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24 Feb 2003 : Column 80—continued
Mr. Weir: The Scottish Executive have powers under the Scotland Act 1998 and the National Assembly for Wales have similar powers under the National Assembly for Wales (Transfer of Functions) Order 1999. Those powers were specifically given to the devolved Administrations. They do not apply to English regional development agencies. As I understand it, if the devolved Administrations use this power, there is no extra money to fund that. The position may be slightly different with the regional development agencies.
Mr. Lansley: I understand the point that the hon. Gentleman makes. I am sure that that is right. I am not clear whether the consent of the Treasury is required for regional development agencies to vire money within the single pot that is available to them, which is a bit like a block grant, if they want to use section 8 powers. If it is not, there is the administrative problem of how to monitor and report on the extent to which they are bumping up against the limit. Perhaps that is one of the reasons why the Government are proposing such big steps of between £200 million and £600 million. If they require the Treasury's consent to move money within a single pot, that undermines the sense of freedom that regional development agencies in England are supposed to have to be able to spend this money. The Minister may be able to enlighten me on that. Perhaps my concerns are not justified.
Back in 1982, the legislation envisaged a limit to restrict previous largesse by Government that had led to intervention in industry, and a system of scrutiny such that if the limit was hit there would be frequent scrutiny by Parliament of that extension of financial intervention in industry. It is astonishing that the Government are now turning that into something that involves big steps:
from £2.7 billion to £3.7 billion in one step, on the basis that several years may go by before Parliament needs to reconsider the use of this money, and thereafter up to four steps of £600 million, which if spending is at the current rate may require two or three years between each reconsideration.My hon. Friend the Member for Sevenoaks is right. On the face of it, the further we move from the 1982 legislation in time, in philosophy and in approach to industry, the more important it is for parliamentary scrutiny to be systematic and frequent. We must decide whether expenditure using these powers is justified. The Government are breaking with the intention of the 1982 legislation—although it may not have been expressed in these terms. It was envisaged that the time would come when the level of financial commitment would be reached, but it should not be breached, or only by small amounts and subject to frequent recall to Parliament. We are going away from that. My hon. Friend is right that we should reconsider the whole structure of the legislation and the basis on which we now approach this issue, because we have come a long way since 1982.
Before this debate, I was aware of a particular absurdity, but my concerns were not assuaged by the Minister's responses. The Secretary of State came before the Select Committee on Trade and Industry and told us about the desirability of rationalising grant schemes in the Department of Trade and Industry. She said that they would be managed under specific portfolios. She came before us again on 29 October last year, and spoke in glowing terms. She said:
- "The team that I have got working on this have been making fantastic progress and, again, I expect to make an announcement on that certainly before Christmas."
I am not naive. I know that it is difficult to get rid of schemes. Various parts of the Department may be involved in a substantial fighting retreat on what should be kept and what should be scrapped, so it may take longer than was thought. Even if it takes longer, it is absurd to bring before Parliament legislation on a substantial number of these schemes. I presume that the majority of the 15 schemes will form part of the review, even if the post office programme does not. It is absurd to propose that year zero for the design of Government grant schemes should be April, but to say to Parliament now, "Fine, we'll spend another £3.7 billion on some of these schemes, but you don't know what they will look like, because we haven't told you yet. We'll tell you a couple of weeks after the legislation has passed through the House." That is deeply undesirable, and completely at odds with the scrutiny which the House demands and which is called for by our reasoned amendment. I shall support my hon. Friend the Member for North-West Norfolk.
7.16 pm
Mr. Bellingham: With the leave of the House, I should like to reply to the debate. I am grateful to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), because he succinctly summed up the difficulties that we have with this legislation. A substantial review is taking place, so why on earth could not Second Reading be delayed until it was completed and the Secretary of State had made a statement?
We have had an interesting, albeit short, debate. I am glad that the hon. Member for Luton, North (Mr. Hopkins) recognises the plight of manufacturing and the difficulties over investment levels. I note that he wholeheartedly supports the rationale behind the original Act and this Bill. The hon. Member for Twickenham (Dr. Cable) talked about accountability, and I hope that, in the light of that, he will support our reasoned amendment. He mentioned the purple report, and the need for statistics and comparable studies. He is right, because we need to know the administrative costs incurred for every pound that goes into these schemes. That point had not been raised before, and I hope that the Minister will comment on it.
On the Rover taskforce scheme, I think that I am right in saying that the £129 million was under regional selective assistance. So far, £12 million has been allocated under section 8, and perhaps the Minister can tell us how much of that has been spent.
The speech of my hon. Friend the Member for Sevenoaks (Mr. Fallon) was a fascinating philosophical tour de force. He considered the genesis of this policy, going back to Keynes's famous four articles, and he fast-forwarded 70 years. He rightly said that it was time to take stock. He made a valid point when he said that Ministers should be looking for value added, not just the headline millions. He made an amusing quip. He talked about good money paid for unreliable Celtic votes. I wish that he had seen the expression on the face of the hon. Member for Angus (Mr. Weir). Questions need to be asked. Does the money stimulate wealth creation and enterprise? My hon. Friend was spot on when he said that the timing of Second Reading is completely awry. We need to know exactly what schemes will be kept.
I was interested in what my hon. Friend the Member for Cities of London and Westminster (Mr. Field) said about the film industry. I had a quick look at one of the DTI briefs. The British Film Commission was launched in 1991, and one of its aims is to encourage film and production units from abroad to use UK-based facilities. It also helps to co-ordinate the work of other national and local film bodies. The commission now comes under the Department for Culture, Media and Sport. Were the grants paid out up to 31 March 2002, which totalled about £7 million, provided by the DTI or did they come out of the DCMS budget? Would the Minister elaborate on that?
My hon. Friend reinforced what had been said about some of the mini-micro-schemes, in regard to which there has been a total loss of focus. The reason we cannot go along with some of these schemes is indeed the lack of sufficient focus and accountability. I am glad that he also mentioned the red tape burden on business and the law of unintended consequences. He gave a fascinating example from East Germany, following his visit last week to some of his more far-flung constituents.
I will accept the rap over the knuckles administered by the hon. Member for Angus in connection with Atlantic Telecom because he obviously knows quite a lot about it, but I stick to my guns nevertheless. Most of those small business men will have had mobile phones, and I do not believe that, had the Minister contacted the chairman and chief executive of British Telecom, it would not have been possible to sort something out at a cost amounting to much less than over half a million pounds.
My hon. Friend the Member for South Cambridgeshire drew on extensive DTI civil service experience. He gave a riveting example involving BP and Sullom Voe, and made the interesting point that the more sophisticated intervention mechanisms became, the greater the distortions that resulted. That must return us to the inadequacy of the scrutiny mechanism set out in the Bill. Moreover, my hon. Friend's point about the loan guarantee scheme was spot on. Apart from the broad statistics relating to the small firms guarantee scheme, we see nothing about failure rates or the net cost. I hope that the Minister will respond on that, and also to the point about the money dispensed by the regional development agencies and the influence that they will have.
The Secretary of State recently promised to drive up UK productivity and competitiveness in order to deliver prosperity to all. We will hold her to account. The five key tests will relate to business investment, which is falling faster than it has for 36 years; to manufacturing jobs, 600,000 of which have gone since 1997; to the trade deficit, which is at its worst since 1967; to productivity, which is growing at half the rate at which it grew under the last Government; and to strikes, to which more than 1 million working days have been lost.
We shall continue to take every opportunity to hold the Secretary of State to account, but for the moment I ask hon. Members to support our amendment, because what we need above all else is proper scrutiny of the Bill and the workings of section 8 of the 1982 Act.
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