My Lords, the Chancellor and I regularly discuss how we can promote small business. Yesterday, the Chancellor unveiled a budget for growth supporting new, small and growing businesses. Announcements included a 12-month business rate reduction for more than half a million small businesses, a doubling of the annual investment allowance to £100,000 and a doubling of the threshold to £2 million for entrepreneurs’ relief on capital gains tax. He announced that Her Majesty's Revenue will continue with “time to pay”, which so far has involved £5.2 billion of delayed tax payment. So the Government are certainly not standing still in their support for small businesses.
I thank the Minister for that reply. Is he aware that half of all small businesses in this country do not claim the small business rate relief to which they are entitled because of the complexity of the process of applying and the complexity of the rules? As a result, small businesses are missing out on £400 million of vital support. Can the Secretary of State think of any reason why this payment should not be made automatically to all eligible small businesses, as we on this side of the House have proposed?
My Lords, in the course of the noble Lord’s discussions with the Chancellor, did he also stress the importance of the provision of finance to small businesses? In that context, can he explain why, despite the process of quantitative easing, the actual figures for the growth in the money supply show a precipitous decline in the latest report from the Bank of England?
My Lords, the issue of small businesses’ access to finance has been at the forefront of my mind for the past 18 months. I am very glad that the Chancellor was able to announce yesterday the creation of UK Finance for Growth—it represents an overall £4 billion of funding for SMEs, including growth capital to meet the needs of those small businesses that seek to expand but cannot get hold of growth capital to the extent that they want—as well as further lending commitments between the Government, RBS and Lloyds. We also announced the creation of a small business credit adjudicator, which will work with SMEs struggling to secure finance to ensure that they are better treated by the banks. I know that all the small business organisations, as well as the CBI and the Institute of Directors, have given a very strong welcome to all these measures.
My Lords, does the Secretary of State realise that Her Majesty’s Revenue and Customs has required every book-keeper, on however small a scale the book-keeper operates, to register under the money-laundering regulations and to pay a £95 per year fee? Given that he has 1.7 million small businesses with fewer than five employees and more than 2 million small businesses with fewer than 10 employees under his care, and given that only 12,500 book-keepers have registered so far—and they are not the book-keepers but the bigger people—will he take steps to end this burdensome bureaucratic nonsense for small businesses?
My Lords, bearing in mind the well known views of the noble Lord, the Lord Sugar—who I am glad to see is in his place—that there is no difficulty of small or medium-sized businesses obtaining finance from banks, can he confirm that the noble Lord, the Lord Sugar, will not become the adjudicator he referred to?
Yes, my Lords. My noble friend raises important issues and these are precisely the sorts of paths we need to pursue and issues we need to examine. UK Finance for Growth, which will be taking on responsibility for the Government to oversee new funding arrangements for small businesses, will pick up precisely those matters that my noble friend has identified.