Oral Answers to Questions
William Bain Excerpts(9 years, 8 months ago)
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Vince Cable
Of course we condemn threats to the rule of law. I simply point out that the level of strikes in this country is the lowest it has been for a generation.
Mr William Bain (Glasgow North East) (Lab)
T2. Has the Secretary of State seen this week’s report by Open Europe, which indicates that unless rights at work in this country were to be completely destroyed, leaving the European Union would cause permanent damage to the British economy? Is not the real risk to businesses and workers at the next election the United Kingdom Independence party-Tory alliance that would destroy our place in the European Union?
Vince Cable
I am beginning to recognise a theme, albeit a very welcome one. I do not wish to spoil the harmony on the Government Front Bench, having worked very well with my Conservative colleagues on restoring the economy, but we happen to disagree fundamentally on the future of Europe.
Oral Answers to Questions
William Bain Excerpts(9 years, 10 months ago)
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Nick Boles
What I hope to hear from the right hon. Gentleman is whether that pledge, which we have costed on a reasonable basis, received the approval of the shadow Chancellor. My understanding is that the shadow Chancellor has not approved the approximately £700 million of extra spending, entirely unexplained, that it would cost to support that ambition. The Government are very clear what our ambition is. We will create 3 million new apprenticeships in the life of the next Parliament. Those apprenticeships will be for all people who would benefit from them. Unlike the Labour party and the hon. Member for Coventry North West (Mr Robinson), we do not discriminate against people over the age of 24.
Mr William Bain (Glasgow North East) (Lab)
4. What estimate he has made of the contribution net trade will make to GDP over the next four years.
The Minister for Business and Enterprise (Matthew Hancock)
Our goal is for exports to reach £1trillion by 2020.
Mr Bain
I am grateful for the Minister’s answer, but last month the Office for National Statistics said that exports had remained largely flat for the past four years, and the Office for Budget Responsibility and the British Chambers of Commerce both downgraded their forecasts for net trade this year, so can he confirm that with this failure on economic rebalancing, his targets for Britain to double our exports to £1 trillion by 2020 and to get 100,000 more firms exporting from Britain will be missed?
Matthew Hancock
It is a pity to hear the Opposition setting their face against the desire to double exports to £1 trillion. Of course, the eurozone on our border is in deflation and has had a series of recessions over the past four and a half years. Over the past three months our trade deficit has narrowed, so things are improving. This is undoubtedly hard work, but it is hard work that we will pursue.
Nick Boles
The level of creation of apprenticeships in my hon. Friend’s constituency is fantastic, but more can always be done. The best possible advocates for apprenticeships in schools are the people who have just finished doing them. They are discovering that they are getting great jobs with better pay than their peers. Getting recently graduated apprentices back to their schools to talk to young people about the choices they are about to make is the most powerful way of persuading them of this opportunity.
Mr William Bain (Glasgow North East) (Lab)
T2. Five hundred of the City Link redundancies are in Scotland. Does the Secretary of State share the outrage of the Scottish people at the way the workers have been treated and the fact that the taxpayer is expected to pay for part of the multimillion pound redundancy bill? What is he doing to help the workers and their families, in Scotland and across the UK, who have been devastated by this news?
Vince Cable
The taxpayer is, of course, always responsible for statutory redundancy and this case is no different. I have talked to the head of the union and the secretary-general of the Trades Union Congress on how to deal with the implications for the labour market. The labour force is very widely distributed across the UK with no major concentrations, but where there are, and if there are people who really need help with finding employment and reskilling, we are certainly willing to do the maximum we possibly can to help.
Assistive Technology Sector
William Bain Excerpts(9 years, 11 months ago)
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Mr William Bain (Glasgow North East) (Lab)
We celebrate the UN international day for disabled people tomorrow and we will consider what help and support the Government should be offering small and medium-sized manufacturing enterprises, such as those in the assistive technology sector, in tomorrow’s autumn statement, so it is fitting that we should have a debate on the role of assistive technology and its empowering effects on disabled people in our society.
The UK is the world leader in the assistive technology sector, comprising 1,000 businesses and other enterprises, providing approximately 1,500 products to students with disabilities, helping to employ nearly 10,000 people in education and other connected sectors, and exporting technology across the world. A recent study by the Helen Hamlyn Centre for Design at the Royal College of Art, in partnership with BT and Scope, found that digital technology has the potential to change radically the lives of disabled people, but that they are a fifth less likely to be online than their peers. Scope’s partnership with BT provides disabled people with new opportunities to stay in touch with friends and family and help ease that digital exclusion, which can affect disabled people’s life chances and their state of well-being. That is done not only with new devices, but by adapting existing devices through, for example, developing new apps or open source software or hardware to cater for individual needs.
Kate Green (Stretford and Urmston) (Lab)
I congratulate my hon. Friend on bringing forward this important subject for debate this week. Given the beneficial effect he has highlighted of assistive technology, both for individuals and for our economy, does he agree that it is regrettable that the Government appear to be downgrading their interest in the subject, with their decision no longer to fund the Foundation for Assistive Technology to produce its independent report?
Mr Bain
Very much so—I am sure my hon. Friend will make an outstanding Minister for disabled people in a few months, and I look forward to working with her and championing the interests of disabled people. I think—I will develop this later—that what has happened reflects an attitude towards the needs of disabled people which sadly followed on from those terrible remarks by Lord Freud.
What we need from Government is policy that encourages the development of assistive technology, not discourages it. However, the sector feels neglected under this Government, with weaknesses in procurement practices in the NHS, responsibility divided between five different Ministers in three different Departments, and legislation affecting the industry being driven by a fourth Department.
In this debate, we should also thank Guide Dogs for the work that it does in promoting audio-visual final destination and next-stop announcement technology on buses. Many Members have had representations from constituents looking for that form of assistive technology to be installed on all new buses across the UK to boost accessibility, which would remove a barrier that many sight-impaired people experience when seeking to take up work.
Online services such as shopping or banking are vital for disabled people, but lack of accessibility remains a key issue. Most sites comply with accessibility standards, but the Scope study found that some disabled people still struggle to use those services, as codes and standards on websites do not meet accessibility needs. Scope has recommended measuring online services by how responsive they are, focusing on the person not the system, through, for example, examining how long it takes a disabled person to complete tasks online compared with non-disabled users of the same site. If it takes longer for a disabled person to use the service, the service provider must do more to make the site equally accessible. That is where assistive technology can really help.
