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Business, Innovation and Skills

Volume 539: debated on Thursday 2 February 2012

The Secretary of State was asked—

Red Tape Challenge

To date, of the more than 1,200 regulations considered under the red tape challenge, we have agreed to scrap or substantially overhaul well over 50%. That is in addition to our plans to cap the cost of new regulations through the one-in, one-out system.

I am very grateful to the Minister for that answer. Will he clarify how much the one-in, one-out rule saved businesses in 2011?

My hon. Friend is absolutely right: it is costs that businesses are focused on. I can tell him and the House that last year we were able to rein back planned regulations, which will save businesses more than £3.2 billion a year.

Businesses across my constituency and elsewhere, and organisations such as the Federation of Small Businesses, are making it clear that red tape and bureaucracy are the biggest blocks to growth and employment. After six new pieces of red tape or regulation a day under the Labour Government, will the Minister outline how many regulations have already been cut and what his ambitions are for the rest of this Parliament?

We inherited a scenario in which there was the equivalent of six new regulations every working day. I am therefore pleased to say that in the last year we have identified 600 regulations under the red tape challenge which we will either scrap or substantially overhaul, and we intend to ensure that we increase that number in the years to come.

Reducing the number of regulations is extremely important, but so are the interpretation of regulations, particularly those from Europe, and the risk of gold-plating regulations, such as the agency worker directive. What action is the Minister taking to ensure that in interpreting regulations, we use the lightest touch possible to comply with the law?

We have changed the guiding principles from those that we inherited. That means, first, that we are not going to tie British business down by implementing early, as we have in the past. We will implement on the last legal day, under transposition rules. Secondly, my hon. Friend is absolutely right about interpretation. We will ensure that we copy regulations out and do not embellish them, as was sadly all too often the case under the last, Labour Government.

Higher education applications in this country have collapsed, although not across the board—I think applications to Oxford, Cambridge and Durham have increased. However, in the universities that ordinary people go to, they have collapsed.

Nobody disputes that unnecessary regulation and red tape have to be dealt with, but Government Members are deluding themselves if they think that is the central issue, when unemployment is at record levels and the economy has ground to a halt. Every time I go to meet a successful manufacturing company that has orders waiting and wants to take on new staff, I am told that the central problem is the lack of finance. Instead of trying to pursue this issue, the Minister should be concentrating on getting money from the banks to manufacturers so we can get the economy moving and they can take on more staff.

I am glad to say that we are capable of doing both. Unlike the last, Labour Government, we are tackling finance. It is sad that the Opposition are not listening to small businesses. We are, and we are working to make sure we help them.

As part of the red tape challenge, will the Minister look again at the regulations that deny employees the right to proper compensation or redundancy payments if their workplace has fewer than 20 people, as is the case for ex-employees of Woolworths? That is regulation that successive Governments have failed to address.

I am aware that what the hon. Gentleman refers to is a live case, so I must be careful in the sense that it is before the tribunals. However, I am sure that the representations he has made are clear. Again, we need to strike the right balance so that employers and employees have a fairer deal. Frankly, I do not think that was the case in the 13 years of the last, Labour Government.

Last year, 171 people were killed at work and 115,000 were seriously injured. Is the Minister really saying that now is the time to water down health and safety legislation?

The changes that Professor Löfstedt has identified are not about reducing safety at work; they are about cutting unnecessary red tape. That is clear; indeed, it is why one Opposition Member has been part of that panel and has supported its proposals, which this Government will implement.

High Pay Commission

12. For what reasons he does not plan to implement all the recommendations of the High Pay Commission. (93009)

I welcome the High Pay Commission’s valuable contribution to this debate. The proposals that I announced to the House last week drew on its analysis, and we are taking forward 11 of its 12 recommendations either in full or in spirit. We have chosen not to implement its recommendation requiring workers to be put on all remuneration committees.

Most people in this country would consider £180,000 a year to be high pay. Will the Secretary of State tell the House who signed off the special dispensation with Her Majesty’s Revenue and Customs regarding the extraordinary tax arrangements of Mr Ed Lester, the chief executive of the Student Loans Company?

I understand that there is to be an urgent question shortly, when hon. Members will be able to go into that issue in detail if they wish. I simply say that this concerns an exceptionally useful individual who has helped to turn around that organisation. The arrangements under which the negotiations took place involved substantial value for money for the taxpayer and a tax cut by the individual. We will pursue matters of public concern on the tax issues, and the answers will be given by the Chief Secretary to the Treasury in response to the urgent question.

Further to that point, may I ask the Secretary of State who on earth signed it off? Answer!

These issues will be answered, and the mechanics dealt with, in the urgent question in an hour’s time.

Does my right hon. Friend agree that, as we all share an ambition to put the employee’s voice on the board, the best way to do that is to encourage employee share ownership?

It is indeed. Employee ownership is an expanding movement, and a popular one. It allows employees to become involved in the companies in which they have a share, and we wish to see it encouraged. We also wish to see workers properly consulted; there are powers to achieve that under existing legislation, but they are not being sufficiently used.

Does my right hon. Friend agree that it is better to force companies to consult all employees, rather than consulting one individual? How would that individual be chosen, especially in a company that might be located in many parts of the world?

