§ 1. Sir William Elliottasked the Secretary of State for industry through which Government-aided schemes or bodies factory space for starter businesses is available in the principal conurbations.
§ The Under-Secretary of State for Industry (Mr. John MacGregor)The English Industrial Estates Corporation, the Scottish and Welsh Development Agencies and the Northern Ireland Department of Commerce can all provide nursery units from public funds in the principal conurbations of the assisted areas.
Local authorities throughout the United Kingdom and urban development corporations also build factories and receive central Government funds, for example through the urban programme. Privately-financed developments of this kind have been encouraged by the 100 per cent. industrial buildings allowance in the 1980 Finance Act.
§ Sir William ElliottI am grateful to my hon. Friend for that catalogue. Does he accept that Newcastle-upon-Tyne depends enormously on the further encouragment of small businesses in that city Will he consider all possible further means of encouraging small businesses, possibly through the EEC regional fund?
§ Mr. MacGregorI am well aware of what my hon. Friend said. Last Tuesday, I was in the Northern region at a business opportunities programme conference, which was well attended by representatives of small businesses. I assure my hon. Friend that I shall continue to study all ways of helping small businesses.
§ Mr. Campbell-SavoursIs there not among those bodies British Steel Corporation (Industry) Ltd. and the enterprise trusts which it is fostering? In what way can the Minister help Sir Charles Villiers, who this moring suggested that additional funds should come from the European Community to help foster the development of enterprise trusts in areas of high unemployment?
§ Mr. MacGregorThere is a distinction between British Steel Corporation (Industry) Ltd.—I am well aware of its excellent work, and I have visited it on a number of occasions—and the enterprise trusts, which involve large firms, local authorities and others, including local chambers of commerce, combining to help small firms. 564 Much aid, in the form of funds of one sort or another, comes from European sources, and the hon. Gentleman will know of the encouragement that the Government are giving through exchange risk guarantee schemes and other such measures. I shall consider Sir Charles Villiers' suggestion, but we are doing all that we positively can to encourage such initiatives.
§ Mr. SteenWhy is my hon. Friend so sure that these public funds are best spent in this way? Would it not be better to privatise the English Industrial Estates Corporation and other organisations to which the Government give sizeable funds, because many private sector development companies would be happy to build factories in inner city areas.
§ Mr. MacGregorI am aware of my hon. Friend's recent publication "New Life for Old Cities", which I have read, and we are now studying a number of its suggestions. There is a substantial role here for the English Industrial Estates Corporation. Under this Government, the EIEC has concentrated on building smaller factories. At the end of October, it had built 592 units of less than 2,500 sq ft, another 537 were under construction, and 841 were at the design stage. In many cases, it is building in areas where so far the private sector has not been involved. As my hon. Friend will know, it is also building with private sector funds, and it can sell off its estates at the end. There is a role here for the EIEC in conjunction with the private sector.
§ Mr. John GarrettDoes the Minister agree that, regardless of the amount of space being made available for new starter businesses, the rate of new small business formation today is no higher than it was in the 1970s and the rate of small business deaths is about four times as high? Compared with such facts, which are caused by the Government's squeeze, which is reducing more small businesses to bankruptcy, the availability of space is surely a somewhat secondary matter.
§ Mr. MacGregorWe have no precise figures for start up and close down of small businesses in earlier years. We are working on the figures for last year, and they show a high rate of small business formation. It is interesting that more smaller premises of this kind are being built now than for many years past and that the take-up is very high.