Small and Medium-sized Enterprises: Foreign Languages
Debate between Lord Harrison and Baroness Wilcox(12 years, 4 months ago)
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Lord Harrison
To ask Her Majesty’s Government what assistance they provide to help small and medium sized enterprises which export their products and services to acquire foreign language expertise.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, UK Trade and Investment provides a subsidised service, available to SMEs, which helps them to overcome language and cultural barriers in overseas markets. The service can provide a bespoke written report with in-depth advice and information on types of language learning and rates, and on recruiting students and foreign nationals to provide in-house language skills. The service also signposts companies to professional bodies such as the Chartered Institute of Linguists and the Association for Language Learning when they wish to select a provider for foreign language training.
Lord Harrison
My Lords, the House would welcome further information about what sounds a very valuable addition. However, given the recent parlous decline in British exports—attributable in part, according to Professor Steven Hagen of the University of Wales, to the failure of British firms to acquire language skills—and given that only three out of 100 British firms have any kind of language management strategy, will the noble Baroness start to set tongues wagging in the small business community in favour of learning languages? Will she ensure that the languages unearthed and mobilised during the forthcoming Olympics, especially those found among our ethnic representation, can be used to help small businesses, so that British exporters, unlike the British Government, can ensure that they are not speechless in the face of a widening Europe and a widening world?
Baroness Wilcox
Right—information on the Export Communications Review, along with all other UKTI services, will be available at Olympic business-related events. Details of the help that will be available have already gone out. We certainly wish to use the opportunity to make sure that people from our small and medium-sized businesses meet as many people from foreign businesses as possible. We are very fortunate in this country in having a multicultural society—I think that in London alone more than 300 languages are spoken. Very often it is just a case of making sure that small and medium-sized businesses realise that there are agencies that can provide their employees with the languages that they need. It is not just a matter of a requirement to learn a language; understanding the culture of the country that you are going to is also important. The French that you speak needs to be not just the French that you learnt at school but the language of the culture. UK Trade and Investment goes into small businesses with a subsidised programme to help them understand how to take their products forward by making sure that they are aware of the culture of the country they are visiting.
Entrepreneurship Opportunities
Debate between Lord Harrison and Baroness Wilcox
Baroness Wilcox
Yes, the right reverend Prelate the Bishop of St Edmundsbury and Ipswich is right. Everything we can do to help to build the confidence of the young in this area is very important. We have the new enterprise allowance, which helps unemployed people to start their own businesses. It is available to those who have been claiming jobseeker’s allowance for six months or more, and it provides access to business mentoring, as well as offering financial support. Very often, it is a case of having somebody to talk to who understands the situation. I am lucky that I grew up in an entrepreneurial family and therefore I grew up with the language of entrepreneurs at home. These facilities provide an enormous advantage for children who come from homes where perhaps no one at all goes out to work and where they are therefore starting from a point of terrible disadvantage. We are looking at this carefully to see what we can do to help.
Lord Harrison
My Lords, on entering the White Lion pub in Alvanley in deepest Cheshire on Sunday, my wife and I discovered that it was national sandwich week. When I asked the young lady behind the bar who had so declared it, she replied, “The landlord”. Catching that enterprise, she then declared to me that next week was to be national vegetarian week. I wonder whether the Minister could explore the opportunities for mentors and young people to come together, full of ideas, and so build the small businesses and enterprises that we so badly need in this period of recovery.
Baroness Wilcox
Somebody clever beside me has just said that the noble Lord was describing a sandwich course, but there we are.
Businesses: Debt
Debate between Lord Harrison and Baroness Wilcox
Lord Harrison
To ask Her Majesty’s Government what action they are taking to monitor, enforce and improve the provisions of the Late Payment of Commercial Debts (Interest) Act 1998 to aid small and medium-sized enterprises’ access to finance.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Government closely monitor UK payment times. Experian reports that UK payment duration has been and continues to be historically low, and has reduced by more than four days since the first quarter of 2009. However, the Government recognise the importance of prompt payment to business cash flow, especially to small and medium-sized businesses, and we plan to improve the provision of the late payment Act by transposing the 2011 EU directive by 16 March 2013.
Lord Harrison
My Lords, at a small business event this week I met a “Dragon’s Den” winner who tells me that over the past three years paying late has increased and payment periods have increased, causing him to spend time on chasing people up and wasting valuable time that could be spent adding value to the business. When will the noble Baroness find the inner dragon in herself, not only to breathe fire into existing legislation but on big businesses and public institutions that deprive small businesses of £35 billion that should be available to them to add value to their businesses?
