Education Funding for 18-year-olds

Matt Hancock Excerpts

Tuesday 28th January 2014 Westminster Hall

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

It is a great pleasure, Mr Williams, to respond, under your chairmanship, to a forthright debate. I am grateful for the opportunity to set out the context and some of the issues surrounding our decision, which was not an easy one to take. Many of the points raised were not quite accurate, so I hope to provide some reassurance on them, and on how we will deal with the impact on individual colleges, not least because several hon. Members raised the concerns of colleges that are particularly hard hit; I am looking at the hon. Member for Croydon North (Mr Reed). At the moment, we are confirming with colleges the individual allocations.

Before we get to the meat of the debate, let me say that the process for making the decision was completely in line with the process for making such funding decisions under this Government and the previous Government. Say that following the overall allocation in a spending round, it becomes clear that savings have to be made in the Department for Education, outside the ring fence for education for 5 to 16-year-olds; the overall funding policy for the following academic year should be set out before Christmas, in December, in a letter from the Education Funding Agency. That is the normal way of doing things. Someone implied a criticism of the EFA, but there should be absolutely no criticism of the EFA over this, because such decisions rightly rest with Ministers. In February, normally, we come up with the allocations for individual colleges. That is the process we are going through: we are looking at the impact on colleges. We have estimates of those impacts, but we need confirmation from each college. That is the normal process, followed by the previous Government as well as this one. There has not been a problem in the process, but we can go into the individual decisions.

[Nic Dakin]

First, earlier information about a cut would have been helpful and welcomed by colleges. Secondly, although the process described by the Minister is accurate, for the first time that I can remember, a decision will affect people already enrolled on courses. If they are on a two-year course, the cut will impact on them and, because of the lagged funding, that is particularly difficult.

[Matthew Hancock]

I will certainly respond to that point. The irony for those already in education who are affected by this decision is that the funding is being returned to the 2012-13 level that it was at when they enrolled. An important piece of context has not yet been mentioned: the decision, which regrettably had to be made because of pressures on the public finances, changes funding for 18-year-olds back to the 2012-13 level. I understand and appreciate the pressures on the budgets of FE colleges, but in 2012-13, pupils were funded for 450 hours, and we raised that to 540 hours—an increase of 16 and two thirds per cent.—and we are now debating a cut of 17.5%, which is of almost exactly the same order of magnitude. The discussion about the impact on colleges and the conversations with college principals need to happen in the context of the fact that this changes the funding rate per pupil for 18-year-olds back to 2012-13 levels, which was only last year.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I accept that the Government have done a lot of good work in the FE sector. The Minister says that further discussions will take place with specific colleges. For the record, MidKent college, which will lose £800,000 and have 1,000 students affected, is being told that it will get a cut of 3.4%, and yet there are high levels of deprivation in that area. Will the Minister have discussions with the college to see how things can be taken further?

[Matthew Hancock]

I will absolutely ensure that that happens. In fact, I will ensure that such discussions take place with all colleges. It is important, however, to set out why we took the decision we did.

We were faced with a cut across Government to make savings to reach our goals on reducing the budget deficit. I need not stress the wider argument about the necessity of reducing the deficit, but life would be easier for a Minister and throughout our country if we did not have a budget deficit of £100 billion, and if we had not had an even bigger deficit three years ago. We all know who is responsible for that. There is tension on the Opposition Benches between those who recognise and acknowledge the need to deal with the problems left by the Labour Government and the others. Not least, I recognise the reasonable approach taken, and the suggestion of alternatives, by the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Rochdale (Simon Danczuk); that is in contrast simply to complaining about things and saying, “Aren’t we in a terrible mess?” It is difficult being a Minister when there is no money left, but we all know whose fault that is. I will not stress that any more.

I care about the individual impact on colleges. For example, I would be delighted to visit Cambridge—I think I have a campaigning visit in the diary. According to our figures, which we are in the middle of confirming with colleges, as a result of the decision, Long Road sixth-form college will have a reduction in funding of 0.7% and Hills Road college of 0.2%. Those figures are to be confirmed with the institutions, but that is the scale in those instances. The impact assessment sets out the effect for types of colleges.

The reason for our decision is partly that it is in tune with other things that we are trying to do, not least raise the participation age. Many people have talked about NEETs, and I bow to no one in my support for FE colleges and their work in reducing the number of NEETs, but the biggest impact comes from the level of education at the age of 16, and from those who are in FE at 16 and 17 and whom we have to keep there. We are raising the participation age up to 18 years, with cross-party agreement, and are insisting that everyone stays in some form of education up to that age. We are focusing the funding on that.

The reasons underpinning the funding decision, therefore, are the decision to return funding for 18-year-olds to last year’s levels; our raising of the participation age; the need to do so much work to ensure that people stay in education at 16 and 17; and the fact that on average—this is not the case for everyone—18-year-olds spend less time on their education, even when it is full-time education. Furthermore, as the impact assessment says—this ought to be recognised in the debate—those who are 18 in education are no more likely to be disadvantaged than anyone else.

[Dr Lewis]

I had an exchange with the hon. Member for Bethnal Green and Bow (Rushanara Ali) earlier. Given that there will be this extra emphasis on people up to the age of 18, is it at least the Government’s aspiration to get rid of the value added tax anomaly?

[Matthew Hancock]

I am well versed in the VAT issue and recognise the argument. Removing the VAT anomaly would cost £150 million, which is the same amount that we have had to save through the measure we are debating, so I am afraid that I simply have to plead having no money to deal with it. All I will say is that I fully acknowledge the argument.

A sixth-form or FE college has a private sector designation from the Office for National Statistics that leads to the VAT charge, but it also gives the college much more power over borrowing. On the one hand, a sixth-form or FE college has much more power to manage its finances, but on the other hand, it has to pay VAT. I note that in the past couple of years, there have been two new sixth-form colleges. Yes, there have been new 16-to-19 free schools, but there have also been new sixth-form colleges, so some people have taken the decision, even though they know that they will have to pay VAT, to go down the sixth-form college route, because they get extra flexibility in managing their finances. I completely acknowledge the VAT issue, but there is a flip side to the argument, which is why some people go for paying the VAT, even though they might not need to do so.

[Eric Ollerenshaw]

The Minister is explaining himself extremely well, but there is a bit I do not get. Why did he make the commitment to colleges that they could have 540 hours, which they then budgeted for, only to take it away, leaving them with a problem?

[Matthew Hancock]

My life would certainly have been easier had the decisions been taken together, and had that not happened. I am simply putting that forward as an explanation of the context we need to think about when considering the size and scale of the cuts.

We are looking at the individual implications. I am happy to ensure that the EFA and my team talk to any college that is concerned. We need to recognise, however, that the reason for the decision was that savings had to be made across Government. There is also a policy explanation: there is the fit with other things on which there is consensus across the House. I am not looking for adulation over this policy decision; I am looking to explain myself as well as I can. I am happy to talk to colleagues and colleges further, because my goal is to support colleges and education to the best of my ability.

Oral Answers to Questions

Matt Hancock Excerpts

Thursday 23rd January 2014 Commons Chamber

[Sheryll Murray (South East Cornwall) (Con)]

2. What steps he is taking to ensure that apprenticeships respond to employers’ needs.

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

Our apprenticeship reforms are responding to the needs of employers by putting them in the driving seat. Trailblazers, led by employers and professional bodies, is leading the way in developing new standards in a wide range of sectors.

[Sheryll Murray]

Will my hon. Friend join me in congratulating the 300 in 100 campaign in Cornwall on its aim to get 300 new apprenticeships in 100 days? I participated in the campaign in St Mellion a few weeks ago along with many employers in my constituency.

[Matthew Hancock]

I would love to congratulate my hon. Friend, who has teamed up with other MPs across Cornwall, including my hon. Friends the Members for Camborne and Redruth (George Eustice), for Truro and Falmouth (Sarah Newton) and for St Ives (Andrew George) and many others. Many Members of this House have been part of the 100 in 100 campaigns to get 100 apprentices in 100 days, and Cornwall is taking it just that bit further.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The number of apprentices in the 16-to-18 age group is dropping at the moment, with serious implication for our long-term skills base. Will the Minister look again at the proposals of the Business, Innovation and Skills Committee to use public procurement contracts to ensure a certain level of recruitment for that age group in the way in which the previous Government did and local authorities are doing?

[Matthew Hancock]

Of course, Crossrail, which is the biggest public construction project in Europe, has in it exactly what the hon. Gentleman describes. He will have seen last week that we announced 2,000 new apprentices as part of High Speed 2. I entirely agree about the need to drive up the number of apprentices. We introduced a rule that every apprenticeship had to be a minimum of a year, and the number of apprenticeships for those aged between 16 to 19 lasting a year or more has gone up sharply. We must be careful to consider the reason for the numbers. Apprenticeships of under a year, in many cases without a job attached, are not really apprenticeships at all.

