Amendment of the Law

Part of Budget Resolutions and Economic Situation – in the House of Commons at 7:42 pm on 10th March 1992.

Alert me about debates like this

Photo of Sir Nicholas Bonsor Sir Nicholas Bonsor , Upminster 7:42 pm, 10th March 1992

I am sorry, but I shall not continue to give way.

There are two or three matters in the Budget of which I approve. The freezing of increases in the unified business rate will be of great value to small businesses and to businesses generally. I hope that those commercial landlords who seem to be increasing their rents in an unacceptable way in the current economic climate will take a leaf out of the Government's book and follow suit in freezing the rents that they charge.

A business in my constituency has a large insurance company as its landlord and its rent is to increase by about 400 per cent. over a three or four-year period. I sent the insurance company's chairman a copy of the company's accounts to show that if he were to increase the rent in that way it would wipe out the small profit that the business was making, leaving it in grave financial difficulties. I received no satisfactory response and the company insists on putting up the rent. I have no doubt that, as a consequence, the company will go out of business and the insurance company will find itself with empty premises that it cannot let.

Such occurrences are not simply in my constituency —they are much more widespread. It is a matter of profound regret that in many instances commercial landlords are not acting with proper consideration for their tenants and for the economy as a whole but are acting in a way that is greedy and stupid, and that will backfire on them and their revenue in due course.

The VAT threshold is to go up in line with inflation and that is welcome, as is the cutting of the penalties. The penalties for what were quite minor VAT misdemeanours were unacceptably high and I am glad that my right hon. Friend the Chancellor addressed that matter.

I am pleased also that my right hon. Friend dealt with the inheritance tax burden on small businesses. The proposal has been referred to several times and it will be a great comfort to those who have built up small businesses over the years. I declare an interest because I am the non-executive chairman and a smallish shareholder in a small business. I am glad to say that it was one of the 20 fastest-growing companies in this country from 1987 to 1991. The largest shareholder has put an enormous amount of his life's work into the business and I am delighted that my right hon. Friend has made it possible for his family and his children to share in the results of that labour when he retires and, ultimately, dies. Our policy is in stark contrast to that of the Labour party.

I wish to suggest four ways in which I think that my right hon. Friend the Chancellor might go further in his next Budget. The inheritance provisions will be of great benefit to farmers, but while our agriculture is still part of the common agricultural policy and is in an abysmal state not many small farmers will be in a position to benefit from the remission of inheritance tax. Agriculture is dreadfully short of money and most small farmers will go out of business in the near future if nothing is done to assist them. We can do that only by coming out of the CAP or by persuading our European partners to take a more sensible view of the way in which agricultural returns are structured.

I should like to see the Chancellor's proposals to make Government-owned companies pay their small subcontractors promptly extended to other large companies. It is undoubtedly one of the great burdens to any small company's cash flow that large companies use their clout in order not to pay their bills punctually to help their own position. That threatens the future of many small businesses. I hope that the Government will consider following the German example where it is compulsory in a contract to add interest to a bill if an invoice is not settled within 30 days. Firms in Germany cannot contract out of that obligation and large firms cannot use their industrial muscle to wriggle out of paying promptly as they do in this country.

I welcome the proposals on the car tax. As the right hon. Member for Plymouth, Devonport (Dr. Owen) said, a 5 per cent. reduction will cost £600 million, which is expensive. However, it will be of great help to our car industry, which is in grave difficulty, although it is doing remarkably well in the European context. I hope that another 5 per cent. reduction will be announced in the next Budget, if not before.

I am delighted to see that £15 million is to be taken off the betting levy and redirected back into racing.