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Business, Innovation and Skills

Volume 534: debated on Thursday 27 October 2011

The Secretary of State was asked—

Royal Mail

As I made clear during the passage of the Postal Services Act 2011, we are taking a staged approach to its implementation. Before decisions can be taken on private sector investment, the regulatory regime must be reformed and the Government must secure approval to take on Royal Mail’s historical pension deficit and restructure its balance sheet. Progress is being made in these areas, alongside Royal Mail’s progress with its modernisation plan.

I thank the Minister for his reply. Will he therefore tell the House exactly how much the Government value the assets in the Post Office pension fund at this moment, how much will be transferred to the Treasury and what will be left in the assets of the pension fund thereafter?

The hon. Gentleman will know, having been in the House a long time, that we would not make a valuation while working with the European Commission to secure state aid clearance. Until we get that, those sorts of calculations would be completely inappropriate.

As part of the deregulation process prior to the sale, we can expect a reasonable rise in stamp prices, which are currently the second lowest in Europe, despite the fact that we have the highest delivery specification. Does my hon. Friend agree that it is ironic that the Labour party now criticises us for remedying the problems that it created through its regulation procedures?

During the passage of the Postal Services Act, we heard a lot of criticism of the regulatory regime that the Labour party put in place. We put in a much stronger regime, which has been greatly welcomed.


As part of rebalancing the British economy, we are taking steps to support manufacturing in the UK by encouraging high levels of business, innovation, investment, exports and technical skills. I set out our strategy for achieving that in a talk to Policy Exchange yesterday.

From recent discussions with several representatives of our largest manufacturing companies, it is apparent that they are now looking actively to bring more UK supply manufacture back to our country, but they seem to question whether some of our small and medium-sized enterprises have sufficient capacity or investment to meet the growth in demand in this area. What can the Government do to help facilitate the right conditions to help some of our SMEs meet this increasing demand?

The hon. Gentleman is right to say that there is a supply chain issue. We are hearing good news from the automobile and aerospace sectors, with the large primes, such as Tata, Rolls-Royce and Airbus, making large investments. However, we also need to attract back the supply chains, which is already happening, particularly in the car industry. We have bodies that co-operate with industry in both those sectors: the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) chairs one of them and I chair the other. We are therefore working actively with industry to attract the supply chains back to the UK.

Will the Secretary of State join me in congratulating the work of the high-value manufacturing technology and innovation centre, which has had a display in Parliament for the past two days, and especially a business in my constituency, Advanced Composites, on the work that it does as part of that? Does he agree with the strategy and aims that it has set out, especially on having a strategy for how we can get manufacturing back to being 20% of gross domestic product by 2020?

Yes, we are fighting a historical trend, because, under the previous Government, and certainly over the past decade, manufacturing contracted as a share of the economy more rapidly than in any other western country and we lost a third of the work force. We have to retrieve that, and one of the main ways of doing so is through promoting innovation. The first innovation centre, as my colleague rightly points out, is the manufacturing technology innovation centre, which has seven campuses. Composites is one of those core technologies being developed, which I very much welcome.

Does my right hon. Friend agree that if we are effectively to support manufacturing, we need to ensure that our future work force have the necessary skills? Will he join me in welcoming the approval of Sandymoor free school in my constituency, which is receiving support from the nearby Daresbury science and innovation campus and which will help to achieve this goal?

Skills are obviously critical, and no doubt my hon. Friend the Minister for Further Education, Skills and Lifelong Learning will say more about the big increase in the number of apprenticeships shortly. I am sure that the school in my hon. Friend’s constituency will contribute to this at an early stage of development. Apprentices are a real success story and we are certainly going to build on it.

One way to increase manufacturing growth would undoubtedly be for the Business Secretary to turn his attention to Markham Vale. I cadged about £32 million off the then Chancellor of the Exchequer in the Labour Government to flatten the pit tips and build a vast industrial estate straight off junction 29A on the M1, and what has happened? There have been grey, miserable clouds hanging over Markham Vale ever since this tin-pot Government came to power. Why don’t you pull your finger out? We were spending money while the sun was shining; there is none being spent now.

I would certainly be happy to visit Markham Vale at some point and talk those things through with the hon. Gentleman. His area has a local enterprise partnership and has had an opportunity to put in a bid for an enterprise zone or the regional growth fund. I do not know what it has done, but I am certainly happy to talk to him.

I know that the hon. Gentleman is a long-standing Member and I am sure that he has followed the changes in attitudes towards manufacturing in this House under different Governments. He will be interested in the leader of the Labour party’s new distinction between “predators” and “producers”. What is troubling a lot of us on the Government Benches is why a party of dinosaurs is so opposed to predators. Perhaps the hon. Gentleman can explain.

Companies in my constituency that manufacture construction products, quarry materials for concrete or build materials for the construction industry have very much welcomed the plan announced by my right hon. Friend the Member for Morley and Outwood (Ed Balls) to bring forward infrastructure projects in order to increase employment and build manufacturing capacity in the United Kingdom. Given falling growth and rising unemployment, would it not be prudent for the Business Secretary to support that plan?

