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Business, Innovation and Skills

Volume 569: debated on Thursday 24 October 2013

The Secretary of State was asked—

Small Business

We are doing more than ever to support small business. More than 7,000 start-up loans have been drawn down since the scheme’s launch in September 2012. Over the past year, UK Trade & Investment has helped 31,800 businesses to export, the growth accelerator scheme has supported more than 9,000 small businesses, and the regional growth fund has helped a further 3,000.

I am grateful to the Secretary of State for that answer. Will he clarify how many businesses have been backed by the Government’s start-up loan scheme, and are there any plans to extend it further?

We estimate that something of the order of 7,000 start-up loans have been drawn down since the scheme’s launch in September 2012, a significant number of them in the hon. Gentleman’s constituency. To sustain it, we have made available an extra £34 million from September, to bring the total to £151 million.

Business creation is on the up and unemployment is down by almost 30% in Selby and Ainsty since the election. However, many small companies are struggling with crippling business rates. In some cases, rates are almost the cost of the rent they are paying. What can the Government do to encourage local councils to engage with small businesses to assist them with their rate costs?

The hon. Gentleman is right that the trend is a positive one. Half a million small businesses currently get rate relief and a third of a million pay no rates at all. Under recent changes whereby local councils give discounts, as they are now encouraged to do, half of that will come from the Government.

Arthouse cinemas such as the Cambridge Arts Picturehouse are much smaller and completely different from massive chain multiplexes. Despite this, the Competition Commission wants to force the sale of the excellent Cambridge Arts Picturehouse. The Leader of the House said in response to a question I asked that

“there is no cause for the Competition Commission to seek to intervene”.—[Official Report, 10 October 2013; Vol. 568, c. 314.]

Will my right hon. Friend the Business Secretary talk to the Competition Commission and encourage it to work on real local monopolies and not this issue?

As an avid cinema-goer and, indeed, someone who used to go to that cinema, I have some sympathy with my hon. Friend, but the process is this: the Competition Commission has come to a resolution and the next step has to be to go to the Competition Appeal Tribunal. I suggest to my hon. Friend that, since the Cambridge law faculty has some of the best minds in the country, including that of his predecessor, it may want to take on this issue on a pro bono basis.

Having run a small business, I understand exactly the burden of regulation that small businesses have to deal with, and I know how pleased small businesses in Rugby are about the Prime Minister’s commitment to make this Government the first in history to cut the overall amount of regulation. Will the Secretary of State confirm that his Department will lead the efforts to cut burdens that hold back small businesses from growing and taking on more staff?

We are totally committed to that task. Under the red tape challenge—the one in, two out system that my colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) is leading admirably—we estimate that we have probably already saved business about £1 billion a year, and there is a commitment to extend that process.

What discussions has the Secretary of State had with his Government colleagues about the impact of energy prices on small businesses? Does he support the Prime Minister’s call for a cut in green taxes? Does he support the call by my right hon. Friend the Member for Doncaster North (Edward Miliband) for a price freeze? Does he support Sir John Major’s call for a windfall tax? Or is he in favour of doing nothing at all?

We have made it clear that doing nothing is not an option. We fully understand the implications of rising energy costs for business, particularly energy-intensive businesses. We have framed compensation arrangements and payments have already been made under the European Union emissions trading scheme, and state aid approval is now being sought for compensation for the carbon price floor for energy-intensive companies.

A great deal has been done at central Government level to ensure that we reach our target of 25% of Government contracts going to small and medium-sized enterprises. Considerable progress has been made in reducing the bureaucracy of pre-qualification questionnaires. The problem remains at the decentralised level—local government, hospitals and so on. Efforts will be made through legislation to simplify that process.

The No. 1 issue for small businesses in my constituency is the high level of business rates. I urge the Secretary of State and his ministerial colleagues to support our proposal for a business rate cut, followed by a freeze.

As I have said, there is an extensive programme of business rate relief, which extends to half a million companies. That is a very good programme, but there is an issue with how we will continue to pay for it, given the many other claims on Government spending.

May I press the Secretary of State further on business rates? Does he not recognise that in his constituency, as in mine, businesses are raising the issue of the rising cost of business rates? Businesses in my constituency welcome the proposal to save them £450 by cutting and freezing business rates. Would that not be welcomed in his constituency?

I am aware of this problem in the town centres of my constituency, and I am sure that it is a problem across the country. I repeat that there is an extensive programme of business rate relief. The Government have given local councils the freedom to offer discounts on business rates and we provide a 50:50 matching contribution.

Labour is the party of small business—[Laughter.] Conservative Members may laugh, but their party believes that a business that has 300 members of staff is not that large. That shows how out of touch they are. Some 99% of businesses are smaller than that.

