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Business, Innovation and Skills

Volume 558: debated on Thursday 7 February 2013

The Secretary of State was asked—

Workplace (Women)

The number of women in work is higher than at any time in British history. We propose a new system of shared parental leave and extending the right to request flexible working to all workers, which will further promote female participation in the workplace by increasing flexibility and choice. We are also committed to seeing more women in senior positions in the UK’s top companies, initially focusing on board representation.

In the last tax year men paid £92 billion in income tax whereas women paid £36.8 billion, which is 60% less. Normally I am in favour of lower income taxes, but in this case will the Secretary of State explain what else he is doing to help to equalise those figures and, most importantly, bring an extra £55 billion into the Exchequer?

I pay tribute to my hon. Friend for the work she has done through the Working Families charity to promote shared parental leave and on female participation in the finance sector. It is not entirely a problem that women are paying less income tax; raising the tax threshold will help low-paid women in particular to pay less tax, which is one of our objectives. Female participation and promotion and women rising to the top in business are also key objectives of our policy, and that will produce the equality for which my hon. Friend strives.

Warm words butter no parsnips. The cost of child care holds women back from entering the work force. Does the Secretary of State regret his decision to support the reduction in child care tax credits and will he now push for that to be reversed?

The Government are supporting women with young children, and families in general, to the tune of about £5 billion through the child care element in tax credit and free early years tuition, which for low-income families has been extended to two-year-olds, as well as tax relief on employers’ schemes. That amounts to very substantial support for child care.

The number of women in the workplace has been increasing for some time, of course, but in Wirral women public servants faced with the threat of redundancy and women leaders of small business tell me the cuts to Wirral council are threatening their job security. Will the Secretary of State ask his colleagues in the Department for Communities and Local Government to have a rethink about some of the heaviest cuts that are falling on places such as Merseyside?

It is never good when people lose their jobs, and I always regret that, but the simple fact is that in Wirral, as in other parts of the country, the number of public sector local and national Government jobs lost is far outweighed by the number of jobs created in the private sector; over 1 million have been created over the past two years.

Net Lending (Businesses)

Figures from the Bank of England show that between January 2011 and December 2012 lending to businesses by UK banks increased in six months, and decreased in the others. The Government and the Bank of England are working to increase lending across the economy, for example through the funding for lending scheme and the new business bank.

Over the last two years net lending has gone down by £28 billion. What is the Secretary of State doing about that, apart from his various failing piecemeal initiatives, which do not get to the nub of the problem? The problem is a lack of consumer confidence and the banks’ failure to lend enough because of their lending criteria. What is he going to do about that, so that he will have a better record in two years’ time?

Certainly, the decline in net lending to SMEs is a serious issue, which I frequently refer to. It is a genuine problem and Government schemes have provided support in a variety of ways, including about £7 billion of net lending and £1 billion alone from the enterprise guarantee scheme.

Before we are lectured on this, we need to go a little further back and remember who was in charge when the banks collapsed and the lending crisis erupted. The hon. Gentleman may recall, given that, like me, he has been a Member of the House for some years, the Cruickshank report of 2000, which pointed out that the banks were overcharging their business customers, providing a poor service and making excess profits. The last Government had an opportunity to reform the banking system then. They did absolutely nothing about it, which is why we are in this mess today.

Small and medium-sized enterprises in Oldham have told me how they are struggling to access finance. We now know from Bank of England data that bank lending fell by £18.6 billion last year. On top of this, SMEs were owed more than £36 billion in late payments in 2011. Will the Secretary of State back an inquiry I am launching as part of my Be Fair—Pay on Time campaign to investigate the issues associated with late payments?

I would like to acknowledge the contribution the hon. Lady has made through debates in the House to this very important issue. The Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon), has launched a significant initiative with business in order to reduce that problem. We also have a trade financing scheme, working with Kingfisher to try to ensure that credit flows through the supply chain. The key point is that credit does not depend solely on banks; it also depends on the big primes, whether in the retail sector or in manufacturing, and we are providing substantial support to small companies caught up in that problem.

Businesses in Huntingdonshire are reporting to me that access to credit has significantly improved over the last year, which is very good news indeed. The complaint I am increasingly getting is that banks are becoming detached from their customers—that, because of regionalisation and formulaic processes, they still cannot get to the right people. Are the Government addressing this issue?

Yes, the decline of relationship banking has been a long-standing problem and it underlines the difficulties my hon. Friend describes. The factual position is that last year a third of all applications to the banks for loans were declined, according to SME Finance Monitor. When appeals were made to an independent arbitrator, some 40% were successful, which shows how bad the banks are in sifting good credit from bad.

Does my right hon. Friend agree that the new business bank is not the silver bullet solution for all firms’ financial needs? What is he doing to diversify the sources of finance for business, particularly SMEs?

No, it certainly is not a silver bullet but it will make a significant difference in increasing diversity in the system, in providing wholesale financing for some of the new entrants into the market, and in making Government support more concentrated and easy to access. It will be an important contribution, and the plans are already under way. The expert committee met for the first time a couple of days ago, and we are already looking at products and projects that hopefully will provide some £300 million, geared substantially with private money, over the course of this year.

