Small Businesses (Hansard, 31 January 1977)

§ 8. Mr. MacGregor
asked the Secretary of State for Industry what action he has taken over the past three months to help small businesses.

§ 18. Mr. Anthony Grant
asked the Secretary of State for Industry what steps have been taken to assist small firms since the Minister responsible for them took office.

§ Mr. Cryer
In the course of the last three months the Government have announced changes in, and additions to, most of the sectoral schemes currently in operation under Section 8 of the Industry 12 Act 1972. They now contain special provisions for assistance to small firms towards the cost of consultancy studies, and in the case of the clothing industry scheme the minimum value of a project eligible for help has been reduced from £30,000 to £10,000. In addition, I have inaugurated a pilot counselling scheme for small firms in the South-West Region which, subject to our experience, we will extend in due course to the rest of the country.
The Small Firms Information Service has also been extended by the opening of a new sub-centre in Liverpool to serve small businesses in the area. The construction of 82 advance factory terrace or nursery units has also been progressing during the past three months. Work is progressing well on a study of the needs of small firms managers for training and how these needs can be met, and I am actively promoting the Department's scheme for collaborative ventures among small firms.

§ Mr. MacGregor
Is the hon. Gentleman aware that much more would be served if he looked at the fact that the flood of Government legislation, departmental bumf and bureaucratic intervention is killing off not only small businesses but the incentive to grow and to provide more jobs for many more people? If he is to protect small firms, will he consider setting up a strong interdepartmental committee to scrutinise all legislation and major regulations before they come to this House in order to exempt small businesses from those which are not appropriate to them?

§ Mr. Cryer
I am sorry that my answer took so long, but there has been a wealth of activity in the Department of Industry regarding small firms.
The hon. Gentleman will recall that value added tax was introduced by the Conservative Government. That was one of the sources of complaint. That is something that the Common Market has brought into a permanent situation. The Department is always reviewing the position of small firms and is constantly examining legislation to see in what way they can be helped. It is difficult to create two categories of people. with one of them working for small firms and the other working for large firms. Indeed, 13 I do not suppose that many hon. Members on either side of the House would choose, for example, to have lower standards of employment in small firms and perhaps worse safety standards than in medium and large firms.

§ Mr. Grant
Is the Minister aware that, in view of the greatly increased numbers of liquidations from bankruptcies, his efforts so far have been feeble in the extreme? Does he recall a resolution passed by the House exactly one year ago today calling upon the Government to alleviate the taxation and other burdens that were threatening the existence of small firms? When does he propose to comply with the wishes expressed by Parliament?

§ Mr. Cryer
Such changes have already been made. For example, corporation tax on profits up to £30,000 is levied at a lower rate. Quite recently, as the hon. Gentleman is no doubt aware, although his question does not exactly indicate the fact, the Chancellor of the Exchequer announced changes in capital transfer tax to allow for easier transfer of small businesses.
As to the question of bankruptcies, small firms are not separated in the statistics. I am, however, sure that the hon. Gentleman will be pleased to know that in 1976 bankruptcies at 7,172—that high figure is regrettable—were in fact down on 1975, when the figure was 7,271. I have no doubt that the hon. Gentleman will go round the countryside pointing out the marginally smaller number of bankruptcies which took place in 1976 and get away from the constant political diatribe that he and his supporters put up about the greater number of bankruptcies among small firms.

§ Mr. Madden
What advice is the Department giving to local authorities, such as the Merseyside County Council, which are anxious to enter into arrangements with the National Enterprise Board to assist small firms in safeguarding and promoting employment?

§ Mr. Cryer
My hon. Friend will know that we are looking at the whole question of the development of small firms in inner city areas. A committee is looking at that matter with a great deal of urgency. We are alive to the problem.

§ Mr. Adley
That is all right then.

§ Mr. Cryer
It is no use the hon. Gentleman shouting from a sedentary position. The fact of the matter is that the situation is being examined in great detail. Indeed, in Liverpool we are constructing 16 terrace units for small businesses among the 82 units which the Government are currently having constructed in using public expenditure. I do not suppose that the Opposition would jib at that.

§ Mr. Kenneth Clarke
Has the hon. Gentleman noticed that the Prime Minister's remarks at the Labour local government conference last week about the decline of small businesses and employment potential in inner cities were almost a repeat of the speech made by the Secretary of State for the Environment on the same subject in September last year and that they both expressed it better than he did in reply to the last question? When will all the window-dressing be translated into a statement on Government policy for reversing the trend leading to the decline of small businesses in inner city areas and removing the restraints on small businesses which have been described?

§ Mr. Cryer
The hon. Gentleman's comments demonstrate the strong sense of unity which prevails in the Labour Government. Those statements indicate that there are two elements in encouraging and preserving small firms. One element is central Government. I indicated earlier that the Department of Industry does not regard the whole matter as completely perfect. Nevertheless, we are encouraging small firms to the best of our ability in difficult economic circumstances.
The other element is local government. Both statements referred to by the hon. Gentleman indicated that local government had a part to play. We want to encourage local government, when making planning decisions, which often in the past have resulted in the disappearance of small firms, to bear this fact in mind. I am sure that local government will take notice of what my right hon. Friends said.