Enterprise Initiative

Part of Prayers – in the House of Commons at 1:22 pm on 4th March 1988.

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Photo of Mr John Bowis Mr John Bowis , Battersea 1:22 pm, 4th March 1988

One of the prerequisites of these Friday debates appears to be to say where we were before coming here. My hon. Friend the Member for Taunton (Mr. Nicholson) has been to the sunny sands of Saudi Arabia. The Opposition spokesman the hon. Member for Great Grimsby (Mr. Mitchell) is from the sunny sands of Grimsby. I have come from the dentist and, for that reason, I apologise to my hon. Friend the Member for Carshalton and Wallington (Mr. Forman), who opened the debate, for being absent. While he launched eruditely into the subject of enterprise, I had my feet up and was flat on my back, being capped—no doubt an experience more often felt by Opposition Members.

I very much enjoyed the speech of my hon. Friend the Member for Colne Valley (Mr. Riddick) and the other speeches that I was present to hear, but unfortunately I did not hear the opening speech. I am sorry that my hon. Friends have been so adamant about the green Benches of the Opposition. It is quite restful on the eye, and I am sure that the hon. Member for Great Grimsby is worth the rest of them put together, with his wit and the entertaining speech that is about to come. Linked to the wit and musical talents of my hon. Friend the Parliamentary Under-Secretary of State for Industry and Consumer Affairs it should be a fine summing-up for a Friday afternoon. We look forward to it.

I refer first to the changes in our society and the need for enterprise initiatives of all kinds to adapt our society to those changes. We must take into account the fact that we are moving from a world in which we spend two thirds of our life at work to a world in which we spend one third of our life at work. That is partly because of shorter hours, the shorter working week, longer holidays and earlier retirement.

We are also moving towards a world where, increasingly, people have more than one job at a time and more than one career during their working lives. We are also moving towards a world where employment in itself is no longer the norm, as more and more people are becoming self-employed. That is where such initiatives are particularly important.

About 700,000 new businesses have been created in the past eight years and the number of self-employed has increased from 1.9 million to about 2.6 million between 1979 and 1986, although the Minister may have more up-to-date figures. It is welcome to note that almost 250,000 people have taken up the enterprise allowance scheme. That is a new way forward, but we have a long way to go to catch up with some of our competitors abroad in encouraging smaller firms.

In Japan, for example, almost 50 per cent. of people work for firms which employ fewer than 20 people and only 8 per cent. work for firms which employ over 500. The same pattern is apparent in France and Italy. However, in Britain, some 26 per cent. of people work in big firms and only 25 per cent. in small firms.

There is much scope for greater expansion of our small firms sector and of the self-employed sector. The rewards are there to grasp. The recent report from the university of Newcastle, compiled by Doyle and Gallagher, showed that, from 1982 to 1984, only firms which employed fewer than 20 employees were the net creators of jobs. That is significant. The birth and expansion of firms is occurring in those sectors. They are creating the jobs on which the British economy so desperately depends.

Small firms have many benefits. Obviously, managerial control is much simpler, industrial relations problems are fewer and quality is more responsive to customer needs. However, small firms also have to contend with many problems. Their ability to innovate after the first idea is more restricted. They are more likely to have cash flow problems and less likely to have cash for investment and research. They are also less likely to understand marketing and export aspects and the technology that we need to encourage them to tackle. That is not surprising because most small firms start with an individual who has an idea. He does not start as an expert on marketing or man management.

We can give much more support to small firms. I welcome the initiative, particularly the marketing aspect, not only in terms of expanding horizons for the marketing of small firms, but of encouraging small firms to consider the nitty-gritty of advertising. Too often, in small firms' advertisements, one sees the small ad mentality of trying to fit as many words as possible into a confined space, hoping to get the message across. Advice on that matter could go a long way to assist such firms.

I also welcome the changes which will make access to the various schemes easier. For example, under the loan guarantee scheme, since 1981, £600 million has gone to 18,000 small firms. Very few of those grants have been in amounts of less than £15,000, yet the small grants are often the most needed. Grants under the scheme have been most difficult to obtain because of the complicated procedure involved. It is good that the Government and the banks have worked together to ease that problem.

I also welcome a move that is occuring in the EEC. I do not recall that the hon. Member for Great Grimsby has ever welcomed anything from the EEC, except perhaps the fish which, of their own free will, swim into the Grimsby docks—