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Business, Innovation and Skills

Volume 603: debated on Tuesday 15 December 2015

The Secretary of State was asked—

Higher-level Skills

I am sure the whole House will want to join me in sending its best wishes to Major Tim Peake, who successfully blasted off towards space just 30 minutes ago. [Hon. Members: “Hear, hear.”]

We are reforming technical education and establishing clear routes into higher-level skills and employment. We are spending £2.5 billion on apprenticeships—double the amount in 2010—and £1.5 billion on adult skills, growing degree and higher apprenticeships and establishing specialist colleges.

I join the whole House in sending the Secretary of State’s good wishes to our fellow countryman.

Under the Conservatives, Lincoln’s improved educational map offers the young people of Lincoln myriad—nay, a plethora of—opportunities. Does the Secretary of State agree that prioritising funding for young adults, the low-skilled and those actively looking for work is the right thing for a Conservative Government to do?

I absolutely agree with my hon. Friend, who I know cares passionately about skills for young adults. He will be pleased to know that we rightly prioritised spending on further education in the recent spending review, which will enable colleges, such as Lincoln college in his constituency, to offer more to young people.

Further education colleges are vital for apprenticeships in engineering and construction, in which there is an acute shortage of skills across the country. What assessment has the Secretary of State made of the cuts in funding to FE colleges in terms of delivering this much-needed agenda?

I am surprised that the hon. Gentleman is talking about cuts in FE spending. I know that is what Labour was scaremongering about just a few weeks ago, but we have actually protected the adult education budget in cash terms, we will double spending on apprenticeships by 2020 and we have extended the availability of advanced learner loans. Taken together, this will mean a 35% real increase in FE spending by 2020 compared with this year.[Official Report, 5 January 2016, Vol. 604, c. 1-2MC.]

22. I welcome the removal of the cap on university places, but what assessment has my right hon. Friend made of the effect on further education colleges, such as Wiltshire college in my constituency, given that they are fishing from the same pool in terms of vocationally based diplomas and apprenticeships?


I welcome my hon. Friend’s question. We have seen an increase in that, especially in FE colleges that offer higher education courses, which is exactly the kind of diversity and growth we want.

But as ever, it is smoke and mirrors with this Secretary of State. He knows that the Chancellor has announced an extra £360 million of savings from the adult skills budget, so will he come clean and tell us where those cuts will be made?

The Department will shortly issue a skills funding letter answering some of the hon. Gentleman’s questions, but perhaps he missed the point that I just made: the adult education budget is protected in cash terms, we will double spending on apprenticeships by 2020 and the FE budget will be up by the end of the Parliament in real terms.

Met Office Funding

2. What steps he is taking to ensure that the Government receives value for money from its funding of the Met Office. (902699)

The Met Office plays a key role in our economy. A recent review of the public weather service assessed it as delivering up to £1.5 billion of annual value. As the shareholder for the Met Office, I and my officials regularly hold it to account and ensure it delivers value for money for the taxpayer.

The BBC, no less, reported in 2012 that in 11 out of the previous 12 years predictions about increases in temperature had been wrong and that there had been a warm bias. Does the Secretary of State, as the shareholder, agree that he should be asking some tough questions at the board meeting about why we should be imposing expensive climate change policies on businesses and householders, when so often the predictions behind them are proved to be inaccurate?

I always like to ask tough questions, but I note there was flooding in my hon. Friend’s constituency recently, and the Met Office played a key role in helping the emergency services and protecting lives and property. Today is an opportunity to commend the Met Office for some of the work it does.

Trade Opportunities

I chair the exports implementation taskforce, which is driving cross-Whitehall support for exports. In November, my noble Friend Lord Maude launched the five-year Exporting is GREAT campaign, which promotes real-time global export opportunities to business.

In November, I hosted an event in my constituency with the China-Britain Business Council to which I invited small businesses to come and find out more about trading with China. The all-party parliamentary group on China is aiming to help 50 Members to organise similar events. Can my right hon. Friend tell me how his Department plans to make good use of our new trading relationship with China to help small businesses expand into these vital global markets?

Let me commend my hon. Friend on her efforts to encourage businesses in her constituency to export more to China. While exports to China have doubled in the last five years, there is a lot of potential and a lot more that we can do. The recent visit by the Chinese President helped to highlight that, and the effort that my hon. Friend is making with UK Trade & Investment, the China-Britain Business Council and others provides an example to us all.

What steps has the Secretary of State taken since the steel summit to increase trade opportunities for the UK steel sector?

The hon. Gentleman makes an important point. The more we can export of higher-value steel products, the more we can help. We have been discussing this with UKTI and steel producers. We are coming up with a plan, and this will certainly feature in the trade meetings we have in due course.

Next month, I will be jointly hosting an event with UKTI to encourage more local Cannock Chase businesses to consider exporting. Will my right hon. Friend outline what the Government are doing to encourage new businesses to export?

I can talk about a number of initiatives, including the Exporting is GREAT website and the roadshow that will visit constituencies up and down the country. There is obviously also the work that UKTI is doing. Most recently, I helped to launch the midlands engine scheme, which I know my hon. Friend will welcome. We released more money to help that region with exports, including a midlands engine roadshow.

As part of the work of the export implementation group, will the Secretary of State explore with the Secretary of State for Environment, Food and Rural Affairs all options to access new markets for all our farm produce in north America and south-east Asia?

Absolutely. The hon. Lady makes an important point. I know that the Secretary of State for Environment, Food and Rural Affairs has been taking this matter very seriously. One thing we have done recently is to move some of the UKTI resources into my right hon. Friend’s Department so that there is better co-ordination.

