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“Businesses are facing an exceptionally challenging economic climate with uncertainty over the short to medium term.”
He then goes on to give some indication of the help that the Government are supposedly giving to small and medium businesses. Measures to help those firms facing credit constraints include a new small business finance scheme to support up to £1 billion of bank lending to small exporters, a £50 million fund to convert business debt into equity and a £25 million regional loan transition fund. On the surface, that is all good stuff, so I tabled some parliamentary questions to the Treasury, asking how small businesses might access those funds. All those questions were transferred to other Departments, so they will, I hope, be answered in due course.
Not surprisingly, however, it was not long before I started to get letters and e-mails from businesses in my constituency saying, “Hey, we’d like to know how to access this money and help, because no one is telling us where to go, and wherever we go, we’re told to go somewhere else.” For example, the director of a marketing company in my patch, which had 17 employees in September, e-mailed me to say:
“On the 25th November the chancellor announced a £1 billion small business finance scheme designed to help struggling companies gain credit during these difficult times. This whole scenario started when I tried to find out who would be managing the fund and what the route to the fund was. Firstly I contacted Banbury
Chamber of Commerce and they...suggest I contact Business link. This I did at the Thame office. They had no knowledge of the fund and couldn’t help. I then had a call from the Chamber saying the funds were being managed by Regional Development Agencies.”
Over the past few days, my office and I have been trying to discover just where these funds are, and it is the most extraordinarily frustrating experience. The pre-Budget report would tend to suggest that some of these funds are being managed by the RDA. I telephoned the South East England Development Agency, which covers Oxfordshire, and I asked how small businesses could access the new small business financial scheme designed to help struggling small companies, and it said that it did not really know anything about it and suggested calling Business Link. So the next day, we asked the same question of SEEDA, and we were again told to call Business Link, but given a different number. We were told that if the business were eligible, Business Link, which is funded by SEEDA, could give advice on how to apply. So we called Business Link, and it said that it does not give funding directly, only advice and information. It also said that it had no information about the new funding, but it would do some research and ask a colleague to call me. Today, I received an e-mail from a client service representative from Business Link in London, which states:
“I do not have any substantial information on the new funding scheme for SMEs, and will send you any information I receive from our research team. They will not be able to give me a response by Monday, but I will contact you on Tuesday...to update you.”
Two weeks after the Chancellor purportedly produced a package of measures to help smaller businesses, no one in the machinery of government can explain to a Member of Parliament how any small or medium business in my constituency can access any of that money. That is a disgrace. Businesses all over the country are bleeding. They are desperately short of credit and in need of help and support. It is therefore unacceptable that no one can explain what they should do.
Then there is the whole issue of the scrapping of the learning and skills councils. Just as businesses in my constituency started to understand the Heart of England training and enterprise council, this Government scrapped it, just after they came to office, and set up the learning and skills councils. I have lost track of the number of times the LSC for Oxfordshire has changed—it has moved headquarters, its remit changed, and its regional operation has changed, so that at one point it included Milton Keynes and then it did not. At one point, people had to ring somewhere in Kent to discover what was going on, and then they had to ring Abingdon. That is a nightmare for small and medium businesses.
People are now beginning to understand what the LSC does, so of course it is now being scrapped and we are to have a new skills funding agency. That will be dependent on parliamentary approval in the children, skills and learning Bill, so it will not come in next week. There will therefore be a hiatus, just at the time when people need to know where they can get help. The LSC will be in its death throes and key staff will doubtless be leaving to look for other work. Until the Bill is passed, we will not know where the skills funding agency will be based, how it will be organised and how people will be able to access it.
The Gracious Speech provides nothing that will assist businesses in my constituency. For most of them, their main concern is getting access to credit. They find it frustrating that the banks, which have received very large amounts of money from the taxpayer, do not appear to be advancing credit, notwithstanding the exhortations of the Government. The Government do not seem to be taking any cognisance of the fact that credit in the economy has fallen close to zero, which is the lowest level in nearly 30 years. Not surprisingly, the CBI says that the number of firms reporting reduced and withdrawn lines of credit is going up every day. Instead of lending to businesses, the banks are cutting down their balance sheets. If everyone does that at the same time, the recession will clearly get deeper.
