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Business, Innovation and Skills

Volume 552: debated on Thursday 8 November 2012

The Secretary of State was asked—

Business Start-ups

1. What steps he has taken to increase the amount of information available to people who wish to start their own business. (127295)

In January we launched the Business in You campaign to highlight the support available to start-ups. It gives access to online tools, such as a finance finder to help identify local sources of finance. Since then, we have made simple, easy to use information on starting a business available at the GOV.UK website. New businesses have access to 22,000 mentors offering advice on starting and growing a business.

At the start of the year, Leamington Spa set a new record for the number of companies formed in the first quarter, with 164 new start-ups registered—a 10% increase on the previous record. Will the Secretary of State look at how we get information out to our new entrepreneurs and collaborate with important local bodies, such as the Federation of Small Businesses and the chambers of trade, so that we can capitalise on this new wave of entrepreneurship?

We will do just that and I congratulate the hon. Gentleman on his role in promoting local companies. I was in Leamington Spa recently to meet some video game companies that have started up and he has played a useful role in promoting all that. Last year, encouraged by the overall improvement in the business climate, half a million new companies were established in this country, which is a major indication of the growth of entrepreneurial commitment.

The Secretary of State will be aware that with the number of university and college places falling and youth unemployment increasing, now, more than ever, we should be encouraging young people to set up their own businesses. Will the Secretary of State be willing to come and visit the Entrepreneurial-Spark scheme in my constituency and see the innovative ways in which Glasgow is helping to encourage young business people to come forward in the city?

As the hon. Gentleman knows, I take a particularly close interest in positive news in Glasgow and I would be happy to come and see that project. Suffice it to say that there is a new start-up loan scheme for young entrepreneurs, of which large numbers of young people are taking advantage. I am delighted to see that it is happening in Glasgow, too.


More than a million apprenticeships have been started under this Government, 500,000 of them in the last year. As well as this welcome increase in quantity, we are improving the quality of apprenticeships so they are rigorous and provide value for money while being more rewarding to employer and apprentice alike.

Since 2011 the Department for Work and Pensions has encouraged its private suppliers through procurement to hire nearly 2,000 apprentices. If this were rolled out across Whitehall, it would create nearly 100,000 new apprenticeships. Will the new Minister with responsibility for apprentices study this pilot scheme to see whether we can make that happen?

As my hon. Friend knows, I am hugely supportive of the DWP pilot and will study its outcomes carefully, in particular the value for money that it generates. I pay tribute to his parliamentary apprentice academy. Getting an apprentice through the academy that he supports is extremely easy and I recommend it to all Members of the House.

Does the Minister agree that our schools and colleges play a key role in helping to encourage young people who are potential apprentices, and that they need to provide the courses that are relevant to industry today?

I certainly do agree. It is important to include English and maths in apprenticeships for all those who do not have level 2, and we must do more to make sure we inspire young people to look not only at the academic route, but at apprenticeships which combine work and training at the same time.

I commend my hon. Friend and his predecessor for their work on the apprenticeship programme. My hon. Friend will be aware that the Business, Innovation and Skills Committee published its report on apprenticeships. Can he say a little more about the drive for quality, as opposed just to quantity, of apprenticeships?

I welcome the Select Committee’s report. The focus on quality in apprenticeships is important. We have already said that almost all apprenticeships must be longer than a year, and we have taken action to close down some low-quality provision, so this is a direction that I very much want to go in. I will be studying the recommendations of the report extremely carefully.

After the rhetoric, has the Minister read what the all-party Select Committee said in its report last week about his Department’s handling of apprenticeships? It said that the apprenticeship scheme

“continues to lack clarity and purpose”

and an “overarching strategy” to succeed. Those are the latest in a series of warnings to the Department. There was Jason Holt’s report on small and medium-sized enterprises. Apprenticeship starts over the past year are down for under-19-year-olds in seven out of the nine English regions, down in engineering by 30%, and down in construction by 18%. The Minister’s own officials say that one in five apprenticeships get no training, and, as we heard, the Select Committee has issued strong warnings about quality. When will his Department take practical steps such as those that we have urged for almost a year, requiring big companies that want Government contracts to take on apprentices? If the Minister does not get a grip on this, it is not Pitt or Disraeli that he will have to compare himself to, but being in the bunker in charge of phantom armies.

I am glad the shadow Minister has mined the report for all the negatives. I want to start with the opening sentence of the Select Committee report, which says, “We welcome the commitment of this Government to apprenticeships.” This Government commissioned Jason Holt’s report so of course I welcome it. We have already taken action to improve quality and we will take more action. Not least am I looking forward to the Doug Richard report later this month. The vital thing to do is not only to increase the quantity of apprenticeships, as we have done, but to make sure that they provide excellent value for money, so that all those apprentices throughout the country get a brilliant education as well as training in work, and that is what we will deliver.

Business Olympics

3. What assessment he has made of the effect of the business Olympics on exports and inward investment. (127298)

Over 4,000 business leaders and others attended 17 business summits at the British business embassy at Lancaster House. Every one was attended by a BIS Minister. I was very pleased to attend five, which were excellent events. We expect them to generate £1 billion of additional sales by UK companies, and £6 billion of direct investment over the next four years.

Wild Automotive, a great company in Redditch, has increased export sales by 73% over the past two years. What more help can this company and others in Worcestershire access to continue this great record of growth?

