Strengthening Couple Relationships

Andrew Selous Excerpts

Tuesday 14th January 2014 Westminster Hall

[Andrew Selous (South West Bedfordshire) (Con)]

I congratulate my hon. Friend the Member for Aldershot (Sir Gerald Howarth) warmly on obtaining the debate. I am extremely grateful to the colleagues who have been here throughout this debate on a matter of important public policy. It is an area where we politicians sometimes fear to tread, thinking that it is an aspect of personal life where we should not intrude, and that we should get back to the building of bridges, bypasses, hospitals and schools. I reject that argument entirely. The issue is one of public policy that affects the amount of tax we pay, how children do in school, the criminal justice system and pretty much every area of life.

In support of my view, I quote the Prime Minister. In a great speech to Relate in June 2008 he said that

“there are some who think politics should stay out of issues like relationships…I just think that’s incredibly superficial and short-sighted”.

He continued:

“For too long, politicians here have been afraid of getting into this territory, for fear of looking old-fashioned or preachy.”

Those of us who support the thrust of his arguments are here with the full and explicit support of the Prime Minister, because he gets it. In his speech he said:

“The number one challenge we’ve got in this country today is to strengthen our society. There is no more important way of doing that than strengthening families, and there’s nothing more important to families than the strength of their relationships.”

I am delighted he said that. He continued by commenting that:

“helping people maintain strong relationships is not some fluffy alternative to reducing budget deficits—it is the way to reduce budget deficits, by reducing the demands on the state caused by family breakdown.”

In December 2010, as Prime Minister, he made another speech reiterating the important commitments he had made as Leader of the Opposition.

The parents of half the children born today will split up by the time the child is 15. By the age of 16, one in six children will not see their father at all. Cohabiting parents are sadly three times more likely than married couples to have separated by the time their child is five. A child whose parents split up is twice as likely to live in poverty as one whose parents stayed together, and has a 75% greater likelihood of underachievement at school. The Youth Justice Board says that 70% of children and young people in custody have an absent father. How much more evidence do we need that the issue is important, and a legitimate area of public policy? That is why those of us who care about it are here today. To me, it is a question of giving people the skills and support to make a success of the most important area of their lives; it is about reinforcing good habits and positive social norms.

The crisis is unfolding slowly and imperceptibly, without dramatic moments and media attention, but that is no excuse for not drawing attention to it. That is why the debate is so important, and why we look forward hugely to the Minister’s response. We want to encourage him to continue the good work begun by the Government. His boss, the Secretary of State for Education, who is charged with the matter, takes the issue seriously, too. He made an important speech to the Institute for Public Policy Research in August 2008 and considered the educational underperformance of children growing up in unstable families, citing important work by James Heckman of the university of Chicago.

We have been around the piece and we agree that we need to do something about the problem, so I want to be practical. I have five practical, positive steps that we could take. The first is to do with relationship support. There are some wonderful programmes today, and I want to give credit to them. My complaint is that often they are too small and piecemeal. I yearn to roll them out across the country so that they can be carried out to scale, to tackle the size and challenge of the problem. The first programme I want to mention is called As 2 Become 3, and is provided by Insights for Life, run by Bob and Jess Read as part of an antenatal package. That is important because dad is almost always there with mum as they go to the hospital for their antenatal courses, and the feedback about it has been tremendously good.

Let me quote what some couples said. Ali and Simone said of the course:

“The course also helped us make sure we share this 24/7 job and still find time for each other which is important as this is why the baby is here in the first place.”

Adrian and Britta, another couple, said:

“We discussed which values are most important to us, and how they could be developed and nurtured. Learning about different ways to manage conflict gave us permission to be more open and honest, and we now try to collaborate rather than merely compromising. It has been worth the extra effort as it has brought us closer.”

Many colleagues here have talked about the importance of giving people the skills and support of early intervention. Why is every single antenatal course in the country not signposting that course? Why is it not being made available in every single NHS hospital? If it is having good results and good outcomes, let us do it everywhere, not only in a few selected places.

The next course I would like to mention is Let’s Stick Together, which is run by Care for the Family. The Minister’s Department is giving funding to the Let’s Stick Together programme. Pilots are being run in different areas across the country, and we look forward to the evaluation of those. It is an hour’s course that is typically done for new parents in children’s centres. The feedback is really positive and people often want to go on and do more courses to keep their marriages and relationships strong. I celebrate that work; we should have more of it.

Another course, which is run by Family Action, is called Parents as Partners. It looks at parenting issues and encourages strong parenting, but all the academic evidence is that, as the relationship between mum and dad is strengthened, where the parents are together, the parenting outcomes are even better. I pay tribute to Family Action and the important work that it is doing.

