Small Business Saturday

Tuesday 1st December 2015 Westminster Hall

11:00

[Ronnie Cowan (Inverclyde) (SNP)]

I beg to move,

That this House has considered Small Business Saturday

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the powers that be for selecting this topic for debate. I am delighted that we have the opportunity to discuss how vital small businesses are to the prosperity of the UK’s nations.

The importance of small businesses should be self-evident. Indeed, 99% of businesses in the UK have fewer than 49 employees, accounting for 48% of total employment and 33% of turnover. That amounts to 15 million people in the UK being directly employed by small businesses, with a turnover of £1.75 trillion. They are the drivers of economic growth, creating jobs and serving the requirements of our communities. Whether they are—in no particular order—local tradesmen, retailers, service providers or catering outlets, the benefits of small businesses extend beyond the employees they hire. Just under a fifth of all small and medium-sized enterprises in the UK operate in the construction sector and 15% operate in the professional, scientific and technical sectors, and those businesses complement the success of associated industries such as manufacturing. We should therefore recognise that the influence of SMEs cannot easily be quantified simply by looking at their own output as it extends into the wider economy and communities.

In bringing forward this debate, I wanted to stimulate the discussion around how we can continue to support small businesses and to highlight the challenges that they face. For the last three years, Small Business Saturday has provided the opportunity to focus the minds of consumers, business people and policy makers on the indispensable contribution made by small businesses.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining this debate. One issue that our small businesses, whether they are on the high street or are another form of SME, face today is that of business rates, which are crippling many companies. I am sure he would agree that they need to be looked at.

[Ronnie Cowan]

I certainly do, and that is a topic that I hope to cover later on.

Last year, 16.5 million UK adults supported a small business on Small Business Saturday, and I am sure that this year’s campaign will be equally successful when it takes place on Saturday 5 December. However, although it is important to raise awareness of the challenges small businesses face on the first Saturday of every December, we must ensure that the campaign leaves a positive and lasting impact on small businesses all year round.

[Mr Chuka Umunna (Streatham) (Lab)]

I congratulate the hon. Gentleman on securing this debate. I want to pay tribute to the others, along with myself, who instigated the bringing over of Small Business Saturday from the US to the UK, including the Federation of Small Businesses, the Institute of Directors, the British Chambers of Commerce and the British Independent Retailers Association, and to thank Michelle Ovens and the team at Small Business Saturday UK above all for setting it up. Does the hon. Gentleman agree that it is important to acknowledge that Small Business Saturday is not all about shopping? Our small businesses do a lot more than just provide retail services and products and do so much more for our economy. Small Business Saturday is as much about people outside of retail as it is about those within it.

[Ronnie Cowan]

I absolutely agree. It is easy for us to focus on shopping and the high street, particularly pre-Christmas when that is what it is all about. Retail is a large part of it, but small businesses employ people in all sorts of sectors and many of them, such as my business in my previous existence, which I hope to touch on later, do not have the high visibility of the high street.

Other hon. Members will be able to relate to concerns about decline, as shop closures and empty retail units are an issue that stretches right across the UK. As in other constituencies, the situation in Inverclyde varies considerably. The largest town of my constituency, Greenock, is primarily served by an enclosed shopping centre populated by larger retail outlets which has struggled in recent years with closures and has failed to live up to the potential that the centre of Greenock has to offer. In other parts of my constituency, the smaller towns of Gourock and Kilmacolm have been comparatively successful in maintaining more vibrant town centres, mainly populated by small, independent businesses. However, they are not helped when large banks withdraw their high street presence and contribute to the reduction in footfall.

There are no easy answers when it comes to regenerating our high streets, but Inverclyde provides a valuable lesson: smaller, independent retailers are an integral part of creating thriving town centres.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Small Business Saturday is an opportunity to highlight the vital work of local authorities in supporting high streets. His point about empty shops is important and I congratulate the Vale of the White Horse District Council, which has halved the number of empty shops in Abingdon and has put on free parking for Small Business Saturday. It also helps to throw the important Abingdon extravaganza to support local shops. Does the hon. Gentleman agree that Small Business Saturday’s message is that we will see lasting improvements for small businesses only when local communities support them, whether retail or not, throughout the year?

