Business, Enterprise and Regulatory Reform
The Minister of State was asked—
Royal Mail Pension Scheme
We estimate that the Government will assume total liabilities of £29.5 billion and assets of £23.5 billion. That would mean the Government absorbing a deficit of £6 billion. This assessment of the liabilities in the scheme and the funding position is based on the most recent trustee valuation, from March 2008. However, we anticipate that the funding position of the scheme could well have worsened since that date, so when we have updated figures from the new valuation, beginning this month, we will finalise our assessment of the funding position of the scheme.
Clause 20 of the Postal Services Bill will allow the Government to take the existing assets from the pension fund into the consolidated fund and spend it that very same year. Is it wise as part of addressing the pension funding crisis to take the existing inadequate assets and use them to rescue the Government’s current deficit, making the problem worse in the longer term?
Our motivation is not about the public sector accounting impact. Our motivation is to give greater security to the hard-working men and women who work for Royal Mail, because the pension fund is an increasing burden for Royal Mail. At the same time, however, if we are to ask the taxpayer to take on those liabilities—I have set out what the scale of those liabilities is—it is equally right that we also give the taxpayer some confidence that the company can be transformed and modernised in the future. It is precisely those two things that are set out in the Postal Services Bill, which was published recently.
Postal workers in my constituency will be greatly reassured by the Government’s commitment to rescuing the pension scheme, but could the Minister tell the House to what extent the deficit of £6 billion is due to contributions holidays by previous employers?
The scheme was in surplus as recently as 2001, so I am not sure that the deficit can be ascribed to contributions holidays. Another factor that right hon. and hon. Members should consider is that the Government have not taken a dividend from Royal Mail for some years, so the most important thing is to concentrate on what we do now. As things stand, with a combination of the pension fund deficit and falling mail volumes, the company is in a very serious position. That is precisely why we have brought forward plans to deal both with the pension fund and with the transformation of the company in the future.
The Minister has just said that the Government proposals would provide greater security for postal workers’ pensions, but can he confirm that clause 19(6)(b) of the Postal Services Bill provides that this or a future Government could waive the pension guarantee and vary the terms of the postal workers’ pensions without the approval of the trustees, who will lose their power to protect the pensions under the provisions of the Bill?
The changes that we propose to the pension scheme will mean that the deficit is handled on the same basis as the pension schemes serving teachers, nurses and civil servants. That will indeed give Royal Mail staff far greater pension security than they get at the moment, when the deficit appears to be increasing year on year.
Can my right hon. Friend say whether the income from the selling of equity and shares in Royal Mail will be used either to reduce the pension deficit or to modernise Royal Mail?
Our intention, through a partnership, is to bring in new investment into the company. We intend to bring in not just investment in Royal Mail, but experience from another European postal or network company that has been through a transformation of the kind that Royal Mail needs, but has not yet gone through. The harsh fact is that if we do not get that investment and experience, the decline in mail volumes will decide the issue for us. As things stand, without the transformation of the company, for each decline in mail volumes of 1 per cent., Royal Mail loses around £70 million. There is therefore an urgent need not only to deal with the pension fund, but to modernise Royal Mail.
Financial Assistance (Businesses)
Banks participating in the Government’s recently announced asset protection scheme have committed to making available £27 billion of additional lending to businesses over the coming 12 months. The value of eligible cases for the enterprise finance guarantee has increased tenfold, from £3 million in the first week of operation to more than £31 million last week.
If the Minister were to join me in my meetings with small businesses in Southgate tomorrow, would he be able to tell them how long the crippling effect of credit insurance withdrawal along the supply chain will continue, and when the planned increase in the flow of credit from the Government’s schemes will actually reach the high streets of Southgate?
The hon. Gentleman is perfectly right to point out the severe problems that many companies are facing as a result of the global credit crunch. Our priority as a Government has been to fix the power failure in the banking system, and we have been taking action to do that through the recapitalisation of the banks last October, and through the actions that we took through the asset protection scheme. That will stimulate extra spending in the economy as well. I can tell his firms that the Government are providing real help to businesses through the enterprise finance guarantee, which will cover over 95 per cent. of all companies, and through the asset protection scheme and the measures that we have taken to get lending going again.
My hon. Friend is absolutely right to say that the Government have taken significant steps to open the process up, but does he agree that the banks and other lenders have not yet properly started to play ball? Barclays are asking a company in my constituency for 9.9 per cent. above the base rate for an overdraft, for example, and the car finance corporation is charging a 30 per cent. annual percentage rate on loans. Those rates are not going to get businesses and customers back to where we want them to be, which is buying and selling.
