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Oral Answers to Questions

Volume 564: debated on Thursday 13 June 2013

Business, Innovation and Skills

The Secretary of State was asked—


Our ambition is to double exports to £1 trillion by 2020. This ambition was reflected in the 2012 autumn statement, when UK Trade & Investment was allocated an extra £140 million to enable it to double the number of small and medium-sized enterprises supported from 25,000 to 50,000 by 2015.

The Government have made an excellent start, with exports to Brazil up by half and to India by more than half and those to China almost doubled, yet still only one in five SMEs exports. Were we to get that up to one in four, we could wipe out our trade deficit, so what efforts are the Government making to engage with the four out of five SMEs which currently do not export but whose products and services would be attractive to overseas markets?

My hon. Friend analyses the problem correctly: we have to make a major effort in big emerging markets, which we have neglected in the past. We have identified 20. I have been to the majority of them, leading trade missions, as have my colleagues. With reference to raising awareness, for example, in May, a few weeks ago, we had 80 events across the country identifying 3,600 businesses with interests in emerging markets, and there is a greatly increased tempo of activity in the field through the establishment of chambers.

What has the Secretary of State learnt from the experience in Germany, where the state-backed investment bank makes export finance one of its priorities and one of its objectives? Does he think there are lessons there for this country that could improve access to export finance to address the problem that he has just set out?

The Germans do indeed have a very good system of export support and trade finance. They do many of these things well. Partly in response to that, in the earlier period of this Government I introduced a new range of short-term trade finance products that we had not had before. They are now picking up a substantial amount of interest, and in the Budget the Chancellor announced £1.5 billion for medium-term—three to five-year—export credit guarantees, which are now being implemented.

I am going to Luxembourg tonight. I hope that by the end of tomorrow we will have to agreed to launch those very important negotiations. This is potentially the biggest trade deal that has been accomplished for many years, and it will have major implications—positive implications—for British exporters, particularly in sectors such as cars.

The Secretary of State’s answer to the very pertinent question posed by the hon. Member for South West Bedfordshire (Andrew Selous) smacked of complacency. His response did not mention the fact that figures published last week showed that the value of exports has fallen by 1.3%. The CBI also said last week that the trade figures were “unsatisfactory”, with

“still a long way to go. The Government needs to do more to help raise exports to the fast-growing economies.”

Does the Minister agree with the CBI’s assessment? Is he satisfied with the Government’s performance in boosting trade so far or does he think he needs to raise his game?

The game has been raised very considerably over the past three years but the hon. Gentleman is right. The figures on exports are not great and the reason is simple: half our exports go the European Union, where output is declining. It has a major economic crisis. Exports are growing rapidly to emerging markets. My hon. Friend the Member for South West Bedfordshire (Andrew Selous) cited the figures and I will repeat them: 28% growth in the past year to Russia, 16% to Brazil and 16% to China. That does not suggest that we are not trying.

Consumer Protection

Yesterday the Government published our response to the recent consultations on consumer rights and, alongside that, a draft Consumer Rights Bill. This will help consumers and their advocates understand their rights when things go wrong.

A constituent of mine paid £20 for the previous day’s congestion charge, rather than £12, having found an authentic-looking site at the top of Google’s listings. The ownership disclosure was out of sight on the landing page, below the fold. What can be done to protect against such intermediary internet rip-offs?

As many of us know from our constituency work, there are a large number of consumer rip-offs. The purpose of this legislation is to provide for much stronger redress, particularly in internet trade, which is growing rapidly—we have had the most rapid growth of any country outside Finland—and we must bring consumer legislation up to match it.

Glasgow’s Evening Times reported this week that one in five Glasgow citizens is currently using payday loans to try to meet everyday costs. What measures do the Government propose taking in their new legislation to protect consumers and, in particular, control the rollover of payday loans, which is often the nub causing people to go into serious debt?

A great deal is happening on the payday loan front. The Office of Fair Trading is coming to the end of its investigation, which will result in action that is appropriate to the competition authority. Responsibility will shortly pass to the Financial Conduct Authority, which has more powers and can be more active in that field. We are looking, in particular, at how we can deal with misleading and dangerous advertising in that area.

At my surgeries I have met residents who have come to see me because they are anxious about having been ripped off or having been victims of mis-selling. What will the proposals do to help them get their money back?

They will considerably improve the rights of redress, and there is a whole series of specific measures in the Bill, which will be debated at length, on how to achieve that. When we aggregate all the redress elements, we estimate that it will probably be worth something in the order of £4 billion over 10 years to consumers.

In June last year the Government announced a crackdown on cowboy builders. The DCLG website states:

“The measures will also ensure that householders have a financial safety net in place… if… self-check installers fail to finish work properly or if they can’t be chased through the courts.”

Around 85,000 complaints about cowboy builders are made to the OFT every year. Will the Secretary of State tell the House how many people have benefited from that Government scheme in its first 12 months?

