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Even though Business Link knew that the debate was taking place today, it could not tell Members how small businesses will be able to access the money announced by the Chancellor in the pre-Budget report.

Mr. Denham: The new loan guarantee schemes and the support for export credits and for capital investment announced in the pre-Budget report will be made available, and Business Link is the right place to go for details, although it is not entirely surprising that schemes announced only a fortnight ago are not in every case yet in place. However, the Government’s action in taking those measures is in stark contrast to the attitude of Opposition Members who have criticised everything we have done and take the view that nothing can be done to help small businesses get through. As the schemes are brought in, Business Link will be the right place to go for information.

Chris Ruane (Vale of Clwyd) (Lab): The optical electronics research and innovation centre, OpTIC, is in my constituency, so I welcome my right hon. Friend’s announcements about research and development and the export trades. What will be their impact in a Welsh constituency?

Mr. Denham: A number of the functions of my Department, especially my responsibility for research budgets, are UK-wide and the investment we are maintaining in research is critical not just for England but for the whole country. Skills policy is a devolved responsibility so I cannot tell my hon. Friend that every single thing done in England will be mirrored, but we maintain close contact with all the devolved Administrations, including the Welsh Assembly. In those Administrations, people are looking at ways of meeting similar needs, so I urge him to raise the issue with the Assembly. I shall be happy to do so, too, if he feels that his constituency is not getting support that should be available.

Mr. Tobias Ellwood (Bournemouth, East) (Con): May I go back to the point made by my hon. Friend the Member for Banbury (Tony Baldry)? The problem is that small and medium-sized businesses cannot get hold of the money and loans they need, because the £37 billion of taxpayers’ money lent by the Government has been lent at an interest rate of about 12 per cent. That compares with only 5 per cent. in the United States or Germany. As long as the rate is 12 per cent., how can money possibly be handed down to the SMEs that are begging for money so that they can stay solvent?

Mr. Denham: If the Opposition had had their way over the past year we would not be discussing a banking system that existed at all to lend to SMEs. On every significant issue that came up over the past year, the Conservatives got it wrong. We made sure that the right investment was made and that there were the right loan guarantees to stabilise the banking system and prevent
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collapse. As the hon. Gentleman knows well, we are engaged in discussion with the banks about the detail of their lending policies, but they have made clear the obligations they accept about marketing and the availability of finance for small business. We are putting in place the extra measures announced by my right hon. Friend the Chancellor two weeks ago. That is a powerful set of messages. However, the hon. Gentleman is right: small businesses are crucial in the economy, which is why we are going to such lengths to ensure that we tackle all the problems. As they arise, we shall continue to bear down on the banks and the guarantee systems—whatever is necessary to make sure we get through this recession. It is the hallmark of the Government that we understand our responsibility not to walk away from families and businesses in hard times, but to tackle difficult issues and to keep coming back to issues that are not easy to solve at first sight. That is in stark contrast to what would have happened if the Opposition had been in power.

I was talking about the extra investment for SMEs that we will make through training. We can do that only because the Government have planned to invest in skills, unlike the Opposition, who have promised to cut— [ Interruption. ] Hon. Members should listen, because this will affect many of their constituents. The Conservatives have promised to cut Train to Gain spending by more than £1 billion. They have promised to deny 1 million employees the chance to obtain new skills, and to get on, every year. That is a big difference. We are planning to invest in skills. The Opposition are planning to cut investment in skills.

Mr. David Anderson (Blaydon) (Lab): May I give some advice to Opposition Members who say that regional development agencies are not helping them? In the north-east, we were advised last week by One North East that a transition loan fund is being set up, as well as a small business finance scheme and a capital loan fund. Opposition Members might consider ringing 0845 600 9006 and talking to One North East—they might get the advice they obviously need for their people.

Mr. Denham: I am grateful to my hon. Friend, who has clearly talked to his local regional development agency and so knows what immediate steps are being taken. The same is often the case with other regional development agencies. His RDA is providing some interim support before the national schemes are fully available across the country.

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): To counter some of the doom and gloom emanating from the Opposition Benches, may I inform my right hon. Friend of a company that I visited in Tipton a couple of weeks ago, called Carrs Tool Steels? It has just invested in a new milling machine, with the aid of a grant from Advantage West Midlands—the RDA—and the backing of a local bank. That machine will increase its productivity twelvefold; it is the only such machine in the country. It will have a remarkable impact on the company’s future prospects. I ask him to make sure that such funding from regional development agencies, and the work that RDAs do with local financial institutions, is maintained. The situation is a contrast to what would happen if some of the policies promoted by the Opposition were put in place.