My hon. Friend is absolutely right. That is why we are stressing employee participation in remuneration discussions. There are powers under existing regulations and we want to encourage people to take more advantage of them. As she rightly says, there are enormous practical difficulties involved in choosing one employee who can properly represent the whole of an international labour force.

Order. The right hon. Gentleman is being saved up for later. It would be a pity to waste him at such an early stage in our proceedings.

You can waste me first, Mr Speaker.

The Secretary of State will be aware of the performance targets set down in the Project Merlin agreement. One of the agreed measures to determine the bonuses of bank chief executives was to examine whether banks were providing the promised credit to businesses and, in particular, to small and medium-sized enterprises. The agreement also clearly stated that there would be no rewards for failure. Why, then, did the Government wave through the bonus for the Royal Bank of Scotland chief executive before the Bank of England had published the annual Project Merlin lending figures?

The chief executive was on a contract, which I think was negotiated when Labour was in government. It had five separate metrics, of which that was one. It is certainly true that, according to the provisional data, RBS has not quite met its gross lending targets, but the Merlin agreement has not yet run its course, and we shall await its findings with interest.

Prospects for Growth

The Office for Budget Responsibility produces independent forecasts for the economy and for the public finances. The OBR’s November 2011 economic and fiscal outlook predicts that the UK economy will grow by 0.7% this year and by 2.1% in 2013.

I thank the Secretary of State for that answer, but consumer confidence is plummeting, the retail sector is struggling, the growth in jobs in the private sector is not matching the losses in the public sector, and in my constituency scores of people are chasing every single job. So if not Labour’s five-point plan for jobs and growth, what? This Government are not working.

If the hon. Gentleman actually read the analysis produced by the Bank of England and, more recently, the Institute for Fiscal Studies, he would understand why the economy is growing slowly. The combination of higher commodity and oil prices last year and, more recently, the crisis in the eurozone is affecting all developed countries, many of them much more than the UK.

As confidence in growth continues to diminish among members of the small business community, does the Secretary of State share my view that the Chancellor should use more than one tool to get the economy moving? Many people think that he has lost the tool box. What influence is the Secretary of State bringing to bear on behalf of small businesses to nudge the Chancellor into creating greater private sector demand?

My hon. Friend is absolutely right to stress the crucial importance of small business. As he well knows from the autumn statement, the Chancellor has come forward with ideas about credit easing to make credit more easily available at lower rates to small companies, and we will wait for the Budget to see how that will be elaborated.

Our economy contracted in the last quarter, with small business confidence at rock bottom in the latest Federation of Small Businesses survey, and we teeter on the edge of recession, yet Ministers have lost control of the levers that active government has for growth. Why, 10 months after the first regional growth fund winners were announced, do a third still wait for their money while £1 billion from Europe lies idle? With national apprenticeship week about to start, why are Ministers not, as we have urged them, taking unused money from the growth and innovation fund to expand local schemes for small businesses to take on thousands more young people? Is it not true that today, under this Government, growth is just as glacial as the weather?

On the specifics, as the hon. Gentleman will know, a third of regional growth fund projects have already started. I am surprised that he picks up apprenticeships as a theme, because we have increased their number by 50% in the last year from the rather depressed levels we inherited. In terms of broad policy, I understand that the hon. Gentleman is standing in this morning for my opposite number, the hon. Member for Streatham (Mr Umunna), who wrote to tell me that he has gone to Germany looking for inspiration. I think the first thing the Germans will tell him is that if he wants sustainable growth, there has to be fiscal discipline.

In these difficult times, the food and drink sector is an example of success with year-on-year growth. I commend the report by the Department for Environment, Food and Rural Affairs and UK Trade and Investment entitled “Driving Export Growth in the Farming, Food and Drink Sector”, but trade barriers still exist. Will the Secretary of State ensure that such trade barriers are broken down so that this sector can go from strength to strength?

My colleague is right to stress the importance of the food sector, including food manufacturing. We often talk about advanced manufacturing, but some of the most sophisticated industries are often in those traditional product areas. He is right about the importance of opening barriers. In the European Union context, my team is actively pursuing trade liberalisation with a variety of Asian countries, the Mercosur countries and others. We hope that those agreements will be delivered soon.

Daylight Saving Bill

May I first pay tribute to my hon. Friend the Member for Castle Point (Rebecca Harris) for her excellent work on her private Member’s Bill? As the House knows, the Government supported the Bill, as amended in Committee. Unfortunately, and as the Leader of the House made clear last week, there is no way the Bill could complete its passage through both Houses in this Session, but it could be taken forwards by a private Member’s Bill in a future Session. The Government would not, however, expect to introduce any trial of daylight saving time if there was clear opposition in any part of the UK.

In the Western Morning News, the Secretary of State is reported as saying that he is disappointed that the Bill was killed by a handful of Back Benchers who could not see the light, and that he did not rule out Ministers—I repeat, Ministers—finding more time. If the Government are genuinely committed to this measure, as they say they are, and if it is not just warm words and they really want it to happen, will they commit to bring forward a Bill of their own in this Session or the next?

The Leader of the House explained the problems of doing so in this Session and was equally clear that we would welcome a private Member’s Bill in the next Session. This Government have worked harder on this issue than the last one did, and we have made more progress. I would hope for emerging consensus in the House because this Government are making real efforts.

