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Oral Answers to Questions

Volume 583: debated on Thursday 26 June 2014

Business, Innovation and Skills

The Secretary of State was asked—

Workplace Insecurity

Employees’ views on job security are related to their individual circumstances and underlying economic conditions. Unsurprisingly, insecurity rose in the recession, but the fall in unemployment from 7.9% when we came into office in May 2010 to 6.6% in April 2014 and the creation of 700,000 permanent employee jobs since 2012 will almost certainly have reduced it.

The national minimum wage gives people at work security and a statutory minimum, ensuring decent wages. In January, the Chancellor advocated a £7 minimum. Was that not just empty rhetoric, given that no action has occurred since? Why are Ministers refusing to back Labour’s living wage plans?

Before I reply directly to the supplementary question, may I thank the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Cardiff Central (Jenny Willott), who comes to the end of her admirable period in office at the end of this week as her colleague returns from maternity leave?

The Chancellor was not advocating a £7 minimum wage; he was explaining the simple arithmetic of what would happen if a real minimum wage were restored. The hon. Gentleman will well know that measures will be coming before the House to introduce much more effective enforcement action on the minimum wage. We should concentrate on strengthening the minimum wage, rather than pursuing the living wage as a mandatory option, about which there is confusion among Opposition Members.

Will my right hon. Friend confirm that any employer found not to be complying with the national minimum wage legislation will be prosecuted, and that any employer seeking to use zero-hours contracts to get around the national minimum wage legislation will therefore be prosecuted? If employers seek to exclude people on zero-hours contracts from being able to take work with any other employer, cannot those contracts be declared void as being contrary to public policy?

On the latter point, we shall discuss in the forthcoming legislation how enforcement action might be taken in respect of exclusivity contracts. The answer to the first part of the question is yes, indeed: if the minimum wage legislation has been breached, action is taken, initially by retrieving the sums involved and by naming and shaming, and under the forthcoming legislation it will be by very significant penalties.

Does the Secretary of State agree that the Government’s approach to zero-hours contracts has to tread the difficult line between supporting the vast majority of employees who want to continue with those contracts, and limiting the use of such contracts where they are neither necessary nor appropriate?

My colleague is right that this is a difficult line to tread, which is why we must base our policy on evidence and not on dogma. The evidence very clearly shows that a large number of people do appreciate and see value in the current arrangements but that there is also abuse, which needs to be dealt with.

Zero-hours Contracts

2. What assessment he has made of the implications for his policies of the Office for National Statistics report on zero-hours contracts, published on 30 April 2014. (904469)

The ONS report was a helpful addition to the debate on zero-hours contracts, alongside the Department’s call for evidence and final consultation. Our policy is that although zero-hours contracts benefit many employers and employees, there is a need to address abuse.

The ONS study showed that 1.4 million workers were on zero-hours contracts. Those workers are unable to access rented property, because they cannot prove a work record, or mobile phone contracts and hire purchase contracts. What work has the Department undertaken also to identify the status of the 1.3 million people whose jobs were not examined as part of the ONS study? Do we not need to find out more about the people on zero-hours contracts rather than staying where we are?

I thank the hon. Lady for her close interest in this matter and for trying to build up the evidence base. There is some confusion here, because the 1.4 million figure relates to the number of contracts, and individual workers may have several contracts; the best number we have from the ONS for the number of workers involved is 583,000, which represents about 2% of the total labour force.

Does the Secretary of State agree that in today’s modern workplace many employees find zero-hours contracts very attractive because of the freedom they give them to combine different jobs, to work from home and be available to work, or to work and study at the same time?

My hon. Friend rightly says that certain groups of workers find these contracts advantageous, the main ones being workers who have passed retirement age and wish to do optional, flexible work, and students, for whom the lack of an obligation to turn up at a fixed time for a fixed period is compatible with their studies.

Will the Secretary of State clear up the confusion he created during the last debate on this issue in the Chamber and confirm that workers on jobseeker’s allowance who turn down a zero-hours contract job will not face sanctions?

Employers are trying to steer a course between being flexible and skirting around their legal obligations, but there is concern about the zero-hours contracts for care workers, on whom we are becoming increasingly dependent. Will the Secretary of State’s Department take a careful look at that industry with a view to giving it further guidance if required?

Yes, indeed. We are already doing that, and I am discussing the matter with the Minister with responsibility for care. The problem with domiciliary care is that there is almost certainly an avoidance by companies to pay the minimum wage, and that overlaps with the problem of zero-hours contracts. We recognise that there are some very specific problems for workers in that sector.

Regional Growth

Some £765 million of regional growth fund support has been paid to companies throughout England, which has leveraged £1.8 billion of private money. This combined investment of £2.5 billion in areas that need private sector growth has already delivered or safeguarded 97,000 jobs. Round 6 was launched last week and I encourage hon. Members to support companies in their constituencies in applying for funding.

