Businesses: Small and Medium-Sized Enterprises

Lord Leigh of Hurley Excerpts

Tuesday 6th May 2014 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I too thank my noble friend Lord Cope for initiating this welcome debate. The report by the Select Committee was published before I was introduced to the House. Accordingly, I have had the advantage of looking at it from the outside. As a relative new boy, it is sometimes easier to make observations. I have observed that the House has had relatively few debates and questions on the area of finance and enterprise. As the noble Lord, Lord Cotter, has just said, nothing can be more important to the well-being of our country than a flourishing economy from which everything else is generated.

Our success as a society stems from the ability of government to raise money from the domestic population and, essentially, other than mineral extraction, this relies on businesses growing, employing more people who pay taxes, generating revenue on which people pay VAT, generating profits and dividends on which tax is paid, and helping entrepreneurs to build businesses, which eventually leads to capital gains tax being paid. It is therefore vital that everything possible is done to help and encourage SMEs which, of course, are typically not multinational, but domestic. As they grow, they are more likely to pay taxes in this country than in other jurisdictions and employ more people in this country. In this context, I welcome the tremendous focus on business growth by a number of government departments. The Treasury has created an environment in which investment into the UK and UK business is proving to be extremely popular and attractive, which is something that I see regularly in my day job. The Department for Business, Innovation and Skills is helping business and young people to gain employment through apprenticeships and, as a result, according to a recent CBI survey, growth expectations among SME firms is the highest since 2003, with manufacturing growing at its highest rate.

There is a feeling in the country that the Government are providing a joined-up approach to promoting business, which has not been seen in the UK for many years. Undoubtedly, the recruitment of my noble friend Lord Livingston as Trade Minister was a real coup for the Government. Having someone with tremendous business expertise and experience leading UKTI sends a message to international business that the UK Government understand what needs to be done and are urgently seeking to promote our businesses. I saw UKTI action at first hand when I accompanied the Prime Minister and Ministers on the trade trip to China in December. However, despite my praise and admiration for UKTI, I have a number of observations and, I hope, helpful suggestions to make in three main areas.

The first is in many ways a function of our own success. There is a plethora of schemes available to SMEs to finance their growing businesses for export. In fact, last week I attempted to put myself in the shoes of such an SME businessman and visited the government website to seek help. As your Lordships may know, the new entry portal for all government help is www.gov.uk and on the very front page there is a link to business. Within two clicks I reached a page that enabled me to read about government-backed support and finance for my imaginary business. This in itself is incredibly impressive. However, unfortunately the clarity ended there. To my horror, the next page offered a choice of 791 different schemes to assist me. Equal prominence was given to the somewhat parochial Barking Enterprise Centre and the Crofting Counties Agricultural Grant Scheme in Elgin. While undoubtedly very worth while, they were given the same prominence as the perhaps more relevant export credit guarantee scheme. There is of course the opportunity to filter down your requirements, and I did then select finance for a business based in London with up to 250 employees in the service sector at the growth stage, and this managed to narrow the schemes down to 42, although surprisingly no filter was offered for people looking specifically for export finance. Accordingly, I would like to suggest providing a very early help button in the government website so that potential SME exporters can have short but direct conversations with experienced UKTI advisers about the route through the maze that is offered to them—because the help is actually there. I believe that this was included in Recommendations 11 and 12 of the Select Committee report, but I have not found any real evidence of their being implemented.

My second point relates to the excellent work being done by the Foreign Office to help SMEs export, and while not strictly on the point of finance for SMEs, it is part of the road to success. Many large UK corporates have consistently mentioned to me that they have noticed a dramatic change in the approach by the Foreign Office in parts of the world where they are seeking to do business. Perhaps it reflects a change in the role of diplomacy abroad, but more likely it reflects the commercial approach to life taken by the current Foreign Secretary to ensure that UK plc benefits from our existing foreign service facilities. Perhaps I may encourage my noble friend the Minister to publicise these enormous benefits that are of value to both the large corporates and SMEs. They are able to obtain advice from UKTI representatives in our embassies abroad and, of course, from Foreign Office personnel. It seems to have worked for large corporations and there is no reason why it should not work for SMEs.