I congratulate that company on its performance. UK Trade & Investment is running export week in the next week, with more than 100 events throughout the UK, which is a great opportunity for businesses to get further advice about exporting. The automotive sector, of which the company in my hon. Friend’s constituency is an example, is now running its first balance of payments surplus since 1975.

Student Loans

4. What estimate he has made of the proportion of loans for students starting courses in 2012 with fees of £9,000 a year which will not be fully repaid. (127299)

We estimate that around half of all borrowers will have some part of their loan written off, as repayments are contingent on their future income. Our reforms are more progressive than the previous system, because people start to repay only once they are earning over £21,000. The new system helps reduce the deficit and is affordable and sustainable for the Government, while offering protection to those who may not go on to high paid employment.

I thank the Minister for that response but, despite what he says, some estimates put the cost of the Government’s higher education funding policy at £1 billion more than anticipated, completely wiping out any expected savings. How will he plug that gap?

There is no such gap. That report was an eccentric interpretation of the evidence. Our figures have been checked by the independent Office for Budget Responsibility, and the independent Institute for Fiscal Studies has produced its own estimates and reached conclusions that are very similar to ours.

Well, that eccentric report was produced by the highly respected Higher Education Policy Institute, and one of its arguments is based on the findings of the self-same Institute for Fiscal Studies, even though the Minister has just said that it underestimates the figure. The Government originally assumed 32% non-payment, but the IFS, as quoted in the report he dismisses as an eccentricity, cites 37%, and today he has said it will be up to 50%. That is where the £1 billion figure comes from. How will the Government explain that away?

Perhaps it would help my right hon. Friend if I explained that there are two different measures. The answer I gave the hon. Member for Scunthorpe (Nic Dakin) was that we think about half of all borrowers will have some part of their loan written off. There is a separate calculation for the value of the loans that will be written off, which we estimate will be about 30%, so both figures are correct. Nothing can be completely certain in this life, and repayment essentially depends on future earnings, but what is certain is that starting to repay only when one is earning more than £21,000 is a jolly sight better than repaying when one is earning more than £15,000, which was the system left by the Labour party.

It is clear that the maths supporting the Government’s higher education funding policy is staring to unravel. The Office for Budget Responsibility has shown that tuition fees count towards inflation and will add 0.2 percentage points to the consumer prices index in the fourth quarter of this year, so the impact of the Government’s policies not only will be felt by students, but will have wider implications. Because CPI is the measure by which public pensions and benefits are increased annually, the Government’s welfare bill and civil service pensions will be affected at next year’s annual uprating. Therefore, does the Minister accept that his policies are disastrous not only for students, but for Government finances in general, and what conversations is he having with other Departments about mitigating that?

Let us be absolutely clear about what our reforms will do. They will save money for the Exchequer, but at the same time they will ensure that universities have, if anything, an increase in the cash they receive for teaching, and graduates will repay only when they are earning more than £21,000 a year. That is a fair deal for all the partners in the higher education system.

Is not it the case that costs would be lower if the cost of courses was lower, particularly for the Open university, which was not always supported by the previous Government as fully as it should have been, and for further education that is skills-based? I thank Ministers, in particular, for their recent intervention in Kent college to secure skills-based education in Kent.

My hon. Friend is absolutely right. There is, of course, a range of options for access to higher education, and the Open university is an important part of them.

Research Partnerships

5. What support his Department has provided to university and business research partnerships in the last 12 months. (127300)

We want to see the best possible links between universities and businesses. The Chancellor recently tripled public investment in our UK research partnership investment fund, which promotes investment in shared research and development facilities on our campuses. Winning bids must include sponsorship from businesses or charities, so the scheme will deliver more than £1 billion of new R and D investment in total.

I welcome my right hon. Friend’s response and highlight for him the success we are achieving in Chester with the Riverside innovation centre and work between businesses and the university of Chester. May I ask him to visit the innovation centre in the near future?

I have happy memories of visiting the university of Chester when Opposition spokesman and so will certainly try to visit as a Minister. My hon. Friend describes just one example of the reason why the World Economic Forum recently placed the UK second out of 144 countries for the quality of university and business collaboration in R and D.

Does the Minister agree that there is so much in Lord Heseltine’s review, “No Stone Unturned”, that it shines a light not only on the eyes we see under the rock, but on the policies that affect the relationship between universities and the business and research communities and the entrepreneurship we need in all our regions to make this country economically vibrant?

Lord Heseltine’s report was excellent. The message that we need to see growth across the entire country is absolutely correct. It is also correct that universities across the country are crucial drivers of local economic growth, and that is one of the many reasons we are supporting them.

In past years, Higher Education Funding Council for England letters have never done much for Wiltshire. Will the Minister be flexible in his approach to student number controls on universities seeking to co-locate with high-tech businesses, and so bring university education to our fine county?

That is an ingenious piece of local lobbying on which I congratulate my hon. Friend. I will certainly bear that in mind. We are continuing to reduce the number controls that we inherited from the previous Government; we have been able to achieve that successfully through our reforms. Now, one in three students is choosing a university without number controls, and we want that to go further.

Business Start-ups

One of the main contributions is the number of jobs created. The best estimate that we have is that start-ups are responsible for a third of all jobs created. Start-up activity has remained highly resilient, with Companies House reporting over 450,000 newly registered companies in 2011-12—the highest number since 1997-98.