Under this Government, 1.5 million businesses have seen business rates rise by an average of £2,000. Our plan to shelve the Government’s 1% corporation tax cut in 2015 and direct all that money towards reducing business rates has won support among organisations from the Federation of Small Businesses to the British Retail Consortium. Does the Secretary of State not realise that many businesses are being crippled by business rates? Why does he not just follow our lead and end the business rate nightmare now?

The hon. Gentleman seems to have forgotten the record of the last Government. I distinctly remember that in one of the last pieces of legislation that I dealt with in the previous Parliament, the Government started to impose business rates on empty property. That was a few months before the collapse in the commercial property market.

Royal Mail

2. How many and what proportion of employees of Royal Mail opted out of the allocation of free shares. (900669)

Of the approximately 150,000 employees who were eligible for free employee shares, only 372 opted out of the scheme. Therefore, 99.75% of employees have accepted the shares that we offered them.

Is not the number of posties who have opted out of the scheme remarkably low? Despite the threats of industrial action and union militancy, is it not clear that the vast majority of Royal Mail employees have accepted the invitation from Her Majesty’s Government to take part in the biggest employee share scheme of any major privatisation?

Yes, it is a very positive story. The engagement of almost every employee of Royal Mail is extremely encouraging. I seem to remember that under the last Labour Government we lost in the order of 2 million working days through industrial action in every single year. This is a big change for the better.

May I remind the Secretary of State that before this privatisation every one of my constituents had a share in Royal Mail? It has been revealed that only a tiny number of people in most constituencies now have any shares at all and that the Prime Minister’s hedge fund friends own a lot of them.

On the contrary, the share register is dominated by large long-term institutional investors, most of whom hold the savings of millions of our citizens.

This afternoon, I am due to meet for lunch that great Welsh export and one of the world’s best rugby players, George North. As the Secretary of State knows, George North was bought by Northampton from the mighty Scarlets at a very reasonable price during the summer. Does he think that the hedge funds feel the same as Northampton Saints, because they have acquired the Royal Mail crown jewels at a cut price?

No; in fact, the offer was framed in such a way as to ensure that the shares were acquired predominantly by long-term institutional investors. A few hedge funds are involved and, indeed, some hedge funds take a long-term view.

Many small businesses and consumers across the country rely on local delivery offices such as the one in Feltham to pick up parcels and important letters. Will the Secretary of State confirm that there is nothing to prevent Royal Mail from selling off its local properties across the country and moving them to out-of-town locations that will be far more difficult to reach?

I think I know the sorting office that the hon. Lady is talking about, because it is the one that serves my constituency. It was rebuilt and re-equipped three years ago, I believe, so it is wildly improbable that the Royal Mail will now want to sell it.

Adults: Skills

It is our priority that all adults throughout England have the English and maths that they need to build successful careers and support their families. We have put English and maths at the heart of our schools reforms and fully fund basic English and maths courses for adults who lack those skills.

I am grateful to my hon. Friend. Will he join me in congratulating Swindon organisations such as Uplands Educational Trust and Enterprise Works that are providing training and support opportunities to adults with disabilities? What plans does he have to ensure that that provision can be enhanced and increased?

I am delighted to hear about creative enterprises such as Enterprise Works and Uplands Educational Trust in Swindon. I know that for many people with disabilities, school or adult education is a rewarding experience that helps them gain life skills. My hon. Friend is a passionate and effective champion of that, and I look forward to talking to him in more detail about those enterprises and others to ensure that we support disabled people as much as possible.

I know that the Minister will be as concerned as I am that unemployment among young adults is still more than 1 million, and that the number of apprenticeships among adults under the age of 19 is now below the level in 2010. Can he assure the House that in the next set of figures the number of apprentices under the age of 19 will increase? While he is at it, will he explain why he voted against Labour’s plans to use the power of public procurement to increase precisely those vitally needed apprenticeships?

Of course we do use public procurement to increase the number of apprenticeships, not least in Crossrail, which is the largest public procurement and construction project in Europe at the moment. It is true that we had to take action to remove some low-quality provision in the 16-to-19 space when we introduced rules to ensure that every apprenticeship was a job, which it had not previously been. I would have thought that the right hon. Gentleman would welcome the improvement in quality. We also have a programme in hand to increase the numbers. Participation in apprenticeships is at the highest level ever, which I would have thought all parties would be able to support.

Young adults in north Northumberland who have left school without the basic skills to which the Minister referred do not have ready access to further education, because there are no college facilities within a reasonable distance of them. Will he work with potential providers to ensure that the gap is filled?

I have visited Northumberland college, which serves my right hon. Friend’s constituency, and it is an impressive institution. Of course, it is important to ensure that adult skills are available throughout our country, and as the recent OECD study showed, spreading English and maths skills is vital to ensuring not only that we can improve our competitiveness as a country but, most importantly, that we can allow everybody to participate. Improving technologies in teaching will help, but we must ensure that there is access to basic skills throughout the country.

