Oral Answers to Questions

Debate between Vince Cable and John Bercow

Tuesday 29th October 2019 Commons Chamber

[Mr Speaker]

Not least due to the charm and courtesy of the hon. Member for Bexhill and Battle (Huw Merriman), quite apart from the magnificent facility that he has just been busily championing.

[Sir Vince Cable (Twickenham) (LD)]

The Minister will know that her colleague, the Justice Secretary, has declined to proceed with a call for evidence on the sensitive issue of assisted dying. Would it not be appropriate for her Department to gather evidence from the professional bodies involved in end-of-life care, to ensure that legislation is evidence-led?

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Monday 17th June 2019 Commons Chamber

[Mr Speaker]

Yes, but there is nothing to stop the right hon. Gentleman depositing a copy of his written request in the Library of the House, for its collective delectation.

[Sir Vince Cable (Twickenham) (LD)]

Does the Minister acknowledge that one unintended consequence of extending permitted development rights to commercial and industrial property is that a significant amount of housing is now being generated that is below accepted space and safety standards? What action is he taking to correct that?

EU: Withdrawal and Future Relationship (Votes)

Debate between Vince Cable and John Bercow

Monday 1st April 2019 Commons Chamber

[Mr Speaker]

Of course I shall come to other Members. I call Sir Vince Cable.

[Sir Vince Cable (Twickenham) (LD)]

On a point of order, Mr Speaker. It is even clearer than it was the last time we had indicative votes that one compromise option has substantial support. There is the largest number of votes in the House for a people’s vote—larger than last time. Is it not possible to combine the two and therefore find a way forward through consensus?

[Mr Speaker]

The right hon. Gentleman’s question is of course of a rhetorical character. It invites no response from me, but he has registered his view, upon which I am sure colleagues will reflect.

United Kingdom’s Withdrawal from the European Union

Debate between Vince Cable and John Bercow

Friday 29th March 2019 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

On a point of order, Mr Speaker. On Monday, it is perfectly possible that the House may indicate a preference for one of the options, such as a customs union or a confirmatory vote, which are compatible with the withdrawal agreement. If that is the case, will the Prime Minister be open to listening to the view of the House and considering how we might have a longer extension to explore them?

[Mr Speaker]

I think that the question was to some degree a rhetorical inquiry. The right hon. Gentleman has made his point, but further debate on these important matters will follow next week.

EU: Withdrawal and Future Relationship (Votes)

Debate between Vince Cable and John Bercow

Wednesday 27th March 2019 Commons Chamber

[Mr Speaker]

Well, interpretations vary, which I think is clear from the points of order. The hon. Lady has made her point with some force, and I am sure that people will study it in the Official Report together with the observations of other right hon. and hon. Members.

[Sir Vince Cable (Twickenham) (LD)]

On a point of order, Mr Speaker. Further to the point about how to reconcile this evening’s votes with your ruling earlier today, I note that two motions received votes significantly in excess of what the Government have achieved with their meaningful votes. Would it therefore not be appropriate for the Government to bring back their withdrawal agreement, amended to take account of the Leader of the House’s changes and modified to allow for a confirmatory vote? In that way, we may at last reach some consensus.

[Mr Speaker]

A variety of options is there for policy makers, parliamentarians and members of the Executive, and the right hon. Gentleman has helpfully indicated what he thinks should be the priorities in the important days that lie ahead.

European Union (Withdrawal) Act

Debate between Vince Cable and John Bercow

Monday 25th March 2019 Commons Chamber

[Mr Speaker]

Order. Resume your seat. What I say to the right hon. Gentleman is this: the right hon. Member for Chelsea and Fulham (Greg Hands), from a sedentary position, was disorderly. The point was raised by the right hon. Member for Derbyshire Dales (Sir Patrick McLoughlin). I have given an apology. I said sorry to the right hon. Member for Chelsea and Fulham and nothing further requires to be added. I thank the right hon. Member for East Devon (Sir Hugo Swire) for underlining his concern, but I said sorry to the right hon. Member for Chelsea and Fulham and it does not need to be said again.

[Sir Vince Cable (Twickenham) (LD)]

On a point of order, Mr Speaker. This evening the House has made a major constitutional innovation. In order that it can be a success and that Wednesday is both orderly and meaningful, would you now establish a business committee of the main parties and those who brought forward these proposals in order to organise these events?

[Mr Speaker]

I think that everybody would hope, or certainly it is to be reasonably assumed that they do, that the process on Wednesday, in the interests of Parliament, is a success. It is my absolute expectation that the right hon. Member for West Dorset (Sir Oliver Letwin) will communicate with others—and, indeed, quite possibly with the usual channels—about the process to be followed on Wednesday to facilitate the House and try to secure a satisfactory outcome. I do not think in the first instance it is to be expected that I would take the lead on the matter, but the right hon. Gentleman can be expected to do so, and I feel sure that, with others, that is what he will do.

UK’s Withdrawal from the European Union

Debate between Vince Cable and John Bercow

Wednesday 13th March 2019 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

On a point of order, Mr Speaker. Now that the House has given effect to its will so clearly on separate occasions, can you give us the benefit of your help and advice as to how to translate these declaratory motions into practical action?

[Mr Speaker]

If the right hon. Gentleman will forgive me—to be honest, even if he will not—I prefer to hear the remaining points of order and then to invite the Leader of the House to deliver the supplementary or emergency business statement. We will see what is intended to take place tomorrow. We may well learn tomorrow of what is intended to take place in subsequent days. There has been a clear expression of will by the House. I rather imagine there will be conversations among colleagues.

Ultimately, the House can debate what the House wants to debate. We will see what it wants to debate and what shape events take in the days to come. I do not want to express myself more forcefully than that—I do not think that would be right—but the right hon. Gentleman need be in no doubt that the matters will be fully debated. Members will have the opportunity to put their point of view. In all likelihood, many propositions will come to be tested.

European Union (Withdrawal) Act

Debate between Vince Cable and John Bercow

Tuesday 12th March 2019 Commons Chamber

[Mr Speaker]

I will come to the right hon. Lady, who may well have important matters to broach not far distant from what the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) has just raised, but let us take the point of order from the leader of the Liberal Democrats.

[Sir Vince Cable]

On a point of order, Mr Speaker. With your vast knowledge of parliamentary precedent and history, can you identify a single case, say since the American war of independence, in which a Prime Minister has twice been defeated—[Interruption.]

[Mr Speaker]

Government Back-Benchers very unkindly spoiled the right hon. Gentleman’s punchline, as a consequence of which I did not hear it.

[Sir Vince Cable]

I asked for precedent for where a Prime Minister had survived—[Interruption.]

[Mr Speaker]

Order. Mr Ellis, calm yourself. I want to hear what the leader of the Liberal Democrats has to say.

[Sir Vince Cable]

I asked for precedent of a Prime Minister surviving two humiliating defeats, but being unwilling to change policy. Since we on the Liberal Democrat Benches are willing to offer an olive branch to embrace policies that she has so far rejected, will she accept the offer of friendship to do so?

[Mr Speaker]

I think that remains to be seen. As to the matter of precedents, it is usually unwise to assert that there is none for a particular circumstance unless one is absolutely certain, because most things have happened at one time or another—quite probably in my lifetime and certainly in that of the right hon. Gentleman. [Laughter.]