Baroness Wilcox
I thank the noble Lord—and, yes, I have been a dragon, but nowadays I am quite quiet. There is no doubt about it that half the problem is caused by the fact that small and medium-sized businesses are so grateful to get the contracts that they usually do not look at the payment terms and do not make sure how they are going to be paid in the first place. We have the legislation in place—the Labour Party put it in place. We are going to improve on it by using a system covering late payment which, after all, we were the first to put into the European Community. We are now writing it for them to extend it so that it will cover local authorities and any business-to-business transactions that are not being carried out successfully. I hope that that helps.
Commonwealth Countries: Trade
Debate between Lord Harrison and Baroness Wilcox(12 years, 9 months ago)
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Baroness Wilcox
Yes, of course. Exports of goods from the UK to Australia—the example given by the noble Lord—were up by more than 30 per cent last year. We are certainly dealing with the European Union countries, as the noble Lord said, and with as many other countries as we can.
Lord Harrison
What evidence does the Minister have that the Commonwealth Business Council has been doing the job that is asked of it of promoting trade intra the Commonwealth? Will she examine the basis of how it is operating to see that what might be useful and successful is actually so?
Baroness Wilcox
We follow very carefully what is happening in all the organisations. I have a list of organisations to do with the Commonwealth which many Members of this House either chair, have chaired or are part of. Certainly, Commonwealth countries also make excellent springboards into other countries, so we gain not just from the countries that are in the Commonwealth but from the countries that they are close to and can give us introductions to.
EU: Structural and Cohesion Funds
Debate between Lord Harrison and Baroness Wilcox(12 years, 9 months ago)
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Baroness Wilcox
I do not happen to have the figures to hand on how much it costs us. I will happily write to the noble Lord.
Lord Harrison
Is it not in the British interest that we support the help to poorer countries of the European Union so that they can participate in the single market actively and bring their standards of living up so that eventually British firms and services can be provided within the European Union for our benefit?
Baroness Wilcox
I completely agree with the noble Lord. The aim of the structural and cohesion funds as set out in the EU treaty was to reduce disparities between regions to create a more cohesive single European market. Structural funds have helped to underpin enlargement of the European Union, opening up new markets in central and eastern Europe to British companies. We have done very well by that.
Small Businesses: Finance
Debate between Lord Harrison and Baroness Wilcox(12 years, 10 months ago)
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Lord Harrison
To ask Her Majesty’s Government what measures they propose to help small businesses and start-up companies access finance.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
The Government have a range of measures in place to help small businesses and start-up companies to access the finance they need. They include the enterprise finance guarantee scheme, which helps small businesses lacking track record or collateral to secure bank finance, the enterprise capital funds programme, which provides equity funding to high-growth potential businesses, BIS’s export finance guarantee, UK Export Finance’s products, and the recently announced £20 billion national loan guarantee scheme that will enable banks to offer lower-cost lending to small and medium-sized businesses.
Lord Harrison
My Lords, can I invite the Minister to correct the false impression given yesterday by the Prime Minister in PMQs that bank lending had increased to small businesses? In fact, the trend in bank lending, published by the Bank of England, shows a decline from April to November of last year. I remind her that the Federation of Small Businesses still talks about the difficulty of members obtaining bank lending. When they do it is typically at a 10 per cent rate. The other government programmes, for instance the Merlin programme, are all smoke and mirrors. The regional growth fund has been lending to big businesses, not small businesses. Can she think of something radical, for instance the state-funded Small Business Administration in America, which has successfully lent to small businesses the right amount of money to get the economy going? It is time that this Government did something big for small businesses.
Baroness Wilcox
Right. I am very pleased that I was at Prayers this morning when the right reverend Prelate the Bishop of Manchester read so beautifully the prayer with the words, “the sea rageth”. Without doubt the sea rageth when it comes to money and getting growth going, but it is important that we keep the faith and keep a steady course. The things that I have read out so far are working. There is no doubt that we are lending money to small businesses and they are starting to do well.
Regional Growth Fund
Debate between Lord Harrison and Baroness Wilcox
Lord Harrison
To ask Her Majesty’s Government what steps they are taking to encourage small businesses by revisiting the qualification threshold for the regional growth fund and by establishing a small business bank created with initial bonds funded by the Monetary Policy Committee.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, we see no need to revisit the qualification threshold for the regional growth fund. In round 1, a third of funding allocated—some £150 million—was targeted at SMEs. It is not the job of the Monetary Policy Committee to establish a small business bank; there are more efficient ways of supporting small businesses, such as the Merlin commitment and the enterprise finance guarantee scheme. My right honourable friend the Chancellor of the Exchequer has also announced that he is considering credit easing options and will make further announcements on this in November.