Banks tell me that small businesses will not ask for money because of their lack of confidence in a flatlining economy. Small businesses tell me that banks will not lend to them because of the risk factor and the desire to increase their capital balances. The Government say they are going to introduce a business bank. When will the business bank be up and running to address these problems, and in what different way will it operate to overcome them?

The business bank has already been organised and as I just mentioned, the expert committee met for the first time a couple of days ago and its products are already being prepared. As the hon. Gentleman will know, we have to go through the state aid process before it can operate fully. In the meantime, it can operate within constraints—pari passu lending, for one thing—and I can assure him that it will make a significant contribution.

Will the Secretary of State join me in welcoming the news that in the third quarter of 2012 there was a record number of company formations in Gillingham?

Yes, and I think my hon. Friend makes an important point, which is that although we frequently hear from the prophets of doom on the Opposition Benches, a large amount of entrepreneurial activity is taking place. The percentage of the population engaged in business has increased from about 6% to 9% in the past two years, and what is happening in Gillingham is an example of that.

Once again, anyone listening to the recent exchanges will not have the slightest confidence that this Government are taking any meaningful steps that will make a difference. Six weeks ago, in the last Business questions, the Secretary of State told us that after the expert group had met he would come here to tell us the timeline and what was going to happen. He keeps telling us that this bank is going to make a significant difference, but nobody really believes we will see any meaningful progress in the next two years. Certainty and responsibility are very important, so can he unequivocally confirm today that the Government are following the policies that he is advocating on access to finance for small businesses? If not, can he explain what the Government should be doing to make a difference on that?

Of course I can confirm that we are pursuing the policies I have described. I get a sense that the hon. Gentleman has not the faintest idea about the issues involved in establishing a new bank. This Government have established, through government, two new banks, one of which is already operating on a significant scale— the green investment bank. The other is the new business bank, which is going through the necessary processes. [Hon. Members: “When?”] Opposition Members ask when, but do they have the slightest idea what is involved in running a bank and doing due diligence, having presided over the collapse of the banking system ignominiously and having allowed the banks to get totally out of control, with the disastrous consequences that we are now dealing with?

Life Sciences Sector

Our life sciences strategy, launched by the Prime Minister, has already triggered more than £1 billion of business investment in life sciences. That is good for growth and good for the NHS.

As my right hon. Friend is aware, Macclesfield and north-east Cheshire are well known for their strong base in life sciences skills and the economic contribution of companies such as AstraZeneca. In the light of that, what further steps is he taking to encourage investment in the north-west, and in north-east Cheshire in particular?

I pay tribute to the work of my hon. Friend, and I recall visiting the AstraZeneca facility at Alderley park with him last year. There is a very strong life sciences cluster in the north-west. We are supporting it with extra investment in the new Manchester cancer research centre and in the Manchester collaborative centre for information research.

At a recent meeting of the Science and Technology Committee, Professor Dame Sally Davies, the Government’s chief medical officer, talked about the increasing amount of antibiotic resistance in disease and stated that

“the apocalyptic scenario is that when I need a new hip in 20 years I’ll die from a routine infection because we’ve run out of antibiotics.”

Will the Minister therefore tell the House what steps the Government are taking to fix what some have described as the “broken pipeline” in the development of new drugs?

I have heard Dame Sally Davies speak eloquently about that challenge, which is why the Secretary of State for Health will, I understand, be launching an action plan on that particular issue in the spring. What we are doing in the Department for Business, Innovation and Skills is backing investment and ensuring a pipeline of new drugs for the future. That is what the patent box is about, it is what research and development tax credits are about and it is what the new biomedical catalyst is about. We can be confident of the support we are providing for medical research in the UK.

I hope the Minister will forgive me for describing that answer of his as a tad complacent. The fact of the matter is that when we talk to leading academics and leading investors in business we find that they think that in life sciences we are lagging behind the other countries we are competing with—particularly China, but also many other places. They are worried that what will happen in life sciences is what is steadily happening in pharmaceuticals, whereby we are losing our pharmaceutical industry and it is switching overseas.

There is certainly a global race and I believe that the Government’s policies are securing us a strong position in it. We are not complacent, but the improvements in the tax relief, the protection for medical research and the innovations taking products closer to market ensure that when companies look around Europe it is clear to them that Britain is the best place to locate their pharmaceutical activities.

The Scottish life sciences sector is worth £3 billion to the economy and employs 32,000 people. Last week, Edinburgh’s BioQuarter announced that three new companies have just moved in. Does my right hon. Friend agree that, as we have already heard, the life sciences sector is about more than the golden triangle in the south-east of England?

That is absolutely right. As well as what is happening in the north-west of England, the Edinburgh BioQuarter is of international repute and the university of Dundee is the centre of another excellent cluster of medical research. This is a British strength, not simply a strength in the London-Oxford-Cambridge triangle.

