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Business Rates

7. Mr. Bernard Jenkin: To ask the President of the Board of Trade what representations she has received from businesses concerning the future of business rates. [661]

Mrs. Roche: To date, my departmental colleagues and I have not received any formal representations from businesses on the future of business rates. However, we have given a manifesto commitment to return to locally set business rates and will be consulting widely on how that might be implemented.

Mr. Jenkin: Does the hon. Lady agree that small businesses already pay too much in business rates?

Mrs. Roche: I certainly agree that the unified business rate introduced by the previous Government, of which the hon. Gentleman was a supporter, is widely loathed and is an unfair tax, according to the "Your Business Matters" conference, as reported by the Institute of Directors. We need a system that is fair to business and does not place an undue burden on small businesses.

Mr. William O'Brien: When considering the future of the uniform business rate, will the Minister have a word with her colleagues about those businesses which have their rates assessed on turnover rather than profit? They are at a disadvantage because the margin is so low that in many areas they face tremendous problems in sustaining their business. In many instances, it is a question of valuation. I appeal to my hon. Friend to have a word with her colleagues at the Department of the Environment about business rates and the assessments that take place from time to time which are unfair to many small businesses.

Mrs. Roche: My hon. Friend raises some important points and I can assure him that they will all be taken into consideration as part of the consultation exercise.

Mr. Nicholls: Does it not follow from what the hon. Lady said to my hon. Friend the Member for North Essex (Mr. Jenkin) that she will be minded to pick up a proposal made in the Conservative party manifesto that the burden of rates should be shifted so that smaller business pays less and greater business pays more, or is it simply that the hon. Lady's apparent conservatism goes no further than rhetoric?

Mrs. Roche: I am astonished at what the hon. Gentleman says. He supported a Government who

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introduced the uniform business rate, which has been widely criticised by business. It was his hon. Friend the Member for North Essex (Mr. Jenkin) who produced a document called "Fairer Business Rates", and his right hon. Friend the Member for Huntingdon (Mr. Major), the former Prime Minister, who described the uniform business rate as an unfair burden. The present Government are determined to do something to help our business community and I am sure that we shall have the hon. Gentleman's support as a result.

Pit Closures

8. Mr. Hinchliffe: To ask the President of the Board of Trade what proposals she has to meet representatives of companies affected by the coal mines closure programme. [662]

Mr. Battle: I am happy to meet and listen to representatives from the coal industry--as I have done in the past and since the election--and more contacts are planned.

Mr. Hinchliffe: I warmly welcome my hon. Friend to his new position and wish him well in the work that he is doing. I draw his attention to the impact of the coal closure programme on companies such as British Jeffrey Diamond in the mining engineering sector in Wakefield. When my hon. Friend meets UK coal producers, will he remind them of the importance of purchasing British engineering products for British pits, particularly in areas such as Wakefield? To pick up the Secretary of State's earlier point on exports, will my hon. Friend actively press his Department to do far more to support the export efforts of companies such as British Jeffrey Diamond?

Mr. Battle: I am grateful to my hon. Friend for his information about British Jeffrey Diamond. Mining engineering technology developed in Britain is second to none and has a long history of manufacturing and engineering expertise. I am tempted to say that it was neglected in previous times, but I hope that it will be fully supported now. We have export drives and promotion campaigns; there is one for mining in Poland. The aim of that campaign is to help UK exporters. We also want to improve markets here. If my hon. Friend will let me have details, I will ensure that companies are put in touch with the relevant officials and we may be able to make progress.

Small Businesses

9. Mr. Singh: To ask the President of the Board of Trade if she will make a statement on the Government's policy towards small businesses. [663]

Mrs. Roche: Small businesses are a vital part of the Government's programme because of their importance to the economy in the jobs they provide, the wealth they create and the new ideas and technology many of them develop.

Our priorities are: cutting red tape, taking tough action on late payment and improving information and support for small firms.

Mr. Singh: May I congratulate my hon. Friend on her appointment? Does she agree that the statutory right to

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interest on late payments will help many businesses in my constituency and others that are plagued by enormous cash flow problems?

Mrs. Roche: I thank my hon. Friend for his kind words. He is right to draw attention to the enormous problems that late payment of commercial debt causes our small businesses. I am delighted that it was announced in the Gracious Speech that the Government will introduce a fair payment of commercial debts Bill.

