Oral Answers to Questions

Julian Smith Excerpts

Thursday 8th December 2011 Commons Chamber

[Mr Marcus Jones (Nuneaton) (Con)]

13. What recent progress his Department has made on its employment law review being undertaken as part of the red tape challenge.

[Julian Smith (Skipton and Ripon) (Con)]

17. What recent progress his Department has made on its employment law review being undertaken as part of the red tape challenge.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

We have made excellent progress with our employment law review. Our radical package includes streamlining the employment tribunals system, doubling the qualifying period for unfair dismissal, promoting early conciliation and mediation, and simplifying compromise agreements. We have also called for evidence on TUPE and collective redundancies as part of our wide reforms.

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[Mr Davey]

We have listened to both employer and employee concerns about the cost and complexity of going to employment tribunals, and believe that our reforms will make a positive difference to both parties. We have set out our conclusions and our response to the “Resolving Workplace Disputes” consultation. Critical aspects of our new approach include a major new emphasis on mediation and a new pre-claim conciliation service by ACAS, and, finally, a fundamental review of the rules and procedures is now being undertaken by Lord Justice Underhill.

[Julian Smith]

Compensated no-fault dismissal could be a great fillip to very small businesses and the employment market. Will the Minister outline the timetable for the Government’s call for evidence and reassure the House that he is completely open-minded on the policy?

Economic Growth and Employment

Julian Smith Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Mr Umunna]

I completely agree with my right hon. Friend. Of course, another question for the Government is why they will not listen to business organisations that have been calling for action. The CBI is calling for infrastructure spending to be brought forward, the Federation of Small Businesses is calling for a one-year national insurance break for every small firm taking on extra workers, and the Federation of Master Builders would like a targeted cut in VAT to 5% for home improvements, maintenance and repairs. Business organisations, from those representing the food and beverage sectors to those representing businesses on our high streets, which are suffering, are calling for a reversal of this year’s hike in VAT. What do all those measures have in common? They are all part of Labour’s plan for growth and jobs. As our motion stated, the Government must take action now to increase demand and growth and give immediate help to the high street—[Interruption.] The Minister of State, the hon. Member for Hertford and Stortford (Mr Prisk), chunters from a sedentary position. If he wishes to ignore all the various business organisations, people might put a big question mark over his judgment. It is clear that the Government need to back our plan and that they must do so now.

[Julian Smith (Skipton and Ripon) (Con)]

Does the hon. Gentleman not agree that the Government have been listening to businesses organisations with regard to employment law and deregulation? I am surprised that he, as a former employment lawyer, has not included in the motion a single proposal to make it easier for small businesses in Britain to take on staff.

[Mr Umunna]

I will move on later in my speech to the Government’s employment proposals, which I might add were announced this morning to a conference rather than to this House.

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[Nick de Bois (Enfield North) (Con)]

rose—

[Julian Smith]

rose—

[Mr Umunna]

I have given way several times, and I want to make a bit of progress.

Instead of reverting to the tired old mantras and doing over the people who work in this country, perhaps the Secretary of State could tell us what he will do to get banks lending to small and medium-sized businesses that are, by his and the Chancellor’s own admission, currently being starved of credit. We know that the Project Merlin accord between the banks and the Government failed. The Secretary of State more or less admitted as much when he said:

“Merlin was necessary but it was never going to be sufficient. I don’t think any of us pretended it was enough.”

We know that the figures published under Merlin are entirely misleading, because under the agreement between the banks and the Government a gross lending measure was adopted, not the more meaningful net figure used by the Bank of England. The truth is that Project Merlin was really no more than a public relations gimmick designed to get the Government out of a hole when banks’ declarations of bonuses were in full flow earlier this year.

For real businesses, the failure is real. The Bank of England’s “Trends in Lending” publication for last month showed the stock of lending to UK businesses contracting overall in the three months to August. The Bank’s latest agents’ summary, for this month, stated that small businesses were still reporting that credit conditions

“remained tight, and in some cases had become tighter.”

That is supported by the figures released this morning by the British Bankers Association, showing lending by the high street banking groups to non-financial businesses contracting this month.

To resolve that problem, the Government first need to change their overall economic strategy, to give businesses the confidence to borrow and grow. The small and medium-sized enterprise finance monitor published last week showed that the main barrier to future borrowing by SMEs was the economic climate, but that the other major barrier was the lending practices of the banks. The Government need to use their influence with the banks, particularly through United Kingdom Financial Investments in the case of the banks in which the state has a stake, to insist that they get money out of the door to responsible businesses that have sound business models but are struggling to access finance. In addition, they must urge those banks to adopt a better lending culture—for example, by ensuring that they have local relationship managers on the ground who get to know the business concerned.

[Mr Umunna]

When will Government Members take responsibility? I wish that we were still in government, but we have not been for 18 months now. It is about time that they got used to the fact that they are in government and took responsibility.

Business is crying out not for a Government who step aside and fail or refuse to act but for one who adopt an active approach, using all the tools at their disposal to create the conditions for private sector growth. For all their claims about our record, such as the ones that we have just heard, the Government have kept in place some of the support measures for business that we left them on leaving office. I should point out that under Labour, 1.1 million businesses were created. When we left office, the UK was rated fourth by the World Bank for the ease of doing business, and first in Europe. Under this Government, the UK has dropped to seventh in the global rankings. We will take no lectures from the Government on support for business.

In government, we set up the Better Regulation Executive and the Regulatory Policy Committee to improve the quality, and where appropriate reduce the quantity, of regulation on business. I note that the Government have continued with them.

[Julian Smith]

Will the hon. Gentleman clarify the top five deregulatory measures that his party took in the 13 years it was in government?

