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House of Commons

Thursday 5 July 2007

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Business, Enterprise and Regulatory Reform

The Secretary of State was asked—


1. Chris McCafferty (Calder Valley) (Lab): What plans his Department has to promote microgeneration in Government buildings; and if he will make a statement. [147635]

The Minister of State, Department for Business, Enterprise and Regulatory Reform (Malcolm Wicks): The Government have set a challenging commitment for the UK to reduce our carbon emissions by 60 per cent. compared with 1990 levels by 2050. That affects us all, of course, and the Government have a full part to play. Indeed, the aim is to make the Government office estate carbon-neutral by 2012. Microgeneration technologies certainly must play their part in reaching that goal.

Chris McCafferty: May I thank my hon. Friend for that reply and take this opportunity to welcome him to the Dispatch Box in his new role? Naturally, I welcome plans to use microgeneration in Government buildings. However, does he agree that all public buildings should be subject to strict targets on microgeneration and that proper monitoring procedures and greater transparency should be put in place to make that possible?

Malcolm Wicks: I thank my hon. Friend for that welcome—it is like I have never been away.

The Government have allocated £86 million over the next three years for our low-carbon building programme. Phase 2 will enable such places as public buildings, community centres and buildings in the voluntary sector to have microgeneration. That is important. I am especially keen on ensuring that we have microgeneration in our schools, not only so that they are energy efficient, but so that we can teach our children about their relationship with energy, and energy’s relationship with the future of our planet.

Regional Development Agencies

2. Mr. David Heathcoat-Amory (Wells) (Con): What recent assessment he has made of the effectiveness of regional development agencies in promoting enterprise. [147636]

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The Minister of State, Department for Business, Enterprise and Regulatory Reform (Mr. Pat McFadden): The performance of the regional development agencies against their targets is laid before Parliament every six months. In 2005-06, the last year for which we have full-year figures, they helped to create or attract almost 19,000 new businesses, supported 800,000 businesses through Business Link, and assisted more than 166,000 businesses to improve their performance. Half-year figures for 2006-07 have been laid before Parliament and full-year figures will follow shortly.

Mr. Heathcoat-Amory: The figures that the Minister quoted were largely self-assessed by the bodies themselves. The truth is that those bureaucratic bodies show very little enterprise. Does he agree that a great deal of good would be done for businesses, and a great deal of public money would be saved, if he were to abolish them? He could then return the money to businesses through a cut in business rates, especially for small businesses, which would benefit the many, rather than the few businesses that are favoured by regional development agencies.

Mr. McFadden: The performance of the regional development agencies is not judged only through self-assessment. For example, the National Audit Office assessed all regional development agencies as performing either well or strongly. Let me quote a random comment from its verdict on the East Midlands Development Agency:

Charlotte Atkins (Staffordshire, Moorlands) (Lab): Will my hon. Friend investigate the different approaches of the RDAs to rural enterprise? For instance, the East Midlands Development Agency has supported an excellent farmers’ co-operative initiative called Peak Choice, which was launched in my constituency last week. However, it appears that Advantage West Midlands—my constituency sits in the west midlands—is less willing to engage with rural developments and enterprise, even though Staffordshire, Moorlands falls within a rural action zone.

Mr. McFadden: Regional development agencies should be supporting business activity in both rural and urban areas. The output results for 2005-06 have been disaggregated on a rural and urban basis and can be found on the departmental website. I will be happy to take up my hon. Friend’s specific question about Advantage West Midlands with the RDA on her behalf.

Peter Luff (Mid-Worcestershire) (Con): On behalf of the yet-to-be-renamed Trade and Industry Committee and all its members, may I say how much I welcome the Minister and all his new and old friends, especially one old friend, to the Dispatch Box? Is the Minister aware of the Committee’s recent report on UK Trade and Investment and its critical words about the failure
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properly to co-ordinate regional development agencies’ work in overseas markets? What will be the role of another new friend, Sir Digby Jones? Will he be using all his traditional powers of tact and diplomacy to ensure that the regional development agencies are better co-ordinated in overseas markets?