One of the first Bills I voted on after being elected to this House was the one that became the Equality Act 2010, which creates duties on the Government and those providing services to the disabled, or hearing or sight-impaired people, or people with individual needs in learning, including the obligation to make reasonable adjustments to workplaces, places of study or elsewhere, to allow for the widest possible inclusion of people of talent in our universities, colleges and workplaces.
I experienced first hand, as a university lecturer in Glasgow and London for a decade, how essential the support provided by assistive technology to students’ learning experience is. It is a necessity, not a luxury. Many universities have improved greatly the resources available to students with particular learning needs, but it is wrong for the Government to shift the burden more and more on to universities, as the regulations before Parliament on disabled students’ allowances run the risk of doing. Government should work with universities to ensure that more students from backgrounds where there are special learning needs can prosper in higher education, not wash their hands of responsibilities to promote and deliver inclusive education under the Equality Act and article 24 of the UN convention on the rights of persons with disabilities.
Although the regulations on disabled students’ allowances would apply only to students and universities in England, they would have effects on UK-wide supply chains for companies involved in assistive technology manufacturing and development. That is something that, as a member of the Select Committee on Business, Innovation and Skills, I am extremely concerned about. All Members of this House should be concerned in this week of all weeks about additional costs for disabled people that could cause additional hardship for a section of the community which already feels that more acutely than many other people.
To be fair, the Minister for Universities, Science and Cities—I thought perhaps he was going to reply to this debate—responded to a strong, evidence-based argument earlier this year, when he decided to postpone the changes to disabled students’ allowances until 2016. He knows that the National Union of Students provided strong evidence showing that half of disabled students get their assistive technology through funding they receive through DSA, compared with only 8% of non-disabled students relying on allowances.
I hope that the Minister for Skills and Equalities will respond in a similar way to the representations that have been made on the regulations before Parliament. Regulation 10 of the Education (Student Support) (Amendment) Regulations 2014 changed the law to provide that DSA is only available in respect of expenditure on a computer minus a contribution by the student of £200. With 78% of disabled students surveyed by the NUS reporting owning a laptop, rather than an iPad, desktop computer or a MacBook Pro, it is effectively a tax of £200 per student on laptops payable next September for new students who qualify for DSA.
Many students are working long hours as well as studying at university, because for them, every penny counts. A look at any price comparison website will reveal that many popular brands of laptop computers are available for less than £200, but would not now qualify for DSA grants under those regulations, placing the obligation either directly on students themselves or on strained university budgets under this Government. Either universities will have to make the financial commitment themselves in pursuance of their duty to make reasonable adjustments under the Equality Act, or affected students will face the additional costs for equipment that is vital for them to be able to study properly.
It is grossly unfair that the Government have proven to be so out of touch in drawing up the new rules and bringing in a £200 laptop tax, even though the average expenditure per student has fallen over the past eight years. I urge them to take the opportunity presented by this debate to reflect again, or the Government who were the authors of the pasty tax and the granny tax will have a further problem with their legacy by inflicting an unfair £200 laptop tax on thousands of students with disabilities or acute learning needs who are beginning their courses next September.
Even more extraordinary is the Government’s position in the explanatory memorandum to the regulations, confirmed in parliamentary written answers to me by the Minister for Universities, Science and Cities, that the laptop tax would have no impact on business, charities or the voluntary sector. The views expressed to me by the assistive technology sector—by individual companies and by the British Assistive Technology Association—have been somewhat different from the complacent attitude shown by the Minister. It is striking that the Minister believes that the imposition of this new laptop tax would have no impact on the ability of students with disabilities or particular learning needs to attend university. That is not the view strongly expressed by the National Union of Students. There has been no answer from the Government about how the laptop tax would be paid or collected. It is the case that 83% of students purchase their laptop through their DSA payments and 98% of students told the NUS that that was the source of their funding for acquiring supportive software.
We have no details about what support the Government will provide to universities in cases in which a student faces particular financial hardship. We have no clarity on what will happen in the case of postgraduate students who would be eligible for DSA but no other financial support. We have no information about the Government’s plans for bulk purchasing, which they have previously floated as a solution to the problem that they have now got themselves into.
The Prime Minister once said that we should judge a Government by how they treat the most vulnerable. Disabled students have all the talent in the world and contribute billions of pounds in tax revenues to the economy when they graduate. They deserve a Government who are on their side, not acting against their interests with a £200 laptop tax being sneaked through the House without a substantive vote.
Assistive technology companies are one of our new economic success stories in manufacturing, contributing £55 million a year in tax revenues to the Exchequer. The 21 small businesses directly involved, some of which have been scathing about the lack of proper Government consultation and engagement on the proposal, and the wider supply chains that they support deserve better from Government than this. I urge the Minister to use the opportunity presented by the debate this week to reflect on what is right for disabled students and our universities, to support our small and medium-sized manufacturers in an important industrial sector and to scrap the laptop tax before it causes further financial hardship to thousands of disabled people across the country.
The Minister for Skills and Equalities (Nick Boles)
It is a great pleasure to serve under your chairmanship again, Mr Howarth.
I congratulate the hon. Member for Glasgow North East (Mr Bain) on securing this debate on a subject about which he is clearly very passionate. He is of course right to say that it is the responsibility of a fellow Minister in the Department for Business, Innovation and Skills, who unfortunately had another commitment today, which is why I am responding to the debate. It is fortuitous, therefore, that I have two advantages in coming to a subject on which I am otherwise not an expert. First, my Parliamentary Private Secretary is my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who has a great and equal passion for support for disabled people to make the most of their abilities and to be offered as many equal opportunities as it is technologically feasible to offer them in their lives. Secondly, by a bizarre coincidence—I was not even aware that I would be responding to the debate until quite recently—I spent yesterday evening, after returning home from voting in the House, filling out a disabled students’ allowance application form for someone in my family who has acute dyslexia and dyspraxia and scotopic sensitivity. I did not even know what that was until he told me, but it means that he is in a position to apply for some support with his studies. Therefore, although I am not an expert, I am entirely sympathetic to the cause raised by the hon. Gentleman and advocated passionately and consistently by my hon. Friend.
I entirely accept that this country is lucky in the range of businesses, charities and social enterprises that are active in trying to help disabled people to maximise their potential and gain access to all the opportunities on offer in education and employment. We are lucky in the range of innovation that is taking place—much of it is driven by this country—in improving technologies, inventing entirely new technologies and, as the hon. Gentleman said, creating adaptations to existing technologies that make them more accessible to people.
