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Queen's speech debate

8 December 2008

Tony Baldry (Banbury) (Con): To be able from time to time to congratulate a Member on a maiden speech is one of the genuine privileges of being in this House, and I think all Members will agree that we have just heard an outstandingly good maiden speech. The hon. Member for Glenrothes (Lindsay Roy) is clearly rooted in his constituency, and his experience comes from being rooted in it. It was a witty speech, and I say to the hon. Gentleman that if he can make colleagues in this House laugh occasionally, he will be more than halfway to holding their attention. I am sure we will hear a lot more from the hon. Gentleman in the future.

The hon. Gentleman and I share two things at least. The first is a love of the Union. My mother is a Scot; her name is Oina Paterson. Secondly, the hon. Gentleman and I are both constituency neighbours of the leaders of our parties. That can sometimes be good news, but it can on occasion mean that one really has to check the line to take; otherwise, we can find ourselves saying to every inquiry, “I do not do surveys,” if we do not want to have embarrassing discussions with the Whips as to why we appear to be taking a somewhat different line from the leader of our party.

We all look at the Queen’s Speech from the perspective of what it says to speak to the condition of our own constituencies. Interestingly, the proposed subject for today’s debate is employment, universities and skills and housing. We have heard very little about employment, other than what the Government intend to do to reorganise the Learning and Skills Council and other such things; they are just reorganising the furniture of the machinery of government. The recession is hitting the M40 corridor with some vengeance. Last week, Aston Martin announced that it was making a third of its work force redundant at Gaydon, and Honda announced that it was looking for a buyer for its Formula 1 team at Brackley and that if it did not find one, it was simply going to pull out and close altogether.

A vibrant specialist, high quality motor racing industry has always been based along the corridor from Longbridge to Cowley, which goes up the M40, providing highly
skilled jobs. That is reflected in the fact that Banbury is home to excellent companies such as Prodrive; indeed, when the Queen and the Duke of Edinburgh visited Banbury the other day to celebrate the 400th anniversary of the borough of Banbury’s having received a charter, Prince Philip, unsurprisingly, visited Prodrive. So, it is a matter of concern when high quality, specialist automotive engineering jobs such as those disappear in such large numbers. I pray to God that Honda finds a new buyer, because it generates many excellent supply jobs not only for itself, but throughout the local economy. It will be incredibly bad news if that starts to unwind.

The M40 corridor is not only losing jobs in high-tech manufacturing, as we saw—again this happened last week—with what happened to the Alden Group, a printing business that was based in Oxford, but is now based in Witney. It was a family business going back six generations; it was second only to Oxford University Press. It had been sold by the family earlier this year to a German company as a vibrant, strong going concern, but last week the administrators were called in. I do not know the exact details, but I would be willing to speculate that it was not because of any inherent weakness in the Alden Group. I suspect that, as with many companies, a hedge fund or some other organisation in the new company’s structure found itself in financial difficulties, that necessitated a fire sale, its investments were undermined and unwound and that lead to the loss of jobs.

The recession is already hitting the M40 corridor, but research by the Local Government Association tends to suggest that counties such as Oxfordshire will be hit far worse by this recession than by any previous one and that Oxfordshire will be hit far worse than many other parts of the United Kingdom, not least because of the large number of jobs in Oxfordshire that depend on financial services. The jobs of people who travel to London, Reading and other financial centres on a daily basis may start to unwind. Such people will never have expected to have been out of work or to have lost their jobs.

What help will such people receive? They will go to Jobcentre Plus and they might be eligible for jobseeker’s allowance, and I wish to make two points on that. We have heard a lot today about training—Train to Gain, adult training and other types of training. When people become unemployed, they often want to acquire new skills, perhaps to find other opportunities in the world of work, but one of the perversities of claiming JSA is that people cannot train while doing so. The other day, I learned of a constituent of mine who had been made redundant and who had decided to use his savings to train to become a driving instructor. He discovered that because the job centre did not consider him as being available for full-time employment, he lost his JSA, so he was doubly hit. I hope that Ministers will examine the ability of those who are made unemployed to find opportunities to train without losing their benefit.