Lord Harrison
My Lords, the Government seem more interested in giving cheap phone access to Ministers for big businesses than getting cheap loans access to small businesses that are starved of funds. I ask the Minister again to look at the regional growth fund, the qualification for which is a £1 million claim by any small business. I ask her to look at some fresh ideas, like those of Professor David Blanchflower, for creating within the Bank of England, through the MPC, a bank which is capable of offering loans to small businesses at low rates of 2 per cent.
Baroness Wilcox
If the noble Lord will wait for the Chancellor of the Exchequer to explain what he is going to do about credit easing, the noble Lord might take comfort from that. In the mean time, there is no doubt that the fund is accessible to SMEs; it is available through specific bids from organisations with experience of the SME sector that will be able to help make small grants, below £1 million, available to projects that support the fund’s objectives.
I have a couple of examples which might help. The Plymouth University and Western Morning News growth fund was announced in the summer, which targets that money directly at SMEs in the south-west of England. That will work well. Contracts have recently been finalised on the majority of engineering projects in the RGF-supported SME energy cluster in the north-east, headed by Chirton Engineering Ltd. That will be delivering 140 jobs. Although £1 million sounds too high for a small organisation, it would have been impossible to look at every one of those small applications. If anyone wishes to phone the regional growth fund, they will be helped and guided as to how they can come together with other small businesses to take this money. As your Lordships can see, we have already made available some nice amounts of funding—almost a third—to the SMEs.
Hallmarking
Debate between Lord Harrison and Baroness Wilcox
Baroness Wilcox
I am sure that our assay offices know exactly what they are doing and they are well monitored by us. If my noble friend would like to send me a letter about these Chinese wooden objects coming into our airports, I am sure that I could respond. But I think he is worrying unnecessarily.
Lord Harrison
My Lords, while the Chester Assay Office had to close in the early 1950s, when the Minister is next in Chester will she take the opportunity to visit the wonderful display of silverwork with the Chester Assay mark in the Grosvenor Museum? In the mean time, will she recognise something that is very traditional and well loved by the British people? I hope that any precipitate move on behalf of the Government to abolish hallmarking will be resisted.
Baroness Wilcox
My Lords, if I get the opportunity, I certainly will make a visit. The assay office in Plymouth, where I come from, closed down many years ago, as have a lot of assay offices over time. The Government are looking at doing something positive in this area in order to compete with our European counterparts, particularly the Dutch. Under current UK law, UK assay officers can hallmark only in the United Kingdom. We are taking forward a legislative reform order, by April 2012 I hope, to allow UK assay offices to hallmark overseas so that we, too, can compete in Thailand and China.
Businesses: Regional Growth Fund
Debate between Lord Harrison and Baroness Wilcox
Lord Harrison
To ask Her Majesty’s Government how many small and medium-sized enterprises have been helped by the Regional Growth Fund, and what other plans they have to help such businesses.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, about one-third of the £450 million conditionally allocated for successful bids in round 1 will benefit small and medium-sized enterprises. Our expectation is that at least 1,000 SMEs, located in areas where there is not already a vibrant private sector and culture of enterprise, will benefit directly from round 1. The second round of the fund is bigger, and we expect further bids that will benefit SMEs.
Lord Harrison
Given that only one-third of the successful submissions are from small businesses, whereas the regional growth fund was designed to help small businesses, does the Minister accept that a flaw in the design of that fund is that you had to submit a minimum bid of £1 million, which is out of reach for many small businesses? Does she accept that the advice on the BIS help site is absurd, given that the proposal that you should spatchcock together lots of different projects from small businesses not only increases bureaucracy but means that projects are brought together which are unnatural neighbours? Is it not time that the Government thought big about small businesses?
Baroness Wilcox
I know exactly what the noble Lord is talking about: the threshold value of £1 million seems very high for very small businesses. We recognise that £1 million is too high a threshold for the smallest businesses. Sadly, it would take much time and resource to deal with a very high number of very small bids. We have addressed that point by conditionally allocating funding to organisations with experience of the SME sector, so that they can work with it to deliver the grants. Projects below £1 million can join up with other projects to form a coherent package and can bid together to meet the threshold. I come from a business background and know that if you cannot get a grant or a loan for the business the first time round, you go out there to find another business that will join you so that you can get it. This is a competitive process, which is what we want it to be, and I think it will succeed.
