HC Deb 13 November 1990 vol 180 cc432-4
2. Mr. Vaz

To ask the Secretary of State for Employment what policies the Government intend to introduce to help small businesses expand to create more local employment prospects.

The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth)

The Government will continue to give priority to maintaining the best possible business environment and, in particular, the control of inflation and the reduction of unnecessary controls and red tape. This will benefit all small businesses, whether they are established or just starting up. At local level, training and enterprise councils are taking over responsibility for the delivery of many enterprise support schemes and are ideally placed to ensure that such support is geared to the needs of local businesses.

Mr. Vaz

None of that will give any comfort to those who currently run small businesses, especially in the textile and footwear sector. Is the Minister aware that one job is lost every 30 minutes in each of those industries? Is he further aware that if that trend continues, there will not be a British textile and footwear industry left by the turn of the century? When shall we have reasonable, decent proposals from the Minister rather than the nonsense that he has talked today?

Mr. Forth

The hon. Gentleman must get tired of peddling stories of doom and gloom. It is regrettable that he is unable to say something positive even about the industries for which he alleges great support. It is encouraging to note that, even in the present difficult economic climate, there is a remarkable resurgence of new industry, with new people coming forward and new businesses being set up. That is what we are encouraging and shall continue to encourage and one of these days it will receive acknowledgement from the Opposition.

Mr. Steen

It is not so much expansion but survival that is important for village shops. In my constituency, 12 village shops have closed since the introduction of the uniform business rate. Will my right hon. Friend comment on the maintenance of existing shops and small firms rather than the expansion of those that have not yet come into being?

Mr. Forth

My hon. Friend raises the important issue of the need to make a distinction, of which I am aware, between encouraging new small businesses—we are remarkably successful at doing that—and the position of existing businesses, in the retail sector and elsewhere. The uniform business rate has had varying effects in different parts of the country, as was the intention from the start. My colleagues at the Department of the Environment have taken great care to try to ensure that the burden of the uniform business rate is limited to the extent that it affects businesses adversely. I hope that the businesses in my hon. Friend's constituency will come to my Department for advice and help, which is available in many different ways, so that they have the best possible chance not just of surviving but of prospering.

Mr. Wallace

Does the Minister accept that the loss of transitional relief under the uniform business rate when businesses move premises can not only restrict expansion but make it difficult for businesses in difficulties to scale down? What assessment has his Department made of that and has the hon. Gentleman made any representations on the subject to the Secretary of State for the Environment?

Mr. Forth

The hon. Gentleman is tempting me on to territory on to which I dare not stray—[HON. MEMBERS: "Why not?"]—because another Government Department is responsible for that, as Opposition Members well know. [Interruption.] I am in touch with my colleagues at the Department of the Environment constantly to monitor the varying effects of the uniform business rate on small businesses. If hon. Members contact me with details of specific cases, I undertake to raise them with my colleagues in that Department to see what can best be done. [Interruption.]

Mr. Speaker

Order. I urge hon. Members not to barrack in such an unseemly way. It is very disruptive.

Mr. Wilkinson

At this time of undoubted recession, when small businesses are being hit particularly hard, it is important for them to be able to retain the greatest proportion possible of their hard-earned profits. Will my hon. Friend discuss with the Chancellor of the Exchequer the possibility in the next Budget of introducing relief against corporation tax on the first £500,000 of the profits of small businesses?

Mr. Forth

The one thing that I cannot undertake to discuss with my right hon. Friend the Chancellor is the word used by my hon. Friend, which I certainly would not dream of discussing with the Chancellor. My hon. Friend raised an important point and I hope that he will agree that we have gone a long way to ensuring that small businesses have one of the lowest rates of both personal and corporate taxation in the developed world, with the favourable rate for small businesses. Our remarkable success in setting up small businesses has reflected that in full. I am making representations on behalf of the small business community to our friends in the Treasury. I shall think carefully about my hon. Friend's helpful suggestion.