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Business, Enterprise and Regulatory Reform

Volume 470: debated on Thursday 17 January 2008

The Secretary of State was asked—


The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

A strong enterprise culture is vital to the UK’s long-term economic prosperity and can help us meet some of our important social objectives.

Thanks to measures taken by the Government, there is a record number of small businesses in the UK and young people are increasingly looking to set up businesses as their chosen career path. More than 180,000 new businesses have been created each year since 1997 and new VAT registrations have exceeded de-registrations in each of those 10 years. We are working on strengthening our enterprise strategy and will publish a White Paper in the spring.

I am grateful to my right hon. Friend for his reply. I welcome everything that the Government are doing to increase enterprise. We in Stoke-on-Trent, which is not traditionally renowned for the number of its small enterprises, are very proud that it was the winner of the Enterprising Britain award. I have been in touch with the “Make Your Mark” campaign and we have great hopes that, from now on, the Government will make Stoke-on-Trent a city of enterprise as valuable as Liverpool is as a city of culture, so that we can make progress on everything that they want to do for enterprise and encourage investors to come to Stoke-on-Trent because we are proud of our award.

I am happy to endorse my hon. Friend’s comments about the North Staffordshire regeneration zone, which did a brilliant job in winning the national awards in 2007 and was a runner-up in the European competition. We will continue to do all we can to support enterprise in her constituency, which several initiatives can benefit. I am happy to say that my right hon. Friend the Minister for Competitiveness hopes to visit Port Vale soon to open some new enterprise units. As I said, we will continue to do all we can to support my hon. Friend’s excellent work.

Enterprise relies on new business, as the Secretary of State mentioned. What is he doing to help enterprising people who start up new businesses, given the credit squeeze, which is having such an impact on their cash flow? Will he ask the banks to be sensitive at this difficult time?

I accept much of what the hon. Gentleman says. We are in constant communication with the banks and others to monitor the impact of the financial upheaval in the markets that has taken place since the summer. So far, there has been little impact on banks’ borrowing practices in respect of small businesses, but we are keeping the situation under the closest supervision.

In areas of deprivation, social and community enterprises are an excellent way in which communities can take control and get themselves out of deprivation. What assurance can the Secretary of State give that people in those communities will receive assistance to give them the capacity to start their own businesses and social and community enterprises?

In our work on the new White Paper, we are closely considering the issue that my hon. Friend raises. In my response to my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley), I said that enterprise is not only an economic issue, although it is a powerful one, but an important social tool that helps us reach into areas of disadvantage throughout the country. I am sure that a reinvigorated enterprise strategy can help areas in Britain that are under-represented in business start-ups to do better, and especially groups of people—for example, women—among whom the number of business start-ups is much lower than among other groups.

We are examining a range of measures—I shall not announce the detail of the White Paper today—but I assure my hon. Friend that we acknowledge her points and are tackling them directly in our work on the White Paper.

Does not the Secretary of State realise that most small businesses would laugh at his claim of championing enterprise? With Labour proposals to double capital taxes on business and abolish income sharing on dividends between spouses, with enterprise groaning under the weight of some 3,000 new regulations a year, with growing instability in the banking sector and now the high street, and with energy costs and inflation rising, how can he say that enterprise is being promoted?

Because we use facts and evidence, not the hon. Gentleman’s empty huff-and-puff rhetoric. Policy should always be based on evidence, not ideology. He has made his party political point, which is all well and good, but I wonder what view business would take of a party that wants to cut research and development tax credits and business support schemes and introduce a new bureaucratic trading scheme for, for example, chocolate and fatty foods. That is evidence of a party that has totally lost touch with business reality in this country.

Following on from the question about social enterprise, I applaud the work that my right hon. Friend, the Department and the Office of the Third Sector in the Cabinet Office are doing to promote social enterprise. However, will he look closely at whether sufficient support is being given through Business Link branches, many of which are reformed? The support available is sporadic; in Luton, for example, we are under-resourced in terms of support and capacity building for social enterprise. That particularly affects those in black and minority ethnic communities who want to go into social enterprise, but do not have the advice and financial support to do so.

In relation to Business Link, we are again considering all such issues in the context of our work on the White Paper. On social enterprise, I shall draw my hon. Friend’s comments to the attention of the Chancellor of the Duchy of Lancaster, because he is overseeing a lot of the Government’s work on social enterprise. It is important in all parts of the country that there should be an efficient, modern and private sector-led business support service that can provide bespoke and tailored business advice to businesses that are just getting going. That is very much our ambition for Business Link.

Business Competitiveness

The UK continues to perform well on a wide variety of measures of competitiveness, including the best measure, which is productivity. The comprehensive spending review set out a number of measures to raise long-term productivity further.

In an increasingly competitive world, with an explosion in globalisation and fierce competition from India and China, was the Minister as dismayed as I was to read the report by the institute of management and performance showing that the UK had slipped from ninth to 20th place in the competitiveness league? He is an intelligent Minister, so what assessment has he made of the Government policies that have contributed most to that downfall?

