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Business, Innovation and Skills

Volume 560: debated on Thursday 21 March 2013

The Secretary of State was asked—

Trade Links (Non-EU Countries)

1. What progress his Department has made on developing trade links with non-European Union countries. (149127)

We have increased UK Trade & Investment’s focus on growth markets and we are championing ambitious EU trade agreements to help stimulate an export-led recovery. Over three years, our goods exports to Brazil are up by half; to India, by over half; to China, they have almost doubled; and to Russia, they are up by 130%.

We learned yesterday from Office for Budget Responsibility figures that the eurozone economy shrank by 0.6% in the last quarter, and the economies of the United States and Japan are flat. Does my right hon. Friend agree that if we are to return to sustained growth in the United Kingdom, we have to increase the business we do with high-growth economies such as Brazil, Russia, China and India?

Yes, I absolutely agree. The Prime Minister and I, and other Ministers, spend a lot of our time trying to develop exports in these growth markets and to attract inward investment from them; that is clearly where the growth is. That does not mean that the EU market is not important; it clearly is, and that is why we are pressing for improvements to the single market.

In his autumn statement 2010, the Chancellor stated that he wanted to see an export-led recovery. Given that last year exports fell and the current account deficit was the greatest for a quarter of a century, how does the Minister responsible for exports think his Department is doing?

We are being extremely energetic in promoting that agenda. It is certainly true, as the Office for Budget Responsibility has made clear, that the slow-down in the British economy was primarily due to the failure in net exports. In our major export markets, zero or negative growth has been a significant factor. As I said in my first answer, we have very rapid growth in exports to some of the big emerging markets. A lot of that is due to the supportive efforts that are being made not only by British business but by Ministers, including me.

Is it not a serious source of concern that while we have a £20 billion trade surplus with the rest of the world, we have a £48 billion trade deficit with the European Union?

Yes, it is a source of concern. We now have the benefits of a much more competitive exchange rate, and given the efforts that we are making to promote British exports and import competing industries, I would expect that deficit to narrow.

As the Secretary of State and the hon. Member for Montgomeryshire (Glyn Davies) have said, the UKTI strategy recognises the need

“to increase exports, especially to the high growth and emerging markets of the new global marketplace”.

Yet despite this objective, and as well as sterling’s dramatic weakening in recent months, which should help exports, the Bank of England has described export performance as “disappointing”, the OBR has described it as “weak”, and yesterday’s Budget revealed forecasts of net trade rising by a paltry 0.1% until 2017. Why are we not experiencing an export-led recovery, and what will the Secretary of State now do differently to boost exports?

I would have thought it was fairly obvious that when there is an economic slump in the markets that constitute half our exports, it is rather difficult to expand into them, despite the competitive advantage that we have. There are deep structural problems. Many exporters genuinely have problems in getting access to bank finance or difficulties in getting access to trained workers. These are long-term structural problems that we inherited and are now trying to deal with.

Business Regulation

Through the red tape challenge, we have committed to scrapping, improving or simplifying at least 3,000 regulations. We introduced the ground-breaking one in, one out rule, which has saved businesses around £1 billion in regulatory costs; and from January we upped that to one in, two out. In addition, the micro-business moratorium introduced in April 2011 has protected the very smallest firms, and I hope that we can build on that when the moratorium expires next March.

I thank the Minister for that answer. The Institute of Directors estimates that regulation costs British business £112 billion each year. I understand that the Government moratorium on new regulation applied to micro-businesses and start-ups, to which the Minister has referred, expires next year. Will he extend it for another three years in order to boost growth and get firms hiring?

We are looking hard at what we can do to extend that protection for the very smallest businesses from burdensome regulation from next year. In addition, we are pressing the Commission to make more proposals to implement its own commitment to a moratorium. We have seen a couple of examples from the European Union so far and we need to see more.

The Minister will agree that most of the small firms we meet want light regulation, if none at all, but they also want good finance. What does he have to say about Rich Ricci, who has just been awarded a £16.7 million bonus by Barclays? What has Barclays ever done for small business in order for a man to get a £16.7 million bonus on the same day as the Budget took welfare money away from the poorest in our country?

I am not sure what that has to do with the red tape challenge, but Barclays is one of the banks that we are pressing hard to do more to lend more to small businesses, and we expect it to steadily increase the take-up of the various Government schemes on offer.

Will my right hon. Friend look at removing gold-plated provisions on items such as jam, which has to be marketed as a preserve unless it has the right amount of sugar or fruit in it?

It was the previous Government who transposed the European directive but who failed to transcribe the flexibility that France and Germany have to lower the minimum sugar content in jam. We will consult on that shortly. Under this Government, not only is there more flexibility towards the European Union, but there will be more jam tomorrow.

Given that Members in another place—not just Labour peers, but a former Conservative Chancellor of the Exchequer and former Cabinet Ministers and Cabinet Secretaries—have this week rejected the Government’s shabby proposals on cash for workers’ rights, is it not right that the Government now reconsider their shabby proposal?

