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Ian Pearson: Bentley is a great brand, but I know that the company is having difficulties, because as with other companies in the automotive industry, people are not buying its cars. That is one of the reasons why it has had to make some of the decisions that it has made recently to cease production for a period. There are challenges facing Bentley, just as there are challenges facing all our major car manufacturers in the UK at the moment. All that the Government can do is look at what sort of sensible measures we can put in place to help the industry, and the working credit scheme will help many companies in the supply chain, especially as the cessation
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of production by some companies creates enormous problems for a lean, integrated, just-in-time supply chain. We will continue to work with the industry on tackling the problems that it faces and providing solutions where it is sensible to do so.

Mr. James Plaskitt (Warwick and Leamington) (Lab): My hon. Friend will be aware of the importance of the industry in my west midlands constituency, which has many design and component companies. They have told me that two things are essential at this stage. The first is support for credit lines, and the second is encouragement to adopt green technology, so I think that they will welcome the statement as right on the button in terms of what they have told me is necessary. However, I have noticed that the money will be accessed via application, and the companies have also told me that the application process is sometimes very complicated, tortuous and involved. Can my hon. Friend ensure that the application process is as simple and as streamlined as possible?

Ian Pearson: My hon. Friend is right to stress the importance of the automotive industry to his constituency, and I am well aware of it. He is also right to say that what companies want is access to support as quickly as possible, and we are endeavouring to achieve that. We need to look at the issue on a case-by-case basis and there are certain due diligence steps that we will need to take because taxpayers’ money is involved; the whole House would expect us to be responsible with it. Having said that, we need to move as speedily as we can in all these areas, including access to the working capital scheme, on which we are working actively with the banks at the moment.

Anne Main (St. Albans) (Con): Access to credit and loans is not working in the way that the Government would like. In my constituency, I have a small specialist company that distributes bearings and supports the bearing industry. It cannot access any funding under the current schemes and I doubt that it will be big enough to access funding under the scheme proposed by the Government. However, that company is a key component of the aerospace and automotive industries. Will the Minister meet my constituent who runs this company—he would happily take on three or four extra people if he could access funds—to discuss the problems facing small and medium businesses?

Ian Pearson: In the first instance, if the hon. Lady e-mails me with the details I can get some officials to look at that matter right away. We will see how we go from there, but if it is appropriate to have a meeting I will be more than happy to do so.

Alan Simpson (Nottingham, South) (Lab): General support schemes for industry can do a range of things, but they do not green industry by one jot. Will the Minister reconsider the German scrappage scheme? My understanding is that the €2,500 subsidy is offered specifically to those who are the owners of older high-carbon vehicles when they trade in those vehicles in exchange for new low-carbon vehicles. Will he consider using demand to make the same green shifts in the UK and to tie improved access to finance to precisely the same green demand agenda?

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Ian Pearson: As I said, I do not think the German scrappage scheme is necessarily quite as straightforward as it might seem from reading about it in the newspapers. It is a lot more complicated. We continue to monitor the situation with the German scheme and the French scheme, too, which I understand is not without its problems. I remain to be convinced that the schemes are an effective use of public money. I will always keep my mind open and we need to consider the evidence on such schemes, but my judgment is that there are better ways to support industry and to achieve our environmental objectives at this point in time than going ahead with the scrappage scheme. We will continue to review these matters.

John Howell (Henley) (Con): I have listened to the statement twice and I am none the wiser as to how many new cars the money will help to sell. Would the Minister like to tell us?

Ian Pearson: I have been at pains to stress that the measures we are announcing, which will provide guarantees that will support £2.3 billion-worth of lending to the automotive sector, will help to ensure that we give the companies that are supported a bridge to the future to enable them to get through the difficult times that we are in and to support the development of cleaner, greener cars. That is what we can do. The sensible thing to do is to help companies through the short term to ensure that they are best placed for the future when the economic upturn comes.

Margaret Moran (Luton, South) (Lab): I particularly welcome the training and greening initiatives that my hon. Friend has outlined, which appear to be in stark contrast to the do nothing or “lay workers off” policies of the Opposition. The provisions will be of particular use to IBC Vans in my constituency, a company that is very highly productive but where workers are facing a 30-hour week from February. May I press the Minister further on the issue of tax incentives for businesses to purchase fleet vehicles, as I think that they would benefit small and medium-sized enterprises, IBC Vans and white van man?

