HC Deb 21 January 1999 vol 323 cc1005-8
3. Mr. Howard Flight (Arundel and South Downs)

If he will make a statement on Her Majesty's Government's policies to assist small firms. [65192]

The Minister for Small Firms, Trade and Industry (Mr. Michael Wills)

Small and medium businesses are crucial to a successful enterprise economy, and the Government are firmly committed to stimulating the creation, competitiveness and growth of new and small businesses.

The key principles underlying the Government's approach include fostering an enterprise culture that encourages innovators and risk takers; providing and maintaining a supportive economic environment; identifying and removing barriers to growth and providing high quality business support for firms at all stages of their development. The Government also work within the European Union to help to further these aims throughout Europe.

Mr. Flight

I welcome the new Minister to his post. Is he aware of the recent national insurance contributions regulations, which can impose huge additional taxation on entrepreneurial businesses, specifically on approved and unapproved pension schemes when companies go to the market to float for money, and on share conversions in management buy-outs where the business is succeeding? If he is aware of that, please could he make appropriate representations to his colleagues at the Department of Social Security for some amelioration of the situation? If he is not fully aware of it, please could he look into in the matter?

Mr. Wills

I thank the hon. Gentleman for his kind words of welcome. The Government are proud of their record on corporate taxation. We have conducted a major reform, and as a result corporation tax is at its lowest level ever—20 per cent. for small firms. That is the lowest level of any major European economy.

Yvette Cooper (Pontefract and Castleford)

I welcome my hon. Friend to his new position, and wish him well at the Dispatch Box. Is he aware of the importance to small firms of proper enforcement of the Late Payment of Commercial Debts (Interest) Act 1998? A company in my constituency received a letter from Rentokil saying that it was prepared to continue business only on its own late terms with limited interest. Since I wrote to the Department, Rentokil has withdrawn that letter, and has promised to comply with the Act. What other action is the Department taking to ensure compliance with the Act?

Mr. Wills

I thank my hon. Friend for her kind words of welcome. I reassure her that the Government are committed to changing the whole culture of payment. The 1998 Act was an important start, but we realise that we must do more. That is why we have established the better payment practice code. The better payment practice group contains representatives from all sides of industry, including large and small firms. It ensures that the spirit as well as the letter of the Act is implemented. I understand that Rentokil has agreed to comply with both the spirit and the letter of the Act.

Mr. Brian Cotter (Weston-super-Mare)

I welcome the Minister to his new post. Is he aware that, in a survey this month, more than 50 per cent. of small business owners said that they would not consider starting a business because of the burden of legislation they now face? Will he give an assurance that legislation this year will not affect the viability of small businesses?

Mr. Wills

The Government are committed—[Interruption.] We are, indeed, committed to small firms and to ensuring that as many people as possible start up small firms. I am delighted to tell the House that the latest evidence from Barclays bank and National Westminster is that business start-ups are up in the third quarter of last year compared with the third quarter of 1997. It shows that the Government's policies on small firms are working.

As regards legislation, we are aware of the problems that small firms experience in complying with regulations. That is why we have set up the better regulation task force to ensure that regulations are implemented effectively and sensitively in relation to small firms and, indeed, all businesses.

Mr. John Healey (Wentworth)

An important part of the Government's policies to support small firms is help with start-ups—especially in areas such as Rotherham, where the ratio between employers and population is only about half the national average. We welcome the Government's commitment to supporting 10,000 new start-ups in the high-tech sector this year, but what steps is the Department taking to support start-ups in other industries?

Mr. Wills

We are committed to helping all start-ups. The competitiveness White Paper is particularly dedicated to helping businesses to start up when we think that they have a high growth potential that will create jobs, productivity and growth, but, as I have said, we are committed to helping all start-ups. That is what business links are tasked with, and that is what we shall continue to deliver.

Mr. John Redwood (Wokingham)

I congratulate the Minister on his appointment. Under Labour, only a few people are born to office. Some seek office to live well, and some have office thrust upon them. As the Minister has no salary and does not do red boxes, I assume that he is in the latter category.

One of the most important things that the Government can do to assist small firms is to ensure that the law applying to companies is fully and fairly enforced on all of them, so that they can trade on equal terms. The Opposition welcome the institution of a rogue director hot line, which the Government have set up to help small firms in this context. Does the Minister agree that Mr. Derek Draper should be referred to the hot line for his violations of company law at 3C Ltd? Does he agree that new Labour establishment should be referred to it for the failure of Progress Ltd. to submit accounts for that Blairite magazine—and does he think that he should be referred to it for his failure to submit the necessary paperwork relating to one of his companies?

Mr. Wills

I hoped that the right hon. Gentleman might start the new year with a more gracious approach, but he has reassured me nevertheless by continuing in the spirit that he adopted last year.

Of course—

Mr. John Bercow (Buckingham)

Spit it out!

Mr. Wills

That is exactly what I am about to do, and the hon. Gentleman will welcome the answer when I give it.

Let me set the record straight in relation to my own affairs. Fellows of All Souls—of which I believe the right hon. Gentleman is one—used to conduct their research in libraries, and they used to employ researchers. It appears that they now conduct their research in The Times diary, in which that story appeared. Unfortunately, those who snout around in the inaccurate and the meretricious come up with the meretricious and the inaccurate, which is what the story was. Every company with which I have been associated has filed its returns in compliance with the deadlines set by Companies house.

As for the other matters to which the right hon. Gentleman referred, I am sure that the Department will examine them closely, fairly and without doing anyone any undue favours.