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Business, Innovation and Skills

Volume 496: debated on Thursday 16 July 2009

The Minister of State was asked—

Automotive Assistance Scheme

As we said at the time of its launch, the automotive assistance scheme is for long-term reinvestment in the industry, not short-term rescue funding. The Department has been in contact with about two thirds of all companies that may qualify for assistance under the scheme, resulting in 19 formal expressions of interest so far. Projects in the pipeline could involve total Government support of about £1.45 billion.

I thank the Minister for that reply. There seems to have been some delay in allocating loans or guarantees under the scheme. Could the Minister clarify why that is? Is it because the conditions set out in the scheme’s criteria are too strict? Clearly, the money has not yet found its way to most manufacturers.

As I said, it is important to understand that this scheme is about long-term reinvestment projects, not short-term rescue. The Secretary of State said at the time of its launch:

“There is no blank cheque on offer and there are no operating subsidies. We are committed to ensuring that anything backed by the scheme offers value for taxpayers’ money, enables us to green Britain’s economic recovery”


“delivers significant innovation in processes”.—[Official Report, House of Lords, 27 January 2009; Vol. 707, c. 178.]

We are working through these projects with the companies concerned. I can assure the hon. Lady and the House that there is no delay on the Government’s part. We are working closely with the companies concerned, but we also want to ensure that we get value for money and the long-term benefits of reinvestment for the industry concerned.

I endorse what my right hon. Friend says about the automotive assistance scheme being about long-term investment in green technologies, and so on. However, that does not necessarily mean that the process of approving the money needs to be long term. There needs to be greater dispatch in bringing things to a conclusion, particularly where strategically important companies are involved that are part of the global and regional economies, one example being Jaguar Land Rover in the west midlands and in the north-west.

Constructive discussions between the Government and Jaguar Land Rover are continuing. The Government are keen to help, but of course the terms must be right. I assure my hon. Friend that the Government are not seeking to delay help at all, but we want to ensure that the help that we give is in line with the aims of the scheme as set out when we launched it. I remind my hon. Friend, who represents the area covering Longbridge, that only last week we were being criticised for being too ready to put Government money into the car industry. It is absolutely right that we ensure that in doing this we get appropriate value for money and do it for long-term reinvestment projects that can help to secure the long-term health of the UK automotive industry.

I fully endorse the concerns expressed about the urgency of dealing with Jaguar Land Rover, but the supply chain in the automotive sector is also in crisis. Is the Minister able to clarify his position on closing the gap in eligibility under the enterprise finance guarantee scheme and the automotive assistance programme to help the supply chain?

The hon. Gentleman echoes a point that has been raised by several potential applicants under the scheme about the £5 million threshold. My officials have worked with companies in that position to help them to brigade potential projects. We want to take a flexible and helpful attitude to this; we are not in the business of turning away companies for no good reason.

I have listened carefully to what the Minister is saying about long-term investment, but that does not mean long-term lead-in. If we look across the channel to France and Germany, and then further afield to the US and Japan, we can see that they have already delivered substantial amounts of assistance, so I do not understand why it is taking so long in the United Kingdom. For the past six months, while Parliament has been sitting, nothing has happened—not a single penny has been given to any automotive company. Now that we are going into recess, perhaps the Minister could give a guarantee about at least some funding coming through to the automotive sector—and during his holidays, perhaps he would like to pop over to France and Germany to see how they have managed to do it there when we cannot seem to do it here.

I have to disagree with the hon. Lady when she says that no help has been given to the automotive industry. She ignores the car scrappage scheme, which has been in place for some months and has helped to boost a significant number of sales in the UK automotive industry. That is giving real help in the short term to automotive companies. I think that it is widely recognised as being a success. This scheme is different in that it is geared towards long-term reinvestment, not only towards the short-term issues facing the car industry. We are working diligently, carefully and productively with the companies that are making applications under the scheme.

Learndirect Programme

2. What recent representations he has received on the future of the Learndirect programme; and if he will make a statement. (287049)

There has been recent interest in Learndirect’s proposals to develop its technology and support more learners directly over the internet and telephone. We are examining the results of the trials, but for the foreseeable future we will continue to see face-to-face contact as a core aspect of delivery for many learners.

With more than one in 10 young people not in education, employment or training, it is good news that the Train to Gain programme in Learndirect centres and elsewhere has increased its uptake by 60 per cent. to 800,000. Why, then, is the Learning and Skills Council struggling with its current Train to Gain budget and the university for industry shutting down all Learndirect centres in 2010? Is there a real future for Learndirect and Train to Gain?

