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It is a particular pleasure to be able to respond to a debate opened by the hon. Member for Mid-Worcestershire (Peter Luff). He made many points, and some generous comments about the Department’s ministerial team. I have to say, however, that I do not agree with his points on accountability. There are many precedents for Departments being led by peers. There are also many devices to hold the Department to account—not only through the work of the hon. Gentleman’s Select Committee, which I commend. There are regular Business questions in this House, during which hon. Members of
all parties can scrutinise the Department’s work. I am sure that there is no Minister in DBERR who feels unscrutinised. I remember that in one 10-day period I appeared before seven different Select Committees, of both this House and the House of Lords.
I welcome the comments of the hon. Member for Banbury (Tony Baldry) about the immediate response he has received from DBERR officials when he has raised particular issues. That is a small indication of the commitment in the Department, from both Ministers and officials, to do all we can to help businesses and families through the recession.
Peter Luff: I will not repeat the debate on accountability, as I have made my points—although I profoundly disagree with the Minister, and think he is absolutely wrong on it.
I did not know about the helpline that my hon. Friend the Member for Banbury drew to the House’s attention. He kindly showed me the letter that he mentioned. The relevant reference comes in the last paragraph of a three-page letter, the contents of the first two pages of which I was entirely familiar with. It would be prudent for the Department to draw that excellent helpline to the attention of the whole House in a single, dedicated letter just to make the point that it exists, because I did not know that it existed.
Mr. Thomas: The hon. Gentleman has drawn the House’s attention to it, and we will certainly consider whether we need to do so further, but I am sure Members will read Hansard and reflect on the speeches of the hon. Gentleman and the hon. Member for Banbury.
I want to pick up one further point that the hon. Member for Banbury made. He raised the question of Ministers working across Departments. That is not a new innovation. It seeks to break down the silo mentality that can, on occasion, bedevil any Government of any colour. In a time of economic difficulties it makes absolute sense to have, in the case of my hon. Friend the Member for Dudley, South (Ian Pearson), a Minister with one foot in the Treasury and another in the Department for Business, Enterprise and Regulatory Reform. For other Ministers who also have joint responsibilities, there is the opportunity to bring, on occasion, a slightly broader view to their discussions internally.
I hope that the hon. Member for Mid-Worcestershire will forgive my saying that I was slightly surprised by two omissions from his opening comments. I am sure that he would accept that DBERR Ministers have a key role to play in continuing to encourage trade, and particularly in encouraging the avoidance of protectionism. That is another key part of the Department’s work, in which Ministers are playing their part. I am sure that only lack of time meant that the hon. Gentleman could not also raise issues to do with help for families, which my Department is offering, such as the increase in support to debt advisers, the national debt helpline and citizens advice bureaux. I am sure that the hon. Gentleman and the House in general will recognise the importance of that assistance.
The hon. Gentleman asked a number of specific questions. I will deal with one of them now, and I hope to address some of the others during the course of my remarks. He asked for final clarity as to whether the enterprise finance guarantee scheme applied to Northern Ireland. I can tell him that it does; I hope that deals with the remaining confusion on that.
My hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) made a very good speech, in which he drew attention to the important work he has done in making the case for the car industry, and also his work as Chair of the Select Committee on Regulatory Reform. It was striking that the hon. Member for Northampton, South (Mr. Binley), who I hope will forgive me for saying is not the silent and retiring type, went quiet when offered the chance to attend the Regulatory Reform Committee, which is chaired so ably by my hon. Friend. I hope that the hon. Member for Weston-super-Mare (John Penrose) is not only a talker, but a doer, and will thus investigate why Conservative Members of Parliament are not turning up to the Regulatory Reform Committee—my hon. Friend alluded to that.
Andrew Miller: I thank the Minister for his compliments. He is making suggestions to Conservative Members, so I should say that if they did attend the meetings, they would understand that not only has the administrative burdens reduction of 25 per cent. been achieved, but it has been praised by Governments elsewhere; the hon. Member for Weston-super-Mare (John Penrose) is mixing his targets.
Mr. Thomas: My hon. Friend makes the point for me; I am sure that the hon. Gentleman will ensure a better Conservative attendance in future.
The hon. Member for Winchester (Mr. Oaten) made an interesting speech, in which he picked up some of the comments about accountability that the hon. Member for Mid-Worcestershire made. I recognise that the hon. Member for Mid-Worcestershire will not agree with me, but I hope that he will accept that I have addressed those points, and I shall try to come to some of his other points a little later.
