Skip to main content

Oral Answers to Questions

Volume 510: debated on Thursday 3 June 2010

Business, Innovation and Skills

The Secretary of State was asked—

Regional Development Agencies

9. What plans he has for future support for businesses in Merseyside and the north-west; and if he will make a statement. (775)

12. For what reasons his Department plans to replace regional development agencies with local economic partnerships. (778)

15. What plans he has for the future of the regional development agency in the north-east; and if he will make a statement. (782)

The Government intend to replace RDAs with local enterprise partnerships and to bring together business and local authorities to establish local accountability. Where they enjoy clear public support, the partnerships may take a similar form to existing RDAs. In making the necessary reductions in RDA budgets and reviewing their functions, we will seek to mitigate the impact on economically vulnerable parts of the country.

I thank the Secretary of State for his answer, and congratulate him and his team on their new positions. I wish them well.

Advantage West Midlands brings an economic benefit to the regional economy of over £7 for every £1 spent. Does the Secretary of State understand that the cuts that his Government have announced will put jobs at risk in my constituency and critical projects such as the i54 business park?

The Secretary of State does understand the importance of RDAs, which of course will be changed but in a way that makes them more effective. I am sure that the hon. Lady noticed that in my first comments on RDAs very shortly after I took office I recognised that several parts of the country were especially vulnerable. I mentioned the west midlands as one.

In my constituency of Wirral South there are a great many people who are very concerned about the coalition Government’s proposals, and specifically those with special relevance to the projects that have been progressed by the Northwest Regional Development Agency. Will the Secretary of State give me some reassurance that this vital business support will continue?

Within days of taking up this job I went to the north-west of England. I visited the RDA and talked to the chairman and chief executive and to businesses in the region. I reassured them that we are well aware of the problems faced by Merseyside and the north-west, and that it is an area of priority in terms of resources.

I too congratulate the Secretary of State, and I heard what he said about not tinkering too much in the west midlands. How many jobs would have to be lost in the west midlands before he considers this policy to be a failure?

I congratulate the hon. Gentleman on being returned to the House. I remember that he was a formidable force in the Government Whips Office in his day. He has already noted the acceptance that the west midlands has particular structural problems, and they will be taken into account in the reordering of the RDAs. In my first answer, I stressed that the changes depend very much on the reaction of local business and local authorities. I am sure that he will make representations to Birmingham city council and local businesses, and I hope that they will reflect the priority that he wishes to give.

I thank my right hon. Friend for the part that he played in securing a very clear assurance from the Prime Minister yesterday that One NorthEast will continue to have a key role as a regional development agency. Will that role and the way in which it is structured enable it to continue to assist existing and new firms to develop the private sector, for example in assembling land where needed?

I hope that it will continue to play a positive role. My right hon. Friend has been extensively involved in supporting the north-east, and I talked to him about these things on the several occasions I visited Newcastle and the region. He knows that one of the early decisions that came to me was to appoint the new chairman of One NorthEast, and appointing someone to manage the transition was a statement of a wish to maintain an element of continuity. I do not pretend that the RDAs will not change: they will, but I recognise that the north-east is a particular case because of its very high dependence on public sector employment and the generally very positive feedback I get about One NorthEast.

I congratulate my right hon. Friend and his team on their new positions. Is he aware of the Richard report commissioned by the Conservative party in opposition? It found that a third of RDA money was spent on administration and that much of the rest was spent on signposting to other sources of information. I beseech him to ensure that in the new policy businesses and locally elected authorities can get together to avail themselves far more directly of all that taxpayer money.

Yes, I am aware of that report. There was a happy coincidence of thinking between my colleague’s party and my own on the future of RDAs. She is quite right to say that there was a lot of administrative waste, some of which we are now removing as a result of the changes that have been made in the last week. There will be parts of the country—including, I think, the part that she represents—where we will have a substantial cutback in RDAs. However, they will be refocused and made more effective.

I thank the Secretary of State for last week coming to visit Pace International, an excellent company in my constituency. Following on from the excellent question from my hon. Friend the Member for Stourbridge (Margot James), I have been concerned that the Secretary of State has indicated that Yorkshire Forward may be given a reprieve. May I tell him that it is just as unacceptable for the unelected and unaccountable Yorkshire Forward to spend £300 million a year of public money as it is for similar organisations in the south of England?

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

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

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

I welcome the Secretary of State and his ministerial team to their post and wish them well. The Secretary of State and I have something in common: we both used to work for the late John Smith in times past, but that of course was before the Secretary of State fell in with the wrong crowd—and now he has fallen in with an even worse crowd.

The Secretary of State has said several times in recent weeks that his Department will be the Department for growth. I am not going to begin these exchanges by denying that whoever won the election, there would have been difficult decisions to take on deficit reduction, but does he accept that the £300 million of cuts to RDA budgets this year are not efficiency savings? They will mean real cuts in real business support, with less private investment leveraged in and cuts to important regeneration projects. Is it not the case that the specific feature of these cuts and his plans for replacing RDAs is that they will impact on our capacity to secure the very growth that is necessary to make deficit reduction a success?