This morning I had a briefing from Safe Families for Children, which is an excellent project to help vulnerable children. It involves early respite care for children whose parents are in deep difficulties, before the situation gets to the fostering stage. It has been run in the Chicago area very successfully, saving a lot of money there, and it has been rolled out in the north-east. I think the Minister has had an invitation from Sir Peter Vardy to go and see it, and I hope that he may be able to take that up at some point. Parents are most likely to split up just after a child has been born, so if parents can be given some space to deal with difficult issues, that can help the couple to stay together.

Last, but by no means least, I pay huge tribute to the work done by Holy Trinity Brompton, by Nicky and Sila Lee, who are the pioneers of the marriage preparation course, the marriage course, and the restored lives course, for people whose relationships have sadly split up—we must not forget such people, because we want to help them to rebuild their lives, so that they can build stronger relationships and marriages if they get the opportunity to marry again. That work is being looked at around the world. In Shanghai, they are very keen on the work of the marriage course. The Chinese Government get it in a big way and are copying in Shanghai what Nicky and Sila Lee are doing. That is the first area that I wanted to cover—practical things being done around the country. However, let us do them to scale and make sure that there is proper signposting in all those areas.

Secondly, I want those courses, and others which have not yet come to my attention but are no doubt happening, to have a kitemark—a Government seal of approval—so that public authorities such as local authorities, hospitals and others can refer people to them with confidence, knowing that proper provision is made and people’s qualifications and other standards will be acceptable. That would be hugely helpful, so that directors of public health, people running family centres, local authorities and so on could signpost such courses with confidence.

The third area I want to address, which has been mentioned by some colleagues, is local authority and local council engagement. I believe that if we value something, we measure it, and we also measure what we value. It is therefore really important that local authorities know what is going on in terms of relationship health in their areas. If local authorities saw the extent of family breakdown in their area, they would be more determined to do something about it. They have the opportunity to do so through their child poverty strategies, which need to address family breakdown. If they saw that an area was worse than another similar area, they would ask why that was and what that other area was doing better. They would perhaps want providers of some of the courses that I mentioned to come in and do something about it.

In my area, I set up the Bedfordshire Family Trust. We run couple strengthening courses. We get people coming to them and know that the courses work and that people appreciate them. That is the sort of thing that local authorities should be able to refer people to in order to save their budgets on housing, care placements and so on, because, as we know, local authorities have to watch the pennies at the moment. That is the third area where I would like to see action.

The fourth issue is public health, and that shows why family is so important. We have a Minister from the Department for Education here and I do not expect him to be an expert on health issues, but he will have heard colleagues mention health earlier. We know that there are significant implications and health costs, and that poor-quality relationships can lead to increases in alcohol consumption and cardiovascular disease, and linked problems with childhood obesity and diabetes.

As the chair of the all-party group on strengthening couple relationships, I was hugely surprised by one fact. We issued a report earlier this year called “Relationships: the missing link in public health”. Just listen to the data on coronary artery bypass grafting, which is perhaps not something that people would have thought was directly linked to the quality of relationships. The facts are that:

“The quality of couple relationships also has a remarkable impact on survival rates after bypass surgery, with married people being 2.5 times more likely to be alive 15 years after coronary artery bypass grafting (CABG) than those who are not married, and those in high-satisfaction marriages being 3.2 times more likely to be alive 15 years after CABG compared with those reporting low marital satisfaction”.

That is a reason to have a strong marriage, if no other.

On that fourth point, the cost to the health service of people with long-term conditions is huge. When couples are together and can support each other in older age, we save a huge amount for the health service. That is another reason why we have to take public health seriously.

--- Later in debate ---

[Steve McCabe]

As a divorcé, I do not feel that my divorce has prevented me from being able to have a further solid relationship; nor has it prevented me from having a strong parental role or from being part of a family.

It is interesting that the Government’s most explicit policy to support marriage, the married couple’s tax allowance—we heard quite a lot about that from the hon. Member for Gainsborough (Sir Edward Leigh)—is available only to one third of married couples. The proposals are really designed for the situation in which one partner does not work outside the home or earns very little. It is really a policy for stay-at-home mums, which is perhaps slightly at odds with some of Dr Coleman’s suggestions. Of course, it is available only for married mums, not for widows, cohabiting mums or anyone like that. Perhaps most astonishingly of all, it is available for the love rat who deserts his wife and family and runs off with someone else’s wife. He can remarry and claim the allowance. That strikes me as a slightly perverse way of strengthening couple relationships.

The other thing that is slightly strange about the policy is that it applies to only 4 million of the 12.3 million married couples, and it is not clear what impact it will have on children, given that pensioner families make up more than one third of the beneficiaries. In fact, only 35% of the 30% of families who gain from the policy have children, and only 17% have children under the age of five. It is hardly a well targeted policy if its aim is to support the concerns raised by the hon. Gentleman.

[Andrew Selous]

I want to draw the hon. Gentleman’s attention to the international facts. If we look across the OECD, we see that the UK is very much an exception in not recognising marriage at all in the tax system. In fact, it is really just us and Mexico alone among all the OECD countries that do not recognise it; 80% of the population of OECD countries live under a system in which marriage is recognised.

