House of Commons
Thursday 18 September 2003
The House met at half-past Eleven o'clock
PRAYERS
[Mr. Speaker in the Chair]
Oral Answers to Questions
TRADE AND INDUSTRY
The Secretary of State was asked—
Small Businesses
1. Mr. David Cameron (Witney): What steps she is taking to encourage small businesses to increase employment levels; and if she will make a statement. [130814]
The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): We have given UK small businesses the best VAT threshold in the EU, cut the corporation tax starting rate to zero and created a sound and stable economy that has generated more than 1.6 million additional jobs since 1997. More people are now in work in Britain than at any time in our history.
Mr. Cameron : What would the Minister say to the small business people who come to my surgery each week and list the Government-inspired reasons why they no longer want to expand their work force? What would he add to that list, which includes the national insurance increase, stakeholder pensions, the working time directive, new rules for employment tribunals and the fact that businesses are now treated like benefit offices? Will he confirm that the rate of small business failures has actually trebled in the past four years?
Nigel Griffiths: The national insurance increase that the hon. Gentleman mentions occurred in April and the employment figures were published yesterday. The House will be pleased to note that since April, 63,000 more jobs have been created than lost. Indeed, he will be very pleased to note that in his own constituency, the number of unemployed claimants has fallen by 76, to less than half the figure for 1997.
Mr. Derek Foster (Bishop Auckland): May I praise the vigour and energy with which my hon. Friend is attempting to increase the number of start-ups in areas such as mine, which has experienced enormous difficulties for some 60 or 70 years? But may I ask him to bear in mind—this has little to do with Government policy—the swingeing increases in employers liability
insurance, which are genuinely affecting employment prospects in many companies in my constituency and elsewhere?
Nigel Griffiths: That is obviously a very serious matter, on which a statement was made in the House before the recess. A report was published in June by the inter-ministerial working group, on which I serve, and placed in the House of Commons Library. It included a number of findings and recommendations, and a second report is due in the autumn. I hope that it will address some of the issues—as we have indeed done—to ensure that no business is left without that vital liability insurance. I am very pleased to have worked with the Federation of Small Businesses, the CBI small and medium-sized enterprises council and other representatives of business to ensure that the insurance industry itself is addressing this issue. However, we are constantly monitoring the situation.
Mr. Tim Yeo (South Suffolk): The Minister will trumpet the latest employment figures, but what he does not tell the House is that many of the jobs to which he refers are not being created by small businesses; rather, they are jobs for Government-paid, pen-pushing bureaucrats. Does he believe that requiring small business employers to administer the Government's chaotic tax and benefit system and to become legal experts in every detail of employment law will make it more or less likely that they can continue to create jobs? Does he not understand that the accumulation of new employment regulations, often introduced with the best of intentions—to protect workers' rights—is now in danger of taking away their most basic right of all: the right to a job? Indeed, we can see that happening in Germany, France and Spain.
Nigel Griffiths: I prefer to be advised by Barclays than by the hon. Gentleman. Its recent survey points out that since 1997, 2.4 million new businesses have started in Britain, which is a result of the climate that we have established. If the hon. Gentleman wants to give lectures on bureaucracy, he has chosen the wrong place. Starting up a business in Britain now takes less than a day and costs less than £100; 10 years ago, setting up some businesses required 28 licences, registrations and certificates.
Sir Patrick Cormack (South Staffordshire): That is all very well, but was my hon. Friend the Member for Witney (Mr. Cameron) right to assert that the rate of small businesses going down the drain has trebled in the past four years?
Nigel Griffiths: I have in front of me the figures for deregistrations—such figures are the most valid measure, and were accepted by previous Governments as well as by this one—which show that the failure of businesses in the past decade or so peaked in 1992. Indeed, in no year of the Labour Government have the figures reached anywhere near the horrendous levels of 1992, when 226,000 businesses went bust. Of course, we support all businesses, and most businesses that fail do so for honest reasons. But as I have told the House before, the real figure is the 2.4 million new start-ups and the best survival rates for small businesses for a decade.
Horse Racing
2. Chris Grayling (Epsom and Ewell): What discussions she has had with representatives of the British Horseracing Board about the Office of Fair Trading investigation into the control of British horse racing. [130816]
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe): A number of written representations have been received from a variety of organisations in relation to that matter.
Chris Grayling : I represent one of the highest profile race courses in the world. My constituents will not suffer because Epsom will always be the home of the Derby, but those involved in racing are profoundly concerned about the impact of these proposals on the industry as a whole. Will the Minister ensure that the Office of Fair Trading report and any action taken as a result of it does not do irreparable damage to horse racing in this country?
Mr. Sutcliffe: I welcome the hon. Gentleman's interest in the matter and I understand that he represents Epsom. Clearly, however, he knows the rules of the competition regime that the Government have put in place, and that it would be wrong for me, as the Minister with responsibility for competition, to become involved in OFT investigations. I have worked closely with colleagues in the Department for Culture, Media and Sport and have put forward the concerns raised by the industry and on both sides of the House. I am sure that the OFT will take them into consideration, but, at the end of the day, it is the OFT's decision. I should clarify that this is not a Government-inspired investigation. It came about because the British Horseracing Board went to the OFT to secure a decision on certain practices within the industry. I hope that, as the process continues, hon. Members on both sides of the House will make contact with the OFT to express their views.
Jeff Ennis (Barnsley, East and Mexborough): Is the Minister aware that there are currently 59 race courses throughout Britain, nine of which are in Yorkshire—my home county and his? Under the current Office of Fair Trading proposals, up to six Yorkshire courses could be closed in the next few years. Does the Minister share my concern and agree that a sport such as horse racing requires a certain amount of central regulation, particularly in respect of the fixture list?
Mr. Sutcliffe: Again I welcome my hon. Friend's interest in the horse racing industry. I know that he is co-chairman of the all-party racing and bloodstock group—although I am never too confident about his forecasts on some of the horses that he tells us about. Clearly, he is right that horse racing is prominent and a large employer in Yorkshire. However, the position is that the sponsors of the industry fall within the remit of the DCMS and the competition issues fall within that of the DTI. As I said, it would be wrong for me to influence the outcome of the OFT report in any way, but I am sure that all the concerns will be passed on to the OFT.
Mr. Laurence Robertson (Tewkesbury): The Minister will be aware of my Adjournment debate on this matter
later today. For now and for the record, is he aware of the letter sent to me by the Minister for Sport, which says
- "I share your view that full implementation of the OFT's rulings, as far as we understand them, may damage the fabric or integrity of the sport"?
Mr. Sutcliffe: I look forward to debating the issue with the hon. Gentleman in greater detail later today, when I hope we can get to the heart of the matter. The letter that he received from my right hon. Friend the Minister for Sport is entirely appropriate. The DCMS covers the horse racing industry and the hon. Gentleman has expressed his concerns. My responsibility in the DTI is for the competition regime and we are still awaiting the outcome of the OFT deliberations.
Pete Wishart (North Tayside): Is the Minister aware that small but extremely successful national hunt courses, such as Perth race course in my constituency, are deeply concerned about what is being included in the Office of Fair Trading report? What words of comfort can he give to Perth race course that national hunt racing will not be a casualty in this process of change?
Mr. Sutcliffe: I acknowledge the hon. Gentleman's point and I refer him to my right hon. Friend the Minister for Sport. National hunt horse racing—and, indeed, the welfare of all courses—is important. Clearly the words of comfort will have to await the outcome of the OFT report.
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