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Topical Questions

Volume 542: debated on Thursday 15 March 2012

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

As the Government have stumbled from the tuition fees debacle, through the uncertainty caused by core and margin and AAB, the reputational damage of international student visa policy, and the failure to develop policy on postgraduate education, will the Secretary of State admit—he has rightly identified this in other areas of Government policy—that the Government lack a compelling vision for UK higher education, and that that is behind today’s fall in our international reputational rankings?

We set out our approach to higher education in our White Paper. It shows how, even when public expenditure has to be reduced, we have been able to ensure that our universities remain well financed. It ensures that we still have more young people applying for university than in any year of the previous Labour Government. We are backing our universities.

T2. Given that we now know that the new Offshore Renewable Energy Catapult centre will be in Glasgow, with a base in Blythe but with no regional hubs around the country as originally envisaged, will the Minister outline how the considerable expertise and resources found on the East Anglia coast can be best utilised? (100044)

The Government recognise the strong energy and offshore renewable sector in East Anglia. It is the intention that the Offshore Renewable Energy Catapult will provide a national capability that will be available fully to companies from all the English regions.

May I congratulate the Secretary of State on his leaked letter to the Prime Minister? I know he had some choice words to say about the Opposition, but the letter describes the Government’s action to promote growth as “frankly rather piecemeal”. I could not have put it better myself. When that was put to the Prime Minister last Wednesday, he said that the Secretary of State was wrong. I think it is grossly unfair that the Prime Minister should have the last word on this, so will the Secretary of State explain why the Prime Minister is mistaken?

I am delighted the hon. Gentleman is focusing on that issue. As far as the leak is concerned, I am sure he is aware that it emerged from a Government Department—not mine—and was given to the Labour party, which gave it excellent publicity. If he ever finds himself out of a job, he is welcome to apply to be a press officer in my Department.

The letter had many choice words on Labour’s record in government, but it makes a strong case, which my colleagues in the Government share, and which I have set out in more detail in a couple of long speeches, for the need to get behind successful British companies and sectors, as we are doing through our training, our innovation policy and our support for supply chains. That will happen to a growing degree as we proceed.

Well, let us look at the support. The national loan guarantee scheme, also referred to as credit easing, has already been mentioned. Last October, Ministers said that they would urgently implement the scheme, yet they only submitted it to the EU Commission for approval on 10 February—more than four months after it had been announced. At our small and medium-sized enterprise lending summit in the House yesterday, RBS told us that the scheme would make little difference, that the benefits in the main would not be felt by SMEs and that the promised reduction in the cost of borrowing would be insignificant. If this is what the country’s largest bank is saying about the scheme, why should we believe it will make a blind bit of difference?

The hon. Gentleman needs to wait until the Chancellor announces the scheme. It is a very, very large scheme, far exceeding other forms of Government support. The detail clearly needs to be got right, and we clearly need EU state aid approval, but I believe, as does the Chancellor, that it will make a significant difference to the terms on which small companies can borrow. He should be a little patient and wait for the Budget next week.

T4. There are almost 4,000 small businesses in my constituency, in towns such as Alsager, Congleton, Sandbach and Middlewich, and many of them are micro-businesses. What are the Government doing to support micro-businesses and to enable them, when they want to, to develop and grow? (100046)

Alongside helping with things such as bank lending and the new equity schemes, I would point most obviously to the business angel co-investment fund, which is crucial to plug that equity gap for micro-businesses—not the larger equity businesses but the ones looking for funding of between £200,000 and £2 million. It is a £50 million package, and I commend it to my hon. Friend.

T3. Recent evidence has shown that those from a lower socio-economic background make up only 14% of those applying for medicine and dentistry, whereas the figure is 29% to 30% across other courses. Will the Minister say what steps he is taking to ensure that those from a lower socio-economic background are not priced out of the courses where, as Professor Sir Les Ebdon has said, they are needed most? (100045)

It is important that we have true meritocracy in access to our universities, including to medical courses. I am a great admirer, for example, of a programme run at King’s College London, linked to Guy’s and St Thomas’, that provides an extra foundation year for young people who have an aptitude for medicine but not the necessary A-levels. That is a good example of how access funding can be used to improve social mobility.

