Commons Sitting of 15 May 1987

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PETITION

    Leicester (Road Safety)
    9.34 am
    Mr. Greville Janner: It is my pleasure to present to the House, in the last breath of this Parliament, a petition from the citizens of Leicester, West concerning road safety in my constituency, where too many people have been killed as a result of inadequate safety measures and because resources for taking those measures have been and remain limited. The House will be pleased to know that, as a result to no small extent of the petition presented to this House in connection with Anstey lane, agreement has been given by all concerned for the installation of road safety measures, but alas this happened only after the tragic death of a child at the crossing outside the English Martyr school.
    The petition concerns an area where, perhaps because of a miracle from St. Patrick's church, outside which the danger is caused, no one has as yet been killed, and it is the prayer of my constituents that measures should be taken now so that we do not wait for a tragedy to happen. It is one of the parishioners of that church who has collected the same 150 signatures.
    Therefore, I present the petition of the citizens of Leicester, West, which showeth:
    "that the junction of Beaumont Leys Lane and Halifax Drive, Leicester, is a place of grave danger to those who need to cross there,
    Wherefore, your Petitioners pray that Your Honourable House will support the Petitioners in their campaign for a crossing to be made at that place."
    To lie upon the Table.

    Asylum Seekers (Heathrow)
    9.37 am
    Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. I wonder whether you could help me.
    Earlier this week I made an application under Standing Order No. 20 for a special debate about the group of Kurdish people from Iraq who had arrived in this country and sought political asylum. For understandable reasons, you were not able to grant that debate. However, is there any way that we can receive a statement or undertaking from the Home Office in these last moments of this Parliament about the plight of these 24 people? A stop on their removal was refused by the Home Secretary after consultation with the Prime Minister on the ground that they would not be returned to Iraq from Syria if they were removed from this country. After that, their barrister then sought and obtained leave to seek judicial review, which was granted.
    My concern is that these families have now been held in custody at the airport and other places for upwards of 10 days. Two of them have attempted suicide, and twice they have all been put on a plane, but the pilot has refused to take them out of the country. Now the Government seem determined to remove them to Syria where, quite clearly, there is some danger that, at a later stage, they could be removed to Iraq to face a certain death penalty.
    May we receive an undertaking from the Home Office that it is prepared to accept stops on removals from retiring Members of the House between now and the bringing together of the new Parliament? Secondly, will it be prepared to abide by the terms and wording of the Geneva convention on refugees so that the people arriving in this country and seeking political asylum and fearing a return to certain death are not rejected by immigration officers without reference to Ministers?
    Quite clearly, the implication is that the Immigration (Carriers' Liability) Bill is being operated, although it is not yet law, and that Ministers are not involving themselves in decisions but are leaving them to the low-level immigration officers who are making decisions that have life and death implications for these people.
    Mr. Speaker: I understand and appreciate the hon. Gentleman's concern for the unfortunate refugees, but the hon. Gentleman will know that the matter that he raises is not a question of order. I am sure that what he has said today will have been heard by the Government Front Bench. It is possible that a statement could be made on the matter at 11 o'clock, but I am afraid that I cannot help the hon. Gentleman further than that.
    Mr. Laurie Pavitt: On a point of order, Mr. Speaker. Perhaps you could give us some guidance as to the position on immigration cases between now and 11 June for Members who will not be returning to the House. As you will know, I have many such cases every week. Am I still entitled until 11 June to raise with the Home Office the possibility of intervention on behalf of a person being held at Heathrow or Gatwick?
    Mr. Speaker: First, I should say how warmly we welcome the hon. Gentleman back today. After Parliament is dissolved, there are no Members of Parliament, but in the period between Dissolution and the

    487
    new Parliament it is, of course, possible for the hon. Gentleman to make representations to the Home Office in his private capacity as an ex-Member of Parliament.

    Captain Simon Hayward
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
    9.41 am
    Mr. John Gorst: As these will be among the last words spoken in this Parliament, it is fitting that we should reflect on one of the most fundamental issues which have concerned us in this century and in days gone by and which, one hopes, will continue to concern us for as long as we have Parliaments. Indeed, the points of order that have been raised today illustrate this very point. The issues to which I refer are matters of conscience, liberty and justice. We discuss them as they affect whole populations and at the level of the most insignificant individual. We debate with anger, with passion, with rationality, and with a great concern for truth and decency. That is what this departing Parliament is and has been for, and what the new Parliament will be for when it assembles.
    It is appropriate that with its last breath the House should turn its attention to the plight of an individual and that it should mirror a concern for human rights and justice and the maltreatment of one single but perhaps not entirely ordinary human being. Captain Simon Hayward is a man of exceptional integrity and service to his Queen and country. Nothing can be more daunting than the plight of a powerless citizen confronted by the overweening majesty of an all-powerful state. It is thus entirely proper that this House should adjourn after discussing such a fundamental issue which as I have said, lies at the very core of Parliament's existence.
    Exactly 63 days ago, Captain Simon Hayward, a 31-year-old captain in the Life Guards, was arrested in Sweden. He was driving a Jaguar car, belonging to his brother Christopher, back to England from Ibiza where he had been on holiday. The considerable extra distance that he was travelling was to enable him to put in a couple of days ski-ing at the invitation of a casual acquaintance known to his brother. That acquaintance, thought by Captain Hayward to be a Swede and using a Swedish-sounding name, was in fact a Scotsman known as Cay Forbes Mitchell who, it seems, had been under observation by the Swedish police for a considerable time, suspected of being involved in drug trafficking.
    Following information received, I believe, the Swedish police closed in on Captain Hayward's car shortly after he had kept a pre-arranged rendezvous with Mitchell in a Swedish provincial town. In due course, half a million pounds worth of well-hidden drugs were discovered in the car. I understand that several Swedes have been arrested in connection with the case and that all of them, as well as Mitchell, are alleged to have confessed their complicity. Captain Hayward, however, has protested his innocence throughout and his strong belief that the drugs consignment could have been hidden in the car when it was stolen in Ibiza and recovered by the Spanish police just hours before his departure from the island. I understand that the Swedish police have issued a warrant in absentia for the arrest of Captain Hayward's brother, Christopher, who has since disappeared. It appears, therefore, that the police do not accept that Captain Hayward was the unsuspecting dupe of a highly professional drugs ring.
    Whether Christopher Hayward is alive or dead, no one can say for certain. Chief Inspector Bihlar, who is in

    489
    charge of the investigation, said to me in front of the British consul that if he went to Ibiza to investigate the case himself he feared that he might be murdered. It is thus not entirely fanciful to speculate that such a fate might have befallen Christopher Hayward if he was innocent or that he might be afraid for his life. Before dealing with any of those circumstances and their implications, however, I will explain how I come to be concerned with the case and why I believe that it has more far-reaching significance.
    At the outset, two considerations will be universally accepted by my hon. Friend the Minister, by both sides of the House and, above all, by the Swedes. First, everything connected with the supply and sale of narcotics is evil and despicable, its capacity for causing misery and destruction is callous and brutal, and those who engage in this inhuman trade deserve the severest penalties. On that, there can be no disagreement by anyone.
    Secondly, the due processes of detection, arrest, trial and punishment are for each sovereign state, whether Swedish or British, to determine according to its own constitutional practices. We should as bitterly resent interference by Sweden in the internal legal procedures of the United Kingdom as the Swedes would rightly resent any such interference by us. On those two matters, I believe that we are all in agreement.
    There are, however, aspects of our bilateral relations which impose upon this House a duty to study the legal practices in our respective countries. First, both countries are signatories to the European convention on human rights. Secondly, we have a bilateral treaty or other arrangements for extradition with every signatory to the convention, with the exception of Ireland, Turkey and Liechtenstein. Thirdly, it is unthinkable that we should keep an extradition treaty in existence with a country whose legal procedures we regard as alien to our own notions of natural justice and humanity, especially if those procedures are not in accordance with the European convention.
    In the course of this debate, I shall seek to show, by reference to known facts, that Sweden is at best in violation of the spirit of the European convention on human rights, that its pre-trial procedures specifically are contrary to natural justice, that the case of Captain Simon Hayward illustrates that contention and is not an isolated case affecting just one British citizen, and that without interfering or dictating to the Swedes about how they administer justice to their own people or to people visiting their country we should suspend the extradition treaty of 1966 until we are satisfied that the provisions of articles 3, 5, 6 and possibly 17 of the European convention are complied with in both spirit and letter. We should do that until such time as Sweden is prepared to adopt pre-trial procedures that are in accordance with universally accepted standards.
    If the Minister thinks that this is a drastic and precipitant step to take, I hope that he will reflect on Sweden's record in this area. It is certainly not an unblemished one. Sweden is not a first-time offender. It has been arraigned before the Court of Human Rights in the case of McGoff versus Sweden and found to have been in violation of article 5.3. The issue involved was not being brought promptly before a judge. It was found to have been in violation of the same article in the case of Skoogstrom versus Sweden. Both cases were within this decade.
    490
    I shall now return to the description of the circumstances involved in the case of Captain Simon Hayward and I shall begin with an explanation of how I came to take an interest in the matter. Captain Hayward is not a constituent of mine, but, as a serving officer in the Life Guards who has been on classified duty in Northern Ireland for the past two years, I do not think that he is a constituent of any hon. Member. Before I visited Captain Hayward on the 54th day of his solitary confinement in Uppsala I had never met any of his family or friends
    Captain Hayward was brought to see me three or four years ago by a well-known film producer who had been invited to do a documentary film on a proposed Life Guards expedition to Africa. It was running into problems that it was felt I could help to resolve. I met Captain Hayward and two of his fellow officers on about half a dozen occasions. I was struck not only by his exceptional straightforwardness but by his sense of duty towards the men under his command. In every respect he typified the highest traditions of one of the British Army's finest regiments. What I am trying to say to the House is that Captain Hayward struck me then as an individual of transparent integrity. Judge then my surprise when I learnt from the press in late March that he had been arrested in connection with a squalid and disreputable drug peddling activity. I did what I believe any hon. Member would do if he thought intuitively that a ghastly mistake had overtaken an innocent person. I wrote to Captain Hayward through the good offices of the Swedish embassy, to which I explained my interest in the case. I offered Captain Hayward help if there was anything I could do and I promised to visit him in the summer if the Select Committee of which I am a member had business that took me to Sweden.
    In due course the helpful Swedish authorities in London confirmed in writing that a visit would be possible, that my letter had been forwarded to Captain Hayward and that the Swedish Ministry of Foreign Affairs would contact our embassy in Stockholm, through which arrangements for my visit should subsequently be made.
    I dwell on those details because of the extraordinary allegations from the Uppsala prosecutor and police that have appeared in the press in Sweden since my visit on 5 and 6 May. Perhaps I shall conjecture later about their motives. However, at this stage, suffice it to explain to the House that from my knowledge of what our embassy did and said on my behalf, its actions were scrupulously accurate and entirely correct. Furthermore, I must inform the House that on Tuesday of this week I issued a writ for libel against the Daily Telegraph because of its issue of 8 May in which it said in a headline:
    "MP 'lied to Swedish police' for interview with guards officer."
    That headline was toned down in subsequent editions to read:
    "Swedes angered by MP's jail visit to guards officer."
    Since there has been speculation in Sweden about whether I went there in a so-called private or official capacity, let me make the position quite clear. I do riot know what Sweden meant by "official", but everyone in the House will certainly know what is meant when I say that I went there in my capacity as a British Member of Parliament. To our way of thinking, nothing could be more official than that.
    In the middle of April I received an acknowledgement from Captain Hayward to the letter I had sent to him. He

    491
    told me very little except that he protested his innocence while admitting the gravity of the circumstantial evidence against him. He invited me to contact one of his military superiors who had visited him in detention. In two long telephone conversations with that senior officer I established many of the facts and I heard the explanations for all the known supicions held by the police. My intuitive feeling of Captain Hayward's innocence was then translated into a more reasoned one. I shared his senior officer's belief in his innocence and believed that he was being held in solitary confinement in circumstances that gave me reason to suspect that the police hoped not to prove his guilt but to entice another suspect, his brother Chrisopher, to come forward.
    It was the intolerable suspicion that an innocent man was being held as bait that prompted me to inform my right hon. Friend the Prime Minister, in a brief conversation on 30 April, that I would welcome a further meeting with her if I returned from my visit to Sweden on the following bank holiday Monday as convinced of Captain Hayward's innocence as I was before I left. The Prime Minister indicated her willingness to see me if I chose to seek a meeting with her.
    A British citizen who has not yet been charged with any offence has been in solitary confinement for 63 days. Month by month a Swedish court sitting in secret is asked to continue that solitary confinement on the grounds that the police are presumably continuing their investigations. Meanwhile, a man against whom there is nothing more tangible than the fact that he unknowingly drove a car in which drugs were hidden remains in isolation.
    Until recently Captain Hayward had been given no privileges. Now, the so-called privileges of correspondence, visits, newspapers, sweets, radio and television are provided or withdrawn in an indiscriminatory and arbitrary fashion. The prosecutor and police issue damning or damaging statements to the press and on television. They denigrate visitors like myself and make such visits a pretext for refusing any other visits to him—friends and family, in particular. We have absolutely no influence or control over this matter. The Swedish authorities have no control or influence over what any Member of Parliament says. Nevertheless, the Swedish authorities refuse access to him even by the family solicitor, Sir David Napley. Why do they behave in that fashion? Why cannot justice not only be done but be seen to be done? Is this a sophisticated, genteel, humanised version of the intolerable technique known as brainwashing?
    Captain Hayward is a healthy, resilient, 31-year-old man. There is no doubt about his healthy physical condition. However, the same cannot be said of his psychological state. When I saw him nine days ago in the presence of the police and of the British consul, he had red rings around his eyes, his manner was subdued and apologetic, his speech was hesitant and faltering and at times he gave way silently to totally untypical emotion.
    The day I left Captain Hayward he wrote me a letter which the authorities allowed to get through to me. It is only after deep thought that I quote from it. It is a private letter and I have not been able to seek his permission to quote from it. However, if the case that I am making is to contain any form of credibility, I feel obliged to quote certain parts of it. In the letter of 5 May he said:
    492
    "may I apologise for being so wet and for letting my emotions show but as you will realise I am not in the best frame of mind at present. One day I must sit down with you and analyse the effects of all this, but perhaps now is not appropriate. I am afraid though, that the pressures of my situation have slowly built up on me. It is not so much being in solitary confinement but all the other factors accumulating with isolation that seem to make one feel rather miserable. I don't wish to be seen to be stooping to self pity but I hope this explains my behaviour during our discussions.
    This whole affair is so unreal—I still can't quite believe it is happening … Above all I have a feeling of intense embarrassment … I also hope that my answers to your questions were satisfactory—my mind is not very clear at the moment and I am having difficulty in concentrating, so please forgive me if I was less than verbose."
    Contradictorily, he ended his letter by saying:
    "despite appearances I am fine."
    The letter deeply disturbed me after my observations of Captain Hayward. It is absolutely clear—I have now consulted many people who know him intimately—that he is significantly disorientated. I have now pursued a number of other inquiries to establish what may be happening to him. The National Council for the Welfare of Prisoners Abroad approached me the day before yesterday. That organisation was established about eight years ago. The council told me that not only is my hon. Friend the Member for Westminster, North (Mr. Wheeler), who is a former prison governor, associated with it but also the Archbishop of Canterbury and Lords Gifford, Beaumont and Soper. Therefore, I have no doubt about the council's respectability and integrity.
    The National Council for the Welfare of Prisoners Abroad, which has expressed deep concern about pre-trial practices is Sweden, put me in touch with a British subject who spent many months in solitary confinement in Sweden. I quote a verbatim record of my conversation with that British subject. He said:
    "I read books. Just to keep my sanity, I read a lot of books. Wrote a lot while I was in isolation. I came out and I couldn't read another book for six months. All I wanted to do was to be with people—whatever I did. It was just like having to learn to be with people again. It is very hard to explain the feeling … It is a very unpleasant and inhuman thing to do to somebody. I've often talked about it with other people and we have discussed which is better: a physical torture or a mental torture. In all honesty, many of us would prefer to be beaten—just pushed around a bit for four or five days—and then to be put with our fellow human beings, than to spend six or seven months in solitary confinement. I haven't suffered the beatings. But other prisoners I have met have been in prison in Spain and France—and not beaten with sticks, but they got pushed around and smacked about the face a little bit … but they say they would honestly take that any day to six or seven months in isolation … Mentally, you are fighting a battle that they are trying to make you say something that maybe you did or maybe you didn't do. But you don't want to say it. When they lock you up, it is like psychological disorientation. They just want to break you."
    After helpful professional comments by my hon. Friend the Member for Reading, East (Sir G. Vaughan), who is not only a former Minister for Health but also a qualified psychiatrist, I contacted other eminent psychiatrists suggested by him. Their observations were deeply disturbing. Dr. Anthony Flood, a psychiatrist at St. Luke's hospital, agreed that from Captain Hayward's letter and from my descriptions it was clear that Captain Hayward would be disorientated.
    I spoke to a consultant forensic psychiatrist with whom I had been put in touch by the Royal College of Psychiatrists. I had asked the college to refer me to somebody with specialist knowledge of the possible effects