European Union (Withdrawal) Act 2018

Debate between Vince Cable and John Bercow

Tuesday 29th January 2019 Commons Chamber

[Mr Speaker]

Yes, I will take other points of order briefly.

[Sir Vince Cable]

On a point of order, Mr Speaker. Now that the House has given the Prime Minister contradictory instructions—not to have no deal, but to pursue a course of action that will lead to no deal—will she return to the House tomorrow and give a clearer indication of what these alternative arrangements actually are? They have been rejected at her own summit at Chequers and now appear to be the basis of negotiations.

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order, but I would say to him—I know that he will take this in the right spirit—that this is not Prime Minister’s questions. Prime Minister’s questions will take place tomorrow. If I understand correctly, I think the right hon. Gentleman was more concerned to make his point than to elicit a reply from the Prime Minister, and there is no reason for the Prime Minister to feel any need to reply tonight. The right hon. Gentleman has made his point and there will be ample opportunity for further exchanges, doubtless tomorrow and in many subsequent days.

Finance (No. 3) Bill

Debate between Vince Cable and John Bercow

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

rose—

[Mr Speaker]

Order. If the right hon. Gentleman feels able and willing to express his views in a minute, I will be delighted to hear him—I hope he will not be offended—but otherwise I will call the Opposition Front-Bench spokesperson.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Monday 17th December 2018 Commons Chamber

[Mr Speaker]

I gently exhort the Minister of State to face the House so that we can all benefit from his mellifluous tones.

[Sir Vince Cable (Twickenham) (LD)]

The level of educational funding will be radically affected by the new treatment of public sector pensions. Can the Minister confirm that it is the Government’s policy to cover the majority of costs for schools and colleges, but not for universities, and explain the different treatment?

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Wednesday 23rd May 2018 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

The Prime Minister and the Labour Leader of the Opposition—[Interruption.]

[Mr Speaker]

Order. Let us hear the full eloquence of the right hon. Gentleman’s flow and the flow of his eloquence.

[Sir Vince Cable]

The Prime Minister and the Labour Leader of the Opposition both agree that we should leave the single market and leave the European Union customs union and that the public should not have a final say on the Brexit deal, so will the Prime Minister dispense with our tradition of party political point scoring and, in the spirit that I am setting, publicly thank the leadership of the Labour party for its help and support in making Brexit happen?

Tributes (Speaker Martin)

Debate between Vince Cable and John Bercow

Tuesday 1st May 2018 Commons Chamber

[Mr Speaker]

I thank the right hon. Gentleman very warmly for what he has said. I think the reaction of the House shows that colleagues feel the same.

[Sir Vince Cable (Twickenham) (LD)]

rose—

[Mr Speaker]

If the right hon. Gentleman understands, I would like to call the successor but one to Michael’s constituency. I will come to the leader of the Liberal Democrats in a moment.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Tuesday 17th October 2017 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

rose—

[Mr Speaker]

Ah, the leader and the deputy in hot competition. On this occasion, my instinct is to side with the deputy. I call Jo Swinson.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 12th October 2017 Commons Chamber

[Mr Speaker]

The Minister is assuring his hon. Friend that he is indeed oven ready. That is a new one on me; the hon. Lady has very helpfully added to the collective lexicon of the House of Commons.

[Sir Vince Cable (Twickenham) (LD)]

Why do the Government not draw a clearer distinction between inward foreign investment, which adds capacity and jobs and is welcome, and inward investment for acquisitions in devalued pounds, which often detracts from our science and technology?

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 26th March 2015 Commons Chamber

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

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

[Mr Speaker]

Possibly including flights to Pendle—you never know.

[Vince Cable]

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

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 12th February 2015 Commons Chamber

[Philip Davies (Shipley) (Con)]

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

[Mr Speaker]

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

[Vince Cable]

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

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 20th November 2014 Commons Chamber

[Vince Cable]

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

[Mr Speaker]

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

Royal Mail

Debate between Vince Cable and John Bercow

Tuesday 1st April 2014 Commons Chamber

[Vince Cable]

The last thing I intend to do is apologise. What I do intend to do is refer to what the report actually said, as opposed to the spinning and froth that is being generated around it. Let me read again the report’s initial conclusion on value for money:

“By floating Royal Mail on the Stock Exchange the Department achieved its key objectives of introducing private capital and commercial disciplines. Given Royal Mail’s prospects and prudent initial capital structure it is now less likely that the taxpayer will have to provide public support for the universal postal service.”

That is what it actually said.

Let me address the criticisms, if that is what they were. The first was that the Department was cautious, but I would have thought that caution in this context had a lot to commend it. The reason the Department was cautious was the very real risk that the floatation could fail. The choice we faced was: had the floatation failed, it would have remained in public ownership and, despite the hon. Gentleman’s preference for keeping it in public ownership, the valuation placed on it continuing in public ownership was about £1 billion. That was not disputed by the National Audit Office. The alternative—the floatation which happened—resulted in a value for the taxpayer of £2 billion in cash and £1.5 billion in continued value of the retained sale. There was a choice between the £3.5 billion that resulted from the privatisation and the £1 billion had it failed, so it is absolutely right and sensible that we were cautious.

The hon. Gentleman made the point that there was a lack of flexibility in the initial public offering system. Indeed, the National Audit Office makes that point: there was a lack of flexibility. The question, therefore, is: were there any alternatives? Could this have been done in a different way? The Government could have eliminated the retail investors and had more flexibility over price at the time of sale, but as it happens one of the successes of the privatisation is the fact that 670,000 investors now have shares.

The other way of selling Royal Mail would have been through a trade sale, and of course we looked at that as an option. One of the reasons we did not pursue it was that we looked at the history of privatisation under the Labour Government. and there was one very good example of what happens when a trade sale is pursued: I refer the hon. Gentleman to the NAO report on the privatisation of QinetiQ. What happens with the supposed flexibility of a trade sale—[Interruption.]

[Mr Speaker]

Order. Mr Blenkinsop, before Christmas I specifically advised you to take up yoga or some other similarly therapeutic and calming activity. Moreover, your brother very wisely purchased you a book on the subject. It is evident to me that you have not yet read it.

[Vince Cable]

What happened in that trade sale was that a company with an equity value at sale of £125 million was eventually valued at £1.3 billion—10 times what the Labour Government sold it for. That is the alternative model with which we were confronted.

Let me address specifically the issue of the long-term institutional investors. The hon. Gentleman is absolutely right to say that one of the key objectives, to which I attach particular importance, was ensuring that the long-term institutional investor base was strong, and indeed it is. When the hon. Gentleman looks at the breakdown of share ownership, he will see that between two thirds and 70% of the shares held as a result of the IPO are held by those long-term institutional investors. When we put that with the Government’s retained shares and those of the workers, we see a very large majority of investors who are committed to the long-term strength of the company. One does have to ask the question: why did some of the long-term institutional investors sell? Some bought, some sold. The reason they sold was that they considered the share price after sale was overvalued. It was an obvious market reaction, and that was the consequence. None the less, having a long-term investor base remains a basic objective, and we have achieved that fundamental objective.

Let me turn to the issue of the valuation, to which so much importance is attached. It should be blindingly obvious, although I do not think it is to the Opposition, that trying to sell 600 million shares at one go is a fundamentally different proposition from the 2 million to 3 million sold in daily trading, which explains why the price has varied since the flotation.

