HC Deb 26 February 2004 vol 418 cc398-9
3. Mr. David Cameron (Witney) (Con)

What steps her Department has taken to help small businesses in the motor repairs industry. [156254]

The Parliamentary Under-Secretary of State for Trade and Industry(Nigel Griffiths)

The House will be delighted to hear that since we extended the small firms loan guarantee scheme to include motor repairers 10 months ago, 69 loans have been guaranteed to the motor repair sector. Since the scheme was extended, applications have increased by 40 per cent. I know that the hon. Gentleman will want to join me in congratulating the sector on taking up that Government help.

Mr. Cameron

Can the Minister explain why small garages are being sent such mixed messages about LPG —liquefied petroleum gas? On the one hand, the Department of Trade and Industry has launched "Boost LPG", a programme to encourage garages; on the other, the Department for Transport has stopped making Powershift grants to car owners to convert their cars. Is the Minister aware that if people ring Powershift they find that it has never heard of "Boost LPG", and that if they ring "Boost LPG" they find that it has never heard of Powershift? What would he say to garages, such as Ernigrip in Enstone in my constituency, that have spent thousands of pounds tooling up to convert cars to LPG, only to see what even the most kind-hearted Back Bencher would call a bit of a shambles from the Government?

Nigel Griffiths

I notice that the hon. Gentleman calls for more Government money to go to people who want to convert. I wonder whether he has cleared that with the shadow Chancellor of the Exchequer, whether the shadow Chancellor has costed it and which further cuts he will propose to achieve that. However, I share the aim of many other hon. Members of ensuring that there is diversity of supply. I recognise the role that LPG can play in providing clean fuel, and I would advise the hon. Gentleman to back what he rightly described as the DTI's position on the matter, which is very clear.

Mr. Roy Beggs (East Antrim) (UUP)

The top priority concern of the 60,000 small businesses in Northern Ireland, including motor repair industries, is insurance. Already, average increases are about 62 per cent. Sole traders have seen premiums rise by more than 100 per cent., and 21 per cent face closure. Some 99.98 per cent. of small businesses believe that the Government have not yet done enough about that. What are the Government doing to address the problem of the huge rip-off of insurance for small businesses?

Nigel Griffiths

We very much see insurance as a matter for the private sector companies that are providing it. We also wish to ensure that this is a regulated and fair market. Our concern is such that a working group—under the chairmanship of the Minister for Work, my hon. Friend the Member for Kilmarnock and Loudoun (Mr. Browne)—of which I was a member, has considered this matter. Premiums have risen for a number of reasons, a key reason being the market. Working with the insurance industry, we have come up with three areas concern and action. Those have been welcomed by the small business groups that have been involved in advising us. We must ensure that insurance is available to all ear owners and to the garages that carry out the repairs. I do not think that the problem is as acute as the hon. Gentleman suggests, but I am willing to consider any evidence that he cares to submit to me.

Mr. Henry Bellingham (North-West Norfolk) (Con)

Is the Minister aware that, over the past seven years, more than 4,000 small garages have closed? Most cited the main reason as excessive regulation. For example, it is extremely costly and bureaucratic for a garage to open an MOT inspection centre. Furthermore, garage mechanics are now banned from wearing vinyl gloves in case they get eczema. More and more obstacles are being put in front of small independent businesses. The Minister said that he is the champion of small businesses, and he talks about the loan guarantee scheme, but what more can he do to stop the closure of these small businesses that are he lifeblood of rural economies.

Nigel Griffiths

We have done a lot to help those businesses. I mentioned earlier that we have helped them by extending the small firms loan guarantee scheme. Under that scheme during the previous Conservative Administration, those rural motor businesses were not entitled to those guarantees. We have given them other help as well. They are among the up to 700,000 small and medium-sized enterprises that can benefit from the flat-rate VAT scheme. By raising the audit requirements, we no longer require 219,000 businesses to spend up to £275 million a year. Those are tangible benefits. There are lots more, and I think that we are shortly coming to a question that will allow me to elaborate on that.