Financial Reporting Council: Annual Reports and Accounts
Debate between Lord Harrison and Baroness Wilcox
Baroness Wilcox
As I said in the original Answer, the Financial Reporting Council is independent and can bring out any suggestions it wishes. The proposal comes from the council and does not represent the view of the Government. As I said, the law states that reports and accounts must be printed and made available. Until it is decided that the law should be changed, that is how it will stand.
Lord Harrison
In talking to the Financial Reporting Council, will the Minister discuss the abject failure of many firms to report on their social and environmental policies in order to keep shareholders better informed?
Baroness Wilcox
The Financial Reporting Council is independent, and the European Union says that we must have an audit regulator. The council has to fulfil certain requirements in law and it does so. It is not for the Government to tell it how it should distribute information.
Businesses: Contracts and Payments
Debate between Lord Harrison and Baroness Wilcox
Baroness Wilcox
My Lords, the noble Lord raises two points. He is talking about the private sector and the public sector, which are not necessarily exactly the same. He will know about the work we have been doing in the public sector on speedy payments. The public sector is paying faster than ever before. Central government departments aim to pay 80 per cent of invoices within 10 days. There is now a contractual requirement for main contractors to pay their own suppliers within 30 days. With regard to the private sector, the law stands. We also have very big organisations, such as the CBI and the Institute of Directors, with which we work all the time, as did the previous Administration, to see whether encouragement can be given—not to intervene in that sector, as that would not be correct. I have been a small supplier to a large company. I would say that there needs to be more training and education and more pressure on small companies to ensure that, when they get wonderful contracts with big companies, they do not get overexcited and that they reward the salesman but do not reward the invoice clerk in the back office who gets the invoices wrong 30 per cent of the time.
Lord Harrison
My Lords, has the noble Baroness reflected on the solutions offered by the Federation of Small Businesses, to which I drew attention in a Question I asked last week, which included obliging firms to pay their subcontractors as quickly as the Government pay the contractors, thereby easing the cash flow of small businesses, which is such a vital advantage in this competitive market?
Baroness Wilcox
Yes, my Lords, I well remember that Question being asked by the noble Lord and the supplementary question. Central government is paying within five days. I also know that some of the people it is paying within five days are paying their people within 20 or 30 days of sight of invoice. We shall certainly look at all those contracts that have been set up as soon as they come to their due date. You can be absolutely certain that I, as a Business Minister, who has been on the receiving end of that, will ensure that the terms are right all the way through the system.
Small Businesses: Invoice Payments
Debate between Lord Harrison and Baroness Wilcox
Lord Harrison
To ask Her Majesty’s Government what steps they are taking to promote prompt payment of invoices to small businesses by public sector organisations and within the private sector.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Government are working in partnership with business and finance bodies to challenge the long-standing culture of late payment. Our strategy encompasses three key aims: equipping suppliers with the support and guidance they need to better manage their customer relationships, invoicing arrangements and cash-flow management; establishing the public sector as a payment exemplar; and identifying and promoting private sector exemplars.
Lord Harrison
My Lords, given that one in three small firms has to wait 40 days beyond the agreed payment periods to receive an average £38,000 in late payment from Government, public bodies and larger firms, will the noble Baroness study some of the solutions offered by the Federation of Small Businesses? These include having a social clause, which would oblige contractors to pay subcontractors as swiftly as they are themselves paid by Government. She knows very well that small firms worry about obliging larger firms to comply with the late payment Act because they think they will not get future contracts. Secondly, will the Minister enforce the Companies Act 1985 and ensure that Companies House has the wherewithal to name, shame and fine the regular violators of late payment law, which so frustrate our small businesses at a time of financial downturn?
Baroness Wilcox
I thank the noble Lord for the question and the recognition that I come from a small-business background. Therefore, I know what it is like to try to get your invoices through. I have to admit that some of the research that we have done shows us that an awful lot of small businesses are so keen to get a contract—I know because I have done it in my time—that they do not read the small print and produce their invoices in exactly the way that a particular company wants to receive them. There is then an easy mechanism for them to say that the invoice is not suitable for payment. The Federation of Small Businesses, which the noble Lord cited, is well known to the ministry for business and meets regularly with us to help us develop and enforce the prompt payment code. More than 1,000 companies have signed up to that, some as big as Tesco and some as small as Mr Andrews, the plumber in my village of St Mawes.