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Oral Answers to Questions

Volume 506: debated on Thursday 4 March 2010

Business, Innovation and Skills

The Minister of State was asked—

Online Fraud

1. What steps his Department is taking to protect individuals from organised fraudulent online schemes which solicit money and financial details. (320192)

On 2 July 2009, the Government published the consumer White Paper, which details plans for more effective enforcement against those who deliberately set out to defraud consumers. I recently announced funding of £4.3 million for the Office of Fair Trading and trading standards to tackle those who use the internet to con consumers.

The majority of victims of cyber scams are people aged between 35 and 44, but those aged 55 and over lose most money and are more likely to succumb to scams on more than one occasion. What specifically are the Government planning to do to assist those people to understand the dangers that they are face?

The hon. Lady is absolutely right to say that it is very important to consider the impact on vulnerable people, including the elderly, of the sorts of scams that we have seen operated on the internet. That is why we are investing in the scambusters team and trying to raise awareness of the problem among older people. She might be interested to learn that my predecessor and former First Minister of Wales, Rhodri Morgan, has just taken up the internet; when he was recently in the office he received an e-mail, which he showed to me, from a woman who said that he was exactly the kind of man she was looking for. I did point out that it was not from my hon. Friend the Member for Cardiff, North (Julie Morgan)—his wife.

Will the Minister examine the OFT’s powers to tackle this issue? The electronic version of these scams is new, whereas the paper version is not, but, like the paper one, it is becoming much more sophisticated and much more believable. I am not sure that the OFT has sufficient powers to tackle those scams, particularly when they originate from another country.

My hon. Friend raises a good point. The OFT and trading standards have powers under the Enterprise Act 2002 and the Consumer Protection from Unfair Trading Regulations 2008, but we are examining enforcers’ powers to tackle online consumer problems to see whether they need to be strengthened, and we are discussing that possibility with the relevant key players.

University Funding

2. When he last met representatives of the Russell group to discuss university funding; and if he will make a statement. (320193)

The Minister will be aware of my association with the university of Glasgow, which is a member of the Russell group. The Beatson institute for cancer research remains at the cutting edge and international forefront of cancer research generally. Given the squeeze on higher education funding, can he assure us that internationally leading research of the type at Glasgow will continue to receive the support that it both needs and, as I am sure he will agree, deserves?

I acknowledge the right hon. Gentleman’s position as rector of that university and his continuing championing of it in this House. I also recognise that that cancer facility is world renowned. He will appreciate that the Scottish Funding Council and the research council are rightly responsible for science funding more broadly, and that any funding decisions are rightly their responsibility under the Haldane principle.

Will my right hon. Friend ensure that when the research money is allocated there is no further concentration of funding, for example, on the Russell group? Will he confirm that all centres of excellence in research, wherever they may be found across the university system, including in the superb materials science group in the university of Bolton—my own university—are considered equally for funding with the top-level research universities?

Drawing on his tremendous experience, my hon. Friend continues to champion science and research issues in this House. He is absolutely right to say that we should fund excellence wherever it is found, and that is the Government’s policy.

Can the Minister give an undertaking that when the Browne committee reports after the election and imposes greater debt on students in order to fund universities, that funding will not be removed from universities in terms of their central Government funding? Can he assure us that universities will at least be better off if students have to pay higher fees through increased debt?

I know that the hon. Gentleman is an educated man, but I did not realise that he was a fortune teller. I am not going to anticipate the Browne review.

Will the Minister consider reducing funding to universities that fail to take action to stop the propagation of Jew hate and anti-Semitism on campus?

I recognise that this is a very serious issue. I was pleased to meet the all-party group against anti-Semitism and to meet Jewish students recently to discuss these matters. My right hon. Friend will know that I have regularly brought together universities, students and others in the sector to discuss these matters. I do not believe that this is a widespread problem across British universities, but I recognise that examples of it are patchy. We must remain vigilant and we must not allow anti-Semitism anywhere on campuses in this country.

Will the Minister confirm that the Government have set a target of 50 per cent. of young people going to university, and that this year—the very year to which the target applies—they are fining universities to the tune of £10 million simply because they have recruited more students? Is it not the final absurdity of Labour’s target culture that it can set a target and then punish institutions for taking the measures needed to hit it? Why does he not instead match our pledge to offer 10,000 more university places this year?

Because the hon. Gentleman’s pledge is bogus and ridiculous. It would involve the Government borrowing more money to help which students pay off their loans quickly? The richest students. That is where his heart lies. The 50 per cent. participation rate is an aspiration that his party has continually opposed. We have got the figure up to 43 per cent., so there are more young people than ever before going to university, including more young people from poorer socio-economic groups than ever in our history, but his party has opposed the measure at every opportunity. This is the most opportunistic volte-face I have seen in the House for a long time.

Excellence should always be invested in. In the north-east, both Sunderland and Teesside universities offer such excellence, so is it not about time that they received research moneys equivalent to those received by the Russell group universities and the greater amounts received by universities in the golden triangle?

