting more Welsh businesses represented on UKTI missions and on projects of that kind.

[Ian Lavery (Wansbeck) (Lab)]

5. What recent assessment he has made of the effectiveness of the regional growth fund.

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

In April we announced that 50 bids had been successful as part of round 1 of the regional growth fund, receiving a conditional allocation of £450 million, which will deliver 27,000 new or safeguarded jobs and close to 100,000 jobs in supply chains. More than half these projects have already started, and successful bidders will receive funding as due diligence is completed. Announcements on the second larger round are imminent.

[Ian Lavery]

There have been conflicting reports about the Department’s performance on the regional growth fund and what has been settled as a result of it. Will the right hon. Gentleman tell us how many applications have come from Northumberland, how many of them have been successful and how many have received any form of payment to date?

[Vince Cable]

I cannot tell him off the cuff how many companies in Northumberland have received regional growth fund money. I know that the north-east was the most substantial recipient in the first round. I believe that several—in fact, the majority—of those projects are proceeding, and they will create jobs in Northumberland.

[Mr Richard Bacon (South Norfolk) (Con)]

We in South Norfolk were very pleased to see the Secretary of State visiting Group Lotus, one of the country’s highest technology companies, which he described as “the best of British”. Does he agree that the regional growth fund would be seen as even more effective if Lotus’s high-quality bid were successful?

[Vince Cable]

I think my colleague is disarmingly tempting me to commit some indiscretion here. I have been to Lotus, but we did not discuss the regional growth fund bid. It is an outstanding company, and I am certainly aware that it has put in a bid.

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

Well, why do we not put the bunting out? Six months after 45 regional growth fund bids were submitted, only three have got the money, so there are only 42 to go. Perhaps the Secretary of State could tell us how many people in BIS it takes to change a light bulb. However, on 17 October, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) assured The Times that due diligence on the bids had taken an average of six weeks. These bids have all been waiting six months. Will the Secretary of State tell us when the bidders will get their promised money, as all these continued growth prospects have been put at risk because his Department has been asleep at the wheel?

[Vince Cable]

I definitely think we should put the bunting out for the regional growth fund. As I explained in my first answer to this question, more than half of all these projects are now under way. Factories have been built; jobs have been created—that is what it is about. As was made clear at the outset and as Lord Heseltine made clear a few days ago, the release of funding is a later stage in the process when due diligence has been completed. Are the Labour Front-Bench team seriously arguing that we should dispense with controls over the spending of public money in the private sector? I know they did that in government, but we are not going to do it.

[Stuart Andrew (Pudsey) (Con)]

6. What steps his Department is taking to promote manufacturing skills.

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[Jake Berry (Rossendale and Darwen) (Con)]

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

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

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

[Jake Berry]

I thank my right hon. Friend for that answer. I congratulate Ministers on the fantastic apprenticeship numbers that were announced today. With that and the rebalancing of our economy in mind, and given that in Rossendale and Darwen we have a manufacturing economy, can the Secretary of State tell the House how we are going to make it easier for employers in my constituency to take on new apprentices?

[Vince Cable]

The hon. Gentleman is right to acknowledge the big increase in apprenticeships, and it is not simply quantity; it is also about quality. Some of the rapid growth that is taking place is in advanced apprenticeships, including in manufacturing, and we welcome that, but we do not accept that the status quo is adequate. We want to strip away some of the bureaucratic barriers that hinder companies, particularly small companies, and my colleagues are working on that.

[Mr Chuka Umunna (Streatham) (Lab)]

A few years ago, the Business Secretary was described by the Deputy Prime Minister as an “economic prophet”. So in January, when the Secretary of State told the House that

“…economic growth is now strong. It will become stronger as a result of the work that the Government are doing in stabilising finances”—[Official Report, 13 January 2011; Vol. 521, c. 429.]

we listened with interest. Given the performance of the economy since January, does the Business Secretary believe he has lived up to his billing?

[Vince Cable]

May I first warmly congratulate the hon. Gentleman on his rapid and considerable promotion? I will not tempt fate by hoping that he makes a success of it, but I none the less wish him well. Of course, one advantage that he has in coming into Parliament only very recently is that he is not personally responsible for some of the disasters that occurred under his predecessors. One of our problems is sorting out some of those disasters, not least of which are the massive deficit that we inherited, a broken banking system, large amounts of personal debt and a flat housing market. All those factors explain why it is now very difficult to launch into rapid growth, but we are putting in place the rebalancing of the economy and the financial discipline to make that feasible.

[Mr Umunna]

I thank the Business Secretary for his kind words, but I wonder when he will take responsibility. In his first speech as Business Secretary, he described his Department as the “Department for economic growth”. The truth is that, under his leadership, it has been the Department for no growth. The economy has stagnated, unemployment has soared and confidence has nose-dived—and that is all before the effects of the eurozone crisis have been felt. Things would be very different if he changed his policy and adopted a proper plan for growth to get demand back again. In January, he thought his policies were working and it turns out he was wrong. He has described himself as a Keynesian, but Keynes famously said:

“When the facts change, I change my mind.”

