Question proposed, That the clause stand part of the Bill.

I welcome you to the Chair, Sir Alan, for the Committee stage of our proceedings.

Clause 1 amends the cumulative limit on the financial support for business under section 8 of the Industrial Development Act 1982. I accept that, as such, it does not authorise actual expenditure, but can the Minister confirm that authorisation for the orders involved, under the new wording, will be made by affirmative resolution? Furthermore, does he accept that it would be good practice that when each order is submitted for debate, it should be accompanied by a detailed update as to the range of schemes involved and their current funding levels?

At present, the Government publish only an annual report, which is often unrelated to the issuing of the orders in question. It would be more helpful if we in the House had the chance to consider the current schemes at the time when we debate the Government's request to increase their funding limits. I would be grateful if the Minister would consider that carefully and make a specific response in his reply to the debate, should he catch the Chairman's eye.

On Second Reading the Minister cited as one of the main reasons for moving to a higher limit of £12 billion the Government's wish to switch away from grants and to increase the proportion of support in the form of loans and loan guarantees. Will he therefore tell us what proportion of the current £6 billion is in grants and what proportion is in loans and loan guarantees?

Overall, the Opposition agree that loans and loan guarantees are often a better form of business support than grants. After all, money for loans can be recycled, but loans are also treated differently by their recipients. When I ran my business a few years ago, I was also a mentor for the Prince's Youth Business Trust, helping young people to start up businesses. I saw then how the provision of loans motivated a start-up firm far more than a grant did. It is not that surprising; one is far more likely to try to maximise the value of funding if one knows that the money has to be paid back, than if one knows that it has been gifted.

On the whole, therefore, the Opposition support a shift in the balance of financial support. However, it would be helpful, not least in considering the clause, to understand better the current balance. Indeed, of the future £12 billion, and the potential £16 billion that the Government expect the Bill to cover, what proportion do they expect to take the form of a loan over the next five years?

Further, the Minister on Second Reading failed to inform us of the balance of the schemes and their exact proportion of the total. He mentioned a list of different schemes, and we have debated them on numerous occasions, but he has not told us which are the most important. So, in reply to this debate, will he tell us the five most important schemes by value under the clause, their current value and by how much he expects their value to increase with the new total of £12 billion? That will enable us better to understand the direct impact not only on small, medium and large enterprises, but on different business sectors, which I know he is keen to be seen to support.

Finally, on clause 1, the Minister mentioned on Second Reading that the Bill's remit includes funds for the post office network, and I am delighted to see the Minister for Employment Relations and Postal Affairs in the Chamber. Will the Under-Secretary of State for Business, Enterprise and Regulatory Reform, the Minister responsible for the Bill, tell us how much has already been allocated to the scheme, and how much has been paid out to date?

I shall be brief, Sir Alan, as most of what I want to say will come towards the end of our proceedings.

On Second Reading, the Minister described a wide range of schemes that the legislation will cover, and the Liberal Democrats, too, welcome the emphasis moving from grants to loans and loan guarantees, because it creates a fairer playing field for industry generally and should constitute better value for money for the taxpayer. We welcome also the increase to £12 billion and the potential increase to £16 billion.

We appreciate that to elicit the loan guarantees, companies must undertake proper due diligence. However, hon. Members in all parts of the House have criticised the fact that the release of funds to companies, especially to small companies that are not seeking to borrow vast sums, is taking an inordinately long time. Will the Minister comment on the steps that are being taken to expedite the due diligence? The Government quite properly require it, but it can slow things up and is putting small businesses, in particular, which need help fast, beyond the reach of the schemes that were designed to help them.

Clause 1 is essential to enable the section 8 power of the Industrial Development Act 1982 to continue to be used to give financial assistance to industry for the purposes specified in that Act. It is necessary to continue to strengthen the provision of support for businesses so that they come through stronger from the current global economic downturn. The Bill seeks to amend the cumulative limit on financial assistance that may be provided under section 8 to an initial ceiling of £12 billion, which can be increased by four orders of up to £1 billion each to make an overall limit of £16 billion. We have proposed the £12 billion limit as it restores the ceiling to more or less the same proportion of GDP as was the case when the original Act came into force.

The business support that we now provide is often in the form of loan guarantees or loans. Those can offer better value for money for the taxpayer in the long term, as loans are repaid over time and only a proportion of guarantees will ultimately need to be met. The hon. Members for Hertford and Stortford (Mr. Prisk) and for Solihull (Lorely Burt) recognised and welcomed that.

I want to be clear that when we offer loans or loan guarantees, the full amount secured against public funds will count towards the section 8 limit. That is one of the reasons why we need to increase the limit; we debated the issue on Second Reading. We think that £12 billion is a sensible limit at the current time, when it is vital that we maintain sufficient flexibility to respond to the challenges ahead. I want to say something more about flexibility in a moment, because it is relevant to the hon. Gentleman's point about the balance of funds between grant schemes, loans and loan guarantee schemes.

However, I also want to be clear that the section 8 financial ceiling does not itself authorise any actual expenditure. The Bill retains the accountability to Parliament contained in the existing legislation, and I can confirm that that is through the need for affirmative orders of the Commons, which would replace the existing limits with new, higher ones, reflecting the need for continuing support for industry when necessary.

We have maintained the £10 million limit for the referral of single expenditure schemes back to the House. As the hon. Gentleman said, an annual report will continue to be published in the Commons Library, setting out how single projects are funded. Combined, the measures provide an appropriate balance between accountability and providing the Government with the legal power to respond to business need.

The annual report can be helpful, but as the Minister will understand and Members on both sides of the House will appreciate, when we are considering an order for an increase of the not insubstantial sums identified in clause 1, it will be helpful if we can see the current point when we debate the issue in Committee, rather than just having the annual report. That was what my point was about. Does the Minister not accept that that would improve the quality of scrutiny in the House?