T5. Many people in South Staffordshire are concerned when they see the directors of large public limited companies awarding themselves large pay increases despite the fact that the companies are not performing. Will my right hon. Friend assure my constituents that the voice and votes of shareholders will be listened to when it comes to remuneration packages? (100047)

Yes, that is absolutely the direction in which the Government are going. Following the Prime Minister’s announcement that we intend to proceed on binding votes, I announced a set of detailed proposals that will give shareholders a significantly enhanced role in the setting of pay and which will, I hope, have the moderating effect that the hon. Gentleman described.

T6. I am still receiving numerous complaints from small businesses across Denton and Reddish facing problems accessing finance for their viable business propositions. Given that the economic forecasts are continually being revised downward and the quarter 4 gross domestic product figures are showing a contraction, will the Secretary of State now act and get the banks lending to viable small businesses in my constituency? (100048)

Although two thirds of businesses seeking a loan get it, I fully understand, having run a business myself, that for those who do not it is immensely frustrating. That is why we have extended the enterprise finance guarantee and saw a 13% improvement in bank lending under Merlin. But is there more to do? Yes. The Chancellor will deal with that next week.

T7. Does the Minister agree that Newcastle upon Tyne, with its great industrial heritage, will be the ideal location for a university technical college, which will provide exactly the sort of technical education that can cure youth unemployment and help meet the needs of modern manufacturing and engineering employers? (100049)

The coalition is keen to see more of these university technical colleges. They are an excellent way of linking universities and schools, and I am sure that his eloquent bid will have been noted.

Given that UK companies are sitting on some of the highest levels of cash reserves of any western nation, what steps will the Secretary of State’s Department take to release those funds for the much-needed investment in British industry?

Perhaps I should say that because of the problem of large piles of liquidity in the big corporates—this is not a new problem: it has been building up over the last decade—I asked Tim Breedon, who was formerly the chief executive of Legal and General, to look at practical ways of dealing with it, such as building up supply chain finance and new forms of trade credit. It is a serious problem, but we need business to invest, and the cash is there in many companies.

T8. I was reassured earlier to hear my right hon. Friend the Secretary of State describe the work that he is putting in with GM to help protect the future of Vauxhall at Ellesmere Port. In his discussions with GM, will he remind the company that Ellesmere Port is one of its most productive plants in Europe and ideally placed to build its next-generation cars, such as the all-electric Ampera? (100051)

My hon. Friend touches on the core argument. We are talking about a very productive plant, which reflects well on the management, and also on the labour force, who have been consistently co-operative. Currently the plant does not operate at full capacity; the issue for the company is how to use that production in a way that minimises excess capacity. We are confident that the UK has a strong case in ensuring that existing production—but also new models, as he said—is secured in Ellesmere Port.

The Business Secretary has just described himself as being under attack from left and right on his proposals to weaken employment protection laws. Where on that spectrum would he put Fiona Dawson, the managing director of Mars UK, who has said:

“I would like to see something that makes it easier for the workforce but it’s got to be fair. So I would not support employees’ rights being removed. I think we’ve got to make sure that it is fair, not just for businesses but for employees as well”?

How does he respond to that?

It is precisely for that reason that we are having a call for evidence, and the company that the hon. Gentleman has mentioned and others can contribute to it.

There is currently complete inequality between the bargaining position of small businesses and that of their banks. Many small businesses find themselves threatened with receivership unless they concede to higher interest rates or new charges. What can the Government do to rebalance the law in favour of enterprise?

We can do what good Conservatives do, which is to introduce competition. That is why we are ensuring that we get new entrants into the market, so that the four or five that take the view that they have an opportunity to dominate the market are unable to do so. Let us get the new entrants in. I am proud that, as a coalition Government, that is precisely what we are doing.

The most successful defence-exporting countries procure and buy from their own home-grown industries. How will the approach that the Ministry of Defence is now taking—buying off the shelf in open competition, without any regard for British firms—help us to export more to the rest of the world?

We need to ensure that we get the very best value for money on behalf of the taxpayer, but do we need to ensure that procurement contracts reflect good indigenous British businesses? Yes, and that is exactly what is reflected in the White Paper. That is the approach we want to take.

Does the Minister agree that when a company goes into administration, wages owed to its staff should be the top priority? Will he take steps to ensure that redundant Thamesteel workers in my constituency take priority over all other creditors?

I certainly agree that the interests of workers should absolutely take priority, and I would be happy to look into the case that my hon. Friend has raised.