Green Investment Bank

The UK Green Investment Bank has a total of £3.8 billion of funding to finance green projects in sectors within its approved remit, and to date it has committed £714 million, including for waste recycling facilities, energy from waste plant, offshore wind farms and energy efficiency projects.

I thank the Secretary of State. It is impressive how quickly the bank has got up and running. However, the scope envisaged during the Committee stage of the Enterprise and Regulatory Reform Bill, and indeed in the Bill’s green purpose, included low-carbon industries such as the nuclear supply chain. I understand that that did not get EU state aid clearance. Are we going to appeal against that so that we can go back to the original mandate?

The hon. Gentleman is right that European state aid restrictions mean that the sectors involved are narrowly defined, and I understand his concern for the nuclear industry supply chain. However, following the announcement of the new reactor this week, and the commitment by the companies involved to provide more than 50% of procurement to British companies, the nuclear supply chain has a really excellent future anyway.

The UK Green Investment Bank has indeed been a success so far and part of its success is in bringing in co-investors from the private sector for projects that it supports. Although I do not expect the Secretary of State to admit this, he will know that the Prime Minister’s announcement yesterday of a review of green taxes has already thrown up uncertainty about long-term investment in the green economy. Does the Secretary of State recognise that if the Government are prepared to give long-term price guarantees to new nuclear, they should also give long-term security to the whole green economy?

I thank the hon. Gentleman for his positive comments. He is absolutely right: for every £1 the UK Green Investment Bank puts in, something in the order of £4 of private funding goes in parallel with it. I agree that if we are going to get long-term investment in renewable energy there has to be stability in policy.

Minimum Wage

I am asking the Low Pay Commission to consider what conditions would be needed to allow the minimum wage to rise in the future by more than current conditions allow and without damaging employment.

As the Government are supporting hard-working people, does my right hon. Friend agree that we should help lower earners more by raising the minimum wage—by adding regional minimum wage top-ups, increasing the threshold for national insurance or taking people who get the minimum wage out of tax altogether?

I commend the hon. Gentleman for the work he has done on low pay. Indeed, I think he is a member of the Prospect union and has campaigned for the work force in his constituency. I think that the best way forward is the one that we have chosen: lifting the personal allowance, which has so far taken 2.7 million people out of tax. As a consequence, almost 40% of adult minimum wage workers have seen real increases in their take-home pay since 2010.

University Students: Liverpool

We have placed increased responsibilities on universities to widen access. Universities and colleges plan to spend more than £700 million a year by 2017 on broadening access, and our highly successful student finance tour is running again this year, providing students and parents with information about the student finance available.

The Minister will be aware that we face a difficult task in attracting people from deprived areas in Liverpool to universities and that we also face a challenge in retaining students who have graduated from higher education institutions. What steps does he plan to take to make it more attractive for graduates to stay in the city of their learning?

We are seeing an increase in the percentage of people from deprived areas who are applying to university and last year saw a national record overall. The figures in the Liverpool local authority area also show continuing increases in the percentage of people from poorer backgrounds applying to go to university. Of course, one of the great attractions of having a leading university in the city is that many graduates then stay.

The question is purely on the subject of students from Liverpool, not elsewhere in the north-west. If the question is about Liverpool, it is in order. If it is not about Liverpool, it is out of order.

Will the Minister join me in welcoming the fact that 16% of students from Liverpool go on to the top Russell Group universities, making it one of the top 10 local authorities in the country?

I absolutely agree with my hon. Friend and congratulate him on his commitment, particularly to education as it affects Liverpool.

When I visited Liverpool to do some work for the Government on access to education, I was clear that one thing that students there wanted was the opportunity for scholarships to help with living costs. Will the Minister update us on the roll-out of the scholarship programme for young people from deprived backgrounds in Liverpool and elsewhere?

We have been able to help people from deprived areas in Liverpool and across the country through the fact that the combination of the value of the maintenance grant and the maintenance loan is higher now for people from poorer backgrounds applying to university than it ever was before.

Royal Mail

The universal postal service is protected under the Postal Services Act 2011. The service is unaffected by the sale of Royal Mail and can be changed only with the agreement of Parliament.

Does the Minister share my concern that following the fire sale of Royal Mail, private hedge fund shareholders will no longer be prepared to fund the not-for-profit universal service obligation?

The hon. Gentleman should be aware that that is not an option for Royal Mail, which remains the universal service obligation provider, and it is the duty of Ofcom as regulator to ensure that it complies with that obligation. If any future changes are to be made, it is up to Parliament to agree to it, and I do not see that happening. In fact, we go beyond minimum EU requirements in having a six-day-a-week universal service delivery.

Does the Minister share my regret at some of the scare stories that were put round by campaigners against privatisation, and will she confirm that the Ministry of Defence pays for Royal Mail post overseas to forces, not Royal Mail?

