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Oral Answers to Questions

Volume 571: debated on Thursday 5 December 2013

Business, Innovation and Skills

The Secretary of State was asked—

Retail Sector

I regularly meet representatives of the retail sector. I attend the retail policy forum, which meets three times a year, and I recently spoke at the Association of Convenience Stores’ heart of the community conference. As part of small business Saturday, I will visit independent shops in Westerham this weekend and I encourage all colleagues to support this hugely important campaign.

The rise in e-commerce and online sales is changing our shopping habits and impacting on our high streets. What more can the Minister do to encourage co-operation between big retailers, independent retailers and councils to take advantage of the opportunities offered by developing technology to transform our high streets into exciting community spaces for the 21st century?

I agree with the hon. Lady about the huge opportunity here. We are keen to help small businesses in particular to trade online. With the help of my Department, Go ON UK is piloting a programme to help to provide businesses with the skills to transact online, including using mobile technologies to exploit the increasing use of smartphones in e-commerce. That will roll out nationally next spring. The Technology Strategy Board carried out a successful digital high street pilot last year in Hereford and it is currently exploring how to build on that.

I, too, will be out and about in Calne, Royal Wotton Bassett and Malmesbury on small business Saturday, supporting our small retailers. Does the Minister agree that one of the biggest burdens I will hear about as I wander around will be the overwhelming burden of business rates on small businesses? What action can he take now to lessen that appalling burden?

My hon. Friend will know that we have doubled small business rate relief and have already extended it until 2014. On our plans after that, I must ask him to be patient a little longer.

Chester has been a fantastic shopping centre for centuries, but it faces increased competition from online shopping and out-of-town shopping centres. Does my right hon. Friend agree that these days we have to make shopping an entertainment experience, with cafés, bars and on-street entertainment to drag people back on to the high street?

Yes, I do agree. As the hon. Member for Stockport (Ann Coffey) put it, we have to make high streets community spaces again that are not simply for transactional shopping. There are a number of ways in which high streets can respond to the challenge of e-commerce and the Government are here to help.

Small Business Sector

2. If he will meet representatives of the small business sector to discuss the removal of unnecessary regulation. (901444)

I am very happy to meet small business representatives. We actively listen to feedback on regulation, including through the red tape challenge, but we do not just meet representatives—we act. For instance, we are freeing about 1 million self-employed people from health and safety law where their work poses no harm to others.

I am grateful to the Minister for that reply. Is he aware that King’s Lynn and west Norfolk has an incredibly diverse economy? Experts tell me that since 2010, 1,000 new small businesses have been set up. Will he tell the House that he is as determined as ever to go on championing the cause of removing unnecessary burdens on business, and does he agree that small businesses will be the major exporters of the future? What will he be doing on Saturday to champion wealth creation and enterprise?

Like my hon. Friend and many Members across the House, I will be celebrating small business Saturday this weekend. We are constantly vigilant and listening to small businesses to make sure that their task is made easier and the burdens we place on them made smaller.

If the Minister is in listening mode and cares so much about regulation, will he look very carefully at the threat to crowdfunding, which is a real alternative for small business and community group start-ups? The Financial Conduct Authority is conducting an inquiry and consultation. If we get this wrong and implement inappropriate regulation, it will kill something wonderful that can regenerate communities and business.

I agree with every word that the hon. Gentleman says. We are supporting crowdfunding on financial terms, not least through the new business bank, but we are also making sure that it can operate in a high-quality framework. The fact that there will be a regulatory framework around crowd-sourced funding has been welcomed by the sector. We have to get it right, and I will meet Martin Wheatley of the FCA to make sure that we get the details right.

Some of the most burdensome regulations on manufacturing companies in my constituency are the registration, evaluation and authorisation of chemicals regulations imposed by Brussels. Will the Minister undertake to work across Government to do all he can to reduce the burden of these REACH regulations?

Yes, the REACH regulations are among the 30 recently highlighted by the EU business taskforce. As my hon. Friend knows, we are working hard to reduce the burden of those regulations.

Small Businesses

We are doing more than ever to support small business. More than 10,000 StartUp loans have been drawn down since the scheme’s launch in September 2012. Over the past year, UK Trade & Investment has helped 32,000 businesses to export, the growth accelerator scheme has supported 10,000 small businesses and the regional growth fund has helped a further 3,200.

I shall support small businesses in Helmsley this Saturday. Will the Secretary of State use his good offices to encourage the local enterprise partnership for North Yorkshire to make funds available to improve the A64 corridor, because its safety record and its terrible congestion are holding back growth for all businesses along its route?

I will certainly make sure that the local enterprise partnership is aware of my hon. Friend’s priorities. In relation to small business Saturday, I praise the activities that she is undertaking in Helmsley. That council is one of 25 that will offer free parking that day, and I hope that a few more will sign up to that in the next 48 hours. I shall be in Twickenham to support my small businesses.

