Small Business, Enterprise and Employment Bill

Lord Cope of Berkeley Excerpts

Tuesday 3rd March 2015 Lords Chamber

[Lord Cope of Berkeley (Con)]

My Lords, I also have doubts about the terms of the amendment, both for the reasons that my noble friend has just given and because we have to consider who is laying down the payment terms. The amendment refers to the supplier’s payment terms as though the supplier—the small business that we are thinking of—is able to say that it wants payment within a certain time. However, in the instances that the noble Lord, Lord Mitchell, gave just now of large companies extending the terms in which they make payments, it is of course the customer who lays down the terms. If you do not like those terms—the extension to a larger number of days—then you do not supply. A big company in a powerful position in its market will be able to lay down its terms and that will drive a coach and horses through the amendment. Therefore, I do not think that this is the solution.

I do not for a moment say that there is no problem—of course there is. I entirely accept what was said earlier and in Committee about the difficulties of late payment, and these are not new difficulties; we have had them for years. I think that the amendment to the existing law proposed in the Bill is a step forward. I would like to see that come into law rather than the more prescriptive version suggested by the Opposition.

--- Later in debate ---

[Lord Mitchell]

My Lords, I have addressed your Lordships’ House many times to take the Government to task for the slow take-up of new schemes designed to provide finance to small and medium-sized businesses. My theme has been constant. There have been so many initiatives over the period of this Government that even I, who really ought to know about these things, am confused. If I do not get it, how can small businesses understand the options when they seldom have to deal with them?

I have cited Funding for Lending as an example. I know that the Government think that it has been a resounding success, but that is not what I hear at the coalface. One banker said to me, “What am I to do? The Government throw money at us, and I have a choice: whether to deploy these funds on small businesses, which are risky and difficult and costly to analyse and administer, or else use the cheap funding to build my mortgage business where I can assess the risk, and it is easy to run”. It is also not what the figures show. More often than not, one quarter followed by the next quarter, the amount of funding extended by Funding for Lending has gone down.

While all these government initiatives have been sputtering along, there has been a very acceptable growth in non-government schemes. The market for alternative finance has exploded, largely as a result of the paralysis of the high street banks, and we on these Benches think that that is to be encouraged. Challenger banks have made a very big impression. Metro Bank, Aldermore and others, such as Santander, are changing the landscape. Peer-to-peer lending has taken off and is becoming a major force. We, as I say, welcome these changes. The traditional banks have let down small business, and it is perfect that alternative sources are stepping into their shoes.

We need, however, to know what is happening in the marketplace. So many questions are asked in your Lordships’ House on this issue, and the truth is that no one seems to know the answer. This amendment will place a duty on the Secretary of State to conduct a review of alternative forms of finance available to small business. This review will examine how the banking sector is catering to the finance needs of SMEs and how SMEs are being encouraged to use alternative forms of finance.

We need the facts, and only an obligation on the Secretary of State will give us the information we require. I beg to move.

[Lord Cope of Berkeley]

My Lords, as the noble Lord, Lord Mitchell, has said, we have debated access to finance and all the various schemes, both government and private sector, on a number of occasions. I agree with him that there is an awful lot going on in this field. A lot of improvements have been made, by the Government’s efforts, these new forms of alternative finance and so on. I go along with the noble Lord, Lord Mitchell, on all that and on the difficulties of assessing quite what is happening and where the best developments are.

Where I get into trouble with Amendment 6 is the last little bit—proposed new subsection (4)—which says that, at the end of this review, when it is laid before Parliament:

“The Secretary of State may, by regulations, act on the findings of the review”.

That is an incredibly sweeping power, which I would be wholly reluctant to give the Government. I heard what the noble Lord, Lord Stevenson, said at the end of the debate on the previous amendment, but this is a very sweeping power indeed, about which I am very cautious.

