Small Businesses

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of John Howell John Howell Conservative, Henley 11:30 am, 5th November 2013

What recent fiscal steps he has taken to support small businesses.

Photo of David Gauke David Gauke The Exchequer Secretary

The Government are very supportive of small businesses. We demonstrated this support again at Budget 2013 through the introduction of the new £2,000 employment allowance for small businesses and charities from April 2014.We have extended the small business rate relief from April 2013. We have increased the small business research and development tax credit to 225% and the lifetime limit on entrepreneurs relief to £10 million. In addition, we have launched a £1 billion British business bank to improve access to finance for small and medium-sized enterprises in the UK.

Photo of John Howell John Howell Conservative, Henley

I congratulate my hon. Friend on the fact that the new employment allowance will mean that 450,000 small businesses pay no national insurance contributions at all. Is this not a positive help to small businesses such as those in my constituency as they seek to take on more employees?

Photo of David Gauke David Gauke The Exchequer Secretary

I entirely agree. That £2,000 for every business will feed through by helping businesses take on new staff, invest in their business or pay higher wages. It is a positive contribution, which contrasts with the proposals that we inherited for an increase in employer’s national insurance contributions.

Photo of Tom Blenkinsop Tom Blenkinsop Opposition Whip (Commons)

Why since 2011 has SME investment and lending to SMEs fallen by £30 billion?

Photo of David Gauke David Gauke The Exchequer Secretary

We have had to deal with the aftermath of a banking crisis that occurred, in part, because of failed regulation set up by the previous Government.

Photo of David Morris David Morris Conservative, Morecambe and Lunesdale

Does my hon. Friend agree that it is good news that, due to the investment in small businesses, unemployment in Morecambe has fallen by 10% in the past three months?

Photo of David Gauke David Gauke The Exchequer Secretary

That is very good news. As we are hearing from various constituencies, unemployment is falling. It is going in the right direction and it is important that we stick to the economic path.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

Why should we believe from the Minister that the present scheme for dealing with national insurance contributions will be any more successful than his previous scheme, where take-up was extremely poor and did nothing to increase jobs?

Photo of David Gauke David Gauke The Exchequer Secretary

I do not know whether Labour is opposing the scheme. That was not the impression I got. This is a very simple scheme. It does not require applications or involve any of the complexities that we saw with two of the Labour national insurance contribution schemes. We are confident that the current scheme will work. It has been widely supported by business groups and I think it will make a big difference to small businesses.