House of Commons
Friday 7 November 1997
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker in the Chair]
Innovation (Small Firms)
Motion made, and Question proposed, That this House do now adjourn.--[Janet Anderson.]
9.34 am
The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): The theme of today's debate is doubly important, as innovation--the successful exploitation of new ideas--is a key factor in the competitiveness of this country, and small firms provide the motor which will push forward wealth creation, employment and quality of life for the benefit of us all.
Innovation is now everybody's business--large and small companies, Government, and the providers of new ideas and techniques in the knowledge base. It is true to say that, the more it is seen as key to competitiveness, the more likely we are to see our companies succeed, grow and prosper.
The United Kingdom has a number of thriving small firms which have based their businesses on the leading edge of technology. They are living proof that it is not necessary to be a big, world-class company such as Glaxo-Wellcome or British Aerospace in order to break new technological ground.
For example, Surrey Satellite Technology operates in a sector traditionally associated with large companies and high price tags. Yet it has built up a valuable and profitable business producing small satellites which perfectly meet the needs of developing countries looking for the benefits which space systems can bring them in such industries as telecommunications. These satellites are both affordable and small enough to piggy-back on the launches of larger satellites.
There are many other examples in the biotechnology and information technology sectors that I hope hon. Members will draw to the House's attention during today's debate.
Mrs. Cheryl Gillan (Chesham and Amersham):
I thank the Minister for giving way so early in her speech, and congratulate her on securing today's debate. Surrey Satellite Technology is indeed a tremendous company that is to be congratulated on the great strides that it has made in the space industry in Britain. Will the Minister confirm that that company is part of the university, and that its profits help the university's costs, particularly as students will now be facing charges for higher education?
Mrs. Roche:
I whole-heartedly concur with the hon. Lady's comments about the importance of a debate, and join her in congratulating the company concerned.
I am proud to say that the Government have secured the future of higher education by following the proposals so ably made by Sir Ron Dearing. We have a great deal to do to make up for the disastrous state in which the previous Government, of which the hon. Lady was a member, left our education system, but I am so pleased that my right hon. Friend the Secretary of State for Education and Employment has made such a truly remarkable start.
Mrs. Gillan:
Will the Minister confirm that the Government have betrayed all students throughout the country by imposing charges for higher education?
Mrs. Roche:
Of course not. Again, the hon. Lady seems to be muddled. As it is rather early in the morning, I shall refrain from saying anything more cutting.
The Government are reviewing our education base. We have been elected in circumstances in which 50 per cent. of 11-year-olds entering secondary school are failing the basic average standard in the three Rs. As the hon. Lady was an Education Minister in the previous Government, it is amazing cheek that she has the gall to criticise the present Government's excellent record.
Most hon. Members will be familiar with the buzz-words "benchmarking", "spreading best practice" and "mentoring". They all boil down to one simple message: every company, every public sector body, every educational institution needs to be open and receptive and to take a close look at what is happening not only in its own sector but throughout the country and the world. We all need to learn from each other and from our customers how to be the best. The Government are ambitious for our companies; we want them to compete. That applies to the largest company and to the smallest, to the biotechnology company, newly spun out from a university, and to the small retail business next door to it.
Although most of what needs to be done can be achieved only by business itself and by monitoring best practice and putting it into practical use, the Government have a role in helping to set the right framework and spread the message. The Government are trying to do something that most companies find hard and many commentators regard as an impossibility for politicians: long-term thinking. We are not simply planning for this parliamentary Session, this year or this term. We want real stability in our economic, industrial and regulatory policy. Only when we have achieved that will companies feel able to plan ahead with confidence.
As my right hon. Friend the President of the Board of Trade made clear last month in a speech to a 3M/Confederation of British Industry conference, the message of stability--setting clear goals, making them public and sticking to them--will underlie our approach to the work of the Department of Trade and Industry.
An example of such long-term thinking is the foresight programme led by the Office of Science and Technology. Foresight brings together business, the science base and Government to look at future trends in technologies and markets, their interaction and the challenges they pose for developing new skills, managing change and making future investments. I am sure that the House will agree
that, with the coming together of our academic base, industry and Government, we can really provide the climate in which our firms can succeed.
For the next phase of the foresight programme, leading up to 1999, we have set ourselves the challenge of involving companies which have not been touched by the programme so far, and of going deeper into those we have touched. Our ultimate goal is for finance directors to take as much of an interest in the foresight programme as research directors. I understand that there is now some evidence of that taking place.
We need to explore the potential of the supply chain in engaging smaller companies in the foresight programme. Foresight offers the smaller company a unique insight into what their main customers are likely to be demanding from it in five years' time. That is a good example of forward thinking and planning. That trend can strengthen only as large companies out-source more and more of their research and development, as well as their production work, to their suppliers.
If the foresight programme is to have its full effect, it must also play its full role at the heart of Government policy on business competitiveness. That need was recognised in the recent report "The Innovation-Exploitation Barrier", issued by the Select Committee on Science and Technology in another place. In our response to that excellent report, we picked up the need to involve small and medium-sized enterprises in the foresight programme, and the need for more co-ordination in government.
When she took up her post, my right hon. Friend the President of the Board of Trade commissioned an audit of the foresight programme across Whitehall. Its aim was to assess the level of departmental activity and identify areas where more emphasis is required. The audit is one of the benchmarks against which future progress and proposals can be measured. The results of the audit were announced last month, and show that there is still work to be done.
Many Departments believe that a lot more can be done through the foresight programme in setting their priorities and formulating their R and D programmes. A ministerial foresight group has been established to provide top-level co-ordination of the programme across Whitehall. I am sure that that will be warmly welcomed by all hon. Members.
Of course, it would be a mistake to see the foresight programme as our only--or even our main--activity in this area. All aspects of our policy have been developed for the long term, in close consultation with business at every step of the way. We are moving purposefully and very speedily to bring about simpler government and cut red tape, which is a real barrier to growth for small businesses. We need constantly to re-examine our practices and procedures to ensure that we are achieving the right balance between the Government's legitimate role in our society, and heavy-handed bureaucracy.
Let us imagine the benefits which could flow, for example, from the introduction of a single form for collecting information for a range of Departments. At a stroke, we could reduce the paperwork that slows down
companies, especially small and medium-sized enterprises, while cutting out needless duplication of effort in government.
Mrs. Teresa Gorman (Billericay):
I speak, as I have for many years, as an employer. Is the hon. Lady aware that one of the most obstructive things to small firms' daily life is the business of Government interference in the way in which firms employ people? Does she agree that the Government's decision to sign up to the social chapter, which will inevitably impose more regulations on the way in which small firms take on people, will have a detrimental effect on the growth of small businesses?
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