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Topical Questions

Volume 539: debated on Thursday 2 February 2012

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.