I will support small business Saturday by literally putting small businesses in my constituency on the map on my website. What will the Secretary of State do to improve access to finance and mentoring to ensure that Oxfordshire businesses continue to thrive?

I think we all agree that small business Saturday is a positive, cross-party initiative, and hon. Members on both sides of the House will be out there backing it. I praise the originality of my hon. Friend’s approach.

On small business funding—I am sure this issue will be raised many times—I have drawn attention to the StartUp loans scheme that is helping large numbers of start-ups to get going, and the business bank is supporting both new and original forms of funding, as well as a rapid expansion of guarantees for existing companies.

I, too, will support small business Saturday, as I have done in the build-up to this weekend. Will my right hon. Friend join me in congratulating the Holmfirth Hullabaloo and Totally Locally Slaithwaite campaigns, which have engaged local shopkeepers with innovative reward and prize schemes to encourage local communities to shop locally?

I do not know what those exciting schemes involve, but they sound fun. The basic underlying theme is that we are all being urged to support our local shops and to shop locally. I am sure that is a very good theme around which we can all unite.

Across my constituency, small businesses are being forced out by big developers who want to redevelop them for luxury flats. The local council is supporting that, and in the case of Shepherd’s Bush market, has even issued compulsory purchase orders to drive out small businesses. The Tory party will always prefer big business over small business. What will the Secretary of State do about this situation?

This distinction between big business and small business is seriously unhelpful—most big businesses have supply chains—and we should support both.

Many small and medium-sized enterprises in my constituency—including in Shoreditch, which the Prime Minister calls tech city—are keen to bid for Government contracts, thereby growing, employing more people and becoming larger businesses. What is the Department doing to support them, because they face many hurdles in trying to become Government contractors?

The hon. Lady will find that the trend in Government procurement is very much on track to meet the 25% target for small business. It is much more difficult with devolved bodies, such as health authorities and local government, but we are working on that with the relevant Departments.

Less than seven days ago, the Secretary of State said to a small business forum in Bath that solar energy

“had a part to play in powering the nation”.

Will he tell me whether Government is actually joined up, given that small businesses in my constituency are complaining to me about the cuts announced yesterday?

Enormous numbers of homes use solar power. The major technological advances in that area are driving down costs. We need to see that happen across renewable energy. The Government of course had to cut the subsidy when it became clear that the industry was more sustainable.

Without wishing to show off, I am going to 20 small businesses on Saturday across Chesterfield and Staveley—my wife is bringing her purse.

The urgency of small business Saturday seems all the more serious after a recent report by the Association of Convenience Stores which shows that 55% of its owner members earn less than the minimum wage on an hourly basis. Is the Secretary of State really telling those people that further cuts to corporation tax for big companies are a higher priority than cutting their business rates, which are the most expensive commercial property tax in Europe?

I am very sympathetic to the business groups that have consistently made representations over the past few months to say that business rates are a major burden. This Department has certainly made it clear that we regard it as a major issue. The hon. Gentleman will have to wait for an hour or so to find out what the Chancellor is doing about it.

Small Business Regulation

5. How many regulations affecting small businesses the Government have (a) introduced and (b) removed since May 2010. (901448)

The statement of new regulation, which we publish every six months, shows that since January 2011 we have introduced 57 regulatory measures, 135 deregulatory measures and 108 measures that have no net cost to business, many of which are deregulatory. That is saving British businesses nearly £1 billion a year. Small businesses, which account for 99% of all businesses, benefit in particular from the one in, one out rule—it is now the one in, two out rule—that drives this deregulation.

I congratulate the Minister on his efforts to secure an exemption for micro-businesses from specific EU regulations. That will help small businesses in Kettering and across the country. What further efforts does he intend to make to secure more exemptions from harsh EU rules?

The EU business taskforce, which I chair, identified 30 regulations that should be repealed. We continue to press the Commission to lighten the rules for small businesses and to exempt the very smallest businesses altogether.

Apprenticeship Minimum Wage

6. What recent estimate he has made of the number of apprentices being paid below the apprenticeship minimum wage. (901449)

The Government have overseen one of the most successful expansions of apprenticeships, with about 1.5 million apprenticeship starts since 2010. However, we are concerned that the level of non-compliance with national minimum wage rules, which the 2012 apprenticeships survey shows to be 27%, remains too high. The Government have zero tolerance for employers who break the law. That is why we have introduced a range of enhanced enforcement measures to crack down on such rogue employers.

I thank the Minister for her answer. It is certainly worrying that the proportion of apprentices who are not receiving the apprenticeship minimum wage has increased and that one in four apprentices do not receive it. What firm and decisive action is she taking to clamp down on the rising non-compliance of employers with the apprenticeship minimum wage, especially given that the number of young people aged 16 to 18 who are starting apprenticeships has fallen?