[Lord Myners (Non-Afl)]

My Lords, I support the amendment of the noble Lord, Lord Mitchell, and will be very surprised if the Government do not see merit in it. The coalition Government have made very serious efforts to address the impact on the economy of a shortfall in credit availability. They have launched multiple schemes, as the noble Lord, Lord Mitchell, indicated. The previous Government, of which I was a member, did likewise, and we found it extremely difficult to stimulate sensible extensions of credit to support business. The coalition Government found that they finally got lending going largely through the mortgage market. Only time will tell whether that has long-term economic benefit.

The Government have encouraged us to leave relatively undisturbed the dominance of the major banks. The market share of our major banks would be sufficient in normal circumstances to have triggered a competition inquiry many years ago. The dominance of the major banks is reflected largely in the absence of any differentiation in their products and pricing, and their basic business model is the same. They do not compete aggressively for market share; they do so at the margin but, on the whole, they sit on large legacy books of existing relationships. We know that, statistically, one is more likely to divorce than to change one’s bank.

Therefore, the Government should be encouraged to promote new forms of lending and should see this as an important adjunct to their own policies to support the economy. In those circumstances, I should like to believe that the Government would see real merit in the amendment of the noble Lord, Lord Mitchell, thereby ensuring that we get clarity about how the banking and credit availability system is working. I do not think that Santander is a challenger bank; it is the old Abbey National. Aldermore, Virgin, Metro and Bank One are challenger banks, but not Santander. However, if progress is not made by these banks, that is precisely the circumstance in which the Government would want to reach to independent evidence to show this.

I do not quite share the anxiety of the Benches opposite about the sweeping powers implied by the final part of the amendment. I imagine that they could be exercised only within the powers of existing law. I hope that a Government who are committed to furthering and promoting competition and transparency will not put themselves into contortions to reject the amendment. If they do so, they will stir continued anxiety that sitting opposite are a Government of bankers, for the bankers, rather than for society and our broader economy.

Small Business, Enterprise and Employment Bill

Lord Cope of Berkeley Excerpts

Wednesday 28th January 2015 Grand Committee

[Lord Snape (Lab)]

Before the Minister replies, I endorse and agree with the remarks made by my noble friends. On Second Reading, I intervened on the Minister’s opening remarks. I said:

“I am sure that the House will recognise how far the Government have moved on this”—

that is, the principle of consultation—

“and will welcome that movement. However, can she assure us that any future discussions will involve representatives of the tenants and will not be dominated by the pubcos?”.

The Minister replied as follows:

“My Lords, I can assure the noble Lord that we are always discussing these issues”—

I emphasise the word “always”—

“and changes with tenants—that is extremely important when you are making changes of any kind—and, indeed, they have helped us to get to the position that we are now in”.—[Official Report, 2/12/14; col. 1243.]

That is not the view of the tenants who I have spoken to. Indeed, most of them take the view that the position we are now in is thanks to the noble Lord, Lord Hodgson, and some of the pubcos.

Although we are grateful to the Minister for the sympathetic way in which she pointed out that there was a difficulty with some of the amendments in the group, we should return to the question of consultation. I hope that she will spend some time explaining to us exactly what consultation has taken place and with whom. Is it true, for example, that, despite the Minister’s promise on Second Reading, the consultation with the representatives of tenants consisted of an hour or so in the department? What consultation has taken place with the pubcos in the department and elsewhere?

I have a feeling, looking around at the Room, that a considerable amount of entertaining—if I can put it that way—has gone on over lunch. Perhaps the views of the pubcos have played a major role not only in the grouping of the amendments—about which we rightly complain—but the sentiments that the Minister expressed and, I fear, will express, about the postponement of proper legislation that was voted on in the House of Commons but seems to us by the amendment and the grouping to be being flouted by the Government.

I hope that the Minister can reassure us at this early stage, because if she cannot, I can assure her of a fairly long and drawn out Committee sitting here today, and that a considerable number of amendments will be tabled at Report on behalf of those who feel that they have a raw deal under the existing arrangements and cannot see it getting any better under the Government’s proposals.