I am sure that the Minister will welcome this week’s CBI report showing that small and medium-sized enterprises are very optimistic about adding jobs in the year to come. However, what would he say to a start-up in my constituency, Energetic UK, which builds eco classrooms for schools? It is run by very experienced people, but because it is a start-up they do not have the three years’ annual accounts needed to get local authority contracts. I have written to him about this company and wonder what the Department could do to help.

Instructions to contracting authorities emphasise that the assessment of financial risk should be based on a business judgment, not on a purely mechanistic application of financial formulae such as value of turnover or three years’ accounts, which could unreasonably shut out start-up companies.

Small businesses are being held back from expanding and taking on extra workers because they are unable to get the finance they need. This week Dave Fishwick, also known as Bank of Dave, addressed a group of MPs about a model of community banking that has worked in his area. What more could the Government do, particularly given the failure of their Project Merlin scheme, to ensure access to finance and better relationship banking in communities such as mine?

I am not sure that we need lectures from a party that introduced six new regulations every working day during its 13 years in office. We have cut red tape and business tax. There is an issue with access to finance. That is why we have set up the business bank, the funding for lending scheme, and a range of other schemes. It is now up to the banks to rebuild their relationship networks to make businesses more aware of the appeals mechanism. We are encouraging the British Bankers Association to do that to make sure that the money that the Government and the taxpayer are providing gets through to the companies that need it.

The Minister understands that every new successful entrepreneur is a new job creator, a new wealth creator, and a new net contributor to paying for our public services. Does he also understand the importance of the intention of people to become entrepreneurs? What is the Department doing to strengthen the entrepreneurial culture in our country?

We shall be playing our part in next week’s global entrepreneurship week, with 2,500 events throughout the country. I shall also be promoting a range of other Government schemes such as the CEiS scheme, which encourages more investment by entrepreneurs in start-up companies, and a number of other schemes that encourage enterprise in our schools and colleges to help those who are thinking of starting up companies as soon as they leave further or higher education.

On economic growth, does the Minister agree with the National Audit Office’s assessment that a “significant portion” of the regional growth fund has been

“allocated to projects that create or safeguard relatively few jobs for the money invested”?

What steps is he going to take to address this concern?

I do not wholly accept that criticism. The regional growth fund has been a key part of creating and safeguarding 500,000 new jobs in rounds 1, 2 and 3. I find the logic of the National Audit Office report somewhat perverse. It argues that we should look only at net jobs. If a plant in the hon. Gentleman’s constituency closed with the loss of 500 jobs and 450 of the people affected were subsequently employed elsewhere, he would not stand up in this House and say that he had only lost 50 jobs.

Does the Minister agree that new start-ups benefit from grant aid in particular? To that end, will he ensure that the UK takes advantage of EU transition zones in the next funding round, and will he structure them in accordance with the Heseltine recommendations of local flexibility to ensure that new start-ups are not put in a straitjacket and are unable to use them?

Yes, I will certainly look at that. We are now preparing how we manage and administer the programmes under the new multi-annual financial framework, which will begin in January 2014 and last until 2020. I want to make sure that we have a smaller number of programmes across the United Kingdom and that we therefore minimise the differing costs and start dates under the previous seven-year framework. We need a simpler approach to the cohesion funds, but I certainly take the hon. Gentleman’s point on the importance of the transition regions outside the category A regions.

Tied Landlords

7. If he will establish an independent body to review the relationship between big pub companies and tied landlords. (127304)

11. If he will establish an independent body to review the relationship between big pub companies and tied landlords. (127308)

20. If he will establish an independent body to review the relationship between big pub companies and tied landlords. (127319)

The Secretary of State has written to the industry asking for evidence on how the self-regulatory approach announced last November is working. We will make our decisions after considering its response.

I thank the Minister for that answer, but a broad coalition of organisations as diverse as the Campaign for Real Ale, the Federation of Small Businesses, the Business, Innovation and Skills Committee, which has a majority of coalition members, the all-party save the pub group, Unite and the GMB—the list goes on—all think that the relationship between pubcos and their licensees is unfair. Is the Minister able to name any serious organisation that thinks that self-regulation will work in this sector?

I understand that a wide range of organisations have expressed concerns, which is exactly why we have written to the industry to ask for its views on how this is working. We want to proceed on an evidence-based approach and once we receive the evidence we will report back to the House.

In Wigan, we are proud of our small breweries, AllGates and Prospect, whose beer will be in this place very soon. An independent inquiry would allow us to consider the impact of restrictions on their trade and, in particular, the impact on our local economy, given the breweries’ importance to Wigan. A commitment today from the Minister to establish such an inquiry would go a long way to restoring confidence in the industry. Will she make that commitment?

I thank the hon. Lady for her question. She does a wonderful job in championing her local breweries and the BIS Committee was very positive about the relationship that family brewers have with tenants. I may have to disappoint her by not giving her the commitment that she asks for today, but the Government are open-minded. As I have said, when we receive the industry’s response, which we have asked for by 23 November, we will consider the matter further.

On 12 January, this House supported unanimously a motion stating that the Government should commission a review of the self-regulation of the pub industry, to be conducted by an independent body, by the autumn of this year. It is now November and there has been no action. Why does the Minister hold the decision of the House of Commons in such contempt?