I cannot tell the hon. Gentleman exactly how many, but I am happy to write to him about that. I launched the scheme and am therefore interested in seeing how successful it has been. Over the years we have all met constituents who have had appalling experiences with rogue builders. The existing system operating through trade standards has not been totally effective. This kind of branding will, we hope, bring more cowboy builders to account.

Car Manufacturing

The UK automotive industry is in great shape: last year UK car production increased by 9% and car exports exceeded imports by value for the time since 1976. The new automotive investment organisation, which we are announcing today, will build on that strong performance, which has already attracted more than £6 billion in global investment over the past two years.

I thank the Minister for that impressive description of the current state of the British car industry. What measures is he taking to ensure that we have sufficient skills, particularly in engineering, to develop the components industry in the car sector as well as recognising the need to provide new technologies?

Addressing the skills challenge and increasing the supply of engineers is critical for the automotive industry and others. It needs attention in schools, where the Department for Education is investing £135 million in science and maths education, and from industry itself. I hope that more car companies will follow Nissan’s lead in taking up the employee ownership pilots.

As a west midlands MP, I join the Minister in welcoming the success of the British car industry, which is a tribute to the industry, its work force and trade unions and his Department under both Administrations. Is it not extraordinary that other Government Departments do not back the British car industry, especially the police, who are buying more and more foreign vehicles? Will he talk with the Home Secretary to get her to back British industry? It might even help her leadership ambitions.

They may not need that much help.

The right hon. Gentleman makes an important point about procurement by public authorities. He has been to the Department recently to discuss the matter with me and I have written to him about it.

In South Staffordshire we are seeing the construction of a £500 million new engine plant for Jaguar Land Rover. However, one of the great constraints on the automotive sector is the need for more engineers coming through our university system. What more can the Government do to encourage more engineers to drive forward our wonderful automotive sector?

We are encouraging more children to take up science subjects and to study maths earlier and for longer, and to be more aware of the high-value, highly regarded careers that are available in engineering. We are urging companies to open up their premises to more visits from schools, particularly in connection with the See Inside Manufacturing initiative that we are launching again this October.

Prompt Payment Code

5. What steps he is taking to ensure that small business suppliers are paid promptly by large businesses and by government; and if he will make a statement. (159356)

I have written to all the FTSE 350 companies urging them to sign up to the prompt payment code. Signatories must pay their invoices on time to maintain membership. Three quarters of FTSE 100 companies are now signatories, and over 1,400 large companies have signed in total.

Last year a Federation of Small Businesses report showed that 40% of small businesses had faced problems with payment from Government agencies and quangos. Will the Minister make the prompt payment code mandatory for all public sector organisations and consider budget cuts for persistent offenders?

There is now a statutory obligation for all public bodies, including the NHS and local authorities, to pay invoices within 30 days.

Does the Minister agree that paying small and medium suppliers on time is part of the broader responsibilities of the large company? Will he look at the Public Services (Social Value) Act 2012, which is making a real difference for small and medium-sized enterprises and their relationships with taxpayer-funded local authorities and health authorities? Will he try to ensure that large companies pay taxes and have a broader responsibility to the community in which they sit?

That goes a little wider than the original question, but I agree with the hon. Gentleman. There are large companies sitting on large amounts of cash, and it is not right that smaller businesses in their supply chains should have to wait longer than 30 days to be paid promptly.

Medical Education and Research

6. What recent assessment he has made of the adequacy of his Department’s budget for medical education and research. (159357)

The Government are committed to well-funded medical education and research and to maintaining long-term funding in these areas. In 2013-14 we will spend £330 million on health education and £630 million on health research.

I thank the Minister for his answer. However, the chair of the Medical Schools Council has said that any move of this budget to the Department of Health poses a significant risk of undermining Britain’s leading position in health research and education. Will the Minister confirm that he will resist all attempts at Treasury short-termism and a move of the budget to the Department of Health, as this area is a driver of growth and a global strength for the UK?

It is a global strength for the UK, and that is why we have protected the Medical Research Council’s budget in real terms. Only last week we had the topping-out ceremony at the Crick institute—the opening of the new laboratory of molecular biology. On the particular issue that the hon. Lady raises, I cannot do better than to quote the Chancellor of the Exchequer, who said the other day:

“I give you an absolute commitment that I will do nothing that jeopardises that vital basic research that the Medical Research Council undertakes, and I would always make sure that that money is not used for other things.”

We cannot do better than that.

The Government have announced more university training places for medical students and doctors. This is a matter of some urgency given the wave of doctors who are due to come up for retirement and the fact that it takes seven years to train a doctor. Will my right hon. Friend update the House on this?

I know that my hon. Friend has a particular interest and expertise in this area. Of course, the number of students who come through for medical training is very carefully planned, taking account of the needs of the NHS for future doctors.

