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Topical Questions

Volume 549: debated on Thursday 6 September 2012

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

The whole new ministerial team will already be aware that Malvern is the capital of cyber-valley owing to the cluster of private cyber-security firms that are located there, close to GCHQ. Will the Minister update me and the rest of the House on the steps that the Department is taking to encourage growth in that important sector, and will he visit Malvern?

My hon. Friend is absolutely right about the strength of the cyber-cluster in Malvern. Yesterday evening we held a major conference at the Foreign Office, at which I and colleagues briefed representatives of FTSE 100 companies on the threat to cyber-security, the practical steps that they could take to ensure it and the strength of the British cyber-security industry.

May I first welcome the Secretary of State’s new team of minders to their positions on the Front Bench? I note that he is so irrepressible that he needs not one but three minders to keep him in check. His new minder of state, the hon. Member for Sevenoaks (Michael Fallon), told the Financial Times yesterday that he would

“make sure business feels it has a senior champion in the department.”

Does the Secretary of State not feel that he himself has been a sufficient champion of business across Government of late?

I certainly regard myself as a champion of business, and the success that we have had in private sector job creation and in some of our main strategic industries, such as the car and aerospace industries, with both of which I have worked closely, is evidence of that. I very much look forward to working with my colleague, and we have exactly the same aspirations for British business.

The fact is that business simply does not believe that the Government are doing enough. Last month, the head of the British Chambers of Commerce said that he would give key politicians—presumably the Secretary of State is one of them—three out of 10 for delivery. A couple of weeks before, members of the Institute of Directors went further, stating that Government policies to support business were ineffective in every single area, and who can blame them? The Government have failed to deliver on their infrastructure plan, they have failed to get finance to businesses that need it, and they have failed to meet the delivery targets in their 2011 plan for growth. The Government are ridden with indecision. Three marks out of 10 was generous. How many marks would the Business Secretary give the Government given their litany of failure?

Whenever I talk to business groups—which I do frequently—they unreservedly support the Government’s emphasis on financial stability That is something that the Labour party takes lightly, although we have emphasised it. There is a major agenda to revive the British economy, but in his question the hon. Gentleman made no reference to this morning’s housing statement. At the moment, construction is the most difficult sector in the British economy, because of the collapse that took place in the wake of the boom that his party created when in office. This morning, the Government have proposed a series of businesslike initiatives to free up sites for private development, to put substantial guarantees and resources behind social housing, and to revive a sector that was destroyed in the false bubble created by the hon. Gentleman’s Government.

T2. How much does the UK earn from overseas students, and what assessment has the Minister for Universities and Science made of the potential for further export growth from that sector? (119418)

We estimate that overseas students in higher education bring £8 billion to the British economy, which shows what a major export industry it is. We can be very proud of the success of our higher education sector, and that is why Britain has no limit on the number of suitably qualified overseas students who can come here to study.

T3. This morning the OECD predicted that the British economy will shrink by 0.7% this year. When will the Secretary of State get on and set up a proper British investment bank, and follow the example of institutions in Germany and Brazil that between them invested nearly £100 billion last year? (119419)

The hon. Gentleman is being a little churlish in not even acknowledging that on Sunday, the Chancellor made it clear that we wished to proceed with a business bank. We are discussing the range of its activities and the resources that will be available. The hon. Gentleman knows well that growth prospects in all European countries are extremely depressed at the moment, not only in the UK.

T4. As secretary of the all-party group for post offices, I strongly support the Government’s commitment to ensuring that there are no further post office closures, as well as the ambition to develop post offices to carry out more front-office Government services. I am, however, slightly concerned about the pace of progress in making new services available through post offices, and sub-postmasters in Gloucester are concerned about the possibility of losing the DVLA contract. I appreciate that the Minister has only just arrived in her post, but will she give that issue priority in the future? (119420)

I thank my hon. Friend for his comments; he is a strong campaigner for post offices which we all recognise lie at the heart of many of our communities. He asked me to comment on a live procurement contract, which I hope he will understand I cannot do. There are, however, some reasons to be cheerful. Over the past year, the Government’s services revenue for Post Office Ltd increased for the first time in 10 years, reversing the trend of decline that we saw under the previous Government.

