SMALL BUSINESSES (MERSEYSIDE) (Hansard, 20 March 1978)

§ Mr. Graham Page (Crosby)
I wish to call attention to the last item on page 117 of the Supplementary Estimates 1978. I refer to item Ell, Vote 14, Class IV, and it relates to the small firms employment subsidy, the provision for which originally was estimated at £1,900,000. The increase now required is estimated at £143,000. I wish to relate this to what is happening to small firms on Merseyside.
I wish first to put on record the history of the subsidy. It was announced in the Budget Statement a year ago and was to 1168 come into operation in July last year and to run for six months. The beneficiaries under it were to be the private independent manufacturing firms in the special development areas—firms which employed fewer than 50 persons on 29th March 1977. That was the date when it was announced. The subsidy was to be £20 a week for 26 weeks for every extra job of 35 hours a week and £10 a week for 26 weeks for every extra job of 21 to 34 hours a week.
By October 1977 950 firms had benefited by creating 1,500 new full-time jobs. It works out at an average of 1½ jobs per benefiting firm. The scheme was extended to 31st March 1978. By the end of 1977 —this appears from the Press statement from the Department of Employment on 30th December 1977–1,428 firms had benefited by creating nearly 3,000 extra jobs. I am not sure from the statement whether those were extra full-time jobs or half-time jobs. But let us assume that they were all full-time jobs or that the figure was calculated on that basis. It means about two new jobs per benefiting firm. In January 1978 the scheme was extended to 5th March 1979.
We now come to some rather peculiar figures. In exactly one month—that is, during the month of January 1978—the number of extra jobs leaped, according to the Secretary of State for Employment, from nearly 3,000 to 5,338. That was a statement by the Secretary of State which appeared in Hansard on 30th January 1978 at columns 64 to 65.
It is a rather extraordinary jump from 3,000 at the beginning of the month to a figure of 5,338. The firms which benefited jumped from 1,428 to more than 1,500. It seems to me that somebody thought that the figures were not showing enough full-time jobs and added up the half-time jobs. Therefore, we are hardly comparing one thing with the other.
However, on 15th March 1978 the terms of the extension of the scheme up to next year, 31st March 1979, were announced. As from July next the subsidy will be available to manufacturing firms in all assisted areas, inner city partnership areas, London docklands, inner Birmingham, and to firms with fewer than 200 employees.
However, that is for the future. We are now concerned with the 1977–78 1169 estimates and the £143,000 increase on the estimated £1,900,000. On any reasonable interpretation of the figures, that £1,900,000 cannot have been spent upon actual subsidies. After all, the subsidy lasts only six months for any one job. It seems that the whole of the supplementary estimate of £143,000, and part of the £1,900,000, must be going into administration expenses, which is a substantial amount.
The subsidy seems to be a very expensive way to increase the number of jobs. It covers only manufacturing firms, which in my view is one of its failures. During the 10 months from July 1977 to January 1978 the scheme produced only 1,353 new jobs in the whole of the North-West. Some part of that number of new jobs went to Merseyside, but that did not make up for the jobs that were lost during the same period. I have in mind especially men working for small firm who had to terminate their employment for various reasons. I submit that that applies particularly to small businesses on Merseyside.
On Merseyside the small firms employment subsidy seems to have been like a trickling tap running into a bath in which the plug has been removed. The plughole is bigger on Merseyside than elsewhere in the country for several reasons.
The first reason is that in the past few years Merseyside has become so heavily dependent on Government help in almost every enterprise that individual effort has been stifled. The situation at the docks may be taken as an example. Since the Mersey Docks and Harbour Board went into statutory liquidation and became almost entirely financially and managerially dependent upon the Government, the docks have been run to the dictates of the Government and the trade unions. There is no way in which a private firm can move in to undertake and develop work ancillary to dock work. The private hauliers, stevedores and ships chandlers are almost extinct. The few who remain do so only at the pleasure of the trade unions.
I admit that the example that I am about to put before the House is not that of a manufacturing firm, but it shows the attitudes towards small firms on Merseyside. It may be that the subsidy should have helped such firms as well 1170 as manufacturing firms. I refer to a haulage firm in my constituency that has been in the same family for over 70 years. It started in 1905. It is now run by the son and two grandsons of the founder. A substantial part of its work was to take goods to and from the docks. The firm has five vehicles and a year ago employed six union men to drive those vehicles.
Work dropped off for a time and two men had to be made redundant. The two grandsons—one had been doing office work and the other repair work on the lorries—occasionally drove the spare lorries after those two men became redundant. The grandsons were not union men. The union officials refused them access to the docks. They immediately said "May we become members of the union?" That request was refused. Instead, the union blacked the firm and the other drivers employed by the firm because they were driving with the two-non-union proprietors. Yet they were willing to join the union.
I wrote to the general secretary of the T and GWU setting out these facts. I wrote not to the local man, because I could not get any sense out of him, but to the head office. I received a courteous reply: Dear Mr. Page, I have asked our North-West Regional Secretary to look into the matter you raise urgently and to reply to you direct. Yours sincerely, J. L. Jones". That was in November. I have not heard a word since and the firm has remained blacked. The firm's business is now down to one-fifth of what it was before this unreasonable blacking.
That is an example of the determination of the trade unions on Merseyside—on the docks in particular—to destroy the family business which is connected with dock work. There is a fantastic rule, concocted by the unions, that haulage business owners must not drive their own vehicles, even though they may be union men, if the firm has more than three vehicles. This fantastic rule is aimed purely and simply at the family business. Any appeal by the little man to the Government-sponsored undertakings or to the trade union headquarters seems purposeless.
1171 It would appear that very few of the major decisions for Merseyside undertakings or the unions are now taken on Merseyside. Such organisations are run from headquarters outside the area. A survey undertaken not long ago by Plesseys of 80 firms taken at random on Merseyside to find out where the decisions for those firms were made showed that fewer than a dozen were run from Merseyside. Absentee employers have little sympathy with truly local problems. The same applies to what I call absentee trade union leaders.

