Women Entrepreneurs

Debate between Jim Shannon and Stella Creasy

Wednesday 18th March 2015 Westminster Hall

[Stella Creasy (Walthamstow) (Lab/Co-op)]

It is a pleasure to serve under your erudite chairmanship and beady eye this morning, Mr Robertson; you will ensure that all of us are well-served this morning.

I congratulate my hon. Friend the Member for Feltham and Heston (Seema Malhotra) on securing this debate. I know that this is a subject she is really passionate about. She has done a lot of research on it, which really shows in the insight she offers into it and the things that we can do about it.

I also want to put on record my interest in and support for the fact that there are a number of MPs here. May I venture to say to the hon. Member for Upper Bann (David Simpson), who sadly has now left Westminster Hall—

[Jim Shannon]

He will be back.

[Stella Creasy]

I am pleased that the hon. Gentleman will be back, because it is good to see male MPs supporting the idea that there is a gender gap that needs to be addressed. However, may I venture to say that that is not necessarily a concern because of his wife but because when 51% of the population are not fully utilised it is a concern for us all that we are missing out on the contribution that they could make? Frankly, sorting this issue out would help a lot of men, because it would help our economy, and therefore it perhaps has less to do with his wife and more to do with his constituents. It is because of them that he should be concerned about why we have such a gender gap. In particular, my hon. Friend set out well the particular gender gap that we see in the UK, because the situation is not the same in other countries, which should be very telling about what we can do in this country to address these issues.

A number of Members have already pointed out that there would be many more businesses if women were starting up businesses at the same rate as men. However, it is worth considering the situation in other countries. It is not only America that has a higher level of female entrepreneurship than the UK but countries around the world. Therefore, there is something happening in the UK. It is also worth noting that we have a higher rate of churn in the UK, so even when women start up businesses here they are failing more often than in other countries. Women entrepreneurs here are also less likely than elsewhere to attribute the closure of their business to business failure and more likely to cite personal reasons as one of the reasons why their businesses were not successful.

Why does this issue matter to us all? It is because equalising the labour market participation rates of men and women would boost the UK economy by an average 0.5 percentage points every year, with a potential gain of 10% of GDP by 2030. Given the recession that we have just gone through and given the fact that our recovery appears to be beginning to slow, getting more women into business and into leading more businesses would clearly make a tremendous difference to us all and our future economic position. Indeed, the Royal Bank of Scotland has calculated that boosting female entrepreneurship could deliver an extra £60 billion to the UK economy.

--- Later in debate ---

[Stella Creasy]

Again, my hon. Friend shows her experience in this area. What we are certainly seeing is that women who start businesses tend to bring forward new products, as opposed to men who start businesses, who tend to bring forward competitor products. So women are certainly driving innovation.

My point in referring to the online economy is to set on the record that Labour thinks this issue is less about women bringing their previous experience of purchasing to business so much as their ability to use the opportunity that online behaviour offers to open up markets to people. When someone is bringing a new creative product to the market, having a window that sells to millions of people rather than perhaps having a window just in their local high street opens up the potential for greater success, and it is important that we consider that and ask ourselves how, for example, we can support more women to learn skills, such as coding, to be able to sell online.

A number of Members today have obviously focused on women themselves and what might be stopping them from getting into business. Certainly, one of the issues that people have come up with is child care. So let us be very clear that there probably is an issue around child care and helping women to be able to juggle, which suggests men are holding women back, because, after all, it takes two to have a baby. One thing that I would be interested to hear the Minister’s view on is how we can make men hold up their part of the bargain in looking after children, so that their wives can be the successful entrepreneurs that they want to be.

Labour’s child care proposals will probably help a lot of women entrepreneurs. For example, there is our proposal to increase the number of hours of free child care that are available. With child care costs rising by up to 30%, there could be many parents—for example, the women who want to be the next Anita Roddick or Laura Tenison—who find their ability to be entrepreneurial being hampered as a result of this Government, because they find they cannot afford the child care necessary for them to spend the time setting up a business.