I recently talked to a senior Indian businessman and asked him how we could increase trade with India. He said that the one thing we could do was to leave the EU because of the restrictions. Will the Secretary of State, either as Secretary of State or personally, endorse his comment?

I spoke to a lot of Indian businessmen and women and many Indian students last week. There is certainly one area in respect of which we could certainly increase our exports to India, and that is education.

It is all very well, but it is not working, is it? The UK’s latest balance of trade deficit is widening. It was up to £2.4 billion in the last quarter. Exports of goods—[Interruption.] Perhaps the Minister for Small Business, Industry and Enterprise should have a little listen to this. Exports of goods from the UK actually fell last month by £700 million. It is a pity we cannot export spin, because the Government are very good at that. The “march of the makers” was very good, and now we have the “midlands engine”. What is the Secretary of State’s excuse for the Government’s dismal record on the trade deficit?

The hon. Gentleman should not do down our world-class exporters. They are doing a fantastic job. Let me give him a few examples of what they can export. They can export wine to France, chocolate to Belgium and even boomerangs to Australia, although I fear that it is sometimes the same boomerang that keeps coming back.


We have given employers control over apprenticeship standards and require all apprenticeships to last at least 12 months and involve substantial off-the-job training. We will be setting up an independent, employer-led institute for apprenticeships to approve standards and assure quality in future.

I thank the Minister for that response, and I welcome the fact that there have been nearly 1,100 apprenticeship starts in north Warwickshire and Bedworth over the last 12 months. However, I know that local businesses are concerned that the focus might be on quantity rather than quality. What assurances can the Minister give to my constituents, especially those in highly skilled engineering, that that will not be the case?

There is, in fact, no innate tension between quantity and quality. We want better quality, because that will mean more employers wanting to offer apprenticeships, such as BMW in my hon. Friend’s constituency. I strongly welcome the very high-quality apprenticeships that it is creating.

As the Minister will know, Ofsted has said that apprenticeships are not good enough at present, and many people in industry believe that the only way to hit the 3 million target is to water down quality further. What reassurance can the Minister provide?

I welcome that question, because while it is true that Ofsted has highlighted some bad practice, that bad practice has been familiar to us all for a long time, and has inspired the reforms that we are introducing. All apprenticeship frameworks will be replaced by standards developed by employers. Training must last for more than 12 months, and at least 20% of it must be off-the-job training. We will also ensure that quality improves at all levels. I disagree slightly with the chief inspector’s implication that a level 2 apprenticeship is somehow not of high quality. Apprenticeships should be of high quality at all levels, and the existing level 2 apprenticeships increase people’s incomes by an average of 11% three to five years later.

23. There were 970 new starts in my constituency last year, many of them in engineering and technology. That was an increase of 24% on the number of starts in the previous year. Will my hon. Friend join me in congratulating the new apprentices, and does he agree that those figures show that the Government are committed to high-quality apprenticeship places, such as those that are provided at Prospects college of advanced technology?


That was a stunning achievement in my hon. Friend’s constituency. I know that it was largely due to PROCAT, which is an excellent institution, and one of the first institutions to become a college for a long time. My visit to PROCAT was my first visit to a college in my current job, and if my hon. Friend invites me to return, I shall be happy to do so.

I commend the Minister for establishing an institute for apprenticeships which will put employers at its heart, but may I suggest that he should consult trade unions and find ways of harnessing their insight and experience in this valuable area?

As the hon. Gentleman knows, I greatly value the work that trade unions do in encouraging employees to take up training opportunities, which is why we continue to fund the important work of Unionlearn. I will certainly reflect on his suggestion, and will make some announcements shortly.

Snap-on is a major United States manufacturer, developer and marketer of tools, and its UK headquarters are in Kettering. Given that it is seeking to increase its investment in apprenticeships throughout the country, will my hon. Friend accept an invitation to open its new £2 million facility in Kettering on 15 February?

I am glad to say that Kettering is very close to my own constituency. If the Whips allow me, I will be there.

Business Support (Exports)

My Department is leading a cross-Whitehall work programme to support exports. For example, UK Trade & Investment connects UK businesses with export opportunities throughout the world. Over the next year, the UKTI export hub will travel around the country to give face-to-face assistance to first-time exporters.

Feedback from businesses in my constituency suggests that there needs to be more support for small and medium-sized enterprises that export less than half a million pounds’ worth of goods. It suggests that once they are in the bracket of Government support, that support is short-lived, and is complicated by red tape. How would the Secretary of State respond to those businesses?

I agree that we should always try to do more to help small and medium-sized enterprises, in particular, to export more. The hon. Gentleman may know that I recently led one of our first regional trade missions, the northern powerhouse trade mission, to the far east. It included not only the Greater Manchester chamber of commerce, but companies such as Televic Education, which is in his constituency.

Fairline has a long history of exporting luxury boats across the world, but last week we heard the devastating news of 380 redundancies. While I hope that the administrator can identify a buyer, many of those employees have been laid off for significant periods with reduced pay. Will the Secretary of State do all that he can to ensure that the redundancy payments are expedited, especially given that Christmas is just around the corner?

This is, of course, a very difficult time for the employees who have been affected. I will certainly look into the position, and, during discussions with any potential buyer, I will ensure that export opportunities are highlighted.

Do the Government foresee any long-term difficulties with the transatlantic trade agreement with the United States if the Americans decide to export agri-food products into the UK?