Mr. McFadden: Comrade Digby, as we call him in the Department, will have a very important role to play. He has been outspoken on the issue, and I am sure that he will be a vocal and effective voice in ensuring a co-ordinated approach by RDAs working abroad.

Anne Snelgrove (South Swindon) (Lab): I add my welcome to the new ministerial team. Does my hon. Friend welcome the Prime Minister’s announcement earlier this week that there will be regional committees of Members of this House, and does he agree with me that that will strengthen the relationship between the House and the regional assemblies, particularly with regard to enterprise and the economy of our regions? Will he encourage Opposition Members to join in with those regional committees with full enthusiasm, despite their aversion to regionalism?

Mr. McFadden: My hon. Friend makes a strong point. Such committees can play an important role. I shall just mention the kind of work that they could consider doing, in the context of current problems. For example, the RDA in Yorkshire moved very quickly in response to the recent floods; it has made £1 million available in business support. That is moving quickly, locally, in response to a local emergency. That is the kind of issue that could be examined productively by the committees that she mentions.

Miss Julie Kirkbride (Bromsgrove) (Con): On the point made by my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Select Committee, will the Minister tell us what his new Department will do about the duplication that takes place in the RDAs’ overseas activities? The simple fact is that to the Indian market, to take just one example, the United Kingdom is a very small place, and the differences between the west midlands and the east midlands, or the north-east and the south-west, are irrelevant to that market. We want business to come back to UK plc, and once it gets back here, we will decide where it goes. What will the Minister do about that particular problem, and that waste of money?

Mr. McFadden: As figures published this week show, the UK is performing extremely well in attracting inward investment from abroad. Of course we have a duty to make sure that our efforts are properly co-ordinated, but we would not accept a situation in which it was suggested that something was seriously hampering our efforts to attract inward investment; the record shows that we are an extremely attractive location. The hon. Lady mentioned India. She will know that the UK is home to about 60 per cent. of Indian inward investment in Europe. I think that we are performing well in the Indian market. I am sure that we could do better in that market and in others, and I assure her that my colleagues and I will do everything that we can to make sure that that is the case.

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David Taylor (North-West Leicestershire) (Lab/Co-op): As a newly elected Labour and Co-operative MP in 1998, I was happy to serve on the Regional Development Agencies Bill Committee, in which we considered what later became the Regional Development Agencies Act 1998. At the time, I received reassurances from Ministers that the RDAs would have a specific brief to encourage co-operative and community enterprises. There have not been too many signs of that, particularly in the east midlands, where an investigation is taking place, in which I played a part last week. Will the Minister look again at how best we can tap the potential of a principle whose time has come, in many ways?

Mr. McFadden: I agree with my hon. Friend that the co-operative sector is an important part of the economy, and it can be a very successful part of it—indeed, it is, in many ways. The RDAs should take that into account in their work, but I am happy to have further dialogue with him. The RDAs should be responding in a comprehensive way that supports all kinds of businesses, including co-operatives.

Postal Services

3. Mr. David Jones (Clwyd, West) (Con): If he will make a statement on the future of the Post Office and Royal Mail. [147637]

The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): We are committed to securing the long-term future of both Royal Mail and the Post Office. We have made substantial investments available to Royal Mail on commercial terms and, subject to European Community state aid clearance, we will provide substantial further support for the Post Office, in order to provide a comprehensive and accessible national network.

Mr. Jones: Does the Secretary of State agree that the proposed post office closure programme is likely to hit rural areas disproportionately hard? For many people living in villages such as Llansannan, Llanfair Talhaiarn and Llangernyw in my constituency, the post office is frequently the only convenient means of access to financial services. Will the Secretary of State say how he reconciles his Government’s aim to combat social and financial exclusion with a proposal that, if fully implemented, may well put financial services out of reach of people in such areas?

