Taxes and Public Expenditure (Hansard, 20 March 1991)

§ 9. Mr. Franks
To ask the Secretary of State for Trade and Industry what representations he has received from industry about taxes and public expenditure.

§ Mr. Lilley
My right hon. Friend the Chancellor's Budget is a Budget for business. It has been widely welcomed as such by industry generally.

§ Mr. Franks
My right hon. Friend will be aware of the announcement early this morning of projected job losses of 3,000 to 5,000 in the shipyards of Barrow over the next four years. When formulating regional policy involving public expenditure, will my right hon. Friend recognise the inevitable consequences of the peace dividend in places such as Barrow-in-Furness? Will he recognise that, inevitably, his Department will have an increasing role to play in my constituency?

§ Mr. Lilley
I share my hon. Friend's concern about the job losses announced in his constituency. As he will have heard, my hon. Friend the Under-Secretary will be visiting his constituency shortly to assess the position. I believe that the measures taken in the Budget will make Britain in general and Barrow-in-Furness in particular more attractive to inward investment and for the development of new businesses. The measures to encourage small businesses will be particularly helpful and the reduction in corporation tax will attract industry to this country. I hope that that will bring benefits rapidly to my hon. Friend's constituents.

§ Mr. Gordon Brown
How does the Secretary of State think that it will help struggling businesses if millions of purchases in our high streets and shops are to be subject to an unwanted and unnecessary 2.5 per cent. poll tax supplement? Has he, as Secretary of State for Trade and Industry, made an assessment of the number of jobs that will be lost in textiles, electronics and high streets and shops as a result of the poll tax supplement? Or is it the case that to escape from the poll tax chaos that the Government have created, they are prepared to sacrifice the interests of anyone and everyone?

§ Mr. Lilley
The hon. Gentleman is apparently unaware that a transfer of tax from one source to another does not reduce the net purchasing power of consumers. He also has not let the House know how he would raise the taxation necessary for local government. Would he increase income tax instead of value added tax? He and his party will have to come clean about that before the end of Monday.

§ Sir Anthony Grant
Is my right hon. Friend aware that the small firms sector gives the warmest welcome to the way in which the Chancellor responded to its representations and that the very last thing that it wants is a return to the conditions that prevailed when the hon. Member for Bradford, South (Mr. Cryer) was Minister responsible for small firms? Will my right hon. Friend convey one other representation to the Chancellor from the small firms for an early reduction in interest rates?

§ Mr. Lilley
I welcome the points that my hon. Friend makes. He knows more about small firms than does the whole of the Labour Front Bench put together. He is right that the Budget has been well received by small firms. In particular, the rise in the threshold below which small firms do not have to pay VAT and the fact that my right hon. Friend the Chancellor got that through the European Commission are extremely welcome. I shall convey to my right hon. Friend my hon. Friend's point about interest rates.