The hon. Gentleman will know that these discussions are still going on. By their very nature, they are complex, as two huge economic areas are involved, and so they will still take some time. Agri-products and all products of that nature need to be carefully looked at, so we have not reached a final point. It is worth remembering that once this deal is done, it can be worth up to £400 for every household in the UK each year.

In my former career, I exported broadcasting equipment to 48 countries worldwide—no thanks to the EU and its regulations. Is it not the case that people need the chutzpah to export, and although the Department can give as much help as it can, people have actually to get out there and do it, and be confident in doing so?

One thing we know is that my hon. Friend is not short of chutzpah, and I am glad he deployed it in his former career. He is absolutely right in what he says and he makes a key point: there is only so much the Government can do. We will do that and look for ways to provide even more support, but we want more and more companies to do everything they can, too.

The Government’s so-called support for exports has seen grants converted to loans, and the sudden closure of the business growth service. Businesses supported by that service grew four times faster than other businesses, and the scheme created 83,000 jobs and added more than £3.5 billion to the national economy. As one BGS mentor says,

“the service’s closure doesn’t make sense considering its huge success and may prove detrimental to Britain’s economic health.”

What message does the closure of the BGS send to businesses that want to grow? Given the outstanding record of success, does the closure of the service not show a complete lack of understanding by this Government of what works on support for exports?

I am glad the hon. Gentleman has raised the issue of the BGS, because although it was a good fee-earner for consultants, there is very little evidence to show that it helped businesses to grow. [Interruption.] There is little evidence that it was the best way to help those businesses. The best way to help businesses is to make sure that we continue to have a growing economy—our economy is growing faster than those of all our rivals—so one thing he can do is support our long-term economic plan. We are also providing funding to 39 local enterprise partnerships—all the LEPs—through growth hubs, which they can use for localised support, including export opportunities.

Apprenticeship Levy

6. What assessment he has made of the potential cost to businesses of implementation of the apprenticeships levy. (902703)

Employers with a payroll bill of more than £3 million a year will be required to pay the new apprenticeship levy. It will raise £3 billion in 2019-20 to support apprenticeship training throughout the UK, including in Scotland.

We do, of course, hope that the apprenticeship levy will provide the same opportunities for young people south of the border as the 25,000 who started a modern apprenticeship in Scotland this year have. Is the Minister aware of the Association of Employment and Learning Providers’ concerns that the number of small and medium-sized enterprises affected by the levy is likely to be much greater than originally thought? Will he give an undertaking to provide clear and early guidance to those, well in advance of implementation?

I am delighted that the hon. Gentleman is proud of the 25,000 modern apprenticeship starts in Scotland, just as we are proud of the half a million starts we have had in the past year in England. This would suggest to me that we can both take pride in our commitment to apprenticeships. I hope he will welcome the fact that the apprenticeship levy will be generating resources, some of which will pass to Scotland to enable it to fund what I hope will be a dramatic expansion in the number of its apprenticeships.

As the Minister will appreciate, the oil and gas industry faces distinct challenges at the moment. I know from my engagement with companies in the sector that there is significant concern that this levy may represent a second charge, with many oil and gas companies already paying levies to industry trading bodies. It also represents an additional cost to these companies at a time when controlling business costs is of paramount importance. Will he commit to meet me, along with my colleagues and a delegation from the industry, to hear their concerns and discuss how the apprenticeship levy scheme can be designed to take account of these circumstances?

Of course I would be delighted to meet the hon. Lady and that delegation, but I will be asking them what they thought of her party’s plans for Scotland’s economy, which rested on oil prices at $100 a barrel and would now see an independent Scotland entirely bankrupt and probably scuttling to the International Monetary Fund.

Adult Skills (Funding)

7. What steps he plans to take to make the efficiencies and savings in adult skills set out in the “Spending Review and Autumn Statement 2015”. (902704)

We are protecting funding for adult education at £1.5 billion per year in cash terms. We are extending advanced learner loans to more adult learners and increasing spending on adult apprenticeships to £1.5 billion by 2019-20. As my right hon. Friend the Secretary of State says, this means that total funding for adult skills training will be 36% higher in the last year of this Parliament than in the first.[Official Report, 5 January 2016, Vol. 604, c. 2MC.]

Salford city college was one of more than 100 further education colleges that wrote to the Prime Minister to protest at repeated year-on-year real-terms funding cuts to adult skills since 2010 amounting to 40%. Despite the promise not to cut adult skills funding for FE colleges, Treasury documents say that there will be £360 million of savings and efficiencies, as my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) mentioned. After years of savage cuts, how can that be achieved?

Like many other colleges, the hon. Lady’s college wrote to the Prime Minister before the spending review in response to the shroud waving by the Opposition, who predicted a 25% to 40% cut in the adult skills budget. If the hon. Lady had taken the trouble to attend my right hon. Friend the Chancellor’s spending review statement, she would have heard that he was protecting it in cash terms while increasing the funding for apprenticeships, which her college and others could bid for. If she spoke to her college, she would discover that, like all other colleges, it is pleasantly surprised by the funding settlement.

Any credible long-term economic plan would recognise the critical importance of adult reskilling, but the Government have systematically cut adult skills by 40% since 2010, including a 24% cut in February this year in non-apprenticeship funding. That is probably why the Chancellor ducked out of making any reference to the further cuts in his autumn statement, leaving it to his Blue Book to talk about £360 million of efficiencies. Will the Minister say precisely what the £1.5 billion of core funding that he talks of is made up of? Does it include loans to over 25-year-olds, 50% of which we know will not be taken up?