The Minister seems to be trying to face two ways at once. It is quite clear that time could have been made. We have a general debate later today and the time for it could quite easily have been devoted to private Members’ Bills. I doubt whether today’s business will run the full course. Come on, let’s put this Bill back on and let Parliament decide.

I know my hon. Friend is a huge supporter of the Bill, but the Leader of the House has made clear the problems of getting it through both Houses during this Session, and I am certainly not one to challenge his judgment.


The Government have already acted to make it easier to start and grow micro-businesses. Action has included cutting corporation tax rates, extending relief from business rates, and introducing a moratorium from regulation for all micro-businesses.

The Minister is conducting a review of disruptive business models as part of the red tape challenge. Has he considered introducing a new limited liability scheme for sole traders, similar to the limited liability partnership? I believe that such a scheme operates in France, and it would be fantastic to see one like it operating here.

I know that my hon. Friend is a real champion of micro-businesses. The Government have focused on practical measures that help the micro-businesses’ bottom line, but, as she knows, I am happy to consider the legal issues with her and her all-party parliamentary group.

On Friday I attended the opening of a micro-business in my constituency, Little Rembrandt’s Café in Ferryhill. That business opened despite the Government and despite the banks, which refused to lend. The owner had to put her own financial security on the line by remortgaging her house. That situation obviously cannot be right, because it is stifling growth in the economy.

I understand the hon. Lady’s point. Two thirds of small businesses are able to secure the money that they want, but that is no consolation to those who are not. Perhaps I could write to the hon. Lady about the community development finance institutions, which we have been funding and which are well placed to help the kind of micro-business to which she has referred.

When will the call for evidence on making it easier for micro-businesses to part company with their employees begin, and what will be the terms of reference?

The Minister was right to describe the hon. Member for Newton Abbot (Anne Marie Morris) as a great champion of micro-businesses. Last week she called for the Government to introduce a VAT cut to 5% on construction, which is part of our five-point plan.

The truth is that the Government are failing Britain’s small businesses. They have failed to live up to expectations on regulation, they have failed to persuade the banks to lend to small businesses, and they have failed to get growth into our economy. Why does the Minister keep pretending that small businesses think his policies are working when it is so clear that they are not?

There are substantially more small businesses now than there were when we came to office, and they have confidence in what we are doing. We need to support and encourage them, and we will do that. I do not accept the hon. Gentleman’s wholly negative analysis.

Executive Pay

Last week I announced a comprehensive package of measures to tackle the disconnect between executive pay and company performance. These proposals will increase simplicity and clarity, give shareholders more effective power through binding votes, increase the diversity of boards and remuneration committees, and encourage employees to be more engaged.

In the last few weeks the chief executive of Lloyds TSB, then the chairman of the Royal Bank of Scotland, and then its chief executive appear to have got the message that huge bonuses are not acceptable in this time of austerity. Given that this month we expect both banks to announce significant losses amounting to millions of pounds, how can Government, Parliament and constituents such as mine in Southwark convey the message to the rest of the directors and investment bankers in the publicly owned banks that they too should not have huge bonuses in times of austerity?

Those two individuals are symbolically very important, but what is much more important is that we have a proper system governing executive pay over the long term, and that is what my proposals were designed to achieve. Bonuses in the banking sector as a whole are now running at roughly a third of the level at which they operated at the peak of the boom when Labour was in power. As for the state-owned banks, my right hon. Friend will know that a set of disciplines is being introduced through United Kingdom Financial Investments Ltd.

Does the Secretary of State agree with Will Hutton, the chair of his High Pay Commission, that there should be a definite risk to the basic pay of executives who fail to meet their targets?

Yes. I have talked extensively to Will Hutton about that. In the proposals that I will bring forward next week, we will introduce the principle of a clawback; that clawback can operate in different ways, and we are certainly looking seriously at one of the ways that Will Hutton has recommended.

To get to the dizzy heights of executive pay, one must first get a job. What are Ministers doing to reduce the red tape and bureaucracy relating to apprenticeship schemes for small and medium-sized businesses?

That question is fascinating, but sadly it bears absolutely no relation to the question on the Order Paper, so the hon. Gentleman should keep it for the spring, or some other suitable time.

In view of the Secretary of State’s answers, will he assure the House that he has made representations to the Chancellor and United Kingdom Financial Investments Ltd to make sure that in the RBS last year’s practice of giving 323 bankers bonuses in excess of £1 million is not repeated, and that the anticipated payment of £4.5 million to John Hourican, a senior banker in RBS, does not go ahead?

Of course there is a continuing issue with the scale of bonuses in RBS, but they are vastly reduced from their former level. We are conscious of the issues involved. Many of those people are American traders operating in the United States, but we are conscious that every amount that goes out in bonuses is money that could otherwise have gone to small businesses.

Further and Higher Education

9. What plans he has to facilitate the provision of higher education in further education institutions. (93006)

The Government see a crucial role for further education colleges in delivering higher education, because demand cannot be enlivened unless supply is diverse, so we are extending loans to part-time students; freeing up controls on student numbers; increasing directly funded places at FE colleges; widening access to higher learning; and changing assumptions about the modes of and access points to learning. It is higher education for the many, not the few.