Business Certainty

4. What assessment he has made of the need for business certainty for firms to secure investment and long-term growth. (141931)

Industrial strategy sets out a long-term approach to deliver greater certainty and growth in partnership with business. We will publish 10 sector strategies jointly with business throughout 2013.

Whether it is on energy, infrastructure or Europe, the Government are sending out confused signals, no signal or the wrong signal to business. On the latter point, what representations has the Secretary of State had from businesses on the impact on investment and growth of his Government’s decision to hold an in/out referendum on EU membership in 2017?

Inward investors always make it clear that they want certainty and clarity in that matter. TheCityUK recently did a survey which suggested that the stability of our membership of the single market accounted for roughly 40% of decisions to commit to the UK.

I am sure my right hon. Friend agrees that it serves no good purpose at all in the context of certainty to delay airport decisions until way after the next election. Will he confirm that he has put pressure on his colleagues in government to use the opportunity of the interim report at the end of this year to provide clarity for businesses, residents and communities?

I know that the hon. Gentleman shares many of my concerns about airport expansion. The wider national interest must be safeguarded and we have commissioned Sir Howard Davies to do a proper and thorough investigation into the extremely difficult issues associated with Heathrow expansion.

Tomorrow marks the first anniversary of the leaked letter from the Business Secretary to the Prime Minister, in which he acknowledged the need for

“a compelling vision of where the country is heading…Where we know big investment decisions are going to be made…we need to…provide certainty to business.”

In only the past few weeks, Bloomberg New Energy Finance stated bluntly:

“Investors have made clear to the UK government that policy uncertainty has undermined investment”,

and the National Audit Office said in its report on infrastructure that

“uncertainty over government policy might lead project sponsors, lenders and contractors to defer or abandon projects in the UK for opportunities elsewhere.”

One year on from his letter, why has nothing improved?

A great deal has changed. There is now a great deal of support not only in government but across business for the industrial strategy. If the hon. Gentleman had been following the news he would have seen that some sectors, particularly the car industry and aerospace, have highly impressive growth and a long-term commitment to Britain. That is what we are trying to achieve.

Will the Secretary of State look again at the sudden change in the combined heat and power regime announced in the 2012 Budget? The CHP provisions are expected to last until 2023 and the change has resulted in a severe financial penalty to energy investors, such as Sembcorp in my constituency.

My hon. Friend’s question more directly relates to the responsibilities of my colleague the Secretary of State for Energy and Climate Change. On the broader point about energy policy, however, there is much greater clarity with the electricity market review. Particular sectors and their treatment under it, such as those involved in CHP, perhaps need to be reconsidered and I am sure that my hon. Friend will talk to my colleague about that.

Higher Education (Student Fees)

5. What recent assessment he has made of the effects of his reforms to higher education and student fees; and if he will make a statement. (141932)

Our higher education reforms are increasing cash for teaching at our universities and delivering more choice for students. Higher applications this year are up by 3% and the proportion of 18-year-old applicants from the most disadvantaged backgrounds has increased to the highest level ever. Every English region has seen applications increase.

With £9,000 tuition fees, universities are seeing considerable variations in their student numbers—potentially up to 40% in some cases. What research has the Minister done into the reasons behind the 13% drop in student numbers last year?

The variation in applications between universities is what happens when there is competition and when the money goes with the student. That is a key feature of our reforms. This year we are seeing applications up. Given the hon. Gentleman’s genuine concern about this issue, I should have thought that he would welcome the fact that the application rate for disadvantaged young people from England is at its highest ever level—19.5%.

May I congratulate the Minister on his excellent reforms and urge him to push forward with all the efforts that he is making to attract foreign students to the UK?

My hon. Friend is right. There is no cap on the number of overseas students who come to Britain. All legitimate overseas students are warmly welcome in our country.

Will the Minister acknowledge that both universities in my constituency, along with many others across the sector, have been negatively impacted by the ill-considered and hastily introduced student control measures last year? Will he recognise that he made a mistake by rushing into that and explain what he is going to do to mitigate the damage?

Let us be clear. The student control system that we inherited involved allocating a fixed number of student places to every university in England. We do not believe that that is the right way of ensuring competition and choice in our education. That is why we are introducing new flexibilities, so that universities that succeed in attracting more students can take on more students.

The Government are right to be encouraged by the fact that we have seen the highest ever number of applicants this year from Wales, Scotland, Northern Ireland, the EU and outside the EU, and the third highest ever from England, particularly from disadvantaged backgrounds. Will Ministers continue to focus on those from disadvantaged backgrounds and on young men, of whom there appear to be relatively smaller numbers of applicants, compared with young women? I am sure we need both to feel encouraged to go to universities in equal measure.

My right hon. Friend is right and I pay tribute to his efforts in this area. Clearly, we must not be complacent. There is always more to do, and I hope that in all parts of the House we can agree that we must communicate the crucial message that no student has to pay up front to go to university; they pay back only if they are graduates in well paid employment.

