| Previous Section | Index | Home Page |
7 Apr 2003 : Column 68—continued
Mr. Lansley: I am grateful to the hon. Gentleman for giving way again; he is being very courteous. I would be slightly worried if the Minister were to endorse his argument even for a second, because if the European Commission were presented with such an argument for section 8, it would simply strike the whole thing out. The measure, in its current form, should not be available to provide competitive subsidies for UK businesses to compete in the single market. The restructuring involved should not impact adversely on the single market. Furthermore, if such restructuring is related to specific regions, it should be covered by section 7 rather than section 8.
Mr. Hopkins: The European Union is well aware of this legislation, and well aware of what our Government have done to provide appropriate assistance to our economy from time to time. I would suggest that other
members of the European Union have caused greater offence to the principles of the EU. For example, when France attempted to subsidise its state airline, it caused much more upset than a modest measure such as this would do. I suspect that the spirit of the European Union's competitive philosophy is adhered to more strongly by our Government than by many other EU Governments. I do not, therefore, have any fears that the EU will be upset by the Bill.I was about to make the point that I would like the Bill to go further. It is a relatively modest Bill and it could be improved by increasing the numbers still further. However, I do not imagine that my right hon. Friend the Chancellor would want to give me the opportunity to spend his money willy-nilly. I would simply encourage him in that direction, and hope that, in future years, he will be more inclined to provide appropriate assistance to our economy in this way and in others. I shall leave that argument there.
I emphasise that I do not speak for the Government. I speak for myself as a member of the Government party. I am just trying to encourage my Minister to go further even than the Bill suggests, and to reject the constraining amendments tabled by the Opposition.
Mr. Henry Bellingham (North-West Norfolk): I am most grateful to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) for tabling the amendments. He has a huge amount of experience in these matters, he is very highly regarded—after all, he worked in the DTI for a while—and he is an expert on this subject. As he pointed out, the new limits were chosen by means of a 20-year roll-forward of the existing limit of £2.7 billion in real terms, using a 2.5 per cent. GDP deflator. The Minister explained on Second Reading that, based on current spending and assuming that the rate remained constant, the new ceiling would last for six years before the first order would be needed, with increases by order every four years after that.
That is the nub of the issue, because, in spite of the claim in the DTI's briefing note that the new regime would lead to more parliamentary scrutiny, the reverse will be the case. It based the claim on the premise that it was 14 years before the first order was needed in 1996. Of course, the 1982 Act was a new initiative that set a brand new ceiling of £1.9 billion. To be honest, the previous Government would have had to spend at an unbelievably frenetic and furious rate to have hit the ceiling before 1996, when the first tranche was needed.
6.30 pm
As the Minister will be aware, the three orders after that came hard on the heels of each other. The first came in 1996, followed by others in 2000 and 2002. Of course, another was introduced only the other day, which means that, during the past seven years, Parliament has had the chance to scrutinise the 1982 Act every 20 months. That compares favourably with the 4.5 years, or 54 months, anticipated under the new Bill's regime, however, so accountability is the issue and my hon. Friend is absolutely right.
If we have to wait six years until the House has a chance to scrutinise what has been going on, that will be far, far too long, which is why I tabled a commencement and continuance enforcement clause in Committee. The Secretary of State would have had to bring the matter back to the House every two years or the legislation would cease to have effect. My hon. Friend's amendment would have roughly the same outcome, which is why we will support him if he forces it to a vote. We must try to increase scrutiny and accountability.
Another point is highly relevant to the debate, and it concerns the Secretary of State's business support review, which obviously includes many section 8 schemes. I do not know the state of play, but perhaps the Minister will give us another update, as the review involves all the industry and business support measures operated by the DTI. A number of important changes may be recommended and some schemes could be abolished, reconfigured, finessed or whatever, but what, for example, would be the case should the Secretary of State decide to abolish some section 8 schemes?
That is not completely improbable, and if it happened the Minister may have trouble spending taxpayers' money under section 8, despite his keenness to do so, within the six-year period. In such circumstances, the date of the debate on the first tranche could be pushed back further than six years, so it might be seven or eight years before the House has a chance to consider the legislation, what is happening under section 8 and the 1982 Act. Accountability would be reduced still further.
It is quite possible that various changes may be made to some section 8 schemes when the Secretary of State completes her review. We have pushed hard for an early look at such schemes, particularly those involving venture capital. I ask the Minister to address our concerns, especially on venture capital funds and, for example, the UK high-tech fund and the early growth funding programme, whose first fund, the London seed capital fund, was launched in December last year with a £2.65 million investment from the Small Business Service. It may eventually build up to £50 million.
A lot of money is going into those schemes, and I simply submit that the Opposition are not convinced that the Government should be in the business of trying to pick winners and acting as a substitute for this country's mature, enlightened and proactive venture capital sector. It does a superb job and the Government should not be in that space at all. If the Secretary of State takes our advice, some of those schemes—perhaps the two or three that I have mentioned—will be seriously reviewed, which could immediately take out quite a tranche of the section 8 funding.
It could be 2010 before the House considers what has been going on, holds the Government to account and scrutinises them, which is why I support what my hon. Friend is trying to do. If we do not have a vote this evening, we will return to the issue in another place, because although we support the principle of what the Government are trying to do and although we would find it difficult to vote against some schemes, including the urban post office reinvention scheme, we feel strongly that we are considering a large increase in the amount of money in the well, as the Minister calls it. The ceiling is being increased substantially as are the
tranches, but accountability and scrutiny are to be reduced. That is why I urge the House to support my hon. Friend.
Dr. Vincent Cable (Twickenham): May I say a few words in support of the amendment, which is eminently sensible and modest? It is perhaps too modest, but it is still well worth supporting.
I regret that I did not participate in Committee. Obviously, there are occasions when we all miss a Committee for reasons of double booking, forgetfulness or constituency engagements, but neither I nor my hon. Friend the Member for Weston-super-Mare (Brian Cotter) was informed about the Committee. When we discovered that it had taken place, we went back over the records and discovered that we had received cards inviting us to proceedings on something called the international development Bill.
A mistake had been made, which was subsequently rectified through the Government and Conservative Whips Offices, but not through ours. The Bill is modest, but it is important and I would not want the Minister and other Members to think that the fact that I was not present, which I regret, reflects any lack of interest in it.
On the substance, I argued on Second Reading, and do so again, that the problem with the Bill is that the sums are too large, too long a period is involved, the tranches are too big and there is a lack of accountability. The measures built into the amendment seem sensibly to address that, however, and I want to make three substantive points. Most of them have already been made, but I want to add emphasis.
First, the rather lazy assumption is being made that, because we have been spending a large amount on industrial assistance for the past 20 years we should continue to spend it for the next 20. Why should we make that assumption? A few moments ago, the hon. Member for Luton, North (Mr. Hopkins) addressed the issue by saying that we need a reserve facility in case of crises, but the problem with that argument is that one is more likely to try to sort out a crisis with public money if it has already been allocated.
Mr. Hopkins: Does the hon. Gentleman agree that when there are inevitable occasional downturns in the economy, the time to ensure that the investment goes in and new businesses are encouraged to start is on the upturn? Indeed, those occasions sometimes happen in concentrated time spans, so one needs instruments to be available at that time.
| Next Section
| Index | Home Page |