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Mr. Alan Duncan (Rutland and Melton): Does the Minister accept that one of the best ways of encouraging small businesses is to reduce the social costs that they face in their infancy? Although assisting them with gaining access to capital would be helpful, the removal of those social costs would achieve far more.
Mr. McCartney: The hon. Gentleman is masking his laissez-faire views; he is obviously embarrassed by them. By reducing social costs, he means removing people's right to be paid a national minimum wage and their rights to take paid holidays for the first time, to investment in their skills and to workplace development. He should realise that the small business community does not want to be smeared by the Conservative party as a poor employer; it wants to be, and in the main is, a good employer.
The Government, working together with the small business community, have introduced a national minimum wage in a non-disruptive way. It has become one of the most popular policies with small businesses in Britain because, for the first time in the past 20 years, they can enter the marketplace in the sure and certain knowledge that they are competing on the basis of their ability to produce good-quality goods and services without
worrying that some firm down the road is undercutting them by paying workers £1 or £1.20 an hour. That was the hallmark of the previous Conservative Government.
Mr. John Bercow (Buckingham):
Will the right hon. Gentleman give way?
Mr. McCartney:
I thought that that would get someone to their feet.
Mr. Bercow:
I am grateful to the Minister of State for giving way. Of one thing we can be sure: he certainly cannot hide the fact that he is the left-wing troglodyte in his Department. Is he aware that the Secretary of State said in his speech to British Chambers of Commerce on 3 June that he intended to make three significant statements on deregulation in June. He regarded that speech as the first; what are the other two?
Mr. McCartney:
If the hon. Gentleman had been at the conference, as I was, he would know that my right hon. Friend set out the framework of the Government's strategy on small and medium-sized businesses and the issues surrounding regulation and deregulation. I will outline that strategy in the remainder of my speech. My right hon. Friend's speech was received by the small business community with acclamation; indeed, when Ministers travel across the country to discuss such matters, we are all received with acclamation. Thank God small businesses have a Government who believe in and promote business. Our policy is not to close a business down every three minutes of every working day.
Let me make the hon. Gentleman an offer: next time I attend a business community event, I will look to see whether he is in the audience. I will invite him to join me and co-operate in promoting entrepreneurship in the British business community--
Mr. Bercow:
I promise to stand up.
Mr. McCartney:
I thought that the hon. Gentleman was already standing up.
Mr. Geraint Davies (Croydon, Central):
Before my right hon. Friend was so rudely interrupted, he was talking about venture capital Although our venture capital industry is the most developed in Europe, does not it have some way to go? The vast majority of the venture capital industry in Britain is focused on re-engineering large enterprises through management buy-outs and leverage buy-outs. Its United States counterpart is much more diversified and focuses on new, high-tech small business enterprise growth.
The challenge for the venture capital industry in Britain is to achieve wider diversification to take advantage of the emergent opportunities in a new Europe and the single market. Unless we get our act together, there will be danger of a competitive threat from United States operators.
Mr. McCartney:
My hon. Friend is absolutely right. I have been setting out the Government's strategy for turning round the Titanic that is the venture capital industry, successful as it is. The industry needs to play an effective, hands-on role with the small and medium-sized
The enterprise fund is a £180 million Government fund designed to increase the availability of finance for SMEs, particularly those caught in equity gap, as my hon. Friend the Member for Croydon, Central (Mr. Davies) said. New funds will be used to lever-in private finance and we will work with the private sector to maximise our resources and expertise. Early discussions have indicated support in principle from several major United Kingdom and European institutions.
We expect the fund to be operational by the end of the year. It will provide four key elements of assistance: continued support through the small firms loan guarantee scheme; support for regional venture capital funds specialising in the provision of small-scale equity to potential businesses, which is the area in which my hon. Friend the Member for Croydon, Central is keen for us to work; a national venture capital scheme to support early-stage, high-technology businesses, for which an additional £20 million was promised in the previous Budget; and flexible support for innovative proposals from the finance industry to meet the needs of fast-growing businesses and ensure that our SMEs have access to the widest possible range of funding options.
I shall now discuss ways in which we can promote an entrepreneurial culture. The Government can also foster a broadly based culture of enterprise so that people of all ages and from all backgrounds have the desire, confidence and skills to exploit an opportunity to turn new ideas into successful products and services--creating a society where people are willing to take risks and are rewarded. The Government will help to do that by supporting a national enterprise campaign led by British Chambers of Commerce. The campaign is designed to ensure that entrepreneurs are valued for the jobs that they provide and the opportunities that they bring, not just envied for the money that they make.