In paying tribute to the hon. Member for Cardiff Central (Jenny Willott), perhaps the Secretary of State could put in a good word for her to get another job—there are so few Liberal Democrat women Ministers in the coalition Government.

Humber local enterprise partnership has been among the best in showing that it needs to go further than Ministers are with Lord Heseltine’s agenda on devolved funding, distributing £30 million of round 3 RGF funding to more than 80 companies, mainly small and medium-size enterprises. The funding ends in March 2015, and the fact that future rounds will be open only to larger businesses and universities with a minimum bid of £1 million will exclude many SMEs that are vital to the future of Hull. Will Ministers look again at this matter?

On the hon. Lady’s first point about women in senior roles in Government—of course I want to add again compliments to my colleague—she may have noticed that the last of the FTSE companies that did not have a woman on the board, Glencore, has listened to our clear advice that it should proceed, and Mr Glasenberg appointed a woman director this morning. On the £30 million, which is of course the local fund that was hitherto administered through the local enterprise partnership but will come under the local growth fund when it is available from 2015-16, the local enterprise partnership will have discretion over how to use the funding available to it. I am sure that it will, as before, continue to support development in Hull.

For Kettering’s sustainable urban extension to be sustainable, the Department for Transport says that a new junction on the A14 called junction 10A is required at a cost of £39 million. That is supported by both the Northamptonshire LEP and the South-East Midlands LEP. Given that the junction could release economic activity worth up to £1 billion under the Treasury green book rules, will the Secretary of State look favourably at this bid from Kettering for this new road junction?

That is an issue that the Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon), the Department for Transport and I will have to examine. As I understand it, under the arrangements that will prevail in 2015, this is very much a matter for the two LEPs involved to exercise their priorities.

Some really good stuff has happened under the regional growth fund, and I am glad to see the next round, but it is still not enough. We are still not getting borrowing for start-ups. New entrepreneurs are not being encouraged enough, and we are not using crowdfunding and crowdsourcing enough. What will the Secretary of State do to increase the number of young entrepreneurs who have access to capital so that they can make a difference?

First, I thank the hon. Gentleman for his constructive remarks at the beginning. On funding, he will be pleased to know that under the StartUp loan scheme, we now have 13,000 loans that have been disbursed. They operate through the Business Bank, which is also funding crowdfunding, and it is operating on a significant scale and accelerating fast.

Vocational Training

We are creating a system of vocational training to enable everyone to achieve their potential. We are on track to deliver 2 million apprenticeship starts. We have introduced traineeships for young people, we are supporting national colleges for key sectors and technologies and of course more than half of university students are doing a course that leads directly to a profession.

I welcome the huge progress that has been made. What progress has been made in implementing the Richards review recommendation to give employers greater purchasing power over apprentices’ training to drive up standards?

I met Doug Richards in a very upbeat mood only half an hour ago, and I can assure my hon. Friend that we agree with Doug Richards that employers should purchase apprenticeship training. We want providers to respond to businesses, not to Government. We have consulted widely on how to make that happen. We will publish details of our preferred payment mechanism and next steps in the autumn.

The hon. Gentleman and the Minister appear to have a symbiotic relationship, and we are grateful for that, I am sure.

Despite all the praiseworthy emphasis that the Government have placed on increasing the number of apprentices, the number of apprenticeship starts in the under-19 age group is dropping. The BIS Committee recommended that the Government should use public procurement to increase those numbers, as a lot of local authorities do. Why have the Government not done it?

The Government believe in promoting apprenticeships across the public sector. Figures published today show an increase in the number of apprenticeships in that crucial age group.

Apprenticeships are essential to help deliver a growing economy, but nearly 400 employers in the north-west have replied to the future of apprenticeships in England funding reform technical consultation, and they have said that they will no longer recruit apprentices under the reforms that the Government propose. Will the Minister please say what he intends to do specifically for SMEs, which are concerned about the proposals?

We have had a range of reactions to our consultation, and the national bodies that represent businesses strongly support the proposals that we and in particular my excellent colleague the Minister for Skills and Enterprise are putting forward.

As a dyspraxic, I remember how much extra effort I needed to put in to succeed at university. Students with disabilities and learning difficulties will be concerned about the Government’s reforms to the disabled students allowance, under which many of them will lose out. The evidence shows that students with learning difficulties are already less likely to complete their course and less likely to achieve the highest grades. Why does the Minister want to widen that gap even further?

Let me be clear: we are committed to helping disabled students. We will expect universities to do more to discharge their direct responsibilities to disabled students. Often, improved provision by universities is a better way of helping disabled students than funding to individual students. We will maintain strong support for disabled students.