[Robert Halfon (Harlow) (Con)]

Does my hon. Friend agree that one of the best ways of increasing the skills of apprenticeships is the creation of pre-apprenticeship schools, otherwise known as university technical colleges? Will he look at expanding the Government’s programme of 24 UTCs, one of which will be in Harlow, so that there is one in every town across the country?

[Matthew Hancock]

I absolutely support my hon. Friend in his enthusiasm for UTCs, not only the one in Harlow, for which, I know, he is a great campaigner, but those across the country.

[Bill Esterson (Sefton Central) (Lab)]

But why have Ministers failed to match their rhetoric with action? Something like what my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) suggests in his Apprenticeships and Skills (Public Procurement Contracts) Bill would create thousands of new quality apprenticeship opportunities by requiring all major suppliers on large public projects to offer apprenticeships.

[Matthew Hancock]

As I said, we do that on some of the largest procurements. If we are talking about action, the fact that a record number of people are in apprenticeships is action that we should support, and the fact that 1.5 million people across the country have started apprenticeships since 2010 is also action we should all be proud of.

[Stuart Andrew (Pudsey) (Con)]

3. What recent assessment he has made of the level of UK exports.

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[Mark Pawsey (Rugby) (Con)]

9. What steps he is taking to support small businesses.

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

We are passionate supporters of small businesses. More than 12,000 start-up loans have been approved; over the past year, UK Trade & Investment has helped more than 30,000 businesses to export; and, in April this year, a new employer allowance will cut £2,000 from the national insurance bill of every company in the country.

[Mark Pawsey]

Located at the crossroads of the UK motorway network, Rugby is a great place to do business. Our excellent small businesses can benefit from the initiatives that the Minister has outlined. What would he say to small businesses that want to grow as the economy expands, but are unable to find larger premises because many of the older buildings have been demolished and speculative development of the type they need has not taken place?

[Matthew Hancock]

Ensuring that the commercial property market works effectively is an important part of reforming the banking system and getting it back on its feet after the crisis. That market is one of the main routes through which we can open up more development and ensure that there is more capacity, so that when small businesses want to expand, they have the physical space in which to do so.

[Mr Robin Walker (Worcester) (Con)]

Small businesses on Worcester’s high street are looking forward to the employment allowance and to the generous rebate on business rates that was announced in the autumn statement. Will the Minister join me in urging Worcester’s Labour-led city council not to put up parking charges by 10%, which would be a kick in the teeth for the high street?

[Matthew Hancock]

Ensuring that any agency of Government or any council can live within its means is a crucial part of good governance in these difficult times. The approach that the Government have taken is to do that through making savings, difficult as it is. That is clearly working and I recommend it to the Labour-led council in Worcester.

[Laura Sandys (South Thanet) (Con)]

10. What assessment he has made of innovation in the UK manufacturing sector.

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[Lyn Brown (West Ham) (Lab)]

13. What recent estimate he has made of the number of female entrepreneurs.

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

There are now a record 4.9 million businesses in the UK, and we estimate that 880,000 of them are led by women, which is 18% of the total. That demonstrates the opportunity for this country, should we manage to get that proportion up.

[Lyn Brown]

Evidence shows that companies with more women in positions of power outperform their rivals. Does the Minister agree that we cannot afford not to make progress in securing more women in positions of power? If so, what will he do about it if companies do not hear him asking them nicely?

[Matthew Hancock]

I, too, have seen the research showing that companies with women at the top tend to perform better than those that have only men. That balance in the boardroom is vital, and I am a strong supporter of the agenda the hon. Lady promotes. More than 4,000 start-up loans have gone to women, and we are bringing in a new partner directed precisely at people who are returning to work after having children. For the bigger picture, ensuring that we have more women on boards is a campaign we are working on across the Government.

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

The start-up loans scheme has been the most monumental success, but many female entrepreneurs ask me for more focused sectoral mentoring as part of that scheme. May I encourage the Minister to promote that as he develops the scheme further?

[Matthew Hancock]

A scheme exactly like the one my hon. Friend calls for is coming his way very soon.

[Julie Hilling (Bolton West) (Lab)]

16. What recent estimate he has made of the number of apprentices being paid at a rate below the apprenticeship minimum wage.

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

Yes, I am a great supporter of Lowestoft college, which it was a pleasure to visit last year with my hon. Friend. It has a centre for the promotion of engineering and training in the offshore industry, which is so important to the town, and I will do everything I can to support it.

[Ian Lavery (Wansbeck) (Lab)]

T4. Blacklisting is a scourge of any civilised society. Will the Secretary of State guarantee to the House that the confidential documents currently being withheld by the Government relating to the Shrewsbury 24 dispute in 1973 do not include extensive details relating to individuals who have been blacklisted and the companies operating this very sharp practice?

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

T3. Suppliers to top-tier Government contractors still complain that payments made under the prompt payment code are not forthcoming. What more can the Government do to improve the situation and release billions of pounds back into the economy to support our long-term economic plan?

[Matthew Hancock]

The problems of people failing either to make prompt payments or to honour payment terms—two related, but slightly different points—need to be addressed. They are largely problems that negatively affect small companies, and we are currently consulting on how radical we need to be to get the balance right and address them.

[Mr William Bain (Glasgow North East) (Lab)]

T7. Will the Secretary of State confirm that business investment has flatlined over the last year and that this is one of the major causes of Britain’s worsening productivity problem? What are he and the Government going to do about it?

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[Stephen Lloyd (Eastbourne) (LD)]

I wholly support the Government’s move to increase the education leaving age to 18, but while the Department for Education budget is protected, the further education budget, which comes under the Department for Business, Innovation and Skills and which will now be educating far more people up to 18 than schools, is not. This will put a huge strain on FE budgets. Will the responsible BIS Minister talk to the Secretary of State for Education to ask for assistance?

[Matthew Hancock]

I frequently talk to the Secretary of State for Education. The change to funding for 18 year olds was not one made lightly; dealing with the deficit requires difficult decisions. We published the impact assessment on the consequences, which show that disadvantaged students are not affected disproportionately. If we did not have a budget deficit of £100 billion, life would undoubtedly be easier.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Queen Victoria was on the throne when the Dunlop Motorsport factory first produced wooden wheels and then rubber tyres in Erdington. Now, 125 years of history and 300 highly skilled jobs are at risk. Jaguar Land Rover needs the land for its welcome expansion. Birmingham city council has identified an alternative site about three miles away. But the global board, based in Ohio, has yet to commit to Birmingham and Britain—with only nine months left before the lease runs out. In thanking the Secretary of State for the welcome steps he has already taken, may I ask whether he will convene a top-level meeting with Goodyear Dunlop, involving both him and me, so that we can get a decision made that a great piece of our manufacturing history remains part of a great manufacturing future in this country?

Oral Answers to Questions

Matt Hancock Excerpts

Monday 6th January 2014 Commons Chamber

[Andrew Stephenson (Pendle) (Con)]

14. What steps his Department is taking to improve the quality and quantity of apprenticeships.

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

There were 868,700 people undertaking an apprenticeship last year—more than ever before. We have already taken steps to increase standards and remove low-quality provision, and we will take further such steps.

[Karl MᶜCartney]

I am pleased to hear that our Government are providing more support to young people who do not wish to pursue an academic course at university. Does the Minister agree that we need more participation in the apprenticeship scheme by small and medium-sized enterprises such as PK Automotive in Lincoln, which has joined larger firms such as Siemens in my constituency, and worked with local institutions such as Lincoln college and LAGAT, to help to deliver real opportunities for young people?

[Matthew Hancock]

Yes, I do. I am delighted to say that 2,200 people in Lincoln are participating in apprenticeships. As is the case in many other places throughout the country, that is a record number. Of course apprenticeships are valuable in companies large and small. In fact, a majority of apprenticeships are in small businesses, but we need to ensure that the benefits of apprenticeships are communicated to all employers.

[Andrew Stephenson]

Sara Underwood, a higher apprentice with Rolls-Royce at Barnoldswick in my constituency, was recently awarded the Mary George memorial prize as part of the Institution of Engineering and Technology’s young woman engineer of the year awards. Will the Minister join me in congratulating Sara on her achievement and Rolls-Royce on its exceptional apprenticeship scheme?

[Matthew Hancock]

I am delighted to join my hon. Friend in recognising the work that Sara has done not only to win the prize that she so thoroughly deserves, but as a true ambassador for apprenticeships as she goes around explaining the benefits of apprenticeships to young people, employers and the wider economy.

[Andrew Gwynne (Denton and Reddish) (Lab)]

A recent survey by The Times Educational Supplement showed that three quarters of young people did not receive information about apprenticeships in their careers lesson, so does the Minister still stand by the words of the Secretary of State to the Education Committee in December that the Government have no plans to address and amend careers guidance?

