§ 3. Sir W. Elliott
asked the Chancellor of the Exchequer if he will give tax concessions to small businesses operating in inner city areas.
§ Sir W. Elliott
In noting my suggestion, will the Chief Secretary take into full account that there is a new modern-day problem with regard to our city centres and those who are in business in them, due to modern development, traffic congestion, and so on? Does he appreciate to the full that those in business in the centre of Newcastle upon Tyne and other major cities experience additional difficulties compared with people in similar businesses elsewhere? Will the right hon. Gentleman take due account of that factor in future taxation proposals?
§ Mr. Barnett
I appreciate that small businesses in city centres have serious problems, but it is difficult to say that it is only small businesses in city centres. There are problems, including tax problems, everywhere, but it must be said that the tax problems of small businesses are very much fewer today than when the corporation tax system was introduced by the then Conservative Government.
§ Mr. Eyre
The Chief Secretary indicated that he was not aware of the very serious unemployment problems in the inner areas of large towns and cities. Instead of hammering small businesses, will he consider what the Government can do to help? What incentives can they give to aid existing small businesses to grow and to encourage people to come in as business starters, with the aim of creating additional employment in those areas?
§ Mr. Barnett
It is simply not true that small companies are being hammered, whether they be in city centres or anywhere else. It is a grotesque distortion to suggest that that is true. Under capital transfer tax, the great majority of small companies are very much better off than they were under the old system of estate duty. Under the 100 per cent. tax relief for investment, and the stock relief, they are virtually paying no corporation tax at all. It does not help small businesses or anyone else for the hon. Gentleman to distort the situation in that way.
§ Mr. Heffer
I congratulate my right hon. Friend on his new appointment to the Cabinet. Is he aware that some Government supporters feel that it was the most deserving of all, especially on the basis of hard work? Unfortunately, the hard work may have been misguided. My 1612 right hon. Friend will realise that I am serious about this, because he is a great personal friend of mine. Is he aware that in areas such as Liverpool there has been a wholesale destruction of small businesses, and that assistance is required to bring them back to the inner areas? We have seen the total destruction of small businesses, and it requires Department of Industry assistance from the Treasury to re-create employment in areas which badly need it.
§ Mr. Barnett
I very much appreciate my hon. Friend's kind remarks. I assure him that if at times he has thought that I have been misguided, the same goes vice versa. But we are at the moment looking into the whole problem of the inner cities. My right hon. Friend the Secretary of State for the Environment is looking into the general problem. It is a fact that for some years now small shops in inner city areas have been closing down, for a variety of reasons. There is no one simple reason for it. There is the growth of the large stores and the rest, which has been a factor. I hope that it will be possible to do something about it, although it will have to be done in the context of the present limits on public expenditure.
§ Mr. David Howell
I can understand the Chief Secretary's need to be defensive on the subject of small businesses. But is not the hon. Member for Liverpool, Walton (Mr. Heifer) correct? Is not the position that small businesses are being driven from our inner city areas by tax measures and well-meant employment measures passed by this Government which make it impossible for anyone to be taken on in a new job? Is not there a need to consider all these matters, and will the right hon. Gentleman at least assure us that the Treasury will consult the Department of the Environment and the Home Office and put to them the priority need to give better tax treatment to small businesses which alone might do far more than substantial grants and subsidies thrown round the inner city areas for other purposes?
§ Mr. Barnett
If anyone should be defensive, it is the right hon. Member for Guildford (Mr. Howell). He and his right hon. Friends have a lot to answer for. It is absurd to suggest that there is one simple answer and that it lies in 1613 giving further tax incentives on a geographical basis. Once we start spreading tax incentives on a wide geographical scale, if we are not careful the net result will be to destroy incentive, anyway. We have to be careful about this geographical type of incentive. I hope that the hon. Gentleman realises how wrong have been many of the statements made today by him and his hon. Friends.