Further Education College (Sittingbourne)

The House is making me earn my salary today.

We have launched a process of locally-led area reviews to consider each area’s skills needs and plan how further education colleges and sixth form colleges can best organise themselves to meet them. The Kent review is due to start in November 2016.

I welcome the review. Sittingbourne is the largest town in Kent without its own FE college. However, we have a unique opportunity to change that. May I invite the Minister to visit the Swale skills centre in my constituency to learn about how, with the right help, it could easily and cheaply be extended into a small college?

I have had a message from the Whips saying that they would be only too delighted for me to do further visits to hon. Members’ constituencies, so I would be delighted to visit my hon. Friend’s constituency. We do not hear the Opposition celebrating when new institutions open, including the Swale skills centre, which was set up by a very successful academies trust that is already doing a great job of running three local schools.

Student Loans

9. What discussions he has had on the effect of freezing the threshold at which graduates repay their student loans. (902706)

I consulted on the proposal to freeze the student loan repayment threshold and received responses from a wide range of interested parties. I considered those responses, as well as a detailed impact analysis, before deciding to proceed with the freezing of the threshold.

Does the Secretary of State agree that if a commercial company had made a retrospective change to a contract in this way, costing students £6,000 in the process, there would likely be an investigation? Does he accept that, in doing so, he breached the trust of former, current and future students?

What I accept is that these were the right set of changes. I considered the responses to the consultation carefully. It is important that we strike the right balance between the interests of the students, making sure that all who have the ability have the opportunity to go to university, and the interests of the taxpayer, ensuring that we have an affordable, sustainable funding system. That is exactly what the changes bring about.

Despite the negative comments from the Opposition, can the Secretary of State confirm that this year record numbers of young people secured places at university, including record numbers of children from disadvantaged backgrounds?

My hon. Friend is right. That is true of England. We have seen a record increase to 382,000 people in the past year, and the number of students from disadvantaged backgrounds has gone up from 9.5% to 18.2% in the past five years. In Scotland we have seen a fall in the number of students because Scotland does not have a funding system that allows all who want to go to university to do so.

Given the report in The Independent on Sunday that Ministers in the Cabinet Office are desperately trying to find ways to increase the cap on tuition fees without proper debate and a vote in this House, can the Secretary of State confirm that any attempt to increase the cap on tuition fees will come back to this House for a full debate and vote? Can he also confirm that Government proposals in the autumn statement to extend tuition fees to nurses, midwives and students of allied health subjects will be subject to a proper debate and a vote in this House?

If the Government do decide to change the caps on tuition fees, there will, of course, be a debate in this House.

Does the Secretary of State agree that retrospectively changing the terms of a contract is, in effect, mis-selling? Will he guarantee that in this Parliament there will be no further changes to either thresholds or interest rates?

The changes in question are entirely lawful. That is the advice that I received and it is perfectly consistent with the aims. Hon. Members should remember that the loans that are provided are on significantly better terms than those that are available commercially, and they achieve the objective of allowing all those who wish to go to university and who have the ability to do so.

Aerospace Industry

I was delighted that in the spending review the Government committed a further £900 million of funding for aerospace research and development, supported by the Aerospace Technology Institute. That means that this Government will invest almost £2 billion in aerospace research over 13 years to 2025-26, so our world-leading aerospace industry can stay at the forefront of development and capitalise on the estimated £3.6 trillion market for new aircraft that will be needed over the next 20 years.

I recently met Mark Porter and Jon Brough, the trade union representatives at Rolls-Royce’s two sites at Barnoldswick in my constituency. They welcome the continuation of Government support for the aerospace growth partnership in the comprehensive spending review. However, they remain concerned about the outsourcing of high-value engineering jobs to low-cost countries. What more can my right hon. Friend do to address this concern?

I am more than happy to meet my hon. Friend to discuss the concerns of all those he has met with. Rolls-Royce, along with the aerospace sector as a whole, is a major contributor to the United Kingdom economy, so we get how important it is. That is why we have protected and, indeed, extended the investment that we are making in research and development.

The recent announcement of the expansion of the Aerohub enterprise zone in Cornwall to include the Goonhilly earth station has been keenly welcomed in Cornwall. Does the Minister agree that this creates a great opportunity for Cornwall to be awarded the location of the UK spaceport, which would provide a huge bonus to the Cornish economy?

I am sure my hon. Friend will continue to make that case. I have to say that a number of other airports are in the running and we aim to launch the selection process next year. We have heard the great news about the launch today and Major Tim going up into space. Ground control can report that the UK space sector has almost doubled to £11.8 billion—[Interruption.] I know it is the festive season, but I think it is most unfortunate that Opposition Members are singing. It is not good. I hope they might cheer the fact that the sector has almost doubled to £11.8 billion in just seven years and employs 37,000 people.

Order. Sing, but no Member of this House can match David Bowie—highly relevant as far as ground control is concerned.

Rolls-Royce is of strategic importance to our aerospace industry, not just in Derby but in Sheffield and Bristol. What are the Government prepared to do to safeguard that capacity, which is increasingly in the news at the moment, in order to ensure that we not just invest in but safeguard the future of the industry so that the UK stays at the forefront of aerospace manufacturing globally?

We should of course mention the importance of Rolls-Royce to a great city like Derby; I say that, obviously, as a Nottinghamshire MP. In all seriousness, we are monitoring the situation carefully. We recognise the huge importance of the role that Rolls-Royce plays in our economy. It is really important that we do not talk things down. [Interruption.] Forgive me, but there is too often a tendency among Labour Members, not necessarily the hon. Lady, to talk things down. It is really important that we do not do that and that we continue to support Rolls-Royce.