Life Sciences

We are promoting research and development, innovation and manufacturing so the UK is a global leader in life sciences. Businesses in life sciences have announced more than £2 billion of investment since our strategy was launched.

Following my right hon. Friend’s recent visit with me to see cutting edge 3D print technology at BD’s plant in Swindon, will he work with me to help the further development of high-value specialist manufacturing at companies such as BD, Patheon and Catalent, which form an important part of Swindon’s life sciences sector?

I remember vividly that visit last month and congratulate my hon. Friend on his very good working relationships with local employers. He is right that our life sciences strategy is not simply about research and development, important though that is. It is also about supporting high-tech manufacturing and promoting more of that in the UK.

In the run-up to the election, it is important that we try to maximise consensus across the House on science policy. To help the debate, we launched our Green Paper on science on Tuesday, and I welcome the Royal Society’s report today. It is important to be honest about where we are, though. Life science investment has fallen, according to the Library, by almost £500 million since 2010. In the last year for which data are available, total R and D spending in the UK is down by nearly £1 billion. We are now 23rd out of 33 for R and D spending in the OECD. Why does the Minister think that is? I am sure he will agree that this is not the way to win a race to the top.

A major change is happening in the structure of the life sciences industry, with it moving away from having large, in-house R and D facilities. That trend is happening around the world. We have been particularly successful in this country in making sure that as that happens we promote alternative investment, and we are now seeing—for example, in the facility that Pfizer operated in Kent—significant renewal as new, small businesses come in. Our life sciences strategy is attracting new investment to the UK—£2 billion of it since we launched the strategy.

Regional Growth

We want to see growth that is sustainable and balanced, but it is local businesses and civic leaders who best understand what drives growth in their area. Through local enterprise partnerships they will have at least £20 billion to allocate until 2020.

May I take this opportunity to welcome the Government’s proposed plans to build a high-speed rail network between our great northern cities? In the light of that announcement will the Minister assure me that local businesses in Fylde and the local enterprise zone in Warton will continue to receive the full support of Government to promote growth in west Lancashire?

Yes, I give my hon. Friend that assurance and tell him that we hope before the summer recess to agree a growth deal with the Lancashire local enterprise partnership, centring on the arc of prosperity it has identified alongside Lancashire’s huge strengths in energy, manufacturing and engineering.

On support for regional growth, when will the financing be agreed for the electrification of the south Wales valleys train lines?

I shall certainly raise that with my colleagues in the Department for Transport. I do not have the date to hand, but I hope that the hon. Gentleman will welcome that investment.

17. Does the Minister agree that it is incumbent on local government leaders, LEPs and local MPs to work with local businesses to ensure that places such as Carlisle maximise their potential as an economic powerhouse in their region? Does he agree also that local government and local businesses are as important as national Government in promoting growth and job creation? (904492)

Yes, I absolutely agree. I thank my hon. Friend and his colleagues for their input into the Cumbria economic plan. I saw that close working for myself when I chaired the recent Cumbria forum on advanced manufacturing.

Regional growth is dependent on good transport connections, and there has been widespread concern in northern Lincolnshire among the business community about the threat to services on the south transpennine line. Will the Minister agree to meet a delegation of business leaders from northern Lincolnshire to discuss that and other issues?

I am very happy to meet any delegation of business leaders with my hon. Friend. I am not the Minister for rail transport, but I shall certainly refer the issue to the Department for Transport, and I am happy to have the meeting that my hon. Friend requests.

Employment Support: Young People

7. What additional funding for training his Department has provided to support unemployed people and people aged 16 to 24 to get into employment. (904474)

We have record numbers participating in apprenticeships, new traineeships, maths and English training, which, with the record number of jobs, have contributed to a 98,000 fall in youth unemployment over the last year. We are simplifying vocational education and today publishing a simple slide showing young people their education options between the ages of 14 and 18.

I have a BAE Systems plant at Samlesbury in my constituency, and my hon. Friend the Member for Fylde (Mark Menzies) has one in Warton. BAE Systems took on a record number of apprentices last year, giving young people an opportunity to learn new skills to use in highly paid jobs when they are later taken on. What are the Government doing to encourage many more smaller firms to understand that apprenticeships can also benefit them?

I pay tribute to the work that BAE Systems does with its apprenticeships. It not only has hundreds of apprentices, many of whom I have met, but offers more and more higher apprenticeships, which provide the very best available training on the job. We have to make sure that smaller businesses get the message that apprenticeships can help them too; in fact, the majority of apprentices are in smaller businesses. We have made the apprenticeship grant for employers focused on smaller businesses to help them with the extra costs they have in taking on apprentices.