Infrastructure is certainly a key to recovery, and it is absolutely right to put it on a sustainable basis. The Chief Secretary announced a programme for urgent modest-scale infrastructure projects a few weeks ago, and other infrastructure projects will be announced in the regional growth fund imminently.

In answer to questions to his Department in June, the Secretary of State said:

“There is rapid growth now beginning to take place in manufacturing and exports.”—[Official Report, 9 June 2011; Vol. 529, c. 276.]

Given that figures from the Office for National Statistics confirm that manufacturing output fell last quarter and given that yesterday’s CBI industrial trends survey showed sentiment from manufacturers deteriorating, order books emptying and export prospects sharply declining for a second successive quarter, will the Minister update his assessment of four months ago? Does he think that any aspect of Government policy needs to change to ensure that manufacturing drives forward economic recovery and growth?

The hon. Gentleman is right to say that business conditions are difficult, but over the last two years manufacturing has increased significantly faster than the rest of the economy, as have exports. That is the direction that we need to pursue. Given that manufacturing is predominately an export-based industry, he will understand that the difficulties facing our major export markets in the European Union are creating problems for manufacturers and manufacturing confidence, but we will hit our way through them.

I thank the Secretary of State for visiting SABIC Petrochemicals in my constituency to hear about the cost issues for energy-intensive manufacturing industries. When can those industries expect an announcement about a mitigation package?

I think they expect an announcement very soon. The visit was extremely constructive, and my colleague and others have rightly emphasised to us that energy-intensive industries are a key part of manufacturing recovery. It would be totally counter-productive economically and environmentally if they were driven overseas. We are determined that that should not happen, and a package of measures will be announced soon.

Science Funding

3. What recent assessment he has made of the level of science funding over the comprehensive spending review period. (76853)

Funding for science and research programmes has been protected with a flat cash ring-fenced settlement of £4.6 billion for each of the next four years. We can be proud of our scientific research, and that is why the coalition is backing it.

Although I welcome the investment in the technology and innovation centres, one of which is in my constituency, will the Minister explain to the House why the Government have continued to cut the science budget by 12% overall when Germany, one of our main competitors, has increased its budget by 8%?

No party at the last election promised complete protection for the BIS budget. In fact, in its last economic statement in December 2009, the hon. Gentleman’s party committed itself to cutting £600 million from the higher education and science and research budgets. We, by contrast, are offering complete cash protection for that budget.

The scientists to whom I speak are concerned not only about the amount of money available now but about the levels of capital funding and the long-term security of funding running many years into the future. While I welcome the announcement of funding for companies such as Babraham, what assurances can the Minister provide that he will try to get more capital funding from the Treasury and to ensure good, long-term security so that scientists will know how much funding there will be for the next decade?

Of course, we have been able in the past year to fund six of the eight capital projects that the science community identified as the most important. We think that that has been a considerable achievement in tough times, and we will continue to try to secure financing for other capital programmes in the future.

The Secretary of State recently said that all long-term economic growth was linked to innovation, yet one year after he claimed to have protected the science budget, the independent Campaign for Science and Engineering has revealed that its budget has been slashed by 12%, as my hon. Friend the Member for Sedgefield (Phil Wilson) mentioned. The Minister’s own Department says that cuts to science will damage our world-leading position, yet businesses up and down the country are being denied the innovation support that they need, and the shambles in university funding makes it harder for universities to provide science places. If innovation is the engine of growth, why is the Secretary of State doing so much damage to it?

We in the coalition are absolutely committed to the importance of science and research, and we are strengthening the links between science and research and the business community. We are also offering cash protection for the science budget across all main current expenditure, which the hon. Lady’s party never did in government. The very source that she has just cited, the Campaign for Science and Engineering, only a fortnight ago

“welcomed Chancellor George Osborne’s announcement that £195m of new investment will be spent on science and engineering.”


My Department is supporting British exports through UK Trade & Investment. Its strategy, which was launched in May 2011, sets out plans to provide practical support to exporters over the next five years. I have undertaken a number of visits overseas to promote British business to countries including China, India, Brazil, Japan, South Korea, Turkey and Romania, and next week I shall be in south-east Asia promoting British trade.

Britain is increasingly becoming a centre of excellence for high-tech, high-value manufacturing exports. In Derbyshire, we have some great high-tech exporters ranging from Rolls-Royce, which my right hon. Friend knows all about, to Pektron, an innovative, family-owned electronics manufacturer. What more can my right hon. Friend do to showcase those exceptional firms and remind people up and down the country and internationally that high-tech British goods are in demand everywhere, and that that needs to continue?

Yes, there are many successful British exporters. Over the past year, exports have grown on a year-to-year basis by about 9%. Where we have fallen down historically is that British small and medium-sized companies have not been as involved in exporting as the larger enterprises such as Rolls-Royce. One of the main commitments in the UKTI strategy is to concentrate help and resources on those companies, which would undoubtedly help the specialist company in my hon. Friend’s constituency.