[Steve McCabe]

I was talking about the efficacy of a particular measure. Despite the doom and gloom, if we accept that not all relationships come in the form that the hon. Member for Aldershot would like to see—I accept that that is his view, and I understand that he holds it sincerely—the Relate survey to which I referred has some interesting observations. Let me pay tribute to the comments by the hon. Member for Mid Derbyshire (Pauline Latham) about Relate. I agree: I think that it is an excellent organisation that we should protect. The Relate survey paints a slightly rosier picture. It found that 93% of people said that, when times were hard, relationships within their family were important. Although the media sometimes presents our society as one in which family relationships have broken down, Relate could not find evidence that that was the case overall. According to its survey, families—albeit sometimes new families or reconstituted families—remain the backbone of our support systems.

Oral Answers to Questions

Andrew Selous Excerpts

Monday 6th January 2014 Commons Chamber

[Matthew Hancock]

I think much as I thought about five minutes ago when I last answered that question. This is a difficult decision, but the impact assessment—which, of course, I have studied—is very clear about taking difficult decisions to deal with the catastrophic mess left by the Labour Government. We are having to take decisions, and we will take them to put this country on the right track.

[Andrew Selous (South West Bedfordshire) (Con)]

What would be a realistically ambitious date by which to expect significant improvements in England’s programme for international student assessment scores?

[Michael Gove]

Ten years.

Oral Answers to Questions

Andrew Selous Excerpts

Monday 11th November 2013 Commons Chamber

[Mr Laws]

I certainly agree with the right hon. Gentleman. The challenge is to ensure not only that we expand entitlement right across the country by September 2014, but that the meals are healthy and are delivered effectively in every single school. We shall ensure that we do that exactly as set out in the school food plan published a few months ago.

[Andrew Selous (South West Bedfordshire) (Con)]

6. What assessment he has made of the potential role of massive open online courses in schools.

[The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)]

MOOCs present a huge opportunity for this country and are part of a technological revolution that we are seeing around the world. A student in Newcastle can now watch a lecture online from a physics professor at the Massachusetts Institute of Technology for free. I think that helps democratise education and open up knowledge.

[Andrew Selous]

Does the Minister agree that MOOCs are a way of ensuring that all children, from whatever background, can get an outstanding education from world-class communicators, thus freeing up teachers to help children with their online exercises?

[Elizabeth Truss]

My hon. Friend makes an excellent point. Thanks to our new national curriculum and qualifications, which are much more flexible, we are seeing a rise in the number of MOOCs in this country. Cambridge university is developing a new MOOC for physics and there are online courses, such as our new core maths course for 16 to 18-year-olds, which is enabling students to study international baccalaureate maths online in their schools.

Share Capital (Businesses)

Andrew Selous Excerpts

Thursday 24th October 2013 Commons Chamber

[Andrew Selous (South West Bedfordshire) (Con)]

I am grateful to Mr Speaker for giving me the chance to raise the important issue of how we can raise share capital for our nation’s businesses. All hon. Members will be well aware that we do not have to spend long in either Treasury questions or business questions before Members from all parts of the House get up to talk about the difficulties that businesses have in gaining access to finance. Every time that has happened over the past couple of years when I have been in this Chamber the complaint raised by Members has been that the banks are not lending. Indeed, we still have a partially broken banking system, which is why the banks are not able to lend in the way that British business, large and small, would ideally like them to do.

Of course, loan finance is only one way in which businesses of all sizes—although I am thinking particularly about small and start-up, fast-growing businesses— can raise the capital they need. The other way is through equity or share capital. I find it odd that that type of capital—that way of helping businesses to start up, grow and expand—is a subject so rarely raised in this House, and I wish to remedy that this afternoon. So I stand here on behalf of the nation’s 4.5 million smaller businesses—the small and medium-sized enterprises that do so much to power our economy and grow the larger businesses of tomorrow—and on behalf of the men and women who work in the “small- cap” market sector of the City of London, who try to raise that much-needed and incredibly important share capital, or equity finance, for our nation’s businesses.

I wish to pay tribute to some of the people who work in that sector in the City and who took time out, at no remuneration to themselves, to write the Drury report. They are: Tony Drury, Roger Hardman, David Scott, Michael MacDougall, Simon Webber, Robin Stevens, Brian Hibbert CBE, Charity Walmsley, Laura Keeling, Teresa Quinlan and Paul Quade. I had the pleasure of working with them and helping them. Indeed, I took them all to meet the previous Financial Secretary to the Treasury, so that they could outline what was in their report.