I do not think that that is an accurate representation of my view. I came into the post just a couple of months ago and I am looking at the issue very seriously. My right hon. Friend the Secretary of State has written to the industry and it is appropriate to proceed on an evidence base. Once we receive the written responses, discussions will be required with the industry and, as I have said, we will return to the House with further information on what has been presented to us.

Will the Minister outline how she, as the Government’s representative, might help independent freehold houses generate business and, in particular, line up with independent mini-breweries?

I thank my hon. Friend for that question. It is certainly interesting that three quarters of the new pubs that have opened in the last year and a bit have been freehold. That says a lot about how people who are looking to set up pubs feel about the business models. The Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) outlined some of the initiatives of global entrepreneurship week. The Government have a raft of measures to support small businesses. I know that Members from all parts of the House want to support small community businesses in their constituencies, including small breweries.

The Minister says that she wants to hear from the industry. If she has looked into this matter, she will know that the entire industry was united in thinking that the Government’s response last November was too weak. The Secretary of State said in June 2010 that he would support the commitments made by the previous Government, and this House set out its clear view in January 2012. Now, years after all the Select Committee reviews, we have yet another consultation. Why does the Minister not listen to the view of this House, listen to the view of the industry and set up an independent review of whether self-regulation is working? Let us start saving some jobs and pubs before it is too late.

I am listening; that is the purpose of asking the industry how the current approach is working. There are positive signs, such as the setting up of the Pubs Advisory Service and the Pubs Independent Conciliation and Arbitration Service. PICAS has started to hear cases and two have been found in favour of the tenants. There has been positive action and we need to assess whether that is sufficient. That is what the gathering of evidence is designed to do.

Wind Farms

8. What assessment he has made of the effect on jobs of the extra costs of energy arising from subsidising wind farm development. (127305)

There are 94,000 people employed in the development and construction of wind farms. We are seeking to develop the supply chain to create more jobs. We are separately preparing a compensation scheme for energy intensive industries to offset the higher electricity costs in order to maintain their competitiveness.

Some businesses in Montgomeryshire tell me that the greatest impediment to their growth and job creation is the rapidly rising cost of energy. Does my right hon. Friend agree that controlling energy costs, including by dealing with the unsustainably high subsidies to the onshore wind farm industry, must be the aim of the coalition Government if they are to achieve their ambitions of job creation and economic recovery?

We do accept that proposition. That is why we have introduced the £250 million programme to provide compensation for energy intensive industries. I may have to disappoint the hon. Gentleman on the wider issue because the coalition Government are absolutely committed to the 30% target for the generation of electricity from renewable sources by 2020. Onshore wind is one of the cheaper renewables and its costs are falling. I notice that a few days ago, the hon. Gentleman tweeted that there is a big lesson here:

“If my party loses in 2015 they’ll say ‘It was wind farms wot done it’”.

All parties in the House, particularly mine, may have to brace themselves for the return of Lembit Öpik.

It is true to say that there are differences within the Government on the importance of wind power. When will the Government speak with one voice so that there is a clear strategic approach, rather than the alternatives that we have before us today?

We very much speak with one voice on this subject. I encouraged the Minister of State, Department of Energy and Climate Change, the hon. Member for South Holland and The Deepings (Mr Hayes) aggressively to promote apprenticeships. I am sure that when he has settled into his new job, he will be an enthusiastic advocate of wind farms.

Experience and Training

9. What steps his Department is taking to encourage participants in further and higher education to gain experience and training in business and industry. (127306)

We are supporting students to gain vital work experience by growing high-quality apprenticeships across the economy. We are also supporting the roll-out of student enterprise societies in every university to support the creation of student internship and graduate job opportunities with local enterprises.

In my constituency, the human resources department of our local Morrisons regional distribution centre is working closely with Sittingbourne community college to ensure that school leavers have a better understanding of what employers expect from potential employees. Will the Government encourage human resources departments based in the head offices of large companies to liaise in a similar way with universities, to better equip students for the workplace?

That is an excellent and imaginative idea. I think some of that happens already, but we are actively promoting such initiatives in a series of round tables that the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock), will be leading. Universities are now obliged to put on their websites key information about graduate employment outcomes from their courses, which will encourage initiatives such as that described by my hon. Friend.

Green Manufacturing Jobs

10. What discussions he has had with the Secretary of State for Energy and Climate Change on investment in green manufacturing jobs. (127307)

I regularly meet the Secretary of State for Energy and Climate Change to discuss energy and climate change policies, including investment in green manufacturing jobs. We are seeking to exploit opportunities for growth through green technologies, and I have recently announced that the UK Green Investment Bank is operational, which will support investment in green manufacturing.

Companies such as Tag Engineering Services on Teesside, and many others, have invested millions of pounds to create capacity to build monopiles and other components for the offshore wind industry. They have some of the best facilities in the world, yet they see multi-million pound contracts go out to Europe. What is the Secretary of State doing to get British wind farm contracts placed with British firms?

I share the hon. Gentleman’s frustration that supply chains in that sector are not as well developed as they should be, not just in respect of the components, but also of the steel that contributes to the masts. That is why the Secretary of State for Energy and Climate Change and I are bringing together the renewables supply chain to develop the capacity that the hon. Gentleman wishes to see.