The hon. Gentleman is certainly right about the ferocity of the worldwide competition that UK companies face. There are a number of different indices, but some are rather volatile, partly because the methodology that is used changes from one year to the next. However, I refer him to the World Bank, which last year and the year before assessed the UK as sixth in the world for ease of doing business, and to the Organisation for Economic Co-operation and Development, which says that we have the lowest barriers to entrepreneurship of all the OECD countries. However, the best measure is productivity, on which we have closed the gap with Germany, as well as having been the only G7 country to keep pace with US productivity growth since 1995. We have done well on competitiveness, and the new stability in the economy over the past 10 years has been the key.

One sector that is competing well in the north-east is the biotechnology sector. Indeed, it is flourishing, with 50 start-ups being established in the past five years. I recently met members of the sector, who told me that they are facing difficulties, in that they need another 1,000 biotechnicians in the next few years. We need to address that issue as far as competitiveness is concerned. What are the Government going to do about it?

I am pleased that my hon. Friend has raised that important subject, because we are establishing a new innovation and growth team to focus on the biotech sector. He is absolutely right about the importance of the sector for the UK economy, particularly as addressing climate change is an increasingly important priority. The Sainsbury review last year made the point that the UK is well placed to do well globally in industries such as biotechnology. That is why we have committed extra resources to science, to train exactly the kind of people that that sector and others need. Given the ferocity of international competition in the biotech and other sectors, we will continue to ensure that the UK does well. Indeed, my right hon. Friend the Secretary of State is leaving immediately after questions to board a plane for India, and we will continue to battle for UK business.

Competitiveness lies at the heart of many of our problems in Dundee over the past 12 months, with 1,600 job losses, including 1,000 in manufacturing, and the work directly transferred almost exclusively to more competitive economies in China and Hungary. I know that the Minister and the Secretary of State are aware of the difficulties in Dundee, so will they meet me and others who are concerned about the Dundee and wider Tayside economy with specific regard to the loss of manufacturing jobs? Will they also meet the local business community, if a request comes from the chamber of commerce to explore what the Government might be able to do in conjunction with the Scottish Executive?

The hon. Gentleman is absolutely right that the fierce international competition that we have been discussing applies nowhere more than in manufacturing. I would urge him to look at how the manufacturing sector as a whole has been performing over recent months. It has been doing well; I draw his attention to the fact that, for example, we made almost twice as many cars in Britain last year than we did 25 years ago. We want to take a fresh look at our manufacturing strategy. We introduced a strategy in 2002 that made a big contribution, not least through the manufacturing advisory service. However, as my right hon. Friend the Secretary of State announced in November, we will review our strategy between now and the summer. I would welcome the opportunity to meet the hon. Gentleman and representatives of the business community in his area to discuss such issues.

My right hon. Friend will be aware that one of the main elements in competition is the price of energy. He will also be aware that, last week, The Sunday Times reported that six energy companies were meeting to conspire to ensure high energy prices. What action will he take to ensure that British competitiveness is protected from the profiteering of the energy companies?

My hon. Friend is absolutely right about the importance of energy prices for competitiveness in the UK. He will be aware of the initiative taken by my right hon. Friend the Chancellor, and he will also know that Ofgem is looking closely at this issue. It is the case that the competitive market framework for energy in the UK has delivered energy prices that are among the lowest in Europe.

The Minister talks about the importance of improving competitiveness, not least among small companies. While he has been talking, however, the Chancellor has raised those companies’ corporation tax rates and increased their business rates, and he is now planning a £900 million tax hike on their capital gains. How can small firms remain competitive when the Chancellor is taxing them to death? Is the Minister’s Department going to stand up for those firms or simply let the Chancellor walk all over them?

I simply draw the hon. Gentleman’s attention to the fact that we have more small businesses in the UK today than we have ever had before. There are now 4.5 million of them, and there has been a 20 per cent. increase in the number of companies registered for VAT. I believe that the Chancellor is absolutely right to seek the simplification of capital gains tax. The combination of indexation and tapered relief had created a complex system, and he has proposed changes to address that. He is also listening to representations from small business organisations and he plans to make additional announcements.

Energy Supply

3. What assessment has been made of the impact on business efficiency of energy supply contracts which require 90 days’ notice of termination. (179523)

The Office of Gas and Electricity Markets—Ofgem—is responsible for regulating gas and electricity supply, including supply to the business sector. Termination arrangements are a contractual matter between the supplier and the customer.

My constituent, Mr. Mark Middleton of Coppicemoor Farm, Pytchley, near Kettering, has an electricity supply contract with npower. npower wrote to him 30 days before the end of the contract to ask him whether he would like to renew it. He said that he would not, but npower said, “Tough. You should have given us 90 days’ notice.” So Mr. Middleton is now tied into his contract with npower for another 12 months, after which he will seek an alternative supplier. Will the Minister look into the notice periods that companies impose on their customers? This inability to switch easily between suppliers is creating a brake on business efficiency.