This is not a new issue. The Macmillan committee report of 1931 identified what became known as the “funding gap” as far as British businesses were concerned. Our Government, in March 2012, commissioned the Breedon taskforce to write a report, “Boosting Finance Options for Business”, examining these very issues. In our relatively recent history, we have been quite successful in getting stock markets, large and small, to raise equity capital for small and growing businesses. Between 1998 and 2008, the Alternative Investment Market—AIM—and the PLUS market provided many hundreds of UK companies with early-stage equity finance. It is the belief of the Drury report that if the small-cap sector was rejuvenated in the way it suggests, a further 200,000 people could be found work as the businesses were helped to grow in the way that those behind the report believe they can.

I have to tell the Minister that, sadly, all is not well in the small-cap market in the UK. Between 2009 and 2012, there was de-listing of 722 companies on the AIM. Indeed, the amount raised on the AIM in 2012 was barely 17% of the £16 billion raised on that market in 2007. Let me quote one small paragraph from the Drury report. It states:

“For us the small-cap sector is ‘Middle England’: the millions of people trying to run and grow their businesses against all the odds. The sector is friendless, ignored by the banks, hounded by officialdom, bullied by bigger brothers and misunderstood by some politicians.”

I hope to rectify some of that misunderstanding today.

Many people are not even aware of all the markets that enable smaller businesses to raise funds. In addition to the AIM, we have the ISDX—the ICAP Securities & Derivatives Exchange—formerly known as PLUS markets. Currently, 112 companies are listed on it. That story is not happy either, I am afraid—there have been 35 de- listings from the ISDX since the ICAP relaunched the exchange in October last year, but only eight additions.

There is also the GXG, on which 106 companies are listed; again, that could be larger. At the moment, 859 UK companies are listed on the AIM, whereas in 2007, before the great recession, there were 1,347. Companies de-list for a number of reasons, one being the cost of being on a market; I will talk about that and regulatory issues, which we need to consider, in a moment.

Today I was given some stunning figures—they really jumped out at me—by the London stock exchange. In the United States of America, bank lending as a percentage of external, long-term funding is 19%—that is, under a fifth. In the European Union, however, the figure is 81%, or more than four fifths. Those figures are stunningly divergent. If the Minister and his officials take back only one set of figures from this debate, I ask them to consider why there is such a different financing model in the US and why so much more share capital and long-term investment are put into businesses there than here in the European Union.

The European Commission green paper on the long-term financing of the European economy has been published and the Government will respond to it. It has some sensible suggestions. The London stock exchange has urged a “think small first” approach and asked the Commission particularly to assess the regulatory impacts on access to capital for smaller companies, the costs of capital and the fiscal bias against equity, which I shall come to.

For the sake of completeness, I should say that there are three other, smaller equity markets: Sharemark, AltCapX and BritDAQ.

Clearly, there is a funding gap for British industry and many businesses. Banks are increasingly nervous of lending to businesses that do not have strong balance sheets. I am not setting up equity capital against loan finance; if a business has a strong balance sheet and a decent amount of share or equity capital, it is more attractive for a bank to lend to. The two issues go together.

As we know from recent research from smallbusiness. co.uk, one in six small businesses has had to resort to a payday loan and just one in 10 was able to secure a loan from its bank in the first year of trading. The Minister’s Department, the Department for Business, Innovation and Skills, has said that it estimates the current funding gap facing British industry up to 2017 at anywhere between £84 billion and £191 billion, of which between £26 billion and £59 billion relates to smaller businesses. Those are huge figures. It is clear why we need to consider how share capital can help bridge some of that gap. Many smaller businesses are simply unaware of even the possibility of raising share capital and how they would go about doing it. I shall come to that in a second.

It is worth putting on the record that the tax treatments of share capital and debt are very different. Debt interest payments are tax deductible, whereas share capital is taxed four times—on purchase, for stamp duty; when profits are declared, through corporation tax; when profits are paid out, through income tax on dividends; and when shares are finally sold, through capital gains tax.

Credit where credit is due—the Government have reduced stamp duty on AIM shares, which is excellent, and we are lowering corporation tax. The Government have already helped in some areas. However, the Minister will see that there is a significant difference between the tax treatments of share finance and loan finance.

The regulatory costs of raising share capital are significant, and the Government need to look at that issue very closely. I am delighted that we have here not only this Minister, who is an excellent Minister for whom I have the very highest respect, but a BIS Minister. I sometimes wonder who in Government is looking at this issue, not just from the investor’s point of view in making sure that every box is ticked as regards regulation, but in being the champion for these 4.5 million small businesses as regards their need to raise share capital. I would love the Minister, as well as dealing with the very many important tasks he has to deal with, to be that champion. I am throwing down the gauntlet to him and hoping that he will take up that challenge as part of his many important responsibilities.

Financial Conduct Authority costs are high in this regard. One broker who deals in the small-cap market in the City, in a relatively small firm, estimated that the regulatory costs are about £10,000 per member of staff. A company that has large volumes of business can cope with that, but for one with relatively small volumes of business the whole thing will border on being unviable. Yesterday morning, at a breakfast meeting, I put that point to Martin Wheatley, the chief executive of the FCA. He acknowledged that the costs of raising share capital for smaller businesses are high and that regulation is onerous. He did not disagree with me, but I am not sure that we quite worked out what we can do about it.

