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Mr. Beard: How did small and medium-sized businesses fare when the previous Government--whom I believe the hon. Gentleman supported--raised interest rates to 15 per cent. plus?
Mr. Wilkinson: It might interest the hon. Gentleman to know that I voted consistently against Maastricht, and my constituency association repeatedly submitted resolutions to our party conference that called for a reduction in interest rates, rather than the astronomic levels that were consequential upon our insane membership of the exchange rate mechanism. Incidentally, we shall have to rejoin the mechanism--if the president of the Bundesbank is to be believed--if we are to join the single currency. Furthermore, I did not support the financial perspective laid down at the Edinburgh summit, according to which our country will have to pay 3 per cent. extra in real terms every year until the end of the decade to the European Union.
Our Government should seek to reduce taxes on business and, to their credit, they cut corporation tax by 2p in the pound. This was a great step forward and I whole-heartedly applaud it. However, the Government do not understand the importance of facilitating investment in small companies, especially family enterprises. We should have a threshold for the smallest companies, below which they would pay no corporation tax. It is true of personal taxation, because one does not pay income tax until one has passed a certain threshold, and the same should be true of small businesses. They rely on their profits for innovation, expansion and the creation of new jobs. If a climate of investment is to be fully encouraged, we must also abolish inheritance tax and capital gains tax.
One final aspect of our European policy was discussed in European Standing Committee B on Wednesday and has not yet been resolved--Britain's participation in the fifth framework programme for science and technology. The shadow Minister, my hon. Friend the Member for Chesham and Amersham, played a distinguished part, as one would expect, in the debate in Committee on Wednesday. In this, we are seeing another case in point of the dangers for small business in the European Union. If the EU were a free trade area and nothing else, small business would do well out of it, but it is the process of political construction of a European super-state that will impose burdens on small business, as it will on all our people.
If the Commission has its way, under the programme for science, technology, research and development, this country is likely to be required to pay an extra 25 per cent. over the next five years. We are already the second largest net contributor to the European Union. It will be an opportunity cost to small business, as to the whole of British society, including the British taxpayer.
As for innovation in science and technology, the small countries of Europe are delighted at the prospect of an extra 25 per cent., because they have small science and technology bases. We are at the forefront of scientific and technological innovation in Europe, so we shall bankroll the improvement of science and technology in the smaller countries of Europe, which will ultimately become our competitors.
Through their corporate taxation, our small business men are required to pay for that process. I hardly believe that it makes sense. Their interests are even less likely to be safeguarded when, after the Amsterdam treaty is ratified, we abolish the veto on such matters, and lay ourselves open to the vagaries of majority voting--or rather, to the small countries ganging up against us.
Lest people may think that I am negative, let me add that I am not. I believe passionately in the role of small companies in export. We have not discussed this area of policy in the debate. I am encouraged by the fact that the new Government take a consistent interest in the subject, as did their predecessor.
The export promoters in the Department of Trade and Industry do a wonderful job in lending the expertise that they have gained in trade, commerce and industry, especially to small enterprises, which need help with exports.
Secondly, our much maligned missions throughout the world do an admirable job. I have always found the commercial sections most willing to provide assistance, to answer queries, to give help with leads, to suggest which companies may be appropriate for joint ventures, and so on.
Furthermore, that is true not only of the local commercial section but increasingly of the whole of a British mission overseas, which is usually whole-heartedly engaged, from the ambassador down, in the process of export promotion. There is support for British trade fairs, British trade missions, British weeks and other activities, all of which is fully provided by our missions abroad.
I must add a final plaudit to the chambers of commerce in our country. They may be regarded as somewhat old-fashioned institutions, inasmuch as they are funded by businesses themselves and are not an apparatus superimposed by Government. They are responsive and understand the needs of industries great and small--in contrast to the Confederation of British Industry, for example, which these days is the spokesman for corporatist Britain and does not comprehend the needs of small business in the same way. I hope that the Minister will do everything that she can to support the chambers of commerce.
