§ 6. Mrs. Claire Curtis-Thomas (Crosby)If he will make a statement on the impact on small and medium-sized enterprises of the recommendations of the Competition Commission. [44502]
§ The Chancellor of the Exchequer (Mr. Gordon Brown)My statement to the House on 14 March made clear the Competition Commission's conclusion that competition in the market for banking services to small and medium-sized enterprises is not working properly. The Competition Commission's recommendations, which the Government have accepted in full, will bring competition into the market for banking services to small businesses.
§ Mrs. Curtis-ThomasI thank my right hon. Friend for that answer. When he announced in the House several weeks ago the results of the Competition Commission's inquiry into banking services for SMEs, many hon. Members were delighted to hear that the liberalisation of banks would lead to £500 million being sent back to small and medium-sized enterprises. What further initiatives can those companies expect in the forthcoming Budget to ensure that they reap the rewards of their ventures?
§ Mr. BrownIt might be more comfortable to announce the Budget in the House when there is a far more friendlier atmosphere than I will perhaps find next week, but I hope that my hon. Friend will forgive me if I hold the Budget announcements for the appropriate time—next Wednesday.
As for banks and small businesses and what more we can do to back them up, competition grounds led me to support the Competition Commission's report on banking for small businesses. We want to see competition in that sector, because for too long there have been only a few big players and the service has undoubtedly not been as good as small businesses want. My hon. Friend will know that we have also announced that we want to do more to simplify VAT and to help small businesses starting up. We also want to help small, high-tech businesses, and I hope that we can build on that over the next few months.
§ Mr. David Ruffley (Bury St. Edmunds)The Chancellor will recall being advised by Mr. Ed Balls on post-neoclassical endogenous growth theory. We now read that Mr. Balls has a new big idea called progressive 142 universalism. [Interruption.] It is jargon. Will the right hon. Gentleman explain how the principles of progressive universalism influence Treasury policy on competition?
§ Mr. BrownBy helping all banks and those who have suffered most as a result of the operation of a monopoly in the banking market. It is a universal requirement that all banks be given good service, but the small business community, which has suffered most, must have the redress that we have proposed and that the Competition Commission had originally recommended. It would repay the hon. Gentleman to read all Mr. Balls's speeches.
§ Roger Casale (Wimbledon)What direct representations has my right hon. Friend received from small and medium-sized enterprises on the steps that he is taking to increase competitiveness? Many SMEs in my constituency recognise that the Government are on the side of business; that we shall continue to take appropriate measures to increase profitability; and that we want small businesses to succeed. Is it not the case that, as well as providing secure economic stability and promoting enterprise, we consult small businesses almost daily through the Small Business Council? By contrast, the Conservative party never listened to business and was not aware of its needs. The last Conservative Government will probably go down as the Government most inimical to the interests of business in recent years.
§ Mr. BrownMost Members have between 3,000 and 5,000 small businesses in our constituencies, so the reaction of small businesses and the importance that we attach to them is vital to us. I was gratified that the Federation of Small Businesses welcomed the decision that was made on the Competition Commission. It said that we had made the "right and proper decision". The British Chambers of Commerce welcomed the help for small businesses that would come from the Competition Commission's recommendations. The Institute of Directors, which is not known for always supporting what the Government do, said:
Two cheers for Government response to competition banking review.It is true that circumstances in which long-term interest rates are at their lowest for 40 years and inflation is also low compare dramatically with the state of the economy when the shadow Chancellor was Secretary of State for Employment and interest rates were at 15 per cent.