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House of Commons

Thursday 16 July 2009

The House met at half-past Ten o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Business, Innovation and Skills

The Minister of State was asked-

Automotive Assistance Scheme

1. Sandra Gidley (Romsey) (LD): What assessment he has made of the rate of take-up of the automotive assistance scheme. [287048]

The Minister for Business, Innovation and Skills (Mr. Pat McFadden): As we said at the time of its launch, the automotive assistance scheme is for long-term reinvestment in the industry, not short-term rescue funding. The Department has been in contact with about two thirds of all companies that may qualify for assistance under the scheme, resulting in 19 formal expressions of interest so far. Projects in the pipeline could involve total Government support of about £1.45 billion.

Sandra Gidley: I thank the Minister for that reply. There seems to have been some delay in allocating loans or guarantees under the scheme. Could the Minister clarify why that is? Is it because the conditions set out in the scheme's criteria are too strict? Clearly, the money has not yet found its way to most manufacturers.

Mr. McFadden: As I said, it is important to understand that this scheme is about long-term reinvestment projects, not short-term rescue. The Secretary of State said at the time of its launch:


We are working through these projects with the companies concerned. I can assure the hon. Lady and the House that there is no delay on the Government's part. We are working closely with the companies concerned, but we also want to ensure that we get value for money and the long-term benefits of reinvestment for the industry concerned.

Richard Burden (Birmingham, Northfield) (Lab): I endorse what my right hon. Friend says about the automotive assistance scheme being about long-term investment in green technologies, and so on. However,
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that does not necessarily mean that the process of approving the money needs to be long term. There needs to be greater dispatch in bringing things to a conclusion, particularly where strategically important companies are involved that are part of the global and regional economies, one example being Jaguar Land Rover in the west midlands and in the north-west.

Mr. McFadden: Constructive discussions between the Government and Jaguar Land Rover are continuing. The Government are keen to help, but of course the terms must be right. I assure my hon. Friend that the Government are not seeking to delay help at all, but we want to ensure that the help that we give is in line with the aims of the scheme as set out when we launched it. I remind my hon. Friend, who represents the area covering Longbridge, that only last week we were being criticised for being too ready to put Government money into the car industry. It is absolutely right that we ensure that in doing this we get appropriate value for money and do it for long-term reinvestment projects that can help to secure the long-term health of the UK automotive industry.

Peter Luff (Mid-Worcestershire) (Con): I fully endorse the concerns expressed about the urgency of dealing with Jaguar Land Rover, but the supply chain in the automotive sector is also in crisis. Is the Minister able to clarify his position on closing the gap in eligibility under the enterprise finance guarantee scheme and the automotive assistance programme to help the supply chain?

Mr. McFadden: The hon. Gentleman echoes a point that has been raised by several potential applicants under the scheme about the £5 million threshold. My officials have worked with companies in that position to help them to brigade potential projects. We want to take a flexible and helpful attitude to this; we are not in the business of turning away companies for no good reason.

Lorely Burt (Solihull) (LD): I have listened carefully to what the Minister is saying about long-term investment, but that does not mean long-term lead-in. If we look across the channel to France and Germany, and then further afield to the US and Japan, we can see that they have already delivered substantial amounts of assistance, so I do not understand why it is taking so long in the United Kingdom. For the past six months, while Parliament has been sitting, nothing has happened-not a single penny has been given to any automotive company. Now that we are going into recess, perhaps the Minister could give a guarantee about at least some funding coming through to the automotive sector-and during his holidays, perhaps he would like to pop over to France and Germany to see how they have managed to do it there when we cannot seem to do it here.

Mr. McFadden: I have to disagree with the hon. Lady when she says that no help has been given to the automotive industry. She ignores the car scrappage scheme, which has been in place for some months and has helped to boost a significant number of sales in the UK automotive industry. That is giving real help in the short term to automotive companies. I think that it is widely recognised as being a success. This scheme is different in that it is geared towards long-term reinvestment,
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not only towards the short-term issues facing the car industry. We are working diligently, carefully and productively with the companies that are making applications under the scheme.

Learndirect Programme

2. David Taylor (North-West Leicestershire) (Lab/Co-op): What recent representations he has received on the future of the Learndirect programme; and if he will make a statement. [287049]

The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs (Kevin Brennan): There has been recent interest in Learndirect's proposals to develop its technology and support more learners directly over the internet and telephone. We are examining the results of the trials, but for the foreseeable future we will continue to see face-to-face contact as a core aspect of delivery for many learners.

