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Lord Clinton-Davis: My Lords, there is a difficulty. Last October, my honourable friend Mrs. Barbara Roche announced a number of new initiatives including Business Link in order to help small companies. This is a perennial problem which has afflicted more small enterprises. One can only hope that perhaps some of our venture capitalists in this country will take a broader and less short-term view in order to assist them. The same applies to conventional banks. It is not a matter as regards which the Government can directly intervene.

Baroness Nicol: My Lords, is the Minister aware of the value of worker co-operatives in relation to small businesses? Does his department take positive action to advise those who are in difficulties in starting small businesses to consider the possibility of a worker co-operative? It can be started with the minimum of capital.

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Lord Clinton-Davis: My Lords, I am very much aware of my noble friend's interest in worker co-operatives. I have had an interest in this field over a number of years. I am sure that her prudent words in this regard are extremely important.

We cannot persuade or ensure that people take advantage of these opportunities, but we favour this particular prospect. I hope that my noble friend will recognise that we favour the whole panoply of measures that can be used to assist small and medium-sized enterprises, of which this is one; and we are making progress in this sector.

Lord Marlesford: My Lords, did not the Minister put his finger on the issue when he referred to the need to acquire new skills? In that context, is not the Government's main responsibility the TECs which I believe have over £2 billion a year to spend? I was in Cambridge visiting a major company this week. Its representative said that the local TEC was more interested in hairdressers than engineers. Will the noble Lord ensure that TECs make a better contribution to upgrading people's skills in exactly the way that the Question envisages?

Lord Clinton-Davis: My Lords, just as with Business Link, the records of the TECs are variable. We try to encourage higher standards so that the TECs reach the levels of the best. That is what it is all about. However, there are human frailties which govern these factors. If the noble Lord cares to write to me about the specific matter, I shall examine the evidence.

Lord Stoddart of Swindon: My Lords, does my noble friend agree that in such an initiative it is essential to involve the associations concerned. Is consultation taking place with the Federation of Small Businesses, and the Institute of Directors? I am sure that they would be able to lend much expertise to the initiative.

Lord Clinton-Davis: My Lords, we have carried out the most extensive consultations with all groups representing small and other enterprises. It was part and parcel of the remit of the export forum which has made some invaluable recommendations. I can assure my noble friend that we have had, and will continue to have, extended consultations to ensure that we get the best out of this vitally important sector of our economy.

Lord Cope of Berkeley: My Lords, is the Minister aware that I support strongly what he has said about the noble Lord, Lord Randall, taking the chair of this new initiative in which I, too, am involved? It is welcome to hear the Minister's support for small businesses. It contrasts greatly with the actions of previous Labour Governments, and some of the actions of the present Labour Government in connection, for example, with the minimum wage and the social chapter.

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Does the Minister agree that every help should be given to all small businesses, including in particular those of the African-Caribbean members of our community, both to enhance jobs and to spread enterprise in the interests of all?

Lord Clinton-Davis: My Lords, I pay tribute to the noble Lord for joining my noble friend in this important and spirited enterprise. I am glad that he is now seeking to compensate for the errors of his government in dealing with the appalling situation which beset small and medium-sized enterprises as a result of their inertia.

Lord Pearson of Rannoch: My Lords, will the Minister agree that red tape and bureaucracy hit small and medium-sized enterprises much harder than they do larger businesses? Would he care to comment on the fact that, since my right honourable friend the then Prime Minister, Mr. John Major, set Tarzan free, in the shape of my right honourable friend Mr. Michael Heseltine, to cut through the jungle of red tape which besets small businesses, some 650 redundant regulations have been repealed and no less than 17,500 new ones have been imposed? Can the Government give the House any assurance as to how they may attack this problem of over-regulation?

Lord Clinton-Davis: My Lords, I have learnt over a period of time in this House to view the statistics referred to by the noble Lord with a degree of reserve. We made it clear when the deregulation Bill was before the House that we did not support unnecessary red tape and we welcomed its extirpation. I am surprised to hear the noble Lord of all people paying tribute to Mr. Michael Heseltine and referring to, "setting Tarzan free", bearing in mind the background from which he approaches the European Union.

London Underground: Funding

3.31 p.m.

Lord Ezra asked Her Majesty's Government:

    Whether the new arrangements for providing capital investment for the London Underground announced by the Deputy Prime Minister on 20th March (HC Deb, cols. 1539-42) will result in long-term funding on an adequate and consistent basis.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, The Government's proposals for a public-private partnership for London Underground will indeed secure the long-term funding that the Underground needs. Investment will not be constrained by annual public expenditure plans, so contractors will be able to manage their investment programme far more efficiently. The higher cost of borrowing within the private sector needs

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to be set against the substantial savings that will result from an efficiently funded long-term investment programme.

Lord Ezra: My Lords, I thank the noble Baroness for that Answer. I generally welcome the Government's proposals, but I wish to ask a couple of questions. First, does the noble Baroness feel that the sums now proposed--that is, the additional public funding together with private funding--will be adequate to meet what are described as the "steady state" requirements of the London Underground together with overcoming the backlog of £1.2 billion that is recorded as being the under-investment of the past? According to my estimates, a further £100 million a year is still required to meet those two requirements. Secondly, if the funding from the private sector turned out to be less than the Government estimate, will they ensure that the shortfall is made good from public funds?

Baroness Hayman: My Lords, I am grateful to the noble Lord for his welcome for the proposals. We believe that the combination of the £1 billion investment programme over the next two years, with the additional funds that were announced in the Chancellor's Budget, together with what we are confident will come in with the bids for the infrastructure concessions, will provide the £7 billion worth of investment which, we are informed by London Transport, will not only make up the backlog but ensure that the Underground system is brought up to a level at which it can function and serve the needs of Londoners adequately.

Lord Brabazon of Tara: My Lords, will the Minister say why, in the Deputy Prime Minister's Statement on Friday, there was absolutely no mention of fare levels, which are of great concern to many Londoners? While one welcomes the investment programme over the next 15 years it will undoubtedly cost money and will have to be serviced. Will the noble Baroness therefore give the House an assurance that government support for investment will continue after the two-year period which has been announced in the Statement in addition to what was planned before? Will she give a further assurance that fare levels will rise no more than the rate of inflation, as was proposed in the previous government's plans?

Baroness Hayman: Yes, my Lords, I think I can give that assurance. It will be done on the basis of the proper investment in London Underground, which was certainly not assured by the previous government's plans and is the reason for the problems that we have inherited. We have no reason to expect that fare increases above those of recent years will come from the investment programme that we have announced. Our analysis does not assume that there will be such fare increases. We are confident that there will be great interest from potential contractors and that we shall see very competitive bids in response to the innovative process that we have announced. However, were the

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bids to be higher than expected, I can give the noble Lord the assurance for which he asks--namely, that we would continue to give the subsidy that was necessary.

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