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Mrs. Gillan: It is clear from the Minister's furious interventions that she did not know that the initiative for business existed in the Home Office and was not consulted before a small firm was informed that the initiative was being cut. She should immediately contact her opposite number in the Home Office to find out what is going on.
The Association of Police and Public Security Suppliers wrote to the Department of Trade and Industry on 28 August, saying:
"You may not be aware of a very recent development affecting the Home Office Exports Initiative . . . which is that the Minister, Alun Michael, is closing the initiative as from the end of October 1997."
That is exactly right: the Minister is obviously not aware. The letter continues:
"Whilst committed financial support will be honoured, the ambitions of the Trade Associations and the security industry are, nevertheless, being left hanging.
Dr. Palmer:
Does the hon. Lady intend to address the subject of innovation before her speech ends?
This move is extremely disappointing to APPSS and, of course, the security industry. As a result of analysis we carried out during this year's Embassy exhibitions, which were supported by the Home Office initiative and by DTI country desks, I recently presented evidence to the Home Office committee of clearly identifiable business returns to industry and therefore to our national export drive, especially in Europe.
We have indications on file of new business arising from our Vienna, Madrid and Stockholm/Helsinki events this year."
Mrs. Gillan: I am awfully grateful for that intervention. It is difficult to see how firms can innovate against this background, and I intend to provide more illustrations of the problems that small firms will face.
The bottom line is that the Minister did not know that the initiative existed, or what was happening to it. She told us that she had had no meetings with any of her colleagues in other Departments; yet she is the Minister responsible for small business.
Mrs. Roche:
It is only 10.27 am, so the hon. Lady is still a little muddled, but if she had been listening carefully, she would have heard that I said only a few minutes ago that I did indeed meet my ministerial colleagues on small business issues. May I also tell her that I am never furious?
Mrs. Gillan:
I thought that you just said--
Mr. Deputy Speaker (Mr. Michael Lord):
Order. That is the second time this morning that an hon. Member has not addressed the Chair correctly. I should be grateful if all hon. Members remembered how to do so.
Mrs. Gillan:
Please accept my unreserved apology, Mr. Deputy Speaker.
I believe that the Minister said that the Access Business ministerial group had not yet met but, after all, it is quite early in the morning for her, too.
Mrs. Gorman:
Does my hon. Friend agree that all these Government initiatives are very worthy, but that in the end most small firms do not go to the Government for help when they set up; they do it on their own? The one thing that they do not want is the Government breathing down their necks when they are trying to get up and get going. The proposed new Government regulations will have a devastating effect on that initiative.
Mrs. Gillan:
My hon. Friend is right, and later I shall come to the devastating effect that the Government's
This week, I received another letter. It was from Pocketbond Ltd., which makes plastic models and is an innovative and successful company. The letter was to inform me about a matter on which the company has also written to the Minister. I do not believe that, as yet, it has received a reply. The company writes about the Contributions Agency and the imposition of national insurance contributions, which are targeted at small businesses and not payable by big business.
The company is small and has two employees. As it was so small, it was not possible for it to join a company private health insurance scheme, which usually requires at least three to five employees, to provide an employee--who happened to be the managing director of Pocketbond--with private health insurance. It was necessary for him to purchase his insurance in his own name, and the cost was passed on to the company for reimbursement. The Contributions Agency is now claiming that national insurance is due on those BUPA payments, solely because they were invoiced not to the company but to the man himself. BUPA is not subject to national insurance when provided to an employee through a company scheme, but the agency claimed that it must be subject to such contributions if invoiced in the man's name. The managing director writes:
Mrs. Roche:
Of course, I take letters written by any small business to me very seriously. As I explained, I see my role as meeting colleagues and liaising with them. I am pleased that the hon. Lady is promoting the profile of small firms and talking about the regulatory burdens on them. Will she, therefore, condemn the record of the Government of which she was a member in the previous Parliament, as they over-regulated and added to the burdens on small firms, contrary to the deregulation initiative that they introduced?
