Enterprise and Regulatory Reform Bill

Debate between Lord Bates and Lord Marland

Monday 3rd December 2012 Grand Committee

[Lord Bates]

I, too, welcome this amendment but I have some questions about it on which I would like to put down some markers to which I hope the noble Lord, Lord Mitchell, and the Minister will respond. My questions concern the use of the term “SME” and how we define a small and medium-sized enterprise. That definition differs in different parts of the world. For example, the European definition of a small enterprise is one comprising between10 and 50 employees and a medium enterprise is one comprising between 50 and 250 employees. It would be useful to know what definition the noble Lord is using to define small and medium-sized enterprises, particularly when we discuss clauses further down the track. The businesses that I call micro-enterprises, which are defined in European terms as having below 10 employees, are the ones that really need help in accessing finance and are struggling at present. Therefore, it would be helpful if the noble Lord told us the parameters and the definition of enterprise that he is using when he is talking about SMEs.

Secondly, I wonder whether the amendment achieves the ends that the noble Lord, Lord Mitchell, seeks. We are talking here about incredibly capital-intensive investments. I know from one of the first of these businesses that was established in my home area in the north-east of England—an anaerobic digestion plant—that you are talking about a capital investment of £100 million. These are huge sums which would be outside the reach of most businesses. Yet, as a result of the investment through the Green Investment Bank announced just a couple of weeks ago, the project will go ahead and there will be many jobs for micro-enterprises and SMEs in the supply chain, particularly in the construction and operation of that plant.

Those are two questions that I hope that the noble Lord will take as being not at all critical of his amendment, which seeks to help SMEs and have correct in asking for a definition of who it is that we want to help.

[Lord Marland]

My Lords, of course the Government are very committed to SMEs, and I know that the noble Lord, Lord Mitchell, who I can say lots of nice things about, is a committed and good advocate for their cause. The noble Lord, Lord Bates, put his finger on the pulse—it is about definition. However, I do not want to get too deep into definition, thereby tying the hands of the bank too early on in its endeavours.

It is clear that the great challenge for any Government at the moment is to get the SMEs going. I know this first hand, given that I am not only the Prime Minister’s trade envoy but chairman of UKTI’s Business Ambassadors Group. This is our challenge—the beating heart of Britain—getting the SMEs going. Therefore, in the context of SMEs, we have to look at what the Government are doing as a wider initiative, rather than be tied down. That is why we have established the Funding for Lending scheme, Capital for Enterprise, the Business Growth Fund, the Regional Growth Fund, and the Enterprise Finance Guarantee fund, which has already helped 18,000 SMEs. To a certain extent, it is working, because we have had the highest amount of new businesses established since records began. Some 460,000 start-up businesses have registered at Companies House in the past 12 months.

However, I completely agree that this issue is an enormous challenge. In fact, my noble friend is committed to this cause, as he is on late payments—an issue that is fundamental to SMEs. He tells me that his maiden speech was about late payments and commercial debt. He has a record of support for that case.

The noble Lord, Lord Cotter, has raised this subject a number of times in the Chamber. Therefore, do not get me wrong. The Government are completely committed to helping SMEs. That is why, for example, in procurement—one of the issues that I am involved with in government—we have insisted that 25% of government contracts should go to SMEs. An awful lot of work is going on. I do not want to be too prescriptive in this area of the Green Investment Bank, but it is totally focused on this issue and looks at each opportunity on its merits. Already, the bank’s smaller-scale funds for waste and non-domestic energy efficiency are already delivering investment for SMEs, such as the £8 million announced last week alongside a Teeside-based SME. Work is already going on to support SMEs.

With that in mind, I hope that the noble Lord will agree to withdraw his amendment.

Businesses: Start-ups

Debate between Lord Bates and Lord Marland

Monday 8th October 2012 Lords Chamber

[Lord Bates]

To ask Her Majesty’s Government what assessment they have made of the number of new business enterprises being created in the United Kingdom; and what measures they are taking to encourage more new business start-ups.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)]

My Lords, in 2011-12, Companies House reported 450,000 newly registered companies in Great Britain, the highest number since records began. We are helping SMEs in many different ways, including providing an extensive package of advice and financial support. This includes the new start-up loan scheme and supporting high-growth potential SMEs, with over 1,000 businesses signed up to our GrowthAccelerator scheme.

[Lord Bates]

I thank my noble friend for that encouraging Answer, and I welcome him to his new role, to which he brings great experience. In doing so, I pay tribute to his predecessor, my noble friend Lady Wilcox, who also made a significant contribution in that role.

Is my noble friend aware that, while it is encouraging to see the number of SMEs increasing, only one in five SMEs actually exports overseas, and of that one in five only one in 10 exports to the fastest-growing parts of the global economy, in Asia, Africa and the Middle East? What steps will my noble friend take to encourage more businesses to take opportunities in those key markets for us?

[Lord Marland]

I am very grateful for my noble friend’s encouraging remarks and I am delighted to be managing this brief; my noble friend Lady Wilcox is a hard act to follow.

My noble friend puts his finger right on the pulse; my statistics say that one in six SMEs are exporting, not one in five. We have a huge amount to do to change the attitude and incentivise people to export. That is why my noble friend Lord Green has visited 42 countries in the past 18 months. I, in my own small way, have visited 25 countries—