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Oral Answers to Questions

Volume 531: debated on Thursday 14 July 2011

Business, Innovation and Skills

The Secretary of State was asked—

Open University

I meet representatives of the Open university regularly. My most recent meeting, covering a range of issues, took place earlier this week. The Open university has, of course, particularly welcomed the extension of loans to part-time students, which will benefit up to 175,000 students overall, including many from the Open university.

Some 20% of the newest undergraduates at the Open university come from the 25% most disadvantaged communities in the country. Does my right hon. Friend agree that the widening participation allocation is crucial to delivering results and will be essential to widening access in the future?

Yes. My hon. Friend refers to something that, in many ways, is the equivalent of the pupil premium in schools. The Higher Education Funding Council for England is now consulting on how best to deliver the money in future, but we have made it clear that it is very important to reflect the additional costs that under-represented groups face.

Is the Open university the only happy university at the moment? I note the 10% increase in the number of its students, but what about the rest? Most of the vice-chancellors I talk to are very unhappy about the destabilisation of the sector and cannot see their way forward.

The hon. Gentleman does higher education a great disservice. In my experience, vice-chancellors are looking forward to the challenge of attracting students and know that one in four students will be bringing their money to the university that they choose, as we push back the quotas. They also see that in our White Paper we envisage universities having 10% more cash coming to them in four years’ time than they have now.

May I just remind the House that the question is specifically about the Open university? I know that that is what the hon. Gentleman on the Opposition Front Bench will be asking his question about.

I am always grateful for your helpful advice, Mr Speaker.

As the Minister reflects on his important meeting with the vice-chancellor of the Open university this week and as he worries, too, about the number of would-be students set to be turned away from university this summer on his watch, can he tell the House which of the following he is most proud of? Is it the decisions that have already been taken by the Government to axe 24,000 student places? Is it his plan to axe another 20,000 places at quality universities in order to fund an auction to the lowest bidder? Or is it his claim that universities charging the full £9,000 would be the exception?

The hon. Gentleman is in danger of becoming the mad axeman. There are no 24,000 places being axed—he has invented that figure. What we have been able to do, even in tough times and even when we are reducing spending across the board, is broadly maintain the number of student places.

Green Investment

2. What assessment he has made of the effects on growth of green investment; and if he will make a statement. (66017)

4. What assessment he has made of the effects on growth of green investment; and if he will make a statement. (66019)

In the transformation to a green economy, low-carbon industries will grow, while other sectors will face significant challenges from increased energy prices. There could be significant transitional costs in the near term, but those could be manageable, with targeted Government action. We have committed to announcing in the autumn a package of measures to reduce the impact of Government policy on electricity costs for energy-intensive manufacturers whose international competitiveness is most affected by our energy and climate change policies.

Ernst and Young’s latest survey found that only 8% of renewable energy professionals said that they were optimistic that the Government would establish the conditions for success in the next 12 months and that only 14% of those surveyed expected significant growth and new jobs, which is a decrease from last November’s figure of 65%. Is it not clear that the Government are undermining confidence in growth in this important sector and are costing real jobs at a difficult time for our economy?

The renewable energy sector will, of course, be given confidence and clarity as a result of the electricity market review, which my colleague the Secretary of State for Energy and Climate Change launched this week, and it will be given further confidence by the investments of the green investment bank, which will take shape in the coming months.

Why have the Government inexplicably cut investment in tidal power by 50%, given that the immense power of the tide in my constituency is the second greatest in the world? We have this vast resource, with huge potential. It is green and inexhaustible, yet the Government refuse to invest in it. Should they not give the powers to the Welsh Assembly and the Scottish Parliament, which thoroughly understand the potential of tidal power?

Tidal power may well have an important role to play in the long-term development of renewables and that is why it is one of the components of the new technology innovation centre that will focus on renewable energy.

To unlock the full growth potential of the green investment bank, the UK will need to secure state aid approval. What progress is the Secretary of State’s Department making to obtain that approval and to ensure that the legislation is introduced as soon as possible?

The proposals are at such a stage that they are being referred to the European Union for state aid approval. Legislation will follow, but in the meantime the Department will be able to make available loans and other forms of investment under the green investment bank, as we originally envisaged.

Clear regulatory frameworks are essential to facilitate green investment. The construction industry, which is flat on its back at the moment because of the Government’s policy, is desperate to take forward the green deal but it does not know the rules of the game. When will it have some clarity from the Government to facilitate investment and build jobs and growth?

The answer to that question will be included in the green economy road map that will be announced at the end of this month. It involves a process of collaboration across Government by my Department, the Department of Energy and Climate Change and the Department for Environment, Food and Rural Affairs in discussion with business and trade unions that will provide a consensus framework within which such decisions can be pursued.

Regulation (EU Directives)

I am pleased to have this opportunity to remind the House of our recent successes. The recent political agreement to exempt micro-enterprises from onerous accounting and financial reporting obligations should save British companies between £150 million and £300 million a year. Thanks to the UK’s persistent efforts, a further commitment from the Commission to introduce proposals to exempt micros from new and existing legislation was also secured at the European Council in June.

I thank the Minister for that response. Is he aware of the EU waste electrical and electronic equipment directive, which requires all showers that are not fitted to be registered through a costly system, whereas those that are considered to be fitted need not be registered? There is a great debate about what constitutes a fitted shower. Such nonsense is not helping British business or jobs. Is that really why we put so much money into the EU?

