| Previous Section | Index | Home Page |
7 Apr 2003 : Column 75—continued
Mr. Lansley: I will not detain the House too long because we have the opportunity to make further points in relation to the Bill generally on Third Reading. I thank the Minister for responding to the debate. I know that he covered similar issues in Standing Committee but, not least by virtue of the presence of the hon.
Member for Twickenham (Dr. Cable), we have benefited from the further debate about the specific numbers in the Bill. We elicited from the Minister a rather damaging admission that the Government's intention is for expenditure to go above £200 million and above £220 million. In his view, it may damage the argument for amendment No. 4, but in my view it reinforces the argument for the amendment.We are dealing with legislation that was always intended to be for an exceptional purpose and over a transitional period. It has been appropriated by Ministers, in some cases correctly, as a mechanism for providing support to industry. I heartily endorse the points that were made by the hon. Member for Twickenham that far too little scrutiny is being given to the underlying question of whether Ministers ought to have a power to spend in this way. There is far too much recourse to section 8 as an omnibus mechanism for paying out money for various schemes. The fact that it is being used for the closure of post offices demonstrates that it is simply a well, as the Minister is fond of describing it, of money into which Ministers are want to drop their bucket for all sorts of purposes that do not necessarily have appropriate parliamentary scrutiny. It seems all the more obvious that we should come back to Parliament more regularly to examine what is going on. If we are not doing it on the basis of scrutiny of annual reports, we should do it on the basis of scrutiny of regular orders to add to the sums of money that are available to Ministers.
It is purely a matter of judgment as to whether the first of the orders should happen in six or four years' time, and whether the length of the further extension of spending power should be 20 or 10 years. I do not resile from my view that 10 years is a perfectly sufficient—in fact, rather generous—length of time, during which Ministers should be free to spend only with affirmative resolution scrutiny of their powers from Parliament.
My mechanism would at least have meant that, at the present rate of spend, Ministers came back before the House early in the next Parliament, whereas they may come back at a later part of the next Parliament. We shall see when that happens and who it is who does it, but I hope that Ministers, whichever Government they serve, will begin—perhaps not least because we have spent some time arguing our points in these debates—to think far more rigorously about section 8 as a legislative framework for the expenditure of the DTI. It is long overdue for the DTI to think again, to restructure its legislative framework and to find a more modern definition of what the DTI's purposes are, rather than resting on one that is about the restructuring of the smokestack industries of the 1970s.
I do not want to let down my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) or the hon. Member for Twickenham but, notwithstanding their generous support, I do not propose to pursue the amendments to a Division. Ministers and my colleagues have had plenty of opportunity to express their views. I hope that they will be regarded with seriousness. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.58 pm
Alan Johnson: I beg to move, That the Bill be now read the Third time.
The Government believe that we can best support business by encouraging its competitiveness and creating a favourable climate in which it can operate. We believe that financial assistance has a part to play in that, where it will drive up productivity and where there is clear evidence of market imperfection.
It is a small, modest Bill of just two clauses, but it is essential to enable the section 8 power to continue to be used to give financial assistance to industry for the purposes specified in the 1982 Act. The Bill will increase the cumulative limit on financial assistance that may be provided under section 8 of that Act. The Bill retains the accountability to Parliament contained in the existing legislation through the need for affirmative orders of the Commons. It replaces the existing limits with new, higher ones reflecting the growth in the economy over the past 20 years, without making it too burdensome for Parliament. We want to strike a balance between retaining proper parliamentary control and bringing the limits in the 1982 Act up to date.
A transformation of the DTI's business support activities is under way, and eventually all existing business support schemes will be run down, including the eight Small Business Service schemes set up through the use of the section 8 power. New products will be introduced, some of which will incorporate the best elements of existing schemes. We have begun to roll out the new approach to business support with the release of the first of the new products on 1 April. This included the launch of the new extended small firms loan guarantee. Further products will be released over the coming months, and announcements will be made by the Secretary of State.
We need the new limits in place to ensure a legislative base for existing schemes, as do Secretaries of State and Ministers in the devolved Administrations, who are able to use section 8 to fund their own activities. Without the introduction of new limits, the legislative basis for the current section 8 schemes would be exceeded when the £2.7 billion limit that is allowed for by the 1982 Act is reached—we forecast that that will happen early next year—rendering unlawful further use of this power by Ministers.
I am pleased that hon. Members on both sides of the House have been supportive of the Bill's main aim, which is to allow financial assistance, under section 8 of the 1982 Act, to continue to be offered to industry throughout the UK. Even though the Bill has not had a detailed or lengthy passage, it has certainly undergone scrutiny on Second Reading and in Committee. In addition, section 8 was the subject of a Standing Committee debate last month, in order to raise the ceiling for a fourth and final time under existing legislation.
I am grateful for the constructive approach that Opposition Members have taken, and I hope that they feel that, for the most part, the Government have listened to their views and taken action on many of the issues that they raised, even if the proposed amendments and new clauses were not accepted. In response to their comments, I have committed to including more detail on each section 8 scheme in the future annual reports
required by the 1982 Act, and to including the conclusions of any explanations published in the reporting year. My officials are already taking forward this initiative for the 2002–03 report. Moreover, I wrote to those who spoke on Second Reading and in Committee, outlining progress on the current DTI section 8 schemes since the annual report was published for the year ending 31 March 2002.I cannot commit to laying the annual report before the House much earlier than we currently do. It takes time for the information and statistical data to be gathered from throughout the DTI, as well as from other Departments, devolved Administrations and regional development agencies. The 1982 Act requires an annual report to be laid before Parliament
- "not later than six months after the end of the financial year to which it relates".