There is certainly a variable picture out there in terms of lending and of the rates being offered on overdrafts and other credit facilities. The most recent Bank of England lending panel report demonstrated that margins were coming down, however, and that lending was now cheaper than in 2007. There has been some progress, with the reduction in the LIBOR rate, although there is probably more to be done. The Government remain committed to ensuring that we have competitive lending available to UK companies and mortgage holders, and we are focused on delivering that.
Money is not getting through. We have said that again and again, but the Government seem not to be listening. In recognising that there is a management element to the Government’s job, will the Minister tell me what the Department is doing to ensure that he is getting out there, monitoring the process and ensuring that the thing works? It is not working at the moment.
There are two points here. The first is about overall lending, and what the Government are trying to do to stimulate lending in the economy through the actions that we are taking with the banks. I hope that the hon. Gentleman realises that, about 12 months ago, 50 per cent. of the lending to the commercial sector in the UK came from foreign banks. Those banks have not gone bust, but they have gone home. That proportion of lending has therefore disappeared from the UK economy, and our banks are having to work even harder to replace some of that lending. That is why we have taken action through the asset protection scheme and other measures.
On the question of specific Government programmes, I have already set out the progress that we are making through the enterprise finance guarantee. This was the old small firms loan guarantee scheme. We have now upped the qualifying limit from £5.6 million to £25 million, which covers the vast majority of companies in the United Kingdom, and we have upped the limit of loans from £250,000 to £1 million. The guarantee stands at 75 per cent., and more than 1,100 companies that are eligible for the scheme are already having their applications assessed. We are monitoring the scheme weekly through the banks and through Capital for Enterprise. It is up and running, and we believe that it is on target to meet its commitment to supporting £1.3 billion of lending to the UK economy.
The “Real help now” package that the Government have put in place shows their determination to help small businesses, but the banks remain stubbornly resistant to co-operating with what has been put in place. Businesses in my area describe interest rates being held stubbornly high or increased, bank charges being imposed without warning and a requirement for 100 per cent. security despite the fact that loans are covered by the guarantee scheme. Is it not time that we had an independent ombudsman or arbiter that businesses could go to when the banks are not carrying out what they should be doing on their behalf?
We are certainly already monitoring the actions and activities of the banks through the lending panel, so there is a level of scrutiny there. Obviously, we cannot stand in the shoes of the banks that have to make commercial lending decisions on the basis of their assessment and pricing of risk. That is what would be expected of any functioning economy. What we can do, however, and here I agree with my hon. Friend, is rigorously monitor the situation. It is right to say that we need to keep a close eye on the banks; we are doing just that.
What are the Government doing about credit guarantee—in other words, what happens when a firm delivers goods to another firm that subsequently becomes insolvent? The Prime Minister assured me during the Gracious Speech debates that something was being done, so will the Minister tell me exactly what is being done to assist small and medium-sized companies?
We are taking a range of measures to support small and medium-sized companies, which we recognise as the backbone of the economy, so we need to help them get through the recession in the best possible shape. I have already mentioned the enterprise finance guarantee scheme. We are also taking actions through the working capital scheme to shore up credit lines. I know that there have been criticisms from Conservative Members that we have not made further announcements on the working capital scheme, but what we are doing there is guaranteeing portfolios of working capital facilities. These are deals that we are doing with the banks rather than individual companies, but they run into hundreds of millions of pounds. As the right hon. and learned Member for Rushcliffe (Mr. Clarke), who speaks for the shadow Chancellor of the Exchequer knows, these deals are not done in five minutes or even days and weeks, as they are the result of complex negotiations, but they are important to shoring up working capital for companies, and they are in addition to the actions that we are already taking.
The actions taken by the Government so far have been largely defined by, and perhaps constrained by, sections 7 and 8 of the Industrial Development Act 1982, which include the provision to expand or sustain the productive capacity of any industry. Is the Minister happy that those provisions are sufficiently broad and flexible because the construction industry, and particularly the buildings material industry in my area that feeds it, is yet to see the real fruits of the Government’s initiatives? Do we not need some more imaginative action; might not some emergency legislation be appropriate?
Yes, I am happy that sections 7 and 8 of the Industrial Development Act remain fit for purpose: section 7 covers regional assistance and section 8 covers industrial support more generally. In the Second Reading debate on the Industry and Exports (Financial Support) Bill on Monday, we explained why we were increasing the limits relating to section 8 expenditure, which are going to go up to £12 billion if the legislation is passed and with a possibility of their going up to £16 billion. That reflects the fact that the more modern way in which we are providing support is through loan guarantees that have to be scored as expenditure even though they are really a contingent liability. We can provide support under that legislation, and the schemes that we have announced will have as their legal vires that industrial development legislation.