    493
    of solitary confinement on a normal human being. I described to Dr. Paul Bowden of the Maudsley hospital—he also works for the Home Office entirely in connection with prisoners—what I had observed of Captain Hayward. I also read to him the entire contents of the letter I have just referred to.
    Dr. Bowden's comments were as follows. He said, "His response to the conditions of this detention reflect that he has been improperly detained. I don't know the details of the conditions of this detention. All I know is that, however he is being detained, it is having an adverse effect on his mental health." I asked, "What do you mean by improperly?" He replied, "To the extent that he is becoming mentally disordered as a result of the conditions of his detention, his detention is not conducive to good mental health." I asked, "Might his treatment prejudice him at his trial?" He said, "Even if he is innocent, he might come to believe he is in some way guilty and, in that frame of mind, he would be unable to effectively defend himself against the charges." I asked, "What is your opinion of Captain Hayward's present condition judged from my description of his state when I saw him on 5 May"—after he had been in detention for 54 days—"and from the evidence of his letter to me written on that day?" Dr. Bowden replied, "He is undergoing severe emotional reaction. His mental state is precarious. Unless the situation is altered, he will get a good deal worse. This view, incidentally, is irrespective of whether he is innocent or guilty." I asked, "How might his condition deteriorate from now onwards?" He replied, "He would start losing his sense of identity. He could begin to create around himself an artificial world. At the extreme, he could even go mad in trying to make his own illusory world."
    It is not for us to conduct a trial of Captain Hayward. He has not yet been charged with any offence. This is a matter for the Swedish authorities. What must concern us is that he has not been accused of a crime. Under a Swedish law—I believe that it is called sanalika skäl—a person arrested for a crime committed beyond reasonable doubt will go to prison for it unless he can prove that he did not do it. He is guilty until he can prove himself to be innocent.
    I do not know whether that provision has been invoked in the case of Captain Hayward, but I know that he has been treated and penalised as though he was a criminal. How can a British person held in solitary confinement prove his innocence without benefit of family, friends, or even a British lawyer? He has only the Swedish lawyer appointed by the Swedish court. I have no reason to criticise his defence lawyer, Mr. Tom Placht, whom I have met. I am sure that he is doing his utmost, including visiting London at this very moment, but I wonder whether it is in the interests of total justice that he cannot be joined by a British lawyer who can explain the way in which Britons and Swedes differ in their behaviour and thinking.
    Her Majesty's Government should take one step as a matter of urgency. I have drawn attention to the disorientation from which I believe Captain Hayward to be suffering. I have quoted the views of qualified psychiatrists on the possible consequences of solitary confinement. I suggest to my hon. Friend the Minister that the Swedish authorities be asked to allow regular independent checks to be made by professionally qualified experts so that Captain Hayward's condition can be monitored regularly while he is in detention and until he is brought to trial, if that is to be the case.
    494
    I cannot accept that such monitoring should be done under the supervision of the Swedish prosecutor or his police colleagues. By their distorted and partial statements to the press, they have forfeited any claim to impartiality, and by their whimsical denial of access to Captain Hayward they have reinforced the impression that they are employing dubious psychological techniques that have been rightly condemned by all civilised Governments. I would not mind an invitation to a suitably qualified Red Cross expert or a specialist such as a Home Office forensic psychiatrist. Both would be well qualified.
    I am aware that officials at the British embassy in Stockholm have visited Captain Hayward. Indeed, he was visited only last night. But neither they, I, nor Captain Hayward himself, let alone his family, are experts in psychological manipulation. I believe that Captain Hayward should and will be proved innocent, but what an experience he has suffered. On Wednesday, Amnesty International told me about the case of a British subject just released by the Swedish courts having been found not guilty of a murder charge. He had been held in solitary confinement for 13 months. He has now started proceedings against the Swedish state, but what compensation could eradicate the mental scars that he will have to carry throughout his life?
    A legal expert in the Swedish Ministry of Justice told me that there are provisions for appeal after conviction, and that appeals may be made even after a full sentence has been completed. He told me that if the appeal on new evidence is upheld, the victim may sue the state for damages. But how much money could compensate an outstanding British officer such as Simon Hayward for the violation of his dignity as a human being? What value can be placed on the interruption of his brave activities on behalf of this country? Do we not as a nation also have a claim for the loss of his services? What price can be put on the distress caused to his mother, who is denied the opportunity to visit him? How do we assess the lost hours, days, weeks and months for his girlfriend, his family and his other friends? They have suffered great anguish and feel a deep sense of injustice. If he is guilty, he deserves punishment; but to be punished, he must first be tried. That has yet to be done. In the meantime he is receiving a disorientating, dangerous, debilitating punishment that can never be eradicated. It is happening now, and nothing will extinguish its haunting memory.
    The heart of my argument against the Swedish pre-trial procedures is that, guilty or innocent, it is no way to treat a suspect. That is why I ask the Minister to re-examine our legal arrangements with Sweden and, if appropriate, to annul them. A fundamental assumption of the European Convention on Human Rights is that preserving the rights of innocent people is more precious to a free society than putting the villains who threaten it behind bars. Justice must be tempered with mercy, but it must be administered with humanity. The system that I am questioning derives from the notion that the end justifies the means: that convicting the guilty justifies crucifying the innocent. It is a repugnant concept.
    Sweden is a long-standing friend of Britain. We admire its social enlightenment and respect its ancient cultural traditions and achievements. We have a warm regard for its friendly people. Simon Hayward may have a case to answer before the Swedish courts, but Sweden has a case to answer before world opinion.
    10.16 am
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): I am extremely grateful to my hon. Friend the Member for Hendon, North (Mr. Gorst) for raising this case. It is especially appropriate that the penultimate debate of this Parliament should be devoted to discussing the circumstances of an individual British citizen. It is in the finest traditions of the way in which this place operates.
    As the House would expect, I shall consider carefully all the points made by my hon. Friend. I have especially noted his comments on Captain Hayward's character, his state of mind and the assessment of my hon. Friend and experts of the effects of solitary confinement on Captain Hayward. Of course, I shall ensure that the record of this debate is made available to the Swedish embassy in London as soon as possible.
    Mr. Gorst: Will my hon. Friend use his best endeavours to ensure that the Hansard report of this debate is made available to Captain Hayward?
    Mr. Eggar: I assure my hon. Friend that, in so far as it is within our power, we shall make sure that such documents are made available to Captain Hayward.
    I shall comment now on some of the more detailed points made by my hon. Friend, but I will read carefully the record of his speech and comment further in writing to him. Sweden's record on human rights is well known, and we believe that it takes very seriously its responsibilities under the European Convention on Human Rights. I am sure that it will study my hon. Friend's comments carefully.
    As my hon. Friend knows, Captain Hayward has been visited on several occasions by our consular staff and has not made specific complaints about the conditions of his detention. If Swedish legal procedures are not properly applied, that is a matter for Captain Hayward's defence lawyer to raise with the appropriate authorities in Sweden. As my hon. Friend has stressed, we understand that Sir David Napley was not denied access to Captain Hayward but was denied access without the presence of a police officer. In other words, a condition was put on Sir David Napley's access.
    Our present understanding of the position on private visits is that further family visits have been temporarily suspended, but, as my hon. Friend recognises, that is a matter for the Swedish authorities.
    Mr. Gorst: While I understand what my hon. Friend is saying, does he concede that the giving and withdrawing of privileges is a well-known technique of brainwashing?
    Mr. Eggar: I have noted my hon. Friend's comments. However, I am afraid that I must again stress to him that that is a matter for the Swedish authorities. I do not want to pass judgment on the technique to which he has referred.
    I understand that a number of visits have been allowed by Captain Hayward's mother, girlfriend and commanding officer. I am told that the first such visit by his mother was allowed in late March, less than two weeks after his arrest. As I have previously told my hon. Friend, Captain Hayward was visited yesterday by our vice consul, who reported that Captain Hayward appeared to be in good spirits and that he had no complaints to make.
    My hon. Friend referred also to the position of the English lawyer who was appointed by Captain Hayward's
    496
    family. I must advise my hon. Friend that in the United Kingdom a foreign lawyer would not be allowed to represent a client in court. I believe that that puts into context Sir David Napley's standing under Swedish law.
    My hon. Friend specifically asked whether we could request the Swedes to allow regular independent checks on Captain Hayward's state of mind. We shall certainly make such requests if Captain Hayward specifically requests us to do so. I am sure that Captain Hayward will be enabled to be aware of the arguments, assuming that the Swedish authorities are happy to allow a record of the debate to reach him.
    Mr. Gorst: This is perhaps the most disturbing aspect of the case. From my inquiries, I believe that any prisoner would regard himself as being at risk of penalties if he were to make such a request. I do not know whether Captain Hayward would wish to make such requests. When I spoke to him, in an interview that lasted about 90 minutes, he was plainly not making any criticisms. However, when one observes his general demeanour, one wonders whether he is aware of his present conditions.
    Mr. Eggar: I accept my hon. Friend's point entirely. However, our consular authority's relationship is in this case directly with the prisoner, Captain Hayward. Therefore, we cannot take official action with the Swedish authorities without his specific say so.
    It may assist the House if I set out the series of events as perceived by Her Majesty's Government, following the notification of Captain Hayward's arrest, and comment briefly on the actions taken by the Government.
    On the afternoon of 17 March, Captain Hayward telephoned the vice consul of the British embassy in Stockholm to say that he had been arrested on 13 March. He requested a visit. At the same time, we learnt that another British citizen had been arrested. However, we have not been asked to assist that other British citizen in any way. The Swedish police confirmed the arrest the same day to the embassy, adding that Captain Hayward, along with the other British national, had been arrested at Uppsala for possession of a large quantity of cannabis. They were being held at Osteraker. The consular department of the Foreign and Commonwealth Office was immediately informed by the vice consul in Stockholm. The Department promptly ascertained from the Ministry of Defence that Captain Hayward's mother had been informed.
    On the same day, 17 March, Captain Hayward's mother telephoned Her Majesty's embassy in Stockholm suggesting that she should go to Sweden. After the embassy had discussed the proposal with the Swedish police, Mrs. Hayward was informed that she would not, at that time, be allowed access to her son but that she would be notified as soon as a visit would be permitted.
    The vice consul visited Captain Hayward the following day, 18 March, at the police station in Vasteras. Captain Hayward made no complaints about the conditions of detention. The vice consul spoke to the Uppsala police inspector about legal representation, explaining that Her Majesty's embassy maintained a list of local lawyers which may be of help to Captain Hayward. However, Captain Hayward's brother telephoned from London to the embassy to say that the family would be appointing a lawyer. The police inspector informed the embassy the

    497
    following day, 19 March, that a court hearing was to be held, probably on 23 March, at Uppsala and that a lawyer had been appointed.
    On 20 March, Captain Hayward informed the embassy that the hearing had been arranged for 24 March. A closed court hearing was, as planned, held on that day in Uppsala. Captain Hayward was further remanded in custody until 25 May pending further court investigation. We understand that Mrs. Hayward was able to visit her son on 26 March and then again at the end of April, when she was accompanied by Captain Hayward's girlfriend.
    In the meantime, on 22 April, the Swedish police had issued an arrest order for Captain Hayward's brother, Christopher, "in absentia", as my hon. Friend has said.
    Her Majesty's consul and the military attaché were able to visit Captain Hayward at Uppsala police headquarters on 28 April. As my hon. Friend has said, he visited Captain Hayward on 5 May.
    The consular department of the Foreign and Commonwealth Office was informed in a letter from my hon. Friend, dated 30 April. that he proposed to visit Captain Hayward and I discussed the case with him personally for the third time on the same day.
    Our embassy in Stockholm was immediately informed and, at my hon. Friend's request, sought to obtain permission for the visit to Captain Hayward and to arrange appointments for my hon. Friend with the Swedish Commissioner of Police, an appropriate official in the Ministry of Justice, Captain Hayward's lawyer, and someone at the embassy who could talk to him about Swedish legal procedures.
    As my hon. Friend is aware, the Swedish authorities initially refused permission for a visit on the ground that it was a private visit. Following discussion with my hon. Friend, the embassy informed the Swedish authorities that, in its view, my hon. Friend was there in an official capacity as a Member of Parliament. Thereupon, the Swedish authorities permitted the visit.
    On arrival in Sweden on 4 May, my hon. Friend was met by our vice consul and taken to Uppsala to meet the defence lawyer, Mr. Tom Placht, then to Stockholm to meet Ministry of Justice officials. On 5 May, the consul took my hon. Friend to Uppsala to see the head of the local police, and subsequently was permitted to visit Captain Hayward for approximately one hour.
    I do not wish to underestimate in any way the circumstances of Captain Hayward's arrest and detention, but I must emphasise that the law in Sweden allows for long periods of custody until the prosecutor is ready either to charge or release the person being investigated. It is the usual practice for people arrested for serious offences—this is regarded as such—to be kept in solitary confinement. I understand that Captain Hayward is now allowed to listen to the BBC world service, watch television and read British newspapers and books. He is permitted one hour's exercise a day. This is in keeping with the Swedish practice for all such detainees of whatever nationality, and such provisions apply equally to Swedish nationals.
    It may be helpful to the House in general if I describe the role of our consular officials overseas when dealing with the arrest and detention of British nationals.
    Mr. Gorst: I would point out that when Mrs. Hayward applied to be allowed to visit her son after my visit, she was told, "No, you cannot visit him, because of the visit of that
    498
    MP." In other words, she is apparently being penalised for what I, as an independent Member of Parliament, who had never met her before going to Sweden, had done in what I believe to be the interests of Captain Hayward.
    Mr. Eggar: I have taken careful note of what my hon. Friend says. One must bear in mind that there was initial resistance from the Swedish authorities to my hon. Friend's visit. I understand that one of the arguments was that Captain Hayward had received a considerable number of private visits. As my hon. Friend is well aware, visits are under the control of the local authorities in Sweden, and we must simply accept that they have discretion in those matters. I appreciate my hon. Friend's concern that Captain Hayward's mother should appear to have been penalised, if that is the appropriate word, for actions that were said to have been taken by my hon. Friend. I understand his anxiety.
    As my hon. Friend made clear, it is internationally accepted practice that officials or representatives of one state cannot intervene in the judicial proceedings of another sovereign state. As he said, we in the United Kingdom would not tolerate attempted foreign intervention in our judicial system. The role of consular officials is limited to visiting the detainee as soon as possible after arrest or detention, unless the offence is a minor one, to ensure that the British citizen's rights under local law are fully explained and that they know how to obtain legal representation, if desired. A consular official will try to ensure that a British national is charged and brought to trial without delay, that the trial is conducted within -.he recognised canons of justice, that their alien status is not detrimental either at a trial or during imprisonment and that they are subject to the same standards as apply to the nationals of the country in which they were arrested.
    It is our policy that, after an initial visit, further consular visits will he made in the light of local conditions and the detainee's circumstances. Our consular officials will also ensure that a detainee's next-of-kin is informed of the detention, but only if so requested by the detainee. They will also arrange the transfer of funds from friends or family in the United Kingdom for prison comforts, and raise any complaints with the proper authorities.
    The United Nations approved minimum rules for the treatment of prisoners in 1957. While the rules have no binding force, our consular officials as a matter of policy would bring them to the attention of the local authorities, if it was seen that the rules were not being observed in respect of a British detainee.
    There are limitations on what consular officials can do. They cannot get a national out of gaol, provide a lawyer at Her Majesty's Government's expense, put up hail or carry out investigations into any alleged crime, nor can they offer legal advice.
    A consular convention does in fact exist between the United Kingdom and Sweden. Under that convention, a consular officer is permitted, without delay, to converse privately with, and to arrange legal representation for, any British national who is confined or detained. Any communication to the consular officer must be forwarded without delay by the Swedish authorities.
    The consular officer, upon notification to the appropriate authority, has the right to visit; but any visit must be conducted in accordance with the regulations in force in the institution in which the British national is detained. It is, however, understood that such regulations

    499
    should permit reasonable access and opportunity of conversation. I must emphasise that our consular officers in Sweden must operate within the parameters of the convention and Swedish law.
    I shall consider carefully all the points that my hon. Friend has made, particularly those relating to the mental condition of Captain Hayward. I shall, as appropriate, ensure that they are taken up with the relevant Swedish authorities and, in particular, I shall do what I can to make certain that the record of this debate is passed on to Captain Hayward, subject, naturally, to agreement by the Swedish authorities.
    While I fully understand my hon. Friend's concern, I am afraid that the Swedish legal process must take its course. Her Majesty's Government have no standing to intervene in that legal process, although, through our consular officials, we shall continue to monitor the case closely and to offer all the assistance to Captain Hayward that we properly can.

    Small Businesses
    10.35 am
    Mr. Roger King: This Adjournment debate on small businesses is extremely appropriate, because if there is one section of the economy in which the Government have been successful above all, and they have been successful in most, it is in assisting the development of small firms and businesses.
    Since 1979 a record number of new businesses have been created. That has not happened by any accident: it has been brought about by the favourable economic climate and by people who have adopted an attitude which perhaps we had lost over the past half century. They realised that the opportunity exists for them to create what they wish to create easily and ably. Perhaps it is also now generally accepted that a self-employed person is not some sort of crook who is trying to deceive the tax man but someone who has an important role to play in our economy. He may create his little business employing just himself, whether as a decorator or a plumber, and develop it into something more substantial by building on his business experience and reputation within the community which he serves. To be self-employed—at one time, perhaps, denigrated—is now a respectable, laudable occupation. Such people can feel proud indeed to play their growing and important part in our economy.
    The Labour party has always believed first and foremost in spending wealth, but it has paid little attention to the role of creating it. Unless we create wealth, we have none to spend. Over the past eight years the Government have been successful in creating the wealth which we can now spend on, for example, increased National Health Service expenditure. It is now running at record levels in real terms, let alone in money terms, and that has been brought about because more than any Government in the past we have paid attention to the role of the wealth-creating sector.
    The wealth-creating sector is not merely big business. Many big businesses have had to rationalise and change their outlook. The huge number of small businesses created since 1979 has increased the Exchequer take from industry and commerce through paying their taxes which can then be redistributed in our social welfare benefit systems.
    The legacy bequeathed to us in 1979 was a hopelessly unproductive economy. Let me make no bones about it. From the last war we inherited sloppy industrial relations and sloppy management and somehow the belief, still, that the world owed Britain a living. This Government had to take dramatic decisions. They had to say that the feather bedding must stop because we no longer had an empire or a Commonwealth and that we must make our own way in an increasingly competitive world. The Government had to make some very difficult decisions affecting many of our old established industries. Of course, that is nothing to be ashamed of.
    From time immemorial the trade unions have been shouting for investment. Some of the leading trade unionists asked how could we compete with the rest of the world, including the Germans, the Japanese and the Americans, with outdated manufacturing processes and lack of investment in industry. They also pointed to the failure by management to spend the money necessary to

    501
    introduce the new equipment when, in the eyes of the trade unionists, that money was going into the pockets of shareholders in the form of profit taking.
    Mr. William Cash: My hon. Friend must have made a slight slip of the tongue when he said that we no longer have a Commonwealth. What he possibly meant was that through the development and fostering of small businesses we have been able to generate common wealth among people as a whole. We certainly have a Commonwealth and I am sure that my hon. Friend would not want to see it reported in his local press that we have not.
    Mr. King: I thank my hon. Friend for his comments and I take his chastisement. Perhaps I was interpreting commonwealth in the literal sense. As I understand it, Britain exchanged its manufactured goods for raw materials with the old empire that we called the Commonwealth. Of course we still have a Commonwealth of nations and long may it remain, because it has an important role to play in world affairs. Our industrial position in the world has been affected because many of the Commonwealth countries are looking at alternative sources of supply for their finished goods and for the materials that they require and are looking less towards the United Kingdom. We have an opportunity to provide much of what they want.
    There is a well-recorded and documented recent incident about the Indian navy which wanted to place an order for a new type of warship. Two yards were suggested, one in Aberdeen I believe, and one in Korea. The Aberdeen yard was more competitive than the one in Korea, but by some sleight of hand somewhere the Koreans were able to reduce the price by about £6 million and the Indian navy gave the contract to the Korean yard.
    In the way in which I used to understand the Commonwealth it is not now so much a Commonwealth in terms of tied markets for our goods and their raw materials, because we are very much in competition with the rest of the world. For some time trade unions have been demanding that British industry should improve its productivity and invest heavily. The Labour Government of the 1970s paid only lip service to the role of employment in industry. Initiative was taxed away and it was not worth a candle to speculate by investing heavily in new factory plant and equipment.
    A substantial risk is involved in starting up a business. I know that because I went through the process in 1974. I started a business in October of that year on the day that Labour got elected. However, that was not a mistake, because the business prospered and a good portion of it is still there. The attitude of the Labour Government to taxing the individual deterred many new business starts. It is relevant that we should remember Labour's tax on jobs, the national insurance surcharge.
    This Government are criticised for not cutting taxation enough, but our critics forget that about £3 billion of taxation, brought about by Labour's terrible surcharge, was placed upon the people who were employed and was nothing more than a tax on jobs. It had a dramatic effect in causing industry to shake out the people that it did not want. Industry was not prepared to take any chances and if people were surplus or even partly surplus to production capacity, industrialists were no longer prepared to pay the penal rates of national insurance, and people were made
    502
    redundant. That meant that in the dying throes of the Labour Government unemployment doubled. The Labour Government built up a momentum of unemployment that was difficult for us to stop when we came in to clear up the mess that Labour had made.
    The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): It is important to emphasise that during the period when Labour were in Government the number of self-employed people dropped by 100,000. That is an incredible figure.
    Mr. King: My hon. Friend has made the point very lucidly. Of course Labour did not mention the small business man in 1979, or, indeed, in 1983. That species of business man, so essential for our wealth creating process, was totally ignored. I understand that Labour's manifesto for this election has been written on a postage stamp because Labour do not want to go into too much detail. I do not blame Labour for that, but I doubt if that manifesto will refer at all to what Labour intends to do, if it is elected, about continuing to build on the work that this Government have carried out in reconstituting small businesses as an important area of our economy.
    Whether we like it or not the shake-out of jobs from large manufacturers has been inexorable and there is no point in trying to put back the clock. In the car industry in particular one can see what happens when the investment that the trade unions wanted has gone into manufacturing capacity. Robots have been installed and integrated manufacturing systems and computer-aided design and manufacture have enabled us completely to change our outlook on manufacturing. Those things have also changed our capacity to produce cars and other products, such as washing machines and refrigerators, on a par with the best of our competitors.
    Investment has not proved to be the way forward in employment within our traditional industries. Therefore, we have had to pay a great deal more attention to other areas where any investment that is going can be used to create jobs. Over the past few years the modernisation of industry has gone ahead so fast that other sectors of industry have not been able to take up the many people who have lost employment. Happily, the take-up has now been increased because we are creating more real jobs than any other country.
    Much comment is made about the relevance of unemployment, but yesterday more people went to work in Britian than at any time in our history. Today a few more will go to work and on Monday a few more still, the signs now are extremely encouraging and new businesses play an increasng part in creating new jobs. I take this opportunity to pay tribute to the Parliamentary Under-Secretary of State for Employment, my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier). I almost said the so-called Minister for small firms. I am sure that my hon. Friend would be proud of that title, because for four years he has beavered away and has created an outstanding success story. The whole country is in his debt because he has striven for and obtained a better deal for the entrepreneur. That has not been easy, because it is difficult to break through the barriers of understanding confronting the person seeking to start off a business. That person sees before him the enormous challenge of getting his product to the market place, but he is also bewildered by the vast range of restrictions which

