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Topical Questions

Volume 510: debated on Thursday 3 June 2010

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.