My hon. Friend continues to make the case for the north-east and for excellent universities such as Teesside and Sunderland, which do fantastic work, particularly in applied research. She is right that funding must follow excellence wherever it is found. I cannot anticipate decisions that are appropriately the domain of peer review, but she is absolutely right and the Government support that approach.

Late Payments

3. How many small businesses which supply his Department did not have their invoices paid within his Department’s target time in the latest period for which figures are available. (320194)

In January, fewer than one in 18 supplier invoices to the Department took longer than 10 days to pay. Data are not kept separately for small businesses, but data regarding the invoices of all suppliers are published on the Department’s website every month.

About 4,000 business failures were caused by late payment last year. How will the Government protect failing businesses as a result of late payment and what sanctions have they promised to impose on businesses that contribute to the problem by delaying payment?

The hon. Gentleman will know about the legislation that we have introduced, but, in reality, companies are reluctant to take sanctions against their customers. He is absolutely right to highlight the importance of this issue and to draw attention to those 4,000 businesses. That is why we launched the prompt payment code for government at the start of the downturn. We have committed to a central Government target of 10-day payment of invoices, on which we have a very good record of adherence. In addition, we have taken very successful action to support small businesses through the Revenue and Customs’ time to pay initiative. The measures that we have taken have made a big contribution to the relatively low record of business failures during the recession that we have just come through, compared with past recessions.

Royal Mail

4. What plans he has for the future of Royal Mail’s universal service obligation; and if he will make a statement. (320195)

The Government are committed to maintaining the one-price-goes-anywhere universal postal service. In the UK, the universal service provides a six-day-a-week letter service and a five-day-a-week parcel service. This goes beyond the minimum requirement in the relevant EU Directive and we have no plans to change the universal service obligation.

I am grateful to the Minister for that answer. Is he aware that Postcomm has issued no fewer than 46 licences entitling companies to deliver to the door? Does he accept that that raises a real danger of cherry-picking in urban areas? That would leave Royal Mail having to deliver the universal service to the rural areas, and raise long-term concerns about the sustainability of that service. Are the Government looking at the future in that context?

As I said, we are determined to keep the universal service. It is an important part of the social glue of the nation, and it is particularly valued in constituencies such as the hon. Gentleman’s, which is one of the most beautiful and remote parts of the UK. He referred to competition, but most of the competition developed in mail so far has been in upstream access and not door-to-door delivery. The vast majority of letters—I think around 98 or 99 per cent.—are still delivered every day by the Royal Mail. We express our gratitude to the hard-working postmen and postwomen who do it.

Of course my right hon. Friend is right to show his commitment to the USO, and we are pleased to hear it. Does he accept, however, that the USO ought to be backed up with a very strong post office network with a community bank? The two go hand in hand: will he please show the same commitment on that?

I agree that banking and financial services are already a very important source of revenue for the Post Office, which has some 2 million financial services customers. We recently issued a consultation document asking the public about the extra services that they would like, and also about things such as current accounts, weekly budgeting accounts, children’s savings accounts, and so on. Like my hon. Friend, I think that such services offer huge potential for Post Office revenues. Traditionally, people went along to the post office every week to claim their pensions or benefits, but those claimant patterns have been in decline in recent years. That decline is probably likely to continue.

The Government have ignored the sensible recommendations of the Hooper report and abandoned their own Postal Services Bill, so does the Secretary of State have any policy that is designed to save the universal service—or, for that matter, the future of the Royal Mail?

I am very grateful to the hon. Gentleman for my premature and—at the moment—fictional promotion, but I will stick to the job that I have. The most important thing for the future of Royal Mail is a comprehensive modernisation package that covers the introduction of new technology into the network as well as the number of mail centres, delivery offices and so on. The package should also cover the working practices that will need to alter to accommodate those changes.

For the past couple of months, these very matters have been the subject of intense negotiations chaired by Mr. Roger Poole, the former deputy general secretary of Unison. I am hopeful that a comprehensive modernisation agreement will be reached. If it is, that will be in the interests of Royal Mail, its staff, and the public.

Three major banks still do not let customers use banking facilities at post offices, even though two of them are partly owned by the Government. What progress is being made towards allowing customers of those banks to use post offices? That would provide extra business for post offices, and extra facilities for their customers.

I am grateful to my hon. Friend for raising a very good point. We have been talking to the banks about this, particularly in the light of consultation on post office banking. Members of the public may not be aware that some 20 million high street bank accounts are currently accessible through the post office, but I agree that we want that number to rise. We want more banks to allow people to access their accounts through the post office network.

Sector Skills Councils

5. What recent assessment he has made of the effect of the work of the sector skills councils on the skills level of the work force. (320196)

Sector skills councils help raise demand for skills, provide authoritative labour market intelligence and ensure that qualifications meet employer needs. Their annual skills assessment sets out how the skills needs of their sectors are being met, and all SSCs have recently undergone a robust and rigorous relicensing process.

The Minister will be aware of the recent Baker Tilly report, which indicated the positive impact that sector skills councils are having on the UK economy. But is he also aware of the memorandum of understanding that is being signed next week by the Alliance of Sector Skills Councils and the Federation of Small Businesses to ensure that qualifications being offered in the future by the SSCs are more relevant to micro and small businesses?

