National Insurance Contributions Bill

Anne Marie Morris Excerpts

Tuesday 23rd November 2010 Commons Chamber

[Anne Marie Morris (Newton Abbot) (Con)]

I am delighted to have the opportunity to contribute to this debate and I offer my wholehearted support to the Government for this excellent Bill.

On part 1 and the increases in rates, a point that has not been made but that is worthy of comment concerns the timing. Opposition Members had considered the increase when we were at a flaky stage in the recovery of the economy and when there was concern that there might be a double-dip recession. To move the timing from June of this year to April of next year is to be commended and it is absolutely the right and responsible thing to do.

My speech will focus principally on part 2 and the so-called “holiday” for new businesses, a provision that I wholeheartedly support. It is absolutely right that new businesses should be given a helping hand, particularly now. I am fortunate that my constituency of Newton Abbot is in Devon and therefore in the south-west, which means that my new businesses will benefit from these new measures. The Government estimate the benefit across the country at £940 million. That is well worth having and I am delighted to see Opposition Members supporting it. The cost in the grand scheme of things is relatively small and the administration costs of £12 million can be set against the overall administrative costs for this tax, which stand at £1.54 billion. The estimated benefit for individual businesses will be £2,000 per business with a rough administration cost of £166. That strikes me as very good value for money.

I want to take up a point that has been made by a number of Members on both sides of the House. In my view and, clearly, that of others, micro-businesses desperately need help. In the south-west, 91% of businesses employ only five people—small businesses that are a large part of the business community. In my part of the world, issues will arise because of the changes to the public sector, so helping micro-businesses will be very important because it is more likely than not that, because of their sheer number, they will take on those who are made redundant and the NEETs, as we call them—those not in employment, education or training—who clearly need a helping hand.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Has the hon. Lady realised that the proposed holiday does not apply to existing small businesses?

[Anne Marie Morris]

I thank the shadow Minister, but that is precisely my point. I would like to ask the Treasury and the Treasury team to extend the provision to those businesses in the fullness of time.

In particular, we should clarify what we mean by a micro-business. The European Union defines it as a business with 10 employees and a turnover of less than £2 million. For my money, that is a very big business. In my part of the world, micro-businesses are really very small. The hon. Member for Dundee East (Stewart Hosie), who is no longer with us, suggested that we might think about a small business of two employees that was considering adding one extra employee. The point was that it is a big step for a sole trader or husband and wife team to take on that extra member of staff, and it is there that we need the help.

I suggest that the Treasury urgently considers extending the provision to micro-businesses, not in this Bill but in a future Budget. I cannot see why micro-businesses should not be covered across the country rather than in regions. My plea is that micro-businesses, which are different to small businesses, should be properly represented and that we should consider what we in this Parliament mean by a micro-business rather than necessarily taking the European definition. We should also consider what help we can give them.

As for the point made by the hon. Member for Ilford South (Mike Gapes), it is not just about tax assistance, but about regulatory assistance. Some very small businesses are drowning in legislation, much of which is simply not appropriate for them.

[Justin Tomlinson (North Swindon) (Con)]

My hon. Friend is making some excellent points, which, as someone who used to own a small business, I recognise. Micro-businesses also have the opportunity to take on apprentices, and we should encourage small businesses to take advantage of that.

[Anne Marie Morris]

I thank my hon. Friend for that contribution and I absolutely agree.

I ask the Treasury team and the Minister, after the successful outcome of this measure, urgently to consider extending it in the next Budget to micro-businesses and to introduce a proper definition of a micro-business. I think that they need particular help and support.