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Volume 470: debated on Thursday 17 January 2008

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

A strong enterprise culture is vital to the UK’s long-term economic prosperity and can help us meet some of our important social objectives.

Thanks to measures taken by the Government, there is a record number of small businesses in the UK and young people are increasingly looking to set up businesses as their chosen career path. More than 180,000 new businesses have been created each year since 1997 and new VAT registrations have exceeded de-registrations in each of those 10 years. We are working on strengthening our enterprise strategy and will publish a White Paper in the spring.

I am grateful to my right hon. Friend for his reply. I welcome everything that the Government are doing to increase enterprise. We in Stoke-on-Trent, which is not traditionally renowned for the number of its small enterprises, are very proud that it was the winner of the Enterprising Britain award. I have been in touch with the “Make Your Mark” campaign and we have great hopes that, from now on, the Government will make Stoke-on-Trent a city of enterprise as valuable as Liverpool is as a city of culture, so that we can make progress on everything that they want to do for enterprise and encourage investors to come to Stoke-on-Trent because we are proud of our award.

I am happy to endorse my hon. Friend’s comments about the North Staffordshire regeneration zone, which did a brilliant job in winning the national awards in 2007 and was a runner-up in the European competition. We will continue to do all we can to support enterprise in her constituency, which several initiatives can benefit. I am happy to say that my right hon. Friend the Minister for Competitiveness hopes to visit Port Vale soon to open some new enterprise units. As I said, we will continue to do all we can to support my hon. Friend’s excellent work.

Enterprise relies on new business, as the Secretary of State mentioned. What is he doing to help enterprising people who start up new businesses, given the credit squeeze, which is having such an impact on their cash flow? Will he ask the banks to be sensitive at this difficult time?

I accept much of what the hon. Gentleman says. We are in constant communication with the banks and others to monitor the impact of the financial upheaval in the markets that has taken place since the summer. So far, there has been little impact on banks’ borrowing practices in respect of small businesses, but we are keeping the situation under the closest supervision.

In areas of deprivation, social and community enterprises are an excellent way in which communities can take control and get themselves out of deprivation. What assurance can the Secretary of State give that people in those communities will receive assistance to give them the capacity to start their own businesses and social and community enterprises?

In our work on the new White Paper, we are closely considering the issue that my hon. Friend raises. In my response to my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley), I said that enterprise is not only an economic issue, although it is a powerful one, but an important social tool that helps us reach into areas of disadvantage throughout the country. I am sure that a reinvigorated enterprise strategy can help areas in Britain that are under-represented in business start-ups to do better, and especially groups of people—for example, women—among whom the number of business start-ups is much lower than among other groups.

We are examining a range of measures—I shall not announce the detail of the White Paper today—but I assure my hon. Friend that we acknowledge her points and are tackling them directly in our work on the White Paper.

Does not the Secretary of State realise that most small businesses would laugh at his claim of championing enterprise? With Labour proposals to double capital taxes on business and abolish income sharing on dividends between spouses, with enterprise groaning under the weight of some 3,000 new regulations a year, with growing instability in the banking sector and now the high street, and with energy costs and inflation rising, how can he say that enterprise is being promoted?

Because we use facts and evidence, not the hon. Gentleman’s empty huff-and-puff rhetoric. Policy should always be based on evidence, not ideology. He has made his party political point, which is all well and good, but I wonder what view business would take of a party that wants to cut research and development tax credits and business support schemes and introduce a new bureaucratic trading scheme for, for example, chocolate and fatty foods. That is evidence of a party that has totally lost touch with business reality in this country.

Following on from the question about social enterprise, I applaud the work that my right hon. Friend, the Department and the Office of the Third Sector in the Cabinet Office are doing to promote social enterprise. However, will he look closely at whether sufficient support is being given through Business Link branches, many of which are reformed? The support available is sporadic; in Luton, for example, we are under-resourced in terms of support and capacity building for social enterprise. That particularly affects those in black and minority ethnic communities who want to go into social enterprise, but do not have the advice and financial support to do so.

In relation to Business Link, we are again considering all such issues in the context of our work on the White Paper. On social enterprise, I shall draw my hon. Friend’s comments to the attention of the Chancellor of the Duchy of Lancaster, because he is overseeing a lot of the Government’s work on social enterprise. It is important in all parts of the country that there should be an efficient, modern and private sector-led business support service that can provide bespoke and tailored business advice to businesses that are just getting going. That is very much our ambition for Business Link.