This House agreed before Christmas to make available this additional right. Nobody has to take it up—they cannot be bullied or harassed into it. There is no need for them to take it up, but equally there is no need for the other place to deny them the opportunity if they wish to do so.

Regional Growth Fund

The regional growth fund is a success, not least in the east midlands where 16 projects and programmes have access to nearly £117 million. Nationwide, 198 projects and programmes have already been finalised and can draw down their funding, including 15 from round 3 which have already benefited from the accelerated process I announced last October. The rest of the round 3 awards will be finalised in the middle of next month, including, I hope, the Leicester and Leicestershire local enterprise partnership programme, which will support businesses in the hon. Gentleman’s constituency.

I think that the right hon. Gentleman intends to visit my constituency tomorrow to attend the Federation of Small Businesses conference. I am sure he will find that we have a significant number of small and medium-sized enterprises in Leicester, Leicestershire and the east midlands, and a significant manufacturing base. Despite what he has said, the east midlands appears to be bottom of the pile when it comes to regional growth fund allocations. In round 3, we received just 2% of allocations. When will the east midlands get a fair deal?

I am looking forward to attending the FSB’s annual conference with the Secretary of State in the hon. Gentleman’s constituency tomorrow, and to hearing more about how it applauds what was in yesterday’s Budget. I hope the hon. Gentleman will be there, too.

On the regional fund’s allocation for the east midlands, this is a competitive fund. There are no specific targets for each region and 19 bids have been selected in the east midlands. Subject to finalising the award I mentioned, the Leicester and Leicestershire LEP programme will support SMEs across the hon. Gentleman’s constituency with 25% capital investment grants ranging from £25,000 up to £150,000. I hope he will encourage—

The regional growth fund has certainly attracted interest in Wiltshire, with bids from Melksham’s Cooper Tires and the Corsham Institute. Whether it brings sustainable energy solutions or exploits the digital economy, is this not a welcome diversification of Wiltshire’s economy?

It certainly is. The purpose of the regional growth fund is to help better balance our economy by encouraging manufacturing, especially in those regions that have been over-dependent either on public sector employment or single types of employment.

Supply Chain Management

4. If he will bring forward proposals to require companies to include supply chain issues in their annual narrative reporting. (149130)

The Department has no plans to require companies to report specifically on supply chains. However, responsible supply chain management is an important issue, which good businesses should understand and take seriously. From October, listed companies will be required to report on community, employee and human rights issues. Later this year, we will publish a framework for action on corporate responsibility, which will consider supply chain management.

I thank the Minister for that reply. We found out yesterday in a press release that businesses are being urged to sign a human trafficking charter. That came not from the Department for Business, Innovation and Skills but from the Home Office. It appears that the Minister for Immigration is taking over the responsibilities of Business, Innovation and Skills Ministers. He is proposing that businesses should sign up to a charter that seems very similar to the contents of my private Member’s Bill, the Transparency in UK Company Supply Chains (Eradication of Slavery) Bill. Surely it is up to BIS to include human trafficking in the narrative reporting of companies in its proposed statutory instrument. If the Minister for Immigration wants that requirement on human trafficking, surely BIS Ministers do too.

I commend the hon. Gentleman for campaigning against this vile and abhorrent crime. He rightly points out the action that the Government are taking on human trafficking. That is being done in conjunction with BIS, but the Home Office is obviously the lead Department on human trafficking. The Minister for Immigration has rightly been taking the matter forward. Both he and I spoke at a conference this week about human trafficking and the risks to the hospitality sector in particular. We will continue to work with business to raise the awareness of this issue and to clamp down on problems in the supply chain. It is a reputational risk for businesses and we must ensure that there is proper enforcement through the Home Office procedures.

Female Apprenticeships

The number of women starting apprenticeships has more than doubled since this Government took office. The tax cuts for low earners that were announced yesterday by my right hon. Friend the Chancellor of the Exchequer will take thousands of apprentices—men and women—out of tax altogether.

I thank the Minister for his answer, I think. It sounded lovely, but unfortunately the Business, Innovation and Skills Committee reported in November:

“Gender segregation remains a huge problem with only 3% of engineering apprentices”

being women

“compared to 92% of hairdressing apprentices.”

The Select Committee said:

“Such inequality, especially in a publicly funded scheme is not acceptable”.

Since November, what has the Minister been doing about that?

Under Labour, a minority—[Interruption.] Hold on! Under Labour, a minority of those starting apprenticeships were women, and now a majority of those starting apprenticeships are women. I thought that the hon. Lady would welcome that. Specifically on engineering, not only is the apprentice of the year, Jenny Westworth, a brilliant engineer, but we have a scheme with Rolls-Royce, BAE Systems and others to promote women in engineering. This is something that I feel passionately about and we will do yet more.

This week, I met two hugely impressive female engineering apprentices from the company MBDA, which achieves a 50% intake of female engineering apprentices. That shows that it can be done. Does my hon. Friend agree that one of the best ways of achieving that is for businesses to engage with schools as part of an effective design and technology curriculum?