[Matthew Hancock]

As my right hon. Friend the Secretary of State said to that Select Committee, we will shortly publish new guidance on careers education. As we have set out many times, a far more important—if not the most important—thing for young people’s inspiration and motivation is people who themselves are successful in their careers, so that is what our careers advice policy focuses on.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I thank the hon. Gentleman for his replies to these questions, but how does he propose to deal with the real dearth of engineering apprenticeships—female ones—when frankly there will not be enough role models to go around? We need good careers advice in classrooms, but it needs to be targeted so that we get young women, especially, into engineering and STEM—science, technology, engineering and maths—subjects.

[Matthew Hancock]

Of course role models can be of either gender, and I am sure that many men can think of women who would be role models for themselves. Under this Government, the number and proportion of applications for apprenticeships in engineering are up, and the number of applications to study engineering at university is up. There is much more to do, but we are moving in the right direction.

[Robert Halfon (Harlow) (Con)]

Does my hon. Friend agree that university technical colleges will make a huge difference to apprenticeships? May we have a commitment from the Government that we will have one in every town after the next election?

[Matthew Hancock]

I am a great enthusiast for UTCs, not least because they prepare people to go into not only apprenticeships, but an academic career. They can open up opportunities for young people, and we work hard in the Department for Education to ensure that as many people as possible get those opportunities.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

Does the Minister believe that schools are providing adequate careers guidance about the availability of apprenticeships in the light of Sir Michael Wilshaw’s comments:

“It is worrying that the new arrangements are failing to provide good guidance or to promote vocational training options and apprenticeships”?

[Matthew Hancock]

I am clear that the strength of guidance, inspiration and motivation needs to increase, and that the best place to get that motivation is from people who are in careers. We have inspirational apprentices such as Sara Underwood, who was mentioned by my hon. Friend the Member for Pendle (Andrew Stephenson), who explain the benefits of apprenticeships. I explain the benefits of apprenticeships, and it should be incumbent on all of us in the House to explain that opportunities are available to allow people to prosper.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

4. What systems his Department has in place for management of failing academies and free schools.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

6. What plans he has for future funding for students in the further education sector; and if he will make a statement.

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

We announced the 16-to-19 funding policy changes for the academic year 2014-15 last month, and we will confirm the allocation of funding for individual institutions by the end of March.

[Debbie Abrahams]

Oldham sixth-form college and Oldham college were notified, without any consultation, that their funding would be cut by 17.5%. That has a devastating impact on young people in our area and it is anticipated that 700 young people in Oldham will be affected. Long-term youth unemployment in Oldham has more than doubled since November 2010, and we know that the national figure is 1 million people. Given the Prime Minister’s pledge that our young people should “earn or learn”, is this move not another example of this Government’s hypocrisy?

[Matthew Hancock]

Not only are unemployment and youth unemployment falling—thankfully—from the very high levels we inherited from the Labour party, but we have had to make savings in the 16-to-19 budget. We think it is fair to make this change affecting those who have already had two years of post-16 learning; many 18-year-olds in full-time education do not study as many hours as 16 or 17-year-olds. I also say to the hon. Lady that her Front-Bench colleague, the hon. Member for Manchester Central (Lucy Powell), said on television earlier that she wanted the deficit to fall faster. I am not sure that she got the memo from the shadow Chancellor, but Labour has opposed every single cut, no matter how difficult.

[Caroline Nokes (Romsey and Southampton North) (Con)]

College principals from around Southampton have been keen to emphasise the valid reasons why 18-year-olds may need an additional year at sixth form, which include ill health, their possibly suffering from disabilities, and, of course, the need to improve GCSE results so that they can go on to study their A-levels. What reassurance can the Minister give me that these young people, who are in need of the most support, are not going to be penalised? They are the most at risk of becoming NEETs—those not in education, employment or training.

[Matthew Hancock]

When my hon. Friend sees the impact assessment, I think that she will be reassured on some of those points. As I have said, this is a difficult decision and not one that we will take lightly, but the alternatives are also difficult, and 18-year-olds have already had two years of study post 16 and, indeed, they often study for fewer hours than 16 to 17-year-olds. I look forward to discussing with her, once we have published the impact assessment, exactly why that decision was made.

[Richard Burden (Birmingham, Northfield) (Lab)]

I am afraid that the Minister has not answered the point that the hon. Member for Romsey and Southampton North (Caroline Nokes) raised. Some 71% of the over-18s in further education are on vocational courses and they are often the people who need a second chance and additional support, yet he is cutting funding for them by 17.5%. Why is he hitting those who need support?

[Matthew Hancock]

As I said to my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), once the hon. Gentleman sees the impact assessment he will be able to have a full view of the value of the policy.

[Mr Speaker]

I was looking for Dr Huppert. He popped up a moment ago but has popped down again. Never mind. We will accommodate him on some other occasion.

[Sir Tony Baldry (Banbury) (Con)]

My experience of the Banbury and Bicester job clubs is that young people who have dropped out of education or training often find it difficult to get back into education and training. Can my hon. Friend reassure me that those youngsters who have been NEETs but want to get into further education will be given support to do so?

[Matthew Hancock]

Of course. The massive expansion of apprenticeships and the introduction of traineeships were designed to do precisely that. There is a huge focus on ensuring that those who are in education and those who are NEET get the opportunities to fulfil their potential. Raising the participation age is another part of the plan for dealing with the problem. There are many policies designed to have that effect. The changes across the piece are all about ensuring that, within the funds available, we give everybody the best possible opportunity.

[Mr Steve Reed (Croydon North) (Lab)]

7. What steps he is taking to ensure accountability and oversight of all publicly funded schools.

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[Stephen Mosley (City of Chester) (Con)]

13. What assessment he has made of the benefits and disadvantages of the use of tablet devices in schools.

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

Technology, well used, can be a powerful tool to help teachers drive up standards, and evidence shows that the use of technology can have the biggest impact on those most disengaged from learning.

[Stephen Mosley]

Technology such as tablets can be very beneficial in the classroom, but it can also put huge strain on parental finances. What support can the Government offer to make sure that all children, irrespective of their family circumstances, have access to the technology that they need in the classroom?

[Matthew Hancock]

My hon. Friend makes a very important point. In fact, during the past year the number of tablets in secondary schools has gone up by 50%, and the number in primary schools has more than doubled, while we also have a special capital fund for colleges to fund such IT. However, this is about more than physical resources; it is about changing the way teaching is done to make the best use of this tool to drive up standards.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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[Graham Evans (Weaver Vale) (Con)]

T2. What steps is my hon. Friend taking, working with the Treasury, to equalise the VAT treatment of sixth-form colleges, such as the outstanding Mid Cheshire college in my constituency, to bring them in line with school, academy and free school sixth forms?

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

I am a passionate supporter of sixth-form colleges. I recognise the work that they do, in particular Mid Cheshire college with its outstanding status. I have regular discussions with the Treasury. However, we do not think that we will be able to find the resources in the current spending round to solve the problem with VAT that my hon. Friend raises. I will continue to work with the Treasury to try to find a solution.

[Mr Graham Allen (Nottingham North) (Lab)]

T3. Ofsted inspections often critique, but usually deliver only advice from a small bag of short-term fixes, many of which have failed before. Will the Secretary of State meet me to discuss how Ofsted can be given the power to deliver 10-year strategic interventions to help schools deliver school readiness at four and 11, so that improvements are sustainable, unlike Ofsted’s short-term fixes?

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[Clive Efford (Eltham) (Lab)]

T4. The Association of Colleges has said that young people from disadvantaged areas and black and minority ethnic groups will be hardest hit by the cut of 17.5% in the funding for 18-year-olds. That is borne out by the assessment that has been carried out by my local college, Greenwich community college. Why have the Government not issued an impact assessment on this proposal, given the severe impact that it will have on disadvantaged groups?

[Matthew Hancock]

As I said in my earlier answers, we will publish the impact assessment very soon. The crucial question is how, in the context of getting the country out of the budget deficit mess that was left by Opposition Members, we can make decisions that will have the best possible impact on the ground. Is it fair to fund 18-year-olds, who usually take fewer hours of education per week, at the same rate, or should we reduce the funding for all 16 to 19-year-olds instead?

[Mike Freer (Finchley and Golders Green) (Con)]

T6. Does the Minister agree with the shadow Secretary of State that Labour failed on vocational education, and does he agree with me that the Government’s rectifying of that mistake means that we now have more employer-led apprenticeships than ever before?

[Matthew Hancock]

I try not to be partisan at the Dispatch Box, as you well know, Mr Speaker, but it is absolutely true that we are driving up standards in vocational education across the board and in apprenticeships. It was a real pleasure to visit McDonald’s in my hon. Friend’s constituency, which does a brilliant job on vocational in-work education. The previous Government made the intellectual error of thinking that just because people have not attained yet, we should not have high expectations of them. We are reversing the consequences of that error.

[Andy Sawford (Corby) (Lab/Co-op)]

T7. Further to the question asked by my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt), will the Secretary of State tell the House now which free schools were approved against the advice of officials? Will he commit to publishing a full list of them?

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[Mr Speaker]

Order. The hon. Gentleman’s inquiry has concluded. What does the Minister think of it?

[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?