In order to stop Rolls-Royce falling into the hands of the Chinese, let us say, why do not this Government take Rolls-Royce back into public ownership?

Because—I know the hon. Gentleman will have trouble in understanding this—this is 2015. We are not back in the ’60s and the dark days of the ’70s, and we have a long-term economic plan that delivers, unlike his plan, which would be an absolute disaster for our country.

As we have heard from my hon. Friends, we have been watching the recent developments in relation to Rolls-Royce very closely, not only because of the implications for national security but because it is the biggest single employer for Britain’s aerospace sector. As the Minister said, the global market for new aircraft is predicted to be worth £3.6 trillion in the next 20 years, so we welcome the investment in the Aerospace Technology Institute. However, is it not about time that Ministers considered developing an industrial strategy instead of continuing the current piecemeal approach?

I am not going to repeat all the things I have said about our continuing investment. With £900 million of taxpayers’ money going into aerospace, we absolutely understand and recognise its significance. It is very easy to put on labels, but it does not matter what label we put on—it is about delivery, and that is what this Government continue to do.

Energy Sector (Research and Development)

11. What funding his Department plans to allocate to research and development in the energy sector over the next five years. (902708)

As my right hon. Friend the Chancellor demonstrated in the autumn statement, the Government put investment in R and D as the top priority in our long-term economic plan. I am delighted, as I am sure that Opposition Members will be, by the announcement on ring-fencing the science budget, with £6.9 billion on science capital and £4.7 billion on revenue. In addition, the Prime Minister recently announced a 50% increase in our funding of climate finance, with £400 million over this Parliament, and we have just announced £60 million going into the energy research accelerator.

Launching an investment coalition in Paris at the weekend, Bill Gates made the point that if we are to avoid global warming we have to move at full speed in developing new renewable energy technologies. To ensure that the UK plays its part, what progress have Ministers made in ensuring that the UK Green Investment Bank receives the full £3.8 billion of capitalisation and maintains its green mandate, irrespective of the future of the Government’s stake in the bank?

I am sure that the hon. Gentleman will welcome the Prime Minister’s announcement of £400 million extra funding. The Green Investment Bank has played the role that we envisaged in supporting the green economy, which is not an allotment economy—it now constitutes 96,000 businesses with 230,000 employees and a turnover of £45 billion for the British economy and £4.8 billion of exports. By giving the Green Investment Bank the freedom to raise money on the capital markets, we will generate more money for the green economy, which is growing under this Government like never before.

The North sea oil and gas sector faces significant challenges at the current time, with a need for a collegiate approach to research and development to fuel innovation and to drive down costs. To achieve this, will the Minister consider setting up a North sea oil and gas innovation centre similar to the very successful offshore wind catapult?

My hon. Friend makes a very interesting point. On the east coast in East Anglia, in the north and in Scotland, this country is leading in the field of offshore energy. We have just funded the offshore energy centre, but I would be happy to look at the specific idea that he recommends.

“Extremely disappointing”, “missed opportunity”, “damaging” and “disgrace” were some of the words and phrases used to describe this Government’s decision to withdraw £1 billion of funding from carbon capture and storage. Hundreds of jobs for the communities of the north-east of Scotland, and the opportunity to be at the forefront of low-carbon innovation, have now been lost. The Government will instead spend hundreds of millions of pounds on subsidising research into nuclear energy. In the light of that decision, would the Minister like to take this opportunity to explain to the people of Peterhead and the north-east specifically how he has supported them to be world leaders in innovation?

It is a pleasure to follow that speech. I will happily repeat the figure I just gave: the Prime Minister has just announced £400 million of extra funding for energy finance. We have just made announcements on onshore research. One of the lessons for Scotland is to reduce its dependence on public sector funding. The truth is that, under the renewables obligation for offshore wind, 28% of the funding went to Scotland—that is £560 million—when it represents only 10% of bill payers. We need to support the green economy in Scotland, just like we are doing in the rest of the country.

In the spending review, a major energy investment of £250 million was announced for small modular reactors. That was warmly welcomed in the north-west and it will make a big difference to our ability to meet our climate change targets. It is crucial that the UK owns the intellectual property rights that result from that technology. Will the Minister and his colleagues in the Department of Energy and Climate Change make sure that that is the case?

My hon. Friend is something of an expert on those matters and I will happily look into the very important point he makes. One of the benefits of our support for the green economy—which, as I have said, is now a £45 billion sector in this country—is that we are generating the leading technologies in 21st-century green energy. I will happily look into the specific points he makes.

Small Businesses (Late Payments)

The Enterprise Bill, which is going through the other place, will create a small business commissioner, and one of his or her most important roles will be to make sure, as much as possible, that the continuing problem with late payment is brought to an end. Of course, we have other measures in hand to make sure that there is reporting, but we are making good progress.

Cheltenham’s superb range of shops and small business rely for their success on people getting out from behind their computers and physically visiting local shops. Does my hon. Friend agree that local authorities should promote flexible and, above all, cheap parking wherever possible to support small businesses and shopping hubs such as Cheltenham?

I fear that, as ever, I am a bit off message. I take a radical approach to parking. As far as is ever possible, I take the view that there should be no parking charges in any towns. The car parks belong to the people—they absolutely do. There are times when a local authority wants to put in car-parking charges—a very good example being in Rushcliffe—to make sure that people do not abuse them, but, as far as possible, we should be supporting our great town centres and our great small businesses. We should not charge people for the luxury of parking in their own hometowns.