I am delighted to be able to tell the House that I am now aware of that issue, because I have answered the hon. Gentleman’s written question on it. He is right that the scope of the EU waste electrical and electronic equipment directive has been problematic since its adoption at the end of 2002. For example, there is no reference in the directive to exemption for fixed installations, but the European Commission’s guidance does allow for one in its interpretation of article 2(1). European negotiations on a recast of the regional directive are under way and we hope for greater clarity on that and other scope issues once a new directive is agreed.

I thank my hon. Friend for his answer, but will he also assure me that he will do all he can to reduce any home-grown regulatory burden that might crop up, especially for small and micro-businesses?

My hon. Friend will be delighted to know that in the Chancellor’s Budget we announced a three-year moratorium on regulations for micros. We have also set up the red tape challenge. We are dealing not just with future regulation but with the stock of regulation, an exercise that was long overdue.


The Government are actively supporting engineering and manufacturing by boosting innovation, increasing business investment, improving skills and encouraging exports.

I thank the Minister for the departmental mission statement, but the reality is that the Thameslink contract is being given to Siemens without even getting the company to build in the UK. The Minister cannot hide behind EU rules, because the French buy only from France and the Germans buy only from Germany—and the last time I looked they were in the EU. Will he stand up for British industry at last, meet the Transport Secretary before the contract is signed and ensure that we keep train building in the UK at its historic home in Derby?

We are concerned for those workers in Derby and that is why we have already taken prompt action. I welcome the support of local Members, but I say to the right hon. Gentleman that the contract’s tendering rules were set in 2008 and you were responsible as a party for the first two years of the contract. I also remind the right hon. Gentleman that 1.7 million jobs were lost in manufacturing under the previous Labour Government.

Order. I remind the Minister that I was not responsible for any such contract at all. I am entirely innocent in the matter.

In South Staffordshire in the past year we have had considerable success in attracting engineering manufacturing jobs, but I am constantly being told that we do not have enough engineering graduates coming out of colleges and universities after 13 years of Labour government. What are we doing to rectify that?

Absolutely right—what we, rather than yourself, Mr Speaker, are doing about it is making sure that we have apprenticeships in place and that we put vocational education, which was neglected by the Labour party, back on a proper footing. We are also making sure that people are able to transfer between engineering firms. There is good news to be told.

Local Enterprise Partnerships

6. What progress he has made on local enterprise partnerships; and if he will make a statement. (66021)

Both the number and activity of local enterprise partnerships is continuing to rise. Dorset is the latest to be cleared, bringing the total to 36—or 97% of the country. Of those, 18 now have full board recognition and have begun their work.

I am sorry to ask my hon. Friend what I suspect will be perceived as an unhelpful question, but local enterprise partnerships are going to have to raise their game seriously if they are to have any traction or impact. I am sorry to have to report to him that, so far, they seem to have no traction or impact in my area of the country.

I am disappointed by my hon. Friend’s comments. I have visited 25 of the 36 LEPs and they are already setting up boards to make sure that they are ready to involve small businesses. Now they are going to be able to lead on enterprise zones, lead on the regional growth fund and make sure that we strip away some of the local regulatory problems on the ground, which I am afraid the Labour party did nothing about.

As LEPs are business-driven, they could have businesses working with local authorities and local education providers to provide a much better and more localised match of skills needs and skills provision. Will the Minister say how many LEPs are taking that responsibility on and whether any examples of best practice will be rolled out with other LEPs?

It is encouraging that almost all the LEPs that I have visited have demonstrated that they are involving FE colleges in their programmes. The hon. Gentleman is right that that is crucial. They are ideally suited to get FE colleges producing what local businesses need; that is one of the crucial projects that at least half a dozen of them have already begun.

The pan-Humber local enterprise partnership is now up and running and it has recently put in a bid for a local enterprise zone across the Humber, which will be based around the renewables sector. As a result, the area covered by that potential enterprise zone is quite large. Will the Minister give an assurance that its size—and the need for it to be of that size given that it will be structured around the renewable energy industry—will be taken into account?

Absolutely; the key issue is the added value. The case will be judged on such merit and we will not seek to preclude anything on, perhaps, spurious grounds.

According to recent OECD research, the single most important factor in regional growth is innovation, but LEPs do not even have responsibility for that, let alone any money, and it is not even mentioned in the regional growth fund criteria. The £440 million that the regional development agencies invested annually in regional innovation is gone, the Technology Strategy Board’s new strategy makes no reference to it and in any case it still does not have a budget for next year. I know that the Secretary of State enjoys chaotic Maoism, but does regional growth not merit a more coherent approach?

The hon. Lady is ignoring the fact that we have made sure that the science budget is retained and strengthened, and that we are putting £200 million into technology and innovation centres. When we look at individual schemes and the regional growth fund, we see that £2 million is being put into 3D printing, which is a vital technology for this country—we lead on it and we are investing in it.

Azerbaijan (Investment)

I would like to thank my hon. Friend for the work he is doing as chairman of the all-party parliamentary group on Azerbaijan to develop the relationship between our two countries. I am pleased to say that more than 100 exporting and investing companies have been assisted in Azerbaijan through UK Trade & Investment in the past two financial years alone.

I thank the Minister for his answer. As he will be well aware, over those past two years there has been compound double-digit growth in Azerbaijan. Is he convinced that his Department is doing enough in two specific areas—the fledgling financial services industry in Azerbaijan and infrastructure investment, on which our companies could add a lot in that part of the world?