UK Commission (Triennial Review)

Matt Hancock Excerpts

Wednesday 18th December 2013 Written Statements

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

The coalition Government made a commitment to review public bodies, with the aim of increasing accountability for actions carried out on behalf of the state. The triennial review of the UK Commission is one of the Department for Business, Innovation and Skills’ (BIS) reviews of non-departmental public bodies (NDPBs) scheduled to commence during the third year of the programme (2013-14). The review will commence in January 2014.

The review will be conducted as set out in Cabinet Office guidance, in two stages.

The first stage will:

Identify and examine the key functions of the UK Commission and assess the requirement for these to continue;

If continuing, then assess delivery options and where the conclusion is that a particular function is still needed examine how this function might best be delivered, including a cost and benefits analysis where appropriate;

If one of these options is continuing delivery through the UK Commission then make an assessment against the Government’s “three tests”: technical function; political impartiality and need for independence from Ministers.

If the outcome of stage 1 is that delivery should continue through the UK Commission as a non-departmental public body, then the second stage of the project will be to ensure that it is operating in line with the recognised principles of good corporate governance, using the Cabinet Office “comply or explain” standard approach.

When completed the report of the review will be placed in the Libraries of both Houses.

Technical and Vocational Education

Matt Hancock Excerpts

Monday 16th December 2013 Written Statements

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

As part of our drive to increase rigour and responsiveness of vocational qualifications, I am confirming today which vocational qualifications for 14 to 19-year-olds have met the standards required to count in the school and college performance tables. The lists of qualifications published today will apply to courses taught from September 2014 for performance tables in 2016 and beyond.

For the first time 16 to 19-year-old students and their parents will be able to see which vocational qualifications are valued by industry and higher education. Two new types of vocational qualification for 16 to 19-year-olds are being introduced:

Tech levels are large level 3 qualifications comparable to A levels. They must lead to recognised occupations, for example in engineering, construction, horticulture, information technology, accounting or professional cookery, either directly or through a vocational degree. To count as a tech level in the performance tables, a qualification requires clear public support from professional bodies, or five employers registered with Companies House.

Applied general qualifications are also level 3 qualifications, but provide broader study of a vocational area which fulfil entry requirements to a range of HE courses, either in their own right or alongside other level 3 qualifications. Applied general qualifications need the backing of a minimum of three universities.

Tech levels and applied general qualifications will be reported separately in performance tables to other academic level 3 qualifications including A and AS levels, the international baccalaureate and the Pre-U.

The third annual list of 14 to 16 vocational qualifications is also being published. This includes a wide choice of qualifications including new engineering courses which have been designed by the Royal Academy of Engineering and backed by world-leading businesses like JCB, Rolls-Royce and Siemens.

The details of the qualifications which will count towards the technical baccalaureate measure (the techbacc) announced in April are also being published. Techbacc students will recognise the highest level of technical training achieved by students aged 16 to 19.

The lists of approved publications will be published at 9.30 am on the gov.uk website.

Engineering Skills (Perkins Review)

Matt Hancock Excerpts

Tuesday 10th December 2013 Westminster Hall

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

It is a great pleasure to serve under your chairmanship, Mr Havard, and to respond to an extremely important debate. I congratulate my hon. Friend the Member for Mid Worcestershire (Peter Luff) and pay tribute to him, not only for bringing this matter to the attention of the House today and the excellent debate that we have had, but for his work over the last year or so in this area, which has been conducted at an impressive pace and with impressive vivacity. His tenacity in sticking to this agenda and driving it forward has been extremely valuable to me as a Minister, to the Government as a whole and, no doubt, to the future of engineering.

We have had a very positive debate, broadly speaking. I will come specifically in a moment to the implementation of all 22 recommendations in the Perkins review. I join other Members in paying tribute to John Perkins for the excellent work he has done and the considered and reasonable way in which he took forward the review, consulting extremely widely. The review has gone down very well in the engineering profession and beyond, and in the education establishment, which is important too. However, one of the most important things about the implementation of the review is that it is a review to be implemented by all, not just by Government. The Government have a very big role to play in doing that, and we will take forward all those recommendations that refer to the Government, but it is not a matter only for them. It is also necessary for the engineering profession to come together, and I will set out a couple of ways in which we plan to ensure that that happens.

Let me respond to a couple of specific questions that were raised. John Perkins did base his report on discussions with marketing and communication experts. He consulted people in the marketing world. Indeed, the argument that a marketing programme is needed and the recommendations that my hon. Friend the Member for Mid Worcestershire pointed to, which he thinks need strengthening, were based on discussions with marketing and communication professionals. I just wanted to put that on the record. On the point my hon. Friend made about the defence industries, the report chose to be cross-sector rather than sector-specific, so that is probably why there is not as much focus on the defence industries as he might have liked.

Let me deal with a couple of other specific points that were made. The hon. Member for Sheffield, Heeley (Meg Munn) referred to the “Closing Doors” report, which is also an extremely important report. The Institute of Physics has produced a very good piece of work. The figures are stark. There are a record number of applications for and entries to GCSE physics by girls in 2013. There has been a 32% increase in GCSE entries for physics over the last three years, and there are a record 73,000 entries by girls. However, of those who get an A*, 49% of boys go on to study physics at A-level but only 19% of girls do so. There is a huge missed opportunity, which can be realised by changing the culture, as the hon. Lady has said, so that physics A-level is seen as a qualification for everybody. The record number taking GCSE is good news, but we must keep driving that progress up the age range so that we get a commensurate increase in A-levels and university applications from girls. We must ensure that the work done to increase applications at GCSE does not tail off.

The hon. Member for Ellesmere Port and Neston (Andrew Miller) made a strong argument about cross-party agreement, which is rife, and the importance of the new 14 to 16-year-old engineering qualifications. I was at the Unilever headquarters in the hon. Gentleman’s constituency—

[Andrew Miller]

It is not in mine.

[Matthew Hancock]

It must be next to the hon. Gentleman’s constituency. I join him in paying tribute to Matthew Harrison at the Royal Academy of Engineering for his excellent work in the area. My hon. Friend the Member for Warrington South (David Mowat) argued in favour of improving the status and cultural position of engineers in our society. We should articulate as often as possible the point that pay for engineers is rising and that engineering is one of the most lucrative career options. To those who are considering what career to go into and who read Hansard—as I am sure they will—the message should go out loud and clear that engineering pays extremely well. If that is what they are after, why not look towards it?

The positive, cross-party approach taken by the hon. Member for Hartlepool (Mr Wright) was exactly the right one. We are dealing with a long-standing problem, which has improved in the past few years but needs a long-term and cross-party solution. He listed all the sectors and areas in which engineering can do someone proud, and I will not repeat what he has said. I would, however, add computer science and the high-tech end, which is extremely exciting. Developments in that area are moving apace. I am not surprised that the hon. Gentleman took a cross-party approach, because he came slightly unstuck when he tried to score a couple of political points. He said that there had been a decline in GCSE science, but that is because there has been a sharp rise in the number of people taking three sciences as separate subjects, which is a more rigorous approach to science. I would not use that statistic in future, if I were him.

I agree with the hon. Gentleman and the hon. Member for Sheffield, Heeley on the need for more inspirational careers advice from people who are passionate about their career. That is exactly the way we want to go. We all agree that Connexions did not fulfil that role particularly effectively, and the Government are passionate about getting inspirational people to motivate young people to take up careers in which they can do well.

[Andrew Miller]

I totally agree with the Minister on the importance of inspirational teachers. To help him avoid slipping into partisan language, does he agree that his comments about GCSE physics versus A-level physics underline the point that I have made several times during the debate about continuing professional development? Far too many young women who may be interested in science are encouraged to pursue medicine rather than focusing on physics and mathematics as the logical way forward, which will help them even if they do subsequently want to go into medicine.

[Matthew Hancock]

There is a lot in what the hon. Gentleman says. The example of medicine is important for engineering, because 30 years ago medicine was almost entirely male dominated, but the culture was changed and the majority of those who go into medicine are now women. We need to have the same sort of cultural change in engineering, so medicine is a valid example. Not least as a result of the success of Tomorrow’s Engineers week, which the Government sponsor, the proportion of young people who say they would consider a career in engineering has risen by about 10%, and there has also been an increase in the proportion of parents who say they would like their children to consider a career in engineering.

[Meg Munn]

I know that the Minister is not responsible for education, but he has mentioned parents, whose views on the matter are influential. What is being done to ensure that in schools primarily led by parents, such as free schools and academies, enough of this work is going on? Although my hon. Friend the Member for Ellesmere Port and Neston is correct about career development for teachers, we need parents to be on board too.

[Matthew Hancock]

That is an important point, which is part of a wider culture change. As a Minister in the Department for Education I am also responsible for the education end of the subject, along with the other Ministers in that Department. On the question of having an impact on the need for engineers, applications to study engineering at university have increased by 20% over the past three years, and in the past year the number of people in engineering apprenticeships has increased by 10%. Things are moving in the right direction, but I do not deny that there is much more to do, hence the Perkins report.

