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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Ian Lucas):
The Government continue to ensure that small and medium-sized businesses have access to the finance that they require. Since January we have secured lending commitment agreements with
banks, introduced the enterprise finance guarantee-which to date has received over £0.5 billion of eligible applications-and, recently, launched the innovation fund as part of the Government's strategy for ensuring the UK's future economic success.
Mr. Swayne: The small firms loan guarantee scheme and the enterprise finance guarantee scheme have produced less than half the target amount of lending. Meanwhile, firms in my constituency with good order books and good prospects are still screaming for credit. What are Ministers going to do about it?
Ian Lucas: What the Government are anxious to do is use public finance to help to guarantee the funds that are available from banks. That is a very positive and innovative approach. The hon. Gentleman must answer this question: where would the money come from under a Tory Government?
Mr. Peter Bone (Wellingborough) (Con): It has nothing to do with the next Tory Government, and everything to do with this Government. They have nationalised the banks-billions of pounds of taxpayers' money have been put in-but small businesses in my constituency are going bust because the banks are not lending to them. What are the Government going to do about it?
Ian Lucas: I have described the active steps that the Government have already taken. I am a constituency Member of Parliament too, and I speak regularly to businesses in my constituency. These issues have been raised, and businesses are well aware that the Government have taken action. However, we will act when individual cases are raised. We will support industry and business, and we know that other parties would not.
Mr. Russell Brown (Dumfries and Galloway) (Lab): I fully recognise that my hon. Friend and other Ministers are doing the best they can, but there are still significant difficulties out there with some of the main banks. Are my hon. Friend and his colleagues making it abundantly clear to Treasury Ministers and officials that small and medium-sized enterprises are, regrettably, still suffering at the hands of the major banks?
Ian Lucas: We all recognise that we are experiencing extremely difficult economic circumstances at present. We are working in the Department to assist small businesses, and of course we liaise closely with the Treasury in discussing the steps that need to be taken to enable us to improve the service that we are giving as much as we possibly can.
Mr. Jonathan Djanogly (Huntingdon) (Con): I suggest that the Government have not been doing all that they can. Is it not the case that the French and Germans had been facilitating credit for their companies months before we got around to it? Is this not too little, too late?
Ian Lucas: I am beguiled by the conversion of the Conservative party to adoration of what is happening across the channel. It seems that the right hon. and learned Member for Rushcliffe (Mr. Clarke) is having rather more influence than I thought.
We are taking action. Great progress has been made in the way in which we are delivering support for business. We will continue to do so-and Conservative
Members have still not told me where they would find the money to pay for these programmes under a programme of cuts.
Greg Mulholland (Leeds, North-West) (LD): Pubs are, of course, small businesses, and evidence from pubs around the country shows that they in particular are not receiving assistance and credit from banks. Will the Minister agree to look into that, and meet a delegation from the save the pub group to discuss this important issue?
Ian Lucas: Mr. Phil Liddell of the Peal O' Bells pub in Holt in my constituency has been very active in trying to draw attention to the difficulties of pubs in the locality. Before I was a Minister, I attended the hon. Gentleman's event on licensing so I am very well aware of the difficulties in the industry. The particular area he raises is not in my remit, but I will speak to my ministerial colleagues concerning this matter and they will get back to him.
Topical Questions
T1. [287073] Mr. Desmond Swayne (New Forest, West) (Con): If he will make a statement on his departmental responsibilities.
The Minister for Business, Innovation and Skills (Mr. Pat McFadden): Our Department is focused on creating the conditions for business success, promoting enterprise, innovation and science and making sure people have the skills and opportunities to succeed. To that end, this week we have published the life sciences strategy and, together with our colleagues in the Department of Energy and Climate Change, the low carbon industrial strategy. That is because we take the view that the Government have an active role to play in helping Britain make the most of the changes we will need in how we transport ourselves, how we build and heat our homes, and how we produce our energy for the future.
Mr. Swayne: And another thing: why is it that someone who is languishing on jobseeker's allowance has to wait six months before they can retrain? Why can they not start retraining straight away-and perhaps be retrained in some of the skills for the wonderful strategy the Minister has just described?
Mr. McFadden: The focus for those who are unemployed for a short time is to help get them back into work as soon as possible. That is why it makes sense to give the extra help for retraining for those who have been out of work for that bit longer. I have to say to the hon. Gentleman that if he thinks there should be more expenditure on helping the unemployed, perhaps he should resist his own party's plans to cut public expenditure now in the middle of a recession.
T6. [287080] John Robertson (Glasgow, North-West) (Lab):
The "Digital Britain" report recommends putting a levy of 50p on all copper lines. Is it fair to ask particularly the people of Glasgow and my constituency where 70 per cent. do not take up broadband to pay that 50p levy? I think the Minister
will have to agree that that is totally unfair. Would it not be fairer to get broadband users to pay that extra levy?