The hon. Gentleman raises an issue that the Government are concerned about and are acting on. From 1 July, Her Majesty’s Revenue and Customs has prioritised complaints about the apprenticeship minimum wage to ensure that it brings proper enforcement against employers who are not paying it. Further, we have made it much easier to name and shame employers who do not pay the minimum wage. We have also announced that we will increase the maximum penalty fine to £20,000. That tough programme of enforcement action should help to ensure that businesses pay their workers properly. That is what the public expect and it is what most responsible businesses already do.

Is my hon. Friend aware that the number of apprenticeships in my constituency of Harlow has increased by more than 80% in the past year? Will she congratulate the Harlow and district chamber of commerce and the businesses who are hiring apprentices and paying them proper apprenticeship wages? Will she also welcome the new university technical school, which is, in essence, a pre-apprentice school that will provide young people with skills?

I happily offer those congratulations, and I add to them my congratulations to my hon. Friend for the unfailing way in which he has championed apprenticeships, not just in his constituency, but in this House by encouraging many Members to take on apprentices in their offices. It is important to ensure that young people have such opportunities. That is why the Government have invested significantly in expanding apprenticeships so much.

Does the Minister accept that companies such as Wetherspoon, which will open shortly in my constituency, are taking on young people on zero-hours contracts?

The hon. Gentleman is right that many workers are employed on zero-hours contracts. In some cases those can work well, but in other cases there are concerns about abuse. That is why the Department has undertaken a fact-finding exercise, and we will shortly launch a consultation on what action can be taken to ensure that such contracts are not abused.


In September the Government announced a £400 million boost for science, technology, engineering and maths teaching. Last month we launched the first annual Tomorrow’s Engineers week, during which the Government worked with more than 70 partners. Our recently published Perkins review of engineering skills calls for action from employers, educators and the profession to work with us to inspire young people to become engineers.

Does the Minister agree with the importance of getting local engineering employers to work closely with skills providers to inspire young people to go into engineering, and will he join me in welcoming the soon-to-open Heanor studio college, which will do exactly that?

We strongly support such initiatives, which are absolutely what is required to ensure that employers get the skilled engineers they need.

Now that the Government’s economic plan is delivering the rebalanced economy we need, we also need engineers, as the Minister just said. Does he agree that one way forward is to encourage engineering in schools, and to ensure that it is considered a protected profession?

I certainly agree that we need to encourage engineering in schools. “Engineer” is not a restricted term, but we support professional titles such as “chartered engineer” or “engineering technician”, which are regulated, and we aim to register 100,000 apprenticeships with EngTech status by 2018.

Does the Minister agree that investing in fundamental research is vital to inspire the next generation of scientists and engineers and to create conditions for the serendipitous discoveries of the future?

I completely agree with the hon. Lady, which is why the Government support fundamental research. Only last week I went to the launch of £250 million of public money for centres of doctoral training run by the Engineering and Physical Sciences Research Council.

One of the biggest engineering projects this country has ever seen will be High Speed 2. What specific steps is the Department for Business, Innovation and Skills taking in conjunction with the Department for Transport to ensure that engineering opportunities are available to businesses throughout the entire country, not just firms adjacent to the route?

We are already working with the current largest infrastructure plan, Crossrail, to ensure that skills are available and that we take the opportunity to build up skills in crucial techniques such as tunnelling. We will take the same approach to HS2.

I recently visited Fairfield Control Systems in my constituency, which is a small engineering company responsible not only for moving the roof at Wimbledon, but for the Division bells in the House of Commons. One of its main concerns was the Government’s encouragement of STEM subjects by the Department for Education. Has the Minister spoken with that Department about how we can encourage the teaching of STEM subjects within the school system?

STEMnet ambassadors are doing a fantastic job of going to schools to encourage young people to study those subjects. There is a surge in the number of young people taking A-levels in subjects such as maths and physics, which are often a requirement for going on to engineering.

IT Skills

Our recent information economy strategy shows that employers find it hard to get people with the right IT skills, yet there is also relatively high unemployment among computer science graduates. That is why I recently convened a round-table with vice-chancellors and employers to tackle that mismatch. I know that issue is vital in the Malvern cyber-valley that my hon. Friend does so much to support.

Indeed, cyber-security IT skills are vital for the online world. Will the Minister welcome the initiative by private sector firms in my constituency to set up a cyber-skills training centre, and may I invite him, once again, to visit?

I do support that initiative and I hope it will be possible to visit my hon. Friend’s constituency, because I know how much she does to support the Malvern cluster, which will soon be rivalling the Cambridge cluster and tech city.

Offshore Wind Turbines

10. What assessment he has made of the potential opportunities for manufacturers in onshore construction of offshore wind turbines. (901454)

In August the Government launched their offshore wind industrial strategy, which aims to build a thriving UK supply chain. Currently, there are 1,375 offshore wind turbines operational or under construction and, on average, half of the capital value of those projects comes from other parts of the supply chain in which the UK has leading expertise. Yesterday’s announcement on the electricity market reform makes clear the Government’s commitment to developing offshore wind in the UK.