My hon. Friend is quite right to say that it is unhelpful when scare stories are put out. For example, free services for the blind are included in the universal obligation and will continue. As he rightly says, free mail for the armed forces is funded separately by the Ministry of Defence, which will continue with that. There is no need for people to be scared by those kinds of stories, which were unfortunately put out by some critics of what is happening.

The Minister needs to talk to her colleague, the Minister for Skills and Enterprise, the hon. Member for West Suffolk (Matthew Hancock), as well as her hon. Friend the Member for Redcar (Ian Swales). When I raised with the Minister for Skills and Enterprise the issue of the USO being reduced from six to five days, he said at the time that that would need primary legislation on the Floor of the House. He later wrote to inform me that it would need only a statutory instrument to be passed upstairs for that to change. Would the Minister like to correct the record on behalf of her colleague?

The Postal Services Act 2011, which the House voted for, puts in place a universal service obligation of six days a week. It is therefore something over which Parliament has control. I do not know whether the hon. Gentleman is suggesting that were there to be a Labour Government again, they would in some way threaten that universal service, but I assure the House that the Government are certain that the universal service obligation should stay as it is.

What steps is the Minister taking to ensure that rural communities continue to be served well by the postal service, post privatisation?

The universal service is particularly valuable to rural areas, where it can be a lifeline. That is why it is important for it to be entrenched in the Postal Services Act 2011. For other postal services such as access to posting parcels and so on, the Government have promised to ensure that we maintain the network of more than 11,500 post offices. That is in stark contrast to the closure of thousands of post offices across the country by the previous Government, including in rural areas. We are ensuring that people across the country have good access to postal services.

EU Membership

10. What representations he has received from manufacturers on the case for continued UK membership of the EU with regard to their business and investment plans. (900680)

Ministers and the Department frequently receive representations from manufacturers, and others, in support of continued UK membership of the European Union and the single market. A recent example is the report by the Engineering Employers Federation, “Manufacturing: Our future in Europe”.

Manufacturing is vital to my constituency, the country, and to increasing exports and getting our economy back on stronger ground. Does the Secretary of State agree that the constant doubts cast over our relationship with the EU by Members of his Government are harmful to our manufacturing industry, which wants certainty so that we can invest and grow for the future?

I agree that there should not be any doubt about our continued membership, but evidence suggests that so far that has not done any harm. Britain remains very much the No. 1 country in Europe for inward investment, which last year rose by 22%, despite falling globally by 18%.

Is it true that what businesses want in relation to the EU is free trade? Given that we have a £45 billion a year trade deficit with the EU, is it not perfectly obvious that whether we remain in or out, we will keep free trade? Does the Secretary of State seriously believe that BMW, Mercedes and such companies will say, “Well, it’s the principle that’s important. We don’t want to export to the UK anymore”?

The car companies the hon. Gentleman has cited, and indeed others, particularly the Japanese, have made it clear that they expect Britain to remain in the single market, and they attach enormous importance to being able to frame its rules.

The Secretary of State knows the vital role Nissan plays in the north-east economy, but do not recent comments from Nissan on the importance of our ongoing membership of the EU, and the potential impact of any tariffs if we are not in the EU, underline the risk and uncertainty the Government’s policy is creating?

Nissan has been very clear on the subject—on its behalf, the Japanese Government have made exactly the same point that they do not want the re-imposition of tariffs. However, there is no evidence so far that our policy is discouraging Nissan. Its investment in the UK continues at a high level. I continue to welcome that.

Is the House seriously going to believe that the Secretary of State believes that, if this country were not in the EU, we would not have a free trade agreement with it? Does he expect the House to believe him?

I know the hon. Gentleman’s position, but that is the not the issue. The issue is certainty. There is a lot of risk in the business world. Reopening the matter creates massive uncertainty for employers and makes it even more difficult for them to invest.

The Secretary of State has referred to the publication from EEF, the manufacturers organisation. The report states that 85% of EEF members said that membership of and staying in the EU is good for their businesses. My hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) mentioned the comments of the chief operating officer of Nissan, who has said that the threat of import tariffs between the UK and the rest of Europe in the event of an exit could be an “obstacle” to further investment by the company in this country. Who has more influence over Britain’s manufacturing policy: Britain’s manufacturers or the United Kingdom Independence party?

It is fair to say that our manufacturing companies have a great deal more influence and we agree with them. I would add one point: it is not just about manufacturing. A recent survey by CityUK suggested that 60% of banks in London are here because we are part of the single market.

Beneficial Ownership

The UK has committed to implement a central registry of company beneficial ownership information, accessible to law enforcement and tax authorities. We recognise the potential benefits of making the information available publicly and have consulted on that. That consultation closed in September and we are now analysing the responses. We will issue a Government response in due course.