I agree entirely. That demonstrates the effort that is being made. Indeed, the Secretary of State met the female engineers my hon. Friend talked about. The number of apprentices in engineering and manufacturing has gone up by more than half in the past two and a half years. [Interruption.] The “Oohs” and “Aahs” of Labour Members only reflect their disappointment at being such failures themselves.

The Minister’s Department found recently that one in five apprentices receives no training whatever. That is worrying for apprentices and damaging to the brand. What action is the Minister taking to address that?

The gathering of that evidence started in 2008. It is shocking that that happened under the previous Administration, and we have stopped it.

National Apprenticeship Week

National apprenticeship week last week was a triumph. Tens of thousands of new apprenticeship places were announced; there was double the coverage of last year; and the message went out loud and clear from this House and beyond that apprenticeships deliver.

I am grateful to the Minister for that answer. Last week I had an apprenticeships fair. Does the Minister agree that the National Apprenticeship Service does a wonderful job in supporting MPs, private organisations and charities in boosting apprenticeships in this country?

I commend the National Apprenticeship Service for its work, and I know there were more than 400 local residents and 22 employers at my hon. Friend’s job fair. I have my own jobs fair tomorrow, and national apprenticeship week next year will take place on 3-7 March. I hope that all hon. Members will get involved.

Businesses in my constituency report difficulty in recruiting apprentices in electrical, mechanical and control engineering. What can the Minister do to develop a pipeline of such apprentices?

We have made it clear that we expect a new norm for school leavers to go either into apprenticeships or to university. On average, 10 people apply for every apprenticeship vacancy. There is huge enthusiasm, but much more that we can do.

Further to the question from my hon. Friend the Member for Wirral South (Alison McGovern), surely the Government should adopt a comprehensive strategy to tackle gender segregation, just as they have—rightly—supported the Davies report on senior women on company boards.

A comprehensive strategy is about ensuring that we support women as well as men who want to do apprenticeships, and that is exactly what we are doing.


After years of manufacturing being in relative decline we are seeking to bolster manufacturing capacity and drive the transformation to a skilled economy. On Monday we launched an aerospace strategy with £2 billion Government-industry funding for an aerospace technology institute. Rounds 2 and 3 of the advanced manufacturing supply chain initiative opened for applications today.

One of the major problems affecting ceramics manufacturing in my constituency is, after yesterday’s Budget, no longer the climate change levy, but is security of supply when it comes to gas. We have dangerously low levels of gas storage capacity in this country, and in recent weeks we have come close to energy cut-outs. Will the right hon. Gentleman meet the Secretary of State for Energy and Climate Change as a matter of urgency so that we can have proper energy security for our ceramics industry?

I congratulate the hon. Gentleman and his fellow potteries MPs on putting ceramics on the agenda. We recognise that because ceramics institutions are driven by gas rather than electricity it is more difficult to compensate them under the Government’s scheme. He is right to raise the issue of gas storage, which goes back many years. Compared with France we have relatively little strategic storage and I would be happy to talk to the Energy Secretary about that.

I hope the Secretary of State supports early-day motion 1185 which calls for the 600 taxpayer-funded carriages for the Crossrail project to be built at Derby’s Bombardier factory, safeguarding more than 10,000 jobs. Given that the Mayor of London will have a big say in where those trains are built, will the Secretary of State tell the House whether he is making the socio-economic case to the Mayor for building those trains in the UK, and specifically in Derby?

We will certainly make the case for tendering to be conducted in a proper, strategic way. One lesson we have learnt over the years is that the rather opportunistic approach that used to happen in public sector tendering for public transport was not helpful, and we will certainly make the strategic case directly with Government and public agencies.

Manufacturing is very important to my constituency. Will my right hon. Friend update the House on the outcome of the third annual manufacturing summit, which took place in February 2013?

It was a very productive session at Gaydon and we were able to see successful British car manufacturing—Jaguar Land Rover and Aston Martin were just across the road. It was the largest summit we have had so far, and a celebration, as well as a serious business discussion, of the progress we are making on apprenticeships, innovation and other support for manufacturing.


Advanced manufacturing is crucial to economic growth. That is why the Chancellor announced a further £1.1 billion for our industrial strategy in his Budget. That follows an additional £600 million investment in the autumn statement for eight great technologies.

Will my right hon. Friend commend the vital contribution to the national economy made by advanced manufacturing industries, such as APPH in Runcorn, which manufactures vital parts for the Saab Gripen fighter? The company has recruited four new engineering apprentices from Manchester, Liverpool and Salford universities. Does he agree that it is vital to encourage more young people to take up engineering as a career?

I agree with my hon. Friend. The aerospace announcement in the Budget, to which my right hon. Friend the Secretary of State has just referred, is crucial in supporting those industries. My hon. Friend can be proud of a constituency that has, in Daresbury, an important high-tech centre.

This week, AstraZeneca announced a deep global restructuring, committing its manufacturing facility to Cheshire, but moving its global R and D to Cambridge, with a £300 million investment and 2,000 staff. Does my right hon. Friend agree that that is a sharp reminder of the deep global restructuring in the pharmaceutical sector and the importance of the life science strategy we put in place 18 months ago? May I congratulate his Department on the speed with which the task force was set up?

