HL Deb 26 March 1998 vol 587 cc1336-9

3.22 p.m.

Lord Randall of St. Budeaux asked Her Majesty's Government:

What steps they are taking to encourage an increase in the number of small and medium-sized enterprises within the African-Caribbean community in the United Kingdom.

The Minister of State, Department of Trade and Industry (Lord Clinton-Davis)

My Lords, Her Majesty's Government seek to provide a stable economic environment in which small businesses can grow and prosper. Business support services are available to all and these are delivered through Business Links in England and similar networks in Scotland and Wales. Business Link in the London area is undertaking research into the causes hindering growth among African-Caribbean small businesses.

Lord Randall of St. Budeaux

My Lords, I thank my noble friend for that very informed Answer. However, is the Minister aware of the considerable benefits to both the British economy and the African-Caribbean business community if they were to move on from their traditional limited markets to the more lucrative mainstream markets? Is my noble friend also aware that such a change to mainstream markets would be difficult because of a number of bottlenecks and blockages? Will the Government therefore consider what role they may play in encouraging this important market development?

Lord Clinton-Davis

My Lords, first, perhaps I may congratulate my noble friend on assuming or being elected to—I am not sure which—the chairmanship of the African-Caribbean Westminster Initiative. I wish him well, as I am sure the whole House will, in providing what I believe will be invaluable help to this sector.

In order to move into new and more lucrative markets, it is clear that individual skills and motivation are of prime importance. The Government will do their best to encourage the acquisition of such skills and motivation. Indeed, so far as concerns small businesses and exports, my noble friend will be aware that only yesterday I announced some new initiatives in order to encourage that purpose. I hope that businesses with an ethnic minority background will avail themselves of the opportunity to take advantage of those initiatives.

Viscount Caldecote

My Lords, does the Minister agree that there is still great difficulty in raising funds of up to £1 million for the start-up and expansion of small companies? Will the Government take action to resolve that problem?

Lord Clinton-Davis

My Lords, there is a difficulty. Last October, my honourable friend Mrs. Barbara Roche announced a number of new initiatives including Business Link in order to help small companies. This is a perennial problem which has afflicted more small enterprises. One can only hope that perhaps some of our venture capitalists in this country will take a broader and less short-term view in order to assist them. The same applies to conventional banks. It is not a matter as regards which the Government can directly intervene.

Baroness Nicol

My Lords, is the Minister aware of the value of worker co-operatives in relation to small businesses? Does his department take positive action to advise those who are in difficulties in starting small businesses to consider the possibility of a worker co-operative? It can be started with the minimum of capital.

Lord Clinton-Davis

My Lords, I am very much aware of my noble friend's interest in worker co-operatives. I have had an interest in this field over a number of years. I am sure that her prudent words in this regard are extremely important.

We cannot persuade or ensure that people take advantage of these opportunities, but we favour this particular prospect. I hope that my noble friend will recognise that we favour the whole panoply of measures that can be used to assist small and medium-sized enterprises, of which this is one; and we are making progress in this sector.

Lord Marlesford

My Lords, did not the Minister put his finger on the issue when he referred to the need to acquire new skills? In that context, is not the Government's main responsibility the TECs which I believe have over £2 billion a year to spend? I was in Cambridge visiting a major company this week. Its representative said that the local TEC was more interested in hairdressers than engineers. Will the noble Lord ensure that TECs make a better contribution to upgrading people's skills in exactly the way that the Question envisages?

Lord Clinton-Davis

My Lords, just as with Business Link, the records of the TECs are variable. We try to encourage higher standards so that the TECs reach the levels of the best. That is what it is all about. However, there are human frailties which govern these factors. If the noble Lord cares to write to me about the specific matter, I shall examine the evidence.

Lord Stoddart of Swindon

My Lords, does my noble friend agree that in such an initiative it is essential to involve the associations concerned. Is consultation taking place with the Federation of Small Businesses, and the Institute of Directors? I am sure that they would be able to lend much expertise to the initiative.

Lord Clinton-Davis

My Lords, we have carried out the most extensive consultations with all groups representing small and other enterprises. It was part and parcel of the remit of the export forum which has made some invaluable recommendations. I can assure my noble friend that we have had, and will continue to have, extended consultations to ensure that we get the best out of this vitally important sector of our economy.

Lord Cope of Berkeley

My Lords, is the Minister aware that I support strongly what he has said about the noble Lord, Lord Randall, taking the chair of this new initiative in which I, too, am involved? It is welcome to hear the Minister's support for small businesses. It contrasts greatly with the actions of previous Labour Governments, and some of the actions of the present Labour Government in connection, for example, with the minimum wage and the social chapter.

Does the Minister agree that every help should be given to all small businesses, including in particular those of the African-Caribbean members of our community, both to enhance jobs and to spread enterprise in the interests of all?

Lord Clinton-Davis

My Lords, I pay tribute to the noble Lord for joining my noble friend in this important and spirited enterprise. I am glad that he is now seeking to compensate for the errors of his government in dealing with the appalling situation which beset small and medium-sized enterprises as a result of their inertia.

Lord Pearson of Rannoch

My Lords, will the Minister agree that red tape and bureaucracy hit small and medium-sized enterprises much harder than they do larger businesses? Would he care to comment on the fact that, since my right honourable friend the then Prime Minister, Mr. John Major, set Tarzan free, in the shape of my right honourable friend Mr. Michael Heseltine, to cut through the jungle of red tape which besets small businesses, some 650 redundant regulations have been repealed and no less than 17,500 new ones have been imposed? Can the Government give the House any assurance as to how they may attack this problem of over-regulation?

Lord Clinton-Davis

My Lords, I have learnt over a period of time in this House to view the statistics referred to by the noble Lord with a degree of reserve. We made it clear when the deregulation Bill was before the House that we did not support unnecessary red tape and we welcomed its extirpation. I am surprised to hear the noble Lord of all people paying tribute to Mr. Michael Heseltine and referring to, "setting Tarzan free", bearing in mind the background from which he approaches the European Union.

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