I hope that the Government will reconsider a suggestion made by the Opposition. I find it objectionable that the Government’s only mantra is to go around shouting that everyone else is doing nothing. It is the Government who are doing nothing apart from publishing press releases, because the schemes are not coming. They say that they will make credit available, but perhaps they ought to take notice of the national loan guarantee scheme that we have proposed, which would underwrite lending from the banks to British businesses for a commercial insurance fee, passed on by the banks. Such a scheme would properly protect the taxpayer. Banks would be able to use the scheme’s guarantees to underwrite a significant proportion of any new loans to businesses, so they would not be reckless loans. In that way, we would ensure that the markets would start moving again.
The Government must start to do something fairly speedily because it is important that small and medium-sized businesses get going at this time. The construction industry, of course, is an important part of that. As the Minister responsible for housing, the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright), is here, I want to take a couple of minutes to make some comments about housing.
One of the Government’s crazier ideas was the Weston Otmoor eco-town. I shall not detain the House on why it was and is one of the craziest ideas in God’s creation to have such a development predominantly on a greenfield site and for it to be dependent on digging up pretty much the whole of Oxford railway station and every railway bridge around Oxford—that is neither here nor there. There is no debate about the fact that we need new social housing in this country. I agree with much of what the hon. Member for Brent, East (Sarah Teather) had to say. One of the tragedies nowadays, as has been made clear by the chairman of the Centre for Social Justice, my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), is that working families on low incomes find it very difficult to access social housing. It is perverse that those who are on low incomes and in work are, if we are not careful, condemned for ever to the private rented sector, which means that stability is lost in our communities and in areas of our constituencies.
We need new social housing, and so Cherwell district council has said that it is willing to support an eco-town proposal on the edge of Bicester if the local development framework is gone through to identify where it should
be. That, I think, would be good news for Bicester. It would give some proper focus to a town that is in effect a new town, as it has grown very fast over the past 20 years. However, any such development will depend on the investment put into housing associations by the Housing Corporation. One cannot expect all the developments of the next 10 to 15 years to happen on section 106 agreements. Developers are simply not doing that. Wimpey lost 98 per cent. of its market cap in one year alone and most large-scale developments in my constituency have either ground to a halt or are moving at only a snail’s pace. If the Government want us to proceed with initiatives such as eco-towns and eco-housing, they will have to be prepared to consider allowing the Housing Corporation to invest in social housing in constituencies such as mine in north Oxfordshire.
Nothing in the Gracious Speech will do anything of real value for my constituents. It is all very well to talk about more apprenticeships, but as the Secretary of State for Innovation, Universities and Skills said, apprentices need employers. Of course they do, and in my patch we are desperately trying to maintain employment, but it is dependent on small and medium-sized businesses and although the Prime Minister and the Chancellor talk a good talk about what they are supposedly doing for small business, in practice and in truth, when we ring up and ask, “How do my constituents access that help?”, answer comes, “We do not know.”
8.41 pm
Mr. David Anderson (Blaydon) (Lab): I welcome my hon. Friend the Member for Glenrothes (Lindsay Roy). It is good to have an educator turned legislator. It is a shame that Scottish National party Members are not in the Chamber, as I am sure they would agree that my hon. Friend and the people of Glenrothes taught them a lesson on 6 November that they will be a long time forgetting.
I pay tribute to my hon. Friend’s predecessor, John MacDougall. The best tribute the House could give John MacDougall would be to put pressure on my Government to put right the scandal for people with pleural plaques and asbestos-related disease following the Law Lords deciding in their wisdom last October that those diseases could not be compensated for. Members of the House are working with Ministers to try to reverse that decision, and I hope that as a tribute to John MacDougall and the thousands of other people who have been illegally and criminally exposed to asbestos for many years the House will take that on board and support those who are trying to seek justice.