I thank the right hon. Gentleman for his welcome and congratulate him on his elevation to the shadow Cabinet. He is quite right: we both greatly respected John Smith, for whom we worked. I should also like to thank the right hon. Gentleman for what he did as a very hard-working Minister. He has made the life of this Government easier as a result of all the preparatory work that he did preparing for private capital to come into Royal Mail. But in relation to cuts, I am sure he acknowledges that the fiscal position does demand drastic action. When I joined the Department I was already aware that this process was being undertaken—cuts were already being taken in science laboratories, and further education lecturers were being made redundant as a result of cuts made under his Government.

Flexible Working

I welcome the hon. Lady to the House and congratulate her on her election. The coalition agreement commits the Government to extending the right to request flexible working to all employees. We will be consulting businesses and listening to their views, and we hope to bring proposals to the House later in the year.

Thank you very much for that answer, and I am pleased to welcome all of you to the team. It is so nice to have you in this House.

I want to ask about flexible working arrangements in particular. I know from my own experience how valuable it can be to an employer to have employees on flexible working arrangements, but I realise that small businesses are very concerned about the potential impact of extending this regulation and I wondered what steps the team will take to consult on the extension of flexible working arrangements.

Our commitment is for extensive consultation. I want to make it clear that my door is open to all business organisations and to the hon. Lady and hon. Members of the House. We will listen to those views and take them on board, but there is increasing evidence that flexible working arrangements are embraced by employers and employees and are welcomed in many businesses across the country.

Many employers regard flexible working as involving the hiring of temporary staff—agency workers and so on. Will the Minister put it on the record today once and for all that there is no truth whatever in the reports in the Financial Times that his Government—the coalition—are planning to scrap protections for agency workers, for temporary workers, which give them rights to equal pay after 12 weeks?

I welcome the hon. Gentleman back to the House; I remember sparring with him in previous Parliaments. As a former Minister, he will know not to believe everything that he reads in the papers.

Regulation

3. What his most recent estimate is of the financial effect on businesses of the present level of regulation. (769)

5. What his most recent estimate is of the financial effect on businesses of the present level of regulation. (771)

7. What his most recent estimate is of the financial effect on businesses of the present level of regulation. (773)

While no official estimate currently exists, British Chambers of Commerce calculates that, since 1998, the additional regulatory costs introduced by the previous Labour Government have equated to approximately £11 billion every year.

I thank the Minister for that response and welcome him to the Dispatch Box; I can think of nobody in the House better qualified to occupy his role. The cost that regulation has imposed is staggering. Can he estimate how much of that regulation emanates from the European Union, and what can he do to minimise that?

I am grateful to my hon. Friend for those kind opening remarks, and I hope to be able to satisfy my colleagues’ desire to make sure that we make a real change in how we help small businesses. My hon. Friend is absolutely right to say that Europe is a key source of many of the regulatory problems that we have, but we gold-plate the situation. That is why the Government are determined to adopt a different approach. Let me briefly say what that is. There are two simple principles: first, we will ensure that the timing of implementation does not disadvantage British business, when compared to its European counterparts; and secondly, when introducing regulation, we shall do so in a way that does not substantially increase either the cost or the scope. That is a crucial commitment to small businesses, and I hope that it will stem the tide.

I, too, welcome my hon. Friend to his position. Labour’s red tape comes in all shapes and sizes. There are examples of that in Bournemouth, where a heavy goods vehicle licence is now required to drive one of the Noddy trains, which have provided an excellent service for years. Also, the police are now required to pass a course to allow them to climb an 8-foot ladder to erect Neighbourhood Watch signs. Does my hon. Friend agree that that is not what made Britain great?

My hon. Friend is right about the way in which common sense seems to depart from the way that this works. That is why we need to change the system, not just deal with the symptoms of the problem. That is why we are introducing a one in, one out approach to change the whole culture of Government: no new regulatory burden on business can be brought forward unless reductions are made to existing regulations. That will change the culture of Whitehall and stop some of the nonsense to which my hon. Friend refers.

As chairman of the all-party group on small shops, I receive many representations from shops in Southend West and across the country on the burden of such regulations. In these still unfavourable trading conditions, will my hon. Friend look carefully at those representations and, as a Minister open to new ideas, meet a small deputation from the all-party group?

I am very pleased to accede to that request. My hon. Friend is an excellent advocate of that vital part of our economy. It is crucial that we are open to fresh ideas, so I look forward to hearing those representations, and if he will contact my office, we can arrange that as soon as possible.

With reference to the Minister’s desire to help small businesses, it has to be accepted that some effort needs to be made to create the right environment for manufacturing businesses. Will he therefore please explain the Government’s plans to remove the annual investment allowance, which helps thousands of manufacturing businesses, hundreds of which are in my constituency?