The announcement was obviously disappointing for people at Alderley Park, but we have worked with AstraZeneca in setting up a task force, which I hope will secure a future for the site. Meanwhile, we should celebrate the fact that AstraZeneca decided, having looked around the world, that the UK was the best place to invest in new R and D facilities.

Vocational Education

We are reforming vocational education to be more rigorous and responsive. We will introduce a TechBacc to recognise high-value technical education. We are strengthening further education colleges and, through the Richard reforms, strengthening apprenticeships, so that university or an apprenticeship becomes the new norm for school leavers.

I thank the Minister for his response. He may not be aware that a number of major public and private sector employers in Barnsley recently signed a pledge to have 2.5% of their work force as apprenticeships. However, with the number of young people aged 16 to 18 starting apprenticeships falling, can the Minister learn anything from the innovative approach taken in my constituency?

Yes, I am sure I can learn an awful lot from such an approach. It sounds terrific and I would like to hear more.

My constituency experience is that many young people and their families find it very difficult to understand exactly the qualification routes in vocational education and how young people might plug in later to more academic careers or whatever. Will the Minister consider simplifying the system to ensure much greater clarity for those interested in following such careers?

That is an important point. The TechBacc aims to do precisely what the right hon. Gentleman suggests, alongside making apprenticeships the new norm. We want to make clear the progression routes that people can take to get into the career that they want. I am happy to look at any other steps we can take, but simplification is the order of the day.

Does the Minister realise that success in vocational education is a game of two halves? We will get the expansion in quality apprenticeships we need only if he has prepared the ground, which means proper support for vocational education in schools, on which the Government are failing. The latest research from the Chartered Institute of Personnel and Development shows that parents remain doubtful. Therefore, in his second day job as a Minister in the Department for Education, will he restore key stage 4 work experience and dedicated funding for face-to-face guidance, for which half the people surveyed by the CIPD and the employers I speak to are crying out?

We are introducing work experience as part of the study programmes in sixth forms and for 16 to 18-year-olds. The new duty on schools to provide independent and impartial advice is an important step we have taken from this summer.

Investment (Lincolnshire)

11. What support his Department is providing to encourage investment and growth in north and north-east Lincolnshire authority areas. (149138)

North and north-east Lincolnshire are benefiting from over £41 million of Government investment from the regional growth fund, including the £30 million Humber local enterprise partnership that I launched in February with my hon. Friend, which will support businesses in his constituency. The Humber has also secured the largest enterprise zone allocation in England—1,200 acres over two sites—which will help to support the development of the offshore renewable industry in both north and north-east Lincolnshire.

We obviously welcome the Government’s continuing support and any further initiatives. To emphasise that Cleethorpes is a good place to start businesses, today is the fifth anniversary of the launch of the Cleethorpes Chronicle by two local businessmen. Does the Minister agree that if people show determination and enthusiasm and have a quality product, it is appropriate to start a business, even in these difficult times, as we have seen with the success of the Cleethorpes Chronicle?

I congratulate the Cleethorpes Chronicle on reaching that milestone and we should send our best wishes to Nigel Lowther, Mark Webb and the team. It is a great local paper, committed to the community and the businesses that it serves.

I do not wish to be unkind to the hon. Gentleman, but he represents a Northamptonshire constituency: he does not feature in north-east Lincolnshire. He is close, but not quite close enough. I will give him a go later, if he is a patient fellow, as I am sure he will be.

Royal Mail

Parliament decided two years ago that employees of Royal Mail should share in its success. It would be wrong to deny employees this any longer. They should be sharing in the company’s success and dividends, and it is our intention to have such a scheme in place at the time that we conduct a sale of Royal Mail.

I thank the Minister for that encouraging reply. The better financial performance of Royal Mail owes much to the loyalty of postmen and women getting the mail out to every address in the country, even in during these difficult weather conditions. Can the Minister give us a little more certainty about the timing of this scheme and how those loyal postmen and women will benefit?

It is our intention to conduct a sale during the forthcoming financial year, 2013-14, and I confirm that at the time of that sale we intend to make a share scheme available to the 130,000 employees of Royal Mail who, as my hon. Friend says, have worked so tirelessly to turn it into a successful and profitable business and should share in that success.

What assurances can the Minister give to small businesses and many individuals across the UK who rely on a well performing, six-day-a-week service to their homes and businesses? Will that remain so once Royal Mail is privatised?

Yes, it will, because Parliament put in place, in the Postal Services Act 2011, the statutory requirement for a universal postal service that is secured by Ofcom, an independent regulator, and that will exist irrespective of the ownership of Royal Mail.

We very much support genuine employee ownership, especially for hard-working Royal Mail employees. However, we vehemently oppose this Government undermining employee ownership by attaching it to the Beecroft agenda of giving up rights at work. The Chancellor announced this policy by proclaiming:

“Workers of the world, unite!”

