§ 1. Mr. David Cameron (Witney)What steps she is taking to encourage small businesses to increase employment levels; and if she will make a statement. [130814]
§ The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)We have given UK small businesses the best VAT threshold in the EU, cut the corporation tax starting rate to zero and created a sound and stable economy that has generated more than 1.6 million additional jobs since 1997. More people are now in work in Britain than at any time in our history.
§ Mr. CameronWhat would the Minister say to the small business people who come to my surgery each week and list the Government-inspired reasons why they no longer want to expand their work force? What would he add to that list, which includes the national insurance increase, stakeholder pensions, the working time directive, new rules for employment tribunals and the fact that businesses are now treated like benefit offices? Will he confirm that the rate of small business failures has actually trebled in the past four years?
§ Nigel GriffithsThe national insurance increase that the hon. Gentleman mentions occurred in April and the employment figures were published yesterday. The House will be pleased to note that since April, 63,000 more jobs have been created than lost. Indeed, he will be very pleased to note that in his own constituency, the number of unemployed claimants has fallen by 76, to less than half the figure for 1997.
§ Mr. Derek Foster (Bishop Auckland)May I praise the vigour and energy with which my hon. Friend is attempting to increase the number of start-ups in areas such as mine, which has experienced enormous difficulties for some 60 or 70 years? But may I ask him to bear in mind—this has little to do with Government policy—the swingeing increases in employers liability 1052 insurance, which are genuinely affecting employment prospects in many companies in my constituency and elsewhere?
§ Nigel GriffithsThat is obviously a very serious matter, on which a statement was made in the House before the recess. A report was published in June by the inter-ministerial working group, on which I serve, and placed in the House of Commons Library. It included a number of findings and recommendations, and a second report is due in the autumn. I hope that it will address some of the issues—as we have indeed done—to ensure that no business is left without that vital liability insurance. I am very pleased to have worked with the Federation of Small Businesses, the CBI small and medium-sized enterprises council and other representatives of business to ensure that the insurance industry itself is addressing this issue. However, we are constantly monitoring the situation.
§ Mr. Tim Yeo (South Suffolk)The Minister will trumpet the latest employment figures, but what he does not tell the House is that many of the jobs to which he refers are not being created by small businesses; rather, they are jobs for Government-paid, pen-pushing bureaucrats. Does he believe that requiring small business employers to administer the Government's chaotic tax and benefit system and to become legal experts in every detail of employment law will make it more or less likely that they can continue to create jobs? Does he not understand that the accumulation of new employment regulations, often introduced with the best of intentions—to protect workers' rights—is now in danger of taking away their most basic right of all: the right to a job? Indeed, we can see that happening in Germany, France and Spain.
§ Nigel GriffithsI prefer to be advised by Barclays than by the hon. Gentleman. Its recent survey points out that since 1997, 2.4 million new businesses have started in Britain, which is a result of the climate that we have established. If the hon. Gentleman wants to give lectures on bureaucracy, he has chosen the wrong place. Starting up a business in Britain now takes less than a day and costs less than £100; 10 years ago, setting up some businesses required 28 licences, registrations and certificates.
§ Sir Patrick Cormack (South Staffordshire)That is all very well, but was my hon. Friend the Member for Witney (Mr. Cameron) right to assert that the rate of small businesses going down the drain has trebled in the past four years?
§ Nigel GriffithsI have in front of me the figures for deregistrations—such figures are the most valid measure, and were accepted by previous Governments as well as by this one—which show that the failure of businesses in the past decade or so peaked in 1992. Indeed, in no year of the Labour Government have the figures reached anywhere near the horrendous levels of 1992, when 226,000 businesses went bust. Of course, we support all businesses, and most businesses that fail do so for honest reasons. But as I have told the House before, the real figure is the 2.4 million new start-ups and the best survival rates for small businesses for a decade.