[Graham Stringer (in the Chair)]

Order. I remind hon. Members that interventions should be short and to the point.

[Ronnie Cowan]

I thank the hon. Lady for her point.

One business in my constituency that is contributing to the success is the Pirate and Bluebelle, a gallery operated by Heather McCulloch and Nick Summers. It is a small business in the very literal sense of the word. Their shop is just 2 metres by 4 metres and is one of the smallest galleries in Scotland, if not the UK. Heather and Nick established the business in order to sell artistic photographic prints and by doing so they are now supporting a number of emerging local artists and crafters. Like many small business owners, Heather and Nick are self-motivated, have been prepared to take risks and are driven by a desire to benefit not only themselves, but their local community. In the words of Heather herself:

“We feel that the rewards far outweigh the cash.”

I hope other Members today will join me in commending Heather and Nick’s community spirit in creating a successful small business. Their experiences should be noted by policy makers in this Parliament and elsewhere. For example, Heather and Nick are concerned that the business registration process was difficult to understand and noted that the guidance on what was expected of them on tax and national insurance contributions could have been more clearly stated. Furthermore, Heather and Nick feel that the personalised support from Business Gateway made a positive contribution to the establishment of their gallery. An adviser has been available to answer questions specific to their circumstances and that specialised knowledge has assisted in developing the business in its first year of operation. I would echo that sentiment as I ran my own small IT business for 12 years and the burden of the paperwork required by Her Majesty’s Revenue and Customs distracted from the enjoyment of being self-employed.

The UK has an annual business death rate of 10% and the Pirate and Bluebelle is an example of why pre-planning is so important. Heather and Nick tested the market by attending local fairs and measuring the reception of their product with customers. They followed that up by securing premises on a shopping strip suitable for a small independent retailer and the type of products they wanted to sell. Many businesses fail within the first five years, and it is vital that potential business owners undertake the necessary preparation before fully committing.

[Hannah Bardell (Livingston) (SNP)]

I congratulate my hon. Friend on securing such an important debate ahead of Small Business Saturday. Does he agree that it is important to encourage more women to start their own businesses, as they often fail sooner than their male counterparts? As the world of work changes, we must ensure that businesses such as Decadently Pure in my constituency, which is run by Ros Milligan who recently won a West Lothian chamber of commerce award, are able to develop and flourish.

[Ronnie Cowan]

I would not for one minute believe that women were more likely to fail at small business than men—certainly that is not my experience in my community, where many of the businesses are run by strong, vibrant and intelligent women. I am surprised to hear that. Despite the challenges, long hours and potential risks of running a small business, Heather is optimistic about her future operating an independent business in Inverclyde. She said:

“Setting up and running a small business has been one of the most challenging things we have ever done but also the most rewarding.”

I am aware that a range of support is already available to small businesses such as the Pirate and Bluebelle—I should point out that Inverclyde and, indeed, Gourock have many other good small businesses dealing in fine art. Assisting SMEs must be a collaborative effort across different tiers of government and various other organisations. In Inverclyde small businesses have access to a variety of support, including from Inverclyde Council, the Scottish Government, Riverside Inverclyde, Skills Development Scotland, Business Gateway and Scottish Enterprise.

At local authority level, businesses in my constituency have access to grants that assist with capital expenditure, staff training and structural improvements to business premises. Inverclyde Council provides a small business loan scheme to improve the small business start-up rate. A west of Scotland loan fund is also available, providing loans of up to £100,000 for established businesses operating for more than two years, while newer businesses may borrow up to £30,000 through the same fund.

Such schemes emerged in response to the small business concern of finding credit increasingly difficult to secure. Another local organisation, Riverside Inverclyde, has complemented the work of Inverclyde Council to tailor solutions specific to my constituency. It has promoted the establishment of small businesses by providing quality office space, which is an important task, because Greenock, formerly a town of heavy industry, did not have enough office space suitable for a modern, digitally connected business. In establishing or refurbishing six offices and business centres, Riverside Inverclyde has helped to secure more than 850 jobs.

