Small Businesses

Baroness Warsi Excerpts

Wednesday 9th February 2011 Lords Chamber

[Lord Harrison]

To ask Her Majesty’s Government what role they forecast small businesses will play in the Big Society.

[Baroness Warsi]

My Lords, small businesses are the cornerstone of our economy and have a vital role to play in growing the big society. Businesses already make a significant contribution in supporting local voluntary and community organisations by sharing assets and expertise, philanthropic donations and exchange of staff. In December of last year, we launched Every Business Commits, asking businesses to do their part in growing the economy as well as in helping to tackle social problems and building stronger communities.

[Lord Harrison]

Given the Government’s failure to define the big society and, indeed, the role of small businesses within it, especially in helping to strengthen local communities, will the Minister look again at the regional growth fund, whose administrative possibilities—the £1 million threshold that it applies and the early closure date—mean that there has been a restriction on small businesses? Also, given the Government’s failure in their tepid approach to getting the banks to help out small businesses, will she take up the idea proposed by the chairman of the London Stock Exchange to encourage blue chip companies to contribute to funding small businesses, especially those that are regional and have an innovative flair to them?

[Baroness Warsi]

My Lords, the big society is defined by many in this House as being what most of them have done for most of their lives. It is a volunteering, social action, philanthropic approach to life, but it is also about the opening up of public services to local control and devolution of power. The regional growth fund is a discretionary fund to stimulate economic growth and employment and will operate over a period of three years. In particular, it will help those areas and communities that currently depend on the public sector to make the transition to sustainable, private sector-led growth and prosperity. Small and medium-sized enterprises have a vital role to play in that.

[Lord Bilimoria]

My Lords—

[Lord Laming]

My Lords, does the Minister accept that, if the big society means nothing more than what many of us have been doing for most of our lives, that would be a disappointment? I say this on a purely non-political basis. We now have an opportunity to regenerate local communities and to help them to become much more involved in their own quality of life. However, we can do that only if we get out into local communities and stimulate people to become involved.

[Baroness Warsi]

I agree with the noble Lord’s comments. Indeed, the big society goes beyond what noble Lords have been doing because, as I said, there will be devolution of power and an opening up of public services to local control. However, I am sure that noble Lords around the Chamber will agree that we can always do more.

[Baroness Browning]

Does my noble friend agree that for small businesses to play their part in the big society they need more of what the Government have already started, which is to remove the burden of regulation imposed by the previous Government, such as the burden of proof in disputes in court cases? I am also thinking of reducing the employers’ national insurance contribution and, particularly, maintaining a stable economy. In that way, small businesses will thrive, create jobs and play their part in society.

[Baroness Warsi]

I agree with my noble friend. We must also ensure that we cut back the red tape that stifles those businesses. Indeed, the Cabinet Office and the Department for Business, Innovation and Skills are jointly working on a task force to do just that. It is also important that we open up public and government contracts to small and medium-sized enterprises to ensure that they have a part to play not just in helping communities but in bidding for and having access to all government funding.

[The Lord Bishop of Hereford]

My Lords, I know that the Government share the concern of all of us who live in rural communities that small businesses in rural areas should also be encouraged. I also know that there has been a commitment to widen broadband and speed it up. However, the two things throttling small businesses in the countryside, which has a higher ratio of self-employed people than elsewhere, are broadband and fuel and therefore transport. Will the Government say something about the urgency with which they take those issues, so as to encourage small businesses in rural areas as well?

[Baroness Warsi]

The right reverend Prelate raises some important points. As your Lordships may be aware, one of the first vanguard areas for the big society was in Cumbria and it dealt with that very point: the extension of broadband to rural communities. However, I take on board the other concerns as well.

[Lord West of Spithead]

My Lords, I declare an interest as the secretary of the micro-business APPG. I became very aware as a Minister of the value of SMEs, VSMEs and micro-businesses to the security environment. Today, almost 105 years to the day since the launch of the “Dreadnought”, built by British workmen and enterprise in 12 months, can the Minister please assure me that we will reduce the red tape that is between those small companies and the Government? That is across government but particularly with the MoD, where it damages the ability of those companies to really help us.

--- Later in debate ---

[Baroness Warsi]

My Lords, we are committed to reducing red tape in all sectors. Noble Lords will agree, and the Benches opposite will recognise, that business has been stifled over the past decade by excessive red tape.

