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Lord Stoddart of Swindon: My Lords, I beg to introduce a Bill to provide a right to single sex accommodation for National Health Service patients. I beg to move that this Bill be now read a first time.
Lord Trefgarne rose to call attention to the importance of increased output from United Kingdom manufacturing industry, with particular reference to the contribution made by small and medium sized enterprises; and to move for Papers.
The noble Lord said: My Lords, in rising to move the Motion standing in my name on the Order Paper, perhaps I may start by quoting from the Government's White Paper on competitiveness published in May 1994. At that time they said:
Let me emphasise that if our manufacturing companies are to compete successfully there is an urgent need for improved efficiency in the areas of manufacturing production, marketing and sales. At its simplest that is ensuring that we have the right product at the right price available in the right markets. In order to achieve those aims there is a vital need for sound and stable financial policies, leading to investment in plant, people, the infrastructure and, above all, education and training.
One area where government support is of importance is in the promotion and support of exports, both in European and world markets. Thus the work of ECGD in long and medium-term credit guarantees is of continuing and vital importance. Shorter term facilities are now provided by the privatised NCM company which appears to be going pretty well. But even in that market a continuing element of government involvement continues to be essential, if only in relation to political risk.
Within the broad scope of manufacturing, I should like to draw your Lordships' attention to the significant role played by small and medium-sized enterprises. These firms are defined as employing fewer than 500 people and are generally known as SMEs. It may come as a surprise to learn that more than half of all people employed in the United Kingdom work for such companies. Many of these firms employ only one or two people and empirical evidence gathered from research carried out at Warwick University suggests that such tiny organisations tend to stay small. But, of course, just one more employee for all of them would make a huge difference to our unemployment figures. The Smaller Firms Council of the CBI has estimated that there are some 100,000 firms employing between 20 and 500 people. Of those, 25,000 have been identified as expecting to grow substantially. These surely are the companies which need help and support.
What are the characteristics of these companies and what kind of support do they need? First, there must be motivational and entrepreneurial drive by the owners and the key managers. This must come from within the business itself. Without it nothing can be achieved.
Secondly, there must be a carefully planned product policy which requires both R&D and market research which is often beyond the resources of smaller companies. It has to be said that these smaller companies sometimes eschew this approach to business and, rather than focusing on becoming winners and leaders in their chosen field, become diffused in their efforts and end up "Jack-of-all-trades and master of none"! Clearly, that is wholly undesirable. One of the very important services provided over recent years by the DTI has been the availability of consultancy services, especially to smaller companies, for the purposes to which I have referred. I believe that these arrangements have made a most valuable contribution to improving the competitiveness of companies in this sector, and I hope that they will continue.
Thirdly, there is a need for professional marketing and selling of the product and, again, small companies often lack real experience and training in these areas. This is a matter on which consultants can no doubt offer some guidance, but perhaps more importantlyparticularly in overseas marketsis the selection of appropriate agents in the countries concerned. Here I wish to applaud the work of our missions overseas which are able to identify suitable local partners and bring them together with British exporters. I should perhaps remind your Lordships at this point that much of the work of small companies is very often as sub-contractors to larger enterprises, so the fact that I am, on this occasion, focusing on the needs of the smaller companies should not blind us to the important consideration that their health is equally dependent upon
Fourthly, finance is the lifeblood of any business and is especially vital as small and medium-sized companies strive to grow, especially when operating in the export field. I am not sure that the range of sources of finance available to SMEs is adequatetoo many rely almost solely on their bankbut let us discuss that on another occasion.
Perhaps the most important area in which the Government can assist in the creation, growth and continued health of smaller companies is in the reduction of bureaucracy and regulation. Here I must applaud the various initiatives which have emerged recently from the DTI from the personal spur, we understand, of the President of the Board of Trade himself. There is still a long way to go, not least in containing the plethora of directives, rules and regulations which emerge from Brusselswe had a flavour of that at Question Timebut I urge my right honourable friend to redouble his efforts in this area. It is, in my view, the single most important aspect of government oversight of business generally and small businesses in particular.
To compete effectively in international markets, the United Kingdom must address the immediate issue of skills training. In the longer term, we need to examine how our education system must develop to bring about greater levels of achievement. Compared with our main international competitors, the United Kingdom is consistently shown to be well behind in this area. This is the case in all levels of skills but especially for the intermediate levelsthose traditionally described as craft, technician and supervisory skills.
Recent research carried out by the Engineering Training Authority shows that an encouraging 80 per cent. of engineering sites with 500 or more employees are implementing the new national vocational qualifications. Equally promising is the significant interest employers expressed in using NVQs at the higher levelsthe very levels appropriate to the crucial intermediate skills, to which I have referred. But there is some evidence that smaller companies are not in the vanguard of these welcome developments. I hope that they will be in the future.
Investors in People is an important mechanism for employers to develop workforce skills and competence as an integrated part of the organisation's business plan. The importance of this initiative was underlined in the White Paper, to which I referred, and rightly so. There is, however, a risk that smaller companies may tend to dismiss these ideas as irrelevant to their needs. I do not
The Government's firm commitment to modern apprenticeships is to be applauded. Prototype schemes are currently running in 17 sectors, the largest of those being engineering manufacturing. The Employment Department has pledged further major funds over the next three years to support launches in other sectors. Let us hope that they do not fall foul of whatever changes my right honourable friend the Chancellor of the Exchequer may announce tomorrow, following his "little local difficulty" in the other place last night.
Modern apprenticeships are an excellent means of giving quality training, providing young people with a foundation on which to develop a career or a route to higher education. Whatever the chosen path, modern apprenticeships, with their educational and core skills components, offer a sound basis for life-long learning which is so necessary in helping young people to adapt to change and cope flexibly with varying demands.
In an industry which has seen the number of trainees fall by about a third in fewer than three years, this initiative is an excellent opportunity to reverse this trend and to raise our intermediate skills levels to international standards.
Turning now to education, as distinct from training, the United Kingdom's failure to rank high in the industry league can, in part, be attributed to a comparatively poor output from our nation's schools. A study showed that in 1991, only 27 per cent. of 16 year-olds in the United Kingdom achieved GCSE grades A to C in the national language, maths and science, compared with 62 per cent. in Germany and 66 per cent. in France. United Kingdom pupils achieving two A-levels or equivalent numbered only 28 per cent. compared with 68 per cent. and 48 per cent. in the same countries. This country's highly selective approach to education, together with its emphasis on academic study, serve the minority well, no doubt, but the majority poorly. A fundamental cultural change is needed to bring about the acceptance of vocational courses. This change is crucially important if the manufacturing industry is not to lose out.
My Motion calls attention to the importance of increased output from all sectors of UK manufacturing industry including, in particular, smaller companies. But this vitally important increased output depends crucially upon our companies increasing their efficiency and hence their competitiveness if they are to compete not only here at home but more widely across Europe and the world. We have made enormous strides in the right direction in recent years as our economic recovery now demonstrates. But there is still much to be done. I believe that the main thrust of government policy is in the right direction and I commend the enthusiasm and drive of Ministers in this regard. But in the end our
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