Small Businesses (Hansard, 26 November 1991)

§ 6. Mr. Bellingham
To ask the Secretary of State for Employment when he next plans to meet representatives of the small firms sector to discuss the problem of small businesses.

§ Mr. Forth
My right hon. and learned Friend and I have frequent meetings with representatives of the small firms sector and will continue to do so.

§ Mr. Bellingham
Can my hon. Friend confirm that it is the Government's intention to continue to reduce taxes and deregulate, both of which will help small businesses? Is he aware that the Opposition claim to be the friend of the small business man? How does my hon. Friend think that they square that with their policies of imposing a payroll tax on small businesses and of gaoling small business men who fail to pay a socialist minimum wage?

§ Mr. Forth
My hon. Friend has made some important points. It is correct that Britain has one of the lowest rates of corporate tax in the developed world, something from which our businesses, large and small, have benefited enormously over the years. The Government are committed, when possible, to continue to drive down burdens on industry and rates of tax. It is equally true that Opposition Members seem obsessed with pursuing the business community with prosecutions and they frequently question me about that across a wide range of Government policies—something which I regret, but with which I have become rather familiar. The Government are committed to increasing the possibilities for businesses, large and small, and to encouraging the growth of businesses and self-employment. Our policies have been a huge success up to now and we are determined to ensure that they will continue to be so.

§ Mr. Wallace
Does the Minister accept that in a recession in which many small businesses have gone to the wall, their failure is often identified with the late payment by large companies of their debts? What steps, other than expressing sympathy and exhortation, will the Minister and the Government take to enforce interest payments on debt and to streamline court procedures, so that it will not be too burdensome for small businesses to pursue their creditors?

§ Mr. Forth
There have been a number of business failures over the past, very difficult, few months, but I hasten to add that the level of new business start-ups remains resilient and robust. Under the national enterprise allowance scheme administered by the new training and enterprise councils, 1,000 new businesses have been coming into existence every week this year. I am conscious of the late payment problem, which is something to which we are devoting great attention.
Recently, we issued a new package of measures, "Making the Cash Flow", in consultation with the Institute of Credit Management and the Confederation of British Industry. I have personally written to the chairmen of the country's 100 largest companies urging them to regard prompt payment as a matter of best practice. However, I remain to be convinced that legislation would be beneficial. As yet, the bulk of the country's small business organisations are not persuaded either, but I will keep a close eye on that matter.

§ Sir Anthony Grant
Does my hon. Friend recall that I was the first Minister to have responsibility for small businesses—even before the hon. Member for Bradford, South (Mr. Cryer)? Will my hon. Friend do as I did and haul the leading debtors among large firms before him, to tell them that unless they jolly well pay their debts, Government legislation to force them to do so will follow? Will my hon. Friend also bear in mind—

§ Mr. Speaker
Order. One question, please.

§ Sir Anthony Grant
In his discussions, will my hon. Friend bear in mind the fact that small firms want, more than anything, a reduction in interest rates?

§ Mr. Forth
I am constantly conscious of my illustrious predecessors and daily find it difficult to fill their shoes. As I said when answering the hon. Member for Orkney and Shetland (Mr. Wallace) I have written individually to the chairmen of the 100 largest companies urging them to pay close attention to settling their debts on time. I have received personal replies from most of them, giving me assurances that that will be done. I extend a standing invitation to any firm that is not being paid on time by any of the country's 100 largest companies or Government Departments to allow me to take up its case individually. I have already done so with some success in a number of instances and I hope to continue doing so.

§ Mr. Cryer
The Government are supposed to support small firms, but is not the reality that they have been betraying them? High interest rates have driven hundreds of thousands of small firms out of business over the past 10 years and the loss of more than 2 million jobs in manufacturing industry has carried with it, to their doom, many small firms that depended on larger businesses. Is not it the case that the sooner the Government face a general election and are defeated, the sooner small firms will have a decent chance in the economy?

§ Mr. Forth
I am surprised that another of my predecessors—I choose my words very carefully—should show such ignorance about the small business sector. My figures show that although there were 34,000 business failures in the first nine months of this year, every week 1,000 new businesses have come into existence under the enterprise allowance scheme alone. The National Westminster bank, for example, opened 76,000 new small business accounts in the first six months of this year, which suggests a robust small firms sector. Although I would be the last to claim that small businesses are without their problems, it is a great tribute to the entrepreneurs and to the small business men of this country that they can deal with difficult circumstances in such a way. We pledge to continue to support them in that. I invite them to examine the Opposition's policies to see how they would fare under a Labour Government.

§ Mr. Butterfill
Is not it true that a large number of small firms are in the tourism sector? Will my hon. Friend confirm that he received representations from both the British Tourist Authority and the English tourist board about the damage that would be done to the industry by the restrictions on part-time working and on working hours which are so beloved of Labour?

§ Mr. Forth
Only yesterday, my hon. Friend and I met a number of eminent representatives of the tourist industry from across the European Community. They expressed the 769 unanimous view that the proposals contained in the working time directive, which is to be considered by the Council of Ministers next week, would be extremely damaging to the tourist industry throughout the Community.
We in this country are very much aware of the problem. My right hon. and learned Friend the Secretary of State will take the case to his colleagues in the Council of Ministers and ask them to look again at the proposals, which would be damaging not only to British industry but to industries—including tourism—right across the Community. We hope that we shall be able to make sense prevail.