[Mr Umunna]

I cannot name the top five, but the whole reason the Better Regulation Executive and the Regulatory Policy Committee were set up was to reduce regulations by a huge number and improve their quality.

In government, we also conceived the technology and innovation centres, to promote innovation. The Government are now rolling them out across the country, and they have sought to build on the measures that we put in place to reduce the bureaucracy of Government procurement and increase SMEs’ access to it.

In many other areas, however, there has been a disorderly retreat from an active approach. The Government have undermined certainty for investment, cut the science and research funding budget by 15% in real terms and abandoned the 10-year funding plan, and they have abandoned sector strategies such as the defence industrial strategy. The Automotive Council continues, but the RDAs, which could have helped make a reality of the ambition to strengthen companies’ supply chains, no longer exist.

The Government have undermined new industries, such as green industries, as my right hon. Friend the Member for Don Valley (Caroline Flint) will outline in the debate that will follow this one. They have delayed the roll-out of universal broadband and undermined the collaborative institutions that we set up to work with businesses, such as the Office for Life Sciences and the Technology Strategy Board, which are widely respected. The higher education sector, the seventh-largest export industry, has been put in disarray by the Government’s visa changes. Support for the digital, creative and educational sectors has been scaled back. Then there is the decision to award the £1.5 billion contract for new Thameslink trains to a manufacturer that will make them in Germany, which means that Bombardier is reviewing its activities in Britain.

The Government have retreated from action, undermined confidence, failed to unlock investment, failed to deliver a credible plan for growth and failed to use action to back business. They need to back our five-point plan for growth now and put in place a credible plan to build for our long-term success. These are difficult and challenging times for businesses and people in this country. They deserve better from a Government who say, “We are all in it together”, but who, time and again, show that they have absolutely no understanding of the concept.

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[Julian Smith]

Will the Secretary of State tell us what situation he found exports in when he arrived in his post? What sort of condition was UK Trade & Investment in and what great suggestions did the previous Government have in this area?

[Vince Cable]

UKTI has been radically reformed, thanks to the Minister for Trade and Investment, Lord Green. I think that it will perform an excellent function. What I found was that British export activity in the big emerging markets, which is clearly where future growth lies, had been sorely neglected for many years. As somebody put it to me, when we turned up on the beach the Germans were already in the deckchairs. They have dominated the market in these countries and we are a marginal player. It will take years to turn that around, but that is where our emphasis lies.

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[Gordon Banks]

I agree with my hon. Friend. If we do not get our infrastructure right, we will not be in the position that we want to be in when things move forward and we will be disadvantaged. I ask the Government not to look solely at big individual projects when they are trying to regenerate the economy. We need local and regional regeneration and investment in local and regional infrastructure.

[Julian Smith]

Does the hon. Gentleman welcome the Government’s introduction of the Work programme, which will help many of those JSA applicants of whom he spoke, and the new enterprise allowance, which gives significant sums of money to unemployed people who want to set up a business?

[Gordon Banks]

My experience of the Work programme is that it is a not-working programme.

The cut in VAT to 5% for home improvement repairs and maintenance—another part of Labour’s five-point plan—would discourage the black market and encourage investment in our housing stock at a time when the Government are wringing their hands about the green deal. Experian data show that a cut from 17.5% to 5% would have produced a £1.4 billion stimulus to the UK economy in 2010, which would have got Britain building. It is working on reviewing that figure in the light of the current 20% VAT rate.

On housing, which is an important part of the construction industry, social rent starts and affordable home starts have fallen by 99%, but in 2007, there were 357,000 first-time home buyers in the UK, who generated £2.1 billion in our high streets. That is the real power of the construction industry and why the industry is so important to the whole of the UK. I hope the Government plans announced earlier this week to regenerate the housing market deliver progress, but one must ask: why have they been asleep at the wheel for the past 18 months?

On lending, we are a country of small businesses, yet the Federation of Small Businesses tells us that credit lines for financially sound businesses have been tightened and interest rates have increased. The Federation of Master Builders has reinforced the point about that failure.

The Government have announced a desire to look at credit easing, which suggests that Project Merlin has failed. Do they know how much of Project Merlin’s compliance agreements are re-signed and recycled arrangements? Do they know that banks are withdrawing overdraft facilities and setting businesses up with term loans?

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[Richard Fuller]

I appreciate that, and I shall continue to listen intently to all the hon. Gentleman says.

The challenge that this country faces to restore growth is immense. It needs good ideas from both sides of the House and full commitment to the task. On that point, may I say gently to my right hon. Friend the Secretary of State, who is a noble individual and a good gentleman, that sometimes people feel that commitment may not be there 100% of the time from the Department, and that is a commitment to the role of the free market and business. It is as though we have at times a literary equivalent of Dr Cable and Mr Hyde. There is one part of the personality of the Secretary of State that embraces the idea of business and likes the approach of free markets, and then there is the other side of the personality that likes to hang out with a bunch of people on a camping holiday outside a well-known church musing on the merits of capitalism.

[Julian Smith]

Just to correct my hon. Friend slightly, this Government have done more than the previous Government did in 13 years on deregulation and freeing up British business. We must not lose sight of that.

[Richard Fuller]

That is absolutely true, but the challenge that we face is more immense because of 13 years of over-regulation by the previous Government, and because of the challenge of the international community. From the Secretary of State’s announcements today, I know that the sunshine side of his personality is more to the fore, and that he will demonstrate a strong and full commitment to the hard work that entrepreneurs and business leaders are putting in around the country.

I encourage the Secretary of State to take action on three further areas. First, I encourage him to work more strongly with the Treasury on ideas for credit that work for all sizes of businesses. Although there is a lot of emphasis on trying to make the banks a useful conduit of finance to small businesses, that is not working for very small businesses. Please can we look at alternative measures? Can we look again at tax relief for debt financing for our micro-businesses? For the first time, can we consider peer-to-peer lending organisations such as Funding Circle, which provides an alternative way of raising funds for small businesses? It is not enough to come forward with another policy that relies on the banks doing something tomorrow that they are not doing today.

