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Topical Questions

Volume 545: debated on Thursday 24 May 2012

My Department has a key role in supporting the rebalancing of the economy and businesses to deliver growth while increasing skills and learning. May I repeat, Mr Speaker, that the Secretary of State has a long-standing commitment to be in Berlin and Düsseldorf and therefore regrets not being able to be with us today?

Does my right hon. Friend agree that the UK’s life sciences in areas such as biomedicine, clean energy and agriculture offer a huge potential opportunity for us to drive a sustainable recovery here in the UK by supporting sustainable development in the developing world, and that our science base, not least in Norwich research park in my county of Norfolk, has a key part to play in that revolution?

My hon. Friend is absolutely right. Indeed, I will be visiting Norwich research park later today and will be able to announce £250 million of research funding going into life sciences across the country. Alongside the commitment to human health that we have already made, this will be a commitment to research in animal health, plant breeding and the agricultural industries of the future.

This Government inherited an economy that was growing, with unemployment falling and a recovery settling in. The revised GDP estimate for the first quarter of this year, far from being revised up, as some expected, has just been revised down. With the country in a double-dip recession created by this Government, 50 businesses going under every single day, and over 2.6 million people out of work, this shambolic Government have been squabbling over a report produced by a millionaire Tory donor that suggests that all would be well were it not for people’s rights at work. Why on earth are they going along with this nonsense instead of, for example, implementing the active industrial strategy that we need?

Let us be clear: this coalition Government also inherited an economy that had been hit by a major financial crisis because of Labour’s failure to regulate financial services, and unsustainable levels of Government borrowing which the head of the International Monetary Fund said earlier this week caused her to shiver when she thought what would have happened if they had not been tackled. We are committed, rightly, to reducing the burden of red tape and regulation on the economy, and alongside that we are constructively investing in and supporting the industries of the future.

This is a no-growth Government with their head in the sand. They blame businesses, they blame the people who work in them, and now they blame the eurozone, when countries such as Germany and France are not in recession and we are. They said that they would increase lending to small businesses, but there has been a net contraction in lending to small businesses in every single month of this Government. They said that they would support different industries, from defence to renewables, but they have failed to do so. They boasted that their regional growth fund would create more than half a million jobs, but the National Audit Office tells us that it has created less than a tenth of that. We have always known that Tory-led Governments are heartless. Do today’s figures not demonstrate that they are hopeless too?

That pre-prepared speech had nothing to do with the reality of the industrial strategy being pursued by this coalition, which is delivering big increases in exports to the big markets of the future. Exports to China are up 18%, exports to India are up 29% and exports to Brazil are up 11%. Employment is up, inflation is down and public borrowing is down. [Interruption.]

Order. The hon. Member for Hartlepool (Mr Wright) is usually such a measured and emollient fellow. He must calm himself.

We are committed to working with all our partners across the British economy, including business, to ensure that there is investment in the high-tech businesses of the future. The recent announcements of investments in General Motors, Jaguar Land Rover and GlaxoSmithKline show that the strategy is bearing fruit.

T6. Last week, UK Trade & Investment put on an extremely useful event for businesses in my constituency and that of my hon. Friend the Member for Suffolk Coastal (Dr Coffey). Subsequently, my constituent, Simon Chater, has expressed concern about the cost to small and medium-sized enterprises of using the overseas market introduction service. Will the Minister confirm that UKTI is doing all it can to support SMEs that are seeking to export, including working with other Departments to identify new markets? (109176)

I was delighted to hear about the event in my hon. Friend’s constituency. I pay tribute to my hon. Friend the Member for Stourbridge (Margot James), who has made arrangements with 70 MPs to hold similar events around the country. We have to do a lot to encourage SMEs to export. The level of exports from our SMEs is below the European average, so we need to tackle that. Many UKTI services, including its initial consultations, are free. It has a particular focus on helping SMEs to increase their exports.