Why will the Business Secretary not do the same?

[Vince Cable]

Well, Keynes famously wrote in his well-publicised note to Franklin Roosevelt that probably the most useful thing that the Government could do in a depression was keep down long-term interest rates, and that is what this Government have done as a result of their fiscal prudence.

The hon. Gentleman says that we do not have the policies in place; we have two things in place. We have policies for financial stability, which we did not have when we inherited the economy; and on the other hand we have policies in place to rebalance the economy, to reinvent manufacturing, which was allowed to decline catastrophically under the previous Government, and to promote exports and business investment—things that were shamefully neglected when his colleagues were in government.

[Jane Ellison (Battersea) (Con)]

T2. The Mayor of London has had great success in growing the number of apprenticeships from the low base inherited from his Labour predecessor by requiring apprentices to be taken on as a condition of bids for public projects. Will the Minister look at whether that success could be built on and extended to national Government?

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[Mark Hendrick (Preston) (Lab/Co-op)]

T7. The Secretary of State will be aware that Remploy businesses were set up across this country after the second world war to give work to disabled people returning from the war. Those businesses have gone on for decades and given great work to disabled people. Why are the Government going to axe the programme?

[Vince Cable]

Certainly we should be doing all we can to support disabled workers. My understanding is that those decisions lie with the Department for Work and Pensions, but I would be happy to engage or help if there is a problem.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

UK Trade & Investment has just completed a trade mission to Iraq for the Erbil international trade fair, of which I was privileged to be a part. We had 86 businesses, companies and educationalists at the British pavilion at the trade fair, whereas three years ago we had only one. Will the Secretary of State join me in congratulating the UKTI team and our consul-general on their great work during the mission?

[Vince Cable]

Yes. UKTI does an excellent job. Like all other parts of the Government, it is having to do more with less, but it does so through refocusing and strategy. I have not yet been to that country, but I look forward to doing so.

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

T8. Does the Minister of State really think that sending a letter to Members whose constituents are affected by the potential redundancies at BAE Systems stating that those people could move to other parts of the country to get jobs shows any understanding of the regional economy and the need for skilled manufacturing jobs, particularly in the Humber area?

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

The Bank of England’s own data released last week indicate that lending by banks to small businesses fell by £2.5 billion in the three months to August. Was not the Secretary of State right to admit at last that the economy is in a far weaker state under this Government than it ever was in the last year under Labour?

[Vince Cable]

That certainly is not the case, but the hon. Gentleman has a perfectly valid point in relation to bank lending. That is absolutely the case, and, as a result of the agreement that we have reached with the banks, they have—certainly in the first two quarters—achieved the gross lending objectives that we set them, but there is a lot more to do. Surveys show that a shortage of credit is a serious problem, and we have to continue to work with the banks and, where necessary, to require them to make credit available to the economy.

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

Since December 2008, 3,218 tied pubs have closed and 425 free houses have opened, yet the British Beer and Pub Association, which speaks for pub companies, continues to mislead Ministers and MPs by stating that the opposite is actually the case. Do Ministers agree that this discredits the BBPA and also shows that the Government must stick to their commitment to act on the issue?

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[Duncan Hames (Chippenham) (LD)]

Next month should at last see meaningfully democratic elections in Egypt, but a new democratic Egypt faces a future hamstrung by debts from the Mubarak era. Will my right hon. Friend ask his officials to conduct an audit of the £100 million owed by Egypt to the Export Credits Guarantee Department?

[Vince Cable]

As my hon. Friend knows, there is a mechanism for dealing with official debt, through the Paris Club, but I will certainly undertake to speak to my colleague, the Secretary of State for International Development, to ask what concessional assistance we are giving to Egypt. The matter does not directly bear on my Department, but I accept that there is a link with the promotion of trade.

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

Does the Business Secretary believe that tax evasion and tax avoidance is having a negative impact on economic growth?

[Vince Cable]

Absolutely. I am resolute, and I hope that my colleagues on the Opposition Benches will work with me in combating both.

[Dr Julian Huppert (Cambridge) (LD)]

The Department for Business, Innovation and Skills is considering the creation of a public data corporation. Does the Minister accept that making public data openly available can facilitate innovation in more ways than can be easily anticipated, benefiting the economy and the country? Will he meet me and other campaigners to discuss the details of that further?

[Chris Bryant (Rhondda) (Lab)]

One of the Labour Government’s great successes was the introduction of the artist’s resale right. Since then, the art market has quadrupled, and hard-pressed artists have received £13 million. The derogation in awarding the artist’s resale right to the estate of dead artists lapses at the end of the year. Will the Secretary of State confirm that from January next year it will apply to the estate of deceased artists?

[Vince Cable]

No, I cannot confirm that, but I will speak to my colleague at the Department for Culture, Media and Sport about the impact on the art market, and how we propose to proceed with that in the European Union.

[Mr Marcus Jones (Nuneaton) (Con)]

The success of apprenticeships is undoubtedly vital to future prosperity in areas such as the west midlands. Will my hon. Friend update the House on the progress of the apprenticeship programme in the west midlands region?