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Private Sector Job Creation

Volume 563: debated on Tuesday 14 May 2013

More than 1.25 million private sector jobs have been created since the first quarter of 2010. At the Budget, we took additional steps to support job creation—for example, by further reducing the rate of corporation tax to 20%, through a new employment allowance for national insurance to encourage every business to create jobs in this country and by extending the seed enterprise investment scheme to encourage start-up investment in the UK.

Will my right hon. Friend consider taking further measures? For example, the provision of cheap, easy-to-access finance remains an issue for many small and medium-sized enterprises. With more than 3 million SMEs in our country, will the Government consider creating their own easy-to-access, less risk-averse provision, which I think would seriously stimulate both growth and job creation?

I am grateful to my hon. Friend, who raises an important issue. We are all aware of the continuing difficulties of small firms in getting access to the finance they need. The business bank, which is being taken forward by the Secretary of State for Business, Innovation and Skills, is acting to address gaps in the financial offering for small firms. The funding for lending scheme is substantially expanding lending to small businesses, which is one of its objectives. The business finance partnership is investing £87 million through non-bank channels, such as peer-to-peer platforms, that can reach SMEs in a different way.

Does the Chief Secretary agree that an EU-US free trade agreement would help private sector job creation and that the noise about EU exit is undermining such an agreement? We would get no benefit from such an agreement if we were out of the EU, so why don’t they shut up?

I agree, as do the entire Government, that an EU-US free trade area would be of substantial benefit to the United Kingdom and to the whole of the EU. I welcome the fact that the Prime Minister is in Washington this week precisely to advance that agenda.

The Government is to be congratulated on creating over 1.25 million private sector jobs, but youth unemployment is, as we have heard, still a sticky problem. Will the Minister join me in encouraging businesses to take advantage of the £2,000 tax break provided by the national insurance contributions Bill to try to hire one, two, three or even four young people?

First, I congratulate my hon. Friend on the work he is doing on the million jobs campaign to support young people in getting back to work. I echo his words on the employment allowance, which ensures that one person on an average wage and three on the minimum wage can be employed national insurance-free. That should be a substantial incentive, especially for small businesses, to take on more staff.

On skills training and apprenticeships for young people, there is a two- pronged approach: employment opportunities through apprenticeships and skills training. What is the Chief Secretary doing to ensure that companies can provide skills training in conjunction with colleges?

I hope that the hon. Gentleman will have a look at the employee ownership pilot on apprenticeships, the purpose of which is to put much more of the funding, and more of the control over the way in which apprenticeships are designed and supported through colleges, in the hands of employers to make sure that the skills training that the young people get is suited precisely to the needs of the employers concerned.

Small businesses in remote areas such as Argyll and Bute have been greatly helped by the Government’s decision to freeze fuel duty and to introduce the island fuel duty discount. This means that businesses on the islands of Argyll and Bute benefit from fuel duty being 18p a litre less than it would be under Labour’s plans. I very much welcome the Government’s policy, and will the Chief Secretary make the case to Europe to extend the island discount to remote parts of the mainland, such as the Kintyre peninsula?

I am grateful to my hon. Friend. Every small business in the country is benefiting from the fact that fuel taxation is 13p a litre less under this Government that it would be under Labour’s plans. It is the coalition Government who are on the side of those firms. I will make the case to the European Commission to extend the discount to the most remote areas. We are working to build a case on that and I would welcome his support, and that of his local authority, in doing so.