Well, they have: they have united against this policy, along with the Employee Ownership Association and the vast majority of responses to the consultation. The Minister is not listening to this large body of opinion, so may I press him again, following the question from my right hon. Friend the Member for Delyn (Mr Hanson), to heed the advice of Conservative Lords Lawson, King, Forsyth and Gummer who voted yesterday, with a large majority of other Lords, to dump these divisive shares for rights policies?

I note that the hon. Gentleman wants to divert the House from the question about Royal Mail and the more interesting question of whether those on the Opposition Front Bench will support this opening up of Royal Mail to private capital and the scheme to ensure that those who work for the company will share in its success.

International Students

13. What recent assessment he has made of the costs and benefits of international students to the UK economy. (149141)

International students provide enormous economic and cultural benefits to the UK. Education exports from further and higher education contribute some £9 billion to the economy. We therefore stated in January that we will place no cap on the number of genuine students coming from across the world to study in this country.

I thank the Minister for that answer. We all understand the importance of clearing up the chaotic mess of immigration left by the last Government and the attention that the public pay to reducing the total numbers, but many of us would like to see student numbers excluded from our migration statistics. The economic case has been made by Universities UK and the 1994 Group. Will the Minister reassure me that he is sensitive to these representations?

My hon. Friend is right. The first priority was to eliminate abuse so that people can have confidence that students are legitimate. We have now said that we will disaggregate the statistics so that students are separately identified. The next step is a positive education export strategy, which we will produce before the summer.

The Royal Botanic Gardens in my constituency carries out world-leading research that benefits the UK in many ways. International students and interns are an important part of that work, but the gardens’ particular organisational status sometimes makes it difficult to obtain visas for them. If I write to the Minister with the details, will he, perhaps in conjunction with his colleagues in the Home Office, look at this issue to help support its important work?

I am always happy to work with the Minister for Immigration, my hon. Friend the Member for Forest of Dean (Mr Harper), to iron out such problems, but the general point is very simple: genuine, legitimate students are allowed into this country and there is no limit on the numbers.

The Minister tries to paint a rosy picture, but the facts are that the recent drop in net migration is due to 38,000 fewer international students coming to this country. His policy is choking growth in our seventh-largest export industry, worth billions of pounds, at a time when our economy is flatlining. It is clear that the Minister is too weak to make the case for our world-class universities around the world and too weak to lobby his Government colleagues to change course. Does he agree with me that the one genuine achievement of the net migration pledge has been a net decrease in his own credibility?

The hon. Lady should understand that we have a clear policy: there is no limit on the number of students. I went with the Prime Minister on his most recent trade mission to India, accompanied by leading vice-chancellors, to communicate clearly and directly to one of our most important markets for overseas students that they are welcome to come and study in the UK.

Regeneration (Fenland)

14. What assessment he has made of the potential benefits of the development of a new agri-tech centre in Wisbech for regeneration in the fenland region. (149142)

We announced funding for agri-tech only this week as part of the Chancellor’s excellent Budget. I congratulate my hon. Friend on being the first to bid for some of that funding. I am sure his idea for a new agri-tech centre will be considered carefully, and we will set out our plans in our agri-tech strategy.

I welcome the additional funding announced in the Budget yesterday and pay tribute to the excellent work my hon. Friend the Member for Mid Norfolk (George Freeman) has done on this issue. Will the Minister agree to meet me and the leaders of Cambridgeshire county council and Fenland district council, given the strength of the bid for an area that is located at the heart of the farming fens, in close proximity to the talent centres of Cambridge and Norwich, and adjacent to the College of West Anglia, which is the regional lead for science and technology and is currently building a new £12 million engineering faculty?

Of course I am happy to meet my hon. Friend. I understand the significance of the wider strategy for his area. East Anglia is one of our national leaders in agri-tech and agri-science, with excellent research institutes across the area.


15. What progress his Department has made on improving the export performance of UK manufacturers; and if he will make a statement. (149144)

As part of the Government’s industrial strategy, the Department has focused its efforts on helping British manufacturers access global supply chains through schemes such as the advanced manufacturing supply chain initiative and the manufacturing advisory service. We are concentrating in particular on 20 of the world’s highest growth markets. One sign of progress is that, for the first time since the 1970s, the UK is a net exporter of cars.

The Chancellor’s economic plan was predicated to a large degree on boosting exports. It was reported at the end of January, however, that new export orders had fallen for the 13th month in a row. What advice is the Department giving to the Chancellor on how to move from plan A to plan B and give our manufacturers the support they really need?

My right hon. Friend the Secretary of State for Business, Innovation and Skills outlined in response to an earlier question the significant progress we are making, particularly in non-EU economies, which are seeing much better growth than the EU. The Government have a range of different programmes, with the industrial strategy, the advanced manufacturing supply chain initiative and UK Trade & Investment providing help for businesses to export. In fact, in the past year they have supported firms in creating and securing more than 100,000 jobs for the UK economy.

The Geddington road in my constituency links Corby not only to north-east Lincolnshire but to export markets all around the world. Will the Minister prevail on Northamptonshire county council to reopen the road to goods vehicles, which is important to ensuring that goods can get to markets from my constituency?