I am grateful for the Minister’s answer to my hon. Friend the Member for Walsall South (Valerie Vaz), but perhaps I could press him to go further specifically in relation to the potential moving of the Medical Research Council’s budget to the Department of Health. He will be aware that the chief executive of the Association of Medical Research Charities has described the proposed move as a “fudge” that will threaten the independence of medical research in this country. Does the Minister still believe in the Haldane principle, and if so, will he commit to keep the Medical Research Council under his Department’s control to ensure that it remains free of political interference?

I am happy to give the assurance that we are committed to the Haldane principle and it is important that medical research remains subject to it. That is essential for all parts of the science family. I can do no better than repeat the Chancellor’s assurance that we will make sure that the money is not used for other things, and that if there is any change the vital, basic research that the MRC carries out is not jeopardised.

Apprentices (SMEs)

7. What steps he is taking to ensure that small and medium-sized enterprises take on more apprentices. (159358)

We have made it easier and quicker for small businesses to take on apprentices by simplifying the process for employers. We have introduced an apprenticeship grant for employers. The National Apprenticeship Service has a dedicated team to provide bespoke services for small businesses and we are implementing the key recommendations of the Jason Holt review.

I thank the Secretary of State for his reply. I, like many hon. Members, am dedicated to promoting apprenticeships in my constituency, particularly in small and medium-sized businesses, but they are often very busy and hard to reach, so it is difficult to get across the message about what is available. Ironically, they are often the firms that would most benefit from an apprentice. Will the Secretary of State outline the specific measures available to promote apprenticeships and any support the Department can give hon. Members in doing so?

May I first anticipate the House’s disappointment that I am answering this question, rather than my colleague, the Under-Secretary of State for Skills, my hon. Friend the Member for West Suffolk (Matthew Hancock)? He is being a role model for our policy of shared parental leave and is currently nursing Humphrey Hancock, who was born a few days ago.

My hon. Friend the Member for Castle Point (Rebecca Harris) has seen the benefits of the growth of apprenticeships, which is one of the Government’s big success stories. The number has grown from 500 at the beginning of this Government to 870 at the latest count. My hon. Friend is right that there are particular obstacles for small business, but companies with fewer than 200 employees already take 80% of all the apprenticeships in the country. We are trying to improve the service. One of the latest developments is the introduction of a website to make it much easier to access the NAS and its services.

I am sure the whole House will wish Humphrey a speedy recovery.

The Opposition are not at all disappointed that the Secretary of State has stepped into the breach. Although his Department has achieved some success on apprentices, the construction industry is still falling behind its own targets. If we are to get the investment programme under way, it is vital to increase it. Will the Secretary of State give that some attention and get cracking with it?

I will. Indeed, at the beginning of the week I chaired a meeting of the construction industry’s council, which we have put together. Its members acknowledged that skills were one of their key constraints, one of the problems being that the construction industry has been through a very deep, cyclical depression, which has had a major knock-on effect on skills. We are now working with it to boost skills, so that the upswing in the industry that we are beginning to see is not impeded by the shortage of key people.


We are currently consulting on proposals to introduce a statutory code of practice and adjudicator for the pubs sector. The consultation closes tomorrow.

I thank the Secretary of State for that answer. In assessing the possibility of a code and adjudicator, will he take account of the experience of my constituents Peter and Sara Strawson of the White Horse in Quidhampton, who, like many others, though accepting the challenges of local competition and changing patterns of consumption, maintain that Enterprise Inns signed them up to a lease on a false prospectus and then, with a combined wet and dry rent footing, made their business completely uneconomic and unsustainable?

I think we all have such examples of publicans in our constituencies and it was that kind of experience that led to the Select Committee producing four reports on the subject. It also led to our seeking a voluntary code. In view of the lack of progress, we recommended a statutory code, on which we are now consulting. We have had about 6,000 replies, which is a remarkable response. I cannot yet assess the conclusions, but my hon. Friend’s example is fairly typical of many.

Like too many other landlords in Meon Valley, Angela Ryan, who until recently ran the White Hart pub in South Harting, has lost her battle to continue in business after facing unsustainable rent demands, again from Enterprise Inns. Will the Secretary of State assure me that he will do everything in his power to redress the balance between landlord and owner, so that such SMEs have a reasonable prospect of continuing in business and our rural communities may retain their valued pubs?

My hon. Friend’s example reinforces the general point that I made a moment ago. I cannot pre-judge the outcome of the consultation and we have not yet studied the responses. The Government’s overriding objective is to achieve fair treatment for publicans in respect of rent and beer prices. I think that the mechanism that we have proposed will survive scrutiny.

The Secretary of State will be aware that there was a huge Fair Deal For Your Local rally in Parliament recently. It was attended by Members from all parts of the House who support Labour’s view that a statutory code for pub companies must include a mandatory free-of-tie option to hardwire fairness into the system. Is a fairer distribution of risk and reward an objective of the Government’s regulation?