Mr. McFadden: The "Digital Britain" strategy published a few weeks ago is a very good example of the active role we take in helping to shape the economic future of the country and making sure that opportunities in it are maximised. The report said that those on low-income tariffs would not have to pay the levy mentioned, so it is not universal regardless of income; instead, it is a measure that would step in where the market would not to make sure the opportunities presented by next generation broadband are not just enjoyed by those two thirds of the population or so that the market would provide for, but are enjoyed throughout the country.
Mr. Kenneth Clarke (Rushcliffe) (Con): Has the Minister of State noticed that Royal Mail is losing business at a rate of about 10 per cent. annually, that it faces a pension deficit that will probably be valued at £10 billion, which it is unlikely to be able to fund, and that it now faces strike action? The Government have suspended all progress on a Bill that we were supporting, and which the Minister said was urgently necessary to secure the future of Royal Mail. Is the Government's policy one of benign neglect, or is he simply doing nothing?
Mr. McFadden: As the Secretary of State announced in the other place a couple of weeks ago, the market conditions have not been conducive to getting the best value for the taxpayer from the partial sale we have proposed. Where I agree with the right hon. and learned Gentleman is that that does not mean that Royal Mail does not face significant problems and challenges. It is important that the company gets on with its plans for modernisation, and that the union, which has said it is up for change, shows that that means something in practice-and I have to say that continued strikes and industrial action within Royal Mail will do nothing in the end to help it on the necessary road to modernisation, which is absolutely essential for the future of the universal service.
T8. [287082] Jessica Morden (Newport, East) (Lab): The consumer White Paper has just been published, so will the Minister take a look at credit reference agencies, such as Equifax and Experian, to see what more can be done with this industry to make the reports that such agencies provide to consumers more accessible and easy to interpret?
The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs (Kevin Brennan): Yes, and I thank my hon. Friend for her welcome for the consumer White Paper. The Government want to ensure that all consumers have access to the right tools to help them understand credit reference files better. Of course, people can request a paper copy of their credit reference-that will cost them two quid, so it is not that expensive. We will work with the industry to look at improving people's access to and understanding of their file, including whether it can be made available online.
T2. [287075] Sandra Gidley (Romsey) (LD): Could the Minister explain why hard-pressed graduates in Southampton and the rest of the country have to pay 4.8 per cent. interest on their student loans, given that we now have a deflationary economy?
The Minister for Higher Education and Intellectual Property (Mr. David Lammy): As I have explained before, the rate on income-contingent loans is based on the retail prices index over the year period. We examined this closely, finding that the loan rate is still one of the cheapest loan products available in the developed world.
Mr. Denis MacShane (Rotherham) (Lab): At the close of business today, I shall present a petition on the steel industry. It has been signed by about 5,000 of my constituents and others, and was assembled in a matter of just eight or nine days. I welcome the announcement made by the Minister for Business, Innovation and Skills that the Prime Minister is meeting Corus this afternoon-Lord Mandelson is, of course, coming to the steel industry in Yorkshire tomorrow. On a very narrow point, before the Prime Minister meets Corus and before Lord Mandelson comes up north tomorrow can the Minister for Business, Innovation and Skills examine credit risk insurance? It has been put to me that that is one of the issues to address. Providing such insurance does not cost the Government a lot of money and it is something that they can do. Taking such an approach would send a powerful signal that our Front-Bench team is on the steel industry's side.
Mr. McFadden: I know that my right hon. Friend has been campaigning hard for the Corus workers in his constituency. As he said, the Secretary of State is to visit Rotherham tomorrow. We appreciate that credit insurance has been an issue, not only in the steel industry, but in other sectors of the economy. That is why we put a credit insurance scheme in place and recently announced that we would backdate the help available under it.
T3. [287076] Mr. Philip Hollobone (Kettering) (Con): Those businesses that survive the recession face a 0.5 per cent. increase in employers' national insurance contributions in 2011, at an additional cost of some £2.7 billion. Given that the subscription payments we make to the EU are set to more than double to £6.5 billion by 2011, would it not make sense to save that money and offset the unnecessary rise in the tax on jobs?
Mr. McFadden: I see that the Conservative party is now free from whatever influence the mainstream centre-right in the European People's party had on it and is giving full rein to the instincts that would see us look away from the European Union. I remind the hon. Gentleman that 3 million British jobs are dependent on trade with the European Union, and I do not think that his proposal would advance the interests of those people or of the UK economy.
Mr. Jim Devine (Livingston) (Lab): When we come back in October, it will be three years since the collapse of the Farepak Christmas savings scheme. The directors who ripped off tens of thousands of decent, hard-working families have never appeared in a civil court or a criminal court. Will the Minister, through his Department, organise a meeting with concerned MPs from both sides of the House and the liquidators?
