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House of Commons
Wednesday 2 March 2005
The House met at half-past Eleven o'clock
PRAYERS
[Mr. Speaker in the Chair]
Oral Answers to Questions
WALES
The Secretary of State was asked—
Small Businesses
1. Mr. Henry Bellingham (North-West Norfolk) (Con): What plans there are for supporting small businesses in Wales through central Government initiatives. [218066]
The Secretary of State for Wales (Mr. Peter Hain): The hon. Gentleman looks a bit lonely over there on the Tory Back Benches.
Small businesses in Wales and throughout the UK are benefiting significantly from the stable economic platform built by the Government and from our measures to promote enterprise and reduce red tape.
Mr. Bellingham: I am grateful to the Secretary of State for his initial observation and also for his response to my question. He will be aware that some schemes, such as the small firms loan guarantee scheme, are going very well. Is he also aware, however, that last week the British Chambers of Commerce announced that the extra red tape and burdens that have been placed on business since 1997 now cost a staggering £40 billion a year? Surely this figure completely dwarfs any of the added value from the Government's schemes. Should not the Secretary of State's priority be to tackle this problem so as to enhance wealth creation in Wales?
Mr. Hain: I am not sure whether, by red tape, the hon. Gentleman means the minimum wage, extra parental leave or protection for people with disabilities. He is not saying whether he supports those measures. If, however, he is criticising extra bureaucracy, I agree with him. We are tackling that and bearing down on it, as he was fair enough to acknowledge in respect of the small firms loan guarantee scheme. He must know that small businesses are booming in Wales. There is a fantastic record of start-ups and the failure rate is lower than in the rest of the United Kingdom. I visited Pembrokeshire recently and found that the economy, which was on its back 10 years ago, is now booming. The level of small business creation there is now the fourth highest in the entire United Kingdom.
Kevin Brennan (Cardiff, West)
(Lab): Is my right hon. Friend aware that the Financial Secretary to the
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Treasury recently met representatives of small businesses in my constituency and that they were very appreciative of the efforts of central Government? They certainly conveyed the message that slashing £500 million from the budget of the Department of Trade and Industry would not help small businesses in Wales in any way at all.
Mr. Hain: I agree with my hon. Friend. Abolishing the DTI, as the Liberal Democrats propose, would be even worse for small businesses in Wales. The choice before the country, and the choice for Wales, is whether to go back to the risk posed by the Conservatives to small businesses and to economic instability and bankruptcies. Ten years ago, small businesses were failing and going bankrupt at a rate of 1,000 a week. Now, they are growing right across the country.
Mr. Simon Thomas (Ceredigion) (PC): What further support could the Secretary of State give to small businesses in my constituency and throughout Wales by getting rid of the flat-rate non-domestic rates system and establishing a local income tax and a tax for small businesses based on their profit rather than on the rateable value or the size of their property? Surely that would provide a significant boost to the profitability and future success of many small businesses in Wales. Will the Secretary of State examine that proposal?
Mr. Hain: The issue of business rates and their effect on small businesses is being examined by the Welsh Assembly at the moment, because there is an issue there. If, however, the hon. Gentleman is advocating the replacement of the entire system of local government funding by a local income tax, I have to say to him and to the Liberal Democrats that that would be disastrous for hard-working families right across Wales, many of whom are on modest to average incomes and would pay much more in extra income tax than they are paying in council tax. It is Labour's huge extra investment in local government finance and public services that is benefiting the local economy, compared with the cuts that many other parties are proposing.
Mr. Bill Wiggin (Leominster) (Con): The average small business in Wales spends 23 hours a month filling in Government paperwork. That rises to 73 hours for those employing more than 25 people. Self-employment in Wales has decreased by 8 per cent. in the last year, and the number of people declared bankrupt in Wales rose by 31 per cent. in 2004. Seventy-five per cent. of those were people bankrupting themselves, which is more than double the rate of four years ago. What is the Secretary of State going to do about it?
Mr. Hain:
What I am going to do is not listen to Tory attempts to talk Wales down. The truth is that employment in Wales is now at its highest ever in our history, compared with the mass unemployment under the Conservatives, and the level of small business dynamism in Wales is better than ever before. Wales is going from strength to strength. We are beating everybody in sight on the rugby field—we have beaten England and we are going to beat Scotland and Ireland—and we are cleaning up in the small business sector. Wales is now one of the most dynamic parts of Europe and the hon. Gentleman should be supporting it, not talking it down.
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St. David's Day
2. Simon Hughes (Southwark, North and Bermondsey) (LD): What assessment he has made of the merits of making St. David's day a national holiday in Wales; and if he will make a statement. [218067]
The Parliamentary Under-Secretary of State for Wales (Mr. Don Touhig): No such assessment has been made, but the absence of a public holiday on St. David's day has not diminished the appetite of Welsh people everywhere to celebrate 1 March in style and with pride.
Simon Hughes: That is not an adequate answer, because the pressure in Wales for an ability to celebrate with pride by having a national holiday is mounting every year. The rugby team does its bit; the people on the streets of Cardiff yesterday did their bit; the new millennium centre has made its contribution. Will the Government get on with it, carry out the assessment and then, if the will of the people of Wales is to have a national holiday, give them the national holiday that they deserve to give back to Wales the pride in St. David's day that it justifiably needs?
Mr. Touhig: There is certainly no lack of pride in Wales in celebrating St. David's day. The pattern of bank and public holidays in the United Kingdom is well established and accepted, and the Government have no plans to change it. It is estimated that it would cost about £2 billion to have an additional bank holiday in the UK. However—[Interruption.] If the hon. Gentleman stops chuntering and listens, I will be able tell him that if a case were passed to the Government—based on full consultation with business and industry, the health service, local government and other stakeholders, and taking account of the full impact on the economy and our essential services—we would consider the matter.
Albert Owen (Ynys Môn) (Lab): My hon. Friend will be aware of my strong support for St. David's day being a national holiday, and I am pleased that he is to open a new consultation process. In that consultation, will the Wales Office consider the Republic of Ireland, which has high productivity and a high number of public holidays, and which uses St. Patrick's day to promote Ireland and the Irish economy in the four corners of the world, to the benefit of the Irish people and the Irish economy?
Mr. Touhig:
So that my hon. Friend is under no misunderstanding, I am not proposing any consultation. I am saying that the Government have no plans to change the arrangement of bank holidays, but if we had a case put to us we would consider it. I take his point, but there are matters that need to be assessed very thoroughly indeed—the impact on our economy, for example. There may be benefits for our tourism industry from a public holiday on St. David's day, but there would perhaps be a downside for other parts of industry. Until we received a full and proper assessment, it would be too early for the Government to make any comment or decision whatever.
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