Secondly, I encourage the Secretary of State to look at the sector that is the biggest drag on our economy, namely the bureaucratic state. If we want to create a growing economy, we cannot ignore such a substantial part of it. I encourage him to ask other Ministers to enlist our public servants and bureaucrats in the task of identifying growth. Every single day, the employees of small businesses in my constituency work very hard to create growth and the conditions for profitability, and they tell me that they are not getting the support they need from either their local government or their national Government. We need a culture change in our Government Departments. They need to say: “Our primary task—our national mission—is to support the growth of enterprise and business. What can we do every day to help people to achieve that?”

Will the Secretary of State also look at the opportunity provided by social enterprises? The Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who is the Minister with responsibility for the civil society, is doing a lot of work with social enterprises to free them from some of the burdens of regulation. Will the Secretary of State have his Department look at how the power of social entrepreneurs can be brought to bear on our public services and public sector so that they can be more productive? Social enterprises are a fantastic way to encourage growth.

Will the Secretary of State consider using Parliament to review outdated statutory instruments, laws and regulations that are a bureaucratic drag on productivity and business? Rather than using Parliament to pass new laws, we could use it to scrap existing ones. I am sure we can find time for that.

Thirdly and finally—this underlies all our efforts to create growth—I benefited in my career from two fundamental pushes on growth in our economy: building out the global supply chain and the consequential growth of financial services, which gave people the ability to buy goods and services much more cheaply than they would have got them had we relied only on a national economy; and the growth of information technology. The next source of fantastic growth is likely to be when households in India and China want to buy our goods. But that is not here today. That is not going to be here in the next five years. What we can do in that period of time is have a national campaign led by the Secretary of State to create an entrepreneurial society recognising that there are different motivations for being an entrepreneur. Not only do entrepreneurs want to make money; people are motivated by spiritural objectives. Let that be the mission and legacy of our Secretary of State.

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[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—

Oral Answers to Questions

Julian Smith Excerpts

Thursday 9th June 2011 Commons Chamber

[Alun Cairns (Vale of Glamorgan) (Con)]

4. What steps he is taking to ensure that employment law supports business competitiveness, job creation and sustainable economic growth.

[Julian Smith (Skipton and Ripon) (Con)]

11. What steps he is taking to ensure that employment law supports business competitiveness, job creation and sustainable economic growth.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

My Department is leading a comprehensive review of employment-related laws across Government to remove burdens from employers and ensure that our labour market operates effectively. Our consultation on resolving workplace disputes, for example, closed on 20 April, and we will be coming forward with our proposals in the autumn.

[Mr Davey]

I am grateful for my hon. Friend’s question. I met Lord Young to discuss his views, and he explained that in his meetings with business people they talked about the reality and the perception of red tape, particularly in relation to employment law. We are therefore tackling both aspects with our proposals to reform employment tribunals, our moratorium for micros, and the review of sickness absence and compliance and enforcement regimes. We also published the employers charter to show that the legal position is not as frightening as some employment lawyers would have firms believe.

[Julian Smith]

Are other Departments fully engaged with the employment law review? Which Minister is leading this across Departments? Does the Minister agree that in order to address this issue fully we need all Departments, not just BIS, to be engaged with it?

Apprenticeships (Small Businesses)

Julian Smith Excerpts

Thursday 9th June 2011 Westminster Hall

[Richard Graham (Gloucester) (Con)]

It is a pleasure to be here under your chairmanship for the first time, Mr Davies.

I am delighted that my hon. Friend the Minister has been able to find time at short notice to join us for this debate on a subject that lies at the heart of two of the greatest challenges for the coalition Government: first, how to increase growth in our economy and, secondly, how to reduce unemployment and, in particular, youth unemployment. Today’s debate on the take-up of apprenticeships by small businesses is therefore critical. During the next few minutes, I will lay out the structure of the debate in which I hope that as many hon. Members as are here today—there are many—will participate.

First, I intend to touch on the present Government’s approach to apprenticeships in general. Secondly, I will consider how successful that has been overall in the first year of the new coalition Government. Thirdly, I will examine the relative take-up of apprenticeships by large, medium-sized and small businesses. I hope that in today’s debate we will all focus to a large extent on businesses that are often described as micro-businesses—those employing 12 people or fewer. Of course, it is relevant that all of us in Parliament are in effect small businesses ourselves, employing typically between three and five people. I will come on to that aspect of the issue towards the end of my speech. Thereafter, I want to consider the obstacles to small businesses in taking up apprenticeships, how we might overcome them, what the challenges to overcoming them will be and what aspects of Government policy would help the process. Finally, I will bring all that together in specific recommendations.

The first question is the present Government’s approach to apprenticeships. The Government’s announcement immediately after the election last year that they would provide 50,000 additional apprenticeships, followed up later by a further 75,000, making a total of 150,000 new apprenticeships, was warmly welcomed by all of us who want to see business growth. That announcement sent a powerful message, especially to our manufacturing sectors, that this Government are determined not only to talk about rebalancing the economy, but to deliver by doing something practical to help that to come about.

Of course, apprenticeships today are not only about manufacturing. They are not the cliché of, on the one hand, hairdressing for women and, on the other hand, blokes in dirty overalls. They are about a much wider selection of opportunities. One of the things that I hope will come out of today’s debate is the breadth of opportunity—the breadth of training providers and sectors that offer apprenticeships. All my hon. Friends are seeing that in their own constituencies and of course have the possibility of taking on apprentices themselves.

