§ 2. Mr. Henry Bellingham (North-West Norfolk)When he next expects to meet representatives of the small firms sector to discuss the application of the Industrial Development Acts to Scotland. [128444]
§ The Secretary of State for Scotland (Mr. Alistair Darling)I will continue to engage with all those involved in the Scottish economy. I will be very happy to meet representatives of small businesses to discuss industrial development.
§ Mr. BellinghamThe Secretary of State will know that there has been a huge increase in the amount of funds that are available under the Act. Obviously small firms are vital for the Scottish economy. Will the right hon. Gentleman tell the House what percentage of his grants will go to the small firms sector? Will he also tell us what mechanisms for accountability will be put in place to oversee the expenditure of the money, both in this Parliament and in the Scottish Assembly?
§ Mr. DarlingFirst, I should perhaps point out that it is the Scottish Parliament. As the House will know, I am very aware of these things.
Secondly, as for legislation, I am grateful to the hon. Gentleman for welcoming the fact that the Government have increased the amount of money available for industrial assistance. He will be aware that under the Scotland Act 1998 responsibility for disbursing these funds is exercisable by the Scottish Executive, who have chosen to do so largely through Scottish Enterprise. It will be a matter for Scottish Enterprise as to how and what proportion goes to small businesses. I am pleased 150 to note that in the first quarter of this year nearly 5.000 new firms were set up in Scotland, which I hope the whole House will welcome.
§ John Thurso (Caithness, Sutherland and Easter Ross)When the Secretary of State meets representatives of small firms, what will he say to them about the massive hikes that they have suffered in employers liability insurance? Is he aware of the recent Federation of Small Businesses survey, which reported that 20 per cent. of firms have had a doubling of their premium; 25 per cent. have difficulty in getting cover at all; and 60 per cent. report a drop in profitability? What can the Government do to assist this vital sector?
§ Mr. DarlingI am aware of the problem. I expect that most Members will have been approached by constituents in the small business sector, who have faced quite substantial increases in premiums. That is partly because for a long time the industry was quoting low premiums. It has now had to increase them because of claims. There is also concern about a contraction in the insurance market, especially in certain sectors. It is something that my right hon. and hon. Friends in the Treasury and in other Government Departments are considering. It is clearly for the market to provide solutions in relation to insurance, but it is something about which the Government are concerned. Public liability insurance is becoming an increasing burden on business, and is something on which we want to keep a very close eye.
§ Mr. lain Luke (Dundee, East)May I congratulate the Secretary of State on his recent visit to Dundee and on his visit to small businesses in my constituency? They welcomed his commitment that the Government will do all that they can on issues such as insurance liability indemnity. Will he therefore continue to ensure that there is a strong Scottish voice in the different Departments in the United Kingdom to ensure that Scottish small businesses get their fair share and that their voices are heard at all levels of government in the UK?
§ Mr. DarlingMy hon. Friend knows that I spent an extremely interesting day in Dundee, where I saw some examples of extremely good innovation in the biotech sector in which companies have been set up as a result of research that has been carried out in Dundee as well as in other parts of Scotland, and in which new businesses are being set up that have been extremely successful. My hon. Friend is right that there are matters about which small businesses are concerned, particularly public liability insurance, which as I said a few moments ago is something on which we need to keep a close eye. It is encouraging that with the stable economic background that we have, with the lowest interest rates since 1955, we have the sort of environment that is likely to encourage business growth and in turn generate jobs. That is something that we should all support.
§ Mr. Alex Salmond (Banff and Buchan)I am delighted that the Assembly has become a Parliament in the Secretary of State's second Question Time. [Interruption.] Well, it only took a while. 151 The Secretary of State will be aware that the Federation of Small Businesses listed access to broadband as its No. 1 priority in its recently published manifesto. Despite the fact that there are comprehensive targets in place for Northern Ireland and for Wales, there is no such comprehensive target for Scotland, which means that many areas of rural Scotland, including 25 of the 27 telephone exchanges in my constituency, do not have even a medium-term prospect of getting access to broadband. Will the Secretary of State tell us what the problem is with access to broadband in Scotland? Is it state aid rules or is it just lack of ambition on the part of the Government?
§ Mr. DarlingThe hon. Gentleman is right that it is important that small business has access to broadband. Next week, Scottish Enterprise is running a programme to promote e-business to make people more aware of the opportunities available to them. Despite what the hon. Gentleman said, a recent report produced by the Organisation for Economic Co-operation and Development shows that Scotland is in the upper quartile of businesses that have access to broadband and e-trading. However, the hon. Gentleman is quite right—broadband ought to be promoted, and he will know that that is one of the jobs of Scottish Enterprise which, of course, is the responsibility of the Scottish Executive. It is important that we develop that so that we can make sure that Scotland's small business sector thrives.