The hon. Gentleman’s core point, of course, is a direct attack on a proposal that the Government have brought forward on the disabled students’ allowance. He makes his argument with great passion, but as Members of his party and, even more, Front-Bench Members of his party ever do, he entirely fails to address the fundamental issue: the budget deficit, which remains very high and was the largest ever seen in peacetime in a western country, and the level of expenditure on the disabled students’ allowance in the years since this Government came to office. An increase did not take place only under the profligate chancellorship and premiership of the soon-to-be former right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). A growth in expenditure has taken place under this coalition Government, who are pledged to try to bring the budget deficit down. To be clear, expenditure went up from £87.8 million in 2009-10 to £125 million in 2011-12. That is not the record of a penny-pinching or parsimonious Administration who are seeking to deny support to disabled people, or to withdraw access to technologies that would assist them. That is the record of a Government who are doing everything in their power to support vulnerable people but who nevertheless need to find economies.
Nick Boles
I am afraid that I will not give way. The hon. Gentleman had his go and I am now responding to his very full speech.
This is the challenge we face: how do we continue to support disabled people in gaining access to education, employment and all the other opportunities of society while nevertheless ensuring that expenditure does not continue to increase by so great an amount? Disabled students’ allowance expenditure has increased by more than 30% in the space of less than three years and that is simply not sustainable.
Fortunately there have been further reforms—also opposed by the Opposition—to the state of university finance. Those reforms have dramatically improved the financial position of every university in the country by giving them access to higher tuition fees, funded by a system of heavily subsidised student loans. Universities are now in a dramatically different position from the one they were in when we came into government in 2010, so to expect them to make a contribution out of their broader, much improved resources to support disabled students is entirely reasonable.
Universities are benefiting from the tuition fees paid by those students; they are direct beneficiaries of the funding provided by those students; so to expect universities to play some part in discharging the responsibility to those students—not the whole part, because the Government will continue to play an important role and the disabled students’ allowance will continue to provide a great deal of the necessary support—by means of a further contribution is entirely reasonable.
The hon. Gentleman would have much more chance of making a persuasive case if he had an alternative plan for how to stop the growth in a budget that has increased by 30% in less than three years. If he came forward with such a plan, or indeed if any Labour Front-Bench Member on any area of government activity came forward with any plan to save any pound of public expenditure—we have not heard such plans from him, or from the hon. Member for Stretford and Urmston (Kate Green) in her area of activity, or from any Opposition Front Bencher—it might well be possible to look again at the Government’s proposals. However, until we hear such a plan, it is incumbent on him to explain why it is unreasonable for us to expect universities to make a greater contribution to the support for disabled people that we all passionately believe in.
Oral Answers to Questions
William Bain Excerpts(9 years, 12 months ago)
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Mr Vaizey
There are two answers to that question. The first is that we have sat down with developers and network providers to work on a code of conduct to ensure that new developments get broadband. Secondly, it is worth reminding hon. Members, including my hon. Friend, that this is a difficult engineering project. We cannot deliver broadband with the wave of a wand, but we are ahead of schedule in almost all areas.
Mr William Bain (Glasgow North East) (Lab)
9. At a time when the Government are making more and more services digital by default, does the Minister believe it is acceptable for 1.2 million homes across the UK, including 113,000 in Scotland, still to have no access to broadband whatsoever? What are the Government doing putting back their timetable for superfast broadband? Should we not have universal coverage now?
Mr Vaizey
All homes do have access to broadband; 97% have access to broadband at speeds of 2 megabits; superfast broadband availability has doubled; the average speed of broadband has trebled; one in four people in this country have superfast broadband; and we have the lowest prices of the European Union big five and the United States.
Oral Answers to Questions
William Bain Excerpts(10 years ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
5. What steps the Government are taking to (a) enforce payment of the minimum wage and (b) encourage firms to pay the living wage.
Mr William Bain (Glasgow North East) (Lab)
9. What steps the Government are taking to (a) enforce payment of the minimum wage and (b) encourage firms to pay the living wage.
Ann McKechin (Glasgow North) (Lab)
16. What steps the Government are taking to (a) enforce payment of the minimum wage and (b) encourage firms to pay the living wage.
Jo Swinson
The hon. Lady is right to highlight the importance of businesses and employers paying the national minimum wage properly. We absolutely agree. We have invested extra money in enforcement and are helping more employees. Indeed, last year, £4.6 million of arrears was secured for workers who had not been properly paid. We have also increased the penalties and the resources to enforce the penalties, and we are now naming and shaming companies that offend.
Mr Bain
Two weeks ago while campaigning in my own constituency for the living wage, I met a mother who told me that her son had been offered part-time work paying just over £2 an hour. With the Office for National Statistics showing yesterday that the proportion of jobs not paying the minimum wage has increased under this Government, does the Minister not regret failing to adopt the proposal from the Opposition to increase the fine for non-payment to £50,000 so that we could have proper enforcement of the minimum wage in this country?
Jo Swinson
The key is not only increasing the fine to £20,000, but enabling that fine to be levied per worker rather than per employer. The fine, which is of course linked to the amount of arrears, covers all but three cases found over the last year. None of the others would have reached the £20,000 maximum. We will be fining employers more when they break the law, because those responsible employers who abide by the law deserve to know that those who break the law will be properly punished.
Living Wage
William Bain Excerpts(10 years ago)
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Mr William Bain (Glasgow North East) (Lab)
May I congratulate the hon. Member for Warwick and Leamington (Chris White) and the Backbench Business Committee on bringing this vital issue before the House in living wage week? It is right that this week we welcome the forward-looking approach of many employers across the United Kingdom who now pay the living wage and have more productive and happier work forces as a result. We should also pay tribute to the tireless work of living wage campaigners in the trade unions, the Churches, the growing number of food banks and in broader civic society in Scotland, in common with civic society right across the United Kingdom. They have never settled for second best and envisage a country where a decent day’s work is rewarded with a wage that can give people dignity and the chance of a better life.
It is not just in this country that the living wage movement is thriving. Although, sadly, the Democratic party suffered badly in the US mid-term elections this week, propositions for a big rise in the minimum wage were carried by voters in four traditionally Republican-voting states, meaning that a total of 14 states have this year adopted large rises in the minimum wage.
The low pay crisis, which this debate will shed new light on, means that the gap between the wealthiest and the working poor in our society is getting larger. That gap becomes a chasm when we consider what it means for child poverty. In my constituency, some 38% of children grow up in households that fall below the minimum acceptable income standards. I think of the mums who have to budget harder than any Chief Secretary to the Treasury ever will to buy new shoes for their children to wear to school. I think of the workers on completely unregulated zero-hours contracts, worrying about when they will be able to pay that heating bill which is still outstanding. I think of the mothers not able to get the child care that would mean taking a job that would leave them genuinely better off.