As the House will recognise, the shocks that the global economy has recently experienced are unprecedented in their scale and scope. This recession was not made in Britain, but its consequences are having a profound impact on the daily lives of many families and businesses. That is why the Government have developed a number of key policies aimed at providing real help now. A series of our measures are making a real difference for many businesses and families as we speak. I recognise that there is more that not only the Department but the Government need to do—all contributions from hon. Members from all parts of the House have alluded to that—and we will do it.
Our measures include providing advice to businesses to help them weather the current economic storms and check that they are doing all they can to maximise income and minimise their costs. Almost 30,000 businesses have benefited from the business health check since it was made available. We have also provided new help to allow businesses in temporary financial difficulty to pay their tax bills on a timetable that they can afford. Some 72,000 companies have taken advantage of that new flexibility and reached agreement with Customs, and more than £1 billion in tax payments has been deferred as a result, providing businesses with real help with their cash flow.
I should also point out that we first prevented British banks from going under, with all the horrendous consequences for the British economy and, in particular, the British business community that that would have
caused. First, we prevented Northern Rock from going under—I remind the House that the Conservative party opposed that move and then, in a perfect example of the constantly shifting sands on which their economic policies are made, they changed their minds—and we have since recapitalised a series of banks that were experiencing real difficulties. We are working hard, as the statement by my right hon. Friend the Financial Secretary to the Treasury made clear, to get the banks to increase their lending activities directly. The asset protection scheme has led to agreement with banks on lending levels; an agreement on lending levels has been put in place not only with Northern Rock, but now with the Royal Bank of Scotland and Lloyds bank, as Members who were in the House at the time will have recognised. Lending levels will be increased to help viable businesses get access to the credit that they need.
A number of hon. Members mentioned the enterprise finance guarantee scheme, which could offer up to £1.3 billion-worth of lending by banks to businesses. It is up and running and it includes all the main high street lenders. More than 400 loans—worth some £40 million—have already been guaranteed. Given the amount of interest in the scheme, I have no doubt that there will be more on offer.
Mr. Redwood: Will the Minister explain what the £20 billion supplementary estimate is that stands in the name of the Treasury to promote greater economic growth?
Mr. Thomas: I shall come to the estimates shortly. I also wish to discuss the automotive assistance package, which will help car manufacturers and their suppliers. It is up and running, having got European Commission approval. There is a mix of loan guarantees and, potentially, loans to support some £2.3 billion-worth of lending from the European Investment Bank and other sources. A number of hon. Members raised other issues that are potentially of considerable interest to those in the car industry. A further meeting with car manufacturers and their suppliers will take place on Wednesday—it will be chaired by my hon. Friend the Under-Secretary of State for Business, Enterprise and Regulatory Reform—to go through what further help the Government can offer in that sector.
I have alluded to the fact that we are also helping families who have run into financial difficulties as a direct result of the economic situation. A further £10 million has been provided to increase the number of face-to-face advisers in local citizens advice bureaux,
and further help has been given to the national debtline so that telephone advice and support can be offered to people, some of whom are in very desperate circumstances. Again, that measure provides direct support and is making a real difference to families who are in trouble as a result of the recession.
I should also remind the House that I met representatives of the credit card industry to agree new ways of handling the risks facing that industry—risks that have led them, on occasion, to cause real difficulties for people who have substantial loans to repay. Such ways include a new set of principles for handling how they manage the debts and an agreement to provide a breathing space of up to 60 days for people in financial difficulties, to allow them to sort themselves out and be able to move on with their repayments.
The single biggest measure that we have initiated to help businesses and families through the recession is the fiscal stimulus, which was unveiled by the Chancellor at the pre-Budget report and opposed by the Conservative party. The fiscal stimulus package includes a cut in VAT—the largest tax cut since 1988—putting money back into the pockets of shoppers and shopkeepers; an income tax cut of £1.4 billion; a £60 payment for pensioners; new help on child benefit; and £3 billion of capital investment. That provides real help to businesses now.
I say gently to the hon. Member for Weston-super-Mare that it is a little rich to be lectured on providing support to businesses during a recession by the Conservative party, given that it was responsible for two devastating recessions in the 1980s and 1990s that cost thousands of jobs. Those recessions were directly attributable to the economic policies of the then Government. The striking thing about the Conservative party’s approach, which includes opposing the fiscal stimulus, is that it is completely out of synch with the rest of the world. Doing nothing to help—indeed, it is now advocating significant cuts in public expenditure—is a reckless approach at best; it is certainly extremely dangerous. That approach is advocated by no major country.
The return to the Front Bench of the right hon. and learned Member for Rushcliffe (Mr. Clarke) was trumpeted as bringing new economic literacy to the Conservative Front-Bench team. Given that he disagrees with his leader on VAT, on whether International Monetary Fund help will be needed and on the need for a fiscal stimulus package, and that the only thing on which he seems to agree with his leader is the need for the shadow Chancellor to have some help, I gently say to the hon. Member for Weston-super-Mare and his party that now is the time to rethink their approach.