Young people's understanding of business is crucial to the creation and development of businesses in the future. The Department of Trade and Industry and the Government as a whole strongly support the young enterprise programme, which has been very effective in developing that understanding among schoolchildren. So impressed are we by young enterprise's achievements that we want to extend that understanding and the opportunity to development entrepreneurial skills among higher education students. Therefore, from October, 16 universities will participate in a scheme setting up 55 student companies.
Unlike the previous Government, we do not believe this country can compete as a low-wage, low-skill economy. We believe that the way forward is to produce high-value goods and services, but we will do that only if we raise the skills level of all our people--if we can bridge the skills gap and ensure that everyone has a higher level of skills than they previously needed.
Our strategy will not ensure a job for life; it is designed to ensure employment for life. The principle behind our drive is that people should be in a position to be employed
for life because of the skills that they possess, their capacity for re-skilling and lifelong learning and their capacity to operate in an ever-changing labour market with companies that must meet constantly changing global demands. We need to be involved in and to develop that process.
When the Government came to office, one in three workers in Britain did not receive a single minute of training during their working lives. That is our inheritance from the Conservatives. It is impossible to compete in a global marketplace with such a poor record of investment in the skills development of our nation's greatest asset--its people, the work force. It is important that we bridge that skills gap, and that we do so in a partnership consisting of the primary, secondary, higher and further education sectors, Government and industry.
Mr. Duncan:
What appropriate training did the Minister have for his job?
Mr. McCartney:
I almost give up when faced with such a silly question, asked by an equally silly person. The hon. Gentleman should know--[Interruption.] Well, if the hon. Member for Buckingham (Mr. Bercow) wants to know, I spent a lifetime in work in the public and the private sectors. I was one of the first people in local government to help create a venture capital company. I was the first person to help create a single partnership between the public and private sectors. Mine was the first local authority in Britain to enter the process of inward investment. What more does the hon. Member for Rutland and Melton want to know? When I was the first Minister for inward investment, a record 600 new inward investment projects were attracted into the United Kingdom. Now what more does the hon. Gentleman want to know? I hope that the Prime Minister is listening to the debate. We are in a period when one must impress one's masters, so I thank the hon. Member for Rutland and Melton for that intervention. I ask him to make more during the debate. God almighty! Where do they find them? I got so excited I nearly lost my place, Mr. Deputy Speaker.
The intellectual property of our work force has a high value. Under the Conservatives, especially in the 1980s and throughout the 1990s, efforts were made to force a strategy of removing from the labour market a huge number of skilled workers--a million in manufacturing alone. Those people lost their job and their sense of self-worth and value; the economy lost the vast reserve of knowledge that they took with them. We should never, ever allow that to happen again. The combined knowledge of our work force is a strength that we need to build on and facilitate. That is why the culture of change, in providing an infrastructure for lifelong learning opportunities, is crucial to the success of this venture.
In 1997, the university for industry was a commitment in the Labour party's election campaign. By autumn next year, it will be open for business, transforming the availability and accessibility of learning opportunities for everyone. The university for industry will target those without basic skills; those trying to improve their information technology skills; and managers of small businesses, seeking to enhance their firm's performance. We expect that, by the year 2002, more than 2.5 million
people a year will be using its range of information services and 600,000 people a year will be pursuing its learning programmes.
We are also conscious of the need to find jobs for those people who have the skills, but cannot find the right initial opening. There are excellent examples throughout the country of initiatives that enhance the employability of individuals and at the same time help businesses improve their competitiveness.
One example, in whose development I have taken a keen interest, run by Liverpool university, has helped create 500 jobs, has helped 2,000 graduates find full-time employment and has helped 1,000 small businesses to become more competitive. Companies large or small will succeed in exploiting knowledge only if they are innovative in the way in which they interact with their employees and others with whom they work. It is therefore crucial that, in local labour markets, skills and knowledge are matched with the needs of local enterprises.
Companies increasingly depend on the knowledge and skills of the people in their business to gain a competitive advantage. The DTI and Department for Education and Employment "Partnerships with People" report found that companies of all sizes, from all sectors of the economy, achieved sustained success by creating shared goals in culture, by continuously improving the skills of their work force and by sharing knowledge and information.
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