Mr Ian Pearson (Dudley West)

It is with great pleasure that I make my maiden speech to the House as the new Member for Dudley, West.

I begin by paying a generous tribute to my predecessor, the late Dr. John Blackburn. A man of great charm and courage, he radiated warmth and was popular and widely respected both within the House and throughout the constituency, where he was an energetic and effective Member of Parliament in dealing with constituents' problems. It is with a deep sense of responsibility that I succeed him in the task of representing the seat where I was born and have lived for most of my life.

Dudley, West is situated on the western fringe of the west midlands. It contains a number of small towns and villages, including Sedgley, an old market town that was once part of the Norman barony of Dudley; Kingswinford where I grew up, which dates back to the Domesday book; and Wallheath and Wordsley. They all border on the green belt and rural fringe of south Staffordshire.

The seat has changed radically over the 20 years since a Labour Member of Parliament was last returned to the constituency. Its population has grown enormously, with new housing developments, particularly in Amblecote and Gornal. Now, three quarters of those who live in the constituency own their own homes. Industrially, too, the seat has changed dramatically. The past 20 years have seen the closure of the steel industry and allied trades in Brierley Hill, Brockmoor and Pensnett. Recently, we have seen the growth of Merry Hill, a major retail and leisure complex. It is one of the biggest shopping centres in western Europe, with more than 2.5 miles of marbled malls attracting 23.5 million visitors a year. That prime retail site is more profitable than Oxford street. The area still produces the finest cut-glass crystal in the world and has some of the best pubs and beers to be found anywhere. My constituency has a strong and proud manufacturing tradition, with more than 2,500 small businesses, many of which are in specialist engineering and serve the motor industry.

The people of Dudley, West are practical, hard-working, open and honest. They keep their promises and expect others to keep theirs. On 15 December they spoke for the nation. In massive numbers, they voted against a Government who they believe have lied to them and betrayed them and are completely out of touch, and for a Labour party which they know is more in tune with their needs and aspirations and is developing a growing bond of trust and confidence with the British people.

My principal reason for speaking, however, is not to report the strength of feeling in Dudley, West about VAT on fuel, broken promises and the growing appeal of new Labour—the poll result amply demonstrates that. It is that my background is in business finance and economic development. Until I joined the House, I was closely involved in helping small and medium-sized businesses to grow, and in helping local and regional economic developments to increase jobs, improve skills and raise prosperity.

A burning issue in Dudley, West is the devastating impact of Merry Hill's success on town and village centres within my constituency and the neighbouring constituencies represented by my right hon. Friend the Member for Dudley, East (Dr. Gilbert) and the hon. Member for Halesowen and Stourbridge (Mr. Hawksley). The seriousness of the problem is widely recognised and has produced a major change in ministerial guidance on out-of-town retail development. Nothing has been done, however, to alleviate the problems. Merry Hill's success owes as much to tax incentives for the site's development as to anything else, although I freely acknowledge the vision and entrepreneurial endeavour of the private developers who got the project off the ground. I want the affected centres in Dudley borough to be given special status in an amendment to a clause in the Finance Bill so that they can benefit from a package of tax reliefs and allowances similar to those on offer to Merry Hill when the site was developed. That would be natural justice.

More broadly, there is significant scope for a more imaginative use of tax breaks in funding economic and infrastructure development. Tax breaks should be designed to attract institutional funding support and provide support for public-private partnership development through the issue of regeneration and renaissance bonds. The Budget has missed an opportunity to develop that possibility and the private finance initiative is singularly lacking in that respect.

As a champion of small and medium-sized businesses, I welcome the purpose behind the establishment of venture capital trusts. My experience in the venture capital industry leads me to suspect that the Government's figures on the amount of funds that will be generated from it are highly ambitious, to say the least. I share the concerns and scepticism of my hon. Friend the Member for Oxford, East (Mr. Smith) that the scheme may degenerate into a tax avoidance mechanism for the very rich and produce no real benefit for businesses. That must not be allowed to happen. Neither VCTs nor business angels schemes—I presume that they are given greater support—will solve the problem of the equity gap that still exists. Nor is there an effective support programme for the vast majority of small and medium-sized businesses that do not want to go down the equity route but want to develop, grow and thrive.

The Government have a major role to play in assisting companies to upgrade the sources of their competitive advantage. That is not to deny the role of the market, but our country should provide at least the same level of support for our businesses as that offered by other regional and national Governments.

In the west midlands, our future prosperity is linked to the fortunes of the motor industry. We compete head to head with Baden-Württemberg in Germany and Emilia-Romagna in Italy. We have had significant successes, but the simple fact is that the support available in other regions of Europe for businesses is far ahead of what we can offer in the west midlands. We can, and must, do better to provide such support if we are to compete successfully in future European and world markets. Providing tax relief to defray research and development costs of small companies is one mechanism of merit that should be discussed further in the House, but much more is needed.

For a long time, I have been impressed by the way in which the German Government have supported growing businesses through the Kreditanstalt für Wiederaufbau. There is a strong case for establishing and supporting regionally based business development banks and institutions in our country which could offer patient, long-term loan finance to companies. That matter should be considered in the Committee considering the Bill.

I have been able to touch on only one or two issues relating to small businesses that are the lifeblood of Dudley, West's economy, just as they are vital to the future of Britain as an industrial and trading nation. I believe that it is not the purpose of a maiden speech to go into significant detail, but I would welcome an opportunity to expand on those issues and themes in more detail at a later date.

I know that it is customary for a maiden speech to be heard in silence. I have been warned, however, that I cannot expect similar treatment ever again. I thank hon. Members for their courtesy this evening.

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