Regional Growth Fund (North-west)

6. What assessment he has made of the effect of the regional growth fund on job creation in the north-west. (141933)

To date, 59 projects in the north-west have been awarded a total of £225 million. In addition, £153 million has been granted to 16 programmes, specifically aimed at supporting small and medium-sized enterprises in the region. Taken together, this money will help create tens of thousands of jobs in the north-west.

The regional growth fund has been a great help to businesses across Lancashire and the north-west. In the next round my right hon. Friend can expect to see some excellent bids from Pendle. Will he confirm that he will look closely at these fantastic bids? If they are approved, they will be a real boost to Pendle and east Lancashire.

I certainly will. I am grateful to my hon. Friend for reminding the House that the fourth round of the regional growth fund is now open. I urge any colleague in the House to encourage potential applicants to apply before 20 March, not least because the fund is proving good value for money. In the north-west it is leveraging in some £5.50 for every £1 of public money spent—some 10 times the proportion of the unlamented regional development agency.

Will the Minister confirm that the average cost of jobs created by regional growth funds such as that in the north-west is £33,000? This is more than the cost of jobs created by the regional development agencies, which the Government abolished.

No, I cannot confirm that figure. This is taxpayers’ money for projects that would not otherwise go ahead. They are recommended by an independent advisory panel as good value for money and they are subject always to proper due diligence.

Royal Mail Privatisation

7. What discussions he has had with Royal Mail regarding its privatisation; and if he will make a statement. (141935)

I regularly meet Royal Mail and the Communication Workers Union to discuss a future share sale. Since Parliament decided to secure the universal postal service through the Postal Services Act 2011, we have relieved Royal Mail of its historic pension deficit and established a new regulatory regime. The final step is to give Royal Mail access when it needs it to private capital and to honour Parliament’s commitment that at least 10% of the shares will be made available to employees.

Royal Mail is the jewel in the crown of this nation, and it is cherished by millions. There are grave concerns about the privatisation of Royal Mail in terms of price hikes, job losses and a reduction in services. May I urge the Minister to withdraw the privatisation plans and invest heavily in a publicly owned Royal Mail?

It would be very odd to deny Royal Mail—a business with a turnover approaching £9 billion—access to the capital markets that other large, successful companies enjoy, and which it will need in order to innovate and invest for the future. It would also be wrong to withhold from its 130,000 staff the chance that Parliament has given them to own shares in the company.

Having served on the Committee that considered the Postal Services Bill, I welcome my right hon. Friend’s determination to implement the will of this House and to succeed where the previous Labour Government tried and failed. Is it not clear that for Royal Mail to benefit from the enormous growth in online retail, and consequently in its parcels business, it needs to be free to invest without competing for scarce public money?

My hon. Friend puts it very well. Royal Mail, like any business, needs capital to be sustainable over the long term in order to continue to improve its efficiency, to invest, to innovate, and to seize the opportunities presented by new markets, not least those arising from online retailing. It should not have to compete for scarce public capital against other services such as schools and hospitals.

What measures will the Minister put in place to ensure that Royal Mail is not taken over by a private equity firm following privatisation?

No decision has yet been taken on the timing and size of any share sale. The key is to ensure that a big, successful company is no longer denied access to the capital markets.

This week Royal Mail reported that it had selected a number of agencies to assist in the

“largest privatisation since British Rail”.

The Ofcom consultation, “End-to-end competition in the postal sector”, has stated that that is not relevant to its primary duty of protecting the universal service obligation as regards rival operators cherry-picking profitable Royal Mail work without having to meet its high standards of same-price, every-place, six-days-a-week delivery. What guarantees can the Minister give that Royal Mail’s service standards will not be put at risk? Does he share my deep concerns about Ofcom’s stance on end-to-end competition?

Only the ideologues on the Labour Benches could possibly want to continue to block the access of this company to the private capital markets. Let us be clear: Parliament gave Ofcom a clear statutory duty to secure the provision of the universal service six days a week, and we expect it to carry that out. Ofcom’s consultation on delivery competition has now closed, and it will issue its guidance in the spring, subject to that duty to safeguard the universal service.

Tobacco Industry Exports (Egypt)

8. What the tobacco industry exports which created 2% of Egypt’s sovereign debt owed to UK Export Finance were used for; when those exports were made; and whether they were to the Government of Egypt or to private companies. (141936)

The 2% of Egypt’s sovereign debts relating to tobacco industry exports arose following defaults by the Government of Egypt, who purchased tobacco-processing equipment from UK exporters in the 1980s. The debts were rescheduled in 1987 and 1991 through the Paris Club. The 1991 rescheduling included 50% multilateral debt forgiveness, resulting in the UK forgiving £260 million of debt.

Does my hon. Friend share my concern and that of my constituent, Rev. David Milner, and the Jubilee Debt Campaign that Government-backed UK loans and credits to developing countries should be for worthwhile projects based on responsible lending criteria, should have affordable repayment terms, and should not imperil sustainable economic growth in the countries concerned?

Of course UK Export Finance should support growth that is sustainable. It has recently published on its website the sovereign debts owed to it by overseas Governments in order to become yet more transparent.

