Exam Reform

Baroness Burt of Solihull Excerpts

Monday 17th September 2012 Commons Chamber

[Lorely Burt (Solihull) (LD)]

Under the existing GCSE system, too many of the most vulnerable children leave school with nothing. What arrangements will be made for children with special educational needs?

[Michael Gove]

The hon. Lady makes a good point. In every nation, a small percentage of students—perhaps 5% or 6%—live with such severe special educational needs that it is difficult for them to secure access to an academic curriculum by the age of 16. We must ensure that those young people have a full and rounded statement of what they have achieved at age 16, so that they, their parents, and potential employers know that they have talent and real ability. Although that talent may not be recognised through an academic curriculum, it can be recognised in the world of work and deserves to be applauded. We want to work with specialists in the field of special educational needs to ensure that that achievement is recognised and, where appropriate, for those students to secure EBacc certificates in English and mathematics at a later stage.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 6th September 2012 Commons Chamber

[Jo Swinson]

I thank my hon. Friend for that question. Contrary to many of the headlines, the Beecroft report contained a wide range of proposals, many of which the Government were already committed to bringing forward. A call for evidence on one of the more controversial issues mentioned in it closed on 8 June and the Government are committed to progressing on an evidence-based policy. It is worth bearing in mind that some business organisations have expressed concerns about that policy, but the Government will respond formally shortly.

[Lorely Burt (Solihull) (LD)]

I welcome my hon. Friend to her new post and I know that she will make an effective and assiduous Minister. Does she share my pride as a Liberal Democrat Member of this coalition Government that we are introducing measures such as flexible working and shared parental leave and rejecting the specific Beecroft proposal of a fire-at-will policy, all of which will disproportionately affect low-paid and vulnerable workers?

[Jo Swinson]

My hon. Friend makes her point very forcefully. I am very enthusiastic about the coalition agreement proposals for flexible working and shared parental leave and I very much look forward to taking them on.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 24th May 2012 Commons Chamber

[Lorely Burt (Solihull) (LD)]

My hon. Friend has already outlined many of the measures that we as a coalition Government are taking to reduce the regulatory burden, but does he agree that a fire-at-will policy might be counter-productive and would not produce the increased productivity and growth that we need so much?

[Mr Prisk]

The element of the Beecroft report to which my hon. Friend refers is one of 23 separate measures. We want to ensure that we consider these matters on the basis of good evidence. That is why there is a call for evidence, and once we have had a look at it and weighed the pros against the cons, we will make a decision.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 2nd February 2012 Commons Chamber

[Vince Cable]

It is indeed. Employee ownership is an expanding movement, and a popular one. It allows employees to become involved in the companies in which they have a share, and we wish to see it encouraged. We also wish to see workers properly consulted; there are powers to achieve that under existing legislation, but they are not being sufficiently used.

[Lorely Burt (Solihull) (LD)]

Does my right hon. Friend agree that it is better to force companies to consult all employees, rather than consulting one individual? How would that individual be chosen, especially in a company that might be located in many parts of the world?

[Vince Cable]

My hon. Friend is absolutely right. That is why we are stressing employee participation in remuneration discussions. There are powers under existing regulations and we want to encourage people to take more advantage of them. As she rightly says, there are enormous practical difficulties involved in choosing one employee who can properly represent the whole of an international labour force.

Self-Employment

Baroness Burt of Solihull Excerpts

Tuesday 24th January 2012 Westminster Hall

[Mark Garnier]

My hon. Friend is right. Various factoring, invoice and financing arrangements can be put in place for businesses. They are designed, in theory, to help businesses through their cash-flow problems, such as paying for stock to put on their shelves and sell on. A number of the banks in my constituency are certainly much more cautious about asset filing and invoice filing than they were. That is a serious problem, but it can be dealt with, despite some of the bigger problems that the banks face in meeting the Basel III requirements. My hon. Friend makes an incredibly important point.

I want to look at what the Government can do to help. I ask my hon. Friend the Minister to take note, and I am sure he will have some helpful comments at the end of the debate. First, we already have the Office of Tax Simplification, and it is incredibly important that we get the Government to take on its recommendations. We must make absolutely certain that any tax changes are properly thought through in terms of simplicity and that they have a good economic and social justification. If we are going to write taxes, we should do so with an eye to international competitiveness. They should make it easier for our businesses to trade and for us to attract businesses to come and invest in our country.