The hon. Lady is right to point out the importance of manufacturing; it is a crucial part of our economy. Sadly, it became imbalanced when her party was in power, and we need to change that. On the tax measure in question, and the representation that she made, she will understand that we are in the period running up to Budget purdah and need to be careful not to get ahead of what I think the Chancellor’s ambitions will be, but at the CBI dinner he made it very clear that, as regards corporation tax changes, we will not act in any way that impugns manufacturing in any form.

Does the Minister consider any part of health and safety regulation to be burdensome or, as he just said, red tape? If so, which bits?

The key principle in regulation is to ensure that it is proportionate and balanced, and that risks, where they exist, particularly in health and safety, are recognised. However, I say to the hon. Gentleman and to the whole House, let us ensure that regulations are introduced and implemented with a degree of common sense. Under the Better Regulation Executive we have good rules about proportionate regulation, and I want to ensure that health and safety meets those standards.

May I offer my congratulations to the hon. Gentleman on his appointment? I was very pleased to read that this Government are to follow the previous Government’s initiative in publishing the forward regulatory programme. Indeed, I was very pleased to read the press release in the Financial Times this morning, which I must say was very familiar to me. Press releases are the easy bit, but when will the Government bring forward the costings for additional regulations, such as minimum pricing and additional planning regulations, which have already been proposed and are set out in the coalition agreement?

I thank the hon. Gentleman for his kind remarks and look forward to jousting with him in a reverse of the situation we had before. I am very pleased to answer his point directly, because he raises the question of those regulations that are in the pipeline. I am pleased to tell the House that this Government will initiate a fundamental review of all regulation that is scheduled for introduction over the coming year. In the first few days of this Government, we have already identified several billion pounds of costs in those regulations, and we want to ensure that, where we can, we remove them so that business can get on and grow.

Adult Community Learning

My strong commitment to adult and community learning is well known. It is shared by my Secretary of State and the Prime Minster, who in a recent interview with “Adults Learning” made clear his belief that learning is

“about broadening the mind, giving people self-belief, strengthening the bonds of community”.

That is why in 2010-11 we are developing a skills strategy with increasing importance placed on those with disabilities, learning difficulties and disadvantaged families and communities, spending £210 million in that year alone.

But that is insufficiently elegiac for you, Mr Speaker, and for this House. Lifelong learning feeds hope—builds and rebuilds lives by seeding a hunger for knowledge. It shapes people, families and communities and feeds social justice.

I thank the Minister for that response. Does he agree that the success and value of adult education is measured not only in terms of qualifications and certificates? Will he assure us that, as this Government move forward, the past cuts in adult education, for courses that do not lead to qualifications, will if possible be reversed, and that value will be placed on all layers of community adult education?

I welcome my hon. Friend to the House. I know of his rich experience in learning as a former teacher, and he, like me, understands that learning has a value for its own sake. I do not want to be unkind to my predecessors, because that would be slightly vulgar; nevertheless, it has to be said that the dull utilitarianism that permeated the previous regime’s thinking on this subject has now, thankfully, come to an end.

The Minister will be aware of the huge contribution that the Workers Educational Association has made to adult education. Can he confirm that his Government will support the WEA in its current form?

I am not only an admirer but, I would go so far as to say, a devotee of the WEA. The value that learning brings, in elevating lives and building strong communities, is exemplified by such organisations, and I look forward to an early meeting with the WEA to discuss how we can move forward together.

Apprenticeships

6. What steps his Department plans to take to support businesses seeking to offer apprenticeships. (772)

We will increase the number of apprenticeship places, and we are committed to improving the quality of apprenticeships to make them better suited to the needs of employers and learners. The Government’s decision to redeploy £150 million of our savings in 2010-11, creating an additional 50,000 places, demonstrates our commitment to high-quality, employer-owned apprenticeships.

I thank the Secretary of State for his reply. Is he aware of the excellent Essex apprenticeship scheme that does so much for young people throughout the county? What steps will he take to replicate such schemes to ensure that apprenticeships are better championed to young people? Polling data from the organisation Edge show that just one in four teachers would recommend apprenticeships over higher education.

The hon. Gentleman is absolutely right: this is an extremely important aspect of helping to develop the careers of young people. It is worth putting it in context that the 50,000 additional places we are providing are on top of 250,000 that existed before—a 20% increase in one year. This is specifically directed at small and medium-sized businesses, which frequently do not get the benefit of apprenticeships. I am sure that the good practice in Essex will be emulated around the country.

I welcome the right hon. Gentleman to the Dispatch Box. Has he read the ERA Foundation’s report on the declining productive capability of our country? Does he accept that lively and proper apprenticeships will be an essential building block in facing the productive capacity changes that we need in our country? Will he remember that last time the Conservatives ruled this country, they got rid of apprenticeships? Will he have a free hand to build on the basis that we built on in the past 13 years?

This Government are expanding apprenticeships very rapidly in their first few days in office. Of course the hon. Gentleman is absolutely right on his basic point that apprenticeships are not only good for the very many young people who would otherwise be unemployed, but good for the productivity of the economy.