Ian Pearson: My hon. Friend is absolutely right to point out the importance of the green and training components of the packages that we are announcing. I want to support white van man, too. I want to ensure that white van man has the confidence in his business to say that he wants to buy a new white van because he can see the business opportunities in the future. Restoring that confidence is vital. There is an important point to be made about the fleet market, and we are open to discussions about whether more can be done in that policy space. As I said, my hon. Friend is right to point to the green and training aspects of the package, which will both be welcomed.

Mr. Roger Williams (Brecon and Radnorshire) (LD): It is difficult to overemphasise what a parlous financial state many car dealerships find themselves in. One in
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my constituency reports sales of new cars dropping from more than 30 a month to fewer than 10 a month. If those businesses fail, all the other measures will count for nothing. I urge Mervyn Davies to get on and do his work as quickly as possible but also to investigate other ways to support those businesses, such as relief from business rates. They have to be paid every month regardless of the level of business, which is causing the businesses great distress.

Ian Pearson: I have heard what the hon. Gentleman has said. As I have said, we want Mervyn Davies to be actively engaged and to deal with the matter with the urgency that is required. The hon. Gentleman asked specifically about the dealership network, in which many small businesses operate. He will be aware of the business support scheme operated by Her Majesty’s Revenue and Customs for companies with particular difficulties. There are more than half a million people in the dealer network at the moment. Some of them are tied to big companies but some are small and independent, and we must ensure that they are aware of the range of support on offer. I sometimes think that when we come to the House to announce new initiatives, we need to do more to communicate the vast range of initiatives that are already available out there. We are looking to do more in that area as well.

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I welcome the measures taken by the Government, but I want to stress that their success or otherwise will depend ultimately on how much of the money is distributed. What measures are being taken to ensure that small companies that wish to access the loans know how to do so and where to go? Will the Minister ensure that the institutions disbursing the loans know what is a reasonable basis for their disbursement? Finally, what role does he see the regional development agencies playing in bringing consistency to the process?

Ian Pearson: My hon. Friend makes a very good point. The RDAs, with Business Link as their agent, have a primary responsibility in promoting a wide range of Government services through the Business Link brand. He will be aware of the Solutions for Business programme, which provides a range of different Government support in addition to the measures such as the enterprise finance guarantee scheme that I have mentioned already today. We must make sure that we have the most effective communication channels out there. Companies are facing challenges, but sources of funding are available that are either backed or directly funded by the Government. We will see whether there is more that we can do to make sure that MPs have the information that they need, because I am acutely conscious that lots of MPs are being approached all the time by companies that are having difficulties. They need to signpost those companies in the right direction.

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Welfare Reform Bill

Second Reading

4.32 pm

The Secretary of State for Work and Pensions (James Purnell): I beg to move, That the Bill be now read a Second time.

I should like to start by welcoming the right hon. Member for Maidenhead (Mrs. May) to her new post. I also welcome the hon. Member for Northavon (Steve Webb) back to his old post, although we are no less happy to see him for all that. I know that we will disagree on many things, but also that their scrutiny will improve this important Bill. I look forward to working with both of them, where we agree.

In the debates ahead of us, we shall hear much jargon. We will hear talk of contribution conditions, taper rates and conditionality, but it is important that we start by remembering what the Bill is about. It is about changing lives—of the people who have been stuck on incapacity benefit for too long and of the lone parents who could work if they knew about the support available to them. The Bill is also about giving disabled people control over the public services that they receive, instead of their being controlled by the bureaucracy.

This Bill is based on the simple idea that people will be given more support and, in return, more responsibility. That is not the Government’s idea, nor the Opposition’s. It was expressed in the Beveridge report—indeed, it is one of his three founding principles.

In his report, Beveridge said:

or responsibility.

The Bill is intended to renew the partnership between the state and the individual by ensuring that virtually everyone on benefits is preparing for work, so that support is matched with responsibility. We will support people, but in return they must support themselves. Some people have asked why we are taking measures now. The answer is simple: it is because it would be wrong to abandon people. If we gave up on welfare reform now, we would be condemning people who find it harder to get back into work to not being able to do so. That is precisely the mistake made in the recessions of the ’80s and ’90s, when conditionality and investment were cut, and unemployment rose more than it need have done.

Governments have a choice: we can either invest millions now in helping people back into work, or we can waste billions in the future when we cannot get people back into work because it has become too difficult. We have a choice between an ambitious welfare state that lifts people out of dependency and a passive one that traps them there.

John Robertson (Glasgow, North-West) (Lab): I thank my right hon. Friend for giving way so early in his speech. Will he assure me that we will not do what was done in the past, when unemployed people were hidden in the benefits system, and hidden away in the figures?
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Unemployment was actually a lot higher than the figures suggested. Will he assure me that we will tell the truth right down the line?