I have said and I continue to say that there is a great deal of froth in the valuation of this and other shares—that is how equity markets operate—and this particular share is surrounded by a great deal of volatility. There are two main reasons for that. The first is a great deal of uncertainty over industrial relations in a company that has had a very troubled industrial relations history. It is worth pointing out—I do not know whether the hon. Gentleman noticed—that the mere mention last week of a Unite strike took the stock price down by 20p. That was the context in which we had to make the sale. The second key point—[Interruption.] I am trying to respond to the hon. Gentleman’s points. [Interruption.]

--- Later in debate ---

[Mr Speaker]

Order. The Secretary of State must be heard. This is very important. [Interruption.] Well, people must make their own assessment on both sides of the House—such is the nature of political debate—but the Secretary of State must be heard.

[Vince Cable]

Looking at the volatility of shares, this company is exposed to a considerable level of competition, as a result of actions of regulators beyond the Government’s control. The estimate has been made—I think that I cited this to the Business, Innovation and Skills Committee —that a 1% fall in sales is the equivalent of a 17% fall in profits for this company. We hope, and we have every reason to be optimistic, that with the very good management of the company, the co-operation of the work force and the investment that privatisation now makes possible we shall have a positive outcome in terms of competitiveness, but there is a great deal of uncertainty, which lies behind the volatility of the shares.

We in the Government have been criticised, not least by the Select Committee, over the past few months because we failed to take account of the estimates made by the banks that were bidding for business. One section of the NAO report—the hon. Gentleman has clearly not read it—completely vindicates the Government’s decision to ignore those estimates as completely worthless. They were touting for business, the estimates had no value whatever and we were quite correct to ignore them. Much of the propaganda that he and his colleagues have developed over the past few years has proved to be completely beside the point.

Let me make a final point on valuation. The hon. Gentleman gave us a lecture on the dangers of undervaluing public assets, but let me just quote to him his Government’s experience of the difficult art of valuing assets. The former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), sold large quantities of gold at between $250 and $300 an ounce, but the price subsequently increased to more than $1,500—five times the original value. That is the nature of the highly volatile markets in which we have to operate.

The NAO report reached the important conclusion that we had successfully achieved our objectives. Under this Government, we have taken a loss-making public enterprise and turned it into a highly successful, respected public company.

--- Later in debate ---

[Vince Cable]

Sorry, I did not hear the hon. Gentleman.

[Mr Speaker]

Order. The Secretary of State did not hear the hon. Gentleman. I did, but perhaps he can put his question again.

[Steve McCabe]

I will try to say it louder, Mr Speaker. I asked if the Secretary of State regarded the sale as a personal political triumph.

--- Later in debate ---

[Vince Cable]

The hon. Gentleman seems to be one of the few Opposition Members to have actually read the report, and I commend him for that. There were, of course, other companies and priority investors who invested considerably more. Indeed, I think that one has increased its stake by well over 100%.

While I am on my feet—I think this is the last question —may I just correct a slip of the tongue where I referred to the regulation applying to the first class stamp? Obviously, it applies to the second class stamp.

[Mr Speaker]

I am pleased to say to the Secretary of State that the pace quickened and we got through 40 Members in 37 minutes of exclusively Back-Bench time, so I am deeply grateful to the right hon. Gentleman and to colleagues.

Bill Presented

National Parks (Governance)

Presentation and First Reading (Standing Order No. 57)

Tim Farron, supported by Roger Williams, Dr Julian Lewis and John Woodcock, presented a Bill to give powers to the Secretary of State to provide for elections to be held to the governing boards of National Parks on a pilot basis; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 194).

Royal Mail

Debate between Vince Cable and John Bercow

Wednesday 10th July 2013 Commons Chamber

[Vince Cable]

Costs will not spiral and, as I said in an earlier answer, the regulator has imposed a cap on the cost of a second class stamp. Other elements that small businesses in rural areas need, such as a guarantee of the universal service obligation, lie at the heart of what I have been saying this afternoon.

[Mr Speaker]

We are grateful to the Secretary of State and to colleagues. Fifty-two Back Benchers questioned him in 38 minutes of Back-Bench time. If other Ministers were as brief in responding, we would get everybody in every time.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 13th June 2013 Commons Chamber

[Mr Speaker]

Order. The hon. Gentleman will resume his seat. Topical Questions must be brief. The hon. Gentleman has had one opportunity already. There is a lot to get through and there are other colleagues to consider.

[Vince Cable]

I pay tribute to the work that my hon. Friend has done on the pubs issue. He has played a significant part in influencing the House’s thinking on it. I am sure he appreciates, however, that I would get into difficulty if I started talking about serious people in the industry being dishonest and untruthful. I will not go down that road.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 21st March 2013 Commons Chamber

[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.

--- Later in debate ---

[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.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 20th December 2012 Commons Chamber

[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.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 8th November 2012 Commons Chamber

[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.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 6th September 2012 Commons Chamber

[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?

--- Later in debate ---

[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.

Office for Fair Access

Debate between Vince Cable and John Bercow

Monday 20th February 2012 Commons Chamber

[Mr Edward Leigh (Gainsborough) (Con)]

After 50 years of comprehensive education, why do we have this tragedy that only 50 pupils receiving free school meals are getting into the top universities? How are we going to solve this? The Secretary of State says that he is not going to dumb down standards. Is it not a fact that the era of the greatest social mobility—the most opportunities for poor people—was when there was a grammar school in every town?

[Mr Speaker]

In answering, the Secretary of State will want to focus on the appointment of the director of the Office for Fair Access.

[Vince Cable]

The hon. Gentleman is absolutely right to say that I have no intention of dumbing down standards. The access agreements that are being reached through OFFA and which will be implemented by Professor Ebdon will not dumb down standards either.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 2nd February 2012 Commons Chamber

[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.

Executive Pay

Debate between Vince Cable and John Bercow

Monday 23rd January 2012 Commons Chamber

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

I welcome this opportunity to set out Government proposals on executive pay. Last September I published papers that explored the issues around the rapid growth in executive pay in our largest listed companies, and embarked on a call for evidence.

The evidence is clear that business and investors recognise that there is a disconnect between top pay and company performance, and that something must be done. We cannot continue to see chief executives’ pay rising at 13% a year while the performance of companies on the stock exchange languishes well behind, and we cannot accept top pay rising at five times the rate of average workers’ pay, as it did last year. It is not Government’s role to micro-manage company pay, but there are things we can do to address what is a clear market failure.

Today I can announce a package of measures that the Government will take forward to tackle the issue on four fronts: greater transparency, so that what people are paid is clear and easily understood; more shareholder powers, such as the introduction of binding votes, so that shareholders can hold companies to account; more diverse boards and remuneration committees; and best practice led by the business and investor community. No proposal on its own is a magic bullet, but together they can enable a major transformation to get under way.

Let me start with transparency. Shareholders have told us that they need clearer and more relevant information about pay, particularly the link to performance. At present many company pay reports are simply impenetrable. Through secondary legislation later this year the Government will require companies to publish more informative remuneration reports on how executives are rewarded. This will start with reports being split into two sections: one detailing proposed future policy for executive pay, and the other setting out how pay policy has been implemented in the previous year.

On future policy, remuneration committees will be expected to explain why they have used specific benchmarks and how they have taken into account employee earnings, including pay differentials, when setting pay. Companies will also have to explain how they have consulted employees and taken their views into account. UK employees in large companies already have the right to request that their employers consult them on issues relating to the organisation, including pay, through the Information and Consultation of Employees Regulations 2004. This potentially powerful mechanism for employees has been underutilised to date, so I encourage employees to use it and put executive pay on the agenda.

