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Mr. David Davis (Haltemprice and Howden): No.
Mr. McCartney: Fair enough. Perhaps he is just talking to himself. No one else would listen to him.
The DTI will shortly publish a best practice guide to help spread learning through business networks. That publication is built on partnership. The business community sat down with Ministers and officials to develop this approach. Business is feeding in ideas, and the ownership of the document will be in business itself, because it is essentially the work of business people, working together to identify best practice, sitting down with the DTI and then developing that best practice and ensuring that every enterprise in Britain has the opportunity to operate those best-practice models to
improve, through business networks, opportunities for business investment and jobs growth. We want to encourage more businesses--
Mr. Geraint Davies:
I am especially interested in the university for industry because some of the original ideas that gave rise to it were formed before the general election in the Labour finance and industry group, which I chair. Will there be a link between regional development agencies, which will establish regional strategies for specific industrial strengths in each region, and the university for industry, which can guide skills in the direction in which the region is moving industrially, so that training takes place and the pool of skills in a relevant area reflects the industrial strategy for that area?
Mr. McCartney:
I can reassure my hon. Friend that the ideas have been the engine room of this change, and that the ideas are on-going in our extensive consultation process with the business community in each region, from which will emerge the piloting areas for each regional development agency. At every step in this regeneration of the United Kingdom's entrepreneurial culture, its business culture, its investment culture, business is working hand in hand with Government to get the maximum benefit from this process of change. It is critical that we provide local development partnerships that can affect areas of competitiveness.
I should like to refer briefly to the Wigan borough partnership. I declare a constituency interest, as a Member of Parliament for Wigan. Hon. Members can tell from the Lancashire accent--the elocution lessons did not go quite as well as I had expected.
Mrs. Angela Browning (Tiverton and Honiton):
The Minister needs a bit more training.
Mr. McCartney:
Perhaps I could join the lifelong learning process.
Mr. David Davis:
A bit of upskilling.
Mr. McCartney:
As I understand it, Scotland has many call centres because people like the Scots accent. It has a truthful and honest ring to it. I think that that is true. [Interruption.] Mr. Deputy Speaker knows what I am talking about. Indeed, we sound just like each other. I shall keep my accent, and shall not take up the suggestion of the right hon. Member for Haltemprice and Howden of a bit of upskilling. I shall remain with what I have got and count my mercies.
Wigan borough partnership brings together TECs, chambers of commerce, business links, the careers service and the local authority. The breadth of the partnership has enabled all the stakeholders to establish a common economic vision for the future of the borough, and it adds up to real success on the ground. Through this partnership approach, Wigan borough partnership has taken the competitiveness agenda one stage further, and has made the links between physical development, skills and enterprises.
The European Union is now the UK's major market: it is a home market of more than 200 million people. If we are to make that market work, we must exploit the strengths of Europe and offer something to the global
market that others cannot. Europe needs to undergo some fundamental changes in the way in which it treats business and enterprise. We need to encourage entrepreneurship in Europe by developing a European venture capital industry to match that in the United States, and by dealing with unfair taxes that distort real competition. Promoting economic reform must be an essential part of that strategy.
Europe has already come a long way, and we have a sound platform on which to build, but more progress is needed to improve the functioning of Europe's product, labour and capital markets. Europe needs to maintain the momentum of reform so that it has the necessary strength and adaptability to make job creation easier and growth more dynamic.
Building on the investment in our science base, the reach-out fund, launched on 15 June, has been jointly created by the Department of Trade and Industry and the Department for Education and Employment in partnership with the Higher Education Funding Council for England and the Department of Education in Northern Ireland.
The fund is worth around £20 million a year. It is intended to initiate an important third stream of funding for universities, alongside research and teaching funds, to recognise the importance of working with business, and to develop the capability in universities to respond to business needs. That in turn will help to stimulate more informed demand from business for greaterinnovation and competitiveness. The fund will be open to all universities in England and Northern Ireland, complementing measures in Scotland and Wales.
As today's publication of the 1999 edition of the DTI's research and development scoreboard indicates, we also need to do more to encourage firms to invest in R and D. The scoreboard focuses on the important role that R and D can play as part of a company's innovation process and business strategy.
The scoreboard celebrates the great strengths we have in pharmaceuticals, aerospace and defence. It also provides graphic evidence of the determination of some of our smaller companies in investing considerable amounts in R and D--they will be the Glaxos and Intels of the future. However, it is encouraging that many large United Kingdom companies recognise the crucial part that effective R and D plays in the innovation process.
It is good to see that the UK pharmaceuticals sector still continues to lead the world on R and D investment levels as a proportion of sales. However, it is worrying that many other United Kingdom companies still invest less intensely than their overseas competitors.
The Government are acting to improve UK investment in R and D through a new tax credit to encourage small business investment in this area. That should help more than 3,000 companies to invest in R and D, and help to support at least £700 million of R and D spending among small firms.
Companies can be innovative only if they look to the future. The UK foresight programme helps them to prepare for the challenges that lie ahead by bringing people who know about markets together with people who know about technology.
The DTI is increasing its innovation budget over the next three years to some £230 million. The extra money will be used to drive forward many new and large programmes, and to promote a fundamental change in the
UK's climate for innovation. For example, we are increasing the funding of the teaching company scheme. The scheme not only helps to facilitate the transfer of technology and knowledge between the science base and businesses of all sizes, especially SMEs, but provides industry-based training for graduates intending to pursue careers in business.
Last year, 77 per cent. of all graduates who completed their two years in a teaching company scheme were offered permanent employment by their host company. Every one of them is likely to have been an agent of innovation and change within those companies.
We shall continue to support Shell's technology enterprise programme, under which 1,600 undergraduates undertake an eight-week project-based work placement. Last year, the student selected as the most enterprising STEP student in 1998 undertook a project in a company manufacturing chemicals and supplying the electronics industry. That important project was carried out by a woman graduate. Her work resulted in alternative materials being used in a process with significantly reduced environmental effects, and achieved recurring savings of at least £30,000 for the enterprise concerned.
To remain truly competitive, UK companies can learn from examples of business practices both at home and abroad. They need to benchmark themselves against leading businesses around the world for new ideas, new technologies and management best practice.
Mr. Bercow:
The Minister said that the Government would oppose tax measures that would damage the competitiveness of British businesses. Given that the London eurobond market faces a threat to its competitive pre-eminence and to jobs from the proposed European withholding tax, will he give an unequivocal guarantee that, if that withholding tax remains unamended, the Government will veto it--I repeat, veto it?
Mr. McCartney:
The hon. Gentleman knows full well that the Government are absolutely committed to ensuring that nothing--but nothing--is proposed that will damage the process of work in the City. We have said that time and again. We are getting weary of Conservative Members wanting Aunt Sallies to knock down because of their anti position on Europe and on all matters relating to Europe.
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