Yes, I am aware of that, and later today I will meet John McNamara, who is in charge of the Alliance of Sector Skills Councils, when I can discuss the points that my hon. Friend raises. He is absolutely right; qualifications should be those that employers find useful, and the involvement of sector skills councils in developing qualifications is one of the features of the skills system that the Government have developed that makes them more relevant to employers and, therefore, to employees and learners.

This week a delegation from the print industry in the Yorkshire and Humber region told us clearly that sector skills councils are not hitting the mark. Please will the Minister make them more responsive to the needs of employers, particularly to train the up and coming leaders of local businesses?

Yesterday, in the Department, we held a summit at the behest of the sector skills council employers and trade unions in the print industry to consider its future and its needs. If the representatives from the hon. Lady’s constituency were not invited to that, perhaps she will let me know. We would certainly like to involve them in those discussions because the print industry has a great future. It is not the old-fashioned industry that it sometimes has a reputation for being. It has lots of small and medium-sized enterprises, and great and exciting technological developments are going on that we need to take advantage of.

Is the Minister aware that the largest single employer of apprentices in Scotland is those firms that are currently engaged in building the aircraft carriers? Does he agree that all those apprenticeships, both for adults and for youngsters, would be lost if the Conservatives carried forward their proposal to examine the break clauses of the contract on day one of any future Conservative Government?

Order. I know that the Minister will relate his remarks exclusively to the effect of the work of the sector skills councils.

Of course, Mr. Speaker. Sector skills councils have a UK-wide responsibility in the defence industry and with regard to apprenticeships. I am proud of the fact that under this Government apprenticeship numbers have risen from 60,000 in 1997 to nearly 250,000 now. It would be a great danger if a Government committed to cutting public investment were to come in because that would impact on the number of apprentices.

The important work of sector skills councils is inhibited by the Government’s emphasis on unelected regional authorities, and Ministers’ preoccupation with the Train to Gain programme, which spends taxpayers’ money funding training that people would fund themselves anyway. In confirming that the dead-weight costs of Train to Gain may be more than 80 per cent., will the Minister concede that he has finally listened to my complaints about this waste and so cut Train to Gain funding in the Budget and spend the money on apprenticeships instead?

No, we will not do that. I am glad that the hon. Gentleman has raised the issue of regional development agencies, because his party’s policy of abolishing those was described recently by the Engineering Employers Federation as a disaster. I do not know about other hon. Members, but when engineers warn me of impending disaster, I listen, and people should listen carefully to that advice.

National Investment Corporation

We are working to set up a national investment corporation, alongside working with the banks to establish a growth capital fund. We will announce further details of both shortly.

Do the Government understand that what firms want is lower taxes, fewer regulations, less red tape and the ability to borrow from their usual bank, many of which the Government control, anyway, so it should not be too difficult to ensure? What is the point, therefore, of this new lumbering state corporation, of the type that we thought we had buried in the 1970s? And how many banks have signed up to it, anyway?

In terms of the venture capital funds that the Government have been supporting, we have been getting help to small and medium-sized enterprises in order to ensure that they can take advantage of the recovery, when it comes, and develop new technologies and enterprises. Owing to the investment that we have put in, something like £1.5 billion has been given to 600 small and medium-sized enterprises to undertake such work. I know that the right hon. and learned Member for Rushcliffe (Mr. Clarke) says that

“the words ‘industrial strategy’ send a slight shudder down my spine,”

but, if that type of help were not available in his constituency, it would be very bad news for small and medium-sized enterprises.

That type of help is not available. I think that the expression is “all talk and no trousers,” because nothing has happened. Being a bit of an internet wizard, I googled “national investment corporation” just before I came into the Chamber, and interestingly the last reference to it was a press report on 9 December, so that shows how much activity has been going on. Will the Minister now say that it was a scheme dreamt up by Peter and Gordon, over a brew, to a whiff of sulphur, and will they concentrate on helping businesses, not on announcing great, grandiose schemes that go nowhere?

I do not think that the hon. Gentleman understands at all the needs of small and medium-sized enterprises at the moment. He does not acknowledge that in his region 627 loans have been offered to companies, totalling £67 million. His party would reduce—indeed, take away—all the assistance that we are giving to small and medium-sized enterprises, and it is very sad that he does not understand the importance of our strategy.

Would not more money be available if everybody paid their taxes? A fella is getting away with £127 million, without paying his taxes, and he is running the Tory party. They talk about being the party of change. They are the party of money-changers, and we ought to—

Order. The hon. Gentleman has expressed himself, but unfortunately the relationship with the national investment corporation is not merely tangential, it is non-existent. [Interruption.] We will leave it at that.

The most worrying threat to the future growth of the economy is the appalling decline in business investment. All we get from the Government is a series of grandiloquent announcements or press releases from the Prime Minister and the Industry Secretary. Does the right hon. Lady recall replying to a question in December last year by telling us:

“Further details of the National Investment Corporation will be announced by the time of the pre-Budget report.”—[Official Report, 3 December 2009; Vol. 501, c. 987W.]?

