Industry and Exports (Financial Support) Bill

This has been a short debate. That may be simply because this is a relatively uncontroversial Bill, but I am saddened to note that the Minister has sat in pretty much solitary splendour on the Labour Benches. No Labour Back Benchers have spoken, although one or two are present and their presence has been much appreciated. It strikes me as incredible that at a time of some of the worst economic conditions that we have experienced for not just one generation but probably several, not a single, solitary Labour Back Bencher thought it important enough and could care enough to turn up and add his or her tuppence-worth. Labour Members apparently did not think it important not only to support their Minister in what he is trying to do, but to try to ensure that their constituents and people around the country understood that they really care about the parlous economic conditions in which businesses are trying to operate. However, a number of Members did speak—most, but not all, were Conservative Members, although there were contributions from Liberal Democrats as well—and a number of common themes featured in their speeches. My hon. Friend the Member for Bromsgrove (Miss Kirkbride) in particular, but others as well, asked for more details about the schemes that the Bill is supposed to support. The Minister did his level best. He is a decent man, and he tried to ensure that we all understood the various Government-announced schemes for which the funds would be used. I am sure that that was deeply appreciated, but it is clear from what was said by others today that he needs to say a bit more, if possible, in his response to the debate. Let me pick up a couple of the points made by my hon. Friend the Member for Bromsgrove. It seems that neither the 1982 Act nor the Bill provides for assistance to either banks or insurance companies, but a number of the loan guarantee schemes that we have discussed today involve banks in one way or another. If they do not involve banks, they involve finance arms of car companies and others which—if not outright banks and holders of banking licences—are near-banks, and are certainly the subject of much thought on the part of the Financial Services Authority at present. Will they be excluded from the Bill's provisions, in which case will the Government need to come up with funding through some other route, or will it be possible to use the financing under the Bill to support such various different schemes? I understand that the provisions of the Bill are not allowed to apply to areas that have been granted assisted area status. The principal areas with such status at present are Cornwall, the west coast of Wales, the north-west coast of Scotland and the whole of Northern Ireland. If the measures under discussion cannot apply to firms that are based in, or operate in, those areas, how will the Minister be able to make sure that the money raised is directed towards, for example, a car company that has dealerships in districts with assisted area status? Will he offer clarification on that, so that it is put on the record not only for Members of this House, but for the many rather confused members of the business community? This afternoon, we have heard many examples of the incredibly complicated plethora of schemes. It is not just the number of schemes that is the problem, large and numerous though they are—and they were read out with careful diction by my hon. Friend the Member for Hertford and Stortford (Mr. Prisk). As he also pointed out, each one of them has not only its own scheme, but its own application forms and terms and conditions. Therefore, if anybody trying to make an honest living by running a business wants to apply for one of these schemes, they almost have to hold a PhD in Government finance before they can hope to access it. That inevitably means that they are being distracted from the vital day-to-day business of adding value and creating wealth, and making and preserving jobs, and instead are having to focus on the best way to navigate their way through labyrinthine Government bureaucracy, which is clearly not an intelligent or productive use of anybody's time. It is also worth while surveying the history behind the Bill. The Minister correctly pointed out in his opening remarks that this all started back in 1982 with a relatively modest amount of money: £1.9 billion. That was still a significant amount of money, however, particularly in those days; it was far from small potatoes. It is instructive to note how that cumulative total limit has grown. In the first 20 or so years, it grew very slowly—from £1.9 billion to just under £4 billion. However, since then—from shortly after the turn of the millennium—we have experienced, as a result of this Government's hyperactivity and the debt-fuelled boom in the country's economy, what is described in business terms as a hockey-stick increase. If we were to graph the rise in the cumulative limit, we would see that it increased very slowly for a long time, and in the past five or six years shot up. As a result, whereas the sum was £1.9 billion in 1982, we are now asked to agree an increase from about £6.1 billion to, in theory, a maximum total of £16 billion. I am afraid that if we ever needed an illustration of the speed with which the wheels have fallen off the Government's economic carriage, that is it. The most frequently made and most damning point has been about the problem of implementation and delivery. That point has been made in various parts of the House—I was going to say in "all parts" of the House, but I am afraid there have not been any contributions from the Labour Back Benches. Many people would agree with the principles that the Government are trying to pursue, particularly in their various different loan guarantee schemes, but they have been woefully inadequate in turning their fine words into action—into something practical that business people can get their teeth into and their hands on—by making sure that the banks are starting to lend and that the various different loan guarantee schemes actually function. As my hon. Friend the Member for Hertford and Stortford pointed out, the working capital scheme was supposed to be the Government's flagship scheme for getting credit moving in the economy. It was announced way back in January, but as of last week it had not guaranteed a single loan. The enterprise finance guarantee scheme was supposed to help small firms. It was announced in January, but the Federation of Small Businesses says that only 8 per cent. of its members can find a bank that is actually offering it. The loan guarantee scheme for car manufacturers—much discussed this afternoon—was announced in January, but the Government have only just asked for applications from firms needing help, and they have not disbursed a single penny so far. To be fair, Lord Mandelson realised that scheme was not moving fast enough. He saw it was in trouble and he said that he would "investigate" why it was not getting under way. But as far as anyone can see, the investigation involved sending a junior Minister round to No. 11 Downing street to knock timidly on the Chancellor's door and ask him—"Please, if he wouldn't mind awfully and it wasn't too much trouble"—to pull his finger out. That serves to illustrate the problem. We did not need an investigation into the difficulties. The problem was plain for everyone to see: dithering and spin instead of decisive, practical action. We did not need investigations or inquiries; we needed action—we needed Lord Mandelson to sit down with the Chancellor and have what is known in the Foreign Office as a full and frank exchange of views. We need the two of them to put the needs of the country ahead of party rivalries and personal wrangling over who is supporting whom in the running to become the next leader of the Labour party. That, however, was not what happened. Britain's businesses did not get the prompt action they needed. Instead, what we got was weeks and months of bureaucratic constipation where nothing happened at all, and then, last week, Lord Mandelson lost his temper and started blaming people. He blamed the Treasury. He blamed the Bank of England. He blamed pretty much anyone he could think of. But the people of Great Britain knew exactly who was really to blame: him, and this Government. The tragedy is that this is not just an internal Whitehall squabble where the only winners and losers are a few politicians and bureaucrats. This is deadly serious, because for every day of ministerial indecision, inaction and incompetence, more people lose their jobs, more companies go bust, and more investors lose faith in Great Britain. Rather than losing his temper and lashing out at his colleagues in Government, the Secretary of State needs to buckle down, as should his Ministers. They need to realise that they may have announced something and got a few headlines, but it will not happen unless they roll up their sleeves and get personally involved. They need to forget about the press releases and glossy announcements and get stuck in to the grubby, messy business of implementation. The trouble is that that is not likely to happen with this Secretary of State and this Government. They are creatures of PR and spin. They have spent the past 15 years doing it, and it is too late to expect them to change now. Leopards cannot change their spots. That is the tragedy of this recession. If they had moved faster and more effectively, they could have made it shorter and easier for all of us, but they did not, and now the whole country is paying for their dithering and delay. Every community in every part of Britain is feeling it: lost jobs, ruined companies, broken hopes. That is why people are increasingly coming to the same conclusion: it is time for a change.