HC Deb 26 April 1990 vol 171 cc474-5
12. Mr. Pawsey

To ask the Chancellor of the Exchequer how many businesses he expects to be helped by his proposed value added tax reforms.

Mr. Ryder

About 1,150,000 businesses should be helped by the proposed new scheme for relief from VAT on bad debts, and most of the 250,000 or so businesses that register each year could benefit from the simplified VAT registration requirements.

Mr. Pawsey

I thank my hon. Friend for that helpful response. As a former managing director, I know only too well—[HON. MEMBERS: "Hear, hear."] Those were the days when I was gainfully employed. Bad debts are bad news; they go straight to the bottom line and adversely affect the balance sheet. I therefore welcome unreservedly my right hon. Friend's Budget changes, which will substantially help companies. I wonder whether I might pursue one matter with my hon. Friend—[HON. MEMBERS: "No."]

Mr. Speaker

Order. One question is the ration.

Mr. Pawsey

I have not actually asked the question yet, Mr. Speaker. I should like to ask my hon. Friend to elaborate on the figures that he announced at the end of his answer. Did I hear him say that there were 250,000 new registrations each year?

Mr. Cryer

Will the hon. Gentleman give way?

Mr. Pawsey

How does that compare with the last year of the last Labour Government?

Mr. Ryder

I thank my hon. Friend for his kind remarks about my right hon. Friend the Chancellor's Budget. My hon. Friend is right also to give thanks to the imaginative set of Budget proposals to help small and growing businesses which my right hon. Friend introduced on 20 March. My hon. Friend is looking for a figure. Under this Government, more than 1,300 small businesses start up each week. In the last year of the Labour Government, there was a loss of 100 per week. I do not think that the hon. Member for Bradford, South (Mr. Cryer) was the Minister with responsibility for small businesses at the time because he had resigned. Nevertheless, there was a net loss of 100 a week.

Mr. Nicholas Brown

Very quickly, before the Prime Minister comes in, will the Minister give the House an assurance that the Government will not extend VAT before the next general election?

Mr. Ryder

The hon. Gentleman was on the Standing Committee that considered last year's Finance Bill and he has held his job for a long time. He knows perfectly well that the Government's position with regard to VAT has been set out on countless occasions from the Treasury Bench. There is no change whatever in those views.

Mr. John Townend

The small business lobby is grateful to the Government for the changes made by the Budget, but will my hon. Friend go a little further in respect of bad debts? Bad debts are bad debts when they become bad debts. No small business man writes off debts that are not bad. It seems an onerous requirement for a small business man to have to wait two years to get relief from VAT. Will my hon. Friend promise to reduce that period?

Mr. Ryder

Doubtless we shall have an occasion to debate that matter when the subject of bad debt relief comes before the House—perhaps in a Committee of the whole House on the Finance Bill. I look forward to debating the matter further with my hon. Friend then.