[Bill Esterson (Sefton Central) (Lab)]

I congratulate the hon. Gentleman on securing the debate. He is talking about the support needed by small business, which, as he said, is vital all year round. Does he agree that the Small Business Saturday team is becoming more of an all-year-round support and is securing support, not least with its bus tour, which has travelled throughout the country for many weeks, to show that support is needed every day of the year, not only on 5 December?

[Ronnie Cowan]

Absolutely. This coming Saturday is a focal point, which is all about raising awareness, as is the debate. As the hon. Gentleman says, it is all year round, because it is sometimes a day in, day out struggle for businesses to keep their head above water.

At national level small businesses have been eligible for the Scottish Government’s small business bonus scheme since 2008. Almost 100,000 businesses now benefit from having their business rates reduced or completely removed—a record amount since the introduction of the scheme. The scheme has provided indispensable assistance to businesses throughout extended periods of difficult economic circumstances. Since its 2008 introduction, the amount of money being saved by businesses throughout Scotland has more than doubled and because of that competitive advantage, businesses in Scotland can this year save up to £3,200 more under the scheme than equivalent businesses in England can. I welcome the First Minister’s commitment that the scheme will continue throughout the next Parliament, should the current Scottish Government be re-elected.

Cross-border collaboration also benefits small businesses, in particular on important infrastructure projects such as improving access to superfast broadband. Federation of Small Businesses research found that 99% of small firms rate the internet as “highly important” to their business. I note that the Scottish Government are ahead of schedule in meeting their target of 95% of premises covered by superfast broadband by 2017, so we can see in practical terms how collaboration between levels of government and other organisations is critical to giving small businesses the support they need to thrive.

If I may be allowed to indulge myself, I cannot end my speech without mentioning that Inverclyde has many advantages as a place to do business. It is within commuting distance of Glasgow, is a short distance from Glasgow airport and enjoys excellent rail connections. Anyone wishing to start a business in the area can expect excellent tailored support from Inverclyde Council and Riverside Inverclyde, in addition to the wider benefits that the Scottish Government provide.

[George Kerevan (East Lothian) (SNP)]

I, too, commend my hon. Friend for securing this important debate. He talks about collaboration between different agencies of government, but does he accept that one agency, HMRC, has not been helpful to small businesses recently? It is planning to close down offices throughout the UK, making it much more difficult for small businesses to get their tax forms correct.

[Ronnie Cowan]

I touched on HMRC earlier and I echo my hon. Friend’s sentiments.

In the lead-up to this year’s Small Business Saturday my message is clear: let us create more local jobs and vibrant town centres, and invest in the future of our communities by backing our SMEs.

[Graham Stringer (in the Chair)]

Before I call John McNally, may I check with the Minister that he has had permission to speak?

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

indicated assent.

11:14

[John Mc Nally (Falkirk) (SNP)]

Thank you, Mr Stringer. I also thank my hon. Friend the Member for Inverclyde (Ronnie Cowan) for securing the debate on a subject that is close to my own heart.

As a small business owner, being a hairdresser and running a business employing staff, I appreciate the commitment and training that goes into running a small business for more than 50 years. I appreciate the trials and tribulations of people running their own business and what a powerful driver the small business sector is for growth and competition across the economy.

As the vice-chair—soon to be the chair, hopefully—of the all-party group on the hair industry, I fully appreciate the work that has gone into the Hair Council, which I believe includes more than 250,000 hairdressing businesses in Britain. It supplies a huge amount of effort and employment, especially in support of local town centres. I welcome the opportunity to support the Small Business Saturday campaign and to highlight the business successes in my constituency and throughout Falkirk district.

Over the past two years alone, more than 1,057 new businesses in my constituency have been registered at Companies House. Falkirk has benefited from the steady increase in successful entrepreneurship and business development, with many successful businesses supplying other local businesses in the area. That is in no small part due to initiatives such as Small Business Saturday, a grassroots, non-commercial campaign that highlights small business success and encourages consumers to shop locally and support small businesses in their communities.

As my hon. Friend said, Small Business Saturday takes place on the first Saturday in December. It is my hope that the campaign will have a long-lasting effect on businesses and shopping habits in Falkirk and towns throughout the district, as well as Scotland-wide. Nationally, our small businesses are well supported by the Scottish Government’s small business bonus scheme, which has benefited more than 99,000 commercial properties in Scotland and helped the number of small businesses in Scotland to increase by more than 50% over the past 15 years.

