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Oral Answers to Questions

Volume 458: debated on Thursday 22 March 2007

Trade and Industry

The Secretary of State was asked—

Energy Policy

My Department works with a wide range of organisations in relation to energy policy. It might be helpful if I inform the House that the energy White Paper will be published in May.

I thank the Secretary of State for that answer. First, may I welcome the Chancellor’s statement yesterday that moves will be made to help families caught in the fuel poverty trap? From the Scottish perspective—and for me as an ex-miner—it is also welcome that we are now moving forward on carbon capture and on setting up a plant in the UK. My right hon. Friend has announced that the energy White Paper will be published in May. Would it not be prudent to consider the possibility of cutting across all the Departments that deal with energy and set up an Energy Department?

My hon. Friend’s final suggestion is a matter for the Prime Minister, but let me respond to his earlier points. He is right to say that we have done a great deal to help families on low incomes who face rising fuel bills. Among the measures we announced yesterday were those to help improve the insulation and energy efficiency of homes, which will assist people to cut their fuel bills. My hon. Friend is also right about carbon capture: if we reduce the amount of carbon emitted from gas and coal-powered fire stations, that could enable Britain to become a world leader in essential technology.

Yesterday afternoon, the Chancellor announced a £6 million boost in the budget for household renewable energy grants; that is welcome but modest. Yesterday evening, the Department of Trade and Industry issued a press release announcing a two-month suspension of the current programme. What does the Secretary of State have to say to the householders and businesses who were relying on the promised grants, and would he care to bridge the gap between rhetoric and reality?

Actually, the press releases were issued at the same time, and deliberately so. As the hon. Lady knows, there have been problems with the grants, because the current arrangement is unsatisfactory: at the beginning of each month we make grants available and they run out almost immediately. We have also found that about £5 million of claimed grants have not been spent. The industry knows that there are problems, and we do too. I am glad that the hon. Lady acknowledges that additional money is being made available, and I would like us to take the necessary time to get the scheme right so that we do not repeat past mistakes. Up until yesterday evening, the industry itself had said that we needed to have discussions with it to make sure that the scheme works satisfactorily. It is important that we get the revised scheme up and running. It is also important that the scheme should be time limited to encourage people to do what they can to make their homes more energy efficient and also less dependent on carbon sources of energy generation. The scheme will be in place, but it is better to get it right than again to rush into doing something and to repeat the mistakes that were made in the past.

As part of the Government’s energy policy, my right hon. Friend is rightly looking into renewable forms of energy and, increasingly, into offshore wind farms. What liaison is he having with the Department for Environment, Food and Rural Affairs so that the voice of the fishermen is heard as more wind farms are licensed, and what liaison is he having with the Department for Transport so that ferry routes are protected, because our seas are not empty and when wind farms are erected that has an impact on other industries?

That is true up to a point, but it is perfectly possible to set up offshore wind farms and at the same time meet fishermen’s concerns and make sure that those wind farms are not put in sea lanes. We have been doing that satisfactorily across the piece. Let me say, however, that especially at a time when we are concerned to get greener sources of energy, we need more renewables. It is all very well for people to say, “Yes, we agree with that,” but not if they then come along and object to every planning consent that is sought whether onshore or offshore—in other words, if they are in favour of measures, but not in their backyard. We cannot proceed on that basis. If we do so, we will not get more renewable forms of energy. It is also worth bearing in mind another point, in respect of which I am sorry that not a single Scottish National party Member is present. The fact that yesterday’s Budget revealed that the projected revenues from North sea oil have fallen dramatically means that—

Interestingly, investment has gone up following last year’s tax change. The oil industry knows that it is a mature field with limited available reserves, which is why the SNP’s policy, under which Scotland would be totally dependant on one very unpredictable source of revenue, would be absolute folly. As I have said, I am sorry that not a single Scottish National Member could be bothered to come along to today’s Question Time.

The Secretary of State has had eight months since the energy review in which to prepare the White Paper. He tells us today that it will be published in May with the same certainty that he told us on an earlier occasion that it would be published in March. If he carries on like this, his Department will have been abolished before it gets to be published. Does he not understand that those postponements are delaying vital investment decisions in future generating capacity while investors wait for details about a cap-and-trade system, the future of renewable obligation certificates or ROCs, feed-in tariffs, the role of Ofgem and the whole future of the planning system? He cannot just blame that on the judicial decision to require better consultation, as there are many other outstanding issues. Does he not understand that our energy security requires that we have a Government who are prepared to act and lead rather than a Government who put off the difficult decisions?

That is a bit rich coming from a party that does not have a coherent energy policy. The hon. Gentleman will recall that following the judicial review I said that it was likely that the White Paper would be published in May, but that if I could publish it before Easter, I would. As there is precisely one week between now and the Easter recess, it is perhaps a statement of the obvious that it will not be possible to publish it next week, so I thought it helpful to tell the House that it will definitely be published in May.