She will recall that nothing appeared in the pre-Budget report. Will she admit that it was just another public relations announcement, and that nothing substantial has been done to encourage the banks to return to providing normal lending, normal credit facilities and normal commercial services to small and medium-sized businesses, in particular?

It is astonishing that the right hon. and learned Gentleman does not accept that providing something like £1.5 billion of assistance in venture capital funds to small and medium-sized enterprises is important. We know that he wants to abolish regional development agencies; and we know that he does not believe in intervening, because he said that “industrial strategy” sends a shudder down his spine. But I should like to know how withdrawing investment allowances from small and medium-sized businesses would help whatever. Again, the Engineering Employers Federation said:

“Reducing the level of capital allowances would be a big problem for manufacturers”.

The Opposition do not care about small and medium-sized enterprises, but we do.

Queen’s Diamond Jubilee

Planning for Her Majesty’s jubilee is still in its early stages. I made a statement to the House on that matter on 5 January. We are working closely with Buckingham palace, which is developing a programme of events. However, it is too early to provide further details.

Does the Minister agree that we would do well to follow the lead of the Secretary of State’s grandfather by having a festival of Britain in 2012, when so many people will be coming to the UK for the Olympics? We could celebrate business talents, perhaps a recovering economy and what we have to offer outside the financial sector in terms of manufacturing and technology.

The great 1945 Labour Government made a very wise decision in instigating the festival of Britain, and I am pleased that the hon. Gentleman is offering positive suggestions about Her Majesty’s diamond jubilee. We are willing to listen to such suggestions from those in all parts of the House, because it is of course an occasion that we must all celebrate.

Apprenticeships (West Midlands)

9. What recent steps he has taken to encourage businesses in Coventry and the west midlands to offer apprenticeships. (320202)

We are taking a number of measures to encourage businesses to offer apprenticeships. The National Apprenticeship Service promotes and expands apprenticeships. Spending has gone up from £832 million in 2007-08 to a planned £1.2 billion next year. In December, we announced an apprenticeship grant for employers that offer £2,500 to employers who offer apprenticeship places to unemployed 16 and 17-year-olds. In the west midlands, the area which my hon. Friend represents, 790 employers have committed to recruiting young people, including 31 employers in Coventry.

I thank my right hon. Friend for that answer. What discussions has he had with the Secretary of State for Children, Schools and Families to promote apprenticeships in schools?

We want to promote apprenticeships in many sectors. We are making a particular effort to promote apprenticeships among unemployed 16 and 17-year-olds; that is why we recently announced the apprenticeship grant for employers, which offers £2,500 to employers who offer an apprenticeship. It is urgent that, in the difficult economic times that we have had, we avoid what happened in previous recessions, when young people were unable to find work and then sometimes spent years, or decades, never having a job. We are determined to ensure that that does not happen this time. That is why we are putting so much effort into ensuring that young people have opportunities, and that if they are out of work, that does not turn into long-term and sustained unemployment.

Can the Minister explain why the apprenticeship grant for employers began at the beginning of the calendar year instead of at the beginning of the academic year, making it impractical for small businesses in my constituency, such as James Holden’s business in Honeybourne, to access the scheme, as to support his apprentice he needs him to be able to access courses at South Worcestershire college alongside his apprenticeship?

We want to work with all parts of the economy to make this work for people, including employers and those parts of the education system that participate. I think that this has worked well for the education system. I simply contrast the numbers: a decade ago, we had about 60,000 apprenticeships; last year, we had some 240,000 apprenticeship starts. The truth is that we have brought back apprenticeships as a mainstream part of the labour market. They were in the intensive care ward when the Conservatives were in power, but they are now alive and well, and we are determined to support them in the future.

My right hon. Friend will be aware that there is a particular difficulty with skills levels in the west midlands, notwithstanding the welcome increase in the number of apprenticeships. One of the reasons for that is the perception among young people that going into industry is a dirty job that is not worthy of their particular talents. Will he undertake to work with employers and the educational system to try to change that culture to get young people with aspirations to use their talents within their local companies and local industry?

My hon. Friend makes a good point. Our constituencies neighbour each other and are very similar: they both have many high-quality engineering companies. He is right that despite the fact that these are good jobs, and often quite well-paid jobs, young people are sometimes not attracted to them. One of the things that we have done is to work with the Engineering Employers Federation to set up Manufacturing Insight, whose important job is to go into schools to ensure that engineering is seen as an attractive occupation. Alongside our policies on apprenticeships, I am sure that we can attract more young people to take up careers in manufacturing, because it is critical to the UK economy and represents significant opportunities for them.

Business Credit

10. What recent representations he has received on trends in availability to businesses of credit from banks. (320203)

The Department meets regularly both banks and business representatives to discuss the availability of business finance. This has included the quarterly meeting of the Small Business Finance Forum and a recent “Going for Growth” seminar, which brought banks and businesses together to look at current issues affecting business bank credit and how they might evolve as the recovery of the economy progresses.