The hon. Gentleman ingeniously uses the question to highlight a local issue. It is obviously up to local authorities to make their own decisions, but he uses this opportunity to put his views firmly on the record. No doubt his colleagues on the council will look closely at his comments.

Industrial Strategy

We are developing long-term partnerships with business across a variety of sectors and policy areas. On Monday, I announced £1.6 billion of new Government funding over the next 10 years—well beyond this Parliament—to back our industrial strategy, concentrating initially on aerospace, automotives and agri-food.

In recent weeks, the former director general of the Institute of Directors, Sir George Cox, in his excellent review of tackling short-termism in the British economy, added his voice to the call for a proper industrial strategy to support long-term growth. Since he took office and abandoned much of what the last Labour Government were doing, the Secretary of State has delivered many good speeches on delivering an industrial strategy, but we do not yet seem to have one. When will we get this sorted?

We already have one. We are reversing much of the damage done with the decline of manufacturing industry under the Labour Government. I applaud the George Cox study. It follows, and in many ways echoes, the survey of long-termism and short-termism that I did through Professor John Kay.

Global Competitiveness

The Government have increased funding to UKTI, with an extra £140 million over the next two years, so that it can double the number of small and medium-sized businesses supported from 25,000 to 50,000 by 2015. We will also help 8,000 small companies attend overseas exhibitions in the next financial year. My hon. and learned Friend is absolutely right about the importance of promoting small businesses and export markets.

I am grateful to my right hon. Friend for that answer. SMEs in my constituency, such as Destec Engineering, which I recently had the opportunity to visit, are the drivers of both our local and national economies. Does he agree that the measures announced in yesterday’s Budget, particularly the employment allowance and the reduction in corporation tax, will go a long way to helping such businesses grow and compete in the global economy?

My hon. and learned Friend is absolutely right. We believe that the employment allowance measure, on its own, will ensure that more than 400,000 SMEs no longer have to pay employers’ national insurance contributions, which is the boost they need.

Growth Plan

19. Which measures in the Government’s growth plan his Department has not yet implemented; and if he will make a statement. (149148)

Yesterday, the Government published a progress report on implementation of the plan for growth and the autumn statement 2011. All measures are being implemented and almost two thirds of the measures are now complete—up from a quarter at Budget last year. We are on track for delivery.

The Government have announced the electrification of the Ebbw Vale to Cardiff line, but in advance of that we need to redouble the line to improve train frequency. Will the Government work with the Welsh Government to ensure that the finance for this shovel-ready project is delivered before the next election?

I am delighted to hear an acknowledgement that after many decades of decline in the railway system we now have a major investment in railways and a rail revolution taking place. The hon. Gentleman raises a specific point that I am happy to follow up with the Welsh Government.

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 recent report by the respected consumer group Which? highlighted the extent of irresponsible lending in the high-cost credit market. Do Ministers think that the Office of Fair Trading’s recent threat to revoke the licences of 50 payday lenders goes far enough to stamp out bad practice in the sector?

The hon. Gentleman is quite right to highlight some of the unscrupulous and unacceptable behaviour in the payday lending industry. The OFT’s action, telling the industry it has 12 weeks to shape up or lose its licences, is welcome, but that is not all that is happening. The OFT also intends to refer the industry to the Competition Commission, and we have given it extra powers to suspend licences immediately. The Financial Conduct Authority will be able to take much more action, with the sweeping powers we have given it to ban products, impose unlimited fines and order redress to consumers. The Government take this issue extremely seriously and are acting on it.

T2. Thank you, Mr Speaker; I followed the instructions on the Order Paper, which said, “from 10.15”. Timing is always important. What are the coalition Government doing to promote apprenticeships in manufacturing industries? If the Minister would like good examples, I can draw his attention to Paxman in my constituency—MAN Diesel and Turbo—and Fläkt Woods, among whose apprentices is Kallum Parks, who last month was presented with the Essex apprentice of the year award for 2012. (149153)

I have just announced to the House that national apprenticeship week next year will from 3 to 7 March. I commend Fläkt Woods for the work it does and the apprenticeships it teaches. The number of apprenticeships in Colchester over the last couple of years has more than doubled, so clearly my hon. Friend’s efforts are making progress.

Last year this Government presided over a double-dip recession. The Office for Budget Responsibility has just halved its forecast for what growth will be on the Government’s watch this year, so the situation is urgent. Yesterday the Government announced a number of measures that the Secretary of State says will help—the employment allowance for employers in respect of national insurance, an increase in capital spending by £3 billion a year and the establishment of Lord Heseltine’s single local growth fund. Which of these measures will help struggling businesses in 2013?

There is a long answer, but I will give a short one. Let us start with the employment allowance, which will provide substantial support for micro-companies, building on considerable success with job creation— 1.25 million new jobs over the two and a half years of this Government and 600,000 forecast by the OBR.

