Since then, Lord Drayson has worked with Professor Michael Sterling, STFC Council Chairman, to draw up new arrangements for STFC.  These are designed to ensure that STFC has greater stability in planning long term for the development and use of UK and international large facilities, and to eliminate, as far as practicable, financial shocks within spending review periods.

Lord Drayson and Professor Sterling have gathered views from a broad base, both to confirm the nature of the problem and to explore possible solutions.  Lord Drayson met with the Institute of Physics, the Royal Astronomical Society, and the Royal Society.  In addition, Professor Sterling met the Heads of Physics Departments and has taken soundings from key stakeholders that have a significant interest in the outcome, including the Wellcome Trust.  Finally, there has also been a considerable number of submissions from influential individuals and groups from within the research community.

A notable consensus emerged on the structural issues requiring resolution and on the basic principles for the required solutions.  In particular, there was broad agreement that reducing the pressures from the international subscriptions and UK-based facility operations would substantially remove the risk that unexpected pressures would lead to disproportionate pressure on the STFC’s grants portfolio.

This review of STFC has taken place against a difficult economic background, and in anticipation of a tough spending review.  Consequently, it is important that STFC adheres to its new balanced budget going forward, and to have realistic expectations for its settlement in the next spending review.

Lord Drayson’s measures address the two most significant short term pressures on STFC: sharp and sudden variations in exchange rates arising from international subscriptions, and the funding of demand-led large domestic facilities.  In making his announcements, Lord Drayson drew attention to the considerable support provided by BIS to STFC in recognition of adverse exchange rate movements this year and last, some £40 million in total.

International subscriptions

For the remainder of this spending review, 2010/11, the Department expects to continue to provide STFC with a level of protection similar to that which has been provided this year and last in respect of the additional costs of international subscriptions due to exchange rate changes.

From the next spending review onwards (beginning financial year 2011/12) BIS is looking at options for managing the currency risks better.  BIS is working closely with the Bank of England on how to reduce the exposure of the STFC.

A new arrangement will provide STFC with longer-term protection from the risk of exchange rate fluctuations in its share of subscriptions for the largest international facilities (ESA, CERN, ESO, ILL and ESRF).  This will allow STFC to plan ahead confidently, without the fear that sudden movements in the value of sterling could adversely impact its priorities in other areas of research.

Domestic large facilities

From April 2011 a new arrangement will see RCUK working with STFC to agree the availability and support requirements for large domestic facilities, Diamond, the Central Laser Facility and ISIS, at the beginning of each spending review period, with indicative planning covering the subsequent spending period, a total of some six years.  The funding for the delivery of these agreed requirements will be allocated separately to STFC by BIS starting from the beginning of the next spending round, 1st April 2011, and will be managed independently from the remainder of its budget allocation.  This will further increase STFC’s planning ability and will separate the funding of these facilities from STFC’s grant-giving function.

This approach will also strengthen the engagement of the wider science community in the forward planning for these large domestic facilities better to align facilities’ capabilities with scientific needs.

Summarising his announcement, Lord Drayson said “The better management of international subscriptions to organisations such as CERN through measures to manage exchange rates, and longer-term planning and budgeting for large domestic facilities such as Diamond, will allow STFC’s grant-giving functions to be managed with a higher degree of predictability over spending review periods.  The community has come out strongly in support of grants remaining with STFC, so that they can deliver investment continuity from facility design through to exploitation, and I accept this argument.”

Good afternoon everyone.

It may sound odd for someone like me, whose degree is in Law and who went on to become a barrister, to say this, but I strongly believe that university education has to be about far more than simply preparing people for a given job.

It must be about preparing people for life and for work, which forms such a big part of most people’s adult lives. That means, among other things, giving them the tools they’ll need not just to make the most of the job they’ll get at 21 or 22, but tools that they can carry with them and develop as they get older and gain more experience. Tools which, in our modern world in which a job for life is a thing of the past, should serve them well in a whole variety of settings and help them to get on in each.

Of course, the recession has underlined more strongly than ever that universities are economically essential in a whole range of ways. And perhaps the most important way in which they matter to most employers is by producing the steady stream of skilled people they send into the workforce.

It’s equally obvious that employability skills should matter to graduates as well as employers. What graduates have learnt at university is often a large part of what they have to offer prospective employers when looking for that first job.

The CBI/UUK report Future Fit asked employers what universities should prioritise in relation to their students. More than three-quarters of them said the top priority should be to “improve their employability skills”.

And I want to make clear straight away that I fully recognise the importance of that function.

Nevertheless, it’s common to talk about “employability skills” with only a vague sense of what we mean. It’s too easy to interpret the phrase as an argument for a narrowing of the range of learning and experience that universities should offer down to the purely vocational.
But I would argue that it’s precisely the opposite.

For example, I know that some people think that the whole case for public funding of higher education is based on its ability to supply business with – in that patronising, too widely-used and altogether too depressing phrase – “oven-ready graduates”.

For my part, I think a good case could be made for revoking the charter of any university that saw itself as being just a production-line for clones in business suits.

In fact, I don’t think most young people these days – if my generation was Generation X, then I suppose they’re Generation Y – would stand for that. They’ve grown up to view expressing their individuality as a normal part of life, for example, through Facebook and Twitter, Flickr and Bebo. And, perhaps more than any other generation since the 1960s, they’ve grown up with a healthy distrust of the establishment that has got the world into crises of ecology, finance, politics and much else besides.

And in any case, even if it were possible, seeking to produce identikit employees does no one any favours.

Certainly not students, who risk finding themselves pigeonholed from the word go. And, in the long run, it doesn’t benefit businesses either. It may be tempting for bosses to demand of universities, as I know many do, graduates to slot straight into whichever jobs they have vacant and whichever corporate culture happens to prevail. And that may indeed help to make a business profitable today.

But what that approach won’t do is keep it profitable tomorrow. For example, it won’t encourage creative thinking and new ideas. It will stifle innovation and challenge. And it will fail to build the sense of entrepreneurship and ambition that could lead the current crop of recruits to go on to establish new businesses and create new jobs on their own account.

That’s why the more forward-looking graduate recruiters look not for job-ready skills, but for potential that can be developed through coaching and other forms of in-company training.

For their part, I think more and more universities are coming to realise the sheer breadth of the skills-set that their students may need to carry into the world of work if they are to achieve their full potential. To take just one example, the other week I had the great pleasure of visiting Aston University’s new Careers and Employability Centre, and was greatly encouraged by the variety of growth experiences that are being offered to students there. That already includes placements in industry for almost all.

I admit that I used to be sceptical when business leaders moaned about new graduates lacking soft skills. It seemed to me that it was asking a lot for a degree in biomechanics also to be a qualification in social interaction or individual initiative. But I’m a convert these days.

I’m not just talking about the need for generic, transferrable skills to be learned alongside subject- or job-specific ones – important though that is, but about the active rather than passive attitudes that universities should foster in their students. Like refusal to just accept that the way things have always been done is necessarily the best way to do them now. Like eagerness to question received wisdom rather than just take everything on trust. Like openness to a wide range of different points of view and a forensic approach to assessing them. Like an ability to see the wood as well as the trees.

Of course, the relevance of what students learn at university to their future lives and careers isn’t only of interest to their employers. Since the introduction of variable fees in 2005 especially, students have gradually become much less passive consumers of what their universities dish out. When I go around the country talking to them, I get the firm impression that they’re much more concerned than ever before about what the return on the education they’re helping to pay for will be.

That’s one reason why we have asked all higher education institutions to produce a statement on how they promote employability and how they plan to make access to information about employability outcomes to prospective students.

But there are still some difficult issues to address.

As a result of the extra money that this Government has put in since 1997, there are more people in higher education today than ever before. And not only that, there is a wider and more representative range people at university, too. More students from lower-income families and State schools. More from black and ethnic minority backgrounds. And more who are holding down a job while studying.

We make no apology for that. But as a result, graduates are not as rare as they were only a few years ago. It’s true that the number of high-skill jobs in our economy is growing, but at the same time, it’s becoming less true that a degree is necessarily a passport to a good job on its own.
The range of skills and attributes that make graduates sought-after by employers is wide and complex, as our Higher Ambitions strategy recognised last year.

And that isn’t just the result of the effects of the recession on the graduate job market.

I don’t want to minimise how tough times have been for some graduates. Although unemployment among young people is now thankfully falling and although the Association of Graduate Recruiters’ worst fears about the effect of the recession on graduate vacancies were not realised, we know that, towards the end of last year, graduate unemployment reached its highest level since 1996.

But if we look at a country like China, with its booming economy and the rapidly-growing graduate workforce that its two and a half thousand universities are producing, we still find a country in which one in five graduates is unemployed.

The lesson I take from that is that graduates who aspire to fulfil the promise of a better life that university is supposed to hold out need all the help they can get to make themselves more employable.

I expect that everyone here today knows that the Government’s response to the particular problems graduates have faced during the recession was to offer support that helps build employability skills and boost their CVs.

The creation of the Graduate Talent Pool and of no fewer than 24,000 graduate internships have been an important part of that. Plenty of people sneered at the idea when I first mentioned it a year ago, but it’s turned out to be one of the achievements in my current post of which I’m most proud.

The scheme that we have launched with Raleigh International to provide placements overseas, is equally exciting in terms of what it can do for graduates’ prospects, although on a much smaller scale.

The latest figures from the Association of Graduate Recruiters and elsewhere suggest things now beginning to look up in graduate labour market and those graduates that have taken advantage of opportunities to gain work experience will be well placed to compete.
But we must look to the future as well. Because the need to enrich graduate employability, and the benefits of doing so successfully for individuals, for employers and for our economy generally are not going to go away.

That’s why we are aiming to increase links that universities and graduates have with the sectors and the types of businesses with greatest potential for growth. We recently announced 8,500 internships with small businesses – in partnership with the Federation of Small Businesses – and in priority sectors where we know there will be strong demand in the future for people with graduate-level skills, like digital, low carbon, advanced manufacturing.

All young people deserve a chance to make the best of their individual talents and aptitudes, the more so if they’ve worked hard to gain a degree and contributed towards its cost themselves through tuition fees. To do that, they will need the sorts of skills that programmes like those I’ve just described can help foster. It used to be claimed, with some justification, that it was precisely those sorts of skills and the confidence to use them that a public school education and the Oxbridge tutorial system helped to develop in young people.

But in the 21st century that’s just not enough. And that’s why the Government, with its partners in the university and business sectors, is working to deliver on its commitment to offer a brighter, fairer future to our young people than previous generations could ever have expected. A future in which many more of them will have not only have the specialist knowledge that employers value, but also the skills necessary to make best use of that knowledge, for themselves, for their employers and ultimately for all of us.

I want to conclude with one final thought. I’ve argued today in favour of offering a truly liberal higher education backed up with other measures as a preparation for success in working life. But offering students new experiences and broader perspectives as well as new skills isn’t just necessary for a healthy business environment.

We desperately need the openness and engagement that these things encourage to maintain a healthy democracy, too, and to counteract the growing sense of democratic deficit that we see around us.

Because, if life as well as at work, the antidote to alienation and disinterest is willingness to get involved and to work for real change.

Thank you.

The Department for Business, Innovation and Skills (BIS) and the Department for Children, Schools and Families (DCSF) today welcome the publication of the report from the Science for Careers Expert Group.

Science and Innovation Minister Lord Drayson said:
“Young people have a natural sense of wonder about the world.  We must tap into it so today’s students and pupils are inspired to blaze a trail in science careers.

“We’ve made significant progress in recent years to improve careers advice in our schools, colleges and universities. In Higher Ambitions we outlined how we wish to build on this and will now also consider the recommendations in this excellent report.”

Schools Minister Iain Wright said:

“Science is everywhere in our lives and science education can be the launch-pad into all sorts of different careers. So it’s vital all young people, of all backgrounds, and who might be studying academic and vocational subjects, are aware of the exciting science-related careers available to them.”

The report will build on the work we’ve already done, including our new careers guidance strategy, Quality, Choice and Aspiration, to give students suitable and exciting routes into science.”

Download the report below or visit the science and society website here

Science for Careers Expert Group Report (Pdf 1 MB)

Read the National Plan for Digital Participation (PDF, 665 KB)

Digital Britain blog on the National Plan for Digital Participation

The Government has set a target of 60% reduction in the 12.5 million people who are not online in the UK. The target underpins a new drive to reduce the digital divide in the Government’s National Digital Participation Plan (PDF, 665 KB), published today.

The Plan is supported by the skills and expertise of the Consortium for the Promotion of Digital Participation – 60 public and private organisations that work to help people gain the confidence to get online, reap the benefits the Internet brings and get the most from today’s digital society.

Minister for Digital Britain, Stephen Timms, said:

“Being online is crucial for participation in the 21st Century society – the Internet unlocks a wealth of information and services, giving people more choice in life and access to a range of education, health and financial opportunities.

“That is why we have set an ambitious target to get 60% of those 12.5 million people who aren’t online, online in four years. Our National Plan is an exciting project which will provide the leadership and framework for existing and emerging digital participation projects to drive a more inclusive Digital Britain.

“Bringing people online for the first time and enabling people to interact more creatively will enrich our society and we will ensure no one is left behind.”

Full press release: Government drive to get 7.5 million more people online

Speech by: Lord Mandelson
Event: Trade and Industry Dinner
Venue: Guildhall, London

One year on

My Lord Mayor, My Lords, Ministers, Aldermen, Mr Recorder, Sheriffs, Ladies and Gentlemen. The benefit of giving this speech two years running is that it gives me a very clear yardstick to work from. A year ago we were deeply in recession, the dust barely settled from Lehmans and the immediate consequences of its failure.

Now we have returned to growth. The banks are stabilized. Nobody is hanging out the bunting for a modest 0.3%, and the road ahead is certain to be bumpy. But the reality is that the worst predictions about where the credit crisis would leave us have not been realized. Not because it was wrong to anticipate the worst. But because massive, indeed unprecedented, government intervention pulled a spiraling private economy back from the brink.

A year ago I stood here and said that I believed that the Britain that emerges from the credit crunch would be a different country. For one thing – although this is not what I had in mind – we are a country now unavoidably in significant debt. How we respond to that fact has been the source of some debate, and some rather poor argument, and I want to address that tonight.

But more fundamentally, what I argued a year ago was that we needed to recognise that the crisis, like all crises, reveals both what is strong and what is weak in our foundations. And we should not waste the crisis by failing to tackle the weaknesses.

Our strengths are our flexible labour market, keeping unemployment much lower than projected. Constructive labour relations have allowed many firms to reach deals on pay and hours that protect jobs. I applaud those who have made sacrifices. They are the true heroes of the recession. The rate of business failure has been half that of the recession of the mid-nineties. Half as many homes have been repossessed in this recession. But we have also been brought face to face with some new realities.

Starting in the 1980s we allowed the diversity of the British economy – or lack of it – to approach the limits of what was prudent. Sometimes there was an economic fatalism about manufacturing decline and falling British goods exports, rather than seeing them as something that policy and private enterprise should address. Our economy, and certainly our corporate tax base, became too dependent on the City. We were also carrying a huge hidden insurance liability for a sector that was taking badly understood and inadequately policed risks.

And I think we are now also asking some very far-reaching questions about the values and outlook that we need to embed in our businesses and economy if we are going to prosper in the long term. We will need a smarter and more affordable state, but we also need a private sector firmly focused on long-term productive investment, enterprise and corporate stewardship. The debate that is happening within business on business models, especially the reliance on debt over equity, needs to be part of a wider reassertion of the values of the long term, of organic growth and value creation over the temptations of excessive leverage and the fast buck.

One of the big problems behind the credit crunch was a sort of financial abstraction. People and companies bought and sold financial assets with little regard to the real assets they represented. At the centre of financial markets is the tension between the need for long term investment in a real asset, and the desire for short term gain from a financial asset. Should the prerogatives of the latter trump those of the former? What kind of economy will we end up with if they do? We have to address these questions.

Public Debt

[Political Content Removed]

The fact is we entered the global crisis with the second lowest debt of any nation in the G7. And the global crisis has left government balance sheets across the world in a worse state, as they have absorbed the economic shock and sustained economic activity. Britain is hardly alone in seeing its public finances ravaged by the financial crisis. According to the IMF, in 2010 public debt as a proportion of GDP is forecast to be higher in Japan and Germany than in the UK. [Political Content Removed]

Which is why it is also wrong to assert that the fiscal stimulus and need to borrow must necessarily push up interest rates. While that must always be at the back of our minds, in reality, the shock to economic demand is so deep that the economy needs both continued fiscal and monetary stimulus. [Political Content Removed]

This is not an attempt to dodge the need for sometimes painful public spending cuts: they will come when, but only when, the return to growth is secure. The IMF, the OECD, the IFS: they have all sounded a warning about undermining the recovery.

Growth

But the Government’s analysis is not just about locking in recovery. A credible commitment to reduce the deficit and pay down debt also requires a credible plan to achieve medium term economic growth. Any would-be administration that fails to present a credible growth plan alongside its deficit reduction plan has a big hole at the centre of its programme. Growth depends on continued active government support for business, including new public-private forms of growth and venture capital for high tech and growing SMEs. Especially when banks are risk averse and focused on – indeed being urged to – repair their balance sheets.

Government needs to lend its energy to the stimulation of new innovation and enterprise from our world class research base and universities. We need to ensure that in a period of reduced funding our universities give increased priority to science, technology, engineering and mathematics, and to commercialization of research, and that our skills system provides advanced apprenticeships and technician training to serve the new industries of the future We need to mobilise private and public investment behind the Britain’s infrastructure needs and to boost our national supply chain – in digital, in energy, in transport and in low carbon transition.

[Political content removed].

Since we published the New Industry New Jobs policy framework last year, the Government has earmarked almost a billion pounds for targeted investments in Britain’s basic capabilities in new technologies like composites, plastic electronics and industrial biotech – the kinds of game changing seed investment that markets too often see as unviable or too risky in the short-term.

We have the biggest demonstrator programme of its kind in the world for ultra low carbon vehicles in Britain – publicly funded. We have announced both support for charging infrastructure and for consumer subsidies for the first generation of mass market vehicles next year. The result: Toyota and Nissan have both announced their intention to base new low carbon operations here.

Britain comprehensively missed the boat in onshore wind power generation two decades ago. But we have partnered the wind and wave energy sector in making sure that our natural comparative advantages in offshore energy are exploited this time around. The result: FCC, ClipperWind, Mitsubishi, – all have chosen to invest in renewable energy in the UK. Domestic companies such as David Brown and Skykon are taking advantage of these opportunities as well. No other country in the world makes turbines of the size of those now being developed in the UK on a commercial scale.

These are just two sectoral examples of the way that a more proactive approach to building our industrial strengths can and will pay off if government has the confidence to act at near-to-market stages of development and help to identify and pull away the barriers to commercial viability.

The great slur on British manufacturing has always been that it can’t cut it in a world dominated by China and Germany. This is utter nonsense. Britain is the world’s sixth largest manufacturer and our manufacturing output has remained stable in both value and volume over the last decade despite the fiercest imaginable competition. It remains absolutely central to our export strength. But if we want to maintain those strengths we have to pioneer advanced technologies and keep investing in the science, research and skills that underwrite them.

Companies

We also need entrepreneurs and companies capable of commercializing and transforming these capabilities. And that is a process that requires commitment and innovation. It requires strong and competitive companies. Our basic answer to this challenge in Britain for the last three decades has been to focus on subjecting companies to the discipline of the market and removing the market barriers that prevented them responding.

Industrial relations were reformed. The deepening of the European Single Market and the development of global capital markets created intense discipline for management. Government took a neutral view on foreign ownership and welcomed foreign investment into Britain. These developments have been almost entirely beneficial. They are probably the single most important reason why we still have a motor manufacturing industry, for example.

The massive expansion of capital markets, and widespread public share ownership through pension and saving plans have changed the game significantly. And ironically the costs of this change are closely tied to its advantages. We can entrust our share ownership to intermediaries, which is a good thing, because most of us don’t have the time or expertise to make investment decisions. And we spread our share ownership across hugely diversified, often international, portfolios, which hedges us in most circumstances against market risk.

But the result of intermediation and diversity has been to turn most shareholders into absentee or transient owners of companies. The decisions about what to own and when are made by fund managers whose incentives may require them to deliver returns on short timeframes, even if they manage pensions for people whose key interest lies in the long term.

For companies, the pressure to deliver short-term share price gains too often has to come before any wider considerations. In fact if CEO remuneration is tied to share price movements, simply raising the share price can become a corporate strategy in itself. Market analysts may be as likely to be involved in a sophisticated game of predicting the next press release and share price movement as they are in assessing the long-term strength or weaknesses of firms.

This risks rewarding clever readers of the market more than industrial innovation, quality management, or entrepreneurial skill. On the face of it, it does not seem a model good at building companies with the patient but engaged ownership required for low carbon innovation or infrastructure investment or manufacturing on the back of new technologies in Britain.

In recent years the UK Government has carried out a number of significant reforms to encourage the right kind of long-termism among company directors, not least the directors’ duties in the 2006 Companies Act. We need an equivalent long-termism among company owners, especially institutional shareholders. These company owners need to combine short term activism on company strategy, with long term commitment to the development of the companies they own.

Christopher Hogg’s review of corporate governance and David Walker’s review of banking boards have started to pose the right questions. The UK’s Stewardship Code must emerge stronger from the current consultation. It should make it clear that subscribing fund managers and ultimate owners have a duty of engagement and that long term stewardship must be at the centre of the fund manager’s mandate, and that indeed, this has to be demonstrated in reporting. I think there is a case for making fund managers publish the terms under which they are paid and the goals they are working to.

Takeovers

In this context, I think we need a fresh look at mergers and acquisitions. In some ways the current system is good at defining director and shareholder duties where the ownership is relatively stable. It is less clear how those duties should be interpreted in the fast-moving circumstances of a takeover.

Nobody believes that poorly performing management should be protected. But the open secret of the last two decades is that mergers too often fail to create any long term value at all, except perhaps for the advisors and those who arbitrage the share price of a company in play. A lot of M&A advisors must be sleeping badly in that knowledge. Or maybe not.

And it seems to me that given that a takeover can have huge implications for workforces and communities as well as investors, this is an area where good governance, and active and responsible shareholding, are absolutely critical. I do believe that there is a strong case for throwing some extra grit in the system. This is true for us in particular because the UK has a very open market for corporate control, arguably the most open in the world. And it is in our interest to make sure that this openness is producing sound outcomes.

In the case of Cadbury and Kraft it is hard to ignore the fact that the fate of a company with a long history and many tens of thousands of employees was decided by people who had not owned the company a few weeks earlier, and probably had no intention of owning it a few weeks later.

Company Directors engaged in takeovers clearly have a legal duty to shareholders. For the Directors of the target this is often interpreted as meaning a duty to accept any price that exceeds their own assessment of the future valuation of the company. However, the Companies Act sets out the duties of directors to consider the best outcome for a company in the long term, considering the interests of all the stakeholders – employees, suppliers, and its brands and capabilities. Getting a higher price in a takeover may not be a perfect proxy for that. It seems to me that we need to have a debate about how these various duties should be understood in the fast-moving circumstances of a takeover, when some of the company’s newest shareholders may not have a long term commitment to the company. Obviously we need Directors equipped to be stewards rather than just auctioneers. If this requires re-stating the 2006 Companies Act, then I am willing to do that.

I believe that one of the key ways to strengthen consideration of these wider issues in takeovers is to strengthen the ability of all shareholders on both sides to scrutinize the planning, financing and intentions behind deals. For that reason I welcome last week’s decision of the Takeover Panel to consult on the provisions of the Takeover Code, following Roger Carr’s sensible suggestions reflecting his Cadbury/Kraft experience. I believe that there is a case for:

• Raising the voting threshold for securing a change of ownership to two thirds;
• Lowering the requirement for disclosure of share ownership during a bid from 1% to 0.5% so companies can see who is building up stakes on their register
• Giving bidders less time to “put up or shut up” so that the phoney takeover war ends more quickly and properly evidenced bids must be tabled.
• Requiring bidders to set out publicly how they intend to finance their bids not just on day one, but over the long term, and their plans for the acquired company, including details of how they intend to make cost savings; and;
• Requiring greater transparency on advisors’ fees and incentives.

I also think there is a case for requiring all companies making significant bids in this country to put their plans to their own shareholders for scrutiny. Kraft after all had to bend over backwards to avoid asking Warren Buffet for his binding opinion, although I think we all got his message. None of these measures would necessarily have prevented Cadbury changing hands – that is not the point. They would have enabled the owners of both companies more actively to scrutinize the transaction, and better weigh the long term prospects for the merged company.

Some people have gone further and suggested that we need a new form of public interest test to guard British companies against foreign acquisition. I am happy to have an open debate about this, but I think we need to be very cautious. Britain benefits from inward investment and an open market for corporate control internationally. A political test for policing foreign ownership runs the risk of becoming protectionist, and protectionism is not in our interests.

We already have certain EU and UK rules that protect the public interest in a change of corporate control. A public interest test already applies to questions of competition, public security, media pluralism and – in the UK – financial stability. These rules have evolved over time – most recently to absorb the concept of financial stability. They are not immutable, and as I said I am open to debate. But we must not get drawn into a narrow debate about foreign ownership, which is not the issue. More important is the need for reform to promote corporate stewardship and long term engagement and ownership amongst shareholders, boards and their directors.

Conclusion: renewing the standing of the City

Let me say in conclusion that it strikes me that one of the biggest risks following the banking crisis is the development of an unhealthy attitude towards business and open markets in general – Richard Lambert pointed this out a few weeks ago. People who are losing their own jobs find it jarring when many in the City are reported as having had a good year. And that the biggest individual beneficiaries of the bailout seem to be bankers themselves.

But to jump from this to the conclusion that the whole market economy has failed us is a dead end, politically and practically. Our future depends on us harnessing markets and private enterprise for the good of all. Britain’s economic recovery will not be driven by consumer debt or public spending. It can only be driven by private enterprise and investment, backed by active and strategic government.

And Britain remains a very good place to do business. The World Bank ranks us 1st in Europe and 5th in the world. I realize that the changes made to personal taxation at the top end are not popular with business. But in the circumstances they are fair and justified for now. Our corporate tax rate and capital gains rates, especially for entrepreneurs, are competitive and need to remain that competitive.

As we recover there is an understandable temptation to respond to a clear regulatory failure in the banking sector with excessive new regulation. Of course we need to make our banks safer, and the Government made early proposals for reform. However, I do think that we need to guard against any unintended consequences from the new capital, liquidity and leverage requirements which are being proposed from different directions. As the Prime Minister has stressed, these need to be fully internationally coordinated.

New rules need to be implemented in a way, and on a timeframe, that does not create uncertainty now and which does not put at risk the ability of the banking system to fund the credit needs of the global economy as we recover.

At the moment, the current low demand for credit is masking the issues concerning credit supply. But as the recovery strengthens, we must avoid banks shrinking their balance sheets to meet regulatory requirements at the expense of lending to the viable businesses that we need to drive the recovery. But alongside this we need to recognize the need for renewed belief in the City’s role at the heart of our economic life.

We need to rebuild confidence in the City and Britain’s corporate leadership – and I know the City accepts and advocates this. I realize talking about trust probably sounds rich coming from a politician. Let’s just say: I feel your pain. The City is an immense asset to the UK and a key comparative advantage of our economy. It will be critical to financing the recovery and critical to financing our future growth.

Alongside regulating to strengthen the stability of the finance sector we also need to have a debate about culture. It is about the City leading the debate on a new ethic of stewardship and long-term commitment as the way to economic strength. There will no doubt be plenty of people who regard such comments as unduly idealistic or even naive. I’m enough of an optimist to believe they are not and that the changes we need are eminently achievable. I’m also, my Lord Mayor, enough of an optimist to say I’ll be back next year to see if I’m right!

Thank you for the introduction.

I’m delighted to be here and to welcome you all to the Department for Business, Innovation and Skills, and to the UK inaugural event of Europe’s e-skills week. I welcome this initiative to highlight the growing need for skilled ICT users and professionals – I think the European Union is absolutely right to prioritise this as a key area for the European economy. And I welcome the work of Intellect as the UK’s lead partner spearheading this campaign.

This is right at the heart of the UK’s future economic success, key to the Going for Growth strategy Peter Mandelson set out in January. And, of course, its vital for the responsibility I have: to deliver the aims of the Digital Britain white paper we published last June – a major element in our new strategy to build growth as we recover from the worst downturn in the world economy for 70 years.

It is today a near universal requirement for work to have at least a basic level of IT skills. As we come out of recession, growth in the UK economy will primarily be in high value goods and services whose provision demands digital skills and increasingly sophisticated competencies. Technology products have become essentials. When I became the Minister responsible for broadband for the first time in 2002, it was very hard to believe that we would – as we did within seven years, in 2009 – have 70% of UK households with internet access. The speed of change has been extraordinary and impressive – reflecting great credit on many of the organisations represented at this event.

HMG support for ICT

ICT is an exceptionally vibrant area for innovation, with new forms and new ways of working being developed all the time. It is an important sector of the UK economy in its own right. But it is also an enabler, providing other sectors with their competitive edge, enabling all the other parts of the UK economy to do well. That is a key part of the rationale for our strong support for the development of ICT, set out in the Digital Britain report.

We want our information sector equipped to compete and win in the new global economy, securing the UK’s position as a world leading digital knowledge economy. We know that the economy will look very different over the next decade.

The UK has great strengths in IT: R&D; business solutions capability; technology innovation; internet exploitation; mobile communications; and learning technologies. The UK is already home to Europe’s largest ICT industry, employing more than one million people and contributing 8% of UK GDP.

But we are not complacent – If we are to be successful we know we have to work hard to ensure the UK has the best environment it can for creating and growing businesses.

And that means ensuring the supply of world-class talent.

Digital Skills

Providing high quality professionals who can build and maintain digital Britain means equipping the workforce with both high-level, hard, digital skills and with other business skills – like being able to spot the commercial potential in an innovation.

The IT professional workforce in the UK has more than doubled since the early 1990s to now well over one million. In the short-term technology companies are facing the pressures common to the whole economy, but, looking just a little further ahead, strong growth is forecast to continue. The IT workforce is predicted to grow at four times this rate.

Higher Ambitions, launched last year, sets out the direction for higher education over the next decade. It seeks to encourage Higher Education Institutions, employers, Sector Skills Councils and sectoral experts to collaborate to focus customer demand and accelerate the response from universities to meet that demand. A Chief Executive from one of our leading IT companies was telling me last week how hard his company finds it to influence university course content. We need higher education to be more responsive.

The Foundation Degree (FD) is a prime example of HE-employer collaboration on HE qualifications, with the courses being designed with employers to meet specific workplace needs. Sector Skills Councils and professional bodies are also involved. Foundation Degrees have been growing quickly. Many are being delivered through joint arrangements between higher and further education. There are 255 IT Foundation degree courses running.
The ICT Foundation degree framework, launched recently, was developed to meet changing needs in the ICT sector. It sets out a fuller understanding of the sector; learner requirements for up-skilling and preferred delivery methodology. The framework will enable Apprentices to progress their workplace learning. And one of the key strengths of the foundation degree is in providing a pathway into higher education to able people who chose an apprenticeship to further their education, rather than A-levels.

The ITMB (Information Technology Management for Business) Degree Framework has also been developed by a consortium of universities and e-skills UK in partnership with leading employers. Rather than focus purely on technical skills, the framework recognises the importance of business, project management, and personal skills as well.

It provides graduates with specific skills employers see as essential, and the tools to excel in and lead the industry in the future. The first tranche of ITMB graduates is just now starting to enter the workforce.

The UK Higher Education sector produces world-class graduates in the disciplines which underpin a digital Britain. But we need more of them. There are problems getting graduates with the desired mix of skills. Student demand for computing courses has fluctuated. There was a steep rise in demand and provision through the 1990s, followed by an equally steep fall in the first half of the present decade.

Since 2006 numbers have levelled off. Entrants to Computer science courses were up 7% last year – welcome news, reflecting serious effort by those involved. And there is encouraging data from other science and maths courses too.

But we need to continue promoting the sector as an area with good opportunities for those with the right aptitudes.

The impressive economic performance which is our aim requires world class capability in the ‘hard’ subjects that underpin technological innovation. Future growth of the digital sectors depends in no small measure on having the right people with the right skills.

So we are supporting not just new entrants into the industry, and also putting in place the processes to raise the skill levels of the current workforce.

We are investing in development of a National Skills Academy for IT, which will be launched later this year. It will provide services for employers and IT professionals – people working of course in the IT and telecoms industry, but also those working in sectors where IT is essential for business success. And these days that’s most of them!

The National Skills Academy is being crucially influenced by employers in the sector, including BT, IBM, Logica and Microsoft, as well as British Airways, Sainsbury’s, Vodafone and Whitbread. Our aim is that it will ensure that business gets exactly the skills that they need. We see the Academy playing a vital role in the more responsive Higher Education system we are aiming for.

We also announced in Skills for Growth a pilot of a Joint Investment Programme (worth £50 million) from autumn 2010. The programme will involve a small number of Sector Skills Councils and Industry Training Boards in sectors key to economic recovery such as the digital sectors, at skilled technician and associate professional levels. This will match employer investment with government funding.

We are also committed to using our role as a very large procurer of IT services to address skills issues in the IT sector. We currently spend £14 billion a year on IT contracts. In December we announced that IT companies wanting to work with the Government will need to make sure their employees have access to the right training and skills. Suppliers doing business with the public sector will need to commit to using the Skills Framework for the Information Age or one of its equivalents, so that both Government and suppliers are speaking the same language about skills and can therefore ensure that projects deliver maximum value for money.

There’s one other point to make. I’ve mentioned the UK’s strength in learning technologies. So much so, that the Prime Minister recently asked David Puttnam to look into the export opportunities for educational technology. His initial report will be ready for the summer.

Our higher and further education systems increasingly use online learning, appreciating its impact, flexibility and access. Businesses too understand this. 40% of employers have increased their e-learning in the last two – economically difficult – years, when there is a temptation to cut training back. But look at the results. Sky saved £700K and doubled its staff retention. And Xerox saved over £5m by setting up 300 virtual classrooms. We need to see more of that kind of success.

At the start, I said how important this subject is. 21 million people in the UK use IT in their daily work. We are all, citizens and businesses, dependent on technology. Do please take the opportunity today to get involved in the discussion.

Now, I think I’m presenting an award which Margaret Sambell of e-Skills UK and Craig Martin of DediPower Hosting will tell us about …

Award Presentation

It is always a pleasure to recognise and see business ideas rewarded. I understand the competition for this award was exceptionally tough and that the judging panel had a difficult time choosing its finalists. Nonetheless, the winning entry stood out for its commercial and real world application.

So I am delighted now to present the 2010 DediPower Digital Entrepreneur of the Year award, in recognition of impressive work on innovative applications for mobile devices to Stuart Varral of Fluid Pixels.

This post is password protected. To view it please enter your password below:

Password:

Speech by: Lord Mandelson
Venue: Sciences-Po, Paris

As always it’s a pleasure to be in Paris, and of course it’s an honour to speak here at Sciences-Po. During my four years as EU Trade Commissioner I came here to Paris often, but I have to say that a trip to Paris often meant I had irritated someone important. So it’s rather nice to be here and not feel like I’m in trouble somehow!

And I have to say that those four years only reinforced my respect for France’s commitment to a strong and resilient EU. The French Presidency in 2008 was a high point for Europe’s projection in the world. This augurs well for 2011 when France chairs the G8 and the G20.

In every respect, I wanted, and want, the same strength and resilience for Europe. And in that sense the arguments about globalization, or trade liberalization were, and are, eminently worth having.

I am often caricatured as a bit of an Anglo Saxon liberal in France. As a typical free market, free trade Brit. And I am a liberal at heart, with all the necessary caveats. But ironically, really ideological liberals in Britain and America regard me as dangerously French. So you can’t believe everything you read…

Today I want to make three arguments, and I will try to be a bit provocative about this so as to keep things interesting.

The first is that we are in economic trouble in Europe. Europe’s long term economic strength is more vulnerable now after the banking crisis and the recession than it has been at any point for a generation. This threatens not just our prosperity and our solidarity, but weakens our ability to project Europe’s influence more widely in the world.

The second is that the EU is key to responding to this, but that we need to rethink some of the basic ways in which we use EU policy as a way of driving European economic growth. We are in the process of updating the Lisbon Agenda for another decade. Professor Mario Monti is working on recommendations to the Commission.

This is a moment to challenge some parts of the status quo. In particular, we need to refocus EU policy and EU budgets more on innovation, low carbon and high technology research and development. We need to focus on the commercialization of science and technology because this a route to more jobs and growth.

My third argument is that a genuinely transformative agenda for the European economy has to be owned by the European Member States themselves.

This week the European Commission will set out its “Europe 2020” proposals for economic reforms. It is important that the Commission is doing this and we should support it. But the challenge of difficult reform cannot simply belong in Brussels. We cannot subcontract it.

Prosperity at risk

Over the last twelve months a huge chunk of the growth and employment generated by the European economy over the last decade has simply been wiped away.

The banking crisis and the collapse in public revenues following the recession have undone twenty years of public financial consolidation in Europe. Not least in Britain – and I am quick to acknowledge that.

So we face this huge challenge of reconstruction, renewal, rebalancing. We need to upgrade Europe’s economic model. The broader pressures on us as an economy and a society have not changed. In fact they have been compounded by the challenges of economic recovery.

Like Japan, we are ageing while most of our major economic competitors remain demographically skewed towards relative youth.

After the relative luxury of playing catch-up with America over the last decades of the 20th century, now the emerging economies, especially, but not only in Asia, are playing catch-up with us. Indeed, in many respects they are already breathing down our necks.

Pressure on many traditional sectors means that European businesses and entrepreneurs will need to create millions – probably tens of millions – of new jobs over the next decade. And we will have to do this while progressively raising the cost of carbon to reach our climate change targets and operating in public spending constraints.

In this light it is alarming that the 1.5% growth rates projected by the European Commission for the EU after 2010 describe an economy limping into the future.

And there is no escaping the fact that this is a collective European problem. The largest ‘external’ market by far for every European Member State is the rest of the EU. So there will be no sustained national recoveries without a European recovery.

Sharing a single market, a single banking system and, in part, a single currency is a source of great potential strength for Europe. But it is also a declaration of inter-dependence that we have to make work.

The credit crunch has provided a necessary wake up call with respect to the inter-dependence of our financial markets. That is why we took the de Larosiere route to toughened and harmonized financial market regulation in Europe and globally. A route which needs to remain as now agreed, and on which the UK is as determined as anyone.

The debate over the response to Greece’s budget deficit and the need to rebalance demand across the EU is an extreme reminder that the divergences between us in our national competitiveness and fiscal management can turn out to be everybody’s problem. The credibility of big projects like the euro depend on our willingness to defend them when the going gets tough.

So the bottom line is that Europe has a growth deficit which is putting our future at risk. We are rightly proud of our social models, and I believe that they are an important part of our response to a world of very rapid economic change. But they are not cheap. The only way to ensure that they remain affordable is to put the European economy on a stronger path to growth.

The policy response

So how do we do that? Well, we start by recognizing what we have got right over the last two decades. We have got right our commitment to open competition and better regulation as the basic dynamic for improving productivity.

We have got our response right in the Lisbon Agenda’s basic commitment to labour and product market reform and flexibility. One of the big goals for the new Commission needs to be the deepening of the Single Market in services, which remains unrealized.

There have been plenty of people who have argued that the banking crisis has put these things in question, but they are wrong. The answer to Europe’s problems is not to reverse the openness of the single market or to cut it off from competition or trade or to make it harder for people to move from job to job.

But we do need a stronger strategic approach at the European level. Not the dirigisme of the 70s and 80s that tried to direct industry or counter the basic logic of comparative advantage or commercial viability, but a much better sense of how we are going to focus on and drive a deepening of our longterm economic and industrial strengths.