The Prime Minister has expressed his personal support for a public register and is supported in that by four former Labour Home Secretaries, the British Bankers Association and anti-corruption non-governmental organisations, but, as my mum used to say, fine words butter no parsnips. Will he take the opportunity of the open government partnership summit, which I understand will happen later this month, to confirm that the Government will have an open and public register of beneficial ownership of companies?

The hon. Lady is right to mention that the Prime Minister has shown a great deal of leadership on that, not least at the G8 summit in June, where he also said that he has a huge amount of sympathy with the idea of making that information fully public. I am sure she will appreciate that we are analysing around 300 responses to the consultation. I am certain that more information will be forthcoming to the House and beyond as we set out what we plan to do to introduce a register of beneficial ownership, which we have committed to do within this Parliament.

Small Businesses

The Government believe that local businesses are best placed to make the case on their needs. Local enterprise partnerships have consulted with small businesses to develop their strategic economic plans, which will help to give them access to the local growth fund and support skills, housing and infrastructure.

I thank the Minister for that reply and, while I am at it, for his support for investment in the further education college estate. Does he agree that, whether through the regional growth fund, Europe, city deals or local enterprise partnerships and the single local growth fund, supporting initiatives that help small businesses to grow and provide more jobs is critical?

The Government are a passionate supporter of small businesses. The fact that 4.9 million businesses exist—a record number—is partly a response to the improvement in the environment for small businesses, supported by LEPs and the skills system, which we have done so much to put in place.

Our LEP around the Humber is supporting and wants investment by Siemens in Hull. Further to the question from my hon. Friend the Member for Warrington South (David Mowat), will the Department do everything possible to talk to the EU about changing the rules that restrict the ability of the Green Investment Bank to invest in great projects such as that with Siemens, which are so important to our area?

Yes, of course. I thoroughly enjoyed my visit to my hon. Friend’s constituency. Many people raised the issue of Siemens, which would invest not only in the UK, but, through the supply chain, in many small businesses. I will look in detail at what he says.

May I congratulate the Government on the great news that 102,000 new businesses were created last year, bringing the total to an all-time record of 4.9 million? Does the Minister agree that many first-time entrepreneurs and start-ups find that compliance with a whole raft of Government red tape, often designed in Europe and gold-plated in Whitehall, is a genuine barrier? Will he meet me and representatives of entrepreneurial start-up companies to see what we might do to ease the burden on start-ups in particular?

I am always delighted to meet my hon. Friend, so I would love to do that. We are always looking at how to ease the burden further. We have reduced the burden on business enormously. The one in, two out rules are in place and are working, but there is always more to do.

Is the Minister aware of the huge disparity in the attitude of local enterprise partnerships to rural areas? Some are fully engaged and interested, but others appear to think that rural Britain is simply the inconvenient gaps between cities. Will he disabuse them of that notion?

I certainly will. Local enterprise partnerships are led by local businesses and, in large part, respond extremely effectively to the needs of local businesses. In some areas of the country, they are almost wholly reflective of the rural economy—that is true of East Anglia, which is largely rural. I take on board the point that that does not always happen everywhere, and I will ensure that it does.

Royal Mail

13. What assessment he has made of the value for money for the public purse of the recent sale of shares in Royal Mail. (900685)

Our overarching objective is to put Royal Mail in a position to be able to deliver the universal service on a long-term and sustainable basis. When considering value for money, we will assess the sale proceeds together with the long-term value of the taxpayers’ retained stake in the business and the reduced risk to the taxpayer of a stable company with access to private sources of capital.

The shares were sold at £3.30 each and this morning they are selling at £5.32. Does the Minister agree that the taxpayer got a raw deal in the share sale, and does he accept full responsibility?

It is not unusual to see some share price volatility in the immediate aftermath of a sale. Let us be clear: this sale was popular, oversubscribed and successful. When the Labour Government tried to sell Royal Mail, they failed.

The fees paid to the Government’s advisers will be disclosed in the normal way to the National Audit Office, which is of course looking at this sale as they looked at the Northern Rock sale, but they compare favourably to the fees paid to advisers by the Labour Government in the sale of QinetiQ 10 years ago, when 10 senior managers were allowed to walk away with £107 million and no shares were sold to the public.

The Minister claimed that value for money for the taxpayer was central to the Government’s fire sale strategy for the national institution that is Royal Mail. Given that many investment banks valued the company at £1.7 billion more than the sale price, that the sale was oversubscribed 20 times over and that the share price has steadily risen to more than 60% of its initial value, why did the Minister reject raising the price range when he knew the offer was oversubscribed? Does the Minister agree with the Secretary of State that the loss of more than £750 million to the taxpayer is froth and ill-informed?

It is far too early to judge the long-term performance of the Royal Mail share price. With any initial public offering there will be volatility in the price and it is too early to make a judgment. As far as the banks are concerned, a whole number of banks were consulted on the value of Royal Mail. The value established was, I think, around the mid-point of the range of the advice we received.

