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Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): Is the Minister aware that the largest single employer of apprentices in Scotland is those firms that are currently engaged in building the aircraft carriers? Does he agree that all those apprenticeships, both for adults and for youngsters, would be lost if the Conservatives carried forward their proposal to examine the break clauses of the contract on day one of any future Conservative Government?
Kevin Brennan: Of course, Mr. Speaker. Sector skills councils have a UK-wide responsibility in the defence industry and with regard to apprenticeships. I am proud of the fact that under this Government apprenticeship numbers have risen from 60,000 in 1997 to nearly 250,000 now. It would be a great danger if a Government committed to cutting public investment were to come in because that would impact on the number of apprentices.
Mr. John Hayes (South Holland and The Deepings) (Con): The important work of sector skills councils is inhibited by the Government's emphasis on unelected regional authorities, and Ministers' preoccupation with the Train to Gain programme, which spends taxpayers' money funding training that people would fund themselves anyway. In confirming that the dead-weight costs of Train to Gain may be more than 80 per cent., will the Minister concede that he has finally listened to my complaints about this waste and so cut Train to Gain funding in the Budget and spend the money on apprenticeships instead?
Kevin Brennan: No, we will not do that. I am glad that the hon. Gentleman has raised the issue of regional development agencies, because his party's policy of abolishing those was described recently by the Engineering Employers Federation as a disaster. I do not know about other hon. Members, but when engineers warn me of impending disaster, I listen, and people should listen carefully to that advice.
The Minister for Regional Economic Development and Co-ordination (Ms Rosie Winterton): We are working to set up a national investment corporation, alongside working with the banks to establish a growth capital fund. We will announce further details of both shortly.
Do the Government understand that what firms want is lower taxes, fewer regulations, less red tape and the ability to borrow from their usual bank, many of which the Government control, anyway, so it should not be too difficult to ensure? What is the
point, therefore, of this new lumbering state corporation, of the type that we thought we had buried in the 1970s? And how many banks have signed up to it, anyway?
Ms Winterton: In terms of the venture capital funds that the Government have been supporting, we have been getting help to small and medium-sized enterprises in order to ensure that they can take advantage of the recovery, when it comes, and develop new technologies and enterprises. Owing to the investment that we have put in, something like £1.5 billion has been given to 600 small and medium-sized enterprises to undertake such work. I know that the right hon. and learned Member for Rushcliffe (Mr. Clarke) says that
"the words 'industrial strategy' send a slight shudder down my spine,"
Mr. Robathan: That type of help is not available. I think that the expression is "all talk and no trousers," because nothing has happened. Being a bit of an internet wizard, I googled "national investment corporation" just before I came into the Chamber, and interestingly the last reference to it was a press report on 9 December, so that shows how much activity has been going on. Will the Minister now say that it was a scheme dreamt up by Peter and Gordon, over a brew, to a whiff of sulphur, and will they concentrate on helping businesses, not on announcing great, grandiose schemes that go nowhere?
Ms Winterton: I do not think that the hon. Gentleman understands at all the needs of small and medium-sized enterprises at the moment. He does not acknowledge that in his region 627 loans have been offered to companies, totalling £67 million. His party would reduce-indeed, take away-all the assistance that we are giving to small and medium-sized enterprises, and it is very sad that he does not understand the importance of our strategy.
Mr. Dennis Skinner (Bolsover) (Lab): Would not more money be available if everybody paid their taxes? A fella is getting away with £127 million, without paying his taxes, and he is running the Tory party. They talk about being the party of change. They are the party of money-changers, and we ought to-
Mr. Speaker: Order. The hon. Gentleman has expressed himself, but unfortunately the relationship with the national investment corporation is not merely tangential, it is non-existent. [ Interruption. ] We will leave it at that.
Mr. Kenneth Clarke (Rushcliffe) (Con): The most worrying threat to the future growth of the economy is the appalling decline in business investment. All we get from the Government is a series of grandiloquent announcements or press releases from the Prime Minister and the Industry Secretary. Does the right hon. Lady recall replying to a question in December last year by telling us:
"Further details of the National Investment Corporation will be announced by the time of the pre-Budget report."-[ Official Report, 3 December 2009; Vol. 501, c. 987W.]?