At the last DBERR questions, the Minister told me that he expected that lending figures for companies participating in the enterprise finance guarantee scheme
“will quickly start to build strongly”.—[Official Report, 5 February 2009; Vol. 487, c. 957.]
That has simply not happened and, given the scale of the problem, the numbers the Minister has quoted this morning are a pittance. Is he aware that applicants still face considerable difficulty in assessing the scheme, that the banks are still extremely reluctant to grant moneys under it and that the small and medium-sized enterprises that have been clinging on by their fingertips for months now want substantive help and not platitudes? When will the Government get a grip, stop monitoring and actually manage the situation?
We are both managing and monitoring the situation. The hon. Gentleman has made a number of assertions; let me explain the facts to him. More than 1,100 companies have shown themselves to be eligible to participate in the enterprise financial guarantee scheme, and £115 million worth of loans can potentially be made to them. It will be up to the banks to assess the applications. About 70 per cent. of cases are going through at present, which is quite normal. There is obviously a difference between the number of eligible cases, the number of loans offered, and the drawdown of those loans.
This is still a new scheme, but it is growing. I have already said that in the first week there were £3 million of eligible cases, and last week the figure was £30 million. A big increase is taking place. As I have said, we will continue to manage the process as well as monitoring it, to ensure that it delivers for small businesses.
Three weeks ago, the Government proudly announced what they claimed was a unique agreement with Royal Bank of Scotland and Lloyds, which apparently guarantees that those banks will lend business a total of £27 billion this year. Given the evident and continuing problems for businesses, how will Ministers guarantee that sum this year and, given that they are part-owners of the banks, what penalties could they actually apply if the banks proceeded to default?
The hon. Gentleman has repeated the figures that I announced in my reply to the hon. Member for Enfield, Southgate (Mr. Burrowes). He is right about the commitment of £27 billion of additional lending—£16 billion from RBS and £11 billion from Lloyds Banking Group. We will monitor their delivery of that commitment, just as we are monitoring their progress in terms of lending under the enterprise finance guarantee.
I would like to think that the Conservative party welcomes the fact that we are introducing legally binding commitments as part of the asset protection scheme. We expect RBS and Lloyds Banking Group, as responsible companies, to deliver on those commitments, and I have no reason to doubt their genuineness in wanting to deliver for small businesses. Rather than carping and moaning, Conservative Members should welcome the fact that we have an active Government who are making commitments and ensuring that they are delivered.
The Secretary of State announced in December that the Government accepted the analysis set out in Richard Hooper’s review of postal services and that, to maintain the universal postal service, the Government intended to implement his recommendations. I repeated that statement in the House of Commons on the same day.
The Postal Services Bill has since been introduced into the House of Lords, and received its Second Reading on 10 March. The Bill proposes a new regulatory framework for postal services, enables the Government to tackle Royal Mail’s pension deficit, and ensures that Royal Mail remains in public ownership, while supporting modernisation through a strategic partnership.
Are the comparisons in the report made on a like-for-like basis in terms of prices and the services provided? Does the report not fail to identify either the cause of the pensions deficit or the devastating effect that unfair competition has had on Royal Mail?
The report covers all the issues relating to pensions, pricing and regulation. It is entitled “Modernise or decline”, which is an accurate description of the choice that we face. If we do not act to turn Royal Mail around, the decline in mail volumes will decide the issue for us. For every 1 per cent. decline, the company loses £70 million. There has already been a decline of 7 per cent., and a further 7 per cent. decline is forecast. That demonstrates the urgent need to transform and modernise the company. If we do not take that action, Royal Mail will end up cutting services, which is not a solution that we want it to apply to its current problems.
In 2007, 637,000 days were lost at Royal Mail as a result of industrial action. That is 60 per cent. of the number of days lost to strikes in the entire United Kingdom. Does the Minister accept that the Communication Workers Union must become far more realistic about modernisation if industrial relations at Royal Mail are to improve?
Richard Hooper identified industrial relations as a significant problem for the company, and it is not just the industrial action and the strikes that have taken place, but the regular threat of industrial action—such as, in recent months, over changes to the pension scheme and the closure of a number of mail centres. A fresh start for industrial relations is, therefore, needed in Royal Mail, and I would say to the CWU that the current relationship is not what it should be and that bringing in a new partner may present a possibility of improving industrial relations, given their current very poor state.