That picture of what poverty means for 5.3 million people in this country who are paid less than a living wage—the figure has risen by 150,000 in the past year alone—should spur all of us in this House to act. British workers are twice as likely as those in Switzerland and Belgium to earn below the low pay threshold. Wealth inequality in Britain has risen four times faster in the seven years after the financial crash compared with the seven years before it.
Low pay is not just crippling for social mobility or living standards; it is also terrible for our public finances. Some £21 billion was spent on tax credits to help 3 million working families with children in 2012-13, and the cost of in-work housing benefit claims doubled in real terms in the four years to this April. A low-pay economy is a symptom of a low-productivity, low-skilled economy. It is the young, female workers, those in lower skilled jobs, and part-time and hospitality workers who suffer most with that kind of economy, and that must change.
Across the country there are record levels of anxiety over poverty pay. According to the Joseph Rowntree Foundation, one in three people this year has said that low pay is the biggest issue affecting the country. Fewer than one in five voters expect to benefit from any increase in economic growth this year. As we know, the link between productivity and wage growth was broken some time ago and needs to be restored if we are to have a sustained rise in living standards over the next decade.
Sadly, it is no longer the case that the main route out of poverty is a job. Many people across the country juggle several part-time jobs but are still poor. Two-thirds of children in poverty are in households where someone is in work. Hourly pay is now a bigger predictor of the chance of being poor than hours worked. The Government must focus on taking a stronger approach to improving social mobility through our education and skills systems across these islands, taking action on the quality and security of the jobs created in the economy, but also being far more proactive in boosting pay rates through forward guidance on the minimum wage—as adopted by the Low Pay Commission—and expanding the coverage of the living wage to as many people as we can. We also need a combination of action through policies to boost pay, but with the support of the tax and social security system. Although rising pay cuts reliance on state top-ups of income and brings in more tax revenue, the right approach for working families on low incomes is rising pay supported by a strong tax credit system.
Richard Fuller (Bedford) (Con)
I am listening intently to the hon. Gentleman. Does he agree that no one on either Front Bench has been confident or assertive enough in spelling out what policies they can adopt to improve wages for low earners? Would he like more clarity from those on the Front Benches about what they will do with tax credits if people’s incomes rise?
Mr Bain
The hon. Gentleman raises an interesting and important point. Before his intervention I was saying that we should consider the impact of such measures on a lone parent in work. If she were to take a low-paid job—perhaps just above the minimum wage—the tax credit system effectively gives her an average hourly rate of £13 to £14. If wages paid not just by public sector employers but by the private sector increase, the tax credit system will still have an important role in topping up people’s income, but reliance on the state will be somewhat less. That will relieve pressure on the taxpayer and lead to a more affordable social security system in the decades to come.
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend accept that most people in this country do not pay taxes just to subsidise some fast food merchant or security company, and it is about time that we were better at getting that message across? When the centre right spoke a few years ago about “Broken Britain”—incidentally, I think the response from the centre left on that was inadequate—we forgot how such matters were dealt with on a corporate level, and we have to deal with that issue as well.
Mr Bain
My hon. Friend is entirely correct. The proportion of company profits paid in wages has declined in the past 15 to 20 years, but it has declined particularly in the period since the financial crisis and in the four and a half years of this Government. Companies must be forward looking if they want to retain staff and if they want staff to develop. Employees want a job that becomes a career—they want progression in that firm or that profession. Paying higher wages benefits not just the employee, but the employer. Many countries are demonstrating that.
How can we act to end the low pay crisis? First, every level of government, whether a council, a devolved Government, a regional government in England through local enterprise partnerships, or central Government, should commit to using whatever policy levers they have to advance the living wage, to show an example to the private sector and the rest of society. It was therefore disappointing that the Scottish Government yesterday rejected the Labour party’s offer in the Scottish Parliament to extend further the use of the living wage through procurement policies. I hope they will reconsider. With 264,000 women in Scotland earning less than the living wage, it was wrong for the Scottish Government to reject that practical and helpful suggestion yesterday. The living wage is too big a prize for us to be deflected by partisan considerations. People expect all politicians to use every tool at our disposal to extend it to the widest possible number of people. I hope that devolved Governments, central Government and councils use those powers and achieve precisely that aim.
Pete Wishart (Perth and North Perthshire) (SNP)
We know that Labour’s tribal hatred of the Scottish National party is part of Labour’s problem in Scotland, but does the hon. Gentleman not recognise that the Scottish Government pay the living wage to all public sector employees? They also have no compulsory redundancies. That is the SNP’s record. In government, the Labour party could not even match the minimum wage with inflation. That is Labour’s record.
Mr Bain
The hon. Gentleman knows that the hand of friendship is always extended between Labour and Scottish National party Members. I have reiterated that to him on many an occasion. It is wonderful to see him in his place, but I gently point out that Labour Members strived and sat up night after night in order to introduce the minimum wage in the first place. All my Labour party colleagues in the Scottish Parliament were asking in their proposal yesterday was for the Scottish Government to do what the UK Department of Energy and Climate Change does. I would have thought that that was a commendable approach, and I hope the Scottish Government will decide to adopt it.
Secondly, the remit of the Low Pay Commission needs to be shifted from simply setting a floor for wages to examining scope for raising low pay across the board. Different models have been suggested. We could change the commission’s remit so that it offers forward guidance on the scale of future rises in the minimum wage, or, as Labour Members have suggested, we could peg the minimum wage to around 58% of median wages by 2020.
The third tool that I ask the Government and the House to consider is incentivising employers to move to the living wage using the tax system in those sectors of the economy in which that can be afforded. The evidence is that, when employers pay a living wage, they experience long-lasting benefits in productivity and reduced staff turnover. We should use all the levers of fiscal policy. We should see what tax concessions can be given to businesses if they start paying the living wage. We should pump prime the system. I believe that employers and employees will benefit.
The fourth way to solve the low pay crisis is by making the right investments in skills to ensure that people do not remain stuck in low-paid jobs for ever. Important research from the Resolution Foundation establishes that 80% of low-paid workers never escape from low-paid work. There is therefore a premium on government at all levels, whether the UK Government, the Scottish Government or local councils, using the whole range of their powers to have the skills revolution that is needed in the UK.