We need a more strategic approach that invests heavily in the things from which viability and comparative advantage emerge. Infrastructure, skills, innovation, our science and research base and the effectiveness of our capital markets. This is the best way to make the most of the opportunities offered by globalisation.

Europe has spent a decade focusing on freeing up the supply side of its economy. Now we also need to think how we equip the supply side better for global competition through a combination of sharper business models and government covering more of what markets are failing to provide.

As one example, EU markets currently fall far behind the US in making available venture capital for small firms. The EU venture capital market is about a quarter of the size of that in the US. If we were to give the European Investment Fund the freedom to draw in an additional €3billion from private capital markets to invest in venture and growth capital funds we could close that gap. The benefits for small firms with high potential would be substantial.

The UK also supports adapting EU State Aid rules to raise the cap on the maximum size of publicly-backed risk capital investments to €5million per company per year.

We would also like to see the creation of an EU-wide Small Business Research Initiative similar to that used in the UK. This is a programme that provides public contracts to SMEs to enable them to research and develop new solutions to public procurement challenges – setting them the problem and commissioning an innovative solution that saves money for taxpayers. We would like to see a similar programme established at the European level.

There are a range of basic targets that EU states should commit to meeting. The Commission has set a target of 5 million high quality apprenticeships in the EU by the end of this year. All homes and businesses in the EU should have access to broadband at 2Mbit per second at least by the end of 2013 and at least 50Mbit by 2017 – creating the digital infrastructure that the modern European economy will depend on. Patent Offices in Europe should create a fast track patent for low carbon innovations.

These goals are simple, but they are concrete and real, and relatively easy to achieve with the necessary coordination and political will. They represent measureable improvements in the way the EU supports the young, the innovative, the entrepreneurial.

They are part of a new ‘EU Compact for Jobs and Growth’ that Britain has proposed for adoption by EU leaders, and which we hope will be widely taken up in the European Commission’s new research and innovation plan, which Britain strongly supports.

But I would argue that we need to go further than this and rethink the whole orientation of the EU budget. The way the EU spends money is too strategically passive. Only 5% of its budgets are spent on low carbon. There is not enough focus, for example, on EU digital communications and low carbon transport infrastructure. Only a quarter of structural funds support research and development.

Measured against the challenges we face, this suggests we need to think afresh about our priorities. In this respect, I very strongly welcome the fact that the new Commission has created portfolios for innovation and the digital economy.

Leadership

And that brings us to the question of European political leadership. Politically the EU is an unusual animal. We are deeply interdependent, but we are also sovereign states.

Part of our solution to this has been to create strong and effective institutions in Brussels to protect and advocate the European collective interest. The European Commission may be unloved by some – institutions are not loveable things – but it has been the glue that has held the expanding European Union together and this must remain the case.

But the Commission’s leadership is, of course, only as good as its members. It is only indirectly accountable to Europeans. While being string in its advocacy, it cannot wholly implement reforms. That is why its authority must always be exercised with the tacit approval of the European Council. Being EU Trade Commissioner left me in no doubt about that.

But the Commission’s great strength lies in its ability to take the long view, and sometimes the politically difficult view, and the wise rather than the populist view. European governments can have short memories and short attention spans, and the institutions are there to hold them to the promises they make.

So although I have always argued, and I argue strongly now, that we do need greater political leadership from Europe’s states, this cannot come at the expense of strong institutions.

What we need is both. We need a strong Commission to drive the agenda. But the Commission needs to be anchored in the strongest possible consensus from Member States in favour of ambitious change. Both sides need to remember their part of the bargain.

Europe’s greatest achievements have been driven by strong Commissions acting with the clear backing of visionary political leadership from the Council. The creation of the Single Market, the creation of the euro and the enlargement of 2004 all combined disciplined Commission leadership with clear political patronage from Member States.

This is the kind of dynamic that we want to create with the EU Compact for Jobs and Growth. It would act as a political agreement between the European Member States, the new President of the Council and the Commission.

It would establish annual economic summits of EU leaders that would set the direction of travel for EU and national economic policies, identifying the key barriers to faster growth and more jobs. They would bring together and assess EU reporting on public finances, economic reform and financial markets.

European governments would establish national targets in key agreed indicators like employment rates, productivity and capital investment. These targets would not be imposed top down as they have been in the past, but built bottom up.

And although Member States would have different starting points and aspirations, they must be challenged to be ambitious. They would be monitored by the Commission and held accountable for progress. This would be done openly and publicly, so that progress could be compared across Europe.

Conclusion: instruments and intentions

It might seem an obvious point, but my time in Brussels convinced me that this goes to the heart of how the EU succeeds and fails. Almost everything about Europe depends on national political ownership of the idea that Europe and its agenda matters.

We should not make the mistake of confusing instruments with intentions. The Stability and Growth pact, the European Financial Stability Board, the Lisbon Agenda, even the Lisbon Treaty itself: these are all hugely valuable instruments. But they have to be embedded in and advanced by, political leadership and the will to make them work.

The challenges of economic reform in Europe are not resolvable by simply passing more powers – or passing the buck – to the centre. That is just not politically possible, nor necessarily desirable, given national obligations to national taxpayers. It also ignores the need for national political ownership of difficult change.

But the corollary of this has to be an attitude of mind in governments that recognizes the critical European dimension of our national economic and political lives. This is true whether we are talking about changes to financial markets, tackling climate change or the defining of a more coherent European foreign policy.

And Europe certainly needs a more coherent voice in the high politics of foreign affairs and global governance. This is what the Lisbon Treaty aimed to deliver. The EU needs to build a deeper strategic relationship with states like China, India and Russia. Periodic summits and occasional visits do not add up to a substantial relationship.

But it also needs the less glamorous kind of political leadership that owns the hard day to day grappling with national economic reform targets and delivers them on time.

Many European national politicians still regard European policy as a distraction rather than a core part of their democratic mandate. When the time comes to spend political capital, the temptation, inevitably and understandably, is to spend it at home. But I do not believe that Europe can genuinely set a transformative agenda for its future until this starts to change. As future French leaders, this is part of your challenge.

So to sum up: we as Europeans face a growth deficit that threatens our prosperity, our solidarity and our capacity to project our influence outside of Europe. This is the moment to question some of the basic ways we think about the EU’s strategic role in driving growth and innovation. This debate has started in Brussels. But this agenda, however much it is shaped and driven by the Commission, needs to be owned by national capitals. It needs to be driven by national politicians. It is, after all, our names that are at the bottom of the Lisbon Treaty.

I believe that despite the sometimes exaggerated rhetoric, France and Britain are much closer on these issues than the caricatures suggest. Over the next few months we should be at the forefront of defining this agenda. Britain and France both believe that Europe matters. Right now, in the face of a very uncertain future, Europe matters more than ever.

Looking ahead 50 years, the report concludes that a new approach to managing the UK’s land is needed to meet future challenges.

The report outlines that land is a versatile national asset, playing an important role in people’s physical and mental wellbeing as well as supporting prosperity. However several factors will increase pressure on land, including:

• Climate change and a growing population with more people living alone
• New demands as incomes rise in the future – more space for living and better transport.

Decisions will be needed on crucial issues such as:

• How to balance local and national interests
• The appropriate mix of incentives and regulation to guide future land use change.

Over the next 8 months, Foresight will work with departments and stakeholders to work out detailed proposals for moving forward.

To learn more about the Land Use Futures, visit the project pages here.

Land Use Futures: Making the most of land in the 21st century report can be downloaded here.

Read the BIS press notice here.

It has signed a Memorandum of Understanding (MoU) with Mitsubishi Power Systems Europe (MPSE) to invest £100m in new wind turbines in the UK.

£30m has been allocated for a network of electric vehicle charging points across the UK and from 2011 consumers will receive up to £5000 on purchasing a new electric car.

A £17m trial to install innovative low carbon technologies in social housing to make them carbon neutral is also underway.

Wind turbines
Business Secretary Lord Mandelson and Energy and Climate Change Secretary Ed Miliband signed the non binding MoU with MPSE in London today.

The Government intends to provide grants of up to £30 million to support the project. This follows on from extensive work with MPSE and discussions that the company had with Lord Mandelson and Ed Miliband at the Global Investors conference on Monday.

By working closely with Mitsubishi, the UK is a strong contender to be a manufacturing base for Mitsubishi in the future, which could create up to 1,500 new jobs.

Business Secretary Lord Mandelson said:

“Mitsubishi’s investment in wind turbine R&D and the creation of 200 highly skilled jobs is great news for our future plans in low carbon, high technology industries. The UK is now well placed to manufacture the turbines needed for the next generation of offshore wind farms. We will continue to work with Mitsubishi to secure production in the UK.

Read the full BIS press notice here.

Electric vehicles
The £5000 Plug-in Car Grant will be distributed directly to the consumer at the point of purchase and will be available across the UK from January 2011.

To support this, the Government will roll out a £30m trial network of electric vehicle charging points, called Plugged in Places. They will be located in:

• car parks
• major supermarkets
• leisure and retail centres; and
• local streets

The first Plugged in Places will be based in London, Milton Keynes and the North East. Over 11,000 charging points will be installed over three years.

Business minister Pat McFadden said:

“The Government is focusing on this sector as a priority and we are committed to helping British businesses take advantage of the growth potential and job opportunities this presents.”

Read the full Department for Transport press notice here.

Retrofit for the future
The Government-funded Technology Strategy Board (TSB) is leading on a £17m initiative to trial a range of innovative new low carbon technologies in social housing homes across the UK.

It will trial the best combination of new and existing technologies to reduce energy consumption, including:

• insulation
• combination boilers
• improving ‘air tightness’; and
• solar panels.

Science Minister Lord Drayson said:

“Innovative businesses have a crucial role to play in the low-carbon economy.  This £17 million investment by Government will give companies the chance to grab a share of the significant potential retrofit market.”

Read the full TSB press notice here.

Images

More images from the Retrofit for the Future house in Eltham are available at the BIS Flickr photo gallery here.

To stay up to date with low carbon-related announcements, see the Low Carbon News Hub.

Schools Minister Iain Wright said:

“I’m pleased Sir Mark Walport applauds the huge strides we’ve made in the last few years thanks to sustained Government commitment, and that he highlights the UK’s strong showing in international comparison studies.

Science and Innovation Minister Lord Drayson said:

“The UK is a world-leading science and research nation. It is imperative that students are stretched by science education as the next generation of scientists, engineers and mathematicians will be vital for securing strong economic growth in the years ahead. I am grateful for Sir Mark’s report which makes a number of recommendations to build on the significant progress we have made in recent years.”

Download the report

Drawing on more than 40 years’ experience of starting and growing businesses, Lord Sugar responds to some of the questions he is most frequently asked at his advice events.

Further clips to be released in the next few weeks cover issues including finance, banking, prompt payment, growth and expansion, employing people, retailing, marketing, IP and trading overseas.

Download the Government response

The response lays out how the Forum’s recommendations are contributing to three major strategies for the future of higher education: Higher Ambitions (the framework for the future of higher education), the Postgraduate Review and the independent review of higher education funding and student finance.

Recommendations from the Forum have directly informed major elements of Higher Ambitions. They offered a direct insight into areas including information, advice and guidance, flexible teaching and Learning and Employability Strategies.

David Lammy said,

“I would like to thank the Student Forum for all the work they have done this year, which has made an invaluable contribution to Higher Ambitions.

“Working together, students, higher education institutions and the government can ensure the student voice is central to the development of higher education policy and improving the student experience.

“Even in these more challenging times, the productive dialogue which has developed between Government and the NSF presents a real opportunity to look at how universities can support students better, how they can provide more flexible provision and how they can learn from each other to improve.”

Lord Young, said:

“The National Student Forum was set up two years ago to give a stronger voice to the concerns of students in government and I have been impressed by the way it has focussed on issues which are recognised across the sector as key to improving the student experience.

“This is part of an ongoing process and I really value the opportunities I have to meet and talk to students during my visits to universities. A strong voice is essential to ensuring that both government and institutional policies are tailored to the specific needs and concerns of students. I would like to take this opportunity to thank Maeve Sherlock for her superb Chairmanship of the NSF over the last two years.”

The NSF presented recommendations in its second annual report in November last year. They will now work with BIS and the Higher Education Funding Council to develop their proposals to support higher education institutions in these areas.

The funding was announced today by Business Secretary Lord Mandelson and Minister for Regional Economic Development Rosie Winterton.

It will be distributed by the nine Regional Development Agencies (RDAs) to support a range of new initiatives in key industrial sectors, including green energy provision, low carbon manufacturing and R&D, support for science and innovation and urban regeneration.

Lord Mandelson said:

“The RDAs are by far the best way for the Government to secure future economic growth. Their Action Plan highlights how they are uniquely placed to help deliver our strategies for economic recovery, job creation and business success throughout the country.

“For every £1 the RDAs spend, around £4.50 is put back into their region’s economy. Over the past decade, this spending has created more than 850,000 jobs, helped start up nearly 60,000 businesses and ensured that people across the country are able to benefit from new economic opportunities in their region.”

This follows an announcement last month that £125m from the UKIIF will be invested in low carbon and clean tech sectors, bringing the total UKIIF investment to £325m.

The UKIIF today completed first closing on this £200m UK Future Technologies Fund with fund managers the European Investment Fund (EIF). EIF have raised £100m to match Government funding. They will now make their first investments in UK venture funds, investing in technology-based businesses where there are significant growth opportunities, driving the UK economy forward and creating highly skilled jobs.

Video: Prime Minister’s speech from the Global Investment Conference

Speaking to the Global Investment Conference, Prime Minister Gordon Brown said:

“Our new £325 million Innovation Investment Fund – launched as part of Building Britain’s Future – shows our commitment to the industries and the technologies that will create the skilled jobs of the future.

“This fund, seeded by the Government, is bringing private venture capital to growing enterprises. It is already providing £125 million of funding to high tech, low carbon businesses. From today, a further £200 million will be available for life sciences, digital and advanced manufacturing.”

Global Investment Conference microsite

Read a transcript of the Prime Minister’s speech

Listen to the Prime Minister’s podcast on investment

Full press release: £200m Boost for Future Technology Sectors

Press release: UK Innovation continues positive trend

While much of the data in this second report precedes the onset of the global recession, it highlights rising R&D investment, more A levels and first degrees being taken in STEM subjects and more innovative public procurement through the reformed Small Business Research Initiative. However, it also highlights that UK business spending on R&D remains low relative to other advanced countries, and it captures the decline in venture capital and private equity investment in the UK in 2008.

The full report and key messages document can be downloaded here.

Download the full Report

2009 Annual Innovation Report 6MB

2009 Annual Innovation Report – Key Messages 253KB

2008 Annual Innovation Report

The first Annual Innovation Report was launched by the Prime Minister on 4 December 2008.

2008 Annual Innovation Report

The month long awareness campaign, called Dads at Work, will see posters and consumer information leaflets distributed in outlets such as doctors’ surgeries, hospitals and antenatal clinics, directing dads to www.direct.gov.uk/dadsatwork for detailed information. Online advertising will also appear on websites that attract high volumes of ‘dad’ visitors.

Fathers are entitled to:

• Request flexible working – parents of a child 16 or under, are entitled to request flexible working such as flexi time, part time or working from home, and, by law, an employer must seriously consider the request;
• Paid paternity leave – new dads can take two weeks’ paid leave. They need to notify their employer 15 weeks before the due date; and
• Parental leave – dads have the right to take up to 13 weeks unpaid leave until their child is five years old.

Employment Relations Minister Lord Young said:

“We know that rights for dads at work are valued by people and that businesses also see real benefits in offering them. But our research shows that there are still some dads out there that are not aware of what they are entitled to and therefore risk missing out.

“Our campaign is all about making sure dads know what they can do and to help them have more confidence as they weigh up what works best for them and their family. The key is to talk to their employer.”

The survey showed that:

• 56% of dads surveyed with children 16 and under said that they would look for an employer who offers flexible working when choosing a new job;
• 91% of dads with children aged five or under believe it is important that fathers have the option to take paid paternity leave; and
• 62% believe a dad’s relationship with their child will suffer if they are not at home after the baby is born.

However, some fathers remain unsure of the rights currently in place to help them. The poll found:

• a fifth (20%) of dads with kids aged 16 or under – who, by law, are entitled to request flexible working from their employer – did not know if their company offered flexible working to fathers;
• one in three (34%) parents with children aged nought to five did not realise that paid paternity leave is law; and
• one in five (22%) wrongly assumed that fathers only needed to approach their employer to ask for this leave when the baby was born or before it was eight weeks old. (To benefit from legal paternity rights, fathers must speak with their employer 15 weeks before the baby is due).

Directgov: Paternity rights in the workplace

Full press release: ‘2010’ Dads really do want to spend time with the baby

The new qualifications are easier to understand, more flexible and more relevant to employers.

The main change is the introduction of the Qualifications and Credit Framework (QCF).

The QCF is a new system for recognising vocational qualifications in England, Northern Ireland and Wales.

More information for employees, employers, learning providers and Awarding Organisations can be found at the BIS vocational qualifications page.

View the vocational qualifications press notice here.

Each year scams cost three million UK consumers £3.5 billion and recent research from the Office of Fair Trading (OFT) shows that email is now the most common scam approach – 73% of adults have received a scam email in the past year.

Consumer Minister Kevin Brennan said:

“The internet is rapidly transforming the way we shop. It presents massive opportunities for consumers, but unfortunately it also harbours fraudsters who can leave consumers upset and out of pocket.

“So as they get more sophisticated, we need to stay one step ahead. Our investment will help the OFT and Trading Standards to put in place the new specialist teams, training and technology required to take the fight to these criminals.”

The Government is investing £4.3 million over three years:

• OFT’s team has already set up a fully equipped laboratory with specialist equipment and is being trained by an international expert. This new functionality adds to the OFT’s capability across all of its enforcement work from cartels to consumer protection cases; and
• new highly trained trading standards enforcers with specialist equipment will also be placed in every region of England and in Scotland and Wales.

Online scams the teams will focus on include:

• fake products and traders who try to hide their identity to avoid giving consumer redress;
• ticket scams where tickets sold for concerts, festivals, football games and other events are either counterfeit or non-existent; and
• scam websites purporting to sell goods that dupe consumers into making what appear to be bargain purchases, but consumers receive either nothing at all or counterfeit products.

Consumers who suspect they are the victim of an online scam should contact Consumer Direct on 08454 040506 or visit www.consumerdirect.gov.uk. Consumer Direct can provide advice and pass on complaints and information to Trading Standards and the OFT.

Full press release: Government crackdown on cyber scams

Read the Digital Britain report

Speech by: Lord Drayson

Venue: Nairne annual lecture – St Catherine’s College, Oxford

CHECK AGAINST DELIVERY

Good evening.

Let me first thank St Catherine’s for inviting me to give this lecture. I’m honoured to do so, and – as ever – it’s great to be back in Oxford. Many of the best things in my life have their origins here.

It was here that I met my wife, Elspeth, and four of our five children were born in Oxford, in the John Radcliffe.

It was here that I helped to build the university spinout PowderJect and made my fortune.

And it was here that I first encountered Professor Brian Bellhouse – Magdalen Don, medical engineer and serial entrepreneur. Brian is the scientist whose research lies behind PowderJect. He’s also my father-in-law.

And it’s through Brian – and I hope this isn’t too complicated – that I know St Catherine’s own Roger Ainsworth. It was Roger’s work on Doppler Global Velocimetry that helped Brian and his team to characterise the supersonic helium flows in the PowderJect device.

Some beautiful images of those gas flows that Roger produced actually featured on the cover of the PowderJect prospectus when we went public in 1997.

As some of you know will know, the PowderJect device led to the development of a whole new area of genetic vaccines and grew to be the world’s sixth largest vaccine company, employing over 1,000 people and valued at £550 million at the time of its sale in 2003.

What you may not know is that it delivered a 40-fold return to its original venture capital investors and £21 million to the University of Oxford – helping to fund the new engineering buildings on South Parks Road.

Now, I haven’t offered this potted history for vanity’s sake – though I’m proud of what the PowderJect team achieved and I’m proud of my place in this Oxford genealogy.

I’ve done so in service of a broader argument I want to make about the strengths and weaknesses of UK science.

This evening, I intend to be more emphatic than I have been previously about the path this country must pursue on science. And I’ll insist – not for the first time – that certain questions which continue to preoccupy some UK scientists are a distraction from what ultimately matters to all of us.

But back to the story for a moment. All of the commercial value I just mentioned can be traced back to a meeting I had with Brian and Elspeth in 1993.

Yet, Brian’s own achievements rely on previous generations of Oxford scientists, who worked for several decades on supersonic gas dynamics and on fluid flow.

An early group, for example, worked alongside Rolls Royce during the Second World War to urgently address a cause of Spitfire crashes – during high-speed dives, where the aerodynamic flow over the plane’s control surfaces was disrupted as they approached the so-called sound barrier.

That line of enquiry was later taken on by Douglas Holder and Donald Schultz here at Oxford – key figures in breaking the sound barrier.

Donald’s entrepreneurial instincts – unusual in Sixties academia – certainly influenced his research student, a young Brian Bellhouse, who borrowed insights from aeronautics when he investigated the mechanics of blood flow. Breakthroughs in renal dialysis, artificial heart valves and a host of other medical devices all followed.

To me, this is a perfect illustration of scientific serendipity and of the way in which research proceeds: questions about why planes go into fatal tailspins increased understanding of basic physics, led to major advances in aeronautics and eventually spawned medical applications that were entirely unanticipated by the original research teams.

More to the point, there’s a golden thread running through the story – whereby, over time, science creates wealth and jobs and capital for reinvestment in research.

But, in truth, we’re still weaving science narratives in this country without that thread.

The UK’s achievements in pure science are legion – in chemistry, in medicine, in astronomy, to just name three.

We’ve always had the brainpower and attracted the best overseas talent, even when these scientists didn’t have the investment to match.

Since 1997, however, Government funding for research has doubled. Total funding for universities in England has risen by 25 per cent in real terms.

And universities themselves are now much better at generating their own income. Total UK university income in 2007-2008 was around £23 billion.

This spending has brought about a genuine transformation in the research base.

In the 1980s, when I was doing my PhD, I was frankly embarrassed to show visitors around some of the labs where I was working.

Today, it’s very different. Our research infrastructure is excellent. We lead the G8 on scientific productivity. Only the US outstrips us on citations.

This performance owes a good deal to my ministerial predecessor, David Sainsbury, and to the new breed of university vice-chancellors.

But where we are now is not where we have to be in order to meet the challenges of the future.

I say to you tonight that UK science doesn’t need fixing. It needs continued investment and a stable framework so that scientists are able to get on with what they do best: excellent research.

The problem remains that our capacity to create wealth from science needs to improve – to deliver the strong economic growth and jobs.

I recognise that commercialisation of university research is responsible for a significant part of the increase in income across the HE sector. I know from my time on Oxford’s tech transfer and VC fund boards – and from my involvement in setting up the
UK Innovation Investment Fund to support promising UK tech companies – that the quality and number of university spinouts is much improved.

Never better, in fact. In 2007-08 university spinouts employed at least 14,000 people and had a combined turnover of more than £1.1 billion.

The Technology Strategy Board, meanwhile, has grown membership in its 15 Knowledge Transfer Networks to over 43,000 business members and 14,000 non-business members.

But wealth creation from UK science needs to improve further still.

We have to spin much more golden thread because the key question this country faces right now is how we rebalance and grow our economy. This is our top priority.

My single-word answer to growth is “science”. We are number one or two globally in more disciplines than I have time to list. This is our ready resource.

I’ve been arguing this for as long as I’ve been science minister, but – truth be told – I still need to make the case, and particularly to the science community.

When I started talking about “impact” last year – about the UK figuring out where our competitive advantage lies and where we can achieve the most growth – perhaps I failed to be sufficiently explicit about my rationale.

Now, things are clearly looking up. We’re coming out of recession. We’ve taken important steps to make key sectors – like healthcare and automotive – more attractive to investors and to make them work more effectively with the science base to achieve growth. The UKIIF is already the largest equity finance fund in Europe.

But the Government has readily acknowledged that the recovery remains fragile. We have to take the right steps now to achieve robust and sustainable growth.

So, as a nation – and in terms of how we use UK science – we are at a crossroads.

This is a critical point in the economic cycle. It is also a general election year.

Science isn’t peripheral to the decision facing the country. It is central: to growth, to prosperity and well-being.

In this context, we can’t – and I refuse to – back away from impact, from translation, from driving home the necessity of UK science delivering profits to the UK.

High-tech, high-growth companies represent a small minority of businesses, but their economic impact is entirely disproportionate to their number. Research from 2009 by the National Endowment for Science, Technology and the Arts – and covering a three-year period – found that six per cent of companies were responsible for around half of all net employment growth in the private sector.

Sometimes I sense a squeamishness about making money from science, and it mystifies me – not least because I don’t sense the same misgivings about bidding for and spending taxpayers’ money on research.

Science that is profitable also delivers clear benefits to mankind – treating disease, boosting food yields, making water safe to drink, improving communications, inventing new forms of entertainment.

So, let’s concentrate on science-based business.

Let science-based companies deliver tangible products and services in low-carbon, in advanced manufacturing, in digital, in bio-engineering.

Now perhaps my own experience has somehow given me a certain perspective on all of this. But science has been the source of my own social mobility.

My parents are passionate believers in education, and I was lucky to get a good one – especially in science. It was the making of me, and – through helping to break new ground in the fields of robotics, immunology and drug delivery as a science entrepreneur over 20 years – I did make a lot of money.

I want other families to benefit from the same mobility as mine – and my priority is to see that occur through science.

So what needs to happen? First, we need to get away from some of the old clichés.

I mentioned distractions in my opening remarks. Let me address those now.

We have to rise above the simplistic notion – repeatedly advanced by a small but vocal minority – that pure and applied science are in conflict; the notion that they come from the same pot of money, so that any increase in applied research requires a cut to pure.

This simply isn’t the case – and yet I constantly receive messages to the contrary.

Take this tweet that came yesterday: “Gov investment in science commendable, prioritising economic impact over blue-skies research disastrous.”

For the umpteenth time, let me say again: this is not what we’re trying to do.

We need to stop portraying pure and applied as mutually exclusive or different in moral terms – where pure science is somehow a more noble or disinterested pursuit than applied.

And we must urgently focus attention on building our capacity to translate science into wealth and jobs – while maintaining our investment in science. Both pure and applied.

We need to drop another old cliché too.

I remind you that it was UK scientists who invented ultrasound. It was UK scientists who sequenced DNA. It was UK scientists who made the breakthrough on plastic electronics. It was UK scientists who got there first on monoclonal antibodies. In each case, commercialisation happened elsewhere.

So I rejoice every time the UK produces another Nobel laureate in the sciences. We do it time and again, despite our size as a country. We are number two in the world for Nobel Prize winners.

Last month, I met Venki Ramakrishnan, one of our latest winners, whose work on ribosomes has laid the foundations for synthetic biology and for treating infectious diseases currently resistant to antibiotics.

Venki’s company, though, is in California.

I know we can win as a focused knowledge economy. But we have to be more determined – more self-interested.

We have to project a positive vision: a country built on science with the talent, the drive and the focus to fulfil its potential.

So much for the message we put out about UK science. What must we do for reality to match my ambition?

Let me explore this first by way of analogy.

A few years ago, in my first spell as a defence minister, I had the privilege to fly in the back of a Typhoon: the RAF’s latest fast-combat jet, built in Lancashire, and powered by Rolls Royce engines, built in Bristol.

We were on a training mission doing fast interception over the North Sea. At the time, I had only about 14 hours’ worth of flying under my belt – but, at 40,000 feet, the pilot offered to give me full control of the plane at the end of the training mission: to, in his words, “See what she can do.”

So, of course – and as invited – I gave it full throttle – full reheat – and pulled back hard on the stick.

The punch in my back was not only the most incredible sensation physically, but the most visceral encounter I could ever have with the science of supersonic flow that preoccupied me here in Oxford.

I won’t pretend I had time to think of Holder and Schultz at supersonic speed, but they were behind it all.

Well, in 2010, we’ve got UK science to full throttle. It’s taken more than a decade. And in that same time period, we’ve made it so much easier to get an innovative business up and running.

The question is how to light the after-burners.

I offer you five principles.

First – and I continue to insist on this – we have to be ruthless about establishing where we have competitive advantage and what are the sectors with the clear growth opportunities. This is where we have to invest: in space, digital, life sciences.

Second, we must accept that there are some sectors where we’re first-class scientifically and we can identify strong growth prospects – but we have no industry. Fuel cells is an example.

Where the task involves building an industry from scratch, I think we need to look to overseas models – in particular Germany’s Fraunhofer Society. The Fraunhofer institutes include small businesses which lack the critical mass to carry out their own R&D. There is a clear role for universities like Oxford to gestate businesses for longer – even without an industry partner.

The Government has invited the entrepreneur Hermann Hauser to review UK technology centres and recommend how they should be developed in future. We have some institutions already which do this incredibly well – like the Laboratory of Molecular Biology – but we need to build a broader capability.

Third, we require a fiscal regime that does a couple of things. One is to incentivise long-term investment in areas where technological development involves great technology risk but also offers the potential for high returns – areas such as carbon capture and storage. The patent box, announced in the pre-budget report, is a step in the right direction here. From 2013, it will provide a reduced corporation tax rate on income from patents, encouraging dynamic companies to locate IP and to manufacture in this country.

The other is to encourage serial entrepreneurs to remain in the UK, reinvest their profits and spin more thread. A third of high-growth firms in this country were founded by serial entrepreneurs. In the US, it’s almost one half.

Fourth, we’ve got to fix the equity gap once and for all, which – despite the boost provided by the UKIIF – is preventing really promising businesses from fulfilling their potential. There has to be greater investment and longer-term investment.

Fifth and finally, we’ve got more work to do on the STEM pipeline. More graduates are now coming through in maths, engineering and the hard sciences. We’ve got to keep them from wandering off into other areas. And we need even more of them.

Yesterday, I was highlighting the potential of our space industry. Growing already at 5 per cent a year, it has the potential to create 100,000 new, highly-paid jobs in 20 years if the UK raises its global market share in space to 10 per cent.

But I want to bring all this back to Oxford to give a sense of what this means in practice.

It allows me to draw on another story that’s personal – one that’s fundamentally about science and impact, talent and wealth creation, about playing to our strengths.

My proudest achievement concerns the role I played in Oxford getting a dedicated children’s hospital.

I led the five-year fundraising campaign for a new building at the Radcliffe, but it took huge effort – locally, centrally – to make it happen.

Anyone who has visited knows what a fantastic place it is – and that the children who go there are getting treatment as good as anywhere in the world.

But here’s the crux. It’s no longer enough for the John Radcliffe Children’s Hospital to offer outstanding treatment and make kids better. Like the rest of the NHS, It has to be an engine for economic growth – through its relationships with Oxford University researchers and others, with this city’s biotech cluster and counterparts elsewhere.

The new treatments which will save lives on John Radcliffe’s wards have to make money for this country.

The researchers and the entrepreneurs who bring innovative drugs and medical devices to market need to be fully plugged in to the NHS: an NHS which will improve on patient care and on cost if it adopts technologies that diagnose faster and treat more effectively.

For me, this is what it’s all about. I’m optimistic and I’m energised by the opportunities for business, for job creation, for strengthening our universities, for science, for making people’s lives healthier and more fulfilling.

Everyone accepts that belt-tightening is unavoidable. It’s the price of our taking decisive action to save the banks and support the UK through the recession.

Nevertheless, the ring-fenced budget for science and research will continue to rise next year.

We recognise that the best antidote to debt is growth. Everything I’ve said this evening has been about making the case for science as the engine for jobs, for sustainable economic recovery.

And that brings me back to PowderJect, whose alumni have gone on to found more than 20 other technology businesses.

Circassia is developing a new class of T-cell vaccines designed to treat allergies and combat organ transplant rejection.

Zeneus Pharma specialises in oncology and critical care.

PowderMed and Glide Pharma are pursuing further applications for needle-free drug delivery.

Together, these firms have so far been responsible for many new, high-quality jobs, and today have a combined market capitalisation of over £800 million.

So – to my great delight – Oxford’s golden thread continues to unspool. It connects Brian Bellhouse and his predecessors to the people based in the spinouts born of PowderJect.

May they now go forth and multiply – and on a biblical scale!

Thanks for listening. I now welcome your questions and comments.

It is a great honour to be asked to give a lecture in memory of Ron Dearing. Lord Dearing was an outstanding public servant, respected across the political spectrum, who played a role in British public life for more than forty years.

His obituary in The Times observed that: “One minister after another turned to him to help to extricate them from some crisis or to study the need for longer-term reforms”. That makes him sound a bit like Sir Humphrey Appleby’s benevolent twin.

But of course what defined Lord Dearing was the fact that he was everything that the privileged and rather complacent Sir Humphrey was not. He was the product of ladders of opportunity created by our post war government and society. He left school at 16 to start work as a clerk. He ended his career a visiting fellow at the London Business School.

My last conversation with him was coming out of the Chamber in the Lords and I asked if I could bend his ear to discuss wider education and skills policy. I am the worse off for that conversation not ever having been able to take place before his untimely death.

One of Ron Dearing’s great contributions to British public life was his report on Higher Education, It has been associated ever since with the recommendation to adopt variable fees. But it was a much wider vision of the role and future of higher education.

Without really intending to do so, our Higher Ambitions strategy, which I published last November, marked the halfway point of Ron Dearing’s long vision of UK higher education. What I want to do today is to say something about Lord Dearing’s original vision, and how I believe we have stayed true to that in setting the course for the next decade.

I think it is necessary and unavoidable to ask how we can hold that course at a time of fiscal constraint, and some reduction in total public funding for higher education.

I have been criticised for talking up the critical role of higher education in our society and in our economy, while looking for savings across higher education, research and science spending over the next three years. I think that criticism requires a proper response. That’s what I’m going to offer you today.

From The Learning Society to Higher Ambitions

If you go back and read the 1997 Dearing report now, you are struck how deeply it has permeated the way we think about higher education in Britain. It had a clear message for everyone who has a stake in a strong higher education system.

For politicians, it said as diplomatically as possible that the UK had a crisis in public patronage of higher learning. Capital budgets had been slashed. Investment per student had fallen by 35% prior to our arrival in office. The UK was literally hemorrhaging academic talent.

For universities Lord Dearing had a clear message that the institutions needed to focus on distinctive missions, diversified sources of income, a new recognition of the value of teaching, a constant focus on the quality of the service to the student.

And, of course, for students and their parents there was clear notice that the user can and should be expected to pay some measure of the cost of higher education, because the benefits accrued both to society and to the individual in their improved prospects. This cost had to be set in a way that did not act as a check on university access for poorer students, but it was a legitimate part of a properly funded university system.

The decision to follow Lord Dearing’s recommendation with the introduction in 2004 of capped variable fees in England was, as you all recall, heavily criticized – even denounced by some at the time. But in fact it has provided an alternative source of income for universities – without the damaging consequences for participation that were predicted by some at the time. Young people from areas that traditionally have some of the lowest participation rates are now 30 per cent more likely to go to university than even five years ago. Real progress, if not nearly enough.

Lord Dearing was very clear that our higher education system was central to what made our society intellectually curious and critical, what made it socially just and humane. It is the place where we define and redefine our sense of ourselves and the forces that shape us.

These are all convictions that I share personally very strongly. We have to hold very tightly to a belief in the importance of higher education as a civilising force, as the ultimate and necessary bastion of knowledge and learning for their own sake.

Lord Dearing also stressed that they are where we develop the basic capabilities that underwrite our economic strength. Although he did not use the word globalization, he described a globalised economy and he knew that higher education had to be central to our response to that challenge.

This is the key reason why we made the decision to bring skills and higher education into a new department devoted to policy on Business, Innovation, Skills and Science. A decision that has been widely welcomed, and which I believe puts our university policy where it belongs, absolutely at the heart of our growth strategy in this country.

Universities are where we learn to challenge and innovate, where we develop the raw knowledge that is ultimately refined into skills and into innovation. New industry and new jobs start in the research lab and the classroom. I have often been criticized for sounding rather ‘instrumentalist’ when I talk about this economic role for higher education. But I don’t regard universities as factories for workers, but nor do I apologise for insisting on the link between higher education and a job.

And it is precisely because of those close links between higher education and quality employment, and between higher learning and our critical outlook and cultural inheritance that the question of wider access to university is so important to the whole question of social mobility in Britain, which is something on which Lord Dearing insisted rightly very strongly indeed.

A decade of transformation

Looking back we can see now that the Dearing report marked an important turning point in the recent history of higher education in England. This Government has always made reversing the neglect of higher education the centre piece of its ambitions.

Since 1997 when we can to office, total funding for higher education in England has risen by 25% in real terms. Public support for research has doubled since that time. Universities have benefited from an unprecedented commitment – both political and financial – to their transformation and strength.

On the back of that strong public investment, universities have been able to leverage a steep rise in non-state funding. They have widened their sources of income by exporting their teaching brands, opening their doors to fee-paying international students. Higher education is now a major export industry for the UK and a key comparative advantage for us – some £5.3billion in exports in 2008. Nottingham does this very well. The Open University has become a global pioneer internationally of distance education.

We strongly support institutions in branching out in this way, and I want to assure you that the new migration requirements set out by Alan Johnson yesterday will in no way jeopardize the ability of genuine students to study here as both undergraduates and postgraduates.

Universities have also been commercializing more of the knowledge they generate and building more collaborative relationships with business and industry in order to finance research as well as teaching. Over the last decade annual university earnings from collaboration with business have risen to £2.8bn.

The result of this growing diversity in university finance is that public funding for universities accounts for just half of the total income of UK universities, just half comes from the taxpayer. The £23 billion in public and private income that universities received in 2008 is now transformed into an economic footprint in our society worth almost £60 billion in jobs, exports, innovation and added value.

The right expansion

This represents a real transformation in the place of higher education in our society and economy. Around 60% of British 16 and 17 years olds now see themselves as likely to go on to university. It is hard to overstate the revolution that this represents in social attitudes so crucial in young people’s aspirations and ambitions.

But the benchmark here will of course be our success in meeting those raised expectations. We have successfully raised participation levels from every level of British society, including the most disadvantaged. But not enough, especially for our best institutions, which is why I have asked Martin Harris to report back on how we can do better in access for young people from a range of backgrounds to all our universities, and I mean all.

We have created new routes into higher education, and new ways to get a degree while working or at work. These opportunities need to and must expand, even in more constrained environment.

And this remains the fundamental challenge of higher education policy. How do we continue to expand higher education participation in a way that respects the finite resources of the state? And which reflects the fact that three quarters of the workforce of 2020 that is already out of formal education and already in the job market.
How are we going to catch up with the continuing opportunities for higher learning for those people?

The demographics of an ageing population also mean that even with an influx of international students, the student market is going to get progressively older. Students too from a wider set of backgrounds and with a different relationship to work and employment.

These people need flexible and good value choices that can include or fit around work. The three-year, campus-based, straight-after-school honours degree serves us well. It certainly served me well and is popular with students and parents. But it is not where we should focus future growth. Because the profile of students is changing, the range of options must also adapt.

That is why we have invested so heavily in building up Foundation Degrees to their current level of around 100,000. It is why we have asked HEFCE to support models for employer co-funding of courses, which have doubled this year to 10,000 and are projected to double again next year .

That is why, along side traditional three year full time degrees, I want to see more part time study, I want to see two year Foundation Degrees and three years Honours courses delivered intensively over two years expand as part of the mix. Not creating a single blueprint in which everyone is made to conform. We’ve got to create a mix to take higher education forward.

When their objectives and outcomes are clearly defined, and when they are taught well and properly resourced, there is no sense at all in which these alternatives should be seen as inferior to three year equivalents.

And they can be, in many respects, better for students, especially for students without financial resources behind them. Because they enable them to earn and learn. They reduces the amount they have to borrow to get a qualification.

And because these flexible kinds of education and training are vital for those who miss out on higher education straight after school the push for two year degrees and wider part time or work-based study should be at the core of the wider participation agenda. Those who argue against it risk painting themselves as defending an institutional inflexibility that doesn’t serve students, and doesn’t get the most out of public investment that we make in higher education.

