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Nigel Griffiths: I shall address as many points as possible in my winding-up speech, but I must ask the hon. Gentleman what is his policy? Who does he think should meet the cost, and how much would small businesses have to pay?
Brian Cotter: We are very clear on that. Our policy is one of business rate allowances. Small firms under a rateable value of £25,000 would qualify for rate relief on the first £1,500 of that rateable value. There would be no red tape or unnecessary burdens, and 87 per cent. of firms in the country would qualify for such relief, saving between £600 and £700 each. The Under-Secretary asked for the Liberal Democrat scheme, and I have made it absolutely clear—it is in our manifesto. I ask him for the same clarity and commitment today.
The Under-Secretary might say in response that, under his Government, 50 per cent. mandatory rate relief, and so on, has been introduced. All such schemes are very good and to be applauded. Before the election, a Bill was introduced proposing a 50 per cent. mandatory rate relief
for village shops and post offices. The original scheme was extended to pubs and small garages. However, let me point out in anticipation of the Minister mentioning that scheme that the £9,000 threshold was impossibly low, with the result that only the very smallest of, for example, pubs would benefit. I challenge the Government to come up with a more helpful policy. My hon. Friends and I strongly support the schemes that have been aimed at rural areas, but businesses in large urban areas also need help.
Mr. David Heath (Somerton and Frome): My hon. Friend is right. The other problem with the schemes introduced to support rural small businesses is that they apply only in those local government areas that are classified as rural for government purposes, so a business in an extremely rural part of a district council area that is otherwise suburban or urban will not qualify, which seems ridiculous.
Brian Cotter: That is correct. During the foot and mouth crisis we came across the problem of areas not being regarded as in need of assistance. Rather than continuing to talk, the Government must do an awful lot of work to help people. Furthermore, from day one of the foot and mouth crisis, we Liberal Democrats urged that the help proposed should apply to businesses with a rateable value of up to £50,000, but only in the last few days have the Government announced that they intend to extend their assistance in that way.
Before the election, the Government proposed a supplementary business rate scheme, which we felt would impose one more burden on small businesses, so we are glad to see that the Government have abandoned the idea. Instead, they talk about creating business improvement districts. Small businesses welcome the concept but we urge the Government to ensure that the small business community has real input into where the districts should be and how they will operate. Small businesses must have a voice and their concerns must be addressed if the districts are to be effective in ensuring that small businesses are not overwhelmed as they have been in the past by initiatives in which larger companies have a greater say.
We could go on for ever about red tape, but there are clear issues. Excessive regulation comes from many quarters: the European Community is often blamed and I, as a Liberal Democrat, would never say that everything that comes from Europe is to be accepted willy-nilly. However, we in this country have for some reason developed a culture whereby a few pages are turned by civil servants into a sheaf an inch thick. That has happened often. I urge the Minister to make a commitment to resolving that issue. In Holland, the part-time working regulations comprised two or three pages, whereas we ended up with 40 or 50. That has to stop.
Another issue arises when small businesses are turned into tax collectors for the Government, through the working families tax credit, for example. The Liberal Democrats believe that the credit is a good measure, but small firms should not have to implement it. Some other means should be found. Similarly, stakeholder pensions have imposed a burden on small businesses in terms of both paperwork and cost. It is likely that pension firms will help small businesses to run the schemes—but at
a cost. We are concerned that in a few years' time, there will be only two big pension companies left to run stakeholder pensions and they will be able to present small firms with a bill that they have to pay.There are other Government proposals on tax credits that I ask the Minister to address when he winds up the debate. Other issues arise in the context of red tape, including consultation, which was addressed by the Small Business Council today, and a longer lead time for new legislation.
As the hon. Member for South-West Hertfordshire said, small businesses suffer from inspections, some of which may be unnecessary. Many companies endure inspection after inspection. In 1997, 24,000 inspectors carried out 465,000 inspections. Many will have overlapped with each other and been conducted in a draconian fashion. The Government should take the lead in that area.
We Liberal Democrats believe that there should be an inspectorate specifically for small businesses—one that exercises a light-touch regime whereby inspectors go into businesses to advise them, rather as we hope Ofsted will in education. If firms are clearly non-compliant, heavier teams could be brought in. In response to our initiative, the Government asked how one inspector could possibly know about all the different matters that require inspection, but it is equally valid to ask how small businesses can be expected to cover all those matters. If the Government do not expect a single inspector to be able to understand all the issues, how can they expect a small business man to do so?
I should be interested to learn whether this is to be an annual debate. I believe that an annual report on small businesses should be presented to the House for an annual debate. I urge the Government to consider compiling such a report on the impact that legislation has had on small businesses in the last year. That could provide an effective means of demonstrating the Government's commitment to examining the burdens on small businesses. Furthermore, by concentrating minds, it might ensure that many regulations were disposed of.
The Liberal Democrats are looking for a lot from the new Minister. I hope that we can ensure that the Small Business Service is a more effective and stronger representative of small businesses. I look to the Government to produce an effective annual report on small businesses, and I hope that we will have further debates—if not annually, on some day other than a Friday so that more Members have an opportunity to examine that report on the Government's handling of small businesses.
10.58 am
Jon Cruddas (Dagenham): It does not seem long since I was the designated Labour party researcher in an historic by-election in mid-Staffordshire. We all knew at the time that we had a candidate who would go far in Parliament, but I could hardly have imagined that 11 years later, that candidate would call me to make my maiden speech. Thank you, Madam Deputy Speaker, for this opportunity.
