HC Deb 21 January 1987 vol 108 cc563-4W
122. Mr. Lord

asked the Paymaster General if he will make a statement on progress made during Britain's presidency of the European Community in encouraging the growth of smaller businesses throughout the European Community.

123. Mr. Thurnham

asked the Paymaster General if he will make a statement on progress made during Britain's presidency of the European Community in encouraging the growth of smaller businesses throughout the European Community.

124. Mr. Hind

asked the Paymaster General if he will make a statement on progress made during Britain's presidency of the European Community in encouraging the growth of smaller businesses throughout the European Community.

Mr. Lee

The European Community approved the broad principles of an action programme for small and medium-sized enterprises at the Industry Council on 20 October 1986. They adopted a resolution recognising the important role of SMEs in job creation and calling for a Community strategy for SMEs to complement national action. The programme's two main aims are to create a favourable environment for SMEs and to develop specific measures to improve their effectiveness, efficiency and access to finance. The programme provides a framework for the activities of the Commission's SME task force. It identifies the areas in which they will develop proposals in more detail including the reduction of burdens on businesses; ensuring that European Community policies relating to taxation, company law, competition, and the internal market are developed with due regard to the needs and interests of SMEs; ensuring that SMEs have access to European Community assistance through, for example, the European social fund and research and development programmes; setting up information centres to improve SMEs' understanding and awareness of European Community programmes and policies; and improving SMEs' access to advice, training and finance.

In a separate set of conclusions the Industry Council of 20 October emphasised the priority that it attaches to reducing fiscal, administrative and legal constraints on business, particularly SMEs, so as to encourage enterprise and promote employment.

On 17 November 1986 the Economic and Finance Council reached agreement on the substance of a new lending facility for SMEs. One and a half billion ecu (about £1.1 billion) will be made available in two equal tranches, the first to be raised by the Commission, the second by the European Investment Bank.

The Council has already begun discussion of a Commission proposal for a Council directive on the application of value added tax to SMEs. The proposals include provisions concerning the exemption limits below which small businesses are not required to be registered for VAT, and a simplified scheme to be made available for all businesses whose annual turnover does not exceed 150,000 ECU (about £110,000).

In addition, the Labour and Social Affairs Council on 11 December adopted and action programme on employment growth which sets out the formation of new businesses and employment growth as one of the priority areas of its future work. The programme calls for the rapid implementation of the SME action programme as endorsed by the Industry Council and for support for the efforts being made within member states to encourage the setting up and expansion of SMEs and one-man businesses in particular through the removal of unnecessary administrative constraints and a review of existing Community legislation to remove obstacles to the number of people taking up self-employment.