Across the Government, our new approach to commercial diplomacy is working in all those areas. My right hon. Friend the Minister for Europe visited Baku last year and took with him a number of companies involved in the infrastructure project. I am sure that my hon. Friend will agree that the British music industry will take all the possible opportunities presented by the Eurovision song contest being held in Azerbaijan next year, and that they are not “Running Scared”.

Green Investment Bank

Ministers will consider all submitted business cases for a potential location for the green investment bank. To date, London, Edinburgh and Bristol have made representations. However, others might wish to do so, and once state aid approval is granted, Ministers will choose a location that best enables the bank to fulfil its mission.

I thank the Minister for that reply. When the Secretary of State announced the bank in May, it was stated that there was a shortlist of the three locations that have been mentioned, two of which are capital cities. Further to the reply today, can the Minister confirm that the selection process will be based on rigorous and transparent criteria and that other towns and cities will be judged on their merits?

Absolutely—those three are merely early applicants, not a shortlist. All proposals will be considered on a fair and open basis.

I am sure that the Minister will understand the strong case for the bank to be based in Edinburgh, but will he confirm that the bank will not end up just taking up the cuts made elsewhere in Government expenditure? I was concerned by the earlier suggestion that wave power could be funded by the green investment bank. I hope that the bank will provide new, additional funding for greener industries and not just pick up slack elsewhere.

Indeed; we have trebled the amount that the Labour party originally proposed to £3 billion. So, yes, additional funds are very much in place.

Does my hon. Friend agree that, ideally, the home of the green investment bank will have a mix of commercial and ethical banking, a strong network of professional services firms, green non-governmental organisations, charities and sustainable businesses? That strongly suggests that the city of Bristol is the ideal home for the green investment bank.

Will the Minister identify the key criteria in the selection process for the green investment bank location?

I have just set out that, in fact, the process is under way for the rules and criteria. The location, which is obviously the issue at hand, is one that we will bear in mind when we see the business cases. The key issue is what will deliver the best result for the bank itself.


9. How many people in (a) Crawley constituency, (b) the south-east and (c) England have started an apprenticeship in 2011. (66024)

In the first three quarters of this academic year, 550 apprenticeships were started in the Crawley constituency, 41,890 started in the south-east region and 326,700 in England. Overall, that is 114,000 more than last year—more than a 50% increase. By the end of this spending review, there will be funding for 250,000 more adult apprenticeships than were planned by the previous Government.

I am grateful to the Secretary of State for that answer. Will he join me in congratulating Central Sussex college in my constituency on administering 900 apprenticeship places and Virgin Atlantic Airways on creating 42 highly skilled engineering apprenticeship places in my constituency? Does that not prove that further education and the commercial sector working together can improve the offer for apprenticeships?

Yes, indeed; it does exactly that. My hon. Friend’s constituency can demonstrate that this is a real success story. There has been a 62% increase in such places in Crawley over the past year. I certainly welcome the news from Virgin Atlantic Airways about engineering apprenticeships. We have had massive shortages in this country at intermediate level and in graduate and postgraduate engineers, and we really now must buckle down to increasing the supply in this and other ways.

Space Sector

My hon. Friend’s question is very topical: this morning, a statue of Yuri Gagarin is being unveiled just a few hundred yards from here. It commemorates the first human space flight 50 years ago. I am sure that Members on both sides of the House will wish to send their best wishes to Yuri Gagarin’s daughter, whom I will meet later today.

In the growth review, we set out our support for innovative forms of space travel, such as Virgin Galactic, that involve British entrepreneurs and British inventors.

I thank the Minister for that. He will remember the exciting HOTOL—horizontal take-off and landing—project in the 1980s, which certainly put a spring in the step of the British space industry. The single-stage-to-orbit Skylon programme looks equally promising today. I hear what the Minister says—and I send my best wishes, too—but I wonder what role an ambitious Government see for the UK in future human space travel.

I have visited the company to which my hon. Friend refers, and he mentions an excellent British technology that is securing a lot of private backing. The future of space travel rests much more with commercial businesses now, but I look forward to the day when Major Tim Peake, the British astronaut, makes it into space; I regularly raise the issue of that programme with the head of the European Space Agency.

Would the Minister expand on how the UK might increase its participation in the European space business development plans?

We have specifically identified the space sector in the growth review, and we are committed to a major role for British business in that. Indeed, only last week we celebrated a £110 million satellite order.


11. How many people in (a) Stafford constituency, (b) the west midlands and (c) England have started an apprenticeship in 2011. (66027)

In the first three quarters of this academic year, there have been 570 apprenticeships started in the Stafford constituency, 38,350 started in the west midlands, and 326,700 started in England.

I thank the Secretary of State for his response, and I congratulate him, and the Minister for Further Education, Skills and Lifelong Learning, who is not in his place, on their achievements in delivering such strong growth in apprenticeships. Quality is also important. Will the Secretary of State share with the House the steps that his Department will take to monitor the quality of apprenticeships, and the career progression of apprentices once they complete them?

The hon. Gentleman is absolutely right that quality is important as well as quantity, but it is important that the quality assurance is proportionate and does not result in excessive bureaucracy. The best evidence that apprenticeships give value for money is in the results. Typically, employers get payback in three years. An intermediate level of skill, level 2, results in, I think, £73,000 more over a lifetime. A level 3 qualification produces £105,000 added income over a lifetime, and the Government get £40 back for every £1 that they spend on apprenticeships.

