Industry and Exports (Financial Support) Bill

I am delighted to hear that the Conservatives have changed their attitude towards banking regulation. In the past they have done a great deal to try to introduce lighter-touch regulation of banking. I accept what the hon. Gentleman says about other forms of regulation. In that we share a common approach. Many companies are focused completely on the day-to-day cash flow management of their businesses. Instead of reviewing their cash flow every quarter or every month, they are now doing so every week or even every day. They do not want to have their eye taken off the ball by having to contend with new regulations. If they do not give all their emotional energy and attention to managing today, there may not be a tomorrow in which such regulations can take effect. A particular concern to potential investors in this country is the propensity of the Government to make decisions and regulations retrospectively. We saw an example of that on 28 January in the Westminster Hall debate on retrospective business rates, concerning the retrospective levying of business rates on struggling port-based firms. Clearly, more regulation is needed in some sectors, such as banking and trade credit insurance, but in other areas the Government could take their foot off the pedal and delay the introduction of some non-vital regulations. My second question for the Minister is this: will the Government impose a moratorium on the implementation of non-essential regulations until the economic situation improves, and will they give some heart to potential investors in this country by publishing a statement of intent showing that they do not intend to impose any further retrospective legislation? The Bill will amend section 8(5) of the Industrial Development Act 1982 and section 1(1) of the Export and Investment Guarantees Act 1991. Section 8 of the 1982 Act seems to be the Heineken of industrial financial help, reaching parts that other industrial financial assistance cannot reach. Such assistance has to benefit the UK economy, or any other part or area of the United Kingdom, which is a pretty wide definition. It has to be "in the national interest"—well, obviously—and it has to help when assistance cannot be appropriately provided in any other way. The Bill raises the ceiling under which financial assistance can be given from the current maximum of £6.1 billion to a potential total of £16 billion. That is a lot of money, and I look forward to hearing from the Minister why that amount of taxpayers' money was deemed appropriate. Another £10 billion has been added; it is a nice round figure, but what justification is there for it? The figure of £16 billion represents £26,000 for every man, woman and child in this country. The Independent today has done its sums and calculated that, due to the recession, the personal cost of the downturn for every single British citizen is now £40,000, which is a lot of dosh. We must be sure that money is spent wisely where it really will make a difference. The amendment of the Export and Investment Guarantees Act 1991 will widen the definition under which assistance can be given to exporters under the export credit guarantee scheme. The CBI welcomed that measure because it will support transactions where goods have already been exported, such as where early shipment was required before an export guarantee department decision on cover was made. The CBI says that""enactment on this amendment will assist exporters in a clear and practical way and should assist in retaining jobs in the UK."" If it is good enough for the CBI and for the British Bankers Association and other groups, as the hon. Member for Hertford and Stortford (Mr. Prisk) mentioned, it is good enough for me. How effective has the plethora of Government announcements been so far? The Forum for Private Business says that the Government should not just assume that under the enterprise finance guarantee scheme, the problems of smaller business have been sorted, and that they must consider the looming problems of the cost of finance, business rates and late payment. Can the Minister say just how many companies have benefited from the enterprise finance guarantee scheme, the working capital scheme and the capital enterprise fund? We heard from the hon. Member for Hertford and Stortford that no money has yet come through for the latter two schemes. Will the Minister be able to demonstrate that any of these funds are making a material difference, or with regard to the vast majority of companies are the Government just tantalising and teasing business with promises while little or no real money is flowing through? The Government have ignored simple, effective and relatively inexpensive Opposition proposals, such as the Small Business Rate Relief (Automatic Payment) Bill, a private Member's Bill introduced by the hon. Member for Mid-Worcestershire (Peter Luff) only two weeks ago. I will not rehearse the arguments about that, but the Government have ignored that open-goal opportunity to help the smallest businesses that are least well informed about the help that they are already entitled to. Some lenders, such as lease financiers, are simply not covered by the enterprise finance guarantee scheme, although 750,000 small businesses rely on lease financing. There is no safety net for those smallest of lenders, which nevertheless play a vital role in helping the smallest businesses as well as larger ones. Will the Government consider providing assistance for lease financing, along the lines of the enterprise finance guarantee scheme? The opportunity to deal with the nefarious activities of serial liquidators has also been missed. Such parties trade, run up debt and then liquidate a company, leaving suppliers in the lurch, only to set up again the next day under a similar name. Those people cynically drag down good companies, and their activities are downright theft. If any director were required to register in a simple register of administrations, that would enable a quick search to determine how many times an individual had bumped their company. That would protect good companies against directors bent on a course of exploitation of the trust and good will of others. Will the Minister consider the possibility of creating such a register? In conclusion, I should say that the Bill is a missed opportunity. Industry needs an environment in which it can not only compete, but continue to operate. It needs cash, but despite all the announcements that have been made thick and fast in the past few months in committing billions of pounds of taxpayers' money to prop up a banking system so sick that it is haemorrhaging away the blood transfusions that we are administering, vital support is still not making its way to the real wealth creator—industry itself. Taxpayers' money is flowing all right; it is flowing into the coffers of the banks and into an interminable black hole. My hon. Friend the Member for Twickenham (Dr. Cable), the Liberal Democrat shadow Chancellor, has been like a seer; he was sending out warnings to the Government years before the crisis that we now face finally arrived. He predicted that the grand edifice of the banking economy would turn out to have been built on sand, and that we would need to nationalise Northern Rock. He has watched the Government pandering to the banks like an over-indulgent auntie to spoilt and uncontrollable nephews and nieces, asking them please to share out nicely the pile of sweeties that they have been given and becoming mystified when they are not good children who do as they are told. We now have a majority shareholding in Lloyds HBOS and the Royal Bank of Scotland. My hon. Friend the Member for Twickenham is saying to the Government that it is time to take firm action and make the children share out the sweeties. It is time to nationalise the failing banks and ensure that cash goes not into the greedy mouths of the banking industry, but right to where it is needed—the hard-working companies that are struggling to survive.