HC Deb 02 November 2000 vol 355 cc828-9
9. Ms Sally Keeble (Northampton, North)

What progress is being made in the development of the Small Business Service. [133895]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

The Small Business Service has been in place for seven months, and is making excellent progress. Largely as a result of its work, the Paymaster General and I can announce today that from April next year the Inland Revenue and Customs and Excise will change the way in which they deal with companies in financial difficulty. They will use Crown preference to help viable companies through a difficult period by sympathetic consideration of company voluntary agreements. Given that 20 per cent. of all compulsory insolvency cases are currently initiated by the Revenue and by Customs and Excise, the new approach will potentially benefit thousands of small businesses, allowing them to overcome short-term difficulties.

Ms Keeble

I welcome that information. I also welcome the recent award of a franchise to the Small Business Service in Northamptonshire, as, I am sure, will the hon. Member for Daventry (Mr. Boswell).

How will the SBS develop to support small businesses with payroll functions, and how will it deal with working families tax credit and similar important measures introduced by the Government?

May I also ask my right hon. Friend to examine the specific case—which I can refer to him—of one of my constituents who was bankrupted after a VAT inquiry?

Mr. Byers

The new agreements that we are announcing today will be able to respond much more sympathetically to exactly those circumstances. As I have said, one in five actions in compulsory insolvency cases are currently initiated by Customs and Excise and the Inland Revenue, but I think that that will change as a result of the new measures.

My hon. Friend mentioned the support that we can give to small business. I think that we shall be able to provide support through working families tax credit, and also through the new gateway that we hope will exist by Easter next year, which will offer practical sensible advice to the small business community.

Mr. Nick St. Aubyn (Guildford)

Will the SBS report to the Secretary of State on the impact of IR35 on professional contractors? Is the right hon. Gentleman aware that according to a recent poll, although 85 per cent. of those contractors may have voted Labour at the last election, only 3 per cent. intend to vote Labour again? Why have he and his Department characterised people who provide a vital service in our economy as tax dodgers, when all they want to do is accumulate money to enable their businesses to grow?

Mr. Byers

I am not sure that those people have been described as tax dodgers. As for IR35, we have always said that people should pay tax in a fair way, and that is the approach that we have adopted. I am sure that the Small Business Service will talk to those who may be affected by the changes. The service provides a voice for small business at the heart of Government, and I am sure that it will make its views known effectively.

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