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Small and Medium-sized Businesses

4. Ms Helen Southworth (Warrington, South): What measures his Department proposes to foster an entrepreneurial culture among small and medium-sized businesses. [71597]

The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): The recent competitiveness White Paper sets out 75 new commitments to help British businesses succeed, and fostering an entrepreneurial culture lies at their heart. The Department is participating

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in the development of a national campaign for enterprise to create a more entrepreneurial culture. For existing small and medium enterprises, there will also be an enterprise fund to assist business growth. The Department continues to build on the extensive range of services offered to all businesses through the Business Link network.

Ms Southworth: I thank my hon. Friend for that answer. Will he welcome the exciting and innovative initiatives taking place in my area? Warrington Business Connection, which is led by the local authority, will in April provide the opportunity for 5,000 small and medium businesses to meet, create networks and trade not only in the north-west or even in Britain, but internationally in many different marketplaces. Will he welcome also the newly formed Skills Forum, a public-private sector partnership in Warrington, based around identified business need to support and develop skills in the area? I welcome the prospect of my hon. Friend's coming to Warrington to see that Warrington means business and is effective.

Mr. Wills: I am delighted to welcome that news from my hon. Friend, and I shall be delighted to visit Warrington and see it for myself, as soon as I receive an invitation.

Mr. Peter Brooke (Cities of London and Westminster): Does the Minister agree that entrepreneurs are entrepreneurs are entrepreneurs, and that what matters far more than encouraging entrepreneurs is not discouraging them?

Mr. Wills: I am very happy to agree with that.

Liz Blackman (Erewash): My right hon. Friend the Secretary of State for Trade and Industry visited my constituency fairly recently and saw an enterprising small firm that managed to get into the niche market of carbon fibres, capitalising itself on the way. It has now reached a point where it wants to grow on. What help and support do the Government offer firms that want to move from the small to the medium sector?

Mr. Wills: We are providing a range of support through the Business Link network. If my hon. Friend writes to me with details of the firm, I shall be happy to provide specific details for the area.

Mr. Brian Cotter (Weston-super-Mare): Is the Minister aware that the cost to the smallest businesses--those with five employees or fewer--of introducing the working families tax credit will be £25 million? Does he agree that that is not encouraging for new entrepreneurs? Has he made representations to that effect to the Treasury, and if not, why not?

Mr. Wills: We are introducing a range of measures that we hope will help low-income working families. We are proud of those measures and we will continue to pursue them. As regards helping small businesses, we have a range of measures. The costs to which the hon. Gentleman refers must be seen in context. We want small businesses in this country to prosper, and we are confident that we have the measures to enable them to do so.

Mr. Barry Jones (Alyn and Deeside): Does my hon. Friend agree that an entrepreneurial business could take a

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hard knock if its locality suffered the loss of assisted area status? Will he assure me that he will fight hard to keep assisted area status for my constituency, bearing in mind that 4,000 aerospace workers, who are the very spirit of the entrepreneurial British approach, want that status kept, as do the people who work with great enterprise in Deeside industrial park? I am sure that my hon. Friend will fight hard for my people.

Mr. Wills: My hon. Friend is a famous champion of his constituency and his views are well noted. As he knows, the assisted areas map is under review. We shall report the results to the House in due course.

Mr. Tim Boswell (Daventry): Will the Minister concede that his extremely bland new Labour responses sit ill alongside the additional burdens that he is imposing on small and medium enterprises through the Employment Relations Bill that he is currently considering in Committee with us? Those burdens fall on top of the burdens of cost and book-keeping imposed by the national minimum wage and the working time regulations.

Has the Minister noted the recent press report that South Korea, a country in real economic difficulties, has responded to them by going through its 16,000 regulations and abolishing approximately half of them--this at a time when the British Government have scrapped 20 regulations and imposed 2,400 new regulations? Is not that the wrong kind of productivity?

Mr. Wills: We need no lessons from the Opposition, who introduced 45,000 regulations while they were in government--a record that we are striving not to emulate.