I shall talk mainly about apprenticeships, but also about housing. Nearly 40 years ago, I was fortunate enough to be welcomed as an apprentice with the National Coal Board. At the time, it was seen as a good, high-quality apprenticeship and in April 1969 I was paid the grand sum of £7 and 6 shillings a week, and thought myself well paid. The apprenticeship was not just practical. It was not just about learning how to repair and install machinery; it was also very much an academic qualification. We studied mathematics and engineering part-time on day-release, and we had to study and understand mining legislation in particular.
The vast majority of the rules governing mining are, thankfully, not just rules of conduct but were laid down by the House—sadly because of the serious incidents
over many years, when people were killed in coal mines in a multitude of ways. The House took its responsibilities seriously and people who trained as craftsmen in the mining industry had the responsibility to learn the legislation and implement it. When I became a craftsman, the mines were much more mechanised than in earlier years, but sometimes that just meant there were different ways of killing people. If a person did not do their job properly, not only did they lose millions of tonnes of production, they could also ruin other people’s lives.
I was 19 years old when I had served my time. The apprenticeship was a badge of honour; it was important. It brought status, and part of it was that when we became older and had more experience we passed our knowledge on to the next person in line. The young kids coming through were aware that the knowledge was handed down from generation to generation. It was an important part of the culture for people to serve apprenticeships.
Two years ago, I was asked to be a Parliamentary Private Secretary in the Department for Education and Skills, which became the Department for Innovation, Universities and Skills. I asked, “What’s the agenda? What’s the main idea that you’re pushing?” It was the skills agenda. In the two years in which I worked in DFES with the Secretary of State for Innovation, Universities and Skills and my hon. Friend the Member for Harlow (Bill Rammell), by and large, despite the brickbats that we normally throw at each other across the Chamber, the general view was that people in the Department were trying to do the right thing by improving skills and addressing the issues that we face in a global economy.
Obviously, there was discussion between the parties on where we were going and what we were doing, but by and large, people accepted that the Minister and the Secretary of State acted in good faith, and engaged with and worked with people, particularly in the Committee stages of Bills. The Minister and the Secretary of State would appear before the Education and Skills Committee and ask, “Can we find a way to take things forward?” I am not suggesting that that is not mirrored in other Departments, but there was a genuine attempt to try to find consensus. Obviously, at the end of the day Members have different party backgrounds and we divide on tribal lines, but in general we tried to move forward.
It was frustrating for me, as a PPS in that Department, to listen to the criticism of the apprenticeship schemes then in place, because Opposition Members talked about apprenticeships of the kind that I had had. They spoke of something almost like a guild, in which people would work for a time. They would work with a craftsman who had been there for a long time, and who had worked in the industry for many years. That totally ignored the fact that we are now in a very different world. I will be quite honest: I wish that we were still in a world in which we had that level of manufacturing, and the real, serious, heavy industry that produced work of that nature. However, the truth is that we are not in that world, because 20 years ago, the Conservative party had a deliberate policy of de-industrialisation, de-skilling and mass unemployment. It wanted to develop a low-skill, low-wage economy, and it did so very successfully.
The Conservatives devalued the status of work done by people in the public service, such as ancillary workers and cleaners, who were taken out of the public sector
work force. People who had been devoted to the national health service did not feel the same sympathy and passion when they belonged to the Joe Bloggs cleaning company; we see the results of that today. It is a different world now, and clearly we have to accept that.
One of the criticisms made today is that public sector apprenticeships are not being created, and I accept that criticism. It is an absolute disgrace that the public sector has not filled the gap that was left by the demise of heavy industry. Again, we have to look at some of the reasons why it has not done so. For 20 years, the public sector in this country, including local government, higher education and the national health service, were starved of resources. Hundreds of thousands of people were outsourced; jobs were sub-contracted to companies that aimed for the lowest common denominator and did not want to know about training, skills or the long-term agenda. Work force numbers, budgets and terms and conditions were cut to make things leaner and more efficient. As a result, public sector bodies could not fill the gap that we want them to fill. Hopefully, we are accepting in this debate that the public sector must do much more, and do it much better.