Does my right hon. Friend agree that there is considerable potential for new, green manufacturing jobs in new housing systems? In Bicester, which has an eco-town project and aspires to become a new garden city, we are keen to have a green-collar cluster of companies manufacturing new housing systems.

That is a very constructive suggestion. To put it in a wider context, there are already something in the order of 1 million green economy jobs, which is about 8% of our economy. The construction sector is potentially an important and big component of that, and I would be happy to talk to and work with the hon. Gentleman to encourage it.

Engineering Careers

12. What steps his Department is taking to encourage young people to take up careers in engineering; and if he will make a statement. (127309)

This Government celebrate engineering. World-class engineering is vital for Britain’s future, and world-class engineering needs world-class engineers, so we are supporting engineering in schools, apprenticeships and universities to inspire the engineers of the future.

That is a pretty positive answer. However, as defence equipment Minister, I saw time and again that the single greatest problem facing British engineering businesses is a shortage of skills. I therefore commend to my hon. Friend a report from the Engineering Employers Federation, “Skills for Growth”, which makes recommendations to ensure that young people have a better understanding of the opportunities in engineering through careers advice and stronger links between businesses and schools.

Yes, I have seen that report, and the Government have taken action. Some 25,000 science, technology, engineering and maths ambassadors are going into schools to inspire pupils, and there are some signs of success. Over the past three years, twice as many pupils have taken triple science, and the proportion of STEM courses in university is no longer falling as it was under Labour, but rising.

The Minister will be aware that the number of women entering the engineering professions is still appallingly low. What actions will he be taking not only to encourage women into those professions, but also, just as importantly, to retain them there as there is a high drop-out rate?

I agree very strongly with the hon. Lady, and in my first week in this job I announced support for a pilot scheme by Rolls-Royce and other engineering companies to expand the number of women in engineering. After all, we cannot possibly believe that we are getting the best people in engineering if almost half the population are excluded.

Construction Output

13. What assessment he has made of the latest construction output figures; and if he will make a statement. (127310)

15. What assessment he has made of the latest construction output figures; and if he will make a statement. (127312)

The latest figures from the Office for National Statistics show that construction output fell by 2.5% in the last quarter, but overall gross domestic product increased by 1%.

Earlier this year, the Secretary of State gave a commitment that the Government were taking steps to address the decline in construction output, but this week’s construction trade survey showed, for the first time ever, a decline in every single construction sector. What has gone wrong?

There are various surveys; another construction survey shows that output increased in October. In September, we announced a housing and planning package that will deliver up to 70,000 new homes and 140,000 jobs, with a £40 billion guarantee for infrastructure projects and £10 billion for new homes. We have also introduced the Growth and Infrastructure Bill to speed up the planning system and unlock new investment in housing and infrastructure. I am surprised the hon. Gentleman voted against it on Monday night.

Given the importance that the Government placed on the national infrastructure plan just a year ago, why has the value of new construction orders for infrastructure fallen by more than 40% in the first two quarters of this year?

It is being so cheerful that keeps you going, isn’t it? I would have hoped that the hon. Lady welcomed the £4.5 billion contract won by Hitachi to build the next generation of inter-city trains, creating 900 new jobs in north-east England. The north-east also did particularly well under round 3 of the regional growth fund, with 29 bids selected, worth £120 million, creating or safeguarding 30,000 jobs. I am looking forward to my visit to the north-east next week to open new factories in Blyth and on Tyneside.

The 2.5% quarterly drop in construction output to which the Minister referred is dire enough, but year on year, activity in the construction sector has fallen by a massive 12%, and further decline is predicted through to at least 2014. The sector is crying out for assistance from, and co-operation with, a Government who value construction as an important part of an active industrial strategy. Will the warm words, the excuses, the complacent tone that we have heard this morning, the protestations of just how difficult it is and the bland and vague promises of help in future stop, and will the Minister take decisive action that will help the construction sector now?

As I have already said, we are investing £4.5 billion to fund new affordable homes over the spending review period, all of which is committed to be spent in this Parliament. That is leveraging in a further £15 billion of private sector investment. We are on track to deliver 170,000 affordable homes by 2015.

New Businesses (Outstanding Debts)

14. If he will bring forward legislative proposals to prevent owners of businesses which have failed with debts outstanding from starting new businesses of an identical or similar nature. (127311)

The Government have no current plans to bring forward legislation. We recognise that some businesses will fail, but we do not want to prevent entrepreneurs from learning from an initial business failure. I understand, however, the significant concerns that are expressed about so-called phoenix companies. I know my hon. Friend has worked tirelessly on behalf of his constituents on this issue, and I will keep it under close review.

Cavendish Conversions Ltd and, in my constituency, Number Nine Restaurant Ltd, have risen phoenix-like to start again in new guises thanks to dodgy financial gymnastics by their owners, leaving innocent citizens and businesses with serious financial losses. I urge the Government to take action against those people. It is unfair that they can rack up losses and start again.

I thank my hon. Friend for his question. He highlights the distress that is caused to his constituents—I know from my correspondence that this also applies to constituents across the country—when companies undertake the activities he describes. I look forward to meeting him to discuss this specific issue in a couple of weeks’ time. He has already introduced an Adjournment debate to go into his case in detail. I reiterate that we need to get the balance right between encouraging enterprise and protecting consumers and business, but I look forward to discussing the matter with him further.