[Lord Cope of Berkeley (Con)]

My Lords, I think we are still intervening on the speech of my noble friend Lord Hodgson on these procedural matters. I urge my noble friend not to withdraw all her amendments for the simple reason that I find it very difficult to unravel, from all the amendments tabled by the Government and by others, exactly where we are supposed to be at the end of the process that the Government wish. It would be helpful to write the Government’s proposals in full into the legislation at this stage, so that we and everyone else who is to be consulted in a short while can see exactly what the Government are proposing properly set out. No doubt then, at Report, some noble Lords will move their amendments, whether they are identical to or different from those on the amendment paper.

[Lord Snape]

I find it difficult to imagine that someone with such a distinguished record as the Deputy Chief Whip in the other place can confess to any confusion about the layout of the Bill and the amendments. Regarding him seeking clarity, it was my experience in the Whips’ Office—although not personally with him—that clarity was sometimes the last thing that Deputy Chief Whips ever sought. Indeed, I find it surprising—as I suspect the Committee will—that the noble Lord should make such an admission at this early stage.

[Lord Cope of Berkeley]

That is as may be, but I hope, if the noble Lord thinks that I have diverted from my previous course of action, that that will strengthen the force of the remarks that I make.

[Baroness Neville-Rolfe]

My Lords, I do not know whether it is appropriate for me to stand up before noble Lords start to talk about the amendments, but I am essentially, as noble Lords know, a practical person, keen to try to progress the Bill and to do the right thing with today’s business on pubs. I will respond to the point that has just been made on consultation and reassure the noble Lord, Lord Snape, that Jo Swinson, my friend in the other place, held a round table with pub companies and another with tenants, both for the same amount of time. Officials have also had discussions with people on both sides of the debate throughout, while always trying to be balanced and objective. Ministers, advisers and officials have also had several meetings with Greg Mulholland since Report in the Commons, although it would be fair to say that he is keen to keep his clause exactly as it is. So far, that has made progress a little difficult.

Small Business, Enterprise and Employment Bill

Lord Cope of Berkeley Excerpts

Wednesday 7th January 2015 Grand Committee

[Lord Stoneham of Droxford (LD)]

My Lords, I wish briefly to comment on the amendments, particularly following the comments of my noble friend Lord Cotter, who spoke on this issue of late payments.

Obviously, late payments are invidious. They affect small businesses severely, particularly in terms of cash flow. However, in looking at these amendments, there is a balance that we have to get right. There is a danger, certainly in some of the amendments, that we will overregulate. I refer particularly to Amendment 6, which has a requirement for quarterly reports and indicates that all payments to suppliers made more than 30 days after the date indicated have to be listed in some way, unless a formal query has been made on the invoice. The danger is that if one overregulates, all that will happen is that businesses will be inundated with formal queries as a way of avoiding the reporting.

Also important—if one is going to require all this information to be collated—is the reality that in many sectors balancing the payment of bills, whether we like it or not, sometimes protects the cash flow of certain companies that otherwise could be in difficulty. If this information is made more public in detail, there could be consequences for the management of the credit of those companies. So there are problems of overregulation that could be bureaucratic and inflexible, and could damage the businesses that we are trying to help.

[Lord Cope of Berkeley (Con)]

My Lords, I recognise that late payment has been one of the most stubborn problems affecting small businesses over many decades. It is quite a few decades since I was Small Firms Minister in Margaret Thatcher’s Government, but the problem goes back a long time before that. I congratulate the Government on having found a new method of trying to deal with it, which has been incorporated in these clauses. In principle, that is much to be admired and supported.

I am much in favour of Amendment 5, tabled by my noble friend Lord Flight. Like him, I was much impressed by the Grant Thornton list of companies, which gives very important support to something that we all know—that small and medium-sized firms such as those in this list vary hugely. When you compare the turnover, the balance sheet and the number of employees of the different companies, the huge variety is astonishing. Like my noble friend, I cannot believe that the Government really want to impose this new element of bureaucracy on these companies, some of which have very small numbers of employees. One of them had two employees, and many of them—littered about—have fewer than 10, although they often have very large turnovers and large amounts on their balance sheets. We can imagine what sort of companies they are without following them up. Therefore, I support Amendment 5.

