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Mr. Simmonds: Does the hon. Lady accept that many regulations deter employers from taking on more employees?
Ms Munn: I do not accept that. The hon. Gentleman cited many regulations that Conservative Members especially like to cite. However, many are traffic regulations or affect matters that do not impinge on businesses.
When I visit small businesses in particular, they tell me that they come across specific problems, but because they have fewer than 25 employees, they do not encounter them often, hence they do not know where to go for advice. Big companies or local authorities have personnel departments and probably specialists who know what to do. Exactly the same problems affect employees in small businesses, but the support is not always available for them.
Mr. Love: My hon. Friend was far too kind in not reminding Conservative Members that the former right hon. Member for Henley, who claimed morning, noon and night that he would get rid of regulation, was responsible for the greatest increase in it.
More than abolishing regulation, more than having access to finance and other support, small businesses want a good, stable economy, which the Government are providing.
Ms Munn: I agree. Small businesses value the low interest rates and knowing that they can continue to operate in a stable environment.
Much advice exists, and making it available to small businesses is important. I therefore especially applaud the work of the Yorkshire and Humberside chamber of commerce, which is working with partners such as the regional development agencies, local authorities, local business partnerships and the Yorkshire Post. It has established a red tape-busting roadshow, which is making its way around the county, advising on a range of issues such as employment legislation, the minimum wage, paternity leave, stakeholder pensions, health and safety, business taxation and environment taxation to ensure that people who run small businesses know where to go to get the advice to help them understand what they need to do. Business people are no different from the rest of us. Things often sound worse than they are and knowing that clear advice is available and where to obtain it is important.
Mr. Barry Sheerman (Huddersfield): In my hon. Friend's constituency, like mine, the entrepreneurial small business soon learns the access routes to information and grants. When there is money at the end of the rainbow, small businesses learn fast how to deal with what they would normally call red tape.
Ms Munn: My hon. Friend makes a pointed comment, with which I agree. Small businesses learn
what they need to do but that does not mean that it is not a good idea to ensure that people know about their responsibilities, which enable them to have a good, trained, healthy and happy work force. In the long run, that will increase their business profitability.Britain is moving in the right direction. The Budget, the Finance Bill and the measures that the Government have introduced not only this year but in previous years have made Britain a good place in which to start and run a business. As I made my way down to Westminster yesterday evening, I listened to a programme on Radio 4 on which a range of French people were interviewed. They were clear that Britain was a much better place in which to start a business and that the regulations were much simpler and more straightforward than on the continent.
Small businesses have grown in my constituency. The Government support the growth and development of business and I welcome their acknowledgement that development is different in different regions. The regions must be given a key role in driving the agenda.
8.35 pm
Mr. Michael Weir (Angus): The Chief Secretary opened the debate by describing the measure as a Bill for enterprise and fairness. I can only assume that he is reading a different copy of the Bill from mine. The fact that there is nothing in the measure to help Scotland's economy may explain the complete absence of Scottish Labour Members from this debate.
The amendment tabled by my hon. Friend the Member for Banff and Buchan (Mr. Salmond), which has not been selected, sets out our view of this dog's breakfast of a Budget. It states:
- "It contains no proposals for amending the fiscal regime that will address its adverse effects on the Scottish economy, particularly as regards support for indigenous industries, and the widening disparity between the level of economic growth in Scotland and the United Kingdom as a whole."
In his Budget statement, the Chancellor again cut his growth projections, increased his borrowing projections and ignored the needs of Scotland. Getting his sums wrong is nothing new. Between last year's Budget and this year's, he underestimated the UK's five-year deficit by an astonishing £48 billion. Two weeks ago, the National Audit Office pointed out that he had even got last year's deficit wrong by an additional £1 billion.
The Bill does nothing to help Scotland. Under the Government's tenure, Scottish growth has been half that of the rest of the UK. Scotland needs genuine powers to enable us to tackle the fundamental problems of the Scottish economy. That is all the more reason for giving the Scottish Parliament full financial independence—something at which the Bill does not even hint. That is not only the view of the Scottish National party. Nobel prize winning economist Robert Mundell has backed Scottish independence. He said:
- "It could create the conditions that encourage educated labour supply, high quality education and necessary public works"
In his introductory remarks, the Chief Secretary also said that the economy had experienced 43 quarters of growth. That is not true in Scotland. At the tail end of 2001, the Scottish economy went into recession. However, in the Budget, the Chancellor considered only UK growth forecasts, which he dropped to 2 per cent. Given that Scottish growth has been running at approximately half the rate of UK growth as a whole, that means that Scottish growth is likely to be around 1 per cent. at best.
In an earlier intervention, a Labour Member talked about the recession in certain manufacturing industries and about the old industries, I think in Yorkshire and Humberside. In Scotland, however, we have seen the disturbing phenomenon of the new industries—the so-called sunrise industries—also going into recession, with the closures at Motorola and Compaq, and in various other areas. These policies have affected the old industries in Scotland under both Labour and Tory Administrations, and we are now seeing the same thing happening in the sunrise industries.
How can we trust the growth figures quoted by the Chancellor and his continued optimistic growth forecasts for 2004–05, when we cannot even be sure about his predictions from last November?
Ann McKechin (Glasgow, Maryhill): Will the hon. Gentleman give way?
Mr. Weir: I will certainly give way, as someone from Scotland has deigned to turn up.
Ann McKechin: Would the hon. Gentleman like to comment on the fact that, in Glasgow, part of which I have the privilege to represent, the growth rate in jobs last year was the largest in any city in the United Kingdom? Jobs are flooding into the city and into the whole of Scotland, where the unemployment rate has consistently been going downwards. Is not the key to the issue the fact that full employment for Scotland has been achieved by a Labour Government? Is that not why the hon. Gentleman's party was so remarkably unsuccessful last week?
Mr. Weir: That is a bit much, considering that the hon. Lady's own party had the wonderful distinction of losing six seats in the Scottish Parliament—three of them to us—and losing its enterprise Minister. That does not suggest that the Scottish people had a fantastic view of the Scottish economy under Labour. What she is saying is simply not the case. She says that there is full employment in Scotland, yet Scottish unemployment is the highest of all the countries in the UK, with 24,000 jobs having been lost in the past year, and 100,000 people in part-time or temporary work unable to find a full-time job. It is simply not true to say that there is full employment.
The Scottish economy has been underperforming, with low long-term growth, and the Bill does absolutely nothing to address that. If Scotland had matched the growth of the UK since 1975, Scots would be £2,000 richer per person, and if we had matched the growth of the countries in the Organisation for Economic Co-operation and Development, Scots would be £4,600 per person richer. But if we had managed to match the growth of other normal, small independent countries, we would be more than £5,000 per person richer.
Rather than improving, the situation is getting worse. Scotland has grown at half the UK rate since Labour came to power in 1997, and at one third of that rate since the Labour-Liberal Executive came to power in 1999. In fact, since Labour took office, Scottish growth has been the lowest in the European Union: 16th out of 16. Scotland can do a lot better than that, but this Government have made no positive impact on the lamentable record of the last six years. This Chancellor's record on improving Scotland's growth rate is one of abject failure.
Addressing the appalling rate of growth in Scotland is not a matter of abstract macro-economics. Having and maintaining a high level of growth is fundamental to making our country the best that it can be for all those who live there. With strong economic growth, we can generate the additional resources needed to maintain and improve our public services, and afford additional police officers to patrol our streets, making Scotland a safer place to live. With strong economic growth, our businesses flourish, employing additional people and paying them more.
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