We accept the Perkins report, and we will take forward all the Government actions within it. It is important to set it in a wider context, however. That starts at an early age with stronger computing in the national curriculum from the age of eight and more of an emphasis on maths, inspirational careers advice from 12 years old onwards, new engineering qualifications for those aged 14 to 16, the introduction of tech levels and the tech bacc for 16 to 19-year-olds, the increase in take-up of A-level physics that we have talked about—we need to do more work on that to improve the gender balance—and the increase in engineering degrees and apprenticeships, not only at level 2 and the technician end but all the way up through higher apprenticeships. Members will have heard the announcement in the autumn statement of an additional 20,000 higher apprenticeships focused on engineering and technology. Within the lifespan of education from primary school onwards there is a focus at every level on improving rigour, improving responsiveness to the needs of employers and increasing the proportion of students who go into science, technology, engineering and maths. It is in that context that the Perkins report sits.

I agree wholeheartedly on the need for better communication, and the engineering profession has come together in the realisation of the importance of communication during the past couple of years. I have had many discussions with the leaders of various engineering industries on the implementation of Perkins. There is enthusiasm for it and there are mechanisms for it, but we need to make sure that those continue. The Big Bang Fair, which came to Parliament, is funded by Government. That funding has helped it to inspire thousands, but there is undoubtedly much more that we can do.

Given the shortage of time, I will write to my hon. Friend the Member for Mid Worcestershire setting out in detail the Government response to all 22 of the recommendations, and I will make public a copy of the letter. I want to ensure that we drive the recommendations forward. I have no doubt that we will continue to debate the subject so that we can maintain the cross-party, cross-Government national campaign to ensure that the shortage of engineers is dealt with and the supply chain is wide open.

[Jim Dowd (Lewisham West and Penge) (Lab)]

I applaud the Minister’s effort and his enthusiasm. When does he imagine that a Minister with responsibility for this area, from whichever party, will be from an engineering background?

[Matthew Hancock]

As a former economist, I apologise for not fitting the criteria myself. But no doubt, with more engineers coming through, there will one day be the opportunity for that to happen.

[Mr Dai Havard (in the Chair)]

I am not sure whether economics is social engineering, but thank you for the debate, Minister. Do you, Mr Luff, wish to say anything for 30 seconds?

Oral Answers to Questions

Matt Hancock Excerpts

Thursday 5th December 2013 Commons Chamber

[Mr Henry Bellingham (North West Norfolk) (Con)]

2. If he will meet representatives of the small business sector to discuss the removal of unnecessary regulation.

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

I am very happy to meet small business representatives. We actively listen to feedback on regulation, including through the red tape challenge, but we do not just meet representatives—we act. For instance, we are freeing about 1 million self-employed people from health and safety law where their work poses no harm to others.

[Mr Bellingham]

I am grateful to the Minister for that reply. Is he aware that King’s Lynn and west Norfolk has an incredibly diverse economy? Experts tell me that since 2010, 1,000 new small businesses have been set up. Will he tell the House that he is as determined as ever to go on championing the cause of removing unnecessary burdens on business, and does he agree that small businesses will be the major exporters of the future? What will he be doing on Saturday to champion wealth creation and enterprise?

[Matthew Hancock]

Like my hon. Friend and many Members across the House, I will be celebrating small business Saturday this weekend. We are constantly vigilant and listening to small businesses to make sure that their task is made easier and the burdens we place on them made smaller.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

If the Minister is in listening mode and cares so much about regulation, will he look very carefully at the threat to crowdfunding, which is a real alternative for small business and community group start-ups? The Financial Conduct Authority is conducting an inquiry and consultation. If we get this wrong and implement inappropriate regulation, it will kill something wonderful that can regenerate communities and business.

[Matthew Hancock]

I agree with every word that the hon. Gentleman says. We are supporting crowdfunding on financial terms, not least through the new business bank, but we are also making sure that it can operate in a high-quality framework. The fact that there will be a regulatory framework around crowd-sourced funding has been welcomed by the sector. We have to get it right, and I will meet Martin Wheatley of the FCA to make sure that we get the details right.

[Mr David Nuttall (Bury North) (Con)]

Some of the most burdensome regulations on manufacturing companies in my constituency are the registration, evaluation and authorisation of chemicals regulations imposed by Brussels. Will the Minister undertake to work across Government to do all he can to reduce the burden of these REACH regulations?

[Matthew Hancock]

Yes, the REACH regulations are among the 30 recently highlighted by the EU business taskforce. As my hon. Friend knows, we are working hard to reduce the burden of those regulations.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

3. What steps he is taking to support small businesses.

--- Later in debate ---

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

16. What steps he is taking to support small businesses in Newcastle upon Tyne Central constituency.

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

The regional growth fund has allocated £40 million-worth of funding to Newcastle, more than £4.7 million has been offered to local businesses under the enterprise finance guarantee, and there have been 85 start-up loans, totalling £414,000. UK Trade & Investment has supported 292 small and medium-sized businesses in Newcastle to export.

[Chi Onwurah]

I will celebrate small business Saturday with retailers and traders in Newcastle’s vibrant High Bridge quarter and fantastic Grainger market. I am glad that so many Members are supporting this Labour initiative. Does the Minister agree that the best news I could give these hard-working businesses would be that he is going to support another of the shadow Business Secretary’s proposals—to cut business rates and then freeze them?

[Matthew Hancock]

I am delighted that the hon. Lady is supporting the cross-party small business Saturday—an idea that we got from the real Barack Obama—and I hear her intervention on business rates. I recall, however, that the Labour Government legislated to double them for the smallest businesses. Of course we listen to small businesses about the business rates, but not to those who wanted to put up taxes for them.

[Mrs Mary Glindon (North Tyneside) (Lab)]

18. If he will bring forward legislative proposals for regulations under the EU machinery directive to protect disabled people.

--- Later in debate ---

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

19. What steps he is taking to encourage exports.

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

The Government are significantly increasing support for exporters by helping more small businesses on overseas tradeshows. As the right hon. Gentleman will well know, the Prime Minister has just led the largest-ever trade mission to China, but missions to smaller countries across the world are also vital to our economic future.

[Simon Hughes]

We have heard a lot about small business Saturday, and we will all be doing our bit—yours truly included. Let me pick up the Minister’s commitment to ensuring that we do not do export drives only to China, India and the big countries, but particularly to small Commonwealth countries. I ask him to look at the potential for expanding our exports to the Caribbean countries, which feel that they have been slightly neglected in recent years.

[Matthew Hancock]

Absolutely. I agree that we need to expand our trade to the whole world, including the smaller Caribbean countries. I hope that the right hon. Gentleman will be here later this morning, when the Chancellor speaks.

[Julian Sturdy (York Outer) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[Mr David Nuttall (Bury North) (Con)]

One of the biggest and most important decisions that any sole trader has to make is whether and when to take on their first employee. Will the Secretary of State set out what steps his Department is taking to make that process as easy as possible?

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

My hon. Friend is right to identify that moment in the life of a small business. By reducing the amount of national insurance paid, by introducing the employer allowance of £2,000 from April and by setting out that a company cannot be taken to a tribunal for two years, we are hoping to make it much easier to employ people and for small businesses to expand.

[Stephen Timms (East Ham) (Lab)]

T6. Work programme providers say that their participants can hardly ever get on to an apprenticeship, and that surely cannot be right. It may partly explain why the Work programme has been so disappointing. Does the Minister agree that more should be done to open up apprenticeships to unemployed people?

[Matthew Hancock]

A huge proportion of apprenticeships are undertaken by people who were previously unemployed. Of course, every apprenticeship is a job, and in order to get a job someone needs to have an employer willing to take them on. There are many other schemes, such as the traineeships, that Work programme providers work with in order to prepare people for getting a job. Ultimately, an apprenticeship is a job and is therefore a successful outcome for a Work programme person.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

May I ask the Minister for Universities and Science what progress has been made in expanding the scholarship scheme for university students, particularly to help with the cost of living rather than the cost of fees?

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T7. The Government have consistently been on the back foot when it comes to addressing the issue of late payments to small businesses. In the review of that, how will they address the central issue that late payment is a cultural and leadership issue, and needs to be seen as unethical as tax evasion?

[Matthew Hancock]

Late payment is indeed a cultural and leadership issue. I held a meeting in the Department last week with all those concerned. As the hon. Lady well knows, we will be publishing a consultation paper very shortly. I commend her for her continued action and pressing on this issue.

[Stephen Mosley (City of Chester) (Con)]

Small business in Chester is really getting behind small business Saturday this weekend. I have delivered more than 400 packs to businesses telling them what it is all about. Will the Minister commit to making an assessment of the success of the first small business Saturday, so that we can improve and help small business in future?

[Matthew Hancock]

I am sure that we can make a commitment right now to assess the success of small business Saturday, which will be celebrated across this House and across the country. This is the first one this year—it has been going on for some years in the United States—and I hope that it grows and grows.