I am grateful to my hon. Friend for his answer. Will he join me in congratulating Central Sussex college in my constituency, which last September started a university presence on its campus? It is linking local students—under the previous Government, only 17% of them went on to higher education—with first-class local employers. Of course, he has an open invitation to visit.

I am aware of that excellent development, which enjoys the wholehearted support of my right hon. Friend the Minister for Universities and Science, who has done much to encourage the widening of access to higher education. My right hon. Friend will offer some exciting news about additional places when he rises to his feet, because we are determined that everyone, wherever they begin, should have their chance of glittering prizes.

There is very real concern in the FE sector that, arising from the core and margin provisions for higher education and a potential reduction in university places, higher education institutions may claw back provision from FE colleges. What reassurance can the Minister give the sector that that will not happen?

The hon. Gentleman is right to draw attention to that risk, and it is absolutely right that, given our ambition to widen access, which I articulated a few moments ago, universities should not engage in anti-competitive practices. The Secretary of State has made it clear that that is not acceptable, and my right hon. Friend the Minister for Universities and Science is taking action to prevent it. We will take a very dim view of universities that are not engaged with our mission to elevate the people through access to learning.

University Campus Suffolk is based in Ipswich, in a neighbouring constituency to mine. One of the challenges it faces is that as it does not award its own degrees, it is not allowed to appear in the league tables, or in other listings that students readily access. Is there something that can be done to remove that element of bureaucracy, so that it can appear alongside any other university?

Sometimes, my relentless drive to remove bureaucracy is regarded as excessive, but if that is the charge, I plead guilty. My hon. Friend is absolutely right: we need to make the process as straightforward as possible, and we will take action to do so, partly stimulated by her question and her excellent work in this area.

The expansion of the role of further education colleges in providing higher education is a positive step, but it sits alongside the Government’s plans to expand the role of for-profit providers in delivering higher education. Will the Minister tell us whether the Government will bring a higher education Bill to the House later this year, and will he undertake not to introduce regulatory changes that make it easier for for-profits to enter the sector without full parliamentary scrutiny?

If I were a less experienced Member of this House, the hon. Lady’s erudition and charm might encourage me to make predictions about the Queen’s Speech, but it would be quite wrong to do so and I cannot possibly answer that question. What I will say is that the determination on this side of the House to seed opportunity by providing greater access to higher education is a profound one.

Green Investment Bank

In December, the Department invited applications to bid for hosting the green investment bank. The closing date was Monday 30 January, and a total of 32 bids were received. My right hon. Friend the Secretary of State will make a decision shortly.

Newcastle has submitted an outstanding bid to host the green investment bank, and as a region we have the right mix of natural environment, green expertise, infrastructure and professional services, all supported to grow under the last Government in order to make it a success. However, bearing in mind that we are the region with the highest unemployment levels, to what extent will the Government’s commitment to supporting private sector growth, particularly in areas suffering the greatest loss of public sector employment, be a factor in the decision-making process?

I do not wish to prejudice the case Newcastle has put forward as one of the applicants. All I will say is that we will look at the points the hon. Lady has raised as part of the criteria for all applicants, and make sure that we can get a decision out by the end of the month.

Economic Growth

11. What recent assessment he has made of prospects for economic growth and their effect on business confidence. (93008)

As I noted earlier, the independent Office for Budget Responsibility forecasts that the UK economy will grow at 0.7% this year and 2.1% in 2013. The OBR states that the intensification of the European sovereign debt crisis has

“doubtless helped to reduce confidence”.

One of Nottingham’s Work programme providers recently told me not only that she was disappointed that the future jobs fund had been scrapped, but that local employers were reluctant to invest in apprenticeships because they simply were not confident they would have jobs for the apprentices to fill at the end of the process. Is it not time that this Government admitted that their economic plan has failed dismally, and that they need to adopt Labour’s plan for growth and jobs?

I am very surprised that the hon. Lady gives apprenticeships as the central example of failure, given that apprenticeship numbers have risen by 50% and apprenticeships are extremely popular with young people and employers. This is a success story, and I am surprised she is denigrating it.

Perhaps I should also point to the most recent indicators, which were published yesterday. In the manufacturing sector, which is absolutely critical for recovery, the purchasing managers index suggests a significant recovery in the short run.

The Government had the good sense to award a grant under the regional growth fund to the Goonhilly radio astronomy project in my constituency. That is very welcome, but the implementation of the decision seems rather slow. Will the Secretary of State look into the matter and accelerate the implementation of that project, which will generate many jobs in our local community?

I am aware of the difficulties associated with that project, which relate to the fact that we are trying to integrate two separate bidders. My hon. Friend knows the practical difficulties, but we will certainly do the best we can to expedite the project.

The Secretary of State will be aware of the chorus of disapproval at the manner in which the Government have handled the decision on solar power feed-in tariffs. Both the CBI and the Environmental Audit Committee have stated that it has wrecked supply chains and undermined confidence. Erica Robb of Spirit Solar told the Prime Minister last month that “weeks of chaos” have resulted in her having to lay off more than a third of her work force. As the Minister charged with responsibility for growth and co-ordination of industrial policy, what role did the Secretary of State and his Department have in this debacle, and how does the Government’s decision help the establishment of a long-term, credible and co-ordinated industrial strategy that supports fledgling sectors and provides the environment for business confidence and economic growth?