Regional Growth

The Government believe that local businesses and civic leaders are best placed to understand what drives growth in their area. Resources available to local enterprise partnerships have been increased to at least £20 billion until 2020-21, and LEPs will be able to access funding and powers to support growth through local growth deals. Furthermore, the regional growth fund is projected to deliver more than 500,000 private sector jobs, leveraging in more than £14 billion of private sector investment.

The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), and I, along with 12 other colleagues from Suffolk and Norfolk, wrote to the Minister earlier this week emphasising the advantages for promoting growth that assisted area status for Lowestoft and Great Yarmouth will bring to the two counties. Will my right hon. Friend give full consideration to the strong and compelling bid submitted by the New Anglia local enterprise partnership?

I certainly undertake to do that. I have seen my hon. Friend’s letter, signed by several colleagues, and I have also written this week to all Members setting out the benefits of assisted area status and explaining the process and timetable for revising the map for the period 2014-2020.


There were almost 860,000 people undertaking an apprenticeship last year; that is more than ever before. We have raised standards, introduced higher apprenticeships, made it easier for employers to engage and created the £1,500 apprenticeship grant to encourage more employers to recruit an apprentice for the first time.

Will the Minister’s Department do even more—a bit of ambition here—to help young people in my constituency taking part in schemes run by City College and organisations such as Proactive and make it his policy that suppliers winning public contracts worth more than £1 million should be required to offer apprenticeship opportunities on those contracts?

I would be delighted to work with the hon. Lady to promote apprenticeships in Brighton. I might point out that in her constituency the number of apprenticeship starts has doubled since 2010. We have taken action to ensure that quality is improved as well, but the more we can do to improve and widen the opportunities for people to go into apprenticeships the better.

The scandalously low number of women in engineering apprenticeships is a missed opportunity for young women themselves, engineering employers and the wider economy. Does the Minister share my concern about the continuing and powerful evidence of gender stereotyping in schools, particularly co-educational schools, and the low number of engineering companies taking action to improve work force diversity, revealed by the Institute of Engineering and Technology only this week?

Absolutely. I pay tribute to the work of my hon. Friend on this subject and look forward to following his leadership in driving up the number of women in engineering apprenticeships.


17. What assessment he has made of the potential effect on UK artists and creators of introducing a private copying exception without compensation. (900691)

This change will allow people to make personal copies of content they have bought. For example, it will allow an individual to copy their CDs on to an iPad. Many people already do this without realising it is illegal under copyright law. Most people think it is reasonable and should not be prevented by copyright. The Government agree and our new law will recognise this. This change will not allow people to obtain copies unlawfully, and British creators will continue to be rewarded when people buy copies of their works.

So far, the 22 EU member states that have introduced private copying exceptions have all introduced corresponding levy schemes on MP3 players and other copying devices to compensate artists for the loss of income. Why will the UK not do the same?

The reason is very simple: those European countries have introduced far wider exemptions than we are proposing. Many of them allow content borrowed from friends, families and libraries to be shared very widely. That damages creators, so they need to provide compensation, but our proposal is carefully targeted to protect what happens, as we all know, in almost every family in the country without doing damage to creators.

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.

One of the biggest difficulties for all businesses in the country, whether a small retail outlet or a major manufacturer, is the cost of energy. The Secretary of State is a bit of a leftie. [Laughter.] I say that as a compliment, obviously, and he seems to be taking it that way, although the gentleman with the jumper on, the Minister for Skills and Enterprise, who is protecting everybody from the cold over there, seems to disagree. Does the Secretary of State agree with the Prime Minister, with the former Prime Minister or with us about what we should do about energy prices?

I do not think that either the Leader of the Opposition or the former Prime Minister has quite got it right, but I have stressed that, for industry, which is our concern in this Department, the way forward is to ensure that energy-intensive industries are properly compensated and enabled to compete on a level playing field, and we are pursuing that.

T2. Can the Minister give the House a progress report on how the Government are dealing with the scourge of the payday loan companies? (900659)

I thank my hon. Friend for that question. He rightly highlights the fact that there have been significant problems in the payday lending industry; thankfully, significant action is also being taken to match that. Twenty-five payday lenders have left the market since March as a result of strong action by the Office of Fair Trading, with the Competition Commission undertaking an investigation, and earlier this month the Financial Conduct Authority published a suite of new proposed rules, which will limit roll-overs, cap the number of times that a lender can use a continuous payment authority and introduce strict new rules on advertising to ensure that people do not get ripped off.

The Secretary of State has said that growth must be better balanced and less reliant on rising house prices, but this week he has warned of dangerous and unsustainable house prices in London and extreme problems of affordability across the country on his Government’s watch. Does he therefore not agree that it would make sense to review how the second part of his Government’s Help to Buy scheme operates now, as opposed to in a year’s time, given the attendant risks posed to more balanced growth?