I agree with the hon. Member for Colchester (Sir Bob Russell). What happens is that perfectly good businesses get left with bad debts because a contract has not been paid. They then have a cash flow problem and the banks often will not support them. The Minister should look again at this and at the role of the banks in this situation.

The hon. Gentleman makes a very good point, because what often happens is that one business goes under and its creditors get into difficulty as a result. We want to make sure that the system works to prevent such situations and provide support to businesses. We need to be wary of unintended consequences, because we also do not want a regime under which people who have had a failure in business cannot start up again, but we need to look at the disqualification regime and check that we have got the balance right.

Business Start-ups

16. What recent steps he has taken to encourage business start-ups; and if he will make a statement. (127313)

19. What recent steps he has taken to encourage business start-ups; and if he will make a statement. (127316)

There were almost 500,000 start-ups last year—the highest number since records began in 1997, up from 360,000 in 2010. We are helping to encourage business start-ups by providing advice and financial support, and confidence that the Government will pay their way.

I recently visited Warwickshire college’s Rugby site to talk to students at the Peter Jones enterprise academy, and I joined them on the “StartUp Britain” bus. Thirty years ago I started a business without any formal training, and it would have been of great value to me if those resources had been available then; I might have made fewer mistakes in the early days of running my business. Does the Minister agree that these schemes are a great way to ensure that our young people get the vital skills they need to help get new businesses started effectively?

Absolutely. I too have visited a Peter Jones academy, and they are a brilliant new innovation. The new start-up loans provide finance and support for young entrepreneurs to help them get a start, and we need to do all that we can to support people who want to start up businesses.

In addition to making it easier for people to start up their own business, what steps are the Government taking through the tax system to encourage investment in small business?

We have sharply increased the enterprise investment scheme limit and we will do all that we can to support people who work hard and want to get on in life and start their own business. As well as making investment in small companies easier, we also stopped the planned increase in the small business rate and we are cutting business taxes. We are doing everything we can to get Britain working.

Female Board Members (Quotas)

The European Commission is considering what proposals to make to increase the number of women on boards. I expect an announcement shortly, perhaps as early as next week. It is an important issue. I want to see more women on boards on merit. As the House will know, the UK’s voluntary business-led approach is working well, with significant increases in women on boards in FTSE 100 companies.

I thank my hon. Friend for her answer, but does she agree that it is also important that we focus on the pipeline of talented women? Does she welcome the pilot initiative by the Mentoring Foundation which offers women at the junior end of senior management mentoring support from senior women executives who themselves have been mentored by FTSE chief executives?

My hon. Friend is absolutely right about the pipeline issue. It is vital that we encourage businesses and organisations to develop talented individuals. If an organisation is viewed as a pyramid, there are good numbers of men and women at the base of the pyramid, but higher up the number of women falls away, and mentoring schemes are an excellent way to address that. The Women’s Business Council is also looking at this issue, and the Government’s initiative “Think, Act, Report” encourages companies to put in place schemes to ensure that they develop the talent within their organisations and address the pipeline issue.

Regional Growth Fund

18. What recent estimate he has made of the number of jobs that will be created by the regional growth fund. (127315)

The regional growth fund will generate over half a million gross jobs over the period 2011-2021, with 80% of the impact coming in the first five years. Some 300,000 jobs will be delivered by projects and programmes in rounds 1 and 2, and 240,000 from bids selected for round 3. In rounds 1 and 2, eight out of 10 projects and programmes have now started and 149 bidders have now signed final agreements.

When the regional development agencies were in existence, they provided important match funding to enable European regional development fund money to be properly used. When the Communities and Local Government Committee looked at this, we suggested that a portion of the regional growth fund be earmarked to ensure that all our ERDF money could be properly spent. That suggestion was turned down. If we do not spend all the ERDF money to ensure that we create the maximum number of jobs, will it be the Minister’s responsibility or that of his colleagues in the Department for Communities and Local Government?

We are certainly looking at how we can spend money better in the next seven-year framework. There has been underspend, not least because there were so many programmes. I am trying to rationalise and simplify them, working with colleagues in the three other Departments affected. The House will want to note that the regional development agency Yorkshire Forward employed 434 people and spent a large amount of public money, but did not leverage in anything like the amount of private sector money that the new regional growth fund is doing.

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.

Schools routinely measure the number of youngsters going on to higher education, but not necessarily those who go on to apprenticeships—something that was picked up on in the report published this week by the Select Committee on Business, Innovation and Skills. Does the Minister think that more can be done in this area?

Yes. As I said earlier, we welcome the thorough and interesting report from the Select Committee. Recommendation 16 said that alongside university admissions, schools should publish apprenticeship starts from their former pupils, and I agree. Through the new destinations measures, which were introduced this summer, we will ensure that that happens.

There are more than 1,200 people claiming jobseeker’s allowance in the Secretary of State’s constituency. Under his proposed “shares for rights” scheme, employers in his constituency will be allowed to make the acceptance of job offers conditional on people agreeing to give up their basic rights at work for shares. Can the Secretary of State guarantee that JSA claimants in Twickenham will not lose their benefits for refusing the offer of a job because it is conditional on them giving up their rights for shares?

In a statement in the Commons a couple of days ago, I think, the Minister in the Treasury who is responsible for taxation made it absolutely clear that the scheme was voluntary. While the hon. Gentleman hunts for the ghost of Beecroft in this proposal, I will put a simple proposition to him. If employers were seriously interested in trying to set up an arrangement that had minimum job protection for employees, why would they go to the trouble of establishing a complex employee ownership scheme when they could do that so much more easily through an agency workers agreement, which would have far lesser employment rights than this proposal?