I congratulate my good and hon. Friend the Member for West Bromwich, East (Mr. Watson), who I know will be a powerful advocate on behalf of working people. It is a great honour for me to represent the people of
Dagenham. I pay tribute to my predecessor, Judith Church, who served them loyally and energetically. I know that she will be missed by many hon. Members and that everyone joins me in wishing her well for the future.I am the fourth Labour Member of Parliament to represent the people of Dagenham. Before my immediate predecessor, Bryan Gould represented the constituency for 11 years; before him, John Parker was its Member of Parliament for 48 years, eventually becoming Father of the House. I acknowledge the work of all my esteemed predecessors and shall seek to continue their work.
To outsiders, Dagenham is synonymous with the Ford plant, and the fortunes of my constituents are seen as almost solely dependent on the nature of Ford's involvement in Dagenham. Indeed, one wag said to me this morning that contributing to a debate on small firms was appropriate, given that Ford is pulling out of Dagenham.
That attitude is precisely the problem that we face in Dagenham. The end of car production in the first quarter of 2002 is seen by many as devastating for both the town and local people. Indeed, press reports at the time of the announcement talked of a dying town. It is my job to dispel those distorted and simplistic views. Dagenham is well situated to gain from its geographical location and historic association with manufacturing industry. Alongside that, the strategies of the Labour Government in east London and the priorities of the London Development Agency and the Mayor all point to the positive opportunities that are opening up in Dagenham.
My constituency partly covers the Becontree estate, the largest council estate ever built in Britain and one of the largest public housing projects in the world. It is often argued that Dagenham was built for the sole purpose of supplying labour for the Ford plant, yet the estate predates the building of the Ford complex.
However, it cannot be disputed that Dagenham has its share of economic and social problems. A cursory look at some of the statistics in the borough can make for difficult reading. Adults there have the second lowest level of numeracy and the fourth lowest level of literacy in the country, and 4 per cent. of residents have higher education qualifications, which is among the lowest in the country. We have the lowest wage economy in greater London. Barking and Dagenham remains one of the most deprived boroughs in the capital—indeed, in the whole country.
Today, however, I want to flag up a positive agenda for economic and social change in Dagenham and, in so doing, to overcome misconceptions about the area. Geographically, Dagenham sits at the centre of the so-called Thames gateway sub-region, an increasingly integrated area that includes 13 boroughs and 2 million people, and covers many of the most deprived communities in the country. Because of the location of the Ford motor company, Dagenham will remain the manufacturing centre of the Thames gateway.
East London is an exciting place to be at the moment. In the political economy of London, the centre of gravity is moving eastward. The Mayor talks of shifting priorities from west to east London and building a new city to the east. The nature of the London housing market and the dynamics of transport congestion are pushing London eastward, and the people of Dagenham are set to benefit from the major changes that that will bring. I shall now consider some projects that are taking place.
First, despite the press reports that I mentioned earlier, there are considerable developments on the Ford Dagenham estate, some of which will be discussed by the company later today at a press conference. A new high-technology engine manufacturing plant is soon to be built and will be one of the most modern manufacturing facilities in Europe. Annual engine production will rise to 900,000 units a year by 2004. After the end of car assembly, more than 5,000 people will still be employed on the Dagenham estate, which will continue to be London's largest industrial centre and will become Europe's premium manufacturing facility for diesel technology.
In addition, a new supplier park is to be created in Dagenham on London Development Agency land to support the new diesel facility and will attract small and medium-sized, high-tech businesses. On top of that, a proposed new centre for manufacturing excellence on the Ford estate will provide education and training, from basic skills right through to advanced postgraduate degrees for local people.
We must also consider some of the major infrastructure projects. The scarcity of river crossings over the east Thames remains a major impediment to successful economic regeneration. East of Tower bridge, there are only three road and three rail crossings, compared with 26 between Blackwall and Battersea. The proposed package of three new river crossings will have a major impact on creating employment and development opportunities.
The channel tunnel rail link, which will go underground in Dagenham, is vital if international and domestic connections to London and the south-east are to be created and major hubs for new investment established. Hopefully, the Docklands light railway will be extended into the borough, linking it to major job generation sites across east London. Crossrail remains a catalyst for regeneration and strategic regional integration. Options linking Dagenham dock and the key employment sites in the Royal docks and Canary wharf will be high on my agenda. Within Dagenham itself, change is evident, and will be of direct benefit to the community. The heart of the Thames gateway project is providing a new economic future for Dagenham and south Hornchurch to the tune of nearly £500 million.
Just outside the constituency border, the new Oldchurch hospital will be built, and I shall work to ensure that it is completed on time. The local education authority and all the people who work in our schools deserve special mention, as their work has ensured that the borough has some of the fastest improving schools in the country. The Government's strategy to confront pensioner poverty and provide dignity in older age is beginning to bear fruit, as is the tax credit regime for young families.
I could go on; overall, a lot is happening. My job is to ensure that local people benefit from change, and to put the case for Dagenham at Westminster. The radical industrial strategy for east London puts paid to some of the simplicities common in debates about the so-called new economy. Regeneration is based on large-scale manufacturing, construction and civil engineering projects, yet it includes large, medium and small firms at the cutting edge of research, design, skills and technology. That is not the old economy; it is the economy of the future for large parts of east London.
Dagenham has a strong tradition of industrial working class organisation. Before the general election, I worked in Downing street, seeking to develop a positive trade union agenda and better employment rights for people at work. In the House, I shall continue to push that agenda to ensure dignity in the workplace.
The future is bright for the people of Dagenham. Geographically we sit at the centre of the Thames gateway sub-region. Economically, the centre of manufacturing in London will remain within Dagenham even after the regrettable end of car assembly at Ford. It is my job to help to drive the agenda of change in east London. I hope that we can begin a transformation materially to change the lives of the working people of Dagenham. That is why I joined the Labour Party.
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