Many people who have skills will want to contribute those to the community by doing voluntary work while they are looking for work, but they, too, find their claims for JSA undermined. I say to Ministers that there is a difference between the welfare reforms that the Government are introducing in the Queen’s Speech, which seek to get those who have never been in work into the world of work, and the system in respect of people who have been in the world of work, desperately want to get back into it as quickly as possible and want to make a contribution to the community or to acquire new skills while they are unemployed—for the shortest period of time. Our system must recognise the contribution and aspirations of those who have been out of work and want to get back into it as quickly as possible.

For many of those who lose their jobs, life will be an enormous shock; it will be very dislocating, particularly if they have been working in other parts of the country, such as London. One thing that I hope we can do in Oxfordshire—I am discussing this with Oxfordshire county council and the Oxfordshire Economic Partnership—is set up informal jobs clubs in Banbury and Bicester, whereby people who have lost their jobs can come together to take strength from counselling and the experience of others, and can have the support of outreach workers from Jobcentre Plus and the LSC—until it disappears. Why on earth, yet again, should another bit of the machinery of government be abolished just when it might be helpful? Such clubs could also provide people with access to intelligence about what might be happening in the labour market. In short, we should make it clear to them that the community wishes to do everything that it can to support them and get them back into the world of work as speedily as possible. Each and every one of the unemployment statistics is an individual person who has a family and who has individual ambitions and aspirations. Getting such people back into the world of work as speedily as possible is the collective responsibility of us all.

The economy of my constituency is almost entirely dependent on small and medium-sized businesses. What I find so unbelievably frustrating about this Government is not only that they are strong on rhetoric and headlines, but when one starts to dig into the headlines, one finds that there is just no substance. In the pre-Budget report, the Chancellor of the Exchequer devotes a whole section to “Supporting business”, in which he makes the following acknowledgment:

“Businesses are facing an exceptionally challenging economic climate with uncertainty over the short to medium term.”

He then goes on to give some indication of the help that the Government are supposedly giving to small and medium businesses. Measures to help those firms facing credit constraints include a new small business finance scheme to support up to £1 billion of bank lending to small exporters, a £50 million fund to convert business debt into equity and a £25 million regional loan transition fund. On the surface, that is all good stuff, so I tabled some parliamentary questions to the Treasury, asking how small businesses might access those funds. All those questions were transferred to other Departments, so they will, I hope, be answered in due course.

Not surprisingly, however, it was not long before I started to get letters and e-mails from businesses in my constituency saying, “Hey, we’d like to know how to access this money and help, because no one is telling us where to go, and wherever we go, we’re told to go somewhere else.” For example, the director of a marketing company in my patch, which had 17 employees in September, e-mailed me to say:

“On the 25th November the chancellor announced a £1 billion small business finance scheme designed to help struggling companies gain credit during these difficult times. This whole scenario started when I tried to find out who would be managing the fund and what the route to the fund was. Firstly I contacted Banbury Chamber of Commerce and they...suggest I contact Business link. This I did at the Thame office. They had no knowledge of the fund and couldn’t help. I then had a call from the Chamber saying the funds were being managed by Regional Development Agencies.”

Over the past few days, my office and I have been trying to discover just where these funds are, and it is the most extraordinarily frustrating experience. The pre-Budget report would tend to suggest that some of these funds are being managed by the RDA. I telephoned the South East England Development Agency, which covers Oxfordshire, and I asked how small businesses could access the new small business financial scheme designed to help struggling small companies, and it said that it did not really know anything about it and suggested calling Business Link. So the next day, we asked the same question of SEEDA, and we were again told to call Business Link, but given a different number. We were told that if the business were eligible, Business Link, which is funded by SEEDA, could give advice on how to apply. So we called Business Link, and it said that it does not give funding directly, only advice and information. It also said that it had no information about the new funding, but it would do some research and ask a colleague to call me. Today, I received an e-mail from a client service representative from Business Link in London, which states:

“I do not have any substantial information on the new funding scheme for SMEs, and will send you any information I receive from our research team. They will not be able to give me a response by Monday, but I will contact you on Tuesday...to update you.”

Two weeks after the Chancellor purportedly produced a package of measures to help smaller businesses, no one in the machinery of government can explain to a Member of Parliament how any small or medium business in my constituency can access any of that money. That is a disgrace. Businesses all over the country are bleeding. They are desperately short of credit and in need of help and support. It is therefore unacceptable that no one can explain what they should do.