There was a firm commitment right at the beginning of this Government to providing significant funding —hundreds of millions of pounds—for additional apprenticeships. That has been widened further. There have been significant efforts, led by the Minister, who has been a champion of vocational employment—[Hon. Members: “Hear, hear!”] That has been warmly welcomed, as you can tell by the response from everyone here, Mr Davies.

Let me run through some of the detailed figures. Nationally, there are many more apprenticeships now than there were in previous years. Locally, as far as Gloucestershire and my own constituency of Gloucester are concerned, we have seen a significant take-up of apprenticeships; there were about 30% more apprenticeships in 2010 than there were in 2008. The general picture is therefore very encouraging. Of course, that is complemented by Government programmes to create, for example, 100,000 work experience placements and additional commitments to help 10,000 vulnerable young people, which I am sure all of us welcome.

[Julian Smith (Skipton and Ripon) (Con)]

I pay tribute to my hon. Friend for securing the debate. Does he agree that in addition to the number of apprenticeships increasing, the type of apprenticeships available has shifted under the present Government? The previous Government left thousands and thousands of people in the classroom; the present Government are committed to the provision of work-based apprenticeships. Does my hon. Friend agree that that is much better for young and older people who are undertaking an apprenticeship?

[Richard Graham]

My hon. Friend is absolutely right in what he says, although at some point in the debate we should touch on the removal from employers offering apprenticeships of the freedom to have the training element provided in the workplace. The new rules require 30% of the time to be spent away from the workplace, which for some employers is not necessarily practical. My hon. Friend and others may wish to comment on that as the debate continues.

The National Apprenticeship Service has provided the key facts. There are now more than 85,000 employers nationally offering apprenticeships in more than 130,000 locations, with almost 200 frameworks. That is highly encouraging. The statistics about employers who take on apprentices finding that it is a worthwhile thing to do are even more encouraging, with 80% agreeing that apprentices make their workplace more productive, which of course is ultimately the test in terms of the business growth element of the equation. Some 83% of employers who employ apprentices rely on those apprenticeship programmes to provide the skilled workers whom they need for the future.

The question for this debate is whether the take-up of apprenticeships by small businesses is quite so encouraging. I do not have the range of national statistics to argue the case as strongly as I would like to today, but I am sure that the Minister will share with us some of the Department’s research. I know that the Federation of Small Businesses has estimated that take-up by small businesses is only 8%. Anecdotally, in my own constituency and my own county, it is true that it is much harder to persuade a small business with fewer than 12 employees to take on an apprentice than it is to persuade, say, a company with 100 employees.

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[Richard Graham]

My hon. Friend and near neighbour is absolutely right to congratulate the media in Worcester for taking forward the scheme. I congratulate him on making his commitment to take on an apprentice himself. When I outline the target that I have set for Members of Parliament, the Minister should note that we may be able to achieve it in fewer than 100 days, but I will deal with that towards the end of my speech.

My hon. Friend is right to say that the media has an important role to play. I should also stress that local radio can be extremely helpful, too. About six months ago, I held the Gloucestershire apprenticeships fair, jointly with the NAS, which is admirably represented in Gloucestershire by my friend Gina Johnson whom I was hoping to see here today. We had terrific support from Gloucestershire Media, which is something that could be replicated in Worcester, Eastbourne and elsewhere, and from Radio Gloucestershire. I strongly recommend my colleagues in the House to organise an annual apprenticeship fair; the national apprenticeship week is in February, which would be quite a good time to do so if they want to tie it in with national themes.

My hon. Friend the Member for Eastbourne also mentioned the co-operation between DWP and BIS. That is an inter-departmental question on which I will leave the Minister to comment in due course.

[Julian Smith]

Inter-departmental issues are coming up in the Government’s review of employment law at the moment. May I ask my hon. Friend to urge the Minister to ensure that all Departments focus on how we can create jobs and take on people, whether through apprenticeships or full-time employment?

[Richard Graham]

I am grateful for that intervention, and I am sure that the Minister will have noted that point and will come back on it in due course.

Developing the themes of our debate today, we now have to consider the obstacles that small businesses face in taking on apprentices. I have touched on the two key areas of bureaucracy and cost. On bureaucracy, the challenge for those of us who want to promote apprenticeships is that there are so many different ways of taking on apprentices. For example, it is generally the case that the training costs for 16 to 18-year-olds are entirely funded by the Government and those for 19 to 24-year-olds are half-funded by the Government. Members will find in their own constituencies that we have training providers who will provide certain training courses for 19 to 24-year-olds entirely free of charge. On the one hand, that gives the 19 to 24-year-olds a competitive advantage, and on the other, it offers to small businesses the opportunity to take on a slightly more experienced individual at a lower cost than might be the case normally.

Oral Answers to Questions

Julian Smith Excerpts

Monday 21st March 2011 Commons Chamber

[Fiona Mactaggart (Slough) (Lab)]

7. What recent representations he has received on the English baccalaureate.

[Julian Smith (Skipton and Ripon) (Con)]

10. What recent representations he has received on the English baccalaureate; and if he will make a statement.

The Secretary of State for Education (Michael Gove): We have received a number of representations on the English baccalaureate since it was announced. Public opinion surveys have shown that this new league table measure is widely welcomed, and on recent school visits, I have been encouraged by the vocal support that teachers and head teachers have shown for this new measure of achievement.

[Michael Gove]

That is a very well made argument from the hon. Lady, and I sympathise with the case that she makes. It is important to appreciate that the English baccalaureate does not and need not take up the entire teaching time in any school day or week. The reason why it is constructed as it is, with just the five areas that we are familiar with, is to ensure time in the school week for other activities, such as art and design, music, physical education—everything that helps to build a truly rounded young person. There is no need to alter the English baccalaureate for schools to offer a truly rounded and stretching curriculum, and I would love to be able to work with her to ensure that the schools in her constituency appreciate that.

