Micro-businesses

Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 10:30 am on 2nd February 2012.

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Photo of Anne-Marie Morris Anne-Marie Morris Conservative, Newton Abbot 10:30 am, 2nd February 2012

What steps his Department is taking to support micro-businesses.

Photo of Mark Prisk Mark Prisk The Minister of State, Department for Business, Innovation and Skills

The Government have already acted to make it easier to start and grow micro-businesses. Action has included cutting corporation tax rates, extending relief from business rates, and introducing a moratorium from regulation for all micro-businesses.

Photo of Anne-Marie Morris Anne-Marie Morris Conservative, Newton Abbot

The Minister is conducting a review of disruptive business models as part of the red tape challenge. Has he considered introducing a new limited liability scheme for sole traders, similar to the limited liability partnership? I believe that such a scheme operates in France, and it would be fantastic to see one like it operating here.

Photo of Mark Prisk Mark Prisk The Minister of State, Department for Business, Innovation and Skills

I know that my hon. Friend is a real champion of micro-businesses. The Government have focused on practical measures that help the micro-businesses’ bottom line, but, as she knows, I am happy to consider the legal issues with her and her all-party parliamentary group.

Photo of Anne Begg Anne Begg Member, Liaison Committee (Commons), Chair, Work and Pensions Committee

On Friday I attended the opening of a micro-business in my constituency, Little Rembrandt’s Café in Ferryhill. That business opened despite the Government and despite the banks, which refused to lend. The owner had to put her own financial security on the line by remortgaging her house. That situation obviously cannot be right, because it is stifling growth in the economy.

Photo of Mark Prisk Mark Prisk The Minister of State, Department for Business, Innovation and Skills

I understand the hon. Lady’s point. Two third of small businesses are able to secure the money that they want, but that is no consolation to those who are not. Perhaps I could write to the hon. Lady about the community development finance institutions, which we have been funding and which are well placed to help the kind of micro-business to which she has referred.

Photo of Julian Smith Julian Smith Conservative, Skipton and Ripon

When will the call for evidence on making it easier for micro-businesses to part company with their employees begin, and what will be the terms of reference?

Photo of Toby Perkins Toby Perkins Member, Statutory Instruments (Joint Committee), Member, Statutory Instruments (Select Committee), Shadow Minister (Business, Innovation and Skills)

The Minister was right to describe Anne Marie Morris as a great champion of micro-businesses. Last week she called for the Government to introduce a VAT cut to 5% on construction, which is part of our five-point plan.

The truth is that the Government are failing Britain’s small businesses. They have failed to live up to expectations on regulation, they have failed to persuade the banks to

lend to small businesses, and they have failed to get growth into our economy. Why does the Minister keep pretending that small businesses think his policies are working when it is so clear that they are not?

Photo of Mark Prisk Mark Prisk The Minister of State, Department for Business, Innovation and Skills

There are substantially more small businesses now than there were when we came to office, and they have confidence in what we are doing. We need to support and encourage them, and we will do that. I do not accept the hon. Gentleman’s wholly negative analysis.