That is why we have asked HEFCE to advise on how we best use the public funding system to offer the right incentives to those universities and colleges that are willing to set the pace on these kinds of alternatives.

And it’s important that this growing diversity of quality provision doesn’t stop with universities. One of the most important changes that we have driven in the higher skills system over the last decade is in making sure that university is only one of a range of options for advanced and higher learning. Especially if you want vocational training with a strong emphasis on technology or business skills.

Hence our ambition to ensure that 75% of Britons have a higher or advanced qualification by the time they reach the age of 30, recognising clearly that university is only one way – albeit a very important and desirable way – to achieve this benchmark.

This is why we have expanded the advanced apprenticeship system by more than 35,000 places to start the work of creating a modern class of technicians in Britain. All these apprenticeships will earn UCAS points so that they act as a ladder into university.

This point about the huge expansion of alternatives to university is important, because this year, like every year, there will be greater demand than supply for university places. But this year, like every year, many students will not achieve a university place. Although the scope of university education has massively widened, getting into university always has been and always should be a competitive process.

I acknowledge that this autumn there are likely to be more disappointed people who do not achieve the university place they aspired to. I don’t in any way seek to minimize that.

But no student who does not get into university should feel that they have exhausted their options or wasted their efforts. Our best further education colleges and apprenticeships can provide a preparation for the world of work that compares in its excellence and market value to the best of our universities.

The right response to that very real disappointment, as tempting as it might seem, cannot be to guarantee every applicant a full time university place. It makes no sense either in terms of the cost to the public purse, or the provision of quality teaching, which remains critical to the credibility of higher education.

A large scale, untargeted further expansion of full time three-year degrees without any real attention to what these additional students are studying, or how well it equips them for life at work, also makes no sense at a time when we need to be focussing more closely on strategic skills and alternatives to full time study.

That’s why we specified Science, Technology, Engineering and Maths and other economically essential disciplines for the additional 10000 places we provided last year. That’s why we have provided clear financial incentives to provide vocational or work based Foundation Degrees in place of traditional three-year campus based equivalents. That’s why the key challenge is not expansion, but the right kind of expansion. That’s what we’ve got to focus on in our debate, realistically, for all of those with an interest in HE.

Constraints

Now, I realize that to trumpet the diversity and achievements of British higher education at this point is going to invite the response: why, then are you cutting its funding?

The simple answer to that is that we are acting out of necessity. Public funding cuts are the regrettable cost to the UK of saving the banking sector and getting the country through the recession.

Universities are not bearing the brunt, they are not being singled out for financial constraint. The lead times for higher education funding cycles means that we have wanted set out at this early stage, ahead of other areas, where we expect savings to be made. Intelligent, long-term planning requires us to do this.

Much of the rest of the public sector will receive similar constraints in the course of this year or soon after. The appearance that universities are in the frontline of public spending cuts is an illusion created by that need to plan ahead.

I have always said that higher education would have to bear its share of public spending cuts, but not more. What I can say very clearly is that I believe that our higher learning system is fundamental to our capacity to grow and prosper as a nation, not least as we recover from recession and balance the public finances. We have built up this extraordinary asset in our universities and we are not going to see it undermined. Not while we are in office. We are committed to continuing to expand participation in a sustainable way. Next year the budget for science and research will actually continue to rise.

And in that respect it is important to be clear. Precisely because of the widening base of income that British universities have achieved over the last decade, a small reduction in public investment impacts less than it might have, although I recognise that reductions will impact in different ways at different institutions.

But the proposed £915 million in reductions across higher education, research and science spending over the next three years represents savings of less than 5%. In the coming year- 2010-11- this is just £315m out of a total university income of around £23billion – clearly structured to minimise the impact on teaching and research. I do think it’s necessary to see these figures in that perspective. It is a modest sum compared to university income as a whole. This is across the sector as a whole, not just university teaching and over three years.

Now, I don’t want to dress up funding mutton as policy lamb. But I do want to argue that it can focus minds in two ways.

The first is on the need to seek out alternative sources of funding. The best university systems in the world are defined by a wide range of public and private funding and British universities need the same diversity.

I recognise that sources of additional business income are not limitless and can be irregular, especially during a downturn. But even a small expansion in this work would go a long way in closing the gap created by a period of fiscal constraint.

The second is that the push to save costs can and should actually push the system in the direction of the modes of study I have just been advocating during the course of my remarks to you this morning. Part time degrees, shorter and more intensive courses all offer the potential to lower student support costs, use resources more intensively and improve productivity.

Finally, I do not believe that the net effect of public funding constraint has to be a fall in quality, even if it requires a refocusing of resources. Universities are free to find the savings the government requires where they wish, and they can, if they choose, focus funding in their strongest areas of teaching and research.

This is a process that needs to happen anyway and it must inevitably mean institutions removing resources from areas where they are weaker to concentrate them where they are achieving teaching and research excellence. The reality is that we cannot afford a system in which every institution tries to do everything. That is not a sustainable model.

And of course basic operating efficiency can absorb some of this reduction. In this respect, the years ahead for Higher Education will be no different from any other part of the public (or private) sector

The fees review

It would be odd to speak about the financial resources available to universities without mentioning student fees. I don’t intend to pre-empt or prejudge the outcome of the review currently being conducted by Lord Browne and his team. The fees debate is as much about how we guarantee access to higher education as it is about the necessary level of resources universities might want or need.

But I would say simply that we need to see this review as part of a wider debate of how we guarantee excellence in British higher learning in the future. Accepting as I think we must, that state funding can only be part of the final mix. A critical part – but only part – which is why we need to look to individuals and other resources for funding. Whether the balance comes from industrial collaboration, learning exports, donations or fees, the stronger this non-state component of funding is, the stronger the sector will be in the long-term.

Conclusion

Ron Dearing’s core conviction, which I share, was that higher learning is the foundation of a civilised society, a expression of the value of knowledge, for every sake, including its own sake. He also saw it as vital for equipping British people for their economic future as well as for their social mobility.

I do not want to minimise or ignore the impact of reduced state funding for universities and colleges. That has not been my intention today.

But I have argued that the system Lord Dearing helped map out for us, and which we have transformed over the last decade, need not be weakened or undermined by a period of constraint in public budgets so long as we recognise two things.

The first is that a greater focus on alternative income and a greater focus on institutional strengths and a greater focus on alternative modes of study can all cushion the impact of a small reduction in the total level of public support.

The second is that this direction of travel is right and necessary in itself. It is the route to a higher learning system that is constantly testing its relevance against taxpayer value, the expectations of students, the demands of research and teaching excellence and the needs of our economy and society. It will build on state support, but reach beyond state support.

It is important to be absolutely clear that our best institutions are already doing this. I know I have had plenty of conversations with Vice Chancellors across the country. What I am saying and Government is saying is what Vice Chancellors are already doing in their institutions. Some were doing it even before Ron Dearing set his pen to paper in 1997. It is those institutions that have defined the pace and potential of reform, not Government.

I welcome debate about the future of higher education and I expect cuts in university funding to be greeted with varying degrees of dismay – some of it vocal and critical. And some of it downright hyperbolic.

But does a less-than-5% reduction in public support for universities reverse a decade of rapidly rising investment in universities, or leave our best institutions on their knees? Does it seriously damage the extraordinary potential in this extraordinary sector? I don’t believe by any stretch of the imagination that it does.

Is it an opportunity to reinforce some clear-eyed thinking that is already happening about the future of British universities and colleges?

I passionately believe it has to be. I passionately believe universities cannot stand still. Universities must adapt to new times, to new sorts of courses, to new ways of delivering and teaching. This is where I will continue to lead the debate and policy. Thank you very much.

The Midlands and South Wales are to become leaders in low carbon technologies after the Government announced new funding to create  the UK’s latest Low Carbon Economic Areas (LCEAs).

The Midlands has been designated  a Low Carbon Economic Area (LCEA) for Automotive Engineering. It will receive £19m in Government funding to focus on the research and development of low carbon vehicles.

South Wales was named as leading centre in the UK for hydrogen energy with South West as a key partner and with £6.3m of funding through the University of Glamorgan.

The successful bidders for £7.2m in funding to commercialise hydrogen technologies were also announced.

Lord Mandelson visited the International Manufacturing Centre at the University of Warwick to launch the Midlands LCEA. He said:

“I want to see the Midlands help the UK to lead the global automotive industry in the transition from conventional to low carbon vehicle technologies. The LCEA will send a clear signal to the global market about the Midlands’ strengths in advanced automotive engineering.

“The move towards a low carbon economy presents huge opportunities. This new funding will help secure the Midlands’ 10,000 existing car industry jobs, by helping transform them into the green car jobs of the future.”

Speaking at Johnson Matthey in Swindon, Energy Minister Lord Hunt highlighted how the South Wales LCEA will build on the expertise in the area to develop hydrogen on a commercial basis. It would also be closely linked to end users based on the M4 corridor.

“Cleaning up our energy supply and the fuel we use for transport will give the UK the opportunity to develop the low carbon industries of the future. Fuel cells and hydrogen can play a key role in cutting CO2 emissions and reducing reliance on fossil fuels.

“Through this boost for hydrogen, innovative businesses like Johnson Matthey are well placed to benefit from the move to low carbon. I congratulate them on their funding award and thank them for this contribution to tackling climate change.”

LCEAs aim to accelerate the development of low carbon technologies by focusing on areas of the UK where there is existing expertise and infrastructure.

The Government has already announced four previous LCEAs. These are:

• South West: wave and tidal energy
• North East: ultra-low carbon vehicles
• North West and Yorkshire: civil nuclear energy
• Greater Manchester: built environment.

Press notice
Read the Midlands LCEA press notice here.

Read the South Wales LCEA press notice here.

Low carbon news hub
Stay up to date with low carbon news from across Government here.

Speech by: Lord Drayson
Venue: QEII Centre, London

CHECK AGAINST DELIVERY

Good morning.

Throughout the downturn, space has been an ongoing source of good news.

We secured a first European Space Agency facility that’s already up and running at Harwell.

We saw Tim Peake selected for ESA’s Astronaut Corps – a home-grown role model for the most rarefied of careers and the best advertisement, bar none, for doing your physics homework.

And a couple of months ago, I was delighted to announce the creation of an executive space agency to support a sector that’s one of the UK’s hidden gems.

For some time, I’ve been making the case for space as follows.

We are world leaders on the science side – judged by both research output and our participation in international missions.

We are world leaders on satellites – satellites designed and manufactured here – like Hylas, which will deliver broadband across Europe to people unable to use surface links.

We are world leaders on software design and systems integration – expertise now being put to further use at the ESA centre in Harwell.

All told, space is worth £5.6 billion a year to the UK economy and supports 68,000 highly-skilled jobs.

The industry has enjoyed real-terms annual growth of nine per cent since the turn of the century.

And the killer fact: space has bucked the recession. Demand for the technologies and services that we produce and provide remains undiminished. The Government’s commitments to ESA have guaranteed work for UK companies for at least five years. One forecast is for the global sector to grow by an average of five per cent annually until 2030.

So, as we build on the early signs of recovery – as we concentrate on the industries which can drive economic growth and create jobs – space is a strong candidate.

It can boast the track record I’ve just outlined. It has solid links already in place between industry and the research base. It’s backed by a robust supply chain.

And the jobs and the contracts are coming to the UK.

Surrey Satellites is part of the international consortium that – last December – won the first production phase for 14 Galileo satellites, worth £500 million in total. About half of that comes to the UK.

A month earlier, SES in France ordered four new satellites – also worth £500 million – from Astrium. The UK will build half of these by value.

And it’s worth noting that Astrium – which assembles half of its telecoms satellites in Stevenage and Portsmouth – increased its UK workforce by around 10 per cent in both 2008 and 2009.

Which brings me to the opportunities that Andy Green has just presented, and the challenge of scaling up this industry.

First, a word of thanks. This is an excellent report that Andy and the team have drafted. I also want to thank my ministerial colleague Ian Pearson for kick-starting the whole IGT process.

But what matters is that the report outlines a really promising future for UK space.

A sector that creates 100,000 well-paid jobs over the 20 years.

A sector that could be worth £40 billion by 2030.

A sector that takes a 10-per-cent share of the global market.

Now, I’m not going to respond to the IGT’s recommendations today. That’s something that Government has committed to do later this month.

Yet, I will give serious consideration to every one of the recommendations – to talk them through with industry leaders and ministerial colleagues, and explore what’s feasible.

One way to ensure that happens is to adopt the IGT’s final recommendation for a new Space Leadership Council: a group that facilitates discussion – initially about the actions in this report – at the highest levels between Government and industry. So I’ve decided to accept that recommendation right now.

And in the meantime, be in no doubt that the Government appreciates the growing role for space systems, services & applications in existing as well as emerging markets.

That means commercial possibilities in telecoms and transport, internet and entertainment, in defence and security. It means new prospects for tourism and healthcare.

And let’s not forget the equally significant contribution space has to make when it comes to forecasting the weather, monitoring climate change and responding to natural disasters.

Inmarsat, for example, was one of the first companies to support the relief efforts in Haiti by providing satellite communications.

So we’re serious about making sure that the UK plays its part in tackling issues of global concern as well as positioning the country to exploit the opportunities that lie ahead in areas like digital and low-carbon.
I want to see space as a leading sector of UK industry and a mainstay of our economy – built on science, employing talent, manufacturing cutting-edge technologies.

The UK is firmly in the space race – a race to the top of the global space industry over the next 20 years.

Thank you.

Introduction

You know, the last time I was in China I was told that the construction boom in Shanghai is so intense that its street maps have to be redone every six months or so.

I’m not sure if it’s true but it’s a useful image for China itself. Because China is of course redrawing everyone’s economic and political map.

A few months ago I gave a speech at the Party school in Beijing in which I said that the next generation of Chinese leaders would have to be the most internationalist in its history.

Premier Wen gave an important speech in Prague last year about what he called the “larger trend” in global politics – multilateralism.

And I think that is right and inescapable, and that China will be central to it.

There has been a lot said and written about the climate change summit in Copenhagen and what it suggested about the way in which this change is playing out.

There is a very strong impression in the US and EU that this summit marked the emergence of a new and assertive China in international politics.

In the last few weeks we have seen China challenge EU shoe tariffs at the WTO. Tensions between the US and China over Taiwan, Google and Tibet are arguably running higher than they have been for a long time.

What Copenhagen certainly reinforced is that the question of the match- or mismatch- of our expectations of China and China’s own assessment of its role and responsibilities is a vital one.

Europe and the US want and expect an engaged partner – a “deputy global sheriff” as one Financial Times columnist put it the other day.

But for reasons I understand, China is often suspicious of that expectation and insistent on its own terms for any such role.

My question this evening is how realistic assumptions currently are on both sides.

Shared goals

Europeans put a lot of time into trying to divine what China is thinking. Many Europeans assume that the deeper instincts and outlook of China are essentially like those of Europeans, under a layer of ‘Chineseness’.

Partly this is rooted very deep in a European tradition of the universality of human rights and aspirations. We are frustrated or even offended to have our interest labelled arrogance.

Broadly speaking I think we should take this approach in international politics. Not the assumption that everyone shares European values of course, but the presumption that we all want the same basic things.

Stable, growing societies. Hopeful societies. Political self-determination and civic freedom. A safe and secure world.

These things should be a constant reference point, even in more hardnosed debates about our economic or political interests or priorities.

But I do think that Europeans need to be much more aware of the way that they are perceived in China.

Especially by a younger generation of Chinese, whose whole adult experience is defined by two decades of Chinese growth and who resent any suggestion that China should or could be dictated to on economic management or anything else.

When it comes to questions of economic credibility, the catastrophic mismanagement that crippled the Western banking system has only deepened the scepticism of the superiority of the Western model in China. And we do well to be honest in recognising and understanding that.

Not least because it is difficult to assert the wider value of economic liberalization in China or anywhere else if we appear unable or unwilling to confront the mistakes in managing or regulating it ourselves.

It is important that the basic aim of open markets and economic integration remains a shared goal. And this cannot happen if it is pushed or perceived as a ‘Western’ negotiating position.

A problem of perception

When I look back over the last five years of working with Chinese leaders as a senior EU official, I am struck by the distance between how we often see China and how China sees itself.

China has reshaped our markets, and increasingly the markets of the rest of the developing world.

In just the last five years it has overtaken, first the US, and then Germany, to be the world’s largest exporter.

It will soon overtake Japan to become the world’s second largest national economy. It has the world’s largest forex reserves. It has become the world’s biggest emitter of carbon.

What Europeans too often don’t see is that behind this growth is Chinese caution and inhibition born of a governance challenge on a massive scale.

In my experience, European leaders tend to be much more confident of China’s inexorable rise than their Chinese counterparts.

Not because China’s leaders don’t have a profound belief in China – they do. But because they know the scale of the challenge that faces them only too well.

They know that the export-led Chinese growth model is not sustainable in the long term.

They know that weak domestic demand and state-led bank lending, flush now with a huge stimulus, need to give way to something more diverse and durable.

They know that a quarter of a billion people will move into China’s cities in the next 20 years – the equivalent of the entire population of the United States.

The environmental impact of change on a scale that most Europeans can barely imagine has to be managed.

Europeans see 10% annual growth, barely slowed by global recession, as a juggernaut, a tectonic shift in the global economic order.

In my experience Chinese leaders see it as the minimum required to create the jobs to meet the expectations of an urbanizing and industrialising society with a growing and impatient taste for prosperity.

They see it as the only way to ensure a stable transition from a largely agricultural society to an entirely modern one in the space of two or three generations – generations that are getting older very fast.

We see China as increasingly rich. China sees itself as still, in many respects, worryingly poor.

Deputy sheriff?

These issues of perception are critically important and easy to overlook.

They are surely what lies behind the great tension over accepting global targets for carbon emissions.

And the antagonism created by overt criticism of China’s growth model – however justified.

Europe and the US want China to be “deputy sheriff”.

China is understandably preoccupied with its own development and stability and still suspicious that the rules it is being asked to enforce were not written with its interests in mind.

And there is something in that – we should be honest about it. The machinery of global governance is still rather ‘Atlantic’ in its orientation, for understandable, if no longer defensible, historical reasons.

That’s why it is necessary to reform the IMF and the World Bank and the other international institutions to reflect China’s growing influence, along with that of the other emerging economies.

That’s why it is necessary to ensure that the climate change process and international trade rules do not have the appearance of the developed world setting out the rules for everyone else, once they have secured their spot at the top of the economic pile.

I think that both at Copenhagen and in the WTO this principle has actually been well accepted.

And I do think there is a tension in China’s position that needs to be resolved. Some of my Chinese friends have said since Copenhagen: “Europe cannot expect to dictate to China or lead in its name”.

But at the same time there is a strong sense that China is not yet ready or willing to lead in its own name.

And the reality is that effective multilateralism will be impossible without Chinese engagement. And it will become harder and harder for Western politicians to maintain an open and constructive line with China if that line is not seen to be reciprocated.

There will be no global climate change settlement without China. No Asian or global security architecture. No sustainable governance of global trade or finance without China.

For all the frictions that go with managing this system, in the long run China needs these things to work and to function and deliver results as much as anyone else. That’s the reality.

Conclusion

I don’t see how we in Europe can deny the fact that China is going to grow on its own terms. You cannot really dictate anything much to a country of 1.3 billion people.

But the dilemma for Europe (and America) is this: we cannot dictate China’s development or the solutions to its problems. It’s not our business to do so and we wouldn’t know how to if we wanted to. But we do not have the luxury of ignoring them either.

On Europe’s part I think we are still not investing enough in understanding China on China’s terms and presenting it as a coherent European partner.

China has been one of the few global players seriously to invest in a political partnership with the EU as a whole, through the European Commission and Council.

But increasingly I hear from Chinese colleagues that they focus on individual member states because the EU relationship delivers form without enough substance.

Now, I’m obviously delighted that Britain and China have a strong bilateral relationship.

But I don’t delude myself that twenty years from now that partnership will rank alongside China’s partnership with the US, or India, or Japan.

The place at this top table will be taken by a European partner or probably not at all.

I believe this is one of the key foreign policy challenges for the new EU Presidency and the new European Commission. It needs serious and sustained engagement at the highest level amongst EU member states: more than just a sequence of flying visits to Beijing.

We need to develop a clearer and consistent channel for communicating with China, especially on trade and climate change issues.

But of course we also need a China that is there to negotiate and engage.

Europe and the US need to recognize that China will not simply accept a model of global governance or multilateralism that it played no part in designing, or which it feels does not reflect the imperative of its growth and stability.

But Chinese disengagement from the evolving landscape of global governance and multilateralism is obviously not a viable option for anyone, including China.

China is too big, the challenges too great and the global village too small for China not to accept a leadership role.

We may have to show some patience, and nerves for the occasional friction. But one way or another, we all need China to succeed and we all need China to pick up a sheriff’s badge.

Roland Jackson, Chief Executive of the British Science Association, who chaired the expert group said:

“In our report we make explicit the different purposes and reasons for public engagement and set out a detailed action plan for increasing its effectiveness.

“Widely shared ownership of the action plan is essential, since so many different organisations and people are involved in public engagement, for so many different reasons.

“We are therefore seeking to develop an open process for developing and implementing our recommended actions. We will be exploring ideas for this over coming weeks and welcome suggestions and offers to participate and contribute.”

Download the Report

Science for All – Final Report and Action Plan 1MB

Supporting documents

A review of the evidence base surrounding the value of public engagement by scientists 590KB

Aspects of science in UK culture 110KB

Public engagement map 580KB

Reward and recognition of public engagement 170KB

Informing the development of a competency framework for public engagement 280KB

Learning for change in public, educational and other science organisations: embedding greater public engagement 520KB

Organisational learning and change for public engagement 580KB

In August 2009, the Competition Commission (CC) recommended that Government took the steps necessary to establish an effective body to monitor and enforce compliance with the groceries supply code of practice (GSCOP) and give it the power to levy penalties on retailers for non compliance with the GSCOP. Government published its response on 13 January accepting the need for an effective body to undertake this role and made a commitment to begin a consultation in February.

Purpose of consultation

The CC in its 2008 report into the supply of groceries in the UK that some large retailers are transferring excessive risk and unexpected costs to suppliers which can reduce innovation and investment in the grocery supply chain and lead to the detriment of consumers.

To address the concerns that it identified, the CC decided to establish a new code of practice (GSCOP). This Code, which entered into force on 4 February 2010, applies to all firms which are active in the sector and have annual retail groceries turnover of £1billion or more. The CC also believed that the code would only be effective if it was monitored by an independent body. The CC failed to get agreement from the grocery retailers to voluntarily set up a monitoring body and has asked Government to intervene. Government is now consulting on taking the recommendation forward.

Areas for consultation

Government accepts that GSCOP compliance needs independent monitoring and enforcement and a mechanism to hear anonymous complaints. However, there are differing views on whether Government creates a new body or whether this can sit within an existing structure. At the same time we need to consider the regulatory burden that this might impose in developing any policy proposals. This consultation is therefore seeking views on:

• What powers the body monitoring and enforcing compliance with the GSCOP should have, in addition to the body being able to hear anonymous complaints.
• Access to the body.
• Who the monitoring and enforcement body could be, including some possible options.
• Should a sanctions regime be introduced and how might it operate alongside any appeals mechanism.
• The funding of the body monitoring and enforcing compliance with the GSCOP.

This consultation is relevant to large grocery retailers with an annual turnover of £1billion in the UK and those businesses that supply large retailers with grocery produce either directly or through intermediaries. Trade associations and other non Government organisations may also have an interest.

Introduction

Welcome and thank you for coming here today. I appreciate you making the time to be with us this afternoon.

In a few minutes we will give you the chance to put your questions to a panel including: me, Michael Gibbons – Chairman of the new Regulatory Policy Committee – and John Dodds, BRE’s Director of Regulatory Reform. John then will introduce a workshop session.

But before that I think it would be useful to set out where Government is coming from on these issues.
Regulation is an important lever for Government. It is thanks to regulation that we have improved air quality, fewer workplace accidents, more trade across the European Union and a better quality of life in general. But regulation is never cost-free and there are often other ways we can achieve our policy aspirations that are both less burdensome for business and cheaper for Government to deliver.

Today I will argue that the huge challenges of returning the economy to sustained growth, and tackling the deficit, mean we need to become even more disciplined about the way we regulate.

I believe we should always start from the premise that alternatives to regulation are equal, if not better, ways of achieving the important outcomes we want. Regulation, in effect, should be seen as a last resort.
In an ideal world, regulation should keep a low profile. I used to run a small business myself and my attitude to regulation was that it was fine – as long as I could get on with things without too much difficulty. But the global recession and the collapse within the banking sector has turned the spotlight on regulation as never before. It has given us a sharp reminder of just how important it is to have the right regulatory framework.

And that is going to be even more important as we prepare for economic growth.

The right regulation

Some tend to see this debate in black and white. It is all about whether we have too much or too little regulation. The trillion dollar question might well have been could we have stopped the global recession with more regulation? But for me, the debate should be about both quality and quantity.

Getting regulation right is a high-wire act. No intervention is ever risk free and there may be unintended consequences. Your actions might benefit the collective good, or they could stifle growth and limit individual freedom.

To illustrate the point let us look at Government’s efforts to reduce heart disease. The leading cause of premature death in the UK. It has a devastating effect on sufferers and their families and places a significant burden on the resources of the NHS. It is influenced by factors which include poor diet, high blood pressure, obesity and high cholesterol.

Now you might say here there was an immediate need for Government intervention. But we knew that immediate regulation could damage business – by imposing substantial costs on the food industry – and still fail to achieve our objectives.

So we found a middle way. We did that by establishing a programme of voluntary targets which encouraged retailers, manufacturers and caterers to reduce the level of salt, saturated fat and added sugar in their products and therefore reduce national consumption levels.

At the same time, we used extensive consumer awareness campaigns to give individuals the information they needed to reduce their own risk. So really this approach was about encouraging more personal responsibility – empowering the industry and the customer to regulate themselves.

Government action to ensure right regulation

Now, in the current difficult economic conditions, with firms struggling to make ends meet, the need for us to get the balance right and minimise the burden to business is even more pressing.

That is why we have given business more certainty in planning for the future and published, for the first time, a detailed timetable of all the Government’s new planned regulations.

That is why over the past five years we have reduced the paperwork burden to business by one quarter – that’s over £3 billion a year and around £8million a day, every day!

And that is why we have delayed the introduction of nearly 30 new laws, postponing nearly £3.5 billion in costs to business until after April 2011.

Looking ahead, our new target to simplify regulation – cutting costs for business by a further £6.5 billion a year by 2015 – includes the full costs of compliance not just the forms and paperwork. No other country in the world has instigated such an ambitious programme.

And, to keep ahead of the game, we have set up the new external Regulatory Policy Committee (RPC), chaired by Michael. With cross-Government support, I expect the RPC to make a real difference – providing a constructive independent challenge to Government – in helping minimise the cost of regulation, maximising benefits for business and the economy.

So we have done a huge amount to minimise the burden of regulation. And our efforts should be seen in the wider European context too.

The EU has also been keen to get rid of unnecessary red tape which is why it introduced a target to reduce administration by 25 per cent by 2012. And it has also brought in the Small Business Act for Europe, with three key better regulation components. The UK has played a leading role here in helping the EU’s better regulation agenda. To drive this agenda at EU level, I am working closely with my German counterpart. And in the next month I will be publishing joint proposals for EU better regulation priorities with my Dutch and Danish colleagues.

Better regulation

So there is a great deal being done to make sure that we have the right regulation. But, as I indicated earlier on, if we are to make sure this country succeeds in the future, we have to go much further. We need to be clearer about when and why we intervene. And, when we do, we need better regulation.

How can we be clearer collectively, as Government, and with you, business, on the principles that underpin our approach to regulation?

1. Clarity of purpose

Firstly, we need a greater clarity of purpose. We have to know exactly when Government will intervene, and why. In short, we should only resort to regulation to correct a social inequality, or address a market failure. Let me illustrate the point with a couple of examples.

More than a decade ago it was still possible for UK companies to run up huge profits based on exploiting a poorly paid, poorly treated workforce. We changed that through intervention. The National Minimum Wage – which celebrated its 10th anniversary last year – showed how regulation could create a fairer workplace. And it benefited business too by ensuring that competition is based on the quality of goods and services rather than low rates of pay.

So that is how regulation can address social inequality. But it is also sometimes necessary to address a market failure. Why? Because for the economy to function effectively, and allow businesses to thrive in a genuinely competitive environment, markets need some rules.

For example, Government has a vitally important job in setting the regulatory framework to protect consumers from over-pricing by monopolies. The Enterprise Act 2002 took the politics out of competition decisions, with expert, independent competition bodies such as the OFT and other sectoral regulators taking decisions on mergers and markets.

And we know that we have to reduce our carbon footprint by 2050. Now, one of the ways we are going to achieve that challenging target is by changing the way we build our homes to make them more energy efficient. But the problem is that, with the potentially large up-front costs of doing this, the market may not, on its own, provide the solution. So we are using building regulations to drive change.

2. Understanding our impact

The second part of this principled approach to regulation is about having a greater understanding of the impact of intervention.

The recently published Growth Strategy showed how a more active industrial policy will get the UK economy back to a normal and sustained rate of growth.

When Government regulates business, it will always have an impact on growth. Entrepreneurs and businesses react to the signals that Government sends when choosing how to invest and innovate. If we decide to intervene, we must do so in a way that minimises barriers to growth and maximises the opportunities.

We are already taking action. We will shortly be publishing research looking at the effect of regulation on small businesses who wish to become more resource and energy efficient.

And we know that there can be delays to investment and costs created by consents for planning development. So the Penfold Review has issued a call for evidence and I hope many of you will feed in views. The deadline is next Wednesday. It will report in the Spring, looking for ways to stimulate growth.

3. Greater customer focus

The third principle that I think is intrinsic to better regulation is about having even greater customer focus.

UK businesses spend around £10bn per year – that’s about one per cent of GDP – completing administrative tasks related to regulation. Businesses have to keep up with the flow of new laws, updating their processes and guidance, and sometimes taking professional advice on the implications. The “policy costs” of the requirements of the regulations alone are estimated to be several times higher.

Much of this regulation is vital to a modern economy. But the only way we can guarantee whether we are intervening in the right way, and the only way we can know when it is right not to intervene, is by putting ourselves in the shoes of businesses, employees, consumers and families. And that means continually asking ourselves whether what is proposed – either here in the UK or in the EU – is proportionate, accountable, consistent, transparent and targeted.

One of the ways we are doing this is through a committee that is based at the heart of Government. Chaired by the Chancellor, the Better Regulation sub-committee of the National Economic Council scrutinises planned and proposed regulation that impacts on business. The views of business are vital – and that is why we are committed to effective consultation so that business views are at the heart of decision making.

We are also encouraging businesses to have their say, in other ways. We have issued a call for evidence and will feed the results directly into our new simplification programme. Today’s workshop session is another opportunity to gather your views.

Conclusion – alternatives to regulation

So if we regulate only when absolutely necessary and adhere to these three principles – clarity of purpose, greater understanding of our impact on the market, and greater customer focus – we will go a long way towards ensuring we have better regulation. But, in a sense, better regulation goes beyond these principles. It is about seeking out alternatives rather than opting for a new law as a first resort.

Why do I think alternatives to regulation are so important?

They frequently impose less cost and often work better. We need to avoid the trap of assuming that regulation is a fool-proof way of achieving what we want. Alternatives also reduce the need for Government machinery to enforce regulations, as well as avoid the inevitable public spending that entails.

Alternatives are key to the next phase of the evolution of the better regulation agenda. I want to see a new determination, a new energy, in Government, business and society to think more creatively about alternatives to regulation that can help improve people’s lives and support prosperity and growth.

Those alternatives might be about more intelligent, smarter provision of information to consumers, enabling them to take more responsibility for their choices and actions and avoiding the need for regulation. They could be about market-based solutions such as emissions trading to deal with the impact of climate change. Or they could relate to codes of practice, such as the Press Complaints Commission, so that industries are empowered to regulate themselves. From the EU there are good examples too. Last year the Commission announced that 10 mobile phone producers have signed a voluntary agreement to use standardized chargers for mobile phones – reducing thousands of tons of waste each year, while avoiding costly new legislation.

To drive the search for innovative alternatives to regulation forward I have set the Better Regulation Executive the challenge of coming up with options for fresh approaches that will help develop this hugely important part of the agenda. I look forward to seeing the results.

But, of course, this search for better regulation keeps coming back to you. As we look for ever smarter ways of tackling and simplifying existing legislation, we will need to work ever more closely together to get it right.

Your views are vital if we are to build an environment that is better for business, better for the customer, and best of all for our economy.
I look forward to hearing them this afternoon.

Good morning everyone.

Ever since Roman times, one of the things that has distinguished the inhabitants of these islands is the links they have forged with the most distant reaches of the known world. The millions of international students who have studied here help to ensure that this tradition continues today, and that we continue to be bound by ties of friendship and good will to people in all parts of the globe.

Today, there are over a quarter of a million international students in our universities. They’re not here for some sort of working holiday for which study is the nominal justification. Many are the most intelligent and hard-working young people their countries have to offer. And their undergraduate and postgraduate studies are often at the high end of academic difficulty, especially in the scientific and technological subjects in which our universities excel. These are not people who have come to Britain to flip burgers.

International students aren’t here for a free ride from the British taxpayer either. They or their sponsors judge that the education they receive is worth the high fees they’re charged, and their presence here contributes more than £5 billion a year to our economy.

They’re here because they’re hungry for the sort of education that will lay the foundations of success in adult life. They’re here to fulfil the promise that education holds out to all young people of all nations.

And we should all be proud to be doing our bit to help them in that.

Only a couple of weeks ago, the Prime Minister publicly underlined the importance of welcoming international students to this country and announced new measures to help build the UK’s global higher education brand and encourage still greater numbers of international students to choose Britain.

We cannot, must not, use the need to protect our borders as a pretext for Little England attitudes. There is no contradiction for any of us between being proud to be British and proud to be citizens of the world. And just as the tensions within our own society shout the need for us all to become more open to our neighbours, whatever their individual heritage, so the common global challenges that we must all face in the 21st century demand that we become more open to the rest of humankind.

So let me take this opportunity to reinforce that all students who come here legitimately to benefit from our education systems and your expertise are welcome. But let’s also be clear we are determined to stamp out visa abuse.

I want to make clear today that our wish to expand the international dimension of higher education isn’t an act born of the complacent belief that British is best – although our universities do indeed have much that’s valuable to offer. It’s born of a recognition that the students who come to this country bring much more than their money with them.

For example, they bring their knowledge and talents. Especially at postgraduate level, many improve the research going on in our universities and increase the returns that it generates for our economy.

And they also bring themselves. Their experiences of different education systems and cultures. That makes British universities richer and more diverse places. I hope that it also makes them more tolerant places.

Now some of you may wonder whether there is much more we can do to increase the number of learners from overseas who come here. And indeed, the numbers of international students coming here continue to grow.

But other countries are not standing still and our own position will be challenged increasingly. The competitive demands that British higher education faces today are the same as those faced by any other global business.

Australia, for example, is becoming an increasingly prominent economic and political power in Asia, and that is being reflected in its universities’ increased attractiveness to students from elsewhere in the region.

Those countries and others including those on our doorstep are as aware as we are that the global knowledge economy that has been talked about for so long has arrived at last. That has serious implications for how universities do business, but also for the extent to which students perceive study abroad as an investment in their own future employability.

I know that some people in our higher education sector have been quick to grasp this fact and to pioneer a whole range of activities designed to bring the world to them and themselves to the world more effectively. And I applaud their foresight. They will be well placed to reap the benefits of diversification.

Growing numbers of our universities are forming partnerships with institutions in other countries, opening up new possibilities for teaching, learning and research and new opportunities for staff and students alike. Sometimes those links involve physical mobility and sometimes, thanks to the use of distance learning technologies, they’re virtual. But both are valuable.

Some universities have already opened outposts abroad in cooperation with the governments of the countries concerned.

And crucially, many are listening more carefully than ever before to the needs and aspirations of their own international students. The students themselves, to judge by the ones I’ve met on campuses around the country, are becoming more assertive and willing to give a voice to those needs and aspirations. That’s part of a general and, in my view, healthy trend in English higher education that’s become increasingly apparent since the introduction of variable fees for home students.

We know from the National Student Survey and the international Student Barometer that international students are broadly satisfied with their experiences in the UK. But, there are some aspects where they think we can do better particularly in relation to careers and employment support. I am sure that HEIs here today are tackling this and through PMI2, government is working with the sector on this very important area.

International students and international cooperation are becoming more, not less important to the health of British higher education. I believe that’s a process that will continue in the years to come, and that it’s a process which it’s in all our interests to encourage.

Over the next decade, we must ensure that the efforts of our universities to engage with international students is less competitive and more collaborative. We also need to make sure that British students understand what they can gain from a period of study overseas, not only in terms of boosting their employment prospects, but also widening their cultural understanding.

Finally, I would like to see greater focus in the UK on the use of technology in the pedagogy of teaching. We have the opportunity to be the best in the world at this – and such world-leading status in teaching can only encourage even more international students to come and study here.

Thank you.

All governments have to respond to circumstances. The present Government, like any other, has had to change tack a few times over the past 13 years – notably in order to protect British people as far as possible from the effects of the global recession.

But along with what has had to change, there are many important things that haven’t. For example, one of the salient features of this Government’s approach to skills ever since we first came to power in 1997 has been our consistent commitment to apprenticeships.

And it shouldn’t be a surprise either that the current Prime Minister has a huge personal commitment to apprenticeships – after all, when he presented his first budget back in 1997, he had a special new budget box made by apprentices from his constituency. It was a hugely symbolic gesture, so we shouldn’t be that surprised that there are now nearly 4 times as many apprentices – 230,000 to 60,000.

So, as we draw towards the end of another successful Apprenticeships Week, I think it’s timely to take an overview of what contribution apprenticeships are making to our national economic recovery and to the Government’s longer-term skills objectives.

And my basic contention is that apprenticeships work.

The basic apprenticeship model has delivered skills effectively in this country for nearly 1,000 years. And it continues to do so today.

The principle is really straightforward. What better way can there be to learn the skills needed for a job than by actually doing the job and by learning from people who have those skills already? Combine that concept with underpinning transferable skills, technical skills, robust quality-assurance and accreditation arrangements and you have an approach to work-based learning that can really deliver for individuals and employers alike.

Obvious. But back in the 1980s and early 1990s it seemed as if apprenticeships might die out in this country – along with British manufacturing itself. When we came to power, there were barely 65,000 new apprentices a year. However, since, then, over 2,000,000 mainly young people have followed this route to a better chance in life and now nearly a quarter of a million start an apprenticeship every year.

I should add that we have also delivered record numbers of successful completions; record completion rates; and record number of Advanced Apprenticeships at level 3. Overall more than 70% are now completing their apprenticeships, compared with less than half that percentage back then. And of course we have set up the National Apprenticeships Service as a field force to promote and help create more apprenticeship opportunities.

The advantages of the apprenticeship model for employers are clear. And our economic problems of the past couple of years have shown that more clearly than ever. Those employers who heeded the call of the CBI, the trade unions and Government to keep training have reaped the benefits. Our expanded apprenticeships programme and the money we have invested have played a pivotal role in enabling them to do so.

You don’t have to take my word for it. Research has shown that more than 60 per cent of businesses in England have benefitted from employing apprentices during the recession. Half report that their apprentices have helped increase productivity and reduce recruitment costs.

Altogether, four out of five employers think apprenticeships offer value for money.

Britain is now emerging out of recession. Surveys show that employers are getting more confident and that over half are looking to take on new members of staff.

Apprentices will make their contribution to filling those vacancies – and to ensuring that they’re filled by people with the right skills to do the job.

Even during the recession, the Government carried on working to remedy Britain’s long-standing weakness in intermediate skills. The demands that renewed growth will bring are set to give renewed urgency to that task.

