HC Deb 20 February 1979 vol 963 cc240-3
16. Mr. Tim Renton

asked the Secretary of State for Employment what amendments he plans to introduce to the Employment Protection Act in order to encourage small companies to increase their work force.

Mr. Booth

None. I do not believe that amendment of the Employment Protection (Consolidation) Act would encourage small companies to increase their work force.

The Government are well aware of the importance of small firms to the national economy and have been actively encouraging their growth by a series of measures since 1974. My own Department operates the small firms employment subsidy which encourages the creation of extra jobs in this sector.

Mr. Renton

Has the Secretary of State woken up to the fact that the House, by a majority of 122 votes, gave a Second Reading on Friday to the Employment Opportunities (Small Businesses) Bill of my hon. Friend the Member for Surrey, North-West (Mr. Grylls) In the dying days of the Government, will the right hon. Gentleman, as an act of death-bed repentance, bring in amendments to existing legislation to encourage small companies to take on extra labour?

Mr. Booth

I listened to part of Friday's debate and heard one Conservative Member say that civilised practices were required for dealing with cases of unfair dismissal, but I did not hear an argument that that should not apply to employees of small firms.

Mr. Heffer

Is my right hon. Friend aware that it was announced only this week that a small firm in my constituency is about to close, not because of the Employment Protection Act but because of regulations of the European Economic Community which will put 230 workers out of work? Does my right hon. Friend agree that that is an aspect which apparently does not seem to interest Conservative Members or, sufficiently, a number of Labour Members?

Mr. Booth

My right hon. Friends and I are very concerned about any Community measures that may cut down employment in this country—as some clearly may. It is unfair to suggest, as some Conservative Members do, that small employers are particularly at risk. An employer of 50 people has a very small chance of being affected more than once every 10 years by any claim of an employee under the Employment Protection Act, let alone under the unfair dismissal provisions.

Mr. Kenneth Lewis

Is the Secretary of State not aware that any small employer can take on an employee temporarily through an employment agency, although it will cost him more? Why does not the right hon. Gentleman make arrangements so that employers can take on workers permanently?

Mr. Booth

Because the House decided that there should be certain statutory protections for permanent employees, and most people choose to work for an employer on a permanent basis. If the hon. Gentleman is advocating that a general temporary employment condition should be attached to the overwhelming majority of employees of small firms, I must say that I profoundly disagree with him. Most small employers have a high regard for their employees and want to treat them on the basis of permanent employment.

Mr. Cryer

Does my right hon. Friend agree that the six months' probationary period embodied in the Act should be sufficient for small firms and that the Tories' proposals would create a section of second-class workers? Is not the basis of the questioning by the Tories the right for some of their friends to dismiss employees unfairly? Would not that reflect badly on a large number of small firms?

Mr. Booth

I agree that the onus is entirely on those who argue that there should be special, lesser terms of protection for those in small firms, to show why we should have lower standards in one group as opposed to another. Our whole aim in the Department has been to assist small employers in the working of this legislation and in expanding their labour force.

Mr. Brittan

Will the Secretary of State accept that while there may be disputes about the effect of the Employment Protection Act on small firms, the research that has taken place shows that there is some impact on them? If that is so, in view of the present serious employment situation should not the Secretary of State keep a much more open mind about amendments to the Act to prevent this occurring?

Mr. Booth

Of course this legislation has an impact on small firms, just as it does on large ones. But it does not follow that we should in any way modify or amend the legislation. The majority of employers are complying with this legislation, without difficulty, to the advantage of a number of their employees.

Mr. Renton

On a point of order, Mr. Speaker. In view of the completely unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek an early opportunity of raising the matter on the Adjournment.