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Small and Medium-sized Enterprises (Kent Thameside)

5. Mr. Chris Pond (Gravesham): What assistance he proposes for small and medium-sized enterprises in Kent Thameside. [120509]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): The Business Link network provides a range of advice and assistance to small and medium-sized enterprises in Kent Thameside, including guidance on IT, exporting and sources of finance.

Mr. Pond: I thank my hon. Friend for that answer. I know that she and her colleagues worked hard to win assisted area status for Kent Thameside and other parts of north Kent and that she shares my disappointment at the European Commission's rejection of those proposals. Will she consider other ways in which we can help small and medium-sized enterprises in my constituency--and in Kent Thameside generally--to unlock the potential for prosperity and employment that we know exists there?

Ms Hewitt: I do indeed share my hon. Friend's disappointment and that of small businesses in his constituency that we were not able to include Medway and Gravesham in the assisted areas map. However, I can confirm that all the areas that were previously proposed for tier 2 status will be designated as tier 3 areas. Small businesses in Medway and Gravesham will

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therefore be able to apply for enterprise grant schemes. That will undoubtedly help many businesses to thrive in future.

Mrs. Angela Browning (Tiverton and Honiton): Now that Medway and north Kent have lost their assisted area designation, will the Minister explain to small businesses in Kent a letter that Commissioner Mario Monti sent to the Conservative leader of Kent county council? It states:

We have been round this course before. The Secretary of State does not know what he is doing on regional aid. Is not it time that he rolled up his sleeves and learned the discipline of delivery on time?

Ms Hewitt: I think that the hon. Lady is in danger of getting her record stuck. We submitted our proposals for the assisted areas map in line with the timetable that was agreed with the Commission. Of course we were disappointed that we were unable to include all the areas that we would have liked because of the need to reduce population coverage and to satisfy the Commission on the point about which it came back to us--whether or not Gravesham and Medway constituted a self-contained area.

Industrial Assistance

6. Dr. Vincent Cable (Twickenham): What criteria he uses in deciding which sectors receive selective industrial assistance. [120510]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): All sectors are eligible to apply for assistance, subject to European Union restrictions. Aid to firms operating in certain sectors, such as coal, steel, shipbuilding and motor vehicles, is governed by other European codes.

Dr. Cable: So that business can be reassured that assistance is provided on a genuinely objective, non- discriminatory basis free of political interference, will the right hon. Gentleman explain the logic that has led the Government to find help, as he says, for the coal, steel, car, ship and other industries, but not for the chemical, textiles, paper-making and other sectors that have faced the same competitive pressures and difficulties in the job market? Can he give examples from his period as Secretary of State of when he has declined industrial assistance for applicants from particular sectors?

Mr. Byers: We look at three broad matters when considering assistance. First, we need to support investment--either inward investment to attract a mobile project that could go anywhere in the world or projects such as the airbus initiative, where investment is made in the form of launch aid, which is repaid to the Government. Secondly, we need to ensure that competition is not unfair. For example, we must ensure that our shipbuilding industry is not at a disadvantage, given that the industry in other parts of Europe receives Government support.

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Thirdly, we need to assist industry through the process of change. That was one reason why we provided £100 million to the coal industry, where the process of change occurred because of the lifting of the stricter gas consents policy. There is therefore a rational approach to those matters that does not discriminate against particular sectors. We are considering how we might be able to support the textiles industry in a way that falls within those three principles.

Judy Mallaber (Amber Valley): Will my right hon. Friend note the observation in the consultation document from the national textiles and clothing strategy group, which the Department is considering, that take-up of regional selective assistance by textiles and clothing companies is remarkably low? Will he undertake to ensure that the officials who administer regional selective assistance and the enterprise grants take a positive attitude to investment in our eighth largest manufacturing industry and, specifically, that they encourage textiles and clothing companies to make applications for assistance and help so that take-up is increased?

Mr. Byers: My hon. Friend raises an important point. We are looking at the responses that we have received through the consultation process on the textiles strategy and we shall announce our conclusions in a few weeks' time. I will ensure that my hon. Friend's comments are taken on board as we arrive at our conclusions. She also raises an important point about employment in manufacturing. While recognising that there have been difficulties in recent times for certain sectors of manufacturing, it is important to set them in the historical context.

Since we took office, between May 1997 and February of this year 160,000 jobs have been lost in manufacturing. I regret that 160,000 jobs have been lost in manufacturing in almost three years, but it is worth comparing that with the average fall in employment for each year under the Conservative Government from 1979 to 1997: for each of those 18 years, 140,000 manufacturing jobs were lost. That is the Tory record on manufacturing--one of neglect. This Government's record is one of continued modernising investment.