15. When are the Government going to put an emphasis on quality apprenticeships? Why do we need 47 different streams of funding for skills generally? When are we going to sort out on-the-job training from actual apprenticeships? Are the Government lumping on-the-job training into the figures for apprenticeships, when apprenticeships are totally different? (904488)

No, the figures for apprenticeships show the number of apprenticeships. They also show that we are on track to achieve 2 million apprenticeships in this Parliament—in fact, figures published at 9.30 this morning show that there have been 1.8 million apprenticeships since the election. We are simplifying the funding structures and putting more money through employers, so that they can buy the apprenticeship training they need.

I believe that the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), and I are both due to attend the Royal London Society for Blind People’s youth forum launch of “Let’s Work It Out”, which seeks to identify the barriers to visually impaired young people getting into employment. What more can the Government do to encourage employers to see the potential of visually impaired young people and to make them more aware of the technological assistance that can enable them to function in the workplace?

Making sure that those who are visually impaired can fulfil their potential in the workplace is a vital part of the training we support. My right hon. Friend the Minister of State is the president of the organisation that the hon. Lady mentions. Apprenticeships are one option, and there are specific mechanisms to ensure that those who are visually impaired can complete an apprenticeship, but more broadly we need to make sure that the whole skills system works as much for those with disabilities as for those who are fully able.

Small Businesses and Self-employed People

8. What assessment he has made of the effect of the Government’s policies on small businesses and the self-employed. (904475)

The Government are making it easier to start, finance and grow small businesses. There are now 400,000 more small businesses than in 2010. The total number stands at a record 4.9 million, with a record 4.5 million people in self-employment. Yesterday, we introduced in the House the first ever small business Bill.

The Federation of Small Businesses index has highlighted that small businesses are still struggling to get the finance they need to expand—something confirmed by small businesses in my constituency to a very large degree. The FSB also calls for greater competition and choice in business banking. Does the Minister accept that the Government’s failed schemes, including Project Merlin and credit easing, have had no impact whatsoever?

The hon. Gentleman was doing quite well until that last exaggeration. I certainly agree that strengthening access to finance is a vital part of securing our recovery, and of course measures in the Bill announced yesterday will help to do that, but according to the FSB, small businesses’ confidence is at a high since Labour’s great recession. Small businesses in the hon. Gentleman’s constituency are playing their part, because unemployment on the claimant count has fallen by 30% in the past year.

Small businesses in my constituency and around the country tell me that the real struggle when they are supplying large businesses is payment terms. Does my hon. Friend agree that requiring large companies to publish their payment practices is an important step in helping to drive a more responsible payment culture between large and small businesses?

I agree with my hon. Friend so much that we put such measures in the Bill we published yesterday.

I recently held a listening event for businesses across Bolton West. A major concern for them, and a definite barrier to success for micro-businesses, is business rates. As they have gone up by £1,500 already in this Parliament and by another £270 in April, will the Minister support a cut in business rates in 2015 and a freeze the year after?

It is interesting to hear another Labour proposal that is uncosted and unfunded. We have instead taken action to reduce by £1,000 the business rates on retail premises. We are clear that business rates need reform, and that reform will happen, but what we need are sensible contributions to the debate, given the enormous hole in the public finances that we are still having to fill.

Foreign Direct Investment

UK Trade & Investment is promoting a highly competitive corporation tax regime, seeking investment in regeneration and infrastructure and emphasising the quality of our research base, all of which make us the best place in Europe to do business.

Is my right hon. Friend aware that there has been hugely significant inward investment of £500 million by the German firm Palm Paper in a paper mill in King’s Lynn? Does he agree that we need more such inward investment, and that to promote more foreign direct investment we need to deregulate further social and employment measures?

Our flexible labour market is one of the many reasons that foreign investors are keen to invest in the UK and we can always pursue that important agenda further. The latest independent assessment shows that the UK was the most successful country in Europe in attracting inward investment.

Regulatory Burden: Businesses

We have significantly reduced the burden of regulation on business. The one-in, two-out rule has cut the annual cost of domestic regulation by £1.2 billion so far, and the red tape challenge has identified over 3,000 regulations to be scrapped or improved. To ensure that all future Governments remain committed to reducing burdens, the Small Business, Enterprise and Employment Bill published yesterday requires Governments to publish a target for removing regulatory burdens in each Parliament and to report against it.

I thank my right hon. Friend for his excellent reply. Does he agree that for business and enterprise to flourish, particularly in constituencies such as mine that have many small and medium-sized enterprises, we must stop the strangling of business by regulation from the European Union, and that means that the Prime Minister is doing absolutely the right thing in trying to reform Europe so that business can flourish in this country?

I completely agree with my hon. Friend, and I can tell him that of the 30 specific reforms requested by the business taskforce I chaired last year, nine have already been delivered, two further directives were withdrawn last month, and since the transposition rules were tightened three years ago there has been only one example of a European directive being gold-plated, which was the consumer credit directive that banned excessive payment surcharges.