James Purnell: I can absolutely give my hon. Friend that assurance. He describes the Opposition’s policy when they were in government; they massaged the figures and shuffled millions of people on to incapacity benefit. The real crime is that those people were then trapped there, without help. [Interruption.] Well, the truth is that incapacity benefit tripled when the Opposition were in government. Frankly, I am surprised that they want to talk about that record. On top of that, they still have not learned from those mistakes. They would still cut investment in helping people back into work. The right hon. Member for Maidenhead may want to break with her predecessor’s policy right now—she is welcome to intervene if she wants to. The Conservative party’s policy is to cut £1.8 billion from Jobcentre Plus, from our private providers, and from the support in place to stop short-term unemployment—

Mrs. Theresa May (Maidenhead) (Con) indicated dissent.

James Purnell: The right hon. Lady shakes her head, but that would be the consequence of refusing to back our fiscal stimulus. The recession would be longer and deeper than it need be, and the cost to human lives and to the Treasury would be greater. That is the policy of the Opposition, and if Opposition Members want to disown the consequences, they should stand up now and do so. Obviously the right hon. Lady backs the policy of her predecessor on this issue, as on so many others.

Conservative party policy would return us to a passive welfare state—one where we fail to invest in people and fail to have the right level of conditionality. We would end up with more, rather than fewer, people dependent on benefits. That is the opposite of what we should do. We should have an active welfare state that helps people to take control of their lives.

Mr. Terry Rooney (Bradford, North) (Lab): My right hon. Friend rightly talks about the rights and responsibilities agenda. Of course, the responsibilities of claimants are enforced through sanctions, and the state’s right to co-operation is enforced similarly, but the responsibilities of the state to the claimant and the rights of the claimant tend to get diminished. Will he consider the idea of a claimant’s charter, in which those rights and responsibilities would be clearly delineated? Claimants would then know what they could expect, as well as their obligations.

James Purnell: I am aware that the idea has been suggested by Gingerbread, as well as by my hon. Friend, and it has a lot of promise. We want to consider how we can make sure that it is not restrictive and does not become a lawyer’s charter. As I will argue, we want to move towards a more flexible system based on personalised conditionality. If we are to do so, we need to look at how individuals can know that they will be treated fairly. Perhaps the way forward is to have a seminar, to which my hon. Friend and some of his colleagues would
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be invited, to discuss how that could be done. I would be happy for Conservative Members to attend, if they are interested.

Bob Spink (Castle Point) (Ind): I welcome the Bill, as far as it goes, and will support it, but does the Secretary of State accept that if it is to work well, people must accept it as fair? Will he therefore consider the condition of fibromyalgia, and make sure that it is properly recognised, as it is a very debilitating condition?

James Purnell: Of course we are happy to look at anything in our review of the work capability assessment. The hon. Gentleman may know that there is a review coming up, so he will have a chance to make that point then.

How can we have a system that is active and gives people control over their lives? I want to cover three main ways in which we can ensure that. First, we can do so by ensuring that children have a fair start in life, so that they can have a fair chance in life. That is why the Government are committed to ending child poverty and why we will enshrine that commitment in legislation this Session. It is also why we are committed to supporting families. We know that in the modern world we cannot keep all couples together, but we know that we need to look after children, whatever the relationship status of their parents.

Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): When my right hon. Friend is considering the needs of families and children, will he look especially at the needs of families with children with disability? Sadly, that often leads to a break-up of the relationship between the parents. Also, if a lone parent is looking after a disabled child, there is huge difficulty in finding appropriate child care to enable that parent to go into work. Will my right hon. Friend look into those special issues?

James Purnell: I am happy to do so. Indeed, in the next few days the Government will publish the refreshed child care strategy, which looks at that issue. My hon. Friend will also know that the Government have invested significant sums in respite care for parents caring for disabled children. However, she highlights an important issue—the extra costs for child care for children who are disabled.

Child maintenance is important because it gets more money to children whose parents have divorced or separated. It has already taken 100,000 children out of poverty. If all non-resident parents paid what they owed, that number would double and another 100,000 children would be lifted out of poverty. That is why the Bill proposes some changes to strengthen the regime by which we collect money.

The people who suffer most when parents separate are mothers. Mothers are three times more likely to be in poverty after separation than their husbands. Research out this week shows that whereas mothers’ incomes fall, those of fathers often rise. That is why making sure that fathers—not always, but in particular—live up to their responsibilities is so important.

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