Mr. Nick Gibb (Bognor Regis and Littlehampton): Can the Secretary of State confirm that there is deep unease in the ranks of senior civil servants in his Department over the shambles of his industrial policy and that, as a result, he has taken the unprecedented step of moving a number of senior policy advisers to other parts of the Department? In particular, can he confirm that Michael Atkinson has been removed as the director of the coal unit and sent to the resources and business competitiveness group, and that Alan Wright has been removed as director of the coal health claims unit and sent to the finance department? If that is correct, can he tell the House the reasons for those moves?

Mr. Byers: I gave the hon. Gentleman a parliamentary reply a few days ago that put all that on the record, so he should just read the official record and find out. These issues are decided by the permanent secretary; I have had no involvement in them. It is wholly appropriate that that should be the case.

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Mr. Dennis Skinner (Bolsover): If any of those civil servants were around when the Tories shut the 31 pits in the early '90s, then good riddance to them. I hope that my right hon. Friend played a part in moving them.

The reason why it is necessary to refer to selective assistance is that I, as a firm believer in intervention in the labour market, believe that, if it is correct to pay out large subsidies to farming interests, it cannot be wrong to assist where it is necessary in the industrial market generally, so it would not worry me at all. In fact, I would be pleased to know that, from now until the next general election, my right hon. Friend and others will make statements here to say that they are intervening before breakfast, dinner and tea to ensure that British workers keep their jobs. One thing is absolutely certain: unemployment has fallen for a good number of years. We want to ensure that it does not start rising before that next election is called.

Mr. Byers: The issue of intervention is important. I disagree with my hon. Friend on these matters, and he knows it because we have debated them at length. My view, and that of the Government, is that there should be a presumption against intervention. We need to look at the three areas where we are prepared to intervene very much as exceptions. The reason is that history shows that, in the long run, intervention and state subsidies do not build strong, profitable companies. It is only by having strong, profitable companies that we will have long-term employment.

Employment Relations (Seasonal Staff)

7. Mr. Andrew George (St. Ives): If he will make a statement on employment relations in respect of employers who repeatedly reappoint temporary staff on a seasonal basis. [120511]

The Minister for Competitiveness (Mr. Alan Johnson): We would always encourage employers to treat their staff fairly, whatever the basis on which they are engaged. Many employment rights apply to temporary and seasonal staff.

Mr. George: Is the Minister aware that, in west Cornwall, which is characterised by the lowest wages in the country and high unemployment, many low-paid workers such as classroom assistants have a pattern of employment, lay-off and re-employment that makes them ineligible for benefit during the long weeks and months during which they are unpaid? Does he accept that there is a need for joined-up government attention and action to ensure that the best interests of those low-paid workers are protected?

Mr. Johnson: I am aware of some of the problems. It is important to retain the flexibility that seasonal and temporary staff bring, but the improvements that we have introduced include making provision last summer to ensure that temporary and seasonal staff are not allowed to sign away their rights on unfair dismissal. The minimum wage had an effect on such staff. Later in the year, the fixed-term working directive will be debated, which again will look at that particular matter in great detail.

Mr. Lawrie Quinn (Scarborough and Whitby): The Minister will be aware that seaside communities such as

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Scarborough and Whitby have a seasonal employment problem, inasmuch as people are taken on for the season. What discussions have taken place with the Department for Culture, Media and Sport--particularly with the Minister for Tourism, Film and Broadcasting--regarding the tourism and hospitality industry, where there is a problem in terms of the seasonality of employment? What information packages will be made available for small employers, which are the bedrock of many of these economies?

Mr. Johnson: My hon. Friend raises an important point. We looked at this matter when we introduced the minimum wage--and we included such staff--and again when we introduced the working time directive. For the first time, all those workers now have the right to rest breaks and paid holidays. We will discuss with the Department for Culture, Media and Sport--which has an important role--the introduction of the fixed-term working directive to ensure that we give maximum protection without destroying the flexibility which my hon. Friend will appreciate is necessary in those areas.

Mr. Ian Bruce (South Dorset): I am glad that the Minister will look carefully at the directive. In the last Parliament, when the Select Committee on Education and Employment looked at temporary working, it found that the French--who had tried to legislate against temporary working--had 25 per cent. of their employees on temporary contracts, whereas, within the United Kingdom, where there is no legislation against temporary contracts, the figure was only 6 or 7 per cent. I hope that the Minister will look carefully at that before he signs up to job-destroying directives coming out of Europe, which are causing so many problems in France and Germany.

Mr. Johnson: We have no intention of stopping people working on fixed contracts. Many people choose to do so, and have done for many years. However, neither do we have any intention of introducing bad employment practice ghettos for people who are on such contracts. I do not agree that we have introduced job-destroying measures. Unemployment is at its lowest level for 20 years, long-term unemployment has reduced by 50 per cent. and youth unemployment has reduced by 70 per cent. The hon. Gentleman's dogma has been destroyed by the reality of this Government promoting social justice while ensuring that the number of jobs is increased.

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