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1.43 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Wills): I congratulate my hon. Friend the Member for Harrow, West (Mr. Thomas) on securing the debate and thank him for his kind words. He has raised an issue that is important in its own right and has set out cogently and persuasively the case for social enterprise. Social enterprise is also important because it is part of a wider agenda of promoting all forms of enterprise, which lies at the heart of Government policy.

We live in a rapidly changing world in which certainty is a luxury. Patterns of work are changing faster than ever before, and knowledge, skills and creativity, and the people who possess them, are our most valuable assets. People, and the organisations in which they operate, must change--and respond to changing circumstances--to survive and thrive.

Europe is becoming a unified market with the potential to match the United States, but only those United Kingdom businesses that are ready and willing to think and operate on a European scale will benefit. The world economy is open as never before, with larger markets offering greater opportunities, but competitors are stronger and more numerous.

New technologies offer scope for new products, and shorter product cycles make it easier for new entrants to compete with established players, but constant product refinement and development are required to keep pace with those developing technologies. Science is generating new industries faster than ever before.

Enterprise, entrepreneurship and innovation, in the broadest sense, are central to that new economy, promoting growth, increasing productivity and creating jobs--but enterprise does not happen in a vacuum; it is part of a wider social, educational and cultural environment. Enterprise cannot flourish unless it exists in a cohesive and inclusive society.

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The Government are determined to build a dynamic economy driven by vigorous competition and commitment to enterprise, but we are also committed to a fairer and more inclusive society. The competitiveness White Paper, which we published at the end of last year, set out our vision of how we will encourage economic growth and regeneration at national and local level to promote wealth, widen individual options for employment and create opportunities for all.

The Chancellor's pre-Budget report and the White Paper set out the next steps in the Government's strategy for modernising the economy. The debate has highlighted how we need to build a more inclusive framework within which that new, dynamic economy can flourish. We need to ensure that everyone is given the opportunity to realise their potential--in business, as in every area of life: young and old, and men and women, of whatever ethnic origin and wherever they live.

We want business opportunities for the many, not the few. That is why the Government are working with business, banks, business support providers and a raft of other players to promote enterprise throughout this country.

Mr. Jim Fitzpatrick (Poplar and Canning Town): I congratulate my hon. Friend on his appointment. On his last point, and the point about financial institutions supporting social enterprise, which was raised by my hon. Friend the Member for Harrow, West (Mr. Thomas), one area of concern is that the financial institutions--the high street banks and building societies--have left whole areas of our inner cities. How are the Government encouraging the banks and building societies to go back and become involved with local communities, even though they are impoverished, so that they can play a partnership role with the social entrepreneurs who are the bedrock of such initiatives?

Mr. Wills: My hon. Friend raises an important point, and I shall address it in a moment.

We are working with all those financial players to promote enterprise, and a number of key principles underlie our approach. We are fostering an enterprise culture that encourages innovators and risk takers; provides and maintains a supportive economic environment; identifies and removes barriers to growth; and provides business support of the highest quality to firms, at all stages of their development.

We simply cannot afford to miss any opportunity to encourage each and every form of economic activity. We cannot afford the human and economic waste of individuals being denied the opportunity to realise their potential. We must not tolerate the persistence of poverty, unemployment and despair anywhere in this country.

As my hon. Friends have suggested, that requires the wholehearted commitment of many players, not least the new regional development agencies. They have a crucial role to play in taking forward measures to raise regional skills, to encourage links between business and education, to review the coherence and quality of business support provided through the business links and TECs in their areas and, in so doing, to strengthen their communities.

The Government are also considering new measures to support the growth of smaller businesses in areas of particular need--for example, coalfield communities,

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coastal towns and countryside areas, which are suffering steep decline in traditional employment, and cities and towns with severe joblessness. Those measures will complement action to combat social exclusion and will link with other Government programmes to combat deprivation, such as the employment zones, health action zones, the new deal for communities, the single regeneration budget and the new coalfields enterprise fund. That is what joined-up government is all about. I should also mention the initiative launched last year by the Prime Minister to establish a national strategy for neighbourhood renewal. To take that forward, the Government have set up a number of policy action teams. These teams of experts, each with a champion Minister, are working together to solve some of the most intractable problems faced by deprived neighbourhoods.

The teams consist of representatives from the communities themselves, and from business, local and national government and the voluntary sector. They are consulting widely as part of their work. The teams will report by December, so that their work can inform and shape the national policy for neighbourhood renewal, which will be put in place early next year.

The Department of Trade and Industry has a team looking at access to information and communication technologies. It is vital that people living in those neighbourhoods can connect to the real opportunities and activities now being offered by the information revolution. We cannot have a nation divided between information "haves" and "have nots".

