Business Support (Lancaster and Fleetwood)
(Limited Text - Ministerial Extracts only)
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The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)
I am extremely grateful for the chance to respond to this debate, and I congratulate my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) on securing it. My last dealings with Fleetwood directly were around a decade ago, when, as shadow fisheries Minister, I visited that splendid town and stayed at the North Euston hotel, which is, of course, part of the Mount, which is perhaps the jewel in the crown—if I might put it that way—of Fleetwood.
How appropriate that we should today have this Adjournment debate following a debate on fishing, which forms such an important part of Fleetwood’s history. As I recall from my time as shadow fisheries Minister and from information I have gained somewhat later, 1,000 people are still employed in that industry, mostly in fish processing. As my hon. Friend said in his excellent speech, many more people are, I suspect, employed producing Fishermen’s Friends, which I understand are particularly popular in Japan.
John Ruskin said that the first test of a truly great man is his humility. I do not aspire to be a truly great man, but I do aspire to humility, and I should say at the outset that I could never know as much as my hon. Friend about his constituency, nor speak with the passion about it that he has demonstrated today. He comes to the House with a long and proud history in local government, and already, he has brought an energy, enthusiasm, commitment and, if I may say, an expertise to his dealings in this place as the representative of his splendid constituency.
I shall try to respond to as many of the points that my hon. Friend raised as I can, although he will appreciate that time is short. He knows how deeply the Government are committed to encouraging renewed economic growth and the new jobs and businesses that will spring from that, and I draw his attention to the work done leading up to today and the announcement on youth employment made this afternoon by the Prime Minister and Deputy Prime Minister, with which I was pleased to be involved. They announced new policies for encouraging more apprenticeships, which is a subject dear to my heart, and for work placements and experience as a means of moving people from economic disengagement to engagement.
That will resonate in Fleetwood, as my hon. Friend suggests, but ensuring that we take advantage of the capital that lies, sometimes unused, among those who are currently disengaged, is a challenge for the whole country. The investment infrastructure to which he drew attention also means investing in human infrastructure. That is a central pillar of the Government’s macro-economic plans. It would be impossible to recalibrate the economy to make it more sustainable if we did not make that kind of investment, as he properly said.
Just as the Government have been honest with the British people about the scale of the deficit and its implications, we must now accept that the struggle for growth will not be without its setbacks. For example, I was particularly saddened to hear from my hon. Friend of Stena Line’s recent decision to close its service between Fleetwood and Larne, although I understand that the service operated at a loss for some time.
Having said that, just as we accept bad news, we should celebrate good news—better tidings, if I can put it that way. Only the other day, I was heartened to read in the Blackpool Gazette, which is always on my bedside table, as one might imagine, that my hon. Friend had formally opened the delightfully named Strawberry Gardens pub in Fleetwood. I gather that that is the first pub to be opened by the new and even more inventively titled Fuzzy Duck brewery, which has been set up in his constituency. I can assure him of my best wishes for their success.
The creation of a small business such as that one illustrates a fundamentally important point, as my hon. Friend said, for small businesses are the bedrock of our economy. Businesses in Lancaster and Fleetwood are primarily small and medium-sized enterprises, and the issues they face are typical of those experienced by companies across the country over the past few years. SMEs account for more than 99% of private businesses, and about half of all jobs. I do not need to tell you that, Mr Deputy Speaker, given your background and your commitment to that sector based on personal and family experience.
As my hon. Friend suggested, I, too, have a background in business, having been a businessman in the IT industry before coming to this place. I fully appreciate his points about regulation and tax, and in particular about the need to invest in small businesses—and, for that reason, the importance of banks getting behind those businesses, to allow them to form and to grow.
What, he might ask, are we doing to help with all that? Well, we will enable better access to both debt and equity finance. We will ensure that we have a predictable tax system that rewards endeavour. We will also reduce red tape and ensure that the support that we provide SMEs is delivered in the most effective and efficient way possible. I hope to return to one or two of those points in more detail, but I want to emphasise access to finance in particular, as that was a central part of my hon. Friend’s speech. As he said, the flow of credit to viable SMEs is essential for supporting growth; and indeed, that is the core priority for this Government. We recognise the problems faced by small firms that do not have adequate security to obtain finance. That is why we have decided to continue the enterprise finance guarantee until 2015, to unlock up to £2 billion of additional lending to SMEs. The latest figures show that 18 businesses in my hon. Friend’s constituency have so far been offered and have drawn down EFG-backed loans worth over £2 million.
The EFG scheme is of course intended to complement rather than replace mainstream bank lending. This Government have made considerable efforts to get the banks to meet the demand for credit from viable SMEs. Under the Project Merlin agreement, the banks have committed to make available £190 billion of new credit in 2011, of which £76 billion will be for SMEs—a 15% increase on the £66 billion lent in 2010. Clearly Banks still need to make commercial decisions, and it is not for the Government to intervene in these. In view of that, I would encourage any businesses having difficulties with their bank to continue to engage with the bank to try to resolve the issue.
My hon. Friend also made the important point that we need an independent review of such matters when things do not go right; and indeed, an independent reviewer has been appointed to monitor the banks’ appeal processes. He will publish an annual report on the effectiveness of those processes. The appeal process that we have set up is sensitive to the very sound points that my hon. Friend made. He can feel absolutely assured that this Minister, in this Department, along with my hon. Friends, will ensure that small businesses get the backing that they need and deserve.
My hon. Friend also talked about business mentors and advice. It is critical that we establish a network of experienced business mentors offering practical advice to existing businesses and people who want to start a business. We are setting up a new business coaching for growth programme to enable new small businesses with high growth potential to realise that potential. We are also refocusing the Solutions for Business range of products, so that they are better focused on helping firms grow.
We are also establishing local enterprise partnerships. We expect the new LEPs to be able to provide help to small firms, both with advice and by bringing together useful partnerships that will allow the sharing of good practice across the private and public sectors. That increased coherence will help my hon. Friend’s constituency, as it will others, in the ways that he requested. As set out in the White Paper, local enterprise partnerships will play diverse roles, reflecting the differing local priorities in different areas. These will include ensuring that both planning and infrastructure investment support business needs, and working with Government to support enterprise, innovation, global trade and inward investment. He will also know that we announced 11 enterprise zones in the Budget. They will be hosted by LEPs and will bring together a wide range of tools and incentives in an unashamedly pro-growth way, giving power back to local communities and businesses.
My hon. Friend has done a service to this House in highlighting the important issues facing his constituency. They reflect those facing constituencies up and down this country. He can be assured that this is a Government who are pro-business, pro-enterprise, pro-growth, pro his constituency and pro-him.
Question put and agreed to.