It is good to note that exports have risen to their highest level since records began, and I note the Government’s plans to double our exports to Brazil by 2015. Following the Foreign Affairs Select Committee report, what specific action is my right hon. Friend taking to help British exporters to overcome the language issues and bureaucratic barriers that might stand in the way of achieving that?

I went to Brazil precisely to answer that question. My hon. Friend is quite right to say that we are starting from a weak position. As a result of neglect in the past, Britain’s share of imports into Brazil is far lower than those of Germany, France and Italy, for example, and we must remedy that. We are putting in a major effort in Brazil, through UKTI, to capture some of the opportunities, particularly those that are arising from the expansion of the oil and gas industries there.

The Secretary of State has mentioned some exotic locations, but he did not mention the fact that he came to Huddersfield two weeks ago. Did he learn from that visit that export manufacturing is at the heart of getting the biggest bang for our buck, and that manufacturing for export counts for more in regard to the balance of trade? He talks about innovation and universities, but we do not want just seven—we want 133 innovation units.

As a Yorkshireman myself, I would hesitate to call Huddersfield an overseas market, but it is certainly an outstanding centre of excellence. I enjoyed my visit there. We visited David Brown, one of the recipients of regional growth fund money and a very successful manufacturing exporter. I would also commend going further up the valley to Todmorden, where there is a brilliant British casting and forging company working flat out in our major export markets.

UKTI has no presence in Wales, so what discussions has the right hon. Gentleman had with the Welsh Government to ensure that UKTI is doing its best to promote Welsh exports?

Of course the Welsh Government, as a devolved Government, have more responsibilities of their own in this field, but Wales is part of the UK and I will do my best to work with my Welsh Government colleagues to promote exports. I have already talked to the Secretary of State about getting more Welsh businesses represented on UKTI missions and on projects of that kind.

Regional Growth Fund

In April we announced that 50 bids had been successful as part of round 1 of the regional growth fund, receiving a conditional allocation of £450 million, which will deliver 27,000 new or safeguarded jobs and close to 100,000 jobs in supply chains. More than half these projects have already started, and successful bidders will receive funding as due diligence is completed. Announcements on the second larger round are imminent.

There have been conflicting reports about the Department’s performance on the regional growth fund and what has been settled as a result of it. Will the right hon. Gentleman tell us how many applications have come from Northumberland, how many of them have been successful and how many have received any form of payment to date?

I cannot tell him off the cuff how many companies in Northumberland have received regional growth fund money. I know that the north-east was the most substantial recipient in the first round. I believe that several—in fact, the majority—of those projects are proceeding, and they will create jobs in Northumberland.

We in South Norfolk were very pleased to see the Secretary of State visiting Group Lotus, one of the country’s highest technology companies, which he described as “the best of British”. Does he agree that the regional growth fund would be seen as even more effective if Lotus’s high-quality bid were successful?

I think my colleague is disarmingly tempting me to commit some indiscretion here. I have been to Lotus, but we did not discuss the regional growth fund bid. It is an outstanding company, and I am certainly aware that it has put in a bid.

Well, why do we not put the bunting out? Six months after 45 regional growth fund bids were submitted, only three have got the money, so there are only 42 to go. Perhaps the Secretary of State could tell us how many people in BIS it takes to change a light bulb. However, on 17 October, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk) assured The Times that due diligence on the bids had taken an average of six weeks. These bids have all been waiting six months. Will the Secretary of State tell us when the bidders will get their promised money, as all these continued growth prospects have been put at risk because his Department has been asleep at the wheel?

I definitely think we should put the bunting out for the regional growth fund. As I explained in my first answer to this question, more than half of all these projects are now under way. Factories have been built; jobs have been created—that is what it is about. As was made clear at the outset and as Lord Heseltine made clear a few days ago, the release of funding is a later stage in the process when due diligence has been completed. Are the Labour Front-Bench team seriously arguing that we should dispense with controls over the spending of public money in the private sector? I know they did that in government, but we are not going to do it.

Manufacturing Skills

We are promoting manufacturing skills with success. Provisional figures show substantial growth, with 47,020 apprenticeship programme starts in engineering and manufacturing technologies in 2010 alone. That is an increase of 20%. The development of advanced and higher level apprenticeships and the roll-out of the “see inside manufacturing” initiative will build on that success.

I congratulate my hon. Friend on the increase in the number of apprenticeships that was announced today, which demonstrates a real commitment on the part of the Government and employers to training the next generation. Companies such as ATB Morley, in my constituency, and Airedale International are crying out for a skilled work force. Will my hon. Friend elaborate on how apprenticeships can help to provide the training skills that such companies need?

Apprenticeships are, of course, jobs. They give people a chance to learn in the workplace. They provide individuals with a chance to gain the skills that they need and that fuel social mobility, they provide companies with a chance to gain the skills that they need in order to prosper, and they provide Britain with a chance to become a more cohesive, successful and prosperous nation.

