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Rechar Funding
2. Mr. Barnes: To ask the President of the Board of Trade what representations he has received recently concerning Rechar funding; and if he will make a statement. [36066]
The Minister for Industry and Energy (Mr. Tim Eggar): My Department received five representations. I announced additional allocations to Rechar and other European structural funds community initiatives to the House on 3 July.
Mr. Barnes: As you know, Madam Speaker, I have been to see the Minister this morning at his pre-meeting, along with the hon. Member for Eastbourne (Mr. Waterson) and various other hon. Members. I must say that it was something of a damp squib, and that we did not rehearse this question.
In the past, the coalfield communities have felt that the Rechar moneys were ripped off by the Government because of the problem of additionality. Can we ensure that the moneys that are to be available to four areas for community initiatives as a result of recent decisions will be distributed in such a way that the coalfield communities get their fair whack? Has everything been done by the Government to ensure that the total amount for the initiatives is distributed fairly, including a fair element for the coalfield communities?
Mr. Eggar:
I thank the hon. Gentleman for coming along to my meeting. I was particularly grateful to him for telling me that he was coming via Mr. Matthew Parris. I am sure that he will find that my answer is more beneficial as a result of that meeting. I was able to tell him, for example, that his constituency will also benefit from Resider. I hope that a decision on that will be made by the Commission within a few days.
On Rechar, I hope that the hon. Gentleman will accept that the additional allocation of money that became due exceeded the expectations of the Coalfield Communities Campaign. Its representatives wrote to me asking me to ensure that they received at least 18 million ecu; I was able to announce recently that they will receive 20 million ecu. I am keen that Rechar 2 funds should be spent expeditiously and effectively. I am sure that we will try to do that in the hon. Gentleman's constituency as well as in other newly qualifying areas.
Mr. Tredinnick:
Is my right hon. Friend aware that the Barlestone and Osbaston community association project for a new sports hall in my constituency has been effectively stopped because of a change of criteria in the Rechar 2 rules, which exclude recreational projects? Does he agree that, although the current criteria help former coalfield communities in many ways, the failure to include projects for recreation should perhaps be considered again, and would he care to look into that matter if I write to him?
Mr. Eggar:
I can do better than that. I am in the business of offering meetings, and I would be delighted to offer my hon. Friend a meeting to discuss it.
3. Mr. Ian Bruce:
To ask the President of the Board of Trade what assessment he has made of the impact on the number of UK jobs of the introduction of a national minimum wage at a level of £4 an hour. [36067]
The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang):
Officials in my Department estimate that a national minimum wage set at £4 an hour, and with only half restoration of pay differentials, could result in the loss of 1 million jobs.
Mr. Bruce:
Has my right hon. Friend been able to do any calculations on the basis of documents produced by the Labour party before the last general election, which included a calculation of how minimum wages should be set and said that they would start at half average earnings and move to two thirds? Can he confirm that, on today's high wages, created by the Conservative Government, that would be £4.46 to start and £5.54 in the full Parliament? Can he confirm that in America, whose example is often quoted by Opposition Members, real earnings per hour for the minimum wage are about £2.30?
Mr. Lang:
My hon. Friend is absolutely right to draw attention to the dangers of the minimum wage. A minimum wage would be ratcheted up in the way that he implies and, obviously, the higher it went the more jobs would be lost. It would not only be jobs lost; it would be company profits hit and inflation stirred up. That was the view of a study by Kleinwort Benson. Similarly adverse findings resulted from studies by the Organisation for Economic Co-operation and Development and the International Monetary Fund and appeared in the EC White Paper "Growth, Competitiveness, Employment".
Even with the increase proposed for the current year, the minimum wage in the United States would be about £3. That bears no comparison to the territory that the Labour party is in.
Mr. Winnick:
Is it not the height of hypocrisy for there to be such strenuous opposition to a national minimum wage from Tory Members, who usually have at least one outside interest and, in many cases, have a host of directorships?
If poverty wages are to be maintained, how will people be able to take out private insurance along the lines described in the leaked document from the Treasury? That leaked document demonstrates what a nightmare it would be if this Tory Government were re-elected.
Mr. Lang:
It is not just the Tory party that opposes a minimum wage; the Confederation of British Industry, the Institute of Directors, the chambers of commerce, industry, small businesses, the engineering industry and the clothing retailers' industry oppose it. As the hon. Gentleman is in the business of talking about hypocrisy, he might reflect on the fact that the bottom 10 per cent. of the work force have enjoyed an increase in take-home pay under this Government of £27 a week in real terms whereas, when the Labour party was in government, that bottom 10 per cent. suffered a reduction of £1.
Mr. John Marshall:
Is my right hon. Friend aware that Unison, which acts as a sponsor of some Opposition Members, has called for a national minimum wage of £6 an hour? Would that not mean that even more people would be unemployed, and is it not immoral for Members of the House to vote for the unemployment of their constituents? Does that not demonstrate that new Labour means new danger?
Mr. Lang:
My hon. Friend is absolutely right, and those who are most vulnerable, who are least skilled, would lose their jobs first. The undoubted consequence of this policy of the Labour party, like so many of its other policies, would be an increase in unemployment and inflation and a loss of competitiveness.
Mr. Hoon:
The President knows full well that Labour has not set a figure for a minimum wage. Does he accept, however, that, in a report published yesterday, the OECD stated that a minimum wage would not cause job losses for women, young people or the unskilled? Does he further accept that the Employment Policy Institute has said that a minimum wage would not cause job losses? Does he accept that a New Jersey survey shows that increasing the minimum wage takes people out of unemployment by removing them from the poverty trap? If, in the face of that overwhelming evidence, the right hon. Gentleman does not accept the facts, will he tell us the lowest pay that he would expect people to work for--and the lowest wage that he would work for himself?
Mr. Lang:
I do not accept the hon. Gentleman's so-called facts. All the evidence from all the studies that we have seen points in the other direction. Only today, the CBI produced its manifesto in which it points out the dangers of a national minimum wage. Unemployment among youngsters, the most vulnerable category, in countries with a national minimum wage is running at 25 per cent. in Belgium, at 27 per cent. in France and at 42 per cent. in Spain. That should make the hon. Gentleman realise the real dangers that a national minimum wage would bring to young people.
It is about time the Labour party told us what its national minimum wage would be. Why do not Labour Members come clean and defend the policy in which they pretend to believe?
6. Mr. Patrick Thompson:
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]
Mr. Lang:
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.
Mr. Thompson:
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
Mr. Lang:
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.
Mr. Harvey:
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?
Mr. Lang:
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.
Mr. Atkins:
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?
Mr. Lang:
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.
Mr. Ashton:
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
Mr. Lang:
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.
Mr. Steen:
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?
Mr. Lang:
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.
Mr. Hain:
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?
Mr. Lang:
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.
Mr. Thurnham:
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?
Mr. Lang:
I note what my hon. Friend says. As was made clear last week, we are consulting on the implications of taking that step.
Mrs. Beckett:
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?
Mr. Lang:
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.
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