The general principle has to be that business customers can protect their own interests, and that includes monitoring the terms of their contracts and the expiry dates involved. We recognise, as was noted in an earlier question, that high energy costs are affecting businesses as well as domestic customers. For those reasons, I would be happy to bring the hon. Gentleman’s concerns to the attention of the chairman of Ofgem, with a request that he consider whether any changes to the rules governing business supply are required.

Will the Minister give us his assessment of why energy prices have gone up so dramatically in the past few months? Is it simply to do with the price of oil? Does he have any evidence of the anti-competitive behaviour that was mentioned in a previous question? Or is it the failure of the EU energy markets to be properly competitive?

There are a range of factors. The major background factor has to be the huge global demand for energy in the emerging economies of India, China and many other countries, as well as the demand in the western economies. We have seen increases in the wholesale price of fossil fuels of between 50 and 80 per cent., and that has to be the major factor. The Chancellor is in discussions with Ofgem and the Secretary of State is also involved to make sure that the relationship between wholesale price increases and retail price increases is appropriate. We have a competitive energy market here; there is an issue in Europe, where we continue to press for the liberalisation of energy markets. The hon. Lady is right that that is another important factor.

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

My hon. Friend the Minister for Energy has met the chief executives of all the energy supply companies with a view to improving support to those at risk of fuel poverty. The level of support that companies are providing this winter has increased from £40 million to £56 million. The Minister for Energy and I will meet chief executives again shortly to discuss the best way to ensure continued support. Overall, the Government have provided £20 billion in support for the fuel poor since 2000, with 2 million households helped by our fuel poverty schemes and close to 12 million receiving winter fuel payments each year.

That is a good record, but more needs to be done. Some householders face price increases of 27 per cent., which has clear implications for the Government’s fuel poverty targets. In his discussions with companies, will my right hon. Friend commend those that offer good social tariffs and reprimand those that do not, reminding them of the possibility of compulsion?

I strongly support what my hon. Friend says. A number of electricity supply companies have done exemplary work in trying to address some of these issues, particularly with regard to those who rely on pre-payment meters. There is an issue there that is now being addressed. We have decided not to legislate in the Energy Bill to introduce mandatory social tariffs at this point, given the extra investment by companies and their commitment to continue it, but we will keep the matter under careful review.

Is it not the case that the amount of money that these companies spend on social tariffs is a pittance in comparison with their huge profits? Are not all these cosy conversations with the companies achieving practically nothing? With fuel poverty doubling over the last couple of years, is it not time to legislate to make poor people protected instead of hoping that companies will do what should be the Government’s job?

We should intervene in the most effective way possible. I know that the hon. Gentleman’s instinct is always to regulate and to legislate, irrespective of the ability of other mechanisms to deliver. That is not our approach. We are making progress on fuel poverty. There is obviously a growing issue with rising energy prices, which is why in our talks with energy companies we will be redoubling our efforts to find a sensible way to proceed, particularly for elderly consumers of gas and electricity, for whom I accept there is a particular hazard.

One of the problems with social tariffs is that there is not just a difference, but a vast disparity, between the tariffs offered by different companies, which confuses consumers and others. That highlights the fact that some companies are doing a lot more than others, so I urge my right hon. Friend carefully to consider how to achieve not just an incremental increase in the amount of money going into the industry’s support for consumers, but a substantial increase right now, at a time when customers really need any extra support that they can get from a proper social tariffs programme.

As I said, we are in discussions with the energy companies, and those discussions are continuing. They have all promised to maintain the support that they are providing over the next three years. We will discuss with them what more, if anything, can be done. From the Government’s point of view, I have already pointed out some of the areas where we are investing directly in this issue. It is important to keep the overall picture clearly in mind. We are providing direct financial help with energy costs for households and we are also investing more over the next spending review period on energy efficiency for domestic households. We must continue to wage this war on a number of fronts, but I can assure my hon. Friend and all hon. Members who are rightly concerned about this issue that the Government are very seized of the significance of these matters and are doing all they reasonably can to address the concerns that are being expressed.

Last week, we witnessed what can only be described as a rather crude stunt in which the Chancellor reprimanded Ofgem as if it were somehow responsible for higher energy prices and fuel poverty. Is it not the case that, in addition to world commodity prices, the main component of our energy bills’ increase is the higher price of carbon? Is it not also the case that the main culprit here is not markets, but the Government’s failure to adjust their policy on addressing fuel poverty in a way that actually keeps pace with harsher global conditions? Does the Secretary of State agree with the hon. Member for Barnsley, West and Penistone (Mr. Clapham) that companies are, as he put it, conspiring to keep prices high?

My right hon. Friend the Chancellor has an obvious and perfectly legitimate interest in inflation, and given the significance of energy prices to overall inflation levels, I think that his intervention was entirely proper and appropriate. As he and my hon. Friend the Minister for Energy have said, we need to understand the interaction between wholesale and retail prices, and I think that it was perfectly fair and proper to initiate such an inquiry.