I understand the hon. Gentleman's point and I undertake to consider it. If we lay affirmative resolutions, we want to be able to give the reason why they are necessary. Obviously, that would relate to the spend or potential liabilities as a result of Government commitments.

The hon. Gentleman asked specific questions about the top five schemes. He can see them in the annual report. They include the grant for business investment—previously called "selective financial assistance"—the enterprise finance guarantee scheme and the Post Office reinvention programme; those would account for the bulk of it. The hon. Gentleman specifically mentioned the Post Office reinvention programme and, as he will be aware, we have made a commitment to the programme of £1.7 billion over the years 2006 to 2011. At this point, I cannot give the hon. Gentleman an actual expenditure figure, although I am sure that some of that information can be made available. However, it is clear that there is a programme of spending going on over a five-year period, and that that spending will take place at the appropriate time for the business.

The Minister tells us that the three principal schemes include the Post Office reinvention programme. Some Members will be surprised that that comes ahead of, for example, the automotive assistance package, which they might assume would be larger. Is he telling us that that package is not even one of the most important packages in the total number?

No, I am not saying that. I want to draw a distinction between schemes that have been in the annual report previously and new schemes that the Government have introduced. As the hon. Gentleman will be aware, the automotive assistance programme was launched as recently as on 27 January this year. It is a new scheme and, as with all new schemes, it had to go through a process of securing EU state aid approval, which was granted on 27 February. We are in detailed discussions with several automotive companies about the programme. He will be aware of the recent announcements made under the European Investment Bank element of the programme whereby Jaguar Land Rover and Nissan have been offered loans by the EIB. We will want to report to Parliament on the automotive assistance programme and on other programmes in due course, because we believe that there should be full accountability in this area.

The hon. Gentleman will also be aware that the enterprise finance guarantee scheme, which replaced the small firms loan guarantee scheme, is now very much up and running. It is spending significant sums of money, to the tune of about £30 million in loans offered every week. The latest figures that I have seen show that well over 2,000 businesses have made applications to it.

I think that it is now time for the hon. Gentleman and the hon. Member for Solihull to welcome the new scheme and to recognise that the Government have introduced it in a remarkably short period, and that it is providing valued support to companies and helping to make a difference to those that are receiving it.

I am sure that all Members welcome any funding that is finally trickling through to business. The Minister mentioned Jaguar Land Rover. Its assistance under the EIB element has not yet materialised, as it is still waiting for the Government's due diligence to take place. It is obviously important that due diligence takes place, but it appears to be taking a long time. Why is that?

Let me clarify the situation. Jaguar Land Rover has successfully applied to the EIB for a loan to undertake a number of green projects, and it will be up to the Government to provide a guarantee for that loan. That is part of the package of support that Jaguar Land Rover will need to secure its long-term future. We are in discussions with the owners of JLR, as well as its management and its banks, about a package to ensure that it can continue to develop its model programme and have a secure future. The hon. Lady knows JLR well because of her constituency connections. She will be aware that as a west midlands MP, I am also fully aware of its strategic importance not only to the west midlands economy but more generally to the automotive industry in the United Kingdom. We need to continue the discussions that we are having. However, I emphasise the fact that JLR is a successful company that, as with all motor companies, is suffering from the severe economic downturn, which has affected its business just as other businesses in the automotive industry have been affected. However, it was making good profits in the period January to June 2008, and there is absolutely no reason why it cannot do so in future. We need to continue to consider what is the appropriate role for Government in providing support to JLR, and we are doing that in the discussions that we are taking forward with it at the moment.

The other point that I want to make about clause 1 is related to the request from the hon. Member for Hertford and Stortford that we seek to break down how much has been provided in grants and how much will potentially be provided in loans and loan guarantees. I do not have those figures to hand, but clearly expenditure, whether in the form of grants, loans or loan guarantees, all contributes to the need for an authority to spend. We are seeking through the Bill an increase in the limits. However, I will reflect on whether we can provide more and better information, not just in the form of an annual report but on a slightly more regular basis. It would not be appropriate to have a running commentary every week or month, but I recognise that it is not unreasonable to want some more detail about spending progress.

I am grateful to the Minister, not least for being generous in giving way. I return to my original point. He highlighted the fact that the annual report, for example, showed a certain balance of schemes, and now events have changed. He is right, and we understand that that will continue to be the case. It seems to me that a logical pattern would be that when the Government need to come forward with a request for an additional increase over and above the existing limit, that is the obvious moment at which we in the House would benefit from being able to see the current snapshot of the balance.

I am slightly disappointed that the Minister does not have the figures on the balance between loans and grants, but I wonder whether he will ensure that at least some information can be provided to Members. We will not have the chance to consider this further, as this is the last day on which we will have the opportunity to discuss the Bill. Given the fact that Ministers cited the balance between grants and loans as the principal reason for change, it would be helpful if we could at least have the evidence of what the current balance is and what the Government's expectation of change is. Does the Minister accept that, and will he undertake to provide it?

I certainly accept that the reason why we need to increase the limits is that a lot of the programmes that we have looked to introduce have been guarantee schemes. Whether the headline guarantee figure is £1.3 billion for the enterprise finance guarantee or £2.3 billion for the automotive assistance programme, it all contributes to the need for the authority to incur expenditure. In that sense, I have given the hon. Gentleman some of the key figures. I shall happily write to him and put a copy of the letter in the Library, explaining a further detailed breakdown of the schemes as far as I can. Obviously some of that will depend on future draw-down of loan guarantees, so inevitably figures cannot be precise, but we can certainly provide more information. I am happy to undertake that that will be done.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.