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Topical Questions

Volume 489: debated on Thursday 19 March 2009

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.

T2. Only yesterday, the Minister for Employment Relations and Postal Affairs warned that the recession should not be used as a reason to exploit vulnerable workers. Many of us welcomed that warning, but can he tell us what his Government are doing in practical terms to ensure that that does not happen? (264490)

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.

T5. Unemployment in this country is rising at twice the rate of that in the rest of Europe. The TUC and the Federation of Small Businesses have submitted a proposal for a short-time wage subsidy and in February the Prime Minister said that he was considering it. Can the Minister tell us when it will be introduced?

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.