New Businesses (Hansard, 18 June 1981)

§ Baroness Sharples
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Minister of State, Department of Employment (The Earl of Gowrie)
My Lords, the Government are encouraged by the rate of new business activity but of course would not pronounce themselves satisfied. But I am in no doubt that the measures we have taken to improve the environment for small firms, including the recent measures announced by the Chancellor of the Exchequer in his Budget Statement, will stimulate both the establishment of new enterprises and the expansion of existing business.

§ Baroness Sharples
My Lords, I thank my noble friend for that reply and his reference to the recent tax relief, but would he agree that perhaps more encouragement might be given to new businesses in country areas because there are many derelict buildings in the country which could be used and, as he will appreciate, people in the country do not necessarily wish to work in towns?

The Earl of Gowrie
My Lords, I am in agreement with the sentiments expressed by my noble friend and it would be quite wrong to assume that dynamic and new commercial activities are restricted to towns. There is of course in this context the work of CoSIRA as well as some help provided by my own department under the Community Enterprise Programme.

§ Lord Leatherland
My Lords, can the noble Earl also tell us how many businesses have gone out of existence during the same period?

The Earl of Gowrie
No, my Lords.

§ Lord Avebury
My Lords, if the Minister is encouraged by the number of new businesses which have been started since the beginning of this year, can he tell us how many of them there have been and how many new jobs have been created in those businesses and what are the comparable figures for last year, say up to the end of May in each case?

The Earl of Gowrie
My Lords, one of the predominant needs of businesses old and new is for stable, or indeed lower, rates of interest, and the kind of additional costs on public spending required to correlate the sort of information that the noble Lord would wish to have would be quite contrary to that need.

§ Lord Avebury
My Lords, how can the noble Earl be encouraged when he cannot give us the figures?

The Earl of Gowrie
My Lords, people feed information to Governments in a number of different ways. 759 Statistics in this field are unreliable; to make them reliable would need expenditure that we are certainly not proposing to make.

§ Lord Blyton
My Lords, if the Minister is pleased about the success of the increase of small businesses can he explain to me why it is that unemployment keeps rising every month?

The Earl of Gowrie
My Lords, one of the major policies of both the previous Government and this Government has been to reduce employment in old, overmanned industries, and that is liable to continue for a considerable length of time.

§ Lord Whaddon
My Lords, is it true that under the proposed loans guarantee scheme the Government are suggesting charging 3 per cent. above normal bank interest charges, making loans cost possibly over 19 per cent., and will this not be liable to render the whole scheme nugatory and will the Government reconsider these extortionate charges?

The Earl of Gowrie
My Lords, the essence of getting lower charges for loans for businesses, whether provided by Government or by the financial sector, is to have lower rates of inflation and therefore lower rates of real interest.

§ Lord John-Mackie
My Lords, is the Minister satisfied that the county councils are co-operating with CoSIRA in dealing expeditiously with the planning situation mentioned by the noble Baroness, Lady Sharples?

The Earl of Gowrie
My Lords, I do not think any Minister expresses himself satisfied, but I am confident that such co-operation exists and I am grateful to the noble Lord for drawing attention to its necessity.