When the Minister has a moment, will he reflect on early-day motion 2218, which seeks to expose six British construction companies that are threatening to tear up the national pay agreement for skilled electricians and thus trying to de-skill the construction industry? Perhaps in the fullness of time he will give us a written response expressing his view of those actions.

I should be happy to do that. The hon. Gentleman has made an interesting point, and I will certainly consider doing what he suggests. Moreover, I should be happy to meet him and anyone he wants to bring to my Department, with my officials, so that we can take the matter further.

BAE Systems

The Government’s first priority is to support the individuals whose jobs may be at risk. To that end, the Jobcentre Plus rapid response service is providing support, training and careers advice. The Government are also working with the Lancashire and the Humber local enterprise partnerships on two potential new enterprise zones to support local economies.

What role does my hon. Friend think that group training associations can play in redeploying and supporting those who have lost their jobs? In Lancashire we have Training 2000, the biggest GTA in the country, which is already working closely with Rolls-Royce and other businesses that are currently recruiting.

The Government greatly value the role of group training associations. They are crucial, which is why we are supporting them through the growth innovation fund. However, I note the individual case that my hon. Friend has raised.

What is the reason for the reversal of the decision on the Lancashire enterprise zones in September? In August a bid had been turned down, and job losses had been agreed by the Ministry of Defence in July. That sequence of events suggests that the MOD was not talking to BIS, and that BIS made a reckless decision in August which was overturned by the Treasury. Can the Minister explain?

There was a real problem for the workers in that area, and we responded positively by providing the additional two enterprise zones. I hope the hon. Gentleman welcomes that.

Construction Industry

The Government are acting positively to strengthen the industry by reform the planning system, modernising public sector procurement, and producing the first national infrastructure plan, which will unlock up to £200 billion of both public and private investment.

Can we return to planet Earth? Since the election 65,000 jobs have gone in construction, no one is training apprentices, and public sector contracts have dried up. Do we not need a bit more action?

It is nice to have the hon. Gentleman back on planet Earth. It appears that he has been away from it for a long time. We have heard about the work that the Government are doing on apprenticeships, we have seen the investment in infrastructure, and there is a positive story to tell. Why cannot the Labour party understand that?

Very much on planet Earth, there are many sites that are not being developed but could be. Will the Minister talk to his colleagues in the Department for Communities and Local Government and the Treasury to ensure that financial incentives are offered to the owners of sterile land so that it can return to use and be developed, thus providing jobs in the construction industry?

My right hon. Friend has made an eminently sensible suggestion. This is why we are adopting a positive approach, and trying to ensure that when Departments have redundant land, we can return it to use.

Britain’s construction industry needs a lion at the wheel, but instead we have a tortoise that is sitting still while building sites and people in our construction industry are made redundant. However, there is an alternative. The shadow Chancellor’s five-point plan will produce projects that will enable us to get the industry moving. For instance, a VAT cut to 5% on home improvements and repairs and maintenance is a targeted approach that is supported by the Federation of Small Businesses. Will the Government take serious action to get the construction industry moving?

Stem Cell Research

9. What steps he plans to take to protect stem cell research in the UK following the decision of the European Court of Justice to prohibit the patenting of inventions based on human stem cells; and if he will make a statement. (76862)

Order. I think we have had enough references to animals. Let us now experience the product of one of the brains of the Minister.

I will do my best, Mr Speaker.

As I was saying, we are carefully considering the impact of the ruling on current UK patent practice. The Technology Strategy Board currently funds 15 studies involving human stem cells, two of which use human embryonic stem cells. The TSB and the research councils will continue to support and fund research on stem cells from all sources, including embryonic.

That was an interesting reply, because leading scientists in the field have called the decision everything from “devastating” to “appalling”. They believe this work will move to South Korea and Canada, and that potential cures for people suffering from degenerative diseases will be developed later, if they are developed at all. I simply do not understand the Minister’s answer, and I would like more details on how he is going to stop this work going abroad.

I agree with the hon. Gentleman that this research is very important in tackling fundamental human illnesses such as Parkinson’s, and that is why we will continue to support it. We are assessing the implications of the ECJ ruling. It is important that stem cells can be derived in a variety of ways, and embryonic stem cells are only one source of stem cells. That is why we need more time to assess the implications of this judgment.

I am sure the Minister agrees that stem cell science is one of Britain’s great strengths. The feeling within the industry is that this Government are putting their money where their mouth is. In contrast to the accusations and nonsense coming from Opposition Members that we are not investing in science, the recent £195 million investment in graphene and supercomputing and the protection of the science budget amounts to a real growth strategy.

We are totally committed to investing in life sciences in Britain, and let me give a practical example of how we can cut the burden of regulation to bring this industry forward: we have committed to reducing the time it takes to start a clinical trial from over 600 days—the period we inherited from the previous Government—to 70 days in future under us.

My understanding is that the Court’s judgment does not stop research into embryonic stem cells, but that it does mean that scientists will not be able to patent anything worth while, and that therefore the intellectual property is likely to go abroad, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said. What are the Government going to do to stop that happening, because this research is vital for people with degenerative diseases?