As my right hon. Friend the Chancellor has said, the regulatory arrangement for our energy market is one of the most effective anywhere in the European Union, and the result has been, on average, significantly lower energy prices in the United Kingdom. It is up to the competition authorities, which oversee unfair trading practices, to examine any evidence of criminal or illegal behaviour, and if there is any such behaviour, people should draw attention to it so that proper inquiries can be made.

Many economists might say that there is a difference between inflation and just higher prices, but we will not give the Secretary of State a tutorial on that today.

One of the most effective solutions to fuel poverty is to reduce households’ fuel bills by helping them to consume less in the first place. Should the Secretary of State not feel ashamed—indeed, he referred to this in his earlier answer—that the Energy Bill, which was published last week, contains nothing whatever to promote consumer and household energy efficiency, and will therefore continue and even exacerbate people’s exposure to rising fuel prices in the months and years ahead?

I have a great regard for the hon. Gentleman, but I have never seen him as my tutorial adviser when it comes to energy matters—or, indeed, to any other matter that I could possibly think of. However, I am grateful to him for at least the offer of some sort of support in the future.

I doubt that very much indeed, but it might be nice to have a chat with the hon. Gentleman socially, at least.

As to the wider issue of energy efficiency, the measures that we have taken have benefited more than 2 million households in the United Kingdom. We are doing more than previous Governments to tackle the issue of demand for electricity through energy efficiency measures, and we are seeking to make significant improvements in the work that we are doing.

The hon. Gentleman, along with others, seems to have been affected by the contagion that the only response to the issue is to legislate. That is, perhaps, a lesson with which I can help him out in this two-way exchange of ideas that we are to have. Legislation is not necessarily the right answer. The Government have the power and the means, and are using them, to help more households to become more energy efficient, and we can do that without any more regulation or legislation.

Minimum Wage

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

We are running a new national campaign to raise awareness of the minimum wage. The campaign includes national and regional advertising and an online campaign for young workers, in addition to our targeted enforcement campaigns aimed at the hotel sector. The Government are absolutely determined to ensure full, effective enforcement of the national minimum wage legislation that the House has passed.

I support the Government’s campaign, which I have seen on television and in the press. However, as my right hon. Friend knows, thousands of workers, mostly part-time and female, are still being caught in the middle. Will the campaign include explaining to employers the penalties that they will incur if they are found to be underpaying their workers?

Yes, the campaign will deal with all those issues. It will not just provide information, education and advice, but explain how to make and proceed with a complaint. As my hon. Friend will know, we have acted to increase the penalties for violation of the minimum wage legislation, but although we can and should always seek to improve enforcement, I trust that those of us who have always supported the concept of a national minimum wage will draw some comfort from the fact that this year it will be 20 per cent. higher in real terms than it was at the time of its introduction in 1999, without the negative impact on jobs that all Conservative Members confidently predicted.

Is the Secretary of State satisfied that all the migrant workers from eastern Europe who are in East Anglia are being paid the minimum wage?

No, I am not, and addressing that issue will be part of our campaign. Anyone who is working legally in the United Kingdom is entitled to the full and proper protection of UK legislation, and that should and will apply irrespective of a worker’s nationality.

I welcome the campaign, and in particular the minimum wage campaign bus, which I believe will come to the west midlands tomorrow. However, does the Secretary of State agree that advertising the minimum wage is one thing, but enforcing it is another? Will he outline just how this bus will help some of the most vulnerable workers get their rights in terms of wages and conditions?

As a former bus driver myself, I am keen to see buses employed in this helpful way, and the point of the bus campaign and service is to make sure that, as my hon. Friend says, we reach parts of the country where we know there are potential problems. The bus can do that; it will tour across the United Kingdom with expert advice available on board to help those who want and need it.

Post Office Closures

6. How many sub-post offices provisionally identified for closure will not now be closed following the post office consultation procedure. (179526)

Decisions on six area plan proposals have so far been announced by Post Office Ltd. As a result of information received during the local public consultations, it has to date decided not to proceed with 15 post office closure proposals. Also, a number of changes have been made to initial plans in the pre-consultation phase, which involves Postwatch, sub-postmasters and local authorities.

My constituents are awaiting with trepidation the results of the consultation exercise, which threatens seven of my sub-post offices—half the sub-post offices in my constituency. The Post Office claims that a lot of research went into this exercise, yet it turns out that Postwatch is in the dark and has used out-of-date deprivation figures and erroneous distance figures, and one sub-post office was even put in the wrong county. Given that a very small number of sub-post offices have so far been reprieved out of now more than 230 which have been targeted for closure, what assurances can the Minister give my constituents that this is a genuine listening and consultation exercise, and not another cynical, bulldozing and box-ticking exercise?