It is an objective of our regulation to achieve a fair distribution of risk and reward. As I have said, the precise mechanism and whether we proceed with the adjudicator in the way that we have suggested very much depend on how we analyse the consultation. The results will of course be discussed in the House.

Yesterday’s news about Punch Taverns’ unsustainable debt and its row with the committee set up by the Association of British Insurers shows that the securitised pubco scam is a disaster not just for local pubs but for the British economy. Will the Secretary of State listen to the Business, Innovation and Skills Committee, the Federation of Small Businesses and the Forum of Private Business, all of which back Fair Deal For Your Local and the obvious solution, which is the market rent-only option?

We have listened to those three bodies and to many other people, and we are sympathetic to their concern. However, the precise mechanism that is adopted—I am sorry to be repetitive—depends on the results of the consultation.

Small and Micro-businesses

I announced last week that we will extend the exemption from burdensome new regulation to firms with up to 50 staff, and that will continue after 2014. Our growth accelerator scheme has supported more than 6,000 small businesses with high growth potential. We are encouraging more businesses to exploit export opportunities, and UK Trade & Investment is on track to double the number of SMEs it supports to 50,000 by 2015.

Although I welcome the Government’s initiatives to date, given the importance of small and micro-businesses to the economy will Ministers use their influence to push for further tax incentives to encourage growth and employment? After all, cash flow is king for such businesses and history suggests undeniably that financial payback does not take too long to come around.

As my hon. Friend knows, the Government are making the tax system in the United Kingdom the most competitive in the G20. In 2011, we reduced the small companies rate to 20%. More than 1 million employers will benefit from the new £2,000 employment allowance from next April and nearly 500,000 employers will pay no employer’s national insurance contributions at all from that date.

Royal Mail

10. What progress he has made on making shares in Royal Mail available to its employees; and if he will make a statement. (159362)

16. What progress he has made on making shares in Royal Mail available to its employees; and if he will make a statement. (159370)

We are designing an employee share scheme that will honour the commitment made by Parliament in 2011 that 10% of Royal Mail shares should be reserved for employees. We are still considering the details, but it is very much the Government’s intention to make the offer attractive to employees, while balancing the overall value for money for the Government and the interests of other stakeholders.

John Lewis, under the inspired leadership of Andy Street, who I should declare is a friend of mine, is synonymous with quality and service. Does my right hon. Friend agree that John Lewis, which uses the mutual model, might provide an appropriate model for the privatisation of Royal Mail?

As the hon. Gentleman will know, we are currently considering the way the privatisation proceeds, and we have committed to Parliament that 10% of shares will go to employees. There are different ways of doing that and we have not prejudged exactly how it will occur. I remind the hon. Gentleman that this is the largest worker share ownership in any privatisation that has occurred, and it will be the largest for several decades.

More than 90% of BT’s employees registered to participate in shares when the company was privatised. Does my right hon. Friend agree that everybody in this House, and outside, should encourage as many Royal Mail employees as possible to participate in and benefit from shares from a sale?

I totally agree with my hon. Friend. We wish to work with employees, and particularly the union that represents them. My colleague the Minister of State, the right hon. Member for Sevenoaks (Michael Fallon), and I have regular conversations with that union, and wish it to be positively engaged with the share sale process.

Will the Secretary of State tell the House how much will be paid in commission to banks or handling agencies for the sale of those shares to people who are buying things that they actually already own?

The process will be competitive, as is right, and designed to achieve value for money for the taxpayer. As the right hon. Gentleman will know, it is practice to enclose details of those fees in the prospectus, and he will see that in due course.

I am sure the whole House will wish to join me in congratulating all Royal Mail staff for producing a doubling of profits this year, and we send our best wishes to the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), for a speedy recovery.

The Minister of State, the right hon. Member for Sevenoaks, who I am surprised is not answering this question, is seen as a fire fighter in Government, but rather than putting out the fire at Royal Mail, he has lit the fuse and put the fire sale signs up. He is, of course, rushing that through to spare the blushes of his Chancellor, who is borrowing £245 billion more than he said in 2010 and is desperate for pre-election cash in the coffers. The Minister signed a letter in 2009 in which he said he was opposed to privatisation, so why are the Government now rushing a sell-off that is opposed by right-wing think-tanks, the unions, the National Federation of SubPostmasters, small businesses, the Liberal Democrats, and people up and down this country who will receive a poorer postal service as a result?

The Opposition have a strange but perhaps rather revealing idea of speedy decision making. The process of bringing private capital into the Post Office started in 2008 under my Labour predecessor. It was one of our first pieces of legislation—I introduced it in the House, it was agreed, and we are now following through in an orderly way designed to get good value for the taxpayer and a good outcome for Royal Mail.