I talked a bit earlier about merging income tax and national insurance contributions, but I should stress again that it would be incredibly helpful if the collection of national insurance and PAYE could be merged, so that people have a simple form to fill in, rather than two complex forms.

The one-in, one-out system of regulation is welcome, and it should start to force some helpful changes. However, the system needs to be rigorously enforced, and the Government’s commitment to it must remain strong.

[Lorely Burt (Solihull) (LD)]

The hon. Gentleman makes a really important point. Does he agree that, as well as introducing regulations in a rigorous way when they are absolutely necessary, we should measure whether they do their job, with a post-examination within a specific period, so that we can sunset those that we do not need and get rid of them?

[Mark Garnier]

Yes, absolutely. I agree with the hon. Lady. She is absolutely right on UK regulation, but we should also do that on European regulation. We simply cannot have endless regulation coming through, and we really need to see whether it is worth having.

Apprenticeships

Baroness Burt of Solihull Excerpts

Monday 19th December 2011 Commons Chamber

[Lorely Burt (Solihull) (LD)]

Apprenticeships are one of the key tools we as a Government have at our disposal both to tackle youth unemployment and to skill our young people to serve the needs of industry both today and in the future, when there will be increasing demand and the country will need to be able to achieve the growth we all desire. I do not intend to ruin the positive ambience we are fostering with the Opposition this evening, but I must say that the last Government concentrated on higher education, sometimes at the expense of apprenticeships. That is not to say that higher education is not important; it is hugely important, but it is not all-important. The last Government did increase the number of apprenticeships, but it was by an average of 13,000 a year over eight years, whereas this coalition Government have raised it by 160,000 over one year alone.

I do not want to talk about the past, however. The past is past and today we face a new series of challenges. I therefore want to talk about what those challenges are, what the coalition Government are doing already, and what else we might do to develop this success story even more.

We do have a good story to tell. Provisional data for the full 2010-11 academic year show that apprentice starts increased by over 50%, to 442,700, with increases at all levels and stages, contrary to the assertions of the hon. Member for Sheffield Central (Paul Blomfield). There has also been a strong increase in completions, to 181,700. That is mirrored in my constituency of Solihull, where the increase is 53%.

We want the figures to rise even further and faster, but to achieve that we must identify the obstacles preventing employers from recruiting more apprentices. Red tape is a culprit, and I would give special prominence to health and safety red tape. Clearly, we cannot put young people at risk, but from this January employers and trainers will no longer have to comply with the additional health and safety requirements imposed by the Skills Funding Agency. Employers will have to comply only with the Health and Safety Executive’s requirements as set out in “Health and safety made simple”—if that is not a contradiction in terms.

Small businesses are obviously a key area that we need to target, as several hon. Members have said. The Federation of Small Businesses reports that only 8% of businesses surveyed had taken on apprentices last year but 28% said that they would do so if there were a wage subsidy. The FSB very much welcomes the incentive payment recently announced and says that

“initiatives like this will help the smallest of firms to take on young people.”

[Mr Robin Walker (Worcester) (Con)]

Would the hon. Lady recommend the initiative taken by Worcester city council? A small subsidy can, in some cases, make a big difference, so it is providing £500 to small businesses that take on their first apprentice.

[Lorely Burt]

I would definitely commend the hon. Gentleman’s local city council.

I also suggest that the payment of £1,500 should be available to as wide a range of businesses as possible. I would welcome greater clarity on how the money will be targeted and what the eligibility criteria will be. I would be grateful if the Minister elaborated on that in his remarks, particularly given that the FSB wishes to take advantage of this as quickly as possible. For small businesses that may not have the time and wherewithal to organise courses for their apprentices, the FSB would like the use of apprenticeship training agencies and group training associations to be expanded. The ATAs would employ the apprentice and lift the administrative burden for the small business, while GTAs enable employers to come together to offer the right training to meet their needs.

Other barriers that the Government should be addressing are outlined by the United Kingdom Electronics Alliance. It talks about schools and universities

“releasing students onto the jobs market without key life skills such as communication, practical problem solving, work ethic and an understanding of manufacturing and the role it plays in the economy.”