Our plans for this were set out only recently in Skills for Growth, which I know many of you will have read. Among other things, this set out our ambitious vision to increase dramatically the number of Advanced Apprenticeships, creating up to 35,000 new places for 19-30 year-olds over the next two years to support creating a modern technician class.

Because the level of skills needed in the workforce for Britain to remain economically competitive in the coming years is rising, Skills for Growth also underlines the need to build stronger routes from apprenticeships into higher education. Our proposals here include the development of an apprenticeship scholarship programme.

We have other ambitious plans for apprenticeships, too.

For example, the Apprenticeships, Skills, Children and Learning Act puts the apprenticeship programme on a statutory basis and will ensure that an apprenticeship place is available for all suitably qualified young people by 2013. We will focus on ensuring that apprenticeships are a mainstream option for 16-18 year-olds, alongside other education and training routes. Within the next decade, we anticipate that one in five of all young people will be taking an apprenticeship.

And my colleague at the Department for Business Innovation and Skills, Pat McFadden, announced last September that the Government would aim to support 20,000 apprenticeship places over the next 3 years through public-sector procurement, as part of our wider aim to increase apprenticeship numbers.

We are making real progress in opening up apprenticeship opportunities through this route including on the Olympics park development, Building Schools and Colleges for the Future, and the Homes and Communities Agency’s £5 billion a year house-building budget.

We’re committed to doing all this because we believe the apprenticeship programme is an effective route into work that gives people the skills that business values.

But for this to work, we need business to champion the apprenticeship programme, work with sector skills councils to develop new advanced and higher apprenticeship frameworks and offer more advanced and higher apprenticeship places.

This was underlined only last week, in the open letter that the UK Commission for Employment and Skills sent to employers. This made clear that, I quote, “employers are best placed to create opportunities for opening young minds to the world of employment, maybe even leading to sustainable jobs as the economy recovers”.

Indeed, while it is important that people are supported to gain new skills, it is equally important that these skills are used by employers if they are to drive productivity. And this is something that only business can do.

The best businesses already see investing the skills of their workforce as one of the most powerful things they can do to drive their business forward. So the contribution of training organisations and business to this work is crucial.

As the theme of today’s conference makes clear, apprenticeships drive business. But businesses also drive apprenticeships. And as the demand for skills grows it’s incumbent on all of us here to play our part in ensuring that apprenticeships continue to make their full contribution towards meeting that demand.

Thank you.

Speech by: Pat McFadden MP
Event: Deloitte Academy, London

Visit the BIS Ageing Population pages

I rise somewhat unsteadily to stand before you.

Last night in our house was the picture of modern family life. It was about nine o’clock and my partner was sitting on one side of the bed with her laptop doing her homework. And I am sitting on the other side with George’s book open and I am saying to her:

“How do you spell ageing?”

She is from Canada so we had quite a discussion about the spelling of this.

It always makes the news, anything about this. Just looking at his morning’s media, we have got a major report on research into Alzheimer running on the radio and one of the front pages today has a headline about a pill that allows you to live to be 100.

If there is a benefit from my day in bed yesterday, it’s that I had a chance during the course of the evening to really think about this a little about it.

This notion about older people somehow being banished from society is really wrong. I have always enjoyed the company of older people. I come from a big Irish family and when I think of my relatives, some died young and some lived well into their 90s.

My oldest uncle Den died age 96 just over a year a go. I used to really enjoy going to see him. Just him, me and a bottle of Irish whisky

Just hearing him talk about farm prices, about how work had changed, about how technology had changed. When you speak to someone who was born in 1912, the pace of change over a century that they have seen is just amazing to hear. If they are a good drinker and talker as my uncle Den was.

Flicking through George’s book last night, there are a number of obvious issues for any discussion like this that I just want to touch on.

The first one, and the one that my Department is probably most interested in, is the world of work, business and jobs.

The second one is products and services and I’ll come back to that.

And the third includes some of the things, that Mike touched on and that is the issue of costs and public policy.

But there is an overarching thing, which is worth thinking about during the course of today. And that is whether an ageing society is good or bad. It seems to me that a lot of the discussion is that somehow this is a bad thing.

It is a really difficult thing. Yet all of us want to live longer. And surely it is a good thing that not only we are all living longer, but that we are also healthier for longer too. Anyone in any doubt about that, just go around any graveyard and look at the life stories that are there: either about children who died young or about adults who died long before their time.

The Department’s interest in this was really focused on the New Industry, New Jobs document that we published. And that was really an attempt to look to our economic future, try to see what areas of national capability we would need and then think about some policy choices that would help us succeed in those.

And those policy choices really fall into two camps. One is a greater industrial activism to try to create the capability to succeed in those areas. And the other is skills policy to equip people to do the jobs.

And I see these two things come together in a very real way in my own constituency. One of the areas that New Industry New Jobs talked a lot about was the move to a low carbon economy and the need to manufacture a whole series of new products from electric vehicles, to wind turbines, to new nuclear power stations and to have the supply chains necessary to do this.

Looking at my own constituency, it is still, after everything that has happened, very much a manufacturing area. But there is a great sense there that the manufacturing glory days were often in the past. And I think if we get this right we can actually create a new era of manufacturing in the UK that makes the most of the shift to low carbon.

And what that would mean would be using the engineering and manufacturing know-how, in places like the Black Country, which have often felt left out of the long boom, that we saw coming to an end in 2007 and 2008.

And this actually has the capacity to make parts of the country, that did feel left out of that boom, really included in the next wave of our economic future. That will mean using skills that perhaps we haven’t paid enough attention to during that long boom.

So, the first area is about work and about how we make the best use of an older workforce. Part of that of course is around policies about employment, flexible working, part-time working, retirement and so on.

We have this issue in government, which we discuss a lot, around the default retirement age and I was talking to George about it before I began. What this is really is a right to request for older workers to work beyond the default retirement age of 65.

Business says that most requests are accepted, but not all are, and some people say you shouldn’t have a default retirement age at all. Business tends to want the option of saying no, but says it says yes to most requests.

We have said we’ll have a review of the default retirement age this year. We haven’t made up our minds on this and in the review we understand there are issues for both employees and for employers to take into account.

But whatever the public policy, I do think that there is a tremendous wealth of experience in an older workforce that we have got to make use of. When I think about the jobs of future and the greater health that people are enjoying into old age, it simply makes sense for any society that is ageing to use the skills and talents of older people.

That, of course, will mean, in a fast changing world, giving older people the chance to re-train and re-skill. Because if our working lives are going to be longer, focusing training on the years between five and maybe around about 21 and 22 when we finish university or maybe even 18 if we come straight out of school doesn’t seem to make sense when you could then have a working life of many decades beyond that.

So the first big issue, for any meeting like this, is the area of work and the labour market.

The second area is consumption. And this is one where, I think, sometimes perhaps, marketing has a difficulty. Because when we think about consumption of products and services for older people, the expectations have changed and it’s not easy.

No one really likes to think of themselves as being in the era of those small ads at the back of the newspaper for stair lifts and that thing you need to get into the shower with… and the big slipper that you put both feet in to stay warm at night.

Because expectations of retirement and your ability to do things have completely changed. And there is a lot of money there: 80% of national wealth, 40% of annual consumer spending is accounted for by people over the age of 50. Older consumers spend more on housing, on fuel and power, but less on transport. They invest in recreation and culture and are more likely to think about ways to make the most of savings.

So when we think about consumption of products like insurance, banking, savings and obviously tax policy, which I am going to come on to, all of these things have to be rethought if the lifelong trajectory of consumption and saving patterns is much longer than it used to be. So there is a whole area around what people buy, how they save and how they spend.

But it has to be re-booted and re-tuned in line with expectations. One of the things I do as any constituency MP does, is going to lots of places including traditional old folks homes as well as the more modern independent places. And they are very,very different and that’s because expectations of retirement have completely changed, about what we’d want if we’d find ourselves in circumstances where we needed extra care. We would want more independence than has been traditionally enjoyed in those places and the best retirement complexes now are completely different from what we used to think of some decades ago.

That longer life span also means that things are done at different times. For example, there are lots of older dads around and I am one myself. I am 44 and I have got a nine months old baby at home. You wouldn’t have seen so much of that probably in the past, but it does changes your self-perception. That’s why I think marketing for older people is difficult to get right, because as people stay healthier for longer, they are probably not going to want to put themselves in the traditional box of older people in terms of what they buy and the products they expect to be marketed to them.

So there is a big challenge but also a big opportunity for companies to get it right.
A lot of businesses such as Marks & Spencer, Microsoft, Barclays have joined the Age OK programme to ensure products and services in the UK economy meet the needs of an ageing population.

Some car makers, for example, have an eye on this in terms of different models. I was reading in Barbara Beck’s piece in The Economist last night about Volkswagen who have made a model called the Golf Plus which is slightly bigger, slightly roomier, with an eye on the older driver.

So that’s the second area.

The third area I think is around public policy and there is a whole number of questions here.

It is absolutely true that older people have a greater propensity to vote and all politicians of all parties will be conscious of that. What we haven’t seen so far though is a sort of a generational self-interest, if you like, in that voting. You haven’t seen that in the way that you might expect, but I think for all governments we have to think about the trajectory of tax, just as the private sector and financial services have to think about savings products and so on.

And there is the issue of social care as we do grow older. There has been a significant debate around this and how you pay for it. People don’t like the idea of having to sell their house to pay for social care in the last year or two years of their lives or perhaps longer.

So I think you will see both main parties debating this strongly in the coming months and that it will be an issue in the election. We have got to get to a better place than in recent years in terms of the State’s contract with the public about how this is paid for. It isn’t easy because the costs are high but I do think this will be a big issue in the future on which we haven’t got to the right place entirely.

So, those are really the questions that I wanted to put before you today.

The question of work and the labour market.
The question of products and services.
The question of public policy.

As I said, this is all under the backdrop of whether an ageing society is a good thing or a bad thing. I do believe that it’s got to be a good thing that we’re living longer and that we’re healthier.

So those really are my questions:

How do we retain the capabilities of the older generations?

What opportunities are there for business in meeting the demand for goods and services?

How does government get this right in terms of responding to these changes?
If we succeed in facing up to these questions, then I think we’ll get ourselves in a better policy place and we’ll also meet the demands and the desires from an older population.

I want to just say good luck for this meeting today. Thankfully I’ll be able to stay and hear George’s contribution. Having had my day off yesterday means that I have got a double busy day back at the office so I’m afraid I won’t be able to stay for the whole meeting.

Thank you very much.

Hello everyone. It’s a great pleasure to be here.

I must congratulate whoever came up with the James Bond themed title for our conference today.

So before coming here today I thought I’d better have a briefing from M – for Mandelson, obviously – and he asked me to convey his thanks to you all for the works SSCs are doing and to wish you well with the conference.

So let me start by reminding us all of the extent to which we’ve undergone economic change over the past 20 or 30 years.

I come from South Wales, and there are few places that illustrate better just how brutally industrial decline can happen and just how much effort and investment it then takes to create economic regeneration.

If we travelled back in Dr Who’s Tardis we’d see that – My father was a steelworker and my mother’s brothers and father coalminers and to many people, steel and coal once seemed virtually to define my part of the world. But the decline of those industries was swift and its economic and social consequences all too visible. By contrast, their replacement by silicon, service industries and the television and film industries in which we now lead the UK, has been more gradual and less obvious.

As the MP for where BBC Wales is headquartered, I visited the factory which was converted to the set for filming Dr Who. In a sense it had gone from being a site where car components were manufactured to one where fantasies are manufactured

Similar transformations have taken place all over this country, not least here in the West Midlands. But change hasn’t stopped. Indeed, the pace of change is growing, and will accelerate further as the world starts to emerge from recession into recovery.

Businesses will respond to the pressures of global competition by moving into new sectors, striving to increase productivity and to introduce new goods and services.

But for them to do that successfully, and to reap maximum benefit for themselves and for the country as a whole, they’ll need a workforce skilled as never before. And, as our increasingly international business environment has already shown, if they can’t find it in Britain, they’ll look elsewhere.

The issue for Government is how to manage the transition from the old to the new in ways that ensure Britain’s competitiveness but which avoid the sort of trauma to communities that we experienced in the 1980s and 1990s.

That’s going to take a lot more than simply waiting for change to happen, or trying to shore up areas of traditional skills strength. To safeguard existing jobs and create new ones, we’ll need to develop new skills, and especially transferable skills that can serve people well in more than one sector.

The Government’s approach to these challenges is described in two documents. The first, New Industry, New Jobs, was published a year ago and set out our view of the future economy and identified some key sectors for future growth.

The second, Skills for Growth, appeared late last year and discussed how the skills system can support the industries that will have major workforce and skills requirements in the years ahead.

They include, for example, the environmental and low carbon industries. Here, my Department is already working with the Department for Energy and Climate Change to develop a Low Carbon Skills Strategy This will identify particular skills challenges and opportunities across the full range of emerging technologies and markets – ranging from carbon capture and storage, through renewable energy generation, to ultra low carbon vehicles.

We have also launched an Advanced Manufacturing Strategy and strategies for emerging sectors of Plastic Electronics and Composites. I am pleased by how Sector Skills Councils, employers and providers are working to meet the skills needs of these emerging sectors.

Of particular relevance in this apprenticeship week, Skills for Growth sets out our plans to continue to expand apprenticeships:

I think all of us here know that apprenticeships have been one of this Government’s great success stories. When we came to power, there were fewer than 70,000 apprentices. But since 1997, over two million people have started an apprenticeship and we are currently investing over £1 billion a year in this tried and trusted form of training.

Currently, there are over 130,000 employers out there offering apprenticeships across 80 industry sectors.

Now we aim to build further on that. For example, advanced apprenticeship places are almost doubled, with an additional £140 million package to create 35,000 places and creating the apprenticeship scholarship fund.

We also want to provide more opportunities for younger and older people to gain skills at higher education level through learning in the workplace. Our ambition is for three-quarters of people to participate in higher education or complete an advanced apprenticeship or equivalent level technical course by the age of 30.

I don’t pretend that the task of identifying areas of future skills need and then acting to meet it is going to be easy. It will require in particular even closer collaboration between employers and skills providers.

From that perspective, it’s not surprising that Skills for Growth sets particular challenges for Sector Skills Councils (SSCs).

For example, it argues that SSCs need to achieve a better fit with the likely sector boundaries of the future. But it also makes clear that there is a very important role for SSCs in the new skills landscape, notably when it comes to putting employers in the lead in spelling out the skills needs of their sectors.

The Evaluating Economic Impact SSC report launched here today highlights the valuable contribution that SSCs are already making to increasing skill levels in their sectors. And we want to build on their good work in developing our new skills landscape.

In many ways, the implications for the skills system of the need to deliver the highly-skilled workforce we need for the future economy are very familiar. Responsiveness to employers and learners alike will continue to be key.

I recognise here the important work you are already doing to ensure that vocational qualifications really provide what employers need for business success.

So we also need employers and SSCs to keep working together within and across sectors to identify and deliver skills for emerging sectors. The work that SSCs have been doing to inform the forthcoming first national audit of strategic skills will make a key contribution here.

And at a regional level, I have made it clear to RDAs that I expect them to work closely with SSCs in developing regional skills strategies.

None of that is going to be straightforward, especially in the tighter fiscal environment within which all publicly-funded bodies are going to have to operate in the months and years ahead. And employers, too, who remain by far the major funders of adult skills this country, will also have to balance the competitiveness advantages of a highly-skilled workforce against the many other demands on their budgets.

But with all the difficulties comes a substantial reward. Economic dynamism and the prosperity it brings. New industries, new jobs and a new chance to show the rest of the world that the far-sightedness of British businesses and the talent of British workers remain second to none.

Thank you.

Major UK employers are expecting to hire thousands of apprentices in 2010 and the government is encouraging all businesses to take up the new Apprentice Grant for Employers (AGE) scheme offering a £2,500 grant for each 16 or 17-year-old apprentice taken on.

Business Minister Pat McFadden visited a Morrisons supermarket in Camden, London, to congratulate the firm for its commitment to make 5,500 Government-funded Apprenticeship places available by July 2010. Morrisons will be creating more than 20,000 Apprenticeships in the next year, and offers training in Bakery, Butchery and Retail Skills, at level 2 (equivalent to five good GCSEs).

Pat McFadden said:

“For so many businesses to be planning to recruit in 2010 is good news for the whole economy. It shows employers increasingly recognise the benefits they get from hiring apprentices. Undertaking an apprenticeship is a great way of learning a trade and gaining vocational experience.

“Skills will be crucial to a strong economic recovery and I urge employers across the country to take the chance apprentices give them to boost their competitiveness, innovation and growth this year.”

Full press release: Government celebrates apprenticeships and urges business to recruit in the recovery

Go to the Apprenticeships website

Become a fan of Apprenticeships on Facebook

View images of Pat McFadden’s visit on Flickr

At its heart will be the creation of Therapeutic Capability Clusters. These will be made up of a small number of selected academic and NHS centres of excellence, which will work with industry to harness UK capabilities in specific therapeutic areas and work on early stage clinical development and experimental medicine.

Read Life Sciences 2010: Delivering the Blueprint (PDF)
Go to the Office for Life Sciences website

Watch Lord Mandelson’s Speech here

The new Life Sciences Super Cluster will be kick-started later this year with a pilot in immunology and inflammation focussing on disease areas such as asthma and rheumatoid arthritis. The announcement caps off a year of action for UK Life Sciences. In July 2009, the OLS published the Life Sciences Blueprint (PDF) setting out an ambitious and comprehensive set of measures to transform the UK operating environment. In the six months since publication, much has been achieved:

• A Patent Box, applying a 10% rate of corporation tax to patent-related income from April 2013. This will strengthen incentives for companies to invest in innovative activity and locate in the UK. Government will consult with business on the detailed design of the Box in time for Finance Bill 2011;
• A £21.5 million RegenMed programme managed by the Technology Strategy Board (TSB), which will support our growing and strategically-important regenerative medicine industry. The TSB launched two competitions, involving over 40 companies, in 2009 and will hold further competitions in 2010;
• An Innovation Pass, which will give patients earlier access to promising licensed medicines. A consultation on this three-year initiative began in November 2009. A one-year pilot will start in April 2010 with funding of £25 million;

Secretary of State for Business, Innovation and Skills Lord Mandelson said:

“Our Life Sciences industry is exactly the type of high-tech, high-value industry, where Britain has real strengths and the potential for growth in the future.

“The Government has demonstrated that we are prepared to take real action to support Life Sciences and this is already having an impact on investment decisions, but this is just the beginning. we will maintain this momentum and continue to build a thriving environment for UK Life Science”

Read the full press release: Life Sciences Super Cluster announced as support for Life Sciences is bolstered

BIS economics and social research strategy 2009-10: an overview of economic and social research (PDF)

As part of our overall approach to economic and social research the aim of this strategy is to clarify how BIS research is in line with its policy objectives; to increase awareness of the research we are currently undertaking; and to outline the areas in which the Department will continue to have an interest.

BIS is at the heart of the Government’s response to the recession, with a clear role to play in helping businesses navigate today’s pressures and plan for recovery, growth, innovation and success in a changed economic landscape. The role that economic and social research can play in this is fundamental. By ensuring that our policies are clear, transparent, targeted and evidence-based we can create the right conditions for business success; promote innovation, enterprise and science; and give everyone the skills and opportunities they need to succeed.

(Flickr image by Robert Thomson )

The course, ‘Winning the Contract’, shows participants how to identify business opportunities to supply goods and services to the public sector, explains the public procurement process, and demonstrates how to submit tenders. It has helpful hints and tips to guide and inform businesses on the bidding process, and where to find public sector contract opportunities.

Trade, Investment and Small Business Minister Lord Davies said:

“Small and medium-sized businesses already sell their goods and services to the public sector, but many more could do so. Opening up public sector procurement to a wider range of suppliers provides new opportunities for small businesses as the UK economy heads towards growth.”

Chief Secretary to the Treasury Liam Bryne, MP said:

“Small and medium-sized businesses are the engine-room of our economy. We want them to harness the spending power of government to grow their businesses and create jobs. This new free course will help those businesses to compete effectively for government contracts, locking in the recovery and strengthening businesses throughout the country.”

Winning the Contract is nationally available online training course which all businesses, regardless of size and sector, can access free of charge. It is part of a series of joint initiatives by the Office of Government Commerce and Department for Business, Innovation and Skills aimed at making the procurement market clearer and simpler.

Businesses can register to access the ‘Winning the Contract’ course by clicking through to learndirect on the Business Link website at www.businesslink.gov.uk/procurement

Introduction

The last eighteen months have been exceptionally tough for many businesses and the people they employ. Effects are still being felt on the factory floor, in businesses and households up and down the country.

I know what you’re expecting me to say here. You’re expecting me to talk about what the government has done to get us through the recession.

But the real heroes of this recession are businesses and their workers. They are the workers who accepted shorter hours or lower pay to keep jobs alive. They are the businesses that offered this flexibility.

The government has done everything possible to back you in doing that. The £27billion in lending guarantees from the banks and the up to £1.8billion in extra lending capacity for small firms through the two stages of the Enterprise Finance Guarantee.

The VAT cut. The scrappage scheme. The tax deferrals, help lines, the £3billion in extra support for the job centre system to help people get training and get back into work. Many of these things involved close consultation with the FSB and huge thanks for that.

On that point, I want to respond quickly to a criticism that has been levelled at the government over the last couple of days about prompt payment of invoices by government. This is critical for small firm cashflow and that’s why we committed to having central government pay its bills within ten days.

In December, central government paid £21billion worth of bills in less than ten days. 19 out of 20 invoices are now paid within ten days. Although local authorities are not covered by the prompt payment code, most have taken on similar commitments and English authorities are paying invoices in 18 days on average. So I don’t want to minimise the need to keep the pressure up, but public authorities have done a good job in turning invoices around as fast as possible.

So I don’t for one second want to downplay just how tough it has been for small businesses. But the fact that the insolvency rate for firms in this recession has been half of the recession of the early nineties tells us more businesses are able to tough it out. The number of new business owners in the UK has actually risen over the last year.

And because those businesses have survived, and because people have had so much extra help getting back into work, unemployment is more than a million lower than it was in ‘85 or ‘92. And because people are working, repossessions are also running at half the rate of the recession of the 90s.

Frank about the future…and the recent past

But the future remains very uncertain. We’re looking back at the last decade and asking how the global economy stumbled, and the British economy with it.

And I think this means being frank with ourselves about what it is going to take to rebuild Britain’s growth on strong foundations. How we balance the budget without tearing into the fabric of public services, or undermining confidence or demand.

So when I say frank, I’m not talking about silly, hair-raising comparisons between the UK and Greece. Or seeing who can talk the toughest talk about slashing public expenditure from day one of a new government.

Because these things are more complicated than that.

Private demand is growing but is still very weak. The money government spends helps balance that fall. It keeps businesses in contracts and people in jobs. Cut it before private demand is strong or revived enough and you risk a double dip recession.

But we all know that the public balance sheet needs to be repaired. Of course preserving Britain’s credit rating matters. That’s why we have made the commitment in law to halving the deficit by 2014. The biggest recalibration of the public finances in a generation. And we will back this with a new drive for public sector reform and rising public sector productivity, which has fallen too far behind the private sector.

It also means targeted tax rises, which will never be popular and will never make the government friends in business. I get that. But we are committed to ensuring that the UK remains a competitive place to start and run a business. Britain’s corporate tax rate remains very competitive. As does our capital gains tax, especially for entrepreneurs.

Given this, it is surprising that the Opposition have proposed cutting investment allowances for small businesses at precisely the time when we need businesses to be investing.

But we do need to be frank that while growth is growth no one is hanging out the bunting for 0.1%.

We need to be frank about the fact that the dependence on financial services hurt us and is holding us back. About the fact that heavy consumer debt will act as a drag on recovery. Our focus was on inflation, not asset bubbles, or the debt that funded them.

And frank about the fact we need to build a new economic model for this country.

There is no question that future growth in the British economy cannot be based on excessive consumer debt or the growth of the public sector.

It cannot be built on reflating the financial services industry as fast as possible, without the right structural reform. And while I don’t agree with every part of President Obama’s plan of last week, it has the real merit of being clear that the status quo ante is not an option. The real economy will not be held hostage to the financial economy again.

Future growth has to be driven by private enterprise and private investment. And we are committed to raising business investment and backing British exporters to the hilt.

We need, and now have, two plans. A plan for deficit reduction and a plan for growth. Both are equally important and depend on one another for success. The plan for growth is what I have been setting out over the last year.

It’s about investing in the capabilities we need to create the jobs of the future and the skills and science and infrastructure we need to do them in every part of Britain. Our huge new investments in Digital infrastructure and High Speed rail will help open Britain’s regional economies even further to the world and ensure that they share even more in the fruits of future growth.

Our clear commitment to renewable and nuclear energy, our tough carbon targets and our big investments in low carbon technologies will help ensure that the UK builds real new strengths in low carbon and is a world leader in this growing sector.

Government needs to set the strategic direction and put in place the right framework of policy and necessary public investment. But equally, at the centre of our growth plan have to be enterprise and small businesses. They will create most of the new jobs. They will in many cases challenge incumbents with new green technologies. They will be the adaptable, imaginative companies that lead the way on the low carbon transition. They will always be our biggest national reserve of entrepreneurship and self-reliance.

Supporting small businesses

So they need a clear shot at the goal. The red tape burden is so important for just this reason.

We’re proud of the fact that the UK ranks 5th in the world and top in Europe in the World Bank’s Ease of Doing Business survey – which is by far the most systematic and objective survey of such competitiveness. And incidentally, we’ve committed to moving up to 4th place next year.

But there are other big issues. The banking system needs to win back small business trust. We need more competition in the market for business banking. Which is why we have launched the consultation on the expansion of banking services at the Post Office, and asked how its services might be expanded to best meet the needs of small businesses.

With the restructuring of RBS, Lloyds and Northern Rock assets representing about 10% of the UK banking market will be sold to small or new players in the market. That’s very important because competition matters. Let’s get the banks out there chasing for business again and competing to get yours.

We’ve also created two important new vehicles for channelling venture and growth capital in the Growth Fund for established growing companies and the Innovation Investment Fund for high tech firms, including startups. The aim is to invest well over a billion pounds over the next twelve to fifteen years, almost all of it in SMEs.

Small firms are also absolutely central to a healthy apprenticeship and training system. so we are delighted to be working with the FSB to place up to 10,000 graduates, who would otherwise be unemployed, as interns in small and microbusinesses. I know that it has required the shifting of a few bureaucratic boulders…

These are just some of the tens of thousands of opportunities we are opening up to help provide new opportunities for young people and to tackle youth unemployment. Including the guarantee that everyone in this country under 25 will receive training or a job after six months of unemployment. Never, never again in this country should we lose a generation to a prolonged period of worklessness. That was a mistake of previous recessions and not one we’ve repeated.

Rebuilding confidence

This is a moment for a sense of renewal and confidence in our country. That’s why talking the country down for political gain seems to me such a dangerous line of argument. In reality, we are coming out of recession with our growth potential intact.

Most of the choices Britain has made over the last ten years were the right ones. Some of them were not. In some cases we are being driven to change by the reality of globalisation. In some cases we are now asking if the market-driven prerogatives of the short term are always right for a long term world. These debates are too important not to have.

These arguments are central to Britain’s future growth. Business is central to all of them, and small business is central to business as a whole.

It is a debate in which I hope the voice of small businesses will be heard loud and clear- that’s the challenge, I am sure you will not shrink from it!

David, I am delighted to be with you – thank you for inviting me to join you at the inauguration of this celebration. And celebration is the right word – there is a great deal to celebrate in this industry’s contribution to our economy and to our society over the past twenty five years.

25 years of services – but the invention isn’t much older than that. I met a while ago in the US, Marty Cooper who invented the cellular mobile phone and made the first call on one, while working for David’s former company – and that was only in 1973. It has been astonishingly fast progress, with an enormous economic impact.

David talked to us as well about a dream, and I want us to celebrate today as well the social impact. I remember, as many of us will, the debates we used to have about how to extend the benefits of having a phone to people who couldn’t afford one. In the 1990s, many of the asylum seekers and others on very low incomes coming to my surgeries in my constituency in the East End of London were’nt able to give me a phone number. And I remember how that suddenly changed – with extraordinary speed – when pre pay mobile services were introduced a decade ago. Today almost everybody has a phone number. Cellular mobile has powerfully boosted social inclusion.

And its very striking that the commercial packages to provide broadband internet to low income families under the Government programme launched last week, have mobile as their broadband solution.

Looking outside the UK, the impact has been even more extraordinary. In India, in China, in Africa. And in Africa we see, in particular, examples not just of remarkable economic development, as places which have never had a telephone service in the past have leapfrogged to modern cellular communications, but of inspiring social development as well, as the new technology has been harnessed with imaginative corporate responsibility. And some UK players have played a very important part.

Being here in this marvellous hall is a reminder of the complementary relationship between aviation and telecommunications. Both industries can trace their origins back to the time of the French revolution, with the first balloon flights and the first telegraph systems. When, two hundred years later, in 1985, the first mobile phones appeared on the streets of Britain, it began a new chapter in an old story.

Technology develops at a remarkable speed. Government played its part in helping secure worldwide agreement on GSM, now an extraordinary global success story, and later in making sure new spectrum was available for 3G.

It was initially luxury items for a few. But it didn’t take long before the market delivered affordable, indispensible devices for all. And the competitive market in the UK, and our investment-friendly climate, have helped put British consumers at the forefront in Europe.

I am now in my third stint as the Minister looking after Government’s interest in this sector. My contribution has been a modest one by comparison with those in the museum today, but I was on the receiving end in March 2003 of the first official 3G video call, made by then Secretary of State Patricia Hewitt. And it has been a remarkable story, over the past 25 years, of innovation and enterprise, of overcoming hurdles and defeating scepticism, of understanding needs and then smartly figuring out how to best meet them.

Today, my brief is to take forward the strategy set out in the Digital Britain White Paper, published last June. The digital sector is a huge success in itself, with outstanding opportunities for future growth which we need to harness as we emerge into economic recovery. But it is also the vital enabler for economic and social activity, right across every sector. As fiscal consolidation will be imperative over the next decade, and as we look for new sources of growth and for more efficient ways to deliver services, this sector will be providing many of the answers.

Three components in the Digital Britain strategy:

First, it recognised that it is people who use technology, and ‘people becoming digital’ is vital for social mobility and inclusion. Last week’s announcement that mentioned the home access programme will provide 270,000 low income families with a free laptop and broadband, giving parents the ability – for example – to monitor online their child’s progress at school.

Our champion for digital inclusion is Martha Lane Fox, who is doing outstanding work encouraging people to get online – particularly those ten million UK citizens who have never used the Internet in their lives. We hope that, in the next five years, the vast majority of large transactional services will be handled online, often via mobile. And the result will be better value for businesses and consumers – and for taxpayers.

Second, Digital Britain recognised the need for a strong supporting structure for developing content, whether public service content or copyrighted material. The creative industries have been damaged by large scale on-line copyright infringements, though not on the whole by the mobile service. The obligations in the Digital Economy Bill currently before Parliament aim to establish a process through which people are informed about copyright, understand the damaging effect of illegal actions and change their behaviour so they can get the content they want legitimately.

We want content creators to be confident they can continue to earn a livelihood. Companies nurturing creative talent will be able to be confident of a return on their investment, so they can develop new talent to entertain and inform us all.

Third, Digital Britain was about investment in networks. We have to build on the story of liberalisation, competition and independent regulation, with a new phase of infrastructure and service development.

We want a good basic level of broadband to be available to every home, and then go further by investing an extra £1 billion in next generation broadband by 2017. Its even more important in the current economic climate, as having fast, modern broadband will help to create and expand thousands of companies and mean thousands of new jobs. It is crucial infrastructure for Britain’s development in the future.

For mobile services to contribute their full potential, they need more spectrum. Our major challenge is getting spectrum into use in a way that delivers for consumers. Each extra year without next generation mobile services is a year too long.

So our Wireless Radio Spectrum Modernisation Programme was designed to work out how to liberalise 2G GSM spectrum, and provide more spectrum through releasing 2.6 GHz and the Digital Dividend 800 MHz spectrum, which we want to bring into line with other European countries.

The Independent Spectrum Broker’s conclusion, broadly shared across industry was that a lot of progress could only be achieved through a comprehensive approach. By looking at all the spectrum bands involved; at the level of spectrum holdings by operators across those bands; and at which bands spectrum was held or not held.

We are working now to implement the recommendations. We issued a consultation in October on use of the Secretary of State’s powers to direct Ofcom. Once that consultation closes, on 5 February, officials will complete a full analysis of the responses. But the stakes here are very high. Decisions this year will shape the next twenty five. I hope we can together make the right judgments.

Let me close by thanking Cambridge Wireless for organising this event, it’s a great occasion; and thanking everyone in the industry for achieving the incredible success we are celebrating today.

We need a lot more success in the future too. Let’s work together to achieve it.

Thank you.

I am delighted to be here today to launch the “beta” of data.gov.uk. We promised this in Smarter Government; today we deliver it, with over 2,500 data sets.

Government Data

Government has a unique role in the data economy. We gather definitive reference information across a huge number of different areas. If you want to know:

• whether or not a company exists;
• whether it is solvent; or
• whether the products it is selling are safe for consumers

we hold that data. If you need to know

• whether the house you about to buy is built correctly;
• whether it is prone to flooding; or
• whether it is handy for the buses;

We have data on those too.

If you want to know how many fish there are in the English channel, I am reliably informed that we have data about that.

What’s more, as the Prime Minister identified in his Liberty speech back in October 2007 – “Public information does not belong to Government, it belongs to the public on whose behalf government is conducted”.

Data.gov.uk

So on 10 June last year, the Prime Minister told the House of Commons he wanted Government information to be accessible and useful to the widest possible group of people, and that he had asked Sir Tim Berners-Lee and Professor Nigel Shadbolt to help us drive the opening up of access to Government data.

In the seven months since then Tim and Nigel have achieved a lot:

• in Smarter Government we set out clear principles for the release of public data which apply to all departments;




• we have built a developer preview of data.gov.uk, and engaged over 2000 people in helping us improve it and telling us what data would be most valuable to them and in what format;




• we have drawn together over 2,500 data sets into a single, easy to find, place.




• we have agreed an open licence that allows the re-use of the government owned data to be freely re-used with no bureaucracy




• we have set out commitments to release high interest datasets over the next few months in weather, transport and public finances




• We have launched a consultation on how Ordnance Survey can open up some of its datasets, including those people using other government data have told us would be most useful to them. Do make sure you respond to that consultation if you are interested.

Tim and Nigel: that we have achieved so much so quickly is a testament to the leadership and drive that you have injected into the work across Government.

But I know you would also want me to say how delighted we are by the support and feedback from the development community, and how that has been valuable in steering and prioritising the work. That’s been a distinguishing feature of the UK approach. We decided to move very quickly to set up a developer preview of how data.gov.uk might work, so that we could engage with potential users quickly and effectively.

Today we are releasing a new version of data.gov.uk. It is now fully open to view, and its features reflect feedback from developers. But it also includes lots of membership functions so that developers can continue to engage with us and with each other as we take the Public Data work forward.

This is not the end of the process. Data.gov.uk is what the technical world calls a “beta” – it is usable now. Over the next few months:

• Government departments will release more and more datasets on to it;




• we will continue to develop the functions in response to feedback;




• we will make more and more data available in Linked Data form, as well as in raw form;




• we will encourage other parts of the public sector to apply the same principles of public data and to contribute data to data.gov.uk; Nigel has already had the first meeting of his Local Public Data Panel to drive this forward in local government; and




• we set out other public data actions in Smarter Government before Christmas.

And, more than that, we have established further release and reuse of Public Data as key to our plans for reforming Government, implementing the principles spelt out in Smarter Government in order to strengthen the role of citizens and civic society, recast the relationships between the citizen and the State, and streamline Government.

Success in Public Data is not just about what the Government can do. It requires Government and developers – both community developers and businesses – to work together to deliver value for society and growth to the economy. So we want to continue to hear from you:

• what further data is the priority to allow you to create new and innovative services;




• how we can further improve the data.gov.uk service; and




• about your applications and ideas, and how these are being used by people to get a clear view of how government is working on their behalf, how their public services are performing and could be improved, and to allow them to lead safer, more sustainable, more empowered lives.

Applications

That last point is vital. The challenge for all of us is to make this real. We need new businesses, generating profit. We need new social ventures, benefiting all of us, and particularly those experiencing disadvantage. We need to build on exciting early shoots like: the Postcode Paper , ITOworld and Mapumental to deliver real benefits that people can understand.

The Public Sector can offer a wide range of support to help in growing and developing ideas, for example through Business Link.

And I warmly welcome the announcement by 4iP that they will make two investments of up to £100k each in start-ups that use public data.

In 2008, the Power of Information Taskforce headed by Richard Allan – on the panel here today – ran a competition called Show Us A Better Way. With over 450 ideas submitted, the response was astonishing.

Now we have been thinking further about what more we could do to support this sector in the UK and provide a new showcase for British talent?

So, over the next few months, we will be looking to work closely with the innovative web sector in the UK to help showcase British talent in the use of public data.

Summary

Before you hear from Tim and Nigel on the detail of data.gov.uk, I want to leave you with:

• Transparency and Accountability – We want you to see how Government is working on your behalf.




• Improving Public Services – we want you to be able to tell us how we could do better.




• Economic and Social Value and Growth – we want you to develop new, innovative information-based businesses and communities.

We have come a long way in a short time, but there is a great deal more to do. We need your help to shape this in the period ahead. We need you developing, building and telling others what you have done.

Thank you for organising today and pulling this event together. Let’s work together to make the most of these very important opportunities.

Thank you.

Good morning everyone. It’s a great pleasure for me to be able to join you today.

Towards the end of last year, the Government published its plans for higher education, for skills, for tackling unemployment and for growth. And only this week we’ve published our response to the Milburn report on access to the professions.

Today, I want to talk you through some of the main points of these proposals that will affect you. And I want to leave plenty of time at the end to answer any questions you may have.

Skills are an essential part of the national recovery plan. The strategic goals we want to achieve through the skills system remain much as they ever were. But the new context of the need to support British business and British people out of recession and into recovery give our work to achieve them a new urgency.

Indeed, work to maximise the sector’s contribution to recovery and renewed growth is already under way.

To take just one major example, the first of the UK Commission for Employment and Skills Audits of future skills needs is due shortly.

I know that the phrase “the right skills in the right place at the right time” has become a bit of a mantra, but that doesn’t make it any the less necessary. And this analysis should be a real help in delivering it.

My Department’s Going for Growth strategy, which was published early this year, set out a long-term cross-government approach to supporting and encouraging sustainable economic growth.

Not surprisingly, the strategy covers several areas of direct relevance to this conference. For example, the need to foster knowledge creation and its application. The need to help people develop the skills and capabilities to find work or to access higher education. And the need to supply the right skills to build the businesses and industries of the future.

In that sense, it complements the key themes of our Skills for Growth strategy, published last November. This, too, emphasised the benefits of giving people greater control over their own learning by means of skills accounts and better information about courses and the bodies that deliver them.

Those same themes of simplification and individual empowerment also feature in the Department for Work and Pensions White Paper, Building Britain’s Recovery, and indeed, in the Government’s response to Alan Milburn’s report.

You may have picked up already that the measures listed in our response include the introduction of the new Specification of Apprenticeship Standards for England and an Apprenticeship Scholarship Fund from the autumn. These will help to build the new technician class we outlined in Skills for Growth.

It’s no secret that all of these things I’ve been talking about, and more, will need to be delivered in parallel with achieving the financial efficiencies that we are asking of further education, along with the rest of the public sector.

We must not ask you to do the impossible. But we believe that we can free the money necessary to achieve the sorts of objectives I’ve been talking about by reducing funding for lower-priority programmes, increasing the financial contribution made by individuals and employers and finding more efficient ways of delivering learning.

Change will come to the further education sector whichever Party is in power and it’s certain to come without large-scale extra funding attached. At the same time, the demands on you, the most important of which do not emanate from Whitehall, can only intensify.