Will the Minister confirm that the argument in previous answers to questions has been that the Government will privatise Royal Mail and a foreign firm will come in? Can he explain to me how it is that now that we have an economic tsunami lapping on every shore, in Holland, let us say, Dutch TNT can find money that nobody else can find? If the economic recession is hitting everybody, where is the magic wand in Holland to find the money that we cannot find here?
I have great respect for my hon. Friend, but he is not right to say that we are privatising the Royal Mail. The Bill clearly says that we will keep Royal Mail in public ownership, so it is simply not true to say that we are privatising it. He questions why the Dutch postal service may be in a better position than Royal Mail; that is precisely because it has carried through the transformation and modernisation that Royal Mail has not yet managed to achieve. I cannot comment on any particular potential partner, because there has to be a proper process to get the best agreement for Royal Mail and the taxpayer, but if there is a partnership with another European postal company, I remind the House that liberalisation of postal services will be introduced in 15 members of the European Union by the end of next year. That will also give Royal Mail the opportunity to be a major European player, and that is not an opportunity that we should shy away from.
I welcome the clauses in the Postal Services Bill that allow a levy to be placed on the large private mail operators that are not fulfilling the universal service obligation to compensate Royal Mail, which is fulfilling the USO. There is an urgent need for those clauses to be implemented, because Royal Mail is facing unfair competition at present. Will the Minister give a commitment to a rapid introduction of those clauses?
Those clauses, like all the other clauses in the Bill, will be implemented if the Bill is passed by Parliament, but the hon. Gentleman raises a very legitimate point with regard to regulation. That has been a subject of considerable controversy in this House and more widely, and we propose in the Bill to put at the heart of the regulatory system the maintenance of the universal service—of the one price goes anywhere, six-days-a-week universal postal service. That is the foundation of our postal system. We want to legislate to maintain that, not to leave Royal Mail alone to have its finances eaten away by the fall in mail volumes, which is costing it £70 million for every 1 per cent. of decline. That is no future for Royal Mail, but the Bill that we have presented is.
The Government seem to have accepted the Hooper review in total. The official Opposition have accepted, and are supporting, the sale of some shares. Are they also supporting other measures in the review, including regulation—
Wholesale broadband is closely regulated, and the market is regularly reviewed by Ofcom. That ensures that the UK broadband market remains competitive at the retail level. I can tell the House that there are more than 400 suppliers of broadband services.
I note the Minister’s reference to retail. Given that people up and down the land are facing great and real financial hardship, is it not time that the broadband telecoms market was opened up to true competition—not fake competition—so that the current pretty poor service levels can be driven up and customer prices can be driven down?
The hon. Gentleman may know that a number of companies offer wholesale broadband products and a series of other companies that are in a position to do so are choosing not to do so for commercial reasons. That is one of the reasons why we have made sure that the industry is closely regulated. In those parts of the country where there is considerable competition some of the price controls that have been in place have been relaxed. In other areas, where competition is not as strong as we might like, we have kept that regulation in place. He will know from the work of Lord Carter that this issue is being closely examined in government, with industry and with a range of other players. An interim report has been published and further work is in hand. The hon. Gentleman will be able to judge, with the rest of the House, the fruits of that further work towards the summer.
Surely my hon. Friend will agree that the problem is not the number of competitors in the market, but the uptake. Surely we should be examining what is happening in cities such as Glasgow, which has the lowest uptake of broadband in the country, rather than the number of people who are in the market.
With respect to my hon. Friend, I think we need to look at both issues: the level of competition in the market; and how we can ensure universal access to broadband services and speed up broadband access. He raises an important point, which deals with one of the issues reflected on in the interim report that was recently published by Lord Carter. The issue is part of the further work that is being done, and my hon. Friend, along with other Members of the House, will be able to judge our progress in that work towards the summer.
Does the Minister agree that whether in telecommunications or, indeed, the banking world, the best form of regulation is open competition?
With due respect to the hon. Gentleman, I think that competition is a good thing but that, as he knows, or ought to know, only too well as a result of the economic difficulties that our country faces, there is, on occasion, a strong role for regulation to play too. On the particular issue that we are discussing, I should say that where there is real competition, we have been able to relax price controls, but where there is not strong competition, we have kept those controls in place.
In his discussions with Ofcom and the providers, will the Minister ensure that the needs of businesses working in rural areas are met? High-quality broadband is essential in rural areas and sparsely populated areas, because people need to compete on a level playing field.
