Businesses and the Regions

I am quite proud of some of the reliefs and allowances that we have introduced since 1997. Reliefs on capital expenditure on equipment, and research and development tax credits, are positive things that we should not lose. I can understand why my hon. Friend makes that point. I should like to make a general point about JCB, which also applies to other employers. By making such a decision to keep together its skilled work force, the company is maximising its ability to respond when the upturn inevitably comes. It still has its skilled work force ready, rather than letting them go, which could result in their skills degrading or their getting other jobs and being unavailable to a world-class company such as JCB when the upturn comes. JCB is a creditable example of the British enterprise spirit, with its skilled work force and its trade union acting as a social partner in the workplace. I turn now to the issue of access to funding and credit. Inevitably, instead of being part of a general discussion, this is now the No. 1 issue for everyone, because of the problems that we are all facing. The top issue for businesses in my constituency is their cash flow. It has always been important, but it is now critical. At the top of the list of problems is late payment. Businesses strongly believe that it is up to other businesses, like them, to pay their bills on time. They are also worried about the stories emerging of big players—the larger companies—slowing down their payments to others in the supply chain in order to protect their own financial position. They want to hear us say that that is unacceptable, and that organisations large and small should pay their bills on time. I am certainly happy to send that message clearly. As a result of those problems, an old chestnut has re-emerged: the speed with which banks clear cheques and other payments into people's accounts. When people see countries such as Sweden clearing payments within 24 hours, they cannot understand why their bank is still telling them to wait for up to five days. Over the years that I have been an MP, I feel that we have been strung along by the banks. They have always said that, tomorrow, with the right technology, they will be able to whiz these payments into people's accounts. However, I am still hearing that that is not happening. This is something that the banks could quickly get on top of and do something about. Now that the Government are a shareholder in several of our banks, I hope that our representatives on their boards will raise that issue at meetings, so that the banks in which we have a say can start clearing cheques into people's accounts as quickly as they can. I should like to see the corporate giants of our economy, which pride themselves on their social responsibility, making a point of paying their bills quickly and on time, and doing so in a visible manner. That would set an example to others. The Government are also an important buyer of goods, services and major contracts. They therefore have many bills to pay. It is pleasing to hear them say that they are committing themselves to paying those bills as quickly as possible and, in any event, within 10 days. I want the Minister to say that we can have regular updates to show that that is happening. In good years, we have accounts from Departments about their performance, and it is fair to say that even with a target of 30 days, they have not always shone with 100 per cent. success in meeting that deadline. In such times, it is crucial that we, the scrutinisers of Government, have the necessary information. The Government are an important part of the public sector, but there is a big public sector beyond them, and it is important that we urge everyone to adopt the same responsible approach of paying bills as quickly as possible. One thing that we can do as individual Members of Parliament is to chase up the public sector organisations in our constituencies and urge them to pay their bills quickly. I have written to the health trusts, the primary care trust and so on in my constituency to urge them to pay their bills as quickly as possible. When there are such pressures on access to credit and funding, people are concerned about the apparent drying up of access to funds at banks and banks unilaterally changing conditions of trade with their business customers. People have told us about loans that they thought would be rolled over but will now not be, or of loans that will be rolled over but on higher interest rates. As legislators, we should look at the terms that banks are going to use to do business with small and medium-sized enterprises from now on. The investment that we have made in some banks from public funds means that we should have a say in their performance. At Question Time today, some of us asked the Chancellor and his team about the promise that the banks which have been recapitalised using public funds will keep their lending at 2007 levels. We need to understand what that means for businesses. I can understand issuing a caution about not wanting to repeat the mistakes of the past and have irresponsible lending—the idea that asking banks to hit a target could lead to pressure to make the same mistakes—but lending to businesses has nearly always been responsible in this country. There is no reason to think that there should be any falling off in levels of lending to companies as long as businesses and banks continue the relationship that they had. On a final point about access to funding, and one that is beyond the Government, we heard an exchange between the Front-Bench spokesmen about making money from the European Investment Bank accessible to businesses as quickly as possible. I join the hon. Member for Hertford and Stortford in urging that we act quickly on that. To reprise the point that I made to the Minister about Advantage West Midlands, there was a huge shock to manufacturing in the region when MG Rover collapsed in 2001. There was a great deal of worry about the supply chain, which was extensive throughout the region, and about huge job losses as a consequence. Advantage West Midlands responsibly stepped up to the plate and made transitional loans available for businesses that were trying to find work to replace what they had lost with the collapse of MG Rover. As a result of that scheme, there were far fewer job losses than any of us had feared would be the case. The scheme was wound up when it had done its job, but because of the current situation, its time has come again. In fact, I can think of an individual case in my constituency which would benefit now, today, from access to similar funding. I certainly urge the Minister to make moves to see whether such money could be made available in the west midlands and across the country. The public sector as a whole is a huge procurer of services and should not drop its guard when it offers contracts to businesses in this country. I recently chaired an inquiry that produced the report ““Sustainable Procurement””. Despite its title, it is not a green document, but is about the sustainability—economical, environmental and social—of the procurement power of the public sector. I recommend it to the Minister. It includes pointers that would help British businesses to secure British contracts. There is such pressure on businesses that, inevitably, they will look at their skills training budget and ask whether it should be cut in these times of difficulty. That would be a dangerous thing to do and I urge them not to cut back on training now, because in the longer term, when the upturn comes and we need the skills of a better trained work force, they will miss not having made that investment. I hope that they will see the sense in maintaining their skills investment.