In the spirit of Christmas, may I invite the whole ministerial team to come to Huddersfield, where they can learn about spinning and weaving? I can also arrange for them to have a wonderful “Made in Huddersfield” worsted suit, just like the one I am wearing. They can also meet small businesses and the Textile Centre of Excellence and talk about all the pressures on small business and the problems they face because the Government want to take us out of Europe, which will stop us exporting to the rest of the world.

It was all going so well—I was going to be a little Christmas fairy. Of course, everybody knows my views, and, indeed, those of my Prime Minister, on the European Union: we want to stay in a reformed Union and make sure that we get those reforms. In the spirit of Christmas, I would be delighted to go to Huddersfield. I could talk about my family’s long-standing relationship with Huddersfield. We will do that on the basis that I will go to Huddersfield if the hon. Gentleman will come to Broxtowe, to Beeston in particular.


15. What discussions he has had with the Minister for the Cabinet Office on supporting the cyber-resilience of UK businesses. (902712)

I am delighted to say that I talk about cyber-resilience a lot with the Minister for the Cabinet Office. Only the other day, we were saying how pleased we were to hear the Chancellor announce the doubling of the cyber-security budget to almost £2 billion.

I am delighted that the Minister has more than doubled the budget, but only 10% of it goes on consumers, the police force and small businesses. What is the Minister doing to encourage small businesses that are time-poor, meaning that they are not able to engage with this sort of administration? What is he going to do for business in Eltham, to ensure that they are safe online?

I did not double the budget; it was the Chancellor. It is important—particularly for one’s career—to give him credit when he does such things. I take the hon. Gentleman’s point very seriously. We have a fantastic scheme called the cyber essentials scheme, which allows small businesses and large businesses to get a certificate to show that they have been through a process to increase their cyber-security.


The Government are working hard to deliver the ambitious measures outlined in our productivity plan. We will drive productivity growth throughout the UK by encouraging long-term investment and promoting a dynamic economy.

Productivity has been the Achilles heel of this Government’s economic policy. Comparisons with G7 countries are poor, and the figures are even worse when compared with those for smaller to medium-sized and—dare I say?—independent countries. Is it not the case that the Government have been completely obsessed with austerity, and cuts and have completely neglected productivity, internationalisation and innovation, which is the fairer, more progressive way to raise tax receipts and reduce the deficit?

No, that is absolutely not the case. The hon. Gentleman is right that there has been a long-running productivity issue in our country under successive Governments. That is why we have published the ambitious productivity plan, dealing with issues such as skills, infrastructure and innovation. In the past year, we have seen a 1.3% year-on-year increase in output per hour, which is very encouraging.

After five years in charge, it is time the Government took some responsibility. Why has productivity stalled for the past five years?

Because after 13 years of the Labour party being in charge, we had the biggest recession our country had seen in almost 100 years and it has taken time for the country to recover from that. As I have said, productivity is on the rise.

Broadband Market (Competition)

17. What discussions he has had with the Secretary of State for Culture, Media and Sport on improving competition in the broadband market. (902715)

It is nice to be back, Mr Speaker. We have a very competitive broadband market. I was thinking about that the other day when I went to York to see TalkTalk delivering fibre to premises. I met the chief executive of Virgin Media, which is investing billions in fibre. There has been an announcement from CityFibre about its acquiring some of KCom’s holdings. On Friday, I will go to see Gigaclear delivering broadband to homes in Epping Forest. We have a very competitive market.

Ofcom has confirmed to me that Hull is the only city in the country without competition for small businesses and households, and the only city among the worst 20 areas for superfast broadband access. This is really affecting small businesses in Hull. Will the Minister tell me how much of the £530 million that the Government have allocated for investment in superfast broadband will be allocated to Hull?

The hon. Lady knows full well that Hull has traditionally had one, in effect municipal, provider—Kingston Communications, which has been privatised—which is why Hull has white phone boxes, rather than red ones. I am pleased to say that KCom is investing in broadband for the whole of Hull without any need for a public subsidy.

Topical Questions

The recent spending review delivered a strong settlement for many of the Department’s sectors, focusing support on areas that drive up productivity across the UK.

As we have heard, in the past hour Major Tim Peake has successfully blasted into orbit. This morning, the Government launched their space policy, which has achieved lift-off. Launched a short time ago in a museum that is not far, far away, the policy document shows that there are no limits to the UK’s ambitions in this area. To mix intergalactic metaphors, we want to boldly go to infinity and beyond, and our new policy will make it so.

As everyone knows, if we are to improve productivity, we need a good, strong education system. Will the Secretary of State give a categorical assurance that further education institutions, such as Blackburn College in my constituency, will not receive a real-terms funding cut as a result of the cash-terms freeze in adult and 16-to-19 funding?

I agree with the hon. Lady on the issue of productivity and the need to boost skills. There will be area reviews, so I cannot make a promise about any particular institution. However, as the Minister for Skills has said, there will be an increase in FE funding of more than 35% in real terms over the lifetime of the Parliament. In the hon. Lady’s constituency, there has been a 75% increase in apprenticeship starts during the past five years, which I am sure she welcomes.