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Mr. Denham: My hon. Friend is right to raise that example, and to pay tribute to the work that has been done by successful entrepreneurs and regional development agencies. The co-operation between the two has resulted in the development and growth of many successful companies. I agree with him that although times are challenging, the way in which the Conservative party always seeks to run the country down is a challenge in itself, to say the least.

Mr. Phil Willis (Harrogate and Knaresborough) (LD): Will the Secretary of State give way?

Mr. Denham: I would like to make a little progress, but I will take an intervention from the Chairman of the Innovation, Universities, Science and Skills Committee.

Mr. Willis: I am grateful to the Secretary of State. I want to ask him a positive question, to which I hope he will give a positive answer. Last Monday—a week ago today—a number of right hon. and hon. Members visited the Honda Formula 1 team. [Interruption.] No, it was not my fault. We are talking about an innovative company with cutting-edge technologies that drives forward new products at a level that is probably not seen anywhere outside that very exciting area. What will the Secretary of State offer companies such as the Honda Formula 1 operation, through the Queen’s Speech, so that we retain those businesses, skills, and innovative practices in the UK?

Mr. Denham: The important thing is that we maintain our investment in science and research, continue to develop organisations such as the Technology Strategy Board, and continue to recognise those parts of the economy in which we have a particular strategic strength and advantage. That means working with those areas of the economy, whether through investment in innovation and research, or through the development of skills.

So far as Formula 1 is concerned, it is well recognised that there is a triangle of particular expertise in this country, which goes beyond any one particular race team. It has specialist companies within it, and it has links to wider manufacturers. The hon. Gentleman asked me to look at what is happening in the Formula 1 industry, and I am more than happy to do so, but I am quite clear that our commitment to investment in research and innovation lies at the heart of creating the conditions in which such activity can continue.

Train to Gain is not the only issue on which the Government have listened to business. As everyone will have heard, business said that it found the skills landscape too complex, so we are implementing the simplification proposals of the UK Commission for Employment and Skills. We are merging the Train to Gain brokerage service with Business Link. Employers asked us to cut bureaucracy in apprenticeships, and we did. They asked us to ensure that high-quality employer training could be accredited, and we did.

We know that as we respond to the downturn, we need to make further changes. We have already announced additional funding from the European social fund to support skills advice and training for those who lose their jobs, or fear that they may do so. I want to ensure that more of the £5 billion annual investment in further education and skills helps people to get back into work. I want more people to get support before redundancies occur or short-term contracts come to an end.

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Where a business moves on to short-time working, there will be more scope to offer free, short-term and intensive training for employees. I would urge any company, large or small, that is considering short-time working to follow the example of Nissan and JCB, and to talk to their local further education college or the Learning and Skills Council about what training they can offer their staff during that down-time. When redundancies or the shedding of contract labour is pre-announced, colleges and training providers need more flexibility to provide training support before jobs are lost.

The changes underline why further change to the organisation of the skills system is needed as we move towards greater responsiveness to employers, greater flexibility in the skills system and greater flexibility for providers. Under the Conservative party, post-16 education and training was a disaster. The Conservatives rightly gave colleges independent incorporated status, but then denied them funding and support. By 1997, in the confusion created by the training and enterprise councils, FE spending had been cut in real terms in the previous four years. There was no capital budget. The National Audit Office said that some FE buildings were not fit for purpose, and only half the people who started a course completed it.

The establishment of the Learning and Skills Council enabled the Labour Government to transform the scene. Completion rates are now 80 per cent., and that work is concentrated on the most useful qualifications. Investment in skills has risen by 50 per cent., and we are halfway through a £4.3 billion capital programme. The success of the LSC means that we can change to meet changing challenges. In 16-to-19 education, the challenges are securing proper, coherent planning of the curriculum; raising the participation age, which the Conservative party opposes; and taking clear responsibility to further reduce the number of those not in education, employment or training.

Mr. Edward Garnier (Harborough) (Con): Will the Secretary of State please comment on the Government’s performance in relation to education in prisons? I know that that is partly his remit, and partly that of the Secretary of State for Justice. There are large gaps in the provision of education within secure training centres, young offender institutions and the adult prison estate. I am afraid that the position is not getting any better as a result of the reforms that the Government are engineering this autumn and winter.

