Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 30th November 2000.

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Photo of Andrew Love Andrew Love Labour/Co-operative, Edmonton 12:00 am, 30th November 2000

What steps he is taking to raise the level of innovation in the United Kingdom's industrial base. [139531]

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The Government believe that innovation is the key to industrial success. By providing economic stability, the Government are giving business the opportunity to raise its levels of innovation.

Photo of Andrew Love Andrew Love Labour/Co-operative, Edmonton

My right hon. Friend may be aware that, tomorrow, my local business innovation centre will be presenting the annual London innovation awards. On show will be 126 new technologies, many of which can be turned into commercial ventures. Last year's winner has already established a turnover of £600,000 and is poised for major expansion. Will my right hon. Friend give us some tangible examples of innovation making the difference to both jobs and investment in the British economy?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I congratulate those who will be receiving awards at the London innovation awards ceremony tomorrow. There are several good examples of innovation that has been developed here in the United Kingdom, which have been beneficial to employment and have had wider benefits. One immediately thinks of Viagra, which has been useful to a number of people in the UK—[Interruption.] I have not had to use it myself. One thinks also of the Dyson vacuum cleaner, the Psion organiser and something that came directly from a Department of Trade and Industry grant—a smart award—to the production company responsible for "Walking with Dinosaurs", some of whom are on the Opposition Benches. That was a very good money-earner for the UK, and based on a grant that the right hon. Member for Wells (Mr. Heathcoat-Amory) would abolish.

Photo of David Heath David Heath Shadow Spokesperson (Environment, Food and Rural Affairs)

Does the right hon. Gentleman agree that many long-term technology programmes are dependent either directly or indirectly on Government contracts? That is particularly so in defence-related industries. Does the right hon. Gentleman also agree that one factor that should be taken into account when deciding on defence procurement contracts is the ability to sustain the technological research and development base in the UK rather than among American competitors?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I have no doubt that public procurement can be a very effective way of developing innovation and supporting research and development in the UK. Over the years, the defence sector has played a valuable role in achieving that. I know that the Ministry of Defence continues to keep under review its procedures to ensure that the decisions that it takes on its procurement programme will not weaken but support the UK's industrial base, while at the same time providing our armed forces with the quality of equipment that they need to discharge their responsibilities.

Photo of Gillian Merron Gillian Merron Labour, Lincoln

I welcome the commitment to promote innovation in British industry, but how will my right hon. Friend ensure that it will be relevant to the needs of engineering companies such as Alstom Power in Lincoln, which faces hefty competition on the world market?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I compliment my hon. Friend on her very active work with Alstom, which I know is a major employer in her constituency and plays an important role in the UK's manufacturing and engineering base. Alstom is one of the forward-looking companies that has been prepared over the years to innovate. That is one reason why it has been successful in a highly competitive international market.

The role of the Government in such circumstances is not to try to tell companies such as Alstom how it should innovate or develop products for the future. We should offer incentives and try to work alongside such companies. That is why I hope that the Chancellor will consider the extent to which R and D tax credits—he announced this in the pre-Budget report—can be extended beyond the small and medium sector, to support larger employers and companies such as Alstom in my hon. Friend's constituency.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

This week, the Confederation of British Industry estimated that the additional burden on British industry over this Parliament totals £32 billion. How does the Secretary of State think that helps competitiveness and innovation? Instead of inflating his Department—by 1,000 civil servants since the election—and fiddling around with a lot of gimmicky initiatives, will he at last start to stand up to the Treasury for the real interests of British business, begin to roll back the tide of red tape and regulation and do something about the £32 billion extra burden about which the CBI complained this week?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The £32 billion of red tape to which the CBI referred includes the cost of providing people with four weeks' paid holiday a year, which the right hon. Gentleman would scrap. It also includes the cost of implementing the national minimum wage, which he would scrap. [Interruption.] The right hon. Gentleman, in his principal position as shadow Secretary of State, and his deputy, the hon. Member for Rutland and Melton (Mr. Duncan), do not believe in the principle of a national minimum wage. They are clearly on the record as saying that, so there can be no doubt about it. The right hon. Gentleman attacks red tape, but in reality he is trying to attack basic decent standards in the workplace. That is a classic Tory agenda which the Government reject. We believe that decent standards in the workplace support improved economic performance.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

The right hon. Gentleman is wrong about our policies on the minimum wage. [HON. MEMBERS: "No."] He is factually incorrect, but we are right about his policies. He is more concerned with preserving all the extra jobs and expenditure in his own Department than with helping British industry to generate jobs in its sector. How can he be so complacent when the Institute of Chartered Accountants has produced another survey that shows that the cost to the average small business of implementing the additional regulations and legislation has risen from under £5,000 last year to over £8,000 this year? Will the Secretary of State leave his fantasy world of initiatives, advisers and extra civil servants and start to stand up for British industry? Will he take the lead from us and switch some of that expenditure over to make a cut in business rates for all small businesses?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Let us get away from that fantasy world and address what Opposition Members have said on the record. The right hon. Gentleman's deputy, the hon. Member for Rutland and Melton, called the national minimum wage a "cretinous" idea—he should know. The right hon. Gentleman himself has said that the national minimum wage would undermine the country's economic performance, as the record shows—

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The shadow Chancellor did not consult the right hon. Gentleman when he suddenly announced that the Conservative party was going to endorse the national minimum wage.

The right hon. Gentleman talked about the problems that the Government face. However, the facts show that over 1 million more people are in work since the Labour party took office. Today, we are announcing that we have delivered on one of our key manifesto pledges, as 250,000 young people are in jobs as the result of our measures. That is the reality of the situation. The right hon. Gentleman can live in his own fantasy world, but we are delivering for the people of our country.