On the hon. Gentleman’s substantive points, yes, I know that the industry wants a degree of certainty, but it is not possible to publish an energy White Paper without the consultation paper on nuclear alongside it, because nuclear is an important part of that consideration. I want to make sure that we get the nuclear consultation right, and I do not have the slightest doubt that there are those who will want a judicial review whatever we decide; some people are implacably against nuclear, come what may. However, I want to get these things right, and the overwhelming view in the industry is that it is important that we publish the two papers together, which I will certainly do.

Productivity Rates

I thank the hon. Gentleman for that very helpful question. The Chancellor’s excellent Budget statement yesterday spelled out our very successful record in delivering sustainable macro-economic stability and our equally successful performance in making effective micro-economic interventions to remove the barriers that prevent markets from functioning efficiently. That has enabled us to raise productivity rates and to enhance UK competitiveness. Since 1997, we have halved the previous gap in UK output per worker compared with France, and closed the gap in output per worker compared with Germany. The Department of Trade and Industry has played its part in stimulating competition and enterprise, enhancing flexibility, and promoting science, innovation and skills. We have provided the first-class stewardship of the economy that has helped to raise productivity rates, and that is something that only a Labour Government can do.

In order to boost our productivity to French and German levels and to provide the skills that our businesses are crying out for, will the Minister become the champion across Whitehall of the lost generation of 5 million adults who cannot read properly and the 7 million who cannot do basic maths? This is a vital issue on which a cross-departmental lead needs to be taken. May I ask that the DTI do some serious work on it?

I agree with the hon. Gentleman that this is an important issue, which is why we have done something about. We have reduced the figure that we inherited—6 million adults with no basic skills—to the still far too high figure of 5 million. I agree entirely that we must continue to work to provide the basic skills, because it is high skills that will enhance our productivity rates. We in the DTI play our role across government in ensuring that we have the proper structures, programmes and interventions in place to do just that.

Last year, a DTI report stated that low business investment “hinders” productivity and growth. Yesterday, the Chancellor increased taxation on the small business sector. What are the Government doing to encourage investment in that sector across the United Kingdom?

If the hon. Gentleman looks closely at yesterday’s Budget statement, he will find that we introduced a new annual investment allowance of £50,000 that will benefit small businesses in particular. He will also notice that we will increase the tax credit rates for research and development, particularly those for small businesses, so he has got it wrong in suggesting that yesterday’s Budget did not enhance our competitiveness and encourage investment in the small business sector.

Would my right hon. Friend agree that the top productivity levels of the German economy still lag behind those of this country?

I entirely agree that we are doing especially well in our management of the economy. The advantages that we have over the German economy are our flexible labour markets, our high investment in research and a strong academic base. The latter means that we have good innovations and we are getting better and better at translating those into products and services. The fact is that we have closed the productivity gap with Germany through our management of the macro-economy and other interventions to support productivity and we are being extremely successful.

I am sure that the Minister recognises that one aspect of productivity growth is skills investment in staff. Does she agree that at a time when we have 1 million people on jobseeker’s allowance, 1.5 million people saying that they want work and 2.7 million on incapacity benefit, the vast majority of whom also say that they want to work—a huge stock of people who would like jobs—it is ironic that we have invested nothing in skills, so that British industry has had to go across the world to pull in economic migrants to do jobs in this country? Does she agree that that is a real indictment of the Government’s policy?

I have to say that people are living in two parallel worlds. There is the real world, of the real UK economy, with real performance and 2.6 million extra jobs; a massive investment in skills and education; a huge investment in our science base and research activity; and with an enormous investment in enterprise. Then there is another little world of Conservatives who promise either unaffordable spending commitments or unachievable tax cuts. I know whom the British people believe.

I welcome the Minister to planet earth. It is nice of her to join us this morning. I agree with her that improving our productivity is vital, but after 10 years and 11 Budgets filled with complex schemes and political tinkering, the truth is that our labour productivity, as we have heard, is still behind France and Germany and way behind the US. Is not the real issue the quality of business management and, as my hon. Friends have rightly said, poor labour skills? When will the Government focus on that rather than on cooking up over-complex short-term schemes? What does planet Minister say?

The planet Opposition spokesperson has not seen or understood the impact of all the investment that we have made in skills over the past 10 years. I do not know which planet the hon. Gentleman lives on, but were he to look at the statistics—which are not produced in a party political way, but by the Office for National Statistics and others—he would see that the productivity gap between ourselves and France and Germany is closing. He would also see that we are the only country that is maintaining the same level of productivity in relation to the US as we had 10 years ago, although productivity in other European countries has declined. Were he to go around his own constituency, he would also notice that the investment in skills and education is raising standards and ensuring that British companies can perform effectively with the skills that we need.