Question deferred (Standing Order No. 54(4)).
Department for Transport
Railways
[Relevant Documents; The Tenth Report from the Transport Committee, Session 2007- 0 8, HC 219, on Delivering a sustainable railway: a 30-year strategy for the railways?, and the Government response, HC 1105, Session 2007-08; and oral evidence taken by the Committee on 25 February 2009, HC 233-ii, on Rail fares and franchises.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2009, for expenditure by the Department for Transport—
(1) further resources, not exceeding £8,244,816,000, be authorised for use as set out in HC 221, and
(2) limits as so set out be set on appropriations in aid. — (Mr. Ian Austin.)
7.9 pm
Mrs. Louise Ellman (Liverpool, Riverside) (Lab/Co-op): I am pleased to open this estimates day debate on rail. There is no doubt that rail is great success story, but it also faces challenges related to the recession, and there are question marks over its structure and about whether it is achieving value for money. The Select Committee on Transport’s report “Delivering a sustainable railway: a 30-year strategy for the railways?”, which was published on 21 July 2008, considered those points, a number of which are being followed up by new inquiries.
The report considered the rail White Paper, which combines the Government’s strategy for the next 30 years with proposals for the next five years in its high level output statement. It anticipates the doubling of passenger and freight traffic over a 30-year period. The Committee welcomed the growth strategy but criticised the report for lacking vision, particularly in relation to high-speed rail and electrification. It is reassuring to see how much progress has been made on both issues since the Committee’s report was published. They are both of critical importance and the Committee will be pursuing them. We are pleased that studies are being undertaken, but we want to see commitment to action within a realistic time scale.
In today’s debate, I want to concentrate on a number of key financial issues that challenge fundamental parts of the rail system as it operates today, as well as raising specific questions about the estimates before us. The Committee warned in its report that
“if a full-scale economic downturn were to develop, passenger numbers are unlikely to grow as fast as projected in the High Level Output Statement. This situation could jeopardise the current hard-won level of financial stability.”
The latest information available from the House of Commons Library gives cause for concern. It shows a small reduction in the number of passengers in the third quarter of 2008-09 compared with the third quarter of 2007-08. The first two quarters of that year showed small increases compared with comparable periods in the previous year. If that trend continues and there is a reduction in the number of rail passengers or in the number of anticipated rail passengers, that will have major implications for the franchising system for rail services and rail finances.
Public funding for the period 2009 to 2014 assumes a 34 per cent. increase in passenger revenues. Reduced numbers of actual or predicted passengers from those
anticipated when companies bid for and acquired franchises could threaten the viability of rail services and pose a serious financial challenge for the Department for Transport. It is not clear in the estimates whether the scale of that challenge has been assessed or, indeed, provided for. In those circumstances the train operating companies might seek renegotiation of their franchise agreements. They might default on premiums due or seek to increase subsidies, perhaps activating the revenue- sharing agreements that are already in place. They might try to reduce services—indeed, that has already started—or to walk away from their franchises. Concerns have already been raised about all those possibilities, and jobs in the rail industry are already being shed.
Mark Pritchard (The Wrekin) (Con): Of course, whatever the financial state of the train operators, they all need track to run on. As the hon. Lady will know as the distinguished Chairman of the Select Committee, Network Rail has a subsidy of more than £3 billion from the taxpayer. Does she share my concern at the reports that the chief executive of Network Rail, Iain Coucher, and two other directors, known as the two Hendersons, are to receive bonuses of up to £600,000? Would she like to put it on the record that she thinks that at this time, when Network Rail messed up big-time on Liverpool Lime Street and when there are still problems on the west coast main line, those people should not receive those bonuses?
Mrs. Ellman: The hon. Gentleman will recall that the Transport Committee’s report roundly condemned the payment of bonuses to chief executives of Network Rail after failures. I shall return to the whole issue of efficiency at Network Rail and value for money later in my speech.
Bob Spink (Castle Point) (Ind): In view of the obvious problems that passengers are now starting to face—whether with car parking charges, rail fares, overcrowding or reliability—does the hon. Lady believe that now is the time to give the Office of Rail Regulation more teeth so that it can better represent the interests of passengers? It has been quite ineffective to date.
Mrs. Ellman: It is important for passenger interests to be recognised and I think that Passenger Focus has done a very good job, but there is a need for more action and more teeth. I am not completely satisfied that the rail regulator is the right person to do that, but I take the hon. Gentleman’s general point.
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