HC Deb 02 July 1979 vol 969 cc880-1
2. Mr. Stallard

asked the Secretary of State for Trade what representations he has received from small businesses about the effect on them of the Budget proposals.

The Secretary of State for Trade (Mr. John Nott)

I have not received any such representations.

Mr. Stallard

Will the right hon. Gentleman accept that I have, and that most of the small business men to whom I have spoken since the announcement of the Budget proposals feel let down and betrayed by their so-called friends? They are deeply concerned and worried about the effect on their businesses of VAT, increases in rents and rates, the increase in oil prices and the increase in transport charges. They are very concerned that many of them will go bankrupt. What do the Government intend to do to justify the promises they made to small business men during the election?

Mr. Nott

I can understand that the hon. Gentleman may not necessarily like a Conservative Budget, but a large number of the representative bodies that support the interests of small businesses—the CBI Small Firms Council, the Federation of Self-Employed and the Association of Independent Businesses—have all sent in comments to the Department of Industry saying that they thought the Budget was very welcome to small businesses. That is the opinion of those who represent small businesses, although I appreciate that the hon. Gentleman may feel differently.

Mr. Dorrell

Is my right hon. Friend aware that I have received representations from my constituents welcoming the fact that both the owners and the workers in small businesses now have a renewed incentive as a result of the cuts in income tax? Is he aware further that they welcome particularly the return to a single rate of VAT, which simplifies their own administration expenses?

Mr. Nott

My hon. Friend is quite right. It requires a Conservative Government to create an economic environment where incentives are available to both the shop floor and management, where enterprise can flourish and where there is less bureaucracy. We are pursuing all of these objectives, but I can appreciate that Labour Members do not understand this.

Mr. John Smith

What will be the rate of inflation by the end of this year? Given the fact that on the Government's own admission the effects of the Budget will create a 17.5 per cent. inflation rate by November, is it not clear that with other price increases on the way there will be a rate of inflation of 20 per cent. by the end of this year, and that within eight months the Government will have doubled the rate of inflation which they inherited?

Mr. Nott

The right hon. Gentleman knows quite well that in the Budget there has been a switch in the burden of taxation, so that now there is less taxation on earning and saving and more on spending. In the first three Budgets of the Government of which the right hon. Gentleman was a member, the RPI was increased by 5 per cent. and the standard rate of income tax went up by 5p. In both cases his party made the situation infinitely worse. It did not switch the burden of taxation but increased it.