HC Deb 04 December 1972 vol 847 cc906-7
28. Mr. Ridley

asked the Secretary of State for Trade and Industry what consideration he is giving to the provision of new forms of finance for small companies; and if he will make a statement.

Mr. Chataway

As my hon. Friend is aware, the Bolton Committee concluded that there was no case for the provision of new forms of finance for small companies. The full range of regional incentives is, however, available to small firms.

Mr. Ridley

Would not my right hon. Friend agree that a faster growing small firm sector could be the most important contribution that we could make to long-term employment prospects? In that case, would it not be worth making a study of the available forms of finance, whether through the Finance Act or the secondary market, and considering that it is possible that the Bolton Committee under-estimated the gap in this region?

Mr. Chataway

I agree about the importance of the small firm sector to employment and the long-term health of the economy. I will bear in mind what my hon. Friend has suggested.

Mr. Redmond

Does my right hon. Friend agree that the best source of finance for small firms is their own profits? Therefore, would it not be better to ease the tax burden on small firms?

Mr. Chataway

By tax reductions and by a range of other measures the Government have done an enormous amount to implement the recommendations of the Bolton Committee to encourage small firms.

Mr. Alan Williams

Have not the Government by their value added tax imposed an unprecedented work load on the small firms, and, indeed, an unnecessary cost load? How does the right hon. Gentleman reconcile this with the Government's claims during the debate on small businesses earlier this year that the Government would reduce the volume and complexity of paper work for small firms?

Mr. Chataway

That the Government have done. The hon. Gentleman will find if he talks to the small firms that they have no unlimited enthusiasm for selective employment tax.