High Street Businesses

High streets are changing and the Government are committed to helping communities adapt their high streets to those changes. We have taken action following the Portas review by lifting planning restrictions, doubling small business rate relief, and providing towns with a package of support to drive forward their local economy. I look forward to giving evidence to the Business, Innovation and Skills Select Committee inquiry into retail in due course.

High streets obviously need to provide a diverse offer in order to succeed, and the provision of street markets and farmers markets are particularly important to many high streets. There is a significant problem in a number of areas because we cannot get road closure orders to allow such markets to go ahead. What work is the Department doing, together with the Department for Communities and Local Government, to ensure that markets thrive, and what will the Government do to develop a market strategy?

I hope that the hon. Gentleman, like other hon. Members, will support his local market. I had the pleasure of supporting Sevenoaks local market last month, and there is an initiative across the country—love your local market—in which I hope he is participating. I will look into the particular point he raises about highway closures.

In my constituency, a number of businesses in the high street have unfortunately closed. If they go into liquidation, their employees receive pay arrears, holiday pay and notice pay, if necessary from the national insurance fund. If the business just ceases trading and is eventually struck off, its employees do not get pay arrears, holiday pay or notice pay. Will the Minister meet me to discuss that anomaly in the law?

I would be happy to do so, but I hope my hon. Friend will not be too gloomy about the state of the high street. He will know that, in the most recent year for which we have figures, some 22,900 store-based retailers opened and 21,000 closed—more stores were set up than were closed.[Official Report, 18 June 2013, Vol. 564, c. 3MC.]

Is it not time that we looked at the impact of business rates on the high street, and particularly at the glacial speed of appeals and revaluations?

My hon. Friend will know that we have doubled the small business rate relief for the past three and a half years, which has helped more than 500,000 businesses. In the Growth and Infrastructure Act 2013, we postponed the revaluation to give businesses more certainty—a larger number of them were forecast to lose under the revaluation than would have gained.

Does the Minister agree that the prospects for our high streets would be a lot rosier if local authorities did more to encourage motorists into our town centres by reducing parking charges?

I agree with my hon. Friend. We must get the balance right. It is important that local authorities do not freeze trade out of their local high streets. One action we have taken following the Portas review is to encourage local authorities to look at the total local economy and ensure that there are not undue restrictions on encouraging people to come into the high street.

Female Entrepreneurs

Women play an important role in growing our economy. We commissioned the Women’s Business Council to investigate how we can help remove barriers and maximise women’s contribution to economic growth. Following its excellent report last week, the Government will publish an action plan this autumn that will improve web-based support for entrepreneurs. We will work with the British Bankers Association to improve women’s awareness of the financial support available.

If women set up businesses at the same rate as they do in the US, benefits of up to £42 billion could be delivered to the economy. When I recently organised Start-up Challenge seminars for women in my constituency, they were full of excellent, enthusiastic and dynamic women who were keen to be entrepreneurs. What more can we do to stretch out to those women and encourage more of them to be great entrepreneurs for the country?

If women were setting up and running new businesses at the same rate as men, we would have an extra 1 million female entrepreneurs in this country. Despite progress in recent years, women remain less likely than men to start a business, so we have more to do.

The Secretary of State has recently made a number of welcome speeches in support of women in engineering, enterprise and the boardroom, but unfortunately, they are not matched by action from his Government. Why, for example, has the number of investments by the Aspire fund, which was set up specifically to support women-led businesses, fallen under his Government to a quarter of what it was under the previous Government?

Forty per cent. of start-up loans have been taken up by women, which is an important advance. In the two-month period from 1 March, 12% of FTSE 100 board appointments and 40% of FTSE 250 board appointments were secured by women.

Export Week

Export week was launched by my colleague Lord Green in May and included over 80 events across the UK, attended by more than 3,600 businesses focusing on 20 high-growth markets.

As chairman of the all-party group on Azerbaijan, I attended the Caspian oil and gas conference, where BP announced its further development of the Shah Deniz gas field. What action can the Government take with UK Trade & Investment further to expand British trade with Azerbaijan in order to address the concerns of the governor of Ganja, it’s second city, that, although German, Dutch and French companies are bidding for major infrastructure contracts there, no British companies are involved?

We are absolutely aware of the international export opportunities presented by major infrastructure projects and are strengthening the commercial role of our embassies in key target markets such as Azerbaijan to ensure that we secure a fair share of those contracts.

I attended one of the 80 events, in Derbyshire in the east midlands. There were fewer than 100 people there, and not one from my constituency. UK Trade & Investment has been given additional funding. Will my right hon. Friend explain what it is spending that funding on, and why it is not reaching out? It is all right exporting from the south of the country, but we need to look to the midlands and the north too.