Does the Minister agree that our unemployment levels are far below those in France and Germany? Will she also agree that the massive amount of enterprise that was a result of the coalfield plan that we introduced in 1997 has meant that unemployment in Barnsley, where every single pit was shut, is 2.8 per cent. or half the national average? In nearly every coalfield in south Yorkshire, north Derbyshire and other parts of the British coalfield area, the unemployment rate is below the national average. The result is that we have jobs in every pit yard in my constituency, even though every one of those pits was shut by the Tories when there were 4 million people out of work.

My hon. Friend is absolutely right. Unemployment is at the lowest level for a very long time, while the employment rate is higher than it has ever been and much higher than the rate in all our competitor countries. Most importantly, it is this Government who have made the appropriate interventions to ensure that the benefits of stability and growth are enjoyed by all areas of the country and not just the richer ones. That is why employment rates are high in my hon. Friend’s constituency.

Steel Industry

Despite significant restructuring over the past 30 years, the UK steel industry remains a significant employer and an intensive research and development contributor to the UK economy. We believe that the investments, strategies and measures implemented in the sector provide a solid platform for the future prosperity of UK steel operations in a rapidly changing global landscape.

Will my hon. Friend join me in welcoming the recent news that Tata Steel will take over the Corus iron and steel making company? What help and support will be given to Tata Steel to ensure that we have a strong manufacturing base on Teesside? Manufacturing is our bread and butter, as 3,000 jobs depend on it directly, and 30,000 indirectly.

My hon. Friend brings much professional expertise to this subject, and is a steely champion of that important industry. We are pleased that Tata has chosen to invest in the UK steel industry through its acquisition of Corus, and believe that that will lead to a fruitful and productive partnership. The Tata deal will provide access to low-cost raw materials, and to high-growth markets for products in which Corus has a particular strength. That will enable the company to compete on a global scale and thereby help secure the future of plant located in the UK. I look forward to having an early meeting with the leadership of Tata Steel.

While I accept that we are in a global trading situation, I do not share the views of the hon. Member for Middlesbrough, South and East Cleveland (Dr. Kumar). It is extremely dangerous that our strategic industries are being acquired by overseas interests. Corus is not the only one: more industries in this country have been acquired by overseas interests than is the case with virtually any other country in the EU or elsewhere in the world. Does the Minister accept that the remittances and profits are sent overseas and so do not benefit the UK Exchequer or taxpayer? Does he also agree that jobs can be transferred abroad extremely easily?

That was a passionate onslaught on the reality of globalisation. We have had enough banter—some of it not very good—about real worlds this morning, but globalisation is here to stay. The important thing is that British industry should regard it as a challenge and not a crisis. We welcome inward investment and, just as British companies will take over companies in India and elsewhere, some of that business will go the other way. I am confident that the deal is a good one for the UK steel industry, and for jobs.

In an era of globalisation, the ability to innovate is essential for the long-term sustainability of the UK steel industry. My hon. Friend the Minister will know that Hartlepool’s steel pipe mills are a good example of that innovation, as he opened one last year. However, price is also important, and sterling is nudging $2 this morning. I know that the problem is extraordinarily difficult, but what can my hon. Friend do to ensure that the UK steel industry remains competitive in the global economy?

I certainly remember opening that plant. I learned a great deal, and was very impressed by the R and D work going on there and by the sheer skill of the work force. Corus has invested a great deal in the steel industry, and I have no doubt that Tata will do the same. The general message is that we need to compete by adding value to the excellence of the goods and services produced in this country. The hon. Member for Macclesfield (Sir Nicholas Winterton) spoke of challenges in the global markets, but the inward investment by Tata augurs very well for the British steel industry and its highly skilled work force.

Businesses (Taxation)

4. What recent discussions he has had with the Chancellor of the Exchequer on the effects of taxation on businesses. (128950)

I am grateful for that answer. Most enterprises in my constituency, and in Wales as a whole, are small businesses, primarily in the non-capital intensive service sector. Could the Secretary of State explain how such small companies are expected to develop and grow when they are to be subjected to an additional tax burden of 3p in the pound, and indeed will be taxed at a higher rate than when Labour to power in 1997?

First, I am glad that the hon. Gentleman found my answer so helpful. On his second point, about small companies, one of the problems that became apparent was that an increasing number of people were incorporating and becoming small companies to avoid paying tax and national insurance. Any Chancellor must have regard to a pattern of behaviour that leads to people avoiding payment of tax when it is not right that they should do so. The answer to the hon. Gentleman’s friends is, first, that incorporated businesses will benefit from the reduction in corporation and, secondly, that unincorporated businesses will benefit from the reduction in the basic rate of income tax. Firms that invest will benefit from the allowance of up to £50,000 that the Chancellor announced yesterday. All in all, I believe that the changes are welcome and I am surprised that the hon. Gentleman did not welcome them, especially as the shadow Chancellor gave the distinct impression earlier in the week that he wanted to see those changes, too.

Unless I am very much mistaken the Scottish National party Whip is sitting next to me and has been there for 10 minutes. Incidentally, there is not one Scottish Labour Back Bencher in the Chamber—people in glasshouses.