Because although governments ask you to respond to what the country as a whole expects of its further education system, the real impetus towards greater responsiveness comes from much closer to home.

From the demand from young people for a good start in life.

From the demand from over 2.5 million unemployed people for a route into work or back into work.

From the demand from workers for the skills they need to get on.

From the demand from businesses for the skilled workers they need to thrive.

And from the demand from communities for their further education providers to provide the sort of local hub for learning and aspiration that only they can.

If you’re going to respond effectively to all of those demands, you’ll have to be open to innovative approaches where they can deliver greater efficiency or economies of scale.

You’ll also need a clear understanding of the changing environment in which you work and what support you’re going to need to deliver. In that regard, you will need to continue to work with us to ensure that Minimum Levels of Performance, the Framework for Excellence and the traffic light system offer what we all need.

Performance data will help not just funding bodies, but also learners and employers to identify outstanding colleges and training organisations which will have greater autonomy to respond to our priorities. The new Skills Funding Agency will consult on how they are identified and what flexibilities will be available to them.

More streamlined arrangements for determining regional skills needs will also help you respond to your local communities. Regional Development Agencies (RDAs) will deliver regional skills strategies that support national priorities, skills advocacy and the Business Link brokerage service.

The embryonic Skills Funding Agency is already working with RDAs and Sector Skills Councils to ensure that our investment supports their priorities. Details will be included in the Agency’s forthcoming delivery plan. The plan will also set out the next steps for taking forward the policies announced in the Skills Investment Strategy.

I do want to say a little more about the new Agency, because I know that the transition from the Learning and Skills Council to the new body has been a subject of concern for many of you. And I’m pleased to be able to reassure you that transition is going well. The new Chief Executive, Geoff Russell, and his senior team are now in place and staff are moving into their new roles.

Equally encouragingly, all colleges and training organisations know by now who their Skills Funding Agency account manager will be. The Single Account Management system will mean one contact and one contract for all publicly-funded providers. And I know that’s a simplification that you welcome in principle just as much as I do.

I hope that what I’ve said so far will help to inform your discussions during the rest of the day. As ever, the forward agenda for further education is both lengthy and challenging. But the more constructive discussions we have about how to make it all happen, the more likely it is to become reality.

And it’s in that spirit that I’ll now try to answer any questions you may have.

Thank you.

Stephen Timms said: “As Minister for Digital Britain, it’s my job to secure future success in the creative industries. Making sure we have world-class infrastructure, a sound intellectual property regime and the right skills in the workforce. Government activism is a practical necessity.”

Read the full speech on the Digital Britain website.

The Government’s ambitious response to Unleashing Aspiration, the final report from the Panel on Fair Access to the Professions, agrees to implement the vast majority of the panel’s 88 recommendations.

View the responses and leave your comments

Download the report (PDF)

The Panel, led by the Rt Hon Alan Milburn MP, challenged Government to do more to ensure that people with ability, creativity and talent can succeed in the professions, regardless of their social or economic background. Achieving this aspiration calls for reform in schools, in colleges, in universities and in the professions themselves.

The measures announced today look to harness activity across Government and the professional associations. They include:

• The creation of an online National Internship Service, building on success of the ‘Graduate Talent Pool’. This free, nationwide service will help undergraduates and graduates access opportunities and information to develop their employability skills and establish quality standards to benefit both interns and employers. Bursary funding will be available for students from low income backgrounds lacking the means to support themselves. This follows the commitment in the Pre-Budget Report to deliver £8m funding for up to 10,000 new undergraduate internships.
• A guarantee, building on the New Opportunities White Paper published last year, for around 130,000 of the brightest young people from low-income backgrounds to benefit from structured assistance at secondary school. Beginning in 2012, this package should include experience of Higher Education, mentoring and access to high quality information, advice and guidance.
• A new Social Mobility Commission to provide expert evidence on trends and policy on social mobility, and produce an annual report on progress made towards a fairer, more socially mobile society.
• The launch of an expanded Gateways to the Professions Collaborative Forum with an increased remit covering a wider range of professions. Chaired by David Lammy, the Minister for Higher Education and involving senior representatives from 60 key professions. The Forum will advise on and implement many of the panel’s recommendations and will ask professional organisations to report on and share work done to improve access in each of their fields.

Today’s response builds on measures already announced in key strategy documents published last autumn, including:

• Higher Ambitions – measures to ensure wider and fairer access to Higher Education, a high-quality experience for all students and more flexible courses to reflect the reality of modern working lives.
• Skills for Growth – measures to give people greater choice in their training including the national roll out of Skills Accounts and offer apprentices alternative routes into higher education and the professions.
• Department for Children, Schools and Families’s Quality, Choice and Aspiration: A strategy for young people’s information, advice and guidance – measures to modernise careers education to make it accessible for today’s generation of young people and ensure they have equal access to the careers of their choice.

Full press release: Government acts to break through glass ceiling on social mobility

In theory, this is a transformative phase we are now entering for Europe. We have a new role for a President and a new High Representative. We have a big chance to redefine European influence globally in the face of major challenges like climate change.

In practice, the financial crisis that we have experienced and the ensuing recession pulls in the opposite direction, as do a lot of our national politics – these forces risk making us more politically insular. And we have to resist that because it is going to make recovery and building on that recovery a darn sight harder to achieve.

Europe’s big external agenda rests to a large extent on our internal economic strategy. In my view, protracted institutional reform has diverted some attention from economic modernisation and reform. Since 2000 and in recent years we have rather lost our way in pursuing that agenda. During the intervening years, the need for reform and economic modernisation has become so much more urgent.

It is critical to us in the UK that we do not take our eye off this ball any longer.

Britain’s economic recovery depends on Europe’s economic recovery, whether it is European demand which represents our biggest market, or the European response to the financial crisis. And growth plans in this country are inextricably linked to similar plans in Europe.

Crisis measures now giving way to regulatory responses. This is a critical phase for business, and especially for financial services. The key here is to distinguish between the need for new proportionate regulation in financial markets on one hand and the wider regulatory agenda, where the somewhat more disciplined approach of the EU to better regulation needs to be maintained, but strengthened in the life of this Commission. Because business burdens, especially on job creation, will be critical to the rate of recovery in Europe.

Some, as we have seen, in the European Parliament will interpret the banking crisis as a clarion call for more business regulation in general. We need to push back against this intelligently. We have to lead that debate and bring it to a set of reasonable conclusions.

Of course, the City is sensitive about its regulatory burden and I understand the caution being expressed. We do not need regulatory grandstanding – we need regulatory coherence, joined up between jurisdictions. We do not need multiple, cumulative layers of regulation that amount to overkill.

Our own FSA has a duty to take a step back and introduce a sense of proportion. This is not to deny there is a need for more financial oversight and the regulation of risk. There is no point in defining the industry’s competitiveness by the lightness of its regulatory burden if that lack of governance means the system blows up and needs taxpayer rescue once a decade.

There is a compelling case for moving the basic level of the design of financial markets regulation – although not its implementation or supervision – to the level of the Single Market.

We in the government think the balance struck on de Larosiere, where the EU collectively defines, and Member States implement and supervise, is the right one. This makes prudential sense – this is the level at which markets and banking operate. And in my view Michel Barnier gets this and that forward looking common sense will guide his actions.

A coherent EU position also gives us much greater weight in shaping a new global regime through the G20 process. It also makes commercial sense. Don’t see how the UK can detach itself from a single European regulatory regime. If it wants to be the main capital and financial markets centre for the single market and if we want to be the main route or centre for investment into the single market, it doesn’t make sense to detach ourselves from a single coherent European system.

However, I agree that some of the initial attempts at this were badly flawed. Parts of the Alternative Invesment Fund Managers Directive read more like a long standing grudge against the hedge fund industry than a serious attempt to address systemic risk.

Most other member states understand on principle the fact that the UK has more skin in this game than the rest of the EU put together, and we expect that to be respected. We will need to work hard with the European Parliament to get a constructive outcome.

On the wider regulatory agenda, we in Britain have got to avoid two mistakes. Don’t play into the hands of eurosceptics by equating Brussels solely with regulation. All markets are regulated. At base what we should work for is a single regulatory system in Europe, rather than 27 separate ones.

What matters is keeping the burden right, especially for small firms. Business needs to engage firmly in Brussels alongside government to shape the regulatory debate.

We have to provide leadership and engage with the EU on growth plans. We set out as a government some ideas for this last year, which I believe have coloured European Commission thinking.

In 2005 during the UK Presidency, when Britain called the Hampton Court summit there were no competing views. That agenda became the agenda for the European Commission – people do listen to us when we are thinking European, rather than bashing Europe.

Liberalisation of EU services market. 2010 marks deadline for implementation of liberalisation of key service trade. We want the Commission to focus on a clear plan to review implementation. And to focus on remaining obstacles in key areas like professional and business services like accountancy and legal services.

A genuine EU digital transition plan. We think the EU should commit to clear targets on universal broadband access across the whole EU. We need to make sure that the incentives are right to get digital infrastructure into every part of the EU.

When the EU budget is reviewed during the course of this year, we have to bring our views on the redistribution of that budget, so that more is allocated to low carbon, to research, to innovation.

New rules on growth capital – as you know the UK has created the IIF and the Growth Fund to address this problem. We should think creatively about making better use of the European Investment Fund – which is a fund of funds – to significantly reduce the venture capital gap with US at the EU level.

While we have argued very strongly that Commission should end the temporary State Aid flexibilities in 2010, we want to see revised risk capital guidelines for public financing of high tech and innovative companies. We want a little flexibility to enable smart public sector intervention.

The next five years are going to be critically important. We need business and government working side by side in Brussels, not just on a defensive regulatory agenda, but to shape a whole new positive agenda for EU governance and growth. The next five years are important also in the building of our external relations.

I hope very much that the European Commission, without any delay, is ready to recover its leadership role – now that its appointment has been safely banked – and veer a little more to the creative and adventurous side.

This is the Commission’s job:

• to stand up for the long term
• to represent what is wise rather than populist
• and to give a strong lead where, inevitably, more short-term, electorally conscious national Governments may fear to lead.

“I’m very grateful to Fiona and her group for producing this Action Plan. The quality of journalism by the UK’s specialist press is excellent, so it’s great these actions are targeted at protecting and building on it.

“The plan contains a number of initiatives to raise the profile of science journalism and programming and improve their operating environment.

“I’m particularly pleased by how many organisations, from the BBC to the Wellcome Trust and RCUK, have committed to actions. Government will now consider the proposed actions and recommendations.”

Read more on the Science and the Media Expert Group.

Full press release: BIS Responds to Science and the Media Expert Group Report

Guidance made available from today on BusinessLink informs employers of their obligations 12 weeks before the right to request time to train begins on 6 April 2010.

Guidance is also being published today on the DirectGov website to inform employees about how they make a request under this new right.

Skills Minister Kevin Brennan, said:

“Now, more than ever, we need learning and training opportunities in place that empower people to gain the skills and training they need to get on.

“Many businesses and organisations are really good at training their staff and already recognise the benefits of having a highly skilled and motivated workforce. While two-thirds of businesses do train their staff, we need to encourage employers and employees who do not to speak about training opportunities.”

The right to request time to train was included in the Apprenticeships, Skills, Children and Learning Act, which received Royal Assent in November 2009.

The introduction of the right will be phased and will be made available to employees in organisations with 250 or more employees from April 2010 before being extended to all employees from April 2011. This will give smaller organisations and businesses more time to prepare for the introduction of the new right.

Speech by: Lord Drayson
Venue: European Cleaner Racing Conference, Birmingham NEC

CHECK AGAINST DELIVERY

Good morning, everyone.

The first couple of times I attended this event, it was as a driver and a team owner.

But I’ve been the minister for science and innovation for just over a year now – and I’m primarily wearing that crash helmet today, rather than my Drayson Racing one, because I want to talk about how UK motorsport can become an even greater national asset as we move to a low-carbon economy, and why that’s an opportunity for you.

Now, I understand the basic motivation of people involved in motorsport. We want to win. Period. Securing pole position and then standing on the top step of the podium, I know, the be all and end all.

And that’s what we’ve been doing in this country. The UK is – hands down – the world’s best in this industry and in this sport, and I’m not only thinking of Button and Brawn. 2009 saw other triumphs for the likes of Dario Franchitti and Kris Meeke.

Away from the rostrum, we have a motorsport sector which – according to the Advanced Institute of Management – involves around 4,500 firms with an annual turnover of £6 billion; employs some 38,500 people on a full- and part-time basis, including 25,000 engineers; and contributes £3.6 billion to the UK economy through exports.

The Government recognises the value of this industry – not only to the country’s bottom line, but to the UK brand. I’m delighted that the British Grand Prix is now secure. And with two British world champions both driving for McLaren, the F1 spotlight will continue to be directed on UK motorsport – on the talent of our drivers, on the quality of our science, engineering and technology.

That’s all to the good, but I’m also very aware of the challenges facing this industry – both from the perspective of the paddock and from the viewpoint of someone pre-occupied with how we go about rebalancing the UK economy after the credit crunch.

The recession has hit motorsport, just as it has damaged other sectors. The decline in income from sponsorship, especially outside of Formula One, is just one consequence of the global downturn.

And I believe that’s it has also proved damaging to the low-carbon agenda in motorsport.

My sense is that we’re at risk of losing momentum in green racing: in promoting technologies with clear potential for wider application and in convincing a sceptical public – sceptical about green cars and even the very relevance of motorsport in a world facing the challenge of climate change.

Failure to meet that challenge is really not an option for us.

Motorsport has a significant role to play in preparing for and benefiting from that transition to a low-carbon economy. In fact, it’s custom-made to do so, and I don’t believe it will detract from motorsport’s core purpose: winning races.

You need fresh sources of sponsorship, but you also need sustainable business models where sponsorship isn’t the only income stream. Going green and pursuing technology transfer opportunities isn’t the sole answer, but it’s one of them and it’s going to be more important in future.

The automotive industry, meanwhile, needs help pushing ahead with green tech, and the Government needs help in persuading people to change what they drive – because the presenters of Top Gear are having a field day making fun of green cars, and any thumbs-down from the Stig leaves a stigma that’s hard to dislodge. When a green car is rated as “sub zero” on “cool wall”, then we know we’re getting somewhere.

That’s a crude summary of where we are, and it raises the question of what we do next. I want to concentrate now on how we can work together more effectively, but first, I want to issue a challenge to the administrative – as opposed to the team – side of the sport.

Competition is what drives us on. When rules change, teams are quick to adapt technology.

I want to see governing bodies championing radically greener racing by redrafting their rulebooks. It’s the best catalyst for change and a sure means of proving that motorsport is in touch with the abiding issue of the 21st century – and staying ahead, but in step, with what’s happening in the car and other industries.

So what are the barriers? Competition itself certainly won’t suffer, because the rules – the parameters of racing – change all the time. Indeed, what better way is there to secure motorsport’s future, attracting a raft of new potential sponsors?

As I’ve already said, going green would also open up far greater opportunities for developing technology partnerships with the automotive sector – and that’s the other thrust of my speech today.

Where motor racing leads, mainstream manufacturers often follow. We can all reel off examples of motorsport technologies finding their way into aerospace and marine applications, medical and military – to say nothing of cars on our roads. But there’s more you can do to become a greater asset to this country’s industrial base.

My honest view – and this isn’t about allocating blame – is that motorsport and the mainstream car industry aren’t doing enough together – especially in terms of low carbon.

At the same time, UK motorsport and Government aren’t talking to each other enough.

Talking works.

Take the case of mainstream automotive.

Through the Innovation and Growth Team, the Government sat down with the automotive industry to figure out the major drivers of change over the next 25 years. CEOs discussed business opportunities against the backdrop of carbon legislation and energy security. Industry scientists and engineers defined the absolute limits of existing technologies, and the potential of new zero-carbon cars in 40 years.

The outcome was a roadmap for the future, and a significant new body: the Auto Council, where Government and automotive will work together to make this happen.

The process also gave birth, indirectly, to the Office for Low Emission Vehicles (or OLEV), which brings together senior Whitehall figures from business, transport, energy, local government and finance to work with automotive, power generators and infrastructure companies; with experts on pricing and systems design; with academics and creative thinkers.

Things are really moving. OLEV is coordinating over £400 million in direct government support for, amongst other things, the world’s largest EV and plug-in hybrid car demonstrator competition.

Let’s build on this, with more input from motorsport: a greater role on the technology side, a greater role in addressing people’s attitudes to low-carbon.

I’d like to see two things happen – and, to be blunt, neither involves extra money from government. The purpose is to work together and seek out market opportunities.

First, I’m aware that the Automotive Council secretariat is already in dialogue with the MIA, but we need more motorsport companies to engage directly with the Council and its working groups.

Second, we need to identify ways to boost the role of motorsport within the low carbon agenda. I know that my Cabinet colleagues, Andrew Adonis and Pat McFadden, who oversee the work of OLEV, are keen to hear from industry representatives how motorsport can support the move to high-efficiency, low-carbon transport.

I’d like to get your take on this, but I’ve seen it working in the US, where the American Le Mans Series is closely, and productively, involved with the Environmental Protection Agency and the Department of Energy.

One last thing, I’m delighted to be launching today the new CRP electric race bike, designed for exclusive use in the TTXGP race series.

As many of you know, Azhar Hussain, the man behind TTXGP, had the vision to run the world’s very first zero-emission motorsport event in the margins of the Isle of Man TT last June.

Azhar got a fair bit of stick for doing so, but he received support from UK Trade & Investment. The event was a great success, and it has grown into an international series, with races this year in Europe and North America. It demonstrates what I said earlier: when you change the rules of the competition, new technology follows close behind.

Azhar is now behind the CRP, which boasts a good deal of British technology and sets an important precedent. I challenge other firms to develop bikes like this one – which allow enthusiasts to race against constructors. It’s a fantastic development. Great PR.

And I suppose that’s what I want to stress above all. The UK is out in front on low-carbon: the first to set legally binding targets for emissions; absolutely serious about renewables; way ahead of the limited consensus in Copenhagen. Our future industries, jobs and economic growth depend on the UK being a leading developer and manufacturer of low-carbon goods and services.

OLEV is all about affecting cultural change in line with these commitments. And yet we’re struggling to bring domestic opinion along with us.

Motorsport can lend the necessary street cred to going green. You represent the best possible response to Top Gear ridicule – to move the low-carbon story away from lentils, sandals and self-sacrifice.

It can be much more exciting than that.

Thanks for listening.

I want to welcome you all on behalf of the British Government and on behalf of DCSF and BIS who have responsibility for education policy here in England. Thanks also to BECTA for putting together this great World Forum event.

We have many international visitors here today from every part of the world. That’s a testimony to the importance we all attach to the linked challenges of digital education, digital innovation and digital inclusion.

The digital challenge

The digital revolution represents a huge opportunity, and a huge challenge. The challenge is of course one of intense competition with an implacable and impersonal economic force. I am of course talking about trying to keep up with our tech-savvy teenagers…

We all have a pretty clear sense of how digital technology is changing the way we live and work. And the huge benefits that it brings in terms of flexibility, efficiency and effectiveness. There have been perhaps half a dozen genuine step-change technologies in the last century, and this is one of them.

I think it’s important, we be clear-eyed about this as governments. As digital literacy becomes one of the core competencies of modern life, it also has the potential to become a barrier to a full working life for those who do not achieve it. In that sense it is no different from basic literacy or numeracy. We have to get all our people into the digital loop.

Digital technology will be integral to most of the manufacturing and services jobs of the future. The digital economy in the UK already accounts for about 8% of GDP. So it’s a challenge for business as well as government.

There is an infrastructure issue. We need faster, more capable networks that reach into every part of our society. Some of this digital infrastructure the market is already providing, but some of it will depend on public investment.

It’s an education problem: people need the skills to interface with digital technology and really exploit its potential. This is a challenge that runs through the whole education system from primary school to higher education.

In Britain we tackled all of these things in our Digital Britain strategy last year. This set out very big plans to get broadband into pretty much every home and business in Britain within a couple of years, and to get coverage of next generation broadband to more than 90%.

It also launched the digital inclusion agenda the Prime Minister has just outlined. The Home Access scheme we are launching today is an important part of that.

Today we are also launching a pilot Online Basics service to help people in England develop their computer skills. It’s a free online service that you can access anywhere. The explicit aim in the next three years is to reach and empower one million of the fifteen million adults in Britain who don’t use the internet.

Higher and Further education

I want to finish with a few points about the role of Higher and Further Education in this wider challenge. Britain has a very strong Higher and Further education sector. Over the last decade, real terms funding for research in Britain has doubled. Now our challenge is developing that incredible resource into one equipped for a digital knowledge economy.

In my view one of the big challenges for Higher and Further Education for the next decade is pioneering new forms of learning, especially ones that fit around work, or distance.

Most – probably three quarters – of our workforce of 2020 are already out of the formal education system. They need an alternative to three-year-full-time-straight-out-of-school-campus-based degrees.

And we’ve set up an independent online learning taskforce to give strategic leadership in building on our current high quality on-line and distance higher education.

This is not just about learning how to use ICT better. It is about using ICT to make the whole process of learning more efficient. We estimate that efficiencies created by IT have saved more than £1billion in teachers’ time in England since 2005.

BECTA has published a new prospectus today for professional development for FE teachers and trainers to help them build their own digital teaching skills. We are also expanding the Technology Exemplar network which provides them with a resource for sharing best practice.

I think that this is a huge area for international collaboration. Britain has been a big pioneer in online learning and we are committed to building a national innovation system that is very plugged into international partnership and international education.

Britain has long been a very attractive place for international students to study, or learn English. We have some of the strongest learning brands in the world in our leading universities.

Their research strengths have also been central to attracting the very high levels of inward investment that the UK has drawn in over the last ten years. As the PM has just said, this is something we’re very proud of indeed and which we intend to build on.

We also strongly encourage British students to internationalise their education by studying abroad. Both in the rest of the EU, but also through the links we are increasingly building with universities in many of the countries represented here today. That is one particular export – our students, to your universities – that I’m committed to boosting.

Conclusion

The key here is seeing this digital innovation agenda as an agenda where the benefits of international collaboration are not zero-sum. The big prizes of the digital revolution are improved education, rising productivity, greater innovation.

It’s not overly starry-eyed to say that these are races that in the long run we all win. We often talk about the lump of labour fallacy that wrongly says that there are only a limited number of jobs to go round in the world.

We need to avoid the ‘lump of digital innovation’ fallacy. That’s what this conference is about. LATWF is an ideal platform to discuss how we can work together to strengthen academic and also business ties. I’m sure you’ll find the event useful and that your discussions will lead to a strengthening of the links which are mutually beneficial for all of us. I wish you a very productive couple of days.

This consultation is relevant to all stakeholders with an interest in Next Generation Access (NGA), including communications providers, network owners and consumers.

A new strategy to boost strong, sustainable, long-term economic growth in the UK has been announced today by Lord Mandelson.

The strategy, Going for Growth, outlines seven key areas where the Government will build on the foundations of New Industry New Jobs. They include:

• Supporting enterprise and entrepreneurial activity
• Fostering knowledge creation and its innovative application
• Helping people develop the skills and capabilities to reach their personal and economic potential
• Investing in the infrastructure to support a low carbon modern economy
• Ensuring open and competitive markets allowing business to grow
• Building on our industrial strengths in sectors where we have expertise and investing to foster new comparative advantage
• Understanding and employing the right strategic role for government in markets enabling us to capitalise on new opportunities.

Visit the Going for Growth page here to read the strategy and view related announcements, video and links.

News Releases:
Government sets out strategy to get Britain Going for Growth
£70m boost for UK Manufacturing

Lord Mandelson’s speech launching the strategy:

The investment will upgrade the UK’s digital infrastructure to bring super-fast broadband to 90% of the country, essential if the UK is to remain globally competitive as estimates suggest that private investment will only reach up to 70% of the population by 2017.

The Next Generation Fund will provide the UK with a world class communications network to bolster innovation and services in digital content.

The Government is now consulting on the most effective way to deploy the investment – read the consultation document.

The Treasury is also consulting on how the fund will be raised through a new Landline Duty.

Next Generation Fund objectives:

• To support Digital Britain’s objective to roll out next generation networks to at least 90% of the UK by 2017;
• To support economic growth by incentivising market investment in communications infrastructure to meet the needs of businesses and households;
• To maximise links with the Government’s Universal Service Commitment – a parallel broadband investment programme to ensure every community has access to 2Mbps broadband connection by 2012.

Lord Mandelson said:

“This investment is about bridging the gap between the current and future broadband networks. We cannot underestimate the opportunities this will bring for homes and businesses which is why we are taking action to make sure everyone benefits.

“By upgrading our networks we will put the UK at the fore of rapidly developing technologies which will bring jobs, boost business potential and grow our digital economy.”

Full press release – Next generation fund launched: UK to benefit from £1 billion investment in super-fast broadband

Speech by: Lord Mandelson
Work Foundation, London

This week marks the start of a new decade in which we know the economy will come under fiercer competitive challenge than ever before, as the world tilts further east towards China and the other emerging economies.

But we do not have to resign ourselves to relative economic decline. On the contrary.

In Britain we still have one of the best environments in the world for starting and growing a new business.

We are emerging from the financial crisis and the downturn with our key industrial strengths intact, unlike our experience in previous recessions.

The competitive value of the pound is helping exports and increasing the sourcing of manufactured goods in the UK. And the Government will maintain its support for the economy through existing public spending and investment until the recovery is firmly locked in.

But that’s not the end of the story. The recovery is only the beginning of how we are going to pay our way in the global economy and create the jobs of the future.

As the Government will explain in the strategy for economic growth we are publishing tomorrow, how we create future jobs won’t be the same as in the past. We will turn new technologies into jobs, like those in digital and biotechnologies. We will commercialise the output of our hugely successful science and research base. We will turn low carbon into business and employment opportunities.

None of this is going to happen with government simply standing on the sidelines. Other governments are actively investing in their industrial strength. We have to do the same.

And it won’t happen if we take the wrong turn in sorting out the national finances in the coming months.

Two plans

So a credible Deficit Reduction Plan has to be accompanied by an equally credible Growth Plan. Deficit reduction is a three-sided triangle: spending reductions, tax increases and economic growth, and, of the three, growth is the best antidote to debt both in short term and the long term.

December’s PBR has a clear objective – to halve the deficit by 2013-14. It is bold and tough: the equivalent of something approaching an £80 billion turnaround in the public finances. This is the sharpest reduction in the budget deficit for any G7 country. This is vital for credibility, vital for attracting inward investment.

Our social priorities in health, schools and policing are protected. But, as the Prime Minister and the Chancellor have both made clear, the impact on other services cannot be painless.

Our plans do not at this stage fix rigid limits for each department, for the good reason that future uncertainties remain. But the commitment to real reductions is clear.

The politics of growth

You can see the last thirty years as a series of steps and mis-steps towards this economic goal; shaped sometimes by ideology, sometimes by pragmatism, increasingly by the realities of globalization.

The 1980s saw the timely privatization of industries that were long overdue for return to the commercial sector. Industrial relations underwent a sea change. The quality of management in our best firms improved, and with it, corporate profitability.

But, there was also soaring unemployment and social divisions. And other long-standing weaknesses in UK economic performance were becoming chronic: an indifference to manufacturing; neglect of science, engineering, technology and skills; lack of a long-termist business culture; and an education system that paid scant attention to the needs of employment.

British business still suffers from too large a tail of poor management and low productivity and the financial crisis demonstrated that the long-termist business culture needs to be more firmly established. There is a debate within business on business models, especially the reliance on debt over equity.

We need a politics of long termism over short termism.

Of a smarter, more effective and affordable state.

Of a return to the values of hard work, enterprise, corporate stewardship and mutual commitment over those of dodging responsibility, making a fast buck, and putting self before others.

Of working together as a nation to address the shared challenges of the future, not social divisiveness or outdated ideological obsessions about the State or doing away with government.

We need a dynamic economy and society, but we also need to understand that while people want opportunity, they also want security for themselves and their families in a fast changing world.

There are significant strengths for Britain which give us a base that makes the new challenges easier to address.

The UK research base has benefited from a doubling of the Government’s investment in science.

Our universities are now fully part of the way we earn our living in the world: attracting 230,000 fee-paying overseas students and generating £59billion a year for the UK economy – more than 2% of GDP.

There has been a renaissance of major UK cities – a genuine end to the psychological cycle of decline that blighted the late eighties. This has been led by public-private investment in which the Regional Development Agencies have played a major role.

Although it has not grown at the rate of the rest of the economy, the British manufacturing sector did not in fact contract in absolute terms in the decade before the recession – its output in both value and volume has remained stable despite the fiercest imaginable competition.

The resilience and reinvention has been helped by flexible labour markets which in this period became culturally embedded in the private sector.

It is this factor, together with the scale of the fight-back mounted by the government and the strength of our welfare-to-work system, that has helped keep people in jobs and limit the effects of the global recession.

But it is also clear – and I want to be honest about this – that the global economic crisis has exposed structural problems in all developed economies, including the British economy that we did not entirely foresee or deal with in the years of uninterrupted growth.

No-one fully understood the risks in the model that destroyed Lehman Bros and crashed the banking system.

And let me say this quite bluntly. For the past decade we allowed ourselves to become over-dependent on the City and financial services for growth and our tax revenues. That is why, without wishing the financial sector to be smaller, we need other industrial strengths and sources of revenue to grow faster.

And finance will have to change – the insurance bill for saving the economy from the status quo was far too steep and it can never happen again. While putting the City in an iron cage of regulation is undesirable, just relying on a bit of nudge here and there will not suffice.

The document we will be releasing tomorrow sets out the Government’s plans for growth. It sets out what we have done since I launched the New Industry New Jobs agenda last spring and described the Government’s further work programme for the coming months. It is work in progress. We are in a marathon, not a sprint. But it defines an agenda for a very challenging future, and a new approach to investing in our basic capacities for growth.

Today I want to highlight some of the key themes of that work programme and say something about where we need to go with each.

Enterprise

First and foremost we need to foster a new climate for enterprise in Britain. There is no substitute for this – no substitute for the drive and ambition that it brings. It can sometimes be a touch ruthless and raw. But it is the single most important engine of economic progress. The recovery cannot be driven by consumer debt or public spending. It will be driven by private sector investment and private enterprise.

Enterprise and reward go hand in hand. Much as it shocked many of my friends when I said I was comfortable with people making themselves “filthy rich”, in the context I was speaking I was simply stating a simple truth: that enterprise and effort should be rewarded. It sets goals to spur people and brings gains to us all. And it is often forgotten that I added the important rider “as long as people pay their fair share of taxes”.

I would also add now that pay and performance must go together. That means long term sustainable performance. In this case, there is no need for government to intervene. We are not interested in capping salaries for the genuinely successful.

Where pay and performance do not correlate, the whole notion of value breaks down. And if remuneration is actively driving systemic risk, and that risk cannot be confined to a single institution, then we have a real problem.

Of course given the tax rises on the better off imposed in the past year, tax is inevitably once again a hot topic of debate in the business community. Setting tax rates for me has always been a matter of striking the right balance, not of ideology. In a difficult fiscal environment no credible government can rule out the need to raise taxes. And we haven’t shirked from taking those tough decisions over the past year.

But there is never a case for punitive taxation. There is never a case for rates of tax that remove the incentive to self-improvement or to build a business. Britain retains one of the most favourable tax regimes in the world for entrepreneurs who start a successful business and eventually sell part of their stake.

Our 18% capital gains tax rate is among the lowest in the world and our corporation tax rate among the lowest in the G7. A competitive tax environment is something we must preserve.

As for the new top income tax rate, I believe that is justified in the quite exceptional circumstances we face.

It is right that in taking the tough decisions on tax needed to combat the deficit those with the broadest shoulders will bear the greatest burden. I believe we have got this balance right.

But as a Government we will always be vigilant that this burden does not become so great that it damages our long-term competiveness or inhibits those whose efforts will help us build sustainable growth.

At the same time we need to accept that the current structure of most public companies is better at rewarding enterprise in senior management or owners than it is at giving the bulk of the workforce an incentive to innovate or commit to the business. The evidence is that companies that share rewards with their employees, like the John Lewis Partnership, are also very good at pursuing long term growth strategies.

Innovation

Second, we need to renew our focus on what makes us successful innovators. A decade of sustained investment by this government has rescued British science from its desperate straits in the 90s and secured its position of global excellence, second only to the United States. Our challenge is to transform more of that knowledge into economic gain. To get more D out of our R and D.

In productivity terms we spent the late twentieth century trying to catch up with the US. Now Asia is racing to catch up with us. We did well in the American century. We can take little for granted in the Asian century.

Our 21st century economic growth needs to be built on innovation at the knowledge frontier, addressing new challenges such as climate change and decarbonisation and exploiting new digital and materials technologies.

For this reason, it is vitally important to preserve our research capabilities even through a period of increased constraint on investment. Our universities must focus on research that offers the greatest economic potential, prioritise excellence, develop partnerships with industry, specialise around their core strengths and not be afraid to develop distinctive missions.

For each region of the country, I am asking the Chair of the Regional Development Agency to present me with a report by mid- March, prepared in conjunction with their Vice Chancellors, on how their universities, supported by RDAs, can drive economic growth in their area.

In the PBR, to boost innovation, the Government supported the concept of a “Patent Box” that ring fences commercial revenues from patents and secures favourable tax treatment for them. This complements the incentives we have for research in the UK through the R&D tax credit.

Since I launched our policy framework New Industry New Jobs, we have earmarked almost a billion pounds in the last year for investment in British capabilities in cutting edge technologies like plastic electronics, composites, wave energy and industrial biotechnology. We will be publishing the next stage of our plans for the further development of key sectors – including construction, business services and homeland security – by the end of March.

Over recent years we have built up the basic skeleton of an industrial innovation system in the UK. We have the rapidly growing outreach of our universities into business, RDA investment in innovation centres, the setting up and expansion of the Technology Strategy Board, and the recent decisions to establish industrial centres of excellence in a range of technologies including civil nuclear engineering and industrial biotechnology in Yorkshire, and plastic electronics in County Durham.

Our challenge now is to build and consolidate that innovation landscape into something like the Fraunhofer network in Germany which actively connects industry and the German research base. With this objective in mind I have asked technology entrepreneur Hermann Hauser to undertake an urgent but systematic evaluation of the UK’s existing Innovation network to see how Britain can best emulate the outcomes of the Fraunhofer model.

Finally, innovation depends on skilled people. We have set out plans for the creation of a new British technician class, in part through a dramatic expansion of Advanced Apprenticeships. This will fill a longstanding gap in the British skills market.

These proposals have been well received but we need to focus on implementation. I have asked Lord Sainsbury to report to me by the end of March on the development of the registration system for engineers and proposals to introduce a parallel scheme for science technicians that will make this new technician status a reality.

Finance for growth

My third theme concerns the way we finance this enterprise and innovation. Enterprising and innovative companies need investment to grow, but there is strong evidence that UK financial markets have for some time not served some growing British companies well. The credit crisis has exacerbated this problem by dramatically reducing the banking system’s appetite for risk. We need to keep up pressure on banks to lend, but we also need to look for wider solutions, both at the British and the European level.

For a decade we have tentatively been experimenting with public-private solutions to the growth capital problem. It is clear that Britain needs coherent solutions at a different scale. We need a new range of public- private financial instruments to step into the historical equity gap and the breach created by the banking system’s reduced appetite for commercial risk.

That is what the Innovation Investment Fund launched last year will in part do – it has already more than doubled its initial £150 million public investment with private funds and its professional independent fund managers will make their first investments this year.

At the same time the Rowlands Review has explored the issue of growth capital for business and the feasibility of re-creating a successful fund like the old ICFC or 3i. So we are working with banks to establish a new growth capital fund which will invest in established UK SMEs who are seeking between £2 and £10 million to develop their business.

In parallel the RDAs are establishing a number of new public private financial vehicles with the help of European funding and the EIB, which will invest in businesses seeking less than £2m.

These will sit alongside existing smaller venture capital funds established over the last 10 years.

I am therefore now asking Mervyn Davies to report to me urgently on what might be done to give this network maximum coherence and reach. My aim is to create an industrial investment network with a strong regional capacity.

Infrastructure

Fourth, over the next ten years Britain will need a transformative wave of private investment in digital, energy, transport and low carbon infrastructure, totalling hundreds of billions of pounds.

We have two challenges here. First, how we get these high cost, long term investments made. The public purse isn’t going to be able to fund them, so we need to get the conditions and incentives right for private sector investors. Second, we need to make sure that these massive programmes create opportunities for British-based industry. Britain’s supply chain only too often has a habit of missing these opportunities. This time has to be different.

We are implementing plans to stimulate investment in the infrastructure for digital communications. They will extend broadband access to every home and business in Britain in just a few years and extend next generation broadband beyond where the market alone will build it to serve 90% of the population.

And are developing strategies on renewable energy, rail electrification, low carbon vehicles and the charging infrastructure for electric cars, putting in place what only Government can – clear frameworks of policy within which the private sector can take commercial decisions

We have begun a shift in the basic remit of the regulatory agencies so that they focus on the need to renew our infrastructure and adapt it to a low carbon future.

In the transition to low carbon energy and transport, emissions trading and a carbon price potentially provide strong stable investment incentives. Initial experience though has been disappointing. The need now is to look urgently at the options for ensuring we have a carbon price that is more stable and truly reflects the environmental costs.

And we need to examine how the role of pension funds to be major investors in the long term infrastructure projects of the future.

Infrastructure UK has been tasked with producing a full assessment of the scale of the challenge, and to produce creative ideas for how to meet it. Getting this right will be one of the most important ways of securing the country’s future prosperity. We all need to engage with Paul Skinner as he draws up his report in the coming months.

We need equal vigour in tackling the parallel challenge of making sure that British-based firms are ready for the opportunities this wave of investment will create.

Government bodies like the Office for Nuclear Development and the Office for Renewable Energy Deployment need to work intensively with British-based companies to anticipate and compete for the supply chain opportunities from huge shifts to alternative energy or transport infrastructure.

By the time the call for tender arrives, these firms should understand the opportunities, understand the capacities they will require, and understand the help Government can provide in helping them develop those strengths.

That’s exactly what we are doing now for example in the civil nuclear sector through the Nuclear Advanced Manufacturing Centre and our work to develop the nuclear supply chain to serve the growing nuclear industry in the UK.

Long termism vs short-termism

Finally, we need to start a debate about how we build a stronger culture of long term commitment to sustainable company growth in this country, based on a strong compact between institutional shareholders and the corporate sector.

On one hand we need a system that enables shareholders to discipline poor management. But we also need to give management some scope to plan and build without the excessive demands for quick returns that characterise too much modern public company ownership.

I don’t have any easy answers. Our reforms of company law made clear the importance of directors taking a long term view. At the same time we have empowered shareholders. We are now evaluating whether this has changed behaviour in the board room – and among investors.

Chris Hogg has played a key role in this debate with his review of corporate governance, and it is time for Britain to take a long hard look at the questions he and others have raised. I attach the highest importance to the new Investor Code and will be meeting investors and companies next week in the run up to the further consultation by the Financial Reporting Council.

Takeovers provide a very clear test here – for all involved. Companies making acquisitions should set out transparently and publicly their long term plans for the assets they propose to acquire, including company headquarters, R&D sites and main plants. Although these remain commercial decisions, firms or investors should expect to brave the court of public opinion if they are motivated only by short term profit.

Surely investment managers should be judged on their long term growth and profitability, not their short term performance – and the same goes for CEOs. How many strategic and effective managers are being hobbled with the quarterly race to please the beauty contest of the markets?

Conclusion

Only by growing our economy can decent jobs be created, living standards protected, and the winners’ circle expanded outward to those on low and middle incomes.

We have learnt the right lessons from the downturn and will sustain the recovery. But the key question is how we can achieve a step-change in the growth rate of the British economy in the decade ahead.