My hon. Friend is absolutely right on the importance of reaching out to businesses in her constituency and across the midlands. Indeed, we are trying to strengthen the ability of chambers of commerce located in our key target markets to communicate with small and medium-sized enterprises back home. We are specifically helping smaller companies with the cost of going to their first international trade fair, as not enough of them take that important opportunity. We are seeing the benefits, with exports to target markets up by 49% in Brazil, up 130% in Russia, and up 60% in India.

Green Investment Bank

The state aid approval obtained in relation to the green investment bank enables it to make investments on commercial terms across the following green sectors: offshore wind; waste processing and recycling and energy from waste; non-domestic energy efficiency; the green deal; biofuels for transport; biomass power; carbon capture and storage; marine energy; and renewable heat.

I thank the Secretary of State for that answer, and I congratulate him on getting the bank operational so quickly. However, he will know that under the terms of the EU state aid clearance a number of low-carbon technologies were excluded, including nuclear supply chain and solar, and that carbon capture and storage was regarded as low priority. Does he have any intention of going back to the EU and asking for the clearance to be amended, so that the bank can more closely follow the purpose set out in the Enterprise and Regulatory Reform Act 2013?

I am grateful to the hon. Gentleman for acknowledging the progress we have made. Our first priority is to ensure that the institution makes good use of the £3 billion of Government capital that is now being deployed alongside private capital. We are making good progress in that respect—something in the order of £700 million has been committed. He raised the matter of a wider scope for the bank. He anticipates the answer; we would have to go back to the European Commission and seek state aid approval. I do not currently have any plans to do that.

Business Bank

The business bank will tackle long-standing market failures in the provision of finance to small and medium-sized businesses. I expect the business bank to be fully operational in 2014, subject to EU state aid approval. Its programmes are being operated from the Department for Business, Innovation and Skills as an interim arrangement to help businesses straight away, including the £300 million investment programme launched in April.

I thank the Secretary of State for that answer, but in December 2012 he told this House that the business bank was already established. In fact, as he has just said, it is really operating with a re-named group of civil servants from his own Department. What assurance do we have that it will become a bank by 2014, or ever?

I do not know whether the hon. Lady is suggesting somehow short-circuiting the whole state aid approval process. The last I heard, the Labour party was committed to the rules of the European Union. If it wants to break them, it should perhaps make that explicit. In the meantime, we operate within the rules and that means we have a team of professional people—they are not civil servants; they are from the financial sector—who are doing an admirable job and are already out in the market with a heavily oversubscribed offering which we hope to see deployed very quickly.

Heseltine Review

19. What discussions he has had on taking forward the recommendations of Lord Heseltine that regeneration funding be devolved to local enterprise partnerships. (159373)

I have regular discussions. As our response to Lord Heseltine’s report made clear, the Government will be creating a single local growth fund for local enterprise partnerships from April 2015, which will include housing, transport and elements of skills funding. The size and content of the single local growth fund will be confirmed at the spending review.

On 18 March, the Treasury accepted Lord Heseltine’s proposals on devolving regeneration funding to local enterprise partnerships from 2015, but in late April the Business Secretary briefed journalists that we will not be going down that road. Will the Minister tell us whether the Business Secretary backs the Government’s plans to implement Lord Heseltine’s recommendations by 2015?

My right hon. Friend certainly does so. It is up to local leaders in each local enterprise partnership to identify their growth priorities and to set them out in their local economic strategies, and those growth strategies might well include regeneration. The hon. Lady will know that Humber has the largest enterprise zone in England. It has already had some £50 million of assistance from the regional growth fund and is well placed to exploit the opportunities arising from offshore renewable industries, as I saw when I met the partnership there earlier this year.

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.

Given the importance of further education colleges, such as the award-winning and hugely ambitious Middlesbrough college in my constituency, in helping people acquire the skills they need for local job markets, will the Minister explain to the House what work his Department has done to encourage local enterprise partnerships to work more closely with colleges?

The Department has given a clear remit to local enterprise partnerships to work on raising skills in their areas. It is obviously important that they work with further education colleges, and in our legislation in 2011 we removed much of the red tape and regulation that had prevented further education colleges from contributing to that.

T2. The Secretary of State is right to say that he cannot comment during the consultation and to urge as many people as possible to take part in the BIS consultation on pubcos by tomorrow, but does he agree that the evidence supplied to him must be accurate and honest? Given that in the past week we have had a dishonest and untruthful statement to MPs and the Select Committee from both the chief executive of Enterprise Inns and the chief executive of the lobbying organisation for pubcos, the British Beer and Pub Association— (159379)

Order. The hon. Gentleman will resume his seat. Topical Questions must be brief. The hon. Gentleman has had one opportunity already. There is a lot to get through and there are other colleagues to consider.

I pay tribute to the work that my hon. Friend has done on the pubs issue. He has played a significant part in influencing the House’s thinking on it. I am sure he appreciates, however, that I would get into difficulty if I started talking about serious people in the industry being dishonest and untruthful. I will not go down that road.