To reinforce the point that has already been made, 90 per cent. of employment in Wales is in the small business sector. All the baloney about R and D is absolute nonsense, because only one in five ever have an interest in taking it up.

But should we not be encouraging more companies to invest in research and development? The hon. Gentleman must know that our future lies in our ability to innovate and to undertake research and development, yet we have it officially from Plaid Cymru that it is all baloney. Surely, that is no way to build a successful Wales or a successful Britain. The changes we announced yesterday in relation to reducing the rate of both corporation tax and basic income tax will help businesses. On top of that, the fact that we are simplifying allowances, making sure that there is relief and help for companies that invest up to £50,000, demonstrates the differences between Labour and the hon. Gentleman’s party: we want to encourage enterprise and innovation.

In the bipartisan spirit that is appropriate for the Chairman of the Select Committee on Trade and Industry, may I urge the Secretary of State to reflect with more care on the answers he has just given? I am deeply concerned that the service sector—small businesses in particular—can take no advantage of the reliefs that are offered in the Budget and face massive increases in their basic corporation tax bill. Indeed, the one relief they might have been able to claim—for cars, which are very important for getting around and meeting suppliers and customers—is specifically excluded from the new annual investment allowance, so I have deep concern that the Budget is actually rather bad news for the vast majority of small businesses in this country.

I do not agree with the hon. Gentleman. The changes that we announced yesterday will be beneficial both for large companies—those paying corporation tax will see their rate reduced—and for small companies, which are taxed on their income, because the basic rate of income tax will come down. It is absolutely right that we have a more up to date system of allowances; at the moment, it is nonsense that people can claim allowances for investing in foreign plantations yet not for investing in a science park, for example. I would have thought—again in the bipartisan spirit in which the hon. Gentleman approaches these things—that we should have an up to date system of allowances rather than relying on a system that was largely put in place after the second world war when we were more interested in reconstruction than in dealing with the problems we face at the beginning of the 21st century.

The Budget delivered by the Chancellor yesterday had the net effect of piling an extra £1 billion in tax on to UK business next year. Is that bad news for business the result of the Secretary of State having no influence at all around the Cabinet table or, now that he no longer expects to be Chancellor himself, is it the result of him choosing not to use what little influence he seems to have?

The reduction in corporation tax is a tremendous help. Indeed, businesses and companies have for a long time called for a reduction in that tax. Interestingly, on Monday the shadow Chancellor—he had clearly thought up his new corporation tax policy at the weekend—said that he wanted to reduce corporation tax. He said:

“There will be some people who make particular use of capital reliefs. The judgment I’ve made is that even they would end up being beneficiaries of a much simpler and more competitive tax system.”

Yet he reached the judgment that it was worth getting rid of those reliefs—we are introducing new capital reliefs, while the Tories are not proposing any.

We welcome the fact that the Chancellor has been listening to our advice by reducing the headline rate of corporation tax, but will he not accept that, behind his headline rate, tax on business will still increase by £1 billion and that small businesses will be hit most severely by his 3p in the pound increase in tax rates?

As I said to the hon. Member for Clwyd, West (Mr. Jones) earlier, we are making changes to the taxation of small businesses because we need to deal with the growing problem of people who are incorporating to avoid paying tax. If the hon. Gentleman is saying that that is all right by the Tories, I do not agree with him. It is far better to move to a simpler system with two rates of allowances running at the same time so that we can encourage businesses to invest. Increased allowances of up to £50,000 are being made available, but the lower rates of corporation tax and income tax will help businesses. That is exactly what is needed to meet the long-term challenges that we face in the future.

Surface Mining

My noble Friend the Minister for Energy met Gerry Spindler, the chief executive of UK Coal, on 22 February and the future of surface mining in the UK was among the topics discussed. The issue has also been discussed in the Coal Forum, of which they are both members.

Where does the Minister think surface coal mining fits within the so-called renewable energy policy of the Government? Given that research and development into clean-coal technology is at a very early stage, does he share my concern about UK Coal’s plans to extract 900,000 tonnes of coal from an area of outstanding natural beauty in Huntington and New Works in my constituency? Would he like to elaborate on his conversation with the chief executive, specifically on that point?

The hon. Gentleman will know that, quite properly, I cannot comment on a particular project that is going through the planning process. That would not be the right thing to do. All these matters are, of course, considered very carefully on environmental grounds. We hope that UK coal production has a significant future in Britain—an issue discussed in the Coal Forum. UK production amounted to some 9.4 million tonnes of deep-mined coal and 8.6 million tonnes of surface-mined coal. The hon. Gentleman will understand that that makes a not insignificant contribution to energy supplies. Given the difficulties in world markets, we need to produce more of own energy in Great Britain. We need a balanced and rational approach to the issue, but none of my comments relates to the particular project in the hon. Gentleman’s constituency.