This Department certainly does wish to promote the renewables sector and the supply chains. However, given the history of this problem, the hon. Gentleman will know that the level of subsidy—which I think his Government fixed—was totally unsustainable, and action had to be taken to cap it.

Has the Business Secretary had the opportunity to assess the implication of the growing places fund for infrastructure projects such as that relating to the A64 in North Yorkshire? What criteria will apply to selecting such projects, and how can we guide the local enterprise partnership in the right direction?

Order. I know that the Secretary of State’s reply will relate to economic growth and business confidence.

That infrastructure fund, which relates specifically to small projects, has proved very valuable and the local enterprise partnerships have an important role in working up those projects. There are set criteria, of which they are well aware, that they must meet.

Job Creation (Scotland)

13. What recent discussions he has had with the Scottish Government on promoting job creation in Scotland. (93011)

Ministers in the Department have regular conversations with Scottish colleagues on areas of mutual interest. I have been invited to meet representatives of Scotland’s cities to discuss their contribution to the economy and I expect to do so shortly. Much of Britain’s future prosperity depends on our cities, including Dundee.

I thank the Minister for that response. Job creation is of paramount importance in my constituency in Dundee. Dundee has a highly skilled and highly educated work force, but despite that fact unemployment figures remain stubbornly high, particularly those for youth unemployment. There is an increasing feeling that that is the fault of both the coalition Government and the separatists in Edinburgh, who seem unwilling to use their powers to promote economic growth—they are too busy pointing their finger at other people for that. Will the Minister make an urgent assessment of how he, working with the Scottish Executive, can improve job creation throughout Scotland?

I will, but it is fair to point out that, under the Labour Government, youth unemployment increased by 40%, so I think the hon. Gentleman is wrong to imply that that phenomenon has just established itself. He will know that the best and only way to create jobs is on the basis of a successful, stable economy. He will have seen the Institute for Fiscal Studies report yesterday that made it very clear that had the previous Government’s plans been in place, borrowing would have been at £76 billion in 2016-17 rather than £26 billion. That would have been disastrous for the credit rating of this country and the interest rates on which job creation depends.

Does the Minister agree that one way to create jobs and promote job creation is for cities to embrace the concept of elected mayors and would he encourage the Scottish Executive to do so?

That is a matter for the Scottish Executive, but my hon. Friend will know that we are debating orders in Parliament to require referendums in the cities of England to give people the choice of whether they should have elected mayors. We would not be doing that if we did not think that elected mayors gave the kind of leadership that London has benefited from considerably through the leadership of the Mayor of London, Boris Johnson, in recent years.

Business Growth

The plan for growth commits the coalition to creating the most competitive tax system in the G20. We will make the UK the best place in Europe to start, finance and grow a business and we will create a more educated work force who will be the most flexible in Europe.

I am most grateful for that answer. Given the vital role of exports in trying to grow our economy and yesterday’s disastrous news about Typhoon not being take up by the Indians, will the Minister meet me and other BAE Systems MPs to find out what his Department can do to get behind BAE Systems?

Let us be absolutely clear that the Prime Minister, the Secretary of State and I have all been on trade missions to India because we recognise its importance as an export market. British exports are growing by 10% and we will continue to argue the case for Typhoon as an excellent and cost-effective deal for the Indian Government. Of course, Ministers would be very happy to meet employees.

Economic growth has been greatly enhanced in east Kent by the huge amount of work done by BIS for the enterprise zone and the regional growth fund. What more can be done through UK Trade & Investment to promote life sciences internationally and to get inward investment into east Kent?

My hon. Friend is absolutely right. Of course, this week is the first anniversary of the announcement by Pfizer that it was planning to close completely its facility at Sandwich. That will now be transformed into a research and business park, not least thanks to the excellent efforts of my hon. Friend. Indeed, Pfizer will be an anchor tenant employing, we believe, 750 Pfizer staff. That shows we can fight back and we can maintain life sciences activity in this country. Through the proposals we set out in December, we aim to increase that.

If we are to get business growth in our country, we must provide finance. Does not the report that the Minister has just made on the green bank show the truth that we want that sort of bank in each region, particularly in Yorkshire and the Humber? We want a bank for every region that knows the local circumstances and will invest in our regions.

I have a lot of sympathy with the argument that overall we need to see much greater diversity in British banking. Indeed, one reason why the Government are implementing the proposals from the Vickers commission is precisely to make it possible to have once more local banks that understand the needs of the local business community and local individuals, but our position on the green investment bank has been made clear by the Secretary of State.

Construction Industry

The construction industry, as with much of the economy, has come through a difficult period and faces a challenging year ahead but, as ever, in the areas for which I am responsible I offer sunny uplands. Figures published just yesterday show that construction industry apprenticeships for 2010-11 saw an increase of 11.4%—fine words, still finer deeds.

The Minister says that the construction industry faces a challenging year, but it faces a challenging decade. The Construction Industry Training Board points to new research suggesting that employment and output in the construction industry in 2016 will be 5% lower than 2007 levels. Given that the construction industry could be a real stimulant to jobs and growth, will the Minister tell me when the Government are going to come up with policies that actually work instead of ones that just sound good on paper?

