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House of Commons

Thursday 1 November 2001

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]



Oral Answers to Questions


The Secretary of State was asked—

Manufacturing (Eastern Region)

1. Alistair Burt (North-East Bedfordshire): What recent representations she has received about unemployment in manufacturing industry in the eastern region; and if she will make a statement. [9547]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): I have received several representations. Manufacturing employment in the region is falling, as it is in most industrial countries, but unemployment in the region is down, and there are more people in work in the east of England than ever before.

Alistair Burt: I thank the right hon. Lady for her answer. Is she aware that many people in my constituency and in the eastern region as a whole see manufacturing as the silent casualty of the past few years? With the sector officially in recession, unemployment rising and Government measures such as the climate change levy beginning to bite, what personal targets is she setting to obtain some relief for manufacturing in this year's budgetary round? How does she intend to judge her success or failure on behalf of manufacturing when the Budget measures are announced?

Ms Hewitt: Manufacturing in every industrialised country is going through difficult times. Indeed, in the past three months, manufacturing output fell in Japan by 4 per cent., in the United States by almost 2 per cent., in the eurozone by well over 1 per cent., but in the United Kingdom by only 1 per cent. Although many of our manufacturing workers and businesses are having a difficult time in the global economic slowdown, we are better placed in Britain, as a result of the policies that the Government have been pursuing, to withstand the global

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downturn—as the International Monetary Fund confirmed just a couple of days ago. My right hon. Friend the Chancellor and I will continue to work with manufacturing industry and workers to ensure that more of our manufacturing companies become and remain highly productive and competitive in the world economy.

Mr. Gareth R. Thomas (Harrow, West): Does the Secretary of State agree that one way to encourage even more employment opportunities in manufacturing in the eastern region, and elsewhere in the United Kingdom, is to encourage the development of new technologies such as renewable energy? If so, what further action is she taking to encourage businesses such as Shell and BP that have significant manufacturing businesses in renewables overseas to set up manufacturing plant here?

Ms Hewitt: My hon. Friend is right. My hon. Friend the Minister for Industry and Energy and I have been working closely with those companies and others to encourage them to expand their renewable energy production in the United Kingdom. We are investing more than £250 million in renewable energy. We have created an incentive in the exemption of renewable energy from the climate change levy to encourage businesses to obtain more of their electricity from renewable sources. In the eastern region generally, we have the enormous advantage of Cambridge and other world-class universities, which are working increasingly closely with business and the regional development agency to ensure that the region is a centre of successful, growing high-tech manufacturing.

Mr. Nick Gibb (Bognor Regis and Littlehampton): What does the Secretary of State intend to do about over-regulation, which is so damaging to manufacturing industry in the eastern region and elsewhere in Britain, and how should we measure her progress in that?

Ms Hewitt: I know very well that when Opposition Members talk about over-regulation, most of the time they are talking about measures to give better protection to workers, including the minimum wage, which they opposed in the last Parliament, and measures on working time, including the right to four weeks' holiday. We are working closely with business and the Better Regulation Task Force to deal with red tape problems when they arise and to reduce the burden of administrative costs on business. I remind the hon. Gentleman that, according to the Organisation for Economic Co-operation and Development, we have less product market regulation than the rest of the OECD, and that Arthur Andersen found in a worldwide study earlier this year that this is the best place in the world to start and grow a business.

Small Business Service

2. Brian White (Milton Keynes, North-East): What assessment she has made of the operation of the Small Business Service. [9548]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The Small Business Service is helping to build an enterprise society in which small firms of all types can thrive. Among its achievements in the first 18 months is the raising of

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£100 million for early-stage high-technology businesses. Other achievements are set out in the annual report, which is in the Library.

Brian White: The Minister will know that the success of Milton Keynes is largely based on small firms coming to the area, supported by agencies in the public and private sectors. The business plan for the local small business service is based on that same ethos of partnership. Will he ensure that the local service holds to those commitments and give an assurance that the money will go to companies and not into bureaucracy?

Nigel Griffiths: I am certainly concerned about the underspend on operational costs in Milton Keynes, and I am monitoring the performance of Business Links. However, I am delighted by the quality of the support given to local firms that are badly affected by foot and mouth in my hon. Friend's area, such as Hot Air Balloon Adventures. The company informed me this morning that help from Business Links solutions was vital in assisting its survival and recovery.

Brian Cotter (Weston-super-Mare): I think that the Minister will agree that we all hope that the Small Business Service will be truly effective. Many residential homes in my constituency are concerned about the national minimum standards being imposed by the Government. The Small Business Service should act on their behalf, but in this case it has shown its ignorance of the Department of Health's consultation process. In fact, the official report of the Small Business Service to the Department shows that the service has been seeking business representation on a strategic group that does not even exist.

Nigel Griffiths: I am sorry to hear of any constituency concerns about the Small Business Service; it has given us very good service during the past 18 months. I am sure that better is to come and I am happy to take note of the hon. Gentleman's comments and to consider the matter. During the past quarter alone, the Small Business Service has helped more than 130,000 businesses through the advice given by Business Links.

Mr. Harry Barnes (North-East Derbyshire): Some small businesses are providers of services to people with individual learning accounts. Did the Department of Trade and Industry or the Small Business Service have any input in the recent decision of the Department for Education and Skills to stop taking new recruits for the ILA programme on 7 December? If so, was it not undiplomatic for that Department to send letters to small businesses telling them not to rush people into new, inappropriate accounts? After all, not all small businesses are run by cowboys.

Nigel Griffiths: I recently met the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Wentworth (John Healey), who has responsibility for that sector. We agreed that the help given to people should be constantly monitored, updated and improved. With the aim of improving the available services, I have certainly noted the comments of my hon. Friend the Member for North-East Derbyshire (Mr. Barnes). I know that my hon. Friend the

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Under-Secretary is also aware of the matter and is looking to ensure that an effective programme is improved and continues to provide a good service for all our constituents.

Mr. Philip Hammond (Runnymede and Weybridge): Will the Minister tell the House what advice he has received from the Small Business Service about the likely impact on small and medium-sized enterprises of the removal by the European Parliament of the concessions for smaller businesses in the information and consultation directive? That concession was brokered by the UK Government. Would it be too much to ask that in future, when the British Labour Government negotiate concessions in Brussels for the benefit of British business, Labour MEPs vote for them, not against them?

Nigel Griffiths: The hon. Gentleman gave us the position of the European Parliament, but there has been no change in the agreement on the common position on that matter. Indeed, I met Commissioner Liikanen last week in Brussels to discuss the strong representation that we and other member states are making to ensure that small businesses can thrive and grow in the EU.

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