Locally, Falkirk benefits from an excellent district business improvement team in the form of Falkirk Delivers, headed by Alex and Sarah. Their team have a similar ethos to that of Small Business Saturday and have the mantra of keeping things local, which is more than a “use it or lose it” message. It is about supporting businesses that have supported the town and have evolved the way in which they do business to benefit our communities and local people. It is about appreciating local knowledge, providing excellent customer service, and retaining money within our local economy to ensure that our towns are a thriving and vibrant place to shop, live and work, and providing a feel-good factor about them.

Falkirk benefits from a diverse range of businesses located at its core. The town has two covered shopping centres, Howgate and Callendar Square, in which national retail businesses are located, but what distinguishes Falkirk from other, larger towns is the diversity and range of smaller independent businesses. Falkirk also has a renowned and award-winning night-time economy, with a variety of pubs, cafés, restaurants and nightclubs, many of which are independently owned and managed.

Falkirk town centre, like many, has seen a change in the landscape over the past few years, as my hon. Friend the Member for Inverclyde mentioned. Some of our national retailers have moved away from their traditional high street presence, and vacancy rates have hovered around the national average, but our small retailers seem to have weathered the economic downturn of the past few years better than most. I will keep supporting those small businesses in the best way I can.

Small Business Saturday, on 5 December, is an ideal vehicle to remind people to shop locally—at Stenhousemuir, Larbert, Denny, Dunipace, Bonnybridge, Laurieston and Polmont. I hope I have not left anywhere out, or there will be hell to pay when I get home.

The Falkirk Delivers team has a marketing campaign using print and social media that features many of our local independents. For example, we have Gems Sweets, where we can still buy Spanish Gold, Chelsea Whoppers or Lucky Tatties—perhaps that does not fit well with yesterday’s debate about the war on sugar, but they are quite tasty. A fixture in our town for more than 100 years has been G.W. Smith cycle shop. We have Coffee on Wooer, a trendy new artisan coffee shop that always has a space for local musicians, poets and writers to do their thing. The town’s Howgate centre recently launched INDY, an independent marketplace with small unit space, ideal for the have-a-go entrepreneur. It offers the best of both worlds, because it is located in a busy shopping centre but is aimed at encouraging and growing unique and individual independent businesses.

Such businesses are the heart of our town centre community. They are known, loved and trusted by locals and visitors alike. However, Small Business Saturday is not only about retail. Falkirk town centre is home to lawyers, accountants and translators—and we even have a 3D printer—all of whom rely heavily on local businesses, so Small Business Saturday and the wider “keep it local” campaign play a part for those services as well.

Falkirk Delivers and its partners are working on a range of projects and initiatives to continue to support the town centre during a time of change. With the £5 million-plus investment through the Townscape Heritage initiative, the successful launch of our “can do” space and projects such as the Carnegie Trust’s TestTown, the message is that Falkirk is very much open and ready for business. I totally support my hon. Friend the Member for Inverclyde on this issue.

11:21

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I pay tribute to the hon. Member for Inverclyde (Ronnie Cowan) for securing the debate and to everyone who has contributed to it. I will begin with some stats: 99.3% of United Kingdom businesses are small businesses. Small businesses employ 12.4 million people, which is 48% of total private sector employment. They have a combined annual turnover of £1.2 trillion, which is 33% of turnover in the private sector, and there are a record 5.4 million private sector businesses in 2015, which is an increase of 908,000 from the start of 2010. I say that to give context and to show that we should never underestimate the huge importance of our small businesses.

I also pay tribute to the hon. Member for Streatham (Mr Umunna) and others who brought Small Business Saturday to this country. It is a welcome American import that has been hugely successful. I was honoured to go to the launch of this year’s Small Business Saturday in July, where I learned a great deal. I was already a fan of it—it has been in place for a couple of years—but I had not appreciated this annual event’s importance for small businesses not just in having customers going along to celebrate and put their money where their mouth is, but in their relationships with each other. I was really struck by the fact that Small Business Saturday is a great opportunity for small businesses to develop and expand their networks and to learn much from each other.

