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House of Commons

Tuesday 22 October 2002

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]


London Development Agency Bill

Milford Haven Port Authority Bill [Lords]

Read the Third time, and passed.


Order read for resuming adjourned debate on Question [16 October],

Hon. Members: Object.

Debate to be resumed tomorrow.

Oral Answers to Questions


The Secretary of State was asked—

Business Start-ups

1. Dr. Julian Lewis (New Forest, East): If she will make a statement on Government support for new business start-ups in Scotland. [73572]

4. Gregory Barker (Bexhill and Battle): If she will make a statement on Government support for new business start-ups in Scotland. [73575]

The Secretary of State for Scotland (Mrs. Helen Liddell): This Government have provided a stable economy with low inflation, low interest rates and, since 1997, cuts in the average corporation tax bill for small companies by 30 per cent., all of which are essential for new business start-ups; and the new 10p starting rate of tax is of great value to small firms, many of whom in Scotland are unincorporated.

Dr. Lewis : The Secretary of State recently travelled all the way to Australia and New Zealand to promote the virtues of the private finance initiative. Does she think that PFI will help to arrest, and even reverse, the decline in small business start-ups in Scotland? Was she any

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more successful in promoting the virtues of PFI to the New Zealanders and Australians than she has been with her own Scottish Back Benchers?

Mrs. Liddell: The hon. Gentleman should do his homework before he asks questions. There were 10,769 new business start-ups in the first six months of 2002—22 per cent. up on what they were previously. Great use is, of course, made of public-private partnerships in Scotland. Indeed, the complete refreshment of the secondary sector in Glasgow has meant that there has been a considerable increase in procurement from small businesses, which helps the overall environment for small business start-ups.

We are well aware of the popularity of the Government's proposals on PPP, which have been widely taken up by my colleagues in the Scottish Executive. Wherever one travels, the first point one must make is that this is not the old Tory model of PFI, which did not work.

Gregory Barker: What is the situation for business start-ups compared with that in 1997? Will the Secretary of State confirm that since 1997 business start-ups have dropped by 30 per cent.? Will she also confirm that 50 per cent. of Scotland's graduates emigrate each year because there are not enough opportunities for them in small business?

Mrs. Liddell: The hon. Gentleman obviously does not know his Scottish history, because one of its great strengths is that our graduates have moved throughout the world. Indeed, the hon. Member for Vale of York (Miss McIntosh), who is sitting next to the hon. Gentleman, is a Scottish graduate who sought to pursue her career elsewhere, as is the shadow Front-Bench spokesperson, the hon. Member for Beckenham (Mrs. Lait). That all adds to the resource that is available to Scotland internationally.

I am not going to confirm the hon. Gentleman's figures, but I will say to him that there has been an historic problem with small business start-ups in Scotland. There has been a wealth of research over the past 25 years. Some of the evidence relates to risk aversion in the Scottish population, some to a fear of failure and some to the fall in informal finance. The Government, working with the Scottish Executive, have a target of 100,000 new Scottish start-ups by 2009; we are doing what we can to reverse the trend.

The key to the future of small business start-ups in Scotland is the overall European climate. During the Lisbon processes, the Government began a change that will assist small business start-ups; that change will continue to create the 20 million new jobs that will be needed throughout Europe. The splits in the Conservative party do not help that one bit.

Mr. David Stewart (Inverness, East, Nairn and Lochaber): Does my right hon. Friend share my view that a very important niche market for Scottish business start-ups is the Scottish film industry, from the new Inverness film studio to the very successful XMonarch of

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the Glen", filmed in my constituency? Is not Scottish film going to be the start of the renaissance in Scottish jobs and business?

Mrs. Liddell: My hon. Friend asks an important question and makes an important point. The film industry in Scotland is composed mainly of small businesses, many of which are extremely successful. Ecosse Films, which made XMonarch of the Glen", is a very successful company. I had the privilege of visiting the XMonarch of the Glen" set a few weeks ago. I am very conscious of the fact that as a result of XMonarch of the Glen", 50 million people throughout the world can see how attractive my hon. Friend's constituency is. That helps more than small business; it helps the tourism industry the length and breadth of Scotland.

Mr. Iain Luke (Dundee, East): Given the initiatives in this year's Budget to stimulate the growth of small business throughout the United Kingdom, such as small business start-up helplines and starter packs, will the Secretary of State undertake to work closely with her colleagues in the Scottish Executive to ensure that both Administrations lend their weight to the creation of more small businesses in Scotland, especially in areas such as mine that suffer from high unemployment?

Mrs. Liddell: My hon. Friend makes an important point. I agree that we must work very hard to ensure that there is daily co-ordination between national schemes and Scottish schemes. Moreover, this is not just about Government schemes, because Governments alone cannot establish businesses, but about creating the right climate. The Government are creating the climate that helps small businesses to start—low inflation and low interest rates, reform of value added tax and changes to personal taxation—but politicians must make a co-ordinated effort to ensure that entrepreneurship is valued, as it should be. In fact, some years ago, research conducted by Scottish Enterprise revealed that entrepreneurs were classed with politicians and journalists; we have to do something to improve the status of entrepreneurs in Scottish society.

Mrs. Jacqui Lait (Beckenham): I hope that the question is brief, and that I shall get a brief answer. As new business start-ups are as likely to suffer from fires as any other business, can the Secretary of State tell us whether, when she leaves here, she will urge the First Minister and the Joint Ministerial Committee at No. 10 to make available all firefighting equipment to the troops wherever possible?

Mrs. Liddell: The Prime Minister has already made a statement on that issue, as has the Deputy First Minister in Scotland. Securing safety for people is a pre-eminent issue, and I share the view of the Prime Minister and First Minister that there is a need for the Fire Brigades Union to accept the recommendation; it should await the result of the independent review.

Mrs. Lait: I understand that the Deputy Minister for Justice in the Scottish Parliament, who is a member of the Labour party, has said that firefighting equipment will not be made available to the troops—

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Mr. Speaker: Order. The hon. Lady is out of order. She must stick to the question before us; she should ask a supplementary question about start-ups.

Mrs. Lait: Indeed, Mr. Speaker. Fires will affect small business start-ups just as much as they affect other businesses, so will the right hon. Lady make it clear that she supports making firefighting equipment available to the troops to protect Scottish small businesses and lives?

Mrs. Liddell: I reiterate the point that I made: the Prime Minister has made the Government's position absolutely clear, and that position is shared in Scotland and the rest of the United Kingdom.

Mr. Stephen Hepburn (Jarrow): How can the Minister seriously talk about economic development when in some places the basic business link between Edinburgh and Newcastle is nothing more than a country road? Does not the fact that that road was closed by a little drop of rain today pour scorn on the multi-modal study? I ask the Minister to get in touch with the Scottish Executive and United Kingdom Transport Ministers with a view to building a proper road, dualled all the way from Newcastle to Edinburgh, so that we can achieve proper economic development.

Mrs. Liddell: I understand that rather more than a little drop of rain has affected the border between Scotland and England. Indeed, my sympathy goes out to all those people who have been inconvenienced as a consequence of the adverse weather conditions. The Government and the Scottish Executive are now putting considerable resources into transport policy, not just in Scotland but throughout the United Kingdom, with a view to ensuring that roads and the rail network are improved, especially the links between Scotland and England.

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