The Federation of Small Businesses has found that nearly half of small businesses in Scotland are having to use personal savings, personal loans or personal credit cards as a major source of business finance. The Minister will know that the Public Accounts Committee found that Lloyds and Royal Bank of Scotland fell well short of their promises to lend £39 billion last year. Can the Minister tell the House what he will do this year to get the banks lending and, at the very least, ensure that the part-nationalised banks meet their lending targets for small businesses?

The Department has a help for business unit and, if the hon. Lady has individual examples with which she needs assistance, we are happy to take those up and discuss individual cases directly with banks. We are very conscious of the availability of lending and how important it is in taking forward the recovery. There have been signs of progress in the last quarter, but we will continue to engage with both banks and small businesses to ensure that that recovery builds.

Is the Minister aware that the Bank of England’s report last month showed that the fall in bank lending in 2009 was the worst since records began, and that lending to business crashed by a whopping £4.3 billion in December alone? Does he not remember the Chancellor’s words about the Government’s bank rescue plans 18 months ago—as far back as October 2008—when he said:

“The purpose of these proposals is to get lending started again”. —[Official Report, 8 October 2008; Vol. 480, c. 280.]

Given the latest figures, does the Minister not feel even the faintest shred of embarrassment about the yawning gulf between the rhetoric and the reality?

What I do remember is that when I was running a small business in 1992, interest rates increased in a morning from 10 per cent. to 15 per cent. We do not wish to see those days of instability return. We understand small businesses and engage with them, and we are continuing to work to restore credit and investment in industry. There are signs of positive steps forward and we will continue with those as time passes.

One of the problems that small businesses in my constituency have with the banks is the operation of the enterprise guarantee scheme. Despite businesses meeting all the published criteria, the banks simply will not lend, often saying that businesses are unviable because they have had a drop in profitability over the last year—hardly surprising in the midst of a recession. Will the Minister look at the operation of the scheme and put pressure on the banks to deal with small businesses more equitably?

To date, more than £1.2 billion of eligible applications have been pursued through the enterprise finance guarantee from 10,738 companies, and £857 million has been offered to 8,378 businesses. That has meant real help to those individual businesses. As I indicated to the hon. Member for East Dunbartonshire (Jo Swinson), if hon. Members—on either side of the House—have individual examples, I will work with them to help small business.

As the economy starts to grow, the provision of credit for all business, especially small and medium-sized enterprises, will be vital as working capital. As my hon. Friend the Member for East Dunbartonshire (Jo Swinson) said, the PAC has drawn attention to the fact that the nationalised banks have failed to meet their lending commitments. Last week, the Institute of Directors published a survey that showed that 57 per cent. of those who had applied for credit were denied it. Worst of all, of that 57 per cent., 83 per cent. were not even offered information about the enterprise finance guarantee scheme. So the banks are failing to lend, United Kingdom Financial Investments Ltd is failing to do anything about it, and the enterprise finance guarantee scheme is also failing. What will the Minister do about that catalogue of failure?

I have already recounted the figures on the extent of the success of the enterprise finance guarantee scheme—the money invested in businesses and the numbers of businesses that have benefited. We always wish to do more, and as the recovery gathers pace, we will continue to engage with business and banks to ensure that the banks provide assistance to the economy as it grows.

Higher Education

11. What steps he is taking to widen participation in higher education; and if he will make a statement. (320204)

We reaffirmed our commitment to wider and fairer access to higher education in “Higher Ambitions”, published last November. The number of students going to university from lower socio-economic groups is rising, and almost 10,000 more young people entered higher education in 2007-08 than five years earlier.

I thank the Minister for that answer, but with graduates facing debts of more than £20,000 and with the debate about whether to raise the cap on tuition fees to £7,000, I was pleased to sign the Leeds university union pledge against any such rises. Is it not time that the Government were clear about their policy going into the election, and will he now be clear whether he will oppose increasing the fee cap to £7,000—yes or no?

That is a little rich coming from the Liberal Democrats, given that they have had five positions on tuition fees since Christmas last year. Recently, there was a policy change indicating that they would not phase out tuition fees in the next Parliament. The Government have been clear that we will not pre-empt an independent review. We have asked Lord Browne to look at access, and the position of students, parents and employers. I will take no lessons on tuition fees from the flip-flop Lib Dems.

Bank Lending (Businesses)

13. What recent estimate he has made of trends in availability to small and medium-sized enterprises of bank lending. (320206)

The majority of small and medium-sized enterprises applying for finance continue to receive the finance that they require. For businesses with a turnover of less than £1 million, the proportion of applications that banks approved increased in the second half of 2009, and the average monthly approval rates for those businesses in the fourth quarter of 2009 were about 67 per cent. for loans and 72 per cent. for overdrafts.

In the real world, many small and medium-sized businesses in Southend, West are still suffering in the current economic climate, and their situation is not being helped by the negative attitude of banks towards lending. A survey by the Federation of Small Businesses showed that only 1 per cent. of moneys is being got from Government finance, so will they now accept my party’s proposal for a national guarantee scheme?