Thirdly, and finally, is the issue of the relationship between the large retail banks and SMEs, which I believe needs further examination. It is a large topic so I will not take too much time here, but even last week the Treasury Select Committee heard that some of the banks really did not cover themselves in glory during the last recession, and there needs to be a realisation that they may not be the long-term answer for SME lending. I therefore welcome the initiatives that have been started to encourage new entrants to the market.

Israel and Palestine

Lord Leigh of Hurley Excerpts

Tuesday 8th April 2014 Lords Chamber

[Baroness Warsi]

The noble Lord will be aware that this was the fourth tranche of the prisoner releases that were agreed last year. The first three have taken place; the fourth has been delayed. The noble Lord will be aware that there is a difference of opinion about how these matters are seen. Israel felt that these prisoner releases were directly linked to the peace talks. The Palestinians believed that they were directly linked to no further action at the UN. Clearly, the discussions that took place at that stage were vague. I take comfort from both parties having indicated that they are prepared to come back to the negotiating table because that is where progress will be made.

[Lord Leigh of Hurley (Con)]

My Lords, does the Minister agree that unilateral Palestinian action at the UN and other international organisations has been very counterproductive? Does she agree that it is surprising that the EU has not used further efforts to bring Mr Abbas back to the table, given the €5.6 billion in aid that has gone to the Palestinian Authority in the past 10 years?

[Baroness Warsi]

It is not the Government’s decision to be taking sides in this matter. There have been counterproductive actions on both sides. There are things that both sides agreed to that have not been delivered. That is why we are stressing, once again, that they need to get back to the negotiating table because that is the only place where a long, true settlement will be made.

Middle East Peace Settlement

Lord Leigh of Hurley Excerpts

Tuesday 14th January 2014 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, I draw your attention to my entry in the register of interests, which includes board membership of the Jerusalem Foundation, where I had the honour to serve for a short time with my noble friend Lord Weidenfeld.

Despite having only a few minutes allocated to me, it would seem appropriate to echo the words of my noble friend Lord Carrington and pass condolences to both the State of Israel and the family of the late Ariel Sharon. There is a lot we can learn from his life which, while controversial, nevertheless included taking some enormous steps to promote peace in the region, such as agreeing the road map and the withdrawal from Gaza, despite facing enormous pressures internally and externally. I hope that his passionate and determined pursuit of peace towards the end of his life will encourage others to follow his example.

This debate refers to a wider Middle East peace settlement and there is often a tendency in such debates to focus just on the Israel-Palestine conflict, which is not necessarily the main cause of regional instability. However, in my opinion, economic prosperity for all the parties in that region is one of the keys for peace. This debate is focusing on the efforts made by the EU, and quite rightly, as since 1994 the EU has provided more than €5.6 billion in assistance to the Palestinian people. The United Kingdom has been a very large contributor to this sum. Between 2008 and 2012 it was the third largest contributor of direct financial support after Holland and Sweden, with the United Kingdom’s contribution being about 10% of member states’ specific contributions.

Some of this direct funding has gone to support the rehabilitation of the private sector in Gaza, which must be very welcome. However, the recent European Court of Auditors’ Special Report No. 14, which was published in 2013, draws attention to some very worrying observations, such as that a “considerable number”, in its words, of civil servants in Gaza were being paid without going to work or providing any public service. Furthermore, it is now clear that a significant proportion of the Palestinian Authority’s budget, in part financed by the EU Pegase programme, is used to pay a salary to Palestinian prisoners in Israel, many of whom have been convicted of terrorist activities. This now runs at a rate of nearly £3 million per month and, perversely, the longer the sentence, the greater the salary. While Israel has commendably started to release prisoners, as the noble Lord, Lord Weidenfeld, said, the president of the Palestinian Authority has publicly called such convicted terrorists “heroes”. This does not bode well for changing the mood in the region towards peace. The EU would do well to heed the warnings by listening to the concerns in its own auditors’ report and further reflect on whether it should allow its—and our financial—support for Palestine to be used, in effect, for prisoner salaries.

The EU could do much more to promote peace in this area. Specifically, the funds would be much better used in following the example of the Portland Trust, based here in the UK, and using our resources further to promote Palestinian economic growth, which did in fact achieve an impressive 4.25% in 2013. It is by promoting the prosperity of the region that the EU will enhance the peace process.