Last November, the Economic Secretary announced a package of measures to help to expand the credit union movement. As my hon. Friend the Member for Harrow, West suggested, credit unions do invaluable work in providing some of the poorer members of our society with savings facilities, low-cost credit, which has traditionally been a problem for them, and financial education. That gives people most in need the opportunity to build up a good credit record, which would otherwise be denied them. The proposed measures, on which the Government are currently consulting, include allowing credit unions to offer interest-bearing share accounts, making the common bond requirement more flexible to allow more people to join, increasing flexibility in relation to accounts for young people, extending repayment periods for loans, and removing the current 5,000 maximum membership limit.

Those measures, along with proposals for the future regulation of the credit union sector under the Financial Services Authority, will allow the sector freedom to develop, but, at the same time, ensure that adequate protection is in place for savers. A further important initiative is that the banks and credit unions task force is exploring how banks and building societies can work more closely with credit unions to increase their effectiveness.

The Joseph Rowntree Foundation report entitled "Small is bankable: Community reinvestment in the UK", which was published last year, found that, although there is a wide variety of community finance initiatives, they do not fully fill the financing gap between the demand for small enterprise finance in deprived areas and the supply from commercial lenders. My hon. Friend the Member for Harrow, West has given the House further evidence of that in relation to the social enterprise sector.

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There are already examples of good practice. For example, credit unions are beginning to take hold, and we shall do what we can to encourage them. Some of the high street banks are already doing excellent work. There are community loan funds, several of which have now formed a UK association--the Rebuilding Society Network; micro-finance funds, the largest of which, the Prince's youth business trust, has assets of £21 million; mutual guarantee societies; and social banks, of which Triodos bank has some £52 million assets in the UK.

The challenge now for the Government is to explore how best to extend nationwide the best practice of the most successful local community finance initiatives, while enabling local partnerships to devise the most appropriate forms of financial support for all the enterprises operating in their areas.

Crucial as they are, it is not just financial issues that matter; it is also the attitude and good will of all the players at the local level. That lies behind many of the points that my hon. Friend the Member for Harrow, West made. We need to create a sympathetic culture, and I have referred already to the pivotal role that the regional development agencies will play in that respect.

My hon. Friend mentioned the role of the training and enterprise councils and said that he wanted them to do more. I commend the report produced recently by the TEC national council equal opportunities advisory committee on how the TECs and the chambers of commerce are tackling social exclusion. Equality and social exclusion are integral to the work of all TEC national council policy committees, which are charged with

The Government's approach is holistic. It is based on a fundamental commitment to a fair and just society for everyone by stimulating enterprise, creating employment, encouraging everyone to maximise his or her potential and protecting those in greatest need. The Government recognise that it is not for us to do that on our own. We can do it only with, and in support of, effort by others. That is why last year the Prime Minister initiated the Giving Age project, which is now being taken forward by the Home Office. It aims to rebuild a sense of community throughout the UK by encouraging and supporting all forms of community involvement.

Another project, UK Cares, is led by Business in the Community with support from the Government as well as from some of our best-known companies. It aims to modernise the concept of employee volunteering to enable many more businesses and employees to contribute to the communities in which they live and work.

My hon. Friend spoke eloquently about the social economy--the so-called third sector--and he was right to do so. Social enterprise has particular qualities, aims and values that place human achievement and enrichment at the forefront of all its activities. We have only to remember the Rochdale pioneers and their selfless work, which started in the local community but extended far beyond their own dreams to influence today's society. I hope that I have reassured my hon. Friend that, both directly and indirectly, the Government share the values

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implicit, and explicit, in what he has expressed today and recognise the need to support them through practical actions.

I am convinced that one way in which the Government can help is by ensuring that all those who are involved in running social enterprises are helped to become more professional and better equipped with the skills, knowledge and acumen that create profitable businesses and successful organisations. It is the Government's responsibility to ensure that the wealth of advice and support that is available is extended to the third sector. Obviously, it is the responsibility of the sector itself to take advantage of what is available, to make demands on business links and training and enterprise councils, and on

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all who provide enterprise support in the UK. If that support is sought and help is not forthcoming, I should like to know about it. I hope that my hon. Friends will inform me about it so that I can sort it out.

The Department of Trade and Industry is committed to continuing to work closely with other Whitehall Departments to ensure that the social economy has its rightful place on the Government's agenda. In my role as Minister responsible for small businesses, I shall do whatever I can to promote this very worthwhile aspect of the enterprise spectrum. Furthermore, I undertake to report again to my hon. Friend by Easter on the progress that I have been able to make on these issues.

It being before Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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