The hon. Gentleman has campaigned very vocally for the post offices in his constituency. He will be aware that there is a review process, which involves Postwatch, as to whether Post Office Ltd has not abided by the criteria it has set out. That operates at several levels, and his ultimate course of appeal is to Allan Leighton, chairman of Royal Mail Group, should Postwatch believe that the process has not been carried out properly in his constituency.

In addition to issues to do with out-of-date data, some of my constituents are concerned by rumours about the sums involved in redundancy and compensation payments to the people who own the businesses. Will my hon. Friend give an assurance that redundancy or compensation payments for loss of business will not be a factor in decisions on closing post offices, and that the consultation will not be prejudiced by such considerations?

The compensation arrangements in the current post office closure programme are based on those that applied in the urban reinvention programme of several years ago. The Government took the view that it was right to recognise the long-standing commitment made by sub-postmasters and mistresses in local communities, which is why provision has been made in the package of financial support to the Post Office over the next few years to compensate those who are leaving the network as a result of the programme.

Given that the Government tried to manipulate the timing of the consultation to avoid the local elections, does the Minister think that residents who are concerned about the future of their local post office should consider the forthcoming local and London elections as referendums on post office closures?

The Government abided by the Cabinet Office guidelines on these matters. I can only say to the hon. Lady that from my experience of recent months if anything is true about this programme it is certainly that it has not been carried out in secret.

May I tell the Minister that two post offices in my constituency, those at Rodmersham and East street, are closing? The process has been a complete sham. I raised this issue in a Westminster Hall debate, when I also mentioned franchising. It is possible to bid for and own a franchise of McDonald’s, Starbucks or Kentucky Fried Chicken; is it too late for us to put together local initiatives to bid for profitable post offices that the Post Office wants to close?

The issue of third-party involvement in taking over branches scheduled for closure has been raised in debates. I have encouraged Post Office Ltd to engage properly and seriously with local authorities or others who may be in a position to do so. I must also say to my hon. Friend that if such involvement is to happen, it is fair that Post Office Ltd is able to cover all its costs. Such costs include those relating directly to the branch, central infrastructure costs in support of that branch and what it calculates it can save by closing the branch and, in doing so, supporting a smaller network. One would also have to expect that if local authorities or others were in this position, the Post Office would ask them to commit to take over the branch for a reasonable amount of time—several years—rather than do this and be in the same position in a short time in the future.

Under the consultation process in my constituency, which ends on 31 January, 10 post offices are threatened with closure, which is some 33 per cent. of the total. Post Office Ltd indicated in a recent meeting with me that we could perhaps save one or two if we found some factual error in the consultation process, but I was told, “If you save one post office, we will have to close another one because the Government have required us to close a total of 2,500. Therefore, if one is saved, another has to be chopped.” Will the Minister take this opportunity to confirm to Post Office Ltd that the requirement is not to close 2,500 post offices, but to close up to 2,500 post offices? In other words, it is possible that some of my 10 post offices might yet be saved.

The hon. Gentleman is right to say that the figure is up to 2,500 post offices. I must tell him that Post Office Ltd also has to bear in mind the fact that the average amount it is saving from closing a branch that has been scheduled for closure is £18,000 per annum per branch, although the figure will vary depending on the individual circumstances of the branch. That is why replacements have been announced where decisions have been made not to proceed with closures. It is possible that Post Office Ltd might not take this approach in every instance, but there is a cost involved in making such a decision. That is why things have happened in the way that the hon. Gentleman set out.

It is nevertheless hard to understand why the consultation in Derbyshire produced no changes in the plans and included the continued closure of the profitable post office in Church Gresley. Its business will now be transferred to another post office, which has no adjacent parking and where people queue in the street at busy times. It does not seem that rational decision making is taking place.

I understand the points that my hon. Friend makes, but I would counsel caution on his description of post offices as “profitable”. In order to make such a judgment, one has to consider not only the payment to the agent in the branch, but the central infrastructure costs to the Post Office. Such costs include support for the IT system in the post office, for the cash handling and cash holding in the post office, for the provision of forms to access Government business and, possibly, for security. A number of factors must be taken into account, not all of which are included in the payment to the sub-postmaster, so I counsel caution in asserting that his local post office is profitable when all those factors are taken into account.

As the question put by the hon. Member for South Derbyshire (Mr. Todd) has perfectly illustrated this, it will probably come as no surprise to the Minister to learn that concerns about the adequacy of the consultation process and about the accessibility of sub-post offices and, indeed, Crown offices have been pre-eminent among the concerns expressed by hon. Members in response to the request by the Select Committee on Business, Enterprise and Regulatory Reform, which I chair, for information and feedback on the consultation and the closure process. The Minister will come before the Committee on 5 February to deal with this issue. The Committee might subsequently make urgent recommendations—we are only halfway through the process, so there is time to adjust it. Will he commit to respond rather more rapidly to my Committee about any such recommendations than Governments are obliged to do, to ensure that these concerns are properly addressed?