First, Learndirect will not be shutting down all its centres by July 2010. It has been consulting its network of providers about a possible new approach, but as I said earlier, that approach is being tested and the Government will be consulted before any final decisions are taken. On the future of Train to Gain, we will be spending £1 billion in 2011, building on the expenditure this year. Train to Gain is safe with this Government, although not with the Opposition, who would cut it.


3. What recent assessment he has made of levels of growth in the manufacturing sector in (a) Coventry and (b) the West Midlands. (287051)

The manufacturing sector remains absolutely vital to the west midlands economy. Advantage West Midlands and its partners are focusing investment on major markets in which the region has strength and which offer the best prospects for wealth creation and employment as we come out of recession. We have an industry growth programme worth £30 million in the current financial year and £25 million next year, of which 75 per cent. is focused on the manufacturing sector.

I thank my right hon. Friend for that answer, but I recently attended a conference in Coventry organised by the Warwickshire partnerships, which are part of the sub-regional CBI. They voiced concerns about the slowness in getting help to small businesses in the west midlands, particularly in the Coventry area. How can Advantage West Midlands assist small businesses to speed that help up?

As my hon. Friend is aware, my hon. Friend the Minister for the West Midlands, through his taskforce, has looked very closely at how to help small and medium-sized enterprises. I know that the Advantage West Midlands transition bridge fund has made offers of loans totalling some £9.3 million to 55 local businesses to date, and I believe that nine of those are located in his constituency in Coventry and Warwickshire.

Yesterday, the chief executive of Jaguar Land Rover, such an important business in the west midlands, announced 300 job cuts and said that further action would depend in part on how quickly the agreed loan from the European Investment Bank was forthcoming. Given that Ministers agreed on that loan three months ago, why are the company and its workers still waiting? The French and German Governments delivered their loans from the EIB months ago. Why is it that under this Government, car firms in Britain are the last to get the help that they have been promised? Is it deliberate Government policy or just incompetence?

Yesterday’s decision was not connected with the ongoing negotiations about working with Jaguar Land Rover. It was to do with a particular type of production coming to an end. The support that the Government are giving to the west midlands, working through the regional development agency, has ensured that we have been able to safeguard jobs and help businesses. The Opposition, of course, would abolish RDAs, which would mean that the type of help that we have provided would not be available.

My right hon. Friend is quite right in her comments. The west midlands suffered two major recessions in the 1980s. Does she accept that urgent steps are now necessary to help places such as mine in the west midlands that rely heavily on the manufacturing industry? We do not want the curse of mass unemployment to come back.

My hon. Friend is right. In that context, the last thing we want is public expenditure cuts, as proposed by the Conservative party. I think that the manufacturing advisory service has been able to give some direct help. Last year, the MAS helped approximately 2,600 companies in the west midlands and increased the value of business up to £85 million. My hon. Friend is right: we need to get that direct help out there quickly.

London Metropolitan University

5. What recent discussions he has had with the Higher Education Funding Council for England on its funding for London Metropolitan university. (287053)

I have been in regular touch with HEFCE about the serious situation at London Met. I fully support HEFCE’s decision to commission an independent review of its actions, which it will publish shortly. A similar inquiry into the university’s actions is necessary. It is therefore right that the new acting vice-chancellor of the university has asked Sir David Melville to conduct such a review, which will investigate all aspects of what happened, including issues of governance.

I thank the Minister for his answer, but what happened at London Met is a national scandal. Is he aware that dozens of other higher education institutions are facing significant budget deficits next year? According to the funding council, seven higher education institutions are already described as at high risk of financial failure, including London Met and Thames Valley university in my constituency. According to sources at the funding council, that could increase to as many as 30 next year. Can the Minister confirm the scale of the financial crisis and tell the House exactly what he will do about it?

With due respect, I think that my sources at the funding council are slightly better than the hon. Gentleman’s. The situation at London Met is very serious—and extraordinary. It is not unusual for institutions to have problems during the course of a year in relation to students who drop out of courses. In that case, money has to be clawed back from the funding council. However, the scale of the problems that has been revealed at London Met is unusual. The review that is now being conducted is therefore important. The Government will look at the recommendations—

Thank you, Mr. Speaker. I am sorry for taking a while to get to the Dispatch Box—there are many colleagues on the Front Bench.

London Metropolitan university offers excellent scientific research, high level science degrees and an ultra modern science centre. The Minister’s answer was not good enough because, on 20 May in a debate in Westminster Hall, following serious allegations of collusion between HEFCE and LMU over the drop-out rates, which led to the crisis, he gave a clear and unambiguous commitment to the House. He said:

“There will, of course, be an independent inquiry”.—[Official Report, Westminster Hall, 20 May 2009; Vol. 492, c.457.]

