§ 10. Mr. Devlin
To ask the Chancellor of the Duchy of Lancaster what the response has been to the launch of the new enterprise initiative.
§ The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke)
The response has been excellent. We have received more than 30,000 inquiries on the DTI freephone number, and 100,000 enterprise initiative booklets have now been distributed.
My right hon. and noble Friend and I have also received many messages of strong support from industry for the policies announced in the White Paper.
§ Mr. Devlin
I welcome my right hon. Friend's initiative on behalf of the many thousands of firms on Teesside that will directly benefit from the thousands of small projects set up each month, and the doubling of research and assistance to small businesses. Does he intend to maintain the presence of the DTI in its present form on Teesside? 346 If, as has been announced, the regional development office will disappear from Billingham, will he give an undertaking to redeploy the staff elsewhere in the region?
§ Mr. Clarke
The change in the nature of the services offered by our Department will obviously involve some changes in the deployment of the staff. I assure my hon. Friend that we certainly will retain a regional office in Billingham. We shall open a new satellite office in Middlesbrough. It is possible that we shall require additional personnel in the region as a whole, so long as the response is strong enough. There will, however, be some changes, because the staff previously employed in the routine checking of automatic regional development grants at Billingham will no longer be required in the same numbers. We shall look at the possibilities of redeploying them elsewhere in the region as far as possible.
§ Ms. Armstrong
Will the right hon. and learned Gentleman take the opportunity to reassure those firms seeking to locate or expand in the north that the new grants and other measures which he has announced will enable them to get quickly through the bureaucracy—this reflects one of their main fears about the loss of RDG—and that the overall amount of money going into the north next year will be not less, but more?
§ Mr. Clarke
We believe that the new package of grants and support that we are able to give industry in the northeast will enable us to attract new investment to the region with the same success, if not more, as we have achieved in recent years. We plan to spend more money on DTI grants and services in the regions than we planned when the last White Paper was produced. Obviously, the eventual outturn of expenditure will depend on the response of firms in the regions and those who wish to go there.
§ Mr. Grylls
Is my right hon. and learned Friend aware that many people will warmly welcome the consultancy advice offered to small and growing businesses. thereby increasing their professionalism and heightening their success rate, while reducing their failure rate? Is he satisfied that the fees offered to the consultants for which the Department will look will be adequate to ensure that there is an adequate supply of consultants to deal with those firms that would like to take advantage of the services?
§ Mr. Clarke
I am grateful to my hon. Friend for his first remark. The level of response from small firms throughout the country shows that we have identified a genuine need and that we can provide a valuable service. The representations that I have received on consultants fees vary, depending on the type of consultants about which one is talking. At the moment we are particularly recruiting the business advisers who will carry out the initial company audit and decide what form of consultancy is required by the company. We find that the level of fees that we are offering is getting the right sort of people to apply. The fees for the eventual consultancy will be in line with those that we have recently been using satisfactorily for our existing consultancy services.
§ Mr. Salmond
How many of the messages of support have come from business consultancies which undoubtedly will be the prime beneficiaries of the enterprise initiative? Does the right hon. and learned Gentleman believe that what is good for business consultancies is necessarily good for business?
§ Mr. Clarke
The messages of support have come from representative organisations of business and chambers of commerce, both north and south of the border, and from large numbers of business men, who accept the need to make our businesses ever more competitive in ways other than just price competitiveness, at which British industry is getting very good. There will be an increase in the amount of consultancy provided, but we are determined to ensure through our contractors that it is good quality consultancy that achieves the job of raising the management performance of the companies that will benefit from it.
§ Mr. Holt
Referring to Teesside, will my right hon. and learned Friend reflect on the fact that, however great the Government's grants, the swingeing increase in rates by Cleveland county council by an additional 30p this year, bringing it up to 282p at county level, will negate much of the Government's good action in their initiatives? Will my right hon. and learned Friend speak to my right hon. Friend the Secretary of State for the Environment and draw attention to this terrible impost on business in that area?
§ Mr. Clarke
I agree with my hon. Friend. It has been a feature in recent years that those local authorities that complain most about the difficulties of attracting new business in their areas go on to impose the highest possible rates and deter new investments. Fortunately, the Government have a proposal to introduce a national non-domestic rate across the country, which will rescue business from those local vagaries and be especially beneficial to industries in the north, in the type of constituency represented by my hon. Friend.
§ Mr. Blair
Is it not the case that the welcome given by industry — certainly north of the border — has been qualified? Industry says that it welcomes the White Paper only if it will not mean a decrease in the overall level of resources. Is it not the case that the business development initiative, which is one of the main items on which the Government hang their hat when saying that they are maintaining resources, applies nationally? Will the Minister tell the House how much of the money will find its way to the hard-pressed regions of the north, Scotland and Wales, rather than to the regions that are already well off?
§ Mr. Clarke
The initiative does, indeed, apply nationally, but, as the hon. Gentleman knows, we are giving a higher rate of grant to companies that apply under the enterprise initiative in the assisted areas, which include large parts of Scotland and Wales. We are determined to plan and work on the basis that we shall achieve the same level of expenditure, at least in the regions, as we have achieved in the past. Our success depends on the take-up in the areas in question. That is why we are promoting the new initiative so heavily to business men in Scotland, Wales, the assisted areas and the urban programme areas. We wish to ensure that the level of take-up is achieved, benefits produced and the level of expenditure maintained.
§ Mr. Jack
Is my right hon. and learned Friend aware of the keen interest that is being shown by the Labour leader of Lancashire county council in the excellent enterprise package? To assist her in her further understanding of these exciting measures, will the Minister tell me when the DTI satellite office is due to open in
§ Mr. Clarke
The new realism is affecting quite a lot of councils, although, to be fair, some of the councils in the north-west have always been fairly pragmatic and have worked with the Government in helping to promote new enteprise in their areas. I am sorry that I cannot give my hon. Friend the exact date for the opening of the new office. I rather thought that it had already opened, but if it has not, no doubt it will open in the next few weeks.