The Bathroom Manufacturers Association is just one trade body which feels that regulatory policy has too little focus on enforcement of regulation. That leads to the undercutting of compliant, high-quality British manufacturers by cheap, non-compliant foreign imports. When will the Government understand that a mature and consistent approach to enforcement of regulation is not a burden on high-quality British manufacturing business, but an aid to it?

I am happy to meet that trade association to follow up its specific concerns. The hon. Gentleman is right that business needs uniform and proportionate enforcement, and we are looking to deliver that through improved guidance with the relevant bodies, such as the Health and Safety Executive and the Environment Agency.

Energy-intensive Industries

In the Budget the Government announced a package of support of £500 million a year for energy-intensive industries. From 2016, we will introduce compensation for the costs of the renewables obligation and the feed-in tariff. We will also be extending to 2019 the compensation scheme for the emissions trading scheme and the carbon price floor. Together with amendments to the carbon price floor, these changes will be worth around £7 billion to businesses in Britain.

My right hon. Friend will be aware that several of our EU competitors are increasingly cross-subsidising industrial use of electricity, creating a difficult landscape for our energy-intensive industries. A recent example of the impact of this is BOAL Aluminium, an aluminium processor which was going to invest £2 million in the UK but has moved that, with all the associated jobs, to Belgium, where energy costs 30% less. Is there more we can do to prevent carbon leakage of that type?

I am grateful to my hon. Friend for bringing representatives of the aluminium industry to see me in the Department. It is important that we in Britain do not lose out on such investment. We have already paid out some £30 million of compensation to 53 of the most electricity-intensive companies and we will continue to press for further reform in Europe.

It is good that some support is coming from 2016, but energy-intensive industries need support now in the challenging times they face. It is good that the Government have finally got their package of compensation for their unilateral carbon floor tax through Europe, but the Minister has previously given commitments to get that backdated to 2013, as promised to business. What progress has he made in getting that compensation backdated?

It took some 18 months to get that compensation scheme approved by the Commission, which is why it will take some time to get the compensation for the renewables obligation and the feed-in tariff and why that scheme will not apply until April 2016. The Commission did not agree to our request for backdating.

The hon. Member for Warrington South (David Mowat) asked exactly the same question in April and today received pretty much word for word the same unsatisfactory response. The fact is that the Government have imposed a unilateral carbon price floor that is widely divergent from the EU emissions trading scheme, which has put Britain’s energy-intensive industries at a competitive disadvantage to our European counterparts and done nothing to prevent carbon leakage or encourage investment in low-carbon energy. What practical steps is the Minister taking to shape reform of the ETS to make it more credible and to level the playing field for British industry, or have the Government lost that battle in Europe too?

Other countries such as Germany can of course offer higher support to their industries, but they did not have the appalling deficit that we inherited, because of course they did not have a Labour Government. I intend to ask the new Commission this autumn for an early review of the ETS and to include new sectors, such as cement, that have missed out so far.


The number of apprenticeships has doubled and we are on track to deliver 2 million over this Parliament—this morning’s figures show that there are 1.8 million so far. It is all part of our long-term economic plan.

I thank my hon. Friend for that answer. There are exciting plans to develop an aerospace apprenticeship training centre as part of the iAero proposals for the former Filton airfield land, which are being discussed by his Department and aerospace businesses in my constituency. Can he assure me of his support for those plans?

I am enthusiastic about those plans. We are working closely with my hon. Friend and colleagues in the aerospace industry to see whether we can make them happen. The number of apprenticeships in Filton is up by 60% since 2010, so it is clearly a success story and we want to build on that success.

National Minimum Wage

13. What resources have been allocated for enforcement action against employers who do not pay the national minimum wage. (904485)

The Government are committed to increasing compliance with minimum wage legislation. Everyone who is entitled to the minimum wage should receive it. Her Majesty’s Revenue and Customs has 173 staff dedicated to enforcing the national minimum wage, and the Government are already taking tougher action on employers who break the law. We have made it simpler to name and shame employers who do not pay the national minimum wage and have increased the financial penalties for breaking the law.

I thank the Minister for her response, but in Corby HMRC found that £120,000 was owed to local workers, and that was just on a three-day visit, so it was the tip of the iceberg and we need to do much more. Will she, in her last days in her role, leave a present for her successor by beginning a review into how local authorities could take a much stronger enforcement role? They currently enforce on planning, parking and environmental health, so why can they not have a role in making the local labour market work for people?

Clearly we feel very strongly that employers should pay the national minimum wage. People working on the minimum wage are, by definition, on the lowest incomes in society, so it is critical that everything is done to ensure that they are paid it. Every complaint that is made to the pay and work rights helpline is investigated, and where arrears are found they are paid back and employers pay a significant penalty. We are happy to work with any part of Government and any organisations that are keen to ensure that the minimum wage is paid. We will ensure that any complaints reported to the pay and work rights helpline are investigated.