There was no answer to my question in what we have just heard from the Secretary of State. He cannot answer it because this has not been properly thought through. He has said that the scheme has had a mixed reaction. That is a gross understatement: it has been described as “awful” by the National Center for Employee Ownership. He has said that it is not intended for most ordinary businesses. It would be interesting to know which businesses have lobbied him to introduce this nonsense. While we support strongly employee ownership, it is beyond me to think why that must be tied to giving up rights at work. Is it not the case that, just as the Secretary of State was forced to consult on proposals to fire employees at will by the Treasury, he has now been forced to do the same on this crazy proposal? This is a Secretary of State in office but without the power to say no to the Chancellor.

There is no proposal to fire employees at will, as the hon. Gentleman well knows. I will repeat what I said: the scheme is entirely voluntary. He should perhaps reflect in a little bit more detail on some of the comments of both businesses and trade union stakeholders. Businesses have said that this is an interesting proposal that many are unlikely to take up. The trade unions have said, similarly, that they do not like it, but they do not expect it to have a significant impact on the labour market.

T3. Having recently taken a trade delegation of Worcestershire businesses to China, as per my entry in the register, I was impressed by the support from UK Trade & Investment that was available to small and medium-sized enterprises, many of which received sponsorship towards the cost of the trip. What is the Minister doing to ensure that the message gets out about the help that the Government are providing to smaller companies to export to the world’s fastest growing markets? (127323)

I congratulate my hon. Friend, who I think took part himself in a trade mission to China last month. I encourage other hon. Members to follow in his footsteps.

UK Trade & Investment is building relationships with its private sector partners to increase awareness of its services for exporters throughout the networks. UKTI will host export week from 12 to 16 November, when there will be more than 100 events around the UK designed to reach out to small and medium-sized enterprises, including events being organised in the west midlands to promote forthcoming market visits to Austria and Romania.

T2. Jaguar Land Rover and Tata have committed to Birmingham and Britain, transforming the Jaguar plant in my constituency into a world-class success story. Just when the plant is taking on 1,100 workers, the High Speed 2 route unnecessarily threatens its rail terminal, which would have serious implications for the company and the community. Will the Secretary of State intervene with his counterpart in the Department for Transport and meet me, because nothing must be done to put at risk the success of the biggest plant in Birmingham? (127321)

I am happy to meet the hon. Gentleman and anyone else concerned about this problem. I meet regularly with Jaguar Land Rover, as does the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon). This is not an issue that it has raised with us so far, but we are happy to pursue the matter. I want to reinforce what the hon. Gentleman said, however. This is a magnificent company investing £2 billion over this decade and creating high-level employment. The Government have made a substantial contribution to support it through the regional growth fund, support for the engine plant in Wolverhampton, which is now getting off the ground, and in other respects.

T8. Chester has seen record numbers of new businesses being set up in the past year, with 305 being registered during the first six months of the year—a 323% increase on the year before. Does the Minister agree that these and other recent figures show that the work that the Government are doing to encourage private sector growth and redress the north-south imbalance is beginning to deliver results in the north-west of England? (127329)

That is encouraging news and shows the strength of the small business sector in the north-west in particular. The key to encouraging small businesses is to continue to cut back the burden of red tape imposed by the last Government, to reduce the level of business taxation imposed by the last Government and to ensure that they have full access to finance through the banking system.

T4. I am grateful to the Secretary of State for meeting my hon. Friend the Member for Sedgefield (Phil Wilson) and me to discuss the rejection of the bid for a regional growth fund grant by Durham Tees Valley airport and for his offer to meet representatives from the airport and the local enterprise partnership. Will he reaffirm his support for regional airports as drivers of economic development, and tell the House what he can do to help our Durham Tees Valley airport to deliver on its development plan and ensure that the airport is sustained well into the future? (127324)

Yes, I did indeed meet the hon. Gentleman and his colleagues. It was a good meeting, and they have followed it up with a very good submission explaining the link between the regional airport and the growth fund bid. We are now analysing that. I hope that he would acknowledge that there has also been some good news, however, in the sense that the Tees Valley LEP has just won a substantial programme bid through the regional growth fund, which will contribute to development in his area.

Next week is global entrepreneurship week. May I welcome the work that the Government are doing to support entrepreneurship, particularly their support for the national student entrepreneurship union, for silicon valley coming to the UK next week and for the launch of the important Cambridge cluster portal, which highlights that in Cambridge there are now 1,400 technology companies employing 53,000 people and more than 10 billion-dollar companies? Does that not suggest that our policy for an innovation economy is working?

That is an excellent example of the success of our innovation policies. Like other BIS Ministers, I will be welcoming visitors from silicon valley, who I am sure will be coming to England and Cambridge to see how it is done.

T5. Every pound invested in the construction industry generates nearly three in economic activity. What support is being given to construction companies, such as Marshalls in Halifax, to get them building, boost the construction industry and protect and create jobs now—before it is too late for these companies? (127326)

The best way that the hon. Lady can help that company is to support our proposals to unlock new housing, particularly affordable housing, and new infrastructure as set out in the Growth and Infrastructure Bill, which unfortunately the Labour party voted against on Monday night.