[Lord Bilimoria]

My Lords—

--- Later in debate ---

[Lord Cotter]

My Lords, it is well recognised that small businesses are a crucial part of the local community and are ready to deliver on the big society. Local enterprise partnerships were recently established to do this and to help small businesses. However, I point out to the Minister that there is great concern that big business is overshadowing small businesses in the local enterprise partnerships, which were intended to give opportunities for small businesses in the community to provide employment for local people. Will she look at that issue?

[Baroness Warsi]

My Lords, business has always played a vital role in the community. The organisation Business in the Community has been doing that for many years. In light of the fact that 60 per cent of those employed in the private sector work in small and medium-sized enterprises, it is vital that small businesses play a role when local communities are planning local regeneration as part of the local economic partnership.

Social Policy

Baroness Warsi Excerpts

Wednesday 16th June 2010 Lords Chamber

[Baroness Warsi]

I thank noble Lords for an interesting, inspiring, broad-ranging and, at times, challenging debate. I am delighted that my noble friend Lord Wei has chosen this debate to make his maiden speech. Your Lordships will agree that it was a passionate speech, both insightful and inspiring. Although my noble friend refers to his youth and has taken the mantle of the youngest Member of your Lordships’ House from me, I must say that his experience will add much to debates and I am privileged to have him on our Benches.

As has been clear throughout, our country relies on a bedrock of voluntary and community organisations, and social enterprises. These organisations deliver services to families and individuals, provide support and advice to those in difficulty, organise community activities, look out for the young and vulnerable, and carry out a huge range of other roles, some referred to by the noble Lord, Lord Martin of Springburn.

Some of this is motivated by faith, and some by different issues. Without these organisations and the individuals who are part of them, we would be a much poorer and weaker society. I would like to pay tribute today to all those millions of people who contribute to their communities, working tirelessly for the benefit of others, helping to hold communities together, often without expecting any reward for themselves. I include in that Members of this House. The noble Lord, Lord Judd, spoke of public service. I pay tribute to his extensive public service, whether through Oxfam, the YMCA, or his other numerous roles, and to the huge value added by the noble Baroness, Lady Pitkeathley, in her work.

Many organisations in the voluntary and community sector, charities and social enterprises, have a track record of supporting some of the most vulnerable people in our society. They work with families facing financial difficulties, the homeless, those struggling with addiction, people stuck in a cycle of offending or unemployment, and much more listed by the right reverend Prelate the Bishop of Leicester. While government agencies may be searching for the answers, in many cases voluntary and community sector organisations or social enterprises have already found ways to offer effective and lasting support and help. The Government need to support these organisations to help them grow and flourish. Too often we find that it is government rules and regulations that are standing in the way of progress.

The most reverend Primate the Archbishop of Canterbury raised the concern of organisations which face problems with uncertain funding. Other organisations feel confused and uncertain about CRB checks, mentioned by the noble Baroness, Lady Finlay of Llandaff, and I will take back the very practical suggestions made by my noble friend Lady Byford. There are organisations which feel burdened by government mismanagement and micromanagement, and struggle with unnecessary bureaucracy. All of this wastes time and resources, and crucially saps energy and drive, which are the life-blood of this sector.

This Government will build a new partnership with civil society—the right reverend Prelate the Bishop of London calls it a rebalancing—freeing organisations from burdensome rules and regulations that prevent them from doing their jobs and put these organisations in the driving seat, rather than assuming that government knows best, and stop unnecessary interference from government. This new partnership with civil society is part of this Government’s broader commitment to building the big society. This Government believe in giving power and responsibility to individuals and communities. They will reverse the trend of assuming government knows best and has all the answers to society’s problems. My noble friend Lady Perry of Southwark referred to a suspicion and lack of trust. I thank her for laying out in detail the philosophical thinking behind her presentation. Indeed, we will give individuals and communities more freedom to act, to take responsibility and to do what is right in their area.

This Government will stand back from trying to do everything themselves, allowing local people and organisations to step forward. In practice, this will mean that voluntary and community organisations, charities and social enterprises will have more opportunities to win contracts to deliver public services. Local communities will be able to take over running local facilities, like community centres or post offices. Decision-making power will be devolved to local areas, away from the increased centralisation that we have seen in recent years. There will also be increased transparency about what is being achieved—for example, the publication of detailed local crime data every month for local areas so that the public can have proper information and statistics about crime in their neighbourhoods and hold the police to account.