With respect to the hon. Gentleman, I live in the real world too—in Wrexham—and I have small businesses in my constituency as well. We all know that we have had an extremely difficult 18 months and the most substantial global recession in living memory, but we are improving access to credit for businesses. We do not want a return to the up-and-down approach—and the instability that came with it—taken by the Conservative party when I ran a small business.

Science Budget

I thank the Minister for that reassuring reply. The only problem with it is that, because the Government have put off the comprehensive spending review, no one has any idea what sort of sum is being ring-fenced. If it is not to be all show and no substance, will he indicate what sum is being ring-fenced, otherwise is it not nonsense to say that the ring fence will be maintained?

It is axiomatic that every area of Government is subject to a spending review, which will be determined after the Budget; that is obvious and applies to every Department. I think that the question is asked and answered.

Access to Credit

16. What steps he is taking to increase the level of access to credit by small and medium-sized enterprises. (320210)

We have a number of targeted interventions working to ensure access to finance for small and medium-sized businesses. I have already given the House figures concerning the enterprise finance guarantee, which is one example of those interventions.

The statements from the Dispatch Box are quite at variance with the experience of small businesses on the ground. Is it not clear that the second banking bail-out failed in its attempt to extend bank lending to business?

The experience on the ground is that we are seeing signs of increasing investment in business and of businesses beginning to recover as consumer demand develops. Consumer demand is extremely important. That is why it is vital that we do not reach the levels of unemployment in this country that we saw on two occasions under the last Tory Government.

Euro (UK Membership)

I am amazed at that response from the Minister. Is it not a fact that the floating of the pound and the depreciation of sterling have been enormously useful to small businesses and manufacturers in this country, making their goods cheaper abroad and making imports more expensive? Is it not great news that we still have the pound, and will the Government now give up their policy of taking us into the euro?

The Government’s policy remains as it was when it was set out by the previous Chancellor in a statement to the House in October 1997, and when the last assessment against the five tests was made in June 2003, when we said that

“we cannot at this point in time conclude that there is sustainable and durable convergence or sufficient flexibility to cope with any potential difficulties within the euro area.”

The whole House will see exactly what we meant.

Order. Just as I called the hon. Member for Wellingborough (Mr. Bone) to ask Question 19, the hon. Member for Huddersfield (Mr. Sheerman) came into the Chamber. I want to err on the side of generosity; therefore I call the hon. Gentleman.

Insolvency Service

I meet regularly with the chief executive of the Insolvency Service to discuss the agency’s performance and measures to improve it. I also agree the targets for the agency’s performance, which are set after discussions with an external steering board of industry experts. I ensure that the service is set goals that, although achievable, are challenging.

You are very generous, Mr. Speaker.

Will my hon. Friend take on board the fact that for many small businesses the system for individual bankruptcies is cruel and punitive? Big consultancy firms such as PricewaterhouseCoopers charge £200 an hour; indeed, a constituent was charged £800 for a letter to be answered. What is going wrong when these big companies can leech money from small people?

My hon. Friend makes an important point. An important part of the Government’s approach is to develop alternatives to formal bankruptcy procedures, through debt management plans and debt relief orders. We intend to offer a range of help to individuals and businesses, to enable them to avoid the formal procedures for insolvency, if at all possible.

Topical Questions

Our Department’s key task is to work with business to help secure recovery from the global recession. To do that we have put in place a strategic investment fund designed to support key areas such as low-carbon industries, the digital economy and advanced manufacturing; strong regional development agencies, working with business in the regions; and tax support for industry in the form of capital allowances to support investment. We are not about to withdraw £3.5 billion of support for industry through reforms to capital allowances, as advanced by the Conservative party.

I know that the Government are also committed to more apprenticeships. There are still tens of thousands of young people who are not in education, employment or training. Will Ministers look at the idea of posting the apprenticeships that are available, either by local authority area or by postcode, both to make them easier to access and to hold employers in the public and private sectors to account?

We have an online service to match employers with young people seeking apprenticeships, and as I said a few minutes ago, in December we announced a programme of grants of £2,500 for employers to take on unemployed 16 and 17-year-olds. I agree with the hon. Gentleman: we do not want young people to become completely distant from the labour market because of the economic troubles that we have been going through in the past couple of years. That is why apprenticeships are important, why the numbers have increased and why we have put in place the new grant specifically for unemployed 16 and 17-year-olds.

T2. Please could the Minister comment on the negotiations between Royal Mail and the Communication Workers Union? (320218)

The negotiations have been taking place on an intense level since the turn of the year. They are chaired by Mr. Roger Poole, the former deputy general secretary of the Unison union, and I believe that he has the trust of both sides. The aim of the negotiations is to reach a comprehensive agreement governing all the modernisation and change that needs to take place to put Royal Mail on to a healthier footing. We are not yet at the point of agreement, but I hope that we will be, and I very much hope that the talks will be successful, because that will be in the interests of Royal Mail, its staff and, most importantly, the public who depend on the postal service.