Never let anyone say that voting does not matter when there are families who can be helped by the Government, the Low Pay Commission and employers acting together to secure a decent pay rise for millions of people. Never let anyone say democracy does not count when by our actions the UK could become a living wage country by 2025, as the child poverty and social mobility commission recommended last month. Never let anyone say that the right to vote means nothing when it can help to deliver the right to more decent work that genuinely pays a living wage.
We know what has to be done to end the scourge of poverty pay in this country. The question is whether we have the determination to do it. In supporting the motion before the House today, I hope we can say we must and we will.
National Minimum Wage
William Bain Excerpts(10 years, 1 month ago)
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Mr Umunna
I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.
Mr William Bain (Glasgow North East) (Lab)
Is my hon. Friend aware that in my constituency 38% of children are now growing up in poverty? Their parents are working harder, but have a lot less to show for it. Does that not demonstrate that the Low Pay Commission needs to take a long-term view and have an ambitious target to raise low pay, and does he regret the Government’s failure to adopt one?
Mr Umunna
That is right. On that 38% figure, I must say that I have a similar situation in parts of my constituency. I agree with my hon. Friend but I would add that I think so much of our economic debate takes part around the GDP figures, statistics and data, and of course that is right—we should look at the data—but the question is the lived experience of people in this country: do they think they have never had it so good? When we listen to the rhetoric from Government Members, that is often what we would be led to believe.
Matthew Hancock
I am certainly suggesting that we had one of the deepest recessions in the world because of the failure of the last Labour Government to regulate the banks properly and to mend the public finances in the run-up to the recession. That youth unemployment had risen by 40% even before the crash shows the failure of Labour’s economic policy. That is a theme to which I shall warm in my speech.
Matthew Hancock
I will come later to progress on raising the national minimum wage, but the central point, which Labour Members do not understand, is that we cannot have a strong national minimum wage without a strong economy.
Mr Bain
On the issue of fairness, does the Minister agree that people should be treated equally under the minimum wage legislation? Will he take this opportunity personally to disown the distasteful comments made by his ministerial colleague, Lord Freud—that some disabled people were not worth the full rate? Is that not an outrage; should not the Government apologise?
Matthew Hancock
Yes, of course, everybody who is in work should be paid the minimum wage.
Social Mobility/Child Poverty Strategy
William Bain Excerpts(10 years, 4 months ago)
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Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to follow the hon. Member for Beverley and Holderness (Mr Stuart). I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on securing this important debate and launching it with such an excellent, passionate speech. I also congratulate the Backbench Business Committee on granting the time to discuss this study, which was published last October by the Social Mobility and Child Poverty Commission. I have a particular interest in this issue for several reasons, the principal one being that the commission’s chair made a very well-received speech last year at Springburn academy, in my constituency. The experiences of my constituents in communities suffering from multiple deprivation will form the context to my contribution.
My parents, like those of my right hon. Friend, both left school before the age of 16. They had to work hard in jobs as teenagers, because that was needed in order to provide for the rest of the family. The concern that many millions of people across this country have is that their dream of seeing their children do better than they did—a dream we thought would continue through generations to come—is in danger not only of failing to be realised, but of actually going into reverse unless we make big policy changes. I also endorse entirely what my right hon. Friend said about the need for universities and colleges to reach out and be open to talent in every part of the country, regardless of someone’s ability to pay or family connections. That was a big part of my job when I was a university admissions tutor in London and in Glasgow. Links between universities, colleges and schools are central to breaking down the old boy and old girl networks that are too prevalent in many professions and in our politics.
The underlying causes of child poverty are numerous and its solutions complex, but there should be a commitment by all Members across this House to end it. There are real divides of wealth and opportunity in every part of these islands. It cannot be the mark of a decent society that, in the ward in which my constituency office is based, nearly one in every two children is in poverty, while just a few minutes away, in the constituency of the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), the number stands at only one in 12. Some in this House might envisage the answer as being the creation of new state borders across these islands, but the more progressive solution is to bring down the barriers that hold back too many of our talented young people. The concern that many Members will have is that the detail of the Government’s child poverty strategy simply does not meet the scale of the commission’s report, or indeed the need of the people whose voices deserve to be heard in this debate.
The Institute for Fiscal Studies has said that, with no change in current policies, there will be big rises in child poverty. I hope that this debate will give the Government an opportunity to reflect on that and to work with the Opposition on a long-term approach to defeating and ending child poverty.
The first key point is that we are facing a crisis in the nature and security of employment that previous generations in recent times did not encounter in the same way. Global flows of labour, services, goods and capital and the hollowing out of the jobs market, which saw the loss of tens of thousands of skilled manufacturing and construction jobs, has meant that there is an even bigger premium on skills for people at every stage of their working lives.
Glasgow Kelvin college, which sits across the road from my constituency office, is now the beating economic heart of my constituency. It gives young people from very difficult family backgrounds—I am talking about backgrounds in which there is alcohol abuse, violence in the home or drug abuse—the first, second or third opportunity to get the literacy, numeracy or other vocational skills that are required to get the jobs of today and the future. It is only by doing that that we will begin to see genuine shared prosperity across this country.
Two weeks ago, the principal of that local college told me that nearly one young person in five in the north and east of Glasgow lacks skills at even level 3. If we continue with that level of illiteracy and innumeracy, we will not see a rise in social mobility in our country. That is the scale of the crisis that we see in one of the poorest parts of these islands.
The analysis published by the OECD last autumn, with data from England and Northern Ireland—Scotland and Wales were not included—also provides us with a stark warning about reduced living standards in the future compared with other countries if we fail to get to grips with the skills agenda. In the decades to come, inequality in skills will be as big a barrier to a good life as inequality of financial wealth.
I hope the Government will work with the Opposition to look at the impact of the 16-hour rule on many of our colleges. Recently, I spoke to some young people who said that they are unable to get state support if they want to train and improve their skills to level 3 or above at a local college. The rule also limits what courses colleges can offer to improve skills. My local college principal is excited about the prospect of removing that rule and designing new courses that would allow young people to improve their skills and be able to get into the employment market.
Recently, members of the Business, Innovation and Skills Committee, of which I and the hon. Member for Worcester (Mr Walker), who is in his place, are members, saw the huge benefits that come to our society and economy from strong links between business and universities. We must break down the barriers that suggest that universities are ivory towers. Universities give people real skills and experience in engineering, which is the kind of career that we need if we are to thrive and see opportunity flow throughout the country.
Secondly, the biggest reason for the rise in wealth in many households in the past 40 years is the increase in the female employment rate. If we are to continue that progress, which is in danger of being reversed, we need to get real about the need to invest in quality, affordable child care as that is the biggest barrier to some 1 million women being able to get back into the labour market.
