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4 Mar 2010 : Column 1007

Greg Mulholland: I thank the Minister for that answer, but with graduates facing debts of more than £20,000 and with the debate about whether to raise the cap on tuition fees to £7,000, I was pleased to sign the Leeds university union pledge against any such rises. Is it not time that the Government were clear about their policy going into the election, and will he now be clear whether he will oppose increasing the fee cap to £7,000-yes or no?

Mr. Lammy: That is a little rich coming from the Liberal Democrats, given that they have had five positions on tuition fees since Christmas last year. Recently, there was a policy change indicating that they would not phase out tuition fees in the next Parliament. The Government have been clear that we will not pre-empt an independent review. We have asked Lord Browne to look at access, and the position of students, parents and employers. I will take no lessons on tuition fees from the flip-flop Lib Dems.

Bank Lending (Businesses)

13. Mr. David Amess (Southend, West) (Con): What recent estimate he has made of trends in availability to small and medium-sized enterprises of bank lending. [320206]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): The majority of small and medium-sized enterprises applying for finance continue to receive the finance that they require. For businesses with a turnover of less than £1 million, the proportion of applications that banks approved increased in the second half of 2009, and the average monthly approval rates for those businesses in the fourth quarter of 2009 were about 67 per cent. for loans and 72 per cent. for overdrafts.

Mr. Amess: In the real world, many small and medium-sized businesses in Southend, West are still suffering in the current economic climate, and their situation is not being helped by the negative attitude of banks towards lending. A survey by the Federation of Small Businesses showed that only 1 per cent. of moneys is being got from Government finance, so will they now accept my party's proposal for a national guarantee scheme?

Ian Lucas: With respect to the hon. Gentleman, I live in the real world too-in Wrexham-and I have small businesses in my constituency as well. We all know that we have had an extremely difficult 18 months and the most substantial global recession in living memory, but we are improving access to credit for businesses. We do not want a return to the up-and-down approach-and the instability that came with it-taken by the Conservative party when I ran a small business.

Science Budget

14. Dr. Julian Lewis (New Forest, East) (Con): Whether his Department's science budget will remain ring-fenced after 2011-12. [320207]

The Minister for Higher Education and Intellectual Property (Mr. David Lammy): The Government have no plans to alter the ring fence around the science and research budget.

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Dr. Lewis: I thank the Minister for that reassuring reply. The only problem with it is that, because the Government have put off the comprehensive spending review, no one has any idea what sort of sum is being ring-fenced. If it is not to be all show and no substance, will he indicate what sum is being ring-fenced, otherwise is it not nonsense to say that the ring fence will be maintained?

Mr. Lammy: It is axiomatic that every area of Government is subject to a spending review, which will be determined after the Budget; that is obvious and applies to every Department. I think that the question is asked and answered.

Access to Credit

16. Mr. Desmond Swayne (New Forest, West) (Con): What steps he is taking to increase the level of access to credit by small and medium-sized enterprises. [320210]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): We have a number of targeted interventions working to ensure access to finance for small and medium-sized businesses. I have already given the House figures concerning the enterprise finance guarantee, which is one example of those interventions.

Mr. Swayne: The statements from the Dispatch Box are quite at variance with the experience of small businesses on the ground. Is it not clear that the second banking bail-out failed in its attempt to extend bank lending to business?

Ian Lucas: The experience on the ground is that we are seeing signs of increasing investment in business and of businesses beginning to recover as consumer demand develops. Consumer demand is extremely important. That is why it is vital that we do not reach the levels of unemployment in this country that we saw on two occasions under the last Tory Government.

Euro (UK Membership)

19. Mr. Peter Bone (Wellingborough) (Con): What recent representations he has received from businesses on UK membership of the euro. [320213]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr. Stephen Timms): The Department has received no such representations recently.

Mr. Bone: I am amazed at that response from the Minister. Is it not a fact that the floating of the pound and the depreciation of sterling have been enormously useful to small businesses and manufacturers in this country, making their goods cheaper abroad and making imports more expensive? Is it not great news that we still have the pound, and will the Government now give up their policy of taking us into the euro?

Mr. Timms: The Government's policy remains as it was when it was set out by the previous Chancellor in a statement to the House in October 1997, and when the last assessment against the five tests was made in June 2003, when we said that

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The whole House will see exactly what we meant.

Several hon. Members rose -

Mr. Speaker: Order. Just as I called the hon. Member for Wellingborough (Mr. Bone) to ask Question 19, the hon. Member for Huddersfield (Mr. Sheerman) came into the Chamber. I want to err on the side of generosity; therefore I call the hon. Gentleman.