[Chris Ruane (Vale of Clwyd) (Lab)]

T8. The number of workers who feel insecure in the workplace has gone up from 6.5 million to 12 million since this Government came to power. That has a knock-on effect on the physical and mental health and productivity of workers. Will the Minister make an assessment and do some research into the effects of insecurity on the work force?

[Dr Julian Huppert (Cambridge) (LD)]

For many years, Mill Road winter fair has celebrated one of the most diverse shopping areas in Cambridge. This year the fair coincides with small business Saturday. Will the Government congratulate those who have been running the fair and encourage its spread so that we can see real diversity? We also want a road closure so that people can walk easily to the shops.

[Matthew Hancock]

I congratulate Cambridge on what it is doing for small business Saturday. I am sure that it will be a great success.

[Caroline Lucas (Brighton, Pavilion) (Green)]

T9. The Secretary of State will be aware of the mechanism in the transatlantic trade and investment partnership that will allow global corporations to sue Governments before secretive arbitration panels that bypass domestic courts. As his own Department’s research says that nothing would insulate the UK from becoming subject to costly and controversial arbitration claims in the future, will he work to ensure that investor-to-state dispute settlements are removed from that agreement?

[Mary Macleod (Brentford and Isleworth) (Con)]

Will my hon. Friend keep pushing for the teaching of enterprise in our schools, so that we can inspire a whole new generation of entrepreneurs?

[Matthew Hancock]

Yes, I will, and I pay tribute to my hon. Friend’s work, especially in her constituency where new academies that link the world of work and the world of enterprise are springing up with her support.

[Paul Blomfield (Sheffield Central) (Lab)]

T10. May I press the Minister for Universities and Science further on why he repeatedly rejected warnings on uncontrolled financial support to students in private higher education colleges? In March, he argued that the policy was important to enable private providers to continue with their expansion, but now that he is faced with a growing black hole in the BIS budget, he has reversed the policy. Will he explain why and will he guarantee no further cuts to student support to pay for his mistake?

--- Later in debate ---

[Bill Esterson (Sefton Central) (Lab)]

I shall enjoy supporting small business Saturday, too. Many young people take their first job in retail and gain vital experience and training that stands them in good stead for the rest of their working lives. Given the problems that retail faces, what steps will the Government take to support retail, especially to deal with the scourge of youth unemployment?

[Matthew Hancock]

We support the national skills academy for retail, and I recently opened its new premises. It is a great supporter, ensuring that people in retail have the right skills to do the job and to progress.

Extractive Industries (Developing Nations)

Matt Hancock Excerpts

Friday 29th November 2013 Commons Chamber

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

I congratulate the hon. Member for Falkirk (Eric Joyce) on securing this debate on the extractive industries and their impact on the developing world. During his speech, I was reflecting on the role of trade, alongside aid, in lifting developing countries out of poverty—he made the case for that powerfully. The rise of Africa and Asia is driven, in the first instance, by the free market operating in a strong framework of the rule of law. We are discussing one aspect of that, and how rules on transparency for the operation of extractive industries can strengthen that process and ensure that British companies and companies across the world can contribute to the growth of developing nations. Not only has he prosecuted his argument well over a long period, but it is gaining salience. The proof of that is in the strong growth rates of many of the countries around the world; so I would probably start on a more optimistic note than he finished on.

I also wish to pay tribute to, and put on the record the Government’s thanks for, the work that the hon. Gentleman does as the civil society representative on the UK extractive industries transparency initiative multi-stakeholder group. He has had an interest in this area for some time. He referred to issues relating to the Grangemouth refinery, and we know that such issues can be political hot potatoes at times, but I have noticed that he always seems to be on the side of those supporting the growth of the British economy, and I am grateful for that.

Natural resources such as oil, gas and minerals make a major contribution not only to this country’s economy, but to those of many developing countries. They can deliver transformational change, if managed well, and can be worth billions to developing countries. For instance, Nigerian oil exports were worth almost $100 billion in 2012—that is more than the total net aid to the whole of sub-Saharan Africa. Interestingly, the acronym BRIC—Brazil, Russia, India and China—has been used for some years to represent the fast-developing countries, but countries such as Turkey and Nigeria are quickly coming into their own and challenging the BRIC countries as the next phase of fast-growth countries.

In 2007, Botswana became an upper middle-income country. In 1996, when it gained independence, it was one of the world’s poorest countries, and its success is largely due to well-managed diamond mining. Such examples show that international mining has the potential dramatically to boost economic growth and provide a route out of poverty for resource-rich countries. Listed and unlisted extractives companies are important partners for us in government. We work together with them to ensure that developing countries make the most of their resources to drive growth and tackle poverty, and do so in an open and transparent way. We work through DFID to help resource-rich developing countries derive the maximum possible benefits from oil, gas and mining projects in the region. We also work directly with companies, Governments and communities across the developing world, including in Africa, to improve the development impact of extractive industries. For instance, we are working with the World Bank in the Democratic Republic of Congo, where we are investing in mining sector reform. Our immediate focus is on conflict minerals in the east, where we are partnering with responsible mining companies.

Work is under way with UK-based and other extractive companies to build skills and capacity in east Africa, too, where we are evaluating whether to contribute to the African Legal Support Facility. That organisation plays an important role in procuring world-class legal expertise for Governments who are negotiating complex oil, gas and mining investments, so that the Governments of developing countries have the same access to high-quality legal advice as large companies.

We are also committed to increasing transparency in the extractives sector. I want to dwell on several points that the hon. Gentleman made. As he is well aware, we are committed to encouraging strong, transparent and accountable institutions, which can regulate extractives and promote open markets and open societies. Helping to create that environment is an important part of attracting responsible investment too.

The UK presidency of the G8 was used by the Government to commit to working towards common global standards of transparency. Transparency was one of the goals of the summit. We want to level the playing field for business internationally and provide information for citizens around the world, so that they can hold their own Governments to account in the same way as we are held to account in this Chamber. We have launched eight partnerships, working with companies, Governments and civil society in resource-rich countries to improve transparency and build accountability. It was very encouraging to hear the leaders of UK-listed extractives companies, including Sam Walsh, the chief executive officer of Rio Tinto, join us in calling for other countries to adopt common global standards of extractives transparency.

As the hon. Gentleman mentioned, in May the Prime Minister announced that the UK would sign up to the extractives industries transparency initiative. As he said, it is a matter of getting the right balance between transparency to support the good use of resources and ensuring that such transparency is not over-burdensome. The EITI is designed to build trust and dialogue and promote public debate by putting information into the public domain. For instance, in countries with very poor governance, the EITI prompted the first time that different stakeholders sat round the same table to discuss the management of the mining sector. The initiative has a direct impact.

Many extractive companies listed or headquartered in the UK are active in supporting the EITI. Shell sits alongside Rio Tinto on the international EITI multi-stakeholder board. By signing up, we want Governments to know that the EITI is not just for developing countries, but should be a truly global standard. The hon. Gentleman put the case very well. It means that we have a stronger argument to encourage emerging and developing countries to adopt similar rules.

The Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for East Dunbartonshire (Jo Swinson), who is the Minister for employment relations and consumer affairs, is the UK’s EITI champion. She has committed to implementing an effective and timely initiative for the UK. Unfortunately she could not be present to respond to the debate today, but across the Department for Business, Innovation and Skills we take an interest in ensuring that the initiative works properly.

While the EITI shines a spotlight on domestic production, chapter 10 of the EU accounting directive requires listed and large extractive companies to report the payments they make to all Governments. We are committed to early implementation and are exploring whether we can put regulations in place in 2014, about a year ahead of the transposition deadline—not least because bribery and corruption are barriers to trade and growth, including in the extractives industry. They hinder development, distort competition and ultimately perpetuate poverty. Those problems can have a profound impact on developing economies, and the evidence is widespread. That is why the UK is a signatory to the UN convention against corruption and the OECD bribery convention. Under the Bribery Act 2010, which came into force in July 2011, a company that carries out business in the UK can be prosecuted for bribery anywhere in the world. Those companies can also trade on the honesty and integrity that the Bribery Act implies. It includes an innovative “failure to prevent” offence, and an “adequate procedures” defence to encourage companies to put in place measures to prevent people associated with them from bribing.

The Bribery Act is an important part of the agenda, but another barrier to growth is weak corporate governance. London is the world’s leading international financial centre, and a wide range of companies choose to list on our markets. That includes many extractive industries companies, whose operations are largely overseas. One of the reasons for that is our strong legal and regulatory framework, which includes corporate law and good corporate governance, giving shareholders clear rights on voting and information, and holding companies to account. That flexibility and confidence helps London as a listing location, and making sure that we keep that strength and confidence is important. We continue to enhance the listing rules to ensure that they are strong and well recognised internationally. The rights of independent shareholders in premium listed companies with controlling shareholders will be strengthened. There is new guidance on independence requirements for companies with a premium listing in some sectors, including mineral and extractive industries.

