HC Deb 24 November 1980 vol 994 cc191-2
6. Mr. Trippier

asked the Secretary of State for Industry what interest has been shown in the North-West in the Norwich Union scheme for small businesses, which is administered by his Department.

The Under-Secretary of State for Industry (Mr. David Mitchell

The Norwich Union Life Insurance Society has agreed to consider making investments in small businesses in the North-West on the basis of introduction and appraisal by counsellors engaged by the Department's small firms service. A number of business propositions have been examined. None of these has yet reached the stage where it has been submitted to the Norwich Union.

Mr. Trippier

Does my hon. Friend agree that this scheme will become increasingly attractive as the rate of inflation continues to fall?

Mr. Mitchell

My hon. Friend is correct and has hit the nail on the head in saying that once inflation has fallen the prospects for business growth will be placed on a sound basis. We shall have to wait and see the extent to which businesses need money by way of equity investment from insurance companies and the like, as well as the proportion that they need in the form of loans. My hon. Friend will know that in his constituency the European Investment Bank will lend at 10 per cent., plus 2 per cent. for insurance cover against changes in the exchange rate.

Mr. Straw

In the light of the results of the CBI survey published this morning, which show that manufacturing industry faces prospects that are even worse than those of the 1930s, does the Minister agree that prospects for small businesses in the North-West will continue to be extremely bleak so long as the lethal combination of the Secretary of State and the Prime Minister pursuing uncomprehending and obstructive policies is continued?

Mr. Mitchell

Given time, the Government's policies will create the basis for sound business growth. When we have the combination of sound money and lower interest rates, we shall see the birth of many more small businesses.

Mr. Nicholas Winterton

Does my hon. Friend agree that it is cheaper to keep businesses going than to establish loans or other forms of assistance to get new businesses under way? I support the excellent point made by my hon. Friend the Member for Rossendale (Mr. Trippier), but do the Government agree that they have contributed directly to the fact that tens of thousands of good, solid working people have been put out of a job by a combination of high interest rates, the high value of sterling and unnecessarily forcing up the cost of energy which is vital not only to industry in general but to textiles and paper and board in particular?

Mr. Mitchell

My hon. Friend does ill-service to his cause, because while he asks for public money to be spent to keep business in being, at the same time he asks for interest rates to come down. That must mean public sector borrowing coming down. Therefore, he cannot have it both ways.

Dr. John Cunningham

Is it not true that the Association of Independent Businesses, which represents thousands of small businesses, has told the Government that conditions for small businesses have never been as bad as they are today? Does not that contrast starkly with the promises made during the election by the Conservative Party to aid small business men?

Mr. Mitchell

I continue to maintain contact with all the organisations representing small firms, including the Association of Independent Businesses, with which I have a good working relationship. Of course we take into account what it says, and as time unfolds the House will see that during the lifetime of this Parliament we shall achieve all that we promised at the time of the election.