The hon. Lady is right: this is vital research. The crucial points, however, are that the research is taking place using stem cells from a range of sources, not just embryonic stem cells, and we are continuing to assess how much of the research and development that currently takes place in Britain would be affected by this judgment.


The Government are committed to making the United Kingdom the best place in Europe to start, finance and grow a business. Steps being taken include boosting tax relief, getting the banks to increase lending to small firms and scrapping regulations from this Department alone that would have cost small and medium-sized enterprises more than £315 million every year.

I thank the Minister for his answer. It is clear that the Government are taking an active lead on growing and supporting our entrepreneurs. Will he therefore join me in supporting the Federation of Small Businesses in its fantastic real-life entrepreneur campaign, as that support will demonstrate yet again just how committed the coalition Government are to the entrepreneurial spirit in UK plc?

Absolutely. That is an excellent campaign by the FSB, and it shows why we are focused on matters that concern those real-life entrepreneurs: cutting their costs; tackling red tape; and of course improving access to finance. There is a lot more to do, but they know that we are on their side.

Another excellent campaign from the FSB and also the Federation of Master Builders is the “Cut the VAT” campaign, which supports a cut in VAT on home improvements to 5%. Such a move would also be good for entrepreneurs. Will the Minister support that campaign?

We are doing a lot of things to help small businesses. I notice that, although the Labour party is now saying that such things should be done, in 13 years in government it did not do it. Why not?

I congratulate the Minister on all the help he is giving entrepreneurs. Could he find time in his busy schedule to visit the many entrepreneurs in Brighton and Hove?

I will be delighted—my diary secretary may not be—to respond positively to my hon. Friend’s request.

Seaside Towns

11. What recent discussions he has had with the Chancellor of the Exchequer on support for seaside town economies. (76864)

My two Departments, the Department for Business, Innovation and Skills and the Department for Communities and Local Government, have regular discussions with the Treasury about support for economies. My hon. Friend will know that the Chief Secretary to the Treasury has announced the coastal communities fund, which will be available from April.

Two Select Committee reports have identified that one of the main problems facing coastal communities is poor transport links. May I invite the Minister to visit the warm and welcoming English riviera to see the challenges and opportunities there, which could be fully addressed by better transport links?

A visit to the English riviera is an enticing invitation, and I will be delighted to go there. My hon. Friend is right to say that connectivity is a concern for all coastal communities, and I know that he is waiting for a decision on the south Devon link road. I cannot pre-empt that, but I think I will go by train this time to avoid any delays.

Will the right hon. Gentleman place in the Library a copy of the advice he received from BIS officials—not DCLG officials—on the historical disadvantages that seaside towns and cities face, particularly those relating to access and business failures? Clearly the advice was not forceful enough, because neither Torbay nor Plymouth was successful in this round of bids for local enterprise zones, as he well knows.

As the hon. Lady knows, we have had discussions about Plymouth. I very much hope that all the representatives of Plymouth will join in putting together an area to attract business that is very much in keeping with the enterprise zone proposal. Of course I will put together a package of the research and make it available to her.

Scientific Research

12. How much capital expenditure for scientific research his Department has allocated in 2011-12 to date. (76865)

I have recently announced that the Department will be investing an additional £145 million in high-performance computing. That brings the Department’s total capital spend in science and research to £793 million for 2011-12.

I thank the Minister for that reply. Britain has always been great at discovering and inventing things, but we need to address how to commercialise some of that cutting-edge research. Will he therefore comment on what the Government are doing to ensure that we bring that research, and those discoveries and inventions, to market in the future?

My hon. Friend is absolutely right, and that is why we are setting up the network of six technology and innovation centres. It is why we are particularly backing the campuses in Norwich, Babraham, Harwell and Daresbury, which bring together scientific research and business applications. It was also the reason for the investment of £50 million in the application of graphene to business purposes, which was announced only a few weeks ago.

Does the Minister recognise the deep concern in our universities at the cutting back of their capital programme, in contrast with what is happening in other countries, which will put us at a significant competitive disadvantage?

The figure that I just gave the House for capital spending on science and research is comparable with the figures for capital spending under the ring-fenced science budget under the previous Government. So, even in tough times, we are absolutely maintaining our commitment to investing in science.

MPharm Qualification

The Government do not determine the academic levels of higher education qualifications. The Higher Education Funding Council funds the MPharm as an undergraduate master's degree, to the benefit of 10,000 students a year who are entitled to teaching grants and student support.

I thank the Minister for that answer. My constituent Louis Leir has done an undergraduate degree and wants to do a MPharm, but unfortunately it is classified as an undergraduate-level degree. He is therefore caught by the equivalent or lower qualifications —ELQ—policy and is unable to get help with tuition fees. Will Ministers give further considerations to the issues relating to master's level qualifications? The MPharm truly is one of those, as most of the House probably recognises.