    503
    seemingly confront him, not least that of raising money and finding somewhere to locate his business. Those matters are substantial Eigers to climb, yet the Minister has played a major part in easing some of the difficulties which small businesses have hitherto had to face but which now perhaps are easier to overcome.
    Many of our opponents denigrate the small business and laugh it off as the ice cream and candy floss part of our business sector. That is nothing less then an insult because it denigrates what may become a large business in the not-too-distant future.
    In the west midlands we face criticism in the tourism sector. Tourism is a bastion of the small business, bearing in mind the number of guest houses, small hotels, small coaching companies, taxis, restaurants, pizza parlour and beefburger joints, as the Americans call them, that have been created as a result of the leisure and tourism sectors. It does not matter whether it be Alton Towers, which started as a small business and has become a large one, or the Severn Valley railway, which operates successfully between Bridgnorth and Kidderminster and employs a substantial number of young people on the community work schemes as well as having a hard core of permanent people. That railway did not exist 15 or 20 years ago when the late Sir Gerald Nabarro, as chairman, bought a few miles of derelict track to open one of the first standard gauge preserved lines. That is now an outstanding success in terms of tourism potential, yet it started off in a small way. Who did not say, "Well they are a lot of nutcases who are interested in chuff-chuffs; let them get on with it; it is irrelevant to our present economy"? The people involved with that railway have taken risks and bought more miles of surplus British Rail track and they now have a link with the main line at Kidderminster. That risk has been translated into a successful and thriving preservation society, with all that it means for the economies of Bridgnorth, Bewdley, Kidderminster and many of the little villages along the route of that line.
    Mr. Stephen Ross: What about Arley?
    Mr. King: The hon. Member for Isle of Wight (Mr. Ross) knows the area well and I believe that he is returning there shortly. If he returns as a tourist he will be able to sample the delights of travelling along that line and seeing the jobs that have been created as a result of people taking risks when everybody else thought that it was a silly thing to do.
    There have been spin-offs from that venture. We have a vintage car museum in Bridgnorth. That is a delightful town which is now open to the tourist potential that that railway has brought.
    Mr. Cash: While my hon. Friend is describing the delights and the tremendous tourist potential of the west midlands, I hope that he will bear in mind that we are taking strong initiatives to develop tourism in Stafford with its ancient high house, the castle, its association with Izaak Walton, who was the greatest angler of all time and many other attractions. My hon. Friend may also wish to bear in mind Ironbridge. I am on the board of Ironbridge, which has recently been awarded the world heritage award, which is one of the most prestigious awards that can be given in the tourist sector. While we are dealing with the west midlands, we should bear in mind the
    504
    importance of the Heart of England tourist board and pay tribute to Roger Carter and the others who have helped so much with regard to the Severn Valley railway company, Alton Towers and all the other matters that my hon. Friend has mentioned.
    Mr. King: My hon. Friend is right and has made a number of interesting points. His reference to Ironbridge is particularly relevant to me because as a small business man I operated in that area of Shropshire for a number of years and I became a part-time assistant—unpaid, I should add—in the squatter's cottage on the Blist hill site. In the very cold winters, we had a roaring fire going and people used to come from all over the world. I was promoted to the Mission church, which is a little tin shed, a traditional Mission church, where people used to come and expect me to deliver the sermon. On one occasion I was tempted to do just that, but it was part and parcel of a development in tourism which was self-funded. The state did not provide any money; it has been resourced by a number of grants from British industry.
    Ironbridge, which is a little off the beaten track with no motorway going through it, has a large number of cafes, shops, restaurants, public houses and so on, which have sprung up as a result of the attraction that that museum is giving the area. All of those are small businesses.
    Mr. Cash: The Minister of State came to Ironbridge to put up the plaque for the world heritage award and announced a £3 million endowment for Ironbridge. It might be helpful to get on the record the fact that the Government are being extremely helpful to Ironbridge.
    Mr. King: I was not aware of that, but in the early days there were some difficulties, which happily have been resolved, and it is now a thriving and dynamic area. Hon. Members should pay homage to the cradle of the industrial revolution.
    I must take up the point that my hon. Friend the Member for Stafford (Mr. Cash) made that Stafford is in the forefront of attracting tourists to its area. Birmingham and the west midlands are doing exactly the same. We have a tremendous amount to offer the tourist and we are going about it in a businesslike manner. It may interest the House to know that I was recently in Singapore and looking at, among other things, its tourism potential. There are parallels between Singapore, Birmingham and the west midlands in that neither area immediately leaps to mind as being a tourist trap. Both have a reputation of being industrial areas where one goes to do business, but not to spend time as a tourist. In Singapore, it has been calculated that if it could get the average businessman to stay one extra day, it could almost double its tourist ecenomy with a great deal more hotel occupancy than it has had hitherto. The way that is is attracting new businesses and tourist potential by recourse to the private sector and the entrepreneur lends lessons, if we need to learn that much, to similar areas of our country which are taking the first substantial but hesitant steps along the tourist trail.
    My hon. Friend the Minister will know that our hon. Friend the hon. Member for Birmingham, Yardley (Mr. Bevan) is chairman of the Conservative back-bench tourism committee, and he does superb work in that sector. I have the honour of being one of its joint secretaries. What the Minister may not know is that my hon. Friend the Member for Yardley is contesting his seat

    505
    at the election with the chairman of the West Midlands enterprise board, which is an august body that has sought to invest in local industry and has done much successful work. However, we take exception to that gentleman when he says that tourism is an ice cream and candy floss industry which has little relevance to Birmingham and the west midlands. We deplore that attitude because tourism is relevant and will result in a substantial number of new jobs.
    We deplore the fact that someone in that position says that the National Exhibition Centre and the proposed convention centre in Birmingham, which is being built, will not mean much to the area's economy. I assure the House that people in my constituency are seeking actively to capitalise on the opportunities that the convention centre will bring, with minibus tours throughout the area, small hotels and other accommodation and retail outlets. These will be needed to satisfy the demands of the substantial number of people who will come from all over the world to what will be the largest convention centre in this country. That centre will have all the benefits of being located in the centre of Britain's second city.
    Mr. Andrew Rowe (Mid-Kent): Do not such people show a lamentable understanding of history? In the middle ages, a substantial number of the most influential and important towns in Europe were based almost entirely on the tourist trade, although they were then, on the whole, called pilgrimages. All sorts of substantial economies whose prosperity has continued were founded on a tourist trade.
    Mr. King: My hon. Friend has raised an interesting point which I had not addressed. He is right. Of course, people on pilgrimages and people wandering various parts of the country were basically tourists. That is an extremely relevant point.
    The creation of new businesses, whether in tourism or elsewhere, has been going on apace in America. In the eight years to 1976, two thirds of all jobs created in America were created by companies with 20 or fewer employees. One can see how the Americans do it. There are rows of car washes where one can get one's car hand washed. One no longer has to run the risk of having the car scored by automatic car washers. These days, automatic car washers do a sophisticated job, but a good hand car wash and leather-off afterwards cannot be beaten. I do not care what anyone says; the constant use of a powered car wash will damage a car's paintwork over a period, but it is another case for a hand-washed car. That is the way to wash a car, but one cannot easily get one's car hand washed in Birmingham for love nor money, and I doubt very much whether it can be done in London either. In most American cities the customer is almost spoilt for choice. That job is very labour intensive and lends itself to the activities of a small entrepreneur.
    The small entrepreneur has the problem of finding a location and obtaining the necessary permission from the local council. He must apply to the local water authority to ensure that the right sort of sediment traps and filters are used before the water drains into the sewerage system. It is right that that should be done, but it all adds to the costs and the problems associated with establishing a labour-intensive business. I know from speaking to people who run manual car washes in this country that they have difficulties in holding on to labour. I was told that, in the
    506
    black country, a person would work for 12 to 18 months before moving on. A similar exercise was tried in London. but people stayed in the job only two or three days before deciding that the work was too arduous.
    About 1·4 million new businesses are now created in America each year compared with only about 90,000 a year in 1950. America has considerable experience in creating and developing new businesses. We are beginning to realise our investment because of the work that we have done in the past few years. We still have not tapped a great resource among people—the wish to get up and do their own thing. I hope that our policies will continue under the next Government to develop much of the ground work already done by my hon. Friend the Minister and his colleagues.
    I was impressed by the leaflet on small businesses "The Success Story", which was prepared by the Department of Employment and which explains what the Government have been able to achieve and what that has meant. It identifies a number of the problems that the small business man faces.
    Mr. Trippier: On a technicality, it is important that I make it clear that the leaflet was prepared not by my Department but by Conservative Central Office.
    Mr. King: I am grateful for that correction. I should have looked at the small print at the bottom. The leaflet informs us of the problems that the small business man has faced which the Government have tackled successfully. Taxation has been one way of tackling those problems. Taxation changes mean that those starting small businesses will be adequately rewarded for the risk if they are successful. Of course, many are not, but a large number are. That is our fundamental belief. If the opportunity presents itself to get into a high income bracket and to retain much of one's income, it is worth aiming for and achieving. But that is less likely to happen if the Government take 98 per cent. of one's income. We have created the desire to take a chance to accumulate wealth for small business men, their families and employees.
    Obviously, we need to reduce the burden of regulations facing the small business man. The Government have been keen to address their mind to that. They have ensured that planning authorities have been urged to help small businesses. Simpler and more flexible building regulations have come into force in England and Wales. Employment protection legislation affecting small businesses has been eased. A small business expands and takes on people. It is important to be able to release people from employment at relatively short notice and at little cost. If a small business is shackled to making substantial redundancy payments, development is hindered. Small businesses go up and down, up and down in their development cycle. They need to shed labour, take on labour, shed labour, and so on, and there is nothing wrong in that. Of course, it is unfortunate that many people are in the difficult position of being in work one day, and out the next, but they should be secure in the knowledge that other small businesses are taking on labour.
    I am pleased to note that the Government have taken steps to establish an entrepreneurial outlook in our education system. We must step up our activities. A number of years ago, I talked to a class of about 30 16-year-olds on the subject of starting up one's own business. I asked, "What is the one thing that one needs

    507
    to start a small business?" All the students, save one, said, "You need money." To a certain degree, one does need money. But one person said, "You need an idea." We need to stimulate that sort of outlook. We need to broaden people's horizons and make them aware that there are limitless opportunities in the education system and that, once people have completed their education, they can go out in the world and take up the challenges and opportunities of creating their own businesses. Only if people have that attitude—in far too many places our education system is not engendering it—can we hope to create the entrepreneurial society and jobs that we desperately need.
    Mr. Graham Bright: I am pleased that my hon. Friend has come to this point. Does he agree that the most important requirement if a person is to run a successful small business is that he should have the training to do so? This usually means a broad-based education. The one thing that a small business man has to do and large business man does not is to be an expert in every activity. Does my hon. Friend agree that that is probably the most important thing needed if small businesses are to succeed? Anyone can start a business, but it is a different matter to make it succeed.
    Mr. King: I agree with my hon. Friend the Member for Luton, South (Mr. Bright) that it is essential that our education system furnishes aspiring entrepreneurs with the basic qualifications to make decisions and understand the workings of the industrial and manufacturing business sectors.
    Nothing concentrates the mind like the commitment that one must put into an enterprise. No matter how much education people receive, it is sometimes difficult for some to understand the relevance of a cash flow chart and production manufacturing methods. Such knowledge comes from knife and fork experience. It is not easy to educate young people to understand these things, and much more can be done. I am aware that, in many schools, business studies takes on the form of creating a business within the school environment. Such schools exist in Birmingham, and I am sure that there are more elsewhere in the country. I commend those schools, but we must step up our efforts to extend that practice.
    Although some youngsters may not readily appear to be the sort of material capable of running their own businesses, those who have difficulty mastering the three Rs, they should not be written off, because nothing succeeds like experience. Although when some youngsters leave school they may not be ready to start their own business, within a few years, having undertaken a YTS and the opportunities of training, they may eventually move on to start up their own business. They will remember that, at school, they were taught to have broader horizons than the present narrower ones that pupils all too often receive.
    After a meeting I had had in a youth club in my constituency the youth officer asked me to meet some of my constituents. I went into the side room of the club and met eight youngsters. I introduced myself and asked them how old they were. They were 16 and were about to leave school. I asked how many of them had got jobs. One of the youngsters put up his hand and said that he had an apprenticeship. I said that I could not believe that the rest of them had not got jobs and the others replied, "We are
    508
    on YTS, you know, slave labour." I am sure that most of us remember that when we left school many of us took up jobs at slave labour rates. I remember taking up an apprenticeship in the motor industry and the pay was absurd. Indeed, before I started previous apprentices had paid the company for the privelege of receiving training.
    I asked the youngsters who were to start on the YTS what training they were to receive. One said that he was to be trained as a brickie and another said that he was to be trained as a plumber. I said that they should consider the training that they will receive not as slave labour or as a dead-end job. I said that they should try to become the best brickie or the best plumber in the area. I told them that they should keep their eyes open and their ears to the ground and that once they had trained themselves to become the best they should consider starting up on their own as a self-employed brickie or plumber. Indeed bricklayers are much in demand. I told them that they should aim higher instead of believing that after YTS they were washed up and finished. That is not the ease. The YTS furnishes people with ability and enables them to go out into the market place to use those skills working for someone or perhaps working for themselves.
    The efforts that the Government have made to make young people more aware of the challenges of small business and widening their horizons at school is essential if we are to continue to create the number of new businesses that are currently being established.
    Earlier I mentioned that I, too, was a small business man. I remember, way back in October 1974, starting a business manufacturing alloy road wheels. I had had some experience because, prior to that I had been selling the same type of product for another company. I realised that there was a gap in the market place. That is the key to success, one must have an idea on where one's product will go. I had identified a gap in the market place and together with two other colleagues I started up a small business. If one has an idea starting up in business is not difficult. I had the necessary capital from a house that I could sell—I had bought it on anticipation of getting married, but I had not done so—and my two colleagues already ran a small business and had the necessary investment stake to put into the business.
    The problems occur for small businesses perhaps 12 months or two years later. By that time the business has established its product in the market place. The small business man's hunch has been correct, but the demand for the product is so great that he is facing an increasing order book, but a lack of capacity to meet those orders. Suppliers are rather reluctant to continue to extend credit because they do not want to suddenly find themselves with an insolvent company and to lose their money.
    Our company experienced similar difficulties, but we got round it by introducing new money into the business. That money came from my family and from the existing business run by my colleagues. We got over that obstacle, but many people fall at that first hurdle when developing their business from the knife and fork stage into something more sophisticated.
    In those days, 1974–76, it was difficult to find new premises for businesses to develop. We were based in Warwick and there was nowhere between the areas of Coventry, Birmingham, Walsall and Wolverhampton in which to develop. That seems incredible now. The only space that we could find was on the second and third floors of a derelict industrial unit. Indeed, that is one of the

    509
    problems faced in many inner-city areas. Because of the constraints on land space many factories have been built on the vertical rather than on the flat. It is no good passing products up and down a factory using a lift because it is inadequate and causes bottle necks in production. Factories need to spread out, but many of the factories built in the pre-war and immediate post-war period were built on the vertical. However, such buildings soon lay derelict, ready to be knocked down while the manufacturing industries moved away to one-storey buildings.
    I did not want to be located on the second and third floors of a factory block in the middle of Birmingham so we moved to Telford new town. There was an adequate supply of factory premises on one level. One of the other advantages of moving to that area was that we were able to introduce more capital into the business.
    I mentioned previously that, to start the business, I had sold my house and as a result I had been living with my parents. When we moved the firm to Telford I had nowhere to live and I certainly could not commute from Birmingham. However, in Telford there was plenty of good rented accommodation and my accommodation was very close to my factory. As a small businessman I found myself working all hours. It was not unusual to load up a lorry coming in from Holland at midnight to enable that lorry to get down to the docks first thing in the morning for shipment across to Europe. We were able to undertake such work because we lived virtually next door to the factory. Certainly, if the factory had been located in the centre of Birmingham or London it would have been extremely socially inconvenient to commute for 40 miles to carry out such loading, especially at about midnight. However, Telford offered marvellous opportunities for the business man located close to his factory. It offered a short commuting distance between one's place of work and rest.
    We should build upon the opportunities that are available in such places as Telford. When one looks around one can readily identify the problems in the southeast. There are constraints upon development because of land space and property values are high. A modest detached house in the south-east may be worth £100,000—in the centre of London it may be worth a good deal more. That modest detached house, perhaps bought seven years ago, has probably made a capital gain of £50,000.
    There are wonderful opportunities for the entrepreneur in the south-east to up sticks and move to the midlands, the north-east or the north-west. He can go there clutching £50,000 to put into a small business. Of course he must have somewhere to live, but the property that cost him £100,000 in the south-east would cost him only £45,000 in my constituency. If we offered decent rented accommodation to the entrepreneur, he could go to the midlands with a substantial sum to introduce into his business. If he has a friendly bank and a partner in a similar position to himself, there is no reason why he should not be able to put £100,000 into the business plus another £100,000 by way of an overdraft. Such pound-for-pound arrangements are not unusual.
    It is a good idea for entrepreneurs in the south-east to give up the congestion and overcrowding, to sell up and go to the midlands—to Birmingham in particular where their capital appreciation would go a long way to realising their dreams of having a business. Life in Birmingham is pretty good. We might criticise the Labour authority there,
    510
    but it is defined as Right-wing and recognises business opportunities, although some of its high rating policies make one wonder how important they consider businesses.
    The countryside in the area is wonderful. The city is open with leafy-laned housing estates and a symphony orchestra. Birmingham is not that big that it is impossible to get to know us well. We have an opportunity to attract the entrepreneur who is anxious to start his own business. The entrepreneur from the south-east can widen his horizons by moving north.
    Some small business development estates could do with a major refit. There is no reason why industrial units should not have living accommodation built in. Why do starter factories not have living accommodation so that a family can live alongside the business? That happens in the garage industry, in pubs and the retail trade. Why should it not occur in the manufacturing sector? Why, historically, must people live up to 40 miles from their place of work? If we brought together work and living we could realise far more the resources and abilities of the young would-be entrepreneur. I am sure that we can do more for the small business man and I am confident that the next Conservative Government will build on all that has been achieved.
    Nursery factory units with living accommodation could be one way forward, as could professional on-site assistance. In privately developed manufacturing estates it would be a good idea to house an on-site accountant and secretarial facilities. Initial assistance with typed letters, simple accounting and advice would be welcome to those starting up in business.
    The retail sector is important. We have enterprise zones throughout the country. After a shaky start some are proving outstandingly successful. The Telford enterprise zone is successful and the Dudley enterprise zone is coming on well, albeit on a retail platform which was not originally envisaged. Vast numbers of jobs and opportunities are being provided.
    Why cannot we establish enterprise shopping areas in the cities? Most cities have run down areas which could he turned into enterprise shopping areas where small businesses can thrive.
    Mr. Jack Dormand: The hon. Gentleman has made some sensible suggestions, but who is to provide the money? The Minister is a devotee of private enterprise. That is the Conservative's philosophy, but it is also the kind of policy for which the Labour party argues. I should have thought that the system itself, according to the lion. Gentleman's philosophy, would provide the opportunity and the money.
    Mr. King: Building living accommodation into nursery units is a matter for private developers. Perhaps such a scheme has not occurred to them, or perhaps there is some reason why it cannot be done. No Government diktat is needed. The Government do not need to say, "Thou shalt build living accommodation onto industrial units over 2,000 sq ft." Private developers, of which there are many in the west midlands, should examine ways of providing on-site assistance. We already have a type of enterprise zone and I see no difficulty, perhaps through inner city partnerships, about developing enterprise shopping areas.
    The hon. Member for Easington (Mr. Dormand) asked where the money would come from. There is a move towards hypermarket developments outside city centres.

