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Support for Small Businesses

Volume 747: debated on Tuesday 19 March 2024

Small businesses drive our economy and we support them to thrive using levers across Government, whether that is through our small business rate relief, by increasing the VAT registration threshold, by providing reliefs such as the annual investment allowance or through various programmes offered by the British Business Bank.

The Welsh Government are increasing the burden on small businesses by reducing retail, hospitality and leisure business rates relief from 75% to just 40%, despite the UK Government rightly extending that relief in England in the Budget. That means that businesses in my constituency, such as the Little Cheesemonger, Now to Bed, Presents with a Difference and Tu Mundo, are all facing unsustainable business rates bills. One business has to find an extra £35,000 a year for business rates alone. What advice does the Minister have for small businesses in north Wales facing these onerous bills?

My hon. Friend is right that at the autumn statement, this Government extended the retail, hospitality and leisure relief in England—a tax cut worth £2.5 billion for small businesses. The Barnett formula applies to allow the Welsh Labour Government to offer similar relief if they want to. It is disappointing, if not surprising, that when given the opportunity, Labour decides not to cut taxes for working people.

Does my hon. Friend agree that one of the best steps that the Government can take to support small businesses in Eastleigh, Hedge End and Botley is through a package of business rate reductions? Will he outline to the House the progress the Government have made in this regard, which was desperately needed?

My hon. Friend is right. Business rate relief is a great way to support small businesses in Eastleigh and across the country. Our small business rate relief means that one third of all properties in England already pay no business rates at all. We have frozen the small business multiplier, protecting more than 1 million properties from a multiplier increase. As I was just saying, we are supporting high streets with our retail, hospitality and leisure relief.

Just after the Budget, I met some of the small businesses in my constituency at the Flower Pots in Cheriton. While they were pleased with some of the Budget, they talked about improving productivity and growth by raising the VAT threshold far beyond £90,000, and possibly to £250,000. They felt that that would incentivise sole traders and small businesses to expand and work longer hours. They feel at present that growth is restricted because of the level of the VAT threshold. Has the Chancellor given any thought to increasing the threshold to improve productivity?

My hon. Friend is right to engage in the way that she is with her small businesses. We believe that the £90,000 threshold, which has just been increased, strikes the right balance between managing the public finances and supporting small businesses. I encourage her to look at the wider package of support that the Government are providing for small businesses, not least the business rate relief that I was just talking about.

Will the Minister have discussions with his counterparts in the devolved institutions to ensure that the likes of sole traders and small businesses see a reduction in bureaucracy to make them more profitable, offering more business opportunities to more people across the United Kingdom?

I can assure the hon. Gentleman that the Government engage frequently with our counterparts in the Northern Ireland Administration, and that will continue to be the case.

According to the Federation of Small Businesses, two in three small businesses are suffering from late payments. We are now 14 years into a Tory Government. Why do the Government not follow Labour’s lead and strengthen the law on this?

We are acutely aware of this issue, and I have had meetings with the FSB. That is why the Chancellor has announced plans to improve the situation for small businesses. I am happy to outline that in writing to the hon. Gentleman.

One of the requests from female-led businesses in my constituency, including Cùrlach and Rock’n Rollers, was for a VAT cut for hairdressing businesses. Can the Minister tell me why that was not considered in the Budget? These businesses are an important part of our high streets and they are often led by women, who have missed out significantly in the Chancellor’s Budget.

We of course support hairdressers, our high streets and women-run businesses, which is why we have extended the retail, hospitality and leisure relief to 75%. Cutting taxes for hard-working people is what the Conservative Government do.