HM Revenue and Customs’ (HMRC) new Dynamic Response Team will work on the most high profile and complicated National Minimum Wage cases faced by HMRC, particularly in areas where employers are using migrant labour to undercut competitors by paying below the minimum wage.

The team is funded from a £70 million Government fund, paid for by a levy on migrant workers, to support those communities that are feeling the impact of migration most strongly.

The team will be made-up of highly-trained specialist officers who are committed to providing a rapid response to cases across the UK ensuring that everyone who is entitled to the minimum wage receives it.

Business minister Pat McFadden said:

“The Government and HMRC are doing more than ever to make sure that those entitled to the Minimum Wage are receiving it. Evasion hurts both workers and responsible employers who play by the rules, so we are stepping up our fight against non payment of the minimum wage.

“The Minimum Wage is a key part of the Government’s strategy to establish fairness in the workplace and the benefits of the minimum wage are felt by about one million workers every year, especially women and part-time workers.

Financial Secretary to the Treasury, Stephen Timms, said:

“The Government’s priority is to ensure that all workers are paid at least the National Minimum Wage, and HMRC enforce this robustly.

“This new Dynamic Response Team will respond quickly and effectively to National Minimum Wage non-compliance, making sure that employees are paid what they are legally entitled to.”

Communities Secretary John Denham said:

“Tackling the abuse of migrant workers is an important part of building a fair society.  Employers undercutting the wages of local workers put unfair pressure on businesses struggling to compete and cause resentment in the community.”

The new team will work with other Government departments and Local Authorities to ensure the most effective action is taken to deal with non-compliant employers, including civil and criminal prosecutions where appropriate.

There are around 1 million low paid workers who benefit from the minimum wage and since April HMRC have helped around 14,000 workers re-coup over £3.5 million of wage arrears. This included more than £640,000 alone in the hospitality sector, a sector noted for low levels of pay.

HMRC already tackle serious breaches of minimum wage law, such as the Jacksons Butchers case in Sheffield, which was closed in 2009. Pauline Smout and David Jackson were prosecuted for wilfully neglecting to pay the National Minimum Wage and were both fined and ordered to pay compensation because they could not pay staff the arrears they were entitled to.

Read the full BIS press notice here.

Download the guide

With the New Year approaching, many graduates will refocus efforts on their job search and the Government-backed Graduate Talent Pool website is a great place to start.

With around 6578 vacancies and two thirds offering payment, the site matches talented graduates to internship opportunities. Internships allow graduates the opportunity to develop their knowledge, skills and experience in a real working environment and give an insight into what a particular career has to offer as well as being one of the best ways for graduates to improve their employability.

Denise, author of How to Get a Job in a Recession, says: “Now six months on from their graduation, many graduates may be in need of some family support in their job search. Despite their children being grown up, many parents of graduates are still naturally concerned about their prospects and want to be able to help.”

Minister of State for Higher Education David Lammy said:

“Internships can help graduates kick-start their careers and are part of a package of measures to support them and improve their chances of getting a long term and well paid career.

“The guide explains all of the opportunities available so that parents and graduates can discuss the options together.

“Higher education is a long term investment that pays back big dividends over a working lifetime and even in these difficult times graduates do better than those with lower qualifications.”

The ‘Parent Motivators’ guide is available to download for free at www.direct.gov.uk/graduates.

The Know Your Consumer Rights website has useful information to help you. It sets out the key rules that you should know, when looking for a bargain or taking something back, such as:

• Anything you buy must be accurately described
• Products must be of satisfactory quality
• Anything you buy must be fit for purpose, and if goods are faulty it is the retailer’s responsibility not the manufacturers
• If you buy something off the internet, in most cases, you have a cooling-off period when you can cancel your order without giving a reason and receive a full refund

The campaign is part of a major initiative by the Government to make sure that you know how to get a fair deal when you’re shopping and to make sure that you know what to do if things go wrong.

Consumer minister Kevin Brennan said:

“Just because you’ve bought something in a sale, it doesn’t mean that you don’t have the same rights as someone who paid full price.

“About a third of people have said that they felt their consumer rights had been ignored at some point, and I want to do everything possible to make sure this doesn’t happen in the future. Consumers deserve better.

“If you know your rights, and are confident in what you can ask for, you’re much more likely to get the right result when things go wrong.”

Visit the ‘Know Your Consumer Rights’ website

This is BIS’s first SDAP, previous Plans having been published for BERR and DIUS prior to their merger in June 2009. The new SDAP reflects the linkages between the work of the former BERR and former DIUS and how BIS’s activities contribute to sustainable development.

The SDAP not only brings into one document the Department’s work on innovation, science, universities, skills and businesses in relation to sustainable development, but also addresses how it will improve sustainability across its operations on its own estate.

• Creating a more diverse higher education landscape, by increasing the range of alternatives to the full-time three year degree;
• Maximising the impact that higher education makes to the economy by supporting the programmes with highest economic and social value;
• Supporting research concentration to underpin our world class ranking, while continuing to support excellence in research;
• Developing a standard set of information about higher education, so that all students can exercise informed choice about courses and institutions.

Download the letter 280KB

Higher Education Minister David Lammy said:

“Over the past decade, the Government has invested record amounts in Higher Education – around 25% more than 1997 – and there are now more students than ever before in our history attending university.

“It is right that universities, in common with all other areas of public spending, play a part in helping manage the pressures on public finances brought about by the impact of the financial downturn. Tough choices are inevitable but we are minimising the effect on the frontline by making savings on capital budgets, asking the sector for further efficiency savings and by asking HEFCE to look to reduce funding which will not impact on teaching.

“We are absolutely clear that a high quality student experience with excellent teaching is vital to maintaining the world class Higher Education we enjoy in this country today.”

Download the plan 4.8MB

It contains good news for the UK as we are already meeting key elements of European best practice in the four areas covered by the National Action Plan on Researcher Mobility and Careers (NAP): open recruitment, pensions and social security, attractive working conditions and skills.

Compared with most of our EU partners, the UK has built a very open research environment. Approximately 20 percent of our academics come from abroad, roughly evenly split between EU and non EU in origin. At researcher level, the percentage is even higher – up to 50 percent in some disciplines.

As a result, the NAP restates current UK practice along with a number of case studies showcasing national and local initiatives.

It also identifies future actions so that we can continue to build on our good practice and remain an important destination for top quality research.

These include developing and strengthening the implementation of the UK Researchers’ Concordat. This Concordat, developed by the research community, aims to increase the attractiveness and sustainability of UK research careers and to improve the quantity, quality and impact of research for the benefit of UK society and the economy.

Minister for Science and Innovation Lord Drayson said:

“We are investing record amounts into research. This investment is vital to make sure that the UK, and Europe, is to fulfil our economic potential and address the great challenges ahead. That includes creating an environment which encourages the brightest young people to choose research careers.”

The NAP highlights how the UK is the most popular destination for researchers supported by various elements of the European Framework programme for funding research. These include:

• The Marie Curie programmes which explicitly set out to fund mobile researchers
• The European Research Council which fund the best researchers throughout the continent so that they can take their research outside their home country.

It also highlights several other initiatives which demonstrate UK good practice including a scheme run by the Wellcome Trust – a major UK research funder – to support outstanding medical or science researchers as they establish their academic careers in selected Eastern European countries, i.e. Croatia, Hungry or Poland.

Download the plan 4.8MB

(Image: Creative Commons)

A Consultation on a Direction to Ofcom to implement the Wireless Radio Spectrum Modernisation Programme

That Consultation Document set out various directions which the Secretary of State proposes to  give to Ofcom in accordance with his power to give directions under section 5 of the Wireless Telegraphy Act 2006. The directions proposed were set out at Annex G to that Consultation Document.

Since that consultation was commenced, one organisation that has received the Consultation Document has raised two matters concerning the contents of that document. So that the position is beyond any doubt, a Supplementary Document has been published which deals with each of them.

Please note that the Secretary of State has now extended the time within which all responses to this consultation exercise need to be received. The deadline for responses is now 5pm on Friday 5 February 2010.

In July 2009, the Government published its Consumer White Paper “A Better Deal for Consumers: Delivering Real Help Now and Change for the Future”. One of the commitments we made in the White Paper was to consult on banning the use of bills of sale for consumer lending.

Purpose of consultation

Bills of sale are being use to support “log book” lending, namely lending using a consumer’s car as security. This practice has been the subject of relatively high levels of complaints to consumer groups and the OFT. Complaints relate to the lack of consumer protections available to people if they fall into arrears, unfair collection practices, the complex and confusing nature of the language used in agreements and the high cost of the loans. Consumers may have their assets – typically their cars – repossessed without the need for the lender to obtain a court order. Bill of sale loans may also encourage vulnerable consumers to slip even further into debt. This consultation seeks to address concerns about adverse outcomes for consumers where borrowing is secured under a bill of sale.

Areas for consultation

We want a better deal for consumers who have been using this form of subprime loan and to tackle any areas of emerging bad practice, while ensuring that any intervention is proportionate, transparent and targeted. We believe that a ban on using bills of sale for consumer lending is likely to be necessary to achieve this. We have yet to take a final decision on whether to proceed with a ban or whether alternative options would achieve a better result. We specifically seek your views on the proposals set out in this consultation document to help determine the most appropriate next steps.

In particular, the consultation seeks views on the following options:

• Whether current measures underway will provide sufficient additional consumer protection or if not, what other measures are needed;
• Whether a voluntary code of practice or self-regulation would provide sufficient additional protections for consumers;
• Whether targeted reform to bills of sale legislation would rectify the problems identified in relation to bills of sale;
• Whether a ban on the use of bills of sale for consumer lending would achieve the best outcomes for consumers while promoting an open, competitive and innovative credit market.

We also seek further evidence about the use of bill of sale loans, in particular: by the vulnerable with no access to mainstream credit; and for business purposes by the self-employed and owners of small firms.

Speech by: Lord Mandelson
Venue: IISC – UK Lecture Series, Indian Institute of Science, Bangalore

 I’m very honoured to launch this lecture series. Over the next few months the series will cover a wide range of topics from prime numbers to the economics of climate change. The very distinguished Professor Alison Richard, Vice Chancellor of Cambridge will be first up here on January 12 to speak about how universities can help drive innovation.

Of course it’s also a huge privilege just to be at this podium in Faculty Hall, which in its illustrious history has hosted Nobel Laureates, and minds a lot sharper than mine. I’ll just have to do my best.

The aspiration and inspiration for this series is that it should give us a chance to reflect on the evolving relationship between India and Britain in the field of science and innovation.

So obviously, for the last couple of weeks I have been casting about for symbolic new projects to launch this week. And I knew I might be onto one when someone mentioned to me that the Indian space programme has charged Indian scientists with developing a curry suitable for astronauts.

Now, given that Indian cooking has transformed British tastes over the last twenty years, I’m wondering if this is an avenue for joint research? Perhaps British scientists can work with MTR to develop some sort of zero-gravity dosa? India and Britain: going where no paan has gone before.

Coming back to earth, I want to provide a sort of preface to the lectures to come by talking the general value of internationalism in innovation and science. Both between India and Britain, but also more widely. Both India and Britain are investing heavily in their national innovation systems. Today I want to argue that while the capacity to innovate is clearly central to national growth, it does not follow that innovation is something we should see solely in national terms.

Races we can all win?

If science and innovation are so central to competitiveness, why should we see them as something that should be built on international collaboration? This question goes to the heart of what ultimately makes globalization ultimately a good thing. Trade in goods and services, just like collaboration in science and innovation, has an important role in raising productivity, which benefits both sides. Rising productivity is, generally speaking, a race we can all win.

No less importantly, many of the big challenges of this century, such as food security and climate change, are ones in which we can all potentially lose – some worse than others and the world’s poor worst of all. We are in a race to develop green technology. But ultimately the race is not between  countries but between humanity and an advancing ecological crisis.

If the twentieth century sometimes seems like a calamitous  exercise in applied ideology, the next century needs to the century of applied science. How will we address poverty and eradicate treatable disease? How will we engineer the low carbon, and eventually the no-carbon, solutions on which a sustainable and equitable human future depends?

What this suggests to me is that the next generation of engineers scientists and innovators that the world produces will be among the most important in our shared history. Faced with these kinds of challenges there is a clear incentive to make the best use of our collective scientific and technological resources.

To put it more positively, the incredible process of cross-fertilization of ideas is one of the defining benefits of globalization. It has never been possible to separate trade in goods and services from the transfer of knowledge.

Innovation spills over from researcher to researcher and company to company. The art of paper-making came down the silk road with the silks and the spices. Indian mathematics made its way into Europe by way of Arab and Persian traders. A lot of the technologies of the later industrial revolutions flowed back the other way. East to west, west to east.

This institute is a good reflection of that. JN Tata had a clear conviction that India needed to develop its own indigenous industrial strengths. And like most great industrial pioneers, he was utterly pragmatic about the need to draw in expertise from outside India, including the budding steel industry of Pennsylvania and the United States. The first Director of this Institute was Morris Travers from Bristol.

Kamal Nath has set the same challenge for India’s infrastructure revolution, which he has openly said will require India to pull in the skills and investment of the best in the world. I know Kamal well enough to know that he is far too smart to see this as a sign of weakness. He’ll rightly see it as the fastest route to Indian strength.

Education, research and industrial competitiveness

There is another real innovation that this Institute represented, and represents, and it put J N Tata well ahead of his time. This was the recognition that you can’t separate industrial competitiveness from education and research and that you have to invest strategically in these strengths. 

The way in which this commitment to first class training and research has powered the development of an Indian technical and scientific class is of course one of the things that defines India’s recent economic rise for many non-Indians.

One extraordinary spillover from this commitment is the fact that for the last decade more than a quarter of America’s IT and software companies have been founded by Indian emigrants. In fact a troublemaker might say that the modern US economy is built on Chinese money and Indian brains. Although, I, of course, am not that troublemaker.

Britain’s hasn’t always got this balance right. An ideological distaste for public investment of almost any kind under Margaret Thatcher had left Britain hemorrhaging scientists and with a chronic underinvestment in higher education.

But over the last decade that situation has been reversed through massive investment. Britain now ranks first or second only to the US in almost every discipline. It has one of the strongest science bases in the world, way out of any proportion to our size. It’s paid off hugely in British international leadership in the biosciences and advanced technologies.

The challenge for Britain is of course to make sure that these elite institutions and specialist strengths are not a like a ladder with strong rungs at the top and weak rungs at the bottom. We have invested heavily in generic skills and in primary and secondary education and have dramatically opened up alternative vocational routes to higher skills like apprenticeships.

Obviously India’s experience is very much sui generis.  But India also faces a huge challenge of general and specialist education. And there are parallels for the simple reason that both Britain and India’s higher education systems emerged from the same nineteenth century model focused on turning out highly civilized civil servants. 

I know that Indian commentators like Nandan Nilekani have devoted a lot of time to thinking about how you transform this model into one equipped for a globalizing India. To an outside observer, this debate is yet another sign that India is at a critical point in its dramatic transformation. While its initial breakaway growth might have been driven by low cost and low value service provision, its future will increasingly be tied to driving up the value added in India. India is moving from the generic, to the genuinely innovative.

Implicit in this ambition, as writers like Nandan Nilekani are surely right to insist, is a huge education and innovation challenge. Britain is having a version of the same debate. Both of us are focused on making higher education more relevant, more vocational, more accessible and more of a driver of economic growth and innovation, without losing its civilising character.  

Britain and India

My hope is that Britain and India can ultimately build a deep, durable and mutually beneficial partnership in pursuing this. We certainly want to make sure that the UK is as open as possible to Indian who want to study in the UK.  Over 30000 Indian students studied in the UK last year – a rise of almost 40% on the previous year.

We are encouraging British universities to internationalise Higher Education and seek out Indian partners for student and faculty exchanges and developing joint and complimentary curricula. And this must be a two-way flow, with UK students and faculty coming here to experience modern India.

We need to continue to transform our research relationship from one in which we procure teaching or research from each other into one that is genuinely collaborative. India is a cost-effective place to do joint research and it has obvious strengths across the spectrum- from ICT, pharmaceuticals and green energy to public policy problems around poverty reduction and public health. Indian companies and researchers can only benefit from collaboration with knowledge brands like the best UK universities. There are a lot of good examples of how this can work in practice.

The UK and India jointly funded three Science Bridges last year, worth up to £6million, to strengthen our research and innovation relationship. One of these Bridges is between IIS, the University of Leeds and ICRISAT, focusing on sustainable agriculture. Another is between IIM Bangalore, Nottingham University and IIT Kanpur. This will see Nottingham students studying here, including at AstraZeneca’s Bangalore research lab.

The multi-million pound joint investment in the India-UK Advanced Technology Centre is working on applying technologies in rural education and healthcare and has brought together academic institutions with leading corporations in India and the UK, including Infosys and British Telecom.

Imperial Innovations, which is the research commercialisation arm of Imperial College, now has a venture here in Bangalore and has raised about $10 million for research spinouts. On an even larger scale, the Welcome Trust has now been working with the Indian government for a year on a £80million programme of biomedical research.

The UK is also increasingly keen to partner with India on publicly funded development research. The UK’s research budget for international development over the next few years will be bigger than that of the World Bank – around £220 million. In the past this is the kind of funding that has helped lead to the production of treated bednets to defend against malaria and to simple oral treatments against dehydration, which is still the second biggest cause of infant mortality in the world after pneumonia.

What we must not do is let practical obstacles get in the way. Of course we have different models for funding and defining our research agendas. We need to use the experience of existing collaborators and bodies like the India-UK Science and Innovation Council and the UK-India Education and Research Initiative as a kind of adaptor plug to fit UK institutions and research councils and Indian decision-makers together.

One endpoint of this process will be the growth of a base of innovative Indian firms to follow the first global generation of Indian companies that have emerged in recent years. We obviously want to make sure that Britain is the country of choice for these firms when they position themselves for the European market or establish a European research and development presence. All of the major Indian IT players now operate in the UK. I have just come from a fascinating visit to Wipro, where Azim Premji outlined Wipro’s impressive plans for developing low carbon business in the UK.

I know that there are concerns among some in India that changes to the UK’s migration system might put this at risk. But I can guarantee you that while we do have to guard the system against abuse, the route into Britain for skilled and qualified Indian workers and investors will remain open.

Conclusion

In making this case for an international view of innovation I don’t mean to sound overly idealistic or blind to the challenges. At the business end of the knowledge economy there will always be hardheaded debates about intellectual property and licensing. That’s a necessary reality and part of the mix of incentives that drive innovation.

It’s also the case that tough commercial competition will always be an integral part of what makes us innovative. It’s when we are under pressure that we challenge established ways of doing things and do them better. We don’t protect innovators by cutting them of from competition: often that just takes away a spur to innovation.

But this doesn’t negate the argument that science and innovation should be something that are driven at their core by international openness and collaboration.

Scientific discovery is something that India and the UK have always done well together.  Sir Roland Ross won the Nobel prize for medicine for research into malaria he did during his time in Bangalore. The most recent Nobel Laureate, Venkatraman Ramakrishnan, who this year won the Chemistry prize, is based in Cambridge.

Their experience is a reminder that in the expanding global single market for ideas, international collaboration in science and innovation is good for India. It’s good for the UK. And it’s good for our human future.

This increase of 27.4 per cent compared to 2007/08 means the Government has met its target to increase the number of apprenticeship completions two years early.

The overall success rate for apprenticeships was 70.9 per cent in 2008/09, significantly higher than the target success rate of 65 per cent, and the 37 per cent pass rate in 2004/05.

Apprenticeships Minister Kevin Brennan said:

“It’s great news that we’re seeing the highest ever number of people completing an apprenticeship, and that the success rates have jumped to over 70 per cent. I’d like to congratulate all the people who have successfully completed an apprenticeship, and all the businesses who continue to offer apprenticeships, even in difficult economic times.

“We know that business values the apprenticeship highly because this training is providing the skilled workers British businesses need for the future and Government remains committed to making it easier for businesses to offer them.”

Other figures show that in the academic year 2008/09:

• People started 817,400 qualifications through Train to Gain, and successfully completed 543,100 qualifications;
• Overall, over 1.4 million Train to Gain courses have been started since the scheme was launched in April 2006 and over 850,000 people so far have gained a qualification; Train to Gain is the Government’s flagship service to help employers improve the skills of their employees and the productivity of their businesses.

Press release: Record numbers of people successfully completing apprenticeships

Read about ‘Skills for Growth’ – a strategy that includes creating a modern class of technicians through a dramatic expansion of advanced apprenticeships, creating 35,000 new places over the next two years.

 In this Westminster Hall debate on the future of the steel industry in Teesside, Pat McFadden talks about the three factors that served as the backdrop for Corus’s decision to mothball its Teesside plant: fall in demand, fall in price and the collapse of the off-take agreement to buy the steel produced there. He then sets out the Government’s response – a £60 million package of support to help the people of the area.

 Read the full debate (external link)

- Launch date: 15th December 2009
- Closing date: 10th February 2010
- Response:     Spring 2010

A new review and a call for evidence to identify and address barriers to investment created by consents for development, other than planning permission, was announced on 15 December by Business Minister, Ian Lucas. The Penfold review, headed by Adrian Penfold – the current head of Planning and Environment at British Land and board member of British Land Corporation Ltd, will look at consents for development made alongside or after planning permission for all sizes of projects.

A well functioning planning and consents environment is an essential component in encouraging and facilitating investment in development. Striving for a regime that seeks to minimise the cost, time, bureaucracy and uncertainty attached to planning and consent applications has been, and continues to be, a key priority for government.

Submissions should be sent to penfoldreview@bis.gsi.gov.uk by 10 February 2010, though earlier responses would be helpful.

Full details

• The Penfold Review of Non-Planning Consents: Call for Evidence (Word, 69KB)
• Penfold Review – Terms of Reference (Word, 47KB)

Questions

1. How important do you consider non-planning consents are in making decisions about whether to invest in development proposals?
2. When applying for non-planning consents, what obstacles do developers encounter in terms of a) administrative burdens; b) costs; c) uncertainty and risk in applying for; and d) the length of time associated with obtaining such consents? Do any obstacles encountered have a particular impact on a specific sector, type of development or size of business? Which obstacles cause most difficulty and why?
3. How do those seeking consents go about identifying what additional consents are needed alongside or after planning permission? What difficulties do they encounter in doing so?
4. Can you give examples of investment options which have not been pursued, have been delayed or have otherwise significantly changed because of non-planning consents? Which consents were integral to the decision to stop, delay or change the development? Can you quantify the impact of the changes for the business affected?
5. What opportunities do you see for reducing a) the administrative burden; b) the cost; c) the uncertainty and risk in applying for; and d) the length of time associated with obtaining non-planning consents? What action can regulators take to improve the service they give to developers when dealing with non-planning consents? Which actions would bring greatest benefit and why?
6. Are there other relevant issues that the review should take into account?

Transcript of Podcast: Federation of Small Businesses’ John Wright

The summary report, published by the Better Regulation Executive, detailed how more than 280 changes to regulations have helped save UK businesses around £2.9 billion a year so far.  Read the full summary report here: Summary of Simplification Plans 2009 (PDF, 825KB) 

Ian Lucas, Minister for Business and Regulatory Reform, said:

“Simplification is making a real difference to the everyday lives of businesses, helping to make things as simple as possible, saving more than £8 million a day, every day.

“Individual measures may look small but it is overall impact that adds up to real savings. And support from the business community has helped make sure that savings to businesses are felt on the ground.

“But the programme also shows real change across government in its attitude towards regulation. Delivering the right business environment to promote growth relies on creating a flexible regulatory framework that minimises costs to business but ensures essential protections and rights are in place. Better regulation, with simplification at its core, is making that possible.”

An independent panel including representatives from the business community has tested whether simplification measures were effectively communicated to businesses and were felt in the ground.  In May this year, this Panel again scrutinised the Government’s delivery and validates 77.5% of the Programme’s gross savings.  

The Government is on track to meet its target of cutting the administrative burden on businesses by 25% by May 2010 that will deliver an expected £3.3 billion in annual net savings.

The report also details how government has delivered more than 30 per cent net reduction of the amount of information requests from central government on front-line public sector workers, such as nurses and police, and how it has cut more than £1.3 billion in wider costs of complying with regulation.

The Government recently announced a new commitment to cut the costs of regulation further, by £6.5 billion by 2015. This was part of a package of measures to strengthen the management of regulation with the publication of the Government’s regulatory programme until April 2011 and the creation and set up of a new independent scrutiny body to advise on the costs and benefits of new regulation. 

The Government announced in the Pre-Budget Report that it has already identified potential savings of over £1 billion towards the new target.  Recognising the importance of ensuring that the programme focuses its attention on the areas which are of greatest concern for business, the Government is today launching a call for evidence, to enable business and other interested parties to feed in suggestions of which regulatory activities place disproportionate costs on business, compared to the benefits delivered, and to propose action that will reduce or remove these costs.

PLEASE CHECK AGAINST DELIVERY

Good afternoon.

I have an announcement to make.

The UK is going to have an executive space agency – a single, coherent organisation to support an industry and a research base that are one of the best advertisements for the UK.

Space directly employs 20,000 people in this country.

It contributes £6.8 billion to the UK economy.

And here’s perhaps the most impressive achievement: our space sector has been recession proof.

Astrium recently won a €500 million contract to manufacture four Eurostar 3000 telecommunications satellites. Facilities in Stevenage and Portsmouth will be handling much of the build.

Surrey Satellites has signed an agreement to build Sri Lanka’s first Earth observation satellite, and has already started work on that country’s first communications satellite.

Systems Engineering and Assessment has sealed a deal to provide the remote interface units being used on the BepiColombo mission to explore Mercury.

The space industry has grown in real terms by around nine per cent per annum since 1999/2000 – more than three times faster than the economy as a whole.

Going forwards, it’s forecast to maintain average annual growth of five per cent until 2020 – and, on their own, commitments made at last year’s ESA ministerial meeting have provided work for UK space companies for at least the next five years.

In fact, space provides the strongest rebuttal to all those people who knock the UK and argue that we no longer have the right stuff when it comes to manufacturing.

Think about it. Space is the toughest environment of all, where systems and components are subjected to the ultimate workout – instruments required to function at just a tenth of a degree above absolute zero. When you send multi-million pound kit into orbit, there are no second chances.

We compete in this environment – and we win.

A fundamental reason for that is that you’d be hard placed to find another sector where industry and the research base are so wedded together.

The knowledge transfer relationships are long established here – and the basic story of UK space is outstanding science delivering strong commercial returns.

As we rebalance the economy, this is precisely the high-value, highly-skilled, technologically advanced area we must focus on: for jobs, for growth, for prosperity.

Hence the agency.

The recent public consultation on the funding and management of our civil space activities found that the current partnership structure has served a useful purpose.

Through the existing system – and in the past year alone – the Herschel and Planck satellites are gathering the most detailed information we have about the birth and evolution of our Universe.

The European Space Agency centre has opened here at Harwell, a facility that will lead Europe on integrated applications, robotic exploration and the management of climate change data.

It will soon be joined by the International Space Innovation Centre, where publicly-funded science will take place right alongside industrial R&D. Together, the ESA and ISIC centres will serve as a vital cluster to exploit our competitive advantage.

But the majority of respondents to the consultation agreed that we do need to raise our game in several areas – like strategic decision making, like leading multi-partner programmes, like extending the space technologies in other high-tech, high-growth areas.

That’s what the new agency will do – not through more money, but through better organisation.

It will put the machinery of government fully behind the sector. It will secure cross-Whitehall decisions and buy-in on space-related issues – including education and outreach – and it will prioritise UK involvement in future space projects.

We need that unified approach to grab a greater share of the global market in space systems, services and applications – and remain at the forefront of advanced manufacturing.

Other countries have similar ambitions. At the moment, I’d venture that the UK is the place to be for space scientists and entrepreneurs.

Only yesterday, for example, we announced a new tax measure to support innovation – the patent box.

Businesses built on patents – as many in this sector are – will benefit from a 10 per cent rate on corporation tax.

That’s great progress – and we need to keep going in what is an increasingly competitive global market.

In the last 12 months, we’ve seen India – which has a comprehensive programme of launchers, telecommunication and Earth observation satellites – send its first probe to the Moon; carrying – I might add – an instrument built here at Rutherford Appleton.

The Canadian Space Agency has received a stimulus package worth $100 million to boost its robotics capability.

There’s been no let up in China’s programme to launch dozens of spacecraft, build its first manned space station, and dispatch probes to both the Moon and Mars.

It’s early days for the agency. A cross-Government group will now meet to begin planning the way forward – and there will be a formal agency launch in due course, where we’ll reveal its name.

If you saw the Times yesterday, you’ll know there’s already been some speculation about that.

Today, we’re also publishing an independent review of space exploration – one that’s unique in attempting to quantify the potential economic benefits from future human or robotic activities.

Although the broader economic climate means we’re not in a position to change our current approach to investment in space exploration, the data in this report will inform the work of the space Innovation and Growth Team – and, later, the agency. It only reinforces the case for space as a major growth sector.

For now, let’s celebrate an excellent 2009 – strong on the science side, strong on the commercial side.

I’ve had two personal highlights as minister.

The first was meeting apprentices at Astrium – young people describing the thrill of working on equipment being dispatched to the far reaches of space.

The other was news of Tim Peake’s success for being selected as one of ESA’s Astronaut Corps.

I know that BNSC are working on a publicity campaign featuring Tim that will encourage young people to study science subjects in school. Space has a unique capacity to inspire and Tim has iconic potential.

Next year, we’ll see more data from Herschel and Planck. The UK-led Cryosat mission to study ice thickness at the poles. The launch of the Hylas spacecraft, developed by start-up company Avanti Communications, which will deliver broadband across Europe to people unable to use surface links. And the imminent report from the IGT setting out a 20-year strategy for the sector.

So these are exciting times. Promising times.

A joint NASA/ESA programme of Mars exploration is being finalised with the UK at its heart. Space technology is being built in this very lab to monitor illegal destruction of the rain forests. And about 200 miles above our heads, there’s now a fully functional scientific laboratory on the International Space Station, conducting medical, material and biological research.

What we’ve got to do is build on what the UK already does extremely well, and really go for growth – growth backed by the agency.

The late Werner von Braun, arguably the greatest rocket engineer of the 20th century, once made a rather elegant quip. He said: “There is just one thing I can promise you about the outer-space programme: your dollar will go further.”

Von Braun’s observation applies in any currency. So let’s get our full pound’s worth – up there and down here.

Because, if you look carefully this sector, you can glimpse Britain’s future: built on great science, employing the most highly-skilled physicists and engineers, manufacturing leading-edge technologies in demand worldwide.

It’s a great future.

If you’ve paid for something and you’re not happy, establishing your rights is the first step towards claiming the refund, repair or replacement you may be entitled to.

The key rules to be aware of are:

• Goods must fit the description given
• Goods must be of satisfactory quality
• Goods must be fit for purpose

Consumer Direct is a government-funded advice service for consumers and should be your first port of call for practical help with how to complain. For more information visit the Consumer Direct website or call the helpline on 08454 04 05 06.

Later today Kevin Brennan will tell the National Consumer Federation’s Consumer Congress in London that: “There’s a lot of of protection in place to support consumers, but we want to see a big improvement in awareness of this protection and of consumer rights in general.

“You are much more likely to get a fair deal, save money and get the right result if you are aware of your rights. This is especially important at Christmas when most people are spending money both on gifts and in the sales.”

Watch the ‘Know Your Consumer Rights’ video

Speech by: Rosie Winterton MP
Venue: New Local Government Network Conference – Invigorating Local Economies, London

Introduction

I am delighted to be here today and I’m sorry I have to leave so early. The reason is that I am going up to the North East to discuss the closure of the Corus plant. I think that illustrates very aptly why we are here today – to explore the role that local authorities can play in developing their local economies.

Later today I will be doing just that, meeting with local authorities and their partners to discuss what they can do to assist in what is a very, very difficult situation for thousands of people in the North East.

I believe that over the past 18 months or so, during the global recession, we have seen local authorities across the country rising to the challenges it has posed, and graphically illustrating the need for strong local leadership on economic issues.

So what we need to look at now, as the immediate crisis subsides and we focus our attention on laying the foundations of our future prosperity, is the hugely important role of councils – working closely with the Regional Development Agencies – in shaping our economic recovery.

Nurturing the economic recovery

The seismic shifts we have seen in the global economy are creating a wealth of opportunities, as well as challenges. And as a country, we have to be ready to grasp them.

So as a Government we have been examining what we need to do to facilitate that. The New Industry, New Jobs strategy we published earlier this year is our blueprint for a more active and interventionist approach towards industrial policy.

It’s not about picking winners – that’s not our job. But it is about identifying our existing economic strengths and developing new capabilities. So our people and our companies are equipped to compete and win in the new global economy that’s emerging as the recovery gets underway.

In recent years, British companies have secured a place at the top end of global supply chains, where our science, our engineering and design skills are best matched.

That expertise – and our investments in high-value, high-growth sectors like low-carbon; advanced manufacturing; healthcare and education; financial services; and others – puts us in a powerful position to compete globally.

But if we’re going to build on that we absolutely have to harness the power of Government at every level – targeting our interventions in the sectors and the areas of the country where they can have maximum impact. What we mustn’t have is a recovery that is powered purely by London and the South East.

This Government is passionately committed to economic opportunity for all – whoever they are, wherever they live. So we want to make sure that communities across the country are able to grasp the opportunities on offer.

That means ensuring that the skills training on offer meets the needs of local employers; providing the right transport networks so people can commute to work; putting in place an effective planning regime that allows firms to grow and develop; and guarding against a regulatory regime that stifles business innovation.

Partnerships for growth

Getting that right requires close partnership working – between councils and their local partners, the Regional Development Agencies, and central government. And to make that happen, each of us has to be clear about the role we need to play.

So tomorrow I will be publishing Partnerships for Growth: a National Framework for Regional and Local Economic Development.

This framework sets out the responsibilities of each tier of Government, and identifies the areas where central, regional, sub-regional and local partners can each make the greatest contribution to economic development.

It lays down how we can all collaborate to strengthen growth and spread prosperity – ensuring that every part of the country performs to its full potential.

It also identifies the growth sectors where targeted interventions can help Britain compete globally, and how support for these can be aligned with regional and sub-regional economic development to boost jobs and economic opportunity.

The framework will give local authorities, the Regional Development Agencies and other partners the ability to identify key priorities and combine their firepower to drive economic growth – for the benefit of their areas.

Councils have an absolutely vital role to play here, leading efforts in everything from creating the right environment for business investment, to equipping people with the skills that local employers need. The framework will establish economic development as a core activity for every authority.

It means they need to consider the economic impact of everything they do, and develop their understanding of how issues such as procurement, regulation, and the quality of local public services can boost – or hold back – growth.

But just as local and national priorities need to fit together, so local and regional priorities also need to be aligned.

The new Regional Strategies, being developed jointly by the regional Local Authority Leaders’ Boards and the RDAs, will set out the priorities for each local area and region, bringing together objectives for economic development, housing and climate change. They are a means of targeting key investments in infrastructure and sectors that will boost the economy across the region and drive national economic growth.

It’s essential not to lose that wider economic perspective. So the framework heralds a new approach for the RDAs, requiring them to work together with the Government to support national priorities, as well as to continue to promote economic growth in their regions.

RDAs are close enough to the ground to be sensitive to local circumstances, while being far enough away to take a strategic view. They can balance economic priorities; foster local and regional partnerships; and take the big decisions on the new infrastructure needed to galvanise growth.

That regional dimension is essential. Whitehall can never have the in-depth local knowledge; but town halls may miss out on economies of scale or sometimes the slightly bigger picture.

By aligning the priorities and the activities of Government at every level – nationally, regionally and locally – we can ensure that public investments have maximum impact and the fruits of economic growth are shared as widely as possible.

Now I suspect that for a lot of people here today, what is in the National Framework will reflect what you are already working towards; there won’t be any huge surprises.

But I do think it’s important to have written down, in a document that people can refer to, a description of how those different relationships work at national, regional and local level. And making very clear the point about local authorities’ crucial role in the driving the economy at the local level.

Local Economic Assessments

I also want to mention Solutions for Business and the role that councils have to play in that. What we have been trying to do – because we have been very aware that businesses have sometimes found all the different services on offer slightly confusing – is to bring them together.

We do need the help of councils in making sure businesses in their area are aware of what’s on offer, and in supporting the approach we have adopted in their own activities.

All of this is about creating the right environment for businesses. And I believe that the new Local Economic Assessments coming in from next April will give councils and their partners a very clear understanding of local economic conditions.

In view of what has happened in the North East with Corus we were discussing earlier whether, within the assessments, there should be the ability to look at what would happen if there is a big closure in an area.  These are the kinds of issues we need to tease out, and identify what it is that councils can bring to the table in such circumstances.

Councils can also use the opportunity of the assessment to draw up a Work and Skills Plan, which is a good way of taking the skills objectives set out in the regional strategies, and translating them into a coherent delivery plan for each area.

In the Government’s new skills strategy, Skills for Growth, published last month, we have laid emphasis on ensuring we have plans at the regional and local level to ensure we are able to equip people with the right skills for the jobs of the future, and with the flexible skills that employers constantly tell us they need.

I have been very struck by the way that councils have increasingly led from the front in ensuring they talk to local employers and involving them in the training that’s provided locally. If we get the Local Economic Assessment right, it will very good way of drawing local employers in even further to that process.

Multi Area Agreements have also been very important in ensuring local partners work together to identify priorities for the wider area – on issues such as skills, transport, and housing. And the Economic Prosperity Boards coming in from next year are a way of translating the economic assessments, as possibly the Work and Skills plans, into real action.

So I am absolutely committed to exploring just how ambitious we can be in this area, and how much further we can go in putting local authorities right at the centre of driving economic development.

Conclusion

But to do that successfully, of course, Whitehall, town halls and the RDAs all need to work together to translate our vision of economic opportunity for all into a blueprint for action in every region and local area.

I do recognise that this will involve big challenges for local authorities – we are asking a lot of you. So I think it’s important we have a dialogue about how we continue transforming the role of councils, equipping them to deal with the big challenges we face today and tomorrow.

I believe that by harnessing the power of councils and working in partnership we can generate prosperity for people in every part of the country. Today is a first step in defining how we take that forward – I am sure it will be very successful.

Thank you.

BIS is playing a key role in the Government’s plans announced as part of today’s Pre-Budget Report (PBR). Only if the economy returns to strong and sustainable growth can we reduce public borrowing and protect frontline public services.

That’s why we are prioritising and targeting our actions to ensure that they support recovery and drive longer term economic growth.

We’re building on the work we’ve done already, with the latest statistics showing Real Help for Businesses is getting through and initiatives under way to invest in growth as part of our active industrial strategy, New Industry, New Jobs.

Extra funding to invest in growth through the Strategic Investment Fund

The Strategic Investment Fund (SIF) has been expanded with an additional £200 million, bringing the value of the fund to £950 million. This will extend the targeted support for investments across the UK economy to strengthen its capacity for innovation, job creation and growth.

New investments announced are particularly targeted at low carbon and emerging technology projects around the country.

Support for small businesses extended

While most firms report that they can get the finance they need we recognise that closing our support schemes too early could risk derailing the recovery by stifling the investment plans of the businesses that create growth and jobs.

The Enterprise Finance Guarantee facility will continue for another year, supporting up to £500 million of bank loans to viable businesses between April 2010 and March 2011.

The Government also announced that the Time to Pay scheme, which helps businesses spread their tax payments, will be extended for as long as necessary and the increase in corporation tax for smaller companies will be deferred until April 2011.

Incentivising Innovation

To strengthen the incentives to invest in innovative industries and ensure the UK remains an attractive location for innovation, a 10 per cent corporation tax rate will be introduced on income which stems from patents. This will benefit all businesses that develop patents – in particular innovative industries such as pharma, biotech, aerospace, automobiles, and telecomms.