    511
    Authorities could consent to planning permission on the understanding that the hypermarkets pay a levy to subsidise a small enterprise shopping area in the city centre. The hypermarket would help subsidise the small business which in some cases has to close because it cannot compete with the hypermarket. We have to get the balance right and adjusting the fiscal problems would be a step in the right direction. Our Asian and West Indian friends would be delighted to open more small businesses in cities but they are deferred by high rates. Government reforms in relation to the community charge and the national rating charge will encourage small businesses.
    I am worried about our insolvency rules, particularly as they affect directors' responsibility. In my experience there are times when a small embryonic business is technically insolvent. A business can come unstuck if an accountant says that the business is insolvent at one particular time. He will say, "You took a risk, so you're for the high jump." That does not encourage the entrepreneur to take the risks necessary to put his tiny embryonic enterprise on to the bottom league of business. We should extend more benevolence to directors who fall foul of the insolvency laws. They should not be strung up as an example.
    Much comment is made about the late payment of bills. I fear legislation which will make all businesses pay bills within a certain time. Many a small business has to decide which bills to pay. The business man might want to keep his raw materials coming in so he will pay his supplier but not pay the carton supplier. A time limit will create cash flow problems for the small business as it seeks to break out of the straightjacket of bills and costs.
    Product liability also causes concern. The technical resources for innovation so that a business can break into the market place are limited. Some costs of product liability, particlarly when one is exporting to overseas countries such as the United States, are substantial. I am not sure how one can get round the problems of being refused an insurance policy to cover one's product liability. That is one of the big hurdles that a small business faces. In my experience it was difficult to get hold of the sort of liability cover that we wanted when making wheels and seats. We might have given up if the market in the United States had not been such a good one to go for.
    There is still the difficulty of the gap between those with ideas and those with money. We need to encourage further steps to bring the two sides together. I am tempted to suggest the idea of a small firms broker, who would have the job of introducing those with money to those with businesses. Perhaps the banks should play a greater role by taking initiatives and saying publicly that they are in the business of creating small businesses and want to go hell for leather to that end. They must have special departments for that, and people to make the introductions on a friendly basis, rather than merely doling out money for cash-flow forecasts, and the nice talk of promoters, in some cases only to find that there are problems later on.
    I also want to pay tribute to the work of Peat Marwick McLintock in the Midland areas, which has come out with a "Businessman's Guide to Grants and Incentives in the Midlands". It is an excellent booklet, which illustrates the
    512
    plethora of opportunities for assistance and grants that is available for small businesses in the midlands. That, too, goes a long way to helping small businesses develop.
    All too often we hear of those who are not able to offer the security that is necessary for those who wish to lend money. A good idea can fall as a result of not obtaining the necessary funding. I wonder whether a special scheme could be introduced in inner city partnership areas under which the Government would allocate a small amount of risk capital for new business start-ups. That could work within the existing ICP scheme; perhaps a small firms board could be created within that scheme for the inner city areas. Such help would probably only be available after the first year of a new business's operations. Initially, people would be on their own, starting, say, a welding or accident repair business. I mention the inner city because many of our West Indian friends find it particularly hard to start a business. Perhaps, ultimately, those people hold the key to our inner city rejuvenation. I do not like the thought of zeroing in on a particular minority to give the people who comprise it special help that is not available to others—it should be available to everyone. However, in our inner city areas there are still opportunities for West Indians and Asians to create their own business—a far more difficult proposition than it is for the indigenous population.
    The Government have a record of which they can be proud. One looks in vain for the ideas of other parties. One finds them wanting, if they are mentioned at all. We have made several significant steps over the past few years. I am sure that we shall make many more over the next five years, and progress should he maintained. Within the small business sector lies the hope and salvation of many of our people and great cities—small businesses with the skills that are necessary to drive us forward towards the latter part of the century into a post-industrial society, but nevetheless, a business-oriented society. I am convinced that the next Conservative Government will rise to the challenge.
    11.34 am
    Mr. Stephen Ross: I have listened for nearly an hour to the hon. Member for Birmingham, Northfield (Mr. King) and have enjoyed at least some parts of his speech. On occasion, he was somewhat too party political and euphoric, because nobody in his right mind wants to discourage small businesses, which are the wealth of the nation and from which big businesses grow. My party and, I am sure, the Labour party want to encourage small businesses.
    The hon. Member for Northfield had a tilt at the Labour party in the early part of his speech, saying that when the Labour party was in office it took no notice of small businesses. That is not true. Mr. Bob Cryer was a good Minister for small businesses. At the time of the Lib-Lab pact we persuaded the Prime Minister to make Lord Lever the Minister responsible in the Cabinet for small businesses. So efforts were made. It was not easy, because the country had been in a financial crisis.
    I had a rant on this subject, as the Minister well knows, only three or four weeks ago. I do not want to bore him or the House by repeating myself. I have been involved with small businesses during the past 10 to 12 years, and I have tried to build up a few of them. I own a china shop and my wife has a bookshop. I own premises that I lease out to a man who makes furniture and to a person who

    513
    makes double glazing. I have a bakery which my son helps to run; it has been bankrupt twice, but it is now making money. I also have tenants involved with hairdressing and children's clothes. I also try to sell Isle of Wight products, which is the biggest mistake that I ever made. I try to sell Isle of Wight wine and biscuits, but nobody seems to want to buy them.
    I speak as one who has borrowed freely from banks over the years. High interest rates still prevail. I know that they have come down, but far too often they still cripple small businesses. Inflation is levelling off at 4 per cent. and may fall slightly, but interest rates are still extremely high. Anything that we can do to get interest rates down will help small businesses more than anything else.
    I shall have a go at the banks. I am grateful to them for helping me, but they seem to clap on all sorts of charges. I recently found another one on my bank statement a security charge for holding deeds of £9 or £10. That idea comes from the Americans. The banks charge arrangement fees and about 50p every time that we cash a cheque. Given that the National Westminster Bank has just made profits of more than £1 billion, the banks could be more helpful than they are.
    I want to talk about the role of the Development Commission, and I know that the Minister will share my views on this. I pay tribute to the Minister, who has done a good job in the time that he has been in charge of small businesses. He has achieved a great deal. At one time, the Development Commission was under threat from the Government, but fortunately it survived and has an enormous role to play in rural areas such as my constituency. It has done much for us int the way of building nursery units, and it has recently spent just under £1 million on converting a boat yard into units in Cowes, which I hope will be let. However, the problem is that the commission's wings may well he clipped in future, and if we must look only to the private sector for the provision of such facilities, that simply cannot be done in the Isle of Wight, the west of England or in many other parts of the country. The private sector will not receive the return that it requires from the lettings—about £5 per foot in a constituency such as mine. The maximum will be about £2·50, which is not a feasible proposition for the private sector.
    When seeking outside developers to build factory units, possibly for a small high-tech park, which is what my development board has in mind, the only way to do that is to allow them to build 100,000 sq ft of retail warehousing. That is crippling to the in-town retailers, but outside contractors require that incentive. There has been some glee on the Conservative Benches about the fact that we have just lost control of Medina borough council, but that was due not so much to a swing to the Conservative party but to the problems of planning and the question whether the island should have another Tesco superstore, which will go to Newport now. Consequently, we retained all the seats in Newport and lost them all in Ryde. Ryde thinks that it will lose out because the superstore is going to Newport. Now we are trying to build some factory units just outside Ryde, and the only way to do that is by putting up another 100,000 sq ft building of the B & Q superstore type. That will cripple the town centres. Planning decisions should not be taken under pressure of that kind.
    The Development Commission is the body to which we must continue to look to supply the factory units that we
    514
    need and that are rapidly taken up. They are subsidised, and I believe that that subsidy must be met by central funds.
    I criticise the Development Commission to some extent because it is a little bureaucratic, through the Council for Small Industries in Rural Areas, its subsidiary. It is occasionally probably too slow in reaching decisions. Sometimes it is very slow in bringing in accountancy advice. Apart from that, I have nothing but praise for the commission and its chairman. We owe it a great deal in my part of the world, as is the case elsewhere, I am sure.
    The local authority can also play a vital role. I am a great believer in local government. It has had one hell of a time over the past few years with central Government withdrawing funds. Nevertheless, the local authority is always the body to which the smaller or bigger firm comes when it needs help. The hon. Member for Northfield talked about tourism. I could not agree with him more. About 8 million people visit the Isle of Wight every year, which is far more than the number of people who visit the Channel Islands. It is a bit below Devon and Blackpool. If the local authority is interested in encouraging tourism, it can do so by providing small amounts of funds and helping in other ways such as the provision of facilities. That is desperately needed because tourism has had a rough ride since 1979.
    This year we had the special Olympics in the Isle of Wight. A great deal of work was done by the local authority. Sponsorship was given and some of the people who visited us from all parts of Europe and England were privately accommodated on the island. Nevertheless, the county council did most of the spadework. A little later this year we shall have a festival of the arts. I am staggered that it has come off. When it was suggested by a PR consultant who works in the House, I poured cold water on the idea. I thought that we would lose a lot of money. We lost money on a song contest. I did not think that, the festival would get off the ground. In fact, it has, and I am pleased to say that the Minister for the Arts, if he is still in office, will visit us. Sadler's Wells ballet, symphony orchestras, and so on are coming. It is amazing. The sponsorship has also surprised me. It has taken us a year and a half to build up the festival, but it will last for three to four weeks. We are using the grounds of Osborne house for the ballet and other events.
    That would not have started if the present leader of the county council had not said, "We'll put £20,000 into the kitty so that Mr. Kevin West can be appointed to organise the festival." Mr. West has been extremely successful as the organiser, but basically the process started with the local authority. That is why I come back to the role that the local authority has and must continue to play. It is well known that the Minister is a great supporter of enterprise agencies. We established our enterprise agency through the local authority, although most of the money came from other sources. Through the local authority we have moved up a step to the development board, which is chaired by our former lord lieutenant.
    I should like to make one plea to the Minister. We have kept our enterprise agency going because, through his efforts, he has persuaded the Chancellor of the Exchequer to encourage enterprise agencies by putting aside money that can be given to them if other funding comes from local sources. It doubled the amount. That was a good idea. It was floated for some time, and it has now come to fruition.

    515
    I should like to put this point to the Minister's boss, the Secretary of State for Employment, who was on the island recently. He should see whether the scheme can be made more flexible. We should like to merge our enterprise agency with our development board, but we cannot do it because we need the extra cash. That is why we shall hang on. I accept that there are some development boards that the Government suspect are not run on the lines that they would like. It is only right that the structure should be investigated, but if it comes up trumps I ask the Secretary of State to be a little more flexible. It would help us, and I believe that it would help others.
    The development board has managed to bring together all political views. It has managed to get the three authorities on the island to agree on how we should proceed. It is doing very good work. I pay tribute to Sir John Nicholson, who has moved into areas in which I could not have operated. He does not mess about going through junior bank managers. He rings up the chairman himself and things begin to move. That is his ability.
    The boards and enterprise agencies are there to help occassionally with finance. The hon. Member for Northfield talked about some sort of Government funding, perhaps at subsidised rates of interest. We on the Liberal Benches have promoted that idea for a long time. It will be in our manifesto, and is highly desirable. When I was leader of the county council, we had a budget of about £150,000. We were able to lend to small firms that had a bit of crisis, perhaps over a machine, and could not get the money from the bank. They were stretched too far. Small firms might have had a problem with marketing, so they received help with publicity. They were helped with all sorts of things, such as stands at shows on the mainland, and even in Germany and other countries. Those are areas where a little money can help enormously. It is not always forthcoming from banks—not by a long shot. I used to always ring up the bank managers, to find out why a firm was not being helped. We always had it double checked by the treasurer. We used to proceed through the enterprise agency. Such matters are now dealt with directly by the development board. I cannot remember one instance when we fell down. On the whole, that little stimulus helped enormously.
    The role of accountants is vital. As the hon. Member for Northfield said, it is in the second or third year that one gets into difficulty. He mentioned Peat Marwick McLintock. Accountants should do a little more, if possible—even the local firms—to help small businesses, perhaps by not charging too big a fee to start with. They should keep a watchful eye on small businesses because things tend to go over the top. They get excited, orders come in, they can overstretch themselves and then they are in difficulty. The accountants can keep them on the strait and narrow. Such things can happen—for example, in the bakery to which I referred.
    I should like to fly my kite, in that I am a great believer in the elected mayoral system. Birmingham should have a chief who is directly elected and who can make decisions. Incidentally, it would take one hell of a load off the backs of Members of Parliament. We would not be involved in matters that should rightly be subject to local decision. We would be able to do the work that we wanted to get on with. We are constantly being called to write to the local authorities or make pleas on behalf of constituents on
    516
    matters that should not be our concern. I believe that the leaders should be well paid and should have a team—of professional advisers. The Government would then have to listen when the mayor of Birmingham arrived. I should like the Lord Mayor of London to be a real Lord Mayor. I should have liked to be elected the mayor of the Isle of Wight. Then I could have done things that I have not been able to do in my 13 years in the House. But I have not managed to get that into our manifesto. I nearly won that battle, but not quite.
    I agree with what the hon. Member for Northfield said about the problems of late payment. That matter has been discussed much in this Parliament. Surely the problem is that the big firms do not pay the small firms promptly. That happens on too many occasions, and sub-contractors suffer enormously when their bills are paid late. It could work the other way, and the hon. Gentleman is right to point that out.
    We would like national insurance contributions to be cut by about 25 per cent. in assisted areas and unemployment black spots. That would help small businesses.
    I do not agree with assisted areas, and I believe that the Secretary of State does not either. We should help small firms, wherever they are. If someone has a good idea, I say, for goodness sake, help to get that bloke off the ground. This country cannot afford to lose such people. People still have bright, fantastic ideas. Japanese products seem to be based on ideas that started here, although I agree that the Japanese are now giving some back to us. People come to my office with all sorts of amazing ideas recently even a cat trap. I must say that I did not see a future for that!
    Those people should be helped, not necessarily just in assisted areas. I have bleated about that many times. Unemployment is at about 17 per cent. in the Isle of Wight and is more than that in winter. One feels bitter when one loses a firm to an assisted area. We have lost one or two, notably Desmond Norman. I feel strongly about all these matters.
    Many niggling factors do not help small firms. I have great battles with our county surveyor because he tends to go around putting double yellow lines everywhere, often unnecessarily. It can hurt a small business, if, when it has just got going, suddenly yellow lines are painted along its road. People cannot park outside, so they tend to go elsewhere. Road repairs and unnecessary closures are another problem. We have had roads closed for weeks on end, and that can be damaging for a business's cash flow. Valuation officers should deal more quickly with rating reviews. Often they take a year and will not give an inch, even if a road has been closed for some weeks, or a redevelopment is going on opposite and affecting business.
    There is too much fussiness about bill boards. Small firms up hack alleyways or in secondary trading positions, and suffering as a result, want to make themselves known. They put up decently decorated boards and the surveyors' department comes along and takes them away. It tells greengrocers that they are coming out on the pavement too much and should move back. Two greengrocers opened on the Broadway in Totland bay and they were served with such a notice. However, anyone who would open a greengrocers there in the middle of winter deserves a medal, because there is virtually nobody to serve. The department is crackers to behave like that. Such niggling

    517
    factors tend to come from authorities run by people who have never had their own business and know nothing of such problems as a weekly letter from the bank manager.
    One major factor has risen recently about which I had no knowledge, although perhaps I should have realised what was going on. It results from the sort of regulations that we often pass in the House without debate. We recently passed one concerning the carrying of chemicals on roads and ferries, and quite rightly because many dangerous chemicals are being carried in this way but have not been declared.
    However, many chemicals are desperately needed by firms in my constituency such as Plessey Truecast—a firm that the hon. Member for Northfield will know—which makes castings for the motor trade and racing cars, and paint makers, all of which are finding that the chemicals cannot come on the ferries because all the ferries take both passengers and lorries; there are no goods-only ferries. There is some dispensation when there are only 25 passengers on board, but ferries will almost always carry more than 25 passengers.
    All this will cause problems and add to the firms' overheads. I have met with the Minister with responsibility for shipping, who happens to have a house on the island and so is aware of the problem, which is not an easy one to overcome. The cost of the Solent crossing is always a complaint, because it can add hundreds of pounds to a firm's costs, and there will now be the additional problems over these essential chemicals. Even the water authority is having trouble. I am not sure how we shall get over this difficult problem.
    The House never debated the regulations, but perhaps it should have done and insisted on some dispensation for a longer period. I know that, as a result of the Zeebrugge
    518
    disaster, the problem of carrying chemicals is in everybody's mind and it is right that something should be done about it. However, the result has been another problem for small businesses in my constituency, some of which will move if the problem cannot be solved. Having gone through the traumas with Westland, Plessey and the recent Williams bid for Temperature, which is a company employing nearly 300 people in my constituency and having survived all those, we are now coming up against the problem of the chemicals. It is a good job that I am leaving the House, because I do not think that I could take very much more of this.
    Finally, we want greater loyalty about buying British goods. I wish to goodness that people were a hit more loyal to their country. When I opened my business selling china, I determined that I would sell only British and Irish porcelain and glass, so I sell Wedgwood, Coalport, Waterford glass and so on. A salesman came in the other day and asked us to purchase some Czechoslovak glass and my manageress said, "Oh no, we sell only British Glass." He looked at some Caithness glass and said, "Well, that was made in France anyway." I checked with Lord MacKay, who was chairman of Caithness glass at the time, and asked whether the company got any glass from France. He said, "Of course we do. It is much cheaper. Then we inscribe it." One cannot win. We should try to encourage greater loyalty to buying British and buying locally. Perhaps we could persuade the public to do a bit more of that.
    I am grateful to the House for putting up with me and for listening to this rant, and I am grateful to you, Mr. Speaker, for allowing me to make my last speech to the House.

