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Mr. Beard: The hon. Lady has several times mentioned her aversion to the social chapter, which gives people security and decent conditions at work. Will she recognise that innovation depends on people taking risks and being creative, and that they will do that only if they are in secure employment? They will not do that if they are subject to the hire-and-fire culture that existed under the previous Government, whom the hon. Lady has supported, off and on, in past years. The policies of total deregulation and of putting people at risk, with people not knowing where their next wage is coming from and whether they will still be employed in a week's time, are total anathema to an innovative culture.
Mrs. Gorman: The hon. Gentleman must be aware that the previous Government reduced unemployment to an all-time low--despite many of the regulations imposed by the social chapter--but that each new regulation causes a distortion in employment patterns.
The latest, of which I hope the hon. Member for Wolverhampton, South-West might like to remind the Minister, is that firms will be punished if they fail to consult their work force about key decisions. She knows what it is like in a small firm. The idea that an employer must make a decision quickly, but that, before that, he has to run around, tell all his employees and get them into a committee to agree it, is nonsense, yet the Government will innovate all these social chapter requirements, which will have a devastating effect on small businesses.
I refute the idea that security is important in entrepreneurship. It is not. I recommend that the hon. Member for Bexleyheath and Crayford (Mr. Beard) takes a look at that classic of entrepreneurship, albeit in the Victorian era, Samuel Smiles's "Self-Help". It is a wonderful book, recently reissued in paperback. It shows that nearly every innovation--including, I may say, those of Mr. Sugar, of Mr. Dyson, of the man who invented hovercraft, whose name I cannot remember, and of Henry Ford--resulted from the innovators losing their job, being hard up and needing to work their way out of poverty.
These days, people are prevented from doing so by the barriers created by the state to getting a business off the ground. I recommend that the hon. Member for Bexleyheath and Crayford takes heed of the measures that the previous Government introduced to get rid of unemployment, and that he warns Ministers in the present Government that much of what they propose to do is
likely to reverse the beneficial effects of those measures and undermine their policy of creating more jobs for youngsters.
Mrs. Gorman:
If the hon. Gentleman contributed that to the debate, I should be extremely pleased, but I am sure that, having made his contribution, he would prefer that I allowed someone else to get in on the act.
Dr. Nick Palmer (Broxtowe):
I declare a general interest in the subject. I have been an owner and publisher of a magazine for 14 years, and I advised my former company in the pharmaceutical industry.
I add my congratulations to my hon. Friend the Member for Wolverhampton, South-West (Ms Jones) on her maiden speech. I hope that, after I have been in the House for many years, I shall have learnt to speak as fluently and confidently as she did.
I support the comments of my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard), and disagree with the hon. Member for Billericay (Mrs. Gorman) about security being unimportant for small business. I would not dream of introducing a major change in the way my business operated without consulting my staff, and I would be surprised if any business that did so was successful in the longer term. The hon. Lady may agree that a stable environment is important for business; similarly, a stable environment, including some security, is important for the people who work in it.
I shall now discuss the report of the House of Lords Select Committee on Science and Technology, and the Government's response. I very much welcome the general trend of the remarks in that paper, but I have two reservations. The first, which was mentioned by my hon. Friend the Member for Bexleyheath and Crayford, concerns the dangers of the report's undiluted enthusiasm for the commercialisation of universities.
We often hear that universities are hard pressed for funds, and that they produce a great deal of important and valuable research. What could be more natural and more welcome than to reinvest in the university the proceeds of its research? It is motivating for people who work there; it contributes to the economy; surely it is an undiluted good. We should consider what happens in America, where that philosophy is widespread. I do not want to oppose development altogether, but I want to mention some possible drawbacks.
Such a philosophy leads to an excessive emphasis on research leading to immediate short-term marketability. The Select Committee says in passing that the effect is sometimes to undermine a focus on basic science, because it is very difficult to produce a marketable product from basic science. The more subtle and insidious effect in a university is that it tends to upgrade people who can produce a product that can be sold and to downgrade people who have been asked, perhaps for some years, to work in an area that does not happen to have that benefit. We must be careful that any change does not have that effect.
The philosophy has introduced, broadly in the United States and increasingly in Britain also, a reluctance among academics to co-operate to the extent that was possible
in the past. There has always been competition between academics, which is natural and welcome, but there has also been a tradition of sharing preliminary results, working together towards a joint goal. Some universities and colleges, in this country and overseas, instruct their staff not to consult staff from other institutions on certain projects, because it might result in another institution achieving a marketable product first.
How can we prevent those side effects without killing the goose that lays the golden egg? We should not allow universities to become primarily dependent on marketing products as a method of finance. We must ensure that the Government continue to be responsible for the bulk of their finance, so that universities are responsive to the national need to upgrade the British people's level of education, giving everyone the best possible chance to produce a successful and congenial society.
My second reservation about the Select Committee report--I heard my concern echoed in one or two speeches today--is a certain insularity. It is the belief that, if a company is to flourish, it must find finance and support from sources in its immediate vicinity. The report says that, unlike in America, venture capital in Britain is somewhat cautious, and banks are extremely cautious about taking risks.
Governments can react to that in two ways. One way, which we all support, is that they encourage British venture capital and banks to take greater risks and try to build up institutions and rules to help them do that. They should also try to help small businesses find venture capital and research partners overseas. The future of markets in Britain is not small groups of companies clustering together against the whirlwinds of the global economy; it is British companies thriving in the world economy, in partnership with research institutions and other companies at home and abroad. The Government's role is to promote that.
What do small businesses most need to help them innovate? Small businesses are not necessarily those formed when someone working in an area sees an opportunity, grabs it and makes a market out of it. While those are welcome, they are not the problem.
The problem arises when a person with a good idea has neither a business background nor widespread contacts, and has difficulty moving into the market. He or she then needs assistance to set up, and advice and support not just with the corporation process, for which there is fairly widespread support, but, as mentioned in the Select Committee report, with patenting and trademarks.
That is such a headache for many small businesses that the Government should consider providing a service to assist small companies to register patents and trademarks, so that each small company is not forced to reinvent the wheel, and to prevent a company from registering a patent expensively, too early or with loopholes, so that it is cheated of the benefits of its innovation. New businesses also need to build research partnerships with related companies so that they can not only use the immediate idea but invest in the future.
Small businesses need to find partners for design, as was said earlier, and for help in marketing. A classic British disease is that we are good at producing products, but not so good at marketing them once they have been produced. Another requirement is access to venture capital.
Those conditions are not unique to Britain. Abroad, services and additional help for new companies to thrive are increasingly provided by internet links and long-distance national support networks. In some countries, that is done in an ad hoc way--individual entrepreneurs are setting up websites offering advice--and in other countries it is undertaken as a coherent strategy.
Even hon. Members who are committed to an entirely free market with no Government intervention may still consider that to be a legitimate area in which Government can be a real help to small businesses, by providing internet support wherever they are across Britain. For that reason, I welcome the enterprise zone initiative mentioned by my hon. Friend the Minister, which bears the potential to be expanded a great deal more.
The present initiative, as I understand it, offers advice on the internet to small companies. That could be expanded into a powerhouse for small businesses, providing an area to seek partnerships, an area to seek technical support, an area to seek finance and an area to market the products in retail virtual malls, as has been increasingly the practice in the United States.
12.50 pm
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