Shareholders say that pay policy too often appears totally disconnected from their company’s overall strategy. I want companies to state clearly and succinctly how their proposed pay policy reflects and supports company strategy, how performance will be assessed and how it will translate into rewards under different scenarios. In the backwards-looking section of the report, companies will have to provide a single figure for total pay for each director and explain how pay awards relate to the company’s performance. To provide context, companies will be mandated to produce a distribution statement outlining how executive pay compares with other disbursals, such as dividends, business investment, taxation and general staffing costs.

Alongside more information, shareholders need new powers to hold the board to account. I will consult shortly on specific proposals to reform the current voting arrangements and give shareholders a binding vote, enabling them to exert more pressure on boards. This will include a binding vote on future pay policy, including details of how performance will be judged and real numbers on the potential payouts directors could receive. Companies will have to include a statement on how they have taken into account shareholder views and the results of previous votes.

There will also be a binding vote on any director’s notice period longer than one year and on exit payments of more than one year’s salary. Shareholders will still get a vote on how the agreed policy has been implemented. I will consider whether we need further sanctions that could be applied when a significant number of shareholders dissented in the advisory vote. In addition, we will review what level of shareholder support is needed to pass pay proposals—for example, whether the threshold for a successful vote should be raised to 75% of share votes cast. By way of context, last year four FTSE 100 companies failed that test.

Let me move on to diversity in remuneration committees. Having diverse remuneration committee membership is crucial to changing the status quo on executive pay. The right way to tackle this is by having more diverse boards. I want to see more people who come from different backgrounds appointed, including people from the professions, public servants, academics, lawyers, and people who have not been directors before. For example, I would like at least two board members to have never previously been members of a board of directors.

In October a new provision in the UK corporate governance code will come into force requiring companies to report on their policy on boardroom diversity, how they propose to deliver it and what progress has been made. That sits alongside a new code of conduct for executive head-hunters and good practice guidance from the Association of British Insurers on the importance of board diversity, board evaluation and succession planning. The Government will also address fundamental conflicts of interest in the pay-setting process and require greater transparency on the role of remuneration consultants, how they are appointed, their fees, and who they advise and report to.

We have also observed that in the FTSE 350 about 6% of remuneration committee members are executives of other companies. There is a perceived conflict, as those individuals have a personal interest in maintaining the status quo in pay-setting culture and in pay levels, and we are looking at mechanisms to limit that.

In the context of such changes, we must deal with the specific issue of payments for failure. Some of our consultees have argued that all quoted companies, not just those in financial services, should have a clawback mechanism in place, and we will ask the Financial Reporting Council to revise the corporate governance code in order to require all large public companies to adopt clawbacks.

In relation to best practice, this package of measures will create a more robust framework within which executive pay is set and agreed. Moreover, lasting reform depends on active shareholders and responsible businesses accepting the need for change and pushing the agenda forward.

Deborah Hargreaves, who chairs the High Pay Commission, will launch a new project next week to monitor the state of pay at the top. The high pay centre will perform an important role in delivering the high-quality research that this area of debate badly needs. Companies have to show leadership on this issue, and in the following weeks and months I will be working with business and investor groups to build on the current momentum for reform, to agree on what best practice looks like, and to promote that more widely.

[Mr Speaker]

Order. I am extraordinarily grateful—[Interruption.] Order. I am extraordinary grateful to the Secretary of State, but I have been immensely—perhaps excessively—generous, because the right hon. Gentleman took precisely three times as long as he is supposed to take in answering an urgent question. I know he will understand—I listened to him with great interest and respect—that I must make allowance for that with regard to the Opposition Front Bencher’s response, but above all I make the point for the future that those on the Front Benches must stick to the limit, because my concern is to protect the rights of Back-Bench Members.

[Mr Umunna]

Thank you, Mr Speaker, for forcing the Secretary of State to come to the House today to set out the Government’s proposals in this area—[Interruption.] The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey) chunters from a sedentary position, but it is quite extraordinary for Ministers to demand greater accountability and transparency from people in business, and then to seek to avoid being held to account for their policies in that area in the House of Commons.

The problems of excessive executive pay and rewards for failure have grown over the past few decades; in fact it was probably 30 years ago, when the current Business Secretary was a happy and active member of the Labour party, that things were more in proportion. We agree that it is right that those who work hard, generate wealth and create jobs for our country are rewarded, but excessive pay and rewards for failure are bad for business, the economy and society at large.

I welcome much of what the Business Secretary says, but his proposals simply do not go far enough in promoting the transparency, accountability and fairness that people want to see. We support all the recommendations of the independent High Pay Commission, to which the Business Secretary referred, but why will he not do the same, particularly given that his Treasury spokesperson in the Lords is a member of the commission, and presumably supports its recommendations?

The Business Secretary and other Ministers have underlined the importance of consulting employees, so why will he not back moves for employees to sit on the remuneration committees that set pay? Employees play that type of role in Europe’s strongest economy, Germany, and on the board of one of our most successful businesses, John Lewis. We read that he would like to back the proposal but has been prevented from doing so by the Prime Minister and the Chancellor. Can he confirm that?

The right hon. Gentleman said nothing about the publication of pay ratios within businesses. Why will he not agree to that proposal? If I am wrong, I am happy to be corrected. I agree with him on the need for greater clarity about the role of remuneration consultants. They currently owe their duty to the board, as I understand it. Does he agree that there is a case for changing the situation so that, much like auditors, they owe their duty to shareholders?

Above all, I do agree that increased shareholder activism is key. Two issues have been cited as obstacles: that more of our UK stock is held by foreign investors and that it is held for a shorter period. Does the right hon. Gentleman agree that that need not be an insurmountable barrier to increased shareholder activism?

Finally, on shareholder activism, the Business Secretary, the Deputy Prime Minister and other Ministers who ultimately bear responsibility and control the public stake in the banks—RBS, in particular—have said that they are in a position to stop the chief executive of that bank receiving a large bonus while he is issuing thousands of redundancy notices to RBS employees. How and when will that happen? Does the right hon. Gentleman think that it is acceptable for the chief executive of RBS to take a bonus of the order of £1 million when thousands of company employees are being made redundant?

--- Later in debate ---

[Vince Cable]

May I just gently suggest that my hon. Friend reads through the responses to the consultation, which are predominantly from businesses and investors advocating measures such the ones we are implementing? He might particularly want to examine the contribution of the CBI.

[Mr Speaker]

It is interesting to note that the shyness and reticence that previously overcame the hon. Member for Shipley (Philip Davies) have now been successfully overcome.

[Jonathan Ashworth (Leicester South) (Lab)]

A few moments ago, the Secretary of State told us that he would consider it desirable to see more employees represented on boards, but then he told us about what he considered to be insurmountable obstacles. If Germany, Austria, Finland, Sweden, Norway and Denmark can do it, why cannot we?

--- Later in debate ---

[Vince Cable]

I have not followed those developments, but perhaps I should retract some of the complimentary things I said about the Leader of the Opposition.

[Mr Speaker]

I remind the Secretary of State that he has absolutely no responsibility for restructuring the Labour party.

[Alex Cunningham (Stockton North) (Lab)]

Here is another opportunity for the Secretary of State to clarify his views on RBS bonuses. The share price has collapsed by 35% in the past year, so will he use any powers he has to block any bonus for the chief executive, or has he really surrendered those powers to the Prime Minister and the Chancellor, who simply do not agree with him that the bonus must be stopped?