We are back to the “oily rag syndrome” of ignorance, where many young people have little idea of what manufacturing really is; a key area that we need to address is how to give kids an understanding of what exciting futures are out there, and these futures involve ingenuity, creativity, imaginative design, great job satisfaction and good money. We have to link schools up with companies while kids are at a formative stage, to open their eyes to the possibilities of what is out there and crying out for their skills and aptitudes. When these young people have a realistic idea of what the world of work is like, they will focus on the skills that the UKEA talks about.

The coalition Government are also doing some good things for higher apprenticeships. The higher apprenticeship fund will support the development of up to 25,000 new higher apprenticeships at levels 4 and 5, which compares with a figure of just 200 in 2008-09. The shadow Minister talks about achieving by hand or by brain, but surely the pinnacle of achievement in manufacturing comes about by hand and by brain.

The UKEA also suggested that a tax credit would “de-risk” the decision for companies willing to set up apprenticeship schemes and that we could introduce the idea of leaving money on the table if a company does not invest—this is a push-pull strategy. I would be interested to hear the Minister’s views about using tax credits in that way. I could say more, Madam Deputy Speaker, but other colleagues wish to speak. Of course we need to do more, but we have made a pretty reasonable start.

Economic Growth and Employment

Baroness Burt of Solihull Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

It is a pleasure to follow the thoughtful speech by the hon. Member for Bedford (Richard Fuller). He and I have a common interest in the supply chains that he ended his comments talking about. The Secretary of State knows that I have been working hard in the north-west region to improve the automotive supply chain. That is one of the solutions because we are now in a position to recapture work from countries to which work in the automotive sector was previously exported as a result of changes in those countries’ economies. As labour costs have risen, as they will continue to do inexorably in Poland and China for example, we will be able to start thinking about recapturing that work. There needs to be common ground there.

I want to correct one point: for the second time, the hon. Member for Skipton and Ripon (Julian Smith) made a mischievous intervention concerning the previous Government’s record on deregulation. I think that the hon. Member for Solihull (Lorely Burt) will back me up on this point because she attended the Regulatory Reform Committee assiduously when I was its Chair: we could count on one hand the number of times a Conservative Member turned up to the Committee in the last Parliament. Perhaps they are finding their road to Damascus at last.

[Lorely Burt (Solihull) (LD)]

The hon. Gentleman and I spent many happy hours tinkering around the edges of much regulation but we did not really power into the important pieces of regulation. Does he agree that that is what the Government are now seeking to do?

[Andrew Miller]

That was certainly the case with the Regulatory Reform Committee—it used the framework of the House to make limited adjustments—but we should remember the legacy left by Sir William Sargent, who did an amazing amount of work leading the Better Regulation Executive and putting in place the framework now being utilised. To ignore his work would be an insult to a fine public servant.

On skills, I am pleased that the apprentice Minister or the Minister for apprenticeships—whichever way it is—is here. I understand that he has indicated his wish to visit West Cheshire college. He is most welcome to visit that fine college built with resources provided by Labour but I would like him to think about some issues, particularly the needs of apprentices and young people coming to train from areas of extreme deprivation. There are many simple things that he could urge the Treasury to think about. For example, in my area there are plenty of vocational courses leading to jobs in specialist sectors, yet young people from deprived areas who, had they stayed on at school, would have got free school meals get no support to help them eat when at college.

TTE training runs a good training centre in my constituency providing Cogent training courses—I recently had the great pleasure to attend the royal visit to the centre organised at the behest of the royal family. That training centre is doing fantastic work at the high end of the petrochemicals sector—with players such as Shell and Ineos Chlor—but it is having difficulty finding a financial solution to deal with the needs of small and medium-sized enterprises. The Secretary of State will know that in Germany the burden is often placed on the large players, which are encouraged to finance the supply chain. That is one possible solution but the important point is that we need a practical solution, otherwise we will have no way forward and the young people making themselves available to go on such courses will be—

--- Later in debate ---

[Lorely Burt (Solihull) (LD)]

When I read the title of this debate—about supporting business to encourage economic growth and employment—I hoped that all the parties might for once argue constructively to come up with ideas together. I am sure that we all agree that business in this country needs support, and we all want it to get that support. On the economy, however, that is probably where the consensus ends. The coalition Government cannot abandon their plans and adopt the seductive mantra of going less far, less fast. The consequences of doing that can be seen across the channel in Greece, Portugal and Spain, which have borrowing rates of 32%, 11% and 7% respectively, compared with Germany’s 1.82%, France’s 3.12% and the UK’s 2.28%.