T3. The Eden Project in my constituency has run a successful apprenticeship in horticulture for the past year. Horticulturalists will become more and more important in meeting our increasing demand for food. What support can the Minister provide to promote horticulture as a worthwhile career for young people? (902690)

My hon. Friend makes an excellent point. We are supporting the horticulture industry under the UK agritech strategy. Indeed, I recently opened a horticultural waste reduction facility. The horticulture sector is leading in the UK on low water, low plastic and low energy farming systems, and on novel uses of insects to avoid the use of pesticides and hydroponics. It is an innovative sector that is developing interesting careers and contributing to our growing agritech economy.

May I start by adding our best wishes and congratulations to Major Tim Peake, who will be the first British astronaut to visit the international space station, ahead of his Principia mission? May I also take this opportunity to pay tribute to Helen Sharman, who was the first Briton to go into space? Let us all pledge to do our bit to inspire the next generation of scientists, engineers, mathematicians and explorers, in the same way that the moon landings inspired my generation.

Most businesses understand that nearly half our exports and 3 million jobs are linked to our membership of the European Union, and most believe, like I do, that it is in the interests of the UK to remain a member. Yesterday, the right hon. Member for North Shropshire (Mr Paterson) described the Prime Minister’s negotiations as “froth and nonsense” and the Prime Minister’s approach to his endless renegotiations has been described today as a “shambles”. Does the Secretary of State agree with UK business or with the Eurosceptics on his side of the House?

I associate myself with the hon. Lady’s comments about Major Tim Peake’s mission. It is an inspiration for us all and will hopefully get more young people interested in science.

On the European Union, I agree with almost all the businesses I have met because they want to see reform. They want to see changes in our relationship with the EU. They want the EU to be more competitive, they want to be able to make easier, quicker and deeper trade deals, they want a deeper single market and they want less bureaucracy. I am sure that the hon. Lady agrees with that too. That is exactly what we are fighting for.

We all want the UK to remain in a reformed European Union, but the Secretary of State’s Eurosceptic interests are well known. It is not like him to be so shy and timid about them, so let ask him more directly: is he prepared to resign from the Cabinet to fight for Brexit in the forthcoming referendum? If he cannot answer that question, how can he claim to be representing the interests of British businesses, which overwhelmingly want to stay in?

When it comes to divisions and resignations, it is her party that the hon. Lady should be worried about. I am prepared to fight for the reforms that I just outlined. Those are the reforms that everyone wants to see. We will fight for them tooth and nail, and then we will put the question to the British people and let them decide.

T4. The Worcestershire growth fund will provide grants of up to £100,000 to businesses that are looking to expand and create jobs in Worcestershire. Will the Secretary of State join me in encouraging as many businesses as possible across Worcestershire to apply for the first round before the deadline this Friday? (902691)

In the short time that my hon. Friend has been a Member of Parliament, he has done a lot to champion small businesses in Worcestershire. I have seen that at first hand. The Worcestershire growth fund represents an excellent funding opportunity and I certainly join him in encouraging companies in his constituency and mine to apply.

T2. The illegal money lending team has commenced 330 prosecutions against illegal loan sharks and had £63 million written off for the most vulnerable in our communities. The decision to cut a third of its £3.6 million budget may not have crossed the Secretary of State’s desk at the time, but he has had plenty of time to review the decision and it will have a big impact, so why does he continue to dodge questions about this short-sighted cut? (902689)

We are not dodging any questions. If the hon. Gentleman had attended Prime Minister’s questions last week, he would have heard my right hon. Friend the Chancellor say that he was looking at the possibility of introducing a levy to continue to fund this action against loan sharks. That is the Treasury’s policy to take forward and the hon. Gentleman will have to ask the Treasury if he wants further details about it.

T5. A few days ago in North Devon, I met the new cohort from the Petroc College Care Academy, which has a unique programme providing part-time apprenticeships at the local healthcare trust. Will the Minister join me in congratulating them, and does he agree that it is an important programme for training the next generation of our healthcare professionals locally? (902692)

I absolutely join my hon. Friend, and I thank him for raising the matter. The Care Academy programme is doing great work, and Petroc College in his constituency is pioneering 18-week placement courses so that young people can discover the interesting range of careers in the health and care sector. It supports the local economy as well as our national skills base.

T6. Several organisations, including Electrical Safety First, welcomed the recent product safety review conducted by the Department and headed by Lynn Faulds Wood. We must work to prevent ineffective product safety recalls and improve traceability better to protect customers and business in the UK. When will the Department publish the review? (902693)

I have met Lynn Faulds Wood and I thank and commend her for her work. I will have a further meeting with her to see when we can publish the review and make the progress that we all want.

T7. Will the Secretary of State update the House on the objectives of his recent visit to India, and how best local businesses in my constituency can tap into that market? (902694)

Yes, I will. The recent visit was to build on the momentum generated by Prime Minister Modi’s recent visit. Along with the Minister for Universities and Science, I went to India to promote getting more Indian students to come to the UK and study. I took 30 vice chancellors, including two from Dorset. That is just the kind of export that we want.

T8. Last week, The British Chambers of Commerce downgraded its forecast for overall GDP growth, citing weaker than expected trade. On Thursday, the Office for National Statistics released data, which showed that the gap between imports and exports grew from £3.1 billion in September to £4.1 billion in October. Will the Secretary of State update the House on the measures that he is taking to support export growth, given that his current plans are clearly not working? (902695)

The hon. Lady knows that there has been export growth in the past five years, including to some of the fastest growing markets in the world such as India and China, which came up earlier. We obviously need to do more, and that is why we have several measures in place, some of which I have mentioned. Those kinds of changes, such as increases in exports, are leading to falls in unemployment throughout the country and generating jobs, including a 53% decline in jobseekers’ allowance claimants in her constituency.