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 8th December 2011 Commons Chamber

[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.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 14th July 2011 Commons Chamber

[Vince Cable]

rose—

[Mr Speaker]

Order. I know that the Secretary of State will provide a single and pithy reply to those four questions.

[Vince Cable]

The shadow Secretary of State knows perfectly well that the decision to reopen the contract in relation to Hitachi was not about the tender but about the whole project. We cannot do that in the case of Thameslink—a project that was already 10 years late.

Green Investment Bank

Debate between Vince Cable and John Bercow

Tuesday 24th May 2011 Commons Chamber

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

I thank the Secretary of State for his statement, but although the Deputy Prime Minister announced this policy yesterday and the statement was timed for 12.30 pm today, I had not received a copy by 10 minutes to 1, and did not receive it until five minutes to 1.

A successful green investment bank can make a significant contribution to developing low-carbon technologies and enabling British companies to succeed in the low-carbon green technology markets of the future. That is why the green investment bank was in Labour’s manifesto. Will the Business Secretary confirm that it has taken a year of infighting to get to this stage? Is it not true that the Government are at odds over green policy, and will he confirm that only a month ago he tried to block the adoption of the carbon emissions targets announced this week? So much for “the greenest Government ever”!

Progress is welcome, but have the Government not already taken a series of decisions that have damaged investment in green technologies and activities? Did they not set feed-in tariffs that encouraged many investors into green energy and then suddenly change the rules, leaving investors high and dry and deeply cynical about the Government’s commitment to green technology? Is the Business Secretary aware that the target for zero-carbon homes by 2016 was encouraging new and innovative business approaches to architecture, building technology, skills training and offset technologies? It was already encouraging a supply chain to make our homes greener. Now that has been changed by the flip-flops of Government decision making. Is it not true that when the Severn barrage was abandoned the Government ruled out any tidal investment for five years, so that when this country turns to tidal power we will end up relying on foreign technology?

Despite all the talk of private investment, where is the evidence for it? Is it not damning that the Pew Environment Group’s report in March stated that investment in renewable technology in the UK crashed from £11 billion in 2009 to £3.3 billion in 2010—due, it says, to political uncertainty. That saw the UK drop from sixth to 13th in the ranking of countries encouraging green investment—another example of the Tories letting go Labour’s green legacy.

As with the green deal and the electricity market reforms, green businesses know enough about the green investment bank to be excited, but not enough to start planning investments and changing business models. Does the Business Secretary not accept that the bank will not work without much greater consistency, certainty and clarity about Government policies for green energy and the low-carbon economy than we have seen to date?

When will the green investment bank legislation be brought forward? Will he publish draft legislation so that all those interested can help shape it and ensure that the bank truly does become a long-term part of the infrastructure? How will the bank be staffed, and will he ensure that it is not an offshoot of the Treasury or his Department? Will he learn the lessons of Labour’s technology strategy board, where private sector leadership and real operational independence have helped to contribute to its considerable success? Given non-governmental organisations’ role in shaping all parties’ policies on this issue, will the Secretary of State at least consider allowing an NGO representative to join in the work of the advisory board that he proposes to set up?

Will the Secretary of State tell the House why the bank will be barred from raising its own finance until 2015 at the earliest? What does he say to the CBI, which made it clear at the time of the Budget that the investment

“is welcome, but the bank should have powers to borrow from the outset to give investors confidence.”

Has the Treasury imposed this rule? If so, is that not another case of the Government allowing their preferred reckless approach to deficit reduction to take priority over the investment in jobs and growth that would make it easier to get the deficit down?

Can the Secretary of State confirm that, as of today, he does not even know whether the activities of the green investment bank will be on or off the public balance sheet? And is it not essential that that is clarified at the earlier possible opportunity? Does he not recognise that denying early investment in fledgling green industries will hinder their ability to create and expand into new markets? Does he agree that, above all, the UK needs long-term investment in the innovative, entrepreneurial companies that have the potential to become the pace setters and global market leaders of the future?

Does the Secretary of State recognise the risk that the available funds could easily be absorbed by major energy supply companies—companies that, relatively speaking at least, have access to capital—which would invest largely in the installation of established technologies, often supplied by overseas companies? Does he recognise that that risk could prevent UK-based innovators and suppliers from winning market share and developing the established technologies of the future? What assurances can be given that the bank will focus not only on the areas of activity named by the Deputy Prime Minister yesterday, but on the less mature technologies that remain unmentioned, such as solar and marine energy?

There is clearly a balance to be struck between major infrastructure investment and all the activities of innovative companies, but will the Secretary of State tell us how he intends to ensure, in the legislation that will set out the green investment bank’s remit, that he will strike the right balance between those activities?

Finally, given the huge uncertainty and inconsistency that the Government have shown over the past year, can the Business Secretary set out how he intends to create greater confidence in green industry companies about the future direction of Government policy? There was precious little about that in the Government’s growth plan, but without that market confidence none of the high hopes that we all share for the green investment bank will come to fruition.

[Mr Speaker]

Order. Before I ask the Secretary of State to reply, I make the point that I allowed the right hon. Member for Southampton, Itchen (Mr Denham) to reach his conclusion because I saw that he was getting towards it, but we cannot again have a situation in which the response to a statement is longer than the statement.

[Vince Cable]

I take it that, despite the slightly carping tone of the response, the Opposition do support this proposal. It is important that they support it, because the concept of the green investment bank is that it should be an enduring institution that lasts through successive Parliaments. It is important that we have all-party support for what we are doing.

The right hon. Member for Southampton, Itchen (Mr Denham) seems to be claiming credit for this policy, which leaves me with a very simple question: why, in 13 years, did Labour not do it? The demand was there and there were institutional finances looking for such an institution, but it never happened. Why did the Labour Government not do it? They did have a financial vehicle to fund infrastructure investment: the private finance initiative. The whole point about PFI was that it was off balance sheet and the debt was hidden. It was not independently assessed as the green investment bank will be, and as a result numerous institutions, including hospitals and schools, have been lumbered with debts that they cannot manage. Our proposal is a soundly based financial institution leading with equity risk capital, which is what this kind of investment requires.

The Government present this, and I am a Business Secretary proud to lead on such an environmental initiative. The right hon. Gentleman referred to something I said earlier about carbon objectives. We must obviously strike a balance between promoting new green industries and jobs, which are absolutely crucial for growth, and taking proper account of energy-intensive industries, several of which are well represented on the Opposition Benches, such as the steel, ceramics and chemicals industries. Of course we must take those into account and manage the process by which the expansion of green industries takes place alongside proper regard for those industries. I am surprised that he is so insensitive to an important sector of industry that should be of concern to many of his Back Benchers.

The right hon. Gentleman asked about the timing of legislation. Legislation will be initiated once the state aid process has been completed, and we hope that that will take place rapidly.

The right hon. Gentleman asked specifically about less mature technologies, and he is quite right that there is a spectrum of activities of varying degrees of risk and maturity. There are institutions, including the excellent technology strategy board, to take on early stage technologies, and there are bodies such as the Carbon Trust to deal with early stage activities. The green investment bank has a specific role and mandate for projects that are high risk, but none the less mature and ready for commercial investment.