The answer is that none of those measures will help businesses in 2013, because they do not kick in for at least a year, when what the economy needs is a stimulus now. What confidence can we have that the Government will actually deliver? Let us take Budgets 2011 and 2012. The Secretary of State and others boasted about their infrastructure plan, but two years on, less than 2% of the projects are completed or operational and now he says that Budget 2013 will get business investing. If that is the case, why, having accounted for this Budget, has the OBR revised down its forecasts for business investment this year, next year and in the following three years? It is not exactly a vote of confidence, is it?

The OBR was quite clear about the reason for its downward revision of growth: it was explained in terms of net trade. That was the overwhelming factor, but if the hon. Gentleman wants evidence of projects that are now going through, he should look at some of the increases in capital investment approved in the autumn statement—and happening in my Department with my colleague the Minister for Universities and Science—big R and D projects going ahead in partnership with the private sector and many others now going ahead under the regional growth fund, creating jobs across the country.

T6. I believe it is Lord Heseltine’s birthday today. I wish him congratulations. Large rafts of money are going to city regions such as Leeds and Sheffield for transport infrastructure and other projects. We feel that we will be left in the lurch, so may I ask the team what support will be given to rural areas of North Yorkshire to improve the roads and other infrastructure? (149157)

That is a perfectly fair point, but let me reassure my hon. Friend that the single pot funding from 2015 will be allocated not simply to the cities, but through local enterprise partnerships. It is her local enterprise partnership that will be able to make a bid to the Government.

T4. I do not want to use my topical question to talk about the obscene Barclays bonus; I want to ask whether the Secretary of State is aware of the fine example of CEEP—clean and energy efficient production—and sustainable manufacturing in our country’s industrial production. We are a world leader and we have amazing markets in China and India for this product. Will he put even more effort behind CEEP—he has done well up to now—so that we can conquer those markets? (149155)

Yes, absolutely. I appreciate the hon. Gentleman’s acknowledgement that we have done well up to now. I have visited Huddersfield twice to see some of the successful companies there, and I am very happy to see more.

T7. I welcome the appointment of Andrew Witty to lead a review of how universities can support local growth. The university of Worcester has already delivered exciting regeneration projects, including Europe’s first joint university and city library, the Hive, and the new Worcester Arena. As it sets out to look into a new university business park, may I encourage my right hon. Friend to come to Worcester to meet representatives of the university, which has already become a powerful engine of local growth? (149158)

I welcome my hon. Friend’s welcome for the important new review that Andrew Witty will be carrying out and, yes, of course I look forward to visiting the university of Worcester. I have not visited it for several years, but I believe that I shall be there in June, and I look forward to that.

T5. May I press the Minister on payday lenders? Will the Government really get those companies to make it much easier for consumers to understand the cost of those awful payday loans? (149156)

The short answer is yes. The hon. Gentleman is quite right to say that consumer awareness is vital. Some of the people who take out such loans would be much better off with an entirely different financial product. That is why advertising is such an important element in tackling the issue. The Government are working with the Advertising Standards Authority and we will also work with the Financial Conduct Authority, which will take over those powers from next year, to ensure that we clamp down on advertising that misleads people and lures them into taking out products that are not right for them.

T8. The north-west is at the heart of Britain’s aerospace industry, and I welcome this week’s announcement of the £2 billion aerospace technology institute. May I urge the Minister to consider the Warton enterprise zone in my constituency as a potential location for it? (149159)

We will certainly do that. The aerospace industry received an enormous boost on Monday with the announcement of £1.5 billion that is to be shared, along with another £1 billion from the private sector. I hope that that will give the industry the confidence to invest, right across the remainder of this Parliament and through to the end of the next one, in what is already one of Britain’s great success stories.

T10. The Secretary of State has often told us of his plans to rebalance the economy. Is he as worried as I and many commentators are that a huge plank of the Chancellor’s growth strategy seems to be predicated on a policy that could reinflate the housing bubble? (149161)

We certainly would not want to see that happen again. I have to say that I am a little surprised to be given a lecture on this, having seen the housing bubble that developed 10 years ago and got completely out of control and did so much damage. Clearly, the intention of the stimulus announced yesterday is to provide supply as well as demand in the housing market.

T9. Lancaster is an excellent university town, and we have a high number of creative and innovative entrepreneurs. What additional help can we get from the Department to provide them with the right marketing, financial and manufacturing advice to help them to get their products to market? (149160)

My hon. Friend is absolutely right. Among the resources that we do not use enough are the business schools in our universities, which can be a source of expertise and support for local businesses. I hope that this will be among the issues that Andrew Witty addresses in his review.

The Secretary of State is fond of talking about rebalancing the economy. A walk down the high street in any town or city will show that the growth industries are payday loans, betting shops, pawnbrokers and food banks. Is not that a really sad, evil commentary on these three wasted years?

Perhaps the hon. Gentleman will come back with me to Markham Vale in his constituency, which I visited at his suggestion—[Interruption.] Real regeneration is taking place there with Government support.

I have raised the issue of interest rate swaps with my right hon. Friend the Secretary of State before, and I am grateful for the action he has taken. However, the problem is still hurting businesses in my constituency, so will he keep the issue firmly on his radar and work with colleagues across government to bring it to a conclusion as swiftly as possible? [Interruption.]