May I ask the Secretary of State to give an assurance to manufacturing companies, particularly those such as Thamesteel in my constituency, which need to recruit people with high ability as apprentices, that the apprenticeships scheme that we are proposing will not be targeted only at people with less ability?

Indeed; the hon. Gentleman makes an excellent point. We are talking about the full range of skills in this regard. If he wishes to pursue his point in relation to his constituency, the National Apprenticeship Service is there to help him to steer the scheme in the right direction.

I warmly welcome the right hon. Gentleman to his position and welcome his apparent desire to carry on Labour’s outstanding record on growing apprenticeships. When I became the Minister with responsibility for apprenticeships, I thought I was being radical in appointing an apprentice to my private office, but I must admit that even I would not have been as brave as this Government and gone so far as to appoint an apprentice as the new Chief Secretary to the Treasury.

Given the need to set a good example to business, can the right hon. Gentleman tell us what the numbers will be for this year on public sector starts for apprenticeships?

Of course we cannot give numbers for that, for the simple reason that it is an offer for businesses to take up. Many of them will be in the public sector, and many of them will be in the private sector. I will keep in touch with the hon. Gentleman and give him the information that he requires as it emerges.

I warmly welcome my right hon. Friend and his colleagues not only to their jobs but to their commitment to apprenticeships. May I ask him, in particular, to ensure that those involved in large-scale construction projects and large-scale transport projects take their full responsibility for apprenticeships and that all chambers of commerce are engaged in the process of spreading the word?

Yes, indeed; that is a very helpful point. I would merely stress that, by and large, very large companies do engage in substantial apprenticeship schemes for their own good reasons, and have the resources to do it. The particular expansion that we are engaged in is focused on small and medium-sized enterprises that lack the resources and the support to do that.

Employment Law

8. What the terms of reference are of the review of employment law referred to in the coalition agreement. (774)

We are reviewing employment law to maximise flexibility for employers and for employees. Our aim is fairness for employees within a competitive environment for business.

I thank the Minister for that response. During the election campaign, the Secretary of State said that he and the Liberal Democrats believed that the link between the Labour party and the trade unions was corrupt. Can we have an assurance from the team that that prejudice will in no way influence the employment law review?

The Secretary of State has made it clear that he did not make those remarks. We are looking at a review that will not cut the rights of individuals, but we want a streamlined process to cut the costs of compliance for employers. We have noticed the comments that have been made by, for example, British Chambers of Commerce and the Institute of Directors, which have called for changes to the employment tribunal system so as to streamline the process. That is what we are considering.

Sheffield Forgemasters

10. Whether he has discussed with Sheffield Forgemasters the continued availability of a loan facility from his Department; and if he will make a statement. (776)

At this time, I have not discussed with Sheffield Forgemasters the continuing availability of the loan facility but, as the then Chief Secretary’s statement on 17 May made clear, all projects that were approved after 1 January 2010, including this one, are undergoing a process of review. An announcement will be made in due course as part of the review.

I thank the Secretary of State for his answer, but will he acknowledge that the loan was crucial in levering in significant private sector investment to enable the acquisition of the largest forging press outside Japan and Korea? Over three years, the loan was subject to rigorous review by the shareholder executive and a value-for-money exercise, and this further review is causing unnecessary uncertainty. Will he therefore urgently get rid of that uncertainty, give Forgemasters the confidence to move forward and confirm the loan?

I understand the importance of that project to the hon. Gentleman’s constituency and to Sheffield, but he needs to understand that we inherited a very large number of projects that were agreed in a hurry in the run-up to the general election. I do not want to speculate about the motives, but we inherited a lot of projects that were of variable quality. We now have to judge those projects, including this one, according to the criteria of value for money and affordability.

Let me assure the House that the Sheffield Forgemasters project was not agreed in a hurry. Does the Secretary of State understand that the decision of the last Government to provide a loan, not a grant, to that company was about not just support for one company but our ambition to secure a national capability for the United Kingdom in making key components for the nuclear supply chain that is set to grow throughout the world in the coming years? Does he also accept that if the damaging uncertainty not only about this but about other important projects, such as the electric car at Nissan and the automotive assistance to Ford, is not resolved soon, all the Government’s talk about supporting a lower-carbon economy will be seen as nothing more than rhetoric, with their actions going in entirely the opposite direction?

I understand the issue because I have studied the reasoning behind the project. However, the hon. Gentleman has got to understand that we must do due diligence and a lot of projects have to be reviewed. There is also the basic question of affordability. We have inherited a very serious financial situation and all such projects must be judged against whether money is available for them.

Women Entrepreneurs

While the existing start-up rates for female-led businesses compare favourably with other G7 nations, the Government believe that much more needs to be done to help more women in business.

I am currently talking to a wide range of businesses and considering what role the Government should play with regard to access to finance, home-based businesses and enabling more women to start their own firm.