When will that independent inquiry begin? The Minister has a choice: he can either confirm the inquiry or apologise for the misinformation.

The hon. Gentleman is not over the detail. There has been an independent inquiry by KPMG, commissioned by the funding council. It will report to the board of the funding council and be published in due course. Sir David Melville, the former vice-chancellor of Kent university, is undertaking another inquiry into what happened at London Met. That, too, will report in the autumn. At that point, the Government will consider the recommendations and, if there is something for us to do, we will do it.

Creative Arts (Thurrock)

6. What progress has been made in funding the proposed co-location of the National Academy for Creative and Cultural Skills and the Royal Opera House production campus in Thurrock. (287054)

I have asked the Learning and Skills Council to review all national skills academy funding proposals in the light of the funding that is available. The Learning and Skills Council expects to be able to make an announcement soon.

“Soon” is ambiguous. Does the Minister mean in the next few days? In that case, I would tick the box marked “joined-up government”. However, if he does not provide funding—approximately £650,000—immediately, this side of the recess, the project will be put in jeopardy. It is a flagship project—culturally, through its co-location with the Royal Opera House project, and in its relation to the Thames Gateway project and the projects for the Olympic games. I want to know whether we will get our money so that the design and the work can commence soon. I need to know that before we go into recess. Answer now.

My hon. Friend has made his point with his characteristic command of the colloquial and plain-speaking, so perhaps I can put it this way: I’m on it.

Perhaps the Minister’s honesty will continue in his answer to my question. He will know that creative and cultural skills are vital for our economy. The UK has the largest cultural sector in the world in terms of proportion of GDP, employing 1 million people. However, a recent report by Tom Bewick, the director general of the sector skills council, says that there are more than a

“hundred employers queuing up to take part”

in new creative and cultural apprenticeships,

“but they cannot currently do so because government is failing to actively engage”.

In revealing precisely how few businesses in the sector receive funding, will the Minister scotch the rumour that the Government intend to transfer powers from sectors to regions?

Well, yes. Obviously, the creative sector is an extremely important and growing part of the economy. We recognise its critical importance, and I recognise the importance of the capital bid that my hon. Friend the Member for Thurrock (Andrew Mackinlay) featured in his question. We are committed to the sector and to providing support to national skills academies.

Steel Industry

7. What recent discussions he has had with representatives of the steel industry on its future prospects. (287055)

We have had regular discussions with steel industry representatives in recent weeks. I have spoken on several occasions with Mr. Kirby Adams, the chief executive of Corus, and Mr. Michael Leahy of the trade union Community about the future of the industry in the UK. The Prime Minister will be meeting representatives of Corus later today.

The announcement last week of further job losses at Corus in Llanwern, coming on top of the 500-plus job losses already announced earlier this year, is more bad news for Welsh steelmakers and their families. Can the Minister reassure me and my constituents that progress is being made on the crucial issues of stimulating demand, energy prices and more money for training?

In my discussions with the company, Corus has said that demand is the critical issue. Global demand for steel has fallen sharply, and the United Kingdom is not exempt from that. At the moment, Corus has the capacity to produce around 3 tonnes of steel for every tonne that it sells in the UK market. That is why it is critical that we maintain both the capital expenditure programme, in construction for example, which uses half the steel that Corus produces, and the car scrappage scheme, which has helped to boost automotive sales, and that we resist the pressure for public expenditure cuts, as advanced by the Opposition, which would hit demand and threaten steel jobs even further.

In supporting the hon. Member for Newport, East (Jessica Morden), may I ask the Minister to go a little further? Steel is an essential part of the UK manufacturing sector. He has talked about bringing forward construction projects, but could he be more specific? Major civil engineering projects could take up quite a lot of the product of Corus, so could he give us any indication of the sort of projects that the Government are genuinely bringing forward at this time?

Just last week we announced more social housing, which will help to stimulate demand in the construction sector and increase demand for steel. My advice to the hon. Gentleman would be to speak to his Front-Bench colleagues, because I very much agree with the sentiments of Mr. David Blanchflower of the Monetary Policy Committee, who has said:

“If you want to transform a recession into a depression, go ahead and cut public spending. I would advise against it…Voters want jobs.”

I heartily agree.

In congratulating my hon. Friend the Member for Newport, East (Jessica Morden), let me say that her campaign goes well beyond Wales, vital though that is. In my county of Lanarkshire we have men and women with the skills and potential to do still more, but we would like to know what Corus’s strategy really is.