I pay tribute to the hon. Member for Cardiff Central (Jenny Willott), who has always been a very kind and effective Minister, and wish her well in her return to the dark arts of the Government Whips Office. Given that compliment, I am sure that she will wish to agree with me that any sanctions for non-compliance with the national minimum wage are ineffective without proper enforcement. Figures show that since the Government came to power the number of national minimum wage inspections is down by 60%, with only two prosecutions. That is hardly surprising, given that a recent answer she gave to a parliamentary question committed a budget of £9.2 million to enforcement, but the head of the national minimum wage enforcement unit publicly stated only last month that the budget is just £8 million. Just like the Chancellor’s hollow promise to increase the national minimum wage to £7, is this not just another example of the Government failing to stand up for the lowest paid against rogue employers?

I completely disagree with the hon. Gentleman. The enforcement action taken by HMRC has significantly increased the number of workers who are getting the wages they are due. Between 2009-10 and 2013-14, there was an increase of over 17% in the number of workers who were helped and were given arrears, and the amount that has been paid back has been increased significantly. In addition, we are increasing fourfold the penalty that employers have to pay, and we now have in place a very draconian naming and shaming scheme. That means that all employers who are found not to have paid the national minimum wage are put forward for naming and shaming, and, unless exceptional circumstances are involved, they will be named publicly. That is acting as a real disincentive to employers not to treat their staff fairly.


Office for National Statistics figures for April show that manufacturing output in the UK rose by 4.4% year on year—the fastest pace since February 2011. Industrial production rose by 1.1% in the three months to April compared with the previous three months—the strongest three-monthly growth since June 2010.

I thank the Minister for that encouraging answer. With the need for more skills in energy engineering in mind, does he agree that it is a very good idea to have a centre for those skills at the now-decommissioned Berkeley power station, and that that represents a significant step in the right direction for the long-term economic plan?

Yes, I do agree. That project is a key part of Gloucestershire’s economic plan, and it can provide the skills that we will need for the next generation of nuclear power stations at Hinkley and Oldbury. We are currently considering Gloucestershire’s request for local growth funding to support the project. I hope to announce the allocation for Gloucestershire as part of the growth deal before the summer recess.

Small Businesses

The Small Business, Enterprise and Employment Bill builds on a record of 42,000 businesses helped to export by UK Trade & Investment over the past year and 15,000 small businesses supported by the growth accelerator scheme. As the Secretary of State said earlier, the number of start-up loans approved has reached 18,000.

As my hon. Friend will be aware, large businesses still owe small businesses over £30 billion in overdue invoices. Only yesterday, a company in Basildon contacted me to say that one of Essex county council’s main contractors owes it well over £100,000 past the due date. Will he expand on how we will use the small business Bill to resolve this issue and pump billions back into the economy?

The Bill contains two elements on prompt payment, the first of which is to increase the amount that Government pay quickly. BIS pays almost all its invoices within 30 days and the vast majority within five days. We will also bring transparency so that when small businesses enter into contracts with large businesses they know their payment performance and can negotiate on that as part of the contract.

Order. I thought that we were through all the substantive questions with time to spare, but we will take a question from Debbie Abrahams.

I am very grateful, Mr Speaker.

I am pleased that the Government have finally produced a Bill to deal with late payments to small businesses by large companies. It includes some of the recommendations from my inquiry last summer into late payments. However, it does not go far enough and will give little comfort to the small businesses whose viability is threatened. Why are these measures so timid?

I pay tribute to the hon. Lady for the work that she has done on this subject. We consulted on all the potential options, including statutory maximums for payment terms. We put the consultation out with an open mind and a wide range of options. In fact, the small business groups that came forward with proposals in response to the consultation favoured transparency, not a statutory limit. We followed the evidence and the response to the consultation. Like her, I am determined to do everything we can to tackle this problem while not getting in the way of freedom of contract between businesses. We have taken these measures because of what the evidence demonstrated, and I think they will have a big impact. That is all part of our long-term economic plan.

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.

In September, the Portsmouth warship yard, where many of my constituents work, will shut. That will leave the Government without a plan B for warships if the referendum goes the wrong way. The work force will be dispersed before there is an alternative user and the shipyard’s role in providing manufacturing apprenticeships across southern England will be lost. Will the Secretary of State look to delay the closure until the referendum is over, until there is a new user and until there is a credible plan for training manufacturing and engineering apprentices in southern Hampshire?