I congratulate my hon. Friend on his ingenuity in pursuing that constituency case, about which we have corresponded. Just as he was with the Pfizer case at Sandwich, he is a persistent hon. Member and I congratulate him on that. However, we believe that if we were to take the ingenious approach he proposes, it might mean that the 10,000 undergraduates currently benefiting from financial support lose it.


18. What assessment he has made of the difficulties faced by apprentices aged 19 and over in obtaining adequate funding for level 3 qualifications. (76871)

The Government are investing significantly in adult apprenticeships, with earmarked investment of £679 million in 2011-12. We rely on employers coming forward to make places available and many more are doing so every day, week and month. There were 114,900 starts in 2010-11—nearly twice as many as in the previous year—for those aged over 19.

The Minister not only champions apprenticeships but facilitates their delivery and I congratulate him on that. May I ask him to consider introducing a flexible three-year contract for young apprenticeships, with a break clause after year 2, so that there is an equalisation of funding for young apprenticeships on courses both before and after their 19th birthdays?

Knowing my hon. Friend’s expertise and commitment to this subject, when I saw his question I spoke to my officials and got an interesting response from them. I think that if we better estimate at the outset people’s prospects of progression, we may well be able to take account of what my hon. Friend says. I invite him, as I did earlier, to come to the Department to talk that through and to see what changes we can make to remove any disincentives of the kind to which he refers.

The construction industry, the manufacturing sector and apprenticeships all go hand in hand. Will the Minister confirm that the vast majority of the increase in apprenticeships in the past year has been in the over-25s category? Frankly, that is not doing enough to assist with the serious problem of youth unemployment.

The hon. Gentleman is right that there has been a growth in over-25s apprenticeships and he will know that the previous Government commissioned the Leitch report, which said that that was exactly what we needed—to upskill and reskill the work force. Notwithstanding that, however, he will also know that there has been remarkable, unprecedented growth in 16 to 18 apprenticeships and in 19 to 24 apprenticeships over two years. Contrary to the complaints of the carpers and the cringers, the whiners and the whingers, the biggest proportion of growth has been at level 3—that is A-level equivalent.

Having recently served a one-year apprenticeship by the side of the Minister for Further Education, Skills and Lifelong Learning, I am not surprised by the excellent numbers that were released today on apprenticeships, as his dedication is second to none. May I ask him to say a word on the increase in level 3 apprenticeships, which are equivalent in qualification to A-levels?

My hon. Friend has gone on to other, I am tempted to say greater, things since he served that apprenticeship, and he is right to draw attention once again to the increase at level 3, because there were those, largely drawn from the bourgeois left, who looked down their noses at practical learning and who thought that the most growth would be at level 2, but actually we have facilitated very substantial growth—over 60%—at level 3 as my hon. Friend says. It is a rosy day for the Government and, much more importantly, a rosy day for Britain.

Small Businesses

In these rosy days, in addition to extending small business rate relief and reversing Labour’s planned rise in payroll taxes, we also intend to reduce the burden of financial accounting rules. That will save businesses up to £600 million, a third of which will benefit small and medium-sized enterprises.

At a time when many small businesses are struggling to thrive in the economic climate, will my hon. Friend join the campaign of Harlow chamber of commerce and the Essex Federation of Small Businesses strongly to oppose the proposals of the Health and Safety Executive to charge £750-plus to inspect small businesses?

I am very much aware of the consultation that the agency is undertaking on fees and other proposals, and I understand the concerns that my hon. Friend voices. Any fees, any proposals, need to be proportionate and reasonable.

Many small businesses in the construction sector would benefit from a cut in VAT to 5%, as has been raised. We heard the Minister’s response; he thinks we are wrong in calling for that. If he thinks we are wrong, does he think the Federation of Master Builders, the Builders Merchants Federation, British Precast and the Modern Masonry Alliance are wrong as well?

The Labour party thought those organisations were wrong when it was in office. The party needs to realise that it cannot do one thing in government and say another in opposition. [Interruption.] That is its record.

Topical Questions

My Department has a key role in supporting the rebalancing of the economy and business to deliver growth while increasing skills and learning.

I thank my right hon. Friend for that answer. I congratulate Ministers on the fantastic apprenticeship numbers that were announced today. With that and the rebalancing of our economy in mind, and given that in Rossendale and Darwen we have a manufacturing economy, can the Secretary of State tell the House how we are going to make it easier for employers in my constituency to take on new apprentices?

The hon. Gentleman is right to acknowledge the big increase in apprenticeships, and it is not simply quantity; it is also about quality. Some of the rapid growth that is taking place is in advanced apprenticeships, including in manufacturing, and we welcome that, but we do not accept that the status quo is adequate. We want to strip away some of the bureaucratic barriers that hinder companies, particularly small companies, and my colleagues are working on that.

A few years ago, the Business Secretary was described by the Deputy Prime Minister as an “economic prophet”. So in January, when the Secretary of State told the House that

“…economic growth is now strong. It will become stronger as a result of the work that the Government are doing in stabilising finances”—[Official Report, 13 January 2011; Vol. 521, c. 429.]

we listened with interest. Given the performance of the economy since January, does the Business Secretary believe he has lived up to his billing?