On the future of apprentices, has the Secretary of State yet had a chance to look at the new report from the all-party parliamentary motor group about an industry that supports 700,000 jobs and contributes £1 billion towards research and development? One of the conclusions of the report, to which Ministers in the Department have contributed through discussion, is about the skills gap in the automotive industry. The Secretary of State has referred to the skills gap in engineering before; what practical steps can he take to ensure that the issue is addressed?

The hon. Gentleman is right in the premise of his question; the automotive industry is enormously important. As he knows, some very welcome investment is taking place in the west midlands, the north-east, Luton and elsewhere. Indeed, I have been to Japan, Detroit and elsewhere to encourage that investment. He is right also that potential investors stress the need for skills. A great deal of investment is now taking place; specifically, there are the 10,000 places for advanced apprenticeships, which will be directed specifically to small and medium-sized enterprises in the supply chain of industries such as the vehicle industry.

Employment Law

As part of the review, we have consulted on employment tribunals and unfair dismissal, launched the employer’s charter, commissioned reviews of sickness absence and of compliance and enforcement regimes, repealed the default retirement age, introduced a moratorium for micro-businesses and start-ups, and announced that we will not proceed with the dual discrimination provision in the Equality Act 2010. We have announced future work priorities for the review, and the red tape challenge will also consider cross-Government employment-related regulations.

I thank the Minister for that answer. I am really worried about the lack of engagement with the review by other Departments. Does he agree that the Department for Work and Pensions and the Home Office also impose significant burdens on employers? May I encourage the Minister to throw his weight around with those other Departments? We have an urgent need for jobs.

I assure my hon. Friend that all Departments with responsibility for employment-related legislation are contributing to the review; it is important that they should, if the review is to have a real impact on burdens on business. I will talk to colleagues in other Departments to ensure that they are taking a clear role in it, as I am sure that they will.

Given that the well respected Chartered Institute of Personnel and Development considers that the Government are

“justified in seeking to reform procedures to resolve workplace disputes”,

but suggests that

“the decision to increase the qualifying period for rights against unfair dismissal is questionable”

and could be

“potentially harmful to the long-term performance of the UK economy”,

will the Government stop using a tax on employment rights as a pathetic and unproven substitute for any real growth strategy and drop plans to increase from one to two years the qualifying time for unfair dismissal?

The hon. Lady is right to quote the Chartered Institute of Personnel and Development on this issue, because it supports much of the coalition Government’s better regulation agenda in this area. She will know that the unfair dismissal period is out to consultation. A number of responses are very much in favour of the proposal, but she would not expect me to prejudge the consultation today.


13. How many people in (a) Mid Bedfordshire constituency, (b) the south-east midlands and (c) England have started an apprenticeship in 2011. (66029)

I am beginning to appreciate that there is a lot of heavy lifting involved in being acting Minister responsible for skills.

In the first three quarters of this academic year, 420 apprenticeships have been started in the Mid Bedfordshire constituency. It is not possible to quantify the number of apprenticeships started in the south-east midlands region, but 28,230 have been started in the east of England.

In 2013, Centre Parcs will open in my constituency, and I have already turned the first sod of earth. It will need a wide variety of employees, from accountants, HR professionals and medical staff to caterers, landscape gardeners and beauticians, all of whom require skills. What will the Government do further to relieve the burden on employers who wish to take on apprentices, so that we can continue with the impressive trend that we have started already?

To reduce what is unfortunately the substantial amount of bureaucracy in this area, we are greatly simplifying the number of funding channels and the number of institutions and introducing outcome-based payments for large employers that are training providers. The point behind the hon. Lady’s question is that apprenticeships and vocational training are a great success story for employers, who are beginning to see their real advantages, for young people, who see benefits for their own careers, and for the Government, who have prioritised them and seen the results.

Does the Secretary of State welcome the apprenticeship initiative led by Johnson Matthey and announced this week in my constituency of 100 days for 100 new apprenticeships, the launch of which I attended, and will he recommend it to other Members as a course of action to provide support for the local economy and local new apprenticeships?

I would strongly recommend it. I believe that 24 such schemes have already been launched and more than 5,000 apprenticeships have been generated in that way. I congratulate the hon. Gentleman on his role in promoting it in his constituency and compliment the company, whose headquarters in Royston I visited a few weeks ago. It is a superb and innovative British manufacturing company that is exporting most of its production and investing in skills for the long term.

Women (Corporate Boards)

14. What recent progress his Department has made on implementing the recommendations of the report of Lord Davies on female representation on corporate boards. (66030)

Lord Davies’s report rightly challenges directors and investors to increase the number of women on boards. The report is already having an impact on FTSE 100 companies; some 21% of new board members appointed since February are women, up from 13% last year, but there is scope to do more. I fully support this initiative and will shortly consult on requiring quoted companies to publish the proportion of female directors and senior executives in their organisations.

I thank my right hon. Friend for that encouraging reply. I am sure that he is very aware of the large body of evidence, including Lord Davies’s report, that associates a higher number of women on corporate boards with higher stock price performance and corporate returns. If that is right for the private sector, it should be right for the public sector. What is he doing to encourage the number of women in financial regulation posts in particular, and could we have a female head of the green investment bank?