The right hon. Gentleman asked about the scale of the activity. I do not think that most people would regard £15 billion of investment as trivial, and such an undertaking by the end of this Parliament is very ambitious. He says, “Well, why don’t you just borrow more?” But that is the problem. We have an exceptionally high level of debt in relation to our GDP, and it is a painful process working it down, which is what the Government have been doing. It is frivolous and irresponsible to say that we can deal with those problems simply by borrowing more and adding to the debt.

Department for Business, Innovation and Skills (Performance)

Debate between Vince Cable and John Bercow

Wednesday 2nd February 2011 Commons Chamber

[Mr Speaker]

That is quite long enough.

[Vince Cable]

There are indeed many wise words in that book, which is why it has been reprinted several times—it retains its relevance.

Let me move on from the general picture of de-industrialisation to the specifics. Let me also deal specifically with the Pfizer closure, which is a serious matter and an extremely disappointing development. The implication in the remarks of the right hon. Member for Southampton, Itchen was that the Government had somehow or other failed to head off a closure, which could have been avoided. Let me therefore talk him through the sequence of events, which is also important to many colleagues behind me, and explain what we are doing about the problem.

We were first notified about this at the beginning of last week—on 28 January. The chief executive came to London and briefed the Minister for Universities and Science, who rightly immediately asked what the British Government should do to avert the closure. The answer was that this was not a matter for British Government policy, and that the choice was not made on the basis of whether Britain was an attractive place to do business. Rather, the company was making global closures, including large closures in Dusseldorf in Germany and Massachusetts in the United States. The cycle of the company’s patents was relevant, and it was a purely commercial decision. What happened with Pfizer is offset by what is happening elsewhere in the pharmaceutical industry. Only a few weeks ago GlaxoSmithKline announced a £500 million investment, creating 1,000 new jobs directly—and much else happening in the industry is positive.

The right hon. Member for Southampton, Itchen asked me what we were doing about the situation. First, I have established a taskforce comprising Kent county council, local interests and the Department for Work and Pensions working together to look at the local labour market and what we can do to help. My ministerial colleagues are involved in the process. The Minister for Universities and Science is working with the Secretary of State for Health to see how we can relocate scientists from those research facilities into the rest of the pharmaceutical industries. We may well establish a model based on the relative success so far of Allan Cook’s efforts in the defence industry to see how best to pursue the relocation policy. However, the decision was not based on the investment climate in the United Kingdom. It was a commercial decision, and we are acting promptly in doing whatever we can to help the people who are caught up in that difficulty.

Higher Education Fees

Debate between Vince Cable and John Bercow

Thursday 9th December 2010 Commons Chamber

[Vince Cable]

I will take interventions later. You have asked, Mr Speaker, that both Front Benchers should keep their introductions brief. [Interruption.] As hon. Members know, I am very happy to take interventions, but I will take them when I have developed an argument. [Interruption.]

[Mr Speaker]

Order. The Secretary of State should resume his seat for a moment, and I apologise for having to interrupt him.

There are strong opinions on this matter, and passions are aroused. That is understood and accepted. What is not accepted by any democrat is that the Secretary of State should not receive a fair hearing. The right hon. Gentleman will be heard, and if Members are making a noise and then expecting to be called, I fear that is a triumph of optimism over reality.

[Vince Cable]

When I became Secretary of State, I invited Lord Browne to make two adaptations to the terms of reference that he had undertaken under the previous Government. The first thing that I asked him to do was to see how we could make the existing system of graduate payments more progressive and more related to future graduates’ ability to pay. He undertook to do that, and we have done further work to develop the progressivity of the system. As a result, the Institute for Fiscal Studies was able to conclude that the package that we have produced is more progressive than the existing system and more progressive than the Browne report. Concretely, what that means is that just a little under 25% of all future graduates will pay less than they do under the current system that we inherited from the Labour Government.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Speaker]

Order. The Secretary of State is not giving way for the moment.

[Vince Cable]

For the funding of universities, Lord Browne recommended—in a report that the then Labour Government endorsed, I think, in their manifesto—that there should be no cap on university fees and a specific proposal for a clawback mechanism that gave universities an incentive to introduce fees of up to a level of £15,000 a year. That was the report given to the Government. We have rejected those recommendations and proposed instead that we proceed as the statutory instrument describes. That involves the introduction of a fee cap of £6,000, rising to £9,000 in exceptional circumstances.

I will now explain the basic economics of that problem in the light of the intervention from the right hon. Member for Blackburn (Mr Straw).

--- Later in debate ---

[Vince Cable]

rose—

[Mr Speaker]

Order. Just before the Secretary of State replies, let me say that an enormous number of Members wish to speak in this debate. I want to accommodate as many as possible. From now on, interventions must be brief.

[Vince Cable]

Yes, of course I hear what the hon. Lady says about the education maintenance allowance. What I would say is that the existing system that we inherited was enormously wasteful. Large numbers of pupils received the EMA who did not need it to stay on at school. However, she is quite right to stress the fact that there are large pockets of deprivation in Britain, and her constituency in the east end of London is one of them. We understand that. The purpose of the pupil premium, which is being introduced into the school system, is precisely to address that problem of giving support to schools and pupils in areas of high deprivation.

--- Later in debate ---

[Vince Cable]

Opposition Members who follow these arguments closely have often made the following argument. “We acknowledge,” they say, “that universities will continue to have high levels of income, but you’re replacing public funding with private funding, and this is”—in some sense—“ideological.” [Hon. Members: “It is!”] That is a debating point, and I am happy to take it on. At present, roughly 60% of the income of universities comes from the public sector, through different funding streams. The rest comes from private sources—something that the previous Government were trying to encourage. That will be reversed: in future, roughly 40% of university funding will come from the public sector and 60% will come from the private sector. I am keen to encourage more private funding of universities, which is why I have spoken to the director general of the CBI. He is approaching all his members to ensure that we have a significantly higher level of employer support for apprenticeships, sandwich courses and other—[Interruption.]

[Mr Speaker]

Order. First, there is still far too much noise in the Chamber. Secondly, when the Secretary of State has indicated that he is not giving way, Members must not continue standing. That is the situation.

[Vince Cable]

I hope that not too many Opposition Members would regard additional funding from employers as somehow ideologically contaminated, because we will need more resources going into universities, not less, and that is what we are doing.

--- Later in debate ---

[Vince Cable]

That is a highly pertinent question in the light of the experience of the last Government, who had a two-tier system. There was a migration of all universities to the top of the range. They operated, in effect, like a cartel, and that must be stopped. It must not happen again, and there are several means by which that will happen. First, any university that wants to go beyond £6,000 will have to satisfy very demanding tests of access for low-income families, including through the introduction of the scholarship scheme. Newer institutions, particularly further education colleges providing accredited courses, will drive down the cost of high quality basic teaching. If universities defy the principle of operating on a competitive cost basis, it may well be necessary to introduce additional measures to observe the principle that my hon. Friend has correctly summarised, which is that—

[Mr Speaker]

Order. I apologise for interrupting the Secretary of State, but I must ask him to address the House. His natural courtesy causes him to look at the Member to whom he is responding, but I want the whole House to hear what he has to say.

[Vince Cable]

I am simply saying that there are potentially other mechanisms by which universities that exceed the £6,000 level will not be allowed to behave in the way that they behaved under the last Government.

--- Later in debate ---

[Vince Cable]

No, I am not giving way.

[Mr Speaker]

The Secretary of State is not giving way at the moment and must be allowed to continue—[Interruption.] Order. He must be allowed to continue his argument.