Key announcements

10 Dec 2009

• 1.07pm Government Welcomes GSK’s Response to Patent Box
• 12.57pm Consumer Minister Welcomes Additional £5m For Citizens Advice Bureaux
• 12.27pm Cutting edge computing institute for Wales

9 Dec 2009

• 4.13pm Investing for Growth
• 3.20pm New £24m Boost to Life Science Sector in Edinburgh
• 3.15pm Government Extends Loan Guarantee Scheme
• 3.05pm Government to Create Europe’s Largest Technology Venture Capital Fund
• The Chancellor’s speech in full
• How the PBR will affect you

Useful links

• Watch the Chancellor’s statement at BBC Democracy Live
• Visit the Treasury’s PBR website
• Follow the Treasury on Twitter
• Consultation on Implementing a Landline Duty (’broadband tax’)

IMAGE: Josh Hallett, licensed under Creative Commons 2.0

On 14th October David Lammy, the Minister of State for Higher Education, and John Goodfellow, Chair of the SLC, jointly commissioned Professor Sir Deian Hopkin, supported by Bernadette Kenny of HMRC, to provide external scrutiny of the lessons learned exercise undertaken by the Company

David Lammy, the Minister of State for Higher Education, and John Goodfellow, Chair of the Student Loans Company have now been presented with a report by Professor Sir Deian Hopkin on the recent problems surrounding applications for student support.

The Recommendations have been accepted in full.

The Minister made a Written Statement to the House of Commons on Tuesday 8th December.

Read the statement

Download the report 276KB

SLC letter to David Lammy 40KB

The SLC have delayed the opening of student finance applications for academic year 2010/11 to ensure that they are fully able to take the recommendations of the report into consideration.

Applications are expected to open shortly, and this date will be publicised via www.direct.gov.uk/studentfinance

Statement by: Lord Young
Venue: House of Lords

My Rt. Hon. Friend the Minister of State for Higher Education and Intellectual Property (Rt. Hon. David Lammy MP) has made the following statement.

This year Government is spending more than £5 billion on student support in England, underpinning our commitment that finance should not be a barrier to higher education. The number of undergraduate entrants to higher education has increased by 19% since 1997, and the 20 most deprived constituencies have shown higher than average growth in student numbers over that period.

Students need a simple and straightforward application service when they are applying for student support. As I said to the House on 14 October, this year’s problems have had an unacceptable effect on individual students and their families. Even when they have not led to financial hardship, they have undoubtedly caused worry and frustration. It is clear that there were serious lapses in the customer service provided by the Student Loans Company (SLC).

At the beginning of September I became aware that, in this first year of operating the new service, there were delays in processing, customers were unable to speak to the Company, and some documentary evidence could not be traced. I ordered that a number of actions be undertaken to enable the Company to accelerate the processing of applications and to increase the number of calls being answered.

These issues are why, together with the recently appointed Chair of the Student Loans Company, I commissioned Professor Sir Deian Hopkin to provide external scrutiny to the review of lessons to be learned from this year’s processing problems. Professor Hopkin has now provided his Report and I am very grateful to him for carrying out his work so swiftly.

Download the report 276KB

While at the time of this statement the Student Loans Company has paid 801,000 students, it is clear that this year the service has fallen short of expectations. The Report says that: “While some aspects of the Programme have been realised and some progress made on others, there has been a conspicuous failure in key areas of its delivery which has had a far-reaching impact on applicants and stakeholders”.

The Department accepts in full all the recommendations in Professor Sir Deian Hopkin’s report and, as I would expect, the Board of the Student Loans Company has also accepted the recommendations in their entirety.

I am now clear that decisive action is required to change the service and that the key to this is strengthening the leadership of the Company and ensuring that the customer is at the heart of everything the Company does. The Chair of the Student Loans Company has confirmed that the senior management team of the Company will be strengthened and reorganised.

I expect the Chair to ensure that the Company transforms how it communicates with its customers so that they know what to expect from the service, what is expected of them, and that risk management, contingency planning and staff training are all significantly improved.

I have asked my officials to consider the best practice in other public sector organisations to enable us to better challenge and scrutinise the Company’s performance. But there must be no confusion about roles: it is for the Student Loans Company Board to hold the Executive to account and to ensure it has the capacity and capability to deliver the service.

Key to moving forward and improving the service next year is early engagement with customers and stakeholders in the Higher Education sector. I have therefore asked the Company to establish a Stakeholder Forum which will include representation from the National Union of Students, Higher Education Institutions and UCAS. This will help the Company to develop Student Finance England, including implementation of the recommendations in Professor Hopkin’s report and should mean, with stakeholders more closely involved in the company, that many of the issues experienced this year can be identified earlier and swift action be taken to avoid them in the future.

We have invested significantly in a substantial programme of improvements which are designed to transform the way the student support service works for customers. Over the next few years, the centralised service – which takes over from applications to local authorities where the level of service was variable – will allow students to apply on-line; they will no longer need to send in their passports to verify their identity; and their sponsors will not need to send paper evidence of family income.

I acknowledge that some of the improvements will take time to implement, but I have received assurance from the Chair that improvements in the way the service is managed will be made quickly. As the Report says, the highest priority at the moment is to successfully complete this year’s application cycle. There remain problems with Disabled Students’ Allowances and I have asked the Student Loans Company to engage directly with universities and assessment centres to speed up the process, and to increase staffing resource for these activities.

The Chief Executive and Chair of the Student Loans Company have publicly apologised for the difficulties customers have suffered. As the Minister responsible for higher education, I too have expressed regret for the unacceptable service parents and students have experienced.

Customers must also play their part, and take responsibility for applying for their student support in good time if we are to ensure the service has the best chance of operating efficiently.

A copy of the Report and a letter from the Chair of the Student Loans Company are being deposited in the Libraries of the House and paper copies of the Report will be placed in the Vote Office and Printed Paper Office.

Download the report 276KB

This year Government is spending more than £5 billion on student support in England, underpinning our commitment that finance should not be a barrier to higher education. The number of undergraduate entrants to higher education has increased by 19% since 1997, and the 20 most deprived constituencies have shown higher than average growth in student numbers over that period.

Students need a simple and straightforward application service when they are applying for student support. As I said to the House on 14 October, this year’s problems have had an unacceptable effect on individual students and their families. Even when they have not led to financial hardship, they have undoubtedly caused worry and frustration. It is clear that there were serious lapses in the customer service provided by the Student Loans Company (SLC).

At the beginning of September I became aware that, in this first year of operating the new service, there were delays in processing, customers were unable to speak to the Company, and some documentary evidence could not be traced. I ordered that a number of actions be undertaken to enable the Company to accelerate the processing of applications and to increase the number of calls being answered.

These issues are why, together with the recently appointed Chair of the Student Loans Company, I commissioned Professor Sir Deian Hopkin to provide external scrutiny to the review of lessons to be learned from this year’s processing problems. Professor Hopkin has now provided his Report and I am very grateful to him for carrying out his work so swiftly.

Download the report 276KB

While at the time of this statement the Student Loans Company has paid 801,000 students, it is clear that this year the service has fallen short of expectations. The Report says that: “While some aspects of the Programme have been realised and some progress made on others, there has been a conspicuous failure in key areas of its delivery which has had a far-reaching impact on applicants and stakeholders”.

The Department accepts in full all the recommendations in Professor Sir Deian Hopkin’s report and, as I would expect, the Board of the Student Loans Company has also accepted the recommendations in their entirety.

I am now clear that decisive action is required to change the service and that the key to this is strengthening the leadership of the Company and ensuring that the customer is at the heart of everything the Company does. The Chair of the Student Loans Company has confirmed that the senior management team of the Company will be strengthened and reorganised.

I expect the Chair to ensure that the Company transforms how it communicates with its customers so that they know what to expect from the service, what is expected of them, and that risk management, contingency planning and staff training are all significantly improved.

I have asked my officials to consider the best practice in other public sector organisations to enable us to better challenge and scrutinise the Company’s performance. But there must be no confusion about roles: it is for the Student Loans Company Board to hold the Executive to account and to ensure it has the capacity and capability to deliver the service.

Key to moving forward and improving the service next year is early engagement with customers and stakeholders in the Higher Education sector. I have therefore asked the Company to establish a Stakeholder Forum which will include representation from the National Union of Students, Higher Education Institutions and UCAS. This will help the Company to develop Student Finance England, including implementation of the recommendations in Professor Hopkin’s report and should mean, with stakeholders more closely involved in the company, that many of the issues experienced this year can be identified earlier and swift action be taken to avoid them in the future.

We have invested significantly in a substantial programme of improvements which are designed to transform the way the student support service works for customers. Over the next few years, the centralised service – which takes over from applications to local authorities where the level of service was variable – will allow students to apply on-line; they will no longer need to send in their passports to verify their identity; and their sponsors will not need to send paper evidence of family income.

I acknowledge that some of the improvements will take time to implement, but I have received assurance from the Chair that improvements in the way the service is managed will be made quickly. As the Report says, the highest priority at the moment is to successfully complete this year’s application cycle. There remain problems with Disabled Students’ Allowances and I have asked the Student Loans Company to engage directly with universities and assessment centres to speed up the process, and to increase staffing resource for these activities.

The Chief Executive and Chair of the Student Loans Company have publicly apologised for the difficulties customers have suffered. As the Minister responsible for higher education, I too have expressed regret for the unacceptable service parents and students have experienced.

Customers must also play their part, and take responsibility for applying for their student support in good time if we are to ensure the service has the best chance of operating efficiently.

A copy of the Report and a letter from the Chair of the Student Loans Company are being deposited in the Libraries of the House and paper copies of the Report will be placed in the Vote Office and Printed Paper Office.

Download the report 276KB

Speech by: Rosie Winterton MP
Venue: Tackling Worklessness through Local Partnerships, Bloomsbury Hotel, London

Introduction

I am very pleased to be here today. Tackling worklessness is one of this Government’s top priorities and I believe that, since 1997, we have made real progress in helping people back into work. By 2007 the UK employment rate had reached a 30-year high, and we had the second highest employment rate in the G7 countries.

But we are also very aware – as Steve [Houghton] and I both know coming from South Yorkshire – that there are areas where people face particular challenges in joining the labour market. There are historic reasons for that which stem from previous recessions where, I believe, a very different attitude was taken to helping people during those difficult times. 

Of course, there have always been particular challenges that some people face and that’s why we asked Steve to undertake a review of worklessness. To look at what we could do to dismantle the barriers that some people face and overcome what had been entrenched deprivation. Thank you Steve for the work you have done.

The global recession, which has been felt in all our communities, has meant this work has done has taken on a new urgency over the past year. Although there are some encouraging signs that the economic recovery is getting underway, it is also true that people are still losing their jobs. Because unemployment is a lagging indicator we would expect it to continue to rise for a time after growth returns.

But what we are very clear about, as a Government, is that we must work together – nationally, regionally and locally – to make sure this recession does not leave behind a lost generation of people plunged into long-term worklessness and left on the scrapheap, as happened in previous recessions. 

Government needs to intervene so we don’t get that waste of talent; and we don’t repeat the mistakes of the past. I know that local authorities share this conviction – nearly 90% of Local Area Agreements have at least one target to tackle the causes of unemployment.

So Steve’s emphasis on the central role councils and their local partners must play in providing opportunities and raising aspirations is absolutely right.

Last month we announced an extra £40 million for the Working Neighbourhoods Fund, to be shared by 61 local authorities, to help them find innovative ways of tackling worklessness. 

And that’s why the £1 billion Future Jobs Fund was the centrepiece of our response to Steve’s review – making clear that we need local partnerships on the ground to take the lead in implementing it.

Houghton review and Future Jobs Fund

His review really set out the way ahead on this agenda. And his findings have provided a framework for tackling worklessness, especially in areas where in a sense it had become the norm.

The theme of this conference – Local Partnerships – is absolutely the right one if we are going to make this work. We can see many examples of councils are working with Jobcentre Plus, with Primary Care Trusts, the Citizens Advice Bureaux and others from the third sector, to tackle the complex barriers some people face in getting back to work.

And why is it so important to have the local council at the centre of this work? Well because it’s about local challenges and local solutions. Local authorities know their areas; they know their people; they know local businesses – so what we want to give is the freedom and flexibility to make sure that national objectives make sense locally.

Local authorities have a crucial role to play as champions and stewards of their local economy. The evidence I have seen – not only in my role as Local Government minister, but also in my role as Minister for Regional Economic Co-ordination at the Department for Business, Innovation and Skills – is that
local authorities have really risen to the challenge of leading efforts to tackle the fallout from the global downturn.

I think we need to build on the experience that has been gained. So that in future, economic development is a core activity for every authority.

The Future Jobs Fund shows how it could be done – and why it should happen. It is designed to help young people and other groups who are especially vulnerable to long-term unemployment.

But it’s also important to remember that it is a challenge fund. Which means councils can use it as a starting point and ask how they can take it forward – by using other resources flexibly and imaginatively to target worklessness and create that pool of job-ready people for local employers to draw on.

The Fund itself is expected to create something like 150,000 jobs nationally. Around half of the 95,000 jobs already in the pipeline are from local authority-led partnerships. I think what we need to do now, is ask how we can build on this strong start?

Steve gave an example of what is happening in Barnsley, where they are using the Working Neighbourhood Fund to double the length of time that placements last. And we are seeing other examples from around the country of how councils are building on the fund.

Hampshire County Council, for instance, is putting in £300,000 to set up an apprenticeship programme to complement its Future Jobs Fund. An Apprenticeship Officer, part funded by the Learning and Skills Council, is being recruited to co-ordinate and create additional apprenticeships.

Social Exclusion Task Force research findings

Projects like these show how important it is that Government, at every level, does intervene to dismantle the barriers that prevent access to employment.

We cannot simply stand back and expect the market to resolve some of these structural issues by itself. It takes active Government working with local partnerships to intervene in the right way, at the right time.

There is going to be some research published by the Social Exclusion Task Force next week, which will show these interventions can limit the corrosive social effects of recession.

Because, of course, it is not just a question of people losing their jobs. The effects go much wider – affecting people’s health, their personal relationships, and where they can afford to live.

So this time around we have put in extra resources to try to limit these effects.

• we have put  £263 million into the Social Fund to support the hardest-hit households;
• £20 million into the local authority Preventing Repossession fund;
• we are rolling out the £173 million Improving Access to Psychological Therapies programme;
• and a £13 million package to support people experiencing distress as a result of the recession, which includes the new NHS Stressline.

The preliminary findings from the Task Force research show that, this time around the social costs have been less severe than in the 1990s and 1980s. There has been no evidence of an increase in homelessness, or of property crime increasing – we can’t be complacent, of course, but these initial findings are encouraging. They suggest that if you do intervene, you can make a difference – not just in terms of employment levels, but on some of the other social effects as well. 

I think we can learn a lot from this research about what happened in previous recessions, and the practical steps councils and others can take to boost local economic recovery.

New Industry, New Jobs Strategy

But we cannot just leave it to local partnerships – we do need a coherent local response, but it has to be backed up by effective national policy. That’s why there is a relentless focus from Government on economic recovery. Because we know there can be no lasting solutions to worklessness unless we have economic growth – in every part of the country.

That’s why, through the New Industry, New Jobs strategy, we are looking to build on our existing industrial strengths and invest in new capabilities. That means a focus on key sectors – such as low carbon technologies; advanced manufacturing; healthcare and education; the creative industries – that will drive economic growth. Targeting strategic investments in the regions and areas where they can have most impact, so we can boost the regional and local economies.

But the other side of the coin is making sure that people are ready and equipped to take advantage of new job opportunities. The Skills Strategy, Skills for Growth, which published last month, is vital in that respect.

Skills

The strategy outlines how Government will ensure everyone can get the right skills for the jobs of the future, and the flexible skills that employers constantly tell us they need. And we need to make sure that, as growth returns, we have the strategy in place to help people with a history of exclusion from the jobs market into work.

So in the strategy we have signalled the importance of enabling people with low skills to access training that will help them get into a job, and keep it. It outlines plans to extend outcome-based funding, to incentivise colleges and other providers to help unemployed people get work. And it has plans for skills accounts, which are an excellent way of motivating adults to take up training and get advice and guidance about what is going to be most appropriate for them. 

We also want to build in flexibility, so that the training provided locally will meet the needs of employers and match the jobs that are available in an area. I remember going to Steve’s Work and Skills board, which was very well-led and ensured the work was done hand-in-hand with local employers: that is what made it so relevant to the local economy.

Local planning, and a clear grasp of the local economy, will be essential to ensure that the two agendas reinforce and complement each other. So councils and their partners do need to really understand the constraints and the opportunities that exist within the local labour market and economy.

Local Economic Assessments

But what else can and should Government do to help set the framework? From next April, all top-tier authorities will be required to carry out a Local Economic Assessment. And part of that will be a worklessness assessment.

This will ensure a strong evidence base and a strategic approach, so authorities really understand the drivers of worklessness in their area. They can also then take the opportunity to draw up a Work and Skills Plan, which they can use to formulate a strategy in response.

Those plans can provide a framework for tackling barriers to employment locally. And they can provide a starting point for any local partnerships that want a greater devolution of employment services in their area.

Work and Skills plans can also take the objectives that Regional Development Agencies set out in their regional skills strategies and translate them into a coherent delivery plan for each area, with identified priorities for action.

Now I believe that, when we take together the economic assessment and the Work and Skills Plan, we will see the building blocks of a ‘Total Place’ approach to tackling worklessness in an area.

They will offer the opportunity to use joint planning and resource-mapping to make funding go further, enabling local partners to align budgets around key priorities. I think that this will be an exciting new approach with the potential to deliver real benefits.

We will shortly be publishing an Employment White Paper to set out our vision for the employment and skills system, including plans to ensure a responsive, integrated support service for those who are out of work and on benefits.

Conclusion

But the success of that vision depends on effective local leadership. And I believe that only councils can truly provide it. National initiatives will fail locally without that vitally important contribution.

We cannot tackle worklessness on our own, sitting in Whitehall. Councils know their areas, their residents, their businesses better than anyone, so that partnership approach is absolutely the right one.

We are looking to devolve the freedoms and flexibilities that authorities need to get on with the job. And we are putting in place the broader frameworks that will make sure these efforts bear fruit.

I think we have to be clear. Economic opportunities – particularly in the difficult times that we face at the moment – do not just happen by themselves. Anybody who suggests the market can resolve these issues without assistance from Government is, I believe, wrong.

It is right that Government intervenes at national level. It is right that we work with the RDAs and have a coherent strategy at regional level.

But none of it can happen without councils taking the lead in their local areas. I know from my many visits to authorities around the country that it is not necessarily the core business of all councils yet. I believe we need to make it so.

Thank you.

To show your support, please sign the Back the Bid pledge. By signing up you’ll also receive daily morning updates from the summit.

The pledge forms part of the Act on Copenhagen website, from the Department of Energy and Climate Change. Other site features include:

• Ten facts on why climate change is happening
• An interactive map showing the effect of a 4℃ rise in temperature
• DECC’s Twitter stream and RSS feeds to keep in touch with summit news

Below is a taster from the Act on Cophenhagen site – a timeline showing key events en route to the summit.

The Autumn Performance Report shows there has been progress across all the PSAs and DSOs that have been assessed, showing that the Department is performing well in difficult economic conditions.  Of the five BIS-led PSAs, one is showing strong progress, three are showing some progress, and one is yet to be assessed.  Of the eleven DSOs the Department has inherited from BERR and DIUS, eight are showing strong progress and three are showing some progress. 

Also included in the Autumn Performance Report are an update on delivery of BIS’s value for money savings targets, and assessments of outstanding PSAs from the 2004 Spending Review.

Work, Recovery & Inclusion (PDF, 1.4MB)

It sets out a long term vision to radically increase the number of people from this group in employment by 2025, and to narrow the gap between their employment rate and that of disabled people generally.

Mental ill-health is the most common reason for claiming health-related benefits and costs the economy between £30bn and £40bn through lost production, sick pay, NHS treatment as well as the personal and financial costs that result from being out of work.

Skills Minister Kevin Brennan said:

“Today is a landmark in bringing together our long-held collective aspirations for a better deal for people with mental health conditions. Two years ago, the Foresight Project on Mental Capital and Wellbeing set out how we could achieve the best possible mental wellbeing for everyone in the UK. We have worked to develop a strong, cohesive set of services that will support those out of work, employees and employers to manage mental health. For our part, we are making sure that our learning and skill systems are part of that solution. “

Notes:

1. Download Work, Recovery & Inclusion (PDF, 1.4MB).  Related information can be found on the Cabinet Office website.

2. DWP reports can be found at www.dwp.gov.uk/realising-ambitions

3. The DoH report – new Horizons can be found at www.dh.gov.uk

4. An occupational health advice line for small businesses is being piloted in seven regions of England (East Anglia; Merseyside; North East; North and West Yorkshire; Portsmouth, South Hampshire, East Sussex & Isle of Wight; South Buckinghamshire, South Oxfordshire, West Berkshire; and West London), and across the whole of Scotland and Wales. The advice lines for all pilots will be open Monday to Friday, 9am to 5pm (9am to 4.30pm on Friday in Scotland). The advice lines will be operating from 7 December. DWP is working with the NHS to deliver the service.

England
Health for Work Adviceline – 0800 0 77 88 44
www.health4work.nhs.uk (website for England goes live a t 9am on
Wednesday 9 December 2009).

Scotland
Healthy Working Lives Adviceline – 0800 019 2211
http://webarchive.nationalarchives.gov.uk/+/http://www.healthyworkinglives.com

Wales
Health at Work Advice Line Wales; Llinell Gymorth Iechyd ar Waith Cymru – 0800 107 0900
http://webarchive.nationalarchives.gov.uk/+/http://www.healthyworkingwales.com

The paper will show how Government, by making the necessary savings and taking tough choices on spending priorities, can both protect frontline services and help meet its commitment to halve the public deficit within four years.

Download the publication and see live coverage of the launch here.

The package includes a new Advanced Manufacturing Research Centre in Sheffield, an £8m upgrade to the University of Manchester’s nuclear laboratories, a Rolls Royce facility in South Yorkshire, and designating the North West and Yorkshire a Nuclear Low Carbon Economic Area.

For more information on the package, visit the Advanced Manufacturing website here.

Speech by: Lord Mandelson
Venue: House of Lords

In this speech, Lord Mandelson responds in the House of Lords to the motion: That this House takes note of the Secretary of State for Business, Innovation and Skills Order 2009 (SI 2009/2748).

“In a global supply-chain economy, Britain cannot and should not ever aspire to be a country that competes by undercutting on wage costs or employment standards. We must compete by adding value, not reducing it.

“That puts a premium on what we do in knowledge, specialisation and sophisticated skills. It puts a premium on making this country one of the world’s great repositories of scientific and technical knowledge and the ability to commercialise that knowledge. It puts a premium on thinking about the interests of business – not just the businesses that already exist, but those that do not yet”

In July 2009, the Government published its Consumer White Paper “A Better Deal for Consumers: Delivering Real Help Now and Change for the Future”. This White Paper announced that a Consumer Advocate would be appointed in 2010 to co-ordinate work to educate consumers and be a champion for groups of consumers who have suffered a loss at the hands of a business. One of the commitments we made in the White Paper was to consult on equipping the Advocate with some specific powers.

Purpose of consultation

We want your views on how the Consumer Advocate can successfully deliver real benefits to consumers. We also want to ensure that when the Consumer Advocate is equipped with new powers that he/she will have the ability to do all that we are asking. In particular that the Advocate has an effective power to obtain, as a last resort, compensation for groups of consumers through collective court actions.

Areas for consultation

The consultation seeks views on the initial role of the Consumer Advocate, for example how the Advocate can best improve consumer education and champion the provision of consumer compensation. The consultation then focuses on the key proposal that the Consumer Advocate be granted the power to take, as a last resort, collective actions on behalf of consumers.

In particular it seeks views on:

• the scope of the proposed collective action power,
• the right option in terms of the type of collective action, and
• what conditions should be met before a collective action can be taken.

Finally, the consultation seeks views on the Consumer Advocate having the power to facilitate the return of funds that have been identified as belonging to or due to UK consumers which have been secured by overseas enforcement agencies. And, it also seeks views on whether the Advocate needs to be given a specific power to tackle unfairness in consumer credit agreements.

Simplifying Trade Across UK Borders – A Plan of Action sets out measures to boost trade by reducing the bureaucracy faced by businesses at UK borders.

Measures include making greater use of electronic processes to reduce paperwork and better coordination between border agencies to streamline movement of goods in and out of the UK.

Download Simplifying Trade Across UK Borders (PDF)

The plan of action, published during Doing Business in Asia Week, will aid the movement of goods between the UK and countries both within and outside the EU. Doing Business in Asia Week sees UK Trade & Investment export experts from 11 markets across Asia return to the UK to speak to 1000 SMEs. In London, Leeds, Birmingham and Edinburgh they will give practical trading advice and business climate updates to help UK companies win a larger share of Asia’s markets.

Read the full press release

This consultation sets out what the Post Office already offers in terms of financial services; it draws comparisons with Post Banks around the world; and it sets out the Government’s vision for Post Office banking and the values that should underpin it.

In addition, the consultation puts forward a number of proposals for new financial products that the Post Office could offer. These include:

• A Post Office current account
• A Children’s Savings account to encourage saving at the Post Office from an early age
• New services for small businesses including a Post Office business account
• A weekly budgeting account to allow those on low incomes to take advantage of direct debits and reduced bills

Visit the Post Office Banking consultation website

Introduction

I am delighted to be here this afternoon to be able to contribute to this significant debate. I would like to pay tribute to BMW for bringing us together and hosting the event.

I first visited Berlin in 1979. I came again in 1990 in that strange time when the wall was open, the DDR remained but the re-unification of Germany was pending.

Today I am proud to be here in the midst of the futuristic architecture – characterised by the magnificent renewed Reichstag Building.

The new Berlin is celebrating a momentous and inspiring period in its history this year and it is a privilege to be here at this time.

If there is one political lesson from Germany’s recent past it is that there are no certainties. I never believed in 1979 that I would be free to walk through the Brandenburg Gate to Unter den Linden. But the point I wish to make today is that the old certainties are gone in industry too and we stand at a defining moment in our shared history. We will need the same boldness and creativity in the challenge we face in moving our societies to a low carbon economy.

The context

When I visit British factories I am struck by how much German plant and equipment is there. But Britain manufactures too. We were the first industrial nation and we have a great tradition of innovation – for example, the train, the light bulb and the television. But manufacturing in Britain is not just in the past.

No. The UK is still the world’s sixth largest manufacturer, and we are very aware that our manufacturers, our engineers will hold the key to our future economy.

The global financial crisis has shown all of us the centrality of innovation and new manufacturing technologies to economic growth as we emerge from this recession. And ultra low carbon represents a tremendous economic opportunity.

Of course, it is all too easy to  think of the shift to a low carbon economy as if it were something that is inevitable. But when you sit down and think about it you realise we must act and innovate to change everything we’re used to. The way we power our factories, the way we run our homes, and the way we fuel our cars. It’s nothing less than a new industrial revolution. And that means our focus will have to be on revolution not evolution.

And what’s driving this huge economic shift, this need for a fundamental re-ordering of the way we do things, is the threat of climate change – something that is inevitable unless we do act. That’s why the UK is committed to a legally binding target to reduce greenhouse gas emissions by 80 per cent by 2050.

The UK is keen to help lead the way in low carbon. We have an estimated 50,000 companies employing 880,000 people in the UK in the low carbon market. But to fully realise our potential in a sector already worth around £3 trillion worldwide we realised we needed to do more to reshape our economy and prepare for this low carbon revolution.

So our new industrial policy looks at how we can have a national capability in the areas where we believe our future interests will lie – in advanced manufacturing, in nuclear energy and in low carbon.  And, since, travel accounts for around 21 per cent of the UK’s total domestic greenhouse gas emissions, the need to place our travel on a more sustainable footing is absolutely key.

But the gapbetween ambition and success is vast. Consumers will not  simply switch to low carbon alternatives unless they are convinced it is right for all their needs. So today I would like to set out three ways in which the UK Government intends to have a world class capability in low carbon travel.

Educating our consumers

Firstly, we’re making sure consumers are properly informed to allow them to make greener choices. Our ‘Act On CO2’ campaign encourages people to reduce their carbon footprint whether it’s through better journey planning, vehicle sharing, cycling or walking. We know this sort of campaign can have a real impact. In the past five years the three Sustainable Travel Towns of Darlington, Peterborough and Worcester have seen car trips fall by around 9 per cent, walking increase some 14 per cent, and cycling increase by 12 per cent.

Infrastructure

Secondly, we’re making sure that we will have the right transport infrastructure in place.  So we’re spending money on widening our roads and motorways to relieve some of the congestion that blights our journeys. And we’re now expanding the electrification of  our railways – since an electric train typically emits up to a third less carbon per passenger mile than does a diesel train.

And you can’t expect people to take the train if the train is the slowest alternative.  So we’re following Germany – and Europe’s – lead on high speed rail.  We know this has the potential to lower carbon emissions by encouraging people to change their habit of relying on road or air travel.

So, by the end of the year, we will have delivered a dedicated route plan for the first stage of a high-speed line between London and the West Midlands.

Low carbon vehicle infrastructure

But, of course, the key topic of interest for the people in this room is what we’re doing with cars. How is the UK making sure its car industry is fitted out with the capability it needs in a low carbon age?

It would be entirely wrong to play down the huge strides that the motor industry has made in the past few years. Britain, for example, has a world wide reputation for making motor vehicles – everything from mass market cars to Formula 1.

However, the UK’s reputation as a major auto manufacturer will, ultimately, depend on more than evolutionary improvements to the internal combustion engine.  It will be about harnessing the potential of the revolutionary emerging electric and hybrid technologies, and accelerating the transition to ultra-low carbon vehicles.  This is where the UK sees a strategic opportunity to bring together our research and engineering skills to make a stronger impact in the global industry.

But the shift to low carbon won’t happen quickly enough without Government help. That’s why we set up the Office for Low Emission Vehicles (OLEV) to provide Government leadership with industry and link them with the energy providers. And we are doing everything we can to ensure we have a national capability in low carbon cars. OLEV has developed a comprehensive package to encourage demand, support supply, and enable places where these vehicles can be used, based on the industry consensus behind the formation of the UK Automotive Council.

Our ‘Plugged In Places’ scheme will support lead UK cities as they switch on for electric vehicle use. The UK is perfectly placed for electric vehicles, with high city population densities and short distances between conurbations.  So we are even turning our congestion into an opportunity!

London is aiming to become the electric vehicle capital of Europe, and it is aiming to have 25,000 charge points across the city by 2015; but it is just one of the cities in this revolution.

And we’ve already made a commitment worth over £400m to accelerate the transition to ultra-low carbon vehicles, and to encourage take-up and support the technology as it comes to market. This includes customer incentives of between £2,000 and £5,000 a vehicle from 2011, when we expect these vehicles to come onto the market in volume.

Encouraging innovation

I’ve talked about how the UK Government is helping consumers make informed choices and how we’re building up the right infrastructure. The third element of our plan is all about encouraging innovation.

What powers each industrial revolution is strength in innovation, linked to industrial capacity, capital, science and government support.  The abundance of people prepared to think in completely different ways. If we’re going to create the next generation of electric cars, if we’re going to power another industrial revolution, we need to find and nurture the right talent. Not just people with know-how and expertise but people capable of approaching a problem from a totally different angle.

Now we’re good at innovation in the UK. I mentioned our historic tradition but we’ve been pioneers in a whole range of fields recently from plastic electronics to Bluetooth technology.  We have an excellent science and research base supported by significant increases in government science investment in recent years.  And we have four of the best ten universities in the world.  

But, even so, we know there can be some gaps between having those great ideas and bringing them to market. So £150 million of our UK Innovation Investment Fund is designed, again, to lever in additional funding from the private sector.

And because we know innovators need space and time to test out their ideas – two commodities in short supply especially during a global recession – we’re building national centres for excellence to help develop the prototypes we need. Last week, for example, I visited Bristol to announce the site of the National Composite Centre which will help us realise our potential in this next generation material.

Low carbon vehicle innovation

When it comes to low carbon vehicles we’re encouraging innovation in a number of ways. Recently, we ran a competition to develop and demonstrate low emission vehicles. It brought together car manufacturers, energy companies, local and regional government and world-class universities. As a result we are now testing low carbon vehicles from 16 manufacturers in eight locations across the UK – from Glasgow to Oxford, the West Midlands to the South East – making it possible to showcase new and emerging low carbon vehicle technologies in real world situations.

We want the UK to become the place to be for ultra low carbon demonstrator projects.

BMW, our hosts today, will soon be advancing the next generation of electric vehicles by testing their electric Mini prototypes on the streets of Oxford. And they will be showcasing a range of electric, hybrid and conventionally-fuelled vehicles at the forthcoming 2012 Olympics in London.

Britain has been chosen by Toyota to be the home of the first Toyota hybrid vehicle to be produced in Europe. And we’ve a site chosen by Nissan to be the European “mother” plant for battery production. 

By taking such an active approach, the UK is already helping speed up the technological development of low carbon cars. Yesterday, I was fortunate enough to test drive the Ampera  electric car and it was an important moment when I realised I did not notice the difference from the internal combustion engine.
We are also funding exciting products such as Jaguar’s limo green – which is an electric vehicle in the luxury class.

But this isn’t just about products.  We are developing our skills system so that people with the right skills and abilities can come through into these exciting new areas of research, development and manufacturing. Last month we published a Skills Strategy to identify the skills gaps in our low carbon industries.  For example, this autumn we launched new qualifications for the production of hybrid vehicles.

As a result, we’re building up a new technician class through our revived apprenticeship system. We’re also seeing how we can devise practical low carbon courses in schools, further education colleges and universities.

And we are working with Richard Noble to use the new land speed record “Bloodhound” car targeting 1,000mph to create enthusiasm in our universities and increase engineering intake, just as the space race did in America 40 years ago.

Conclusion

Today I’ve mapped out three ways that will, when it comes to low carbon, make the UK the place to invest in years to come. But we will not be successful in our approach without a fourth and final element. And that is our ability to work in partnership – locally, nationally, and most particularly at the European and the global level. International partnerships, partnerships between businesses and between Governments are essential if we’re to build up those local and international markets in low carbon. Because the challenges we face in the shift towards a low carbon economy are global in scale. They transcend national boundaries. And global problems demand global solutions.

I’ve already highlighted areas where co-operation between British and German companies is bearing fruit. I had a superb visit earlier this year to the BMW Mini Plant in Oxford where, building on an iconic British brand, British and German engineering has combined to create a world beating car. More broadly the car industry’s consensus on a low carbon road map was central to the UK Government’s own strategy for the automotive industry which we published earlier this year.

And our newly created Automotive Council will set a long-term plan for the development of the industry. Its membership includes world class engineers, suppliers, scientists and business leaders from across Europe. It is an impressive group. And I’m delighted to hear that BMW’s Jürgen Hedrich, along with Hermann Kaess of Bosch and Franz Josef Paefgen from Volkswagen, have agreed to join the distinguished cast list.

In a few weeks’ time world leaders will gather in Copenhagen.  We believe that the conference must succeed.

But, whatever the outcome, that meeting has already underlined a few basic truths that are now universally acknowledged.  Our future is in low carbon.  We’re behind it here in the UK and we want to work with you to realise our full capability. Today’s discussions will advance our co-operation and I’m sure we will reap the rewards far into the future.

In this speech, Lord Mandelson debates the Second Reading of the Digital Economy Bill. He focuses on three key areas where the Bill will enable the UK to modernise its digital infrastructure; to update its copyright regime for a world in which we use digital content in radically new ways; and, finally, to protect and strengthen public service content both nationally and locally.

 ”When we talk about the digital economy, we are talking about every business that runs a website or transfers data digitally; every firm that sells goods online or whose creative or intellectual property is represented by digital content; and every business that enables these business models to exist.”

Lord Mandelson said:

“Growing financial services at the Post Office will help secure the future of the network and give people access to a full range of banking products at an institution they trust and value.”

Some of the proposals put forward include: a weekly budgeting account, a current account, a children’s saving account, business accounts, more mortgages and closer links to credit unions.

See the Post Office Banking page for more information.

Read the full press release

Making its initial response to the Gibson Review of Engineering Construction, a study of productivity and skills in the sector, the Government has committed to:

1. Earmarking £4.5 million of funding for more trainees and apprenticeships in the sector.

2. Working with the Engineering Construction Industry Training Board to ensure that the industry’s training levy is fairly applied to all firms working in the industry, including non UK firms.

Lord Mandelson also welcomed the creation of a new cross-industry body set up to promote change in the sector to be chaired by Ian Marchant, chief executive of Scottish & Southern Energy.

Lord Mandelson said:

“The engineering construction sector employs up to sixty thousand people in the UK. This new investment means that more home grown workers will be provided with the skills and experience needed for them to take the work opportunities that designing, building and maintaining the wave of new investment the country needs in power stations and energy infrastructure.

“I am delighted that someone of the calibre of Ian Marchant has agreed to take on this important role. His experience is highly relevant, and he is extremely well placed to take the work of the Forum forward.”

New chair of the forum Ian Marchant said:

“The UK’s engineering construction industry needs more people with more skills and better productivity if it is to play a full part in the transformation of the UK’s power stations, oil refineries and chemical plant that we will see over the next two decades. One of the key risks to the overhaul of the country’s asset base is that it lacks the engineers to do the work. Over the next 18 months, I expect the new Forum to set out a practical and comprehensive plan to turn this risk into an opportunity for the UK to improve skills, create jobs and provide work for a growing number of successful engineering construction companies.”

Download the Gibson Review 1.6MB

Accompanying analysis and press releases

PLEASE CHECK AGAINST DELIVERY

Thank you and good afternoon everyone.

Languages matter because words and the perspectives on the world that they represent matter. The more of those perspectives we can take in, the richer and more rounded we are likely to be as human beings.

I don’t think you need to be a professional linguist to understand that.

My work in the law and in politics has been an education not just in the power of words and ideas, but also in the diversity of viewpoints that language can express. And my life as a Londoner, living here in a city where 250 languages are spoken, has shown me that English is not the only tongue capable of giving expression to unique, valuable or beautiful insights.

So often in history, language has been a wall that separates people from each other, a barrier to mutual comprehension and a source of distrust. To break down that wall by learning another language is not just to find a new means of communication, but also to gain an alternative way of understanding the world and how it works.

Anyone who sees languages in that way cannot consider the promotion of language-learning as anything other than a priority for our education system. And I certainly want language skills to be recognised as a key contributor to our country’s success, now and in the future.

We cannot afford to ignore the fact that 75 per cent of the world’s population does not speak English. And even if we could, there is no virtue in showing an Anglo-centric face to a world that is much more complex than that.

Global ambitions, whether in commerce or in political influence, require global perspectives. And they in turn require our knowledge and use of languages other than English has to be nurtured and encouraged to grow.

Without this growth in language learning, we stand in danger of losing much that is valuable to us.

Our business competitiveness and our ability to attract inward investment will fall.

Our ability to research in collaboration with non English-speaking countries will decline.

And British people will be unable to compete for jobs in an increasingly open European labour-market.

I’ve met people who think of languages as an irrelevance, or at best as an afterthought to be tacked onto the end of a CV. Of course, they’re hopelessly wrong.

More and more businesses operate in more than one country. In those companies, staff need to spend time working abroad and speaking other languages if they are to gain promotion and get on in life. If we fail, as a country, to embrace language learning, we will set arbitrary limits on people’s aspirations and on their scope to achieve social mobility.

In that context, the recent CBI report Stronger together: Businesses and universities in turbulent times is required reading. It reminds us that the skills of language graduates are not just needed for interpreting and translation careers. They are important in global businesses and industry.

I quote: “Language skills are also important in an increasingly globalised workplace. Students should be striving to develop these skills which…are not an optional extra”.

In view of all this, it’s just as well that languages are not dying out in Britain. On the contrary. Today, you can hear more different languages spoken in this country than at any time in our history. And, as I’ve already said, there’s no better place to see that for yourself than here in London, the most linguistically diverse city on earth.

Moreover, more British children are growing up bilingual than ever before. Indeed, a recent survey of almost a million school-age children in London found that fewer than three-quarters of them speak English at home.

