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Mr. David Chidgey (Eastleigh): I should like to ask the Secretary of State three specific questions in the interests of clarity and speed. Can he tell me precisely what targets his Department has set for improving
competitiveness and productivity and closing the skills gap? How will he measure progress towards those targets? What account has the Secretary of State taken of the forecast by the Institute for Fiscal Studies that 20 per cent. tax credit rates for small and medium-sized enterprises would increase the ratio of research and development expenditure compared with gross domestic product by less than one tenth of 1 per cent? Although I welcome the Secretary of State's proposed investigation into price competitiveness and the wide range of prices that consumers are charged, does he agree that his task would be easier if he were able to compare like with like--perhaps in just one currency: the euro?
Mr. Byers: I shall not go down that road this afternoon. [Hon. Members: "Go on."] Well, they say that Labour Secretaries of State count their time in office in days rather than in months and years, and I want to try to get a few months under my belt.
On the important points that the hon. Gentleman raised, I have seen the IFS figures for its projections of the consequence of the tax credit for research and development, and I think that it is mistaken. The tax credit will make a big difference for SMEs. They have been asking for that measure and I am pleased that we were able to respond to their request in this Budget.
On productivity and improving skills, much joint work will need to be done across Government to deliver that agenda. I am already discussing in detail with my right hon. Friend the Secretary of State for Education and Employment the joint work that we can do to fulfil the need for skills to be developed and improved. I hope that we will be able to introduce many initiatives in the months and years ahead. On productivity, we need to continue working with the Treasury to identify ways in which we can make progress. The implementation plan for the White Paper that was published before Christmas reveals the timetable in which we shall achieve those objectives. When the hon. Gentleman has had the chance to read the implementation plan, he will recognise that we are serious about delivering on the commitments in that widely acclaimed document.
Mr. Peter Mandelson (Hartlepool):
I congratulate the Secretary of State on his excellent statement and wish him not only many months in his office but many years, which he will thoroughly deserve. I want to ask him about two aspects of the Government's agenda to which he has not referred. First, on the important subject of electronic commerce, when will the e-envoy--the digital ambassador--start work? Secondly, on competition and enterprise, when will the Government's proposals for the Post Office be implemented? It was envisaged that those would be introduced in the first quarter of this year. What or who is holding them up?
Mr. Byers:
I am delighted that my right hon. Friend is here for my statement. Much of the implementation plan that we are publishing today builds on the excellent work over which he presided in the Department. I am pleased that we are able to implement many of the ideas that he advocated.
My right hon. Friend raises two important points. I interviewed two exceptionally good candidates for the post of digital envoy only 10 days ago, and I hope that
we will be able to announce an appointment in the next few days. When my right hon. Friend finds out who is likely to be appointed, he will think that we have made a very good selection for that important post.
On the Post Office, a good deal of work is going on to make sure that we have a White Paper that will command broad support across the House and out in the wider community. It will be a comprehensive document, which will demonstrate that we want a forward-looking Post Office for the next century. That will take some time, but it will be worth it to get the proposals right. I expect to be able to publish that White Paper within the next two months.
Mr. Ian Taylor (Esher and Walton):
It would be churlish of me to criticise the Secretary of State too much because we started some of those measures when we were in government. I congratulate him on persuading his Chancellor in a way that I did not persuade mine about the proposals that he has announced this afternoon.
Will the Secretary of State take great care to ensure that the enterprise fund and the Small Business Service are staffed by people at least as entrepreneurial as those to whom they will be giving advice? I speak from some experience and I know that the service will break down, however much money one puts in, if the two sides of the equation are not properly matched. He will find that very difficult to achieve.
Secondly, the Secretary of State knows as well as I do that the devil will be in the detail of the application of the research and development grant and its success will depend on how the Inland Revenue interprets it. Will he please keep his eye on that and not pass it across to the Revenue?
Finally, why did the Secretary of State not persuade the Chancellor to cut capital gains tax to 20 per cent. or at least to introduce a 20 per cent. rate? That is his one big failing in the Budget, and I hope that he keeps working at it.
Mr. Byers:
I shall pass on those comments to my right hon. Friend the Chancellor of the Exchequer. The hon. Gentleman's important point about the people who might staff and give advice in the Small Business Service is absolutely right. We need people with good, up-to-date, relevant experience who are able to mentor and to pass on that experience to the individuals who will come to the service for advice and assistance. We must see to that. One of the tasks that we will set ourselves will be to recruit the best possible people. With the additional new funding--it is new funding--coming into the service, and the recognition that there will be a voice for small business at the heart of Government but at arm's length from the Government, people will see that we are serious about providing a focus for the needs and aspirations of the small business sector.
I hear what the hon. Gentleman says about getting right the detail of the tax credit for research and development, and I will take a personal interest in achieving that objective.
Mr. Richard Burden (Birmingham, Northfield):
I welcome the statement. May I raise two points with my right hon. Friend? First, does he agree that a particularly important part of the SME sector that will need to be
Secondly, in relation to the small business fund--I suppose I am taking up a point made by the hon. Member for Esher and Walton (Mr. Taylor)--can my right hon. Friend assure me that the good ideas in that scheme will be properly linked to the RDAs and the regional agenda, so that the service to be established is not monolithic, but sensitive to regional and local needs and differences?
Mr. Byers:
My hon. Friend makes an important point about developing the work closely with the RDAs to make sure that the small business service works with local agencies to give the best possible service to the small businesses in the locality.
With reference to the car industry generally, it is important that we give assistance to the supply chain, especially where there is a major producer in a particular region. My hon. Friend will be aware that we have established an industry forum to help the supply chain in exactly that situation, so that productivity can be improved and the quality of the product raised. By developing best practice, we can offer new opportunities to companies and businesses.
Mr. Alasdair Morgan (Galloway and Upper Nithsdale):
With regard to mortgage interest rates, does the Minister agree that the best guarantee of competition in that sector is the existence of a thriving mutual building society sector? Will he therefore undertake to have a word with his right hon. Friend the Chancellor to see whether something can be done to stop so many building societies having to spend such an inordinate amount of management time fighting off the attentions of a tiny bunch of predator carpetbagger members, who have no interest in lowering interest rates, but are simply out to make a fast buck?
Mr. Byers:
I know that that sector is always being actively considered within the Treasury, to make sure that the interests of the wider community are served.
Mr. Dale Campbell-Savours (Workington):
As one who was formerly an entrepreneur, may I tell my right hon. Friend that I believe that the package for enterprise is excellent? It addresses many of the issues that small business men bring to me in my constituency. Can my right hon. Friend give me an assurance that when an examination is made of the bankruptcy laws--I understand that he may have to make a statement on them in the next month--that will not lead to an increase in the number of phoenix company operations being set up, such as the Tanning Shop or Cabouchon jewellery, or all the others that we know about? I seek that assurance because many of us know of phoenix operations in our constituencies.
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