I thank my right hon. Friend for that detailed reply, and I too welcome yesterday’s news, not least given the market uncertainty recently when RWE was forced, for geological reasons, to pull out of the proposed £4 billion north Devon offshore wind farm. The Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), knows that I have raised the potential of the Kishorn site on the west coast of my constituency previously and yesterday’s news will give added confidence to those who are looking at the potential there, but what forms of further support might such a site be able to attract? Given the weather today, I cannot repeat my invitation to my right hon. Friend to visit, but I hope to do so in future, more clement times.

I would be delighted to visit the site, and the mountains, in my right hon. Friend’s constituency. The site to which he refers is extraordinary and in its prime, in the North sea oil boom, it built the largest mobile structure on the planet at 600,000 tonnes. It has great potential, and if this supply chain development takes place, 2,500 new jobs will be created. We want to do everything we can to make that possible, and the announcement yesterday certainly helps. He will know that the Catapult in Glasgow is working on the technology behind offshore wind developments, and we will do everything we possibly can to make sure that Kishorn and other UK ports develop on the back of that rapidly growing industry.

The Secretary of State speaks of a rapidly growing industry, but the commitment by the Government three years ago was to 40GW of offshore by 2020. The commitment yesterday was for 10GW. Why has that commitment shrunk to 25% of what it was?

The hon. Gentleman seems to have forgotten that Britain has by far the largest offshore wind industry in the world, and under the guarantees that we gave yesterday it now has the incentive to expand—and will do so, both onshore through the supply chain and offshore in the wind farms.

Business Bank

The British business bank is being established to increase the supply of capital to smaller businesses throughout the UK, resulting in increased competition in the banking sector from alternative lenders, such as peer-to-peer lenders and challenger banks. It is being established with £1 billion of new capital, with another £250 million announced on Monday for new small business programmes.

The Secretary of State will know that Bank of England figures show that small business lending fell by £1.5 billion over the past quarter. Can he reassure us that this new institution will be more than simply rebranding the previous schemes that have proved so unsuccessful?

The right hon. Gentleman is right that there is a negative trend in net lending. It has been sustained and is worrying, although gross lending is now beginning to recover quite rapidly. The interventions of the business bank will do two things. They will support existing schemes—in fact the take-up under the guarantee schemes has risen by 85% over the last year since they came under the business bank—and they will provide new funding. He will know that, under agreements we have already reached, new debt funds have been supported, and those will find their way into support for small businesses in his and other constituencies.

In north Cumbria, we already have the very successful Cumberland building society. Does the Secretary of State agree that such societies should be supported and, most importantly, smaller financial organisations should not be overburdened by regulation?

The hon. Gentleman is right that the building societies have a crucial role, primarily of course in mortgage lending, which is their traditional business, but some of them are moving into small business lending and that is very welcome. One of the reasons why the Chancellor and I did not support the recommendations of the parliamentary commission on leverage ratios was to protect building societies and enable them to expand.

Given the failure of successive well-intentioned but ineffective Government schemes to boost lending for small businesses, including £78 million of unallocated resources for the funding for lending scheme, will the Secretary of State outline what extra measures he will take to ensure that the business bank succeeds where other schemes have failed?

The bank is already succeeding. As I said to the right hon. Member for East Ham (Stephen Timms), there has been a very big increase in the lending being made available under the existing schemes and a big growth in equity-related activity. I think he will find that, as the business bank moves forward, we will use the £1.25 billion of new capital from the Treasury to do exactly what it was designed to achieve. I am very positive about the bank’s future.

The Secretary of State admits that there have been problems with the Government’s plans. One area of lending at a local level that has been picking up the pieces and expanding is payday lending to businesses. Does the Secretary of State now accept that his Department was wrong to oppose capping the cost of credit, given that businesses have been ripped off by legal loan sharks as much as consumers?

The evidence from Bristol university among others, which we support, suggested genuine potential problems with a cap on interest rates, but we have been persuaded, on the balance of evidence, that we should do it. There are good experiences, in places such as Florida in the United States, that we will now seek to apply in the UK. I congratulate the hon. Lady and others on their persistent campaigning on this subject. I think we have now achieved a good outcome.

Workplace Insecurity

The 2011 workplace employment relations study found that employees’ feelings of job insecurity were related to three factors: whether their workplace had been subject to any recent redundancies; the perception among managers of the effect of the recent recession; and the number of changes at work experienced by employees.

An increasing proportion of the work force is subject to zero-hours contracts. Does the Minister think that they have anything to do with job insecurity? Do they contribute to insecurity or do they contribute to security?

We have of course been looking at these issues and there is a range of evidence out there. The hon. Gentleman might be interested in the survey published last week by the Chartered Institute of Personnel and Development, which found there was no difference in the level of job security experienced by zero-hours workers compared with the average employee. We have looked at a range of problems that have been identified, such as exclusivity, the information available and the uncertainty over earnings. We will be publishing a consultation shortly.

Is not the greatest cause of insecurity for those in work the nightmare prospect of the shadow Chancellor ever getting anywhere near the door of No. 11 Downing street, given that he has been proved wrong in every single economic prediction he has made?