Mr. Hutton: What the hon. Gentleman says is right. We all recognise the importance of sub-post offices to the social infrastructure of our country, particularly in rural areas. I, too, represent a constituency that includes a substantial rural area. However, we cannot hide from the reality of what is happening in the post office network. Customer behaviour is changing. People are not using the post offices in the same way that they did, and we cannot hide from that fact. What we are proposing, with the compensated closure plan and the new outreach locations, is a sensible strategy to deal with the change. I understand that Opposition Front-Bench Members have recognised that the current network is not sustainable, as has the National Federation of SubPostmasters. I urge the hon. Gentleman and his hon. Friends to work with us. I hear
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what he says about concerns about rural areas. I think we have addressed them, but I am rather surprised that he chose not to take part in the recent consultation exercise about the future of the post office network affecting his constituency. [Interruption.] The hon. Gentleman did not take part.

David Lepper (Brighton, Pavilion) (Lab/Co-op): I welcome my right hon. Friend to his new role. We are all aware that the deal between Post Office Ltd and WH Smith in relation to some Crown post offices is a done deal, but will he use his good offices to ensure that before those transfers take place, the Post Office and WH Smith have full regard to disability access to the relocated branches? I give the example of the WH Smith branch in Churchill square, Brighton, where the relocated post office will be in the basement, where the lift has been out of order for the past three weeks and where, although there is a down escalator, there is no up escalator. I suspect the same is true of many other branches.

Mr. Hutton: I am very sorry about the problem with the escalators in my hon. Friend’s constituency. Let me make it clear to him and to other hon. Members who have perfectly reasonable concerns about the issue that there is very clear legislation about the need to ensure that premises such as post offices and Crown post offices are accessible to disabled people. It will clearly be the responsibility of the franchisee—WH Smith, in this case—to make sure that all its premises are fully accessible to disabled people.

Mr. Alan Reid (Argyll and Bute) (LD): There is unfair competition between private mail operators and Royal Mail, because the private operators are able to cherry-pick the most profitable areas. In order to even up the market, would the Government consider imposing a levy on private mail operators who do not fulfil the universal service obligation, and use the money to help fund Royal Mail for delivering in remote rural areas and islands?

Mr. Hutton: No, we will not impose additional levies as the hon. Gentleman suggests. It is the responsibility of the regulator to make sure that all these issues are properly addressed and the universal service obligation is properly implemented. There are significant benefits for all of us in a more liberalised, competitive postal market, and we will do all we can to ensure that those benefits reach businesses, customers and eventually taxpayers.

Mr. John Grogan (Selby) (Lab): How do the Government intend to fulfil their manifesto commitment to review the operation of the Postal Services Act 2000 and the impact of market liberalisation?

Mr. Hutton: We will keep all these matters fully under review. We are strongly behind the liberalisation of the postal sector. In the long term it will be in the best interests of British business, consumers and taxpayers. If my hon. Friend wishes to come and discuss any aspects of these matters with me, he is more than welcome to do so.

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Robert Neill (Bromley and Chislehurst) (Con): The number of post offices in my constituency has been exactly halved, from 22 to 11, in the past seven years. Now the Post Office in another WH Smith deal proposes, in this case, to put the Crown post office upstairs rather than in a basement, but again with a one-way escalator and a lift at the back of the building, which may suit WH Smith but does not suit my constituents, yet two further post offices are ear-marked for possible closure in the latest round of consultations. What faith can my constituents have in the consultation process or in the words of the Minister’s earlier reply, given that in his previous incarnation he was significantly responsible for taking away a great deal of the work that kept small post offices going—

Mr. Speaker: Order. I think the hon. Gentleman is annoyed about the matter.

Mr. Hutton: I understand some of the concerns that the hon. Gentleman raises, but I am slightly surprised that a Conservative Member is making those accusations, particularly about the failure of the Post Office to win business in a competitive marketplace. He seems to be urging Ministers to give the Post Office business on terms that are not advantageous to consumers and to business. That would be a completely unacceptable state of affairs. There will be a full and open consultation in the hon. Gentleman’s area, and I urge him to take part in it. Let me remind him of some of the facts that he overlooked. During the period of the previous Administration, nearly 3,500 post offices were closed without any type of agreement on consultation or on ensuring proper and appropriate access to the remaining branches of the network. There are difficult decisions that we have to take. My view is that we should not hide from them or duck them; his view seems to be that we should do both.