As the hon. Gentleman knows, the Employment Relations Bill promotes a range of family-friendly policies. We are proud of them and we do not regard them as a burden on business. We regard them as fostering a spirit of partnership. We are promoting a new spirit of partnership in the workplace, which was sadly lacking from the measures introduced by the previous Government. Far from increasing burdens, we believe that our measures, seen in the round, will decrease the burdens by tackling the crippling cost to business of absenteeism.

According to an estimate by the Confederation of British Industry, that cost was £25 billion in 1996. A new spirit of partnership in the workplace will help to reduce it.

Rover Longbridge

5. Mr. John Austin (Erith and Thamesmead): What action he has taken to ensure continued production at Rover Longbridge. [71599]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I am in close contact with both Rover and BMW. I have also spoken personally to the new chairman of BMW, Dr. Milberg. I am pleased to tell the House that he has confirmed that BMW will proceed with the planned investment at Longbridge for the new Mini. I welcome that decision.

In addition, BMW is reviewing its medium car strategy. As part of that review, the Government will carefully consider any approach from BMW for assistance that will help to secure the long-term future of the plant, and will

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help Rover to achieve the world-class performance that it needs to achieve if it is to operate successfully in this competitive, global marketplace.

Mr. Austin: I welcome my right hon. Friend's support. Will he also commend the Rover work force at Longbridge for their positive contribution to ensuring continued production at the plant? Does he share my view that the ground-breaking partnership deal struck in December was struck between recognised trade unions and the board, and should be unaffected by any recent changes in the board? Does he also agree that the loss of 14,000 jobs at Rover Longbridge, and of up to 80,000 in the supply and service industries, would deal a devastating blow not just to the west midlands but to the British economy as a whole? Does he agree that, in a global market economy and given the inevitable rationalisation of the motor car industry, the victors will be countries that support domestic producers?

Mr. Byers: This is clearly a time of uncertainty for the 14,000 people who work at Longbridge, and for the many more people in the west midlands who depend on Rover Longbridge for their contracts. It will be a period of change. In the autumn, the work force voted for change, demonstrating their commitment. The Government want to ensure that those workers can be partners in change, not victims of change. We shall do all that we can to support them, and to help BMW to decide where the medium car is to be produced; but I must repeat that there is no question of the Government's bailing out an unsuccessful industry. We are prepared to give financial support to the improvement of skills at Longbridge so that productivity can increase, on condition that that support levers in substantial extra investment by BMW. We believe that partnership approach is the best way in which to secure the long-term future of Longbridge, and of Rover in the United Kingdom.

Miss Julie Kirkbride (Bromsgrove): I welcome a great deal of what the Secretary of State has said. As he may know, the Longbridge plant is in my constituency as well as that of the hon. Member for Birmingham, Northfield (Mr. Burden), and I should be grateful if, when he intends to visit it again, he would do me the courtesy of telling me.

I associate myself with what was said by the hon. Member for Northfield, but also ask whether the Secretary of State will have the decency to accept that part of the problem at Longbridge has been caused by the Government's economic policy and the ruinously high exchange rate that operated during the early part of the Government's term of office, when Rover was unable to sell its cars abroad and was uncompetitive in the home market where it had traditionally sold them. Sadly, that will continue, because foreign car companies have bought forward sterling and will therefore be able to continue to undercut Rover in its home market.

In view of the Government's partial culpability in regard to the present crisis, may I urge the Secretary of State to encourage his right hon. Friend the Chancellor of the Exchequer to be generous? There is a perfectly reasonable precedent in the investment in Longbridge that took place under the last Conservative Government.

Mr. Byers: I can understand why Conservative Members try to score political points, but we should look

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at the facts. The hon. Lady referred specifically to exports and alleged that the car industry faces particular difficulties in that respect because of the rate of sterling. A fact: car exports from the United Kingdom last year were the highest ever. A fact: United Kingdom car industry production was the highest for 24 years. United Kingdom sales are the highest since 1989. That is the reality of the situation. Conservative Members do not like to have the facts drawn to their attention. Those are the facts and here is another one: 6,500 new jobs have been created in the car industry in the past year under this Government, after years of neglect by the Conservatives.

