Small and Medium-Sized Enterprises
Debate between Lord Harrison and Lord Marland
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Marland)
My Lords, the Government recently announced that they are setting up a business bank to address long-standing gaps in finance for small and medium-sized businesses. This will build on a range of measures already in place. Increasing the supply of finance to lenders through the Funding for Lending scheme will lead to lower costs for borrowers. The Enterprise Finance Guarantee scheme helps small businesses lacking a track record or collateral secure bank finance. The Enterprise Capital Funds programme provides equity funding to businesses with high growth potential.
Lord Harrison
My Lords, according to the Federation of Small Businesses, three out of four small firms rate credit availability as either poor or very poor, and four out of 10 firms are being paid later than the agreed 30-day payment period, including by the Government. What will the Government do to enforce the excellent legislation on late payment of the previous decade and ensure that small businesses get their money back? Welcome as the announcement of the British business bank is, does the Minister recognise the failure of the regional growth fund, which was supposedly designed to help small businesses but was panned recently in the House of Commons by the PAC? When will the Government deal with small business as big business on the road to growth and to restoring the economy?
Lord Marland
The word is “restoring” the economy. We have inherited a significant problem—I am talking about the previous Government—and we need to be careful not to get too political. Small business is at the heart of what we are trying to do. On a serious note, it is clear to me that all of us in this House want to achieve dynamism in the small business community. In fact, I am extremely grateful for the noble Lord’s Question because today we have published Best-Practice Guideline: SME Finance which sets out ways and options available relating to this critical subject. I do not want to go on too long, but there is a lack of confidence in business that banks will give finance. The banks have to look at themselves and consider that they are turning the screws on successful businesses too tightly and government have to work hard with them to make sure they get the finance.
Businesses: Start-ups
Debate between Lord Harrison and Lord Marland
Lord Marland
There is no doubt that the two great threats to business are regulation and, of course, taxation. We are committed to reducing the level of regulation through our Red Tape Challenge. Of course, the most marvellous thing that the Lord Chancellor has done is to show a very clear pathway for the reduction in corporation tax—it is headlined down to 22% in two years’ time—which will make it the lowest in the G20. That is a really significant boost to business. For SMEs it is 20%, which is a very encouraging target.
Lord Harrison
Would the Minister accept that because of the byzantine entry forms for the regional growth fund most funding went to big businesses not small ones, to the south-east and not to the other regions, and nothing much was helped to grow except the occasional passing wilting weed?