Industry and Exports (Financial Support) Bill

Let me say at the outset that I am glad that the official Opposition recognise the need for these additional powers. They are necessary, as they cover expenditure that may need to be incurred in the future to provide support for industry, and we all want that support to be provided. The key points made in the debate fall into several categories. The first point I want to reply to is whether there are too many Government schemes and programmes. I recognise that there has been significant growth in the number of schemes over the years, which is why the Government, with the support of the CBI and others, introduced the business support simplification programme. That is also why we now have a programme of support called Solutions for Business, which works alongside the real help for business initiatives we have announced. I reject entirely the over-exaggerations that are sometimes made by Opposition Members. I do not believe that one needs a PhD in Government finance to understand the programmes of support out there. I suggest that the hon. Member for Weston-super-Mare (John Penrose) and others who find the schemes confusing should visit the Directgov website or the real help section of the Business Link website, where they will be able to see the wide range of assistance that is available. Secondly, may I say something about the enterprise finance guarantee scheme, which links to the points made by a number of hon. Members, before I move on to discuss the issues to do with delivery? The scheme covers more than 95 per cent. of all businesses in the UK. It is available to businesses with a turnover of up to £25 million and can provide Government loan guarantees at a rate of 75 per cent. for loans from £1,000 to £1 million. It has been welcomed by industry and, in terms of delivery, it is making progress. I recognise that when companies are facing financial difficulties in a world of 24-hour news, expectations are rightly high. More than 1,100 businesses have now been registered by lenders as eligible for support with potential lending values of more than £110 million. In the past week alone, potential lending of more than £30 million has been registered. That shows that real progress has been made. I would say to hon. Members who might be interested in examining the facts that when one is in effect launching a new product, it takes some time to be established in the marketplace. That is the case with the enterprise finance guarantee and it probably explains some of the survey findings from the Federation of Small Businesses. All the major banks that have been participating in the scheme—I think there are 19 active lenders now, so those banks participating in the scheme include more than just the major lenders—have been training their staff at a variety of levels on the enterprise finance guarantee and how it operates. Banks are reporting approval rates in line with commercial lending approval rates of about 70 per cent. As the product becomes more established in the marketplace, we will see it continuing to spend. The fact that more than 1,100 businesses have to date shown themselves to be eligible and the fact that they are being considered by banks show that there is some significant take-up. In some cases, having considered an application from a company, banks will decide even under the terms of the enterprise finance guarantee that they do not want to make the loan. Typically, that would be because a bank believed that the business could not service the loan. Clearly, we cannot support banks providing irresponsible lending. The enterprise finance guarantee has to be there for viable businesses, but it is right that the banks have to make the final decisions based on the lending criteria. We are making progress with the enterprise finance guarantee scheme and I hope that I have shown that.