Insolvency Service

18. Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): What steps he is taking to improve the performance of the Insolvency Service. [320212]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): I meet regularly with the chief executive of the Insolvency Service to discuss the agency's performance and measures to improve it. I also agree the targets for the agency's performance, which are set after discussions with an external steering board of industry experts. I ensure that the service is set goals that, although achievable, are challenging.

Mr. Sheerman: You are very generous, Mr. Speaker.

Will my hon. Friend take on board the fact that for many small businesses the system for individual bankruptcies is cruel and punitive? Big consultancy firms such as PricewaterhouseCoopers charge £200 an hour; indeed, a constituent was charged £800 for a letter to be answered. What is going wrong when these big companies can leech money from small people?

Ian Lucas: My hon. Friend makes an important point. An important part of the Government's approach is to develop alternatives to formal bankruptcy procedures, through debt management plans and debt relief orders. We intend to offer a range of help to individuals and businesses, to enable them to avoid the formal procedures for insolvency, if at all possible.

Topical Questions

T1. [320217] Simon Hughes (North Southwark and Bermondsey) (LD): If he will make a statement on his departmental responsibilities.

The Minister for Business, Innovation and Skills (Mr. Pat McFadden): Our Department's key task is to work with business to help secure recovery from the global recession. To do that we have put in place a strategic investment fund designed to support key areas such as low-carbon industries, the digital economy and advanced manufacturing; strong regional development agencies, working with business in the regions; and tax support for industry in the form of capital allowances to support investment. We are not about to withdraw £3.5 billion of support for industry through reforms to capital allowances, as advanced by the Conservative party.

Simon Hughes: I know that the Government are also committed to more apprenticeships. There are still tens of thousands of young people who are not in education,
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employment or training. Will Ministers look at the idea of posting the apprenticeships that are available, either by local authority area or by postcode, both to make them easier to access and to hold employers in the public and private sectors to account?

Mr. McFadden: We have an online service to match employers with young people seeking apprenticeships, and as I said a few minutes ago, in December we announced a programme of grants of £2,500 for employers to take on unemployed 16 and 17-year-olds. I agree with the hon. Gentleman: we do not want young people to become completely distant from the labour market because of the economic troubles that we have been going through in the past couple of years. That is why apprenticeships are important, why the numbers have increased and why we have put in place the new grant specifically for unemployed 16 and 17-year-olds.

T2. [320218] Rosie Cooper (West Lancashire) (Lab): Please could the Minister comment on the negotiations between Royal Mail and the Communication Workers Union?

Mr. McFadden: The negotiations have been taking place on an intense level since the turn of the year. They are chaired by Mr. Roger Poole, the former deputy general secretary of the Unison union, and I believe that he has the trust of both sides. The aim of the negotiations is to reach a comprehensive agreement governing all the modernisation and change that needs to take place to put Royal Mail on to a healthier footing. We are not yet at the point of agreement, but I hope that we will be, and I very much hope that the talks will be successful, because that will be in the interests of Royal Mail, its staff and, most importantly, the public who depend on the postal service.

Mr. Kenneth Clarke (Rushcliffe) (Con): Have Ministers noticed the report in this morning's Financial Times that the chemicals company Ineos, the largest private firm in this country by sales, has joined the queue of companies intending to move their headquarters out of the United Kingdom, citing levels of corporate and personal tax? Are Ministers also aware that, in the Davos World Economic Forum league of competitors, the United Kingdom has now slipped to 81st in the world in terms of its tax levels? Will the Minister make representations to the Chancellor that he should follow the Conservatives' recommendations on lowering levels of corporation tax? Will he also tell the Chancellor that the choice of national insurance as a source of revenue in 2011 is particularly disastrous when we are supposed to be trying to come out of a recession?

Mr. McFadden: I regret the Ineos decision, but I must point out that our corporation taxes are lower now than when we came into office; they are the lowest in the G7. The right hon. and learned Gentleman asked me whether I would approach the Chancellor and ask him to support the policy that his party has advocated. Just a few days ago, his colleague, the shadow Chancellor, said that that policy would involve the withdrawal of £3.5 billion of support for investment allowances for manufacturing industry. That is absolutely not what our industry needs at the moment, and, combined with the Conservatives' policy to abolish the regional development agencies and
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to attack the strategic investment fund, it would represent a real threat to British industry. That is not what we want at the moment; we should support industry through the investment allowances and through strong RDAs working with-

Mr. Speaker: Order.