Strategic Defence Review

10. What discussions he has had with the Secretary of State for Defence on the development of the Government’s strategic defence review. (141938)

Preparations for the review are under way. My Department is fully engaged on the industrial aspects. Together with Steve Wadey from MBDA, I co-chair the defence growth partnership, which is addressing the competitiveness of the defence sector and especially how we can better exploit the links between civil and military technologies.

May I do something unusual, which is to thank the Secretary of State and the Minister for their help in saving the London Taxi Company in Coventry? What discussions has the Secretary of State or the Minister had with Rolls-Royce on the possible impact of its decision on the supply chain and through job losses?

I know that the hon. Gentleman and the hon. Member for Coventry North West (Mr Robinson) discussed that matter in the Department on Monday. I met Rolls-Royce yesterday. I understand that its decisions have to be made primarily in response to changes in key international defence programmes. If the hon. Gentleman is referring to the potential decisions about Ansty, he will know that any run-down there is expected to take several years and that no final decision has been taken.

The biggest threat to British defence companies is the shortage of engineering skills. That threatens our prosperity, their success and our security. I therefore invite my right hon. Friend to look as sympathetically as possible at the ten-minute rule Bill that I will introduce next week, which aims to inspire more young people, especially girls, to take up the exciting opportunity of pursuing a technological or engineering career.

I am grateful to my hon. Friend. He will know that the number of engineering apprenticeships and applications to study engineering are already increasing. The skills needs of the sector will be a key focus for the defence growth partnership.

Redundant Ministry of Defence sites can blight a local area, but they also offer the potential for new jobs and brownfield development, as is recognised by the Swindon and Wiltshire local enterprise partnership. Will the Minister recognise that in any advice that he gives to colleagues when they are considering the bids for the second wave of city deals?

That was a most ingenious formulation in support of the bid from the Swindon and Wiltshire local enterprise partnership in wave 2 of city deals, which is under consideration at the moment. I will ensure that the use of redundant land is one of the aspects that we consider.

Debt Advice

The Government established the Money Advice Service in July 2011 to co-ordinate and monitor free debt advice. We also support advice through the National Debtline and Citizens Advice. Nevertheless, the evidence suggests that many people are still unaware that there is free debt advice and so fall prey to high up-front fees and profit-driven advisers. Today, I am therefore announcing a new debt management protocol that will protect consumers and ensure they know where to go for free debt management advice.

Last week, I listened to a pointless radio advert from the Money Advice Service that advised people how to get a mortgage. Surely debt advice from the Government should focus on priorities such as vulnerable families who are finding it difficult to afford basic food or their rent, far less the luxury of obtaining a mortgage.

I understand the frustration that the hon. Lady feels. Of course, the Money Advice Service is there to provide not only debt advice, but information on a wide range of financial issues and there is place for that. She highlights the huge importance of raising the awareness of the free debt advice that is available. The new protocol that has been published today should help to do that, because debt management providers who charge for their services will have to make people aware that free options are available before they sign up. That will help people to get the advice that they need.

Last week, I met representatives of Corby citizens advice bureau, which does an excellent job in my local community. Given the appalling human cost of the cumulative impact of the Government’s measures, such as the cuts in council tax benefit and housing benefit, and the crisis that we expect to see in April when universal credit is implemented, does the Minister regret scrapping the financial inclusion fund, with the loss of 500 citizens advice advisers at a time when their help is most needed?

It is a little rich of Labour Members to talk about the difficult situation that people are in as if they had nothing whatever to do with it. They forget that they left this country in a perilous economic situation. The hon. Gentleman is right to recognise that people are finding it very difficult. That is why the Government are helping by cutting income tax for 20 million people and taking more than 2 million of the lowest-paid people out of paying income tax altogether.

Export Support Services

13. What steps he has taken to raise awareness of export support services among small and medium-sized enterprises. (141941)

We have reformed UK Trade & Investment to ensure that it better supports small and medium-sized enterprises. Some 90% of UKTI’s trade customers are SMEs, and its awareness raising includes a plethora of local activities, including MP constituency trade seminars. One hundred and forty colleagues, including me and my hon. Friend, are holding UKTI trade seminars in their constituencies, and I urge Members from all sides to get involved.

I thank the Minister for that response. In my experience, and that of my constituents, UK commercial banks could do more to promote trade finance. Does my hon. Friend think they are doing enough to promote services offered by UK trade finance?

Not yet, but they are about to. UK Export Finance is establishing a series of regional advisers who through banks, lawyers and accountants will reach more SMEs. That is part and parcel of a widespread message going out to all businesses that if they want help exporting, UKTI is there. The trade seminars in Members’ constituencies will be an important part of that.

Does the Minister agree that one of the biggest frustrations for small businesses is the Government’s tendency to launch a plethora of schemes and press releases to go with them? I congratulate the Government on holding a bonfire of the brochures in the life sciences sector, and on setting up a dedicated life science investment office that is staffed by two industry experts who support the Department’s generalists in providing targeted advice.