[Vince Cable]

As well as the measures we have taken to improve access for low-income families, as opposed to the separate problem of low-income graduates, we have made it clear that additional grant provision will be made, as I said in response to an earlier intervention. In addition, universities wishing to move to a higher threshold will have demanding tests applied to their offer requirements in respect of access.

It is worth recalling the situation that we have inherited. There are a lot of crocodile tears from Labour Members, so let me remind them that social mobility, judged by the number of people from disadvantaged backgrounds getting into Russell group universities, has deteriorated over the last decade. There are currently 80,000 free school meal pupils, of whom only 40 made it to Oxbridge —40 out of 80,000. That is fewer than from some of the leading independent schools. That is a shameful inheritance from people who claim to be concerned about disadvantaged backgrounds—and we intend to rectify it.

Let me conclude in this way. I do not pretend—none of us pretends—that this is an easy subject. Of course it is not. We have had to make very difficult choices. [Interruption.] Yes, we have. We could have taken easier options, but we were insistent that at the end, we would make a substantial—

[Mr Donohoe]

On a point of order, Mr Speaker. Did not the Secretary of State say that he was going to give way? Why is he not doing so?

[Mr Speaker]

I understand what the hon. Gentleman has said, but that is not a point of order; it is a point of frustration.

[Vince Cable]

rose—

[Vince Cable]

I have given way to several of the hon. Gentleman’s colleagues and several of my own, and I now wish to summarise where we are.

As I was saying, there have been difficult choices to make. We could have made a decision drastically to cut the number of university students; we could have cut student maintenance; we could have cut the funding to universities, without replacing it. Instead, we have opted for a set of policies that provides a strong base for university funding and makes a major contribution to reducing the deficit, while introducing a significantly more progressive system of graduate payments than we inherited. I am proud to put forward that measure to this House. [Interruption.]

[Mr Speaker]

Order. [Interruption.] Order. [Interruption.] Order. I understand the passions, but the more noise, the greater the delay and the fewer the number of Members who will have a chance to contribute. I want Back Benchers to have the chance to contribute and I appeal to right hon. and hon. Members to help me to help them.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 14th October 2010 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Has the Secretary of State also done a U-turn on his views of Sir Philip Green, who gave advice about non-departmental public bodies? Once upon a time he said, talking about Sir Philip Green, that he had

“no time for billionaire tax dodgers who step off the plane from their tax havens…and have the effrontery to tell us how to…run our tax policies”.

Has he changed his mind on that as well?

[Mr Speaker]

Order. We do not need a character assessment of Sir Philip Green, what we require is comments on the subject matter of the question. The Secretary of State is welcome to volunteer them, otherwise we will move on.

[Vince Cable]

I am certainly happy to answer. I have not changed my views—I think Sir Philip Green should pay his taxes in the UK.

--- Later in debate ---

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

Does the right hon. Gentleman agree that if a green investment bank is to be successful, it must embrace all the science and technology available in our country? Much of that is seated in our great universities—we have over 120—but has he not already sold the pass? There will be substantial cuts in university budgets, which will affect towns, cities and innovation in this country.

[Mr Speaker]

Order. Can we focus on the green investment bank?

[Vince Cable]

You are right, Mr Speaker, that we have strayed a little.

The hon. Gentleman chaired the Select Committee on Children, Schools and Families for many years, so I am sure he knows that in my statement on Tuesday, I spoke about the implication of the teaching grant for student-graduate contributions. The implications for research remain to be seen till next week.

--- Later in debate ---

[Vince Cable]

I have always enjoyed—[Interruption.]

[Mr Speaker]

Order. I want to hear the Secretary of State’s reply.

[Vince Cable]

I have always enjoyed joining the hon. Gentleman in the Division Lobby, and I have done so on many occasions. I have also enjoyed his humour. If he had followed my writings as closely as he claims to have done, he would have realised that I was advocating the introduction of private capital into Royal Mail about six years ago.

Higher Education and Student Finance

Debate between Vince Cable and John Bercow

Tuesday 12th October 2010 Commons Chamber

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

rose—

[Mr Speaker]

Order. There is a great deal of interest in the Secretary of State’s statement, and I appeal to Members leaving the Chamber to do so quickly and quietly, because I want to hear the Secretary of State—[Interruption.] I am always grateful to you, Mr Pound, for your attempted assistance.

[Vince Cable]

With permission, Mr Speaker, I would like to make a statement on the future funding of higher education and student finance, in the light of the report published today by Lord Browne’s independent inquiry.

Lord Browne was asked to undertake his review in November last year. The review was set up by the Labour Government on a cross-party basis, and that is how we wish to proceed. I and the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), thank Lord Browne and his review panel. The Government endorse the main thrust of the report, but we are open to suggestions from inside and outside the House over the next few weeks before making specific recommendations to Parliament, with a view to implementing the changes for students entering higher education in autumn 2012. More detail will be contained in next week’s spending review on the funding implications, but as a strategic direction the Government believe that the report is on the right lines.

Browne acknowledges that

“the current funding and finance systems for higher education are unsustainable and need urgent reform”.

The issue is how, and it has to be framed in terms of how the higher education sector contributes to the deficit reduction programme. There is also, I think, consensus that there should be no up-front tuition fees for students, which would seriously deter students from low and middle-income families, and this Government strongly oppose up-front tuition fees. Indeed, we share Lord Browne’s conclusion that we should extend exemption from up-front tuition fees to part-time students—currently 40% of the student population—who have been unfairly discriminated against hitherto.

The question, then, is how much the graduate contributions for tuition should be. We are considering a level of £7,000. Many universities and colleges may well decide to charge less, because there is clearly scope for greater efficiency and innovation in how universities operate—two-year ordinary degrees are one approach. Exceptionally, Lord Browne suggests that there should be circumstances under which universities can price their courses above this point, but he suggests that this would be conditional on demonstrating that funds would be invested in securing a good social mix with fair access for students from less-privileged backgrounds, and in raising the quality of teaching and learning. We will consider this proposal carefully.

We believe it essential that if the graduate contribution is to rise, it should be linked to graduates’ ability to pay. On average, graduates earn comfortably more than £100,000 over their lifetimes compared with non-graduates, but not all graduates benefit in this way. Some choose socially useful but modestly paid or unpaid work, which may include time spent bringing up a family. At present, the graduate contribution acts too much like a poll tax, and is not fair.

I therefore asked Lord Browne specifically to look at progressive solutions to the problem, and he has come up with persuasive proposals to deal with it. He suggests a £21,000 graduate income threshold before any payment is made—as against £15,000 at present—and that it be linked to average earnings. He also suggests that a real rate of interest should be paid, but only over that threshold. The effect is striking: 30% of graduates would pay less from their lifetime earnings than they do under the existing system. The top third of graduate earners would pay more than twice as much as the lowest third. That is fair and progressive. The Government broadly endorse that approach, and we will examine the details of implementation. The principle of needs-blind admission to universities must remain central.

The cost of university education to individuals and the state reflects living costs as well as tuition costs. The Browne report makes some constructive suggestions. We will make detailed proposals that will not only make it attractive for students from families of modest means to go to university, but be fair and affordable, including by exempting the poorest students from graduate contributions for some or all of their studies.