Then there is the whole issue of the scrapping of the learning and skills councils. Just as businesses in my constituency started to understand the Heart of England training and enterprise council, this Government scrapped it, just after they came to office, and set up the learning and skills councils. I have lost track of the number of times the LSC for Oxfordshire has changed—it has moved headquarters, its remit changed, and its regional operation has changed, so that at one point it included Milton Keynes and then it did not. At one point, people had to ring somewhere in Kent to discover what was going on, and then they had to ring Abingdon. That is a nightmare for small and medium businesses.

People are now beginning to understand what the LSC does, so of course it is now being scrapped and we are to have a new skills funding agency. That will be dependent on parliamentary approval in the children, skills and learning Bill, so it will not come in next week. There will therefore be a hiatus, just at the time when people need to know where they can get help. The LSC will be in its death throes and key staff will doubtless be leaving to look for other work. Until the Bill is passed, we will not know where the skills funding agency will be based, how it will be organised and how people will be able to access it.

The Gracious Speech provides nothing that will assist businesses in my constituency. For most of them, their main concern is getting access to credit. They find it frustrating that the banks, which have received very large amounts of money from the taxpayer, do not appear to be advancing credit, notwithstanding the exhortations of the Government. The Government do not seem to be taking any cognisance of the fact that credit in the economy has fallen close to zero, which is the lowest level in nearly 30 years. Not surprisingly, the CBI says that the number of firms reporting reduced and withdrawn lines of credit is going up every day. Instead of lending to businesses, the banks are cutting down their balance sheets. If everyone does that at the same time, the recession will clearly get deeper.

I hope that the Government will reconsider a suggestion made by the Opposition. I find it objectionable that the Government’s only mantra is to go around shouting that everyone else is doing nothing. It is the Government who are doing nothing apart from publishing press releases, because the schemes are not coming. They say that they will make credit available, but perhaps they ought to take notice of the national loan guarantee scheme that we have proposed, which would underwrite lending from the banks to British businesses for a commercial insurance fee, passed on by the banks. Such a scheme would properly protect the taxpayer. Banks would be able to use the scheme’s guarantees to underwrite a significant proportion of any new loans to businesses, so they would not be reckless loans. In that way, we would ensure that the markets would start moving again.

The Government must start to do something fairly speedily because it is important that small and medium-sized businesses get going at this time. The construction industry, of course, is an important part of that. As the Minister responsible for housing, the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright), is here, I want to take a couple of minutes to make some comments about housing.

One of the Government’s crazier ideas was the Weston Otmoor eco-town. I shall not detain the House on why it was and is one of the craziest ideas in God’s creation to have such a development predominantly on a greenfield site and for it to be dependent on digging up pretty much the whole of Oxford railway station and every railway bridge around Oxford—that is neither here nor there. There is no debate about the fact that we need new social housing in this country. I agree with much of what the hon. Member for Brent, East (Sarah Teather) had to say. One of the tragedies nowadays, as has been made clear by the chairman of the Centre for Social Justice, my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), is that working families on low incomes find it very difficult to access social housing. It is perverse that those who are on low incomes and in work are, if we are not careful, condemned for ever to the private rented sector, which means that stability is lost in our communities and in areas of our constituencies.

We need new social housing, and so Cherwell district council has said that it is willing to support an eco-town proposal on the edge of Bicester if the local development framework is gone through to identify where it should be. That, I think, would be good news for Bicester. It would give some proper focus to a town that is in effect a new town, as it has grown very fast over the past 20 years. However, any such development will depend on the investment put into housing associations by the Housing Corporation. One cannot expect all the developments of the next 10 to 15 years to happen on section 106 agreements. Developers are simply not doing that. Wimpey lost 98 per cent. of its market cap in one year alone and most large-scale developments in my constituency have either ground to a halt or are moving at only a snail’s pace. If the Government want us to proceed with initiatives such as eco-towns and eco-housing, they will have to be prepared to consider allowing the Housing Corporation to invest in social housing in constituencies such as mine in north Oxfordshire.

Nothing in the Gracious Speech will do anything of real value for my constituents. It is all very well to talk about more apprenticeships, but as the Secretary of State for Innovation, Universities and Skills said, apprentices need employers. Of course they do, and in my patch we are desperately trying to maintain employment, but it is dependent on small and medium-sized businesses and although the Prime Minister and the Chancellor talk a good talk about what they are supposedly doing for small business, in practice and in truth, when we ring up and ask, “How do my constituents access that help?”, answer comes, “We do not know.”