I believe that Corus values its work force, and that it is doing its best to maintain capacity in a very difficult trading situation. As I have said, it has the capacity to produce roughly 3 tonnes of steel for every 1 tonne that it is able to sell at the moment. In those circumstances, it is also working with the Government on extra training help for the work force, and we have offered £5 million of help for that training effort in order to work with the company to help maintain its work force through this difficult period.

Graduate Job Prospects

8. What steps he is taking to assist students graduating in the summer of 2009 to find employment. (287056)

These are undoubtedly tough times for graduates, but we should not forget that a degree remains a strong investment. Businesses are continuing to recruit through the downturn, and the Government are obviously committed to helping graduates. Working with employers and universities, we are boosting the number of internships and offering more loans to support further studies, so graduates should remain positive in difficult times.

Recently, there was an announcement of 1,000 new jobs, training places and internships in the west midlands, and young people, their parents and their lecturers in my constituency and in the wider west midlands certainly welcome that. In Dudley, however, we are already suffering the effects of a botched school closure programme and a failure to take up Building Schools for the Future. What future does my hon. Friend foresee for the young people in my constituency if they are to suffer possible cuts alongside that idiosyncratic education policy?

I know that my hon. Friend is a keen advocate for the young people in her constituency, and I am very pleased that internships are coming up in the west midlands for them. It is important to get that regional spread. She will be aware of the September guarantee to ensure that young people in her constituency are offered training or guaranteed a job, should they face unemployment. The Government are doing all they can, working across the Departments, to support young people, because we do not want to see a lost generation, as we saw in previous downturns.

Graduation parties taking place around the country at the moment are not the joyful occasions that some of us might remember, as graduates discuss their miserable job prospects. Yesterday, we heard the announcement of the Government’s aspirations for green jobs and a greener economy, but we cannot meet our 2020 climate change targets without investment in skills—particularly in our engineering base—or without innovation. Would now not be a good time to ensure that all new graduates in physics and maths have a good chance of getting on to a research programme? At the moment, two thirds of such applications are turned down.

That is why we are supporting the innovation fund, which the Minister for Science and Innovation, my noble Friend Lord Drayson, brought forward. That is also why we made the announcements yesterday on low-carbon jobs. And that is why we have established knowledge transfer partnerships to support young people, particularly those doing post-doctorate studies, working with businesses, often in low-carbon areas. All of this is going on because we have balanced and managed funding for higher education, which is something that the Liberal Democrats have yet to commit to.

Many proud parents will be attending their children’s graduation ceremonies this week; indeed, I am one of them. I can report to the Minister that there is a lot of concern about the job prospects for graduates. Why does not he back the proposal that we have put forward to ensure that there are more opportunities for young graduates to go on to do taught masters courses at university? We have identified specific savings this year to make that opportunity available for 25,000 graduates. Is that not far better than his tiny internship scheme, which does nothing to match the scale of the problem, when one in five young people are now unemployed?

I congratulate the hon. Gentleman; this must be a wonderful time for his family. May I also remind him that we have seen a massive increase in masters courses and other postgraduate study over the past 13 years? The figures are up, not by 30 per cent. or 60 per cent., but by 90 per cent., and 450,000 young people are now in postgraduate study, 350,000 of whom are studying STEM—science, technology, engineering and mathematics—subjects. The Opposition’s proposal is a little bit too late.

Overseas Students

10. What his latest estimate is of the number of overseas students in universities; and if he will make a statement. (287059)

According to the Higher Education Statistics Agency, in total, there were 112,150 non-UK EU students and 229,640 from elsewhere studying in UK higher education institutions in 2007-08.

Thank you, Mr. Speaker. Gosh, we have reached question 10 and it is only just 11 o’clock!

Given the additional administrative and legal requirements that the Government have placed on all universities for the handling of visa requirements for overseas students, does the Minister recognise that there is additional complexity and inconsistency in the way in which these applications are handled in the various home countries? There is also the length of the appeal process to consider and the fact that if a foreign student studying at a university in Britain has to apply for an extension, they now have to go via the UK Border Agency at an average individual cost of £357. Does not all that cut against the university policy encouraged by the Government to win more overseas students to the UK generally?

The hon. Gentleman is right that there has been concern in the higher education sector about the new points-based system. We have worked consistently, particularly with Universities UK, to address those concerns. I am pleased that application rates are now equivalent to last year’s levels and that the number of refusals has come down. There will be a meeting next week on 20 July between university vice-chancellors and the UK Border Agency to address any outstanding concerns, but there have been regular discussions and progress is being made as we make this transition.

