Small Firms

Part of the debate – in the House of Commons at 12:20 pm on 21 June 1985.

Alert me about debates like this

Photo of Mr Chris Smith Mr Chris Smith , Islington South and Finsbury 12:20, 21 June 1985

I am afraid that I cannot agree with the hon. Gentleman. I shall come to the detailed figures for GLEB's funding in a moment, but the net cost — obviously one must take into account the return on investment—works out at about £4,500 per job.

A year or so ago, my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) asked what the average cost had been of creating jobs under the Government's enterprise zone policy. He was told that it was £18,000 per job. Enterprise zones, of course, are supposed to involve deregulation, derestriction and other factors which form the kernel of the Government's philosopy, as set out in "Burdens on Business". Thus, on a pure value-for-money basis, the work carried out by GLEB clearly bears comparison with the Government's stated policies.

Hon. Members may know that GLEB is largely funded by means of revenue grant from the GLC. Under the terms of the paving Bill that was dragooned through the House last year, the GLC applied to the Secretary of State for the Environment for about £20 million of funding in this financial year. It sought approval to make that money available to GLEB. However, the right hon. Gentleman refused to allow the GLC to make £20 million available, and said that he would let the GLC make only £4·9 million available for the first three months of this year.

Consequently, all the new projects that GLEB was considering funding have had to be put on ice. This year, GLEB has been unable to support any new projects. At a meeting only two days ago with representatives of the Department of the Environment, GLEB was again refused permission to support any new enterprises or initiatives. But it was said that if a firm structure of accountability to the boroughs could be agreed and if documents could be fully prepared and signed, money might be made available. Although GLEB and the GLC both gave firm guarantees to the Government that they were prepared to enter into such an arrangement with the London boroughs, because of the possible abolition of the GLC the Government would not allow GLEB to receive any further funds from the GLC at this stage for the promotion of new initiatives.

About 20 new projects and 1,000 new jobs are at stake. Having identified and assessed those projects, GLEB is prepared to put money into them, but is unable to do so because of the Government's decision. Those 1,000 jobs for Londoners are being held up by the Government's deliberate decision. That is the reality of the Government's commitment to small firms in London. Despite all the fine words that we have heard today, that is the reality for small firms that are promoted by GLEB with GLC money.

However, the Government have very generously said that there might be some room for manoeuvre on projects that are already supported by GLEB, but that possibly need new funding. They have said that they might be prepared to look at such projects, and to allow the GLC to give some money. The total proposed by the GLC is £4 million. I hope that the Minister will let us know what the Government propose to allow. He should bear in mind that there are other projects at stake, including the much-publicised electricity-powered bicycle initiative, which already has orders from round the world. It could take off, and is waiting only for the Government's decision.

So for GLEB has done some very good work in order to create and protect jobs in London, but the Government's record in the past few weeks has not been good. I hope that Ministers at the Department of Trade and Industry will use all their influence with their compatriots at the Department of the Environment, who have the task, under the paving Bill, of scrutinising money that goes from the GLC to GLEB. I hope that Ministers will use all their power and influence to ensure that the money that the GLC wants to make available to GLEB, which could create jobs and help proven projects to get off the ground, is used to that end.

If the Government are as concerned about small businesses and the co-operatives as they say, they could overcome their ideological objections to the Greater London enterprise board and the GLC. The Government should say, "Yes, we are prepared to support the creation of good jobs in good enterprises. We are prepared to allow the money to be used to create jobs and to support small firms in London." Those jobs and enterprises are desperately needed.