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Automotive Industry

Volume 490: debated on Thursday 26 March 2009

6. What recent discussions he has had with the Secretary of State for Business, Enterprise and Regulatory Reform on assistance for those on short-time working in the automotive industry. (266529)

The tax credit system is particularly effective in delivering immediate help to families whose income falls—for example, as a result of short-time working. We have worked closely with the Department for Business, Enterprise and Regulatory Reform on the Government’s automotive assistance programme.

In a previous exchange, my hon. Friend the Member for Chorley (Mr. Hoyle) mentioned the need for wage compensation for those on short-time working. In Stroud we have worked up quite a sophisticated training package with both Delphi and Renishaws, and I thank the South West of England Regional Development Agency, Gloucestershire First and Unite trade union for that. The missing link is the need to recognise that people are putting their own time and money into the training package. If the Government could provide some additional funding for that, that would be important. I know that there is a paper before the Cabinet. May we have some clarity and some progress on this?

I am grateful to my hon. Friend and he is right to draw attention to the range of measures that are in place to support the automotive industry. I point out to him again the benefits of the tax credit system—for example, for someone who is earning £400 a week, with two children. If their income falls by £40 a week, perhaps as a result of short-time working, the tax credit award could well go up by £15 a week. So there is real and immediate help from the tax credit system to people in the position that my hon. Friend describes. We are looking at other options. We are looking, for example, at the possibility of a wage subsidy scheme that we have seen elsewhere, to see whether that could add to the real help that we are already giving. The car industry is making good use of the Train to Gain support of up to £100 million, which my hon. Friend mentioned. We are giving the help that is needed.