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Baroness Gardner of Parkes: In view of the answer to the previous question, does the position remain the same as when we debated the issue of intruders and burglars years ago, when the late Lord Hailsham said that it was up to you to keep your path in good condition because you would be liable if the burglar

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tripped and broke his leg? However, he went further and said that if you saw him climbing up to your window on a ladder, you were not obliged to tell him that a rung was faulty. Is the situation the same?

Lord Bach: My Lords, who am I to argue with such a distinguished lawyer and ex-Lord Chancellor?

Lord Lester of Herne Hill: My Lords, we on these Benches entirely agree with the way that the Minister has expressed the position, namely that there is a fair balance in the criminal law as it stands and no need for reform. Has the Minister noticed that so far in this short debate, the Official Opposition have not made clear their position? Does he agree that if the Official Opposition were in government and sought to change the law in the way suggested, they would run up squarely against the European Convention on Human Rights and would find themselves in grave danger of violating the rights of the individual? Finally, as far as concerns civil law, will the Minister tell the House what has happened to the assurance given on 20 October by the noble Lord, Lord Brett, that he would consult the police about the misuse of Section 239 of the Criminal Justice Act, which was raised by the Court of Appeal in the Adorian case?

Lord Bach: I am grateful to the noble Lord for giving me advance notice of the second point. The consultation has not yet taken place. I will talk to my noble friend and to the Home Office about that after this Question Time. As far as concerns the first part of the question, the position of the Official Opposition is not clear at all. They would be well advised in our view, and in the view of practitioners in the field, to leave the matter alone. It is not an issue to play politics with.

Lord Carlile of Berriew: My Lords, does the Minister agree that there is something unattractive about newspapers and some elected politicians who speak of the jury system as the holy grail of our criminal justice system on one hand, and then complain about jury verdicts when people who plead self-defence have been convicted on the other? Does he agree that the exercise of prosecutorial discretion and the good sense of the jury is a real protection for individuals in these cases?

Lord Bach: It certainly is a real protection. Prosecutorial discretion is an important part of that, but the jury system is as well and juries in these cases nearly always get them right.

Banks: Lending


11.29 am

Asked By Lord Razzall

The First Secretary of State, Secretary of State for Business, Innovation and Skills and Lord President of the Council (Lord Mandelson): My Lords, data supplied to my department by the four main lenders to small

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and medium-sized enterprises show that demand for finance remains subdued, with the number of applications in the final quarter of 2009 some 25 per cent down on the early 2008 high. However, the value of loans drawn in the final quarter of 2009 was more than 7 per cent up on the previous quarter, and the majority of businesses applying for support continue to access the finance that they require. Loans totalling more than £690 million have been drawn down by nearly 7,000 businesses under the Government's enterprise finance guarantee, and that is lending that would not otherwise have occurred.

Lord Razzall: My Lords, I thank the Minister for that Answer but can I press him further? Is he aware of the recent survey by the Institute of Directors which shows that nearly 60 per cent of applications for finance by directors seeking bank finance in 2009 were rejected by the banks and that 20 per cent of the businesses surveyed are to some extent funding their businesses with credit cards? Does he not agree that these figures challenge the central claims made by the UK banks, the latest being made by RBS this week, that, where demand exists for bank finance, the majority of that demand is being met? Does he also not agree that we have been making this point from these Benches for the past 12 months?

Lord Mandelson: My Lords, it is difficult to assemble an absolutely clear and stable picture of exactly what is going on. Surveys undertaken by my own department show that around three-quarters of businesses get finance from the first source they approach. The data indicate that current approval rates for loans and overdrafts are around 66 per cent for businesses with a turnover of up to £1 million and close to 90 per cent for those with a turnover of between £1 million and £25 million. Those figures for this first quarter are up or stable compared with the fourth quarter of 2009. However, I readily accept and acknowledge that the general perception of bank lending among SMEs is, frankly, more negative than these figures indicate. In these circumstances, I strongly urge the banks to be both more communicative and more competitive in their approach to lending to SMEs.

Lord De Mauley: My Lords, how does the Secretary of State respond to the new data from the Institute of Directors, in which I declare an interest as a member, which found that, despite government assurances that businesses found to be ineligible for commercial credit would be offered access to the enterprise finance guarantee, 83 per cent of those found so ineligible were not even offered information on that scheme?

Lord Mandelson: My Lords, I am not aware of the information to which the noble Lord refers, although I shall make sure that it is supplied to me by my department. Obviously, that would create concern in my mind. I can only say that the principal problem that we have in the economy is a lack of demand for lending rather than a lack of supply. As the recovery gathers strength during this year and next, the demand problem might become more of a supply problem, and that is why we have to be very vigilant about the approach, practices and behaviour of the banks in relation to the corporate sector.

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Lord Harrison: My Lords, given the imperative need of small firms for ease of access to finance, will my noble friend satisfy himself that the excellent legislation on late payment, introduced over a number of years by his Government, is properly observed and monitored in both the private and public sectors to ensure that small firms do indeed get ready access and that their cash flow is not compromised?