Today, therefore, I will set out four areas that I would like to hear the Government’s response about. They are less to do with women and more to do with the environment that we are asking women entrepreneurs to enter.













First, hon. Members talked about finance. Clearly, finance matters. The evidence shows us that women start businesses undercapitalised, and with not just less finance, but fewer human resources and less social capital. That puts them at a disadvantage by comparison with their male counterparts. Not having the same level of resource is a factor in respect of confidence and risk-aversion among female entrepreneurs. It is important to say that it is not always a bad thing that women are risk-averse, but we should recognise it when they do not have the same resources, and so cannot take the same risks, as their male counterparts. We must consider how to ensure that they have access to more resources, rather than encouraging them to take more risks, and we should recognise that their lack of confidence may not be misplaced and that they might not have the resources to succeed.

How much of a barrier is finance? Some 10% of female entrepreneurs say that access to finance is their only barrier to entrepreneurship, and that it is a particular challenge in respect of expanding in the way they would like to. Again, that appears to be a bigger problem in the UK than in other countries, particularly in Europe. Women in Europe are much more likely to be able to access finance to start and run their businesses than their UK counterparts. Some 20% of women in the UK have tried to get money to start a business but have been turned down, compared with only 11% of European female entrepreneurs.

My hon. Friend talked about the Aspire fund, which was set up in 2008 to try to deal with this challenge and ensure that there was a dedicated pot of money to support women in business. As she said, as of last year only £4.7 million of the £12 million had been invested. It is worth comparing that with other forms of start-up finance backed by the Government to see what the difference is. For example, in the same period, the enterprise finance guarantee scheme, set up to provide assistance to small businesses with an annual turnover of less than £41 million, has offered £2.6 billion, and £2.3 billion has been drawn down. The regional growth fund, which matches private finance with public assistance, has awarded £2.6 billion, of which £1.15 billion has been drawn down. There is a differential. It would be interesting to hear the Minister’s view on why the Aspire fund has not been as successful in promoting and supporting women’s businesses as some other start-up funds.

Research by Strathclyde university states that decisions regarding women and finance are based on the interaction between women, who may lack confidence—perhaps because they recognise that they do not have the same level of resource to start a business—and those offering them finance, who may have a certain attitude and approach. There is an interesting challenge for us: if we can change the attitudes of those offering finance—for example, through the Aspire fund—will more women go into business?

Secondly, we have to acknowledge the issue of confidence. I challenge slightly the vicious circle that the hon. Member for Strangford mentioned: he said that dedicated schemes for women could undermine their confidence. I assure the hon. Gentleman that the other way of looking at that is that it recognises that they are a priority. Dedicated schemes, with mentoring and support for women, recognising that there is a gap, and bringing other women forward are helpful and supportive.

Some 38% of women in the UK, compared with just 3% of women in Europe, take advice from Government business support projects. Women are more likely to use all forms of business support than men, whether public or private, and are more likely to access support from professional services. It is important that mentoring schemes exist. It matters that other women are in business, because you cannot be what you cannot see. It is a simple principle, but seeing other women being successful in business offers a road map for women, showing them how they could be successful.

I pay tribute, as other hon. Members have, to a women’s business forum in my constituency. I venture to say that that forum, run by the amazing Jo Sealy, is more successful than our general business forum.

[Jim Shannon]

I just want to go back one sentence, with the hon. Lady’s permission, and talk about confidence. I was saying that we all have different natures. I have a different nature from other gentlemen in this Chamber, and the hon. Lady is different from other ladies here. It is important, when encouraging ladies to take a job up or move forward with their idea for entrepreneurship, that it is done in such a way that their confidence is encouraged. It is not that what is happening is not right; it is right for some, but perhaps not right for all.

[Stella Creasy]

I thank the hon. Gentleman for his clarification. My point is that he was querying whether a gendered approach to mentoring might not be counter-productive. I wanted to reassure him that such an approach is important for a lot of women, because it shows them a road map of where they could get to.