I also said that I am in full agreement with Members about the importance of the evaluation of schemes. Following the DTI's review of business support, in future all the Department's business support products, including measures that use section 8 as their legislative base, will be subject to ongoing monitoring and analysis to measure whether they have achieved their objectives and offered value for money. Evidence from this analysis will help the newly formed investment committee to target business support funds where there is a clear rationale. It is expected that this evidence will be published in full.
With these assurances, I commend the Bill to the House.
7.3 pm
Mr. Bellingham : I shall be brief, obviously, and I should begin by declaring my interests, which are listed in the Register of Members' Interests.
We support the principle of this Bill, and we certainly accept the need for some industry-specific intervention—after all, the original Act was ours. I do not accept the comment of my hon. Friend the Member for Buckingham (Mr. Bercow)—albeit from a sedentary position—that it was among the worst of the legislation that we introduced. [Interruption.] Well, it certainly numbered among our better legislation. Indeed, if one looks at the good that has come out of it—the number of jobs saved, and the number of schemes that have brought substantial business success—one can conclude that it is very good legislation.
There has been considerable debate about the different ceilings and tranches and the need for greater scrutiny, and I do not doubt that there will be further debate on those issues in another place. The same applies to the points that I made about the business support review. The Minister did not give a satisfactory answer to the questions that I posed. If that review comes up with various fairly significant and far-reaching conclusions, the actual date for initial scrutiny under the legislation could well be pushed back beyond the six-year period. He did not deal with that point, and hopefully it will be re-examined in another place.
I am very grateful to the Minister for what he said about trying to improve the level of reporting on the different schemes. As he pointed out, KPMG produced
a very good report on the small firms loan guarantee scheme, which we all appreciated enormously. It added a great deal of material, and contributed to wider knowledge of that scheme. Why cannot the same be done in respect of many of the other schemes under section 8, particularly those carried out by the Small Business Service?The Minister said that it would be unrealistic to bring forward the annual report any further. I take on board entirely the point that, under the legislation, the report has to be published within six months of the end of the financial year. However, in the light of modern IT and the information retrieval systems that the Minister has at his disposal, surely it is not asking too much for the report to be published within four weeks of the end of the financial year, say, probably in May. We need to know exactly what is going on, particularly given the extra money that the Government will be spending. So perhaps the Minister could have a look at that issue.
We had a good discussion about the small firms loan guarantee scheme on Second Reading and in Committee. It is a flagship scheme and, as the Minister pointed out, to the end of January this year almost 84,000 loans averaging £37,000 had been guaranteed, totalling some £3.24 billion. On Second Reading, we debated the problem whereby some sectors do not qualify for the scheme. The Minister pointed out that the Minister with responsibility for small businesses—he was here earlier this afternoon—has announced that some of the sector restrictions have been lifted. In fact, I understand that the scheme has been expanded to include, for example, retailing, catering, coal, hairdressing, libraries, museums, motor vehicle repair and servicing, steel and travel agents. However, what about education schemes and medical health services—the two sectors for which I pushed for inclusion very hard? They appear not to have been included, but they certainly should be.
I want to say a brief word or two about the urban post office reinvention fund, which was introduced to deal with the fallout from the proposed implementation of automated credit transfer. As my hon. Friend the Member for Blaby (Mr. Robathan), who is shadow spokesman for Post Office matters, pointed out, the total fund committed is £210 million, of which £180 million will constitute straightforward compensation, with £30 million going into matched funding schemes. Presumably, the £15 million that will come from the Office of the Deputy Prime Minister is not covered under section 8, and will actually come from that Department. Perhaps the Minister knows the answer to that question.The chairman of the Post Office, Allan Leighton, pointed out in a speech of 14 November last year that some European money would be brought in to match the money coming in under section 8. He presumably knows what he is talking about, or perhaps it was simply wishful thinking on his part.
We are looking at the law of unintended consequences. The Government worked out that a fairly juicy saving could be made by moving over to automated credit transfer. I understand from my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who is very experienced in these matters, that the total potential saving to the Department for Work
and Pensions is in the region of £430 million. That may sound like a significant sum, but in the light of how those savings will be made—mainly through clawing back payments made to sub-postmasters—one needs the urban post office reinvention fund, and that is to say nothing of the money that will be put into rural post offices. So through the law of unintended consequences, one part of government is looking at a juicy sum that can be saved, and another is simply coming to the rescue of the victims of that ill-thought-out scheme.The post offices in my constituency do not have enough information to hand at the moment. Many people are asking for details of how to have their benefits or pensions paid into bank accounts. I have recently received many letters from constituents telling me that many post offices do not have the information available. Perhaps the post offices are trying to fight a rearguard action because they do not want people to move over to automated credit transfer. As I said, we are seeing the law of unintended consequences at work.
We must take the wider economic and industrial context into account. The Chancellor will tell us some good news about employment and inflation on Wednesday, but the Opposition have set out five tests to assess the wider economic context. One test is business investment, which is unfortunately falling at its fastest rate for 36 years. Another test is jobs in manufacturing industry, and 600,000 jobs have been lost since 1997 with the CBI predicting another 40,000 job losses in the next month. We have the biggest deficit in traded goods since 1697, when William of Orange was on the throne—
| Next Section
| Index | Home Page |