Of course we take the views of the Select Committee very seriously on this. It has published two reports, or two iterations, on the issue so far. If I may paraphrase their overall view, it is that this is a regrettable but necessary process to reduce the size of the network, as—I am sure—the Chairman of the Committee will confirm. I can assure him that any points made in future Select Committee examinations of the process will be taken seriously by me and by the Secretary of State.

My hon. Friend is fully aware that footfall plays a vital role in determining whether a post office is busy. The vast majority of that footfall arises from benefits and pensions. Keeping in mind the fact that the Post Office card account is to be replaced, will he say whether he has yet had, or is in a position to have, discussions with ministerial colleagues in the Department for Work and Pensions about the replacement for that account?

The current Post Office card account contract comes to an end in 2010. The Government have committed to a successor product to it, and legally that has to be put out to tender. A decision will be made later this year. I am sure that the Post Office will bid strongly for that, but the process has to be legal and proper. A decision will be announced later this year.

But does the Minister deny that the immediate closure announcement of many more sub-post offices has only been postponed until after the local government elections?

As I said earlier, the Government have abided by Cabinet Office guidelines on this. This programme is taking place over a 15-month period, roughly speaking, and the local election campaign will take three to four weeks. It will not have a massive impact on a programme lasting 15 months.

Does the Minister not yet understand why the public feel so disillusioned by this consultation process? The Government have halved the 12-week consultation period recommended by the Cabinet Office; they are using access criteria that result in post offices being closed because of their geography rather than their viability; they are making it difficult for local communities to find other ways to provide funding to keep post offices open; they are setting communities against communities; and people feel that the campaigns that they have mounted have been ignored. Is it not time that the Minister accepted that his process is flawed and is neither taking account of local views and concerns nor delivering the right post office network for the future?

I certainly understand the public concern about the closure of post offices which are valued organisations, but let us remember why it is happening. It is because the number of people using the post office has declined by 4 million a week in recent years. The network is losing several million pounds a week and the difficult decision was taken to reduce the size of the network and to support the remaining network with a subsidy of £150 million a year. I have to point out to the hon. Gentleman that the subsidy committed by his Government was zero.

Nuclear Power

7. What percentage of the UK’s present energy needs would be met by the construction of one medium-sized nuclear power station; and at what estimated cost. (179527)

A single medium-sized nuclear power station of 1.2 GW would provide around 2 per cent. of the UK’s electricity needs. This would be equivalent to about 0.8 per cent. of our total energy supplies. The White Paper on nuclear power published last week sets out why nuclear is the cheapest low-carbon option for electricity generation.

What the Minister’s response actually demonstrates is how deeply flawed the policy is. The reality is that nuclear power is hopelessly uneconomic and, even on the Minister’s own figures, one station will meet only 0.8 per cent. of our energy needs. Is not the reality that it would be much better to invest in energy efficiency and renewables, which would have a much better response in terms of energy policy, and is not what he proposes a white elephant and a red herring?

With respect to the hon. Gentleman, what my reply demonstrated was that I was answering his question. I invite him to read the nuclear White Paper before forming a judgment. Yes, energy efficiency is crucial to energy strategy for climate change and, yes, renewables play a vital part—and will play a bigger part in the future. That is our policy, but we need other energy supply, too. If one day, heaven forbid, the Liberal Democrats were in power, it would be a dark, cold and gloomy place, with their Members huddled around, burning Nick Clegg leadership manifestos to keep warm.

It is possible that zero-carbon nuclear energy might one day save the world from climate change; hot air from the Liberal Democrats certainly never will. After the proposals in the excellent energy White Paper are passed, nuclear power will have to internalise the cost of decommissioning power stations and waste, as it should. However, as I understand it, those rules will not apply to energy producers that produce energy using fossil fuels. Why not?

My hon. Friend is absolutely right to say that the entire costs for the management and disposal of radioactive waste and spent fuel from any new nuclear power stations will have to be paid by the power companies. In terms of a wider strategy to reduce carbon emissions, we need to do many things. The EU emissions trading scheme is vital. Much will depend on a high price for carbon through the development of that scheme and we are pressing for that. Our Secretary of State has also announced a major demonstration project for carbon capture and storage, which surely also shows the way ahead.

Trade Liberalisation (Developing Countries)

8. What discussions he has had with the Secretary of State for International Development on liberalising trade with developing countries. (179528)

All relevant Ministers discuss trade and development regularly, including in meetings of the Cabinet Sub-Committee on trade, during Cabinet and in the normal course of business. Recent discussions have focused, in particular, on the current round of world trade talks, economic partnership agreements and regional trade agreements.

I am grateful to the Minister for his answer. When next he and his colleagues meet to discuss international trade matters, will they agree that the time has come to break the logjam in the Doha round and the economic partnership agreement negotiations by urging our partners in Europe and in other rich countries to take the unilateral step of opening our markets to all low-income countries as defined by the World Bank? If they do that, I am sure that they will have the support of those on these Benches and a great number of non-governmental organisations and other experts in the field. It could be a great measure that would unify the nation and help the world.

