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Smaller Enterprises (State Promotion)

Volume 408: debated on Thursday 3 July 2003

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What assessment she has made of the effectiveness of state-funded promotion of smaller enterprises. [123229]

The Parliamentary Under-Secretary of State for Trade and Industry
(Nigel Griffiths)

The best assessment of the effectiveness of our DTI small business support programmes is contained in the reports of the Small Business Council, whose 24 members are all successful entrepreneurs. I know from my ministerial visits to the north-east that there are many success stories, and I want to work with my hon. Friend to achieve even more.

I very much welcome Labour's new economic policy for small businesses, and I am extremely disturbed to learn that the Conservative party would want to scrap it completely. That support, however, must be clear and effective. Is my hon. Friend the Minister as concerned as I am by the statement of the chair of the regional development agency in the northeast that there are no less than 200 different organisations trying to support small business within fives miles of the centre of Newcastle? Does he have any proposals to rationalise that, to get some clarity and to establish robust, clear support that new and small businesses can understand and with which they can work?

Indeed. One NorthEast, the regional development agency, has conducted its own review of business support to ensure that all funds for the purpose are held in one pot, to get a strong focus on start-ups and to meet the needs of SME customers who choose the service that they want. I also pay tribute to the £13 million being spent in Tyne and Wear on business support, which is being co-ordinated by Business Link Tyne and Wear. Those two important agencies are cooperating, and I am sure that they will take the advice of my hon. Friend on board.

I declare an interest as an unpaid director of Ormeau enterprise park. Does the Minister accept that small businesses need help when they start up? Unfortunately, those who may fund some of those businesses may have a mindset that, when they have failures, they cannot be relied on to go forward in the future. Do we not need to change that mindset, bearing in mind that even large firms with enterprising inventions have had to repeat their experiments to succeed?

The hon. Gentleman is absolutely right. When I was in Belfast a couple of weeks ago discussing this issue with Bill Jeffrey of the Federation of Small Businesses, I stressed to him that the changes in the insolvency provisions that we have already made, which take the focus away from the honest failures and allow us to concentrate on the small minority of dishonest failures, will help to introduce a culture into Britain that to start up in business, to run a business, and to fail because the wrong product or service is being offered at the wrong time is not something of which to be ashamed. I encourage all Members of the House and the press to take that approach and to ensure that people are given encouragement to start business again. In the United States of America, people are not a success in business unless they have had at least one failure.