The figures I just revealed show that the construction is not being hampered by current difficulties but is investing in its future. We know that industry sectors that invest in the future bounce out of the kind of downturn that the industry currently faces. However, I accept what the hon. Lady says and we will go further. As a result of her question and my consideration of these matters, I will, with the CBI and the Federation of Small Businesses, invite the construction industry into BIS to talk about how that boost in apprenticeships can feed the kind of improvements that she seeks and Britain needs. Talking down business is talking down Britain, and that is something we will never do on this side of the House.

Construction is an important sector in my constituency, but its future very much depends on making sure that we have the skills available to support this sector for the future. Will my hon. Friend set out what actions he is taking to make sure that we support skills in this vital area?

As I said, the investment in apprenticeships is critical. No one doubts that construction industry apprenticeships are vital to building the skills the industry needs. I just want to say that no Member of the House has been more doughty in championing the interests of business in his constituency than my hon. Friend. He personifies our determination to boost skills, improve our prospects and build recovery.

Tuition Fees

16. What assessment he has made of the effect of higher tuition fees on the level of university admissions in the next academic year. (93014)

UCAS published figures on 30 January 2012 covering applications to higher education institutions by its main deadline. That independent information shows that the proportion of English school leavers applying to university is the second-highest on record and is higher than in any year under the previous Labour Government. It is also encouraging that applications from people from some of the most disadvantaged backgrounds remain strong. We will continue to monitor closely the data on applications.

I thank the Minister for his answer and draw attention to my interest in this matter, as set out in the Register of Members’ Financial Interests. Since this Government’s punitive and regressive £27,000 tuition fees have been introduced, university applications for design are down more than 16%, applications for history are down more than 7%, applications for classics are down more than 8% and applications for non-European languages are down more than 21%. Britain has long had a world-class reputation for the humanities; why are this Government so determined to kill it off?

I am amazed that the hon. Gentleman could refer to an arrangement under which graduates pay for their higher education only if they are earning more than £21,000 a year as a regressive policy. It is a progressive and fair way of maintaining higher education. Because, unlike him, young people across the country understand that, we have had a very healthy level of applications to universities this year—down only 1% on last year’s peak.

What assessment has my right hon. Friend undertaken of the impact on admissions of university access agreements supervised, and indeed enforced, by the Office for Fair Access?

It is very encouraging that when we look behind the 1% fall in applications overall, it looks as though the fall in applications from prospective students in the most disadvantaged areas is actually only 0.2%. That tells us that the message is getting across, and I pay particular tribute to the efforts of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and the advice we have had from him, and to the work done by OFFA to get that crucial message across.

Higher education applications have collapsed. In teaching, we have a simple way of measuring whether children are learning by rote or are actually learning and understanding: we ask them what would happen next. When the Minister tripled tuition fees and abolished education maintenance allowances, what did he think was going to happen next?

I thank the hon. Lady for the advance notice of her question. Contrary to the stories of collapse and disaster, we believe that the fact that applications have fallen only by 1% is evidence that the message that students do not have to pay is getting across, and this summer I shall once more sadly be in the position of having to explain why young people applying to go to university do not have a place. In other words, we have succeeded in explaining the truth about our proposals, contrary to the misleading allegations of the Opposition.

I know that the Minister will not be suggesting that any Opposition Member has misled the House. I am sure he is referring to activity outside the House.

Will my right hon. Friend the Minister join me in reassuring my constituents that, unlike the views of the Opposition, under our scheme a top-quality university degree will actually cost them only £30 a month when they are earning £25,000 a year?

I entirely agree. Indeed, that figure on earnings of £25,000 a year contrasts with payments of £75 a month under the arrangements we inherited from the Labour Government.

Public Interest Declarations

My right hon. Friend the Secretary of State takes seriously any public interest declarations made to him. If a declaration alleges that a company is trading in a fraudulent manner, the Secretary of State can authorise an investigation into the affairs of that company, using powers under the Companies Acts. Such investigations are confidential and it is seldom possible to confirm or deny whether an investigation is in train, but if there is an enforcement action as a result of the investigation, that can be made public. My officials will of course be willing to take further details of the allegations.

I am grateful to the Minister for his answer, and to the Secretary of State for the letter he sent me yesterday in response to my constituent’s public interest declaration. I cannot but note that it is only since the question appeared on the Order Paper that his Department appears to have been taking the matter seriously, because the declaration was made in mid-December. Given that it is a serious declaration, involving allegations of unethical and probably criminal behaviour by a significant company, will the Minister ensure that the investigation takes full and detailed evidence from my constituent?

I am sorry that after the initial e-mail sent just before Christmas there was no substantive follow-up. I apologise to the right hon. Gentleman’s constituent, but the Secretary of State has now written to the right hon. Gentleman, as he acknowledged, and I confirm that officials of the Insolvency Service who exercise those powers will now make contact with his constituent as he has requested.

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.

A moment ago, the Minister for Universities and Science referred to student loan repayments, which the right hon. Gentleman will know are deducted at source, which is more than can be said for the extraordinary contract awarded to Mr Ed Lester of the Student Loans Company. Will the Minister explain why he signed off those extraordinary tax avoidance arrangements?