After last week’s appalling decision to allow UK Coal to ruin the beautiful countryside at the Lodge House site in my constituency and a recent similar decision at Longmoor in the constituency of my hon. Friend the Member for North-West Leicestershire (David Taylor), will the Minister urgently discuss with his colleagues in the Department for Communities and Local Government how to stop planning inspectors totally misinterpreting the original intention of the revised MPG3—mineral planning guidance—guidelines and how to reassert the presumption against open-casting? As stated in those guidelines, local authorities know best about the balance of local factors and it is not environmentally acceptable to state that immediate appalling damage can conceivably be put right by dubious assertions about the long-term restoration of a site. Will the Minister also have urgent discussions with—

I do understand the question. Although I gave the figures for across our countries, in fact less than 1 million tonnes was produced through surface mining in England. There are tight planning controls—

We have talked about skills, and I am happy to educate the shadow Secretary of State on this matter. There is a presumption against development if the proposal is not environmentally acceptable or cannot be made so by conditions or obligations attached to a consent, or does not offer local or community benefits to offset the adverse impact. I will not ask the hon. Gentleman to repeat that, but that is the situation. I hope that my hon. Friend the Member for Amber Valley (Judy Mallaber) will forgive me, but it would be inappropriate for me to comment on a particular planning decision.

Marine Renewables Deployment Fund

The Department’s £50 million marine renewables deployment fund was established to assist the continued development of wave and tidal-stream energy technologies.

I am surprised that the Secretary of State did not also tell us that since the fund was opened for applications in February last year, it has received only two applications, both of which were rejected. Does he share my concern that the fund might not be as effective as we would both wish in retaining the world lead in the development of marine renewables? Now that a year has passed, will he review the access criteria for funding applications, with a view to introducing more flexibility in the fund in order to allow more companies to get more devices into the water?

I suspected that the hon. Gentleman would raise that point—and I am worried that there have been only two applications. The difficulty is that in order to qualify for the grant a project has to have been operating in the sea for three months. In other words, the idea was to help projects that had significantly proved themselves to be a real possibility for development. There are other grants around, however, to help with development at a far earlier stage. I am reluctant to reopen this matter, because it is important that we encourage projects that have a real chance of success. If it appears that no projects have reached that stage, however, perhaps we ought to look at some other form of assistance. The hon. Gentleman and I both agree that marine generation of electricity is important, and there are good examples of such work being carried out in his own constituency. The reason why this grant is difficult to get is that it sets quite high criteria for eligibility.

Citizens Advice Bureaux

7. What recent discussions he has had with ministerial colleagues in the Treasury on the future funding of front-line services provided by citizens advice bureaux; and if he will make a statement. (128954)

I have had no recent discussions with ministerial colleagues on the future funding of front-line services provided by citizens advice bureaux. However, the DTI and the Treasury work closely together on the administration of the £47.5m face-to-face debt advice project that is funded from the Treasury’s financial inclusion fund.

DTI backing for face-to-face advice is most welcome. The Minister will know that Citizens Advice annually provides a vital, trusted, value-for-money lifeline to about 2.5 million people, with 6 million problems, nationwide. It also helps to deliver the Government’s agenda of eliminating poverty, preventing homelessness, improving health and well-being and reducing reoffending. Does my hon. Friend agree, however, that there is still a significant unmet need for telephone, weekend and online services, and that continued support for—and strategic Government investment in—Citizens Advice will lead to major social and economic benefits?

I certainly agree with my hon. Friend, and I am sure that all right hon. and hon. Members admire and respect the work that the citizens advice bureaux undertake. I can advise my hon. Friend that, last week, the Economic Secretary to the Treasury announced a new financial inclusion fund for the next spending period. The DTI will be part of a cross-departmental ministerial working group that will determine fund priorities and publish a detailed action plan after the comprehensive spending review. I am sure that my hon. Friend will supply details of the difficulties that he has outlined, and that the working party will look at them so that they can be resolved in due course.


8. What progress has been made in discussions on the role of Postwatch in scrutiny of the post office closure process. (128955)

The Government’s consultation on the post office network ended on 8 March. We have received more than 2,500 representations, and are grateful to those who took time to participate in the process. We are giving full consideration to the comments received and hope to be able to announce our final decisions in May. Discussions are in progress between Post Office Ltd and Postwatch, and we expect to set out Postwatch’s role in developing local area closure proposals in our decision.

Does the Minister agree that when the Government are about to embark on a huge post office closure programme, which he has acknowledged will have a massive impact on consumers throughout the country who rely on that important service, the idea of simultaneously abolishing the Post Office watchdog is madness?

We have included specific provisions in the Consumers, Estate Agents and Redress Bill, which had its Second Reading this week, to ensure that the new national consumer council has a role, as Postwatch does now, in advising on the number and location of post offices and their accessibility to users. We are also involved in ongoing discussions between Post Office Ltd and Postwatch to make sure that the arrangements are as robust as they need to be.