I hear over and over from mothers in my constituency that the costs for after-school care are rising and that the hours of child care that they need even to work part-time simply are not available. In an era when public spending will remain tight, we need to ensure that we invest available funds in building institutions for people in their own communities, recognising that social action without state support and vice versa will not bring about the permanent reductions in poverty that we seek. In an era of tight public spending, I urge the Government to work with the Opposition to see how we can increase investment in child care. It is essential to our country’s future and to reducing the inequality gap.
Thirdly, the Government should think again about the design of the universal credit system, if it ever gets off the ground in any meaningful way, and about the tax credit system overall. As Gingerbread and other charities have pointed out, the new system will mean that tens of thousands of mothers in two-earner households with children will face an uphill battle to be better off in work should they work more than 20 hours a week. The tax and benefit system ought to be rewarding such households, not setting a cap or limit on their aspirations or efforts. I urge the Government to look at these rules and at the work allowance for universal credit to ensure that mothers and families do not lose out as a result.
Fourthly, we need to become a living wage society. Two out of every three families in which people are in work are now poor and they see little way of improving their standard of living in the future. More hours at work are not available, and pay is continuing to fall in real terms even now. As few as three in 10 of the people who go out to work in my constituency bring home a living wage. Encouraging employers to pay a living wage to their staff will have the benefits of reducing staff turnover, contributing to greater productivity, which is stagnant in our economy, enhancing satisfaction at work and helping to reduce the bill for tax credits and housing benefit.
The Government can also use their procurement powers to favour living wage employers. They should also be inviting the Low Pay Commission to revise its remit to give proper forward guidance on raising the minimum wage across the economy and to examine the case for a higher sector-by-sector floor so that as many people as possible can be taken out of the low-wage economy. Nearly 3 million people have been trapped on pay around the minimum wage for five years or longer. Without a ladder out of that low-paid trap, they will never see an improvement in their living standards and we will face mass inequality in this country.
Fifthly, as my right hon. Friend the Member for Salford and Eccles has said, we need new pathways to boost social mobility, which is showing worrying signs of reversal. Too few people on low incomes, for example, have the opportunity to save, so the gap between those who have capital, whether it is in a home or another vehicle, and those who do not have capital or any savings at all is growing. Not only in discussions in this city about Thomas Piketty’s book but on the doorstep in every community across the country, we see the impact that that increase in asset inequality is having on communities. A young person might be unable to save to get the car that would allow them to get their first job. Other people might be unable to save to get the money together to allow them to take up a university course. Courses for adult learning are also being cut, particularly in Scotland because of some of the misguided decisions taken by the Scottish Government. The lack of assets is a driving factor in the growing inequality between our poorest communities and other parts of our society.
We also know that the professions have to throw open their doors. I have experience from the law, which has some good and innovative schemes to include people from difficult backgrounds. I know from my experience as a university lecturer, however, how difficult it was for people to get pupillages to become barristers just because they came from certain universities. The law and other professions must break down these barriers. We must remove these old boy and old girl networks if we are to see a proper meritocracy in our country, and see people who have the talent given the opportunities they deserve.
There is nothing inevitable about poverty. Inequality is not a natural state for any society. Let us hope that this debate can serve the purpose of ending the stop-start approach we have seen in policy in this area for too long. More opportunities and a fairer society are not optional extras if we are to pay our way in the world. In the 21st century, they will be essential for this country’s success.
Oral Answers to Questions
William Bain Excerpts(10 years, 10 months ago)
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Matthew Hancock
The problems of people failing either to make prompt payments or to honour payment terms—two related, but slightly different points—need to be addressed. They are largely problems that negatively affect small companies, and we are currently consulting on how radical we need to be to get the balance right and address them.
Mr William Bain (Glasgow North East) (Lab)
T7. Will the Secretary of State confirm that business investment has flatlined over the last year and that this is one of the major causes of Britain’s worsening productivity problem? What are he and the Government going to do about it?
Vince Cable
As everybody acknowledges, business investment has been badly hit since the financial crisis, but with the economy rapidly recovering, I think we all expect—and the surveys suggest—that there will be a movement forward in terms of business investment, once capacity has been fully utilised.
Small Businesses
William Bain Excerpts(10 years, 11 months ago)
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Mr Bain
Indeed; it is a great pleasure to follow the tremendous speech by the hon. Member for Newton Abbot (Anne Marie Morris). I thank her and the Backbench Business Committee for scheduling the debate.
I represent a constituency that has one of the largest problems of family poverty and long-term unemployment in this country, but it also has some rapidly expanding SMEs. I have been in contact this week with Gaia-Wind, which is the fastest growing private company in Scotland and the eighth fastest growing SME anywhere in the UK, to hear its exciting plans for expansion. It also, however, shows us some of the particular needs of participants in the green economy and the problems that they face.
There is a lack of investment in our economy. We discovered yesterday that investment by businesses has been largely flat over the past year. In fact, business investment contributed only 0.1 percentage points to the 0.8% of GDP growth in the third quarter. We also know that access to finance is a huge problem for the SME sector. Although the small regional banks in Germany, the Sparkassen, were able to keep lending to support SMEs during the recession, lending by institutions in this country, such as the Royal Bank of Scotland, shamefully fell to spectacularly low levels, which had a huge and disproportionate impact on the SME sector.
In the coming weeks, we will celebrate the contribution that small business makes to our local economies and the national economy. We will celebrate the fact that there are 4.9 million businesses in this country employing 24.3 million people. However, we must be aware of the need to take firm action on business rates, the need to expand the range of financial institutions that are able to lend to SMEs, and the need to do much more on skills, and research and development.
Julian Smith (Skipton and Ripon) (Con)
Will the hon. Gentleman also celebrate the excellent, detailed, cross-departmental work that the Government have done to support British businesses—big, small and medium—and to get the economy in a position to turn a corner and move into accelerated growth?
Mr Bain
I certainly will not celebrate the three years in which we have had very little growth, which had a huge impact on SMEs. With respect to the hon. Gentleman, I want to speak about the positive issues on which we might find more cross-party agreement in this debate.
I refer hon. Members to the excellent report that Santander and Dods published recently in the House. It contains key recommendations that the Government should attend to quickly. It shows that 285 separate schemes are available to SMEs which, in the view of the report’s writers, is far too many. It sets out the good recommendation, which the Government could implement straight away, of developing a single portal through which SMEs can have contact with central Government. The report found that only 29% of SMEs were aware of the existence of the funding for lending scheme and that 28% of businesses thought that access to finance would be the biggest impediment to growth in the next few years.
