HC Deb 29 July 1975 vol 896 cc1496-9
Q4. Mr. Thorpe

asked the Prime Minister whether he will now ask a senior Minister within the Department of Industry to take special responsibility for the welfare of smaller businesses.

Mr. Edward Short

I have been asked to reply.

My right hon. Friend has no plans for changing the present arrangements under which special responsibility for the welfare of small businesses rests with my hon. Friend the Minister of State, Department of Industry.

Mr. Thorpe

It is well known that the hon. Member for Rutherglen (Mr. Mackenzie) has special responsibility for small businesses, but is the right hon. Gentleman aware that they have been going out of business at the rate of 4,000 a year and are not being replaced? Will he further accept that their fortunes are inextricably linked with those of the self-employed? Is it not unfortunate that the same Minister on 6th March refused the invitation to meet the National Federation of the Self-Employed on the ground that he had no such responsibility for the self-employed? Would it not be valuable now to extend his remit so that he does have responsibility?

Mr. Short

The right hon. Gentleman asked a question on the self-employed last week and I pointed out that they are a wide group and are not homogeneous. The small businesses are much more restricted and in that respect the Minister of State, Department of Industry has a direct responsibility. For example, he recently went to the North-East to initiate the voluntary counselling scheme for small businesses. If this is a success in the North-East it can be extended. Moreover, we have consultants examining the small firms information centres, of which I think there are 10 throughout the country dealing with approximately 1,500 inquiries a week. The consultants are looking at the position and we shall see how it can be improved once we have received the report. A good deal is being done to help the small businesses.

Mr. Kelley

Is my right hon. Friend aware that many small businesses are related to the sale of motor cars? Is he aware that many small businesses of that nature, being patriotic, would prefer to sell English or British-produced motor cars rather than foreign ones? Is he aware that in 1970 the balance of trade with the EEC was£37,234,000 in surplus but that in 1974 we had an adverse balance of£158 million, which means that many small businesses are selling more foreign motor cars against the interests of this country?

Mr. Short

I am sure that my right hon. Friend the Secretary of State for Trade will be glad to have the support of my hon. Friend in his campaign to persuade people to buy British cars. However, we must also sell cars abroad, which we do with great success.

Mr. Eyre

Does the right hon. Gentleman realise that the West Midlands County Council, which is under Socialist control, is bringing forward legislation to this House under which it proposes a great extension of municipal trading, directly at the expense of small businesses? Will the right hon. Gentleman say now whether he rejects that kind of proposal?

Mr. Short

Certainly not. As long as municipal trading engages in fair com- petition with private enterprise, it is to be welcomed.

Mr. Wrigley

Is the right hon. Gentleman aware that many small businesses in Wales have been crucified by the increase in water charges? In my constituency there has been one increase from£50 last year to£17,000 next year. When will he ensure that the Secretary Of State for Wales and the Secretary of State for the Environment liaise so that there is some co-ordination of policy about this matter?

Mr. Short

There is an acute problem in this respect, not only in Wales but throughout the country, resulting from previous Conservative legislation. As the hon. Member knows, the matter is now being looked at.

Mr. Heffer

Is it not clear that there is no contradiction between the extension of municipal ownership and assistance to small businesses? Is my right hon. Friend aware that there are real problems for small businesses which need to be looked at again? Small businesses have serious liquidity problems and in large city centres many of them have been destroyed because there are no premises available because old buildings have been destroyed and no new ones have been built to replace them. Will my right hon. Friend look at the matter again, because there may well be a case for a special Minister to deal with the problem?

Mr. Short

My hon. Friend, who knows a great deal about this matter, has put his finger on one of the problems of small firms. This is a problem where bigger firms can help by prompt settlement of their bills to their smaller suppliers and by taking no action which will injure their liquidity situation. If such a simple suggestion were heeded by the bigger firms, it would help the smaller firms a great deal.

Mrs. Thatcher

Is not the right hon. Gentleman aware that municipal trading often cannot be carried on in fair competition with the self-employed because the self-employed have to meet higher rates, higher overheads and higher national insurance contributions, all of which will add to their costs? Will he therefore look at this matter again?

Mr. Short

Rates are an allowable tax relief for small firms provided they have taxable profits. We believe, and it is part of our philosophy, that municipal enterprise is to be welcomed provided that it trades fairly in competition with private enterprise. We have no fear about which will gain if that takes place.