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7 Apr 2003 : Column 80—continued
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Member is straying rather wide of the debate currently before the House.
Mr. Bellingham: I am grateful to you, Madam Deputy Speaker, for putting me right, but we have to take the wider economic context into account. I will be brief, but I want to mention two more criteria. First, productivity, which is growing at half the rate under the present Government—
Madam Deputy Speaker: Order. I have just ruled the hon. Member's comments out of order, so I would be grateful if he would return to the debate.
Mr. Bellingham: I will, indeed, return to the debate, Madam Deputy Speaker, and I apologise for being over-zealous, but it is important to put the debate into the right context. Unless we consider the grant aid that is available under section 8 within the wider economic context, it does not make much sense.
The Government should be aware—it is a relevant point—of how the Department of Trade and Industry is regarded. What Business Wants recently carried out a survey—I see you looking a little nervous, Madam Deputy Speaker, but this is relevant to section 8—based on the responses from 600 companies. One question was
- "Does the DTI do a good job at helping UK firms?"
- "Does this Government understand enough about what business needs to thrive?"
- "Do you think Trade Secretary Patricia Hewitt has a grasp of how business operates and what it needs?"
Madam Deputy Speaker: Order. Once again, I am afraid that the hon. Member is straying rather wide of the mark for this particular debate. Perhaps he could come back to it.
Mr. Bellingham: I will come back to order, Madam Deputy Speaker, but only a staggering 0.5 per cent. said yes, the right hon. Lady did understand completely. [Interruption.] It is one business in 200. That shows that, if the DTI wants to justify the different schemes under section 8 and the huge extra expenditure involved, it has to do much more explaining to the business community. There is some potential good will for the different Government schemes, but they need to explain what they are doing much better. On the wider issue, we will come back to the importance of scrutiny in the other place and we shall keep on pressing our points, which were fairly and comprehensively encapsulated in the amendments proposed by my hon. Friend the Member for South Cambridgeshire.
In conclusion, we support this small Bill, which is necessary, but it needs more scrutiny. In the light of the recent, wide-ranging and important survey to which I referred, we also believe that the Government should explain their case to business more clearly.
7.14 pm
Mr. Michael Weir (Angus): My contribution will be brief. I expressed some reservations about the Bill and the intentions behind it on Second Reading. Although it has been described as a small Bill that does not achieve a great deal, it is still another step—as I thought then and still do now—in the direction of providing assistance to industry on a sectoral and national, rather than a regional, basis. I think that that is wrong and that it could have important implications for the future.
I was particularly interested on Second Reading—the Minister referred to it again tonight—in the role of the devolved Administrations in the use of section 8. I followed up my interest with a letter to the Minister asking for further details and I received a full and fairly detailed reply about how the devolved Administrations could utilise section 8 powers without necessarily having to secure Treasury approval. Reading between the lines and after going all around the houses, it appears that there will be little benefit for the devolved Administrations, because no more money will be made available to them. Once again, we come back to the block grant from this place to the devolved
Administrations, which is decided in advance of any need to utilise section 8 powers. There may not be much benefit from the provision, so it provides another argument for the full fiscal autonomy of the Scottish Parliament. I hope that we will move towards that in the near future. Having said that, the power has been used to good effect in some areas of Scotland. I supported the Bill on Second Reading and I will continue to support it, but with some reservations.7.16 pm
Mr. Lansley : I do not want to repeat what I said on Report, but to make one or two additional remarks about the purposes to which section 8 scheme money is put. I take the point made by the hon. Member for Angus (Mr. Weir). If I do not agree with him about the extent to which expenditure should be made on a devolved basis, particularly in respect of the English regions, I can still recognise a conflict between the Government's expressed intention to devolve budgets to the devolved Administrations—and, in England, to the regional development agencies in a single pot—and their attempt to spend considerable money by assuming powers for national spending through national rather than regional schemes. That is an inherent contradiction in the Government's approach, which the Bill does nothing to resolve.
My points are straightforward. I do not share the enthusiasm of my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) for the principle of spending Government moneys. It may be a small Bill, but it has a quite a large price tag. By the time we finish, we will have spent just over five hours in the House and in Committee scrutinising the Bill: that amounts to £10 million a minute in relation to the expenditure that the legislation will allow, so our scrutiny is not excessive. The Government fail to acknowledge that in extending the ability to spend—and in making the financial resources available—they have strayed far from the spirit of the legislation, and have in fact used it even more widely in recent years.