Economic Downturn

12. What assessment he has made of the role of higher education in assisting individuals and businesses during the economic downturn. (287062)

Universities play an important role in helping businesses and individuals through the downturn, but also in securing our future success in a knowledge-driven economy. The Higher Education Funding Council for England has a £60 million economic challenge fund, which is expected to help 11,000 business and 50,000 individuals through a range of activities.

I am grateful for that reply and I am sure that my right hon. Friend would wish to pay tribute to the university of Derby at Buxton, which is co-ordinating work with nine major companies in the food industry to promote and co-ordinate apprenticeships and the upskilling of the work force. Will he recommend that regional Ministers throughout the country follow the example of the east midlands in taking the university sector on board as members of the regional economic cabinet?

My hon. Friend is right. I was pleased that universities acted so swiftly to ensure that they were plugged in and engaged with businesses regionally. It is right to say that the university of Derby has provided an excellent example. As well as the project to which my hon. Friend referred, there is the economic challenge fund bid, which is £2.27 million worth of support for the unemployed in the area, working with industry and business. The university of Derby’s corporate project is also about engaging with highly skilled people in the area. I congratulate the university, and I also congratulate the sector on what it is doing to support businesses in a difficult time.

Further Education Colleges

13. If he will bring forward proposals to increase capital funding for further education colleges. (287063)

The Government have already made a substantial commitment to extra funding for capital investment in further education colleges in the Budget. We will be spending over £300 million more in the next two years, taking total planned spending to £1.2 billion.

The recent announcement of funding for FE colleges did not include a single college in the south-west region. Will the Government make available the papers that show the decision-making process here, so that people can see that the entire process was transparent and that there was no political agenda behind the choice of colleges to receive funding?

A robust and thorough assessment by independent consultants took place, and the chief executive of the Learning and Skills Council has already committed to give the colleges their individual scores under the system, and to publish them in full in the near future. The process will be open and transparent, as recommended by the Foster review.

Last week, I visited the brand new York further education college once again. It draws students from my constituency and neighbouring Liberal Democrat and Tory constituencies. It was made possible by capital from the Government, and is a fantastic £60 million new college. Will the Government continue to fund the building of new colleges so that young people and adults in other towns and cities in the country get the benefits seen in York, and that building workers get jobs during the downturn?

Yes, we will continue to do that. We have a forward programme, and so far, since 2001, 700 projects have been built and nearly 330 colleges funded under the scheme. That has transformed the further education estate for learners. How do we judge a party on such an issue? We judge it on what it does and what it says it will do. The Conservative party did nothing when it was in power, spent nothing on FE capital in its last year in power, and has no plans for the future either.

Basingstoke college of technology has already spent £1 million on developing plans for future expansion. Basingstoke is, as designated by the Government, one of the most important employment areas in the country, and is part of the country’s future economic growth. Will the Minister reassure me that such important strategic investments will get the priority that they deserve, because that has not always been indicated in the past?

In the autumn, the Learning and Skills Council will consult colleges on the future capital programme, and a strategic approach will be taken based on priorities—learning priorities and so on. I assure her that the process will be fair, transparent, thorough and objective.

Vehicle Scrappage Scheme

More than 110,800 orders for new vehicles have been placed since the scrappage scheme was announced in the Budget. July vehicle registration figures are not published yet, so I cannot give an exact answer. However, industry has indicated that total sales in June were 15 per cent. higher than forecast. To date, £15,080,000 has been paid out, and a further £14.5 million-worth of claims from manufacturers are being processed for payment.

I thank the Minister for that response. May I also draw his attention to a slight discrepancy in the rules regarding cars that were first registered in Northern Ireland on or before 31 August 1999? My constituents, Andrew and Rachael Budd, found that although Ford, Renault and Citroen would gladly scrap their vehicle, Vauxhall and Peugeot said that they would not. Therefore, there are different interpretations of the rules. Will the Minister assure the House that cars first registered in Northern Ireland are covered by the scheme?

I am extremely grateful to the hon. Gentleman for drawing my attention to that individual case. I will certainly look into the matter and try to take it forward. There have been glitches in the scheme, which the Department and officials working with me have been anxious to address. I am grateful to Members of Parliament for bringing individual cases to my attention, and I urge them to do so again.

Here is another case for the Minister. One of my constituents has had a car in her family for many years, but sadly, her husband, in whose name the car was registered, died a few months ago, and it appeared that the car was now outside the rules. I e-mailed an urgent inquiry to the Minister’s Department on 5 June, and followed it up on 23 June and 2 July. It is now 16 July, and there has been no answer on a clearly sensitive issue. I would be grateful if this was one of the glitches he ironed out.