I was very disappointed that despite an invitation, no Minister from the Department was on the Treasury Bench when I moved a motion to introduce the Eradication of Slavery (UK Company Supply Chains) Bill. Will one of the Ministers in the Department meet me to discuss the Bill’s ambition to eradicate slavery from the supply chains of large UK companies, following legislation in other countries?

I welcome this week’s report by Cranfield School of Management, which shows an increase in the number of women on company boards. Does my hon. Friend agree that this shows both how success can be achieved without imposing quotas and how much further there is to go before British industry can access the much-increased pool of talent that including women will reveal?

The initiative taken by the noble Lord Davies has been remarkably successful. Some 26% of appointments to directorships of FTSE 100 companies over the last year have been women. That is a dramatic improvement on the previous position, and we have every confidence that it will have a continuing improving effect in the boardrooms in this country.

Given that the Higher Education Funding Council for England is predicting more mergers and turmoil in the higher education sector, and that Asian universities are overtaking UK universities for the first time in our history, will the Minister come to the Dispatch Box and reassure the sector that it has a future?

I have absolute confidence in the future of our universities. Indeed, the Higher Education Funding Council has produced a report in the last few days that confirms that our universities are in a very healthy financial position. The extra income that they will receive through fees and loans should also increase in the years ahead. We inherited from the previous Government plans for a reduction in university science funding but, fortunately, those plans have not had to be implemented.

Does the Minister agree that, regardless of the success of the one-in, one-out policy, the fact that European Union regulations are not included in it means that the overall burden of regulation on businesses is likely to increase?

We are alert to that danger, which is why we have ensured that we have the agreement of the Commission that, for the first time that I can recall, micro-businesses will be exempt from future European directives. I hope that my hon. Friend will welcome that change.

An inquest is taking place this morning into the tragic death of 22-month-old Joshua Wakeham, who died after becoming entangled in a looped curtain cord. Sadly, such events are not rare; there were three in one month recently, and 360 in America in a 15-year period. Joshua’s mother has fairly asked why no one warned her of the danger. A campaign has been mounted by my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) and other Members to expose the danger of those cords. Will the Minister agree to meet Joshua’s family, so that we can discuss the dangers and the need for an advertising campaign so that everyone knows about the 250 million such cords in this country?

Order. It sounds as though that matter is strictly sub judice. The hon. Gentleman has been felicitous in the way he has worded his question, but I know that, in response, the Minister will want to focus on the broad issue, and possibly on a meeting, rather than on the details of a sub judice case.

With your guidance, Mr Speaker, I would say to the hon. Gentleman that the broader issue is clearly one that we should all be concerned about. In the light of your advice, I would certainly be happy to look at that broad issue on behalf of the Department.

I applauded the Secretary of State’s announcement, back in 2010, that the Government would cease the practice of gold-plating European Union regulations, but the vast majority of businesses in this country would like to see him take a more backward-looking stance and review the 13 years of gold-plating that took place under the previous Administration. Can the business community rely on the support of the Secretary of State in that regard?

My hon. Friend is clearly thinking along exactly the same lines as the Government. We are going to look at precisely that problem, by going back through the stock of regulations that were introduced by Labour during those 13 years.

The Government will be aware that this is national science week, and that the Big Bang Fair is taking place at the national exhibition centre in Birmingham. I am sure that the Minister will be pleased to hear, as I was, the good news that Coventry schools have more finalists in those events than any other schools in the country. Will he find time to join me at the national exhibition centre, where we hope Coventry will win some of the prizes in the finals when those decisions are taken?

On this occasion, I can confirm that I should be delighted to accept the hon. Gentleman’s invitation. I plan to be at the science festival in Birmingham on Friday, and I look forward to meeting him there. It will be a celebration of the strength and excellence of science in Britain.

Small and medium-sized enterprises in Harrogate and Knaresborough have been telling me about the charges they face for late payments. This is a broader, national issue as well. Will the Minister please update the House on what he is doing to tackle the issue?

As we have learned, the Labour Government introduced legislation on this, but it is not working. We want to do more. We want to ensure that the Government lead by example, and we are working with business on that. We also need to reflect on the fact that half of all business transactions are entered into without any prepayment agreements. There is therefore a fundamental problem with how business is transacted. I want to look at that, rather than simply reaching for the legislative button at the first opportunity.