Mr. Whittingdale: I am gratified to learn that the Minister has read the pamphlet by my hon. Friend the Member for North Essex (Mr. Jenkin). I hope that she found it enlightening. Will she tell the House what the Government will do to help reduce the burden of business rates on small businesses?

Mrs. Roche: We have a manifesto commitment, and we have stated that we will have a consultative programme, which is more than the previous Government had in 18 years in imposing that burden. We will localise the business rate and enable proper consultation between local firms and local authorities, because that is vital. The hon. Gentleman might care to consult the right hon. Member for Horsham (Mr. Maude), who was a member of the previous Administration's deregulation task force, which fully supported our proposals.

Mr. Stevenson: Does my hon. Friend agree that one of the reasons the Tories lost the election was that they failed to support small businesses, especially through the business rate? Is she also aware that, in my constituency, council tax has not increased for two years, but business rates have gone up by no less than 30 per cent? That happened under the Conservatives, who are the enemy of small businesses.

Mrs. Roche: I am grateful to my hon. Friend. He is absolutely right. It is clear from speaking to small business people throughout the country that concern about the business rate is at the top of their minds.

Mr. Bernard Jenkin: What is the Minister going to do?

Mrs. Roche: It is no use the Tories protesting. The previous Government organised the "Your Business Matters" conference, at which the UBR and the business rate were at the top of the agenda for concern. Who introduced the UBR? The Tories.

Mr. Page: May I congratulate the hon. Lady on being appointed the Minister with responsibility for small businesses? I wish her every success, with my hands out straight and no fingers crossed. As the Government are getting used to U-turns, may I ask for one more--on the social chapter? If that is not possible, will the Minister lobby furiously for an opt-out or derogation for small firms? Small firms will create employment, but they will be hit hard by the minimum wage. Let them not be hit hard by the social chapter. I do not mean the social chapter of today, but the one that will follow as soon as we are foolish enough to sign the agreement.

Mrs. Roche: I thank the hon. Gentleman for his kind words and for his great courtesy to me when I was his

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shadow. It was much appreciated. He should consider the wording of the social chapter. I know that the former Chancellor did not read the Maastricht treaty, but there is no excuse for not reading the social chapter, which expressly mentions small firms and says that nothing will be done under the chapter mechanism that places an undue administrative burden on them. We made it very clear that we would use the mechanism to promote employability and competitiveness, and that is what we will do.

Aerospace Industry

10. Mr. Pike: To ask the President of the Board of Trade what discussions her Department has held with the United Kingdom aerospace industry on the impact of the merger of Boeing and McDonnell Douglas. [664]

Mr. Battle: The Department is in constant dialogue with the United Kingdom aerospace industry on a range of issues, including future competitive challenges. It is important that the sector should be in a strong position to meet those challenges over the coming months and years.

Mr. Pike: I congratulate my hon. Friend on his new appointment, and wish him and his team well for the years ahead.

As my hon. Friend knows, the aerospace industry is crucial to the UK economy, particularly in Lancashire, and the merger will have a tremendous effect on it, both in the UK and in Europe. Will my hon. Friend take all possible steps to ensure that the Government work with the industry to make certain that it is not squeezed, and that we do not lose jobs as a result of the merger that is taking place in the United States?

Mr. Battle: Yes. The UK aerospace industry is the third largest in the western world, employing more than 110,000 people. Exports alone are worth about £7 billion. The industry is the second largest source of research and development, and there are spin-offs into other industries.

It is not usual for Ministers to comment on the details of mergers, but I can tell my hon. Friend that this is a matter for the European Commission and the United States competition authorities. The Government are closely following the Commission's investigation of the proposed merger. The parties are providing the Commission with further information, so it is not yet time to take a firm UK view; but I emphasise that the Government are keen to support the aerospace industry and enable it to develop, not least through support for research and development, which we hope will strengthen the sector and secure even more jobs.

Sir Peter Emery: Will the Minister implore the President of the Board of Trade to pay particular attention to Britain's role in the space industry? We shall be able to have a great deal of new business if that is done properly. Will the Minister ensure that our commitment to the European Space Agency is properly fulfilled?

Mr. Battle: Again, the answer is yes. We intend to do even better than the last Government in that respect.

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