Tuesday Volume 496 14 July 2009 No. 111 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Tuesday 14 July 2009 £5·00 © Parliamentary Copyright House of Commons 2009 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; Tel: 0044 (0) 208876344; e-mail: [email protected] 137 14 JULY 2009 138 Mr. Ian Davidson (Glasgow, South-West) (Lab/Co-op): House of Commons Does the Minister agree that there are substantial numbers of public sector workers who are low paid and do not Tuesday 14 July 2009 deserve to have their pay frozen, and that although there is a need for pay restraint, it ought to be applied to those at the top of the public sector and, indeed, to The House met at half-past Two o’clock those at the top of the private sector? PRAYERS Mr. Byrne: My hon. Friend has an excellent point. It is incumbent on the leaders of public services, at such times, to show restraint and to set an example. However, [MR.SPEAKER in the Chair] I agree that over the past 10 years it has been important to give some above-average pay increases to front-line BUSINESS BEFORE QUESTIONS staff in particular, such as nurses, fire service workers and the police. If we look back at the average pay rises throughout the private and public sectors, we find that CANTERBURY CITY COUNCIL BILL they basically come out about the same. However, within Motion made, That the Bill be now read the Third that overall improvement in public sector pay, we are time. proud to have achieved particular rewards for nurses, teachers and police, because, let’s face it, for many years Hon. Members: Object. they were under-rewarded. Bill to be read the Third time on Thursday 15 October. Mr. Greg Hands (Hammersmith and Fulham) (Con): NOTTINGHAM CITY COUNCIL BILL The Minister says that he is in favour of quango-boss Motion made, That the Bill be now read the Third pay restraint, yet we are seeing figures of 22 per cent. at time. the Centre for Environment, Fisheries and Aquaculture Science, 17 per cent. at the National Treatment Agency Hon. Members: Object. for Substance Misuse and 16 per cent. at the UK Bill to be read the Third time on Thursday 15 October. Hydrographic Office. The Chancellor told The Sunday Times that “a pain-free way of cutting public spending would be to freeze public sector pay”. Oral Answers to Questions So which is it? Is he in favour of a pay freeze or huge rises for quango bosses? TREASURY Mr. Byrne: The argument is the argument that I made to the hon. Member for Broxbourne (Mr. Walker). There cannot be any automatic entitlement to bonuses The Chancellor of the Exchequer was asked— or, indeed, to high pay. Any bonuses to people in the public sector can be awarded only on the basis of the Public Sector Pay performance that they have delivered for the public. Of course, on quangos there are wider questions—not just 1. Mr. Charles Walker (Broxbourne) (Con): When he about pay, but about the number of quangos that we last met the chief executive of the Audit Commission have in this country—and that is why I have asked for a to discuss levels of public sector pay. [286189] cross-Government look at the number that we have. What I will certainly not be doing, unlike the Opposition, The Chief Secretary to the Treasury (Mr. Liam Byrne): is bringing forward plans for another 17 of them. I met the chairman of the Audit Commission together with ministerial colleagues yesterday. Bank Lending (Small and Medium Businesses) Mr. Walker: At a time of private sector pay freezes and public sector pay restraint, is it right that the 2. Derek Twigg (Halton) (Lab): What recent leaders of our quangos are getting pay increases of up representations he has received on the level of bank to 20 per cent. or more? lending to small and medium-sized businesses; and if he will make a statement. [286190] Mr. Byrne: The principle that must guide the rewards that go to leaders of quangos must be very clear: they 6. Mr. Jim Cunningham (Coventry, South) (Lab): must be rewarded only on the basis of their performance What recent representations he has received on the level on behalf of the public. However, the hon. Gentleman of bank lending to small and medium-sized businesses; is right to allude to the necessity for public service and if he will make a statement. [286195] leaders, no matter what part of the public sector they work in, whether it be the BBC or any other non- The Chancellor of the Exchequer (Mr. Alistair Darling): departmental public body, to set an example and to The Bank of England’s latest credit conditions survey show restraint. That is why we have limited pay awards suggested that there has been a second consecutive for senior civil servants, judges, senior NHS managers increase in the availability of corporate credit, in the and NDPB chief executives in this financial year to just second quarter of this year; and it expects a further 1½ per cent. easing in the following quarter. 139 Oral Answers14 JULY 2009 Oral Answers 140 Derek Twigg: My constituency has seen some of the John McFall (West Dunbartonshire) (Lab/Co-op): In largest increases in unemployment in the country, so it the Treasury Committee’s current inquiry into mortgage is vital that the banks support viable businesses and lending, the anecdotal evidence coming in to us indicates maintain jobs. Will my right hon. Friend do all that he that credit scoring is tightening almost by the week. The can again to encourage banks to lend to viable businesses? Home Builders Federation has said that lenders are There is an inconsistency among the banks which has looking for any reason to refuse a loan. In his most been brought to my attention by a number of constituents. recent appearance, the Governor of the Bank of England said that lending to business is falling and lending to households is flat. When the Chancellor meets the Mr. Darling: My hon. Friend raises an understandable banks, will he reinforce the point that they have not only concern. We do have lending agreements with those economic but social obligations to ensure that this banks in which we have substantial shareholdings, the lending does indeed take place? Royal Bank of Scotland and Lloyds Banking Group. Those agreements will this year see RBS lend £25 billion and Lloyds lend £14 billion. In some cases, instructions Mr. Darling: As my right hon. Friend knows, there is do not appear to have worked their way down to a balance to be struck in this regard. About a year ago regional and local levels to ensure that high-level agreements in Treasury Question Time, Members on both sides of have been translated into available lending for companies the House expressed concern about irresponsible lending. and individuals. I am meeting the banks shortly to Inevitably, there has been some retrenchment on the discuss that matter further, but they must ensure that part of lenders to ensure that when they lend money the the people who are responsible for making those decisions borrower can maintain the repayments, which is obviously make them in the way that we want; that, in many cases, very important. The general point that my right hon. they renew their acquaintance with some of the businesses Friend makes has been made on both sides of the with which they deal; and that they get back to some House. It is absolutely imperative, in this country and in good old-fashioned banking. others, that the banks see through the obligations that they have entered into. We need to get credit going again because that will be the thing that helps to drive Mr. Cunningham: Following on from that, though, the recovery. I will certainly be raising these matters this has been going on for quite a long time; the banks’ when I meet the banks shortly. slowness to help small businesses has often been raised in the House. My right hon. Friend said that he is going Mr. George Osborne (Tatton) (Con): The Chancellor to meet the banks shortly. However, what effective says that lending in the economy is lower than he measures can he take, because small businesses are expected. Perhaps that is something to do with the fact suffering, they are impatient, and people’s jobs are at that half his schemes are not working. When he launched stake? the asset-backed securities guarantee scheme, he said that it would Mr. Darling: I agree with my hon. Friend. It is “increase confidence and capacity to lend, and…support the important, particularly if we are going to see a recovery, recovery”. to ensure that credit starts flowing, especially to the Can he tell us how many major banks have made use of small and medium-sized enterprises sector, which employs that scheme? so many people in this country. As I said a moment ago, it is important that the banks honour their commitments. Mr. Darling: We are still in discussions with the In addition to the commitments that I referred to, banks to ensure that that facility is there, but it has to be Barclays and HSBC have also given undertakings to seen in the context of a range of other measures that we lend additional money during the course of the next have introduced to help to stabilise the banks and help year.