[Julian Smith]

Schools across Skipton and Ripon are delighted about the E-bac, but there is concern about religious education. Are there any plans in the near or medium term to review the decision to exclude RE from the E-bac?

[Michael Gove]

I know that a number of schools and hon. Members have pressed for additional subjects in the English baccalaureate, but the reason why religious education is not included is that it is a compulsory subject at all stages in the national curriculum to the age of 16. The reason why it is not included in the humanities section of the English baccalaureate is specifically so that we can drive up the take-up of history and geography, which are currently not compulsory after the age of 14.

Further and Higher Education (Access) Bill

Julian Smith Excerpts

Friday 4th March 2011 Commons Chamber

[Mr Chope]

My right hon. Friend has just succeeded in getting his Bill through its Second Reading, Committee stage and Third Reading very fast. I hope that my Bill will make similarly rapid progress. That is why I look forward eagerly to hearing what the Government’s attitude to it will be. As a general rule, I am not sure that the length of the explanatory notes, or the fact that there are explanatory notes, is a good guide to whether a Bill will make progress. If I recall correctly, the Wreck Removal Convention Bill, which was brought forward by my hon. Friend the Member for Suffolk Coastal (Dr Coffey) and which we will discuss in a fortnight, has quite extensive explanatory notes. I am not sure that that is necessarily an indication of how much time will be spent discussing it.

I return now to one of the principal reasons for my concern about the guidance. The full guidance that was issued by the Secretary of State for Business, Innovation and Skills and the Minister for Universities and Science to the director of fair access in February was based on the draft guidance that was issued on 7 December 2010. Paragraph 6.1 of the draft guidance was very clear:

“There have been no changes in the legal constraints on your powers as Director of Fair Access. You are not empowered to interfere in institutions’ decisions about the admissions of students and you may only set conditions that clearly relate to promoting participation and access.”

When the final guidance was issued last month, that paragraph was omitted. I tabled a parliamentary question to the Minister for Universities and Science, asking why it had been omitted. Unfortunately, the fact that I received a holding reply rather than an immediate substantive reply makes it obvious that he had to think about why it had been omitted. Eventually, he came back with an answer pursuant to the holding answer of 16 February:

“Paragraph 6.1 was unnecessary as it provided no new information.”—[Official Report, 17 February 2011; Vol. 523, c. 981W.]

I am not convinced by that and remain very suspicious. Indeed, the full guidance is more extensive than the draft guidance. The full guidance is some seven and a half pages long, whereas the draft was only five and a half pages long. That clearly expressed paragraph is omitted from the final guidance.

I share the concern of many people in universities that the Government are trying to increase regulation and interference to tick boxes on social engineering and social mobility, and that that is ill conceived.

[Julian Smith (Skipton and Ripon) (Con)]

In the guidance—I am not sure on what date the guidance I have was published—have not the Government directed OFFA that it must be “fair, transparent and evidence-based” in all that it does? Does my hon. Friend have an issue with that? It seems quite clear from the guidance that I have read.

[Mr Chope]

Well, we will have to see what happens. If one looks at the detailed guidance—I do not have the paragraph to which my hon. Friend is referring to hand—one can see that it is full of contradictions. The director of fair access said that, based on the guidance, he would issue advice to universities before the end of February to meet their tight time scales. The fact that he has not yet done so perhaps indicates that he is finding it a bit problematic.

This issue even appears in today’s newspapers. In The Times, there is a letter from John Foster, a former chairman of the council at the university of Leicester, expressing strong concern about the Government

“digging itself into an ever-deeper hole”

over universities and student fees. In particular, he states that the Government

“now proposes to penalise some universities that wish to charge the maximum level by cutting their student numbers and diverting thus-frustrated applicants to lesser institutions.”

He states:

“Many will regard this as confirmation that the Government is viscerally opposed to students in general and to higher education in particular. Others will interpret it as a deliberate discouragement to excellence and a reward to mediocrity. I have no doubt that it will weaken the international standing and competitiveness of some of our finest universities.”

Such comments are coming thick and fast from people on the front line in higher education, and they reflect the concerns of, for example, the Russell group of leading universities. It issued a press release on 10 February commenting on the Government’s guidance to OFFA, which made a number of good points and emphasised that

“admission to university is and should be based on merit, and any decisions about admissions must also respect the autonomy of institutions and maintain high academic standards.”

That is four-square with my Bill, because clause 1, which is headed “Duty to allocate places on merit”, states:

“It shall be the duty of all institutions within the further or higher education sectors in receipt of public funds to consider applicants domiciled in England for any course of study below post-graduate level on the basis of merit alone unless the circumstances in section 3 apply.”

--- Later in debate ---

[Mr Chope]

Absolutely, and my Bill is designed to promote the freedom of universities to decide the issues in question for themselves and to restrict the Government’s ability to interfere in the governance of our universities, many of which are international institutions of high repute. They are expanding and raising their standards in the global higher education context, and they are highly respected. They do not need an interfering Government, who are pledged to reduce regulation, increasing the regulatory burden on them. However, that, of course, is exactly what the Government’s current policy seems to be.

[Julian Smith]

As I understand it, one of the biggest problems that the Government are trying to solve is that people of merit from socially disadvantaged backgrounds have not been getting to good further and higher education institutions. Does it not concern my hon. Friend that the Bill could restrict such people’s ability to get into our universities?

[Mr Chope]

Looking at the Bill, I do not see how that can be the case. I define merit in clause 2 as

“academic ability, potential and aptitude as assessed by the institution of further or higher education”,

thereby emphasising not just academic ability as reflected in exam results but potential and aptitude, to be assessed exclusively by the institution in receipt of an application. That emphasises the importance of giving institutions the freedom to make the judgment themselves.

