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House of Commons
Thursday 8 July 2004
The House met at half-past Eleven o'clock
PRAYERS
[Mr. Speaker in the Chair]
Oral Answers to Questions
TRADE AND INDUSTRY
The Secretary of State was asked—
Workplace Rights
1. Mr. John MacDougall (Central Fife) (Lab): What further changes to workplace rights she expects to be in place by 2007. [182677]
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The Government will continue to find the right balance between establishing fair standards for workers and creating more jobs. As we have already announced, we will introduce regulations on age discrimination and implement the information and consultation framework, on which we published a draft for consultation yesterday. We are committed to reviewing our family-friendly package of laws in 2006.
Mr. MacDougall: I thank my right hon. Friend for that response. She mentions family-friendly rights; how successful have such initiatives been, and what progress has been made on issues such as age?
Ms Hewitt: The new law that we introduced last year, which gives parents with young children the right to request a change in their hours, has already been enormously successful. Nearly 1 million parents—about a quarter of all parents with children under six—asked for a change in their working hours. Eight out of 10 of those requests have been granted in full, and a compromise was agreed in respect of a further one in 10. That is extremely encouraging, and we now want to extend much greater choice to older workers, who all too often are locked out of the labour market. This is not about "work till you drop", as the press likes to suggest, but about "choose when you stop". My right hon. Friend the Secretary of State for Work and Pensions and I will invite employers, employees and their unions, and others with a direct interest, to sit down with us and agree a way forward that will promote choice for older workers without imposing burdens on employers.
Mr. Andrew Mitchell (Sutton Coldfield)
(Con): Conservative Members are enthusiastic supporters of developing the work-life balance, as I told the general secretary of the TUC when I met him recently, but
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unlike the right hon. Lady we recognise that it has to be paid for. Does she not understand that the plethora of directives, consultations and burdens under which British business is groaning today will be paid for in jobs, time and competitiveness?
Ms Hewitt: As the hon. Gentleman and his colleagues have made it clear that they would cut public spending, the one thing of which we can be certain is that they would not pay for maternity pay and leave, and that they would not keep the rights that we have already introduced. [Interruption.] The hon. Member for Eddisbury (Mr. O'Brien) shows that he simply does not understand that it is the Government and taxpayers who pay for statutory maternity pay. What is more, at the request of small businesses we compensate them for more than the cost of maternity pay, in order to help them cover the administrative costs. There are no burdens from us; instead, there are better rights for parents at work. If the Conservatives were in government, they would cut them.
Mrs. Anne Campbell (Cambridge) (Lab): Does my right hon. Friend agree that high-performance workplaces are those in which employers look very carefully at staff flexibility and make every attempt to allow staff to cope with their domestic, as well as their professional, responsibilities? Does that not reduce stress and absenteeism and mean that staff are more productive in the long term?
Ms Hewitt: My hon. Friend is absolutely right. Businesses, particularly public sector employers, who organise their work flexibly are increasingly finding that doing so is good not only for their employees but for their organisation. So there is a very strong business case for family-friendly working, and that is the basis on which we have introduced the law.
Technology Start-up Businesses
2. Mr. Archie Norman (Tunbridge Wells) (Con): What proposals she has to encourage technology start-up businesses. [182678]
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The university challenge seed fund, the grant for research and development and the UK high technology fund are three ways in which the Government help technology start-ups. As a result, some 17,000 start-ups are assisted every year.
Mr. Norman:
Would the Minister like to comment on the report in today's edition of The Times that the Chancellor plans to cut £300 million from the DTI's business support division? Can he also confirm that flagship support for technology start-up schemes—the grant for research and development—has already been cut, that the number of grants will be reduced this year from 900 to 300, and that the waiting list for grants has already been extended from two months to five months? Does he not agree that if anything should be cut, it is the cost of running the DTI, rather than support for new start-ups?
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Nigel Griffiths: The hon. Gentleman is wrong on both counts. On grants for research and development, over the last five years the number of applicants for grants—all accepted because the criteria were met—resulted in a 17 per cent. underspend on the allocation, and in the past two years we have been able to supplement the allocation by up to £10 million over and above what we expected to spend. The eight new products offered by the Department of Trade and Industry will guarantee future success. Our track record on start-ups is very good. On 31 March the Barclays survey of start-ups showed that 465,000 companies or businesses started up last year—a 19 per cent. increase on the previous year and the highest since Barclays started the survey in 1988. Our track record on start-ups is rather good.