Economic Prosperity and Employment

Lord Cope of Berkeley Excerpts

Thursday 18th July 2013 Lords Chamber

[Lord Cope of Berkeley]

My Lords, the noble Lord, Lord Haskel, and I served together on the Select Committee on SME exports. We all warmly thank him for instituting this debate and, indeed, for the way in which he has introduced it.

My long-held view is that while economists argue continuously over monetary and fiscal policy, what really matters is whether SMEs flourish in home and overseas markets. That is what will decide whether our children and grandchildren live in prosperous times—I cannot help but mention that a fourth grandchild has just been born to my wife and me, to focus our attention even more on the future—but what the Government do about SMEs is crucial to the future.

Many business men and women when asked what government can do best for them say, “Keep out of the way”. I sympathise, but I do not agree. In 1967, I helped Lord Weatherill to write a pamphlet urging the Wilson Government to get much more involved in SMEs to emulate the small-business administration of America. A couple of years later, that Labour Government, to their credit and particularly to the credit of Harold Lever, took a few minutes off nationalising things and command and control and set up the Bolton committee on small businesses, the first authoritative study.

These days there is general recognition of the importance of SMEs. In support of continuity, to which the noble Lord, Lord Haskel, referred, the Government have taken over from their predecessors, UKTI—UK Trade & Investment—and it has grown in stature and effectiveness under my noble friend Lord Green of Hurstpierpoint. His energy, focus and constant travelling have contributed notably to UKTI’s success, and I am sorry that he is leaving later this year.

Since the debate on our SME report last month, my noble friend Lord Green has told us of two new initiatives: the Future 50 programme, to help 50 selected companies grow to the point of being listed on AIM, and the creation of an alliance of high-tech digital clusters similar to Tech City. These are excellent, but the first reaction of some will be: can the Government or their agencies successfully spot winners? We know that it is difficult to spot winners, not only for the Government but for the investment industry, whose job it is. The oldest mantra in investment, after all, is, “Spread your risk”. The reason is the difficulty of picking winners and avoiding losers. The Government should not be put off by that. If only some of the 50 succeed, it will be worth it.

Part of what SMEs mean when they say, “Keep out of our way”, is “Do not keep changing the rules”. The noble Lord, Lord Haskel, referred to this, too. SMEs understand that it is necessary to collect tax and regulate employment, health and safety, but they hate spending hours mugging up on the latest initiative that has just come to their attention.

The latest example is PAYE. From April 2013, or April 2014 for some small businesses, RTI—real-time information—has been introduced. New PAYE software —not all small businesses use software—triggers automatic direct debit payments for PAYE and national insurance on pay day. This is necessary to the smooth working of universal credit. But for the small business with few employees, some part-time probably, striving to remain legal over the minimum wage expressed in hourly rates and changing every October and/or bumping up against the lower earnings limit for PAYE expressed in weekly rates and changed every April, all this is complex and a complete overhead on top of actually selling things and earning a living for the employer and their staff, which is obviously what they have to do to succeed. It is all desirable, no doubt, and perhaps it will be simpler in the long run. Technology often works that way, but it does not mean that it is easy to grasp in the first instance. Changes for small businesses mean more hours of trying to understand new forms and procedures, simply to stay in line with the latest requirements.

My basic message is always that if SMEs flourish, the economy will flourish. We must nurture our entrepreneurs. Only some of them will succeed, but we need them to do so.

Queen’s Speech

Lord Cope of Berkeley Excerpts

Wednesday 16th May 2012 Lords Chamber

Moved on Wednesday 9 May by

[Lord Cope of Berkeley]

That an humble Address be presented to Her Majesty as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most Gracious speech which Your Majesty has addressed to both Houses of Parliament”.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, it is a privilege for me to open this debate, which my noble friend Lord Sassoon will wind up later today—much later today, because 58 Peers are down to speak.