May I welcome the new Minister responsible for further education and skills to one of the most important economic posts in the Government? Will he confirm his backing for the successful union learning fund that helps 100,000 people a year get on to courses? It is strongly backed by employers who claim that staff with little history of learning are helped to take up training because of the unions’ work.

I am grateful for that question. It is clear that we have not only supported the union learning fund, but we will be driven by the evidence of what works to ensure that we increase the skill levels of the British population, both for its own sake and so that we can drive our competitiveness in the years ahead.

T5. I know the Front-Bench team are totally committed to promoting growth in our economy. Will the Minister set out how he will boost employment and growth in rural areas while balancing the need to protect the environment from unrestricted development? (119421)

Several local enterprise partnerships are specialising in developing the rural economy—the hon. Lady’s LEP is one of them. Such development should be dealt with properly at that level. At my level, I look forward to talking to the new Secretary of State for Environment, Food and Rural Affairs about how we integrate economic development and rural development.

Three hundred and sixty of my constituents have told me that they value our local post offices. May I press the Minister to allow the post office network to allow the DVLA to have that contract for the future? Why will she not commit to doing that?

As I said in answer to my hon. Friend the Member for Gloucester (Richard Graham), that is a live procurement contract—I hope the hon. Gentleman also understands that. However, he makes his point clearly. His points are on the record and it has been noted that he is standing up for his local post offices.

T6. What is being done to assist exporters, particularly in the north-west, to achieve results that match those of the best, such as Fisherman’s Friend in my constituency, which exports 97% of its products to more than 100 countries? (119423)

Until I heard the hon. Gentleman’s question, I thought Fleetwood was primarily famous for its football team, which has just got back into the Football League. I will make an effort to visit Fleetwood. I am delighted to hear of the success of Fisherman’s Friend, which I consume a great deal of. I had not realised it was an export firm, but we will do everything we can to promote it overseas.

The Enterprise and Regulatory Reform Bill will, in effect, introduce no-fault dismissal by the back door through the system of protected conversation, which was debated extensively in Committee. Monitoring will be difficult, but what plans do the Government have to monitor the system to ensure that it is not abused by bad employers?

There is no question of introducing no-fault dismissal by the front or the back door. The proposal in the Bill relates to settlement agreements. We are proceeding in consultation with both employers and the trade unions—there is a wide area of consensus on the matter.

I am delighted that my right hon. Friend is going to Honda Swindon today to help to mark 20 years of investment of more than £2 billion. Will he take the opportunity to discuss how trade barriers between the EU and Japan can be further removed and improved so that Honda’s position can be strengthened?

I pay tribute to the hon. Gentleman’s work, and to the workers and managers in Swindon who have made a success of the plant. As many of us remember, many of them went on to part-time working and long vacations to keep the plant alive, and it is now succeeding. I have discussed trade barriers with the Keidanren in Japan and with others. There are a lot of non-tariff barriers in the automotive industry. We must deal with them if we are to have a genuine free trade agreement with Japan.

The green investment bank was first announced in the coalition agreement. Why, two and a half years later, is it not up and running properly?

The green investment bank is up and running properly. The parliamentary legislation is being put in place, and the hon. Lady has the opportunity to debate it. The team in my Department that is overseeing the bank has already disbursed significant amounts of money to energy conservation and waste projects. The bank is a success, and it will expand considerably over the next few years when it has achieved state aid approval.

Business investment in research and development is absolutely essential for growth, and yet UK business invests less in R and D than our international competitors. What can the Department for Business, Innovation and Skills do with the Treasury to encourage more investment in R and D in our businesses?

