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Topical Questions

Volume 560: debated on Thursday 21 March 2013

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.