HC Deb 09 June 1999 vol 332 cc631-3
2. Mr. John Bercow (Buckingham)

If he will make a statement on the prospects for the small business sector in Wales. [85156]

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain)

There is a revival of small business confidence in Wales, supported by many Welsh Office initiatives. Following the transfer of functions, the issue will be a matter for the National Assembly for Wales.

Mr. Bercow

I am afraid that that answer wins a gold medal only for complacency. In the first quarter of 1999 there were 444 business failures—an increase of more than 40 per cent. on the equivalent period last year—and 3,000 jobs were lost in manufacturing industry alone. Business optimism has fallen faster in Wales than in any other part of the United Kingdom. Does the hon. Gentleman not recognise the gravity of the situation? Since he took office, how many times has he bothered to meet his counterparts from the Department of Trade and Industry to discuss the crippling over-regulation of small businesses, which has been gathering pace and has been exacerbated throughout his tenure of office?

Mr. Hain

I have lost count of the number of times I have met my ministerial colleagues in the Department of Trade and Industry to discuss concerns from business in Wales and other matters. [HoN. MEMBERS: "What have you achieved?"] Our achievement has been to take seriously the burden of red tape and over-regulation that was heaped upon the business community by the previous Government. As the Member representing Buckingham, the hon. Gentleman does not have a clue about what is going on in Wales. That is shown by the fact that the Welsh Federation of Small Businesses recently issued a statement expressing the small business sector's confidence in the future of the Welsh economy. That is because interest rates are at a 33-year record low, corporation tax for small businesses is at a record low of 10p, and tax for self-employed business men is also at a record low, starting at lop. That is why the small business sector trusts Labour to look after its interests.

Ms Jackie Lawrence (Preseli Pembrokeshire)

I wonder whether my hon. Friend has seen the business survey conducted by the Federation of Small Businesses in March 1999 which precisely countered what was said by the hon. Member for Buckingham (Mr. Bercow). It showed that 33 per cent. of small businesses in Wales are more optimistic than they were last year and that 20 per cent. have increased their work force. Does my hon. Friend agree that that is in part due to the increased consultation process that is now available to small businesses as a result of the Government of Wales Act 1998?

Mr. Hain

Yes, I agree with my hon. Friend. What is more, in the past two years during which I have been the Minister responsible for industry, the Welsh Office has had more of an open door to small businesses than ever before. There has been a series of initiatives, including an 18 per cent. increase this year in spending on small business support, which will help 6,000 companies. In addition, we are establishing an entrepreneurship action plan and making Wales an enterprising country in which people want to expand and invest. The small business sector is a vital part of that.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

Bearing in mind the fact that over 90 per cent. of employment in Wales is in the small and medium-sized enterprise sector, what recent plans have there been to assist the small business sector to expand its work force, particularly to make it more economically viable and attractive to do so, and to bring in youngsters?

Mr. Hain

In addition to the measures that I have already described, we have revamped Business Connect Wales, giving it a new business-led management board, to ensure that it is able to supply the support and advice often needed by small business people. The sole trader initiative, by which a self-employed individual is able to take on his or her first worker, has been a great success in Wales, particularly north Wales, and is being driven forward. A series of other measures is being put in place to give small businesses what the hon. Gentleman correctly says is their rightful place in the Welsh economy.

Mr. Huw Edwards (Monmouth)

Has my hon. Friend seen the list of the fastest growing firms in Wales which was published by the Western Mail this morning in conjunction with KPMG? May I share my wonderment and pleasure at the fact that six of those happen to be in Monmouthshire? Does my hon. Friend agree that the last thing needed by small firms exporting in Wales is the anti-European posturing of the Conservative party?

Mr. Hain

I very much agree with my hon. Friend and I am sure that the wonderful success of those companies in Monmouth is due to the excellent representation from their Member of Parliament. Every small business in Wales has a great deal to fear from the Tory objective, expressed in the past few days, of wanting to leave Europe instead of wanting to lead Europe.

Mr. Nigel Evans (Ribble Valley)

I see that the Minister is wearing his rose-tinted spectacles. Does he accept that in the first three months of this year the number of bankruptcies among Welsh businesses rose by 40 per cent. and is rising at three times that rate among smaller companies? Smaller companies are creating jobs, but the Government are putting them in a straitjacket as a result of costly extra domestic legislation and the fact that they will sign up to any directive from Brussels. Is it not the case that our Welsh businesses want to be in Europe, but do not want to be ruled and governed by Europe?

Mr. Hain

Welsh businesses want a Government who stand up for them, support them and represent them strongly in Europe instead of standing on the fringes pursuing extremist policies that would result in Britain leaving Europe, as it would do under a Conservative Government. In respect of small business problems, it really takes the biscuit to recall that the hon. Gentleman speaks for a party that presided over record bankruptcies among small businesses in Wales and right across Britain. In each of the last five years of Conservative Government there was an increase in the number of closures and VAT deregistrations among small businesses in Wales. It is a shabby record that we are reversing.