14. What proportion of new over-18 apprenticeships have been taken by people in existing employment since May 2010. (141942)

Apprenticeships are designed to help people develop the skills they need to enter an occupation, and to reskill and progress within a job. The 2011 apprenticeship pay survey found that 77% of apprentices had some experience of work with the same employer before the start of their apprenticeship.

Will the Minister undertake to make clear in all statements about apprenticeships how many are new starts in employment, and how many are existing employment? Will he confirm that a lot of the increase in the number of apprenticeships has come from converting the previous Train to Gain scheme into apprenticeships?

It is very important not only for people to enter the workplace, but to improve their skills within it. For instance, 99% of those on management apprenticeships had some previous experience of work in the company, which is to be expected. It is about getting people out of unemployment, but also ensuring that their skills improve while they are in a job.

North London chamber of commerce and Enfield’s Johnson Matthey are tonight hosting a local business awareness of apprenticeships programme, and are determined to exceed last year’s recruitment of 107 new apprentices. Will the Minister offer a message of support for tonight’s event and, in particular, for Mr Barry Connelly of Johnson Matthey of Enfield who has led that programme?

I would be pleased to support Johnson Matthey and the work it is doing to expand the number of people in apprenticeships, and indeed to increase the quality of apprenticeships. I know that the apprenticeships it offers are of high quality and it is well worth raising awareness of that and getting involved.

The Government’s latest figures show that apprenticeship starts for young people under 19 are down by 15%, and Ministers are complacent about the risks to apprenticeships for over 24-year-olds from their further education loan plans. It is obvious that we urgently need a game- changer for apprenticeships, so why is the Minister still ignoring what the Opposition and now the Business, Innovation and Skills Committee have called for: Government procurement contracts, not least on projects such as high-speed rail, to ensure that companies sign up thousands of new apprenticeships in order to win those contracts?

The shadow Minister does rather better when we take politics out of apprenticeships, not least because there has been a record number of apprenticeship starts over the past year. On HS2, I say only that Crossrail—the largest construction project in Europe and signed off by this Government—has precisely the sort of arrangement for which he asks.

Apprenticeships are rightly a focus for the Government, and the extra investment is extremely important and welcome. Does the Minister acknowledge that some companies have a problem when apprentices choose to leave? Will he consider ways in which to compensate the company that puts people through an apprenticeship scheme in the first place?

Ensuring the success—wherever possible—of apprenticeships is important. I will look at the issue the hon. Gentleman raises, but the most important thing in ensuring as high a success rate as possible is that the learning within apprenticeships is as relevant as possible to the company involved. We are working to improve that, and I hope that will reduce the incidence of the problem he describes.

Schools and colleges still do not promote apprenticeships for the most able students as an alternative to university. What are the Government doing to rectify that situation?

That is an important question. This summer, we introduced destination data that showed not only the proportion of children who go to university but the percentage from each school and college that go into apprenticeships. There is a new, important duty on schools to provide independent and impartial guidance. Ofsted will conduct a thematic review—to report in the summer—to show how progress has been made.

Topical Questions

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

A number of businesses in my constituency that I have visited have reported welcome news of an increase in orders from abroad. However, they have raised concerns about the time it takes to get export licences. In order to help those companies to remain competitive, what is my right hon. Friend’s Department doing to try to speed up efficiency in that respect?

The Export Control Organisation is currently meeting its primary target of approving 70% of licence applications within 20 working days. Last year, it met its secondary target of approving 95% within 60 working days. However, I well understand the frustration of legitimate exporters. The ECO is working with the Foreign Office to improve performance still further.

The EU Council is gathering as we speak. From the common agricultural policy to the absurdity of the European Parliament sitting in two places, it is clear that the EU needs reform. It is also clear—to the extent that any reform involves a significant transfer of power from Parliament to the EU—that we all agree there should be a referendum. Does the Secretary of State agree that, although reform is crucial, the immediate priority for British business is to grow our economy, and that continued membership of the EU is fundamental to that goal?

I agree. The way the hon. Gentleman phrased the question suggests that, despite some of the drama, there is a lot of common ground. As I understand it, all three party leaders want us to remain within the EU. We all support the need for radical reform and for a referendum on the conditions set out in recent parliamentary legislation.

To pick up on a question asked by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) earlier, I have spoken to many businesses—large and small—that believe that the Prime Minister’s approach to the EU risks Britain stumbling out of the EU. Companies in numerous sectors—from Virgin to Siemens, and from BMW to BT—that account for 170,000 direct jobs, never mind indirect jobs, have reiterated the importance of our continued membership of the EU to their businesses. In the Secretary of State’s leaked letter to the Prime Minister, he said the Government must build more certainty and confidence for business to invest. Does the Secretary of State believe the Prime Minister’s EU policy has helped or hindered that process?

The Prime Minister’s pressure for EU reform is necessary. I work with like-minded Ministers in other European countries to help to deliver that reform. We are all agreed that we need a minimum of uncertainty to attract inward investment. It is incumbent on all who want jobs in Britain to sound that positive message.