But the people who need to support women entrepreneurs and are failing to do so are at the banks, despite evidence from the Grameen bank and from the USA that investment in women entrepreneurs can grow the economy. What conversations is the Minister having with the banks to ensure that women-led businesses can succeed? Is he confident that a male team of Ministers will make that a high enough priority?

The priority of making sure that the banks are doing their job is something that both the Secretary of State and I are working on closely with the banking sector and the Treasury. We agree with the hon. Lady that we need to make sure that the banks are doing their job properly. I think there was a degree of, dare I say, complacency from some Ministers at the end of the last Government that all things were settled, but she is right to point out that they are not. She has also rightly pointed out the gender imbalance on the Front Bench, but I am pleased to tell her that my noble Friend Baroness Wilcox, who represents this Department in the other place, is working closely with me on the question of women in business. Baroness Wilcox is a successful business woman herself and I think she will make an excellent contribution. I know the hon. Lady takes a close interest in this matter. If she and other business women here would like to contribute to the debate, so that we can ensure we get the gender balance right and help more firms, they would be very welcome.

Many companies already accept the wisdom of procuring from companies that look like the customers whom they supply. We are behind many other countries, particularly the USA. I greatly welcome the Government’s aspiration to procure 25% from small businesses. Will the Minister consider the issue of procurement, and measuring procurement, from women-owned businesses for Government contracts?

I would be wary on trying to secure gender balance, as it becomes very complicated. The key is ensuring that women, as business owners and managers, can have the best opportunity. I would be happy to talk to the hon. Lady about how we can do that. I extend to her and other female Members who are in business and have real experience an offer to help me ensure that those businesses can succeed.

Higher Education Funding

Universities will receive £5.1 billion for teaching from the Higher Education Funding Council for 2010-11. This includes an increase of £70 million since the December 2009 grant letter. That reflects the 10,000 extra university places that the coalition is committed to delivering in 2010-11.

The Government will make future funding decisions in the light of the Browne review on student finance, established by the previous Government, which will report later this year.

I am sure that hon. Members know that for almost a decade Professor Philip Cowley and his colleagues in the school of politics at Nottingham university have been studying Back-Bench behaviour. Their findings have been published on the “Revolts” website and are widely used by journalists and hon. Members—particularly, I am told, the Whips Office. Does the Minister share my concern that the project has recently lost its Economic and Social Research Council funding, just at the time when it might yield the most interesting results from the Benches opposite?

I attended a meeting at Nottingham university before the election when Professor Cowley presented his report on the fascinating subject of rebellions in the House of Commons, so I am aware of his work. However, it would be dangerous if we got into a position whereby Ministers responsible for higher education started commenting on and micro-managing individual universities’ decisions about their departments. I do not think that we should go down that route.

My hon. Friend will be aware of the value for money that the US community college model provides in getting more disadvantaged young people into higher education. Is he having any work undertaken in the Department to assess what we can learn from that important system in the USA?

I pay tribute to my hon. Friend’s expertise in the subject and his record of campaigning on it. I completely agree that progression through college to university is one of strengths of some American systems, such as that in California. Experts from California are coming here next week. We definitely need to learn from those systems so that people have opportunities as they progress through education to move from college to university.

I welcome the hon. Gentleman to his new role. I know that many in the higher education sector value the continuity that he provides, but they also value consistency. In November 2009, he said:

“At a time when the jobs market for young people is tougher than ever, it is far better to find them a place in education than to leave them languishing on the dole.”

Why, within days of taking up the job, has he done a volte face and condemned 10,000 young people to the dole by not providing extra student places to HE this summer? Is that not desperately hypocritical?

I look forward to my exchanges with the right hon. Gentleman, and of course I recognise his expertise as the former Minister for universities. As he held that position, I am sure that he remembers the grant letter that the former Secretary of State sent out in December 2009 to the Higher Education Funding Council, which involved a reduction in the number of students. We have delivered the pledge that we made to our party conference, and which is in the coalition agreement, of 10,000 extra places. That is why the amount of money going to universities in teaching grant this year is £50 million higher than the figure set out in the December 2009 letter.

Royal Mail

It is for individual Government Departments and public bodies to decide which mail carrier to use, having regard for the most efficient and cost-effective ways of sending their mail. Given the public sector deficit that the Government inherited, that must be the right way forward.

Several Departments do not use Royal Mail, but outsource to firms such as DX Group, which, of course, means that the public purse is not recompensed. Surely if we are to safeguard Royal Mail and the Post Office, we ought to do more to help them.

I am sorry to disappoint my hon. Friend, but it is very important that we use the competitive mail market to get the best value for the taxpayer. It is crucial that we abide by public procurement rules, and the Department for Business, Innovation and Skills will not tell other Departments and public bodies how to procure their mail services.

I received 12 mailings from one organisation that has had a lot of state money in recent years, and some of my constituents received up to 30 mailings. Will the Minister have a word with some of his colleagues, because they all love to talk about how they support the Post Office, but when the Tory party and Lord Ashcroft funded those direct mailings, none was delivered through the Royal Mail? Will he have a word with those hypocrites, and every time they talk about the Post Office, remind them of that?