The starting point of the hon. Lady’s question is absolutely right, and I congratulate her on the effective pressure she brings to bear on the issue. Her central point is that having more women on boards has nothing to do with political correctness; it is about sensible economics, good business and tapping into the potential that women can bring. The force of her argument is reinforced by the statement made at the beginning of the week by leading institutional investors that they will punish companies that do not make progress in this area. I will certainly receive her CV for the green investment bank if that is what she has in mind.

Construction Industry

For three years now, construction has faced very tough times after one of the sharpest recessions ever, but there are encouraging signs. Output in May rose by 0.4%, with increases in new work for most of the construction subsectors. We have published the national infrastructure plan, for the first time in this country, with £200 billion of investment over the next five years.

The purchasing managers index for construction shows that in June employment in the UK construction industry fell at its fastest rate since January’s VAT rise, and cuts in social housing investment, particularly in areas such as mine in Hull, are not helping. Would not a temporary VAT cut help to protect these skilled construction jobs at this difficult time?

I am fascinated to see this re-presented to the House. As I recall, when the opportunity came for Labour Members to vote on it, they ducked it—they abstained. It is a shame that they do not have the courage of their convictions.


Recent initiatives include a high-value manufacturing, technology and innovation centre, and a financial commitment that by the end of this spending review there will be funding for 250,000 more adult apprenticeships across all sectors than were planned by the previous Government, including 10,000 higher apprenticeships. We have also launched the “see inside manufacturing” initiative to promote and showcase manufacturing careers to young people.

Given the success of the “Made By Britain” exhibition last week, will the Secretary of State join me in congratulating the businesses showcased at the event and give an assurance that the Government will continue to support such initiatives in the years ahead?

Yes, it is a brilliantly successful initiative. I congratulate the hon. Gentleman and the hon. Member for Huddersfield (Mr Sheerman) on the efforts that they put into developing it, and all the hon. Members who have contributed—50 so far, I think, and I hope others will do so. We shall have a great virtual exhibition next year for the Olympics.

Is the Minister aware that one of the most useful things he could do to promote British manufacturing would be to get the banks together to come up with a financing package for the Bombardier contract that matched the Siemens one? That is directly within his responsibilities, and I think that the package is now being negotiated. It would be something that the banks could do, for once, to back British industry instead of filling their own pockets.

The Minister of State, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), has already explained the background to the Bombardier contract. It was confined to very narrow tendering terms of reference that, in the circumstances, we could not avoid, but the hon. Gentleman is absolutely right to focus on how public procurement can be used, within European rules, to support British industry. I have taken an initiative with the Secretary of State for Transport to try to make sure that, in future, tenders do reflect that priority.

Will the Secretary of State meet me and members of the Derby and Derbyshire Rail Forum to talk about how we can help those who are made redundant from Bombardier, how Bombardier can move forward and get further contracts, and how we can make sure that procurement rules benefit the people of this country as well as those abroad?

The hon. Lady is absolutely right about the procurement rules. As I said, we are taking an initiative to try to address an anomaly whereby Britain appears to be uniquely open in relation to other European countries. Regarding the work force who are, sadly, affected by these redundancies, I have already announced the launching of a taskforce in Derby led by a former senior executive of Rolls-Royce to try to mobilise assistance.

At the previous Business, Innovation and Skills questions, the House united to welcome the confidence shown by Japanese, German and Indian companies in UK manufacturing through their investment in Nissan, BMW and Jaguar Land Rover, so is it not a tragedy that in the past few weeks this British Government have put their confidence in German manufacturing to provide our Thameslink trains? Will the Minister confirm Network Rail’s estimate that in addition to Crossrail, between 12% and 25% of the 12,000 trains in Britain will need replacing over the next 10 years? What is the Secretary of State doing to ensure that there is a UK manufacturer capable of designing, building and winning orders for those trains?

I am surprised that the shadow Secretary of State keeps returning to this theme. I have to repeat the point that my colleague, the Secretary of State for Transport, inherited a tendering process defined in law, which, if abused, is open to judicial review and which made it absolutely imperative for him to conduct the order in the way he did. If it had been cast differently, there could have been a different outcome. We must learn from that experience. The shadow Secretary of State is absolutely right that it is in the British national interest that we have a capacity to produce locomotive equipment in this country. There will of course be a significant increase in that capacity in the north-east with the Hitachi project, but we must also ensure that future tenders for the contracts that he describes are properly constructed, which they were not in 2008.

That was not a strategy for the future of the UK rail manufacturing industry. Does the Secretary of State not know that the factory in the north-east is there purely and simply because Labour Ministers were prepared to challenge a procurement process and get the right deal for UK manufacturing? Will he confirm that the Department for Transport could have run a separate funding competition? Will he confirm that Siemens still does not have a proven energy efficient bogie system for the new trains, while Bombardier does? Is it not the truth that these and other issues could have been used to get the best deal for UK manufacturing? Does he realise that it is not good enough just to blame the last lot and do nothing when it is his responsibility to ensure that we have a UK rail manufacturing industry to win orders?

Order. I know that the Secretary of State will provide a single and pithy reply to those four questions.

The shadow Secretary of State knows perfectly well that the decision to reopen the contract in relation to Hitachi was not about the tender but about the whole project. We cannot do that in the case of Thameslink—a project that was already 10 years late.