With great respect to the right hon. Gentleman, the least developed countries already have access to the EU market, including the UK market, under the “Everything but Arms” initiative. I agree that we need to see progress in the Doha development round. We expect to see revised negotiating drafts of documents, which could potentially lead to ministerial discussions to close the round towards the end of January, or perhaps at the beginning of February. All sides will need to give ground and to show additional flexibility. I hope that the key players—the G4 members and others—will help to ensure that progress is made.

Topical Questions

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

The purpose of my Department is to help to ensure UK business success in an increasingly competitive world. We promote business growth and a strong enterprise economy, lead the better regulation agenda and champion free and fair markets. We are the shareholder in a number of Government-owned assets, such as Royal Mail Group, and we work to secure clean and competitively priced energy supplies.

It is now 100 days since the Government announced changes to capital taxation for business and individuals—plans described yesterday by the president of the CBI as being in “complete confusion”. We now have only 54 working days until the 5 April tax deadline. Yesterday, the Government were accused by a respected trade association of creating the conditions for a false market in stocks because of their indecision. When will Ministers stop dithering, accept that this shambles is damaging British business and make a decision at long last?

Order. Before we go any further this morning, I expect topical questions to be punchy; they should not have so many words in them.

The hon. Gentleman will know that tax matters are the responsibility of my right hon. Friend the Chancellor who, along with my right hon. Friend the Prime Minister, myself and other Ministers, has been listening to the concerns articulated by business. He will bring forward his proposals shortly, but it is not right for the hon. Gentleman to suggest that the fundamentals of the British economy do not remain strong. They certainly do.

T2. The Secretary of State is well aware that Britain’s power-generating capacity is ageing. Many people will welcome the decision to replace the nuclear power stations, but many other power stations also need upgrading. Is he as dismayed as I am to hear that the Government are looking at imposing a windfall tax on power companies? Will he argue against that, and point out to the Treasury that it will do nothing but deprive the energy-generating sector of much-needed investment? Will he tell the Treasury to back off? (179512)

With great respect to the hon. Gentleman, I think that he needs to do his homework a little more thoroughly. The Government have made no such proposals.

T3. May I stress to Ministers that huge increases in energy bills at the coldest time of the year have left my constituents worrying whether they can afford to keep themselves warm? My right hon. Friend the Secretary of State has said that he has ruled out legislation on social tariffs but, given the sudden and surprising double-digit increase in energy costs and the latest Energywatch research into inconsistent and inadequate social tariffs, will he not reconsider setting some sort of minimum standards to protect the most vulnerable citizens? (179513)

With great respect to my hon. Friend, I made the Government’s position clear a little earlier, in response to my hon. Friend the Member for Sherwood (Paddy Tipping). We have not ruled out the action that he has described, but we have not brought forward proposals at this time because the energy companies are working hard to address the concerns that my hon. Friend and others have raised. My basic sense is that we should work with the energy companies to reach a voluntary agreement about the best way forward. However, if we do not achieve that, and if proper and adequate measures are not put in place, we have not ruled out introducing further legislation at some point.

T4. On 20 November, the Post Office announced which sub-post offices in Northamptonshire would be closed. The consultation period closed on 10 January. Is it not a sham to hold a consultation over Christmas and the new year? Do the Government not feel embarrassed about that? (179514)

No, we do not. There is no easy way to undertake the process. The consultation schedule was set out last July, and the hon. Gentleman would have been informed about it. The overall process takes significantly longer than six weeks, as prior consultation is held with the relevant sub-postmasters. Post Office Ltd does its best to take all relevant factors into account in what is a difficult, and often locally unpopular, process.

T5. May I ask the Secretary of State or one of his Ministers to continue joining up the Department’s efforts in respect of manufacturing? The skills agenda from the Department for Children, Schools and Families is to be welcomed, and neighbourhood renewal funding is being changed to workless neighbourhood funding. Will my right hon. Friend the Minister for Competitiveness ensure that the new approach ties in tightly with the aim of the manufacturing sector so that people who have been reskilled have manufacturing jobs to go to? (179515)

I very much agree with my hon. Friend. Manufacturing is a very important part of the UK economy, and it is changing into a high-value, technology-driven sector. New investment has been put in, and the manufacturing strategy has done a good job for us over the past five years. We need to make sure that it continues to do so and to provide manufacturing jobs in constituencies such as his. I am confident that the strategy, and the funding to which he referred, will continue to deliver for our constituents.

Petrol prices have now hit £5 a gallon. When the current round of 2,500 post office closures is complete, how much extra in transport costs do Ministers estimate that vulnerable people, people in rural communities and businesses will have to pay as they travel to their increasingly distant and remote post offices?

Even after the closure programme is over, the post office network will still be by far the largest retail network in the country—bigger than all the banks put together, and more than three times the size of all the major supermarket chains put together. It will have an unequalled footprint across the country in both urban and rural areas.

