HC Deb 30 November 1989 vol 162 cc826-8
5. Mr. Hoyle

To ask the Chancellor of the Exchequer how many letters he has received from small businesses about the level of interest rates.

Mr. Ryder

A small number each month.

Mr. Hoyle

Is the Minister not aware that high interest rates are crippling small businesses? What assumption has he made for the level of interest rates in 1990, based on the very optimistic forecast in the Autumn Statement of 5.75 per cent. inflation?

Mr. Ryder

If the hon. Gentleman looked a little more closely at the Autumn Statement, he would have his reply. Obviously he has not read it carefully enough.

Mr. Donald Thompson

Is my hon. Friend aware that small business men in Calder Valley are worried about interest rates, concerned about inflation and absolutely terrified of any prospect of a Labour Government?

Mr. Ryder

My hon. Friend, as usual, is correct in most of his assumptions. I concede that high interest rates are causing a great deal of concern among small business men and mortgage payers. I am interested in my hon. Friend's question because a Gallup poll on Tuesday showed that the vast majority of people in this country.

Hon. Members

Reading.

Mr. Speaker

Order. Ministers have discretion in what they read from the Dispatch Box.

Mr. Ryder

The poll showed that the vast majority of people in this country are content with the Government's economic policy and frightened of a Labour party coming to office with rising inflation, economic chaos, high taxation and undoing all that this Government have put right. That is what the people of this country said categorically in the poll published by The Daily Telegraph.

Mr. Boateng

We appreciate the Economic Secretary's difficulties, but why is he so singularly unforthcoming-even coy—about the assumptions as to interest rates which underlie the Autumn Statement? Does he agree with his officials who, only this morning, are reported as saying that concern about the upward pressure on interest rates and concern about sterling was "so much political froth"? What comfort is that to the small business man suffering an investment nightmare or to the home owner suffering a mortgage hell? Is not the political froth that we should be concerned about the froth that has been washed up on the Treasure Bench? The Government should come clean or get out.

Mr. Ryder

I welcome the hon. Gentleman to the Labour Front Bench, but his three years of rehearsal have done him no good at all. If the hon. Gentleman were to read the Autumn Statement and previous Autumn Statements, as I advised his hon. Friend to do, he would find that interest rate figures are never given and were not given by the Labour Government either.

Mr. Andrew Welsh

Will the Minister show that he is aware how especially vulnerable small businesses are to high interest rates? What specific steps is he taking to help small businesses during what will obviously be a prolonged period of high interest rates?

Mr. Ryder

I fully concede that many small business men and people paying mortgages are suffering from high rates, but a far worse enemy to small business men and to mortgage payers is high inflation. The hon. Gentleman asked what we were doing to help small business men and I will tell him. The loan guarantee scheme has helped more than 20,000 small businesses. Increased corporation tax bands have helped small businesses. The 150 deregulatory measures introduced by the Department of Trade and Industry and detailed in a White Paper are helping small businesses. Improved inheritance tax provisions have also helped small businesses, particularly small family businesses.

Sir Anthony Grant

Is not my hon. Friend astounded at the sheer cheek of the Opposition when, instead of a record number of small firms starting up, as has happened under this Government, in the days when the hon. Member for Bradford, South (Mr. Cryer) was the Minister responsible for small firms a record number were closing every week?

Mr. Ryder

Despite what the Labour party may wish in its heart of hearts, new small businesses are starting at the rate of 1,300 per week. In the last full year of the Labour Government in which the hon. Member for Bradford, South (Mr. Cryer) was a Minister, the number was diminishing at a rate of 100 per week.

Several Hon. Members

rose—

Mr. Speaker

Order. In fairness I should call the hon. Member for Bradford, South (Mr. Cryer).

Mr. Cryer

I am grateful for your sense of fairness, Mr. Speaker.

Is not the reality that this year bankruptcies among small firms have risen by 40 per cent.—a Tory Government record which was never equalled by the Labour Government, who gave a huge range of incentives to small firms, which appreciated and understood the concern that we felt for that sector?

Mr. Ryder

The hon. Gentleman does not seem to be aware of the full facts. Each and every week 1,300 small businesses are starting up. They are being registered for VAT, and that is a net figure, not a gross figure. When the hon. Gentleman was responsible for these matters in the 1970s the net figure was a loss of 100 per week.