I am glad to hear how many organisations and individuals took the trouble to take part in the consultation; I hope that their contributions will be read carefully and listened to. However, does my hon. Friend agree that one simple way of making sure that communities have a voice and are able to retain their services is to accept the Sustainable Communities Bill, which is going through the House? What it provides would be much better than any regulator, because communities would have their own voice and their own means of retaining their services.

I am sure that the Sustainable Communities Bill will provide adequate opportunities to enable communities best to defend themselves. As my hon. Friend knows, we have just completed Second Reading of the Consumers, Estate Agents and Redress Bill, which we believe offers the appropriate place to integrate the Postwatch service, and which will provide consumer protection for those who use any of the services of Royal Mail Group.

The Secretary of State has said that 2,500 post offices will be closed with compensation, but the national access criteria will allow thousands more post offices to close. How does the Under-Secretary reconcile those two facts?

The hon. Gentleman has participated in many of our debates on the future of Post Office Ltd. There is clear recognition that the estimated £4 million a week that the Post Office loses is unsustainable, and there is consensus across the board that something must be done to put the post office service on a more sustainable footing for the future. That is agreed by the National Federation of SubPostmasters and by the Select Committee on Trade and Industry, and we are doing our best to ensure that that happens. As I said, my right hon. Friend the Secretary of State will make his announcement in due course—in May—and we hope that as a result of that, the future of Post Office Ltd will be more secure.

Science Funding (York)

The Department’s primary support for science is through grant in aid to the eight UK research councils. Colleagues will have noted the very good settlement for UK science announced in the Budget yesterday. In 2006, UK research councils funded £17.8 million in research grants to York university. In addition, £35.9 million has been invested jointly with the Department for Education and Skills under the two rounds of the science research investment fund to update and renew university research infrastructure, and £7.8 million has been invested under the higher education innovation fund and its predecessors to facilitate knowledge transfer from science research.

I warmly welcome yesterday’s Budget announcement that funding for science will increase by 25 per cent. by 2010—an additional £1,300 million pounds. My hon. Friend will be aware that Science City York and the other five English science cities have put proposals to the Treasury on promoting science and technology as a driver of economic development. Will those proposals benefit from some of the additional funding for science, and will the Government consider the proposals and respond?

I am sure that there will be a response. I am encouraged by the way in which science cities are flourishing. I had an opportunity at a recent conference, up the road in Newcastle, to meet colleagues from Science City York and others, and I am encouraged by the development and the way in which a range of bodies, such as the learning and skills councils and the regional development agencies—Yorkshire Forward, in my hon. Friend’s case—are coming together to make sure that science cities flourish in the future.

Renewable Energy

10. What recent discussions he has had with the Chancellor of the Exchequer on initiatives to promote renewable energy. (128958)

As was discussed earlier, my right hon. Friend the Secretary of State has had regular discussions with the Chancellor on a range of issues, including the promotion of renewable energy.

The Chancellor’s flagship stop-start scheme to promote the domestic renewable energy industry, the low carbon buildings programme, received 10,000 online applications at 9 am on 1 March. Only 186 were approved. Does the Minister expect that the 50 per cent. increase in funding announced yesterday in the Budget will give rise to a 50 per cent. increase in successful applications—from under 2 per cent. to under 3 per cent?

We had some discussion about that earlier this morning. I am proud of the record of this Labour Government and I would be pleased on another occasion to compare it with the lamentable record of previous Administrations on climate change and renewables. The Government are reforming the renewables obligation, have targets for renewable energy, and have introduced the low carbon buildings programme—with £80 million of funds—not only for householders, but for voluntary organisations and public sector buildings. That is important. There has been a huge demand for householder grants. That is why yesterday it was announced that an additional £6 million for householder capital grants will be available from the Budget, bringing the total funds for householders up to £18 million. We are now having a quick look at that, so that we can announce a new programme. That is why there is a brief suspension of grants during the April period. It is sensible—I think that the industry expects this—to look at that before we announce the way forward.

Will the Minister confirm that according to the Treasury, the microgeneration measures announced in the Budget yesterday will produce carbon savings that, because they are so timid, are too small to measure, and that if one adds up all the energy measures announced in the Budget yesterday, they account for less than 2 per cent. of carbon emissions? That amount will be wiped out by the increase in carbon emissions now taking place.

There are a wide range of measures and a number of areas of the economy, including the houses in which we all live, that will contribute to getting on the right side of the climate change argument. The Government have set what I would contend is the most ambitious target ever for a democracy: to reduce carbon emissions by 60 per cent. from what they were in 1990, by the middle of this century—2050. A range of programmes and changes of behaviour will enable us to hit that target. Microgeneration and, more generally, renewables have an important role to play, but not the only role.