She will recall that nothing appeared in the pre-Budget report. Will she admit that it was just another public relations announcement, and that nothing substantial
has been done to encourage the banks to return to providing normal lending, normal credit facilities and normal commercial services to small and medium-sized businesses, in particular?
Ms Winterton: It is astonishing that the right hon. and learned Gentleman does not accept that providing something like £1.5 billion of assistance in venture capital funds to small and medium-sized enterprises is important. We know that he wants to abolish regional development agencies; and we know that he does not believe in intervening, because he said that "industrial strategy" sends a shudder down his spine. But I should like to know how withdrawing investment allowances from small and medium-sized businesses would help whatever. Again, the Engineering Employers Federation said:
"Reducing the level of capital allowances would be a big problem for manufacturers".
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): Planning for Her Majesty's jubilee is still in its early stages. I made a statement to the House on that matter on 5 January. We are working closely with Buckingham palace, which is developing a programme of events. However, it is too early to provide further details.
Mr. Pelling: Does the Minister agree that we would do well to follow the lead of the Secretary of State's grandfather by having a festival of Britain in 2012, when so many people will be coming to the UK for the Olympics? We could celebrate business talents, perhaps a recovering economy and what we have to offer outside the financial sector in terms of manufacturing and technology.
Ian Lucas: The great 1945 Labour Government made a very wise decision in instigating the festival of Britain, and I am pleased that the hon. Gentleman is offering positive suggestions about Her Majesty's diamond jubilee. We are willing to listen to such suggestions from those in all parts of the House, because it is of course an occasion that we must all celebrate.
The Minister for Business, Innovation and Skills (Mr. Pat McFadden):
We are taking a number of measures to encourage businesses to offer apprenticeships. The National Apprenticeship Service promotes and expands apprenticeships. Spending has gone up from £832 million in 2007-08 to a planned £1.2 billion next year. In December, we announced an apprenticeship grant for
employers that offer £2,500 to employers who offer apprenticeship places to unemployed 16 and 17-year-olds. In the west midlands, the area which my hon. Friend represents, 790 employers have committed to recruiting young people, including 31 employers in Coventry.
Mr. McFadden: We want to promote apprenticeships in many sectors. We are making a particular effort to promote apprenticeships among unemployed 16 and 17-year-olds; that is why we recently announced the apprenticeship grant for employers, which offers £2,500 to employers who offer an apprenticeship. It is urgent that, in the difficult economic times that we have had, we avoid what happened in previous recessions, when young people were unable to find work and then sometimes spent years, or decades, never having a job. We are determined to ensure that that does not happen this time. That is why we are putting so much effort into ensuring that young people have opportunities, and that if they are out of work, that does not turn into long-term and sustained unemployment.
Peter Luff (Mid-Worcestershire) (Con): Can the Minister explain why the apprenticeship grant for employers began at the beginning of the calendar year instead of at the beginning of the academic year, making it impractical for small businesses in my constituency, such as James Holden's business in Honeybourne, to access the scheme, as to support his apprentice he needs him to be able to access courses at South Worcestershire college alongside his apprenticeship?
Mr. McFadden: We want to work with all parts of the economy to make this work for people, including employers and those parts of the education system that participate. I think that this has worked well for the education system. I simply contrast the numbers: a decade ago, we had about 60,000 apprenticeships; last year, we had some 240,000 apprenticeship starts. The truth is that we have brought back apprenticeships as a mainstream part of the labour market. They were in the intensive care ward when the Conservatives were in power, but they are now alive and well, and we are determined to support them in the future.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): My right hon. Friend will be aware that there is a particular difficulty with skills levels in the west midlands, notwithstanding the welcome increase in the number of apprenticeships. One of the reasons for that is the perception among young people that going into industry is a dirty job that is not worthy of their particular talents. Will he undertake to work with employers and the educational system to try to change that culture to get young people with aspirations to use their talents within their local companies and local industry?