The hon. Member for Twickenham (Dr. Cable) pointed out on Second Reading that in 2001–02 approximately £113 million was spent on section 8 schemes, and the Minister told us earlier that it will increase to £220 million—a worrying acceleration in the rate of expenditure. As my hon. Friend the Member for North-West Norfolk illustrated so well, businesses have little confidence in the way in which the Department of Trade and Industry has spent its money, and at the same time they are expressing rising concern about the extent to which they have to pay taxation in order to fund Government activities. They do not want a merry-go-round in which money goes out of the pockets of successful businesses to be spent through section 8 on subsidising failing businesses. We must ensure that section 8 money is spent well. There is no doubt that the Minister or the Secretary of State will tell the House how 183 schemes will be compressed into 30 or 40, but there is no evidence, so far as section 8 is concerned, of a diminished desire to spend on the part of the Government. If anything, there is an increased desire. It had better be good expenditure.
I am not impressed by my personal experience in my constituency of the so-called post office reinvention programme. First, there was an attempt to define the post office at Ickleton, one of the smaller villages in South Cambridgeshire, as an urban post office—
Madam Deputy Speaker: Order. The hon. Gentleman seems to be straying a little wide of the debate.
Mr. Lansley: I am grateful, Madam Deputy Speaker, but I am simply referring to the way in which money is being spent under section 8, which the Government want to top-up. The urban post office reinvention programme is precisely the sort of the scheme whose money the measure is designed to facilitate. It seems relevant whether that money is spent well or badly.
Madam Deputy Speaker: That is fine, so long as we do not get into a discussion about rural post offices.
Mr. Lansley: I am looking forward to the debate tomorrow in Westminster Hall, in which my right hon. Friend the Member for West Dorset (Mr. Letwin) will discuss rural post offices, a subject close to the hearts of my hon. Friends and me. In Ickleton, those involved ignored where the post office was and persisted in doing so until I practically had to take them there to show them that it was not in the middle of Saffron Walden, as they believed.
The Wulfstan Way post office, in the Queen Edith's ward in my constituency, serves the southern part of Cambridge and is the closest post office to Addenbrooke's hospital, the principal destination of those working in Cambridge. There is not a post office on the Addenbrooke's site, and there is now a proposal to close the nearest one. Those involved are following a rationale based on which postmasters want to get out of the business and paying for that, rather than restructuring around a rational understanding of markets and businesses. I shall be taking up that matter vigorously with the Post Office; it seems to be an unwise choice.
I am not expecting a reply now, and we can debate these matters at another time, but it is important that we get an indication of where the Government are going with regard to section 8 schemes. The Minister seems to be saying that there are no proposals to change section 8 schemes under the DTI review of business support. I understand that the Smart scheme, which the Minister knows well, is changing. The feasibility studies that can be part of Smart hitherto have had a possible subvention of up to 75 per cent., or £45,000. It is proposed that that should go down to 60 per cent., although the maximum grant could be increased. The development grant can go up from 30 per cent. to 35 per cent. of the project funding. That is surprising and undesirable.
Recently, the thrust of science and technology policy has been towards pre-feasibility and feasibility stages and away from the development phase. That is the point at which those promoting their project should expect to provide the funding themselves to a greater extent. It is at the feasibility stage that one should expect Government support and help for people in
universities—in my case, the university of Cambridge—to the point at which a business plan can be put together and research validated. That is where the Government ought to be.The Government seem to be looking to a smaller number of such schemes, with more money going to the development phase. That is undesirable and I hope that the Minister will have another look at it. There have been something like 80 such schemes around Cambridge. We are pleased to be recipients of Smart money, but it has to be spent in a smart way.
The Minister wrote to those of us who spoke on Second Reading and responded to a number of questions. The hon. Member for Twickenham (Dr. Cable) said that section 8 would not be used in relation to British Energy or the restructuring of the nuclear power industry. However, the legislation in relation to British Energy was not designed to provide a power to spend money; it was a power to change the way in which the Government occupied their shareholding position in relation to British Energy in particular. The measure, in effect, removed constraints upon spending money.
I am still slightly unsure about the matter; perhaps the Minister will give an answer now, as I have written to him about it. Where will the money come from for British Energy, as the original guarantee to British Energy's borrowing will run over the year end and will become, effectively, a permanent guarantee? On the face of it, it looks to be the kind of thing that section 8 was designed to do. I am surprised that section 8 is not the vehicle that Ministers have chosen.
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