In the US, small business Saturday takes place immediately after Thanksgiving, on one of its busiest shopping days of the year, and celebrates small businesses’ contribution to local economies and encourages people to shop in them. It has proved to be very successful. A grass-roots movement of organisations, including the Federation of Small Businesses, representing hundreds of thousands of small businesses, has formed to make a UK small business Saturday happen later this year. Will the Secretary of State lend his support to this initiative, which aims to give a boost to the country’s small businesses?

I will do whatever I can to boost the cause of small business. I was with the Federation of Small Businesses at the beginning of the week addressing many of those issues. In my earlier answers, I explained what we were doing for small business in respect of trade, apprenticeships and the business bank, and the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), has talked about deregulation. It is a very wide agenda and we are delivering those aims.

One of the things that small businesses find most objectionable is the perceived preferential treatment that they see some large companies getting from Her Majesty’s Revenue and Customs, in contrast to the heavy-handed treatment that small businesses sometimes receive. If HMRC is to clamp down on tax avoidance by large companies, which the Secretary of State says is a Government priority, transparency is key. Under the Companies Act 2006, large companies are obliged to disclose details of foreign subsidiaries to Companies House, but it appears that the latter is not properly enforcing these requirements. In March 2011, the Business Secretary said that he would carry out—

Order. What we need is a question, with a question mark—just one sentence. We have a lot to get through.

It has happened; I have conducted it. The problem is very simple: roughly 4 million accounts are registered with Companies House and scrutinising all of them in detail is difficult. I have asked Companies House—it is now doing this—to ensure that the returns of the top-350 companies are analysed in detail for errors. If there are errors, our experience so far has been that they are very speedily corrected.

T3. Does the Secretary of State welcome Stockport council’s fund to assist private businesses in setting up apprenticeship organisations and schemes? Next time he comes to Stockport, will he agree to meet some of them? (159380)

I have visited Stockport on several occasions. It has been an excellent council over the years, and my right hon. Friend works effectively with it and on Stockport’s behalf. I always try on my regional visits to meet apprentices and small companies providing them, and I would be happy to do that next time I come to Stockport, which I think will be quite soon.

T6. The Secretary of State will have had representations from high energy-intensive users in manufacturing, such as the chemical industry in my constituency, about rising energy prices and energy policy and their impact on its competitiveness. Has he raised those concerns with his colleague the Secretary of State for Energy and Climate Change? (159383)

The hon. Gentleman and his colleagues have quite rightly raised this issue on many occasions. There is an issue of price competitiveness for industries such as steel and aluminium, and we have addressed their concerns. He will know that the Treasury has funded a compensation scheme. We have been through a consultation process. Payments will be made quickly in respect of the European Union emissions trading scheme. The Secretary of State for Energy and Climate Change has also made a commitment to ensuring that the electricity market review implications do not fall on energy-intensive industries.

T4. It is one thing the Government not following through on their promises to tackle plastic waste in this country, but what on earth was my right hon. Friend doing complaining to the EU about Italy’s plans to ban or phase out the use of single-use plastic bags, and why was the Department for Environment, Food and Rural Affairs not even consulted, given that it is one of its policy areas? (159381)

The Italian proposal would allow for only biodegradable bags, so would discriminate against British businesses that sell similar recyclable or other forms of degradable bag—for example, oxo-degradable plastic bags, with which I am sure my hon. Friend is familiar.

T8. If the Secretary of State finds himself before the Star Chamber, will he bear in mind that unemployment in the west midlands is rising and the rate of employment is falling? Will he therefore resist any cuts that further threaten the growth potential of small businesses and research and development across the west midlands region? (159386)

I am frequently in the west midlands; I was in Coventry last week discussing these issues with the local enterprise partnership. My understanding is that there has been rapid growth in private sector employment in the west midlands and many other parts of the country, and, as the hon. Gentleman will have seen from yesterday’s figures, unemployment is still falling.

T7. The late payment of commercial debt regulations provide for a 60-day payment period, unless agreed and not grossly unfair. Will Ministers consider a longstop date of 90 days to give small businesses certainty? (159384)

I know that my hon. Friend has continued to raise the case of Mr and Mrs Langstaff in his constituency. The “Insurance: Conduct of Business” rules require insurers to handle claims promptly, and redress is available through the Financial Ombudsman Service if they do not do so. I note that a number of insurance companies have now signed the prompt payment code.

What assessment has the Minister made of the take-up of post-24 advanced learning loans and the potential impact on further education colleges’ finances?

We are absolutely committed to ensuring that such loans are taken up. We are very much looking forward to ensuring that they help to spread training opportunities for adult learning, to which we have a clear commitment.

I know that my right hon. Friend is aware of the concern about the future of northern museums, including the Museum of Science and Industry. Will BIS Ministers discuss with colleagues in the Department for Culture, Media and Sport how best we can protect the future of our science museums, which are so important in encouraging young people into careers in science?