Order. Just before the hon. Gentleman replies from the Dispatch Box, I should say that I know he will want to keep his answer within order, and that as far as I am aware, the Conservative party is not a public sector body.

Thank you for that helpful advice, Mr Speaker.

The hon. Member for Bassetlaw (John Mann) has always been known in the House for his modest use of language and his cross-party spirit, and I am sure he will want to ensure that all trade unions that fund mailings use Royal Mail.

Video Games Industry (Scotland)

16. What recent assessment he has made of the future prospects of the video games industry in Scotland; and if he will make a statement. (783)

No formal assessment has yet been made since we came into office, only about three weeks ago. However, I can say that the prospects for the Scottish video games industry are excellent, particularly with the centre of excellence for games at the university of Abertay in Dundee.

As the Minister will be aware, the video games industry is increasingly successful in the UK and particularly in Scotland. The Labour Government indicated that they would give a specific tax relief to the industry, which faces huge competition internationally, particularly from the USA and Canada. Will he provide reassurance that that tax relief plan will continue under his Administration?

As the hon. Lady knows, we are currently in Budget purdah, but in opposition, I was on the record as supporting a video games tax break long before the Labour party converted to that. Indeed, for most of the last 13 years, the only time the Labour party ever talked about video games was when the right hon. Member for Leicester East (Keith Vaz) condemned them for all sorts of misdemeanours.

I am glad the Minister mentioned Abertay in Dundee, as the video games sector is hugely important there. Although it was disappointing that the last Labour Budget contained nothing on tax breaks for the games industry in this financial year, and although he is in Budget purdah, will he and his colleagues take excellent representations from TIGA, the games trade body, to understand precisely why tax breaks are required to fend off the competition from jurisdictions where tax breaks are already in place?

When I was the Opposition spokesman, I had a close relationship with TIGA, which is an excellent trade body representing the video games industry—it put together an excellent submission on games tax relief and many other video games sector issues—and I am very happy to continue to meet TIGA representatives to discuss this important matter.

Train to Gain

17. How many employers used the Train to Gain programme in 2009-10; and how many people were trained under that programme. (784)

By July 2009, around 200,000 employers had staff involved in training through the programme. In the 2008-09 academic year, learners started 817,400 Train to Gain courses.

I thank the Minister for his reply and welcome him to his portfolio. The figures he gave demonstrate that the programme is very successful. Local manufacturers in the west midlands have recognised and welcomed it in the past. Can he give assurances that the programme will be continued, particularly as it was used effectively during the global recession, for companies on short-time working? In the event that we relaxed back into a double-dip recession, it could be there for them to use again.

The hon. Gentleman will know that the problem with Train to Gain is its deadweight cost—a fact that the last Administration were unwilling to face up to. The evaluations of Train to Gain suggest that it is used to support all kinds of training that employers would have funded anyway and to accredit skills that already exist—

Well, that is not just my view; it was the view of the National Audit Office, which looked at the scheme and said that it has not provided good value for money.

Apprenticeships

What steps will be taken to ensure that the new system of apprenticeships reaches out to the very smallest businesses in my constituency and elsewhere? All too often in the past the very smallest businesses have had great difficulty in getting the information that they need to engage apprentices.

My hon. Friend is right. The apprenticeships system needs to be built from the bottom up, which is why the Government are determined, as the Secretary of State said earlier, that small and medium enterprises should be supported in securing apprenticeships. We intend to introduce an apprenticeship bonus, which will help those small businesses to participate. We want to look at supply-side barriers and at root training organisations that will help small businesses to take on more apprenticeships. We are committed to apprenticeships in a way that has not been seen for years, perhaps not ever.

That is breathtaking. How can businesses in the supply chain in my area be expected to take on apprenticeships while there is so much uncertainty surrounding the reviews being undertaken on Vauxhall Motors and Airbus?

There is no uncertainty. Let me be clear about this Government’s commitment to apprenticeships. Even in the short time that we have been in office, we have transferred money into the apprenticeship programme that will allow the creation of 50,000 more apprenticeships. That is just the start. My ambition is no less than to build a system that facilitates more apprenticeships in Britain than we have ever seen before.

Topical Questions

My Department’s responsibilities include helping to drive growth, including rebalancing the economy; building on the strengths of manufacturing, the knowledge industries and the science and research base; helping businesses grow by getting rid of excessive regulation and ensuring that they can access credit; being open to trade and foreign investment; and encouraging the development of a skilled and educated labour force.

I trust that, within that roll-call, the Secretary of State can persuade his Department or other relevant bodies to look into the debacle of Vergo Retail Ltd, now in administration, and its acquisition—less than a year ago—of the non-food outlets of the East of England Co-operative Society, with the pending loss of up to 300 jobs, given up by the caring, sharing Co-op across the east of England.