In the late 1980s, I left the mines. I was made redundant in 1989; when I left, I was given £20,000 in redundancy money. The global sum given to miners who were made redundant between the early 1980s and the early 1990s is £5 billion. I am talking about redundancy payments, and nothing else—not unemployment benefit or sickness benefit. If that money had been invested in keeping some mines open, or reinvested in skills, this country would be in a very different position today. I was fortunate, in a sense; through my involvement with the trade union movement—the Trades Union Congress and the National Union of Mineworkers—we got people access to Durham university. That gave people a chance to get skills, and to go back into education, if they had lost that chance earlier in life. That supported me and a few others.
I was one of the lucky ones; I was in the know. We cannot rely on that in this day and age. We need to go far beyond that, but we cannot do so if the Government have the attitude that we should stand back. We cannot do it if they believe in laissez-faire—if their attitude is “Stand or fall”, “Only the strong will survive,” or “If you don’t like it, get on your bike.” Sorry, but we cannot go there again. I am glad to say that we are not doing that today.
Sadly, like everyone else in the Chamber, I have constituents who are facing problems. Only last week, I visited Virgin Media in Team Valley in my constituency, where 113 people have been told that their jobs will have to go before next April. To its credit, the employer has engaged with those people at an early stage, and it has tried to find jobs for them in the rest of the system. More importantly, it has linked very quickly to the relevant agencies. Last week, I spoke to the Department for Work and Pensions, the local council and the regional development agency, which are working together with the employer to make sure that those people do not fall through the net. If they lose their job, they will try to find ways of giving them the skills to get another job, giving opportunities to people who may never have done a job interview or any training for years. The system is there to support them.
Likewise, as was announced by the Secretary of State, we are dealing with the situation at Nissan which, like other car plants, faces serious problems. It is the most productive car plant in Europe, producing quality goods and showing the way forward for manufacturing in this country. Like everyone else, it faces a situation where it has to lay people off. It has engaged with Gateshead college, which supplies the automotive training industry in my constituency, and it has agreed a package so that when people are laid off they do not go and sign on the dole or sit at home—they will go to the training centre and update their skills. Those same people in the training centre are going out into the workplace, and are working round the clock seven days a week with people to provide on-the-job training. They want to update their skills and make their chances better. For me, that sort of thing is welcome.
Twenty years ago this week, just down the river from Nissan, the last shipbuilding industry in Sunderland which, at one time, was the biggest shipbuilding town in the world, was closed down. A recording of what was said in interviews that day was released this week that said it all: when you take the heart out of something it dies, and the heart was ripped out of Sunderland when they shut the shipbuilding industry, with nothing to replace it. I urge everyone in the House to read “A mine of opportunities”, the report produced last week by the Audit Commission which speaks about the key role that local councils play in regenerating coalfield communities. The key message is that the worst thing that happened was the lack of action in the 1980s and 1990s. There was a slow take-up of the fact that people were just left for a long time, which has led to long-term problems, including social problems and drug abuse. People are living in a welfare culture—something that they never wanted to happen. They were proud to go to work, but they have forgotten what it is like to get out of bed on a morning and go to work.
David Taylor (North-West Leicestershire) (Lab/Co-op): My hon. Friend referred to the car industry, and in North-West Leicestershire a good number of firms are car component manufacturers for companies such as Nissan and Toyota. In America, the big four car manufacturers are lobbying the case hard with President-elect Obama as well as President Bush for special support for the car industry as a central part of the economy. Indeed, Lord Mandelson has seemed to make similar noises here. Does my hon. Friend believe that that is the way ahead and, if so, how can support best be given by the Government to such central and core industries, off which many jobs hang in other parts of the country, not just in Sunderland, Derby or wherever?
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