Small Businesses (Hansard, 11 April 1984)

§ 12. Mr. Henderson
asked the Secretary of State for Scotland what assistance is now available to small businesses in Scotland from European Community sources; and if he will make a statement.

§ Mr. Allan Stewart
Both the Government and the European Community attach a high priority to support for small businesses, and the wide range of European Community support includes loans, available throughout Scotland, to help small firms create and safeguard employment, and grants from the European social fund for firms which recruit those currently unemployed. In addition, we have used grants from the non-quota section of the European regional development fund to create for small firms in Strathclyde the better business services scheme, which is unique in Europe. The scheme is aimed at improving the business performance of small firms and I am delighted to announce that there have been almost 1,000 applications from companies in the first five months of its operation.

§ Mr. Henderson
Can my hon. Friend confirm that there is a European Coal and Steel Community project for Fife as well as for Strathclyde? Can he clarify whether that scheme applies to the whole of Fife and for a wide variety of companies of all sizes, and that although the jobs that may be supported through loans from that scheme must potentially be available to ex-miners, that does not necessarily mean that they have to be filled exclusively by ex-miners?

§ Mr. Stewart
Yes, I can confirm that. I discussed the inclusion of Fife with Commissioner Giolitti last November. He has confirmed that Fife is included in the ECSC scheme. On the second point, the employment of ex-miners is not a prerequisite, but the employment of ex-coal and steel workers is naturally considered a priority.

§ Mr. MacKenzie
Is the Minister aware that the best assistance that small firms can get is orders from large companies? The orders are not forthcoming because of the high number of closures in Scotland at present. Will the Minister look at the small firms from that point of view?

§ Mr. Stewart
I must tell the right hon. Gentleman that the Government regard the encouragement of small firms 378 as an absolute priority and that more than 100 new measures have been introduced. Of course the general economic climate and the orders that flow from it are of great importance, but we now have a combination of steady growth and low inflation, which are the basis for sustained expansion.

§ Sir Hector Monro
Will my hon. Friend reconsider the decision to award European assistance only in assisted areas? Is he aware that, for instance, forestry expansion often takes place in non-assisted areas and deserves assistance from Europe?

§ Mr. Stewart
My hon. Friend refers to the conditions of ERDF support, but I must emphasise to him that there is a wide range of European Community support, as I have said, and much of it is available to his constituency.

§ Mr. Home Robertson
Is the Minister aware of the significant success achieved by East Lothian district council with its small business assistance scheme, which has created a significant number of jobs for as little as £500 per job, which is considerably cheaper than some national schemes? Why have the Secretary of State for Scotland and the Minister responsible for trade and industry refused even to discuss that scheme with the district council?

§ Mr. Stewart
I am, of course, aware of the scheme to which the hon. Member has referred. The point is that it is important that the different schemes provided by different parts of the public sector do not conflict and overlap.

§ Mr. Bruce
Will the Minister acknowledge that his Department should be working with the EEC to toy to ensure that small businesses survive? Is he aware that while we get many good figures from the Government about small businesses being founded, they fail to tell us that nine out of 10 of them collapse within the first year? Does he agree that what are urgently needed are measures to enable small businesses to survive and develop, and a little understanding by the party of big business about how small business works?

§ Mr. Stewart
If the hon. Member understood anything about the economy in which we live, he would know that it is always the case that small businesses start up and expand, and that some inevitably go out of business. The Scottish economy is now benefiting from Government policies which create the environment favourable to the expansion of small businesses and the creation of new small businesses.