Have Ministers noticed the report in this morning’s Financial Times that the chemicals company Ineos, the largest private firm in this country by sales, has joined the queue of companies intending to move their headquarters out of the United Kingdom, citing levels of corporate and personal tax? Are Ministers also aware that, in the Davos World Economic Forum league of competitors, the United Kingdom has now slipped to 81st in the world in terms of its tax levels? Will the Minister make representations to the Chancellor that he should follow the Conservatives’ recommendations on lowering levels of corporation tax? Will he also tell the Chancellor that the choice of national insurance as a source of revenue in 2011 is particularly disastrous when we are supposed to be trying to come out of a recession?

I regret the Ineos decision, but I must point out that our corporation taxes are lower now than when we came into office; they are the lowest in the G7. The right hon. and learned Gentleman asked me whether I would approach the Chancellor and ask him to support the policy that his party has advocated. Just a few days ago, his colleague, the shadow Chancellor, said that that policy would involve the withdrawal of £3.5 billion of support for investment allowances for manufacturing industry. That is absolutely not what our industry needs at the moment, and, combined with the Conservatives’ policy to abolish the regional development agencies and to attack the strategic investment fund, it would represent a real threat to British industry. That is not what we want at the moment; we should support industry through the investment allowances and through strong RDAs working with—

T3. What steps is my right hon. Friend taking to ensure that fast, easy broadband access is enjoyed by everyone in the UK, especially those people who live and work from home in rural areas such as North-East Derbyshire? (320219)

My hon. Friend is absolutely right to raise that matter. I am announcing today the formation of Broadband Delivery UK, and the appointment of its chief executive, Adrian Kamellard, to drive forward the universal service commitment to deliver 2 megabits per second broadband to every UK household by 2012, and to manage the £1 billion next generation fund, which will result from the proceeds of the 50p a month phone line levy, to deliver next generation broadband to 90 per cent. of the country by 2017. My hon. Friend is right to highlight the importance of this service in rural areas. Virgin Media recently made the welcome announcement of 100 megabit per second services across its whole network by the end of the year, which will be available to almost half of UK homes. That reflects current demand, and we need to get a move on in delivering such services in rural areas as well.

T4. Listening to the answers given by the Ministers today, I have to say that I just cannot believe the complacency of this Government. Week after week, representatives of small businesses come to my constituency surgeries and tell me that they hear the Government’s rhetoric, yet every time they go to the bank, they cannot get the credit that they are promised. When will the Government stop making promises and start delivering for the people of Milton Keynes? (320220)

We have outlined the support that we have put in place. Some 160,000 businesses have been helped by the time to pay initiative, which has allowed businesses large and small to delay payment of a total of £5 billion in tax, to help them through the recession. Some 8,000 businesses have been helped through the enterprise finance guarantee scheme. I have to say to the hon. Gentleman that small businesses in his constituency would not be helped by his shadow Chancellor’s policy to abolish the £50,000 investment allowance that exists under this Government.

T8. Will my right hon. Friend look at the concerns of small businesses about the payment by Government Departments for work that has already been done? (320224)

My hon. Friend is absolutely right to stress that prompt payment is important. The Government should be a good customer and the Prime Minister has placed a great emphasis on that. As the Under-Secretary, my right hon. Friend for East Ham (Mr. Timms) said in response to an earlier question, the vast majority—more than 90 per cent., I think—of the bills in my Department are paid within the target date. That is important because small businesses rely on prompt payment. That is why we have taken it seriously during the recession.

T5. Despite Government assurances to the contrary, all the evidence on the ground in Essex is that companies cannot secure credit from banks or are having their credit conditions tightened. A recent Institute of Directors survey, as mentioned previously, confirmed that. Why are the Government incapable of sorting this out, particularly when they are a major shareholder in some of the banks concerned? (320221)

It is simply not the case that the Government are failing to take action to support small business. It is very important to increase the levels of consumer demand within the economy to increase the demand for small business. That is why we must focus on unemployment levels and also support business by extending assistance through Her Majesty’s Revenue and Customs by delaying payment. If we had followed the policy of the Conservatives, none of that assistance would have been available because the money would not have been there to assist businesses in their time of need.

What assessment has my right hon. Friend made of the impact of the investment in science on the recovery and also on the transfer into small business in the community?

Some years ago, there was a campaign called Save British Science. It is no longer necessary because we have invested so much extra in science. We value the contribution that science can make. We are a world leader: we have 1 per cent. of the world’s population, but 12 per cent. of the world’s scientific citations. That is a testament to the success of British science, which the Government have strongly supported. My hon. Friend is absolutely right not only that pure science is good in itself, but that the potential for spin-offs between the scientific research councils, higher education and companies is now enormous. We are seeing increasing success in this.

T6. The renewable heat incentive enjoys support in principle on both sides of the House. However, an unintended consequence might be to make the oil refining industry absolutely uncompetitive. The great oil refinery at Fawley in my constituency would see its margins completely wiped out if this levy is imposed on it. As it applies only to Britain, it adversely affects its competitiveness. What reassurances can the Minister give to the greatest oil refinery in the country? (320222)

The assurance I give the hon. Gentleman is that I will make sure that his point is relayed to the Department of Energy and Climate Change and the Treasury. It would probably be wise for me not to comment in any more detail on his question at this point.