Shockingly, the report revealed that only 12% of students in our colleges and universities would make working for an SME their first choice on graduation. That is a real concern, given that the vast majority of job creation in the coming years is likely to come from the SME sector, and it shows that there is much more that the Government, SMEs, colleges, universities and schools need to do to promote founding and working in small businesses as good career paths.
As a country, we need to do far more work on skills. Only yesterday, the Minister illustrated in a written answer to me the growing gap in early rates of pay between those who have level 4 skills and those without any qualifications at all. That hourly pay gap of £8.84 has widened by a tenth in the past six years alone. SMEs, the Government and local authorities need to do a huge amount to improve in-work training so that people can see wage progression in a job, and so that a job in a small or medium-sized enterprise can become a career with long-term prospects.
We need to improve the shockingly low rates of research and development in this country. In public and private sector research and development, we lag way behind our main competitors in the EU and many of the emerging markets. The Government must do much more to boost the innovation that comes from the many millions of small businesses throughout the country, such as Gaia-Wind in my constituency.
As a matter of urgency, we need to improve access to capital. When I speak to SMEs in my constituency, they make it clear that they are willing and able to take on more staff, and that they want to create more demand across our country. However, the banking system is simply not working for SMEs. We need new players to come into the banking system and regional banks that focus on the needs of the economies in Scotland, Wales, Northern Ireland and the different regions of England.
Huw Irranca-Davies (Ogmore) (Lab)
Does my hon. Friend agree that if that is to work, the regional banks in all parts of the UK, including Wales, need to be driven by entrepreneurial zeal, rather than a civil service ethos?
Mr Bain
My hon. Friend raises the important point that we need a culture of long-term investment, as has happened over the past few decades in Germany, where there has been strong support for SMEs from the Government and the financial institutions. We need to see more of that in this country and it would be best delivered through a system of regional banks that provide support to business on a dedicated, local basis.
Finally, in this most significant of weeks for Scotland, I must say that it is critical that the SME community speaks out on the question of Scotland’s continued membership of the United Kingdom. It would be disastrous for Scotland’s trade with the rest of the UK and disastrous for exporters if Scotland were forced out of the United Kingdom. It is important that all of us in the House encourage business to speak out on the need to keep the Union together.
I am incredibly supportive of small businesses in my constituency, and I look forward to hearing a positive debate among Members on both sides of the House.
Debbie Abrahams
I thank the hon. Gentleman for his intervention, if slightly patronising. I have gone into the issue in quite a bit of detail, and it was a specific point about late payments.
Let me give a bit of background to this case. As I said, the story of Ann and Harry Long is far from unique and is a particular problem for small and micro-businesses that do not have the cash-flow buffers of larger companies. I have a particularly a high level of micro-companies in my constituency—more than 85% of companies have fewer than 10 employees—and a number have gone into administration, primarily as a result of late payments.
Nationally, we know from Bacs that more than £31 billion is owed to small businesses, and more than half—58%—of the country’s 1.7 million SMEs say that large companies choose when they pay. In 2011, only £24 billion was owed, so the problem is increasing. If we compare what is owed in late payments to the amounts being lent by high street banks, which last year was £56 billion, we sense the scale of the problem.
According to Bacs data, the average SME is owed £31,000 at any one time and waits an average of eight working weeks for payment, which is nearly double the contract terms. I am particularly concerned about the gaping north-south divide. Small businesses in the north say that they are owed an average of £39,000, which is almost double the £23,000 owed to the average southern business.
The 2012 small business survey reported that 55% of SMEs, 53% of small businesses and 46% of micro-businesses say that large companies are not paying their bills on time. The most recent Federation of Small Businesses survey suggests an even worse picture. Seventy-three per cent. of businesses say that they were paid late in the past 12 months, and one in five say that half of all invoices are paid late. Interestingly, 70% say that the problem has got worse in the past 12 months and that the private sector is the biggest culprit.
Research by the Forum of Private Business last year indicated that late payment is having a significant impact on businesses development, productivity and growth. Access to, and the cost of, finance, and credit trade insurance, were cited as problems linked to late payment. Late payments have a knock-on effect, leaving many small businesses in a vicious cycle of late payment. The FPB’s economy watch panel indicates that 42% of SMEs believe that late payments were not seen as important.
As we have heard, the impact of late payment can be disastrous. It is estimated that, during the 2008 recession, 4,000 businesses failed as a direct result of late payments. No official data have been collected, but the situation needs to be monitored. There is growing evidence that late payments to SMEs are hurting our economic recovery. Office for National Statistics data show that SMEs make up to 98% of the total number of organisations, providing 59% of all private sector jobs and 45% of all employment, and generating 46% of the UK’s income.
What is being done to tackle the problem of late payments? The previous Government introduced the Late Payment of Commercial Debts (Interest) Act 1998, but it was not used, because companies feared being blacklisted. The prompt payment code, a tool introduced by the Institute of Credit Management, committed signatories to pay suppliers on time under the terms agreed without attempting to change payment terms retrospectively, enabling every level of the supply chain to meet the terms. However, the code has had mixed effects. First, there is a very poor take-up by FTSE 100 companies.
Mr Bain
My hon. Friend makes a powerful argument. What does she make of the National Audit Office recommendation that Government Departments need to work more closely together, and that the Department for Business, Innovation and Skills and the Treasury need to work harder to support small businesses in the way she indicates?
Debbie Abrahams
My hon. Friend makes a good point. We need to encourage that.
People are abusing the prompt payment code. They are either signing up and changing their terms, or changing their terms prior to signing. Most recently, the EU late payment directive stipulated that public authority-to-business invoices must be paid in 30 days, and that business-to-business invoices should be paid in 60 days. However, there have been problems with the transposition into UK law. Section 7 of the directive has not been taken up and independent organisations will be unable to use it to help small businesses.
Another development last year was the introduction of the small chain finance scheme. That is another difficult problem.
Huw Irranca-Davies (Ogmore) (Lab)
I welcome this debate and compliment the hon. Member for Newton Abbot (Anne Marie Morris) and the other Members who secured it through the Backbench Business Committee.