[Mark Lazarowicz]

The hon. Lady is in danger of becoming complacent about the Government’s policies, which, as has been pointed out, are resulting in an increase in borrowing well beyond what was predicted. Is there not a danger that the UK could become the target of those who want to speculate on rising debt? We need a change of policy internationally, as was suggested earlier, to prevent the entire world economy from falling into a cycle of more depression, recession and less growth. That is the answer. She should not be complacent about the situation in the UK as a result of the Government’s policies, which are leading to increased borrowing.

[Lorely Burt]

I am grateful to the hon. Gentleman, and he is absolutely right to say that there is more borrowing than we had anticipated. However, the amount of borrowing will be going down year on year. I am sure that my colleagues on the Front Bench would agree with me that we cannot get out of a debt crisis by borrowing more. At some stage we have to start actually paying the money back. The UK is borrowing at low rates—we have that confidence. Let us just imagine how many more jobs would be lost and how many more people would be suffering if we were borrowing at 32%—that is, if we were in one of those dark places.

The motion starts with the usual party knockabout. For example, we are supposedly “choking off” growth and

“failing to use strategically procurement and other tools to drive growth and innovation”.

However, it is not true that we have failed in that respect. We have cut corporation tax, and by the end of this Parliament we aim to create the most competitive corporate tax system in the G20. Research and development credits will rise by 200% this year and 225% next year. Then there is regulation. We have scrapped the proposals that the hon. Member for Ellesmere Port and Neston (Andrew Miller) was talking about, with savings to business currently amounting to £350 million a year. Whatever we did in our little Committee, it never amounted to that sort of saving. We have also introduced a moratorium on new regulation for micro-businesses.

Then there is technology and innovation centres, and so on—I do not have time to say much more in five minutes.

[Julian Smith]

The exemption for micro-businesses is a key development from this Government. Does my hon. Friend think that some of the arrogance of Opposition Members comes from their never having worked in a small business, and that that absence of business experience is influencing their views?

[Lorely Burt]

I would not dream of criticising Opposition Members. I know that quite a number of them have run their own businesses—micro-businesses and bigger businesses, too—but I also give our Government credit for coming up with that exemption, because it is an important source of help at a difficult time.

Finance has been a big issue. We have not got it right yet: there is more lending, but we still need to do more. We have continued the enterprise finance guarantee scheme and the programme of enterprise capital funds. We are also encouraging a more enabling environment for business angel investment, taking forward a package of investment readiness through a network of growth hubs. Then there is the bank-led £1.5 billion business growth fund, to provide funding of £2 million to £10 million for small and medium-sized businesses with strong growth potential. What is more, as I am sure even the Opposition would concede, we have not failed to use strategic tools to bring forward growth. Indeed, a number of those strategic moves are ones that Labour introduced.

After the knockabout we come to the constructive part of the motion, which is very welcome; indeed, I agree with some of it. However, the plan to levy a £2 billion tax on bank bonuses—this week it is to fund 100,000 jobs for young people and 25,000 more affordable homes—is a nice idea, but as my right hon. Friend the Secretary of State said, it is just not practical. We are already taxing banks every year to the tune of £2.5 billion, on the basis of the banks’ balance sheets. That is more than the Labour party raised with its £2 billion bankers’ bonus tax—a move that the right hon. Member for Edinburgh South West (Mr Darling) has already admitted has “failed”.

Opposition colleagues also suggest reversing the VAT rise for a temporary period. That is great, but how are they going to pay for it? What other cuts will they make instead? Is this part of their slowdown programme—their “not too far, not too fast” agenda, which has so spectacularly failed in America, whose credit rating has been downgraded and whose debt is now $15 trillion? The motion calls on us

“to bring forward long-term…projects to get people back to work”.

I totally agree with that—who would not?—and I hope to see more strategies that complement the things that we are already doing, such as the Green investment bank, the green deal, house building, the growing places fund, and so on. I would also like the council house building programme to be brought forward before we receive the receipts from the sale of 100,000 council houses. Why wait? Let us build those houses now.

