The Self-Employed (Hansard, 1 May 1984)

§ Lord Rodney
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

Viscount Long
My Lords, the latest firm estimates available of self-employed people are for mid-1981, when there were 2,057,000 self-employed people in Great Britain. It has been assumed that self-employment has continued to increase at about 100,000 a year since then; but we will not be able to establish the position more certainly until the results of the 1983 labour force survey become available later this year.

§ Lord Rodney
My Lords, while thanking my noble friend the Minister for that very encouraging reply, may I ask whether it is possible to assess the extent to which the special measures introduced to help small businessmen have contributed to this favourable trend? Secondly, is it possible to attribute these figures to particular enterprise zones?

Viscount Long
My Lords, I am grateful to my noble friend for his supplementary question. There are a number of different schemes but I shall bring two to the notice of your Lordships' House. The first is the 462 enterprise allowance scheme, which is designed to help unemployed people who wish to start their own businesses but who are deterred from doing so because of the loss of benefit. The £40 a week allowance helps compensate for this loss during the first year, while the new business is being established.
The second scheme which may be of interest to your Lordships is the pilot loan guarantee scheme, under which the Government can guarantee 80 per cent. loans of up to £75,000. This scheme has helped many small businesses which have been unable to obtain backing in traditional ways because of a lack of security or track record. In the period 1st June 1981, when it was introduced, to 31st March 1984, 14,286 firms were helped with a total guarantee value of £469 million. The scheme is currently being reviewed.
I think my noble friend asked a further question about the distribution of places. Places under the enterprise allowance scheme are allocated to each area broadly in line with their share of national unemployment.

§ Baroness Nicol
My Lords, can the Minister say whether the figures he has quoted include the figures for workers who have formed themselves into co-operatives? If not, are those figures available?

Viscount Long
My Lords, I am grateful to the noble Baroness, but I have to apologise as I do not have those figures. I will write to the noble Baroness in that respect.

§ Lord Maude of Stratford-upon-Avon
My Lords, is my noble friend aware that the figure of increase would have been very much larger had not the Inland Revenue persisted every year in forcing numbers of self-employed people to become employees, and that this has resulted in a number of people being unable to start up and expand what would have been useful businesses?

Viscount Long
Yes, my Lords, there has been that problem, of course; but now, with the Government's new schemes, they are trying to help out, with the Inland Revenue not taking too much from their pockets.

§ Lord Jenkins of Putney
My Lords, is the noble Viscount aware that the percentage increase in bankruptcies under the Government's aegis since 1979 greatly exceeds the increase in the number of small businesses?

Viscount Long
My Lords, I think the noble Lord is moving away from the Question.

Lord Bruce of Donington
My Lords, will the noble Viscount give the House some information as to the extent to which his right honourable friend the Chancellor of the Exchequer gave consideration to the future of those self-employed people who are engaged in the takeaway food business before he imposed the 15 per cent. tax on takeaway food? Will he give the House a further indication of what future effect the Chancellor expects as a result of this grossly excessive tax imposition on the cheaper foods?

Viscount Long
My Lords, I am glad to hear that the noble Lord, Lord Bruce of Donington, likes takeaway fish and chips, as I do. I do not have the answer to the noble Lord, but I will certainly bring his question to the attention of my right honourable friend the Chancellor of the Exchequer.

§ Lord Diamond
My Lords, with regard to the approximately 14,250 individuals who have benefited under the scheme, according to the figure the noble Viscount has just given, can he say how many of those are still carrying on in business?

Viscount Long
My Lords, I do not have the figure for that. I should imagine it is at least 70 per cent., if not more, but I should not like to give a complete estimate at the moment. I will write to the noble Lord.

Lord Spens
My Lords, now that the national insurance surcharge is in process of being abolished, will Her Majesty's Government give attention to the equally iniquitous Class IV national insurance contribution which is charged against self-employed profits without any part of that tax being allowed to be charged as a labour expense?

Viscount Long
My Lords, I am afraid we are going right off the Question at the moment, but if the noble Lord would like to put down a Question on that subject my noble friend will answer it.

§ Lord Glenamara
My Lords, is the noble Viscount aware that we all welcome the increase in the number of self-employed but that this is no substitute for doing something about the appalling unemployment figures? Is he aware that in the North-East of England we have overall unemployment of just under 20 percent., with some areas up to 40 per cent.? I hope I have the noble Viscount's attention. Is he further aware that this is a manufacturing country and that our manufacturing industry has been in deficit since the beginning of last year? It is that which the Government should be doing something about: not fiddling about getting more self-employed people, but making a massive contribution towards doing something about the unemployment figures.

Viscount Long
My Lords, I am absolutely amazed at the noble Lord's question. He does not seem to want to help anybody.

§ Lord Glenamara
My Lords, may I say to the noble Viscount that that remark is utterly stupid? I am speaking on behalf of the many hundreds of thousands of unemployed people in the North of England. I repeat: we have areas with 40 per cent. unemployment. We welcome the increase in the number of self-employed people, but what are the Government doing, of any significance, about unemployment?

Viscount Long
My Lords, I am going to keep to what I have already said; that is, on this Question, to look after the self-employed and help those who want to be self-employed.