Lord Mandelson: My noble friend raises a very important point. That is why I have been extremely active right from the beginning of the financial crisis and during the ensuing recession to make sure that at least in the public sector, and in central government in particular, we observe a 10-day limit for the payment of invoices to SMEs. By and large, that is the benchmark that central government has operated, largely successfully, and of course we want to spread that good practice right across the public sector.

Recently, I have received signs that private sector businesses are seeking to extend-not lessen-the time period over which invoices are paid. I say to larger businesses that they have a responsibility to the rest of the corporate sector and a particular responsibility to their supply chain to ensure that their cash flow and viability are properly sustained. I say to them, "They form exactly the supply chain you will need in future years, so do not, through your actions, start to put so much pressure on them that you put them out of business".

Lord Cotter: My Lords-

Lord Roberts of Conwy: My Lords-

Lord Davies of Oldham: My Lords, it is the Liberal Democrats' turn.

Lord Cotter: My Lords, a moment ago, the Secretary of State referred to the fact that there is a lack of demand for borrowing. I suggest to him that in fact the problem is the hurdles which people have to overcome, such as very high interests rates, bureaucracy, new charges, audits, facility fees, reviews and management fees. Does he agree that many of those hurdles are new and that they discourage small businesses from borrowing?

Lord Mandelson: My Lords, the noble Lord has put his finger on a very real problem. It is one that I raised earlier this week when, with the Chancellor, I met all the CEOs of all the retail banks. I am only too well aware that businesses continue to raise concerns, not just about the availability of credit but about the pricing of that credit. Increased loan pricing can be attributable to the need for retail banks to repair their balance sheets, given the disrepair they got into in the past; to the increased cost of funding for the banks, which is driven by market conditions; and to new and proposed regulation, such as the FSA's liquidity requirements. In other words, safer banks, which we all welcome, may not be cheaper lending banks as a result of some of the regulation that has been introduced. In my view, that points out the need for regulators to be conscious of the full consequences of their actions both for the banks and the businesses which rely on them.

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11.37 am

Asked By Lord Freud

The First Secretary of State, Secretary of State for Business, Innovation and Skills and Lord President of the Council (Lord Mandelson): My Lords, as part of our response to the economic downturn, we have introduced a support package to help jobseekers to consider self-employment as a route off benefits. Nearly 16,000 people have accessed support through Business Link in England since 6 April 2009. That includes a tax-free credit of £50 a week for up to 16 weeks when the person starts trading. To date, nearly 1,000 people per month have taken advantage of that credit.

Lord Freud: My Lords, I thank the Secretary of State for that Answer. Can he tell us why the New Deal self-employment option has dwindled so far below the level that it was at when it was the enterprise allowance scheme and was running at 100,000 a year?

Lord Mandelson: My Lords, in my view, the initiatives taken by the Government have encouraged the self-employment option to be taken up among jobseekers. The Department for Work and Pensions self-employment support package was, as the noble Lord probably knows, originally introduced as part of the six-month offer in April 2009 to provide a significant programme of enhanced support for jobseekers. I think the information I gave in my original Answer supports our contention that that is being extended; it is being rolled out and it is being taken up. The current programme is expected to run until March 2011 and I suspect that it will gather a lot of interest, support and considerably more self-employment, which we welcome.

Lord Martin of Springburn: My Lords, what steps are being taken to offer adult apprenticeships to those men and women who are unemployed, many of whom did not get the chance to do apprenticeships when they were school-leavers? If they are trained and given skills, particularly in the building industry, there is a good possibility of their becoming self-employed.

Lord Mandelson: My Lords, the noble Lord makes an extremely valid point, which is why the Government have invested what are frankly colossal amounts in doubling and more the size of the apprenticeship programme in this country, and why, in my review of the Government's skills strategy, I announced the creation over the coming two years of 35,000 new advanced technician-class apprenticeships. It is vital that in the provision of further and continuing education, we attract, stimulate the interest of and present options to older people, as well as school-leavers, to engage in apprenticeships and, once they have undertaken apprenticeships-if they so choose, and are suitably

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qualified-to go on to higher education, as, I am glad to say, many are doing. I fully sympathise with what the noble Lord said.

The Lord Bishop of Hereford: My Lords, I appreciate the breadth of the noble Lord's portfolio, but will he say something about his and the Government's view of how they can assist people who are self-employed across the difficult threshold of growing their businesses and beginning to employ staff, perhaps from their own home, with all the associated planning difficulties? As he will appreciate, that is a particular issue in the countryside.

Lord Mandelson: My Lords, I entirely agree with the desirability and need for everyone, including those who live in the countryside, to be able both to create their own businesses-whether from their home or otherwise-and to recruit new employees. I am glad that the Government are giving such support, through the measures and programmes that I described, to enable people to become self-employed. It is also important for the Government to consider additional ways and incentives for SMEs to recruit employees.

Lord Cotter: My Lords, I must say to the Secretary of State that bureaucracy is a problem with regard to self-employment. Many people who have just entered self-employment have been fined for failing to register as self-employed quickly enough. In 2009, more than 23,000 people were fined for registering late. Many people going into small business do not realise that there are all those requirements. I could give other examples. That is a great difficulty and a barrier to getting into self-employment.