§ Mr. Deputy Speaker (Sir Myer Galpern)
Order. I wonder whether the right hon. Gentleman can help the Chair. I have been listening carefully to his development of a constituency matter. But, as he said at the beginning of his speech, we are dealing with a Supplementary Estimate of £143,000 on a £1.9 million Estimate. Will the right hon. Gentleman explain how what he has said has anything to do with the Supplementary Estimate? "Erskine May", in page 740, clearly lays down, as I am sure the right hon. Gentleman knows full well, because he is well versed in these matters, that we cannot discuss policy. Where the Supplementary Estimate is small compared with the original Estimate, we can discuss only the reasons for the Supplementary Estimate. What has all this to do with the matter under discussion?

§ Mr. Page
The point that I was endeavouring to make was that the subsidy does not serve a purpose—

§ Mr. Deputy Speaker
Order. We are not supposed to discuss policy. That is what I am trying to establish. "Erskine May" lays down that we cannot discuss policy in relation to a relatively small addition to an original Estimate.

§ Mr. Page
In my opening remarks I pointed to the discrepancy between the numbers of new jobs created and the amount required.

§ Mr. Deputy Speaker
The right hon. Member was on an even keel when he was trying to establish that the administrative cost in relationship to the work done was too high. I thought that he was going to say that there was no need therefore for the Supplementary Estimate. Up to then he was in order. Now I hear 1172 about a particular situation which has, in my opinion, no relationship with the matter under discussion.

§ Mr. Page
I am saying that the money requested is not being correctly used. It should be applied to firms which find themselves in difficulties, as I have tried to explain.

§ Mr. Deputy Speaker
There is a slight difference. I thought that we were discussing the administration of a particular scheme. I thought that the right hon. Member was saying that the money which is now requested is unjustified by virtue of that. But now he is saying that the money is not being applied properly. That is a matter of policy. "Erskine May" says that that may not be discussed.

§ Mr. Page
I am sorry if I have not explained myself clearly. If the subsidy is not helping the type of firm of which I have given examples, surely there is no justification for asking for an increase.

§ Mr. Deputy Speaker
I shall quote from page 740 of "Erskine May", which states: if the supplementary estimate is merely to provide additional funds of a relatively model -ate amount required in the normal course of working of the services for which the original vote was demanded, only the reasons for the increase can be discussed and not the policy implied in the service.

§ Mr. Page
The original Vote was for £1,900,000. As I have tried to establish, that does not tally with the figures for jobs provided. There is a question about whether that sum has been spent on subsidies or on administration, because it has not been spent on assisting firms such as those that I have described.
This is a subsidy to certain types of small firms which employ fewer than 50 people. The figures given by the Government in a Press statement show that the subsidies of £20 per week for 26 weeks or £10 a week for half-time jobs do not add up to £1,900,000. If that is so, there is no point in asking for a further £143,000, unless it is to be allocated to firms that are in difficulties.

§ Mr. Deputy Speaker
It is ten minutes past one o'clock. I feel in a generous and sleepy mood, so I shall let the right hon. Member continue.

§ Mr. Page
I am very much obliged to you, Mr. Deputy Speaker. It is my point to endeavour to show that if the increase is granted, the subsidy could be applied to those firms which need the amount for which the subsidy was originally to be given. There seems to be no point in giving this subsidy if it is not to assist the firms that it was intended to assist.
There have been occasions on Merseyside when small firms have been prevented from carrying out their work and prevented from asking for the subsidy because they have been prevented from expanding. They have been prevented from expanding by the attitude of trade unions on Merseyside. That is why I was endeavouring to give one example, and perhaps if I give a further example that will help to explain the case that I am trying to make.
I have a constituent who runs a technical kind of business. He produces a product which later is mass produced by another manufacturer and eventually put on the market. It was found by the union to which his employees belong that two of them were in arrears with their union subscriptions. As a result, the firm was blacklisted with the manufacturers to whom the article goes, and black listed with its customers. Although my constituent has at all times expressed his willingness to take union labour, and although those in his employ who are not unionised have expressed their willingness to become union members, the union has blacklisted this firm. The result is that a firm that could expand because it is a modern technical firm and could ask for these subsidies is being prevented from doing so by the attitude of the trade unions.
The fear among small firms on Merseyside is that if they endeavour to show any initiative to expand, or even to continue in being, they will be faced not just with union opposition, but with what seems determination to obliterate them. What point is there in asking for this small firms employment subsidy? If that is the case, what is there in the Government's asking for an increase of £143,000?
This is a serious matter as it affects the small firms on Merseyside which might wish to take advantage of the subsidy if only they were not prevented from 1174 expanding by the attitude of the trade unions. There is a great fear not only that small firms will go out of existence, but that no new ones will start up and that therefore this subsidy will be purposeless because no one will be able to take advantage of it.
That is all that I wish to say, Mr. Deputy Speaker. I am grateful to you for allowing me a certain amount of latitude, but I think that my argument relates directly to the item in the Supplementary Estimate to which I referred when I began my speech.

§ The Under-Secretary of State for Employment (Mr. John Golding)
The reason for the Supplementary Estimate is the success of the scheme. Since 1st July 1977, more than 2,000 firms—500 on Merseyside—in the special development areas have applied to join the scheme, and more than 1,800 have been accepted. As at 28th February, 5,784 extra jobs had been provided, 1,477 on Merseyside.

§ Mr. Graham Page
Before the Minister sits down—

§ Mr. Deputy Speaker
Order. The Minister has sat down.