David Taylor: With more than one in 10 young people not in education, employment or training, it is good news that the Train to Gain programme in Learndirect centres and elsewhere has increased its uptake by 60 per cent. to 800,000. Why, then, is the Learning and Skills Council struggling with its current Train to Gain budget and the university for industry shutting down all Learndirect centres in 2010? Is there a real future for Learndirect and Train to Gain?

Kevin Brennan: First, Learndirect will not be shutting down all its centres by July 2010. It has been consulting its network of providers about a possible new approach, but as I said earlier, that approach is being tested and the Government will be consulted before any final decisions are taken. On the future of Train to Gain, we will be spending £1 billion in 2011, building on the expenditure this year. Train to Gain is safe with this Government, although not with the Opposition, who would cut it.


3. Mr. Jim Cunningham (Coventry, South) (Lab): What recent assessment he has made of levels of growth in the manufacturing sector in (a) Coventry and (b) the West Midlands. [287051]

The Minister for Regional Economic Development and Co-ordination (Ms Rosie Winterton): The manufacturing sector remains absolutely vital to the west midlands economy. Advantage West Midlands and its partners are focusing investment on major markets in which the region has strength and which offer the best prospects for wealth creation and employment as we come out of recession. We have an industry growth programme worth £30 million in the current financial year and £25 million next year, of which 75 per cent. is focused on the manufacturing sector.

Mr. Cunningham: I thank my right hon. Friend for that answer, but I recently attended a conference in Coventry organised by the Warwickshire partnerships, which are part of the sub-regional CBI. They voiced concerns about the slowness in getting help to small
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businesses in the west midlands, particularly in the Coventry area. How can Advantage West Midlands assist small businesses to speed that help up?

Ms Winterton: As my hon. Friend is aware, my hon. Friend the Minister for the West Midlands, through his taskforce, has looked very closely at how to help small and medium-sized enterprises. I know that the Advantage West Midlands transition bridge fund has made offers of loans totalling some £9.3 million to 55 local businesses to date, and I believe that nine of those are located in his constituency in Coventry and Warwickshire.

Mr. Mark Prisk (Hertford and Stortford) (Con): Yesterday, the chief executive of Jaguar Land Rover, such an important business in the west midlands, announced 300 job cuts and said that further action would depend in part on how quickly the agreed loan from the European Investment Bank was forthcoming. Given that Ministers agreed on that loan three months ago, why are the company and its workers still waiting? The French and German Governments delivered their loans from the EIB months ago. Why is it that under this Government, car firms in Britain are the last to get the help that they have been promised? Is it deliberate Government policy or just incompetence?

Ms Winterton: Yesterday's decision was not connected with the ongoing negotiations about working with Jaguar Land Rover. It was to do with a particular type of production coming to an end. The support that the Government are giving to the west midlands, working through the regional development agency, has ensured that we have been able to safeguard jobs and help businesses. The Opposition, of course, would abolish RDAs, which would mean that the type of help that we have provided would not be available.

Mr. David Winnick (Walsall, North) (Lab): My right hon. Friend is quite right in her comments. The west midlands suffered two major recessions in the 1980s. Does she accept that urgent steps are now necessary to help places such as mine in the west midlands that rely heavily on the manufacturing industry? We do not want the curse of mass unemployment to come back.

Ms Winterton: My hon. Friend is right. In that context, the last thing we want is public expenditure cuts, as proposed by the Conservative party. I think that the manufacturing advisory service has been able to give some direct help. Last year, the MAS helped approximately 2,600 companies in the west midlands and increased the value of business up to £85 million. My hon. Friend is right: we need to get that direct help out there quickly.

London Metropolitan University

5. Mr. Rob Wilson (Reading, East) (Con): What recent discussions he has had with the Higher Education Funding Council for England on its funding for London Metropolitan university. [287053]

The Minister for Higher Education and Intellectual Property (Mr. David Lammy): I have been in regular touch with HEFCE about the serious situation at London Met. I fully support HEFCE's decision to commission an independent review of its actions, which it will
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publish shortly. A similar inquiry into the university's actions is necessary. It is therefore right that the new acting vice-chancellor of the university has asked Sir David Melville to conduct such a review, which will investigate all aspects of what happened, including issues of governance.