I very much welcome back my colleague, the voice of Colchester, and I know that he will continue to fight assiduously for his constituency. I do not know the facts of this takeover and closure, but I will be happy to investigate if he writes to me or meets me to discuss it.

Does the Secretary of State acknowledge that cutting the higher education budget will place pressure on Lord Browne to conclude that student fees need to rise? Is it not the ultimate cop-out for the Secretary of State to cut the higher education budget and then abstain on student fees legislation?

Of course, Lord Browne’s report was commissioned by the previous Government, on a cross-party basis, so those on both sides of the House will agree that it is right to wait for his report. As I explained to the House earlier, compared with the plans announced in December 2009, we have increased our contribution to student teaching so that we can deliver our pledge of extra student places.

T2. Does the Secretary of State have any plans for departmental reorganisation? Does he recall that his predecessor, Lord Mandelson, went on an empire-building spree as a price for supporting the former Prime Minister, and will he be moving back innovation and skills to the Department for Education? (792)

There are no plans to reorganise the Department, and in any event, it is a matter for the Prime Minister. Actually, one of the strengths of the new Government is that we have maintained continuity and are concentrating on policy and economic recovery, not on moving around the furniture in Whitehall.

T3. Nissan is investing £400 million in its Sunderland plant, and the previous Government awarded it a £20 million grant for that, to help to secure thousands of jobs in the supply chain. Can the Secretary of State tell me whether that grant is still secure, considering that, if he answers no, thousands of jobs will be put at risk? (793)

No, I cannot tell the hon. Gentleman now, because as I explained earlier, all these projects are being reviewed. I know perfectly well that there is a strong case in this instance, but we have to review value for money and affordability in every case.

T5. Will the Government’s apprenticeship initiative provide scope for the training of blacksmiths and other heritage crafts, bearing in mind the concerns of blacksmiths in my constituency that the new entrants training scheme for blacksmith training seems to have been closed down following the decisions of the previous Government? (795)

I know that my right hon. Friend has a strong interest in this subject, and I assure him that the Department is committed to improving the apprenticeship regime for craft skills. I have also already had a meeting on how we can improve the qualification regime so that specific qualifications in craft skills are properly recognised and funded—something that disappeared under the previous Government.

T4. Why is this new Front-Bench team so reluctant to talk about manufacturing? Can we not start to tie up the start-up of new businesses that make things with our university sector? Is it not about time that there was yet another inquiry into doing something about expanding our manufacturing exports? (794)

This Government are very fixed on the issue of rebalancing the economy. Manufacturing has declined continually over the past few decades, particularly in the past decade. It now has the advantage of a more competitive exchange rate, and it will be given support from the Government, particularly through the development of apprenticeships, as I indicated earlier.

After vigorous lobbying, including by the all-party “Save the pub” group, the last Government confirmed plans to relax the beer tie and to set a timetable to act if the industry did not reform itself. Can we get an assurance from the Minister that this Government will stick to that plan and timetable?

T6. I note that this week the Secretary of State visited Glasgow university in my constituency, according to The Scotsman, although unfortunately I did not receive prior notice of his visit. He will be aware of the significant spin-off industries in life science from Glasgow university and other universities in Scotland. Does he agree that a patent box, which the previous Labour Government talked about, is essential if we are to grow and increase the life science industry in this country? (796)

I apologise to the hon. Lady if she did not get advance notice of my visit, but it was a very successful one. There is an outstanding project based on grants from the Medical Research Council, among others, with very good commercial spin-off. That is exactly what the Government want to encourage.

Can the Secretary of State reassure us that any changes to the capital gains tax regime will not reduce investment in business, particularly in new start-up businesses, and will not undermine schemes of employee share ownership?

As the hon. Gentleman knows perfectly well, the coalition agreement envisages the reform of capital gains tax as a way of making the tax system fairer and, among other things, creating revenue to help lift the tax threshold and lift very large numbers of low earners out of tax. We are conscious of the impact of capital gains tax on business, and we want to make it clear that any reforms will acknowledge the role of entrepreneurship, and not damage it.

T7. The Minister will be aware that I have already been in contact with his office about Trench UK and Siemens’ proposals to close this very profitable plant and transfer production to France and Germany. Will he give an undertaking to meet Siemens at the highest possible level to avert this closure, and will he also meet a delegation from the plant so that we can discuss how we can save this jewel of British manufacturing? (798)

I know that the hon. Gentleman takes a keen interest in his local businesses and jobs, and I am concerned about the issue that he has raised. I am aware that Siemens is about to commence a 30-day consultation period for employees. Clearly that is a commercial matter for the company, but in response to his inquiry, I would be happy to receive further representations if he would like to contact my office.

Yesterday, the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), confirmed in response to a question of mine that the Government are committed to introducing

“an ombudsman, in the Office of Fair Trading, to enforce the Grocery Supply Code of Practice…and curb abuses of power which undermine…farmers”.—[Official Report, 2 June 2010; Vol. 510, c. 44W.]