I am convinced that we need to have a proper campaign of education for businesses up and down the country about the advantages of raising share capital rather than just going to a bank for finance. I would like chambers of commerce, the Federation of Small Businesses, the Institute of Directors, the CBI, accountants, lawyers and other business advisers to work together in our communities explaining to businesses how they can raise share capital if they are having difficulty raising loan finance. They could explain that having outside shareholders in a company does not mean that it loses control. Many businesses think that if they have an outside shareholder they lose control of their business, but they do not; if they still own 51% of the equity, they retain control. Yes, their standards of corporate governance may need to improve a bit, and that is generally a good thing, but they retain control. That is often not understood, and changing that would further open up the possibility of raising share capital.

It is important to give praise where praise is due. I was delighted when stamp duty was removed from AIM shares earlier this year; indeed, I was one of the people who lobbied very hard for that. AIM shares can now be included in individual savings accounts. It is not generally understood that if someone is lucky enough to have an estate that might breach the inheritance tax threshold, any money they have in AIM shares is not counted towards that threshold. That is another good thing that will encourage vitally needed investment in this important and growing sector of the economy. Indeed, I understand that the Share Centre reported an increase of over 106% in AIM stock purchases on the day that the policy was introduced.

There are some tremendous success stories; I would not want the Minister to think everything was bad. Let me give him an example. Abcam plc is a business involved in cancer research that sells antibodies to researchers. It listed on the AIM in 2005 with a £58 million flotation. By the summer of 2012, it had grown to a market capitalisation of £770 million. Its revenue rose from £12 million to about £100 million, and the number of staff grew from 78 to 600. The company has significantly expanded, opening up offices abroad, and it is now looking to join the main stock market. That is a huge success story, and we want many other businesses to do the same.

I mentioned the European Commission. I was encouraged to see that posted on its website on 18 October, just six days ago, was information about its “Competitiveness of enterprises and SMEs” programme, known as COSME. Its remit includes improving SMEs’ access to capital markets, so that is good.

The London stock exchange is making representations to the European Union and has asked the Government to do so as well. On the markets in financial instruments directive II, it is pressing for the creation of an “SME growth market” classification in order to, again, make it easier, less expensive, quicker and less of a burden for our vital small and growing companies to raise the capital they need. It also wants to ensure that the implementation of the solvency II directive does not divert capital from equities, and it wants the Government to engage with the Commission’s green paper—I know they will—on long-term loan financing.

In conclusion, I think I am remedying this House’s failure to highlight the significance of share capital to small, fast-growing businesses in particular. I repeat my request to the Minister to be, among others, a champion for the needs of businesses large and small up and down the country to raise equity finance and to help them get the funding they need so that they can grow, prosper and create the jobs that our constituents need to help power our economy forward and pay off our deficit so that we can have a secure and prosperous future as a nation.

[The Minister for Skills and Enterprise (Matthew Hancock)]

It is a great pleasure to respond to this debate, because I agree with the central thrust that motivated my hon. Friend the Member for South West Bedfordshire (Andrew Selous) to call it, namely the importance of equity finance, especially for small and medium-sized businesses, and the fact that it is not discussed as often as it should be in this House.

It is telling, as my hon. Friend has pointed out, that during Treasury and Business, Innovation and Skills questions we tend to get more questions on access to finance than on any other subject. There is some evidence that access to finance is improving, although it is still not in a strong position. Thanks to the tough choices we have made since 2010, I think it is widely recognised that the economy is, broadly speaking, on the mend. It has not fully recovered by any means, but it is on the way back. That is reflected in the number of businesses, not only in my hon. Friend’s constituency, where businesses are creating jobs, but across the country. Companies House records show that there were 480,000 new incorporations in 2012-13, which is the highest figure on record. If I may correct one of my hon. Friend’s figures—I do so as gently as possible—yesterday’s figures show that the number of SMEs in this country is now 4.8 million, not 4.5 million. I hope he is not too disappointed by that minor correction.

I accept my hon. Friend’s challenge to be, along with the BIS team, a champion of smaller businesses in their quest to access finance. Our programme is vital. The Breedon report made a series of recommendations, many of which have been acted on, including the introduction of the business bank, which my right hon. Friend the Business Secretary announced in September.

We know that it has been much harder for businesses to access finance since the crisis. One of the lessons of the crisis was that the economy had become too reliant on one source of finance, namely bank finance from the four big banks. The business bank will help to solve that problem, but it is by no means the only solution, because we need to increase the supply and diversity of finance available, which brings me to the subject of equity finance.