I also pay tribute to Simone Roche of Women 1st, Kate Hardcastle of Insight with Passion, Bev Hurley of Enterprising Women, Heather Jackson of An Inspirational Journey, and Margaret Wood of Opportunity Plus, who supports older women entrepreneurs. There are a number of schemes out there, and what they all have in common is that they were set up by women volunteering. Some of them have become social enterprises. I share the concern of my hon. Friend the Member for Feltham and Heston that, over the last couple of years, the work to support women doing that work has been downgraded. My second question for the Minister is: does he share our concern and think there should be a renewed effort to support and prioritise those mentoring networks, not just in local enterprise partnerships?

My hon. Friend and colleague the Member for Feltham and Heston is a fan of the work of the national Women’s Business Council, which was set up for a year as an independent body. Does the Minister think there is a case for making that a perpetual scheme and for considering how it could support mentoring, using and drawing on the experience there?

Thirdly, with regard to women finding it hard to see other women whom they might aspire to be, does the Minister share my disappointment and concern about the slow pace of progress in getting women into leadership positions in business across the piece? He must be disappointed with the slow pace of change, given the diversity dividend that comes from getting more women into boardrooms. He must also share the disappointment of his colleague, the Minister for Business and Enterprise, about the decisions of many businesses to appoint women to non-executive positions. The vast majority of women who have gone into leadership positions on business boards during the past couple of years have simply been appointed as non-execs and have not been in decision-making positions. I know that the Minister will be worried about that unacceptable situation, because it sends a message to women entrepreneurs that there are not women to trade with. Does he think that there is now a case for getting on with looking at what quotas could offer us, in respect of non-exec and exec positions, and the way that businesses are working with women?

My final questions to the Minister are about women to trade with. There is a slow pace of change when it comes to not just women in boardrooms and in entrepreneurship, but women to trade with. In a world economy, the way our businesses work with other businesses could provide huge opportunities for women entrepreneurs, but at the moment, women-owned businesses are winning less than 5% of corporate and public sector contracts.

The Government’s adviser has called for the Government to collect data on diversity in procurement processes, and said that the pre-qualification questionnaire should ask about women-owned business. Is the Minister concerned that the talk about removing the pre-qualification questionnaire for contracts smaller than €250,000 may mean that we will not see that level of engagement with the question of whether the Government are selling to women and doing all they can, through their own supply chain, to promote women’s business?

Although UK Trade & Investment measures women-led firms that export, we do not measure women being sold to and traded with in our economy. The Government have dismissed the idea of having a quota for tenders and the idea of measuring the number of women being sold to, although clearly that would help us understand the scale of the challenge and whether the Government are doing what they can. If the Minister wants insight into what difference that could make, he should look no further than that socialist utopia, the United States of America, where some 30% of all businesses are majority female-owned and the number of women-owned businesses continues to grow at twice the rate of all US firms. Women are increasing their economic clout and driving the American recovery. That is not happening by accident; it is being driven by the US Government’s deliberate choice. The USA Women’s Business Ownership Act 1988 put in place long-term infrastructure to support women’s enterprise development. The quotas and targets set by the US Government for women in their supply chain are changing the behaviour of companies in America.

In 1994, the federal Government established a 5% spending goal for federal agencies to encourage contracting with women-owned small businesses. That target has not yet been met, but it is almost being met and it is making a massive difference to women entrepreneurs in America. Indeed, it is changing the debate not just in the public sector in America, but in the private sector. Companies such as Walmart—again, not perhaps seen as a socialist leader, if the Minister is worried about that—have introduced “women-owned” labels since last year, allowing consumers to clearly identify products created by women-led businesses and buy accordingly. That company sees a commercial interest in this.

The Minister may be worried that I am talking straight away about bringing in a direct quota for selling to women. I recognise that first and foremost we have to ask the question, so will the Minister commit the Government to asking, in the public sector, about selling to women and to starting to monitor just how women’s businesses are being traded with in this country? Through that, we can understand the gaps in the industry. Perhaps there is a role in that for the Women’s Business Council and that dedicated lead on women’s entrepreneurship and business that my hon. Friend the Member for Feltham and Heston set out so clearly as being required.