Local Enterprise Partnerships

17. What assessment he has made of the potential role of further education colleges in the work of local enterprise partnerships. (66033)

I am pleased to report that further education colleges are already playing a role with local enterprise partnerships in the north-east and elsewhere. In Yorkshire, the Leeds city region held its first skills conference with the West Yorkshire consortium of colleges and it is now setting up its own skills network. That is one of several examples.

I am sure that the Minister will agree that for FE colleges to contribute to local economic growth, their work forces are key. Has he engaged with Newcastle college about its plans to make 180 staff redundant and to cut the pay of some existing staff by up to £10,000 a year? Given that that is driven in part by a combination of funding cuts and Government priorities, is this not a worrying trend for the future of FE?

The hon. Lady paints a very negative picture. When I talk to local FE colleges, they say that they are delighted that we are freeing them from red tape and that they can respond to local businesses. Of course they would like additional funds, but we all know why there is no additional money any more.

Regulation and Growth (Northern Ireland)

18. What recent discussions he has had with the Northern Ireland Executive on reducing regulation and promoting growth. (66034)

Ministers and officials regularly consult their equivalents in Northern Ireland. Their discussions include promoting growth and the importance of reducing regulation, including its enforcement.

Will the Minister undertake to intensify efforts to discuss how regulation that affects Northern Ireland but is not in the remit and purview of the Northern Ireland Executive, including European regulation, may be reduced or diminished to promote growth in an area that is lagging behind other parts of the United Kingdom?

It is a priority to ensure that the red tape that the right hon. Gentleman talks about, which holds back business in Northern Ireland and elsewhere, is dealt with. That is one of the reasons we are ending gold-plating across the UK, including in Northern Ireland. I very much welcome positive ideas that come from the Northern Ireland Executive.

Regional Growth Fund

19. What the outcomes were of the second round of applications to the regional growth fund; and if he will make a statement. (66035)

Bidding for round two of the fund closed on Friday 1 July and we were pleased with the positive response. There appear to have been just over 500 applications for round two, with a total ask of £3 billion. We are currently processing the detail of the bids and will release summary information on the bids later in the month.

Given that the Secretary of State is not yet in a position to give a full account of the regional growth fund, will he give a commitment that investment in basic science and engineering, and research thereon, will be at the forefront of the regional growth strategy? In particular, will he break the establishment view that only the triangle of London, Oxford and Cambridge should get that investment, so that other parts of the country can benefit?

The hon. Gentleman is absolutely right that there has to be regional rebalancing of the economy, and that manufacturing and associated industries are at the core of any revival. It happens that the share of manufacturing is particularly high in areas such as the north-east, so they will benefit from a manufacturing recovery. I remind him that in the first round of the regional growth fund there were nine successful bids in the north-west, generating about 7,500 jobs, including at Bruntwood in Manchester, which I think is in his constituency but is certainly in the city.

Will the Secretary of State ensure that in the next round of the regional growth fund, the Government take into account the national benefit of regional growth, particularly in respect of the Goonhilly earth station application, which will provide the opportunity of radio astronomy for the country as a whole? It is an issue not just of regional growth but of national opportunity.

I am sure that Lord Heseltine, Sir Ian Wrigglesworth and their team will hear my hon. Friend’s advocacy on behalf of one of the 500 projects. It sounds a very good one, and I look forward to seeing it in the pipeline.

Topical Questions

The Department is responsible for reducing regulation, increasing trade, growing the economy and promoting excellence in higher education and skills.

With regard to deregulation, the Minister will have seen the report from the CEOs conference held by The Times, which suggests that an unencumbered supply side is key to growth. One of the key recommendations was moving to faster deregulation—far from one in, one out, it hoped for five out and only one in. Can he make any statement on that?

I am always keen to accelerate matters, but it is worth putting it on the record that in the past 12 months this Department alone has been able to scrap regulations that would have cost business £430 million every year. It is a good start, but, yes, we want to move forward.

T5. In January, at a cost of £300,000, the Prime Minister stripped the Business Secretary of his responsibility for media competition and policy issues after he declared war on Rupert Murdoch. Given yesterday’s announcement by News Corp that it is dropping the bid for BSkyB, does he expect to have those powers transferred back to him at BIS? (66047)

I do not know the answer to that question, but I am delighted to discover that the whole of Britain and the House of Commons now agrees with me.

T2. Central Government clearly has a major role to play in supporting and helping business, but we often underestimate the importance of local government’s ability to support, or indeed hinder, business. Does the Secretary of State believe that returning business rates to local government control will be good for business? (66043)

Yes, I think it is a good idea in principle. Indeed, I announced it in a statement to the House last year. It could incentivise councils to attract businesses to their area. That is the reasoning behind it, but we have to be careful to ensure that there is an equalisation mechanism—some areas, of course, have a strong starting advantage—and to protect businesses from a very large increase in business rates, which could have the opposite effect.

What assessment have the Government made of the effect of the core and margin proposals for student funding on conservatoires such as Trinity Laban in my constituency, of which I am an unpaid director?

The Government understand the particular value and needs of conservatoires, which is why we drew particular attention to their need for proper financing in our grant letter to the Higher Education Funding Council for England.

T3. Using his extensive business experience, as demonstrated by his confident and oft-repeated ability to foresee the economic downturn over many years, would the Secretary of State like to impart some of his wisdom and comment on how his Department, under his expert leadership, has helped small businesses to flourish, particularly management and IT consultants? (66044)

As you can see, Mr Speaker, we are able to work closely together as a team and assume all sorts of identities.