I am delighted to see that the hon. Gentleman has progressed beyond his recent role as a share tipster and is now returning to more important and central concerns. The central point is that the growth we are experiencing is balanced. We are now beginning to see serious growth in manufacturing and the construction sector, and the next big step will be to see improvements in investment. As far as the housing market is concerned, the Chancellor has acknowledged that the Bank of England needs to watch the process very carefully.

But the right hon. Gentleman promised an export and investment-led recovery, yet as growth returned over the summer, exports fell, and the Office for National Statistics says that growth has been concentrated in household expenditure, rather than investment, which is £2 billion lower than it was a year ago. We all know that he is a keen dancer. In failing to prevail over the Treasury, is not the risk that, rather than marching to the tune of the makers, he is dancing to the Chancellor’s new song of house inflation?

I am sure the hon. Gentleman would agree that there is no harm in the trend we are observing, which is that consumers are now more confident and are therefore spending and generating demand—I think we have both agreed over the last three years that the generation of demand is a key part of recovery. As far as exports are concerned, there is rapid growth in British exports to the big emerging markets, such as Russia, China, India and Brazil—indeed, I am going to Russia next week to pursue this course.

T3. Tamworth borough council is doing its bit to back small business Saturday by promoting “created in Tamworth” and offering free market stalls to business people and free parking to customers. Do the Government agree that local authorities have a hugely important role in helping rather than hindering small business growth, not least by offering more free parking? (900660)

We in Government are huge and enthusiastic supporters of small business Saturday, which has cross-party support. I encourage local authorities of all political persuasions to follow the lead of Tamworth and introduce policies that can help to support small businesses across the board, and especially on Saturday 7 December, small business Saturday.

T5. I was disappointed by the Minister’s response to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) earlier and surprised at his lack of basic geography, so I am going to give him another opportunity. I understand that we are all just “the desolate north-east” to Government Members, but I remind the Minister that Northumberland college is indeed in south-east Northumberland and up to 50 miles away from parts of north Northumberland. Once again, what will the Minister do to meet the basic needs of young people in north Northumberland? (900662)

I know the geography well, not least because I have visited Northumberland college in the last few months—[Interruption.] Hold on. Transport issues are important. If the hon. Lady is saying that we need to ensure that we get basic skills provision into all areas, including rural areas, I entirely agree with her, but if she is saying that the best thing to do is to ignore large rural areas, I disagree. I would have thought that we could work together on this sort of thing.

T4. Will my hon. Friend join me in congratulating engineering and manufacturing firms in Erewash, including F. C. Laser and TecQuipment, which are continuing to grow and to recruit apprentices? In addition, F. C. Laser has recently won the D2N2 award for the most promising business in 2013, proving that the entrepreneurial spirit is alive and well in Erewash and creating many jobs. (900661)

I commend my hon. Friend’s work in supporting small businesses and jobs in Erewash, through supporting enterprise. This is all about ensuring that companies can start up and grow and that they can employ people as easily as possible. I hope that our employment allowance, which comes in next April and which will give every company that employs people a £2,000 tax break, will help to take that a step further.

T6. Small businesses in my constituency have been flagging up the importance of local enterprise partnerships focusing more on skills training and apprenticeships, and on the fact that that could be better promoted if all LEP boards included at least one specialist education representative. What does the Minister think of that idea, and will he consider making it a prerequisite for LEPs receiving Government funding? (900665)

Unusually, I agree with both the suggestions that the hon. Lady has made. I look forward to working with her to support skills and small businesses through the LEP in Brighton.

T7. Manufacturing in the midlands is going through a renaissance, but the challenge is to create the skills necessary to meet future needs. Will the Minister join me in welcoming Tomorrow’s Engineers week, and tell the House what more can be done to enthuse young people, particularly young women, about engineering? (900666)

Yes, I am an enthusiastic supporter of Tomorrow’s Engineers, and the Government are backing that project in every way that we can. Tomorrow’s Engineers is about demonstrating that engineering is part of the future of our economy, and that it is an exciting career for someone to get into, whether they are a man or a woman. It is where the future of our economy is going, and providing the necessary skills is a vital part of what we are doing.

The Secretary of State has spoken proudly about the new businesses that have started up, but can he tell us how many businesses closed last year, and how many jobs were lost as a result of those closures?

I shall be happy to write to the hon. Lady with the number of deregistrations, but overall there are more businesses being created than are being closed. We have, I think, 400,000 more new businesses than we started with two and half years ago.

T8. What steps are the Government taking to address skills gaps, create jobs and increase productivity by improving the information given in schools about vocational job opportunities, particularly local ones? (900667)

We are making the skills system more rigorous and responsive to need, but schools have a duty to secure careers advice. I want that advice to be inspirational and impartial, and to include more mentoring, especially from people who have real jobs, so that we can help each child to reach their potential.

