Skip to main content

Topical Questions

Volume 506: debated on Thursday 4 March 2010

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.