Kevin Brennan:
Yes, I would be happy to have that meeting. The report on this was completed in May 2008. It is long and detailed, and counsel has been
considering it and its supporting information. If any proceedings are initiated as a result of the report, they obviously have to remain confidential until they reach court.
T4. [287077] Peter Luff (Mid-Worcestershire) (Con): May I commend to Ministers and to the House two excellent reports that the Select Committee on Business and Enterprise published recently on pubs and on post offices? If Ministers were to embrace warmly the constructive proposals in both, they would do a great deal to safeguard the vital services on which many deprived, vulnerable and isolated communities depend.
Mr. McFadden: I am always happy to pay warm tribute to the work of the Business and Enterprise Committee, chaired so ably by the hon. Gentleman. The report on post offices was something that the Government and the Committee worked on together. It is a good and constructive report, and I assure him that it will be considered positively.
Hugh Bayley (City of York) (Lab): I feel especially well disposed to the Department today. Tomorrow I will open a new packing plant at the Nestlé factory in York that will provide an additional 100 jobs initially and 200 in the longer term. It received support from the Government's enterprise finance guarantee scheme for a smaller company, IPS First, which is the co-packer. The new plant will reduce carbon emissions, because the Nestlé factory will no longer have to truck its Kit-Kats, Aeros and Polos to west Yorkshire for packing. I went to see-
Mr. Speaker: Order. May we have a question, in a sentence?
Hugh Bayley: In a sentence, the Secretary of State-I went to see him about this-moved like lightning to get the money through and I would like my thanks to be passed to him.
Mr. McFadden: The Secretary of State is always a speedy mover, and I will pass my hon. Friend's thanks to him. The story shows the advantages that this Labour Government are clearly having for the people of York.
T5. [287078] Mr. Alistair Carmichael (Orkney and Shetland) (LD): May I encourage the Minister to respond to the Business and Enterprise Committee report not just positively, but swiftly? Having recently worked with the local community in Hillswick in the north of Shetland to obtain an outreach post office in the local shop, I can confirm that the suggestions in the report would make an enormous difference not just to the profitability of the post office, but to the shop as well.
Mr. McFadden: Outreach post offices can be very successful, especially for small rural communities, such as the many in the hon. Gentleman's constituency. In some ways, we have already responded to the need: for example, my colleagues at the Department for Transport were able to announce a new contract with post offices for the renewal of driving licences. That comes on top of the decision taken some months ago to renew the Post Office card account. So already the Government are putting more work the way of post offices.
David Taylor (North-West Leicestershire) (Lab/Co-op): The Opposition parties fought tooth and nail in overnight sittings to prevent one of our finest achievements-the national minimum wage. However, far too many of the recipients of that national minimum wage rely on gratuities to top their incomes up to that level. Will my right hon. Friend consider tabling appropriate amendments to the legislation at some stage, and can he publish some research on the numbers of people in that category?
Mr. McFadden: We have already published a consultation on the number of people in that category, and I am pleased to inform my hon. Friend and the House that regulations to prohibit the use of tips, gratuities and service charges to make up the minimum wage were passed some weeks ago. That change was overdue, and I have been committed to it since I came into this job. It is good news for service workers throughout the country.
Mr. David Heath (Somerton and Frome) (LD): My heart was warmed by the glowing account by the hon. Member for City of York (Hugh Bayley) of the building of colleges in his constituency. May I ask a simple question about the college in my constituency? Frome community college is waiting for a response from the Learning and Skills Council about the building project to replace its tertiary blocks that it plans in conjunction with the LSC, which is already more than matched by local authority funding. That project will fail unless the LSC answers by 28 August. Is it asking too much for a positive response from the LSC for that modest building programme?
Kevin Brennan: I will certainly look into the individual case of Frome community college, but an announcement was made on 26 June about the future of the further education capital scheme, which set out, thoroughly and rigorously, the projects that would be going forward in the next spending round. I undertake to look into the hon. Gentleman's case, but we need investment to proceed with these college building projects-I hope Opposition parties will commit to that investment.
T7. [287081] Mr. Peter Bone (Wellingborough) (Con): My question follows the excellent one from my hon. Friend the Member for Kettering (Mr. Hollobone), which the Minister totally failed to answer. In Wellingborough today there are 3,276 people unemployed, compared with 1,712 in 1997. That is an increase of 91 per cent. I do not want that figure to go any higher, so will the Minister answer my hon. Friend's question? Will he freeze our contributions to the EU, and scrap the increase in the job tax?
Mr. McFadden: The Government have every sympathy for people who have lost their jobs as a result of the recession, and we are trying to do everything that we can for them. We know that there are many such people, in the hon. Gentleman's constituency and around the country. Yes, unemployment has gone up, but I remind him that when the right hon. and learned Member for Rushcliffe (Mr. Clarke) was Chancellor unemployment was running at 10 per cent., with 3 million people out of work. The position was a great deal more difficult than the one that we face today.
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