HC Deb 05 March 1980 vol 980 cc449-51
2. Mr. Myles

asked the Secretary of State for Scotland when next he will meet representatives of small businesses.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

My right hon. Friend the Secretary of State and I are including in our future programmes further meetings with individual small business men and further visits to small companies. My hon. Friends at the Department of Industry keep us informed of their regular meetings with small business organisations.

Mr. Myles

When they meet small business men, will my right hon. and hon. Friends pay particular attention to the employment potential in small businesses and do everything possible to eliminate the disincentives to employment in that sector, especially in rural areas, considering that the fishing industry is a small business?

Mr. Fletcher

I assure my hon. Friend that the Government have already taken a number of steps to make life more attractive for small businesses and to encourage more people to go into small businesses. We are fully aware of their employment potential.

Mr. David Steel

Surely the Minister is aware that everything that the Conservative Party said before the election about what it would do for small businesses has been more than negatived by the fact that they have to borrow at the rate of 20 per cent. upwards. Will he and his colleagues at the Departments of Trade and Industry therefore take steps to make cheaper loan facilities available to small businesses?

Mr. Fletcher

It is as much in the interests of small businesses as of anyone else that the rate of inflation should be reduced. We are aware of the difficulties that interest rates are causing, but we are sure that the banks will consider helping their small business customers in these circumstances.

Mr. Gregor MacKenzie

Since small firms, particularly in Scotland, in both the manufacturing and the service sectors, have been very hard hit, as the right hon. Gentleman has just said, by interest charges and by VAT increases in the last Budget, is the hon. Gentleman yet in a position to make an announcement about what he proposes to do now that he has decided not to renew the small firms employment subsidy?

Secondly, will the Under-Secretary take an early opportunity to talk to the CBI's small firms section and suggest that the biggest help that the major companies in this country could give to small firms would be to pay their bills rather more quickly than they do at present?

Mr. Fletcher

The small firms employment subsidy was the least cost-effective of the special measures, and the resources released by eliminating that subsidy are being put to better use elsewhere. I agree with the right hon. Gentleman about the larger companies. We are actively encouraging them to respond as much as they can to assist new businesses, and small businesses in particular.

Mr. Lang

Will my hon. Friend point out to small businesses that the high interest rates that they face are a direct result of the profligate expansion of the money supply and the public sector borrowing requirement pursued by the previous Government in their last two years in office? Will he reassure them of the present Government's commitment to bringing these matters under control, so as to create a climate in which small businesses can prosper?

Mr. Fletcher

My hon. Friend is absolutely right. That is why the Government's first priority is to reduce the rate of inflation. I say to Opposition Members that in just 10 months we have done much more for small businesses—such as easing employment legislation, reducing the number of forms to be filled in, and creating tax incentives—than the Labour Party did in five years, remembering the increased national insurance contributions and the abolition without warning of the regional employment premium.

Mr. Eadie

In the search for employment through small businesses, has the hon. Gentleman seen the emigration figures? We are exporting people, rather than technology, when one considers the skills available. Is the Minister aware that we are exporting mining engineers? Does not he think that this is a scandal, bearing in mind the reserves of coal in this country, which are unparalleled in the world?

Mr. Fletcher

Unfortunately, the coal mining industry is not a small business. Therefore, I think that the point raised by the hon. Gentleman should be raised with my right hon. Friend the Secretary of State for Energy.