I also agree with the suggestion of a one-year cut in VAT on home improvements, repairs and maintenance. The Treasury is losing many millions of pounds in revenue because of a growing black market involving private customers and small businesses paying cash for jobs done in their homes. The one-year national insurance tax break to help small businesses grow and create jobs is a great idea—one for which I have lobbied for some time. However, as a start, and to make it more affordable, why not introduce it for small businesses? I would greatly like to see—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Davey]

The hon. Gentleman will know, having been in the House a long time, that we would not make a valuation while working with the European Commission to secure state aid clearance. Until we get that, those sorts of calculations would be completely inappropriate.

[Lorely Burt (Solihull) (LD)]

As part of the deregulation process prior to the sale, we can expect a reasonable rise in stamp prices, which are currently the second lowest in Europe, despite the fact that we have the highest delivery specification. Does my hon. Friend agree that it is ironic that the Labour party now criticises us for remedying the problems that it created through its regulation procedures?

[Mr Davey]

During the passage of the Postal Services Act, we heard a lot of criticism of the regulatory regime that the Labour party put in place. We put in a much stronger regime, which has been greatly welcomed.

Intellectual Property (Hargreaves Report)

Baroness Burt of Solihull Excerpts

Thursday 7th July 2011 Westminster Hall

[Lorely Burt (Solihull) (LD)]

It is a pleasure to speak under your chairmanship, Mr Chope. I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) and all those who were successful in securing this important debate.

I would like to address my remarks on the Hargreaves report to its effect on small businesses and patents. We have had plenty of discussion on copyright, but I would argue that Hargreaves does not concentrate adequately on the effect of copyright, particularly as it applies to small businesses. Does that matter? Well, it matters to businesses, for many of which patents are far more of an issue than copyright, according to the Hargreaves report in figure 2.1. Figure 8.2 also shows that patent enforcement is more of an issue to small businesses than copyright enforcement.

Taking small businesses first, I would contend that their interests and views, I am sorry to say, have been systematically and consistently ignored in the report. For example, the panel was composed solely of academics and corporate representatives who, in turn, supported a team of 10 intellectual property officers—the same people who are immersed in the day-to-day operation of the system. So how, one might ask, can a department independently review itself? I would not go so far as to say that it is like asking Rebekah Wade to review the activities of News International, but I think hon. Members will get my point. In particular, in response to Hargreaves, large and small companies have frequently criticised poor patent quality. The panel did not include a single representative of small business, although the report acknowledges, in paragraph 1.5, that

“Over the last decade the majority of productivity growth and job creation has come from innovation…primarily by small and young firms.”

It seemed strange, therefore, that the panel did not think the views of those firms important enough to be represented. Indeed, IBM—an American corporation, which you might have heard of, Mr Chope—was the sole member of the panel with direct knowledge of the patent system.

When small businesses submitted evidence, including solutions to their day-to-day problems with the patent system, some of that evidence was not only ignored but not even acknowledged as a submission to the report. I refer to the SME Innovation Alliance’s paper, “The Economic Failure of the Patent System”, which Hargreaves received. Hargreaves stated that a survey of small and medium-sized enterprises had been done, but that survey is not published, so we do not know the findings.

One of the recommendations of the report is that patents should not be issued for non-technical computer programs. One can have some sympathy with that view, and indeed a constituent of mine who designs software maintains that it is nigh-on impossible to get one. However, Hargreaves does not define “technical”, although he does suggest that “general application programs” should not obtain patents, and he includes word processing under that umbrella definition. But what if a general application program has a technical effect? For example, as of last night, 17,436 word processing patents had been granted in the USA, and they can also be obtained in the EU. By saying that we should continue not to issue similar software patents, we are preventing UK competition in the software industry.

Hargreaves also talks about thickets, which are blockages in the IP system caused by a boom in applications in a specific area. He maintains that, to reduce the thickets, it would be necessary to increase the “renewal costs” of the patent. Who, though, would be disproportionately disadvantaged by that? Would it be the IBMs of this world, or the little guys with less money, less support and fewer clever lawyers? However, we could increase the application fee to get a proper service from the Intellectual Property Office in the first place. The fee currently stands at £200, whatever the size of the company. America has separate fees for large and small companies. Why not, for example, have a £10,000 fee for a small company and a £100,000 fee for a large company?