I have raised the issue of interest rate swaps with Ministers before and have been grateful for the action taken, but this issue is still hurting businesses in Harrogate and Knaresborough. May I ask the Secretary of State to keep this issue on his radar and to work across government to try to resolve this as quickly as possible?

Yes, the hon. Gentleman is right: interest rate swaps were a major scandal. The Financial Services Authority has, as he knows, already set in train a process for remedies. I am working very actively with it, but it is very much in the hands of the FSA and the banks to produce a just solution. [Interruption.]

I gather that the hon. Member for Bolsover (Mr Skinner) was banging on about car salesmen and his disapproval of the answer. If he would like to apply for an Adjournment debate, there is always a sympathetic ear; let us see what is available for him.

The proportion of workplaces that have some employees on zero-hours contracts has increased massively in recent years with some 23% of companies having more than 100 employees using them. What are the Government going to do to regulate those contracts, which confer fewer employment rights and cause considerable financial uncertainty for workers?

The UK employment and labour market is flexible, which can be helpful. For some employees, zero-hours contracts can be helpful. Clearly, where there is abuse happening, it should be clamped down on. That is certainly what the Government will make sure is done.

Recently, Axminster Carpets, a great local company, went into administration. Its bankers were less than sympathetic. The Government have capital funds in place for banks to lend; can the Secretary of State do much more to make sure banks properly lend to business?

There are a great many initiatives taking place. Apart from the advanced manufacturing supply chain finance announced this morning, we will be talking tomorrow about a new raft of initiatives for non-bank lending. The hon. Gentleman will have seen this morning’s ministerial statement on the future role of the business bank. He is right that the closure of the carpet factory is a serious blow, but it relates more to the viability of the company than to the ability of getting credit from banks.

As chair of the all-party parliamentary group on aerospace, I want to welcome the announcement earlier this week of the aerospace technology institute. Will the Secretary of State or the Minister say more about the timetable for its creation and what types of investment it will support?

Yes, I co-chaired the aerospace growth partnership on Monday to press the industrial side of the partnership to get on with the money made available—some £2 billion spread over seven years. I have challenged them to make sure that the money starts to get put into action so that the institute is established as rapidly as possible this year.

In welcoming the industrial strategy being supported by £1.6 billion, I ask whether the Secretary of State agrees that we need to encourage our SMEs to start thinking about investing in tooling for components, especially in the automotive sector, because that is how we will further boost the values of our already impressive exports in cars?

My hon. Friend is absolutely right that the issue in the industrial strategy is promoting not simply the prime contractors but the supply chains. These have been badly hollowed out in recent years, but there is quite a lot of evidence of re-shoring, and we want to support that with the advanced manufacturing supply chain initiative.

The Secretary of State has just cut by half the consultation period for large-scale redundancies. Does he imagine in his wildest dreams—I imagine he has some pretty wild ones—that this will do anything to foster economic confidence?

This was the subject of a lively debate in the Committee corridor earlier this week. As I made clear at that point, this is a minimum consultation period; where it is helpful to continue the consultation, benefiting the business and jobs, of course that can and should continue. The quality of the consultation is being improved through ACAS, which will help to make sure that business benefits but also that more jobs can be saved as a result of that improved process. There is no benefit in just prolonging the uncertainty when it is very clear that a business needs to restructure to make sure that the remaining jobs can be secured.

On the day of Lord Heseltine’s birthday, I have no idea what presents he might have been expecting, but I am sure that the Government’s acceptance of his report’s recommendations will have been a strong gift. I invite the Secretary of State, on behalf of the House, to pay tribute to Lord Heseltine’s tireless work for British business over a long career and to encourage the Government to implement his reforms with the radicalism and speed demanded.

Yes, I would be delighted to pay tribute to him. Quite apart from this major report, large parts of which we are accepting, Lord Heseltine has played a major role in chairing the group of business people overseeing the regional growth fund and has led the initiative, now being taken in Birmingham, to mobilise chambers of commerce. Indeed, he makes a contribution far bigger than that of many Ministers in this and previous Governments.

Last year the Business Secretary wrote to the Prime Minister complaining that his Government lacked “a compelling vision” to drive up growth and provide business confidence. Given that the growth forecast has been cut to 0.6%, and given that the economy is at best flatlining and at worst teetering on the edge of a double-dip recession, does the Business Secretary still think that the Government lack a compelling vision?

The compelling vision has been manifest in the industrial strategy. As the hon. Gentleman will have noted on Monday, the Chancellor and the Prime Minister are fully behind it, and are providing financial support to make that vision a reality.

Will the Secretary of State comment on the progress that has been made in Europe on the introduction of transparency to the extractive industries?

I strongly welcome the support that has been received from both industry and non-governmental organisations for the pursuit of increased transparency in those industries. Talks have been continuing in the European Union this week. We want to make strong EU rules that match the tough United States requirements. There should be no exemptions: listed extractive companies should publish information about all payments that they make to all Governments in all their countries of operation.