HC Deb 18 July 1995 vol 263 cc1126-7W
Mr. David Shaw

To ask the Secretary of State for Scotland if he will make a statement on the results 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. [34695]

Mr. Kynoch

The Government recognise the crucial role played by small businesses in the UK economy. The Government continue to help small companies by keeping inflation and interest rates low and reducing legislation and administrative burdens. They also provide direct assistance where appropriate.

The White Paper published in May 1995 outlines a programme of measures to assist growth and competitiveness of the small firms sector.

Measures operated directly by my Department to assist small businesses include regional selective assistance, regional enterprise grant for investment and regional enterprise grant for innovation. For the period 1994–95, my Department made 219 offers of RSA to the value of £68 million to small companies—those employing fewer than 250. This contributed to the creation of 9,607 planned new jobs and the safeguarding of 1,780 existing jobs. Under both the investment and innovation elements of the regional enterprise grants scheme, 258 offers to the value of £3.7 million were made in Scotland in 1994–95 to companies contributing to the creation of 969 planned new jobs and the safeguarding of 628 existing jobs. RIG is available to companies with fewer than 25 employees while RIN is open to companies employing less than 50 people.

During the same period, my Department also made 27 SMART awards to small businesses with less than 50 employees and nine SPUR grants to companies with up to 250 employees to help them to develop highly innovation new products and processes. The values of these offers were respectively £1.2 million and £1.1 million.

In addition, Scottish Enterprise, Highlands and Islands Enterprise and their network of 22 local enterprise companies have at their disposal a wide range of measures through which they are able to support new and established small businesses.

Following major research involving Scotland's business community, the media, the finance and education sectors and the business support networks, SE published in 1993 its business birth rate strategy. The strategy aims to stimulate the encouragement of entrepreneurship and help improve the environment for new and small businesses. It is guided by a number of themes: to unlock the potential of Scottish entrepreneurs; to improve access to finance; to widen the entrepreneurial base; and to develop and support growth in key sectors.

I am greatly encouraged by the number of recent initiatives which have been generated or informed by the strategy and which are targeted at factors which SE's research identified as constraining the birth and growth of businesses. These include the establishment of the Scottish business shop network in partnership with the local authorities, chambers of commerce and colleges. The network in partnership with the local authorities, chambers of commerce and colleges. The network now comprises 31 first-stop business advice shops operating throughout Scotland, and which in 1994–95 handled a total of 60,000 enquiries. The small business loan scheme, operated in partnership with the Scottish banks, provides capped interest rate loans for start-up companies and existing small businesses. The LINC Scotland initiative provides an advisory service for young and growing companies seeking private investors. SE's strategy has taken particular account of the need to make support available to under-represented groups, including women, non-home owners and the under-35s.

I am very pleased that the number of new companies formed in Scotland in the six months to April 1995 is 32 per cent. higher than over the same period a year before. I believe that the initiatives which have flowed from SE's business birth rate strategy have made a major contribution to that achievement.

Actual and planned performance indicators for the enterprise bodies in Scotland, including advice to businesses and new businesses start-ups, are published in their annual report and in the expenditure plans for the Departments of the Secretary of State.