[Mr Binley]

I have listened to my hon. Friend’s comments, which are always immensely constructive and helpful, but I was concerned when I heard mention of the £10,000 fee for a small company. Many of the small companies operating in software creation are one-man bands, for whom that would be a large amount, even if that one-man band was immensely successful. Would she temper that cost a little?

[Lorely Burt]

My hon. Friend makes an important point. I merely used the figure as one that would allow a patent to be properly researched before it was granted. A two-tier system, with a larger fee for larger companies, would stop some abuses. For example, IBM—I am sorry to use it as an example again; I promise I do not have anything against it—took out a patent for the optimal way to queue for the toilets on an aircraft, which is hardly earth-shattering.

On patent submissions, the review failed to deal head-on with poor patent quality and patent backlogs. As I said earlier, patents can be challenged as soon as they are issued, but once they have been issued, there is no mechanism for enforcement except through recourse to the courts. By taking out a patent, a company could be doing itself a disservice by drawing attention to its innovation and attracting the predatory attention of large companies with big lawyers, which can steal the idea and line up the fancy lawyers and see what the small company is prepared to do about it.

That brings me to costs and damages. Let us look at what happens when a patent holder finally takes an alleged infringer to court. Costs awarded to the loser used to be open-ended but, since 14 June, they have been limited to £50,000, which is a step in the right direction. That was not the result of Hargreaves, and he did not mention it in his report. However, that £50,000 is £50,000 more than in America, and the limit forms a substantial deterrent to a small company taking on a large corporate with resources and lawyers. Also, the award for damages is limited to £500,000, so if someone has a multi-million-pound idea and a big company comes in and steals it, the big company can infringe the patent, knowing that the maximum it will have to shell out is £500,000—a bargain. Compare that with America, where Dyson won damages of £6 million after the expiry of its patent because other companies were too quick off the mark in marketing bagless vacuum cleaners. Hargreaves seems to think that the UK garden is rosy, because fewer UK companies went to court than EU companies, but the reason is not because they are happier, but because too many barriers are in the way.

Hargreaves also ignored the SME Innovation Alliance’s request for a UK penalty for infringing a patent. Is that believable? We are the only country in the G8 that has no penalty. The worst that can happen to infringers is that they might end up paying a hypothetical royalty, as if nothing untoward had happened. By the time an SME has spent years, and money, pursuing infringement, it ends up losing substantial resources—and that is if it wins. As Sir James Dyson put it, it is a bit like having the family silver stolen, with the best result being getting some of it back. Why was the fundamental need for the introduction of a penalty for infringing a patent totally ignored?

The SME Innovation Alliance also complained about difficulties enforcing patent rights abroad, an area on which most SME growth and job creation is dependent. Hargreaves and the IPO have been made fully aware of that, and the IPO acknowledged the difficulties, but Hargreaves did not tackle the subject. All in all, I am sorry to say that SMEs—the main source of UK innovation—believe that Hargreaves has failed them. The Government have to take note of the real needs of UK SMEs, instead of setting up a review that has had the perhaps unintended consequence of pandering to the needs of foreign corporates. In Hargreaves’s favour, he recommends adopting the European patent system, but the total maximum damages of £500,000, covering the whole of Europe, hardly make the game worth the candle for many companies.

I welcome the patent box, an idea that SME Innovation Alliance officers are discussing with the Treasury at the moment. The patent box provides a £1.1 billion tax break for innovative industries. That has been extended to existing industries, and there are proposals to simplify research and development tax credits, but we need that now, not in 2013, if we are serious about job creation.

[Philip Davies in the Chair]

If the patent system does not protect British companies, we are making it harder to innovate in the UK than perhaps anywhere else in the G20, and far easier for others to steal our UK innovations. The SME Innovation Alliance has a number of ideas to improve the system greatly, and I would very much like our Government to take them seriously. Otherwise, all they can do is criticise Ministers for not providing a workable patent system for SMEs, the main source of UK innovation. I therefore conclude by asking the Minister to meet me and the SME Innovation Alliance to sort out the current mess in the patents system.