That’s not a cause for alarm, but for celebration.

Yet much of the rhetoric that has surrounded language-learning in this country is predominantly downbeat and defeatist.

And I don’t deny that there are some understandable reasons why languages are described by some people as being in decline.

I know that there remain concerns about the policy which permits 14 year olds to choose not to study a language at GCSE. And it’s certainly true that numbers of GCSE entrants in languages have been falling for nearly a decade.

But there are clear signs that the standards for languages at GCSE are improving now that compulsion is no longer there. We are encouraging languages in secondary schools through revitalising the curriculum for 11-14 year olds. And in 2011, it will become compulsory for primary schools to offer a language, as more than 90 per cent already do.

And the picture also looks much brighter at A level, where numbers of language entrants have been rising since 2005. And that ought to be feeding through into more demand for higher-level learning of languages.

Of course, it makes it much harder to take an optimistic view of the future of modern languages in universities when some vice-chancellors and their governing bodies decide to cut back or close departments, or to curtail the range of courses on offer.

I know, too, that some institutions have come to see their role in language studies as offering basic language modules for the generality of students rather than full degrees for specialists. And there’s a place for that sort of thing.

I welcome the work that is done by language centres up and down the country giving students studying other subjects the chance to add some French or Spanish to their skill set. But this must not be seen as any sort of substitute for fully-fledged teaching of high-level language skills, backed up by excellent research. We need to produce not just more linguists, but better linguists as well. And we need the understanding of the cultures, histories and politics and economics of the countries where they are spoken that only rigorous scholarship can give us.

These are all reasons why we’re here today. This event is about how we can move forward together in the context of the current state of modern languages and the recommendations in Michael Worton’s report.

I don’t pretend that Michael’s findings make entirely comfortable reading for any of us. But that’s all the more reason to take them seriously.

In particular, I’d like to hear what you think of the messages about languages that the Government gives out.

I know they haven’t always been welcome to many of you. Last year’s Research Assessment Exercise and its effects on language departments has been a particular bone of contention.

Detailed allocations of the quality-related block grant for research are of course a matter for HEFCE.

But I understand that the total amount of funding for each subject reflects the total volume of research in that subject submitted in the RAE. Volumes of language research grew at a smaller rate than in other research areas overall and so this is reflected in shares of funding.

People are understandably focusing on the year on year change in funding. But this year we are seeing a change to funding that reflects the relative volume changes since the 2001 RAE. Over that period the block grant has been steadily rising. In fact, for languages overall, it has risen by 4 per cent in real terms since 2002.

Last year’s RAE actually represented a very good outcome for some languages, like Arabic, Chinese and Japanese. But there’s no reason for it to have placed any department in these or other languages under threat.

I note, too, that Michael’s report argues that linguists in universities themselves could do more to ensure not just the survival but also the success of their departments. He says that they could make more of their successes and do more to convince university leaders of their value, for example, by emphasising their contribution to institutions’ international strategies.

I’d be interested to hear your views on that.

I know as well that some vice-chancellors have misinterpreted the need for the Government to invest in subjects like science, technology, engineering and maths that give the greatest economic return as a lack of commitment to other subjects. And that, of course, has created problems of its own. Over the last ten years, we’ve lost about a third of our languages capacity in higher education.

I don’t like seeing departments close and study options disappear and I don’t believe that the Government’s or HEFCE’s funding decisions have made that inevitable. But I can’t stop university authorities from taking management decisions. You know that the Government’s role in this is not an interventionist one and how protective of their autonomy universities rightly are.

I also want to hear your ideas on any actions we in Government can take to boost demand for university-level language studies. Because ultimately, only demand from prospective students can keep subjects sustainable.

Of course, we already have initiatives like our Routes into Languages programme which is encouraging pupils to learn languages and to enjoy the experience. The signs to date are that this is starting to have a real impact.

But I’m in no doubt that we could do more.

In particular, we must counteract the perception that the Government does not take language learning seriously. We do and we want to demonstrate this. That is why I welcome the recommendation in the report that there should be a forum to provide “clear, coherent messages” and to develop a communications strategy for them.

I want to take my share of the responsibility for this work, and that’s why I can announce today that my DCSF colleague Diana Johnson and I have agreed to chair the new forum jointly.

I’ve talked this afternoon both about some of the challenges that modern language studies face and about how necessary it is to find ways of overcoming them. But now I know that Michael and Chris are as anxious as I am to hear what you think and to answer any questions you’d like to ask.

Thank you.

Speech by: Lord Mandelson
Venue: House of Lords

In this speech, Lord Mandelson responds in the House of Lords to the motion: That this House takes note of the Report of the European Union Committee on Developments in EU Trade Policy

“It is important that Britain leverages the weight of Europe and that Europe leverages its collective strength in the world both to match those emerging economic powers and giants in the global economy and to engage them very seriously in a very practical way.”

I want to say something about the value and challenges of local media today, but I want to start with the bigger picture, which I think is the health of regional life in the UK generally.

Our big challenge now is, over time, to repair the country’s balance sheet, which has been hard hit by the banking rescues and the collapse in growth. To do that we have to get the growth back – and the growth has to be sustainable and diversified, and it has to be shared across the regions of the UK. I want to say something about how we make sure that our growth strategy has a strong regional dimension. And I want to say something about how we make sure that a strong regional culture of news prospers in Britain, and what we’re doing in the Digital Economy Bill to make sure that happens.

I don’t think it’s stretching it to talk about a renaissance of regional confidence in Britain. We must not have short memories about this. Fifteen years ago the talk in Manchester, or Newcastle or Birmingham or Sheffield or any of the industrial revolution cities was still too often about had been lost.

These days it is increasingly about what is being built and renewed, the new confidence, the new links to Europe or the global economy, the new jobs. I don’t want to sound starry-eyed or complacent but these places had the guts ripped out of them by economic change and I believe that this growing regional confidence is real and justified, and preserving it through the downturn has been an important priority for the government.

Flexing the regional muscle

Just to take one big example, almost all of our manufacturing muscle is a long ride from London. It looks different – these days it’s more likely to be a sleek barn on a business park than a factory and a smokestack, but it’s where it has always been. Even a huge chunk of the financial services industry isn’t actually in the City of London.

We talk about the need for a balanced economy in the UK and that means two basic things. A diversity of productive sectors and strengths. And a widely shared spread of growth across the UK. We might measure growth as a single national aggregate, but the reality of regional performance behind that number matters just as much.

That’s why we are committed to creating more regional autonomy and drivers of regional economic growth. It’s why we created the Regional Development Agencies, whose remit is to take a strategic approach to regional economic management. The RDAs have done this well – they produce over four times the regional economic growth for every pound they spend or invest. They’ve trained almost half a million people and helped create or secure more than 200,000 jobs over the last ten years. They are now having more responsibility passed to them for skills training in the regions – a vital key to future growth.

Our intention is to strengthen the RDAs further. Our new tasking framework for Regional and Local government, which we will launch in the next few weeks, sees them acting, for example, as a critical intermediary between local businesses and universities and colleges.

We want to see them collaborating a lot more with each other and with local government to bring in strategic public and private investment and build up regionally-based national strengths in key areas like low carbon and advanced manufacturing in a way that reflects local capabilities and local geography and is coherent across the country as a whole.

Challenges for regional and local media

Now, if you’re serious about strong regions, then the active commitment and engagement of local media is vital. Eight in ten British adults read a regional newspaper. This journalism is – or should be – the bedrock of local democracy and public life, the mirror of regional identity and an encourager of innovation and change.

But of course we all know that local journalism faces the same challenges that the wider media faces. Declining readership. A migration of advertising and interest online. And of course, for the last year the recession has hit revenues very hard.

Its good to see local media experimenting with new models like paying for premium web content and we’ll all be watching how that goes. But, all told, a tough business to be in.

Now, obviously, commercial reality is commercial reality. But a healthy culture of local news in particular is a public good and Government can’t just wash its hands. So I want to make two important points.

The first is that I recognise that many of you are concerned about the impact of the withdrawal of government advertising from local and regional papers. I also know that you are concerned about the competition to local and regional papers offered by Council freesheets.

Obviously Government faces a difficult balance here. Our first obligation is always to spend taxpayers’ money sagely- and revenue from government advertising can’t be a business model in itself.

Local authorities have a public service obligation to publicise the work they do at value for the taxpayer. But we have to weight the effect of this on a strong culture of local media – capable of holding local government to account!

I am looking forward to hearing the Audit Commission input on this question and we will then look at the evidence to see how government advice to Local Authorities might be strengthened.

Public service content

But to my mind the question of local public service content is the big one, and it’s my second and final point. The Digital Economy Bill will receive its second reading this week, and alongside its measures for upgrading the legal and physical infrastructure of our digital landscape for a global knowledge economy, it explicitly makes the case for support of public service content both nationally and locally.

I don’t buy into the view that says that public service content implies a lack of trust in people or that it equates to an evil called state-sponsored journalism. The question is whether we think an entirely commercial market for news or broadcasting produces the plurality and diversity and objectivity that the public demands.

A market for media will pull in the direction the majority of paying customers want it to go, and there is value in that. But broadcasting has a broader remit for a range and quality of programming and news that will never be delivered by the profit motive alone. That principle has to be defended.

You’d think the last two years would have taught us to be a little more cautious in ascribing absolute value to the judgments made by markets. Evidently not everyone thinks so.

Of course, the recent experience of the BBC does make the point that you have to be clear where the line between public service and commercial competition lies. The BBC seems to recognize that there are limits to extending itself into commercial markets, and its review of this is welcome. To say this is not to attack the basic mission of the BBC, as some of its commercial competitors are doing. It is to argue that mission creep can undermine the case for that basic mission.

There is also a strong case for alternative public content providers to compete with the BBC and keep it on its toes. The Digital Economy Bill does this with a new public remit for Channel 4, and we have high expectations of the Channel’s new leadership.

As you all know, we are also going to pilot the idea of Independently Funded News Consortia to provide alternative sources of high quality local and regional news, especially on television and online – the lines between these things now becoming increasingly fluid. Drawing on the experience of the initial pilots, a national roll out is planned for 2013. I’m glad that many in the local media world see a real potential vehicle for their expertise here.

In the first instance we are going to fund these out of the underspend from the digital switchover plan. For the future the Government has made it clear it favours maintaining the current top-up in the BBC’s funding and financing the consortia from that. However, we are not going to set anything in stone in the Digital Economy Bill.

Conclusion

So, to conclude. Preserving and reinforcing the local and the regional in public services, in politics, in policy is vital for effectiveness and accountability. Our economic strength depends on strong regional economies. So does our sense of social solidarity. A strong local media is vital to all of these.

It might sound a little paradoxical but I think one of the things that is driving us back to localism is globalization. Because while it is increasingly becoming rational to move some of our governance in, say, financial markets, or trade rules or action against climate change, to the EU or global level, the need to feel connected to our roots and sense of place means we also want local solutions and will build our political identities around what we want from, and feel about, our surrounding community.

Having grown up on the principles of Morrisonian municipal socialism and served for thirteen years as MP in Hartlepool I know exactly where this instinct comes from, and I think it’s a very good thing. I want to finish by saying again that the role you play in that is, and will always be, vitally important. Thank you.

Business Secretary Lord Mandelson and Minister for Science and Innovation, Lord Drayson, highlighted the exciting potential that exists to invest in technology in the UK.

The Summit will also provide more information on the UK Innovation Investment Fund (UKIIF) to fund managers.

The Fund was announced by the Prime Minister on 29 June 2009 as part of the Government’s strategy for Building Britain’s Future. BIS, DECC and DoH will invest a total of £150 million alongside private sector investment on an equal basis.

It is the Government’s ambition to create a Fund worth £1 billion over the 15 year life of the Fund.

Companies showcasing at the Summit include:
Horizon Discovery
ApaTech
NaturalMotion
TMO Renewables

Twitter
Follow @ukiif to read live tweets from the event.

LinkedIn
Contribute to the discussion about investment in the UK and keep up to date on UKIIF developments by joining the UKIIF LinkedIn group.

UKIIF website
For more information and contacts, visit the UKIIF website here.

A new film aimed at encouraging small and medium-sized enterprises to seize the opportunities presented by addressing climate change has been launched.

The ten minute film, entitled Low Carbon, High Potential, features interviews with five leading UK businesses, including SMEs who are already taking up the opportunities presented by the transition to a low carbon economy. They explain the steps that they have taken to reduce their climate impact, why they chose to do it, and the benefits they have received in doing so.

The film is the result of a collaboration between public, private and third sector organisations. These include The Prince’s Mayday Network, The Carbon Trust, The Prince of Wales’ Corporate Leaders’ Group on Climate Change, the Department of Energy and Climate Change (DECC) and the Foreign & Commonwealth Office (FCO).

Commenting on his involvement in the film, Adnams’ managing director, Andy Wood, said: “At Adnams, we have transformed ourselves into a low carbon business which brings huge benefits to our organisation, both in money savings, brand reputation and employee engagement. I was delighted to be in a film which encourages other businesses to do the same. Every business can make a difference.”

Energy and Climate Change Secretary Ed Miliband said: “Copenhagen is a real business opportunity for Britain. This video shows that going low carbon is not just something for big corporations, but that it is something that can open up new markets, create jobs and present cost saving opportunities to business of all shapes and sizes right here in the UK. That’s why we’ll be pushing for an ambitious outcome in Copenhagen – to help fast-track these opportunities for the benefit of UK business.”

The film will be distributed through a number of UK business networks and websites, including those of the film partners and key business organisations such as BusinessLink, the CBI, the Federation of Small Businesses and the UK Chambers of Commerce.

This guide focuses on cutting costs, both in the short and longer term, but also on the new opportunities that are available through entering expanding low carbon markets for low carbon and resource efficiency. This is a huge sector, globally £3 trillion and predicted to grow to over £4.3 trillion by 2016.

The booklet highlights the risks of inaction: losing out to more efficient competitors, greater exposure to volatile fuel and commodity prices, material scarcity and effects of climate change and responding to the challenges of new government policy.

And finally the booklet looks at how action also leads to benefits in engaging people from customers, through brand reputation, to employee retention.

Can you Afford Not To? (PDF, 471KB) is hosted on Business Link’s ‘Act on Copenhagen’ pages.

Introduction

I am delighted to be here today for the formal signing of the Leeds City Region pilot programme.

This partnership, between the 11 councils, regional partners and central Government takes a further step in this new way of working together – to deliver our shared vision of economic prosperity for all our communities.

The project has become more relevant in the economic downturn because although the recession may have been global in its origins, but the effects have been felt locally, in communities across Yorkshire and beyond.

This pilot will play a crucial role in tackling the fallout from the downturn and making sure that Leeds City Region is ready to seize the opportunities opening up as the recovery begins.

Because to make progress on these issues – whether tackling worklessness; improving skill levels; or nurturing enterprise and innovation – we all need to work closely together.  We can achieve more together than we do alone. And the pilot provides the tools to do just that.

Delivering tangible results

A Housing and Regeneration Board, with new devolved powers, will be set up so the City region can take control of this vitally important agenda. It will collaborate with local partners to deliver low-carbon communities and will strive to make the area a centre of excellence in sustainable design and innovation.

The Urban Eco-Settlement Programme, which is at the heart of this ambition, will provide up to 28,000 environmentally friendly new homes for local people and regenerate brownfield land in Bradford, Leeds, Kirklees and York.

There will also be a new drive to help everyone use less energy. The new Domestic Energy Efficiency Programme will improve 300,000 properties and help lift 50,000 households out of fuel poverty.

The signatories will also work to establish the city region as a globally-renowned centre of innovation, building on existing initiatives such as Science City York and the Bradford Learning Quarter to attract new inward investment.

The Leeds City Region Employment and Skills Board, driven by local employers, will have a crucial role to play here. It will make sure that skills programmes meet the needs of the local economy, training people to work in key sectors such as financial services and the digital and creative industries.  And inward investors also want to know there is leadership here, both civic and business.

But a more skilled workforce doesn’t just mean higher productivity – it means better job prospects, greater prosperity and more life chances for families everywhere. So the new Board will empower learners to get the skills and confidence they need to succeed in the modern working world.

The ambitious commitments that we are all signing up to today will generate new homes and new jobs for the people of the Leeds City Region – tangible outcomes that will change lives and communities.

A new approach

We have already devolved new powers and freedoms to kick-start economic growth through Multi Area Agreements. Now we are taking this up a gear through the City Region pilots.

There are just two in the country – one in Greater Manchester and now one here – so as the Minister for Yorkshire and the Humber I am proud and delighted that one of them is in our region.  I was anxious to make sure Y&H was at the forefront in this area.

The Government believes that devolving these new freedoms will give the pilot the tools it needs to boost economic growth. It is an exciting, ambitious new approach and we want to explore its full potential.

That’s why we have a high-level ministerial committee, which I sit on, devoted to the two City Region pilots. It is a sign of the priority they are being given and the determination to have Ministers and Local Authority leaders working side by side to make sure these pilots succeed.

Core cities matter

And why do we want them to? We believe that dynamic cities, in the North and elsewhere, have a crucial role to play in leading the economic recovery and powering future growth, in their regions and beyond.

The Leeds City Region generates 5% of the UK economy [national Gross Value Added], so we understand the significant contribution it makes to regional and national output and we want to see how much further we can go.

This work is absolutely crucial. Research published earlier this month by the Northern Way looked at Leeds and Manchester and the role these economic powerhouses could play in powering economic growth right across the North.

It found that reducing the commuting time between the two cities, by 20 minutes, could generate up to £3.7 billion of economic benefits, which would have a wider impact across the Northern regions, and help narrow the historic economic gap between the North and South of England.

So the Department for Transport is exploring, with the pilot, ways of working more closely with the Highways Agency and Network Rail to deliver a commuting network that will unlock this economic potential.

This area already has strong economic foundations to build on. The wider Leeds City Region has world-class universities, which are doing cutting-edge research and forging innovative partnerships with industry to become hubs of the knowledge economy.

These institutions are a major draw for inward investors and are playing a crucial role in driving economic development. We need to harness these existing strengths and use them to power economic growth and development hroughout the wider region.

But it would be a mistake to see the Leeds City Region pilot in isolation. The single regional strategy, agreed between Yorkshire Forward, and our local authorities and other partners, is a means of targeting key investments in infrastructure and growth sectors that will boost the economy right across Yorkshire and the Humber. So it’s essential not to lose that wider economic perspective.

And, of course, this is also about setting the agenda – intervening during the downturn – looking at how to stimulate the economy and encourage investment but also ensure that the structures are in place to deliver on the ground. 

That’s why we will shortly be publishing a national framework for regional and local economic development.

This framework will identify the growth sectors the UK will compete in globally, and how these can be aligned with regional and sub-regional economic development. It will give local authorities, the Regional Development Agencies and other partners the ability to identify key priorities and combine their firepower to drive economic growth.

Conclusion

The pilots are an essential part of this picture. They are all about giving members of the partnership greater control over how money is spent to ensure that resources are being used to meet local priorities and local needs.

I believe they are an exciting new development. This pilot gives the Leeds City Region the tools it needs to prepare for economic growth as the recovery gets underway.

And this is just the beginning – I am absolutely committed to exploring just how ambitious we can be, and how much further we can go.

So I look forward to working with the members of the Leeds City Region in the months ahead, to achieve our shared vision – grasping the huge opportunities in the new global economy for the people who live and work here.

Thank you.

Speech by:

Introduction

It’s fair to say that the events of the past year have illustrated how interconnected our world is today. National boundaries have been blurred, as technology has allowed companies in distant places to do business in seconds.

So when the economic crisis hit last year, it is no surprise that some of the biggest holders of Lehman mini bonds were in Hong Kong, and some of the biggest Washington Mutual holders were in Thailand.

I’ve been in Government for 12 months now, and when I joined the banking crisis had just happened, so I said: ‘I’m a politician, not a banker’. And then the MPs’ expenses problem blew up, so then I said: ‘I’m really a banker, not a politician’.

To be in government during the past 12 months has made me a front-row witness to the most extraordinary changes in the world. But the crisis followed a century of huge global innovation – we’ve had political, economic and technological change – where each decade has led to profound transformations.

In 1909 Woolworths opened its first store; in 2009 it closed its last. Now it exists online, its stores taken over by other big brands or community initiatives like Wellworths.

Its fortunes reflect the dual nature of globalisation – first it grew into an international brand alongside the consumer society, and then it fell victim to the financial turmoil that swept the globe.

A century of innovation

So I would like spend a few moments taking stock of where we are, because looking back over the past 100 years can help us think imaginatively and creatively about the next.

The first decade of the twentieth century witnessed the rise of technological innovation. The Wright Brothers took flight in 1903; there was the first radio transmission from America to Britain; and the first model T Ford rolled off the production line in 1908.

This period saw the development of new corporations, such as GE, to exploit these inventions; and the emergence of large corporations, assembly lines and production on a large scale.

Capitalising on this, Frederick Winslow Taylor published what’s widely regarded as the first management book: ‘The Scientific Principles of Management’ in 1911.

By 1914, the UK was at the apex of what has been called Wave 1 of globalisation. By that time, the new world’s labour force had grown by a third since the 1870s, thanks to migration, while Europe’s had shrunk by an eighth. There were increasing concerns about Britain’s ability to compete with what was described then as an emerging economy – the US.

The 1920s opened with the first Council meeting of the League of Nations, an attempt at multilateral regulation of the world order that was compromised by the US refusal to participate. The decade closed with the one of the seminal events in economic history – the Wall Street Crash, which saw 13 million shares sold in panic on Thursday 24th October, 1929.

When you read about them it’s difficult to comprehend how catastrophic the effects of the ’29 crash were. In the 1930s the Great Depression slashed US output by 30%. In the four years to 1933, 20,000 businesses went bust; 250,000 people lost their homes and 20,000 people committed suicide. Protectionist measures such as the Smoot Hawley Act saw international trade tumble from $10 billion to $3 billion by 1932.

In the 1940s, the turmoil of the Second World War led to the foundation of a new global financial system and the implementation of the Bretton Woods system, with the IMF and the World Bank at its heart. The principle of Free trade was promoted through the General Agreement on Trade and Tariffs (GATT), which was a precursor to the WTO.

Post-war stability laid the foundations for what was a ‘golden age’ of economic growth. Rising productivity and high levels of employment produced a substantial increase in living standards – Global GDP rose by almost 60% between 1950 and 1960, while GDP per head grew by nearly a quarter.

In the 1960s, Gordon Moore formulated his famous ‘Moore’s Law’ – that the power of a computer chip doubles every two years, transforming business and societies. In 1968, he and his partner Robert Noyce founded Intel.

As the 1970s dawned the economic environment became more volatile, with two major spikes in the oil price and the birth of stagflation. Silicon Valley saw a generation of entrepreneurs striking out on their own and founding companies that today have become major household names – such as Microsoft and Cisco.

In 1977 the first personal computers – the Commodore PET and the Apple II – went on sale. It revolutionised our relationship with technology. A year later, Deng Xiaoping launched the Four Modernisations – agriculture, industry, technology and defence – that set China on the path towards economic reform.

The early 1980s recession gave way to the boom of the late 80s. During this period the first laptop – the Gavilan SC – was launched in 1983, and Windows 1.0 was introduced in 1985.

But the early 1990s saw another bust. That was followed by the Non-Inflationary Constant Expansion – ‘NICE’ – era, during which Britain and much of the world economy enjoyed a long period of growth, benefiting from falling import prices, sustained increases in trade levels and a massive boost to international capital flows.

In 1995, here in the UK, AIM was launched as a new vehicle for companies seeking finance. But as the decade closed, the highs seen on the FTSE all-share index proved unsustainable as the dotcom bubble burst.

Even so, since the millennium, technology has continued to spread into every aspect of our lives. Mobile phones, iPods, blackberries and computers are now part of ordinary life and we live in a world where distance and time zones are now no obstacle to doing business.

The global economy today

Multinational companies today have no boundaries; it’s not really relevant any more where they have their international headquarters.

By 2008, there were a billion PCs in use worldwide, and laptops exceeded sales of desktop computers for the first time. The Windows operating system now has around 94% of the market.

The BRIC economies – Brazil, Russia, India and China – are taking their place in the world, accounting for 22 per cent of global GDP in 2008. And by last month, over 3,000 companies had listed on AIM, raising over £4.2 billion to fund expansion, and vividly illustrating the growing diversity in ownership and finance that hedge funds and private equity have delivered.

Of course, the seismic shocks in the global economy over the past year have taken us into uncharted waters. On some measures there’s no doubt the recession may be the worst since the 1930s.

But the response of Governments, learning from history, here in Britain and around the world has been very different. We have intervened where necessary, pumping huge amounts of money into the economy to shore up demand. The temptation to retreat into protectionism has, so far, largely been resisted.

The question now, as the crisis subsides, is: where are we heading next? Of course, it’s very difficult to predict the future – unless you are a professor! After all, many of today’s household names in business were not around a century ago. It’s very difficult to sustain your position at the top, even to maintain a company, for ten years let alone a hundred.

Emerging trends

But by scanning the horizon we can begin to see the trends that will shape the strategies and actions of UK businesses in the years ahead. In the short term, the focus will be firmly on getting through the recession and being well positioned for recovery.

In the longer term, it’s clear that we will see sustainability and the global shift to a low carbon economy take centre stage. It doesn’t matter what you’re business is, you’d better get on that train. Otherwise, you won’t survive. It has the potential to be the great industrial opportunity of our age.

This in turn will power technological innovation. There is an interesting debate over whether the increasing costs of research and development – where, incidentally, Britain is a world leader – will be a brake on innovation. The more positive view, put by Will Hutton, who is an adviser to the Government, is that the increase in innovation-related activity globally will boost the discovery of new general purpose technologies.

The corollary of this research is a changing asset base. Economists are developing new and broader measures of investment to capture this, moving away from merely recording investment in tangible assets such as capital equipment. Instead they are capturing the investment in so-called ‘intangible assets’ – which Britain really does excel at – such as R&D, design, software, training and organisational capability. There is no doubt that they are increasingly important for innovation, and help businesses and countries compete globally.

Provisional data suggest intangible assets account for a growing share of UK business investment. Figures soon to be published by NESTA [the National Endowment for Science, Technology and the Arts] in its pilot innovation index put the proportion at 14% of Gross Value Added in 2007. Since 1992, investment in intangibles has exceeded investment in tangible assets.

So as international competition – and co-operation, through global value chains – grows, these investments will underpin a firm’s ability to compete in the global market place. Globalisation creates new opportunities for business as markets expand and international value chains grow. Easier market access and technological change have made it easier – even for small businesses and fledgling firms – to enter them.

If they do, there is a big prize at stake – tens of millions of new customers. If emerging economies continue to grow at the pace that they have in recent times, hundreds of millions of additional ‘middle class’ consumers will provide an expanding market for high value goods and services. The World Bank estimates that the middle classes in the developing world will roughly double between 2000 and 2030. That will mean it will grow from 7.6% of the population to 16.1%, which is around 1.2 billion people.

The global economy of the future

The Government’s foresight unit – our think tank – has been looking at the impact of these emerging trends. It thinks there are four possible futures for world trade.
There’s a best case scenario – and I’m an eternal optimist, so I’m with this one – with strong and coordinated global organisations and abundant natural resources. They call this future ‘global citizen’, which sees the world recover, the world cooperating, and sees the world returning to the prosperity of the last decade.

Even with enough natural resources there is a danger of global fragmentation, leading to their second scenario ‘fragile alliances’ with ‘country cartels’ setting their own local agendas and poor and powerless countries completely losing out.

But the reality is that we have yet to deliver large scale alternatives to fossil fuels. We haven’t got enough arable land in the world, and not nearly enough water.
In this future of scarce resources, without global cooperation we risk the nightmare scenario of deglobalisation. Water wars, starvation, pollution – and no hope of restoring the economy to growth.

But there is a fourth possible future scenario that they predict. One that’s realistic about resources, but champions strong global organisations, that balance the needs of the strong against the powerless, and that finds new ways to develop and create wealth.

They call this scenario ‘global innovation’. That’s why creating a more balanced, sustainable global economy requires unprecedented levels of global co-operation.
Conclusion

The reality of today is that we are all internationalists. We have to be. So we need to create a shared sense of our collective future – economically, politically and environmentally.

That means building on the firm foundations that have been laid this year at the G20 summits in London and Pittsburgh. The sad thing is that it took a credit crunch and a financial crisis to change the G8 to the G20. We have to recognise the increasing power of India and China. These are essential first steps in redesigning the global architecture.

Now we have to balance the needs of the developing and the developed worlds. We have to reach a deal on climate change in Copenhagen next month, to slow the rate of change and fairly distribute the cuts in emissions.

But we also need to do more on multilateral trade deals. Doha is the ultimate goal, but any progress we can make in banishing protectionism and creating open, fair, global markets has to be embraced.

The Chinese have a proverb – opportunities multiply as they are seized. And that’s where we stand today. We are on the cusp of a new global order and a new co-operation around the world, with limitless possibilities. So to those of you who will be embarking on a future in business, I say this: you have to be international if you are going to compete.

Thank you.

There is some evidence that companies may incorrectly use, as their registered office address, the address of another business or private individual with whom they have no connection. While it appears that the scale of the problem is small, the impact on an individual or business who finds that their address is being misused can be significant and distressing.

Purpose of consultation

This consultation seeks your views on whether and how we should change the law to reduce the risk of companies incorrectly using the addresses of other businesses or private individuals as their registered office address and sets out a process for third parties to challenge the information on the register.

Comments and questions

If you want to discuss policy issues raised in the consultation, please contact:

Julie Ford
Department of Business, Innovation and Skills
Corporate Law and Governance
Bay 564
1 Victoria Street
London SW1H 0ET

Tel: 020 7215 2162
Fax: 020 7215 0235
Email: julie.ford@bis.gov.uk

This Consultation invites comments on the options for simplifying the arrangements for the provision of information to shareholders, creditors, the audit and accounting authorities and Companies House when auditors leave office.

Background to consultation

The present arrangements are a combination of measures put in place under the successive Companies Acts to provide information to shareholders and Companies House, and measures introduced in 2006 to meet the requirements of the EU Audit Directive for the provision of similar information to the audit regulatory bodies.

In the Government’s view, after 18 months of operation of the current system, the arrangements may be more complex than necessary and are potentially duplicatory. This document identifies areas for possible simplification and streamlining while still meeting the UK’s obligations under the Directive and the underlying policy goals.

Questions and comments

If you want to discuss policy issues raised in the consultation, please contact Paul Smith at the contact details above.

Email: pauld.smith@bis.gsi.gov.uk
Tel: 020 7215 4164

Composites are increasingly used for their lightweight, super strength properties in aeroplane wings and racing cars.

In the ‘UK Composite Strategy’ document Lord Mandelson estimates that the high-value composites market is currently worth about £1 billion to the British economy.

The UK offshore composite wind turbine blade and aerospace wing market alone could be worth £22 billion by 2020 – highlighting composites’ low carbon credentials. For more information on the strategy see the Advanced Manufacturing website here.

“Our challenge certainly isn’t to fight off that process of technological and structural change – if anything Government has an obligation to drive it faster both for environmental and economic reasons.

“Our job has to be to help you make sure that when the technological kaleidoscope slows again, Britain emerges as one of the best place in the world to makes these new kinds of vehicles and their components, to design and manufacture these new kinds of technologies.”

Read the full speech

Lord Mandelson also announced the full line-up of members making up the Automotive Council. The council will be jointly chaired by Lord Mandelson and Richard Parry Jones (ex-Ford).

I was admiring the cars on display on the way in and it’s hard to disagree with Paul Everitt’s comment in the programme that they are British icons. We’ve been making motoring icons now for more than half a century.  I was born the same year the Triumph TR series was launched. One of us went on to become a classic…

But it’s interesting that we look back on those post-war decades as the heyday of British car manufacturing, when in fact we have twice as many motor manufacturers in the UK now than we did then. We make twice as many cars today as we did 25 years ago, even before the big Asian players revolutionised the market, and twice as many engines as we do complete cars. If you put the 1.65 million cars made in Britain last year nose to tail…they would look like a bank holiday on the M4!

My point is that we sometimes have a glib notion in this country that we don’t really make anything anymore, that we are no longer an industrial economy. The motor industry makes a nonsense of that idea. If we want a balanced, diversified economy then the engineering and technological strengths of the motor industry are a national asset of the most unique kind.

It has been a difficult two years for the motor industry – the toughest imaginable market conditions internationally. So I want to start today by paying a very genuine tribute to the resilience of the industry and its people.

It’s easy to think that motor manufacturing is chiefly about machines, but of course its biggest asset is its people. The workers whose skills and productivity are one of the reasons why this country is one of the best places in the world to make cars and components.  The staff who have accepted limited hours to keep plants viable through the downturn. The innovators in management who have had to build strong business models around high structural costs and ruthless price competition over the last two decades.

This industry is the cornerstone of Britain’s manufacturing economy. I know you’d expect a politician to stand up here and say that – but for the last year I’ve spent more time working for the future of the UK motor industry in one way or another than doing just about anything else. The car scrappage scheme has maybe been the most visible part of that, but through our business support schemes and worker assistance schemes and Train to Gain we have made sure that you had the help you needed.

Of course the wider government stimulus is acting like a crutch for demand as private investment has collapsed, and that helps across the economy. As the IMF stressed again yesterday, prematurely withdrawing this stimulus would put at risk the very jobs, skills and capacity that we have worked so hard to protect. So although there are some politicians who try to make a virtue of their haste to pull away support for demand, it’s clear we need an exit strategy for the stimulus, not a rush for the exits.

Now, I’m going to disappoint you here. This commitment to motor manufacturing is not because it exerts some kind of special sentimental tug on Ministerial hearts. Sorry to say it.  It’s a cold hard judgement of what this industry means to our skills base, our engineering supply chains, our niche manufacturing skills, especially in design, low carbon and ultra high tech. It’s a measure of what this business means for the UK’s industrial future.

We are very very good at making motor vehicles in this country – everything from mass market vehicles to Formula 1. I’ve made that case in Brussels, and Japan and Germany. I’ve made it to the management of GM and Magna.

But the reality is that this is an industry at the end of the current stage of its evolution. That was the basic analysis of the New Automotive Innovation and Growth Team chaired by Richard, whose excellent report has done so much to shape Government strategy over the course of this year. Today I want to take that analysis and ask what Government and industry need to be doing to make sure UK motor manufacturing is equipped to prosper through that change.

The horizon

There are two big basic problems out there for the vehicle industry: decarbonisation and over capacity. The basic evolution of car making over the last century has been based around the constant refinement of the same basic technology on which the automobile was originally based – the internal combustion engine. This has given a huge natural advantage to market incumbents.

But suddenly the market is much more open.    Low carbon technologies provide a real opening for new and innovative firms to shake up supply chains and this presents real opportunities for the UK and for the UK automotive sector.

The industry also suffers from longer-term structural overcapacity – an overhang of productive capacity that is probably 20% higher than demand. Even if we project huge levels of car ownership in the developing world, it is inevitable that some of that European capacity is going to have to be absorbed through consolidation.

Our challenge certainly isn’t to fight off that process of technological and structural change – if anything Government has an obligation to drive it faster both for environmental and economic reasons. Our job has to be to help you make sure that when the technological kaleidoscope slows again, Britain emerges as one of the best place in the world to makes these new kinds of vehicles and their components, to design and manufacture these new kinds of technologies.

It’s absolutely vital that that process is guided by commercial logic, not politics. That’s why I put up such a stiff fight against any suggestion that the future of plants in Luton and Ellesmere Port might be decided by political considerations rather than productivity. Now, how we do that at the European level is a difficult question, to put it mildly. But the long term competitiveness of the motor industry in Britain and Europe depends on restructuring.

Active help from government

So the question we face is how we turn that process of change into something from which British motor manufacturing emerges even stronger. Some of the most important answers to that question emerged from the work done by Richard and his team and the Government’s response to it. I want to say something about three of them: the new Automotive Council, low carbon vehicle policy and the wider strategic way we see the industry and its supply chain.

The creation of the Automotive Council is a great development and has the potential to bring a whole new strategic dimension to the self-management of the industry, and in particular to the way it works with Government. But of course, it will only be as effective as the people on it, and the ideas and energy they bring to it. It needs to represent every part of the industry – the full supply chain including the research base, and the specialist producers.

It needs to be proactive and influential and have a very clear forward strategy, based on a very frank assessment of the industry’s strengths and weaknesses. The better that it is able to set out the strategic challenges facing the industry, the better government and industry will be able to respond to them together.

Keeping membership of the Council to a manageable size has forced some hard decisions.  We have announced the membership this morning and I think it is a great list.  For example, Richard Parry-Jones and Gordon Murray are engineers of world status.  Trevor Mann is a product of the Nissan revolution in the north east of England.  Franz Josef Paefgen brings a bit of continental European class.  Andrea Paver of Leyland Trucks and Gwenne Henricks of Caterpillar show that this isn’t just about cars.  We have suppliers and scientists and SMEs and environmental expertise and the OEMs.  So it’s looking good.

Clearly one of the most important strands of the Council’s work will involve low carbon vehicle policy. Now, I recognise that there is no silver bullet solution to cutting automotive emissions. But the industry’s consensus around a low carbon road map has provided a very useful tool and was central to the Government’s own strategy for low carbon cars, which we published in April.

As you all know, as part of the £150 million Low Carbon Vehicles Innovation Platform, this included £25 million for the TSB’s demonstrator programme for low carbon cars, £30 million for pilot infrastructure for charging ultra low carbon vehicles and £20 million for trials of low carbon vans in public fleets. We have created a Low Carbon Economic Area for ultra low carbon vehicles in the North East that will leverage the various research and production strengths in the region into a single network of mutually-reinforcing strengths.

I think we have to accept that barring a crippling new plateau in oil prices, consumer choice alone isn’t going to get us to a tipping point in decarbonising road transport fast enough. The carbon cost needs to start showing up in the price a lot more clearly. That’s why we were the first country in the EU to tie vehicle taxation to CO2.

But we are also providing positive incentives by investing in charging infrastructure and making £230million available from 2011 for consumer subsidies for the first major generation of ultra-low carbon cars – a policy that reflects closely the timetable for technology roll-out that the industry itself set out in its roadmap.

Key Tier One suppliers around the world are starting to sit up and take notice of what is going on in the UK on low carbon cars. The trick now is to make the UK the place you just can’t ignore if you’re in the low carbon motor business.

I’d like to think that it’s a reflection of this commitment to making Britain the best place in Europe to manufacture low carbon vehicles is one of the reasons why Toyota, Nissan and Ford have all made the decision to locate key parts of their low carbon operations here.

Finally, in building the industry’s future strength we need a comprehensive view of how the sector works: from the manufacturers to the Tier Ones to their suppliers and beyond.  For the future I want a determined strategy to build strength at all levels and sustain the industry’s critical mass here in Britain. The Innovation and Growth Team report left unfinished business here.

For our part, government will make sure that good suppliers can prosper here. We will actively seek out more companies to locate here.We’re supporting the research base in a big way, especially in low carbon. We’re building a new technician class through our revived apprenticeship system. And a Supply Chain Council  – as part of  the Automotive Council – will provide us with advice on further steps.

But the big players in the industry need work with us in partnership – and I think this was clear in Richard’s report. We all agree that there has been some hollowing out of the supply chain in this country  – and we all know who has done the hollowing out!

My offer is partnership. A partnership in which manufacturers show their share of responsibility for the UK supply chain. There needs to be more collaborative, longer term partnerships with suppliers.  When a big player tells me, as one did last week, that it wants to source more here rather than put its faith in supply lines that stretch over the Alps or the Urals – I say, good, let’s ensure that that happens.

Conclusion

Right, that’s enough from me. I’ve argued today that the transition to low carbon and the challenge of rationalising European vehicle production make the next decade critical for vehicle makers in Britain.

My basic message to you today is that Government is committed to working with you to tackle that change.  This has been a tough industry to be in and it seems to me that it is only going to get tougher.

But you know what they say: if everything is coming your way – you are in the wrong lane! Thank you.