Dr. Lynne Jones (Birmingham, Selly Oak): I am pleased that the hon. Member for Bromsgrove (Miss Kirkbride) associated herself with the remarks of my hon. Friend the Member for Birmingham, Northfield (Mr. Burden), but it is a pity that she did not dissociate herself from the calls of her former employer, The Daily Telegraph, to shut down the Rover operations at Longbridge. Despite the strength of the pound, which is a problem for Longbridge, Rover managed to increase its sales in Europe last year, largely due to the success of its higher range models. Such production is set to continue with the highly acclaimed Rover 75. Does my right hon. Friend agree that, if the investment in the small and medium car range goes ahead, the prospects for Rover capturing its share of that market--at home and abroad--are good?

Mr. Byers: I agree with my hon. Friend. I have no doubt that the prospects for Rover, particularly at Longbridge, will be good, provided that we can achieve an approach based on partnership and can work together. The Government are prepared to do their part--not through a bail-out, but through targeted assistance--and, provided that BMW can recognise the benefits that it will receive from Rover Longbridge and investment in that plant, I am sure that we can work together to provide employment for the 14,000 people who currently work there. Such an approach would provide opportunities throughout the west midlands and secure the future of Longbridge, so ensuring that we can maintain that plant as a vital part of the west midlands economy.

Mr. John Redwood (Wokingham): In the middle 1990s, Rover was profitable, BMW was proud to acquire the Rover name and the factories, and BMW management thought that Britain was the best place in which to invest, anywhere in Europe, to build new cars. Under the Government, Rover is a loss-making venture and BMW is threatening to take its investment elsewhere; it is even contemplating not using the Rover badge for the medium car, but substituting a new BMW model.

I hope that the Secretary of State will accept that Conservative Members want a successful motor industry base in Britain. We were proud of the achievements by companies from all around the world which began to establish that base in the early and mid-1990s. Will he tell all those worried people who live anywhere near a Rover plant, and whose livelihoods depend on it, either directly or indirectly, the answers to some very simple questions? Do he and the Government believe that they can persuade BMW to use the new mid-range Rover saloon, the Rover 35, to replace the existing models, or does he think that we might lose out to a BMW model? Does he think that he can persuade BMW to manufacture that model in Longbridge or anywhere in the west midlands?

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How many job losses does the Secretary of State think will result from the plans that BMW is beginning to develop? When does he expect to receive a proper application for grant from BMW? Will that grant application be for the Mini alone, or does he expect it to cover the medium-sized saloon? Will he want any conditions about such a saloon if the grant application relates only to the Mini in the first instance? What guarantees will he want about the number and location of jobs, if and when those grant negotiations get under way?

Mr. Byers: We have just witnessed the gross irresponsibility of opposition. There is no question of debating such detailed, commercially sensitive information on the Floor of the House. The right hon. Gentleman knows that, when he was a Minister at the Department of Trade and Industry, he would not have debated these issues openly at this particularly sensitive stage.

The reality is that yesterday Vauxhall decided to locate its research centre in the United Kingdom. Ten years ago, when the Conservative Government were in power, that company walked away from the UK. It would create great difficulties for securing the future of Longbridge if the Government were to adopt the Conservative party's policies on the single European currency. To rule out entry for 10 years would be seen by companies such as BMW as a condemnation of the future of industry in this country. The right hon. Gentleman would be aware of that if he thought about it. He should make the link, and should listen to the leaders of big business who are telling him and his party that they have got the policy wrong.

We are committed to our policy on the single currency, because we believe that it will secure the future for our people. We shall continue the negotiations at Rover Longbridge. They are progressing well, and I hope that in weeks rather than months they will achieve a successful conclusion.

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