Ultimately, those and other measures that we are putting in place are there to ensure that we have a strong and well recognised system that has the right balance of transparency. As with the trust that is built up through the EITI, the trust and transparency within the UK corporate law and governance framework is vital to achieve long-term sustainable economic growth, including in extractives. I hope that the hon. Gentleman will agree with that.

We consulted on these issues during the summer, following the Prime Minister’s announcement in May that we were joining the EITI. We will publish our official response in early 2014. I am sure that the comments made by the hon. Gentleman today will be taken into account in that. Last month, the Prime Minister announced the outcome of an important part of the trust and transparency agenda. The Government obtained information on the individuals who really own and control UK companies. The hon. Gentleman referred to some of the difficulties that a non-transparent process can lead to. We will implement a central register of this information, which will be maintained by Companies House, and the register will be publicly accessible.

I hope that I have assured the hon. Gentleman that the Government take seriously the role of extractive industries, not least in promoting development in the fast-growing parts of the world, and that we strongly support greater transparency, an agenda on which the Prime Minister has led. It is important to grow economies and empower citizens, to encourage the development of strong and flexible corporate governance and to make sure that UK listed mining companies can lead the way. I am grateful to the hon. Gentleman—

Small Businesses

Matt Hancock Excerpts

Thursday 28th November 2013 Commons Chamber

[Toby Perkins]

I certainly do. I was in the process of paying tribute to the work my hon. Friend has done on that issue. She is absolutely right.

The hon. Member for Rugby (Mark Pawsey), whom I usually regard as a sound voice on the issue of small business, said that if someone is paid late they should refuse to supply the company, but that does not recognise the difference in the relationship between a powerful customer and a struggling supplier. Every year, 2,000 businesses go under simply because they are not paid money that is owed to them, so I think he was wrong about that. My hon. Friend is right to say that we need the Government to be at the forefront of not just encouraging people to pay on time, but ensuring that that culture change passes right down the public sector procurement chain to second and third-tier suppliers.

My hon. Friend the Member for Rochdale (Simon Danczuk) made a lengthy advertisement—I sense it was somewhat to his embarrassment—for Danczuk’s deli. Numerous Members wanted to know about the excellent wares he will be providing. He has been in business before and it is great that he and his wife are opening a delicatessen in the centre of Rochdale and that he is putting his money where his mouth is.

The hon. Member for Brentford and Isleworth (Mary Macleod), my hon. Friend the Member for Rochdale and the hon. Member for Colchester (Sir Bob Russell) spoke, among many others, about the tremendous difficulties caused by the increase in business rates, which I shall return to.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies) promoted the value of local innovative firms and also focused on access to finance. The hon. Member for Rossendale and Darwen (Jake Berry) is not in his place. [Interruption.] I see that he has moved—I do not know how I managed to miss that moustache. He encapsulated the bravery and pioneering spirit required to set up a business and he was right to say that it doesn’t half set the pulses racing. At such moments, people realise what colour adrenaline is.

My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) was entirely right to say that small businesses are undergoing a cost of living crisis, which I will reflect on in a moment.

The hon. Member for North Swindon (Justin Tomlinson) said that Labour always liked to increase corporation tax. If he was still here, he would be surprised to discover that corporation tax was actually 3% less after 13 years of Labour Government. Perhaps he should talk to the former Prime Minister about that.

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

Will the hon. Gentleman confirm whether it is still Labour’s policy to increase corporation tax?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before the shadow Minister answers the Minister, will they please remember that I will stop the debate at 3.45 pm? If the Minister is still on his feet at that point, he will lose the time, because we will have to start the next debate.

--- Later in debate ---

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

This Government are passionate, as am I, about supporting small business. I grew up in one, and I hope that I not only listen to and speak for small business across Government, but understand what life is like in one, as do so many hon. Members who have spoken. The debate has reflected the strength of feeling across the House in support of small businesses, which we should do more to encourage and for which we should do more to make life easier. Why are we so passionate? Because, at root, small businesses are the ultimate fount of prosperity and jobs in our country.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Does the Minister agree that one great virtue of small businesses is that they are embedded in their local communities and are often loyal to them, unlike npower in my constituency, which has just offshored 400 jobs? Will he use the power of his Department to work with local authorities, the LEP and the chamber of commerce to do its best to mitigate that loss?

[Matthew Hancock]

The Department is of course doing what it can to mitigate the impact of that decision. The hon. Gentleman is quite right, as is my hon. Friend the Member for Carlisle (John Stevenson), who spoke passionately about the impact of small businesses, which are embedded in their local communities through jobs and their contributions to local and national life, as well as the role of local authorities in planning, property and procurement.

There have been some fantastic contributions to the debate. My hon. Friend the Member for Brentford and Isleworth (Mary Macleod), as well as recounting the various questions that she has asked at Prime Minister’s questions in the recent past, spoke about drilling enterprise through our education system, which I strongly support. My hon. Friend the Member for North Swindon (Justin Tomlinson) also made that argument. Every time I speak to him, he seems to have another idea about how we can get more content about enterprise into the education system.

Many Members raised the issue of red tape, not least my hon. Friend the Member for Reading West (Alok Sharma), who spoke about the impact of EU red tape. Members across this House must recognise that problem. It is wrongly dismissed by some, but it is an important issue that we need to address. We are doing so through the Prime Minister’s challenge to the EU. The taskforce of six business leaders who are looking at reforming EU regulations is putting the voice of business at the heart of the debate. It has made 30 recommendations on how to remove or improve the most burdensome EU rules. We are working with business to encourage the EU to take up those recommendations over the next year.

My hon. Friends the Members for Rugby (Mark Pawsey) and for Daventry (Chris Heaton-Harris) raised the issue of regulations on employers, especially with regard to micro-businesses. We have made progress by ensuring that employees cannot go to a tribunal until they have been employed for two years and by introducing fees for tribunals. We need to keep this area under constant review because, fundamentally, what we must do is make it easier to employ people and create jobs. That is what growing small businesses is all about.

It is a great pleasure to see you take the Chair, Madam Deputy Speaker. This is the first time that I have been in a debate that you have chaired.

My hon. Friend the Member for Norwich North (Chloe Smith) was here earlier, but apologised that she had an engagement with some small businesses. I pay tribute to the work that she did to open up procurement to small businesses. However, as my hon. Friend the Member for Daventry said, what we are doing in that area is not complete. There is much more to do to improve the formal rules and to ensure that they are seen, exercised and stuck to not only across central Government, but throughout the public sector, including in local authorities. The Department for Business, Innovation and Skills has just reached the target of sending 25% of its invoices to small businesses. That target applies to the whole of central Government and all other Departments are working towards it.

Many hon. Members raised the issues of access to finance and late payment, not least the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). The Government pay more than 85% of undisputed invoices within five days. That is a big change and an impressive feat.

[Debbie Abrahams]

Will the Minister confirm whether that includes suppliers in all tiers? I think that he is referring just to tier 1 suppliers.

[Matthew Hancock]

I was coming on to exactly that point. That figure refers to tier 1 and there is much more to do to drill prompt payments through the supply chain. We must spread that culture across the private sector as well. I will reflect on the hon. Lady’s point that we should make late payment just as culturally negative as tax avoidance and evasion. We will be launching a consultation on late payment shortly.

The right hon. Member for Hazel Grove (Sir Andrew Stunell) raised the issue of the banking appeals system. I do not want to pre-empt what my right hon. Friend the Chancellor will say in the autumn statement in a week’s time, so I recommend that the right hon. Gentleman attends the House on that day.

Opposition Members raised various issues and spoke from different perspectives. The important issue of GRG and the treatment of small companies that have got into difficulties with the banks was raised. The Financial Conduct Authority is looking into the report that was published this week and RBS has appointed Clifford Chance to go through the cases that were raised in detail.

The hon. Member for Glasgow North East (Mr Bain), in typically ebullient fashion, called for firm action and better communication of what we are doing. I certainly agree with him about firm action. That is what I hope to achieve.

On better communication, we have launched the Business is Great campaign, which Members may see on billboards and social media across the country, and the Great Business website brings together in one place the different things the Government and private sector are doing to support small businesses. It is a single portal—greatbusiness.gov.uk—and worth exploring.

The hon. Member for Ogmore (Huw Irranca-Davies) mentioned access to finance, and particularly green measures. Although the Government have reduced the subsidy from energy bill payers and taxpayers to sponsor solar, by ensuring that the scheme was proportionate but still affordable, more than 1 million people are now living with solar panels on their roofs. The hon. Member for Rochdale (Simon Danczuk) spoke passionately about starting his own business with his wife. I hope he gets the chance to have a word with the Leader of the Opposition, who says he wants to ban Members from engaging in any outside employment, including a small business. I strongly hope that the idea that someone can run a small business and be an MP at the same time will continue because of the wealth of insight it brings to people in this place.