--- Later in debate ---

[Mr Chope]

My hon. Friend is trying to attack my Bill as a regulatory measure, when in fact it is a deregulatory measure. It aims to prevent the burden that the Government are trying to place on universities in a less than transparent way—using the Office for Fair Access—and which is increasing regulation on universities. That would be prevented by the Bill, because it would be at odds with the duty to allocate places on merit other than in accordance with the exemptions set out in clause 3. He stands four-square with me in saying that we want to reduce the burden on these universities. However, at the moment the burden is being increased by the Government under their measures to try to bring about social engineering in a rather partisan way.

[Julian Smith]

Is the key fact not that, whether it was the fault of universities or the previous Government, there has been a failure to get people from disadvantaged backgrounds into our better universities? A piece of research by Martin Harris concluded that

“while there have been substantial increases in participation among the least advantaged 40 per cent of young people across higher education overall compared to the mid-1990s, the participation rate among the same group of young people at the top third of selective universities has remained almost flat over the same period.”

Is it not morally right that the Government are trying to address this issue?

[Mr Chope]

There might be an issue there, but Sir Martin Harris has a vested interest; he is the director of the Office for Fair Access and obviously has to keep himself in a job. He is saying that there has been an increase in admissions to universities from people from poorer backgrounds, but that that has not yet percolated through to the top universities. He is therefore seeking a mandate to have more powers to interfere in those top universities. I am trying to put the point of view of the Russell group, which is a representative sample of those top universities. It points out that it has made enormous progress without that sort of interference. Indeed, it thinks that the Government’s ideas—and, by implication, Sir Martin Harris’s ideas—on this will be dangerous and counter-productive by being too prescriptive.

The Russell group has commented on the question of how we are going to measure success in improving access. It is the same with all these principles: if we cannot measure it, we cannot control it. It says:

“Any measurement of universities’ progress in improving access must be undertaken with great care. The investment of Russell Group institutions into outreach activities benefits the sector as a whole, with many students being inspired to study at other institutions as a result of our widely targeted work with potential candidates of many ages and backgrounds. We believe our universities have a role in helping all students to fulfil their potential, not simply widening access to our own institutions.”

That demonstrates how difficult it is to judge an individual university’s outreach programme solely on the basis of how many students it has brought into its own university as a result of that outreach programme, because that programme might have enabled students from poorer backgrounds to apply to, be accepted by and go to other universities. Obviously, the next question that arises is, how will we possibly measure that? It would be very complicated. That takes me back to the point that we do not need to have all this regulation. Why can we not trust these universities to carry on doing as they have been doing up until now.

--- Later in debate ---

[Mr Chope]

If those students are going to go to university on the basis of something other than merit, or on some basis other than the exemptions that are set out in clause 3, but my understanding is that the Government want to open up opportunities for part-time students but not on the basis of anything other than merit. If I am wrong about that, I am sure that my hon. Friend the Minister will correct me.

I have been speaking for longer than I intended, so I shall briefly outline how I think the problem can be dealt with more effectively. Hon. Members will be aware of the Social Mobility Foundation. Sir Terry Leahy, the outgoing chief executive of Tesco, has now joined the board as a trustee. My right hon. Friend the Prime Minister has said:

“The Social Mobility Foundation provides an exemplary service to help academically-talented disadvantaged students achieve their potential. I and many other Cabinet Ministers have been delighted to host SMF students”

and he encourages others so to do. It seems to me that that is the way forward. If we want to encourage the brightest and the best to be able to get access to our universities, we can give support to worthy organisations such as the Social Mobility Foundation.

What is interesting is that even the Social Mobility Foundation has to set eligibility criteria for those who apply to it for assistance. To join the aspiring professionals programme, students have to be in year 12, in receipt of education maintenance allowance or free school meals, and, significantly, in possession of at least five A grades in five different subjects at GCSE and predicted to obtain at least an A grade and two B grades at A-level. Even the Social Mobility Foundation is accepting that academic performance has to play a part in deciding whether people are appropriate to be taken on for help from that foundation.

[Julian Smith]

My hon. Friend must know that leaving this issue to institutions such as the Social Mobility Foundation will not have anywhere near the same effect as the Government taking a stand and saying that we will select young people on merit, and we must get more people of merit from socially disadvantaged backgrounds. He must know that Government involvement is the only way to deal with that.

[Mr Chope]

I am afraid that I am completely at odds with my hon. Friend, because I think that getting the Government involved will be—even more so than it is already—a disastrous policy, and it would be much better to improve the quality of education in our mainstream schools.

I want to quote a final statistic. In 2009, only 232—4.1%—of students in maintained mainstream schools who are known to be eligible for free school meals achieved three or more A grades at A-level. It is a matter not of trying to get more of those students into higher education but of trying to increase that cohort of students, from 4.1% to maybe five times as many. That is the problem. I am not sure that anything that the Government are proposing to do in interfering in this area will help that problem; instead, it will exacerbate it.

There is a mass of literature on all these matters. I was looking—some hon. Members may say, surprisingly —at a couple of articles in The Guardian. One was headed, “Grammar schools do not improve social mobility for working-class. Study shows little difference in work prospects for poorer children who attend grammar schools and comprehensives.” Earlier this week, on 1 March, there was an interesting article by Mr Owen Jones, headed, “Social mobility is a dead end. Our society relies on working-class jobs—dangling a narrow ladder for moving up is a diversion from tackling inequality.” I do not know whether those are articles on which my hon. Friend the Minister intends to comment in his response.