Ultimately, if we want to give women confidence that their businesses will be supported, that they will be successful and that we can bridge the confidence gap, we have to show that the issue is a priority. The Opposition are committed to that; I hope that the Minister will show a similar commitment, so that we can all benefit from the increase in economic activity and productivity that bringing more women into the UK economy would offer.

Consumer Rights Bill

Debate between Jim Shannon and Stella Creasy

Monday 16th June 2014 Commons Chamber

[Stella Creasy]

It is fascinating finally to come to the end of consideration of the Bill in this Chamber.

[Jim Shannon (Strangford) (DUP)]

On a point of order, Madam Deputy Speaker. I stand to be corrected, but I thought that those who wanted to speak on Third Reading did so before the shadow spokesperson. Am I wrong?

Finance (No. 3) Bill

Debate between Jim Shannon and Stella Creasy

Tuesday 26th April 2011 Commons Chamber

[Stella Creasy]

I am sorry that the hon. Gentleman has not been listening closely. Let me make it very clear: the figures from the Office for Budget Responsibility that I cited refer to this past year. Forgive me, but as far as I am aware, his party has been in power during that time and it has presided over this increase in the private debt that households are now taking on.

Let us talk about some of the things that are causing that increase. VAT is costing a family with children an extra £450 this year, on average, due to the rocketing cost of buying basics such as telephones and clothes and of getting a boiler or a washing machine fixed. That is before they even consider getting out and about to spend money. Many Conservative Members have talked about fuel prices, but the increase in VAT is adding £1.35 to the cost of filling up a 50-litre tank with unleaded fuel. The cut in fuel duty gives back only 1p, but the VAT increase costs us almost 3p a litre.

Those who are in work are finding it even harder to make ends meet as a result of the Budget. Since 5 April, 750,000 more workers have been dragged into the higher rate of income tax, and benefit recipients have lost £2.7 billion-worth of payments. Cuts to child care support have taken £1,500 a year from families. The £48 that people will get through the personal allowance increase in the Budget is barely a tenth of the amount that families will have to pay back through increased VAT. In two years’ time, 1.5 million families—including many in places such as Walthamstow—will lose all their child benefit. Credit Action has pointed out that, of the 45 changes to the tax and benefit system made in the Budget, 26 will have a negative impact on households.

There will also be fewer chances of getting a better-paid job, or of getting back into work, because unemployment is set to be higher in every year of this Parliament as a result of this Government’s actions.

[Jim Shannon (Strangford) (DUP)]

Those in the 16-to-25 age bracket who are unemployed will soon top the 1 million mark. Does the hon. Lady share my concern, and that of many other hon. Members, about what the future holds for them?

[Stella Creasy]

I absolutely agree with the hon. Gentleman. I have been a close reader of the work of Paul Gregg at Bristol university, who has shown how unemployment can scar young people and affect their earning potential for life. I am extremely worried about young people in this country who are facing unemployment and have little prospect of a place on a training scheme or in a university.

There is little sign that these pressures on family finances will ease. With the current wage squeeze expected to continue until at least 2013, average wages are expected to fall to less than £25,000, which is more than £1,800 lower than in 2009. People do not have the pounds in their pockets that they need in order to keep spending in the way our economy needs if it is to grow. If we add to that the anticipated rise in interest rates and mortgage payments, which has been one area of respite in the past few years, we can see that things are going to get a lot bleaker. As our newspapers warn daily, and as the Bank of England has pointed out, interest rates are likely to climb, piling pressure on the 60% of low to middle-income families who are already struggling to pay their bills.

It is no wonder that four in 10 people are worried about their current level of debt, with 4 million fearing redundancy and 4 million more having taken on debt in recent months. We know that the cuts that we have seen so far are just the beginning. The ones that families across the UK felt this month accounted for a mere 10% of the total savings planned before 2015 from changes in the tax credit and benefit system. More than 40% of the cuts kick in in 2013.