    Royal Assent
    Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

    1. Finance Act 1987.

    2. Appropriation Act 1987.

    3. Debtors (Scotland) Act 1987.

    4. Billiards (Abolition of Restrictions) Act 1987.

    5. Chevening Estate Act 1987.

    6. Pilotage Act 1987.

    7. Banking Act 1987.

    8. Register of Sasines Act 1987.

    9. Immigration (Carriers' Liability) Act 1987.

    10. Crown Proceedings (Armed Forces) Act 1987.

    11. Housing (Scotland) Act 1987.

    12. Fire Safety and Safety of Places of Sport Act 1987.

    13. Deer Act 1987.

    14. Agricultural Training Board Act 1987.

    15. Northern Ireland (Emergency Provisions) Act 1987.

    16. Landlord and Tenant Act 1987.

    17. Crossbows Act 1987.

    18. AIDS (Control) Act 1987.

    19. Motor Cycle Noise Act 1987.

    20. Protection of Animals (Penalties) Act 1987.

    21. Prescription (Scotland) Act 1987.

    22. Access to Personal Files Act 1987.

    23. Criminal Justice Act 1987.

    24. Parliamentary and Health Service Commissioners Act 1987.

    25. Registered Establishments (Scotland) Act 1987.

    26. Criminal Justice (Scotland) Act 1987.

    27. Family Law Reform Act 1987.

    28. Consumer Protection Act 1987.

    29. Local Government Act 1987.

    30. Parliamentary and other Pensions Act 1987.

    31. Diplomatic and Consular Premises Act 1987.

    32. Abolition of Domestic Rates Etc. (Scotland) Act 1987.

    33. Irish Sailors and Soldiers Land Trust Act 1987.

    34. Territorial Sea Act 1987.

    35. Pontypridd Markets Fairs and Town Hall Act 1987.

    36. British Railways (Stansted) Act 1987.

    37. Aberystwyth Harbour Act 1987.

    38. City of London (Various Powers) Act 1987.

    39. Brighton Marine Palace and Pier (Finance, &c.) Act 1987.

    40. London Underground (Goodge Street) Act 1987.

    41. John Ernest Rolfe and Florence Iveen Rolfe (Marriage Enabling) Act 1987.

    42. George Donald Evans and Deborah Jane Evans (Marriage Enabling) Act 1987.

    Small Businesses
    Question again proposed, That this House do now adjourn.
    11.56 am
    Mr. Graham Bright: I congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. King) on initiating this debate, which takes place in remarkable circumstances. A decade or so ago, the debate would have been about the decline of small businesses and the measures needed to reverse that decline. The situation today is very different. Those measures have already been taken and the debate takes place against a background of sustained growth in the small firms sector. There is no doubt about the scale and importance of that process. However one measures the figures, they are significantly better than they were eight or 10 years ago.
    The average annual net increase in the number of firms registered for VAT since 1979 has been more than 27,000 and the number of self-employed people in both manufacturing and service industries has grown by more than 500,000. From those figures, produced by the Small Business Research Trust, it has been calculated that between 800,000 and 11 million new jobs have been created by small firms since 1980. That is an incredible figure and it entirely justifies the argument advanced by many of us here today, especially my hon. Friend the Member for Surrey, North-West (Mr. Grylls), that the way to create jobs is through small businesses.
    My hon. Friend the Member for Northfield spoke at some length about his business experience and the way in which he started his firm. I have always maintained that one advantage that small firms offer is flexibility. They also offer opportunities for innovation, and, because they are small and flexible, they can deliver on time. That was brought home to me when I began my business in 1970—at the beginning of a Conservative Government, unlike my hon. Friend the Member for Northfield-having been made redundant from a large group of companies. The firm in question was part of the group and was, in effect, thrown out with me. I rapidly became aware that whereas in the past I had had to prepare papers and put arguments for any decision, which then had to go to the main board, a process which took days, weeks or even months, on my first day in command I could simply sit down at my desk and prepare a plan and a budget. As I ate my sandwich at lunch time, it occurred to me that that was it in the afternoon I could simply get on with it and put my plans into action. That really illustrates the flexibility of a small company.
    Of course, small companies can innovate very rapidly. My company is still very small, although it is much larger than it was, and we are able to have an idea in the morning and put it into action in the afternoon. Large firms now recognise that. Many large firms buy in goods from small firms and I can speak from experience. In my constituency Vauxhall, which has a massive record of obtaining materials and supplies from this country, is looking at small companies. It recognises that it will get delivery in time and that the quality will be constant. That is good.
    The figures I have quoted are impressive. They are the result of the structural changes that the economy has been undergoing and the exciting range of measures that the Government have introduced. Criticism of the Government's record from the Opposition is rather ironic

    521
    in the light of their record, particularly—I mention this to the hon. Member for Isle of Wight (Mr. Ross) who is alone on the Opposition Benches—the unholy alliance that took place in the 1970s. It was their policies on personal and capital taxation and on borrowing and lending that had to be reversed to bring the crisis for small firms to an end.
    It is precisely because income tax has been reduced by 6p in the pound and because the thresholds have risen above the rate of inflation that the small business man has found it possible to prosper. That is what small businesses are all about. If they do not prosper, obviously they go out of business and it is not only the business man who loses his job but many others as well. It is so important that we provide the wherewithal for small firms to prosper.
    Because the penal effects of capital transfer tax and capital gains tax have been removed, family businesses have been able to survive, and that is important. I have always argued that. People believe that there is something wrong with a family business. A family business is not just a business. It employs people and if the family, because of taxation, has to sell the company it is not just the family itself that loses out, but many other people as well.
    Opposition Members tell us that they will reverse the policies on taxation that we have introduced if they win the general election. However, they also tell us—we have heard it this morning—that they are the friends of small businesses. One of the other may be true but they cannot both be true. The positive measures we have introduced over the past eight years such as the loan guarantee scheme, the business start-up scheme, the expansion scheme, venture capital scheme, enterprise allowance scheme and many more have had to overcome resistance both inside and outside the House. It is to the credit of my hon. Friend the Minister that he has had the courage to persevere and keep those schemes under way. The story is the same for enterprise loans, development corporations, freeports and so on. The defenders of restrictive practices, obsessive planning controls and rigid employment legislation are the enemies of small businesses. There is no doubt about that. That is why one often turns to the United States.
    My hon. Friend the Member for Northfield spoke about what has happened in America and how small businesses have prospered because there is a different climate there. I always turn to America to see what it does. It has discovered some interesting facts. The American Government ensure that at least 30 per cent. of their spend goes to small companies. On research and development they found that as they went down the scale from enormous corporations to the medium-sized companies they were getting from the medium-sized companies about four times as many innovations per dollar spent. It is even more remarkable that the small companies, where there are a dozen or so chaps working on research, very often in high technology, were achieving 24 times as many innovations per dollar than the large corporations. That is something that not only the Government but big businesses are learning—that it is important and financialy beneficial to involve small companies.
    I know that my constituents normally think of General Motors as being some enormous operation that covers the whole of America. That is not the case. The miracle of new jobs in America has resulted from small businesses, just as it is beginning to occur here. Sixty-six per cent. of all new jobs in America have come from companies employing
    522
    fewer than 20 people and, importantly, companies that are less than five years old. That points the way that we are beginning to go here.
    It is the same in other places such as Canada, Germany and Japan. It is generally thought that one has to be a giant corporation such as Mitsubishi or Toyota to be successful in Japan. Although it may be a useless figure, it is interesting that every sixth Japanese worker is the president of his own company. That shows that Japan is not full of massive corporations. It has many small companies.
    I will use the example of car manufacturing, as I come from Luton. The technique of delivery just in time is being developed in Japan because the large companies there do not make motor cars, they assemble them. Small businesses make the brake pipes, grommets and other bits and pieces.
    Small firms are more flexible as they do not have the sort of labour problems that large firms have. They are able to deliver goods to the end of the production line. Six or seven companies may all make the same component and deliver them in small vans to the end of the line. Imagine the chaos that would be caused in this country if I turned up in my van and unloaded components at a major factory. The whole place would close down. However, that is how that part of the Japanese economy works, and we have to look at that.
    One of the most significant steps we took was the capital allowance for the building of small units. It was first 2,500 sq. ft. and later 1,250 sq. ft. As my hon. Friend the Member for Northfield said, the one thing he could not find when he started his business was a place to start. It was impossible. In the 1970s, people used railway arches or battered, dirty old places that no one else wanted. Small businesses could find no where to start. However, in the country now, and certainly in my constituency, there are small units for nurseries or other businesses to start up in. The small units range from upwards of 400 sq. ft. This has enabled small businesses to become respectable. If a business man was working in a rat-infested place, he was not respectable. However, if he has a nice new developed place, he is respectable. We had to change the attitude that someone working for himself was not second rate. I am sorry to say that that attitude existed, but we have managed to put it on a new plain. The opportunity for small businessesmen to have new small units has inspired businesses.
    Mr. Rowe: I suggest to my hon. Friend that one way of enhancing the respectability of the House might be to ensure that hon. Members have rather better premises from which to work.
    Mr. Bright: I could not agree more with my hon. Friend. Although my small business has very meagre offices, they are like a palace compared with this place.
    Sir Paul Hawkins: I am glad to say that the Services Committee has produced a plan for the entire area from Derby gate to Cannon row. The contract was let on 8 May, and I hope that my successor and my hon. Friend the Member for Luton, South (M r. Bright) will soon have marvellous offices there. At least we shall be able to move more people from this building across the street and allow my hon. Friend to have a good office of his own.

    523
    My first Adjournment debate in the House dealt with the lack of facilities for Members of Parliament. I remember being told by a former Serjeant at Arms—the present one would never say such a thing—that I could not have a filing cabinet until I had been here for a year. After my Adjournment debate, a filing cabinet was issued to me, but it was placed in the Cloisters, which was then a gentlemen's cloakroom. I was told in no uncertain terms by the former Serjeant at Arms that my secretary could not go to the filing cabinet because it was in the gentlemen's cloakroom, even though it did not have a toilet or wash basin. My hon. Friend is much better off now.
    Mr. Bright: We are going a little off the track, but I am sure that you will allow me, Mr. Deputy Speaker, to pay tribute to my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins), who has worked hard to improve conditions in the House. I accept that they are much better than they were, but there is still a long way to go. Thanks to his work, we can look forward to much better facilities. It is a great pity that he will not be with us to enjoy them. If I get a new office, I shall think of my hon. Friend.
    I was talking about new facilities for small firms. The Government also introduced the small firms counselling service. As I said when I intervened in the speech of my hon. Friend the Member for Northfield, it is all very well to start a business, but what does not happen is that, overnight, a fairy waves a magic wand and someone becomes an entrepreneur. A person may have a skill or some knowledge of the product that he is making, but to be a small business man he must also be a bit of an accountant, a marketing man, an engineer or even a cleaner. He must have many trades under his belt. It is not always possible to do that, and the small firms counselling service has done much to ensure that firms do not run into trouble. Some have criticised it as a nanny operation, but it is an essential operation to advise people who do not always know where they are going. I am a marketing person and when I went into business, my accountant had to give me a piece of paper saying, "You enter it on the left-hand side and put it out on the right-hand side." That was all I knew about book-keeping. Often people need simple advice to enable them to keep their companies going in the right direction.
    People are no longer afraid of splitting away and going on their own. I have always admired a company in my constituency called Measurement Technology, because five people who split from a major company and set up on their own—unfortunately, in a rat-infested building—now have a magnificent factory which they built themselves, and employ about 150 people. That is a tribute to them and is the type of thing that we should like to see.
    The great silicon valley in America is not dominated only by large companies. Indeed, a company tends not to get too large because, when it attains a staff of 400 or 500 people, it tends to split and the top management goes off to start its own companies. There is nothing wrong with that and we should encourage it.
    In this country, we are plugged too much into large operations. We have company cars and pension schemes and, therefore, people do not want to move. All too often, people believe that if one is to have a success mark, one must work, for example, for ICI. They do not believe that
    524
    it is any use starting up on their own in a small manufacturing company. I am glad to see that we are beginning to push that idea to one side.
    I do not wish to dwell too much on the past or on the attitudes of Opposition Members. Instead, I wish to turn to the future and to the Government's policies after the election. First, it is essential that my right hon. and hon. Friends continue their tax cutting programme. A reduction of the standard rate of income tax to 25p in the pound in the foreseeable future will assist not only the self-employed and self-traders, it will also remove the divergence with the initial rate for capital gains tax. As long as that discrepancy remains, there is always an incentive for small firms to sell out, and we do not want that to occur.
    Secondly, I hope to see a smoother progression in the rate at which small companies pay corporation tax. There is still too sharp a transition between the lower and full rates of that tax. Furthermore, as many of my hon. Friends have urged recently, it should be possible for small companies to make advance payments which can be offset against future research and development, or expansion. Funding such expenditure is still one of the key problems for small firms. I have plugged away for the introduction of graduated corporation tax for many years, as has my hon. Friend the Member for Surrey, North-West (Mr. Grylls). That should be done so that companies are not suddenly penalised. Indeed, I do not see why there should not be a tax holiday. As happens in income tax, a small company should not pay corporation tax on, for example, the first £5,000 or £10,000. That would encourage small businessmen to re-invest their money. It always upsets me that one must pay tax when trying to re-invest in one's company. Then, having paid the tax, one must go to the bank and borrow more money to put into the company. Obviously, the larger the firm the more able it is to manipulate its financial position and it does not necessarily pay that tax. Instead, the small business man is hit.
    I have said on several occasions in the House, and I shall do so again now, that the thing that makes me most cross is when a small business man who desperately wants to invest more for the future goes out and buys an enormous desk, which is no use to anyone, simply to beat the tax man, or buys a big car just before the end of the tax year. We do not want him to do that. We want him to have the same flexibility in planning for the future as a big company. We want him to re-invest his own money in that business.
    Fortunately, there is now a wider range of financial help available from the clearing banks and other institutions than ever before. I should like to pay tribute to the banks for that. However, they have not yet got it quite right and we must push them still further. I find that whenever I criticise the banks they invite me for lunch. I hope that they do so now because I shall tell them again that they must get their act together even more. We see wonderful advertisements on the television, but the reality is never the same as the golden magic that they pretend exists in the banks. However, it is the City which since 1978 has undergone the most marked transformation of attitudes to small businesses. The fact that banks advertise on television and take full-page advertisements in newspapers, which are aimed at small businesses, suggests that we are getting there.

    525
    The tragedy is that some local authorities, especially in inner-city areas, are still highly obstructive. They have tried to prevent local services from being put out to tender and have imposed extremely negative tests on potential applicants. Instead of fostering the growth of small retailers and manufacturers, they have raised rates thereby driving existing small businesses out and inhibiting the development of new ones. All the available evidence suggests that small firms, that is those employing fewer than 20 people, are the most effective agents for creating new jobs.
    A commitment to open up inner-city areas to small businesses to enable them to find and develop premises without being strangled by red tape or penalised by excessive rates is required urgently. I see no reason why, in the initial four or five years of its life, a new small company in a deprived area, such as Toxteth in Liverpool, should pay any rates. Nor is there any valid reason for confining the repair and restoration of houses in inner-city areas, particularly on some of our bigger estates which are still owned by local authorities, to local authority municipal labour forces or, indeed, to major contractors. We should be prepared to break down contracts to permit small builders, plumbers and, sometimes, even tenants to undertake the work.
    We can make most progress at local level. Small businesses are not the enemies of Labour-controlled local authorities; they are the most effective generators of new employment and the most active means of regenerating deprived areas. It is essential that premises are available to them and that the barriers to their establishment are removed.
    My right hon. and hon. Friends and I are proud of the record of the past eight years which represents an unparalleled achievement. When I first spoke in the House that was one of my major hopes and I took on the chairmanship of the Conservative small businesses committee to keep that hope alive. Now it has been turned into reality. I am determined that the advances we have made shall not be lost. They must be the springboard for further progress by small businesses. Small businesses know who their supporters are in the House, and I am convinced that they will recognise that next month and give the Government the opportunity to move forward in the years ahead.
    12.22 pm
    Sir Paul Hawkins: I thank you, Mr. Deputy Speaker, for giving me this last opportunity to speak in the House.
    First, I should like to congratulate my hon. Friend the Parliamentary Under-Secretary of State for Employment. We have all paid tribute to him, but the way in which he has managed to maintain pressure for small businesses fills me with amazement. He has terrific energy, yet does not have a bald spot on his head and has only a few grey hairs. He has created a completely different feel throughout the country for self-employed people and small businesses.
    The hon. Member for Isle of Wight (Mr. Ross) spoke tremendous good sense. We were both members of the same profession and today we shall both leave the House, for my part sadly. This subject is of the greatest importance to Norfolk and my constituency, but in a different way from that of my hon. Friend the Member for Birmingham, Northfield (Mr. King), whose experience stems from large towns. The whole of Norfolk is an area
    526
    of small scattered villages and market towns with three large places of employment at the corners of the county. Norwich would not say that it was on a corner, and I suppose Yarmouth will be annoyed if I do not mention it as an employment centre.
    Norwich, King's Lynn and Thetford are the three main areas of employment for my constituency. Thousands of people travel 30 or 40 miles to those employment centres. More and more people are becoming fed up with the long travelling times and the immense cost of travelling. They often find that their neighbours who sit at home and do not get on their bicycles or off their backsides to try to find jobs are better off than they are. People who go to seek work in one of these main centres of employment are often asked by their wives if there is any point in getting up an hour earlier and taking an hour to get home and flogging to and from Norwich, King's Lynn or Thetford when they are no better off and will need a new car before long.
    One of the great things about small businesses is that many of them are set up in small towns and villages close to where people live. We must go on pressing for that to continue. We have a large number of council houses which used to be occupied by farm workers. In the past, three, four or more workers were required per 100 acres, but nowadays only one man is required for 500 or 600 acres. The people who live in those houses want work close to home. We must go on pressing local authorities to make more use of farm buildings, even though some local authorities are beginning to do that.
    In my part of the world farm buildings are very attractive with pantiled roofs. However, they are low buildings which will take farm carts but not large implements. Those buildings and barns are falling down, but in many instances they could be converted into small premises for a three or four-man starter business. They could also be used by a craftsman who wants to work on his own or with an assistant or apprentice either making furniture or carrying on one of the many other trades found in the countryside. I hope that my hon. Friend will go on pressing local authorities to help in this way. Mach has been done and I praise that, but much still remains to be done.
    People who want to set up in farming in a small way should be brought into some of the training schemes that are available. It seems totally wrong that while every other type of business can be assisted by business schemes, the small farmer who wants to set up on his own and wants some assistance does not seem able to find any help. Advertising of all the schemes should be carried out in far simpler terms and in local papers. We need fewer and less complicated schemes. The advice service should be as readily available as is humanly possible.
    I fear that banks are not as friendly as they are made out to be or perhaps they are more strictly controlled nowadays from remote headquarters than they were in the past. I remember finding some correspondence between a local director of Barclay's bank in King's Lynn and my grandfather. My grandfather had started an auction market and some people will know that if one has a market on Tuesday one pays out the same night. In the old days people did not pay that in until Saturday. But more and more people were paying in more quickly and my grandfather did not get his money in until about 10 days later. The "Mr. Gurney" of those days wrote to my grandfather and said, "It is about time that you reduced your overdraft", which went up alarmingly at certain times