T2. The Government have recently designated Tyneside a centre for offshore renewable energy. In welcoming that designation, I ask the Minister to set out the economic development advantages of such a designation. What assistance can the initiative expect from UKTI, which operates under BIS? Will Ministers urge senior officials to visit Tyneside, and to promote this Government initiative at home and abroad? (109172)

The right hon. Gentleman raises an important industry and an important location. The local enterprise partnership is doing very well in that area and we are encouraging offshore energy through the work of UK Green Investments. If there were additional points in his comprehensive question, I know that the relevant Ministers will be happy to deal with them.

T7. The Government’s introduction of the national careers service is welcome. The Business Secretary has made it clear that there must be face-to-face careers advice for targeted groups of adults. Will the Department try to win the argument across Government, including in the Department for Education, that face-to-face careers guidance is vital for everybody, and that mentoring for all young people in an important complementary project? (109177)

It was Odysseus who entrusted Mentor with the guidance of his son, as now the nation’s sons and daughters are entrusted to me. To that end, we have set up the first all-age careers service in England’s history. It is right that schools should have a statutory duty to secure independent and impartial advice and guidance. The right hon. Gentleman is correct that face-to-face guidance is an important element of that. I commit to having further discussion to see what more we can do to ensure that such guidance happens.

T3. It is six years this year since the collapse of Farepak. The victims have still not received any of their money back, even though the administrators’ costs to wind up the company far outstripped the minimal compensation that they will eventually receive. Does the Minister understand just how frustrated Farepak customers and agents are, and does he have any positive progress to report? (109173)

This whole saga has been a nightmare for those affected by it, and I have enormous sympathy with them for the plight that they have suffered, which has dragged on for so long. The hon. Lady and I have had one attempt to meet, and I am happy to meet her and work with her to assist those who have been affected.

When it comes to growth in small businesses, I commend the Minister for Universities and Science for the energy and intelligence with which he has enacted high-tech policies for high-growth industries. However, we must be careful not to pick individual winners within those sectors. Does he agree that backing Britain’s successful high-tech sectors is the key to releasing economic growth and securing the jobs and competitive international advantage that we should enjoy?

I agree with my hon. Friend. It is important that we act on the advice that we get about the big, general-purpose technologies of the future and do not randomly hand out grants to particular businesses, as happened all too often in the past.

T4. I am an avid viewer of “The Apprentice”, and I enjoy trying to work out who is next in Lord Sugar’s firing line. As television it is brilliant, but it is far removed from the real world of people trying to find work, stay in work and prosper in it. Can a Minister explain to me how making it easier to sack people will create the jobs that my constituents in Lewisham so desperately need? (109174)

The clear message that should go out is that the best way to get the best out of employees is to recruit well and invest in staff, and in that way to maximise productivity. I remain far from convinced that taking protection away from 25 million employees in the UK would do much for confidence in this country.

Is the Minister aware that Harlow has the highest business growth in the United Kingdom and a new enterprise zone that will open next year and create 5,000 new jobs? Will the Minister of State, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), who is responsible for cities, visit Harlow, even though it is a town, and see what more we can do for jobs and growth?

It would be a pleasure to go back to Harlow with my hon. Friend. We are about to conclude the first round of city deals, but I will make an announcement shortly to invite other places across the country, especially those that have prospects of high growth, as I know Harlow does, to put their innovative ideas forward.

T5. Will the Minister for Universities and Science reassure the House that the introduction of any student premium to offset the impact of tuition fee increases, as proposed earlier this week by the Deputy Prime Minister, will not be at the expense of the funding that is provided for the widening participation premium and currently allocated to universities by the Higher Education Funding Council for England? (109175)

I have just written to the Office for Fair Access and HEFCE to ask them to assess the effectiveness of the very large amount of money that is now used for that purpose through the widening participation premium and universities’ access funding. We fully recognise that the different strands of money have different purposes, and that some of it is there to meet universities’ particular needs through WPP funding.

As someone who benefited from a similar scheme in the 1990s, may I ask the Minister to update the House on the progress of the new enterprise allowance scheme? Will he ensure that it is yet another flagship programme, like the new apprenticeship schemes?