I look forward greatly to the maiden speech of the right reverend Prelate the Bishop of Durham. He brings a broad experience to this House and it will be very welcome to hear him give us some more information on that.

The measures laid out in Her Majesty’s gracious speech reflect the Government’s ongoing efforts to revive the fortunes of the economy, to create the best possible climate for business investment and to steer the UK firmly in the direction of growth.

As my colleague, the Business Secretary, pointed out in another place, the global financial crisis destroyed roughly 10 per cent of our economy. Recovery to date has been slow and halting; ongoing turmoil in the eurozone will especially make further progress equally challenging.

We can look with some satisfaction to the creation of more than 600,000 new private sector jobs within two years, almost twice as many as have been lost in the public sector, and to today’s news that unemployment is falling. That is heartening, but there are still too many families missing a breadwinner. This, above all, is testament to the misguided economic stewardship of the previous Government. Theirs was a flawed approach, predicated on ever greater debt, overly dependent on an unstable banking sector and neglectful of manufacturing.

I regret, therefore, that the noble Baroness, Lady Royall, is moving her amendment. It is only two years since Labour was thrown out by the electorate. I echo the Prime Minister in noting that her party’s only solution to overborrowing, overspending and excessive debt is more of the same. We stand firmly by the measures we have taken to date: tackling the deficit, reducing burdens on business and maintaining low interest rates. This latest legislative programme is again focused on economic rebalancing, rewarding hard work and delivering sustainable growth.

At the same time, we recognise that simply passing more laws will not in itself create the change we need. The Foreign Secretary reached the heart of the matter in today’s Times:

“Governments never have and never will create wealth solely through their own efforts. We can pave the way, but it will be talented and hardworking British people and companies who propel our country towards a prosperous future”.

I intend to devote much of my speech to those Bills which focus most directly on addressing that issue, although I will also cover key measures, including pensions and local government. Under the banner of the enterprise and regulatory reform Bill, we are promoting the UK’s transition to a green economy. The UK green investment bank—a global first—has initial funding of £3 billion to March 2015. Its mission as an independent institution will be to mobilise private finance in green infrastructure, helping to give UK businesses a head start in nascent markets.

Secondly, the Bill will tackle anti-competitive behaviour and ensure more open markets by establishing a new Competition and Markets Authority. Assuming the functions of the Competition Commission and the competition functions of the Office of Fair Trading, it will speed up existing processes within clearer time frames. Regulation is sometimes unavoidable, but it must never be excessive. Some burdens will be entirely done away with under this Bill; others may face sunset clauses. In addition, we will extend the primary authority scheme, allowing more businesses—especially SMEs—to access consistent advice on specific regulatory issues. The new arrangements will save many more small businesses from time-consuming, and often duplicative, inspections.

Many SMEs also regard the current operation of employment tribunals as a disincentive to expansion and hiring extra staff. We agree that it is absolutely necessary to protect people from abusive employers and no measures in this Bill will dismantle those protections. It is also important, however, that where disputes do arise, employers and employees receive help to resolve them without facing the costly and time-consuming employment tribunal process. I trust your Lordships will agree that this objective can be best achieved through helping parties to settle any dispute before a tribunal claim is lodged. We will encourage greater use of settlement agreements and streamlining the tribunals process itself, including a new rapid resolution scheme.

A similar desire to improve the lot of small businesses informs the Groceries Code Adjudicator Bill, designed to protect their interests as supermarket suppliers. Retailers, of course, should not be prevented from securing good deals on behalf of consumers, but nor should they be able to take unfair advantage of farmers and other small suppliers. I know that noble Lords on both sides of this House are eager to see the adjudicator introduced.

The adjudicator will have the powers necessary to uphold the code. As importantly, he or she will support investment and innovation in the supply chain by stopping supermarkets passing on excessive risk and costs to suppliers. That means serving the long-term interests of consumers and the economy, in which agriculture and food manufacturing are major segments.

