§ 10. Mr. David Nicholson
To ask the Secretary of State for Trade and Industry what plans he has to assist small and medium-sized firms in developing new products and processes.
§ Mr. Douglas Hogg
My right hon. Friend the Secretary of State plans to launch in early 1991 a new scheme to support small and medium-sized firms to develop new products and processes. The scheme will be called SPUR.
§ Mr. Nicholson
Despite the present difficulties, does my hon. and learned Friend agree that small and medium-sized firms in the south-west are well placed to take advantage of the single European market? Will he state the proposed level of funding for this splendid new initiative and will he continue to build on it with further initiatives to help innovation?
§ Mr. Hogg
We have a variety of initiatives in place, most notably SMART—the small firms merit award for 980 research and technology—the consultancy initiative and REG—regional enterprise grant. Those are all familiar terms to some hon. Members but not, it seems, to the Labour party. Investment will be about £30 million over three years.
§ Mr. John Evans
Will the Minister acknowledge that the finest assistance that could be given to small and medium-sized firms in Britain, and St. Helens in particular, would be a substantial fall in the appalling level of interest rates, which is currently crippling them?
§ Mr. Hogg
As a matter of fact, the best assistance by far is a profitable industry. The House will like to know that profitability in British industry has increased substantially in the past decade. It is up 1.75 times since 1979, up 2.5 times since 1980 and up 3.5 times since 1981. The House will also like to know that between 1974 and 1979 profitability increased not at all.
§ Mr. Ian Bruce
Following on from that reply, does my hon. and learned Friend remember that during Labour's last period of Government its response to the lack of output from small companies was to increase employers' national insurance contributions by imposing a national insurance surcharge? Does he recall that during the 1980s we removed it progressively and output increased? Has he made any representations to the Treasury about reducing the current high level of employers' national insurance contributions of 11.5 per cent. to perhaps 5 or 6 per cent., which it was in those days?
§ Mr. Hogg
My hon. Friend referred to an important point. Under the Labour Government of 1974–79, manufacturing output actually fell. If the House would like to have the figures, they are these. In 1974, output was £109.1 billion. In 1975, it was £106 billion. To be more precise, production of cars between 1974 and 1979 fell by about one third, from just over 1.5 million to just over 1 million. So, Mr. Speaker, you can well understand why we regard the protestations of the Labour party that it is a friend of manufacturing industry as simply absurd.
§ Dr. Moonie
I was wondering where the continentals got the term "thick bricks" from. How does the Minister propose to aid technology transfer by cutting the budget by 40 per cent?
§ Mr. Hogg
The hon. Member for Redcar (Ms. Mowlam) wants to know about the SPUR scheme. Well, I shall let her know about it. It has three elements. The first is to assist firms to pay for consultants, to help with the introduction of advanced manufacturing systems. The second is to assist small firms with product developments that have a novel, technological edge to them. The third is to assist with the provision of technological expertise to deal with short-term problems. I should expect ringing applause from the Opposition, but I know that I shall not get it.