The hon. Gentleman is absolutely right about the importance of R and D. We are improving the tax reliefs available to businesses, and especially to small businesses, when they invest in R and D to encourage them to do so.

The Secretary of State mentioned the importance of growth in his Department’s mission, and yet, as we have heard, the OECD has this morning revised its growth forecast for the UK economy from plus 0.5% to minus 0.7%. Does he not see the need to change course?

We recognise the economic difficulties faced by most of the western democracies, including our own, and the hon. Gentleman knows the reason for them. We had a boom in this country that got out of control and left a substantial legacy; we have broken banks; we have a very serious consumer debt problem; and we have major problems in our export markets. Those are the factors that contribute to the current difficulties, but we have a range of policies, several of which have been announced today, that are designed to counter those areas of weakness in growth, especially in construction.

UK Trade and Investment has scored some excellent results in attracting foreign direct investment, with a particular upturn over the last two years, but the spread of that investment is not necessarily equal. What action can we take to ensure that all parts of the UK benefit from UKTI activity?

As my hon. Friend says, there has been a considerable increase in inward investment, much of it as a result of the hard work done by UKTI and indeed by Ministers. There was a particular success at the British embassy alongside the excellent Olympic games, which is attracting more inward investment to this country. In terms of regional distribution, we are drawing up agreements between the local enterprise partnerships and UKTI on how to ensure that parts of the country that currently do not receive very much inward investment get a proper opportunity to lobby for it.

I am pleased that the Minister of State has had the opportunity to spell out the importance of international students to the UK economy, and his Department has estimated that the contribution could double. I am sure that he will share my frustration at the way those prospects are being undermined by the Home Office. What is he going to do about it?

We completely understand the importance of the Home Office maintaining the integrity of our immigration controls, but BIS—and the whole Government—believe that legitimate students who have a visa entitlement to come and study in Britain should be welcome. There is no cap on those numbers and we are making every effort through UKTI and British embassies abroad to continue to communicate the message that Britain is a great place to come and study at our colleges and universities.

There has been a series of positive announcements from the aerospace industry in the last few months, especially from companies such as Rolls-Royce, which employs more than 1,000 people in my constituency. Will my right hon. Friend say more about what he is doing to support the aerospace sector?

Within the last few months I have been to Sheffield to open a new centre developing frontier research on materials. There is in addition work on aerodynamics, which we developed through a new grant under the leadership programme that we have in relation to the aerospace sector. Aerospace is an excellent example of how Government and industry can work together to create growth and world-leading industries.

I welcome the new team, who will be very aware that the Government’s stated policy is to improve UK growth through exports. Will they therefore explain why there is only one UK delegate to the NATO delegation supporting British defence industry and exports to that particular market? The US have got 40, the French and Germans have several—can we please have a bit of joined-up government and will he talk to his colleagues in the Foreign and Commonwealth Office?

I can explain what happened at that conference. My ministerial colleagues and I spend a great deal of time promoting defence exports, which are one of the main success stories in the rapid growth of our exports and one of the main features of the rebalancing that is taking place.

In my constituency, 3,000 people are waiting desperately for a council house. Perhaps one answer to that problem, both in my area and across the country, might be to consider quantitative easing through social housing bonds, to ensure that there is an explosion in council house building in this country.

I know how passionately my colleague feels about this. I was with him a few weeks ago in his constituency and there is an acute shortage of affordable housing. The issue he raises of how to get resources into affordable housing was partly met this morning by the substantial increase in guarantees of £10 billion to housing associations, which is direct funding support for social housing. I am sure that he will see a good deal of activity in the wake of this.

Further to the Minister of State’s comments about overseas students, can he explain why there has been such a substantial decrease in applications, given the consequent substantial impact that will have on the British economy?

The evidence from UCAS—admittedly it is imperfect—does not show a fall in overseas applications. Indeed, more students are either coming to Britain to study or remaining overseas and studying for British degrees. That adds up to more than 1 million people who want to come and study for British university qualifications. That is a fantastic effort, and we can increase that number.