Women Entrepreneurs

We have 1 million women entrepreneurs, who contribute £60 billion GVA—gross value added—per annum to the UK economy. If we had the same rate of women’s entrepreneurship in the UK as there is in the USA, we would have 700,000 more businesses adding to the wealth and well-being of the UK economy. I am actively tackling the barriers that prevent women from setting up their own businesses. For instance, I am addressing the gender penalty that women face when borrowing from banks, whereby they pay 1 per cent. more than men over the base rate. That is over £80 a week more in interest payments each month on a £100,000 loan, just for being a woman. It should make no difference whether a man or a woman walks into a bank; each should walk out with the same deal. I am meeting the British Bankers Association later today to discuss and address that issue.

There is a welcome growth in the number of women entrepreneurs right across the UK, but it is interesting to note that recent studies show that the growth is larger in the service sector. What more can we do to encourage women entrepreneurs in the manufacturing sector of our economy? That is extremely important, especially in the west midlands.

I agree entirely with my hon. Friend. That must be achieved through both our work on education and skills training and our efforts to encourage entrepreneurship among women, especially as they take the decision to set up their own businesses at a different time from me—perhaps after they have had their first child, or when their children have left home. Such work to encourage women into entrepreneurship in manufacturing will be an important aspect of righting the situation.

Women and equality

The Minister was asked—

State Second Pension

18. How many more women will receive entitlements to the second state pension as a result of the Government’s pension proposals. (128967)

As a result of our pension reform proposals outlined in the Pensions Bill, which include extending credits to those caring for children up to the age of 12 and the new carers credits, about 1 million extra people will accrue state second pension entitlement, of whom approximately 90 per cent. will be women.

That is indeed welcome news, but does the Minister agree that women are overwhelmingly the poorest pensioners because of their caring responsibilities, so it is absolutely imperative that the Government act quickly? Will she reassure me that that will happen, and that her proposals will make a big difference? Will she consider including in the proposals women who retire before 2010?

My hon. Friend is absolutely right to draw the attention of the House to the impact of caring on women’s ability to build up pension entitlements for the future. One of the key aspects of the Pensions Bill that is going through Parliament is the fact that it puts as much emphasis on caring as it does on paid work. By 2010, as a result of that Bill, about 70 per cent. of all women will be able to build up a full basic state pension, compared with 30 per cent. now. Of course, more will be able to save as well, through the new personal accounts. Although I am, of course, attracted by her proposal of introducing this earlier—I hesitate, perhaps, to say—I think that we have a package that is both affordable and sustainable in the long term. We will bring in the proposals as soon as is practically possible.

Order. May I say that Ministers seem to have the habit today of courteously turning round to speak to their colleagues on the Back Benches, but they then go off microphone, which is a great disadvantage to those who are trying to record our proceedings?

Will the right hon. Lady explain what the Government are doing about the cohort of women who might have paid too much in pension contributions? Will the matter be resolved in this tax year?

The hon. Lady makes the important point that it is right that we try to resolve and address these issues. The matter is under discussion in the Department for Work and Pensions, and as soon as it is possible to make progress, we will, of course, do so.

At the moment, about 2 million carers, 90 per cent. of whom are women, are accruing entitlement to state second pension. Will the Minister tell us what effect the proposals to extend pension credits to carers will have on that group?

My hon. Friend rightly draws our attention to the impact of the reforms that are going through Parliament on not only the basic state pension, but the state second pension. As a result of the new carers credit, about another 80,000 women will be drawn into the system. They will thus be able to build up state second pension rights, as well as their basic state pension entitlement. It is right that as we do that and reduce from 39 to 30 the number of years’ contributions for women, we provide a system that is fair and, most importantly, that values care not only for young children up to the age of 12, but for the severely disabled, because many of such people’s carers do not have the opportunity to work and pay the national insurance contributions that others do.

I very much welcome what the Minister has said so far about help for women pensioners under the new proposals. However, is she aware that some 600,000 women in the UK today are low-paid, part-time workers, often with more than one job, who will not benefit because they fall below the threshold in each of their jobs? The Government say that that cannot be tackled because it is administratively difficult. Does the Minister agree that that, like so many of the hidden messages in the Chancellor’s Budget yesterday, is simply unfair? In the end, because of that administrative difficulty, it is the poorest, lowest-paid workers in our society who suffer the most under the Chancellor’s policies.

Of course the House will realise that it is the poorest, lowest-paid pensioners who gain the most from the Budget proposals announced in the House yesterday, and from the successive measures that we Labour Members have taken to boost pensioners’ incomes, to tackle pensioner poverty and to make sure that women who care and who have dependent relatives are able to build up pension entitlements. The hon. Lady draws attention to an important point: what about those women who earn less than the lower earnings limit? It is right that we think about them, too, but our pension proposals are a package, and many of those women will benefit from other reforms in the system. For example, if they are spending only a short time outside the labour market on a low income, and have perhaps one or two jobs that leave them below the earnings limit, they will benefit significantly from the reduction in the number of years that they have to contribute. They will also benefit from other measures that take them out of having to pay tax in retirement. Overall, the pension deal clearly benefits women, particularly low-paid women.

