Financial Assistance to Industry

Kevin Brennan Excerpts

Monday 14th March 2016 General Committees

[Kevin Brennan (Cardiff West) (Lab)]

If the Minister is going to praise her Secretary of State, I will praise my shadow Secretary of State, who has put a lot of pressure on the Government to try to get them to do the right thing on this issue. It is only fair—if the Minister mentions him, I have to mention her; that is just the way it is.

Broadly speaking, the motion is very welcome. I thank the Minister for her explanation of what we are doing this afternoon. It was interesting to read through the documentation on the issue, including the guidance for applicants for compensation under the scheme. The Minister gave us a little sample of the industries that may well benefit from compensation, but if hon. Members have not had chance to see the documentation yet, they might be interested to know that it has a long list of industries that may benefit from compensation under the scheme—they will be glad to hear that I am not going to read it out. That is extremely welcome, given the high electricity costs for businesses in this country.

One issue that occurred to me in reading through the guidance for applicants, and also through the further guidance for applicants—there is quite a lot of documentation related to the scheme—is that a business filling in the application form must have certification by an accountant of what its energy bills actually are. Let me quote from BIS’s “Compensation for the indirect costs of the Renewables Obligation and Small Scale Feed-In-Tariffs” guidance for applicants, from February 2016. Paragraph 19 states:

“The accountant’s fees, together with VAT and out-of-pocket expenses, will be agreed with and billed to the Compensation Applicant. BIS is not liable to pay the accountant’s fees.”

That is perfectly understandable. The Minister says that businesses are already applying for the compensation. Are any of those businesses likely to be quite small? If so, will the cost of having to use an accountant in that way, as specified in detail in the guidance for applicants, be likely to have an impact on whether it is worth while for a small business to apply for compensation? It would be useful for us to have a feeling of the likely size of the businesses that might be eligible in the long list of industries outlined in the Government’s documentation. If they are very small businesses, it would be a shame if they missed out because the cost of applying takes up a large amount of the likely compensation.

I have a few other questions for the Minister, although we are perfectly content for the motion to proceed without a Division. Her opening statement answered a number of questions that I will now not ask, but from the applications received so far, or from the Department’s own intelligence, does she have an indication of how the funding is likely to be distributed across the country? I understand that that depends on who applies, but what areas of the country does she expect might benefit from being able to apply for the compensation? Does she think that the funding will be sufficient for all the businesses that are likely to qualify? If it is capped, there may be a bit of a scramble to get it before it runs out. It would be helpful if she could give us a general feeling on that.

Will there be there an upper limit on the level of compensation for which individual businesses can apply? As I understand it, we are authorising up to £371 million of funding today. How exactly was that very precise figure arrived at? Further to that, is there a plan in place to disseminate information to small and medium-sized enterprises? The larger players will be well aware of the compensation scheme, but SMEs that might benefit from it might not come across it unless the Department makes an active effort to market its availability to such companies. Indeed, has the Minister thought about involving Members of Parliament in the dissemination of such information in their constituencies? Members on both sides of the House will be aware of businesses in their constituencies that might well benefit from such compensation, and it would be useful if the Department were able to indicate whether it thinks Members of Parliament might be useful in such dissemination.

I will not ask any further questions, but I hope the Minister will give us some ideas on some of those points.