There were good speeches from Opposition Members, and it was a pity there were so few of them, given that support from the Government Benches was very powerful. The hon. Member for Colchester (Sir Bob Russell) and my hon. Friend the Member for Rossendale and Darwen (Jake Berry) raised the important issue of business rates. I am glad that one of the first things this Government did was stop the extension of business rates proposed by the previous Government because that would have been a great mistake. In fact, we have extended business rate relief every year, but I have no doubt that had the previous Government remained in office, they would have put up and extended business rates because that is what they were planning.

[Julian Sturdy (York Outer) (Con)]

Does the Minister agree that one of the key things for helping small businesses is encouraging them to reinvest? The Government have done a lot in extending the capital allowance scheme, but will he consider extending it beyond 1 January 2015?

[Matthew Hancock]

Yes, I will, and I conclude by saying that Members across the House—especially Government Members—argued passionately in favour of small businesses, the values they bring, the hard work but the payback, and the benefits in terms of jobs and prosperity for their communities. None more so than my hon. Friend the Member for Newton Abbot who initiated the debate, and I pay tribute to all her work. If I have not addressed any point on the long list of issues she raised, I will write to her with a detailed response on each and every one. She is a great credit to herself and to small businesses that need such passionate support, and I know they are thrilled to have her at their side.

Skills (North-East)

Matt Hancock Excerpts

Wednesday 27th November 2013 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Betts. I will respond to as many of the points that my hon. Friend the Member for Hexham (Guy Opperman) made in his excellent speech as I can. He is a passionate supporter of not only Hexham, but the whole north-east. He made a strong case in an important debate. One particular reason why it is good news that we are debating the north-east approach to skills and apprenticeships is that the region is blazing the trail and is at the forefront of some of our policy thinking, which I shall come to later.

I thoroughly enjoyed my visits to Newcastle college and Northumberland college earlier this year with my hon. Friend. We were photographed in an empty shell of a building and I very much look forward to seeing the college now the new building is up, running and, I understand, buzzing with learners. That is just as well, because the number of over-19s in further education in the north-east went up by 6% in the last year for which figures are available. There is clearly an increasing demand for education and skills at that level, among not only employers—we heard a lot of stories that corroborate the evidence I have on the demand from employers—but students as well.

My hon. Friend mentioned the need for university technical colleges in the area. We warmly welcome all applications for UTCs. We approve those proposed by the strongest groups in areas where new schools are needed most and those that have rigorous education and recruitment plans. I am sure he agrees that it is important to ensure that new provision is rigorous and responds to the needs of local employers, not least because UTCs provide the opportunity for employers and universities to work together, and therefore drive up the standard of technical education between 14 and 18. We are considering the south Durham UTC application, with others we have recently received, and we have interviewed the applicant group. Applicants will be notified of the outcome in the new year. Lord Nash and the Secretary of State will make the decision in due course.

My hon. Friend also talked about the need to improve standards and quality in the skills system. I strongly endorse that point. Last month’s report by the OECD, comparing skills levels across the whole developed world, was a stark reminder of how much more we need to do. We—England and Northern Ireland—were the only country in which the skill level in maths and English of our 15 to 25-year-olds was no higher than that of our 55 to 65-year-olds. In the long-running debate about whether more exam passes mean better education, that is extremely strong independent evidence that we have to stop that flatlining and start improving our standards, because every other country in the developed world is doing that. That is hugely motivating in the task of driving up standards, especially when youth unemployment is far too high, although thankfully it is now falling. At the same time, there are increasing skills shortages, some of which my hon. Friend mentioned.

We have introduced faster and more robust intervention processes for failing colleges and we driven up the quality of provision through a new and more rigorous Ofsted inspection framework. We are reforming qualifications so that we fund only those that employers sign off. I do not know whether my hon. Friend has managed to read Nigel Whitehead’s report, but its recommendations are sensible and are about driving rigour and responsiveness through the adult qualifications system.

That brings me to the proposal by the north-east LEP. My hon. Friend mentioned that it is one of three LEPs through which we are piloting a new mechanism to ensure that there is local influence over the use of the skills system. He said that he was thrilled that the north-east LEP was chosen for the pilot. I would go further: the north-east LEP invented the idea and brought it to us. We were impressed by it, and two other LEPs came on board to ensure that the mechanism was piloted in more than one area. The north-east LEP is not only a leader on piloting; it is a thought leader on how we can ensure that the skills system is responsive to local need.

My hon. Friend asked for details on how the proposal will work. The proposal is that 5% of funding for all adult provision outside apprenticeships will be allocated if, and only if, the provision is in line with LEP priorities. The LEP will have sign-off. Rather than giving 5% of the funding to the LEP, we have instead said that the LEP will have the final say over what is essentially a quality payment—the final 5% of all adult skills funding outside apprenticeships. That will ensure that the whole provision is targeted at LEPs’ needs. There is good collaboration in the north-east between the LEP and colleges, and the proposal will help to incentivise education providers to look to the strategic needs of business—not only directly but through the LEP—and ensure that the LEP focuses on that. Our job is to ensure that there is enough flexibility in the funding system to allow providers to switch provision according to the needs of local private or public sector employers. That will ensure that the system is filling skills shortages.

In the past, when there have been shortages of training in one area, people have come to the Minister and said, “There is a shortage in this area. Can you fix it?” There is one thing I know for sure, and that is that I do not and cannot know, through a central bureaucracy, the skills needs of every area. It is far better to try to make the system responsive to local need, instead of trying to direct solutions to skills shortages from Whitehall. The proposal is about making it easier for colleges to respond to the needs of employers.

The proposal is also about providing capital for skills provision. Capital funding will follow LEP priorities from 2015-16. Very recently, the Secretary of State for Business, Innovation and Skills announced that we would be financing a further £330 million of skills capital in 2016-17, which provides the long planning horizons that many crave. Those horizons have been too short term in the past.

I pay tribute to the work of all those involved in getting the pilot with the north-east LEP up and running as a policy. It will hit the ground running from September 2014. That policy is part of a broader attempt at making the skills system more responsive to employers. I mentioned that it does not cover apprenticeship funding, which is because we have a broader set of reforms on how apprenticeships are funded to ensure that funding is directly responsive to employers’ needs. We will be working through employers. The taxpayer rightly pays a subsidy towards apprenticeships, because if someone is in an apprenticeship, they are not only doing the job but learning. Apprenticeships benefit the employer, the apprentice and wider society. Recognising that, the taxpayer subsidises apprenticeships. We are changing how they are delivered so that the employer has more of a say over what training happens within an apprenticeship. That will ensure that the training fits the needs of the apprentices and the employer, which will drive up standards.

My hon. Friend quoted the views of a local site manager and talked about spreading the word on the benefits of apprenticeships. As the Minister responsible, I could not agree more. It is just as competitive to secure an apprenticeship at a top employer, such as Rolls-Royce or BT, as it is to get into Oxford or Harvard.

[Ian Lavery]

Does the Minister, like me, welcome the announcement by Northumberland county council earlier this week that it has an ambition to double the number of apprentices linked to the council? It is looking to employ 360 apprentices directly with the council. Some 23 apprenticeships will be immediately created, adding to the total of 134 already on the council’s books already.

[Matthew Hancock]

I had not heard that, but at face value that sounds absolutely terrific. We have a goal of making it a norm in this country that every young person who leaves school goes to university or into an apprenticeship. Rather than trying to push them one way or the other, we want to ensure that there are good choices available on either side. Increasingly, employers, whether private or public sector—including Northumberland county council—are introducing an apprenticeship stream in addition to a graduate scheme. The civil service has just brought in an apprenticeship fast stream to match its graduate fast stream. This week, MI5 and MI6 announced that they are introducing an apprenticeship scheme in addition to their more traditional graduate recruitment. That is happening across different businesses and different parts of government. Someone can now become an apprentice spy, which is interesting, although MI5 and MI6 have not yet told me all the details that someone would learn.

We have an ambition, but we will only be able to persuade people that it is the right ambition so long as we continue to drive up the quality of apprenticeships. The very best apprenticeships are world class, but we have to ensure that quality goes up across the board. We have brought in some tough measures to increase quality by ensuring that all apprenticeships last a minimum of a year, that the English and maths requirements are stronger and that there is actually a job. In the past, some apprenticeships happened without a job attached. Those measures have meant that we have had to remove some low-quality provision. In the medium to long term, that is undoubtedly worth it and will ensure that the apprenticeship brand remains strong.

I agree strongly with the point that several hon. Members have made, including my hon. Friend the Member for Stockton South (James Wharton), that apprenticeships need to reflect the whole economy. The old industries in which apprenticeships were strong, such as engineering and manufacturing, are important, but it is also important that apprenticeships cover the whole economy as it is today. They should include professional services and computing, for instance, in a way that they did not in the past.

The north-east LEP is one of our thought leaders, and we listen carefully to its suggestions. I am watching the pilot’s progress closely to see whether it should be spread more broadly. There is no stronger advocate for the passion with which the north-east is coming together to deliver on skills training and ensure that everyone reaches their potential than my hon. Friend the Member for Hexham, although my hon. Friend the Member for Stockton South and all the other hon. Members who have spoken in this debate are strong advocates, too.