I accept that there is an issue about ensuring broadband access in rural areas, as in the rest of the country. As I have said, the question of universal access is one on which the Government are very much focused in discussions with Ofcom, the industry and other stakeholders. An interim report was published by Lord Carter, further work is under way and the House will be able to judge our progress in that sense towards the summer.
I talk to people in the automotive industry on a regular basis—indeed I have received three texts from companies in the past 30 minutes. The industry-led, BERR-facilitated new automotive innovation and growth team’s report on the future of the UK automotive industry is expected in early May.
People have not stopped driving cars; they have just stopped buying them, because it is difficult to access finance for buying or, indeed, leasing them. Way back, on 27 January, the Secretary of State said that he was setting up a taskforce, to be led by the new trade Minister, Lord Davies. It was supposedly going to work out how consumers could access finance again to buy all these cars and get the car purchase market going. Nothing has been heard of that taskforce, so when are we going to hear the outcome of the work supposedly being done by Lord Davies on this car financing taskforce?
People have not stopped buying cars, but car sales have fallen. February sales were down 22 per cent. in the UK, 48 per cent. in Spain and 24 per cent. in Italy. There is a problem in the automotive sector, and that is one of the reasons why we announced the automotive assistance programme. We are still in discussions with the Bank of England and the Treasury on how car finance arms might be able to access some of the support that is available through Government programmes, but every day newspapers contain good deals on cars, including 0 per cent. finance and cashback in many cases, so finance deals are available. Clearly, we want to ensure that we support a strategically important industry such as the car industry, which is going through a very difficult time. We are doing that and we will continue to look at what further support we might be able to make available.
The Minister must realise that for tens of thousands of people in the automobile industry, the Department is all talk and spin, but no action. He says that Lord Davies is still studying the proposals on car finance that we put forward as a policy suggestion months ago, but when will we get a result? As Lord Mandelson has indicated his sympathy for that policy, is it being blocked by the Bank of England or the Treasury? When will a decision be taken on this important matter?
We all agree about the importance of ensuring that the car industry has support in these difficult times. Along with the construction sector, the automotive sector has borne the brunt of the recession, in addition to what has happened in the banking system. It is difficult to point to other sectors that have seen quite such dramatic falls, but a car is a big discretionary purchase.
The right hon. and learned Gentleman should not pretend that car finance assistance would be a panacea and that if funding is made available through the banks to car finance arms, everyone will go out and buy cars. We will continue to have discussions about whether we can do something that represents value for money for the UK taxpayer that will assist car finance arms. Some of those finance arms are already providing good deals, however, and he knows that.
The focus of our Department is on working with business and employees during these difficult economic times, and on ensuring that British business is as well placed as possible for the future.
This week, the Federation of Small Businesses, the Communication Workers Union and Unite came together to launch the manifesto for a post bank. At a time when the main commercial banks, with the honourable exception of the Co-operative bank, are held in increasing contempt by their customers, and at a time when the Post Office remains one of the most popular and trusted institutions in the country, is not this an idea whose time has come, and will the Minister support it?
I attended the launch of that pamphlet a few days ago. It is right that if the Post Office is to survive and prosper, it needs to look to new areas of business. It cannot survive on nostalgia or by ignoring the changes in people’s lifestyles, such as using the internet and direct debits. The Post Office is already expanding its banking services: it is the leading supplier of foreign exchange in the country and it supplies credit cards, insurance and savings products. I agree with my hon. Friend that an expansion in banking and financial services is a very important part of the Post Office’s future.
In relation to the European Investment Bank loan scheme, will the Minister take action to ensure that funds coming from the EIB to banks with a presence both in Northern Ireland and the Republic of Ireland will be made available to businesses in Northern Ireland? As he will know, two of the main banks are owned by the Republic, so this is a particular problem for the Province. That money needs to be made available to businesses in Northern Ireland.
The hon. Gentleman is right to point out the action that the Government have taken to get EIB support through the banks for further loans to small and medium-sized enterprises. It is right that those loans should be available throughout the United Kingdom and my understanding is that that will be the case. Of course, EIB loans are at advantageous rates and it is right that they should be available in Northern Ireland, just as they are in the rest of the UK.
My hon. Friend is absolutely right to draw attention to that danger. The recession must not be an excuse to deny employment rights to some of the most vulnerable workers in the country. That is why we have changed the law, bringing in tougher penalties for employers who do not pay the minimum wage and better arrears for employees who are denied the minimum wage. We are also putting in extra resources, including a £1 million campaign that was recently launched to inform agency workers of their basic employment rights, including wages, paid leave and so on. It is very important that we come through this recession not only by helping business but by ensuring that the most vulnerable workers do not pay the price.
