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Michael Fallon, MP, answers questions from the National Business Awards alumni

Michael Fallon, MP, answers questions from the National Business Awards alumni

17 Jun 2013

MFMichael Fallon, Minister of State for Business and Enterprise in the Department of Business, Innovation and Skills answers questions from the National Business Awards alumni. The National Business Awards, the UK’s most prestigious independent business recognition platform invited former winners and finalists, to ask about the issues affecting their organisations.  

“While we support the government’s initiative to encourage exporting, we have a large client base of SMEs who are importers, who are really suffering from the weak pound. What are the government’s plans to support this sector?” Jonathan Quin, CEO, World First

Running a credible economic policy is the first step towards regaining the confidence of investors, entrepreneurs and the wider public, thus boosting demand for both imported and homemade goods and services.  That’s why the government’s top priority is to deal with our debts, restoring growth and get spending under control.

Alongside this, my department is helping rebalance the economy so that we are not over-dependent on financial services.  Our industrial strategy is about targeted investment in training and research and development for growth, particularly hi-tech industries, helping firms grow in strength, and therefore purchasing power. We are also waging war on red tape - such as over-zealous enforcement of health and safety and employment regulations - that disproportionately burdens small firms.

But I do understand that UK exported goods are increasingly made from imported components; so exporters as well as importers do suffer from exchange rate movements.

“What is the Government doing to encourage young entrepreneurs? There appears to be a large emphasis placed on degrees – but many entrepreneurs are not suited to higher education and leave to start their own businesses as I did. How is the Government helping them?” Chris Li, Founder and CEO of Luxury For Less, trading as BathEmpire.com

I couldn’t agree more that vocational training is as important as academic learning in building an entrepreneurial society.  The government is doing more than any other to change perceptions and to invest in vocational training, including by relentlessly driving up the standards of training provided through the apprenticeships programme. We want talented people to enter the world of business and to gain the skills necessary to start their own firms, and to drive innovation within a growing private sector.

Enterprise is not usually a product of direct government intervention, but we’re doing all we can not just to restore health to the economy, but to help support the entrepreneurs of the future in a way that works. We have already issued 4,000 start-up loans to help budding entrepreneurs aged 18 -30, and earlier this year we announced that an additional £30m has been added to the fund. This means that over £110 million is now available to create tens of thousands of new businesses. We are also cutting red tape for start ups, providing advice and support via Business in You and setting up the British Business Bank to give budding firms more access to credit.

“How will you strengthen the reputation of apprenticeships so that young graduates and successful A-level students are immediately attracted to apprenticeships instead of internships?”

June O’Sullivan, Chief Executive, London Early Years Foundation

Academic and vocational qualifications are equally valuable, providing they are sufficiently rigorous and high quality.

In order to raise the profile of apprenticeships the Government has re-named the levels, to Intermediate Level Apprenticeship, Advanced Level Apprenticeship and Higher Apprenticeship, so that people can better understand the ladder of opportunities available through the apprenticeship programme.  Alongside this we are demanding higher standards from training providers.

We also want young people, employers and the general public to regard a place on the apprenticeship programme as of equal value to one at university.  One of the ways we are achieving that is by introducing Higher Apprenticeship frameworks at degree and postgraduate level.  These will provide a vocational route into previously closed professions such as law and accounting, and break down the snobbery about work-based learning. 

The best apprenticeship programmes are as over-subscribed as the most competitive university degree programmes, and the apprenticeships deliver strong returns for the economy, employers and apprentices themselves. The Doug Richard Review into apprenticeships looked at how we can build on the strengths we have now to ensure that apprenticeships can meet employer needs as the economy changes. Our reforms aim to bring all apprenticeships up to the standard of the best - by placing control in the hands of employers who are best placed to identify the skills they need for their workforce, and by ensuring that apprenticeships are rigorous and stretching.

“What are the Government’s thoughts on developing nationalised business projects, where both the profits assist in reducing the national deficit and have the potential to be sold to the private sector?” Colin Stevens, Founder, Better Bathrooms

Generally, our approach is to create the stable, low-tax business environment in which private enterprise can flourish.  But there is a role for government in working with various sectors with a high potential for growth, directing public funds into high-quality training or research, for example.  That’s why we’ve protected and reinforced investment in science, why we have set up finance guarantees for infrastructure, and why we’ve developed industrial strategies – effectively partnerships with the private sector – in areas including aerospace, oil and gas and nuclear.

More widely, the Government has always been committed to maximising the value in any assets it owns to ensure the best value for the taxpayer. We're keen to sell those assets where public ownership no longer delivers government objectives and that can be better managed in the private sector. Proceeds from any sale can be used to fund other government priorities to aid sustainable growth.

For Royal Mail, the student loan book and Urenco, various building blocks have come together to make circumstances right for us to progress towards a sale at this time.  With regards to Royal Mail, the Government is committed to securing a sale of shares in order to best protect the universal postal service and the future of Royal Mail. The Government is keeping an open mind on future asset sales.

"Having experienced first-hand the lack of government support for manufacturing after our UK injection moulder went into administration, what is the government doing to help SME UK manufacturing other than verbally encouraging more businesses to "on-shore"? Rob Law, Founder, Trunki 

Small and medium-sized businesses make up the vast majority of the UK's manufacturing base; they are the engines of growth, innovation and job creation.  As well as continually looking for ways in which we can decrease the burden of regulation, we run a number of programmes which have been created specifically to help them grow.

The Manufacturing Advisory Service offers free advice and support with issues such as long-term strategy, improving process efficiency, developing new products and supply chain development to firms looking to expand. Over 10,000 businesses have benefitted from MAS since it was launched as a national service last January. And the Advanced Manufacturing Supply Chain Initiative (AMSCI) provides companies with finance to support research and development, skills training, and capital investment to help UK supply chains achieve world-class standards.

In Round 2 of the scheme, £213 million Government and industry investment was committed to 14 national projects that will create and safeguard up to 16,000 jobs. Examples of winning bids include the creation of a ‘National Aerospace Technology Exploitation Programme’ led by the Aerospace Growth Partnership to address skills shortages and improve R&D collaboration in the aerospace sector. The £35 million project will create nearly 5,000 jobs in the supply chain. Another successful bid, led by David Brown Gear Systems in Huddersfield, will position the UK as a world leader in the creation of large gearboxes for the next generation of offshore wind turbines.

“What can we do to rebalance the TUPE rules especially for those businesses that want to take on contracts from CAS.” June O’Sullivan, Chief Executive, London Early Years Foundation

I know that many organisations have called for improvements to TUPE regulations.  They’ve told us that they are bureaucratic and place unnecessary burdens when undergoing restructuring.

To deal with these issues we’ve proposed a number of improvements to the regulations designed to ease the transfer process, and invited comment from businesses.  This consultation closed on 11 April and we’ll issue an official response in July.  It’s not possible to spell out the detail in advance of this, but I can assure you that we’ll act to eliminate unnecessary gold plating and red tape so that business transfers go through as smoothly as possible. 

We’re committed to upholding appropriate levels of employee protection, but better designed regulation can do this effectively without imposing stifling bureaucracy on hard-pressed businesses. 

 

 

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