Mrs. Roche:
We have had an excellent and stimulating debate, and there has been general agreement about the importance of our small and medium-sized enterprises.
There are three main things that we can say about small businesses. First, the experience of the past decade--in this country, the EU and elsewhere--has shown that jobs come from the small and medium-sized sector. Secondly--this reflects on the point made by the hon. Member for Ruislip-Northwood (Mr. Wilkinson) about wealth creation--small businesses are good examples of people creating opportunities for themselves, their families and their communities by rolling up their sleeves and getting on with creating the wealth that this country needs so much. Thirdly, smaller companies are often at the forefront of innovation, creativity and the competitive edge, and they will show the way to rest of this country as we go into the next century.
We have had an excellent debate with many speeches of a high calibre--with one notable exception. I say this more in sorrow than in anger, but I am referring to the speech of the hon. Member for Chesham and Amersham (Mrs. Gillan). If I were being kind--I always try to be kind to the hon. Lady--I would say that her speech was wide ranging. However, she had absolutely nothing to say about innovation. People in our small and creative firms who are following this debate--and who were pleased that the Government had made time for this debate--will be disappointed that Her Majesty's Opposition had nothing to say about innovation.
The hon. Member for Chesham and Amersham referred rightly to regulation, and I share the desire of the Opposition to do something about deregulation. But she
has a cheek, considering the record of her party in government. The Conservatives' deregulation initiative, which started in 1994, created 13 times as many regulations as it scrapped, yet the hon. Lady has the nerve to talk about deregulation. Only one member of the previous Government's deregulation task force came from the small business sector. There were more ex-Tory Members of Parliament on the task force than representatives of small and medium-sized enterprises. Half of our task force is composed of small business representatives--a practical example which I hope will delight the hon. Member for Billericay (Mrs. Gorman), who made a good speech about the practical nature of what needs to be done.
The Access Business initiative seeks simplicity in terms of central Government, but also--I hope this will please the hon. Member for Billericay--looks at local government, and I am delighted that local government is represented. The hon. Member for Chesham and Amersham had the cheek to talk about small firm exemptions, but what was her party's record? The Asylum and Immigration Act 1996 was passed by the previous Government. When in opposition, Labour proposed an exemption for firms employing fewer than 10 people but the then Conservative Government voted that proposal down. She should not lecture us about deregulation when her party's record was so appalling.
Mrs. Gillan:
May I congratulate the hon. Member for Wolverhampton, South-West (Ms Jones) on an excellent maiden speech, and ask whether the Minister is now saying that she will reconsider the answer she gave me in a letter and look at the possibility of the exemptions for small firms?
Mrs. Roche:
First, I join the hon. Lady in paying tribute to my hon. Friend the Member for Wolverhampton, South-West (Ms Jones)--that is at least something on which the hon. Lady and I can agree. I shall return later to my hon. Friend's excellent speech.
We expect some consistency from the hon. Member for Chesham and Amersham. I know that it is the practice of members of the shadow Trade and Industry team to reverse everything that they previously believed, but if business--large, small and medium-sized--is to take them seriously, they must be consistent.
The hon. Lady spoke about what we should do about late payment. The only word for that is the wonderful Yiddish expression, chutzpah. For the benefit of the House, chutzpah is defined by the young man who murders both his parents and pleads in mitigation that he is an orphan. The hon. Lady's speech was a clear example of chutzpah.
Let us consider the previous Government's record on late payments to small businesses: £230 million was owed to small firms, and in 1995-96, the Treasury--let us not forget that the hon. Lady was a Minister--paid 14 per cent. of its bills late. I am not surprised by that record because, as the hon. Lady will recall, the former Deputy Prime Minister, the right hon. Member for Henley (Mr. Heseltine), boasted about "stringing along" his creditors when he was in business.
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