§ 6. Mr. Barry Sheerman (Huddersfield)What new steps he is taking to promote small businesses. [72418]
§ The Chancellor of the Exchequer (Mr. Gordon Brown)In the last Budget, we announced a range of measures to help small businesses to invest for the future, including the cut in the small companies' rate of corporation tax to 20p from April, enhanced first-year capital allowances at 40 per cent. extended to July this year and a new capital gains tax taper for individuals, reducing the effective rate for those investing in business assets to 10 per cent. after 10 years. Small businesses benefit most of all from a move from the boom-bust economy to an economy based on stability.
§ Mr. SheermanHas my right hon. Friend seen the findings of recent research, which suggest that a high percentage of small businesses not only have no information technology systems, but do not possess a computer? Is it not about time that we gave small businesses real incentives to move into the computer age, even if that means introducing a tax scale of some kind—or, indeed, giving universities a role in the improvement of the systems available to small businesses, and in the education of those businesses?
§ Mr. BrownI thank my hon. Friend for his question, and for chairing, this morning, the first meeting of the parliamentary committee on the euro.
My hon. Friend's point about small businesses is well taken. A third of a million small businesses have access to the internet and to electronic commerce. We intend to raise that figure substantially, and, working with business, we shall do what we can to achieve our aim.
§ Mr. John Townend (East Yorkshire)When I listen to Ministers, I sometimes wonder whether they have any idea of the problems involved in running a small business. I know of those problems from personal experience.
Does the Chancellor appreciate that the small tax reductions that he has mentioned will not help businesses on the borderline, some of which have been driven into losses by the burdens imposed on small business? Those burdens have increased dramatically since the Government came to power. Paternity rights, the social 1204 chapter, the working time directive, the hygiene regulations and the minimum wage will all cause more and more small businesses to go before industrial tribunals, where they will face a maximum penalty of not £12,000 but £50,000, which could put many of them out of business.
§ Mr. BrownWe will take no lectures from a Conservative party that unilaterally imposed statutory sick pay on every employer in the country. As for the climate for business, the hon. Gentleman, who was an MP at the time, will remember that, in the early 1990s, inflation rose above 10 per cent. and interest rates rose to 15 per cent. for a year and remained above 10 per cent. for four years, and 1 million small businesses went under as a result.
What businesses want most of all is the stability that is being provided by a Labour Government. Contrary to what the hon. Gentleman has said, small businesses welcome the cut in tax from 23p to 20p. We have yet to hear whether the Conservative party would rescind that cut, along with working families tax credit.