We absolutely understand the importance of science museums and the communication work that they undertake, and of course we recognise their significant role.

A report from Sheffield Hallam university shows that Merseyside’s local economy will lose a staggering £847 million—that is, two years and five months’ worth of economic growth—as a result of the Government’s cuts to welfare support. What discussions are Ministers having with colleagues in the Department for Work and Pensions about the impact on regional growth?

We do not recognise those numbers. There is a significant resurgence of activity in many successful companies in Merseyside, as there is in the rest of the economy.

The resurgence of the motor manufacturing industry has had a tremendously positive effect on the supply chain across the west midlands, but further growth in that supply chain is now being challenged by the lack of available skills. Will my right hon. Friend tell me what more he can do to address that pressing problem?

This is a pressing problem right across the automotive industry and other engineering industries, and it has to be attacked on a number of fronts, including through more investment by the Department for Education to encourage more children to take up science, maths and technology, and through industry itself getting more involved in the employer ownership pilots and opening up its premises so that people can see the kinds of rewarding career that are now available in manufacturing and engineering.

I am sure the Secretary of State will have noted that, while unemployment fell by 5,000 this week across the UK, it rose in the north-east of England by 4,000 to 131,000. That means that 10.1% of our working population, and 24.9% of our young people, are now unemployed. Will he meet me and other colleagues to discuss how we can alleviate that individual suffering and unleash the potential of the north-east economy?

The hon. Gentleman is right to say that there are particular problems in the north-east of England, but they are far from new. I was in his constituency a few weeks ago when I visited Durham and Tyneside. The great potential of the north-east is that it is a major manufacturing area of the UK with a strong export intensity. If we can achieve the rebalancing of the economy, as we are determined to do, the north-east could be one of the main beneficiaries. I am happy to meet him to talk further about that.

The Government are having a really successful run-up to this year’s G8; $4.5 billion was pledged for global malnutrition last Saturday and there has been a highly successful science summit this week. Will the Science Minister update the House with further details of the science summit?

We had an excellent summit of the G8 Science Ministers at the Royal Society yesterday. We agreed that new global challenges such as antibiotic resistance needed to be tackled, and we committed ourselves to the publication of research and data that are publicly funded.

A delegation from the Confederation of Indian Industry visited the UK this week. What is the Secretary of State doing to support economic partnerships between Britain and India, and how does he envisage their driving growth in the UK?

The Confederation of Indian Industry was in the Department at the beginning of this week to make the case for the deepening of the relationship, and that is proceeding well. Unfortunately, we are starting from a low base, as Britain’s share in the Indian market is not as great as it could be. The one really big success story is Indian investment in the UK, which is growing rapidly. That includes our largest manufacturing company, Tata, which is highly successful and a very valuable corporate citizen. We are doing all we can to develop that relationship.

Further to the question from the hon. Member for Manchester, Withington (Mr Leech), and given the importance that this Government have placed on science, is it the Department’s intention to play an important role, in conjunction with Ministers from the Department for Culture, Media and Sport, in securing the future of the three northern museums in the Science Museum Group, particularly the National Media museum in Bradford, which is crucial to the local economy in the Bradford district?

We understand the importance of those museums. They are the responsibility of DCMS, and that Department is well aware of the significant role that they play, particularly in attracting young people and getting them interested in science and technology.

Earlier this year, my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), my right hon. Friend the Member for Knowsley (Mr Howarth) and I decided to use a survey to investigate zero-hours contracts. The Secretary of State has now followed us. Hopefully I can help by asking him whether he will now look into the situation of the 37,000 people on zero-hours contracts whom the Government estimate to be working in the care sector in the north-west.

We do indeed have anecdotes about abusive practices in that area. We also have a lot of other anecdotes to show that the system works very well for a large number of workers and companies. I am not jumping to any conclusions; I am just trying to gather the facts. I should add that the zero-hours contract system continued under 13 years of the Labour Government and that no Labour Minister thought that there was a problem with that.

I thank the Minister for Universities and Science for his visit to the university of Worcester last week. Does he agree that the magnificent new library, the Hive, which was delivered in conjunction with local city and county councils, is a shining example of creative collaboration between universities and the local government sector, which other universities should follow?

It was an excellent visit, and the initiative for a new joint university and city library was indeed striking. It is an initiative from which other cities across the country can learn.

The Secretary of State will know of the campaign launched by the Cutlers company, supported by the Sheffield Star and with wide support across the city, concerning the threat posed by the red tape challenge to controls over the use of the name Sheffield. In response to the campaign, the Deputy Prime Minister has indicated that the protected name status for Sheffield will be retained. Is that correct?

I will certainly have a look at that. It was a point made to me on Tuesday when I had the pleasure of addressing the stainless steel annual conference and celebrating the 100th anniversary of Harry Brearley’s invention of stainless steel.