My hon. Friend makes an important and powerful point. We want to ensure job security by having falling unemployment and a growing economy. That is exactly what the Government are delivering. [Interruption.]

Order. It is a bit unsatisfactory if one Minister is heckling another. You yourself, Mr Hancock, are undergoing an apprenticeship to become a statesman, but I think there are some years to run.

20. Hundreds of workers across north-east England joined the millions across the country in fearing for their future when npower decided last week to export hundreds of jobs to India and force Thornaby-based workers to travel to a new location nearly an hour away. Does the Minister now understand why half the working population fear for their jobs and feel insecure? What is she going to do about it? (901465)

The hon. Gentleman understandably raises a constituency case, and I am sure the whole House feels for people in that position. Insecurity in that kind of circumstance, where jobs are lost or people fear for their jobs, is something we all understand. The best way to deliver the security that everybody wants to see for their constituents in work is to continue the recovery that the Government have started, ensure that we keep interest rates low, have a thriving economy and support the small businesses up and down the country that are the engine of growth. That is what the Government’s plan for recovery is delivering.

One of the main contributors to the rise in the number of people feeling insecure at work is their inability to seek justice through the employment tribunals system. Data announced last week by solicitors Pinsent Masons showed that in some regions the number of employment tribunal claims had fallen by almost 80% since the introduction of fees, despite the Government’s impact assessment measuring it at just 20%. In the light of these figures, does the Minister agree that the level of fees is fundamentally restricting access to justice, and does she agree with the Scottish Women’s Convention that fees are disproportionately affecting women and they are discriminated against in the workplace?

The hon. Gentleman needs to be careful with his use of statistics, because we have introduced a range of changes to the tribunals system aimed at getting employers and employees to resolve disputes outside the tribunals system, which I would have thought everybody would welcome, given that tribunals are costly in terms of time, stress and money for everybody involved on both sides of the dispute. Our proposals, which we are implementing, on early conciliation and making it easier for disputes to be resolved should be working to reduce the number of tribunals, but the Ministry of Justice has committed to keeping these issues under review, particularly the equality aspects and whether there is any disproportionate effect on one particular group.

Higher Education

That is already our policy. Higher education is vital to our future productivity and economic growth. That is why we have reformed university finance and protected research spending. As a result of our reforms, total university income for teaching will rise from £7.2 billion in 2011-12 to £9.1 billion in 2014-15.

The Minister will know that spending on higher education remains lower than the OECD average, yet higher education makes a huge contribution to the national economy, as I know from the two excellent universities in Brighton and Hove, so will he do even more to address this gap please? Will he also make an assessment of the University and College Union proposal to fund our knowledge economy via an increase in corporation tax for the richest 4% of our corporations, rather than by relying on tuition fees that unfairly fixate on the individual benefit of students going to university?

We have a fair and sustainable way of financing higher education. It is right to expect graduates to pay back the cost of their higher education if they are earning more than £21,000. That has enabled us to see more students going to university and increases in funding for teaching at universities, even while we have been tackling the budget deficit we inherited from the previous Government.

As you know, Mr Speaker, while the Minister was batting for Britain in Kazakhstan last week, the National Audit Office was battering his handling of the student loans system. We look forward to the hearings at the Public Accounts Committee, but in the meantime would he mind telling the House how late he discovered that students at private higher education institutions were soaking up public subsidies at such a rate that there was an overspend of hundreds of millions of pounds? How did he lose control so spectacularly?

Let us be clear: these students are studying for HNCs and HNDs, which are all legitimate and valuable qualifications. Whereas under the right hon. Gentleman’s Government there was no control whatsoever of the designation of alternative providers, we have introduced controls. The number of students going to alternative providers has increased dramatically, and in order to maintain budgetary controls, we have introduced further limits on the numbers, but these are worthwhile courses that we should support.

Zero-hours Contracts

During the summer, the Department undertook a fact-finding exercise to explore how these contracts are used and to identify the issues involved. We found that this type of contract worked well in some circumstances, but could be open to abuse. As a result, we have committed to publishing a consultation seeking views on zero-hours contracts and proposals to address the concerns raised. It will be published shortly.

Does the Minister accept that job insecurity has nearly doubled since 2010 and will she support Labour’s policy, which would stop zero-hours contracts that require workers to work exclusively for one business and end the misuse of zero-hours contracts where employees are, in practice, working regular hours over a sustained period?

I commend the hon. Lady for her consistency on his issue and for raising this concern on behalf of her constituents and others. Exclusivity was one of the issues we found in the fact-finding exercise over the summer to be of real concern, so that will be one of the issues that we will look at further in the consultation. We will also consider whether the transparency of information can be improved between employers and employees, so that there is a bit more certainty about what is expected on both sides of the contract. Used well, these contracts should provide flexibility in our labour market that can benefit both employers and employees.