The maritime industries are, of course, crucial in Portsmouth, as they are in the right hon. Gentleman’s Southampton constituency. On the approach we are adopting, a Government group led by the Minister of State, my right hon. Friend the Member for Sevenoaks (Michael Fallon) is as rapidly as possible finding alternative commercial users, working with the Ministry of Defence. I welcome in particular the very exciting Ben Ainslie project and my colleague is working closely with Rear-Admiral Stevens to develop the Solent maritime industries.

T2. Fylde has a significant amount of advanced manufacturing companies, including BAE Systems and Westinghouse Nuclear Fuel. May we have an update on what steps are being taken to increase the number of highly skilled apprenticeships in the advanced manufacturing sector? (904495)

Absolutely. Through the trailblazer process, we are putting employers in charge of the training involved in apprenticeships, to make sure that, in addition to the big increase in numbers we are seeing, we increase the quality of training so that all young people have the opportunity to use an apprenticeship as an alternative to university in order to reach their potential.

Does the Secretary of State think it is acceptable for a Government Department to increase reporting requirements twelvefold for businesses?

I am not sure what the hon. Gentleman is referring to, but as the Minister of State, my right hon. Friend the Member for Sevenoaks said a moment ago, we have taken considerable action drastically to reduce the regulatory burden on business.

I am talking about the disgraceful burden being heaped on the one in five self-employed people in this country who will be in receipt of universal credit. Those businesses are being required to report their income not once a year, but every single month. Their earnings are being computed on a completely different basis from the assessment carried out by Her Majesty’s Revenue and Customs for tax purposes, and the minimum income they will be assumed to have is for 35 hours a week at the minimum wage. That is unjust and unworkable and it does not reflect how those businesses work. Why has this ministerial team sat back and allowed the red tape baron—the Work and Pensions Secretary—to erect this barrier to aspiration?

I would have thought that most reasonable people would welcome the growth of self-employment and entrepreneurship that is happening under this Government. I think they would also probably welcome the fact that the benefits system demands maximum integrity.

T7. Do Ministers agree that a central part of the long-term economic plan is the delivery of skills to the increasingly innovative and research-oriented manufacturing sector? (904502)

Yes. As my hon. Friend may know, I am a fan of the long-term economic plan. In fact, I have found a copy in my pocket if he wants one. Skills are a vital part of our long-term economic plan, because there is no doubt that, if we are not only to maximise our economic capacity in the future, but to make sure everyone in this country fulfils their potential, we have to deliver on the skills that employers need.

T3. Britain has a crisis in finding young people willing to study engineering, yet I have received an e-mail about a 19-year-old who has been offered a place on a pathways to apprenticeships engineering course. He will get access to £30 a week living allowance, but he will lose his unemployment allowance and he cannot access student grants. He may well not be able to take up the course. What are the Government doing to ensure that there is joined-up action across Departments for young people who want to study crisis employment subjects? (904497)

I recognise the problem that used to exist. The introduction of traineeships has tackled that. It is now possible for someone to go on a traineeship while still receiving their jobseeker’s allowance, because we have tackled the 16-hour rule for traineeships. If the hon. Lady writes to me about the individual case, I will make sure it is taken into account.

At the Mighty Middle conference held by GE Capital and the Reform think-tank this week, mid-sized companies from across Britain were exceptionally positive about the Government’s long-term economic plan. What more can we do to celebrate and assist those mid-sized companies?

Mid-sized companies are absolutely central to the Government’s industrial strategy. We are working with them to develop supply chains in the car industry, aerospace and the various energy sectors, and to support access to finance, training and innovation. They have a great deal of potential, as they do in countries such as Germany, where the Mittelstand are better developed than they are here.

T4. May I draw the Minister’s attention to the excellent “The state of the coalfields” report produced by the Coalfields Regeneration Trust? The report has highlighted particular problems, including a legacy of high and persistent youth unemployment, especially in the NEETs group of those not in education, employment or training. I also draw to his attention an excellent organisation in east Durham, the East Durham Employability Trust. What additional support can be put in its direction? (904498)

I have seen the report on the future of the coalfields. On the issue of NEETs, I would point out that yesterday’s figures show that the number of people not in education, employment or training is at a record low since the series of statistics began in 1994. I have no doubt that there is much more to do, because any young person not in education, employment or training is one NEET too many. The fact that the number of NEETs is at a record low shows that the economic plan is working.

On the issue of new EU legislation, does my right hon. Friend agree that it would benefit British business if the EU adopted the same one-in, two-out rule that the UK Government apply?

It is encouraging that the one-in, two-out rule, or the one-in, one-out rule, is increasingly being adopted by other member states, including France and Spain. I shall visit Brussels next month to urge the Commission to redouble its efforts to remove unnecessary directives, and to make sure that where new directives are proposed, they fully take account of the needs of small businesses, which are most likely to create the jobs we need in Europe.