T3. [320219] Natascha Engel (North-East Derbyshire) (Lab): What steps is my right hon. Friend taking to ensure that fast, easy broadband access is enjoyed by everyone in the UK, especially those people who live and work from home in rural areas such as North-East Derbyshire?

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr. Stephen Timms): My hon. Friend is absolutely right to raise that matter. I am announcing today the formation of Broadband Delivery UK, and the appointment of its chief executive, Adrian Kamellard, to drive forward the universal service commitment to deliver 2 megabits per second broadband to every UK household by 2012, and to manage the £1 billion next generation fund, which will result from the proceeds of the 50p a month phone line levy, to deliver next generation broadband to 90 per cent. of the country by 2017. My hon. Friend is right to highlight the importance of this service in rural areas. Virgin Media recently made the welcome announcement of 100 megabit per second services across its whole network by the end of the year, which will be available to almost half of UK homes. That reflects current demand, and we need to get a move on in delivering such services in rural areas as well.

T4. [320220] Mr. Mark Lancaster (North-East Milton Keynes) (Con): Listening to the answers given by the Ministers today, I have to say that I just cannot believe the complacency of this Government. Week after week, representatives of small businesses come to my constituency surgeries and tell me that they hear the Government's rhetoric, yet every time they go to the bank, they cannot get the credit that they are promised. When will the Government stop making promises and start delivering for the people of Milton Keynes?

Mr. McFadden: We have outlined the support that we have put in place. Some 160,000 businesses have been helped by the time to pay initiative, which has allowed businesses large and small to delay payment of a total of £5 billion in tax, to help them through the recession. Some 8,000 businesses have been helped through the enterprise finance guarantee scheme. I have to say to the hon. Gentleman that small businesses in his constituency would not be helped by his shadow Chancellor's policy to abolish the £50,000 investment allowance that exists under this Government.

T8. [320224] Mr. Jim Cunningham (Coventry, South) (Lab): Will my right hon. Friend look at the concerns of small businesses about the payment by Government Departments for work that has already been done?

Mr. McFadden: My hon. Friend is absolutely right to stress that prompt payment is important. The Government should be a good customer and the Prime Minister has placed a great emphasis on that. As the Under-Secretary,
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my right hon. Friend for East Ham (Mr. Timms) said in response to an earlier question, the vast majority-more than 90 per cent., I think-of the bills in my Department are paid within the target date. That is important because small businesses rely on prompt payment. That is why we have taken it seriously during the recession.

T5. [320221] Mr. John Baron (Billericay) (Con): Despite Government assurances to the contrary, all the evidence on the ground in Essex is that companies cannot secure credit from banks or are having their credit conditions tightened. A recent Institute of Directors survey, as mentioned previously, confirmed that. Why are the Government incapable of sorting this out, particularly when they are a major shareholder in some of the banks concerned?

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas): It is simply not the case that the Government are failing to take action to support small business. It is very important to increase the levels of consumer demand within the economy to increase the demand for small business. That is why we must focus on unemployment levels and also support business by extending assistance through Her Majesty's Revenue and Customs by delaying payment. If we had followed the policy of the Conservatives, none of that assistance would have been available because the money would not have been there to assist businesses in their time of need.

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): What assessment has my right hon. Friend made of the impact of the investment in science on the recovery and also on the transfer into small business in the community?

Mr. McFadden: Some years ago, there was a campaign called Save British Science. It is no longer necessary because we have invested so much extra in science. We value the contribution that science can make. We are a world leader: we have 1 per cent. of the world's population, but 12 per cent. of the world's scientific citations. That is a testament to the success of British science, which the Government have strongly supported. My hon. Friend is absolutely right not only that pure science is good in itself, but that the potential for spin-offs between the scientific research councils, higher education and companies is now enormous. We are seeing increasing success in this.

T6. [320222] Dr. Julian Lewis (New Forest, East) (Con): The renewable heat incentive enjoys support in principle on both sides of the House. However, an unintended consequence might be to make the oil refining industry absolutely uncompetitive. The great oil refinery at Fawley in my constituency would see its margins completely wiped out if this levy is imposed on it. As it applies only to Britain, it adversely affects its competitiveness. What reassurances can the Minister give to the greatest oil refinery in the country?

Mr. McFadden: The assurance I give the hon. Gentleman is that I will make sure that his point is relayed to the Department of Energy and Climate Change and the Treasury. It would probably be wise for me not to comment in any more detail on his question at this point.

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