I am grateful to the Minister for her written replies to my questions of 21 November, but will she ensure that the consultation addresses the parallel abuses where employees appear to be engaged as subcontractors as a way of masking the fact that they are being paid below the national minimum wage so that Her Majesty’s Revenue and Customs find it difficult to enforce the national minimum wage regulations?

My hon. Friend raises an issue about subcontractors. Clearly, we have robust enforcement processes in place for the national minimum wage, but I know that there are concerns in some industries about false self-employment as well. The Government are well aware of that. I hope that my hon. Friend will have just a little more patience before hearing more about what we might do about that. I definitely agree that we must ensure that people are not exploited in the labour market by being forced on to contracts that deny them their basic employment rights.

Small Businesses

The regional growth fund has allocated £40 million-worth of funding to Newcastle, more than £4.7 million has been offered to local businesses under the enterprise finance guarantee, and there have been 85 start-up loans, totalling £414,000. UK Trade & Investment has supported 292 small and medium-sized businesses in Newcastle to export.

I will celebrate small business Saturday with retailers and traders in Newcastle’s vibrant High Bridge quarter and fantastic Grainger market. I am glad that so many Members are supporting this Labour initiative. Does the Minister agree that the best news I could give these hard-working businesses would be that he is going to support another of the shadow Business Secretary’s proposals—to cut business rates and then freeze them?

I am delighted that the hon. Lady is supporting the cross-party small business Saturday—an idea that we got from the real Barack Obama—and I hear her intervention on business rates. I recall, however, that the Labour Government legislated to double them for the smallest businesses. Of course we listen to small businesses about the business rates, but not to those who wanted to put up taxes for them.

Machinery Directive (Disabled People)

18. If he will bring forward legislative proposals for regulations under the EU machinery directive to protect disabled people. (901463)

The EU machinery directive was transposed into UK legislation by the Supply of Machinery (Safety) Regulations 2008. These require products placed on the market to be safe when used for their intended use and are applicable to all relevant people. When used by persons with disabilities, the products must be just as safe for them as they are for able-bodied people.

My disabled constituent Mr Harding, about whom I wrote to the Minister, has experienced recurring problems with his lift appliance, narrowly escaping injury on a number of occasions. Will the Minister say how Mr Harding and other disabled people can ever feel confident about using such equipment if it is not subject to specific legislation and if they have no recourse legally if an accident occurred?

I am sorry that Mr Terry Harding has had these difficulties over a long period with a number of products, but I am pleased that he has now been supplied with a new product—thanks, I think, to the intervention of the trading standards officers of North Tyneside council. I would be happy to discuss with the hon. Lady what further steps she thinks might be necessary and to look at the legislation again with her.


The Government are significantly increasing support for exporters by helping more small businesses on overseas tradeshows. As the right hon. Gentleman will well know, the Prime Minister has just led the largest-ever trade mission to China, but missions to smaller countries across the world are also vital to our economic future.

We have heard a lot about small business Saturday, and we will all be doing our bit—yours truly included. Let me pick up the Minister’s commitment to ensuring that we do not do export drives only to China, India and the big countries, but particularly to small Commonwealth countries. I ask him to look at the potential for expanding our exports to the Caribbean countries, which feel that they have been slightly neglected in recent years.

Absolutely. I agree that we need to expand our trade to the whole world, including the smaller Caribbean countries. I hope that the right hon. Gentleman will be here later this morning, when the Chancellor speaks.

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.

Portakabin, the world-class modular building company which is based in my constituency, has raised the possibility of supporting British exports through assistance with the translation of foreign regulations. What steps is the Secretary of State taking to deliver that vital service, which could break down barriers to trade and boost United Kingdom exports?

I know that the Prime Minister visited the hon. Gentleman’s constituency recently and was very impressed by the Portakabin initiative. We have a concrete proposal for the establishment of a single market centre to help companies to negotiate overlapping regulations, particularly those relating to export controls. Translating regulations into a common language would make the process easier.

We had black Friday last week and cyber Monday at the beginning of this week, but, as many Members have already pointed out, the only day that really matters is small business Saturday. I am sure that you will be visiting small independent local shops in Buckingham this weekend, Mr Speaker. Will the Business Secretary join me in thanking the huge coalition—including organisations representing more than 1 million businesses, AmEx, the Ingenious Britain campaign, and, above all, the national campaign co-ordinator for small business Saturday, Michelle Ovens—that has made this day possible?

I am happy to do that, and to acknowledge the collegiate, cross-party approach adopted by the hon. Gentleman. Small business Saturday is a very good initiative, and we should support and sustain it as much as we can.

The owners of the businesses to which I referred will have heard about the Tomlinson report, which accuses RBS of artificially distressing successful businesses in order to seize assets and make a profit. That is a very serious allegation about a bank that we, of course, own. Tomlinson says:

“Banks must ensure…that robust processes are in place to…avoid conflicts of interest.”

It has transpired, however, that he is an RBS customer, and that he has a complaint about the bank pending. Was the Secretary of State aware of that before he allowed the report to be published, and does it not call the report’s independence into question? It is not independent, is it?