This wish for business to be both successful and responsible explains another section of the enterprise Bill. In this case, we are seeking to re-establish the link between performance and reward at director level. In March, we issued proposals on giving shareholders binding votes on directors’ pay, and invited comments. We are now considering the consultation responses.

Britain needs a resilient banking sector that lends to productive business in the real economy. Our conclusion, following the independent commission led by Sir John Vickers, is that essential banking services must be ring-fenced from other activities and that insured depositors should have priority over unsecured creditors in cases of insolvency. The banking reform Bill will make these changes to foster financial stability and achieve a more resilient banking sector. The retail ring-fence will separate the vital services on which households and SMEs depend from more volatile wholesale and investment banking. This will insulate those services from the effect of shocks elsewhere in the financial system and ensure that if banks get into trouble, problems can be resolved without taxpayer support. The Government will complete all primary and secondary legislation by the end of this Parliament, and banks will be expected to implement the ring-fence as soon as practically possible thereafter.

We are legislating in two other sectors of vital national importance. The energy Bill will reform the electricity market to guarantee supply, reduce emissions more cost-effectively and improve regulatory certainty by making government and Ofgem better aligned. It ensures that the Office for Nuclear Regulation will be able fully to meet the future challenges of regulating the nuclear industry, as the first new power plants since the 1980s are built. Overall, the Government want to see a balanced portfolio of renewables, including new nuclear and carbon capture and storage, with gas playing a role during the transition and as back-up. The draft water Bill, meanwhile, will increase choice for business and public body customers, meaning they can obtain more competitive prices and demand more tailored services. The existing competition regime for water supply will expand to cover sewerage and there will be greater opportunities for new firms to enter the water and sewerage market.

Perhaps your Lordships will allow me to conclude by highlighting three other elements of the Government’s programme. The Local Government Finance Bill, introduced in another place in the previous Session, will shortly be debated in your Lordships’ House. Creating growth, reducing debt and handing back power to local people are at the heart of this Bill. It will incentivise local authorities to go for economic growth by reforming the business rates system, make councils more accountable to taxpayers and give local authorities autonomy in providing for their most vulnerable people. The local audit Bill, which we are publishing in draft for consultation and pre-legislative scrutiny, includes proposals to abolish the Audit Commission and open up local public audit to the private sector. We estimate that this could save £650 million of public money over the next five years.

Finally, following the agreements reached with trade unions for the three largest unfunded schemes, the public service pensions Bill will deliver affordable, sustainable and fairer pensions, and ensure that costs and benefits between employers, workers and other taxpayers are balanced more fairly. Pension benefits that have already been earned will be protected. These pensions will remain among the best available, continuing to provide guaranteed, index-linked benefits in retirement. Equivalent private pensions would cost around a third of an individual’s pay. Those closest to retirement will not see any change regarding when they can retire or any decrease in the pension they receive at normal retirement age.

The fundamental principles behind this programme are clear. As my right honourable friend the Prime Minister made clear in his reply to the debate on the Address in another place, this is a coalition Government prepared to confront the long-term challenges which this country faces. We are a Government prepared to roll up our sleeves and deal with the deficit. We are a Government determined to unleash the private sector, to encourage growth across our country and to sort out our financial services. We are a Government who back hard-working people. We are a Government acting for the long term and in the national interest.

Loans to Ireland Bill

Lord Cope of Berkeley Excerpts

Tuesday 21st December 2010 Lords Chamber

[Lord Cope of Berkeley]

My Lords, first, I should perhaps confirm that I am indeed the British co-chairman of the British-Irish Parliamentary Assembly, although in what I say this afternoon I am speaking entirely for myself and not in any way for the assembly. I do not think that this is an interest in the strict sense that your Lordships’ House understands, but for that matter, a lot of the interests that are declared in the course of your Lordships’ debates are not, in the strict sense, interests either. The House is quite right to err on the side of disclosure in that matter.