Last week, the Minister held a seminar in his Department for businesses in the car industry and for banks to begin to explain how to apply for EIB loans that were first announced by the Government last September. Can he now tell us how many applications have been received and how many more weeks or months it will be before anybody receives any of that support?
Just to correct the right hon. and learned Gentleman, let me say that the purpose of the seminar was to explain the Government’s automotive assistance programme, which covers loan guarantees to companies that are accessing the EIB clean transport facility as well as the Government’s scheme more generally. He knows that, but he is just trying to make a debating point. DBERR has been supporting applications to the EIB. My understanding is that a number of companies are at an advanced stage in discussions with the EIB. I do not think that it would be appropriate for me to name those individual companies, because the negotiations are commercial in confidence, but he will be aware of reports that companies have been making those applications. We hope that next month the EIB will approve applications from a number of companies.
It is true that that is an issue. Many young people want to be famous and there has been a pattern of exploitation, with people setting up in hotels and launching one-day casting sessions. Last year we brought in a new cooling-off period to try to protect people against such activities. We said at the time that if that provision needed to be reviewed we would review it. We have continued to receive complaints, so today we are publishing a consultation document on banning the taking of up-front fees so that young people and their families are not exploited. We do not want to tread on anyone’s dreams and hopes, but we also do not want to see people exploited because of them. That is why we are taking this action today.
It is true that the issue has been raised with us, and of course we will consider anything that we think can help people who are unemployed or in economic difficulty. There is a significant contrast between how this Government will respond to this recession and how the previous Government abandoned the unemployed. The previous Government left the unemployed with only a benefit cheque to keep body and soul together, and gave them no real help to get a second chance. In contrast, this Government will stand by people who are losing their jobs.
I have received a number of complaints recently about mobile phone companies and cashback offers. Is the Minister aware of the problem? If so, is he planning on taking any action?
I can tell my hon. Friend that we are aware, anecdotally, of concerns about the behaviour of some mobile phone companies in that regard. Those concerns have been expressed in letters sent directly to Ministers and in questions raised by Members of Parliament. This is one of the matters that I have discussed with Consumer Focus, the new consumer body, which is doing some work on the problem in tandem with Ofcom. I look forward to discussing with Consumer Focus the results of that work, which we are expecting shortly. We will then consider what else we can do to help.
Are Ministers aware of just how angry businesses are at the Department’s failure to convey information to them? On 12 November, I wrote to the Secretary of State on behalf of a constituent company, asking for information about business loans. It is now 19 March and there has been no answer, despite three further letters, six phone calls to the Department, and a letter to Lord Mandelson last week saying that, if he did not answer, I would raise the issue in the House of Commons. This is the second time in three weeks that I have raised a similar matter. On one occasion, staff at DBERR were not even picking up the phone to answer inquiries because they were in such chaos.
When will something be done? If the Government cannot get information to companies out there, it is no wonder that absolutely nothing is being done. All we are getting is just a lot of talk, and no initiatives are working at all.
With the greatest respect to the hon. Gentleman, I shall look into the specific case that he mentions and come back to him. However, I do not accept his broader point about help not getting through to businesses, and I shall use the region in which his constituency is based, the east of England, as an example. More than 8,000 businesses in that region have been able to defer their business taxes in the past four months, while across the UK as a whole almost 93,000 businesses have been able to have business taxes totalling some £1.6 billion deferred. That is just one example of the real help being given to businesses at the moment, but as I said, I shall look into the specific case that he has raised and come back to him.
My hon. Friend will be aware that we got very close to an agreement. In the words of Pascal Lamy, some 75 per cent. of the conclusions were reached last July, but we have been waiting for a new US Administration to get their new trade negotiators in place. Similarly, we have been waiting for elections to be held in India and elsewhere. We hope to use the G20 summit in three weeks’ time to begin discussions again about how we can finish the negotiations on the Doha round. One thing about which the Prime Minister is absolutely and quite rightly clear is that any descent into protectionism, as happened in the 1930s, will cause further problems for our economy and for the global economy. That is why we are devoting so much attention to trying to make progress in the Doha round. That will be an issue for the G20 and for the G8 too.
Electoral Commission Committee
The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—
The Electoral Commission’s 2004 report entitled “The Age of Electoral Majority” concluded that there was insufficient justification for reducing the voting age to 16. The commission has since refocused its activities on the objectives of, first, regulating party and electoral finance and, secondly, delivering well-run elections. It believes that issues such as the extent of the franchise are matters for Government and Parliament to decide.