Department for Business, Innovation and Skills (Performance)

Julian Smith Excerpts

Wednesday 2nd February 2011 Commons Chamber

[Mr John Denham (Southampton, Itchen) (Lab)]

I beg to move,

That this House notes that the Business Secretary in June 2010 called the Department for Business, Innovation and Skills (BIS) the department of growth; believes that the overriding priority is growth and jobs; expresses deep concern that after nine months BIS has failed to deliver this promise on growth, that the Growth White Paper is still not published, that the dismantling of regional development agencies is ‘chaotic’, that local enterprise partnerships lack powers and resources, and that regional development funding is slashed and grants for business investment abolished, causing oversubscription to the Regional Growth Fund; regrets the refusal of the Sheffield Forgemasters loan; notes with concern that responsibility for the digital economy has been transferred to another department without consultation with business or rationale, that there has been no progress in securing lending to small businesses, while bank taxes have been cut, and that BIS has failed to persuade departments not to change planning policies and public services which damage jobs and growth; further notes the sharp reductions in adult training, that there is no longer a 10-year science funding strategy, and that BIS is prioritising unfair and damaging reforms to universities instead of enabling them to support growth; notes the lack of strategy or leadership for key sectors vital to rebalancing the economy; shares the CBI Director General’s concern that the Government has no plan for growth and that BIS is a ‘talking shop’; and calls on the Government to take decisive action to remedy the deficiencies in that Department.

On 3 June last year, the Secretary of State for Business, Innovation and Skills said that he wanted his Department to be the Department for economic growth. At that time, growth was running at 1.2%. Britain was emerging from the deepest global recession for two generations. Nine months later, Britain’s economy was shrinking—so much for the Department for growth. The Government blame the snow, but in the USA the snow struck too—and there last quarter growth was 0.8%. We must have had the wrong sort of snow—or perhaps the wrong sort of Government.

People are seeing prices rise, they are worried about their jobs and they wonder where jobs, growth and prosperity are meant to come from. The Business Department has failed to give the leadership on growth and jobs that this country needs. It has made the wrong choices, harming growth and business instead of supporting them. At a time when other Departments needed to be persuaded to put business first, the Business Department has lost the argument.

[Julian Smith (Skipton and Ripon) (Con)]

I cannot believe that the shadow Secretary of State has started his speech without admitting the appalling inheritance that he gave this Government and without coming clean about the mess in which his party left this country and the debt and deficit that it left behind.

--- Later in debate ---

[Vince Cable]

No doubt the hon. Gentleman will tell us where that fits on the shopping list. On industrial support, I shall simply say that where the previous Government promoted good schemes, such as the manufacturing advisory service, we are building on them, because we are looking at them on their merits, not doctrinally. However, where schemes were failing and were not cost-efficient, we have reduced them and scrapped them.

[Julian Smith]

Small businesses across Britain were delighted to hear last week’s announcement by the Government on tribunals. May I encourage the Secretary of State and his excellent employment Minister, the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), to go further and faster on freeing things up, and freeing small business from Labour’s legacy of red tape?

[Vince Cable]

I am grateful for my hon. Friend’s encouragement, and the Government intend to do exactly what he suggests. Shortly, we will take a forward look at the pipeline of regulation, and how we plan to reduce regulation and make it proportionate.

--- Later in debate ---

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In America the official unemployment rate is 9.5%; unofficially, it is 13%. Americans face the worst fiscal deficit since the slump of the 1930s, and, despite the huge fiscal stimulus package introduced by President Obama, the US economy is not producing enough jobs to reduce those rates of unemployment, let alone to create enough jobs for new entrants to the job market.

Unfortunately, our economy faces similar conditions, and, as I said in my speech during the Budget debate on 23 June last year, it is essential that as the public sector contracts, everything is done to encourage the private sector to grow as fast as possible in order to take up the necessary slack and to create desperately needed jobs, particularly among the young. At this time, small and medium-sized enterprises collectively account for 99.9% of all enterprises, 59.8% of private sector employment and 49% of private sector turnover. It is clear that our economic recovery will be fuelled by those firms, to which the Government should provide all possible help. The Government have taken a number of steps to help in doing so. They have reduced corporation tax, both large and small; increased the threshold at which employers begin paying national insurance contributions; they are consulting on reforming employment tribunals; and there is a welcome and significant increase in apprenticeships.

There are significant problems out there, however. The banks are lending to certain favoured sectors, and even in other sectors their arrangement fees have increased hugely over the past year or so, thereby increasing borrowing costs. The introduction of regulation on flexible working and paternity leave, although desirable in themselves, could have serious negative implications for small businesses, which can ill afford to lose a member of staff for a considerable time. It is vital that the Department for Business, Innovation and Skills wins those arguments with other Departments, and that business policy is ruthlessly put first.

[Julian Smith]

Does my hon. Friend agree that on family-friendly policies, which are vital for supporting the improvement of children in our country, small businesses with very few employees need to be given special attention? They are special cases, and we need to look after their needs as much as possible.

[Geoffrey Clifton-Brown]

My hon. Friend is prescient, because I was about to move on to that subject. The European Union has what it calls a “Small Business Act”, which requires the EU to look at every new regulation before it is introduced and consider its effect on small businesses to see whether very small firms might be exempted from it. We should do more of the same here.

The greatest challenges and opportunities lie in inward investment—foreign direct investment, FDI—and exports. As I identified when I was shadow Trade Minister, the previous Government’s policies on those matters were incoherent, particularly with regard to the enormously expensive regional development authority offices that were based throughout the world, often in the same city, and competing for the same inward investment to UK. Thankfully, we have put a stop to that, and I am delighted to hear that my right hon. Friend the Secretary of State is about to produce a White Paper on trade. That will be very welcome, indeed, and I am sure it will address several measures that I am going to discuss in my speech.