T2. With youth unemployment falling—sadly, it is still too high—is it not more important than ever that we prepare young people to enter work properly with the right skills, on which York college and Askham Bryan college in my constituency are doing great work? How will the proposed traineeship scheme support that? (141953)

I am extremely enthusiastic about the proposals for traineeships. They will help to get people who need work preparation, work experience, English and maths and a plethora of other skills ready to take on an apprenticeship and go to work. Colleges such as York college will play an important role in delivering that.

T3. This week the British company Centrica withdrew, along with RWE and E.ON, from investments in nuclear power following its investment of £1 billion. That proves that nuclear electricity is now unaffordable unless the Government invest £20 billion of subsidy in a French company. Will the Secretary of State follow his commendable initiative on Greencoat UK by investing in what is Britain’s greatest unused source of power, which is tidal power—clean, green, British and eternal. (141954)

We are certainly promoting research on new generations of renewable energy, and the hon. Gentleman will be aware of the new centre in Glasgow established specifically to look at tidal and wave power. I do not recognise his figure of £20 billion of subsidy for the nuclear industry. I am sure we are not going there.

T4. Will the Secretary of State join me in congratulating Sam Davies from Whitland in Carmarthenshire for doing so well in the “We Made It” competition recently? Will he also get behind that competition, as it encourages so many young people into STEM-based jobs? (141955)

I am grateful to my hon. Friend. Yes, we welcome the “We Made It” competition. Manufacturing offers young people enormous scope to do something really worth while and to be well rewarded in the process. Through programmes such as See Inside Manufacturing, we are ensuring that young people see for themselves the wealth of career opportunities in manufacturing, and understand how studying science, technology and engineering at all levels leads to well-regarded career opportunities.

T6. The Secretary of State is aware of concerns about anti-competitive practices in the waste electrical and electronic equipment recycling market. What will he do to protect the position of small and medium-sized recycling companies such as Mercury Recycling in my constituency? Will he meet me to discuss this issue and wider concerns? (141957)

We have a tough, respected and effective system of competition and anti-cartel policy. If the hon. Lady is concerned about anti-competitive practices, I will certainly raise this with the Office of Fair Trading, but it is an independent agency that makes its own decisions on which cases to investigate.

T5. I, like many, welcome the substantial increase in apprenticeships. However, it is equally important to encourage as many employers as possible to take on apprentices. Does the Minister agree that giving employers a national insurance holiday during the period of an employee’s apprenticeship would encourage more employers? (141956)

I certainly agree that encouraging more employers to be involved is critical. The apprenticeship grant for employers in small and medium-sized businesses that have not taken on apprentices before is worth more, at £1,500 per apprentice, than a national insurance holiday. I encourage companies to get involved.

T7. The Secretary of State was briefed about the York central site next to York railway station when he was in my constituency last year, so he knows well its potential to generate growth and jobs, a potential improved by the Government’s welcome decision to join High Speed 2 with the east coast main line at York. Will he meet me and representatives of York city council to discuss what the Government can do to help the council bring the site into use? (141959)

Yes, I am familiar with the site. It was strategically important for childhood trainspotting, as I recall, quite apart from its potential for housing and regeneration. I am happy to meet the hon. Gentleman. I have already discussed this matter with the council leader and the chief executive. They need some support for infrastructure, although the scale of that is not terribly clear, but we are certainly keen to take this forward.

T8. Does the Secretary of State share my concerns that the Financial Services Authority redress scheme for businesses mis- sold interest rate swap products excludes those businesses that have a life swap value in excess of £10 million, despite the fact that those businesses would otherwise be characterised as “unsophisticated” by the FSA’s own rules? (141960)

First, I congratulate the hon. Gentleman on his work on behalf of the up to 100,000 companies that have been mis-sold these swaps. It is a terrible scandal and he was one of the first people to highlight it. I think the position is now much better, but he is right to say that there are some anomalies at the borderline. The definition of “sophisticated companies” is not simply confined to scale, which I think is the point he is trying to make. I will continue to make that point to the FSA and the banks.

The Secretary of State knows that Nissan is vital to the north-east’s long-term economy and provides much-needed jobs and investment. Is there not a significant risk that the uncertainty about Britain’s future in Europe, which will continue for many years, could jeopardise this?

I am well aware of Nissan’s importance to the north-east. I visited recently and have spoken to the senior management at Nissan about the Prime Minister’s speech to reassure them that we see a future for this country within a protected and enhanced single market. That is what is important for Nissan and many other companies in the sector.

T9. My right hon. Friend will be aware of the growing funding problems for postgraduate students. Most have to pay large sums up front, borrowing from banks or their families if they are rich enough, which creates huge social mobility problems. Has he had a chance to look at the proposals in my policy paper, “Developing a future: Policies for science and research”, or, indeed, the very similar proposals from the Higher Education Commission and the National Union of Students? (141961)

Postgraduate education is very important. We have maintained funding for it through the Higher Education Funding Council for England, but I am following with great interest the imaginative ideas being brought forward and we are open-minded if people have proposals for increasing access to borrowing and finance for postgraduates.