Let me be absolutely clear that this arrangement is set out very clearly in the Student Loans Company annual accounts. If Labour Members had cared to study the report, they would have seen on page 42 a completely transparent account of the arrangements for Mr Ed Lester’s reimbursement. It is set out very clearly there. The payments are to the recruitment consultancy company that found him, and he was appointed on an interim basis to tackle a disaster in the SLC that we inherited from the Labour Government. We of course recognise the importance of ensuring that proper arrangements are in place and will continue to monitor the situation, but I can inform the House that we have agreed that, for the remainder of the chief executive’s contract, the SLC will account for PAYE and national insurance at source.

T3. Last Sunday I attended Indian republic day at the Wellingborough Hindu Association, yet the same week we learn that a £20 billion fighter contract has been lost to, of all people, the French. We now know that the lead bidder was not the British Prime Minister or the British Government, but the Germans. What on earth do they know about cricket and curries? Why was the British Government not leading on that? How did the Secretary of State allow such a cock-up? (93024)

As was explained earlier, the Prime Minister, the Trade and Investment Minister, I and others have made strong representations to the Indian Government on the merits of BAE Systems for this contract. The hon. Gentleman will know that the contract was narrowed down to two companies on the basis of quality. The Indian Government appear to have made a narrow decision based on price, but this is by no means the end of the process. BAE Systems will have plenty of opportunities to restate its case on quality and life-time costs and we shall reinforce it.

The Secretary of State has leapt to the defence of the tax deal by which a public servant running the Student Loans Company avoids tax of £40,000 a year. It is a pity that the right hon. Gentleman is not as vigorous in defending the interests of small businesses when it comes to bank lending. Can he confirm, as the Minister implied earlier, that this arrangement will end immediately? Does he agree that when his Government say, “We’re all in this together”, they mean the tax avoiders and the excessively paid, not the people in businesses who desperately need support in order to get our economy working again?

My colleague, the Minister for Universities and Science, has already given a very full answer on this issue. When I spoke about it earlier, I should have made it clear that Mr Lester had accepted a pay cut, not a tax cut. In addition, there will shortly be an urgent question on the matter, when any further details can be pursued. As for the wider policy questions, we made it very clear last week that we believe that our reforms of executive pay will radically reduce the rewards for failure and mediocrity in business.

T4. I welcome the Government’s plan to set up catapult centres. Will the Minister update the House on what progress has been made in setting these centres up? (93025)

Our proposals for launching the catapult centres are proceeding. We have already announced five technology and innovation centres across the country and will announce the remaining two soon.

T2. The Secretary of State is aware of the imminent closure of the Rio Tinto Alcan plant in my constituency. Rio Tinto Alcan said recently that it puts the blame firmly on the Government because of the lack of investment. The £250 million for energy-intensive industries is too little, too late, and there are also the green taxes. Would he care to comment on those allegations? (93023)

Those were certainly not the allegations Rio Tinto Alcan made to me when I met representatives of the company. They made it clear that this was part of a global downsizing of their operations and that many countries are affected by it. I have visited the site and met the hon. Gentleman to discuss this. We are concerned about the future of the labour force, and we sought to help the company through the support for energy-intensive industries. Now that the company has decided to go ahead with closure, we will see what we can do to help the people in the area.

T7. What can the Department for Business, Innovation and Skills do to support the more than 1,500 community-led work clubs across the country to help young adults to recognise the apprenticeship opportunities that exist, ensure that further education colleges can provide training opportunities for those out of work, and link in the national careers service? (93028)

I am delighted that my hon. Friend has raised that matter again, as he has done frequently. He has done much work in Banbury in this area. The important thing to do next is to match the businesses to the young people. We can do that by getting businesses into schools and by speed-dating—that is an exciting prospect, is it not, Mr Speaker? We must use all modern media to ensure that young people know about the jobs and opportunities that exist—where they are, what they are and how they can find them.

T5. Somethin’ Else is a design and creation company on Silicon roundabout in my constituency. It employs 65 people and recently produced a film that was shown at the Conservative party conference. Recently, it has been battling with Her Majesty’s Revenue and Customs over disproportionate fines for the alleged late payment of tax. That has led to a fine of more than £25,000. Given HMRC’s deals with large corporations and the Government’s professed support for small businesses, which the Secretary of State has reiterated today, what discussions is the Department having with HMRC and the Treasury to ensure that businesses are aware that it is on their side and that the Government are acting in a joined-up fashion so that punitive tax attacks are not made on small businesses? (93026)

That is, of course, a matter for the Treasury. The Department is on the side of small businesses. I have visited that business in Tech City and was very impressed with what it does. Tech City, which had about 100 small businesses when the coalition came to office, now has more than 600 small businesses because of our commitment to the area.

T8. May I, on the eve of national apprenticeship week, congratulate the Minister and the Government on the steps they are taking to increase the number of apprenticeships? I invite him to support the Norfolk Way project, which is giving youngsters work experience and entrepreneurial mentoring. I also invite him to agree with the wonderful words of Galileo Galilei, “We cannot teach people things; we can only help them discover it within themselves.” (93029)

John Clare, who is greatly admired by my hon. Friend, said:

“The best way to avoid doing a bad action is by doing a good one”.