Mr. Wilson: I thank the Minister for his answer, but what happened at London Met is a national scandal. Is he aware that dozens of other higher education institutions are facing significant budget deficits next year? According to the funding council, seven higher education institutions are already described as at high risk of financial failure, including London Met and Thames Valley university in my constituency. According to sources at the funding council, that could increase to as many as 30 next year. Can the Minister confirm the scale of the financial crisis and tell the House exactly what he will do about it?

Mr. Lammy: With due respect, I think that my sources at the funding council are slightly better than the hon. Gentleman's. The situation at London Met is very serious-and extraordinary. It is not unusual for institutions to have problems during the course of a year in relation to students who drop out of courses. In that case, money has to be clawed back from the funding council. However, the scale of the problems that has been revealed at London Met is unusual. The review that is now being conducted is therefore important. The Government will look at the recommendations-

Mr. Speaker: I call Adam Afriyie.

Adam Afriyie (Windsor) (Con): Thank you, Mr. Speaker. I am sorry for taking a while to get to the Dispatch Box-there are many colleagues on the Front Bench.

London Metropolitan university offers excellent scientific research, high level science degrees and an ultra modern science centre. The Minister's answer was not good enough because, on 20 May in a debate in Westminster Hall, following serious allegations of collusion between HEFCE and LMU over the drop-out rates, which led to the crisis, he gave a clear and unambiguous commitment to the House. He said:

When will that independent inquiry begin? The Minister has a choice: he can either confirm the inquiry or apologise for the misinformation.

Mr. Lammy: The hon. Gentleman is not over the detail. There has been an independent inquiry by KPMG, commissioned by the funding council. It will report to the board of the funding council and be published in due course. Sir David Melville, the former vice-chancellor of Kent university, is undertaking another inquiry into what happened at London Met. That, too, will report in the autumn. At that point, the Government will consider the recommendations and, if there is something for us to do, we will do it.

Creative Arts (Thurrock)

6. Andrew Mackinlay (Thurrock) (Lab): What progress has been made in funding the proposed co-location of the National Academy for Creative and Cultural Skills and the Royal Opera House production campus in Thurrock. [287054]

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The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs (Kevin Brennan): I have asked the Learning and Skills Council to review all national skills academy funding proposals in the light of the funding that is available. The Learning and Skills Council expects to be able to make an announcement soon.

Andrew Mackinlay: "Soon" is ambiguous. Does the Minister mean in the next few days? In that case, I would tick the box marked "joined-up government". However, if he does not provide funding-approximately £650,000-immediately, this side of the recess, the project will be put in jeopardy. It is a flagship project-culturally, through its co-location with the Royal Opera House project, and in its relation to the Thames Gateway project and the projects for the Olympic games. I want to know whether we will get our money so that the design and the work can commence soon. I need to know that before we go into recess. Answer now.

Kevin Brennan: My hon. Friend has made his point with his characteristic command of the colloquial and plain-speaking, so perhaps I can put it this way: I'm on it.

Mr. John Hayes (South Holland and The Deepings) (Con): Perhaps the Minister's honesty will continue in his answer to my question. He will know that creative and cultural skills are vital for our economy. The UK has the largest cultural sector in the world in terms of proportion of GDP, employing 1 million people. However, a recent report by Tom Bewick, the director general of the sector skills council, says that there are more than a

in new creative and cultural apprenticeships,

In revealing precisely how few businesses in the sector receive funding, will the Minister scotch the rumour that the Government intend to transfer powers from sectors to regions?

Kevin Brennan: Well, yes. Obviously, the creative sector is an extremely important and growing part of the economy. We recognise its critical importance, and I recognise the importance of the capital bid that my hon. Friend the Member for Thurrock (Andrew Mackinlay) featured in his question. We are committed to the sector and to providing support to national skills academies.

Steel Industry

7. Jessica Morden (Newport, East) (Lab): What recent discussions he has had with representatives of the steel industry on its future prospects. [287055]

The Minister for Business, Innovation and Skills (Mr. Pat McFadden): We have had regular discussions with steel industry representatives in recent weeks. I have spoken on several occasions with Mr. Kirby Adams, the chief executive of Corus, and Mr. Michael Leahy of the trade union Community about the future of the industry in the UK. The Prime Minister will be meeting representatives of Corus later today.

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