Business Links

Oral Answers to Questions — Trade and Industry – in the House of Commons at 2:30 pm on 5th April 1995.

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Photo of George Mudie George Mudie Opposition Whip (Commons) 2:30 pm, 5th April 1995

To ask the President of the Board of Trade if the business links scheme is on target operationally and financially; and if he will make a statement. [16446]

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I have stated on a number of occasions that the programme is well on course to reach its target for a national network in England of around 200 business links by the end of 1995. In addition to receiving a contribution to start-up costs, business links have been assured of on-going funding from my Department for the delivery of counselling and business support services. They are also financed by partner contributions and charges for services.

Photo of George Mudie George Mudie Opposition Whip (Commons)

The House will have noted the President's answer on the financial side, but will he concede that the success of that well-intentioned venture has been jeopardised by a series of blunders which have been extensively catalogued in an internal audit report? I see that the President smiles at that remark. As the internal audit report shows that taxpayers' money will go in at greater levels and for longer periods, does he not think that the report should be published, or is it a case of spending taxpayers' money without explanation or apology?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

No, I think that the hon. Gentleman should respect the rights of Ministers to conduct internal investigations into projects which they are establishing. That is exactly what we have done. I do not think that it adds to the confidence in the regimes that we are establishing if reports are leaked before time and if misjudgments are then paraded in newspaper headlines.

The programme enjoyed all-party support, and I am grateful to the hon. Gentleman for referring to this important innovation. The business links machine is capable of delivering the most sophisticated range of support for small and medium companies that this country has ever seen. That machine—which will amount to some 200 outlets—will be in place by the end of the year.

Photo of Edward Garnier Edward Garnier , Harborough

Is my right hon. Friend aware that on 27 January I opened the business links office in Market Harborough? The taxpayer is already getting good value for money because many of the small and medium businesses that trade around Market Harborough have made good use of that office for their benefit and for that of their employees and the British economy.

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend will be glad to hear that we raised a glass of champagne to him on the day that he opened the business links office.

Dr. John Cunningham:

The President should be a bit more candid about his internal audit document which comments on the progress of the business links programme. The document—a copy of which I have here from his Department—does not confirm what the right hon. Gentleman has said. In the document, his own civil servants say: The medium and long term viability of established business links is uncertain". It also says: We found that the financial appraisal of BL business plans has in general not been sufficiently rigorous". It goes on to say: The Department was exposed to financial risk and potential embarrassment".

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I am sorry to interrupt the right hon. Member for Copeland (Dr. Cunningham), but I am sure that he realises that we do not allow quotes at Question Time. I think that he has forgotten that fact.

Dr. Cunningham:

Will the President confirm that the document says that payments made under the scheme before September 1994 were ultra vires? We believe that that is the case. Why, in his rush to proceed, has the President taken what was a very good Labour party idea—for which, as he said, there was all-party support—and put it in such jeopardy?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I shall try to explain to the House what the issue that has given rise to such interest is about. It is very simple. When we established business links, we had to decide whether we would provide a 100 per cent. subsidy from the centre for a period without question.

It was clearly put to me by the partners in the business links venture—the training and enterprise councils, chambers of commerce, local enterprise agencies, local authorities and the Confederation of British Industry—that they did not want a 100 per cent. subsidy from Government because it would then become a central Government organisation and they wanted local initiative, local discretion and local flexibility. I totally support that view.

One of the ways in which that can be assured is by those partners contributing to the funding, both by subvention from the partner organisations and by way of charges raised from individual companies which take advantage of the service. As, by definition, the need for charges will not come on stream for two to three years on the scale envisaged, one cannot guarantee at the outset the precise level of charges that will be raised. It is perfectly possible for someone to produce a report and say, "You can't be sure that you'll get the money." There will inevitably be questions.

I believe—there is perfectly good evidence for doing so—in the charges that we have made for consultancy schemes and in hard charging for export advice. I believe also that small companies will find those services worth paying for, but I cannot prove that in advance. The only way would be to do exactly that which the partners do not want—underwrite the whole lot from the beginning, at the taxpayer's expense. I refuse to do that.

The scheme which we put in place is imaginative and constructive. It was designed with the local element much to the forefront. As my hon. Friend the Member for Market Harborough (Mr. Garnier) and other right hon and hon. Members said, the important thing is to make the scheme work and to give it every support. It is not controversial. The right hon. Member for Copeland (Dr. Cunningham) rightly said that it featured in the Labour party's manifesto. I do not know how it got in that manifesto, but it did. Before the right hon. Gentleman gets carried away, I shall point out that it was featured in the Liberal manifesto. If there is one thing that creates anxiety in my mind, it is that I introduced an idea to which both main Opposition parties subscribe.