I will take on board all the points my hon. Friend has made and if I miss any out I will read Hansard and make sure they are acted on. I would stress that when talking about equity finance, we need to be cognisant of the importance of the wider availability of both private equity finance and public equity finance. Although it is difficult to measure with precision, in recent times, the amount of private equity finance, whether through angel investing, venture capital investing or bigger private equity financing, has been greater than the amount of public equity finance. Both are important. It is important to have diverse forms of finance, not only so that if one form struggles, others can take up the slack, but because different forms of finance are right for different companies.

It is true that we have extended tax relief, not only by cutting corporation tax, removing stamp duty on AIM shares and allowing individual savings accounts to invest in AIM shares, which is a tax relief in a sense, but through the extension of the enterprise investment scheme and the introduction of the seed enterprise investment scheme, both of which are extremely popular schemes for investing in small and fast-growing companies for those who pay UK income tax. The encouragement of equity finance, in whatever form, through tax relief is an important part of our programme to solve the problems that my hon. Friend highlighted.

Tax treatment plus regulatory costs, whether in the public or private sphere, make up the gap between the equity that an investor can put in and the investment that a small business receives. I hope that drilling down on both will bring more liquidity and finance where they are needed, which is in growing companies that can make good use of them.

I was struck by the figures that my hon. Friend set out. In the United States, 19% of this kind of finance comes from the banks, compared with 81% in Europe. The UK is one of the more friendly destinations in the EU for non-bank finance, but the figures are striking. When I was in the United States last week, I was struck by the powerful fact that more venture capital is available in the skyscraper in which the British consulate in Boston is housed than is available across the whole of Europe. That shows the difference between the two continents not only in the amount of finance that is available, but in the number of people who have started and grown a business and are now reinvesting. The United States, whether on the east coast or the west, is a generation ahead of us. Part of our job is to catch up as fast as we can. That challenge is real; the good news is that the opportunity that it presents is great.

My hon. Friend spoke eloquently about the various small exchanges. I urge him to look also at peer-to-peer finance, whether equity or loan, because that is a small but growing part of the market that companies can look to when trying to access finance.

As well as bringing tax relief and bearing down on regulatory costs, the Government make direct interventions. In the business angel sector, the Angel CoFund makes equity investments of between £100,000 and £1 million in SMEs. It does that alongside syndicates of business angels. It encourages greater levels of angel investment and syndication, and provides companies with experience and expertise alongside the capital. I echo my hon. Friend’s remarks that when finance comes into a small business, it brings not only pure capital, but better governance and advice from people who have skin in the game and who therefore take care in the advice that they deliver.

In the Budget this year, we announced that another £50 million would go to the Angel CoFund, doubling its size. I hope that it will help to strengthen the whole business angels sector, because it invests only when appropriate due diligence has been undertaken and a deal is structured properly. The UK Business Angel Institute, founded by the UK Business Angels Association and AngelNews, is creating standards of professionalism in UK angel investing, which by its nature often involves investing early in quite high-risk companies. If we can have more quality in training courses for private investors, such as those that the UK Business Angels Association is delivering, that will strengthen investing skills in that important area of the market.

My hon. Friend made the point that equity is taxed four times whereas bank debt is tax-deductible. A number of non-tax factors have an impact on whether a business decides to use debt over equity financing, so tax is not the only issue. Different companies look to different forms of finance, and debt can be quicker to obtain and less complicated to use. Of course, there is the also the question of the amount of ownership that is given up in return for equity financing.

I turn to deductions for interest as a business expense. To protect the UK Exchequer, a number of rules limit how much interest a company can deduct from its tax liability. My hon. Friend made the point that dividends are paid out of a company’s tax profits. However, they are exempt from tax in the hands of the company receiving them. In the case of an individual shareholder in the income tax system, the combination of dividend tax credit and the lower rates of tax for dividends ensures that dividends are taxed at broadly the same level as other forms of income, even after corporation tax is taken into account. It is important to take into account not just the number of different taxes that apply to a piece of income but the rates of them, so that we can work out the relative rate on each form of finance. Having said that, it is clear that the Government are moving in the direction that he wants, for instance through abolishing stamp duty on AIM shares and other growth markets, making investments eligible for ISAs and so on.

I wish to mention one other area of tax, which is the entrepreneurs’ relief. That is a valuable incentive and reflects the fact that entrepreneurs take risks and are often the beating heart of growing businesses, which should be recognised in the tax system. We have increased the amount of relief that can be used and allowed it to be used in more situations, so that more businesses and entrepreneurs can benefit from the 10% capital gains tax rate rather than the normal 28% or 18% rates. Over a number of Budgets, there has also been an increase in the lifetime limit for entrepreneurs’ relief to £10 million, so shares acquired from the enterprise management incentive can qualify for a lower capital gains tax rate. There has been action on stamp duty, capital gains tax and corporation tax, three of the four taxes that my hon. Friend mentioned as part of the barrier. The direction of travel is clear, and his argument is strong.