I want to begin by putting a human face on this debate. Several people have talked about the definition of small businesses. For me, that definition could include Worgan’s in Llanharry, a small, family-run enterprise that started as a small gift shop selling various things for the local community, but which extended by opening a café in the next-door premises and then a mobile chip shop. The definition could also include the former Sony site in Bridgend. Sony went through a difficult time when the market for cathode ray tube televisions completely fell apart—when flat-screen televisions came in, those jobs quickly went abroad—but the management retained the skilled work force and rebuilt the business on the basis of high-end engineering and their massive expertise in design, engineering and manufacturing. Working alongside other companies, it has built itself back up and now has 500 employees onsite, 150 of whom work in 28 incubation companies—small companies, built up with the assistance of Sony expertise, working in digital media, graphics, television and many areas, and supported as they grow from micro-businesses into small businesses and, we hope, into the giants of tomorrow.
The definition of small business could also include Ferrier’s, a local estate agent on Commercial street, in Maesteg, where my office is based. It was established in 1918—by coincidence, that was the same year Labour first won the seat of Ogmore, so I hope we will both shortly be celebrating our 100th anniversary—and it has extended to open other outlets in Kenfig Hill and elsewhere. There is a wide range of businesses. I think of Cwm Tawel Yurts, a tourism enterprise in a beautiful little valley around Betws, and of the Food Box. Then there are two brothers on the Maesteg industrial estate who left my state comprehensive school, one going on to study applied sciences, the other, following a different path, management. They came back together and established a 3D engineering company that did all the things expected from 3D engineering, but which has also now extended into life sciences. It applies 3D engineering to the life sciences, uses 3D modelling in the development of things such as heart valves that grow organically within the body and it supplies tiny parts that help the space station run.
In talking about the 99% of small and medium-sized businesses, we recognise that they are diverse, which gives them some resilience; that they are fragile, as my hon. Friend the Member for Rochdale (Simon Danczuk) said; and that they need the right support structures in place to assist them to thrive and grow.
Mr Bain
We have a burgeoning life sciences sector in Glasgow, too. Does my hon. Friend agree that the National Audit Office made a powerful point when it said that there is a potential funding gap of some £22 billion in the finance available to small businesses between now and 2017. Would it not help small businesses in his constituency and mine if the Government did something with the banks to help plug that gap?
Huw Irranca-Davies
My hon. Friend makes a valid point. There has to be cross-party agreement to take this forward and to ensure that finance is available.
Let me mention one stark figure. Even though there are signs of optimism in some parts and some sectors of the Welsh economy, a recent survey of members of the Federation of Small Businesses in Wales showed 55% of them reporting that credit was unaffordable, while 65% said it was not only unaffordable but completely inaccessible. The idea that these businesses can grow by getting affordable and accessible lending is simply not happening, which is a tragedy.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I am pleased to have an opportunity to speak. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) and her colleagues on persuading the Backbench Business Committee to grant the debate.
Small businesses play a major role in all our constituencies —mine is certainly no exception. They are important to the economy not just in their own right, but because they provide vital underpinning for many larger businesses in other economic sectors. They also play a vital role in maintaining healthy local communities through, for instance, their presence in shopping centres.
It is understandable that Members want to be positive in such a debate. Most of what I say will certainly be positive, and Government Members will obviously want to highlight what they see as the Government’s achievements. However, we should not forget the mixed experience that many small businesses have had over the past few years. Many have survived, and are surviving now, only with great difficulty. According to the Forum of Private Business—we will all have received its briefing yesterday—94% of small businesses are reporting increases in cost pressures, and many small business proprietors have managed to survive only by cutting their own wages and those of their staff. Small businesses are not in any way exempt from the cost of living crisis that is affecting so many of our communities and constituents.
As I have said, however, I want to be positive and to focus on what can be done to strengthen and support small businesses, which I have discussed with representatives of various small businesses in my area. Several hon. Members have talked about the need for more sympathetic treatment by the banks. I do not have time to repeat the horror stories that we have all heard, but some of my constituents have reported awful experiences with RBS’s global restructuring group. I hope that the Minister will be able to update the House on what his Department is doing in response to the allegations about that organisation. Even if we leave aside some of the more dramatic examples, it is clear that businesses need more sympathetic treatment by banks. The banks should recognise the difficulties that have been caused by branch closures, and, of course, there needs to be more competition and choice in banking. Labour has made some important proposals in that context.
Other organisations, and indeed areas of government, can also provide funds and other support for small business, and Edinburgh city council has taken a number of important steps in that regard. It has provided the Creative Exchange, an incubator space that opened recently in Leith to provide affordable work space for up to 80 staff. A further example is the council’s procurement policy, which covers a £20 million information technology tender. The council wants at least 25% of the work to go to small businesses; the present contract is held by a single large company.
Small business lending is also important. I was pleased to learn about discussions between the council and Capital Credit Union about the possibility of the union contributing an extra £1.3 million to the East of Scotland Investment Fund, which could provide loans for small businesses. The credit union is able to do that because of changes to corporate lending rules that allow community-based mutuals to offer loans to businesses. As someone who has a very small investment in Capital Credit Union, I am glad that it is at the forefront of that project. It is important to point out that the European regional development fund is also providing support, given the rather negative comments about Europe that we hear from certain Members in the House.
Mr Bain
In Edinburgh, as in Glasgow, there are many small exporting companies. Does my hon. Friend agree that the Government should be doing much more to establish a more proactive relationship with such companies through UK Trade & Investment? I had to draw the attention of a company I visited recently to the services provided by UKTI. Would not such action by the Government benefit small exporters in Edinburgh as well as those in my constituency?
Mark Lazarowicz
It would obviously benefit businesses in constituencies throughout the United Kingdom.
Another initiative undertaken by the city council is the Edinburgh guarantee, which brings together local government, businesses, colleges, the voluntary sector and national programmes at Scottish, UK and European levels to create opportunities for our young people. Since its establishment just over two years ago, it has generated more than 1,000 job, apprenticeship and internship opportunities for school leavers. Many small businesses have been closely involved in the project, and I congratulate the council on what it has achieved.
However, if councils are to provide all the support for small businesses that they ought to be able to provide, they need to have the powers that would enable them to do that to the full. Local government powers in Scotland are obviously the responsibility of the Scottish rather than the United Kingdom Government, but the fact remains that local authorities can perform an important task in supporting small business. Those that are already doing a good job should be congratulated, while those that are not should learn from them.
Although I want to be positive, I should add that we must not ignore the real pressures on small businesses. Cost pressure is an important factor that needs to be addressed. During Energy and Climate Change questions, the Government once again refused to accept the merits of Labour’s proposal for an energy price freeze, which would be of real benefit to small businesses as well as householders. It is disappointing that the Government still refuse to accept the strength of our argument, but in a world of Government U-turns, who knows what their policy may be next week?