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Small Firms

Volume 281: debated on Wednesday 17 July 1996

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To ask the President of the Board of Trade how many small businesses currently operate in the United Kingdom; and what was the equivalent figure in 1979. [36071]

Provisional estimates show there were 3.7 million businesses with fewer than 50 employees at the end of 1994, the most recent year for which statistics are available. Comparable estimates for 1979 show that there were then only 2.4 million such businesses.

Given the success of small businesses in increasing their share of national output since 1979, which must be a tribute to the Government's policies, does my right hon. Friend agree that more of them should exploit the business links network so as to develop and grow? Can that network be used to encourage small businesses to keep in touch with schools and colleges, thereby enabling them to understand better the whole business of wealth creation?

My hon. Friend is absolutely right. The business links network has more than 230 outlets operating around the country and was designed specifically with the interests of small and medium-sized enterprises in mind, to give them access to the skills, advice and assistance, in a one-stop shop, that they would not otherwise be able to obtain. My hon. Friend is also right to emphasise the importance of education and training. The operation of business links in conjunction with the work of the training and enterprise councils and further education colleges underlines the importance of training and the benefits that it can bring to small businesses.

Although hon. Members on both sides of the House will welcome the growth in the number of small businesses, does the Minister share my concern that too many of them are still failing? In particular, will he comment on the latest figures from Dun and Bradstreet showing a 10.8 per cent. increase in the number of failed businesses in the south-west of England in the first half of this year, compared with a national decrease? Recovery may be gaining pace in some areas, but will the right hon. Gentleman acknowledge that it is still patchy?

I hope that the hon. Gentleman will welcome the fact that the number of insolvencies and bankruptcies is falling. Moreover, the number of company start-ups, estimated by the banks last year at 400,000, is estimated by them this year to be over 500,000. There is undoubtedly a growing momentum in economic activity; I am encouraged by the continued improvement in the survival rate of small businesses.

Does my right hon. Friend recognise that the horticulture industry comprises more than its fair share of small and medium-sized enterprises, and that they do a remarkable job for the food industry? Does he also recognise that the industry is concerned about the impact of some EU directives on small businesses? Will he assure me and anyone else in whose constituency the horticulture industry operates that he will continue to do all that he possibly can to ensure that small businesses in this important sector are given the treatment that they deserve?

I am happy to give my hon. Friend that assurance. The horticultural sector was prominent in a trade mission that I took to Japan earlier this year to seek to gain business in the massive£10 billion Japanese horticultural market. I share my hon. Friend's concern that small businesses, like all other businesses, should not be overburdened by EU directives and regulations. It is the Government's purpose to minimise the impact of such burdens on businesses.

Is the Minister aware that the big businesses that he shut down, called coal mines, are not being replaced by small businesses in his enterprise zones because of bureaucracy in the Coal Authority and English Partnerships? Does he realise that they have been wrangling over different sites for 10 months, and that the business men who want to come into areas like Manton Wood and many of my hon. Friends' constituencies cannot get agreement on the land because those agencies insist on selling the land as a package instead of in small parcels? The quangos 'which the Secretary of State set up and his policy of shutting down coal mines have created a great bottleneck.

Clearly, agreement must take place in negotiations on specific cases. I understand that, in that case, the price for the land has not yet been agreed, but the Government offices in the area and all the Government agencies, including business links and the training and enterprise councils, are designed to smooth the path of small businesses and encourage the establishment of new economic activity. They have been very successful in that.

In the specific case to which the hon. Gentleman refers, there is clearly a continuing problem. If he would write to me with more details on it, I should be happy to follow it up for him.

As a deregulator like me, my right hon. Friend will realise that 8,101 new statutory instruments have been created in the House in the past two years, and the cost to small industry has been £8.75 billion. Does he agree that, if we could reduce the number of rules and regulations emanating from all Departments, including his, it would help small industry a great deal more than anything else?

I am grateful to my hon. Friend for confirming that he and I share an ambition to deregulate. Many of the regulations passed have been consolidating regulations designed to reduce the overall number. My hon. Friend will welcome the Government's deregulatory record for small businesses—for example, single notification for tax and national insurance, new rights and enforcement actions, streamlined development controls and the draft Industrial Tribunals Bill, designed to reduce the costs and burdens of negotiating industrial disputes.

What assessment has the right hon. Gentleman made of the impact on small businesses of lifting or abolishing the letter monopoly, as consumers will probably have to pay VAT on postage for letters handled by private couriers?

The Government are considering the possible need to lift the monopoly on the Royal Mail in circumstances in which a strike is designed to undermine the delivery of mail and thus harm the public interest and damage the economy. The dispute is a matter for the unions and the Post Office to resolve, but the Government will deal with the public interest and act as appropriate.

I hope that my right hon. Friend will consider lifting the Post Office monopoly if there are further postal strikes. Is he aware of firms such as Document Interlink in my constituency, which can help small firms with urgent letter deliveries in such circumstances?

I note what my hon. Friend says. As was made clear last week, we are consulting on the implications of taking that step.

Is the Secretary of State aware of the concern expressed by those who chair business links about what they call their bad relationship with his Department? As that was a Labour idea, does it not show that the Government make as big a hash of implementing our ideas as they do of their own? Does he recognise that even a working business link programme can only do so much to help small businesses if the economy is not well run and growing? Does not today's leaked Treasury document show that Ministers expect Britain's future standing in the world to decline, just as under their stewardship we have already fallen from 13th to 18th in the world prosperity league?

The right hon. Lady is talking through a hole in her hat, as usual. Our economy is performing better than any comparable economy in Europe. Unemployment is substantially below the European average; new companies are being created; public expenditure is under control; and inflation has been at an all-time low for the longest period for 50 years. This country's economic performance stands comparison with that of any other country in Europe or the Group of Seven nations. It is time that the Opposition acknowledged that, instead of talking Britain down.