HC Deb 29 January 1981 vol 997 cc1058-9
1. Mr. Waller

asked the Chancellor of the Exchequer what consideration has been given to the introduction of a scheme based on tax incentives to stimulate equity investment in small and medium trading businesses.

9. Mr. Richard Page

asked the Chancellor of the Exchequer if he will give consideration to a speedy introduction of a tax incentive scheme to the individual specifically designed to increase investment in small and medium trading businesses.

The Financial Secretary to the Treasury (Mr. Nigel Lawson)

I regret that I cannot anticipate my right hon. and learned Friend's Budget Statement.

Mr. Waller

When considering proposals for equity investment will my right hon. Friend and our right hon. and learned Friend take into account the fact that small firms have limited opportunities to raise non-interest paying capital, compared with public companies? Does he agree that proposals along these lines would help smaller companies, which have done a great deal in the past to build up Britain's trading position?

Mr. Lawson

I agree with my hon. Friend. My right hon. and learned Friend is bearing those considerations very much in mind. My hon. Friend will recall that a measure of this kind was taken in last year's Budget under the venture capital scheme, which allowed relief for loss on equity investment by, individuals and small businesses.

Mr. Page

Is my right hon. Friend aware that, in addition to providing much-needed equity capital for small businesses, a scheme of that nature will bring investment from professional and senior company executives and, with that investment, expertise in management and the skills that are so lacking in our smaller businesses because it is free of charge and by the personal nature of the investment?

Mr. Lawson

I am keenly aware of all that my hon. Friend has done on the small business front and the close interest that he takes. I am sure that my right hon. and learned Friend the Chancellor has listened carefully to what he has said.

Mr. Skinner

Will the Minister give the same consideration to the smaller businesses—and many of those that have disappeared as a result of the Tories' monetarist policies—as the clearing banks, under the guidance of the Bank of England, gave recently to the multinational Massey-Fergusson group and to Stone-Platt Industries about 12 months ago? The Government have assisted other large industries. If it is right for these large industries to be assisted in an interventionist way by the Tory Government, why do they consistently keep kicking the smaller businesses to death?

Mr. Lawson

I am not sure whether the hon. Member is suggesting that the Bank of England should not attempt to bring people together where that would be helpful, or whether he is suggesting that it should do so. I am sure that, on reflection, he will agree that this is a proper function of the Bank of England.

Mr. Grylls

Will my right hon. Friend further consider the fact that a risk investment scheme would be helped if the Government would look at the idea of allowing a rollover of capital transfer tax? Most small businesses do not reach their optimum size in one generation, and if a rollover provision were introduced, the tax would be paid only when the investment was realised for cash.

Mr. Lawson

There are various roll-over provisions on the statute book, but that is a budgetary matter, and my hon. Friend must be aware that I can make no comment on his proposal at the moment.

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