In an earlier question, on the privatisation of Royal Mail, the Minister deliberately referred to the fact that shares would be sold off to the people in Royal Mail. It almost harks back to the “share-owning democracy” of Mrs Thatcher, when she privatised all the public utilities and almost without exception those public utilities—E.ON, EDF and all the rest—are now owned by Germany, France, Spain and even further afield. That is what happens to share-owning democracies. Instead of gazing into crystal balls, read the history!

I not only read the history, I remember the history because I was here, when the hon. Gentleman and his colleagues—

I voted for it, and he and his colleagues advised the workers in BT—[Interruption]—not to buy the shares and more than 90% of them did buy them. In this instance, Parliament has quite rightly provided that up to 10% of the shares should be reserved for employees. I think that the more than 130,000 people who work for Royal Mail should have the chance to share in the success of their company.

There will be no swearing in my question.

My right hon. Friend the Minister for Universities will be aware of Chester university’s great success in getting industrial support. The vice-chancellor, Professor Tim Wheeler, the hon. Member for Ellesmere Port and Neston (Andrew Miller) and I all have a free spot in our diaries on 1 March. I was wondering whether my right hon. Friend would come and join the celebrations with us.

I very much hope to join that event. I hope to be up there that day. If not, I will be there on another occasion, because I am a great admirer of what has been achieved at the university of Chester.

Does the Secretary of State imagine that the counterfeiters, the smugglers and the others will welcome the introduction of plain packaging for the tobacco industry?

I know that there have been strong views on this issue in all parts of the House, and the Department of Health has undertaken a consultation on it. We await the results of that consultation, which will be analysed carefully. I am sure that the interesting counterfeiting issues that the hon. Gentleman raises will need to be considered alongside the health issues.

With Chinese new year celebrations and firework displays this weekend, will the Minister urgently receive a delegation of MPs and immediately suspend new regulations—which have just been implemented five years early—that will lead to the collapse of the British fireworks industry?

I know that my hon. Friend is speaking up for the industry on this issue. I met him at the end of last year. BIS policy officials have had two meetings with the industry. Lawyers have also had meetings, and a further meeting is due next week to try to resolve the issue he raises. Yesterday I received a letter from him and the hon. Members for Bracknell (Dr Lee), for Sherwood (Mr Spencer) and for Huntingdon (Mr Djanogly). I will be happy to meet them next week as a matter of urgency to discuss this.

There are concerns that the UK is lagging behind its competitors in the registration of graphene patents. The USA has more than 1,100; we have just 46. Does the Minister agree that this is an example of why the Government need to provide more strategic direction and to support important technology sectors for the future?

We have, of course, invested more than £60 million in graphene research, notably, but not only, in Manchester. I have seen that evidence from patents. It is a reminder of the importance of ensuring that we are absolutely out there supporting the commercialisation of graphene, and that is what we are committed to doing.

I congratulate the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson) on taking the Groceries Code Adjudicator Bill through Parliament, and on allowing the adjudicator to impose fines. Will she look favourably on the adjudicator taking their own initiative in investigations from day one?

I thank the Chair of the Environment, Food and Rural Affairs Committee for her question and, indeed, MPs from all parties who have campaigned for the adjudicator. Christine Tacon was announced as the adjudicator-designate a few weeks ago and we are looking forward to the pre-appointment scrutiny by the Business, Innovation and Skills Committee. We want to make sure that the adjudicator will be able to undertake investigations where there is any suggestion or suspicion that the code is not being complied with.

Last week, at a time of great uncertainty on the high street, the Co-op, working with the Farepak victims committee, announced that it would be the first major retailer to protect and guarantee customers’ Christmas savings in the future. Will the Minister welcome that move? May I also thank her and the Secretary of State for their work with Farepak victims? Long may it continue for consumer protection in the future.

The hon. Lady is right to highlight the excellent scheme that the Co-op has just announced. It should be celebrated and I hope that other companies will be encouraged to follow suit, because I know that giving this kind of protection to customers will be very welcome indeed. I will continue to work with her and other hon. Members on the issue.

Although I welcome the fact that university applications are up and that a higher proportion of them are from people from poorer backgrounds, will the Minister for Universities and Science join me in reminding my young constituents that, whatever the fees they are charged, they will only start paying them back once they earn more than £21,000?

My hon. Friend is absolutely right. These reforms increase resources for universities. They are not putting off students from less affluent backgrounds and it is graduates, not students, who pay. That is a very fair and progressive way of financing higher education.

Does the Secretary of State agree that, if the United Kingdom stayed in the European Union and completed the single European market, our growth could increase by 7% within a decade, but that if we left the EU and had a relationship with it such as that of Norway or Switzerland, our exports could be as much as 14 times lower over the same period?

I certainly agree that it is desirable, for reasons of economic growth, that we remain part of the European Union and single market. The hon. Gentleman may not be aware, however, that both Norway and Switzerland observe the rules of the single market as well.