--- Later in debate ---

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

I am delighted to be able to respond to this important debate, and I congratulate the hon. Member for Perth and North Perthshire (Pete Wishart) on securing it. He spoke with knowledge and commitment on a subject that I know is dear to his heart. I have, in fact, spoken on the subject on two consecutive days; I was in this Chamber debating with him just yesterday. As I shall explain later, the Minister in my Department with responsibility for intellectual property is Baroness Wilcox, so I am not here as the Minister with responsibility for the subject but am pleased to speak on it. I pray in aid my professional background in the IT industry. I had a small business, which I subsequently made bigger, and was heavily involved with many but not all of the topics that have been debated today.

The Government are acutely aware that there have been previous reviews and consultations on intellectual property, and I understand the point the hon. Gentleman made at the outset: this is a challenging area, not least because of the changing character of the industry and the technology, and consequent events. He is probably right that we will return to the matter time and again, because of that dynamic quality. The Government are equally acutely aware of the need to facilitate growth. That theme has punctuated this debate, and there is a close relationship between how far we intervene in some of these matters and how we catalyse or, conversely, inhibit growth. That has been the perhaps unspoken dynamic at the heart of today’s considerations.

I am mindful of the words of the late Sir Hugh Laddie, a distinguished commentator on such matters and a judge who presided over many intellectual property cases. He said:

“If patents had been applied from the start we would still be on very early operating systems”—

in the IT industry. He continued:

“To give a business method example, if Ford had patented the concept of the assembly line, the US’s industrial development would have been held up”

altogether. So there are, of course, tensions between how we protect intellectual property and how we facilitate the growth that we need to deliver prosperity.

The economic importance of intellectual property is clearly profound and growing, and it has been said this afternoon that the creative industries are critical in delivering the growth that we seek. I have regular interface with those industries in my role as the Minister for Further Education, Skills and Lifelong Learning and am anxious that we tie the development of skills policy to growth, by identifying the sectors, including the creative industries, high-end manufacturing and the information systems industries, in which skills gaps and shortages might limit what we can achieve. Through that dialogue, I have gained some understanding of how we protect innovation. Innovation and growth are intimately linked by nature—a point made by successive speakers—and we need to make critical decisions about how we facilitate innovation and take advantage of its effect on business activity and employment.

This is a complex environment, and it will continue to change, perhaps even more quickly than at the moment. When people think about macro-economics and economic change, they often say, as has been said today, that as economies advance they become more high tech. I do not dismiss that by saying that it is often said—perhaps it cannot be said too often. What is less frequently cited, however, is the increasingly dynamic need of economies as they advance. Increasing dynamism requires public policy makers to be ever more responsive, and nowhere is that more true than in our handling of licensing, patents and copyrights. That is particularly significant in industries that are at the cutting edge, many of which have been cited. They are not all the same of course, and part of the problem with this debate is that we are dealing with an extremely diverse range of sectors and all kinds of innovation, with different pressures and opportunities.

To support growth, we certainly need an intellectual property system that helps business and consumers realise the opportunities that technology and change create. That is why, as the hon. Member for Wrexham (Ian Lucas) said, the Prime Minister commissioned the Hargreaves review in November. Professor Hargreaves was asked to develop proposals on how the UK’s intellectual property framework can further promote entrepreneurial activity, economic growth and social and commercial innovation.

The Prime Minister asked the review to identify barriers to growth in the IP system, how to overcome them and how the IP framework could better enable new business models appropriate to the digital age. The review considered intellectual property and barriers to the growth of new internet-based business models, including information access, the cost of obtaining permissions from existing rights holders and fair use exceptions to copyright and how they might be achieved in the UK. It also considered the cost and complexity of enforcing IP rights within the UK and internationally, the interaction of the IP and competition frameworks and the cost and complexity to SMEs of accessing IP services to help them protect and exploit IP.

The review issued a call for evidence and undertook a programme of stakeholder meetings and events, to engage with a broad range of organisations. The review team also travelled internationally, visiting the USA to share experiences on managing patent systems and discuss the role of fair use in the US copyright system. There were more than 300 responses to the call for evidence, from a wide variety of sources. More than half came from representative organisations such as the Creative Coalition Campaign and the Open Rights Group that represent hundreds of firms and thousands of individual members.

