Shadow Business Secretary Alan Duncan put pressure on the Government yesterday. He excoriated ministers both for leaking their announcement on loan guarantees to the media (before coming to the Commons) and for adopting a pale imitation of the Conservatives’ proposals.
The fact is that Mr Duncan is an extremely talented operator. He is forensic and devastating in debate, be it on television or in the chamber. He is also genuinely funny, and that skill should not be deprecated – given that it enables him to win over an audience.
The questioning of his energy levels and commitment seems pretty unfair to someone who has seen Mr Duncan working at close quarters. He is a very good politician, and would make a fine minister.
Mr Duncan is at fault for one thing however. Yesterday was not the time to raise economic questions. It was in fact my birthday, and business in both houses should therefore have been devoted to talking about me. Oh well. His words follow.
"May I start by asking the Minister to apologise to the House for the way in which his Department has handled this announcement? It was leaked yesterday to a BBC journalist, it was followed up with interviews on the broadcast media this morning, and it was briefed out in a press conference from the Secretary of State, yet he and his Department only intended to give a written statement to the House. That is yet another display of this Government’s total disregard for proper parliamentary procedures, and Parliament will wish to express its displeasure at the contempt for it shown by Lord Mandelson.
We have been arguing for several months now that at the heart of this current recession is the collapse of credit. Companies of all sizes are experiencing significant difficulties, either as a consequence of the actions of the banks in protecting their own balance sheets or because credit insurers are withdrawing from the marketplace and breaking the payment chain. The CBI says that businesses will face the daunting prospect of refinancing £100 billion during this year. What number would the Minister put on the collapse in the volume of credit over the last year, and how does it compare with the figures the Government have announced today?
For the past few weeks the Conservative party has persistently called for the Government to adopt a big, bold and simple scheme which will open new channels of credit to help restore the flow of lending. Our national loans guarantee scheme would guarantee up to £50 billion of new loans to British business. It has been endorsed and supported by numerous commentators and trade bodies, but all the Government could do was rubbish it, yet now, today, they are announcing something based on it.
Can the Minister tell us how the Government will select the small firms that are eligible for the £1 billion of longer-term loan guarantees? Secondly, will the guarantees be available to foreign firms, or just to British companies? Thirdly, on what basis will the Government decide whether to buy the shares of a company? Fourthly, following the report in The Guardian today, will the Minister confirm that the £10 billion of guarantees for working capital will be self-financing, which is what we have argued for? Fifthly, what is there in the package for larger businesses, many of which are also our largest employers?
Today, redundancies have been announced at Jaguar Land Rover, Barclays and other companies, particularly in the retail sector. We are facing an explosion of insolvencies. Is not the package that has been unveiled today too little, too late and too complicated? The Government have spent months grandstanding and designing publicity stunts, during which time they have done absolutely nothing to help the 6,000 small firms that the Federation of Small Businesses says have gone under while we have been waiting for action. Now, they have announced a pale imitation of our proposals, which the National Institute of Economic and Social Research has said
“will look like another of the Government’s half-measures”.
“well beyond what the Government has announced today”.
How long must we wait for the bigger, bolder and simpler scheme that the Opposition have been proposing for months? Today, we have been given a small bandage for a massive wound to an economy that has been injured beyond measure by the irresponsibility of the Prime Minister."
Similar points were put to Lord Mandelson in the House of Lords by Lord Hunt:
"Our national loans guarantee scheme would have guaranteed up to £50,000 million of new loans to British business. It was endorsed and supported by numerous commentators and trade bodies. All Ministers did at that stage was rubbish the policy, yet here they are today, proudly announcing a wan imitation of it."