    527
    of the week. My grandfather wrote back and said, "I have entrusted you with my money, Mr. Gurney, for the past 15 to 20 years; I think you should be able to trust me for the next few years." Mr. Gurney wrote back and said, "Hawkins, you are quite right". To allow the local bank manager a little more leeway, because he knows his customers, would be a good thing. I think that my hon. Friend the Minister can press the banks to be a little more human.
    Back-up is needed not only to start a business but to continue it. The worst time that I experienced was when I returned from the war. My business had been running for nearly 100 years, but it was almost bankrupt. I should have been partner at the the beginning of the war, but my father was very ill and my uncle, who had been the other partner, died during the war. Luckily, people were very kind to me and after about two or three years business began to build up, but that was the time when one needed the help and understanding of banks and other people to be able to continue. Firms that have been in business for about three, four or five years come upon a time when their plight is very difficult and that is when they need some help.
    I wish that more people would live above their shop or close to their businesses. We find that in towns everybody deserts them and lives about 30 or 40 miles out. I have been lucky because I lived down the yard from my business and I built a house in the old stabling where we used to have horse sales. It can he of great help to live close to the business when one is a small business man. The Government and the Minister have done more for the enterprise of individual people than anyone I have previously known.
    I should like to end by thanking the staff and my colleagues, with whom I have had such a happy 22 years, for all the kindnesses that I and the others who are leaving this House have enjoyed.
    12.33 pm
    Mr. Bruce George: It is a pleasure and an honour to follow a speech such as that which we have just heard from the hon. Member for Norfolk, South-West (Sir P. Hawkins). It must be very sad to be leaving the House, having spent so much of one's life in it. Many speeches have been made by those hon. Members who have chosen to depart. I have not chosen to depart and I hope that this is not my last speech in the House. My majority is 702 and I hope that the good people of Walsall will allow me to serve in the House for at least as long as the hon. Member for Norfolk, South-West.
    The end of a Parliament is a useful time to take stock of one's own endeavours, of the future of the country and of one's region and constituency. At the end of the 1974–79 Parliament, I was fortunate to obtain the last Adjournment debate on the state of industry in my constituency. The Minister who replied was the late, lamented Guy Barnett. He had strong links with my constituency. As the Minister responsible for industry, he was seen in my constituency almost as the Minister for the town, such was the assistance that he rendered to Walsall and Darlaston, which I represent.
    When I reread our speeches of 1979 and contrast the position then with today's, I do not see, unlike other hon. Members, the past eight years as years of almost unparalleled success. They have been the reverse. I do not
    528
    speak as a partisan politician who sees everything that his party did in a wonderful light and everything done by the other party in pejorative terms. Life is much more complicated than that. But this morning we have heard almost a caricature of reality. This afternoon, I shall host a reception downstairs for a launching of a book on the Falklands called "The Fog of War" by Derryk Mercer. The fog can be natural or deliberately induced. This morning, we have had the deliberately induced meteorological variety, confusing everyone.
    Those who are perhaps visiting London and have stumbled into this place to sit in the Strangers Gallery and those who are listening to the debate may have gained the impression that we are on the verge of a Japanese-style industrial revolution. I suggest that people jump on a train at Euston and travel to the midlands or the north where they will see a different pattern which totally belies the euphoric atmosphere that some hon. Members have created, deluding not just the public but constitutents. Conditions are far from euphoric north of London.
    Life is full of bewildering elements. How can one argue that there has been a revival when one looks at the midlands, which was the power house of the national economy until perhaps a decade ago? No one could argue with any sense that the industrial decline in the west midlands began in 1979. It was gradual and has been accelerated by the Government's ineptitude.
    Unemployment in my constituency was 5 per cent. in 1979. I recall an industry Minister coming to Darlaston in 1978 and being berated by virtually all the trade union convenors. They asked. "How can you stand there and tolerate unemployment in this town of 4·9 per cent.7 Virtually every one of the establishments that they represented is now defunct or has been so truncated as to be but a shadow of its former self.
    Manufacturing industry in the west midlands and my constituency has collapsed, although a large number of small enterprises have been created. I very much welcome the establishment of any enterprise of any size. I desperately hope that the small companies will become the ICIs of tomorrow. We should remember a company in my constituency, GKN Bolts and Nuts, which ended its long connection with my constituency. A number of smaller units have been established on that site. I go there and am delighted about the development. I applaud what is being done. One company has gone and 30 are appearing, giving the superficial impression of an enormous increase in employment, but the reverse is true. However, the aggregate of people employed in many of those larger units, which to an extent have supplanted the defunct factories, represents a small percentage of the former work force.
    I find the present state of affairs sad. I am a non-ideological, non-partisan politician. The main thing I want to see is jobs created in my constituency in the west midlands and in the rest of the country. If the Conservatives were able to achieve that goal, I would applaud them and I would be prepared to leave aside partisan politics, but I do not see that golden dawn emerging. I believe that the electors are being subjected to a confidence trick of mammoth proportions.
    Mr. Trippier: I appreciate that the hon. Gentleman started his speech in a non-partisan manner, but now we are getting to the quarrelling stage. I believe that it is a massive con trick on the part of the Labour party to try

    529
    to convince the country that the larger companies, such as GKN and other household names, will increase their share of the labour market. That is a non-partisan point. It is unlikely that those companies will take on more labour because of the increase in modern technology and higher productivity per man. Such companies are much more likely to shed more labour, even though they will make increased profits. However, all the evidence in this country and abroad shows that there will be a dramatic growth in employment in those companies employing fewer than 20 people.
    Mr. George: I do not share the Minister's optimism.
    One of the engines of recovery, introduced by the Government for the area that I represent is the Black Country urban development corporation. The Order establishing it passed through its parliamentary stages on Tuesday and I was a member of the Committee that waved it into existence. In the debate, the Minister alluded to a document that stated that 17,000 new jobs would be created in Sandwell, and in the Darlaston area of my constituency. There is little to underpin that argument. It appeared almost as though those figures were plucked out of the air.
    Earlier I spoke of an attempt to delude the population. Thousands of years ago Plato talked about the "noble lie". If one repeats a noble lie frequently enough, people will believe it. This morning we have heard a line of argument—it will be repeated in the election campaign—that is persuasive but fallacious. The country is told, "We have suffered in the past, but the worst is over. All of the factors are now combining to produce a take-off. You have pulled in your belts; now let us see the virtues of sacrifice and the virtue and wisdom of this Government." That fiction may or may not survive the next month. However, if it does, we shall see the mirage disappear. The anticipated 17,000 jobs will not be created in Sandwell or Darlaston. There is little evidence to support that argument.
    We have witnessed the collapse of manufacturing industry. Some 80 years ago, Lloyd George—no relation, but I am not entirely certain—visited the town of Walsall. He described it as a town of 100 trades. On the basis of economic statistics it is possible to extrapolate that we are almost heading towards a town of 100 jobs. I am not arguing that all the blame can be attributed to the Government. However, as a result of the Government's policies, I have seen the progressive elimination of large, medium and small companies in my area. The roll call of dead or dying companies is alarming.
    I recall one of my speeches in 1979—I am almost reaching Harold Wilson proportions in recalling my old speeches, and I apologise—in the final debate of that Parliament. I listed those companies in my constituency that were in some difficulty but had good futures. The reason why I said that those companies had good prospects was that I had conducted a survey a few months previously among those companies and they had said, "Yes, we are OK. We see the future in a reasonably clear fashion. We are happy about it."
    Of those companies Rubery Owen has almost completely gone from my constituency. I led a deputation to the right hon. Member for Chingford (Mr. Tebbit) when he was at the Department of Trade and Industry I asked him to find a grant to keep the company afloat until something better came along. He turned to his civil servants and they decided on using the derelict land
    530
    clearance scheme. The site was razed and trees planted so that a new enterprise might be established. Industry is not to take on the site but houses are to be built there.
    Eaton Axles, an American company, has gone. F. H. Lloyd deliberately fell on its sword as a result of an appalling deal struck between a number of companies based on a scheme instituted by Lazard. The situation is desperately unhappy. One can list companies such as Charles Richards. They are gone, gone, gone.
    There is talk of a revival, but I say that there is no revival. It may be happening in some other areas—I doubt it—but it is certainly not happening in my constituency, which is typical.
    The Government have let down the area that I represent. I want to encourage industry to move to my constituency. A few days ago I took a day off, at a busy time for us all, to try to facilitate the move by one small company from a part of the west midlands outside my constituency to my constituency. On Monday I am to have a meeting with the chief executive of Walsall council and hopefully a new company will be set up. However successful the Government's policy, it will only partly fill the vacuum left by history, neglect and their policies.
    I have spoken of fiction and of "the fog of war" created by this Government. The unemployment statistics were published yesterday, well timed for the election. They apparently show a fall in unemployment. They are an attempt to stampede people into thinking that all is well. When the Government came to office, just over 1 million people were unemployed, and now the Government claim success as the 3 million barrier is crossed. What kind of success is that? How can one throw one's hands in the air with glee when only eight years ago unemployment was one third of today's 3 million. We know why the figures are coming down. It is only partially because new jobs are being created. It is the result of incredibly sophisticated—but crude in some ways—creative accountancy.
    In Walsall 6,500 youngsters are on job creation schemes. I welcome any training programme, but those youngsters have been removed from the unemployment statistics. That 6,500 should be added to the 17,000 official figure. The real figure is well above the 16 per cent. officially attributed to the Walsall travel-to-work area. The real unemployment figure is about 25 per cent. The problem is acute. No amount of massaging of the figures and euphoric speeches will alter the underlying decline in employment in my constituency.
    I shall attend a meeting this evening with some business men from Caldmore in my constituency. They are mainly Asian shopkeepers who are worried about crime with which the Government claim to be dealing so effectively. I raise this issue, not because I am making a speech about crime and law and order, but because it shows that there is a link between the growth in crime and the alarm that it has caused among many small business men. In the H division of the west midlands police force—the Walsall area—crime has doubled in the eight years since the Government took office. The number of police officers has risen fractionally, but the amount of overtime worked in the past eight years has fallen to less than half of what it was in 1979. Therefore, there are fewer policemen on the beat and driving around in cars now than there were in 1979 and 1980.
    The results are obvious; crime is proliferating. Police officers are doing jobs that they were doing to a much lesser extent seven or eight years ago—for example,

    531
    dealing with crimes involving drugs. At the present time the police are expending a great deal of their effort on preparing to deal with public order disturbances. The community—business men and ordinary citizens—is literally walking in fear. That is what has happened in the period between 1979 and 1987. Crime is affecting small businesses; theft and vandalism make business men reluctant to establish themselves in parts of town that may be run down. The very parts that require regeneration and resources are in an environment in which business men may be timid about establishing their enterprises.
    The picture that has emerged does not inspire me with any great feelings of anticipation or eagerness. The Government have said that they will set up urban development corporations, to which I would give a cautious welcome. It would be remiss of me to turn down any money that came into a deprived part of my constituency, such as Darlaston; I would not want to do that. I welcome the resources that will come—I hope that they will come—but I am sceptical about the method used to bring resources into the town.
    I am a great believer in local government, and I have campaigned for a number of years to get the local authority to see its role more in terms of initiating enterprises, sustaining them and creating an environment that would make more employers want to come to the town. The local authority with which I work—Walsall—has done a good job. Its major problem is that of derelict land. Much of my constituency—especially Darlaston—consists of land that has fallen into disuse. Formerly it was industrial land; it is now moribund and useless. It must be brought back into use for industry, for housing and for other purposes, but that can be done only at a high cost.
    Regrettably, the amount of money given to authorities such as Walsall to start work on their derelict land has been grossly inadequate. If they had been given adequate resources to reclaim that land, that would have created an environment in which industry would be more prepared to invest. If local authorities had adequate resources to create infrastructure on that derelict land, that would be a further bonus. If the Government had been more prepared to give grants to help companies that were in difficulty, those companies would have been sustained, but they have gone to the wall. I should have thought that local authorities would be the agents for industrial regeneration if they had been given the proper resources.
    The great advantage of local authorities becoming more professional, when given proper resources, is that they know their areas; and there are good links between local authorities such as Sandwell, Walsall and Wolverhampton. They could have been the engine of regeneration to supplement other approaches.
    Ostensibly, the Government are anti-quango. When the Conservative party was in opposition, there was an enormous campaign against quangos. The Conservatives said how repugnant they were and that they must be abolished. What did the Conservative Government do? They abandoned the democratic principle by allowing the local authorities to provide regeneration in rundown areas, and they set up the quangos to achieve that.
    A couple of weeks ago I attended the first meeting of the Darlaston local committee in Darlaston town hall. It was an initiative by the local authority to bring local people into the planning process. People were given the
    532
    opportunity to get problems off their chest and to settle scores with councillors for not having done the jobs that they asked them to do. It was the nucleus of genuine input by the public, so that planners would not pursue a policy and then find that it ran counter to local wishes. Such local committees exist throughout the town. They can be used for grievances and settling scores. If handled properly, they can be a great opportunity for public participation. "Public participation" is not an empty expression, but the public can genuinely participate.
    The Black Country urban development corporation, a quango that is on some form of pedestal, will have money to put in. We shall lose the democratic input. I hope very much that there are discussions between the local authorities and the development corporations to try to achieve a proper working relationship. I do not want to see duplication of planning between Walsall council and the urban development corporation. I want to see a harmonious relationship. I hope that the development corporation will work with the local authority to cut down bureaucracy and achieve a common objective. In 12 months perhaps we shall see the extent to which the development corporation has achieved its objective of bringing industry to the town—not by funding it, which is not its responsibility, but by creating an environment in which industry is prepared to operate. I hope that that will be successful, but I believe that some of the hype to which we have been subjected in recent weeks is over-optimistic.
    We are reaching a critical phase in our national and industrial development, which may be a turning point in British political and industrial history. We always talk about each election being an epoch-making or watershed election. Perhaps this one will be. If the Conservative party is successful, perhaps we shall see an economy which in many ways will be a negation of the economy that we have worked for collectively for four decades or more. I do not like to see such a society, with the get-rich quick approach where the wealthy are doing pretty well and the unemployed and those at the bottom end of the economic and social scale are the victims of other people's success.
    The task facing Britain and other industrialised nations is to create sustained growth in employment and to raise living standards, but that will come about through a proper industrial strategy dedicated to securing our economic future. It will be done by rebuilding industry. Much as I want to see small industry prosper, I do not want us to go overboard and see the future of Britain as consisting of the small industrial sector, when we lose one after another of our industrial giants, with one taken over by another foreign company. I do not want our economy to be sustained largely by the service sector.
    I do not want the west midlands to be a grand tourist centre, with tourism being a substitute for other industries. We want manufacturing industry to return, and that can come about not through the approach taken by the Government, but through an alternative approach. We want sustainable growth of output and employment, and that requires a steady improvement in our trade performance in manufacturing.
    The Government have retarded economic recovery. What we shall do to help small and large businesses is introduce an emergency programme to cut unemployment by 1 million in two years. This must be just part of a longer term aim of giving more people an opportunity to work. The objective is to create real jobs. I believe that we shall

    533
    devise and implement a policy that will ensure that the industrial base of my constituency is not diminished and that the unemployment queue will not grow longer.
    In the next few weeks, a genuine choice has to be made between whether or not one wants to see a continuation of the Government's policies. In my constituency and many others, those policies have led to the industrial base being truncated and hope being eliminated from the hearts of many people. An example of such people is the young man I met a couple of weeks ago who, at the age of 22, apart from a short spell on a job creation scheme, has been unemployed since he left school at 16.
    This morning we have heard a great deal about how wonderful is the small sector of industry. I applaud that sector, but I want a healthy private sector operating alongside a healthy public sector. The aim must be to create viable jobs that will be sustained in a difficult world where international competition is becoming more and more intense. I hope that people will not be conned by the lie that we have heard over the past few weeks and that we shall hear more and more over the next few weeks. The economy is not entering a period of sustained growth. The continuation of this Government's policies will result inevitably in the further decline of manufacturing industry.
    1.1 pm
    Sir John Page: It is a pleasure, Mr. Deputy Speaker, on the last occasion that I shall speak in the House, to be called by a Deputy Speaker who is such an old friend of mine. I remember many occasions when you were a Minister at the Ministry of Labour, and I was chairman of the Conservative party labour committee and we used to cross swords, but always in the most friendly way.
    This is a friendly occasion, but I felt that the hon. Member for Walsall, South (Mr. George) tried to damp some of the enthusiasm in order to further his election chances. I do not agree with his final words of deprecation of the future because, as someone who has spent all his life since 1948 in manufacturing industry, I believe that there is new hope for our industries. There has been an uncomfortable time and some slimming down, but now the chances, in both new technology and in the application of new technology to old industries, are exciting.
    My hon. Friend the Minister has done a great deal in getting around to many small businesses of all kinds during the time that he has been responsible for them. I congratulate him on the amount of travel he has done, the time he has spent, and the deep understanding that he has shown. Whether he continues in his present position after the general election or becomes Foreign Secretary or Secretary of State for Trade and Industry, which, would be well deserved, I ask him to continue to take an interest in small businesses and see whether bureaucracy can be reduced still further. Small business men still tell me about the number of forms, such as those for VAT, which they have to fill in, which make life difficult.
    It is difficult for the corner shop to survive in the days of the supermarket. However, those that remain provide a service that cannot be given by the supermarkets, and they will survive and grow.
    I will give a couple of examples. In the village where I live, there were two bakeries 30 years ago, but 15 years ago they vanished and for 10 years the shops sold Mother's Pride homebake and the like which seemed to be provided
    534
    by the manufacturers of cotton wool rather than bread. Now, however, I am pleased to say that we once again have two bakeries. Another example of a highly successful small business is the shop near the Terrace in this building which must have a bigger turnover per sq ft than any other retail outlet in the country. The queues there at Christmas time and, indeed, when I went along there 10 minutes ago show what an excellent service it provides.
    I hope that I shall not be out of order in using that last example as a bridge to my next remarks. It is the quality of service that Members of Parliament receive from all the staff that makes the House of Commons such a marvellous place to work in and I have been very moved by that experience. We have the ultimate elite of Clerks, all of whom know so much more than the Members who come to them for advice but deal with us very gently. Then there are the Hansard Reporters. I do not know how they manage, especially when a Member such as my hon. Friend the Member for Southend, East (Mr. Taylor) is speaking. There are also the people in the Library and the research department and in the Refreshment Department. There are the Badge Messengers and the police. All of them make our lives here so happy. Not once in 27 years has any member of staff ever been the faintest bit rude or discourteous to me, to any of my guests or to any of my constituents who have sometimes come in their hundreds as my constituency is so near London. I hope that over the years this marvellous standard of service will continue in the greatest Parliament in the world.
    1.7 pm
    Mr. Andrew Rowe (Mid-Kent): It is an enormous pleasure and privilege to follow in the debate my hon. Friend the Member for Harrow, West (Sir J. Page), who has been a friend of mine since I was very green and wet behind the ears in Conservative politics. My hon. Friend has always been most generous in allowing me to expose his constituents to my tyro attempts at boring them to death—I have become much better at that lately—and I am very sorry that he will not be with us in the next Parliament. He and others who have spoken today have given a great deal to this place, and as one who came into the House at the last general election I know how much we owe to older Members who have been here for a long time. I am honoured to follow my hon. Friend in the debates today.
    I am sorry that the hon. Member for Walsall, South (Mr. George) has temporarily left the Chamber, as I was somewhat dismayed by his contribution and would like to take up one or two points that he made. For a child, one of the most exciting moments at the pantomime is when the dry ice is activated and the auditorium begins to till with smoke from below, and as it fills up all kinds of magical things happen behind the smoke. As the hon. Member for Walsall, South was speaking, I could not help visualising those engines of fog in the wings. Fortunately, dry ice smoke evaporates very rapidly and I hope that by making one or two observations I shall accelerate the process a little.
    I suspect that the hon. Member for Walsall, South felt a desire to show that he conforms with Labour party policy. In these hard times it must be gratifying to find an hon. Member in the Labour party who does conform with the party line. He was talking about the unemployment figures and the way in which they appear to say one thing