May I first warmly congratulate the hon. Gentleman on his rapid and considerable promotion? I will not tempt fate by hoping that he makes a success of it, but I none the less wish him well. Of course, one advantage that he has in coming into Parliament only very recently is that he is not personally responsible for some of the disasters that occurred under his predecessors. One of our problems is sorting out some of those disasters, not least of which are the massive deficit that we inherited, a broken banking system, large amounts of personal debt and a flat housing market. All those factors explain why it is now very difficult to launch into rapid growth, but we are putting in place the rebalancing of the economy and the financial discipline to make that feasible.

I thank the Business Secretary for his kind words, but I wonder when he will take responsibility. In his first speech as Business Secretary, he described his Department as the “Department for economic growth”. The truth is that, under his leadership, it has been the Department for no growth. The economy has stagnated, unemployment has soared and confidence has nose-dived—and that is all before the effects of the eurozone crisis have been felt. Things would be very different if he changed his policy and adopted a proper plan for growth to get demand back again. In January, he thought his policies were working and it turns out he was wrong. He has described himself as a Keynesian, but Keynes famously said:

“When the facts change, I change my mind.”

Why will the Business Secretary not do the same?

Well, Keynes famously wrote in his well-publicised note to Franklin Roosevelt that probably the most useful thing that the Government could do in a depression was keep down long-term interest rates, and that is what this Government have done as a result of their fiscal prudence.

The hon. Gentleman says that we do not have the policies in place; we have two things in place. We have policies for financial stability, which we did not have when we inherited the economy; and on the other hand we have policies in place to rebalance the economy, to reinvent manufacturing, which was allowed to decline catastrophically under the previous Government, and to promote exports and business investment—things that were shamefully neglected when his colleagues were in government.

T2. The Mayor of London has had great success in growing the number of apprenticeships from the low base inherited from his Labour predecessor by requiring apprentices to be taken on as a condition of bids for public projects. Will the Minister look at whether that success could be built on and extended to national Government? (76873)

My hon. Friend is absolutely right to draw attention to the remarkable figures in London. Of all the regions, London has seen the biggest proportionate growth in the number of apprenticeships, and I recently had a meeting in the Mayor’s office to discuss the subject. She is also right that there are things the Government can do to help, so we will look again at what can be done, based on the experience in London, to promote apprenticeships in the way she describes.

T4. In June, the Office of Fair Trading upheld the Which? super-complaint about card surcharges, agreeing that they pose significant detriment to consumers. When will the Government act to stop people being exploited in this way? (76875)

I am grateful to the hon. Gentleman for his question. We are looking at the OFT’s powerful report and consulting colleagues in the Treasury, and we will come back to the House in due course.

T3. In formulating his response to the Beecroft review, will the Secretary of State bear in mind the interests of hundreds of thousands of people who are currently locked out of the labour market, particularly youngsters who might well be prepared to waive some of the more generous job protection provisions in return for that vital first start? (76874)

My hon. Friend will know that the Chancellor has announced that we will move the period of unfair dismissal from one year to two years—I know that my hon. Friend welcomes that—which will deal with exactly the point he has made. He will also know that we have an employment law review and a red tape challenge to ensure that we have employment laws in this country that will make our labour market fair and efficient.

T5. What message do the Government think they are sending to the thousands of families in this country who are now struggling in debt as a result of payday loans, by allowing the legal loan sharks not only to advise them on employment law, but to swell their party coffers? (76876)

I was expecting the hon. Lady to thank the Government for putting forward an idea that she and other Members have been pressing on the Government: namely, to launch research on the impact of a cap on the total cost of credit. I am really rather disappointed in her.

T6. My right hon. Friend will be aware of the Wilson review on the collaboration between industry and universities. I am currently working on a project in the west midlands with local business leaders and universities. Will he meet industrialists and me when the report is competed next year? (76877)

I would be happy to meet my hon. Friend, because she is absolutely right that one of our priorities is to ensure that the strength of our research base is fed through into stronger support for business and greater business investment, and we look forward to Sir Tim Wilson’s report.

T7. The Secretary of State will be aware that Remploy businesses were set up across this country after the second world war to give work to disabled people returning from the war. Those businesses have gone on for decades and given great work to disabled people. Why are the Government going to axe the programme? (76879)

Certainly we should be doing all we can to support disabled workers. My understanding is that those decisions lie with the Department for Work and Pensions, but I would be happy to engage or help if there is a problem.

UK Trade & Investment has just completed a trade mission to Iraq for the Erbil international trade fair, of which I was privileged to be a part. We had 86 businesses, companies and educationalists at the British pavilion at the trade fair, whereas three years ago we had only one. Will the Secretary of State join me in congratulating the UKTI team and our consul-general on their great work during the mission?

Yes. UKTI does an excellent job. Like all other parts of the Government, it is having to do more with less, but it does so through refocusing and strategy. I have not yet been to that country, but I look forward to doing so.

