§ Mr. David Shaw
To ask the Secretary of State for Scotland if he will make a statement on the achievements of(a) his policies and (b) his Department in helping small businesses over the last 12 months as against the previous 12 months; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.
§ Mr. Lang
Small firms continue to play an important and dynamic role in the regeneration of the Scottish 219W economy. Small firms also continue to benefit from the comprehensive schemes of support that the Government have introduced. In the main, these are delivered through the Scottish Development Agency, the Highlands and Islands Development Board and the Industry Department for Scotland, where policy responsibility lies. In addition to providing services specific to Scotland, the SDA, HIDB and the Industry Department for Scotland are responsible for the delivery and monitoring in Scotland of United Kingdom services on behalf of other Departments, including the Department of Employment and the Department of Trade and Industry. During 1989, there was a net increase of over 4,500 or 4.2 per cent. in the number of companies registered for VAT in Scotland. This is double the increase of the previous year. VAT returns indicate that between 1980 and 1989 the number of new businesses operating in Scotland showed a net increase of 19,900.
The following describes the services available to small firms in Scotland during the periods 1988–89 and 1989–90 and some of their achievements.
For the period 1988–89 IDS made 128 offers of regional selective assistance to the value of £12 million to small companies—those employing fewer than 200 people worldwide—in Scotland. This contributed to the creation of 2,180 new jobs and the safeguarding of 560 existing jobs. In 1989–90 167 offers of RSA were made to the value of over £17 million which contributed to the creation of 3,080 new jobs and the safeguarding of 340 existing jobs. For the period 1988–89 IDS made 2,180 offers to the value of £70 million under the revised regional development grants scheme to proposed projects by small companies in Scotland with the potential for 20,980 new jobs. In 1989–90 236 offers of RDG were made to the value of over £12 million with the potential for 3,400 new jobs. The last date for applications under this scheme was 31 March 1988. Information on the grant offered to small firms under the original RDG scheme is not available. Under both the investment and innovation elements of the regional enterprise grants scheme, 226 offers to the value of £2 million were made in Scotland in 1988–89, to companies employing under 25 people, contributing to the creation of 490 new jobs and the safeguarding of 400 existing jobs. In 1989–90 432 offers of REG to the value of over £4 million were made contributing to the creation of 1,640 new jobs and the safeguarding of 1,660 existing jobs.
During the periods in question, the better business service scheme was administered by IDS, SDA and the HIDB. The scheme allows small companies to have access to subsidised professional business advice and in 1988–89 some 6,804 offers of assistance were made with an associated value of £3.1 million. In 1989–90 some 8,090 offers of assistance were made with an associated value of £3.7 million.
Scottish Development Agency support for small businesses includes the provision of financial assistance, premises and a wide range of advisory services, including the small firms service (SFS) in Scotland and the administration of DTI's consultancy initiatives, under the enterprise initiative. In addition, the SFS offers an integrated and complementary range of business services including a Government business shop, a Euroinfocentre, a franchise desk and a Companies House satellite office. Under the consultancy initiatives, some 1,235 consultancy projects were undertaken during 1988–89 and in 1989–90 this figure was 1,158. In the year 1988–89, the agency had 220W contact with 19,250 small firms and some £.1.8 million was invested in 92 small firms creating or safeguarding 1,600 jobs. In 1989–90 the small firms service handled 17,286 inquiries; figures for SFS investment are not yet available, but across all sectors in Scotland the SDA invested £7 million and safeguarded 6,091 jobs.
As well as delivering a small firms counselling service in its area, the Highlands and Islands Development Board undertakes a wide range of activities in support of businesses, most of which are small, to help them overcome the difficulties in operating in this peripheral and rural part of the United Kingdom. The measures taken include financial support to business, provision of factories and assistance with business advice and training. In 1988–89, the board approved 1,220 offers of financial assistance worth £25.3 million on projects involving proposed private sector investment of some £44.4 million and the creation or safeguarding of 3,300 jobs. For the period 1989–90, the board approved 983 offers of financial assistance worth £19.4 million on projects involving proposed private sector investment of £51.1 million and the creation or safeguarding of 2,700 jobs. In the period 1988–89, the HIDB completed 12,553 sq m of factory floor space. In this period some 3,130 jobs were housed in HIDB factories. In the period 1989–90, the HIDB completed 7,208 sq m of factory floor space. In this period, some 3,200 jobs were housed in HIDB factories.
Local enterprise trusts have proved to be an important catalyst in fostering the enterprise culture in Scotland. The Government have continued to demonstrate their recognition of the valuable role played by the trusts, and the SDA provided financial support of £1.24 million to the 40 enterprise trusts in 1988–89, the latest year for which figures are available—an increase of almost 21 per cent. over the previous year. This has triggered a further £4.23 million from the other public and private sector partners. During 1988–89 trusts in Scotland counselled 25,200 clients from which 3,900 small businesses were formed. Companies assisted by enterprise trusts created some 9,000 new jobs. The SDA bases its financial assistance on its appraisal of each trust's annual management plan which contains details of the previous year's projects and objectives for the oncoming year.
The Scottish Office continues to provide wholehearted support for the deregulation initiative. Recent steps which have been taken to embed further the deregulation message within Scottish Office Departments include arrangements for deregulation awareness training, a ministerial message on deregulation, a staff competition for deregulatory suggestions and the inclusion of advice on the topic in the Scottish Office staff handbook. The Government business shop in Glasgow continues to provide a very effective single access point for information on how to deal with Government regulations.
As for public purchasing and supplier development, in the past year IDS, SDA and MOD have co-operated in the organisation of two seminars on civil and defence procurement. IDS made a strong contribution to a seminar organised by Strathclyde Innovation on improving the availability of development funding for small businesses. A major seminar was organised by IDS/SDA in October 1989 on the subject of supplier development. Another such event, focusing more closely on import substitution is planned for the latter half of 1990.