Small Business, Enterprise and Employment Bill

Debate between Lord Cotter and Lord Mitchell

Wednesday 7th January 2015 Grand Committee

[Lord Cotter (LD)]

Before we move on, I thank the Minister for her response so far. Within the Bill there is this talk about the annual report and the need for the Government to address the issues in that sort of way. On behalf of the small business sector, I feel that we need to continue to look at issues in the Bill—but also particular issues, to one of which I shall refer the Minister. With the annual report, there is a very serious issue with the small business sector and finance, with regard to late payment to them from big businesses. There is a significant issue there, with 50% of big businesses not paying small businesses on time. I hope that monitoring and reporting back on such issues will be something that is ongoing throughout this Bill.

For example, there is a prompt payment code, which is voluntary—or it has been a voluntary code in the past. I very much hope that as part of the annual report Ministers will agree to look at the code and consider whether it is strong enough and whether it has been implemented enough by the businesses involved and by the Government themselves. Late payment is a serious issue when it comes to finance for small businesses; they should have that money available to invest and employ people in the local area.

[Lord Mitchell]

I must thank everybody, particularly the Minister, for her reply. Of course, this is a probing amendment—and I think that we have managed to probe and get quite a lot out of it that is beneficial. I thank the noble Lord, Lord Flight, too. I absolutely agree that there is a huge issue with equity for small businesses. Since I started studying economics a long time ago, there has always been that equity gap that needs to be plugged. In some ways, I am not sure that a huge amount of progress has been made on it.

I suppose that it depends on how you look at these things. If you go to visit some of the banks, as I do—and I hear what the Minister says in that regard—you could think that after five years it is a golden period for small businesses and that it is all absolutely rosy. You hear stories, such as were mentioned by the noble Baroness, of 71% of all applications being approved. However, it depends what you mean by an application. Many applications fall at earlier levels before they get to the formal point.

All I can say—I shall be speaking a little later about my own experiences with a small business—is that it is incredibly tough for small businesses that have been going for two or three years to raise the money necessary for them to expand, and I am talking about successful companies. Therefore, I suppose that I take a far more pessimistic view than the noble Baroness. More needs to be done to encourage these businesses. Nevertheless, I am somewhat reassured by what she said, and of course I beg leave to withdraw the amendment.