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1979-1987 : Mr Major’s Written Parliamentary Answer on Small Businesses

Below is the text of Mr Major's written Parliamentary Answer on Small Businesses on 12th June 1986.


Mr. Ashdown Asked the Secretary of State for Social Services if he will list those measures introduced within his Department within the past year and intended to be of benefit to small businesses.

Mr. Major As part of the Government's initiative to encourage enterprise and to help businesses, particularly small businesses, the Department has set up a deregulation unit. The unit works closely with the enterprise and deregulation unit in the Department of Employment and co-ordinates action within the Department to explore ways of assisting business and easing any burdens imposed by compliance with regulations or administrative, requirements. The unit is currently systematically reviewing all regulations for which the Department is responsible which impact on business to ensure that any unnecessary burdens are removed. Full details of the Government's action in this area are given in "Building Businesses … Not Barriers" (Cmnd. 9794).

Specific measures likely to benefit small businesses include:

 - the October 1985 package of changes in the national insurance contributions payable by employers produced net savings for employers of £80 million a year at 1985-86 rates. Reductions in the contributions paid by employers in respect of employees earning less than £130 a week at 1985-86 rates (£140 a week in 1986-87) should particularly benefit small businesses;

 - the Class 2 contribution payable by the self-employed was also reduced in October from £4.75 per week to £3.50. Even with the April 1986 increase the Class 2 contribution is still £1 less than it was a year ago.

 - since October 1985 it has been easier for the newly self-employed on low earnings to claim exemption from Class 2 national insurance contributions. New follow-up procedures should also ensure that those with continuing entitlement to do so receive exemption for succeeding years.

 - closer liaison between DHSS and Inland Revenue is helping to avoid duplicate visits to employers by Inspectors from both Departments. Arrangements are being improved to ensure greater consistency of decisions (which arc taken on the basis of the same case law) about whether someone is self-employed. Proposals in the Social Security Bill for increased exchange of information should assist this liaison;

 - proposals in the Social Security Bill to remove the odd pence in the NI Contribution tables from April 1987 by using earnings bands of £1 instead of the present 50p bands. This should considerably reduce the size of, and simplify the tables.

 - enquiries of employers about their employees' earnings are being reduced in number, and ways will continue to be sought to reduce them further. For example, Local Offices arc being asked to consider making greater use of the P60 annual statement rather than direct approach to the employer. Proposals in the Social Security Bill to simplify the awarding of special hardship allowance will cut enquiries to employers by up to 200,000 a year.

 - the Department has introduced a number of simplifications to leaflets, instructions and forms used by employers. Design and layout of publications is being improved. One example is the new style Employers Guide to Statutory Sick Pay (October 1985 edition). The Department has also used market research to seek the views of small businesses on improvements to the design and layout of National Insurance Contribution tables.

 - some local offices have set up specific inquiry points for employers and the Department is considering whether the setting up of such points in each local office would be helpful.

 - a number of other initiatives have been taken locally, for example, new employers in the Isle of Dogs Enterprise Zone were visited in order to offer help and advice.

We continue to be firmly committed to better regulation and exploring ways to assist small business men and encourage enterprise.