Lord Browne considers alternatives, including a graduate tax, which I believe the new leader of the Labour party favours. [Interruption.] I have consistently argued for a progressive contribution, which we are now delivering. Some key features of a progressive graduate contribution would incorporate the best features of a graduate tax. It would be collected through the pay packet at a rate of 9p in the pound above the £21,000 threshold and, combined with a real interest rate, as Browne recommends, it would be progressive and related to ability to pay. However, Browne identifies serious problems with what he calls a “pure” graduate tax. He concludes that the proposal is simply unworkable.

If there are any lingering doubts among those on the Opposition Benches, I strongly recommend that they read the open letter from the new shadow Chancellor to the new Labour leader three weeks ago, which reads:

“Oh, and for goodness’ sake, don’t pursue a graduate tax. We should be proud of our brave and correct decision to introduce tuition fees. Students don’t pay them, graduates do, when they’re earning more than £15,000 a year, at very low rates, stopped from their pay just like”—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Secretary of State, but I want to hear every word of his statement, and every Member should want to do the same.

[Vince Cable]

I do believe, moreover, that we need to look beyond the graduate population. Some 55% of young people do not go to university. We must not perpetuate the idea, encouraged by the pursuit of a misguided 50% participation target, that the only valued option for an 18-year-old is a three-year academic course at university. Vocational training, including apprenticeships, can be just as valuable as a degree, if not more so.

Finally, there is a challenge to us all to promote a long-term sustainable future for higher education. This has been a difficult issue for all parties in the House. Those on the Opposition Benches have ranged between early advocates of a graduate contribution, such as the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) and the new shadow Chancellor, through to those implacably opposed to change and to the current Labour leadership, who have apparently embraced a graduate tax. The Conservatives initially campaigned against graduate contributions, but reversed their position. My own party consistently opposed graduate contributions, but in the current economic climate we accept that the policy is simply no longer feasible. That is why I intend, on behalf of the coalition, to put specific proposals to the House to implement radical and progressive reforms of higher education along the lines of the Browne report.

[Vince Cable]

May I welcome the right hon. Gentleman to his new post? He was a much respected Minister in the previous Parliament and was regarded as a man of considerable integrity, mainly because of his resigning from the Blair Government over the Iraq war. Whatever our differences, he will be respected for that decision.

I should be interested to find any quotation marks indicating that I have ever advocated a pure graduate tax. In the South Bank university speech, I advocated a progressive graduate contribution. That is what this statement is all about.

The thrust of the right hon. Gentleman’s comments related to deficit reduction—a problem on an enormous scale that we inherited from him and his colleagues. May I remind him that according to the analysis conducted by the Institute for Fiscal Studies, my Department—the one that he shadows—was, under a Labour Government, confronting cuts of 20% to 25%. About 70% of that budget is for higher education. He and his colleagues have already said that they do not accept the cuts in regional development agencies and they do not accept cuts in science. They were therefore planning to make massive cuts in the university teaching budget. It is just sheer hypocrisy to stand up here and tell us—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Secretary of State. I know that feelings are running high on this subject—[Interruption.] Order. The more noise there is, however, the slower progress will be. Very large numbers of Members wish to participate. I want to help the House, but the House has to be prepared to help itself.

[Vince Cable]

I repeat that Labour Members, who landed the country in this enormous deficit problem, have to begin to spell out what it is that they would cut. It would include universities; let us be under absolutely no doubt about that.

The right hon. Gentleman had the extraordinary nerve to talk about building a future on debt. I and many Members will recall my warning the former Prime Minister five, six or seven years ago about the dangerous escalation of private debt in this country, which has led to British households having more debt in relation to their income than those in any other country in the world. This is what we inherited. He and his colleagues introduced a system of tuition fee funding that is built on debt. They introduced a system of repayment over 25 years; we are extending that, potentially, to 30 years. What is the fundamental objection in terms of personal debt? The right hon. Gentleman has given no convincing explanation of what alternative he is recommending.

I think we need to get to the bottom of this. The right hon. Gentleman did get around to talking abut the graduate tax. Is that now the policy of the Labour Opposition, or is it not? We know that the shadow Chancellor is opposed to it, and that his leader is in favour of it. The right hon. Gentleman is sitting uncomfortably in the middle. What is his position?

The right hon. Gentleman says that the policy recommended by the Browne report, which we have endorsed in outline, is hard on middle earners. Let us confront that proposition. We inherited a system that effectively amounted to a poll tax. That was the way in which the student tuition fee system operated. We required Browne to produce proposals for a progressive formulation. Such a progressive contribution would not have come about if this Government had not intervened and asked Browne to produce proposals. That is the commitment that we have made to middle earners, many of whom will not have to pay the full rate of tax.

Let me read the right hon. Gentleman a comment made by the independent Institute for Fiscal Studies. Opposition Members frequently quote its views, as they did in the aftermath of the Budget earlier this year. The IFS said that

“those in the bottom 30% of lifetime earnings would actually pay back less than under the current system”—

that is, the system that the right hon. Gentleman operated. Only the highest-earning 30% of graduates would pay back the full amount of their loans. That is the progressive system with which we are identified, and with which the previous Government had no intention of proceeding.

Finally, let me confront the pledge, the promise, that my colleagues and I—[Interruption.] Yes, I am confronting that issue: the issue of the pledge that my colleagues and I undertook to implement. In the current circumstances, we cannot implement it. I fully accept—[Interruption.]

[Mr Speaker]

Order. The Secretary of State must be heard. Members have challenged him. He is dealing with the point according to his own lights, and the House must hear him.

[Vince Cable]

As I was saying, I fully accept that, but let me explain. I believe that Members in all parts of the House will share this experience. Like many of them, I was the first person in my family to stay at school beyond the age of 15. I went to university free of charge, with no fees or maintenance costs to pay. They were paid for me by the state.

Like many Members, I wanted to ensure that my children’s and my grandchildren’s generations enjoyed that free system of university education. In an ideal world, that is what we would do, but we are not in an ideal world. We are in a world in which we have inherited a massive financial mess. We have come to terms with reality, and it is time that the right hon. Gentleman and his friends did the same.

--- Later in debate ---

[Vince Cable]

As I explained earlier, when the previous Government put in place a substantial increase, numbers initially fell before subsequently recovering. As I said in response to earlier questions, it is not the job of the Government to be prescriptive about numbers. I return to the point that I made at the outset: there is a danger of looking at universities in isolation. There are many further education options for people post-18, including apprenticeships and vocational training. We have to treat all those on their merits and give them equal status. The number of people going to university is not, in itself, a useful measure of anything.

[Mr Speaker]

Order. I am grateful to the Secretary of State and colleagues for their co-operation.

Oral Answers to Questions

Debate between Vince Cable and John Bercow

Thursday 3rd June 2010 Commons Chamber

[Vince Cable]

The language of “reprieve” is not quite right. All the RDAs will change their nature; they will become local partnerships.

[Mr Speaker]

Order. May I very gently say to the Secretary of State that he must turn to address the House?

[Vince Cable]

What I said is that Yorkshire, together with the north-east, the north-west and the west midlands, has particular structural problems that do need to be addressed.

--- Later in debate ---

[Mr Speaker]

The Secretary of State will provide one brief reply.

[Vince Cable]

We have indeed made large economies, along with the rest of Government, and we had to do so. Had we not met the nature of the economic crisis that we now face across Europe, the cost of capital would have risen, causing even further difficulties for business. I have already told the hon. Lady about the increase in apprenticeships, and high-value engineering is clearly a major target for that.