Mr. David Chaytor (Bury, North) (Lab): Does my hon. Friend accept that there is a risk of making it too easy to start up a small business? I would like to tell him about the scandal of the start-up and rapid collapse of Classic World of Fitness, a small private health club in my constituency. Its director, Mr. Robin Brown, who lives in Warwickshire—I have his address and details if anyone is interested—appears to be refusing to pay thousands of pounds to my constituents. If I provided my hon. Friend with the full details, would he be prepared to look further into the case?
Nigel Griffiths: I am happy to ensure that the appropriate authorities investigate that regrettable case. I am pleased to tell my hon. Friend and the House that that sort of case is an exception, but if the allegations are corroborated, we will be able to bring down all the resources of the law on the case. In the meantime, we want to make it easy for people who have good ideas to take them to market and to start up companies. As my previous answer showed, we have been able to help record numbers of people to start companies and I am pleased to tell the House that survival rates are very strong as well, but that will not deter us from ensuring proper consumer protection.
Mr. Julian Brazier (Canterbury) (Con): Is it not the case that overall levels of business start-ups today are significantly lower than in the last three years of the last Conservative Government? Is not the major reason for that simply the ever-increasing burden of bureaucracy, which deters people from starting up companies?
Nigel Griffiths:
I am puzzled about whether the hon. Gentleman has a comprehension problem or some other problem. Let me give him the facts. The Barclays survey of start-ups, which has been operating since 1988, shows that last year record numbers of businesses started up in this country. The figure is 465,000. If it is a record number of start-up companies, it will obviously be higher than under the last three years of the Conservative Government. We all remember—and we do not have to go back much more than a decade to find out—that 422,000 manufacturing jobs were lost in one year alone. If the hon. Gentleman wants a figure higher than 465,000, he could go back to the Conservative
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Government's first recession, during which 900,000 manufacturing jobs were lost in a single year. We are not going to take any lessons on start-ups from the hon. Gentleman. I will send him the details if he needs them to be repeated a third time.
Mr. Stephen O'Brien (Eddisbury) (Con): Let us look into the outcomes of all these breathless claims from the Minister. He did not dare to mention the Chancellor's research and development tax credit, which is not surprising because the April KPMG survey established that 48 per cent. of small and medium-sized businesses either found that the tax credit was too complicated to apply for and administer or did not know about it at all. Only 3 per cent. of respondents said that it had been a significant benefit. How does the Minister reconcile his boasts with those depressing facts?
Nigel Griffiths: Let us provide the hon. Gentleman with the facts—not directly from me, but from the chief executive of Isis Innovation in Oxford, who commended the Government. He told the Financial Times that the Government had done a great deal to facilitate spin-outs from universities. I recognise that there is a problem with the tax change that was necessary to close a loophole. When I spoke to Tim Cook, the chief executive whom I have just mentioned, and to the director of Exeter Innovation Centre this morning, they told me that they accepted that the loophole had to be closed and agreed with me that we must work to ensure that, in closing it, the Inland Revenue in no way restricts our excellent track record of encouraging spin-outs. We are addressing the problem directly by talking to two of our most successful academic spin-out company directors. In contrast, I do not think the hon. Gentleman has spoken to either of them.
Mr. O'Brien: We can all read, as well as speak to people. Interestingly, the latest comments from the academic community suggest that the system is not working as the Minister claims, because spin-out companies do not have enough connection with that community. So the Government's proposals are flawed. It is important that Ministers are good at more than reading off jargon phrases in Hewitt-speak—but yet again, we have had another smug response.
On Monday next week, the Chancellor is due to announce cuts in the DTI's role and spending. In light of that, what urgent and independent post-audit process have the Secretary of State and the Minister ordered to be carried out to demonstrate how much of the Department's current £8 billion of expenditure has been wasted?
Nigel Griffiths:
This Government have spent £3 billion on the science and innovation framework already, and that is due to increase. The Opposition propose to freeze or cut public expenditure, which means that that budget would be diminished. Over the past seven years, the Government have worked with people who have succeeded in starting important spin-out companies. They tell us that they want the start that we have made, and the billions of pounds that the Government have invested, to continue and expand in the way that I have described. They do not want the cuts that the Opposition propose.
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