Oral Answers to Questions

Lord Vaizey of Didcot Excerpts

Thursday 8th July 2010 Commons Chamber

[Richard Harrington (Watford) (Con)]

7. What assessment he has made of the contribution of small and medium-sized enterprises to economic recovery.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Vaizey)]

Small and medium-sized enterprises are the backbone of the economy and will make a vital contribution to the economic recovery, through new start-up activity and through business growth. BIS is currently conducting a survey of small and medium-sized enterprises, which will further inform our assessment of the contribution of SMEs to the recovery.

[Richard Harrington]

On Tuesday, I visited the Queens Road area of Watford—an area previously of retail prominence—with Helen Lynch, a local community volunteer who is trying to revitalise the area. One of the main problems I saw was that many shops had shut down and were shuttered up. When I have tried to get people interested in taking up retail units in starting up a small business, one of the main problems facing them was the high level of business rates. I wonder whether the Minister with responsibility for small business, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), would agree to come to Watford with me so that we could discuss the issue on the ground with some local business people and other interested parties.

[Mr Vaizey]

I pay tribute to my hon. Friend and the work that he does supporting small businesses in his constituency. I certainly think that my hon. Friend the Minister with responsibility for small business would be delighted to visit them. We are looking at temporary rate relief for small businesses. I know that it is a key problem for them.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Minister do what he can to encourage and, through his own Department, support the venture capital investment so needed for small manufacturing start-ups? Not only is it a problem that the capital allowance has been reduced, but access to the necessary credit and resources is problematic. Will he conduct a review on venture capital availability?

[Mr Vaizey]

Under the Budget we have set up a new enterprise capital fund, into which the Government have put £25 million. We are looking for additional private funding, but I certainly recognise the importance of the venture capital industry and venture capital funding for small businesses.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

SMEs offer some of the best potential for future growth, but the biggest barrier to that is access to finance—in particular, I am talking about the failure of the enterprise finance guarantee scheme, because of the Catch-22 that it is the banks that SMEs apply to that say no. What can my hon. Friend do about that?

[Mr Vaizey]

We are expanding the enterprise finance guarantee scheme by an additional £200 million, and we understand that it will support some £700 million of extra bank lending, but I absolutely agree with the hon. Gentleman about the problem of securing bank lending. We are due to publish a Green Paper on business finance before the summer recess. I hope that that will address many of the issues that are involved.

[Ian Lucas (Wrexham) (Lab)]

We on the Labour Benches welcome the extension of Labour’s successful enterprise finance guarantee that was announced in the Budget. We are questioning what has happened to the “major loan guarantee scheme” referred to in the coalition agreement. Is that in fact the same thing as Labour’s successful enterprise finance guarantee scheme, which the Tories and the Liberals have now extended in their own Budget?

[Mr Vaizey]

In our approach, we want to look at all the issues in the round, so one of the key aims of the Green Paper on business finance is to ensure holistic measures of business support.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

9. What plans his Department has to improve the employability of graduates.

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[Mr Pat McFadden (Wolverhampton South East) (Lab)]

May I ask the Secretary of State about an important area for consumers and businesses—the future of mobile broadband internet? As he will know, it is growing exponentially, and is hugely important for consumers and businesses. Will the Government therefore put an end to the uncertainty on the issue that has been created since the election, and proceed with the statutory instrument on the planned future spectrum option, which can make the sector grow in the UK? That measure, which was put together by the Labour Government, would have ensured fair competition through caps on the amount of spectrum that could be bought by a single operator. There has been great uncertainty on the issue since the election. Do the Government accept that it would be wrong to have that option in place in a way that squeezed out competition, and will they therefore set out their plans?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Vaizey)]

We are looking carefully at this issue, holding regular discussions with the mobile phone operators and involving other Departments and regulators. The right hon. Gentleman is quite right. Getting the issue sorted is an absolute priority for us, and we hope to make an announcement before the end of the summer recess.

[Robert Halfon (Harlow) (Con)]

T2. Following the excellent plans for apprenticeships, is my hon. Friend the Minister aware that the local apprenticeship scheme run by Essex county council and Harlow college has agreed to place an Essex apprentice in my office from October? Will he also look into boosting apprentices in Whitehall and Westminster, and through Government contracts?