The key thing to bear in mind is that when we look at the number of small business start-ups this year and last, we see an increase of 51,000. According to leading independent surveys, there were 470,000. That is a good sign that we are making early progress, but there is much more to do.

Is the Secretary of State aware that the British train building industry hangs in the balance following the decision to appoint Siemens as the preferred bidder for the Thameslink contract? Unless it is reversed, it will cost the Exchequer more than £100 million in lost tax revenue. Derby does not need a task force—we need a reversal of the decision. Will he give a commitment to make representations to the Transport Secretary and the Prime Minister to call in the decision, to protect thousands of jobs and stand up for British industry?

I understand the hon. Gentleman’s passion, but I think that the taskforce is important. If we start to unpick the contract now—in the third year of its running—we will face legal reviews and problems with how the project progresses. We need to deal with the procurement system as a whole. I am sorry to say that his Front-Bench team failed to do that in 13 years.

T4. University Centre Milton Keynes, in conjunction with local partners, is developing a knowledge gateway to stimulate enterprise and skills. May I urge my right hon. Friend to meet the dean of UCMK to explore how his Department might be able to support this initiative? (66045)

I would be pleased to meet the dean. Of course we absolutely support these types of initiatives, which improve the links between universities, employers and businesses. That is one reason we have invited Sir Tim Wilson to consider how we can revive the sandwich course that disappeared under the previous Labour Government.

What consideration has been given to creating a dedicated Minister for manufacturing within the Department to promote this vital economic area?

T6. One of the major barriers to the growth of small and medium-sized enterprises in west Wales is banks refusing to offer facilities to—or, worse still, withdrawing facilities from—companies that are perfectly viable and with which they have had a relationship over many years. Will the Minister offer any advice to those companies and ensure us that he will work with the Treasury to iron out these issues? (66048)

My hon. Friend recognises a real problem—there remains an issue with the supply of finance. Indeed, an independent survey on Monday demonstrated that about 15% of companies are probably discouraged from applying for it. We must wait for the figures in August from the Merlin process, but, as I have made clear in the House before, the Government can take further action if those figures are not satisfactory.

In response to a question from my hon. Friend the Member for Kingston upon Hull North (Diana Johnson), the Minister’s answer was more fairy story than fact. What he did not tell the House was that by 2015 the number of private housing starts will be 14% lower than in 2007, that public housing starts will fall by 39% over the next three years and that road construction spending will be halved by 2014. These are the facts—what is he going to do about them?

We are investing £10 billion in the road programme, £14 billion in the rail programme and £200 billion in infrastructure. We have put in place the first national infrastructure plan, which the Labour party failed to do. We are working with industry and construction, and I am sorry that the Labour party has nothing positive to add.

T7. Will the Secretary of State confirm that he will consider the proposal for the technology and innovation centre for offshore renewables that brings together a network of key hubs across the country, such as OrbisEnergy in Lowestoft in my constituency, so as to ensure that the whole of the UK benefits from the proposed TIC? (66049)

We will certainly consider the proposal, but, as my hon. Friend knows, there is a proper process for evaluating different bids. The third TIC will centre on renewables, substantially on wind, and existing centres, such as the one in his constituency, are eligible and may well be considered.

Yesterday the Prime Minister told us that Citizens Advice was one of the most admired organisations in the country. Given that it and Consumer Focus are boycotting the payday industry proposals on a voluntary code of practice, does the Secretary of State think it appropriate that his Lib Dem colleagues are in Parliament today hosting a reception to endorse it?

The hon. Lady will know that the Government are working very closely with Citizens Advice on all these sorts of issues and that it is important to listen to the industry on a range of issues. I would have thought therefore that she welcomed hon. Members listening to the industry. She often does not listen to the industry and so often is not as informed as she could be.

T8. The Secretary of State will be aware that more than 80% of jobs in my constituency are in the private sector. Will he therefore congratulate the world-famous jam-makers Wilkin & Sons, based in Tiptree, on its outstanding international business, on all it is doing to create good local jobs and on all that it does to promote its brand—a great international British brand—at home and abroad? (66050)

I am delighted to support the company in Tiptree; hon. Members can perhaps see that I tend to do that too often, given my breadth. It is an excellent business that is showing the way, through its exports and productivity. It is a business that we can be proud of.

Five independent schools send more pupils to Oxbridge than 2,000 other schools combined. What is the Minister going to ask Oxford and Cambridge to do about that?

That is why we have required of them much more ambitious programmes on access than the previous Government required. Oxford’s proposals, released this week, show a big extension of summer schools and an extra effort to reach precisely that pool of talent to which the hon. Lady refers.

The French company EDF is about to build a giant wind farm off Redcar. The main contractor will be German, and most of the materials will be imported. What more can the Government do to ensure that British business benefits more from such projects?

This comes back to ensuring that our procurement system is reformed and reviewed, and that is what we are going to do, to ensure that errors are not repeated.

What assessment has the Minister made of the impact of the Scottish Government’s decision to charge English students tuition fees of up to £9,000?

I know that there is strong feeling in England about that, but it is a matter for the Scottish Government and therefore not one for which this Government are responsible.

I know that the Minister shares my passion for the potential of our biomedical sector to create new jobs and businesses. Will he update the House on some of the exciting developments at Sandwich, Charnwood and Stevenage, in regard to the opportunities for the UK in reorganising the pharmaceutical sector?