The value of small businesses to our economy makes them absolutely vital, and helping small businesses create jobs and take people on has been one reason why we have had such strong growth in the number of people employed in the private sector in the past few years.

[Andrew Selous]

I am heartened by what the Minister has said and by the tone and general thrust of his reply. Will he reflect briefly on my points about the cost of regulation? Might he perhaps meet Martin Wheatley of the Financial Conduct Authority, who admitted to me yesterday morning that the costs of raising capital are high? With his business hat on, representing 4.8 million businesses, will he consider whether there is any way to lower the costs of raising capital through regulation, while keeping investors safe?

[Matthew Hancock]

My hon. Friend will be delighted to know that I am already arranging a meeting with Martin Wheatley to make the arguments that he has eloquently made today and broader arguments about ensuring that we can get good finance into our small and growing businesses.

Question put and agreed to.

National Curriculum

Andrew Selous Excerpts

Monday 8th July 2013 Commons Chamber

[Michael Gove]

I would be delighted to meet head teachers from the hon. Gentleman’s constituency.

[Andrew Selous (South West Bedfordshire) (Con)]

May I commend the Secretary of State for his determination to reverse this country’s slide down the international league tables? He is right to ensure that his expectations for English children are no lower than other countries’ expectations for their children.

[Michael Gove]

I am grateful to my hon. Friend for his comments. It is vital that we assert, across the political divide, our determination to ensure that our country becomes a world champion in English, maths and science, alongside generating world champions in tennis, rowing and other great activities.

Education

Andrew Selous Excerpts

Wednesday 26th June 2013 Ministerial Corrections

Teachers

[Andrew Selous]

To ask the Secretary of State for Education what steps he is taking to achieve gender balance in teaching in primary and lower schools.

[Official Report, 20 June 2013, Vol. 564, c. 797-98W.]

Letter of correction from David Laws:

An error has been identified in the written answer given to the hon. Member for South West Bedfordshire (Andrew Selous) on 20 June 2013.

The full answer given was as follows:

[Mr Laws]

The Government has made it clear that it would like to see the proportion of male trainees growing over time. The most recent Initial Teacher training (ITT) census in November 2012 showed a record number and percentage of male graduates entering ITT.

The proportion of qualified male teaching staff in nursery and primary (including lower) education increased from 16% to 19% between 2010 and 2011. Workforce figures for 2012 are not yet available.

In July 2012 the Teaching Agency (TA) launched the Primary Experience Programme, which allowed male graduates interested in primary teacher training to have 10 days’ work experience in a school. 1,000 places have been made available in schools across the country and the programme’s impact is currently being assessed by the National College for Teaching and Leadership.

The TA also regularly puts male graduates in touch with a range of inspirational male primary teachers, to get an insight into teachers' motivations, career choices, challenges and the rewards of day-to-day life in a classroom.

The correct answer should have been:

Oral Answers to Questions

Andrew Selous Excerpts

Monday 24th June 2013 Commons Chamber

[Michael Gove]

Our ministerial team, and, indeed, the superb team at the Department for Business, Innovation and Skills, take every opportunity to encourage young people to consider engineering as a career, but one of the problems we face is that the quality of the teaching of literacy and, in particular, numeracy and mathematics in science qualifications is often not good enough to give ambitious young people the chance to become engineers. That is why we are improving the quality of English, mathematics and science teaching, and reforming GCSEs.

[Andrew Selous (South West Bedfordshire) (Con)]

13. What steps he is taking to improve the status of technical and vocational education.

[The Secretary of State for Education (Michael Gove)]

More than 60% of 16 to 19-year-olds now participate in vocational education. This Government have: raised the quality of vocational qualifications; expanded vocational education through studio schools and university technical colleges; and introduced tighter quality controls in further education and work experience. All those reforms build on Professor Wolf’s report on vocational education, which was welcomed across the board.

[Andrew Selous]

How can we ensure that high-quality non-academic learning gets the status and recognition it deserves, given that we need more practical on-the-job training, such as is being provided at university technical colleges?

[Michael Gove]

My hon. Friend makes a typically acute point. The way in which we can raise the esteem and prestige of vocational qualifications and vocational training is by making sure they are every bit as rigorous as academic qualifications and the academic pathway—I say “pathway” for want of a better word, although I am sure there is one. The way in which we do so is by making sure that the recommendations in Alison Wolf’s report are implemented—recommendations that were once accepted by the Opposition Front-Bench team but now seem to be rejected.

Oral Answers to Questions

Andrew Selous Excerpts

Monday 22nd April 2013 Commons Chamber

[Mr Laws]

I can confirm exactly that. I can confirm also that we would not have had to find that amount of capital had the Labour party not ignored the advice of the Office for National Statistics in 2003-04 about future trends in primary numbers.

[Andrew Selous (South West Bedfordshire) (Con)]

14. How head teachers of academies can be removed if their schools fail to make the progress that can reasonably be expected.