Mr. Denham: The hon. and learned Gentleman raises an important point. The Public Accounts Committee reported on the issue recently, but with respect, it did not say that things were getting no better; it recognised the £151 million of investment in offender learning and some significant achievements. However, there is no doubt that there are further improvements still to be made, particularly when it comes to ensuring continuity of training for prisoners who move around within the prison estate. The Government deserve credit for the investment that we have made. It was a good move to shift responsibility to professional educators and away from the Prison Service. The remaining issues have been properly identified, and we need to work to tackle them. However, progress has been made on that important issue.

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On adult skills, we need a slimmer, more flexible, more responsive system; the new skills funding agency will provide that. Through the children, skills and learning Bill, we will legislate to create the new SFA, to deliver better help, and to deliver a system that will better build the right skills for the future. The SFA will be designed to be flexible, and highly responsive to employer needs and the changing economic demands of the country. Central to the new system will be the way in which funding will follow the choices of learners much more closely. The SFA will focus on results rather than processes, allowing colleges and providers to be more innovative and entrepreneurial.

The SFA will have responsibility for funding Train to Gain and for ensuring that providers are properly accredited. It will house the new national apprenticeships service as well as the adult advancement and careers service, which will offer further support and information for employers and for people who want to get on in their lives.

Joan Ryan (Enfield, North) (Lab): I want to catch my right hon. Friend while he is on the subject of apprenticeships. What the Government have done to support, build and grow the number of apprenticeships is fantastic. It makes a huge difference in all our constituencies, and to the young people concerned; I am sure that we all meet them when we hand them their certificates. I welcome giving suitably qualified young people a legal right to an apprenticeship, but there is a lot to do to ensure that they get the appropriate information, advice and guidance while at school. I seek my right hon. Friend’s reassurance that, when we take those welcome measures forward in the Bill, we will make sure that advice and guidance are given at an early stage.

Mr. Denham: I am grateful to my hon. Friend. The issue of information, advice and guidance is actively being discussed by my Department and the Department for Children, Schools and Families. As a London MP, she will know that we have a London apprenticeship taskforce, which looks to increase the number of apprenticeship places in the capital; for historical reasons, the number there is significantly below the average in the rest of the country.

Several hon. Members rose

Mr. Denham: If I may, I shall make a little more progress.

The Opposition have not learned anything from their time in office. Recently, at the Association of Colleges conference, the hon. Member for Havant (Mr. Willetts) was asked about the capital programme for further education colleges, and he said that

The Government are bringing forward the FE college building programme to boost the economy, but the Opposition plan to cut it.

Rob Marris (Wolverhampton, South-West) (Lab): On apprenticeships, because of the downturn, some employers unfortunately may provide less training. Apprenticeship placements are difficult to obtain, so will my right hon. Friend look at providing expanded apprenticeships in
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the public sector, particularly the NHS and local authorities, similar to those that we used to have under the National Coal Board, for example, which would take on excess apprentices, knowing that some of them would leak out to the private sector on the completion of their training. However, that did not matter, because it was a nationalised industry, and it was simply a different way of providing apprenticeship training for young people. We need to look at doing more of that with the NHS and local authorities.

Mr. Denham: I certainly agree with my hon. Friend, and I will return to that point in a few moments.

Bob Spink (Castle Point) (Ind): I apologise for being late for the debate, as I was attending a meeting. What is the Secretary of State doing to ensure that the education maintenance allowance goes to those young people who need it, to encourage them to take advantage of the greater participation that the Government have made available?

Mr. Denham: That is an important point. The hon. Gentleman will know that we have had to change the contractor supplying that service, and it is working hard to clear up the backlog and ensure that those young people receive their EMA. The allowance has been a considerable success in encouraging young people to stay in further education and training. Again, in contrast to the Opposition, we are committed to that. I am sorry, this is becoming a little routine, but people who say that there is nothing to choose between the two parties need to pay slightly more attention to the differences between us in the areas that we are debating. I was about to move on to higher education, in which we have made a significant investment. The Opposition, however, have tended to indicate that they want to return to the unfunded expansion of higher education. I remind the House of what Lord Patten recently told The Guardian about higher education policy when his party was in power. He said that

We have been warned.

Mr. Paul Truswell (Pudsey) (Lab): May I just rewind my right hon. Friend’s comments? Is he aware of many people’s concern that the targeting of FE funding militates against the provision of return-to-learning courses which are crucial, for example, to women who have spent time outside the work force? What will the Queen’s Speech proposals do to provide that stepping stone before those groups can take more formal qualifications, particularly in the light of the economic situation?

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