Loading debt on to households helps this Government to cut the deficit at the pace they desire, but it is the job of Opposition Members to challenge them on the cost and consequences to all of doing so. In an economy where jobs and growth are in short supply, such debts do not just mean lower consumer spending, higher levels of bankruptcy or repossessions. Nearly 30% of British parents admit they are arguing over their family finances and a third of parents are suffering the stress of sleepless nights because they are worried about money.

Such changes also directly impact on our chances for economic recovery. As the Bank of England pointed out,

“prospects for consumption…have an important bearing on the outlet for activity”,

but it added:

“Near-term prospects have weakened further over the month. The squeeze on households…was likely to dampen consumption materially over the next year or so.”

Even after a sharp reduction in its private consumption forecasts, that favourite of the hon. Member for West Suffolk, the Office for Budget Responsibility, expects British households to account for just over a fifth of economic growth this year and for almost a third next year. The truth is that if the average family is not willing to dig itself deeper into debt, those figures might have to be revised.

The Bill reflects the Government’s complacency about the challenge. There is no commitment to act on these problems—only a general sense of unease, summed up best by the Minister for Equalities, the hon. Member for Hornsey and Wood Green (Lynne Featherstone), who wrote:

“What is tough—and will get tougher—is losing jobs. People in work will mostly get by—somehow. People on benefits will mostly get by—somehow. But for those who lose their job—it will be devastating. The cuts were announced last year. Their impact has yet to fully hit. This budget promised growth. The proof will be in the pudding. And the question will be whether there’s a new job to be found within a time frame that can keep health, hearth and home together—and we need to keep a watch over that.”

Well, I want to do more than keep a watch over that, and I hope to answer a question posed by Government Members about what policies Labour Members could suggest.

Today, I argue that we could do more than squabble over Keynes or the Ricardian equivalence; we could do something to help those people in immediate danger of insolvency and bankruptcy. At present, this Bill is missing that. Given the large numbers of people facing financial difficulty, we should be deeply concerned about the strategies that families have to cope with these pressures and how the Bill could do something to help.

To cover costs, more and more people are turning to sources of credit, which might seem like short-term solutions but quickly become long-term problems. The number of people who say they are likely to use an unauthorised overdraft this month has nearly doubled since July last year—from 900,000 to 1.6 million. Similarly, the payday lending industry in the UK, with its 4,000% interest rates and more, has quadrupled in the past 18 months.

Being able to borrow in a way that does not leave a long-term scar on the family finances is the new dividing-line in our society. Those who can access mainstream credit might just scrape by in austerity Britain. Those with little option but the legal loan sharks, maxing out their credit cards or racking up unauthorised debt, could spend a generation or more trying to become debt-free.

This Government want to pretend that such kinds of personal debt are solely a private matter, but Opposition Members see the social and economic consequences and we must beg to differ. A lack of regulation of the high-cost credit market in comparison with other countries allows that industry to go unchecked in the UK. Recognition of the problems caused by casino banking in the City is widespread across the House, but that is only half the battle; we should not forget the financial needs of those in our communities. For the sake of our economic recovery and for the sake of those families, credit should not be lent in a way that is detrimental to consumers without those who profit from exploiting them being made liable for the consequences.

When this Government announced their Budget, I asked a simple question: how can they be so keen to show that they are so tough on national debt, yet so blind to the growing crisis of personal debt that their policies are stoking? Today, with this Bill before us, we are no closer to an answer, but thousands more edge closer to personal financial problems as a direct result. That is why I will table amendments to review whether the supplementary charge or the bankers’ levy could be applied in a way that would disincentivise negative, high-cost credit lending. It is time that this Government put the fortunes of every family first. Other countries have done that to protect their consumers, and I do not see why British consumers should be denied the same opportunity.

Let me offer an open invitation to Treasury Ministers to do what their colleagues in the Department for Business, Innovation and Skills have signally failed to do, and respond to the concerns of Members throughout the House. I invite them to meet us to discuss how we could cap the total cost of credit. Campaigners all over the country who support such action—Churches, trade unions, community groups and consumer associations—would thank them for taking it.

I hope that Members who share my concern about personal debt will support my amendments, and will join me in holding the Government to account for what they are doing to the personal finances of families in every constituency in the country.