7. What assessment he has made of the contribution of small and medium-sized enterprises to economic recovery. (6685)

Small and medium-sized enterprises are the backbone of the economy and will make a vital contribution to the economic recovery, through new start-up activity and through business growth. BIS is currently conducting a survey of small and medium-sized enterprises, which will further inform our assessment of the contribution of SMEs to the recovery.

On Tuesday, I visited the Queens Road area of Watford—an area previously of retail prominence—with Helen Lynch, a local community volunteer who is trying to revitalise the area. One of the main problems I saw was that many shops had shut down and were shuttered up. When I have tried to get people interested in taking up retail units in starting up a small business, one of the main problems facing them was the high level of business rates. I wonder whether the Minister with responsibility for small business, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), would agree to come to Watford with me so that we could discuss the issue on the ground with some local business people and other interested parties.

I pay tribute to my hon. Friend and the work that he does supporting small businesses in his constituency. I certainly think that my hon. Friend the Minister with responsibility for small business would be delighted to visit them. We are looking at temporary rate relief for small businesses. I know that it is a key problem for them.

Will the Minister do what he can to encourage and, through his own Department, support the venture capital investment so needed for small manufacturing start-ups? Not only is it a problem that the capital allowance has been reduced, but access to the necessary credit and resources is problematic. Will he conduct a review on venture capital availability?

Under the Budget we have set up a new enterprise capital fund, into which the Government have put £25 million. We are looking for additional private funding, but I certainly recognise the importance of the venture capital industry and venture capital funding for small businesses.

SMEs offer some of the best potential for future growth, but the biggest barrier to that is access to finance—in particular, I am talking about the failure of the enterprise finance guarantee scheme, because of the Catch-22 that it is the banks that SMEs apply to that say no. What can my hon. Friend do about that?

We are expanding the enterprise finance guarantee scheme by an additional £200 million, and we understand that it will support some £700 million of extra bank lending, but I absolutely agree with the hon. Gentleman about the problem of securing bank lending. We are due to publish a Green Paper on business finance before the summer recess. I hope that that will address many of the issues that are involved.

We on the Labour Benches welcome the extension of Labour’s successful enterprise finance guarantee that was announced in the Budget. We are questioning what has happened to the “major loan guarantee scheme” referred to in the coalition agreement. Is that in fact the same thing as Labour’s successful enterprise finance guarantee scheme, which the Tories and the Liberals have now extended in their own Budget?

In our approach, we want to look at all the issues in the round, so one of the key aims of the Green Paper on business finance is to ensure holistic measures of business support.