T10. As Tim Peake blasts off today, we are reminded again of the exponential value of science funding well spent. For that reason, the Science and Technology Committee intends to continue our work of testing science spending plans. Will the Business Secretary reassure the House that the welcome increase in science funding will be ring-fenced? Will he accept our invitation to appear before the Committee in January to go over that in detail? (902697)

First, I accept the invitation—thank you very much. I also take the opportunity to commend my hon. Friend for her leadership of the Science and Technology Committee and the way in which has made the case so well for science. I can confirm that the ring fence is protected in real terms, not just cash terms. I also confirm our manifesto commitment to spend £6.9 billion on science infrastructure over the next six years. I am sure that she will agree that, this Christmas, batteries are included.

T9. I previously raised with the Secretary of State the Teesside Collective’s industrial carbon capture and storage ambitions, which will not only contribute massively to the climate change agenda, but secure existing industries and attract investment. In the light of the Paris agreement, will he meet me and industrialists leading that key initiative to explore how we might bring that important project to fruition? (902696)

I hope that I do not disappoint the hon. Gentleman, but I am more than happy to have a meeting with him. He knows the terms on which we always have our meetings: not to shout at me. [Interruption.] Only in the House. I hope that he will join me in congratulating the Secretary of State for Energy and Climate Change on her outstanding achievement on behalf of our nation in playing a full and important role in securing the excellent way forward to ensure that the planet that we leave for our children will be better than the one that we inherited. Yes, I will have the meeting.

As the Minister well knows, Carlisle and Cumbria have experienced devastating floods recently. As part of the recovery, it is vital that confidence is restored as quickly as possible, especially in the business community. Will the Minister confirm that she and the Department will do everything to support Cumbrian businesses, and wherever possible, ensure that people know that Carlisle and Cumbria are open for business?

Yes indeed, and I pay tribute to my hon. Friend and all Members of Parliament affected by this issue for their great work. I will go to that area on Tuesday, and I hope to visit Carlisle as well as Cockermouth, Kendal and Keswick if possible. I am delighted that we were able to secure £5 million funding for all businesses affected by the flooding, which will make a huge improvement. We have done that very quickly, and the money will be available quickly and—most importantly—in time for Christmas, so that all those businesses and shops can be open for businesses.

The Secretary of State mentioned simplifying and clarifying the business environment in this country, as well as paring back bureaucracy and identifying a further £10 billion reduction in red tape over this Parliament. Why did the autumn statement propose that small businesses should file tax returns four times a year, rather than annually? Will the Secretary of State outline how that helps small businesses to reduce their costs and burdens? To keep the “Star Wars” quotes going, “I’ve got a bad feeling about this.”

I have not heard that quote from “Star Wars”. [Interruption.] It is really important that we keep deregulating for small businesses, and that was achieved during the previous Parliament. As Chair of the Business, Innovation and Skills Committee, the hon. Gentleman knows that that measure is a net target, and because of the Enterprise Bill, and many other measures, I am confident that we will see huge net deregulation, running into the billions, for businesses over the lifetime of this Parliament.

The Business, Innovation and Skills Committee had a discussion this week about the phrase “industrial strategy”, which seems to mean all sorts of things to different people. I do not know what that phrase means, but I know that if I did, I would be against it. Will the Minister reassure the House that while he is Secretary of State, this Government will not go about picking winners?

Like my hon. Friend, the Government believe passionately in free enterprise. Free enterprise has motored this economy for decades, and it will continue to lift people out of poverty. We do have a strategy—it is called the long-term economic plan.

I am sure that the space Minister will praise the foresight of the previous Labour Government who established the UK Space Agency. Given that Tim Peake’s incredible mission is launching today, will she say a little more about how she will spread inspiration from that mission to a budding generation of new space scientists, engineers and astronauts, including in Cardiff South and Penarth?

Tim Peake is going to the International Space Station, but I mentioned seven years because—as you know, Mr Speaker—I am not prone to partisanship, and I will always give credit where it is due. I wish that Labour Members would do the same.

We have made huge progress to help great industries such as the steel industry, including our announcement on energy intensive industries, but I notice—let me get this point in when I have the opportunity, Mr Speaker—that nobody has mentioned that or said how good it is. The hon. Gentleman and the hon. Member for Wallasey (Ms Eagle) are right to say how important it is that we inspire the younger generation—boys and girls—about great future career opportunities, especially in engineering.

Will the Minister update the House about life science clusters as a way to stimulate start-ups, excellence and growth in the sector? Does he have any plans to use devolution city deals for such clusters?

My hon. Friend makes an important point, and around the country—not just in Cambridge, Oxford, and London MedCity, but in the Northern Health Science Alliance and the Scottish belt—the UK life science industry is building clusters of excellence and growth for the benefit of our citizens. I am holding discussions with the Chancellor and the Department for Communities and Local Government about how the devolution package could drive and support greater development of those health clusters around the country.

The Minister referred earlier to moneys that have been set aside by the Government for research and development in the aerospace industry. In my constituency, 6,500 people are directly employed by Magellan and Bombardier, and double that number are subcontracted. What discussions has the Minister had with the Northern Ireland Assembly to ensure that we can be part of that research and development?

I have not had those discussions, but I am more than happy to hold them with the hon. Gentleman—he knows my door is always open, especially to him. I recognise the huge importance of Bombardier, and the role that it plays in his constituency and the whole of Northern Ireland.