I am most grateful to the hon. Gentleman. I am surprised that he has not received an answer, because the circumstance to which he refers is one that we have worked to address, and we hope that we have found a solution to the problem. I will come back to him immediately after questions.

Automotive Assistance Programme

16. What progress has been made on the automotive assistance programme. (287067)

Well, Mr. Speaker, it certainly was well worth waiting for.

Have any specific discussions been undertaken with Nissan, and, if so, have any assurances been given about jobs located in the United Kingdom?

I regret to say that the discussions taking place with individual car companies are subject to commercial confidentiality. However, we are having active discussions with many car companies. In particular, we are investigating the development of green technologies, and discussing, in the context of the automotive assistance package, the impressive way in which car companies—including Nissan—are developing, for example, electronic vehicles. We hope that announcements can be made about the sector very shortly.

Small and Medium-sized Enterprises

20. What recent progress his Department has made in securing greater access to finance for small and medium-sized enterprises. (287071)

The Government continue to ensure that small and medium-sized businesses have access to the finance that they require. Since January we have secured lending commitment agreements with banks, introduced the enterprise finance guarantee—which to date has received over £0.5 billion of eligible applications—and, recently, launched the innovation fund as part of the Government’s strategy for ensuring the UK’s future economic success.

The small firms loan guarantee scheme and the enterprise finance guarantee scheme have produced less than half the target amount of lending. Meanwhile, firms in my constituency with good order books and good prospects are still screaming for credit. What are Ministers going to do about it?

What the Government are anxious to do is use public finance to help to guarantee the funds that are available from banks. That is a very positive and innovative approach. The hon. Gentleman must answer this question: where would the money come from under a Tory Government?

It has nothing to do with the next Tory Government, and everything to do with this Government. They have nationalised the banks—billions of pounds of taxpayers’ money have been put in—but small businesses in my constituency are going bust because the banks are not lending to them. What are the Government going to do about it?

I have described the active steps that the Government have already taken. I am a constituency Member of Parliament too, and I speak regularly to businesses in my constituency. These issues have been raised, and businesses are well aware that the Government have taken action. However, we will act when individual cases are raised. We will support industry and business, and we know that other parties would not.

I fully recognise that my hon. Friend and other Ministers are doing the best they can, but there are still significant difficulties out there with some of the main banks. Are my hon. Friend and his colleagues making it abundantly clear to Treasury Ministers and officials that small and medium-sized enterprises are, regrettably, still suffering at the hands of the major banks?

We all recognise that we are experiencing extremely difficult economic circumstances at present. We are working in the Department to assist small businesses, and of course we liaise closely with the Treasury in discussing the steps that need to be taken to enable us to improve the service that we are giving as much as we possibly can.

I suggest that the Government have not been doing all that they can. Is it not the case that the French and Germans had been facilitating credit for their companies months before we got around to it? Is this not too little, too late?

I am beguiled by the conversion of the Conservative party to adoration of what is happening across the channel. It seems that the right hon. and learned Member for Rushcliffe (Mr. Clarke) is having rather more influence than I thought.

We are taking action. Great progress has been made in the way in which we are delivering support for business. We will continue to do so—and Conservative Members have still not told me where they would find the money to pay for these programmes under a programme of cuts.

Pubs are, of course, small businesses, and evidence from pubs around the country shows that they in particular are not receiving assistance and credit from banks. Will the Minister agree to look into that, and meet a delegation from the save the pub group to discuss this important issue?

Mr. Phil Liddell of the Peal O’ Bells pub in Holt in my constituency has been very active in trying to draw attention to the difficulties of pubs in the locality. Before I was a Minister, I attended the hon. Gentleman’s event on licensing so I am very well aware of the difficulties in the industry. The particular area he raises is not in my remit, but I will speak to my ministerial colleagues concerning this matter and they will get back to him.

Topical Questions

Our Department is focused on creating the conditions for business success, promoting enterprise, innovation and science and making sure people have the skills and opportunities to succeed. To that end, this week we have published the life sciences strategy and, together with our colleagues in the Department of Energy and Climate Change, the low carbon industrial strategy. That is because we take the view that the Government have an active role to play in helping Britain make the most of the changes we will need in how we transport ourselves, how we build and heat our homes, and how we produce our energy for the future.

And another thing: why is it that someone who is languishing on jobseeker’s allowance has to wait six months before they can retrain? Why can they not start retraining straight away—and perhaps be retrained in some of the skills for the wonderful strategy the Minister has just described?

