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4.5 pm

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:

'recognises the vital contributions of small firms to economic and employment growth, and supports the Government's policies to minimise legislative burdens on this sector while maintaining a fair balance with the rights of employees.'.

The best that can be said for the speech of the hon. Member for Oldham, West (Mr. Meacher) is that it matched the Opposition's motion for today's debate: it was completely detached from reality. The motion talks of "small firms", "economic performance" and "job insecurity". Let me say something about each of those before talking about industrial tribunals, to which the motion also refers.

First, small firms are an essential part of our economy, and one of the great economic successes of the Government. There are now some 3.7 million firms in this country, of which 97 per cent. employ fewer than20 people. That is well over a million more than existed under the previous Labour Government, and they are providing many more jobs. In addition, the numbers in self-employment have risen by more than 75 per cent. since 1979, and the small firms sector has grown more rapidly than in any other country. So small business is now very big business.

Unlike the last Labour Government, however, who oppressed and persecuted all businesses, large and small, with high taxes, interference and controls, incompetent management of the economy and appalling industrial relations, the Government are committed to working with small firms to set out a policy framework which will take them into the 21st century in an era of low inflation, low taxes, excellent industrial relations and the prospect of sustainable growth. We are listening to what they say they need, and we are doing things to help them.

Mr. Ian McCartney (Makerfield): Would the right hon. Gentleman care comment on the fact that, since the general election, 141 small businesses have closed each and every day?

Mr. Lang: Of course small businesses close. It has always been difficult to guarantee their survival rate, but the point is that there has been a net expansion in their number. There are now a million more small businesses than there were when the Labour Government were in office.

In recent months, we have undertaken the most extensive consultation exercise with small firms in memory in the "Your Business Matters" conference programme. We have already announced a number of measures to help address the concerns that they have raised. On late payment, we announced measures to

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improve payment performance in both the public and private sectors, including league tables for Government Departments. We also announced our intention to consult again on whether companies should publish their payment performance as well as policy.

We renewed our commitment to fight red tape with fairer enforcement of good regulation and measures to give businesses a right of appeal against judgments of enforcement officers. We are looking at substantially reducing the bureaucracy surrounding taxation--I might add that taxation is now down from 42p in the pound, as it was under Labour, to 24p. We have the highest VAT threshold in the European Union at £47,000.

Mr. MacShane: Is the right hon. Gentleman aware that the first schedule in the new self-assessment system that the Government propose to introduce will contain151 questions for answer, and that the eight succeeding schedules contain more complicated forms than those compiled by any other country? With only 24 hours in the day, how on earth will the small business man keep up with that form filling for the wretched Government?

Mr. Lang: The hon. Gentleman has brought me exactly to my next point: at our small business conference last week, we announced our intentions to streamline the taxation and the insurance systems. We announced a major review of all the Government support schemes for business to make them simpler and easier to understand, and we announced a number of further measures of assistance. We are also completing the roll-out of business links.

Mr. Meacher: One notes that all the answers that the right hon. Gentleman gives are about future prospects. The Government have been in power for 17 years--and it is the consequences of those 17 years that small business men complained about bitterly at last Monday's conference. What are the Government going to do about the matter that concerns small businesses most: transferring the financial and administrative burdens of statutory sick pay, statutory maternity pay and statutory redundancy pay on to their shoulders?

Mr. Lang: We announced further measures to that end last week. We have been trying to simplify and to streamline the burdens of handling national insurance, PAYE, VAT and the other administrative burdens that small businesses face. If the hon. Gentleman had come to one of our conferences, he would have been aware that that is happening, and that small businesses are welcoming it.

As I was saying, the Government are also completing the roll-out of business links: the network of one-stop shops providing a range of valuable and relevant advice to small firms--small firms that are now consulting business links at a rate of almost 5,000 a week and expressing a consistently high satisfaction rating in all our early surveys of business links' efficiency. We are now carefully considering a number of further points to emerge from our small firms conferences, and a more detailed Government response will follow in June.

As a result of these policies, a higher proportion of the population is in employment in the United Kingdom than in almost any other European Union country--

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unemployment is well below the average, and there is much less youth unemployment and long-term unemployment. Employment has been rising for more than two years--rising for men, rising for women, rising for temporary and for permanent jobs, rising for all ages, rising for full-time and for part-time work, and rising in almost all areas of the country.

It is a great pity that the hon. Member for Oldham, West could not recognise and welcome that dramatic fact--it is something that no Labour Government have ever experienced. There are 600,000 more people in work now than at the end of the recession, and it is about time the Opposition parties came into the real world and recognised that fact.

Mr. Fabricant: Will my right hon. Friend confirm that, despite what the hon. Member for Oldham, West(Mr. Meacher) said, this country has the lowest rate of corporation tax in Europe? Therefore, does that not show that there is a high correlation between low corporation tax and high employment?

Mr. Lang: My hon. Friend is absolutely right to draw attention to that fact, and I always discount what the hon. Member for Oldham, West says. After all, in The Times in July 1989, he said:

"The Government is incapable of cutting inflation without pushing up unemployment."

If the hon. Gentleman looks at the figures for the past three or four years, he will see what a dramatic fall there has been both in inflation and in unemployment. At the same time--over the past three or four years--we have seen the longest period of low inflation for 50 years, and the lowest mortgage rates for a generation.

Mr. Ken Eastham (Manchester, Blackley) rose--

Mr. Lang: I shall not give way to the hon. Gentleman, because I wish to make some progress.

We are the first choice in Europe for foreign investment, and we are exporting more per head than Japan or the United States. This is good news for all businesses--particularly for small businesses--and for those who work in them. It arises because the Government have taken the hard decisions to create the stable and sustainable economic conditions in which the economy can expand.

One of those conditions is the atmosphere of vastly improved industrial relations and a flexible labour market. In the past, the Government have been too quick to play the part of nanny--and it is quite clear from the hon. Member for Oldham, West's speech today that he is keen to resume that role. We believe that, given the right conditions, employers and employees can be encouraged to make the best decisions themselves, without Government interference.

Since 1980, we have introduced major legislation to free the labour market: employers have freedom to manage their businesses according to their circumstances and their needs; union monopoly power has been reduced and individual choice has been promoted; and there is now greater democracy in trade union affairs. The Government's policies have transformed industrial relations. No longer do we invite ridicule as the sick man of Europe.

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Hon. Members will remember the 1979 winter of discontent, when 29.5 million days were lost through strikes. Compare that with what we have now: on average, only 37 working days per 1,000 employees have been lost as a result of strikes in recent years. That is the lowest figure since records began more than a century ago. It has been achieved by managers reclaiming their right to manage, by ordinary workers standing up against union power, and by the Government creating the right conditions.

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