    535
    whereas in reality they say another. Most of the comments from Opposition Members in the House about the unemployment figures are hypocritical. For example, many people in the Labour party believe that it would be appropriate to reduce the age of male retirement to 62½ and some go down as far as 60 years to have parity with women. Were they to succeed they would remove a considerable number from the labour market at a stroke. I wonder whether they would continue to count 62½year-olds and 63-year-olds as unemployed. If they did not, would that not be massaging the figures in the same way as they accuse us of doing? If people are in the employment market looking for jobs and cannot find them, they are unemployed. If they are in a category which, for whatever reason, is not looking for work, they are not unemployed. The sooner the public understand that all the talk about massaging the unemployment figures is a lot of my eye and Betty Martin the better.
    The hon. Member for Walsall, South also talked about the history of the west midlands. He argued that it was somehow the Government's fault that the west midlands was in decline and that no amount of small business regeneration could possibly replace the prosperity that has disappeared.
    When I first took an interest in small businesses about 11 years ago and I and the then hon. Member for Basingstoke, now my hon. Friend the Member for Hampshire, North-West (Mr. Mitchell), established a small business bureau—the first and only pressure group within a political party in this country aimed explicitly at assisting small firms—the first major campaign we ran was against the legislative monstrosity called the West Midlands County Council Bill. It was an extraordinary piece of dirigiste legislation aimed at enabling that great county council, which has long since died, to set up small businesses for itself. It was to be able to set up florists, hairdressers, travel agencies and a whole host of small firms on the basis that, with its large bureaucratic organisation and what the hon. Member for Walsall, South calls its close understanding of the local community, it would be able to run the small firms with far greater effect than entrepreneurs for whom such firms would be their only livelihood. I am glad to say that the first and great success of the small business bureau was to assist in the destruction of that piece of legislation.
    If the hon. Member for Walsall, South was in the Chamber I would tell him that small firms thrive in places where they are respected and valued. It may be that little by little and grudgingly some Opposition Members are beginning to feel attracted to small firms because they see them, however unwillingly, as generators of employment. The attitude that scums through is one of the grudging acceptance of them, not of the joyful championing of them.
    It is not the slightest use Labour Members preaching that they support small firms while they are struggling but continue to berate successful business men as being cancerous parasites on the body politic. They say that anybody who makes a success of his business, takes home a profit, increases employment and does well is to be despised, but that if he is not doing very well he is desirable. The characteristics of a business man are the same from beginning to end. If the only contribution of Labour Members is to find ways of increasing taxation
    536
    and of destroying business incentives, it is scarcely surprising that small business men who wish to set out on this rocky path go to areas where they know that, if they succeed, they will be as welcome as they were when they began.
    The Minister has been astonishingly patient, as he always is, with the long speeches that have been made today. I should like to make only one or two brief comments. First, when the Government came to power in 1979 we had the most densely concentrated economy in western Europe. The 100 largest firms in Britain occupied a larger share of the gross national product than the 100 largest firms in any other country in the industrialised world. That was a dangerous position to be in. In 1979 it looked as if that position would continue with accelerating speed. That made us vulnerable to the industrial action of trade unions and to changing features in the international business scene. It made us vulnerable because large firms find it difficult to adjust rapidly to changing circumstances, as my hon. Friend the Member for Luton, South (Mr. Bright) pointed out. That position has begun to change quite rapidly. The concentration of wealth and employment in the country is now far more widespread, which is a good thing.
    As my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) said, in 1979 business men had nowhere to start. I wrote a pamphlet called "Somewhere to start". The evidence of the hostility of many local authorities to small firms, particularly if they wanted to use disused agricultural buildings, was overwhelming. since the Government came to power in 1979 that has been changing. In those days what I call "The Archers" syndrome was dominant. That was the wonderful attitude of people who had lived and worked on the outskirts of large towns and who had moved to the country in their retirement with the wonderful vision of birds, butterflies and the quiet of the countryside. The moment that business men decided that they would like to start a small business in their area, those people instantly objected with a passion that only somebody who did not understand the countryside could arouse.
    The countryside and country villages can survive only if there is employment for the people who live there, and the development of small firms in the countryside is an important element which the Government have understood well. They have given great support to COSIRA and to the Development Commission, where Lord Vinson is doing a remarkable job. The light has largely dawned, and I believe that that is another admirable example of the way in which skilful Government support in small doses can have a remarkable effect.
    As we enter a general election, I say to my great party—some of my hon. Friends do not agree with me on this—that the remarkable revival of small businesses under this Government is an example of skilfully employed Government intervention. There is a place in a Conservative Government for the skilful use of intervention to enable people who have been labouring under enormous disadvantages to throw off those disadvantages until they are capable of saying to nanny, "Goodbye. Thank you very much. We have done very well."
    In 1979, small firms were dying in droves, partly because they had been encouraged to borrow too much and were clobbered by high interest rates. The Conservative Government have cut tax, so more money

    537
    remains in the business. We have also cut interest rates, so debts are cheaper to service. One of the most remarkable developments of the past 11 years has been the creation of a vigorous venture capital industry which is making an enormous impact on the provision of money for small firms. That is another tribute to the stability of the economy under the Conservative Government.
    I must declare an interest in that I have been asked whether I would assist the British Franchise Association in its operations. I pay tribute to the franchising industry. During the past few years, there has been a tremendous growth in franchising, and the latest report suggests that the business itself—apart from the firms that benefit from its existence—has created more than 113,000 jobs. Last year, its annual sales were worth more than £2 billion. Franchising is the easiest way for a certain type of small business man to start because he has the advantage of the franchisor providing him with financial backing, marketing skills, other back-up and a proven product. Franchisees are doing extremely well. The industry does not seek Government interference, but it will continue to look for Government support and encouragement. Rocky times are ahead, not least because some people who call themselves franchisors are not that at all and are easily confused in the public eye with people who run genuine franchise operations.
    I shall make two more points and then shut up. Small firms can make an enormous contribution not only to employment but to training. I am a member of the Select Committee on Employment. We have established the fact that the British Government spend as much on training our work force as almost any of our competitors, but that our employers spend very much less. How can we get businesses to see training not as an overhead cost but as an investment? I fear that a change of attitude is required but that it will be difficult to engender.
    The next Conservative Government must seriously consider whether to offer incentives for training personnel to a company, or whether to offer tax incentives to the employees so that they will improve their own training. Perhaps a company could offset the costs of that training against its taxation charges.
    We have heard the detail of many points relating to small businesses, but today we have not discussed the political effects of the great changes that we have seen under this Government. Encouraging small firms enables one to fragment power. If there are concentrations of power at the centre, there is always the temptation to autocratic government. Breaking up the concentration of large firms and creating small ones enormously assists the decentralisation of power, which is an essential part of Conservative philosophy.
    I am interested in the Small Businesses Bureau, which is a founding member of the European Medium and Small Business Union. There may be hon. Members in the House—there are not many to choose from at the moment—who have not heard of the European Medium and Small Business Union. It is a group of right-of-centre European political parties and is interested in small businesses. At the moment 14 countries are members, and I have no doubt that we shall have more. What is interesting about EMSU is that when we have meetings we talk a good deal about hard matters of practice, such as restrictions on cross-frontier trade, taxation policies, protection policies, discriminatory discounting and all sorts of things that
    538
    worry small firms. However, we also talk about the political conditions that are needed to enable small firms to thrive and to allow people to be more independent and free-standing because that makes them independent and free-standing in politics and is an essential part of this great resurgence in small companies.
    One thing that EMSU shows us is the tremendous importance of chambers of commerce in many of the countries that are friendly to us. I hope that my hon. Friend and his ministerial colleagues will reconsider the position of our chambers of commerce which are greatly under-resourced. In other countries they derive huge assistance from the fact that, as each company is formed, it becomes a member of its chamber of commerce, and pays a small subscription. Those subscriptions provide the resources that enable chambers of commerce in, for example, Germany to be one of the great engines for training. The apprenticeship system in Germany, where examinations are created and moderated by the chambers of commerce, has proved to be one of the ways by which the German work force has a far higher standard of training than we have. Perhaps we should consider that.
    Another matter on our agenda should be the question of bankruptcy. In the United States it is commonplace for successful business men to have been bankrupted twice or even three times before they take that experience into a successful business. In this country, we have been rightly anxious to catch the real crooks, who go into business to build up debts and go bankrupt to avoid paying them, so bankruptcy has become a slur on honest but unfortunate business men. We should consider that.
    Since 1979 the business scene in the United Kingdom has been wholly transformed. Year in year out the Government have used their succession of energetic, hard working and highly intelligent small business Ministers to change the whole climate of operation. It is no longer regarded as second best to go into business on one's own; as an untenable proposition for school children to leave school, gain experience and start their own business; or as some sort of has-been operation when one cannot get a job in a big business. That is to say, it is no longer so regarded by Conservative Members. Naturally, Opposition Members regard any change as for the worse and there is still no sign that they value small businesses, have any intention to help them grow or that a Labour Government would avoid penalising them with crippling taxation if they were successful.
    For those reasons, at this election small business men have absolutely no alternative but to vote Conservative.
    1.31 pm
    Mr. Colin Moynihan: I congratulate my hon. Friend the Parliamentary Under-Secretary of State for Employment on his birthday. He has come to the Chamber on his birthday to reply to the last debate of this parliamentary Session and all hon. Members present and. indeed, some outside the House will wish to join me in congratulating him on reaching the fine age of 41. They will also join me in congratulating him on an outstanding tenure of office.
    Mr. Rowe: My hon. Friend congratulates the Minister on coming to the Chamber on various auspicious occasions and, indeed, our experience is of the Minister coming to the Chamber on an endless succession of occasions when he has been either adding to his family or

    539
    celebrating his birthday. It is an unkind fate that pushes him into these situations. If either the Minister or his parliamentary private secretary could give me a list of important family events in the Minister's life, I shall know when we are likely to have debates on small businesses.
    Mr. Moynihan: I am grateful for that suggestion and, indeed, am about to write to hon. Members. I shall give due consideration to the possibility of producing a small catalogue of forthcoming events in the Minister's diary so that they can be well briefed to contribute, as my hon. Friend did so eloquently today, in other important debates which coincide with engagements in the Minister's social calendar.
    I congratulate my hon. Friend the Minister on his outstanding contribution in assisting small businesses and developing small firms. He brought expertise and skill to the Department of the Environment from other Departments, which are unmentionable when one considers the tremendously strong team at the Department of Employment. With his knowledge he has also brought success for small businesses and I wish to concentrate on some of those successes.
    Although reference has been made to some Government initiatives to help small businesses, not enough consideration has gone into the extent to which small businesses contribute to the economy. About 2·5 million people are self-employed, an increase of 750,000 since 1979. That is extremely important because in Britain small firms now account for an estimated 96 per cent. of all firms. They make a contribution of 20 per cent. to our gross national product and employ 25 per cent. of the total workforce.
    It is commendable that the Government have tackled many of the problems facing small firms. That excellent booklet called "Cutting Red Tape" and produced by the Department of Employment has assisted many small firms to overcome the major problem of bureaucracy. It has eased the difficulty of endless form filling and cut the hours that were required to submit the tremendous amount of detail and data required by officials and by Government. Small firms can now spend less time on those things and can concentrate more on the important job of creating wealth, profits and jobs.
    The Minister has served the small business sector well in that respect and deserves to be congratulated by all hon. Members on the work that he has done.
    I regret the use of the phrase small business man. Why do we need to be so "heightist" when it is the size of the business that we are talking about. I am not a tall person, but it is rather sad that the derogatory title "small" has to be used about business men. I hope that some of the inner London boroughs and the Inner London education authority will take note of my comments about "heightism" and that the Minister will consider finding an alternative title. Perhaps we should speak about business men who employ a certain number of people or choose some other appropriate title rather than use this discriminatory heightist slur.
    Many business men, both large and small, have entered the market. So many of them are now contributing to the economy that there is no doubt whatever that small businesses are a vital part of the economy, not least because they employ one quarter of the total work force.
    540
    Conservatives believe that no section of industry or commerce is more representative of the entrepreneurial spirit of this country than small business men, and that is because of the contribution that they make. We believe that everything possible should be done to assist that sector of the economy to develop and to grow and contribute. To do that we need to concentrate on training, and it is significant that 30,000 hours of training material have been made available on a whole range of subjects in order to assist business men coming into the market or to assist people setting up in business for the first time. That training gives people some of the life skills which in other countries are part and parcel of the education system.
    We are working towards such an education system, but we have not quite got there. I shall give an example. The technical and vocational education initiative is excellent. It encourages young people at school to develop what I call life skills, such as basic accounting, how to incorporate a company and about setting up in business. It provides an educational framework so that if young people have entrepreneurial flair and skill they can use that basic education in business to set up their own businesses and to develop from that point to contribute to the economy.
    I say that we have not quite got there because I deeply regret that ILEA is not actively supporting that initiative. It is selling short a generation of our young entrepreneurs by not accepting the Government money that is available to train young people. That money could be used to provide educational skills that would enable young people to contribute as small business men and as business men generally and it would help them later in their careers. I understand that we are now in negotiation with ILEA to persuade it to take this scheme on board. I hope that it will rapidly accept Government encouragement and finance to assist our youngsters in the inner London area.
    Mr. Rowe: Does my hon. Friend agree that one of the reasons why it has been reluctant to do this is that it has so few resources? After all, it spends rather less than double the average on each secondary school child. I am sure that it feels that until it is spending at least double the national average on each school child it cannot possibly contribute even £1 towards improving education for business.
    Mr. Moynihan: I take on board my hon. Friend's comments with regard to the spending of the Inner London Education Authority. That is directly relevant to the debate because it is a tax burden through the rates on businesses in London. I hope that the newspaper rumours of the last couple of days that we may read in the Conservative party manifesto that action will be taken to allow schools or perhaps boroughs to opt out of ILEA are true. If that is not in the manifesto, I hope that it will be Conservative party policy in the future because that would ease the considerable burden on the ratepayers and the business ratepayers of London. That can lead to more entrepreneurialism and growth in the small business sector, which I hope we will see. If that happens, I believe that in inner London we will get substantial cuts in the business rate following the reorganisation of the rating system, which will lead to even more cuts, so it is not just the business rates that will be assisted but a substantial proportion of the domestic ratepayers will benefit from the community charge if we go ahead with that scheme.
    I hope that the matter which was so accurately pinpointed by my hon. Friend the Member for Mid-Kent

    541
    (Mr. Rowe) as being central to this debate with regard to the development of youngsters is recognised as being important for the ratepayers and the business rate.
    For the first time we have an education authority whose cost per pupil is greater than the average cost to the taxpayer for sending his child to a private school at primary or secondary level. That is now the remarkable position in inner London. The Government have an opportunity to take dramatic action to change the funding of education authorities and shift to the parents the emphasis for running the schools and for choice. I hope that the capitation system will go through. In this sector we can get more initiatives from the parents on training to provide the small business men of tomorrow.
    The health of small businesses is vital to the future of the economy and the growth of new jobs. It is essential that small businesses are innovative and flexible. If they are, they can provide the customer with a far wider choice, which is a fundamental Conservative principle.
    Undoubtedly the contribution of the hon. Member for Isle of Wight (Mr. Ross) to the small business sector in his non-political capacity has been substantial on the Isle of Wight. He made an extremely useful contribution to the debate and one that does him credit as a Member of Parliament. He has won the respect and affection of hon. Members on both sides of the House. He highlighted the opportunity in the small business climate to develop new and a wider spread of initiatives and therefore more choice to the consumer.
    The record of the Government on small businesses is second to none. I regret that we hear little from the Opposition about small businesses. It is unusual to read anything in print that the Opposition wish to do to encourage the entrepreneurial climate in which small businesses will flourish. It is characteristic of the way that the Opposition treat this subject that the Opposition Benches are completely deserted for this debate. This matter is fundamental to their constituents and it should be important during the coining election campaign.
    I hope that it will be noted that so few of the Opposition have contributed to the debate and, more important, for the first time that I can remember, not one member of the Opposition—not even a Whip—is present to hear what, no doubt, will be an outstanding contribution by my hon. Friend the Minister. I have never known precedent in this regard to be broken. I have never known my hon. Friend not to make an outstanding contribution on this subject in the House or outside.
    Between 1982 and 1984, under the Government, self-employment and small firms employing fewer than 20 people created 1 million jobs. That shows how serious the issue is. Through the growth of small businesses, we have managed to create 1 million new jobs which have been able to respond to the demands of a rapidly changing technological world. A quick response to service industries is important and it can be made only with the entrepeneurial flair of individuals and small businesses. There is no better example than the development of the Isle of Dogs and the growth in the City, resulting in a need for a range of small business activities to provide support services. Some hon. Members would have seen only last weekend on the television the detailed assessment of the many small businesses that have taken the opportunity provided by Government assistance to speak to constructive local authorities or the London Docklands Development Corporation, which has been very helpful,
    542
    about providing back-up services, from flower arranging to shoe cleaning. Opposition Members, if they were here, might not consider those services to be important, but they employ a large number of people and have been highly profitable. Twenty seven companies have been set up to provide those services. They have earned a lot of money in the City in the post-big bang era.
    Mr. Rowe: Can my hon. Friend help me a little'? He may know more about this than I do. It seems to me that one reason why there is a great debate about manufacturing industry is definition. Am I right in believing that there are two principal considerations? First, if a large company allows its transport manager to start a transport company, it ceases to be defined as "manufacturing", although it was so described while it was in-house. Secondly, many large manufacturing companies use small sub-contractors, so are there not probably as many people engaged in some elements of manufacturing now as before? Those people are engaged in very small companies on which statistics are much harder to collect.
    Mr. Moynihan: My hon. Friend is right. He has pre-empted my next point. That is rather sad but, in a sense, is for the benefit of the House because my hon. Friend has put it much more eloquently than I could have done. This matter very much concerns my hon. Friend the Minister. I am grateful to my hon. Friend the Member for Mid-Kent because it is a key issue and it is important that it should be placed on the record.
    Since 1979, the Government and their predecessor have helped small businesses in many ways. I shall concentrate on a few because it is important to put them on the record. The cutting of the burden of capital gains tax and the reform of capital transfer tax to abolish the tax on lifetime giving were significant moves. Equally important were the abolition of the national insurance surcharge and the reduction in the small company rate of corporation tax. That last point has been taken up by many small businesses in my constituency. Many facts have been put through the mail bag to me and, via me, to the Government to support that important incentive for the growth of the entrepreneurial class that works in small businesses.
    The introduction of the business expansion scheme is also important and I am glad that hon. Members touched upon that in their speeches today. It gives tax relief to investors in new business—that is relevant to this debate—and I hope that due consideration will be given to going further down that path in the future. That is an extremely important start and that initiative that should be welcomed by both sides of the House. The introduction of the loan guarantee scheme, which makes it easier to borrow money to start up a business, is also important. Once again I congratulate my hon. Friend the Minister for the important assistance that he has given to small businesses.
    The employment measures that the Government have concentrated upon have given people the opportunity to start up in business. In that respect the enterprise allowance scheme has been of great significance. It has received a tremendous amount of support from people entering into bsiness for the first time. Many of my constituents have benefited from that scheme.
    In the past few years I have noted a change in the ethos towards small businesses and the entrepreneurial classes.