Can he confirm that that is a reference to the physical location of the ombudsman, and that it does not mean that the ombudsman will be operating under the executive power of the OFT?

I am grateful for that question. I pay tribute to my hon. Friend, who has led the debate on the new proposal. He and other colleagues on the coalition Benches helped to persuade the previous Government to adopt the idea, for which he did so much work. He will be aware that the previous Government undertook a consultation, which ended at the end of April. We are looking at all the submissions to that consultation and we will report back to the House when we have had a chance to analyse them, dealing with the sorts of issues that he has raised.

T8. Earlier, in response to three identical planted questions about regulation, the Minister gave us a whole load of sanctimonious poppycock about his views on regulation, saying that there should be much less of it. May I urge the Secretary of State to keep his Ministers in tow and to ensure a proper sense of regulation, especially in the financial services industry, in which there are still many predatory practices? In constituencies such as mine, loan sharks as well as reputable financial services organisations are still preying on vulnerable families. (799)

The ministerial team is completely united in its approach to regulation. There are clearly areas where regulation is necessary, not least for consumer protection, to which the hon. Gentleman referred, but it must be proportionate and cost-effective, and it must not obstruct genuine business growth.

Just before BIS questions, I received a phone call from the chief executive of a leading company in my constituency who is keen on apprenticeships and welcomes what the new Government are going to do. However, the company is just bigger than a small or medium-sized enterprise, and he does not feel that it gets the help and encouragement that it needs. Are we taking such companies into account as well?

Yes, we are indeed. I am having a dialogue with all the representative organisations of small businesses, and I am of course speaking to the sector skills councils, which play a key role in that regard, in building apprenticeship frameworks that are pertinent. However, as I said earlier, we need to look at the supply-side barriers and bureaucratic burdens that discourage small businesses, and we also need to offset some of the costs through our apprenticeship bonus scheme, and we will do that. We will build apprenticeships from the bottom up, for firms such as that which my hon. Friend has so nobly represented in the House today and the many others like it.

Business, innovation and skills are the engine that will drive forward our economic recovery. Given that, could the Secretary of State tell me the number of high-value engineering apprenticeships that he intends to fund from his Department in the north-east this year, and how it will increase over time? Further, as he has already accepted £836 million of cuts to his important Department, will he acknowledge that any further cuts would undermine our future economic recovery?

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

T9. Businesses both small and large in Wirral are showing great faith in our young people and their future by investing in apprenticeships. However, that work has the potential to be undermined by the great many reviews that the Government are now carrying out. Will the Minister confirm that if those reviews are truly necessary, they will be carried out swiftly and in liaison with businesses, so that their support for apprenticeships will not be undermined? (800)

It may be that I have not made the position sufficiently clear, so let me do so now. No review that is taking place would impact in a negative way on apprenticeships. The hon. Lady can go back to her constituents with pride and say that this Government are committed to apprenticeships there and across Britain. She can also come back to the House and challenge me on that if I do not deliver.

I congratulate the Secretary of State on his appointment. May I also congratulate him on what he said before the election about ensuring that bank lending would be improved, so that cities that are in recovery from the recession, such as the city of Nottingham, can see the cash flow coming into businesses to ensure that they go from recovery to prosperity?

I thank the hon. Gentleman for his welcome, and I am grateful to him for allowing this crucial subject to surface at last. The major factor in inhibiting the growth of business, particularly among small and medium-sized enterprises, is the lack of access to credit. It is the firm intention of this Government to ensure, through a combination of loan agreements, guarantees and other mechanisms, that that credit will indeed flow. I shall be working with the Chancellor on this.

In what way will the Secretary of State ensure that bank credit flows? How is he going to keep the House informed of how successful his pious hopes turn out to be in practice?

I look forward to keeping the House informed of progress. One of my criticisms of the last Government, which I made from the Opposition Benches, was that despite their successful intervention in the latter part of 2008, the banks then ran rings around them. The lending agreements were never enforced, and the semi-nationalised banks simply did not act on the instructions that they were given. We in this Government intend to do a lot better.

On the coalition Government’s rather simplistic policy on regulation of “one in, one out”, will the Minister confirm that the one regulation coming in will be cost-equivalent to the one going out? If so, which regulation will go out when the agency workers directive comes in?

It is very simple: if a Minister wishes to bring forward a new regulation, they must show that they have removed a regulation and that that will reduce the overall burden of regulation, ensuring that businesses see a net reduction. That is an important change. It is something that the hon. Lady’s Government failed to deliver, but it is something that we will deliver on.

Does the ministerial team acknowledge that the sacking of 1,200 Jarvis workers in March by a company that did not manage its affairs properly was unacceptable? May I ask for a meeting, with the MPs who represent those experienced rail engineers, to see what work could be done on contracts that Network Rail needs to meet, to ensure that they find employment?

I do not know the background to the right hon. Lady’s question, but I would certainly be happy to meet her if she thinks that my Department can help to alleviate those difficulties.