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10.25 am

Mr. Tom Watson (West Bromwich, East): I am delighted to make my maiden speech in the House of Commons on an issue that is of vital importance to my constituents in West Bromwich, East. Being elected as the Member of Parliament for West Bromwich, East is a great honour, and I am thankful for the faith and the trust that the people have put in me. However, I have to admit to more than a little trepidation, because I am following in the footsteps of two excellent parliamentarians.

Peter Snape represented West Bromwich, East for 27 years. He left with a distinguished record of service to his constituents and party as well as with a reputation for toughness in the Chamber. The best compliment that I can pay Peter is to say that he never lost sight of where he came from. His working life began as a signalman in the Edgeley No. 2 junction signal box on the west coast main line and, despite his success as a Whip and as a member of the Labour party's transport team, he never forgot his roots. His no-nonsense manner and understanding of the world outside Westminster kept his feet firmly on the ground, but that would often get him into trouble with his colleagues. He was the only member of the Tribune group of MPs to vote for Denis Healey in the party's leadership election. However, Peter was always prepared to take a contrary view if it was the right thing to do.

Parts of my constituency were also represented by another highly successful parliamentarian. Baroness Boothroyd was a renowned defender of democracy and champion of this House. Parliamentarians around the globe referred to her as Madam Speaker, but in West Bromwich she was affectionately and simply known as "Our Betty".

Hon. Members will therefore know how tough it is to take up the role of MP for West Bromwich, East. However, the job has been made much easier by the welcome that the people of the constituency have given me.

West Bromwich, East is a misleading name for the constituency because the seat takes in parts of Walsall, Wednesbury and Birmingham. Each area is fiercely independent, with its own identity and proud history. A quick glance at Wednesbury's "What's on" for July shows a community overflowing with activity—from whist drives to wheelchair basketball.

One of the most frightening experiences of the election campaign was drawing the bingo numbers at the Friar Park millennium centre in Wednesbury. People talk about the fear that hon. Members face when making their maiden speeches, but let me say that this is nothing compared to the terror felt when pulling out the bingo numbers in front of Gladys Cooper and the 50 ladies from Friar Park who regularly attend her bingo club.

The Great Barr parts of my constituency are in the authority of Sandwell but the postal district of Birmingham. They share a common interest with the Walsall part of my constituency in protecting our precious green belt. Great Barr hall and the green fields that surround it lie in the constituency of my right hon. Friend

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the Member for Walsall, South (Mr. George), but a proposed new housing development on the site will affect many of my constituents, who fear congested roads and a reduction of our green spaces. Over the coming months, I will work to ensure that their fears are not realised.

Given my background as an officer for Britain's most progressive trade union, the Amalgamated Engineering and Electrical Union, I hope that the House will forgive me if I concentrate my remarks on the engineering and manufacturing challenges facing small companies in this sector.

After the industrial revolution, West Bromwich was known as "Spring Town". There was no shape or size of spring, for whatever use, that could not be made there. Springs of every shape and size were made and exported to all corners of the world. The springs made by Salter's Weighing Machines graced every kitchen table across the land, as well as shops, offices and factories all over the world. Anywhere where there was a need for accurate measurement of weight, a West Bromwich spring would be present. But that was the tip of the iceberg. West Bromwich also made springs for suspensions and shock absorbers. Ask for a spring for any purpose, and one of the small firms in what today we would call a cluster was able to make it. The byword was innovation.

West Bromwich Spring in my constituency has been at the forefront of the industry for more than 100 years. It makes anything from a spring as small as a few millimetres in length that weighs less than a gram to one two metres high that weighs half a tonne. Although it is important to celebrate such long-standing success and technical expertise in an intensely competitive industry, it is important for us not to rest on our laurels. Put simply, we cannot live for ever on the innovations of our parents and, in some parts of the black country, our grandparents.

It is worth mentioning how, in that early cluster of spring companies, innovation and technology transfer took place. After a long day of thirsty work at the hearth or forge, the springmakers would often drop by at the local pub for a fine pint of black country beer—a practice that many of my constituents still enjoy today. Over a pint, springmakers would fall into conversation about the trouble that they had in getting a particular steel to harden or their difficulty in making an accurate spring. As they chatted away, one would tell the other that he, too, had had the same problem and some time ago achieved the solution, which he then passed on. The next day, back at work, that solution would be put into practice, and technology transfer had occurred.

Today, the technology challenges that small engineering and manufacturing firms face are much broader in scope, from the advances in new materials—composites, polymers and plastics—to the technological explosion in computers and telecommunications brought about by the e-revolution. Sadly, the range of technical support that they need can no longer be found in the local pub. Hon. Members should not think that I am trying to persuade them that there are no excellent hostelries in West Bromwich, East—the Vine and the Crown offer the best curry and beer in the country, and they sustained my campaign team through the long month of the general election.

I warmly welcome the Government's commitment to supporting all small firms through the Small Business Service. I also welcome the commitment to creating a

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regional manufacturing advisory service. It is important to regard the Small Business Service as we would a GP—as looking after the health of small firms in an area. However, when it encounters a technology-based firm with a particular technology problem, it must be able swiftly to refer it to the best possible body of expertise in the relevant technology, wherever that happens to reside.

In an ever more complex world in which multiple technologies are required to make even more complex products, technology transfer from industry to industry and firm to firm will be achieved in many different ways, from seminars and conferences to the use of the internet and the world wide web. We must embrace all those methods to equip our firms to compete in an intensely competitive global market.