I am grateful to the hon. Gentleman for that answer. He will be aware that the Electoral Commission said that it would look at the matter again within five to seven years, so does he agree that it is time for the commission, independent of political influence, to look at the subject? Now that we have managed to allow young people to use this Chamber, although many Opposition Members wanted that not to happen, is it not time to consider young people a bit more than we have in the past?
It is indeed true that in 2004 the Electoral Commission said that it would revisit within five to seven years the case for lowering the voting age, but as I have just explained, the commission has since refocused its efforts. The refocusing is not in any sense an abrogation of its responsibility, but follows a review of the commission’s activities by the Committee on Standards in Public Life. The refocusing has been welcomed by the Government and the Committee.
Does my hon. Friend accept that the Electoral Commission is right to refocus in that way? Like most Members, I regularly visit schools in my constituency and hold question-and-answer sessions with fifth and sixth formers. They are very interested in a number of subjects, but none of them is the slightest bit interested in having the vote at 16.
I am grateful to my right hon. Friend. Most of the responses to the consultation held in 2004 supported lowering the voting age. However, the commission found that more general opinion polling suggested strong support for keeping the current minimum, and that young people seemed divided on the issue.
The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—
Churches Conservation Trust
In 2009-10, the Churches Conservation Trust will receive just over £4.5 million grant in aid from its co-sponsors, the Department for Culture, Media and Sport and the Church Commissioners.
I am grateful to the hon. Gentleman for that reply. Will he join me in paying tribute to the Churches Conservation Trust, in particular for its work in Shropshire looking after nine churches and also Longford chapel in my constituency, near Newport? While I note the grant, will he also join me in recognising that there are real financial pressures on many churches? Churches help tourism and promote culture and heritage in counties throughout the country, and in Shropshire in particular, so will he speak to the Secretary of State to see whether that grant is sufficient to keep these churches running?
I am grateful to the hon. Gentleman for mentioning the Longford chapel near Newport. He might have added Stirchley St. James and Adderley St. Peter, which are in his constituency, as I understand that they, too, benefit from the trust. His point is perfectly right. The Churches Conservation Trust is 30 per cent. Church and 70 per cent. Government funded, and it is working hard to secure its financial future by widening its funding base. I take his point that the Department for Culture, Media and Sport grant was frozen in 2001 until 2008. There has recently been a small cash increase of 1.8 per cent., but it continues to be reduced in real terms. We welcome that contribution from the state, but it is not sufficient.
Given the continuing cut in DCMS support for heritage, especially for cathedrals and churches, will the hon. Gentleman take great care to ensure that the Church Commissioners maintain their financial aid? The Churches Conservation Trust is an excellent organisation. Does he share my enthusiasm for its 40th anniversary celebrations and its “Birthday bells” appeal, in which more than 70 churches across the country rang their bells to celebrate those 40 years? Does he also agree that people who do not like church bells should not buy a house near a church? “Ring out, wild bells”, Mr. Speaker.
I am grateful to the hon. Gentleman for those comments, and I celebrate with him the 40th anniversary to which he referred. On the Church Commissioners’ involvement, the present financial difficulties do not affect churches’ expenditure plans for the next few years, so the Churches Conservation Trust’s grant from the Church Commissioners is safe in our hands.
Church representatives have been in regular contact with the Treasury on that matter. The latest development is the agreement reached by the European Council of Finance Ministers on 10 March that all member states will have the option to apply permanently reduced VAT rates to a number of goods and services. I very much regret that the repair of places of worship is not on that list of goods and services.
I agree entirely with my hon. Friend. One has to bear in mind that the former Chancellor of the Exchequer, now Prime Minister, agreed effectively to reduce VAT on church repairs to 5 per cent. until 2011. The campaign by Members in this House will be to maintain that derogation well after that date. I am sure that right hon. and hon. Members will add their weight to it. In particular, may I thank the hon. Members for Vale of York (Miss McIntosh) and for The Wrekin (Mark Pritchard), my hon. Friend the Member for Wirral, South (Ben Chapman) and others who are present who have contributed to and supported the campaign? I also thank those in the Church of England who have campaigned so arduously. I invite parishes up and down the land to make use of the derogation scheme already in operation.
I thank the hon. Gentleman for his kind words, and for raising the profile of parish churches in rural areas. Now that we have established the derogation, and the broader principle of lower VAT on other goods and services, can we not all unite behind the campaign to persuade the Prime Minister and the Chancellor of the Exchequer to take the argument to Europe, so that they can ensure that the derogation affects churches across the European Union? We must unite behind that worthwhile cause.