To help build the big society, this Government have committed to actions in five key areas. The first is giving communities more power; for example, through reforming the planning system, we will give neighbourhoods more ability to shape their local area and we will give new powers to help local communities save local facilities. The second area is encouraging people to take an active role in their neighbourhoods; for example, we will support a national day to celebrate community action and we will do more to encourage charitable giving and philanthropy. Thirdly, we will radically shift power away from central government to local communities. We will also deliver a major devolution of power and financial autonomy to local government.

Fourthly, we will support co-operatives, mutuals, faith groups, charities and social enterprises by enabling them to have greater involvement in delivering public services, and we will give public sector workers the right to form employee-owned co-operatives. Fifthly, we will publish government data: for example, through legislating to create a new right to data so that government-held datasets can be accessed and used by the public. As a contribution to this, the Prime Minister has said that all new tender documents for central government contracts worth more than £10,000 will be published on a free public website from September this year. From next year, details of all new central government contracts will be published in full.

This Government are committed to building a partnership with civil society. To demonstrate this commitment, we have announced specific plans that will contribute to the big society. For example, we will launch a big society bank using funds from dormant bank accounts. It will provide new finance for organisations, creating a positive impact in their communities. The big society bank will work through intermediary bodies with a track record of supporting and growing social entrepreneurship. Setting up the big society bank is a priority for the Government. The launch of the bank is linked to the timescale for implementing the dormant accounts scheme. We are working with banks and building societies, the FSA and The Co-operative Financial Services to ensure that the reclaim fund is in operation as soon as possible. Further announcements will follow later this year.

We will also support a network of community organisers who will lead and co-ordinate work in their area to help local people work together to make their community a better place to live. This will build on existing successful models of community organisers in the UK and elsewhere. Community organisers will act as local catalysts, mobilisers and enablers to help galvanise change. They will be individuals with a strong connection to the local community and will work with fellow residents to create a strong and participative community. I hope that some of the past concerns of the noble Lord, Lord Low, about retrenchment of the state and about whether society would fill the gap will be met by our commitment to the role of community organisers. We accept that it cannot be left to chance. Therefore, the Cabinet Office will make further announcements about this programme later this year.

We will also provide a programme of neighbourhood grants to provide small amounts of funding to support social action by new or existing community groups. The grants will be available in the most deprived areas, neighbourhoods, estates and wards in England. Those among other things will support the new initiatives and charities on which my noble friend Lady Byford wanted assurances. Areas will be announced in autumn 2010 and the grants will be available from spring 2011.

We will also shortly set up a taskforce to cut unnecessary red tape in order to free up the voluntary sector as far as possible. The taskforce will look at ways to reduce the bureaucratic burden on the sector, particularly on small organisations. That will include, for example, looking at the form-filling around gift aid. The Cabinet Office and the Department for Business, Innovation and Skills will set up the taskforce, which will include leading figures from the voluntary sector.

The right reverend Prelate the Bishop of Leicester asked how government would adhere to the principle of evidence. Evidence is of great importance in public policy—for example, in the targets referred to by the noble Lord, Lord Hunt of Kings Heath. However, the demand for evidence must be proportionate, and I know that it has been felt as a burden by many in the voluntary sector. This is a Government who are committed to removing burdens from that sector. The ultimate aim of the big society is for it to be communities and not government who are in the driving seat in holding services to account.

We will launch a new National Citizen Service. The initial flagship project will provide a programme for 16 year-olds to give them a chance to develop the skills needed to be active and responsible citizens, to mix with people from different backgrounds, and to start getting involved in their communities. This will enable young people to have a shared experience as they pass into adulthood.

The National Citizen Service will draw on what has been learnt from successful pilots run by independent charities over the last four and a half years in London, Wales and the north-west for young people from a diverse range of backgrounds. These pilots were funded by £2 million which the Conservative Party helped to raise while in opposition. Full details of this programme will be announced by the Cabinet Office later this year, with a launch expected in 2011.

I shall say a few words about faith communities and their role in the big society. This afternoon, a number of noble Lords have rightly highlighted the huge contribution that different faith groups make to our communities, and to the well-being of our society as a whole. The point has been well made that the Government need to welcome and value this involvement, and look to make use of the significant potential of faith groups in helping build the big society. I agree with these comments, and want to offer a warm welcome to faith groups to play a full part in the big society. I welcome the big offer, as the right reverend Prelate the Bishop of London called it, which I shall take back to my colleagues with enthusiasm. He may be aware that the Government are already in discussions with the church as to what co-operation will be possible. I recognise the church’s centuries-long commitment to the welfare of all people in their parish.