Last week, I attended the Hounslow enterprise showcase, organised by Dawn Edwards and Isabel King from the Real Business Club, which was run with the support of the local jobcentre and Hounslow chamber of commerce. I spoke to three women from my constituency who were looking for advice on how to start or grow their businesses. Does the Secretary of State think that we need to do more to support women-led businesses, particularly as research shows that the UK has a higher gender gap in entrepreneurship than many of the OECD countries?

Yes, we acknowledge the importance of women in business. Indeed, one of the initiatives that we are leading involves ensuring that women are properly represented on the boards of our leading companies, thereby creating role models for people starting their own companies. I agree that there is a gender gap and I agree that we need to do a lot more about it.

In the past three years, the UK car industry has gone from strength to strength, but there is always more to do. Will the Secretary of State tell the House what further work is planned, in conjunction with the Automotive Council, particularly with regard to new engine and powertrain technologies?

Let me first pay tribute to my hon. Friend, who had responsibility for this industry in the Department for three years. The automotive strategy, published earlier this summer, included a focus on the new automotive investment organisation to attract more suppliers into the UK, work to tackle the skills base by recruiting nearly 2,000 additional graduates into engineering, and further work to strengthen the supply chain throughout the industry.

The Secretary of State will know that there is serious concern among our universities about many of the provisions of the Immigration Bill and their impact on international student recruitment. What discussions has he had with universities on the issue and what representations has he made to the Home Office?

What we are seeing is a continuing increase in the number of overseas students applying to come to study in Britain. We all make it clear whenever we visit overseas markets that there is no cap on the number of legitimate overseas students coming to Britain; they are very warmly welcome.

I understand that in 2014-15 the local LEP is going to have a sizeable budget to distribute for infrastructure. Will the relevant Minister explain how we can access that budget and what the criteria will be?

Local enterprise partnerships have been invited to submit their growth plans not simply for the first year of devolved budgets, which is 2015-16, but for the expenditure of structural funds—both regional funds and social funds—from July next year for the next seven-year period. We will examine each of the local growth funds and work with individual LEPs on particular growth deals to suit each area.

What assessment has the Secretary of State made of the impact of the funding for lending scheme on investment in small businesses?

The funding for lending scheme has had a very significant impact on the mortgage market. It has had a much lesser impact on small business, but it has recently been adapted, and I believe it has been used by some of the new competitor banks such as the Aldermore. We certainly welcome that.

Yesterday evening, I had the pleasure of attending the formal launch of the transport systems catapult, which is going to be based in Milton Keynes. Does my right hon. Friend agree that this will be an important innovation to reaffirm the UK’s leading role in transport technology development?

This is a very important event—investment in our transport infrastructure to make it smart and innovative. It is backed with £50 billion of BIS money, with support from the Department for Transport—and, most importantly, with substantial business support as well.

The Secretary of State will be aware of my concern about the legal requirements when a company goes into administration. Will he look at making it a mandatory requirement for administrators to prioritise the wider social consequences of the sale of a company rather than allowing asset strippers to destroy jobs and local communities?

The hon. Gentleman rightly outlines the devastating impact on communities that can happen when companies go into administration. Those involved in dealing with the administration of a company have a variety of different issues to prioritise. We are making sure that the problem is looked at in a range of ways. We are simplifying insolvency processes and considering some of the issues rightly raised by Members—about pre-packs, for example, with an ongoing review. We are looking at fees, too, which have sometimes meant that people cannot get as much of their money back as they should in these unfortunate circumstances. The Government are taking forward all those issues.

This week marks the 50th anniversary of the groundbreaking Robbins report. Will the Minister for Universities and Science confirm that this Conservative-led Government will continue the spirit of Robbins and ensure that higher education is open to all?

My hon. Friend is absolutely right; indeed, today is the day, 50 years ago, when the then Conservative Government accepted the Robbins report. We are marking the 50th anniversary with more funding going into universities, with more students and with more applications from students from disadvantaged backgrounds than ever before, so we can be proud of our record on higher education.

A report published today by the 1994 Group of universities shows that, although the overall figures for post-graduate study in the United Kingdom look healthy, that is mainly due to a 90% increase in the number of overseas students. What are the Government doing to support British post-graduate students?

That is an issue, which is why the Higher Education Funding Council for England has provided an extra £25 million of support for next year’s post-graduate students. We will increase that amount to £75 million for the following year, because we do not wish to see people who could benefit from post-graduate education missing out.

As the chemical industry is Britain’s leading exporter, I warmly welcome this week’s launch of the chemicals growth partnership. Will the partnership convene specially to discuss the issues presented by Grangemouth?

Despite the serious news about Grangemouth, the sector as a whole remains optimistic about, in particular, the potential for future growth. The launch this week focused on energy costs, innovation and supply-chain development, and the partnership has published an action plan, which I know my hon. Friend has seen.