[The Secretary of State for Education (Michael Gove)]

The responsibility for the performance of an academy rests with the academy trust. Academy trusts are free to set their own processes for managing the performance, and indeed any dismissal, of head teachers. They are free to adopt the procedures that apply in maintained schools, if they choose. If the Department has concerns about the leadership of an academy, we raise the matter with the academy trust.

[Andrew Selous]

Successful schools are vital to the well-being of the areas that they serve. Central Bedfordshire has many outstanding head teachers in academies and maintained schools. When an academy head teacher has not made the progress that could reasonably be expected, does the Secretary of State see that there is a role for the local authority in dealing with the issue?

[Michael Gove]

Local authorities certainly have an important role in championing vulnerable children in particular. If they feel that any school, whether it is a maintained school, an academy or a free school, has a principal who is not doing the right job for their children, they should raise it directly with the Department and we will together take action.

Oral Answers to Questions

Andrew Selous Excerpts

Monday 4th March 2013 Commons Chamber

[Andrew Selous (South West Bedfordshire) (Con)]

11. What steps he is taking to ensure that careers advice is available to pupils choosing AS levels.

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

Schools have a legal responsibility to secure independent and impartial careers guidance in years 9 to 11, and in years 8 to 13 from this September. This requirement will be extended to those up to the age of 18 in colleges. This will help those taking AS-levels to make successful transitions.

[Andrew Selous]

My very excellent Friend the Member for Mid Worcestershire (Peter Luff) has quite properly highlighted the scandal that this country produces only 19,000 graduate engineers a year when we need 41,000 graduate engineers. Unless children take maths and ideally physics at AS-level we are not going to bridge that gap, so will the Minister make it clear to schools that when children make these vital choices, they are told that graduate engineers are being snapped up, the country needs them, and a graduate engineer creates 12 extra jobs in the economy?

[Matthew Hancock]

I can think of few better people to make that argument than my hon. Friend or my hon. Friend the Member for Mid Worcestershire (Peter Luff), with whom I am meeting Professor Perkins, the chief scientific adviser, later today. This is a huge and important area. The lack of engineering skills in this economy is a serious problem, the product in part of 13 years of failure to address the problem. We are working four-square towards that, and we will not rest until it is sorted out.

--- Later in debate ---

[Mr Timpson]

I know that the hon. Lady has taken an extremely keen interest in this very important issue. Of course we need more people to come forward to adopt, because we have a huge shortfall, and that is a national crisis that we need to address. That is exactly what we are doing through our Children and Families Bill reforms, which will help to drive up the interest and confidence of the many people who want to adopt and enable them to do so. One of the reasons we need to do that is that more children require adoption as their best route into permanency. We need to ensure that the people who come forward have the requisite skills and capability to provide a loving home. I am sure that as we move into Committee and hear evidence tomorrow on the adoption reforms we will enjoy discussing this issue further.

[Andrew Selous (South West Bedfordshire) (Con)]

T7. In addition to improving children’s education across the country, the other great commission that Ministers in the Department are charged with is to strengthen family life. The Department runs some great programmes such as “Let’s Stick Together” and “Parents as Partners”, but given the scale of the challenge what more can be done to strengthen family life in this country? Will the Secretary of State meet me to discuss this important issue?

[Michael Gove]

I would be delighted to meet my hon. Friend, who has a formidable record in campaigning to support family life. It is a massive challenge. No single set of Government interventions will help to sustain family life, but it is important that we do what we can. I look forward to working with him to ensure that we can support people who stay together and who demonstrate love and support for the next generation.

Curriculum and Exam Reform

Andrew Selous Excerpts

Thursday 7th February 2013 Commons Chamber

[Michael Gove]

The hon. Lady has conducted a campaign on behalf of creative subjects with skill and panache. The fault is only mine that there was some confusion in the minds of some students and teachers about the distinction between English baccalaureate certificates and the English baccalaureate. There was a fear among some—which I felt was unfounded, but I understand how it arose—that artistic and creative subjects would be marginalised. I hope that the clarity that we have provided today on the accountability in the reforms will reinforce the fact that, for the hon. Lady and for me, artistic and creative subjects are central to a broad and balanced education.

[Andrew Selous (South West Bedfordshire) (Con)]

I commend the Secretary of State for listening and learning. If more people did the same, the country would be a better place. As someone who has been a school governor for longer than he has been a Member of Parliament, may I ask him to ensure that children are given really good careers advice before they decide which subjects to take at AS-level in the improved national curriculum? That will be very important.

[Michael Gove]

My hon. Friend makes a very good point. One of the changes that the English baccalaureate has helped to cement is that students will be clearer about the subjects that they need to take in order to get on to a particular course or into a particular university or college. Given how fast the world is changing, it is vital that we ensure that the advice is tailored to every student in the right way. It is also important that students recognise the potential of new subjects, such as computing, to offer them an even richer range of chances to succeed.