I shall make it absolutely clear that we will not ask faith groups to conceal their beliefs, since we know that it is often their religious faith that is the driver of their social action. That said, we will expect services to be delivered equally and impartially on the basis of need. I make a specific point about the church. Historically, Christianity has been the bedrock of our society, and we have only to look at the work of the church throughout our history to see the phenomenal contribution it has made.

In response to the right reverend Prelate the Bishop of Leicester on education, this Government agree wholeheartedly that the education system must give every child the opportunity to flourish. That is why we are taking radical steps to allow parents, charities, educational groups and teachers to establish new schools when they are not satisfied with the schools directly in their area. That contribution is not just a historical contribution but lives on today through thousands of Christian-based organisations—for example, the Children’s Society and the Passage in Westminster. Then there are the examples given so well by the right reverend Prelate the Bishop of Chester. He makes a very powerful point when he speaks of the benefits being delivered at arm’s length to government. We recognise, cherish and value this work and the ongoing contribution that it makes.

The big question, which has been raised by many noble Lords today, including the right reverend Prelate the Bishop of Salisbury, is—what is the big society? It is a society with much higher levels of personal, professional, civic and corporate responsibility, in which people come together to solve problems and improve life for themselves and their communities and in which the leading force for progress is social responsibility, not state control. My noble friend referred to it as “them’s are us”. In Yorkshire we call it “doing your bit”. There are many definitions that we could give. The noble Lord, Lord Patel of Bradford, asked the same question. No one would disagree that there is a tremendous amount of work being done, as referred to by the noble Lord, Lord Patel. Many actually doing the work would say that it is being done despite the challenges presented by the previous Government. The noble Lord himself mentioned the problems with small organisations unable to access funds because of bureaucracy.

Another question raised on many occasions in this debate is whether the big society is a veil for cuts. Are we, as the noble Lord, Lord Hunt of Kings Heath, put it, simply going to dump responsibilities in that way? Let me answer that question very clearly. It is a simple “no”. The next few years will be tough for all, and the effects of the current financial situation will be felt in every tier of society, but we will ensure that the financial pressures do not lead to unnecessary cuts in services to those who need them most. Those services do not necessarily have to be delivered by the state, however. We want to see greater transparency and access to funding and fairer funding deals, as well as longer-term grants and contracts based on outcomes for those organisations that can demonstrate improved outcomes for society.

[Lord Judd]

My Lords, the Minister speaks with tremendous passion about society moving in to take a more active role in social provision. Will she speak with the same passion about the Government’s determination that in areas of deprivation, where there is little aspiration among people, they will be equally committed to ensuring that those people are never left as second-class citizens in our society?

[Baroness Warsi]

My Lords, I think that all of us in this House will agree with what the noble Lord has said. In many areas where there has been huge deprivation in the past, and where I will say that the previous Government committed funds, we still find that there is a lack of social capital, so that improvements have not been made that could have been. That is why those will be the very communities that will benefit the most from the big society initiative.

I thank noble Lords for their contributions today. I thank in particular the right reverend Prelate the Bishop of Leicester for initiating this debate and other noble Lords for interesting additions—the noble Lord, Lord Roberts of Llandudno, and his speech on betrayal, the robust intervention of the noble Lord, Lord Maginnis of Drumglass, the speech of the noble Viscount, Lord Eccles, and the practical suggestions of the noble Lord, Lord Bichard. Some of the noble Lord’s suggestions are being introduced in the Civil Service at the moment, but I take on board his suggestion for that to be more extensive and for it to overlap between the Civil Service and civil society, to be deeper and for longer.

The breadth and quality of this discussion have given us some flavour of the importance and value of an effective partnership between government and civil society. The issues raised have also shown us the urgency with which the Government must work to build this partnership. I thank the noble Lord, Lord Alton of Liverpool, for giving his words of support, having outlined the numerous challenges that we face in Britain today. I take on board what the noble Baroness, Lady Kennedy of The Shaws, said; I agree with her that the partnership must not suffocate. My colleagues and I look forward to continuing to work with inspiring, energetic and innovative individuals and organisations to start to deliver the big society vision.