Of course, he ended his life near Norfolk. My hon. Friend understated his own involvement in the project that he mentioned; he launched it, but he was too modest to say so. It says here that the project is “determined to nurture the ambition of enterprising young people and to encourage a can-do attitude.” I cannot do better than that.

T6. The Government have been sending out mixed messages recently about the extent of their financial commitment to the proposed green investment bank. Will the Secretary of State confirm that the proposed public contribution will be £3 billion as promised and not up to £3 billion, and that the bank will assume its borrowing powers in 2015? (93027)

I can confirm the first part of the hon. Gentleman’s question: the £3 billion is fully committed to and there are no mixed messages. On borrowing, it is not merely a question of the date, but of the fiscal position of the country.

T10. This week’s National Audit Office report on apprenticeships shows that for every pound of public money that is invested, there is a return of £18. Will my hon. Friend reassure us that he is taking all reasonable steps to continue the successful growth of apprenticeships? (93031)

My hon. Friend will know that the figures published this week show a record number of apprenticeships across the whole country, in all sectors and at all levels. What does the NAO report say? As my hon. Friend described, it shows a massive return on public investment. This is success by any measure. By the way—I did not want to emphasise this, Mr Speaker—it also states that our policy is far better managed than was Train to Gain by the previous Government.

How hard did Ministers press the case for British business with their colleagues in the Ministry of Defence, who yesterday produced a written ministerial statement which said that the Government will no longer prioritise UK suppliers when purchasing defence equipment? That is another kick in the teeth for all of us who are fighting to prevent British BAE Systems jobs from being exported, at a cost of £100 million to British taxpayers.

Of course we have discussed those issues extensively with the Ministry of Defence, and if the hon. Lady actually reads the statement, she will see that it is absolutely clear that in defence, as in other areas, public procurement will operate on a strategic, long-term basis, not as it did under the last Government when narrow contractual arrangements involved purchases off the peg.

Will the Minister support me in establishing a pilot scheme on Wirral bringing female business role models into schools and thereby working towards the coalition’s intention of practical, real-life role models?

I would be delighted to support that. It is an excellent idea and builds on the work that we are doing to recruit 5,000 new business mentors—real business women, helping those who want to start their own enterprise.

What is the Secretary of State doing to stimulate growth in manufacturing industries, particularly the steel industry, which is so important to UK plc and my constituents?

As the hon. Gentleman will know, because I have visited his constituency and discussed these issues with him, the steel industry is going through an extremely difficult time not just in the UK, and steel makers have made losses. We are helping them through energy-intensive support, and there are other forms of help such as the regional growth fund and enterprise zones. We are doing what we can to help steel areas that are affected by the current contraction.

The one seemingly hopeful part of the Government’s otherwise dreadful response on pub companies was the unfortunately named PICAS—the pub independent conciliation and arbitration service. However, hope soon faded when it was revealed that it was to be pubco-funded, and this week it has been announced that it will be chaired by a Punch Taverns surveyor. Does the Minister think that licensees will want to use that supposedly independent body?

I am afraid that as in a number of aspects of this debate, my hon. Friend does not reveal the full details. Rodger Vickers has been appointed with the unanimous support of the board of the pub independent rent review scheme, which includes two members of the Independent Pubs Confederation, the champion of licensees and tenants. I have made it clear to the independent chairman of PIRRS, Mr Brindley, that its efforts to appoint a vice-chair, again with high standing among the licensee community and close links to the IPC, should continue.

Will the Secretary of State clarify what is actually happening to the Typhoon contract? There was an implication that it could be renegotiated. If he fails to renegotiate it, will he blame the previous Government?

There is no question of renegotiation. The Indians have had a pre-selection process, from which the French bid has gone ahead on the basis of price. There is a lot of experience of contracts being reconsidered at the final stage, and at that stage BAE Systems has a very good case to make as part of its consortium. We will support it thoroughly.

Although I understand that the Minister does not want to be unfair to other cities, does he agree that Brighton would make a fantastic choice of location for the green investment bank?

My only worry is that I did not have the opportunity to travel to all 32 locations and be wined and dined, but I note Brighton’s application and we shall have to see.

British Aerospace has a 17% global share, and as such is No. 1 in Europe, but its future depends on not only exports but on investment in research and development. Given that many other Governments in Europe and around the world give more support to research and development than we do, what more can the Government do to help in that vital area?

That is why the Government have provided cash protection and ring-fenced the science and research budget, and why in the autumn statement we were able to announce significant increases in funding for the Technology Strategy Board.

With no pressure from the Secretary of State for a cut in the jobs tax, no meaningful roll-back of job-destroying red tape, no pressure from him for a cut in enterprise-sapping tax rates and his lauding as a good example the pillorying of people for fulfilling their Government contract, can he advise me of what he is doing to encourage enterprise rather than to discourage it?

I think my ministerial team have given an extremely good account of the many things that we are doing in that area, starting with an extraordinary cut in the amount of red tape, which I think is the issue that most concerns my hon. Friend.

Order. There is unsatisfied demand, as tends to be the case. I am sorry to disappoint colleagues, but we must now move on.