Small Businesses

Part of Prayers – in the House of Commons at 10:35 am on 15th May 1987.

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Photo of Mr Roger King Mr Roger King , Birmingham, Northfield 10:35 am, 15th May 1987

My hon. Friend has raised an interesting point which I had not addressed. He is right. Of course, people on pilgrimages and people wandering various parts of the country were basically tourists. That is an extremely relevant point.

The creation of new businesses, whether in tourism or elsewhere, has been going on apace in America. In the eight years to 1976, two thirds of all jobs created in America were created by companies with 20 or fewer employees. One can see how the Americans do it. There are rows of car washes where one can get one's car hand washed. One no longer has to run the risk of having the car scored by automatic car washers. These days, automatic car washers do a sophisticated job, but a good hand car wash and leather-off afterwards cannot be beaten. I do not care what anyone says; the constant use of a powered car wash will damage a car's paintwork over a period, but it is another case for a hand-washed car. That is the way to wash a car, but one cannot easily get one's car hand washed in Birmingham for love nor money, and I doubt very much whether it can be done in London either. In most American cities the customer is almost spoilt for choice. That job is very labour intensive and lends itself to the activities of a small entrepreneur.

The small entrepreneur has the problem of finding a location and obtaining the necessary permission from the local council. He must apply to the local water authority to ensure that the right sort of sediment traps and filters are used before the water drains into the sewerage system. It is right that that should be done, but it all adds to the costs and the problems associated with establishing a labour-intensive business. I know from speaking to people who run manual car washes in this country that they have difficulties in holding on to labour. I was told that, in the black country, a person would work for 12 to 18 months before moving on. A similar exercise was tried in London. but people stayed in the job only two or three days before deciding that the work was too arduous.

About 1·4 million new businesses are now created in America each year compared with only about 90,000 a year in 1950. America has considerable experience in creating and developing new businesses. We are beginning to realise our investment because of the work that we have done in the past few years. We still have not tapped a great resource among people—the wish to get up and do their own thing. I hope that our policies will continue under the next Government to develop much of the ground work already done by my hon. Friend the Minister and his colleagues.

I was impressed by the leaflet on small businesses "The Success Story", which was prepared by the Department of Employment and which explains what the Government have been able to achieve and what that has meant. It identifies a number of the problems that the small business man faces.