Nick Herbert raises local business concerns on 'Any Questions'
Arundel & South Downs MP Nick Herbert drew attention to the plight of local businesses who are being charged more for their bank loans when he appeared on Radio 4's ‘Any Questions’ on Friday evening (9 January).
The programme was broadcast from the Kingsmead School in Enfield, Middlesex.
Mr Herbert said that thousands of businesses are struggling to get the credit they need to stay afloat and called on the Government to introduce a national loans guarantee scheme.
One of the questions put to the panel was: "Will yesterday's cut in interest rates stimulate consumer spending or will people stash that cash in anticipation of the taxation time bomb?"
In response, Mr Herbert commented: "I think the problem is that the interest rate cuts, so far, have not had the desired effect. What business leaders were actually saying yesterday is that it's not the price of money that is now the problem, it is the unavailability of money, of credit to businesses.
"That is why we have been saying that the most important thing that the Government could now do is to introduce a national loans guarantee scheme. The important thing is to give the banks the confidence that they can lend. We need to get credit moving again in the economy. It is the most important thing that we can do and it's what businesses desperately need.
"One in three small businesses now can't get access to funding. I received a letter this week from a profitable business in my constituency who have just had their borrowing arrangements changed unilaterally by the bank. They are having to pay more for their overdraft facility, which they need in order to trade, than they were before in spite of these interest rate cuts."
When the Minister on the panel, Tony McNulty MP, rejected the idea, Mr Herbert responded: "I find the criticism ... extraordinary for two reasons. Firstly, because the Government has just blown £12 billion on a VAT cut that everybody, including all of these business leaders, is saying was a complete waste of money and completely ineffective.
"The second reason that I find your criticism incredible is that it's wholly negative. What are you, the Government, going to do to get credit moving in the economy? All the business organisations are saying that this is the most important thing that can now be done. And instead, you just sat there and criticised this scheme which, by the way, has been welcomed by all the major business organisations including the CBI. It's been welcomed by them. And you've not said what you are going to do to help get the economy moving again."
In a related question about the current economic crisis, a student in the audience wanted to know what policies were in place, or may be put in place by an alternative Government, to safeguard jobs in the future.
Mr Herbert commented: "We've got, now, the highest debt in the developed world. I think it's one of the tragedies that it's our future generations - young people now and those in the future - who will be paying for the profligacies that got us here. They're the ones who are going to be paying with fewer opportunities, who are paying now with higher unemployment, and will be paying the higher taxes that are around the corner to fund Gordon Brown's spending spree.
"I think we have to move from an economy that has been built on debt to one that is built instead on savings. I think we have to move as a country and as a Government that has lived beyond its means to one that lives within its means. We need a Government that understands that money does not grow on trees and, just as individuals and families have to tighten their belts, so we all expect the Government now to tighten its belt as well and live within its means.
"We have to rebuild the economy on strong foundations. There has been an over-reliance on the financial sector and on housing inflation, the things that purported to deliver growth. And yes, I do think that we need to see ‘green' jobs where investment has lagged behind our peer group countries, and investment in high-tech industries. There will be fantastic opportunities in the future for young people if we can affect that structural shift in our economy.
"But it requires having a Government that has the right priorities and which doesn't make absurd claims to have abolished boom and bust when, in fact, I regret that the opposite has happened."
Asked whether the panel believed that Israel was justified in ignoring UN calls for a ceasefire while Hamas continued to launch rockets into the country, Mr Herbert said: "I think there does need to be a ceasefire but it needs to be a durable ceasefire that is sustainable and leads ultimately to a settlement.
"And that means that it's got to be a ceasefire under which Hamas will agree to stop launching its rockets. That's why this all started in the first place. After all, Israel unilaterally withdrew from Gaza three years ago. Many of us will remember the pictures on our televisions of the Israeli settlers literally being dragged from their homes by the Israeli authorities, to remove them from Gaza, because Israel decided that it wanted to advance the peace process by withdrawing.
"And yet, the rocket attacks continued and there have been 5,000 rocket attacks on Israeli settlements emanating from Gaza since then. And the problem has been that Hamas has had no interest in a peaceful settlement, in very striking contrast to Fatah and the PLO. So I think that it's important that we don't simply say: ‘Israel must stop'.
"Of course we're all horrified by the violence. What matters is that there should be a durable solution and that we should ultimately see what the majority of the Israeli population and the Palestinian population want to see, which is a two-state solution and peaceful co-existence."
A member of the audience asked: "What question did you hope not to be asked tonight and why?" Mr Herbert responded: "I'm very relieved that I wasn't asked a question about what I might have given up for the New Year because I haven't given up anything. I'm also relieved that there weren't any questions about reshuffles."
Nick Herbert, who is Shadow Secretary of State for Justice, was joined on the panel by Labour MP and Minister for Employment and London Tony McNulty, Liberal Democrat MP and housing spokesman Sarah Teather and author and columnist Andrew Wilson.
'Any Questions' is broadcast live on Friday evenings and repeated at lunchtime on Saturdays. Panellists are not told in advance what the questions will be.
Notes for Editors
1. For a transcript of the ‘Any Questions' programme, visit http://www.bbc.co.uk/radio4/news/anyquestions_transcripts_20090109.shtml.