If the newly created local enterprise partnerships are not to have any role in FDI, presumably UK Trade & Investment will deliver the policy centrally from London, with small teams on the ground in the regions, something that I have advocated. Perhaps the Minister, when he makes his winding-up speech, will confirm that, because FDI is a vital part of the economy. We must not only seek new FDI from throughout the world, but carefully look after what we have. I was alarmed to see that Hua Wei, one of the world’s largest IT companies and based in Beijing, has just moved its European headquarters from Basingstoke to Düsseldorf. Eventually, that could affect 6,000 jobs, and the Pfizer decision today is another reminder of FDI’s importance.

Education Maintenance Allowance

Julian Smith Excerpts

Wednesday 19th January 2011 Commons Chamber

[Andy Burnham]

I said that I am prepared to sit down and talk about making savings as long as we maintain the principle of a national scheme that supports the kids who most need support. I made the same offer on school sports. I will have that discussion, but I am saying to the Secretary of State do not just dismantle the whole scheme and lose all the benefits that come with it. If we had been asked to make a reduction in EMA commensurate with the rest of public spending, we would have struggled to argue against it, but that is not what the Government propose. The hon. Gentleman stood alongside the Prime Minister and the Secretary of State at the last election promising young people that they would keep EMA. They are the ones with the questions to answer.

The truth is that the Secretary of State cannot will the ends without the means. That will not happen. However talented those young people are, they cannot live off thin air. They cannot have a part-time job and walk miles to college and still get straight A’s. I wonder whether he has much idea of what their lives are like. In 2003, he wrote an article in The Times that acquires a new significance in the light of this debate. He wrote that

“anyone put off from attending a good university by fear of that debt doesn’t deserve to be at any university in the first place.”

Those are difficult sentiments for an Education Secretary to be associated with, as are these, which appear in the same article:

“Some people will, apparently, be put off applying to our elite institutions by the prospect of taking on a debt of this size. Which, as far as I’m concerned, is all to the good.”

How genuine is his commitment to those people who want to get in to Oxbridge?

I have worries about the Secretary of State’s elitist instincts, but I read in The Times last week another interesting piece—from Mrs Gove—which contains insights from home that raise further questions about whether he is living in the same world as the rest of us—[Interruption.] He should listen to this. She says:

“Like all angst-ridden working mothers, I live in terror of upsetting my cleaner.”

Angst-ridden mums in Leigh talk of little else. I sympathise with Mrs Gove’s predicament, but I wonder whether the Secretary of State could pass on a bit of advice to all the wives of his Cabinet colleagues who fret about the same curses of modern living. May I respectfully suggest that the best way to stay on the right side of the cleaner might be not to clean the oven oneself, but to press one’s other half not to remove the cleaner’s kids’ EMA?

[Julian Smith (Skipton and Ripon) (Con)]

May I press the right hon. Gentleman a little further on exactly what percentage reduction he would make to EMA? He said he is open to reducing it, but by what percentage?

[Andy Burnham]

I said that I would make a reduction commensurate with the overall reduction in spending. I would be prepared to sit down and say, “Can we make the EMA scheme work for young people at that level?”, but the Government are not proposing that. They are proposing a scheme that is a tenth of the size of the current one. If the Secretary of State is making offers and rethinking, and if he has been ordered into yet another U-turn by the Prime Minister, I am prepared to talk about it, but the onus is on Government Members to tell us the details of what they are offering.

--- Later in debate ---

[Julian Smith]

On behalf of students and staff at Craven college in my constituency, I thank the Secretary of State. They made strong representations to me about the need to look at travel in the reworked EMA, so I thank my right hon. Friend for agreeing to do that.

[Michael Gove]

I am grateful to my hon. Friend.

Oral Answers to Questions

Julian Smith Excerpts

Thursday 13th January 2011 Commons Chamber

[Mr Davey]

I am grateful to the hon. Gentleman for raising this point, of which I am aware. Royal Mail accepts that there were initial problems with establishing the new delivery system in the Dundee East delivery office and I am sure that it will learn from them. Following a review, a recovery plan was put in place, but I am afraid that the severe weather hindered it. Royal Mail has apologised for the disruption to services and taken a range of measures as a matter of urgency to ensure that households and businesses in Dundee East receive all their mail. For example, 70 extra staff and managers have been drafted in to help the recovery following a major push last weekend. I hope that the hon. Gentleman will be able to report back to me that his constituents and businesses are seeing an improvement.

[Julian Smith (Skipton and Ripon) (Con)]

May I pay tribute to the excellent work of the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) and the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), in reducing the burden of red tape on British small businesses? Will they update me on progress made in one of the biggest areas of burden—that of employment law—and on any exciting steps that might be taking place in the coming weeks?

[Mr Davey]

My hon. Friend will know that we have today announced the abolition of the default retirement age, which is a deregulatory measure. In the very near future we hope to announce the next stage of our employment law review, and I am sure he will welcome that.

Oral Answers to Questions

Julian Smith Excerpts

Thursday 18th November 2010 Commons Chamber

[Mr Prisk]

As you can see, Mr Speaker, we are very keen to answer this question.

Absolutely not. Every area can bid, and the opportunities are clear for every constituency. There are also opportunities for the private sector, but the key point is that when funds are tight, we have to remind ourselves that the reason why is sitting on the Opposition Benches.

[Julian Smith (Skipton and Ripon) (Con)]

May I plead with the employment Minister and his boss to delay the implementation of flexible working, shared parental leave and the expansion of legislation on the right to request training, in order to give British business a holiday from new employment legislation in 2011, and allow it to focus on job creation and growth?

[Mr Davey]

I may be about to disappoint my hon. Friend, because he will know that the coalition has some very expansive plans to promote the right to request flexible working for all employees, and to develop a new system of flexible shared parental leave. We believe that when we publish our plans and consult on them in the new year, he, and many businesses, will see that they are actually ways to promote business growth and enterprise.