T6. I hear what my hon. Friend says, and I listened to and read carefully yesterday’s Adjournment debate introduced by my hon. Friend the Member for Hastings and Rye (Michael Jabez Foster). I am pleased to hear that there is an opportunity for local authorities and third parties to consider saving some post offices, but does the Minister accept that six weeks is not long enough? Under the Sustainable Communities Act 2007, we need to explore how to get community involvement. May I meet him to offer some proposals on sensible and rational ways to save that wonderful network? (179516)

I understand what my hon. Friend says about the length of the consultation process. We have received representations about that. We are, however, mindful of the uncertainty that has been hanging over the network for some time. From beginning to end, the whole process will take some 15 months. On his question whether I will meet him, I will of course be happy to meet him and to listen to any proposals that he makes.

T7. The Essex branch of the Federation of Small Businesses, which also serves the London borough of Havering, reports a nine-month delay in the issuing of VAT registration numbers, and I have a constituency case in which a local business man waited 11 months. What hope can the Minister offer that Her Majesty’s Revenue and Customs will ever reach its published target of two weeks? (179517)

As the hon. Lady will be aware, that is a matter for my right hon. Friends in the Treasury, but I accept that those are genuine and proper concerns and I shall ensure that they are addressed to the appropriate Minister.

T8. As the title of the Secretary of State’s Department now includes regulatory reform, is he not somewhat embarrassed that in a four-year period only 27 deregulations took place, whereas at the same time the British Chambers of Commerce identified 600 new regulations? (179518)

I think the right hon. Gentleman is referring to regulatory reform orders, which are only one part of our approach to regulatory reform. If he looks in detail at the further plans that were published before Christmas—I am happy to send that very large volume to him—he will see examples of further measures that we are taking across the whole of government to reduce the administrative costs of red tape and bureaucracy. In that respect, we are beginning to make significant and promising progress.

In his statement last week on energy, my right hon. Friend said:

“the Government will need to be satisfied that effective arrangements exist, or will exist, to manage and dispose of the waste”.—[Official Report, 10 January 2008; Vol. 470, c. 519.]

I can understand how a Government can be assured that effective arrangements do exist, but it is hard to see how they could be sure that a future Government can be satisfied that, at some indefinite stage in future, such arrangements will exist. Will he comment on that?

I think my hon. Friend is referring to a section of my statement that dealt with the subsequent granting of planning permission for new nuclear plant, should any proposals be made. My remarks were framed in the context of the time scale, particularly in relation to long-term geological disposal. As he will know, because he studies these matters carefully, there is now, I think, no dispute about the arrangements for disposal: interim storage coupled with long-term disposal is the right way forward. In that context, I hope that he will reflect further on my remarks and understand the point that I was trying to make.

T9. The Hawthorn road post office in Kettering is a busy, popular and profitable local branch, which is earmarked for closure. Will the Minister urge Post Office Ltd to reconsider its closure decision? Will he also persuade the Post Office to open up the branch’s accounts and share the information with Northamptonshire county council and Kettering borough council, to explore ways in which the branch could be saved? (179519)

As I said in response to an earlier question, I counsel the hon. Gentleman to be cautious about describing his local post office as “profitable” when both central support costs and payments to the agent running the sub-post office are taken into account. On his question about discussions with the local authorities, if they are serious about covering all the relevant costs for several years—if that is how they want to commit local council tax payers’ money—I would certainly encourage Post Office Ltd to talk to them.

Women-owned businesses comprise only 14 per cent. of UK businesses and, shamefully, only 8 per cent. of businesses in my own area, the west midlands, whereas the figure is 30 per cent. in America. Will the Government look seriously at the issue of supply-side diversity, which has become a cultural norm in America and which UK companies can and should be encouraged to promote for good business reasons?

The hon. Lady raises an important point. It is interesting to compare rates of entrepreneurship in the UK and US. Men in the UK are as likely as men in the US to start up a business; women in the UK are much less likely to do so than women in the US. That reflects a long-term policy focus over two or three decades in the United States on encouraging women’s entrepreneurship in the way that she described and in other ways. We will consider the matter carefully before the enterprise White Paper that we plan to publish in the spring.

T10. The Prime Minister is on his way to China today. By what amount do Members on the Treasury Bench expect UK exports to China to increase in the next three years, and what is the Department for Business, Enterprise and Regulatory Reform doing to assist UK companies to increase exports to China? (179520)

I am going with my right hon. Friend the Prime Minister. If the hon. Gentleman will forgive me, my plane leaves in about 20 minutes, so I had better keep my answer short. My right hon. Friend and I are going to China to make the case aggressively for open markets and free trade between the UK and China. We want significantly to support British companies to increase their share of business with China. I do not want to give a figure, for obvious reasons. I think that we should be as ambitious as we possibly can be. There is a very strong case now, as we have good relations with China economically, for building on that and looking forward to more business for British companies in that extraordinarily dynamic economy.