HC Deb 20 June 1989 vol 155 cc133-5
5. Mr. Harris

To ask the Secretary of State for Employment if he will report on what steps the Government are taking to help small firms; and if he will make a statement.

Mr. Cope

There is a wide range of schemes to help small firms gain access to advice, finance and training, and to help those who want to start their own businesses. Those include the small firms service, the loan guarantee scheme, the business expansion scheme, the enterprise allowance scheme and business growth training, launched in April to help small businesses improve their competitiveness and profits through training.

Mr. Harris

As about 1,300 small businesses are set up each week, does my right hon. Friend agree that that is an area of considerable success for the Government? However, what help is being made available to those small firms to improve their performance, profitability and skills training under the business growth training scheme announced by his Department in April this year?

Mr. Cope

Yes, there is tremendous growth in the small firms sector which reflects the growth in enterprise in the economy generally. Business growth training consists of five broad options to help small businesses improve their competitiveness, starting with small companies, open learning kits, and so on, and working up to seminars and consultancy projects at the higher levels.

Mr. Cryer

What effect does the current high level of interest rates have on small firms? Will the rate of bankruptcies among small firms, which has reached an all-time record under the Government, be likely to increase or decrease? Lastly, how many of the 2 million jobs that have been lost in manufacturing industry since the Thatcher Government were elected in 1979 have been in small firms?

Mr. Cope

The proportion of small firms in manufacturing is smaller than in the economy generally, but I cannot answer the hon. Gentleman's question precisely without notice. It is sometimes difficult for large as well as small firms to deal with high interest rates, but many business men realise that they are essential to deal with inflation.

Mr. Brandon-Bravo

Does my right hon. Friend agree that the establishment and growth of small firms often has its roots in self-employment? I believe that the number of self-employed in Britain has grown by 1 million over the past few years, but Italy, with roughly the same population, has 6 million self-employed people. Can my right hon. Friend assure the House that the help given to small businesses is also given to that seedcorn—the self-employed?

Mr. Cope

Yes, it is. Since 1979 the number of self-employed has increased by rather more than 1 million, but, in making international comparisons, one must bear in mind that the definitions are not always the same and to some extent the higher figures reflect the different tax and social security structures in other countries.

Mr. Ieuan Wyn Jones

Does the Minister agree that a number of job opportunities in rural areas have been lost because small firms do not have proper access to training? Does he further agree that in rural areas the Government are already finding it difficult to find people to serve on the training and enterprise councils because people are far better off running their businesses and do not want to he bothered about joining such bodies? Is it not time that the Government took their responsibilities seriously and gave the proper resources to training colleges and other educational establishments in order to provide decent training for jobs in rural areas?

Mr. Cope

As the hon. Gentleman will find out in a few days' time when we announce the first training and enterprise councils there is no shortage of good people who are only to anxious to contribute to the nation's training effort in that way.

Sir Anthony Grant

Is my right hon. Friend aware that the development of the small firms sector has been remarkable since the bleak days when the hon. Member for Bradford, South (Mr. Cryer) was the Minister responsible for small firms and when they were dying like flies? However, will my right hon. Friend bear in mind that high interest rates are beginning to hurt the small firms sector very much and that they will be even more damaging if they go any higher? Will he please ram that point home in his discussions with Treasury Ministers?

Mr. Cope

Yes, I will. I shall also reflect on the fact that responsibility for small firms has been held by distinguished right hon. and hon. Members in all parts of the House.