Chris Ruane (Vale of Clwyd) (Lab): My right hon. Friend was absolutely right when he said that the Welsh Tories, and indeed the Welsh nationalists, did not take part in the Department of Trade and Industry review of post offices, although they use it as a political football. By contrast, Welsh Labour MPs have convened four meetings, including with credit unions, high street banks and, next Tuesday, the Welsh Local Government Association. In our meetings, we have come to the conclusion that there needs to be greater co-ordination between all those organisations. What measures will he take to improve that co-ordination between the various Departments and agencies that have an influence on the Post Office?

Mr. Hutton: I am grateful to my hon. Friend. He clearly makes the point that it is incumbent on all of us on both sides of the House, whatever party we represent, to address the reality of the situation, including the commercial reality of the difficulties that the post office network is facing—it is currently losing £4 million a week. We have a choice: we can either engage seriously in the consultation process, as are my colleagues, I am glad to say, or we can run away from the issues. In Government, I will do all that I can to co-ordinate across a variety of interested Departments a proper response to the challenge that the Post Office faces. I urge all right hon. and hon. Members to support that sensible process.

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Mr. Mike Weir (Angus) (SNP): The Minister will be aware of Royal Mail’s proposals on zonal pricing, which are being considered by Postcomm. He will also be aware that there is already a problem with parcels in remoter and island areas of Scotland, and many fear that zonal pricing will lead ultimately to an attack on the universal service obligation. It is only for business mail at the moment, but it could be extended later to all mail. Will the Government stand by the universal service obligation and not allow that zonal pricing scheme?

Mr. Hutton: We do stand by the obligation—in fact, it was put into primary legislation as recently as 2004. Postcomm is responsible for dealing with all these issues; that is the settlement that Parliament legislated for. We should let the regulator make these decisions. If the hon. Gentleman wants to come and discuss any particular concerns with me or my ministerial team, he is welcome to do so.

Mr. Andy Reed (Loughborough) (Lab/Co-op): While liberalisation might be good for Royal Mail in the long run, is my right hon. Friend aware of the difficulties that many of the cost-cutting measures that are taking place at the moment are creating for local businesses? For example, Jackson Coachworks in my constituency requires its post by 9 o’clock in the morning in order to do its business but is not getting it until at least midday, and sometimes in the early afternoon. Will he use his good offices to be in contact with Postcomm to ensure that the service that businesses require to carry on day by day is delivered on the ground?

Mr. Hutton: Yes, we will certainly do that. We keep a careful watch on all these matters. However, Royal Mail now operates in a highly competitive marketplace, and if it is not delivering the service that its business customers want, there are probably other companies that will. It therefore has a simple set of choices ahead of it—to be responsive to the needs of its customers or lose business.

Charles Hendry (Wealden) (Con): I warmly welcome the Secretary of State to his new role. We always found his predecessor to be helpful, engaging and courteous—although, sadly, utterly misguided in the policies that he proposed for the Post Office, which threatened to close a third of the network.

Is the Secretary of State aware that it costs Royal Mail 25 per cent. more to operate its services than it costs its competitors, that it is 40 per cent. less efficient, and that any attempts by the trade unions to prevent the modernisation of the service will result only in Royal Mail becoming less efficient and ultimately cost more jobs in the long run? Does he agree with his new friend, Comrade Digby, who is no doubt learning the words to “The Red Flag” as we speak, that the current mail strike is about “last century issues”, and why does he think that that statement has made many Labour peers think that he should not be a Minister and may be a loose cannon pointing in their direction?

Mr. Hutton: I am grateful to the hon. Gentleman for his kind words—that is probably as good as it gets. In fact, I heard Comrade Digby singing the words of “The Red Flag” this morning as I passed his office; he had perfect pitch, too.

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