The focus for those who are unemployed for a short time is to help get them back into work as soon as possible. That is why it makes sense to give the extra help for retraining for those who have been out of work for that bit longer. I have to say to the hon. Gentleman that if he thinks there should be more expenditure on helping the unemployed, perhaps he should resist his own party’s plans to cut public expenditure now in the middle of a recession.

T6. The “Digital Britain” report recommends putting a levy of 50p on all copper lines. Is it fair to ask particularly the people of Glasgow and my constituency where 70 per cent. do not take up broadband to pay that 50p levy? I think the Minister will have to agree that that is totally unfair. Would it not be fairer to get broadband users to pay that extra levy? (287080)

The “Digital Britain” strategy published a few weeks ago is a very good example of the active role we take in helping to shape the economic future of the country and making sure that opportunities in it are maximised. The report said that those on low-income tariffs would not have to pay the levy mentioned, so it is not universal regardless of income; instead, it is a measure that would step in where the market would not to make sure the opportunities presented by next generation broadband are not just enjoyed by those two thirds of the population or so that the market would provide for, but are enjoyed throughout the country.

Has the Minister of State noticed that Royal Mail is losing business at a rate of about 10 per cent. annually, that it faces a pension deficit that will probably be valued at £10 billion, which it is unlikely to be able to fund, and that it now faces strike action? The Government have suspended all progress on a Bill that we were supporting, and which the Minister said was urgently necessary to secure the future of Royal Mail. Is the Government’s policy one of benign neglect, or is he simply doing nothing?

As the Secretary of State announced in the other place a couple of weeks ago, the market conditions have not been conducive to getting the best value for the taxpayer from the partial sale we have proposed. Where I agree with the right hon. and learned Gentleman is that that does not mean that Royal Mail does not face significant problems and challenges. It is important that the company gets on with its plans for modernisation, and that the union, which has said it is up for change, shows that that means something in practice—and I have to say that continued strikes and industrial action within Royal Mail will do nothing in the end to help it on the necessary road to modernisation, which is absolutely essential for the future of the universal service.

T8. The consumer White Paper has just been published, so will the Minister take a look at credit reference agencies, such as Equifax and Experian, to see what more can be done with this industry to make the reports that such agencies provide to consumers more accessible and easy to interpret? (287082)

Yes, and I thank my hon. Friend for her welcome for the consumer White Paper. The Government want to ensure that all consumers have access to the right tools to help them understand credit reference files better. Of course, people can request a paper copy of their credit reference—that will cost them two quid, so it is not that expensive. We will work with the industry to look at improving people’s access to and understanding of their file, including whether it can be made available online.

T2. Could the Minister explain why hard-pressed graduates in Southampton and the rest of the country have to pay 4.8 per cent. interest on their student loans, given that we now have a deflationary economy? (287075)

As I have explained before, the rate on income-contingent loans is based on the retail prices index over the year period. We examined this closely, finding that the loan rate is still one of the cheapest loan products available in the developed world.

At the close of business today, I shall present a petition on the steel industry. It has been signed by about 5,000 of my constituents and others, and was assembled in a matter of just eight or nine days. I welcome the announcement made by the Minister for Business, Innovation and Skills that the Prime Minister is meeting Corus this afternoon—Lord Mandelson is, of course, coming to the steel industry in Yorkshire tomorrow. On a very narrow point, before the Prime Minister meets Corus and before Lord Mandelson comes up north tomorrow can the Minister for Business, Innovation and Skills examine credit risk insurance? It has been put to me that that is one of the issues to address. Providing such insurance does not cost the Government a lot of money and it is something that they can do. Taking such an approach would send a powerful signal that our Front-Bench team is on the steel industry’s side.

I know that my right hon. Friend has been campaigning hard for the Corus workers in his constituency. As he said, the Secretary of State is to visit Rotherham tomorrow. We appreciate that credit insurance has been an issue, not only in the steel industry, but in other sectors of the economy. That is why we put a credit insurance scheme in place and recently announced that we would backdate the help available under it.

T3. Those businesses that survive the recession face a 0.5 per cent. increase in employers’ national insurance contributions in 2011, at an additional cost of some £2.7 billion. Given that the subscription payments we make to the EU are set to more than double to £6.5 billion by 2011, would it not make sense to save that money and offset the unnecessary rise in the tax on jobs? (287076)

I see that the Conservative party is now free from whatever influence the mainstream centre-right in the European People’s party had on it and is giving full rein to the instincts that would see us look away from the European Union. I remind the hon. Gentleman that 3 million British jobs are dependent on trade with the European Union, and I do not think that his proposal would advance the interests of those people or of the UK economy.