I was well aware that Mr Tomlinson was an RBS customer. He has been very public in his comments about the bank for a long time. He was appointed as entrepreneur in residence at my Department —we seem to have a team of entrepreneurs—and has contributed valuable insights. I have referred his report to the regulator and the bank. Crucially, his accusations are echoed in the report published by Sir Andrew Large, who was appointed by RBS.

There are serious problems in the banking system, and in RBS in particular. Those problems need to be investigated, and I think that Mr Tomlinson has performed a useful service in making them public.

T4. I am grateful to my hon. Friend the Under-Secretary of State for her earlier reply in respect of the review of zero-hours contracts, but does she agree that driving out shady employment practices and improving wages, including the national minimum wage, would have the additional advantage of reducing the welfare benefits budget? (901471)

My hon. Friend is right. That is one of the reasons why my right hon. Friend the Business Secretary asked the Low Pay Commission to identify the conditions that are necessary for an increase in the minimum wage. I think that we would all like wages to increase: things have been very difficult for households over the last few years following the economic crisis, and encouraging businesses to pay good wages encourages staff loyalty, motivation and productivity. It is, of course, important to balance that with the fear of unemployment, which we want to keep down.

T2. On Monday the Government announced substantial changes in the ECO energy efficiency scheme, including significant scaling back of the component that insulates solid walls. Most of the large-scale local authority and social landlord energy efficiency schemes depend on that component, and there will obviously be a correspondingly negative impact on the insulation industry. What discussions is the Department having with the industry about the likely number of job losses, and what are they doing to mitigate it? (901469)

I do not recognise the impact that the hon. Gentleman suggests. The energy company obligation scheme is being extended over a further two years, until 2015, and it is being focused better on those households that need it most.

Two hundred and three MPs across this House now back the solution proposed by the Select Committee on Business, Innovation and Skills to pubco overcharging: the market rent only option. Will the Department do the right thing this time, back the Select Committee, deal with this crony capitalism and listen to the voice of small business? Both the Federation of Small Businesses and the Forum of Private Business support our approach.

My hon. Friend has been a stalwart campaigner on this issue, which, as he rightly points out, is of great interest to Members on both sides of the House and to the Select Committee. He will be aware that we undertook a consultation earlier this year, and we are reviewing the responses. He is also right to highlight the important contribution that organisations such as the Federation of Small Businesses have been able to make in putting forward further research reports. We hope to be able to publish that kind of information very shortly so that more people will be able to look at the responses.

T3. In the light of the revelation that the Government have failed to act to close a tax loophole that has cost the public some £500 million a year, what discussions has the Secretary of State had with Treasury Ministers about the concern that some large firms are failing to pay the correct amount of tax while smaller ones are making their contribution? (901470)

There is a general concern about tax avoidance and there are some very public issues relating to certain companies. However, as the hon. Lady knows, in an hour’s time the Chancellor will be making the autumn statement, and I would be very surprised if a substantial part of that were not devoted to the issue of tax avoidance.

The Gangmasters Licensing Authority does terrific work in dealing with one particular vulnerable group of employees. Is there any scope for extending that way of working to protect other sectors, such as the care and hospitality sectors, in which there is at least the implication of abuse of employees and very low wages?

My hon. Friend is right to point out the importance of protecting vulnerable workers. Her Majesty’s Revenue and Customs has recently carried out a two-year investigation into practices in the social care sector, particularly in respect of payment of the national minimum wage, where some non-compliance was found and was absolutely acted on. We need to ensure that such behaviour is cracked down on, which is why we are delighted to be able to put more resources into cracking down on abuse of the national minimum wage, increasing the maximum penalty fines and making it much easier to name and shame employers who deliberately do not pay their workers the right amount. That is the right approach.

T5. Is the Secretary of State aware of the latest scam hitting agency workers in my constituency and around the country, whereby £2.50 a week is deducted for personal accident insurance, even though the cost to the agency is a fraction of that and the worker is already covered by employer’s liability insurance? Will he look into that and put a stop to it? (901472)

The hon. Gentleman has raised issues relating to agency workers on a number of occasions, and I know that in his constituency there is a particular concentration of them. We are always happy to look at whether workers are treated as they should be. I am happy to look into the specific issue he raises and get back to him.

One of the biggest and most important decisions that any sole trader has to make is whether and when to take on their first employee. Will the Secretary of State set out what steps his Department is taking to make that process as easy as possible?

My hon. Friend is right to identify that moment in the life of a small business. By reducing the amount of national insurance paid, by introducing the employer allowance of £2,000 from April and by setting out that a company cannot be taken to a tribunal for two years, we are hoping to make it much easier to employ people and for small businesses to expand.

