Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 140-148)

MR IAN FLETCHER, MR JOHN PEEL AND MS SALLY LOW

TUESDAY 26 FEBRUARY 2002

Mr Berry

  140. Do you have a view about the regional venture capital funds that the government is setting up to particularly support SMEs?
  (Mr Fletcher) We were slightly perplexed at the time it took to get approval. We saw a clear rationale for this scheme. There is a clear market failure in the provision of small amounts of capital and this is aimed at targeting that.
  (Mr Peel) There is a long way to go in the implementation. It is a relatively new scheme and it does not seem to be trickling to the S in SME. There seems to be a barrier there. Why, I do not know.
  (Mr Fletcher) From our perspective, we would support the fact that it has been targeted regionally.

Richard Burden

  141. Throughout your submission, you have put some emphasis on the importance of good communication between government and business. You have mentioned a few examples where you think the idea is good but maybe the delivery mechanism is too confusing or does not reach the S in SME. How would you go about getting the kind of improvements in communication that you would like to see?
  (Mr Fletcher) I see this particular issue of productivity as being analysed to death almost. We have had three competitiveness White Papers from the previous government; we have had an enterprise White Paper from this government. The Treasury analyses the problem at budget and pre budget. There are various external commentators that have looked at this issue in great detail from the National Institute through to McKinseys etc. I do not see it as a problem of analysis. What I see as the problem is that, at the end of the day, increasing productivity is not something that is delivered in the corridors of Whitehall but in the board rooms of businesses across the United Kingdom. It is engaging them in this particular debate and communicating to them that help is out there. There is a lot of good help out there that they do not know about. In that respect, rather than the DTI employing a new chief economist that is highly regarded, I would put that money into employing an equally well regarded communications expert who is able to get these messages out and raise awareness of how government can help. There is another facet to that and that is something that we do, which is undersold, and it is the benefit of networking. You can get business people together in a structured way. They derive a lot, whether it be in business opportunities or sharing best practice.

  142. Do you think that is happening at all, not happening, happening a lot?
  (Mr Fletcher) Our Chamber and Business Link in East Anglia, in Norwich, has a fairly structured programme of looking at exemplars of best practice and organising fairly informal networking links where businesses come and learn about their particular experiences. The 135,000 members of the British Chambers of Commerce are able to network on a daily basis, but we are the only organisation that has that infrastructure across the country. I see a great deal of opportunity to do more.

  143. How do you think the RDA network is doing in providing support and fostering communication between government and the business community?
  (Mr Fletcher) We lobbied hard at the start for the RDA to have greater autonomy over the way it spent its money. Perhaps rightly for political reasons, in the first two or three years of its conception, that was not the case. Now it has that autonomy, it is able to do more to target particular regional needs and we are pleased to see that happening.
  (Mr Peel) A sample happens to be South East RDA housed in Guildford. They are now three and a bit years old and have taken time to get the whole process off the ground and get an understanding of what happens in the region. They have formed their "village" which has enabled many organisations to put an individual on their premises and learn from them at first hand and influence also at first hand. It has taken time but in the south east it is coming along quite well. We do get quite a lot of opportunity to input via their sector groups and via some of their geographic groupings. Although not perfect, it is quite good. If I can mention one other government initiative which I approve of very much, Inside UK Enterprise, it is the ability of one company to visit another. It used to be free of charge; there is now a small charge for it. That has done a lot to promote best practice through business, and encouraging chains or groups of that nature, whether it be inside the Chamber of Commerce or nationally, is an excellent move.

  144. Would it be reasonable to say that the BCC generally would like to see more in the way of regionally based initiatives from government, expanding on things like the RDA network and so on? When I was asking you, for instance, how are you going to improve communications, you said, "Do not employ that person, DTI; employ somebody else." Is that what you are saying or are you saying you should do it regionally?
  (Mr Fletcher) In our submission to the DTI review, we were keen to see greater devolvement of decisions over programmes to a local level to meet particular needs of the business communities in those areas.

  145.   Do you feel that is going in the right direction at the moment?

(Mr Fletcher) There have been some welcome initiatives that have come out of the DTI review. The devolvement of the Smart programme is one. That has been devolved out of the RDAs and that would seem to make sense, given the different focus on innovation clusters and different areas. At the moment, we are in the process of review of all the DTI's programmes and the rationalisation of those into five generic bands. I have not had any intelligence in terms of whether that movement towards more devolvement will continue.

  146. What about LSCs? You mentioned earlier that LSCs were involved in good things but maybe they need to be more attuned to local needs.
  (Mr Peel) I have a perspective on this which is therefore mine alone. They do not appear to have sufficient business focus on their boards. Their funding seems to be very prescribed. Talking to our local Learning Skills Council chair, something like 95 per cent of the funding is prescribed as to where it goes so they have little capability to modify training in a given area to suit the needs of that area. I would like to see more flexibility for that.

Mr Berry

  147. Most of the written submissions we have had list the familiar factors that we all think determine productivity. The question is which are the most important ones. In your view, what is the single most important thing that the government could do to improve productivity? From your shopping list, what is top of the list?
  (Mr Peel) It has got to do something to try to improve the management skills in industry to ensure that management can direct the workforce and motivate the workforce at any level to achieve the aims of the business. We do not think, generally speaking, that management in this country does well. How you do that I leave to the experts.

  148. We sort of thought you were the experts. Thank you very much indeed. We look forward to some further clarification on the costs of regulation but thank you for your written submission and thank you very much indeed for attending this morning.

  (Mr Peel) Mr Berry, if you want to look at a supply chain from end to end, I could certainly lay that on for you as a Committee. It would take a day of your time.

  Chairman: We will consider your offer. Thank you.





 
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