Human Trafficking

After consideration, we do not believe that the creation of the office of commissioner on human trafficking is necessary or appropriate at this time. The inter-ministerial group, of which I am a member, effectively leads and monitors cross-Government work on human trafficking, which includes the soon-to-be-launched action plan and implementation of the Council of Europe convention.

Naturally, I am disappointed by the Minister’s reply. The only country in Europe that has such a commissioner is the Netherlands. I am always keen to learn from good things in Europe, and as a result of the Netherlands experiment and the commissioner there, we have learned much more about human trafficking and the evils going on in that country. If we only had such a commissioner in this country, we could start to tackle the problem.

I pay tribute to the hon. Gentleman and many other hon. Members on both sides of the House for their interest in and concern about the issue. I am sure that he, like me, wants effective action. Of course, we Labour Members are always happy to learn from our European partners about what measures are working, but it is important to consider what progress we can make in this country. The inter-ministerial group that looks into such issues has been in place for some time. It enables us to bring together the work being done in many Departments across Government. There is now a United Kingdom Human Trafficking Centre, which is the first centre of its kind in Europe, and we are bringing together all the work on the issue. We continue to make progress, but we will of course continue to look at what works elsewhere.

My hon. Friend will be aware that earlier this week there was an excellent debate on the commemoration of the 200th anniversary of the abolition of slavery. She attended the entire debate, and will have heard the comparisons that were drawn between modern-day slavery—human trafficking—and slavery 200 years ago. In the light of that, will she let us know what progress has been made in ratifying the Council of Europe treaty to which she referred earlier?

My hon. Friend says that we had an extremely interesting debate, and indeed we did; it was possibly the most interesting and informative debate that I have attended in this House. He rightly draws a parallel, and I am pleased to say that the Council of Europe convention will be signed tomorrow. We will set out the action that we will take to move towards ratification. The Government take signing such conventions seriously, and have not wanted to do so until we were in a position to make rapid progress towards ratifying it. The UK human trafficking action plan will be published at the same time, and that will give hon. Members a great deal more detail on the subject.

Equal Opportunities (Ethnicity)

20. What guidance she issues to other Government Departments on the use of ethnicity as a factor in decision making. (128969)

The Commission for Racial Equality, on behalf of the Government, issues guidance to public authorities on meeting their obligations under the Race Relations (Amendment) Act 2000. The commission issued a statutory code of practice in 2002 on the steps that public authorities can and should take to meet those obligations.

My constituents who work at Her Majesty’s Prison Service office at Crown house in Corby are disgusted that the Prison Service should cite as one of the key influencing factors for trying to relocate the office to Leicester the perceived ability to recruit a more diverse work force there. In other words, my constituents are being told that they are too white and too British. Will the Minister undertake to ensure that the Commission for Racial Equality issues guidelines to the Home Office and its quangos to say that the Home Office should recruit people on the basis of their ability to do the job, and not the colour of their skin?

Of course, the hon. Gentleman has raised that issue before with my right hon. Friend the Leader of the House, who is here on the Front Bench now. The issue, as I understand it, is that there was no alternative to relocation. The building in which the current staff worked was being sold, so there was a need to look at other locations. There was a comprehensive consultation of staff to consider a range of issues that had to be addressed, and the hon. Gentleman’s portrayal is not accurate or true, so he should reconsider his position.

May I confirm that there are lots of white British people in Leicester, and say that we welcome the relocation of those jobs to the city? On the wider point, the Minister is abolishing the Commission for Racial Equality. What discussions has she had with the Lord Chancellor about the Carter proposals, which will have a huge impact on the number of ethnic minority firms doing legal aid work?

I thank my right hon. Friend for his comments about the city of Leicester, and I pay tribute to his representation of all his constituents, whatever their ethnic background. Issues relating to the employment and representation of people from ethnic minorities will be taken over by the Commission for Equality and Human Rights, and guidance will continue to be available on a range of issues, including that raised by the hon. Member for Kettering (Mr. Hollobone). It is a factor to be taken into consideration, but the notion that it is the only factor in any relocation or change is nonsense.

I was surprised that the Minister did not mention the report by the Equal Opportunities Commission entitled “Moving on up? Ethnic minority women at work”, which paints a dismal picture of the situation facing black and Asian women. What specific advice has she given the Department of Trade and Industry so that it can support firms that want to break down the barriers and employ more black and Asian women, but find it difficult to do so?

I thank the hon. Gentleman for his question. I am sure that if I tried to mention everything, you would have words to say about the length of my answer, Mr. Deputy Speaker. However, the hon. Gentleman is right to draw attention to that report, which identifies the fact that ethnic minority women, many of whom do better than their counterparts, still have great difficulty finding employment. I am pleased to say that this is not just a matter of my giving advice to the Department of Trade and Industry, as it has long had a committee that looks into such issues and seeks to ensure that exactly what he described takes place. We are beginning to see progress, although it is not fast enough, and we want to see more.