This morning, I will be going to the topping-out ceremony of the bio-incubator at Stevenage, which represents precisely the kind of future for our life sciences that we wish to see. It is also very good news that Pfizer has now decided that it wishes to have a continuing presence at its research centre in Sandwich.

Can the Secretary of State confirm or deny that his Department is giving grants to fire authorities to set up arm’s length companies that will tender for private sector contracts?

Given that Northamptonshire has one of the fastest-growing populations in the country and that it sits at the crossroads of England, will the business Minister look favourably at the bid that is now on his desk to establish a local enterprise partnership there?

My hon. Friend knows very well that an excellent south-east midlands proposal is already under way. I am encouraging people to work together, but we will certainly always look at representations on a fair and open basis.

Will the Secretary of State actively seek to get responsibility for competition policy in media ownership back into his Department? The fact that he was honey-trapped in his surgery does not mean that it should not be a Minister in his Department who takes such decisions. We have now seen the error of sending these matters to the Department for Culture, Media and Sport.

Unlike my predecessors, I do not see my job in terms of empire building; I am more concerned that we should get good policy. The Deputy Prime Minister has spoken today on the need radically to reform policy in relation to competition and cross-ownership in the media. Indeed, we might well have to revisit the legislation, because it is clearly unsatisfactory.

With reference to the Minister’s response to the question from my hon. Friend the Member for Tewkesbury (Mr Robertson), Triton Showers, which employs 400 people in my constituency, is extremely concerned that the waste electrical and electronic equipment directive is now being aggressively enforced by the Environment Agency. Bearing in mind the Minister’s earlier answer, will he now make representations to the Department for Environment, Food and Rural Affairs on this issue, which is causing real concern in the electric shower industry?

I will certainly look at this. As I said in my answer to my hon. Friend the Member for Tewkesbury, the guidance is slightly separate from the directive, so there is a need for clarity. That is why we are trying to renegotiate these matters in the recasting of the directive.

Following on from the question from my hon. Friend the Member for Edinburgh East (Sheila Gilmore), may I ask the Minister whether he is surprised that the Scottish National party, which voted in this House against tuition fees, is planning to impose them now that it is in government in Scotland? What discussions has he had with the Scottish Government to ensure that English students can attend excellent Scottish universities such as Queen Margaret university in my constituency?

I do discuss this issue with the Scottish Government because it is important that students throughout the whole of the United Kingdom have proper opportunities to travel to universities around the United Kingdom. I also observe that, proportionally, many more Scottish students still wish to study at English universities than the other way round.

The Secretary of State will be aware of the recent announcement in Edinburgh by the climate change Minister of £20 million to be channelled into marine energy. Does he agree that the green investment bank could play a key role in this exciting sector and could do that best by being located in Edinburgh near to the hub of this developing sector?

I am well aware—I am tempted to say painfully aware—of the volume of representations coming from Edinburgh and elsewhere on this subject. They make a very good case for themselves, but will ultimately have to be judged against a variety of criteria relating to how the mission of the green investment bank will be advanced and the talent pool available.

Will the acting skills Minister tell me whether we will definitely be able to see the equality impact assessment of the Government’s proposed changes to ESOL—English for speakers of other languages—next week? It has been promised to me twice, but we have still not seen it.

More than two fifths of places to study medicine are awarded to prospective students living in the top fifth of areas for higher education participation. Will the Minister for Universities and Science consider the social background profile of students on longer degree courses, so that the Office for Fair Access can demand specific actions for these courses in future access agreements?

I know that the medical profession is committed to trying to ensure that it attracts talented people who can contribute to medicine regardless of their background. Of course, together with the Secretary of State for Health, I recently announced a very fair funding arrangement for medical students, which I hope will ensure that the profession will continue to be open to young people—whatever their background.

The Minister is aware that private and public sector have been working together to try to deliver 1,200 new jobs and training opportunities to east Durham through the film studio and centre for creative excellence. Has he given any further consideration to some sector-specific measures to encourage this development?

My Department and, of course, the Department for Culture, Media and Sport will want to look at this together. I am aware of the proposal, as the hon. Gentleman knows, and I will look at it on that basis.

On Tuesday, LVMH, which produces perhaps some of the Minister’s favourite luxury brands of Louis Vuitton and Moët Hennessy, signed the “woman on the board pledge for Europe”. Will the Minister update us on what steps he will take to encourage British business to sign this pledge, and does he agree that increasing the representation of women on British boards is a matter of necessity, not luxury?

I strongly support the sentiments behind my hon. Friend’s question. He will know that the report of Lord Mervyn Davies encourages chairmen and chief executives to publish their aspirations and to have a strategy for their aspirations to have more women on boards. When we consult on the future of narrative reporting, we want to consult on the proposal to make the top FTSE 350 companies disclose their performance, including on women on boards.

Earlier in this question session, the Secretary of State for Business, Innovation and Skills lamented the absence of his colleague, the Minister for Further Education, Skills and Lifelong Learning, and referred to the increased burden on him by virtue of that absence. I thought I would share with the House the very courteous letter received from the Minister of State, the hon. Member for South Holland and The Deepings (Mr Hayes), who wrote earlier this week as follows:

“Dear Mr Speaker, My apologies for not being present for either DfE or BIS questions as I am abroad on Government business. I hope that your disappointment is as great as mine at the missed opportunities for a heady mix of scrutiny and theatre beloved by we connoisseurs of such things.”