Mrs. Gillan:
I wish that the Minister would grow up. She keeps on believing that she is still in opposition and that I have to answer the questions. She has to answer the questions, and the sooner she gets used to it, the better. I am grateful, however, for her undertaking to look into this case. Will she also give an undertaking that she will find out whether a Minister in the Department of Social Security can be appointed to be responsible for the affairs of small businesses, otherwise matters pertaining to them will certainly disappear into obscurity, as they have obviously done in that Department and in the Home Office?
The small business brief is interesting. As the Minister said, one of the most exciting things about it is meeting small business men and women who have been successful--but the Government are seeking to stifle the innovation and progress of small businesses.
I have here another letter. This time, it is from my constituency, from Mr. Wing who works with composers. It sums up what our small businesses are facing. It was addressed not to me, but to the Chancellor of the Exchequer. As yet, no reply has been forthcoming. I think that all three letters to which I have referred are still awaiting responses--so much for the rapid reaction to the problems of small businesses. Mr. Wing writes:
Mrs. Gillan:
Obviously, the hon. Gentleman does not like what I am talking about--the barriers and the stifling that small businesses are facing and will face.
Mr. Wing continued:
"This means we are 'taxed' extra via NI contributions because we are a small company."
I do not expect the Minister to remember that case, but as it seems to be an inequality and an unfairness faced by a small business, I ask her to give an undertaking that she will undertake to look into it, reply to Mr. Brook of Pocketbond and see what she can do to champion the cause of an obviously successful small business that has been discriminated against. I hope that she will give me that undertaking.
"I have just received a letter from one of the companies that I have a pension with advising me that because of your new tax rules that crept in shortly after the election my pension may not produce the required income. Further they warned me that you might be thinking of abolishing higher rate tax relief on pension contributions. I would appreciate three straight answers ie yes or no to the following questions:
Mr. Stephen Timms (East Ham):
I was interested to hear the hon. Lady's constituency correspondence, but I wonder whether she will now come to the subject of the debate, which is innovation in small businesses.
1 Will the tax changes on dividends you introduced reduce the value of my pension bearing in mind my pension is invested in a managed fund.
2 Are you considering reducing the higher rate tax relief on pension contributions.
3 If you do reduce tax relief, have you further plans to tax the self-employed.
As a self-employed person, I have no employer to contribute any monies to my pension and therefore have to provide my own pension. Those who are employed pay no tax on their employer's pensions contributions. As a self-employed person I receive no sickness payment when I am ill and therefore have to pay for an insurance to cover any illness for which I receive no tax relief. Those who are employed pay no tax on their employer's sickness contributions other than tax on received income.
As a self-employed person I cannot afford to be ill and if I have to have medical attention it has to be at a time to suit me ie I must be able to plan my illness and schedule any operation to fit my schedule as the state will not help me. I therefore pay for private health and whilst I am not asking for tax relief on this as it is my right to have the choice, I would point out that, to date, hospital bills etc. for my family have been over £65,000 in the last three years. This is £65,000 that the NHS has not had to spend on my family."
"As a self-employed person I get the distinct impression that New Labour sees the hard working self-employed as a bottomless pit from which you can keep taking without replacing. Yet it is the self-employed who are creating work for others and thus keeping many people in work. I may be a small business, my business has a turnover of under £400,000 and I end up with a surplus of around £40,000. I work approx 80 to 100 hours a week with two weeks holiday. I pay out to other self-employed people in excess of £250,000. Whilst these figures are obviously very small in relation to the economy, they are important and vital to me and those who I engage."
My constituent goes on to talk about living in Haringey in north London, where education standards are poor, and he had little option but to move or have his children privately educated. The letter continues in a vein that
shows me that a small business person is absolutely terrified by what has already happened under this Labour Government and by what will happen.
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