My hon. Friend the Member for Northampton South (Mr Binley) will be pleased to know that 20% of responses came from small and medium-sized enterprises. He was right to point out that some of our most innovative companies are SMEs, perhaps because innovation often springs from the mindset of an individual or small group of people, as I experienced in my own career. I emphasise, as did he, that the interaction between small businesses and larger corporations can be immensely positive in protecting small businesses’ interests.

I do not want to disagree with the hon. Member for Solihull (Lorely Burt), but having worked with IBM for many years, I think that the partner networks established in that industry by organisations such as Microsoft, Oracle and IBM can be positive for SMEs, although I am not complacent about that. I think that my hon. Friend the Member for Northampton South was right to say that those interactions can be a useful means of protecting the interests of small firms, rather than limiting or damaging them. It is not the time to debate that issue, as it is tangential to the thrust of what I want to say, but it is an important matter that perhaps we can debate on another occasion, when I will be more than happy to avail the House of my insight into such matters.

As I said, 20% of the responses came from SMEs. They are usually hard to reach, which is why it is so important that we proceeded on a consultative basis. Small businesses often have fewer resources available to get involved in Government consultations and reviews. We often hear from big representative organisations, and sometimes from large corporations, but ensuring that we have a dialogue with small businesses seems critical. The high response rate from SMEs tells us how important IP issues are to them. The hon. Member for Wrexham is right that the amount of correspondence and information that Ministers, shadow Ministers and MPs have received on the subject reinforces the level of commitment and proper concern felt.

[Lorely Burt]

Given all that the Minister is saying about the importance of submissions from small businesses, I am sure that he is as mystified as I am that the submission from the SME Innovation Alliance was never alluded to or listed among the submissions. Will the Minister confirm that he is prepared to meet me and the SME Innovation Alliance to rectify the Hargreaves report’s failure to take certain things into account?

[Mr Hayes]

The hon. Lady made both those points earlier. With her usual assiduity, she has taken advantage of this opportunity to intervene on me to amplify them. I will deal with them in turn. First, that submission was indeed received and considered, and it played a part in informing the review’s recommendations, although it was not listed because, as I understand, it was received informally rather than through the formal process. Secondly, I am more than happy to commit my noble Friend Baroness Wilcox to meet her. My right hon. Friend the Minister for Universities and Science will want to be involved, too, and will be happy to join that meeting. The Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey) was also mentioned, and I shall deal with him later in my remarks. Given his Department’s involvement in the digital industries, an interface with him would be desirable, too. Having committed three of my colleagues’ diaries, I had better end on that point. However, we will have the meeting. I will insist that it happens.

Professor Hargreaves delivered his report, “Digital Opportunity”, to Ministers and the Government in May. Members know that the Government are considering that report and will not expect me to anticipate our response, but—it is right that the hon. Member for Wrexham raised the issue in his role as shadow Minister—I again make a clear commitment that the Government will publish our response within a month. There is another commitment made by a Minister who is not responsible for these matters; that is one of the virtues of being in this position.

Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 9th June 2011 Commons Chamber

[Vince Cable]

That is exactly what I am doing, as I explained to the right hon. Member for Wolverhampton South East (Mr McFadden). Before the hon. Member for Coventry North West (Mr Robinson) writes off what we are doing, he should consider the undoubted benefits that have already flowed from it. The banks have put £2.5 billion into the business growth fund to provide equity, which is the kind of issue that he was exercised about when he was a Treasury Minister. That problem has now been dealt with.

[Lorely Burt (Solihull) (LD)]

The Forum of Private Business is calling for a return to the traditional bank manager model, and some banks are in fact now doing that. What can we do to encourage banks to give small businesses individual attention, increase the autonomy of bank managers to make decisions and get rid of the culture of “computer says no”?

[Vince Cable]

My colleague puts the point extremely well. What we are dealing with is not a short-term problem but the long-term issue of how to change the culture of banks. One bank in particular, Lloyds, which I think I mentioned yesterday, already has SME lending on its monthly board meeting agendas, and the system of incentives is being changed to create more of that type of relationship management. Crucially, there are new banks entering the market that have exactly the focus that she describes. Competition, ultimately, will help to solve the problem in a major way.