Lord Mandelson: My Lords, it is the Government's firm desire to put away the barriers that stand in the way of such people, to give them proper encouragement and to facilitate the creation of new business and self-employment. That is why, under the jobseeker's allowance self-employment offer, there are two elements to the help available to people who want to move into self-employment or start a business: first, self-employment advice and support provided through Business Link; and, secondly, financial support provided by the Department for Work and Pensions for those leaving jobseeker's allowance and becoming self-employed. I would be the first to acknowledge that if, in providing that advice, support and financial assistance, we make it such a ghastly rigmarole for people to navigate their way through the bureaucratic hoops ever to get to it, we are not doing as good a job as we might. We must remain vigilant about that. There is no point in setting up programmes if we then create so many hurdles to climb over to get access to them.

Disabled People: Student Allowance


11.44 am

Asked by Lord Addington

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The First Secretary of State, Secretary of State for Business, Innovation and Skills and Lord President of the Council (Lord Mandelson): My Lords, the Government provide generous financial support to disabled students in higher education, but I recognise that the first year of the centralised student finance service has not gone well. Following the recommendation from Professor Hopkin, who was commissioned to review the delivery of student support for 2009-10, the Student Loans Company is reviewing the service that it provides to disabled students, in consultation with relevant organisations and special interest groups.

Lord Addington: I thank the noble Lord for that Answer. Does he accept that the proposal from the organisation on 9 February that standard packages, which do not have an initial assessment, should be given to dyslexic students, who form 70 per cent of the student body, is a guarantee for not only giving the wrong type of package but for wasting a considerable amount of money? Is that organisation fit for purpose?

Lord Mandelson: My Lords, I have said that the performance of the organisation is not good enough. That has been confirmed by the independent review. The Government have a good record in giving support to disabled students because we firmly believe that disability should not be a barrier for anyone trying to gain access to higher education. In 1997-98, 10,700 disabled students were offered £13.3 million in support. Provisional figures for the academic year 2008-09 show that more than 45,000 higher education students in England are in receipt of in excess of £100 million in support. That does not mean that the system is operating adequately for all disabled students. I will make sure that those in my department who are responsible for administering this look very carefully at what the noble Lord said and at the ways in which he believes we can remedy the situation and make a poor service better.

Lord De Mauley: My Lords, can the Secretary of State explain why by the end of January, almost four months after the autumn term started, no less than two-thirds of the 19,000 students who had applied for student disability allowance had still not received the money to which they are entitled? Is that what the Secretary of State means by a good record?

Lord Mandelson: My Lords, because these applications rely on specialist needs assessments, we encourage students to apply for student disability allowance well before the start of their course. I am afraid that not all do so, which leads to the problems that some encounter. More than 21,000 applications were received for 2009-10, and 30 per cent of them were received since November, which is well after the start of term. I accept that 9,000 of this year's applications are still pending information from the student or the specialist and have not been fully processed. It is possible that they relate to students who did not get a university place or who have changed their plans and not told the Student Loans Company. None the less, I entirely accept that the performance has to be improved, and we are undertaking the measures necessary to make sure that that happens.

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Employee-owned Organisations


11.48 am

Asked By Lord Brooke of Alverthorpe

The First Secretary of State, Secretary of State for Business, Innovation and Skills and Lord President of the Council (Lord Mandelson): My Lords, the Government take a close interest in employee-owned organisations and the positive role they can play in fostering entrepreneurship and innovation in the private and public sectors. Last December, my colleague Tessa Jowell said that there are important lessons for our public service reform agenda to be learnt from studying companies such as the John Lewis Partnership. She announced the creation of an independent commission on ownership, chaired by Will Hutton, and hosted by the Oxford Centre for Mutual and Employee-owned Business. The commission's work will help inform developing government policy around such issues as staff engagement, customer service, risk management and links with the wider community.

Lord Baker of Dorking: My Lords-

Lord Brooke of Alverthorpe: I am grateful to the noble Lord, Lord Baker. I am also grateful to my noble friend for his fairly extensive reply. Given the evidence from the recent CASS business school research, which shows that employee-owned businesses perform as well as conventionally owned businesses and have outperformed them during the recession, and given that there is well established support already for supporting public limited companies, will the Government give special attention to trying to extend the support to private companies and, equally, notwithstanding what he has just said, spend more time trying to examine how we can develop employee involvement to a far greater extent in the public service than we have done hitherto?

Lord Mandelson: My noble friend makes very valid suggestions and we will try to respond to what he is calling for. I certainly agree that the public sector potentially has much to learn from the way in which employee-owned companies run their businesses. The Government's public service reform agenda focuses on building stronger relationships between citizens or customers and the professional front line. I am very glad to cite examples in the public sector of 390 members of the Reddish Vale co-operative trust taking ownership of their school and of staff at Leicester City primary care trust taking over general medical and substance misuse services for homeless people. There are other examples and we shall seek to encourage more such practice.

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