I am happy to assure my hon. Friend that the scheme is a great way of ensuring that we provide microfinance and experienced business advice. That is what the allowance is specifically designed to do. We have examined past models that have worked, and this one will help thousands of unemployed people become self-employed people.

T8. Can the Government clear up the confusion on their own Benches? What part of the Beecroft report do the Government accept, and what part do they reject? (109180)

The Government are implementing many elements of the Beecroft report. In fact, Adrian Beecroft has already had discussions with officials in my Department and his report includes a lot of measures that the Department was already considering implementing. A call for evidence is out on no-fault dismissal, and it is right to examine the international evidence. We will report after that evidence has been collated.

May I urge Ministers to ignore the canned melodrama of the shadow Business, Innovation and Skills Secretary on the Beecroft report? Will the Minister confirm that the current call for evidence from very small businesses in Britain will be objective?

Order. The Minister is seeking to respond in a very professional way. Whether Members agree with him or not, they ought to hear him.

I am very grateful, Mr Speaker.

It is interesting to note that the evidence gathered from Germany suggests that there was very little change to the level of employment in small businesses after the reforms.

The Million+ group of universities has concluded that the new fees regime to be imposed on mature students will deter many thousands of them from going to university. That will damage their life chances, and it could damage the universities, but it will also restrict the talent available in our economy. Will the Government think again about fees for mature students?

Many mature students are part-time students, to whom this Government have for the first time extended loans to cover the cost of fees. That is one of the many features of our higher education reforms of which we are very proud.

I am sure the House will join me in celebrating the fact that SMS Electronics in Beeston in Broxtowe has been a lucky recipient of a Queen’s award for enterprise. Many small businesses tell me and others that they need less regulation and oppressive red tape if they are to grow. Will a Minister please confirm something that I was told today: that under the previous Government, there were six new regulations every working day?

There were six regulations every working day under the previous Government. I am proud to say that instead of having 1,500 Labour regulations every year, this Government have reversed the pattern. There were just 89 last year. That is real progress, and good for businesses in my hon. Friend’s constituency and across the country.

Do the Government accept the evidence from R3 that businesses in administration find it expensive or impossible to trade because of the ransom tactics of suppliers, particularly on-suppliers. Will they address the shortcomings in the Insolvency Act 1986, which fails to provide firms with the protections they would have under chapter 11 in the United States?

I am sure all hon. Members welcome the publication of the Enterprise and Regulatory Reform Bill, which sets out some great initiatives, including the green investment bank and the fight against red tape. Will the Minister work with local government to ensure that it applies regulations judiciously as opposed to ferociously?

My hon. Friend is absolutely right. The primary authority scheme, which was started by Labour, will be extended under this Government to ensure that the enforcement of regulation, which is often just as burdensome as the red tape itself, will be appropriate in that locality.

Sixty redundancies have been announced today at the open-cast mine at Kirkconnel. It is in the constituency of the Under-Secretary of State for Scotland, but it will affect my constituency in east Ayrshire. What are the Government doing to support the coal industry?

Earlier this week we produced our energy strategy, which involves ensuring not just a fair deal for consumers, but sustaining investment in energy in Britain.

Order. I do not want the Minister to lose his handkerchief. It is about to fall out, but I am sure he can rescue it.

May we have an answer to the question from my hon. Friend the Member for Lewisham East (Heidi Alexander) from a Conservative Minister? Why is it easier to hire people if it is easier to fire them?

It is important that we have a business environment in this country that attracts inward investment. However, interestingly, surveys show that employment protection is not one of the barriers that those seeking to invest in the UK see.

From today’s answers about regulation, it appears that, in the Government’s eyes, progress has already been made. Why, then, has growth slowed so far that we are now back in recession? Does that not show that all this deregulation is not working and that we need measures to increase demand?

Growth has slowed because of the problems in the eurozone driven partly by levels of regulation much greater than those in Britain.