    543
    Many people are attracted to go down to the jobcentre to receive advice. They are faced with a whole range of options and initiatives to enable them to set up in small business. It is praiseworthy that the Front Bench spokesmen from the Department of Employment, through their wisdom, have managed to achieve the growth in new business that we have seen up and down the country.
    Between 1980 and 1985 there has been an average net increase of some 500 new firms every week. That is the sort of excellent result that we have seen and it is an excellent platform on which to go to the country. It shows the electorate that the Conservatives are not only committed to growth, to more employment and to ensure the growth of new firms, but that 1 million jobs have been created in the new business sector. That is a significant fact and one that is welcomed by those 1 million people who have entered the labour market.
    When the Minister replies I hope that he will concentrate on tourism. Tourism comes under the umbrella of his duties and it is a significant area of economic growth. If my memory serves me right, tourism is expected to create 30,000 new jobs a year. Indeed, I understand that that figure has risen.
    Mr. Trippier: It is now 50,000.
    Mr. Moynihan: That is good news. Tourism is a most important industry and it is most important that it is encouraged by the many initiatives that I mentioned earlier.
    I believe that there is good evidence to show that tourism is one of the fastest growing industries in the country. It is an industry that has brought job opportunities, training opportunities and new skills to many people who would not otherwise have those opportunities. I am grateful to my hon. Friend for ensuring that the tourist sector has gone from strength to strength during his time of responsibility.
    In conclusion, I would like to say something about skill shortages and expand on the intervention that my hon. Friend the Member for Birmingham, Northfield (Mr. King) made about TVEI—the technical and vocational education initiative. I hope that we will continue to concentrate in preparing young people, through the range of available Government schemes, to enable them to be ready to set up a small business and to contribute to the economy. I believe that the youth training scheme and the job training scheme are exceptionally relevant in that respect, not least because they have been extremely successful. For the one-year YTS there have been 1 million entrants and 60 per cent. of the leavers went into jobs, many of them in small businesses. That is a tremendous result when one considers the unemployment problems throughout the country.
    Jobclubs are very successful. They give people skills so that they can join small businesses. Eighteen months ago there were only three or four jobclubs. Now there are over 1,000 and, if necessary, there will be 2,000 by September. That is an illustration of the importance attached to jobclubs. Jobclubs help the long-term unemployed who need help and advice, and 60 per cent. of those who have attended jobclubs now have jobs.
    It is disgraceful for the Opposition Front Bench to suggest that they represent only tea and sympathy or that the scheme is a "skivvy". It is disgraceful that they should
    544
    have the nerve, inside or outside the House, to accuse the Government of introducing a tea and sympathy scheme when that scheme has helped into employment 60 per cent. of those interviewed and taken through the course.
    The electorate will decide how to respond to an Opposition who repeatedly attack the unemployment figures and yet publicly announce that if elected again—on some dim and distant day—they will use the same figures that they so regularly criticise.
    Time and again the Opposition attack the Government for introducing a range of measures which have resulted in steadily declining unemployment. The Opposition say that they will get rid of the schemes that have assisted people back to employment, that have assisted the young and the long-term unemployed with guidance and advice, job opportunities and training. The Opposition would put in their place schemes linked to local authorities or the public sector, yet they cannot fill the £20,000 council jobs in the Brent education and race relations department. My opponent in the forthcoming election has the nerve to say that we should get rid of the schemes introduced by the Government to help the unemployed.
    The Opposition have no better point to make about the growth in employment than to turn their backs on this Government's success in introducing a range of initiatives, such as job training, job release, voluntary programmes and community schemes, and in creating an economic climate in which small businesses can flourish.
    I hope that when we go to the polls on 11 June we shall have had the opportunity to concentrate on the opportunities that we have made for people to gain employment. We have created 1 million new jobs since 1983—more than have been created by all the western European countries together. That is our record of success. We have given opportunities to young people. We have initiated schemes such as the technical and vocational education initiative which is so important to young people in helping them join the entrepreneurial work force. We have provided the resources for schools to produce the right skills and training.
    The only barrier has been the Labour party, which has opposed our initiatives ideologically. The Labour party on the Inner London Education Authority has said, "No, we will not allow young people to learn those life skills." I hope that the electorate will judge that disgraceful attitude for what it is worth and praise my hon. Friend, the Minister, and his colleagues for facing the incredibly delicate, important and serious problem of creating jobs, creating growth in the economy and creating opportunities in small businesses.
    I praise my hon. Friend for the outstanding contribution that he has made during his tenure of office as the Minister responsible for this area, and I congratulate him not only on his verbal contribution, but much more on the facts that he can put to the country to show that what he has done has been highly successful.
    2.1 pm
    The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): I am grateful to my hon. Friend the Member for Lewisham, East (Mr. Moynihan) for mentioning the fact that today is my birthday. I am trying to forget about it. As my hon. Friend the Member for Mid-Kent (Mr. Rowe) pointed out, it is quite amazing that every time there is a small firms debate, an incredible event has occurred that affects me or my

    545
    family. Last time, it was the christening in the crypt of my youngest son, and I recall that the time before that I received a note, which unnerved me considerably, announcing the birth of my second son, who was some six weeks premature. All those things have happened when we were having debates on small firms. It must have something to do with the enterprising side of the family. My hon. Friend the Member for Fareham (Mr. Lloyd) will forgive me if I blame the Whip's Office for not paying enough attention to these milestones in my family life. It is only because of the demob—happy frame of mind in which we meet today—the last day of this Parliament—that one can say such things.
    I must pay a warm tribute to those who have assisted me during the period in which I have been privileged to be the Minister responsible for small firms. I want to thank my right hon. and noble Friend the Secretary of State for Employment and my right hon. and learned Friend the Paymaster General for the enormous support they have given to me and to the sector in general. I also thank my hon. Friend the Member for Lewisham, East, who is a distinguished parliamentary private secretary in our Department, for all the help he has given me in recent years. I also wish to pay a warm tribute to the chairman of the small business bureau, my hon. Friend the Member for Surrey, North-West (Mr. Grylls), who has made a significant contribution over many years—not only in this Parliament, but long before it—and to my hon. Friend the Member for Mid-Kent, who was the founder of the SB bureau, together with one of my predecessors, who was the first Minister responsible for small firms in the present Government. My hon. Friend the Member for Luton, South (Mr. Bright) has been a distinguished chairman of the Back Bench small firms committee, which has been enormously supportive of what we have trying to do, and which has come forward with constructive suggestons upon which we have tried, wherever possible, to act. We are all in this together—especially all Conservative Members.
    I am grateful to my hon. Friend the Member for Lewisham, East for pointing out that, once again, even as I speak, the Opposition Benches are absolutely vacant. That is a disgrace. I can hardly castigate the Liberal party, however, because I agree that the contribution made by the hon. Member for Isle of Wight (Mr. Ross) was a good one. Unfortunately, he has had to leave, but he kindly apologised to me for having to return to the Isle of Wight. It is important to pay a warm tribute to him because he is retiring from the House today. I know that he has made a significant contribution to his local enterprise agency and has done much for small firms in his area.
    I am also glad of the opportunity to pay a warm tribute to my hon. Friends the Members for Harrow, West (Sir J. Page) and for Norfolk, South-West (Sir P. Hawkins), both of whom made superb contributions to the debate and are leaving this distinguished House today.
    I must congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. King). Before I do so, it is significant and appropriate that you, Mr. Speaker, are now sitting in the Speaker's Chair. On this, the last day of the present Parliament, it is appropriate that you should be in your Chair in this debate, because I am conscious that this is the last day of your first, highly successful term as Mr. Speaker. It is appropriate because small businesses were your speciality when you were on the Back Benches, Mr. Speaker, and you still play an active part in the local
    546
    enterprise agency in Croydon. Congratulations have been flying about today. I am determined that you will not be left out, Mr. Speaker. Once again, thanks are recorded for all that you have done for the small firms sector.
    We should congratulate my hon. Friend the Member for Northfield on his excellent contribution. I mean that. It was a first-class speech. Today we are talking about one of the most important subjects that we could ever discuss in the House. I am proud to say that since 1979 there have been dramatic changes affecting people running small businesses and those who might want to do so. Under the Government there has been a fundamental alteration in the climate for enterprise. That was the most important point that my hon. Friend made. The climate is the most important thing. It creates the conditions in which new and exiling businesses can grow.
    Peoples' attitudes have changed, so that wealth creation is now recognised as the vital process that it is, with profit as the proper reward for risk taking—the point made by my hon. Friend the Member for Mid-Kent. There has been a substantial strenthening all round of the small firms sector.
    Those changes have been achieved by overturning the high taxation, anti-industry approach that characterised much of the 1960s and 1970s especially the most recent Labour Administration. Small businesses have now been recognised as a source of innovation, vitality, wealth creation and job creation. The Government have been committed to ensuring that small businesses have a better chance of succeeding. However, that has not been achieved by the Government alone. It has needed the efforts of many other contributors to economic development—those who provide finance, advice and markets, and above all the individuals who provide the inspiration and drive that are necessary for business success.
    The single most important factor contributing to the resurgence of small businesses has been the creation of the right macro-economic conditions. That has been the principal part of the Government's economic approach. Conditions of low inflation, sustained growth and lower taxation have given the certainty that industry needs. There is now encouragement for entrepreneurs to seize the opporuntities that are available to them and there are incentives for investors to take the risks involved in making finance available for those projects. Of course, those economic conditions benefit not just small businesses. They have encouraged industry as a whole and have brought about a position in which United Kingdom industry is expanding on a broad front.
    Another aspect of the Government's policy that has benefited large and small firms alike has been the removal of red tape and regulation that has discouraged and stifled others. Last week we published a progress report entitled "Encouraging Enterprise", as well as a glossy version, "Lightening the Load", which I hope is a darn sight easier to understand. This is the third chapter in what will be a long-running novel. We have now had two White Papers. The first was "Lifting the Burden" and the second was "Building Businesses … Not Barriers". It is important that we should not lose the momentum of the deregulation initiative. I welcome the fact that my hon. Friend the Member for Harrow, West made this very point. There is still too much bureaucracy, which is acting as a brake on the enterprise of the people whom we are seeking to encourage.

    547
    Another aspect of the Government's policy, which is important and has been touched on by other of my hon. Friends, is the consultation process that we have introduced since we have been in power. We have been involved in many consultations with business, listening to what business considers to be the biggest problems that it faces. We have been in consultation with the European Community, where special action is being taken to create a favourable environment for businesses, including the control and reduction of administrative burdens on business. It is important to say to my hon. Friends that we started that initiative in Europe because we started the deregulation and simplification initiative over here. Europe has now started to follow our example. It is not only a case of looking at what is going on the statute book over here that might be creating problems downstream for the important people whom we are trying to encourage, but there are problems with legislation that might be coming over the water—from Brussels and the European Commission. Such things might creep up on us and create problems downstream for those important people, the small business men and women in this country.
    It is important that we should get across the message about what we have done about planning. My hon. Friend the Member for Mid-Kent made an important point concerning trying to convert premises in rural areas. He has taken a special interest in this, and he knows full well that he has my support. It is important that we should change the regulations for use planning orders. They have been brought up to date and many other changes have been made or are under discussion. There has been a major review of VAT policy towards small businesses. In the Budget statement, my right hon. Friend the Chancellor announced measures to ease the burden that VAT places on small businesses. These may include a system of cash accounting, annual VAT returns and simplified procedures for registration and deregistration.
    Individual entrepreneurs play an important part in our history, a point made effectively by my hon. Friends the Members for Northfield and Mid-Kent. Over a long time, the role of the entrepreneur and the importance of entrepreneurial attitudes have been lost sight of, and that is what was going on in the 1960s and 1970s. As a result of the Government's policy of creating opportunities and giving the freedom to take advantage of those opportunities there has been a change of attitude in the United Kingdom. There has been a realisation that wealth creation is crucial to the achievement of the social objectives that we have set ourselves.
    There is also recognition that jobs depend not on public sector spending but on soundly based businesses, and this is where I have to quarrel with the hon. Member for Walsall, South (Mr. George). I have to try to convince him—I suspect that I will not today—that, although we regard local authorities as important, we still think that they should be more part of a partnership at community level. If they are in the lead with small businesses, initially those businesses may not be so successful because many of the firms that we are trying to encourage to grow and develop regard Government—national or local—as the unacceptable face of bureacracy.
    What we have learnt, and what I hope that the Opposition will learn, is that business men would rather listen to professional advice or advice from those in the
    548
    industry than to Ministers like me, to my officials in the Civil Service, or, dare I say it, local government officers. If we do not know that by now, we shall never learn anything about the small firms sector. I agree with the hon. Gentleman that local authorities have an important role to play, but I question whether they should be the leading contributors.
    The importance of the small firms to the economy is so vital that I do not understand why the Opposition Benches are so sparsely filled. Some 96 per cent. of all firms in the United Kingdom are small by the definition of the Bolton report. More than 80 per cent. of the 1·5 million businesses registered for VAT have a turnover of less than £250,000. However, as my hon. Friend the Member for Lewisham, East said, they employ only 25 per cent. of the total United Kingdom work force.
    This is again where I have to quarrel with the hon. Member for Walsall, South, who made comparisons between the United Kingdom and the United States of America, where 50 per cent. of the work force is employed in small businesses. I have to try to convince him that, in times of international recession, when there is a large shake-out of labour—which we have seen as the country cannot be sheltered from an international recession—many large companies shed a tremendous number of jobs. One would have to set up an enormous number of small businesses to compensate in any way for the number of people who have tragically found themselves on the dole queue. There would be no difference between the hon. Gentleman and I on that.
    What we have been saying, and my hon. Friends, particularly my hon. Friend the Member for Northfield, have put it well, is that small businesses are less vulnerable to the winds of change that blow during an international recession. As my hon. Friend the Member for Luton, South said, smaller businesses are quicker to adapt to new projects and processes and can change amazingly rapidly. Because of their flexibility, they are better able to withstand the recession, and that is an important point for the future.
    It is all very well for Conservatives, including myself, to point out that this is the seventh successive year of growth, but we need fire prevention measures for the future. We do not want a repetition of the fire brigade exercise that was needed to reverse the trend that set in under the Labour Government when this country lost 100,000 self-employed. That is why we are concentrating so much on the small firms sector. In pointing out the specific assistance that has been given to small firms, however, I acknowledge that the Government are not the only player in the area. The Government's role cannot be that of supplier of all that small businesses need. It must be to encourage others to meet the need of small businesses, to fill gaps which otherwise would not be filled, and to withdraw from areas in which others are meeting the needs.
    Since 1979, many more people have been given the opportunity to develop their own ideas and to benefit directly from their own hard work. That process has been encouraged by the dramatic reductions in personal taxation and the increased availability of local sources of advice, support and other facilities, as my hon. Friend the Member for Lewisham, East so effectively pointed out. In 1979, 1·9 million people in the United Kingdom were classified as self-employed. By 1986, the figure had risen to 2·7 million and had increased as a proportion of overall

    549
    employment. That is encouraging evidence of willingness to have a go at running businesses, many of which will succeed.
    The motivation to become self-employed is different for different people. For some, it will be the desire to escape the restrictions of a large organisation. For others, it may be the wish to live by their own efforts and to be their own boss. The motivation may be financial, although for the vast majority it will mean in reality long periods of hard work to achieve success. We recognise, too, that self-employment may also be a worthwhile alternative to unemployment. Moreover, it is interesting to note that 40 per cent. of self-employed people employ others and that some 80,000 businesses owned by self-employed people have 25 or more employees. That is a welcome feature of this part of the labour market which can all too easily be overlooked.
    The enterprise allowance scheme is the main Government measure designed to help unemployed people to start their own businesses. Since its introduction, more than 234,000 people have taken advantage of its support. The number of places available in 1987–88 will be more than 100,000 and in 1988–89 and subsequent years it will be 110,000. The success of businesses set up under the scheme has been particularly encouraging. Of those that received the full year's allowance. 61 per cent. were still in business at the three-year point. The scheme has also helped unemployed people to create jobs for others. Eighteen months after startup, more than 90 extra jobs had been created per 100 businesses trading.
    During 1986, I asked the Manpower Services Commission to concentrate a little more on management training. This point, too, was brought out by my hon. Friend the Member for Lewisham, East. It is important because I am ashamed to acknowledge that only 1 per cent. of those who run and manage small businesses have undertaken any kind of management development training in the past five years. That must be wrong. In some cases we cannot do much about it, although we can try to entice people to become involved in management training courses. With the enterprise allowance scheme, however, we can make it mandatory for people to go on a short course. At this stage, I decided to introduce an awareness day which lasts virtually a full day to point up issues and business concepts which prospective self-employed people need to consider. The awareness days also emphasise the benefits of further management training, advice and counselling to whet people's appetites and to point out that they may be deficient in certain areas and may not he the greatest living experts on financial control, marketing, and so on.
    Starter days are provided by a range of organisations including local enterprise agencies, professional training providers and colleges of further education. They will be supplemented by an increased number of follow-up visits from MSC staff. The enterprise allowance scheme has given opportunities to large numbers of unemployed people. It has been extended to meet the growing demand, to allow those whose first venture failed to have another go—I agree with what my hon. Friend the Member for Mid-Kent said about that—and to extend it to other areas where support might usefully be given. The scheme has demonstrated above all just how many people, given the right encouragement and persistence, can make a success of their business.
    550
    Where does that process start? If one is trying to change the attitudes in the country, should we concentrate on the adults or should we start with people at school? If we were to start by changing the attitudes of people at school—that point was made by my hon. Friend the Member for Northfield—they would have a head start when they left school. That is why I have been particularly enthusiastic to try to help to develop the mini enterprise in schools scheme. That was launched initially by the Department of Trade and Industry when I was part of that Department and, although I have no direct responsibility for it now, I am anxious to support the Department of Trade and Industry's initiative along with its partnership with the National Westminister bank. The aim is to have 7,500 secondary schools with mini enterprise schemes in them by the end of this year. That is quite a target. I think that about 60 per cent. of schools will have either mini enterprises or young enterprises in them. The young enterprise scheme is based on a foundation, and my hon. Friend the Member for Mid-Kent is quite an expert on that. All that is very important.
    The Manpower Services Commission scheme, TVEI, referred to by my hon. Friend the Member for Lewisham, East, starts at a much younger age where we are trying to encourage young people to take more work-related subjects. Part of the purpose of TVEI is that people should go through the experience of running a small business and making realistic business decisions. They learn how to put together a business plan and how to read a balance sheet. I was certainly denied that sort of education, as I suspect were most other hon. Members in the Chamber. That must be an advantage; it cannot be a disadvantage.
    If we are to encourage more people to follow the entrepreneurial route and become employers of others rather than expect others to employ them, we need to develop TVEI, young enterprise and mini enterprise in schools. In my opinion, we should have been doing that 20 years ago, but, never mind, we are on to it now. We are getting enormous support, not only from the education sector but from organisations such as banks and other large companies which recognise the need to support such initiatives.
    My hon. Friend the Member for Mid-Kent spoke about training in general terms. He referred specifically to the fact that many employers in large and medium sized firms, and perhaps even small firms, regard training not as an investment but more as a cost. That is true. We certainly need to concentrate on that in the future with regard to small businesses. I put to him the point I have made in public outside the House on a number of occasions. If one cannot convince the management within small businesses that they have to invest in their own management development, how can one convince them that they have to invest in training for their work force? It must start at the top.
    I have learnt a great deal from Sir John Egan, chairman of Jaguar. He is perhaps my constituency's most famous son. He was born and bred there and has risen to dizzy heights. He makes it mandatory for everyone, even on the lowest rungs of the managerial ladder, to take a fortnight out every year for training. If it cannot be done within a compressed fortnight, it can be done through a distance learning course and staggered. That goes from the bottom to the top and includes him. I wonder how many business

    551
    managers or owners of small businesses are aware of that and know the significant part he has played in turning that company round.
    The quality of management is crucial in determining whether a business survives—for the smallest start-up, for the established small business or for a firm growing to 20, 30 or more employees. The failure to manage successfully will lead a business into serious difficulties sooner or later. The owner of a small business needs the ability to combine production management, personnel activities, marketing and finance while all the time attending to the overall health of the business. Therefore, we have been concerned to increase awareness in the value of business training and its take-up. We want managers to recognise that training is an investment, not an unnecessary cost. It is principally through the MSC that the Government make their contribution to supporting business training.
    My hon. Friend the Member for Lewisham, East explained what happened in September 1985 when the responsibility for small firms was transferred from the Department of Trade and Industry to the Department of
    552
    Employment. That was a superb opportunity for us to bolt on to small firms what we want to do in training. As a result, there has been a significant change of direction within the MSC. Only recently I launched what I think could be the answer to the problems of trying to get small businesses more interested in their own management training. It is called the private enterprise programme. It is sufficiently flexible and, I hope, will be attractive to many companies. It will be delivered locally and, I hope, will reduce the failure rate of small firms. Far too often we talk about failure rates when we should talk about success rates.
    The fact that we have established so many successful businesses in the past few years is a source of great pride to me. We can never afford to neglect the business sector. The Government have given great encouragement to it and have not been afraid to apply resources to it. We are proud of our record and the significant progress that has been made. I am certain that that success will prove to be a significant factor in the Government being returned to office on 11 June.
    Question put and agreed to.
    Adjourned accordingly at twenty-seven minutes past One o'clock till Monday 18 May.