T6. Work programme providers say that their participants can hardly ever get on to an apprenticeship, and that surely cannot be right. It may partly explain why the Work programme has been so disappointing. Does the Minister agree that more should be done to open up apprenticeships to unemployed people? (901473)

A huge proportion of apprenticeships are undertaken by people who were previously unemployed. Of course, every apprenticeship is a job, and in order to get a job someone needs to have an employer willing to take them on. There are many other schemes, such as the traineeships, that Work programme providers work with in order to prepare people for getting a job. Ultimately, an apprenticeship is a job and is therefore a successful outcome for a Work programme person.

May I ask the Minister for Universities and Science what progress has been made in expanding the scholarship scheme for university students, particularly to help with the cost of living rather than the cost of fees?

We continue to provide support to students. The national scholarship programme has been shown to have less effect on young people choosing to go to university than some of the other support that is available through maintenance and student access programmes. We continue to work on the agenda set out by my right hon. Friend, ensuring that as many young people as possible from disadvantaged backgrounds apply to university.

T7. The Government have consistently been on the back foot when it comes to addressing the issue of late payments to small businesses. In the review of that, how will they address the central issue that late payment is a cultural and leadership issue, and needs to be seen as unethical as tax evasion? (901474)

Late payment is indeed a cultural and leadership issue. I held a meeting in the Department last week with all those concerned. As the hon. Lady well knows, we will be publishing a consultation paper very shortly. I commend her for her continued action and pressing on this issue.

Small business in Chester is really getting behind small business Saturday this weekend. I have delivered more than 400 packs to businesses telling them what it is all about. Will the Minister commit to making an assessment of the success of the first small business Saturday, so that we can improve and help small business in future?

I am sure that we can make a commitment right now to assess the success of small business Saturday, which will be celebrated across this House and across the country. This is the first one this year—it has been going on for some years in the United States—and I hope that it grows and grows.

T8. The number of workers who feel insecure in the workplace has gone up from 6.5 million to 12 million since this Government came to power. That has a knock-on effect on the physical and mental health and productivity of workers. Will the Minister make an assessment and do some research into the effects of insecurity on the work force? (901475)

The hon. Gentleman is right to highlight the downsides of job insecurity. We already have robust data from the workplace employment relations study, which gives us a strong base of research on which to draw to understand those issues. However, I gently point out to him that an increase in job insecurity is related to the fact that we had a massive economic shock on his party’s watch in government. High unemployment and unfortunate economic circumstances are the price that everyone is paying. The least his party can do is apologise.

For many years, Mill Road winter fair has celebrated one of the most diverse shopping areas in Cambridge. This year the fair coincides with small business Saturday. Will the Government congratulate those who have been running the fair and encourage its spread so that we can see real diversity? We also want a road closure so that people can walk easily to the shops.

I congratulate Cambridge on what it is doing for small business Saturday. I am sure that it will be a great success.

T9. The Secretary of State will be aware of the mechanism in the transatlantic trade and investment partnership that will allow global corporations to sue Governments before secretive arbitration panels that bypass domestic courts. As his own Department’s research says that nothing would insulate the UK from becoming subject to costly and controversial arbitration claims in the future, will he work to ensure that investor-to-state dispute settlements are removed from that agreement? (901476)

The overall context is that the transatlantic agreement between the European Union and the United States, if it materialises, would be of enormous economic benefit. We realise that there are some tricky negotiating issues, and the hon. Lady has highlighted one of them. We will try to ensure that the interests of our economy are properly protected.

Will my hon. Friend keep pushing for the teaching of enterprise in our schools, so that we can inspire a whole new generation of entrepreneurs?

Yes, I will, and I pay tribute to my hon. Friend’s work, especially in her constituency where new academies that link the world of work and the world of enterprise are springing up with her support.

T10. May I press the Minister for Universities and Science further on why he repeatedly rejected warnings on uncontrolled financial support to students in private higher education colleges? In March, he argued that the policy was important to enable private providers to continue with their expansion, but now that he is faced with a growing black hole in the BIS budget, he has reversed the policy. Will he explain why and will he guarantee no further cuts to student support to pay for his mistake? (901477)

Let us be clear, we inherited from the previous Government a complete rubber-stamping exercise under which there was no control whatsoever over alternative providers. We introduced controls. For example, in the last year, out of 87 applications from alternative providers, 18 were approved and 69 were rejected. That was effective quality control and we have taken further steps to ensure that the Department can remain within its budget.

Our plans predate small business Saturday, but this weekend in Rochester we have a Christmas fair and also a Dickens weekend. They attract many thousands of people to Rochester, which has, almost entirely, independent small businesses. Will the Minister join me in welcoming that?

The hon. Gentleman is adding his name to the roll call. Perhaps we could simplify this process, whereby if everybody in the House who does not support small business Saturday puts up their hands.

I shall enjoy supporting small business Saturday, too. Many young people take their first job in retail and gain vital experience and training that stands them in good stead for the rest of their working lives. Given the problems that retail faces, what steps will the Government take to support retail, especially to deal with the scourge of youth unemployment?

We support the national skills academy for retail, and I recently opened its new premises. It is a great supporter, ensuring that people in retail have the right skills to do the job and to progress.