§ 5. Rosemary McKenna (Cumbernauld and Kilsyth) (Lab)What assessment he has made of the impact on new business growth in Scotland of the Budget. [167031]
§ The Secretary of State for Scotland (Mr. Alistair Darling)The recent Budget contained a number of measures that will help new and growing businesses in Scotland.
§ Rosemary McKennaDoes my right hon. Friend agree that hundreds of smaller firms will benefit from the Budget, and especially the research and development tax credits? They are an important aspect of the Budget, but one that is often ignored. Does he agree that raising the lamentable input into research and development in Scotland will be a key factor in improving the economy? Will he do something to ensure that companies take up the tax credits on offer?
§ Mr. DarlingMy hon. Friend is right. Research and development is crucial if we are to ensure that Scottish companies do well in the future. My hon. Friend has drawn attention to the fact that in the Budget, and indeed in the previous one, my right hon. Friend the Chancellor introduced a number of measures that are designed to help companies. It is also encouraging to note that the various business surveys that have been published this year show, for the first time in a long while, that optimism is increasing, not only in traditional areas such as manufacturing but in newer areas, such as biotech industries, where Scotland has much to show. We are seeing increased optimism as far as jobs and the sale of goods and services abroad are concerned.
It is also encouraging that we are beginning to attract companies relocating from different parts of the world. They are coming to Scotland because they know that Scotland is a good place in which to live and to do business. All the signs are that things are a great deal more encouraging than they were, say, 10 years ago when the picture was very different indeed.
§ Mr. Peter Duncan (Galloway and Upper Nithsdale) (Con)As a result of the Budget, new businesses in the successful Scotch whisky industry face significant additional burdens to their operations. Bladnoch distillery in my constituency faces an additional cost of 740 £220,000 only two or three years after it started operations at the time when the Government ruled such measures out. Why should the Government's grinding reverse gear be so expensive for this and other potentially vibrant new businesses?
§ Mr. DarlingNo doubt, the hon. Gentleman will draw attention to the fact that, among the measures announced by the Chancellor on Budget day, he announced significant help especially for small whisky businesses. At the moment, the whisky industry is discussing with the Treasury how the new help will be applied and what the specific arrangements will be.
I return to the point that I have made on many occasions. No matter how different the views are of the amount of fraud, the common ground is that a significant sum of money is lost through fraud in relation to whisky. Despite all the efforts, it was felt that nothing was being brought forward that was likely to deal with the problem. That is why the Chancellor decided that strip stamps were the best way of combating fraud. He also announced a major package of reform that is designed to help the very businesses to which the hon. Gentleman referred. I would have hoped that the whole House would recognise that, yes, we have to help industry, but we also have to guard against losses to the Exchequer that otherwise would have to be made up for elsewhere.