As the noble Lord, Lord Bew, has just indicated, as it happened, our last joint meeting as representatives of the legislatures of these islands occurred on 20 and 21 November, at exactly the time that the crisis which is the reason for the Bill was coming to a head. Our Irish colleagues were, indeed, somewhat distracted during our meetings over those days, as your Lordships will guess. It certainly gave us all a greater insight into the stresses that they were under and the political as well as the economic effects of the crisis. I can confirm, as the noble Lord, Lord Bew, has just said, that a great deal of gratitude was expressed by our Irish colleagues for the attitude of UK Ministers and, in particular, for some of the Chancellor’s remarks at that time. That has a political importance quite separate from the economic importance of the Bill and the loans it allows.

I strongly support the Bill. As my noble friend the Commercial Secretary has explained, the Bill and the loans it permits are part of the underpinning of the economy and banking system of the Irish Republic. It is important, as other noble Lords have said, for our economy and particularly for the economy of Northern Ireland. It is difficult to express that aspect of this too strongly.

I go along with the noble Lord, Lord Liddle, to the extent that this is not, of course, the end of such matters. We must expect further strains within the eurozone and, clearly, EU Finance Ministers, including our own, are right to seek agreement on a debt restructuring mechanism, and so on. We in Britain are necessarily involved because our banks are involved, as has been said, but that does not make the Bill wrong. On the contrary, it is right and I support it.

I also support the use of the fast-track procedure, which was devised, after all, by our Constitution Committee and which has proved its worth in this case, although it was questioned in debates in another place. Her Majesty’s Government are to be congratulated on seeking specific legislative authority before signing up to the loans, rather than relying on so-called common-law powers and coming to Parliament afterwards for ratification, which is something that they could have done. The previous Government were accused of having breached the spirit and, arguably, the letter of the Public Accounts Committee Concordat of 1932 which governs these matters. This Government were right not to have risked such condemnation in this case. At the same time, if the Bill had followed normal timings through Parliament, it would have been delayed until well after the loan agreements were likely to be agreed. That is the first reason for the fast-tracking.

The Government also say in the Explanatory Memorandum that fast-tracking is necessary to give confidence to our international partners. I understand that, but it is only part of the matter. The important fact which underlies all this is that markets these days move very swiftly and fast, firm decisions are required to deal with that. I was a Treasury Minister at the time we left the ERM—although I was not involved with that side of the department—so I need no convincing about the power of the markets and the speed with which they can influence events.

Incidentally, there is a tendency to dismiss currency market operations as purely speculators speculating. Of course, there are some operators within those markets who are pure speculators, but the foundation of currency markets—the size of them reflects this—is legitimate traders trying to offset potential currency fluctuations. A board deciding to invest in a new major plant whose operations and building will extend over decades to come needs to insure itself as much as it can against possible currency fluctuations during the time taken to bring it to fruition. Similarly, someone buying or selling large items which take time to deliver can easily find that the profit or loss on the exchange rate can be greater than the profit on the goods themselves. They need to ensure that they are not penalised by currency fluctuations by buying or selling forward. Which of us planning a holiday overseas has not thought about buying some local currency in advance if rates are likely to change? That is not speculation; it is prudent foresight.

I make one further point before I sit down. My right honourable friend the Chancellor of the Exchequer was not quite accurate when, in debates in another place, he compared the affirmative procedure in Clause 1(4) for agreeing any increase of these loans to new primary legislation. He said that the effect is exactly the same, but it is not; certainly not in this House, which is not involved in the affirmative procedure in Clause 1(5)—quite rightly, given the nature of the Bill. The effect of affirmative orders and primary legislation is not the same, and certainly was not when I was a Member of another place a decade and a half ago. I realise that the timetabling of Bills in another place has made things rather different from when I was there. It means that there is less distinction between affirmative orders and Bills in another place, but what a commentary that is on the way in which primary legislation is now scrutinised there.

However, that is by the way. I support the making of these loans to our friends and neighbours in the Republic and I support the mechanism by which it is being accomplished; namely, this fast-tracked Bill.