New Businesses

HC Deb 29 November 1982 vol 33 cc6-7

6. Sir David Price

asked the Secretary of State for Industry how many new businesses have been created since May 1979; and how many new jobs have followed.

Mr. MacGregor

We have estimated from information in VAT records that approximately 240,000 new businesses were created in the United Kingdom in 1980 and 1981. Similar statistics are not available for earlier years. We do not have figures for the resultant new jobs, because this information is not collected.

Sir David Price

Interesting though those figures are, does my hon. Friend agree that in an age of continuous change it is to new rather than to old ventures that we should look for pace setting in the economy and thus for job creation?

Mr. MacGregor

Certainly in many cases new industries, often created by new businesses will be very important for the future of the economy and for achieving structural change, but I am sure that my hon. Friend will agree that there are many older firms taking advantage of new technologies and new products which make just as big a contribution to job creation and economic activity.

Mr. Geoffrey Robinson

Is not the probable reason why the Minister has no figures for the jobs created that, in the period in question, 1.5 million jobs have been lost in the manufacturing sector alone, which represents a reduction of 22 per cent.? Will he confirm that those figures are higher than those of any of our major competitors and are a complete condemnation of the Government's policies?

Mr. MacGregor

The reason why I do not have the figures is that the best way of assessing the number of new businesses created and, incidentally, of deaths of firms that we have been able to find is through the VAT system. Under the VAT system, information on jobs is not collected.

Mrs. Kellett-Bowman

Is my hon. Friend aware that three weeks ago the Commission of the European Communities put forward proposals to help those areas very badly hit by the decline in the textile trade, including proposals for the conversion of mills into new units? Would not these proposals provide precisely the sorts of new jobs to which my hon. Friend refers? Will he give them his utmost support?

Mr. MacGregor

I shall have to look at these proposals. However, my hon. Friend will know that conversions of mills are undertaken, not least by the English Industrial Estates Corporation, and that very often they create good new businesses because they provide just the kind of small staff facilities that new businesses need, but one always has to consider whether there is an economic case for the conversion of some older mills which are not suitable for this purpose.

Mr. John Garrett

Will the hon. Gentleman acknowledge that official statistics for the period in question show that the birth rate of small businesses is roughly in balance with the death rate and that businesses tend to employ more at their death than at their birth?

Mr. MacGregor

We discussed these matters in the debate on Friday. We have been working through a period of world-wide economic recession. An interesting indication of the amount of activity and buoyancy in the small business sector is that in 1980 births and deaths were roughly in balance, but last year there were 15,000 more new businesses than deaths. That is one reason why we are putting such emphasis on helping and encouraging small businesses, including start-ups.