On a personal note, I began by mentioning my predecessors. As a new Member, I cannot help but be struck by the history that swirls around us in this place—the statues of kings, queens and great leaders of the past and the ornate paintings and architecture—but if there is one thing that my predecessors taught me it is that we should always keep our feet on the ground. We are here to serve the people who elected us. The problems that they share, the challenges that they face and their hopes for the children whom they cherish are the reason why we are here.

10.35 am

Brian Cotter (Weston-super-Mare): I applaud the hon. Member for West Bromwich, East (Mr. Watson) for his interesting and lively maiden speech. He mentioned a couple of pubs and said a little about his constituency, but what struck me most was his interest in business and industry. We welcome an hon. Member with such a background, especially as there are fears that the manufacturing industry is in the doldrums. I look forward to hearing more from him.

I declare an interest as managing director of a small manufacturing company. I should be running my business this morning, but I am attending the debate because I keenly anticipate the Under-Secretary making some interesting comments. I hope that my presence will be worth while. [Interruption.] I think that the Under-Secretary said, "One person, one job," but it is important that hon. Members have other experiences. I could not abandon my business when I was elected because my employees depend on me for their work. Like that of the hon. Member for West Bromwich, East and other hon. Members, my business experience contributes to this place. Perhaps the Under-Secretary has such experience, but many civil servants and others do not, and we need people who have day-to-day experience of business.

Small business is usually the responsibility of a Minister of State. It is regrettable that the role has been downgraded—as some Labour Members have—and is now the responsibility of an Under-Secretary. I had hoped that the Government would mark the way in which they think about small business by appointing a Minister of State. It is a shame that they have chosen not to do that, although I hope that the Under-Secretary will be effective.

It is also a shame that we are having the debate today. I am not sure whether this is the annual debate on small business. Perhaps the Under-Secretary will make that

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clear. We need an annual debate, although that is not to say that we should not debate the subject at other times. The annual small business debate should be declared as such and held when many more hon. Members are present to participate.

Having made those slightly jarring comments, I welcome the Under-Secretary to his job and look forward to hearing from him as he gains experience. We want the Government to produce new initiatives. Mere words to the effect that they support small business are not enough. I want something more tangible. Perhaps the hon. Gentleman will surprise us at the end of the debate.

We welcome the Small Business Service. As a concept, it follows the United States model and is a good thing. However, after a year, it is worrying that many people wonder whether it has established a clear profile. The hon. Member for South-West Hertfordshire (Mr. Page) referred to effectiveness in regulation and legislation. I have been looking for such effectiveness in the Small Business Service, as there is in the United States service. The chief executive should have a powerful role and be able to intervene at the heart of government to ensure that regulation is effective and not over-burdensome.

I am not the only one making such comments. The better regulation task force has recommended that the Small Business Service

and that it should be more effective in delivering what it has been set up to do. It is essential that the SBS functions effectively to ensure that the small business community is at last represented—not just by an Under-Secretary but by an organisation at the heart of government.

The Government had an opportunity during the foot and mouth crisis to demonstrate their commitment to small businesses, but they did not come up trumps—nor, indeed, did the Small Business Service. When the crisis broke, many small firms were unsure where to go for the help promised to them. At the time, Government help was very modest, and it was regrettable that, on telephoning the helpline, people found out that they had to pay 8.75 per cent. interest on any deferred payments. That was subsequently put right. The SBS should have come into play quickly and effectively, but it did not. We support the concept of the Small Business Service, but it must be effective.

The Under-Secretary spoke about the Business Link network. The SBS has indeed improved it by issuing franchises, but I still hear reports about their variable effectiveness. The Under-Secretary highlighted the Phoenix scheme and others, and there are some good ones, but we look to him to spread them throughout the country to reach small and micro-businesses in particular.

The Government have today been politely castigated by the Small Business Council, whose report has drawn attention in particular to rules on consultation of small business. The Government and the SBS have not been effective in consulting small businesses so that such firms have a better chance to affect legislation.

The Liberal Democrats have consistently raised concern about regulatory impact assessments. On the one hand, I am glad that the council has said that Departments have failed to produce what is required, but on the other,

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I am disappointed that it has had to do so. We have hammered on about the issue in this Chamber and elsewhere. I hope that the Under-Secretary will take the council's report very seriously.

We broadly welcome the proposed enterprise Bill. We hope that it will be effective in many areas. We welcome proposals to abolish the Crown's preferential right to recover unpaid taxes, to remove automatic VAT fines and to crack down on monopolies and cartels, and the possibility of a new flat rate of VAT. That will be music to the ears of many small business owners.

I hope that the Government will seriously consider including in the Bill a dedicated payments regulator, as recommended in the Cruickshank report. Many in the small business community, the Liberal Democrats, the Forum of Private Business and the Federation of Small Businesses have been concerned about the outcome of the Cruickshank report. At the request of the banks, there has been a delay to give them more time to consider evidence. As the days go by, it is incumbent on the Government to take the report and the issue of the banks very seriously, because we need action and support for small businesses. The banks should not be given time to be less helpful to business than they should be; the situation cannot be allowed to continue.

I am disappointed with the Government on business rates, on which a White Paper was published in the last Parliament. Time and again, the small business community has put concern about business rates at the top of its agenda. Red tape and bureaucracy, about which small businesses have strong concerns, can be difficult to tackle—although my party has clear proposals, having identified 25 unnecessary burdens which in government we would repeal right away, and we are examining many others—but the issue of business rates is very clear.

Small businesses have to pay a very large proportion of their turnover in business rates, for which they get very little return. They have to pay as much as 35 per cent. of turnover, which is clearly a burden, as against larger concerns, such as supermarkets, which pay as little as 2 to 5 per cent. of turnover. I pledged at the general election that we would continue to fight in this Parliament for a scheme to help small firms with rates.

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