When we come back in October, it will be three years since the collapse of the Farepak Christmas savings scheme. The directors who ripped off tens of thousands of decent, hard-working families have never appeared in a civil court or a criminal court. Will the Minister, through his Department, organise a meeting with concerned MPs from both sides of the House and the liquidators?

Yes, I would be happy to have that meeting. The report on this was completed in May 2008. It is long and detailed, and counsel has been considering it and its supporting information. If any proceedings are initiated as a result of the report, they obviously have to remain confidential until they reach court.

T4. May I commend to Ministers and to the House two excellent reports that the Select Committee on Business and Enterprise published recently on pubs and on post offices? If Ministers were to embrace warmly the constructive proposals in both, they would do a great deal to safeguard the vital services on which many deprived, vulnerable and isolated communities depend. (287077)

I am always happy to pay warm tribute to the work of the Business and Enterprise Committee, chaired so ably by the hon. Gentleman. The report on post offices was something that the Government and the Committee worked on together. It is a good and constructive report, and I assure him that it will be considered positively.

I feel especially well disposed to the Department today. Tomorrow I will open a new packing plant at the Nestlé factory in York that will provide an additional 100 jobs initially and 200 in the longer term. It received support from the Government’s enterprise finance guarantee scheme for a smaller company, IPS First, which is the co-packer. The new plant will reduce carbon emissions, because the Nestlé factory will no longer have to truck its Kit-Kats, Aeros and Polos to west Yorkshire for packing. I went to see—

In a sentence, the Secretary of State—I went to see him about this—moved like lightning to get the money through and I would like my thanks to be passed to him.

The Secretary of State is always a speedy mover, and I will pass my hon. Friend’s thanks to him. The story shows the advantages that this Labour Government are clearly having for the people of York.

T5. May I encourage the Minister to respond to the Business and Enterprise Committee report not just positively, but swiftly? Having recently worked with the local community in Hillswick in the north of Shetland to obtain an outreach post office in the local shop, I can confirm that the suggestions in the report would make an enormous difference not just to the profitability of the post office, but to the shop as well. (287078)

Outreach post offices can be very successful, especially for small rural communities, such as the many in the hon. Gentleman’s constituency. In some ways, we have already responded to the need: for example, my colleagues at the Department for Transport were able to announce a new contract with post offices for the renewal of driving licences. That comes on top of the decision taken some months ago to renew the Post Office card account. So already the Government are putting more work the way of post offices.

The Opposition parties fought tooth and nail in overnight sittings to prevent one of our finest achievements—the national minimum wage. However, far too many of the recipients of that national minimum wage rely on gratuities to top their incomes up to that level. Will my right hon. Friend consider tabling appropriate amendments to the legislation at some stage, and can he publish some research on the numbers of people in that category?

We have already published a consultation on the number of people in that category, and I am pleased to inform my hon. Friend and the House that regulations to prohibit the use of tips, gratuities and service charges to make up the minimum wage were passed some weeks ago. That change was overdue, and I have been committed to it since I came into this job. It is good news for service workers throughout the country.

My heart was warmed by the glowing account by the hon. Member for City of York (Hugh Bayley) of the building of colleges in his constituency. May I ask a simple question about the college in my constituency? Frome community college is waiting for a response from the Learning and Skills Council about the building project to replace its tertiary blocks that it plans in conjunction with the LSC, which is already more than matched by local authority funding. That project will fail unless the LSC answers by 28 August. Is it asking too much for a positive response from the LSC for that modest building programme?

I will certainly look into the individual case of Frome community college, but an announcement was made on 26 June about the future of the further education capital scheme, which set out, thoroughly and rigorously, the projects that would be going forward in the next spending round. I undertake to look into the hon. Gentleman’s case, but we need investment to proceed with these college building projects—I hope Opposition parties will commit to that investment.

T7. My question follows the excellent one from my hon. Friend the Member for Kettering (Mr. Hollobone), which the Minister totally failed to answer. In Wellingborough today there are 3,276 people unemployed, compared with 1,712 in 1997. That is an increase of 91 per cent. I do not want that figure to go any higher, so will the Minister answer my hon. Friend’s question? Will he freeze our contributions to the EU, and scrap the increase in the job tax? (287081)

The Government have every sympathy for people who have lost their jobs as a result of the recession, and we are trying to do everything that we can for them. We know that there are many such people, in the hon. Gentleman’s constituency and around the country. Yes, unemployment has gone up, but I remind him that when the right hon. and learned Member for Rushcliffe (Mr. Clarke) was Chancellor unemployment was running at 10 per cent., with 3 million people out of work. The position was a great deal more difficult than the one that we face today.