T5. More than a third of winning bidders in the regional growth fund’s first round have now withdrawn, while others have waited about two years to receive any money at all. Is this all part of the Government’s long-term economic plan? (904500)

It certainly is not. There are many reasons why some RGF bidders withdraw—because they do not get the planning permission they were anticipating, their main board does not give final approval for the plant, or they are not prepared to put in private sector money alongside the regional growth fund grant. Any money that is not used is of course put into future rounds of the fund. It is important that we carry out the necessary due diligence and check before taxpayer money is handed over.

The Business Secretary gave us the welcome news that the local growth fund will come on stream next year. Infrastructure is the key to allowing local businesses to develop. Will there be enough money in the local growth fund to improve and upgrade the A64 along its whole route from York through Malton to Scarborough?

I am afraid that my hon. Friend will have to be patient for a few weeks longer before we announce the local growth deal for the local enterprise partnership covering her constituency, but I am aware that that is one of the projects that the local enterprise partnership wants to prioritise.

T6. When the Prime Minister returned from the G7, he painted a very positive picture of progress in establishing public registers of beneficial ownership in the overseas territories and Crown dependencies, but the real picture is that only half of them have started or concluded their consultations. This is an opportunity for the Secretary of State to show off his leadership skills, so what work is he doing with the Foreign and Commonwealth Office to make some real progress on this issue? (904501)

We will have an opportunity to discuss this in detail, because an open register of beneficial ownership will be one of the elements in the small business Bill. Britain will pioneer work in this area. Of course there are issues with our offshore territories. We are not a colonial power that can send in gunboats to solve these problems; we rely on persuasion, and that is what we will do.

What does the Secretary regard as his finest achievement in office? What is his main goal for his last year in the Department?

There is a very long list of achievements that would bore the House considerably were I to dwell excessively on it, but the set of advances that we have made in giving business a long-term perspective through the industrial strategy, the collaboration with business and the associated work that we have done on access to finance, the build up of apprenticeships and the developments in innovation through the Catapult make up a considerable legacy of achievement.

Two thirds of students on disabled students allowances are dyslexic. Cuts to DSAs affect both the students and the institutions, and penalise both. Will the Secretary of State think again about reversing these cuts?

Let us be clear. We are consulting widely on these changes. The main change is that people should only be supported with extra services, rather than, for example, getting laptops indiscriminately, as they do at the moment. We are talking directly to the representative groups involved and students will not lose out by these changes.

Every one of the 14 letters that the Governor of the Bank of England has written to the Chancellor explaining why the inflation target has not been met has mentioned the rising input cost of resources. What are the Government doing to tackle the problems of input resource price spikes and to incentivise infrastructure in the circular economy to cope with that?

I think that the hon. Gentleman is referring specifically to energy costs, which has been the main issue in the inflation of raw material inputs. My colleague the Minister of State, my right hon. Friend the Member for Sevenoaks gave a very full answer in explaining the compensation mechanisms that we are introducing to offset them.

Will the Minister update the House on the progress made in tackling non-compliance by employers who fail to pay apprentices the rate they should?

We wrote to the Low Pay Commission on its remit for next year. One of the things we have asked it to look at is the apprenticeship rate for the national minimum wage. We are aware that there are a lot of concerns, particularly about non-compliance in paying the national minimum wage for apprentices. The system is quite complex and often employers find it difficult to navigate. We have asked the Low Pay Commission to work out how the system could be simplified to ensure better compliance by employers.

A recent Which? investigation found that ticketing companies can add up to 37% to the face value of a ticket for music and theatre events in booking and delivery fees. Given that the market is dominated by a handful of big players, is the Minister confident that consumers are getting a good deal?

We have done a lot of work on ticketing. As I am sure the hon. Gentleman is aware, we discussed this issue a number of times during the passage of the Consumer Rights Bill. The Department has been working with the Department for Culture, Media and Sport to look at the issue and a number of things are being done to try to tackle ticket touting, while trying to ensure that we still have a vibrant market so that individuals who buy tickets and want to resell them because they cannot attend an event are able to do so fairly and openly.

Like a number of MPs, I have taken on an apprentice, something that has been recommended by the Minister, but as a small employer this has only been made possible by the Liverpool chamber of commerce, which provides all the training, development and support for James, my apprentice. Under his proposed reforms, how does the Minister expect MPs to take on apprentices and provide the same high standard of training and support and administer training budgets? How much time does he expect us to take on this?

I am delighted to hear that the hon. Lady has an apprentice. I now have two apprentices and the House has an apprenticeship scheme that the Clerk has been instrumental in bringing forward. Under the new system we will make sure that small businesses and small employers, including MPs, can take on apprentices, and training providers will have a role to play just as they do now in helping with bureaucracy.

I do not expect it to take any more time than it does at the moment and I am sure that it will be just as valuable for the hon. Lady and for other MPs as it will be for small businesses across the land.