My hon. Friend makes a good point. Our constituencies neighbour each other and are very similar: they both have many high-quality engineering companies. He is right that despite the fact that these are good jobs, and often quite well-paid jobs, young
people are sometimes not attracted to them. One of the things that we have done is to work with the Engineering Employers Federation to set up Manufacturing Insight, whose important job is to go into schools to ensure that engineering is seen as an attractive occupation. Alongside our policies on apprenticeships, I am sure that we can attract more young people to take up careers in manufacturing, because it is critical to the UK economy and represents significant opportunities for them.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): The Department meets regularly both banks and business representatives to discuss the availability of business finance. This has included the quarterly meeting of the Small Business Finance Forum and a recent "Going for Growth" seminar, which brought banks and businesses together to look at current issues affecting business bank credit and how they might evolve as the recovery of the economy progresses.
Jo Swinson: The Federation of Small Businesses has found that nearly half of small businesses in Scotland are having to use personal savings, personal loans or personal credit cards as a major source of business finance. The Minister will know that the Public Accounts Committee found that Lloyds and Royal Bank of Scotland fell well short of their promises to lend £39 billion last year. Can the Minister tell the House what he will do this year to get the banks lending and, at the very least, ensure that the part-nationalised banks meet their lending targets for small businesses?
Ian Lucas: The Department has a help for business unit and, if the hon. Lady has individual examples with which she needs assistance, we are happy to take those up and discuss individual cases directly with banks. We are very conscious of the availability of lending and how important it is in taking forward the recovery. There have been signs of progress in the last quarter, but we will continue to engage with both banks and small businesses to ensure that that recovery builds.
John Penrose (Weston-super-Mare) (Con): Is the Minister aware that the Bank of England's report last month showed that the fall in bank lending in 2009 was the worst since records began, and that lending to business crashed by a whopping £4.3 billion in December alone? Does he not remember the Chancellor's words about the Government's bank rescue plans 18 months ago-as far back as October 2008-when he said:
"The purpose of these proposals is to get lending started again". -[ Official Report, 8 October 2008; Vol. 480, c. 280.]
What I do remember is that when I was running a small business in 1992, interest rates increased in a morning from 10 per cent. to 15 per cent. We do not
wish to see those days of instability return. We understand small businesses and engage with them, and we are continuing to work to restore credit and investment in industry. There are signs of positive steps forward and we will continue with those as time passes.
Mr. Mike Weir (Angus) (SNP): One of the problems that small businesses in my constituency have with the banks is the operation of the enterprise guarantee scheme. Despite businesses meeting all the published criteria, the banks simply will not lend, often saying that businesses are unviable because they have had a drop in profitability over the last year-hardly surprising in the midst of a recession. Will the Minister look at the operation of the scheme and put pressure on the banks to deal with small businesses more equitably?
Ian Lucas: To date, more than £1.2 billion of eligible applications have been pursued through the enterprise finance guarantee from 10,738 companies, and £857 million has been offered to 8,378 businesses. That has meant real help to those individual businesses. As I indicated to the hon. Member for East Dunbartonshire (Jo Swinson), if hon. Members-on either side of the House-have individual examples, I will work with them to help small business.
John Thurso (Caithness, Sutherland and Easter Ross) (LD): As the economy starts to grow, the provision of credit for all business, especially small and medium-sized enterprises, will be vital as working capital. As my hon. Friend the Member for East Dunbartonshire (Jo Swinson) said, the PAC has drawn attention to the fact that the nationalised banks have failed to meet their lending commitments. Last week, the Institute of Directors published a survey that showed that 57 per cent. of those who had applied for credit were denied it. Worst of all, of that 57 per cent., 83 per cent. were not even offered information about the enterprise finance guarantee scheme. So the banks are failing to lend, United Kingdom Financial Investments Ltd is failing to do anything about it, and the enterprise finance guarantee scheme is also failing. What will the Minister do about that catalogue of failure?
Ian Lucas: I have already recounted the figures on the extent of the success of the enterprise finance guarantee scheme-the money invested in businesses and the numbers of businesses that have benefited. We always wish to do more, and as the recovery gathers pace, we will continue to engage with business and banks to ensure that the banks provide assistance to the economy as it grows.
The Minister for Higher Education and Intellectual Property (Mr. David Lammy): We reaffirmed our commitment to wider and fairer access to higher education in "Higher Ambitions", published last November. The number of students going to university from lower socio-economic groups is rising, and almost 10,000 more young people entered higher education in 2007-08 than five years earlier.
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