T8. Does the Minister of State really think that sending a letter to Members whose constituents are affected by the potential redundancies at BAE Systems stating that those people could move to other parts of the country to get jobs shows any understanding of the regional economy and the need for skilled manufacturing jobs, particularly in the Humber area? (76881)

The letter sets out, first, help for those individuals on the ground at those sites. Secondly, it refers to making sure that by having the new talent retention service we do not lose those skills; and, thirdly, it refers to making sure that we put enterprise zones in place. I have to say that the response I have had from local people has been far more positive, sadly, than that of Labour Members.

Many of those who strongly support the Government’s policy to establish a grocery adjudicator to curb the bully-boy tactics of supermarkets will be concerned to ensure that it has the teeth to do the job. Will my hon. Friend the Minister take this opportunity to reassure those supporters of the Government’s policy that a supplier will not be required to take the risk of making a complaint in order to prompt an inquiry by the adjudicator?

I again pay tribute to my hon. Friend, because he has been a stalwart campaigner for that change. I am delighted that we were able to publish the draft Groceries Code Adjudicator Bill on 24 May, and that the Business, Innovation and Skills Committee’s report on it has welcomed our proposals. He will know that the proposal is unique, because it allows anonymous claims to be made to the adjudicator and for reports, of which the adjudicator will be able to take note, to be put into the public domain.

The Bank of England’s own data released last week indicate that lending by banks to small businesses fell by £2.5 billion in the three months to August. Was not the Secretary of State right to admit at last that the economy is in a far weaker state under this Government than it ever was in the last year under Labour?

That certainly is not the case, but the hon. Gentleman has a perfectly valid point in relation to bank lending. That is absolutely the case, and, as a result of the agreement that we have reached with the banks, they have—certainly in the first two quarters—achieved the gross lending objectives that we set them, but there is a lot more to do. Surveys show that a shortage of credit is a serious problem, and we have to continue to work with the banks and, where necessary, to require them to make credit available to the economy.

Since December 2008, 3,218 tied pubs have closed and 425 free houses have opened, yet the British Beer and Pub Association, which speaks for pub companies, continues to mislead Ministers and MPs by stating that the opposite is actually the case. Do Ministers agree that this discredits the BBPA and also shows that the Government must stick to their commitment to act on the issue?

My hon. Friend has been a doughty campaigner on the subject, and he will know that the Business, Innovation and Skills Committee has just undertaken a report on all those issues. The Government are therefore considering it and will respond to it shortly. If I were tempted into replying to the details of his question, I would prejudice that response.

Having withdrawn funding from the UK Resource Centre for Women in Science, Engineering and Technology, will the Secretary of State tell us which women’s organisations he has contacted to encourage women back into those under-represented areas?

It is important that women are properly represented in engineering and science, and I discuss that issue with a range of groups, so I hope the hon. Lady will be encouraged by the fact that we have 26,000 STEMNET ambassadors. Already, we have 40% who are female, but obviously we need to be better.

Next month should at last see meaningfully democratic elections in Egypt, but a new democratic Egypt faces a future hamstrung by debts from the Mubarak era. Will my right hon. Friend ask his officials to conduct an audit of the £100 million owed by Egypt to the Export Credits Guarantee Department?

As my hon. Friend knows, there is a mechanism for dealing with official debt, through the Paris Club, but I will certainly undertake to speak to my colleague, the Secretary of State for International Development, to ask what concessional assistance we are giving to Egypt. The matter does not directly bear on my Department, but I accept that there is a link with the promotion of trade.

Does the Business Secretary believe that tax evasion and tax avoidance is having a negative impact on economic growth?

Absolutely. I am resolute, and I hope that my colleagues on the Opposition Benches will work with me in combating both.

The Department for Business, Innovation and Skills is considering the creation of a public data corporation. Does the Minister accept that making public data openly available can facilitate innovation in more ways than can be easily anticipated, benefiting the economy and the country? Will he meet me and other campaigners to discuss the details of that further?

I am certainly very happy to meet my hon. Friend to discuss the issue. He is right to bring attention to this very important innovation by the Government to create something called a public data corporation, bringing together a number of key Government assets to ensure that they are managed efficiently and to put a greater amount of data into the public domain.

One of the Labour Government’s great successes was the introduction of the artist’s resale right. Since then, the art market has quadrupled, and hard-pressed artists have received £13 million. The derogation in awarding the artist’s resale right to the estate of dead artists lapses at the end of the year. Will the Secretary of State confirm that from January next year it will apply to the estate of deceased artists?

No, I cannot confirm that, but I will speak to my colleague at the Department for Culture, Media and Sport about the impact on the art market, and how we propose to proceed with that in the European Union.

The success of apprenticeships is undoubtedly vital to future prosperity in areas such as the west midlands. Will my hon. Friend update the House on the progress of the apprenticeship programme in the west midlands region?

I described this as a rosy day for Britain, and it is a rosy day for the west midlands too. The number of apprenticeship starts in the west midlands is up by more than a half on 2009-10, which is due in part to the advocacy of excellent Members of Parliament such as my hon. Friend.