The hon. Member for Inverclyde made the good point that Small Business Saturday is not just about celebrating retail, though there is nothing wrong with that. Small businesses in our high streets and towns encompass IT firms, accountants, solicitors, health providers and leisure providers—there is a long list.

[Mr Umunna]

I thank the Minister for her kind words. It is important to state that Small Business Saturday is not about being against our large businesses, because the relationship between our small and bigger businesses is symbiotic—they depend on each other. Small businesses are an important part of larger businesses’ supply chains, so overall this is a pro-business campaign for every business, whether big or small, because everyone benefits in the end.

[Anna Soubry]

I completely endorse everything the hon. Gentleman says. We should not forget that some small businesses are sole traders, while many will employ just one or two people. However, they are a critical part of the supply chain. Indeed, we should not forget the support that accountants and solicitors give to larger companies.

One of the downsides of being a Minister is that I am constrained about speaking in glowing terms about my constituency. All of us love to come to this place and champion our constituents, and rightly so. If I may, I will indulge my businesses and constituents with what I shall do this Saturday in celebration of Small Business Saturday, which is supported by the Government—goodness me, we all know that this is not a party political issue.

I shall probably begin at Bardills, which is an excellent garden centre—we forget how many garden centres are important small businesses—where I will order my Christmas tree. Then I shall go into Kimberley, which is one of three excellent towns. I shall enjoy a cup of coffee in Rumbletums and probably some cake over at Madhatters. I will go to a flower shop—I will be in trouble, because I could go to a number of good flower shops in my constituency, but the one in Kimberley is particularly good. I can buy fruit and vegetables in yet another great small business that, like so many, is family-run. Fred Hallam Ltd in Beeston goes back many generations, and while such families are running businesses they are providing a real service to their communities. We should not forget that.

When I go to the great shops and small businesses in my constituency, I really notice the level of care they give to customers. They know their customers and look after them by making sure that whatever they want is available. Such businesses are particularly keen to ensure that they provide an excellent service to older customers.

I will go into Beeston. The town unfortunately suffered because of the tram works that blighted it, but it is on its way up. Now we have got the tram, and we look forward to more people coming into the town and other people who previously shopped there coming back.

My hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) made a good point about the need for free parking. She talked about her own constituency, where there will be free parking this Saturday, and I am pleased that my borough council will have free parking throughout December. I have quite controversial views on parking, which we will not go into, but let me put it this way: the more towns that embrace free parking, the better. As I said, I shall go into Beeston and enjoy Fred Hallam Ltd—it has a fishmonger, which is rare.

[Bill Esterson]

To show the cross-party consensus on this issue, may I congratulate Sefton on providing free parking throughout December for the very purpose that the Minister describes?

[Anna Soubry]

I completely endorse that.

I will go to the deli and buy, if not fine cheese, some Blue Monkey beer called BG Sips, which I recommend to everyone. Microbreweries are another type of small business that employ people and contribute hugely to the local and national economy. Many are now stepping into exports, and the Government are keen to ensure that UK Trade & Investment looks at the benefits it can provide to small businesses.

No doubt I shall go into Relish, where I will have to have another bacon butty or some similar delight. That is another good example of a small business that is doing well. I shall finish in Stapleford, where I will go to an excellent small business that alters clothes—it has been going incredibly well and is now growing and leading the town team. No doubt, I will end up in Shabbylicious with yet another excuse to drink more tea or coffee and indulge in more cakes and mince pies.

I hope I have made a serious point. Small business are important to the economy, and the statistics show it. I want to finish on a hopefully positive note, which is about business rates: small businesses now pay less tax. We are supporting them by extending the doubling of small business rate relief in England to April 2017. More than 400,000 small businesses will pay no rates at all as a result of that welcome extension.

I know that all Members will be out there on Saturday celebrating Small Business Saturday. I am grateful to the Federation of Small Businesses, which brought the event to my constituency. I pay tribute to it, and to the Institute of Directors, the British Chambers of Commerce and everyone who supports this excellent initiative.

Question put and agreed to.

11:29

Sitting suspended.