Earlier the Secretary of State gave us an update on the good progress we are making on the green investment bank. Can he confirm, however, that EU state approval specifically excludes the nuclear supply chain, which is a major low-carbon industry, and that organisations such as Sheffield Forgemasters will be excluded if we do not appeal that?

We have indeed got state-aid approval for the green investment bank. There are no plans for it to invest in the nuclear supply chain, but we have not ruled that sector out. As it happens, a working party is being assembled to develop a strategy for the nuclear supply chain, which my colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), will be co-chairing, and we expect to give it substantial support.

T6. Polestar, a major printing works in my constituency, has created hundreds of well-paid jobs through its investment in recent years. However, its bid to the regional growth fund to create hundreds more jobs has been turned down. Will the Minister look at how such firms can get good quality feedback, so that hopefully they can submit successful bids in future and create those jobs? (127327)

I will certainly do that. All unsuccessful bidders are offered feedback from the regional growth fund secretariat, and if that has not happened, I am happy to arrange it for Polestar in the hon. Gentleman’s constituency. There were a number of other successful bids in the Sheffield and Yorkshire region, which I hope he will acknowledge will bring more growth and jobs to Sheffield.

Perhaps the most valuable long-term economic legacy of the Olympics will be a boost in UK tourism. To achieve that we will need a few high-profile attack brands. London will of course be one of them; another must surely be the Lake district. What plans do the Government have to make the Lake district an attack brand for UK tourism?

I had an opportunity recently to meet my hon. Friend and his local enterprise partnership, which is one of the most dynamic and is dominated by small business, most of it focused on the tourism industry. He is absolutely right that one of the key legacies of the Olympics is attracting people to come to the UK, and I am happy to talk to him even more frequently than I do at the moment about tourism.

The Minister of State has been to Darlington and should be, but probably is not, embarrassed by the decision he made to decline the regional growth fund bid for Durham Tees Valley airport. Is he as shocked and frustrated as we in the north-east are to learn that there is now £1 billion of unallocated RGF money in his Department’s coffers?

I have not only been to Darlington, as the hon. Lady knows, but I spent 10 years of my life there—and, in the interests of social mobility, I was happy to give her predecessor a leg up the political ladder. I look forward to my visit to the north-east next week. The Secretary of State has already explained the circumstances in which the bid for the airport was turned down, but I have to tell her that the north-east did extremely well in round 3 of the regional growth fund. I look forward to hearing more about some of the successful projects when I visit next week.

I welcome the good news that the British Antarctic Survey is to continue as an independent organisation. May I underline the need to ensure that it remains on a firm and sustainable footing, and also add my thanks to the Minister for helping in that matter?

My hon. Friend is absolutely right. The decision by the Natural Environment Research Council to continue supporting the British Antarctic Survey has been widely welcomed. At the beginning of this year I had the opportunity to go to Rothera and the Antarctic and can personally confirm the excellence of the research that the British Antarctic Survey does.

Ministers tell us that they are well minded against capricious regulation, perverse taxation and over-interpretation of EU judgments. Will one of them therefore listen to the consortium of intermediate alcohol producers and exporters across the UK? They have profound concerns about the impact on their business of HMRC’s changes to notice 163, which go far beyond a one-off adjustment to a marginal tax rate.

I am certainly prepared to look at that. One of the purposes of the red tape challenge was to ask businesses themselves what were the issues constraining growth, and I am happy to look into that matter for the hon. Gentleman.

I was disappointed that I could not join my right hon. Friend the Secretary of State on his recent visit to the MIRA technology park. Despite my personal disappointment, will he join me in celebrating this world-class project, which will create 2,000 jobs in the midlands region, and does he agree that it has been facilitated by the regional growth fund and the enterprise zone policies of this Government?

Indeed, I have now been twice to MIRA. It is a magnificent institution and one of the most successful in the UK at promoting advanced technology. MIRA has benefited from the regional growth fund and a successful enterprise zone, and could well expand to become a world-class centre for transport technology.

The growth of businesses in rural areas is being constrained by the lack of access to broadband. Even where businesses can achieve the Government’s target of 2 megabits, they are finding that that is the download speed, and they are still constrained by the greatly inferior upload speed. Will the Government consider reassessing the 2015 target of 2 megabits?

I will certainly do that. This is an issue for businesses in rural areas across the country. Clause 7 of the Growth and Infrastructure Bill will help to accelerate the roll-out of broadband, not least in rural areas, but the hon. Gentleman joined his party in voting against it on Monday night.

I think that most of us in the House would admit that the Secretary of State is passionate about manufacturing and business, and he exhibited that last Thursday when he came to Huddersfield to visit our textile training centre of excellence. Why cannot we have more all-party agreement on some of the challenges that we face? The recommendations in the Heseltine review give us an opportunity to adopt a common strategy across the House. Is that a challenge that the Secretary of State is willing to take up?

I am absolutely willing to take up that challenge. There is an enormous amount of wisdom in the Heseltine report and we will of course respond to all 89 of its recommendations in due course. I was particularly enthusiastic about his strong endorsement of the industrial strategy, an important part of which could well be the resuscitation of the textile industry of which the hon. Member for Huddersfield (Mr Sheerman) has been a prominent advocate and which I was happy to visit in Huddersfield a couple of weeks ago.