I am grateful to the hon. Lady for her comments, and I would certainly support any campaign that the Prime Minister and the Chancellor might wish to take to Europe, bearing in mind that it took six years to get this far, and that the process was extraordinarily complicated. As my hon. Friend the Member for Wirral, South (Ben Chapman) said, at the last moment, it was decided in Lisbon to throw in toll bridges; they are to be covered, but not VAT on church repairs, which is quite remarkable. I hope that that is not a reflection of how the European Union looks upon the Christian community throughout the Union.
Does the hon. Gentleman accept that many of us are extremely angry at the attitude recently taken in Europe? Does he also accept that at a time of unemployment, it is crucial that church buildings can be repaired, not only because that is intrinsically important, but because that work offers employment to craftsmen and others?
The hon. Gentleman makes a fine point, because the work is artisanal—if that is a word that we can put in Hansard—and helpful for local communities. The essential message that this House should give the parishes is to encourage them to undertake those church repairs, and to collect the VAT reduction. It is important that the scheme is taken up before 2011, so that, with the grace of this House, it can be continued after that date.
Church of England (Disestablishment)
In July 2007, the Church welcomed the Government’s reaffirmation of their commitment to the position of the Church of England, which is by law established with the sovereign as its supreme governor. No assessment of the kind that my hon. Friend mentions has been made.
Archbishop Rowan recently said that it would not be the end of the world if the Church of England was disestablished, although disestablishment should not be on the agenda at the moment. Notwithstanding those wise remarks, would my hon. Friend agree that if an assessment of financial implications were undertaken, it would be highly likely to find that the Church’s inherited financial commitments greatly exceed its inherited financial resources?
I am grateful to my hon. Friend, who raises a pertinent point on the disestablishment of the Church. He referred to the comments made by the Archbishop of Canterbury. I welcome the Archbishop of Canterbury’s intervention on the financial crisis; he added a moral dimension to the debate on the economy, along with the Archbishop of York. Although his comments on disestablishment have been given wide credence, he also said that he would be concerned if there was to be disestablishment.
On the specific point made by my hon. Friend, the financial implications of disestablishment would be a matter of discussion between the Government of the day and the Church of England during the preparation of the necessary legislation. The question of the financing of the Church and its financial outcome would have to be fully debated by the Government of the day, Parliament and the Church of England.
As a supporter of disestablishment, may I ask the hon. Gentleman if he would at least ask the Church Commissioners to undertake the financial assessment to which the hon. Member for North-West Leicestershire (David Taylor) referred, and look at the Churches in Wales and Ireland, which disestablished but which do not appear to have been disadvantaged financially as a result?
I am grateful for the hon. Gentleman’s comments and for his statement that he believes in a disestablished Church. The question that my hon. Friend the Member for North-West Leicestershire (David Taylor) asked related to financial commitments, which far outweigh the total inherited resources of the Church of England. In response to the question about whether we ought to undertake a study, we should not put the cart before the horse. We should await any decisions that the Synod may make before we debate the matter and its financial implications. However, disestablishing the Church would affect every parish in the country, and its allegiance to the Crown and to the Church, and is a step that would be taken only after many years of consideration.
Electoral Commission Committee
The hon. Member for Gosport, representing the Speaker's Committee on the Electoral Commission, was asked—
I thank my hon. Friend for that reply. I am rather disappointed, because I am sure that he is as concerned as I am, and as everyone else in the House who worries about democracy is, about the comments made a few years ago by a judge who said that our standards were those of a banana republic. In particular, will my hon. Friend raise again with the Electoral Commission and with the Government the need for individual registration, rather than household registration, which would go some way towards solving the problem of electoral fraud? In addition, will he raise the fact that postal voting on demand has been shown—this has been commented on on many occasions—to be an easy route to fraud in elections?
Occurrences of electoral malpractice are rare, but it takes only a small number for confidence in the voting system to be seriously damaged. The Electoral Commission takes the view that postal voting should be made more secure, rather than withdrawn, and it very much welcomes the commitment by the Government to introduce provisions to introduce a system of individual electoral registration in Great Britain. The commission has argued for that since 2003, and it believes that the system should be modernised and strengthened by introducing individual electoral registration.
I am sure that the hon. Gentleman will be aware that in certain community groups, there is considerable confusion as to whether people are entitled to vote, particularly because some of them are entitled to vote in local elections, but not in general elections. Is it on the commission’s agenda to do more to educate people about the circumstances, particularly in relation to their immigration status, in which they are allowed to vote?