Some of my constituents work for the engineering company, Firth Rixson, in Darley Dale, one of only three plants in the world making rings for aeroplane jet engines. Will my right hon. Friend use his good offices to help resolve its dispute with Tory-controlled Derbyshire Dales council? It has put in place a noise abatement order that could close down the company, which has been there for 70 years and employs 160 people.

My hon. Friend draws attention to the UK’s strength in aerospace—not only in her constituency, but in many others, too. Aerospace is one sector that has been strongly supported by the strategic investment fund that we have set up. Sadly, that support has been described as disgraceful by Conservative Members, but we believe that it is valuable and important.

T7. During these tough economic times, what is the Minister doing to support traditional English market towns, such as my own of Romford? (320223)

Traditional English market towns are very important for the economy. A couple of years ago, when the west midlands suffered floods, the regional development agency’s marketing of the area was important in saying that we were open for business. That is why the hon. Gentleman’s party’s policy of abolishing RDAs would be so damaging to the market towns that he supports.

T10. My right hon. Friend will be aware that Royal Bank of Scotland and Bank of Scotland cardholders are unable to use their cards at the people’s bank. When will we make the people’s bank exactly that—a bank for all the people—and make those companies in which we have invested a lot of money allow their customers to use their cards in that way? (320226)

My hon. Friend raises a similar point to that raised by my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) a few minutes ago. He is right that accessibility for account holders of other banks is important to the future of the Post Office. Some banks have stepped up to the plate and ensured that, and some 20 million accounts are available in that way. I agree with my hon. Friend the Member for Glasgow, North-West (John Robertson) that more should do the same, and I assure him that we are working on that with other banks.

T9. In Birmingham, far too often companies such as LDV have gone into administration and ended with no jobs and a fire sale of the assets. Have the Government looked into a review of chapter 11 so that when a company gets into difficulty it can come out with a business and jobs remaining? (320225)

We have introduced to our insolvency system several different alternatives to formal insolvency and bankruptcy proceedings, such as debt management plans and debt relief orders. The range of options now being put forward by the Government are an effective way to deal with problems for individuals and businesses that enter financial difficulties.

The Minister will be aware that the motor sport industry in the UK is a world leader. However, it is 10 years since the Government commissioned any research on the industry. Will he consider an up-to-date survey to ensure that the UK keeps its lead in the motor sport industry?

Yesterday, I returned from the Geneva motor show, where I met superb British companies such as Lotus that are making excellent, innovative, world-beating progress in their part of the industry. The world renowned UK Automotive Council is leading our approach to investment and research in the automotive sector, of which the automotive sport sector is an important part.

Does the Department accept that manufacturing industry is the only source of non-inflationary, sustainable economic growth, and that, in bank lending, priority should be given in all cases to manufacturing industry?

I share entirely the hon. Gentleman’s support for manufacturing. With my constituency being Wolverhampton, South-East, I see the value of manufacturing day in, day out. It is therefore important to support investment in manufacturing through the tax system. I hope that he will make representations to those on his Front Bench that they should desist from their policy of withdrawing £3.5 billion of tax support for investment in manufacturing—

But on that point, has the Minister seen the front page of today’s Libération, which refers to the sickness of French industry under a Conservative Government and contrasts that with the more robust health of British manufacturing industry? Does it help our firms to have the shadow Chancellor and shadow Business Secretary touring meetings and studios talking down the British economy?

In Geneva, I met a French manufacturing company that is considering investment in the UK because it recognises the UK Government’s commitment to innovation, manufacturing and industry—a commitment sadly lacking from the Conservative party.

Is the Minister aware of the excellent work of the staff at Telford college of arts and technology, who do a great job providing skills and training for the long-term unemployed? Is he aware that the Skills Funding Agency is seeking to reduce next year’s budget, despite unemployment in the west midlands being at record levels? Will he intervene to ensure that funding is forthcoming to help those who are on the dole?

Overall funding for the sector will increase by about 3 per cent. next year. I shall be happy to look into the individual case of the college to which the hon. Gentleman has referred if there is anything untoward, but I should point out that we have invested in further education, and it would not help if we had to make an extra £1 billion of cuts this year.

As the Minister will know, the science learning centres at York university and in nine university towns in the regions are the result of a magnificent effort by the Government, with the Wellcome Trust. However, they will not work unless teachers are able and willing to go to them for their courses in CPD—continuing professional development—and they need funds if they are to do so.

I recognise the need for teachers to be able to gain access to those courses. I shall be happy to discuss any problems with my colleagues in the Department for Children, Schools and Families.

Next week the board of the Payments Council, which represents all the major high street banks, will meet to rubber-stamp its decision to phase out the use of the cheque, despite the opposition of the Federation of Small Businesses and many other groups. Will the Minister, even at this late stage, make representations to the board and ask for a rethink?

I have made this confession before: I am a cheque user. I do not know whether that makes me a luddite, but I believe that cheques still provide people with a valuable payment mechanism, and I hope that the banks will think long and hard before abolishing them.