Small and Medium-Sized Enterprises

Lord Taylor of Warwick Excerpts

Wednesday 26th June 2013 Lords Chamber

[Lord Taylor of Warwick]

My Lords, I thank the Select Committee and, of course, its advisers for this excellent report. I wish to focus mainly on paragraph 6, which concerns language and diversity. There is no doubt that exporting is vital to economic growth. A number of young people were sitting in the Gallery watching this debate. That reminded me of the tragedy of more than 1 million young people unemployed. For their sake alone, we need to increase growth, and that must come from increasing exports.

My noble friends Lord Cope and Lord Teverson and the noble Baroness, Lady Coussins, all mentioned the language problem, which we can no longer ignore. The National Centre for Languages has produced a report called Talking World Class. It asserts that a language gap leads to a trade gap. It criticises the lack of language skills that we have in this country. It was quite shocking to see the research produced by the European Commission that the UK has the lowest number of people able to speak other languages in a league table of 28 European countries. According to the report, 80% of export managers in the UK cannot communicate competently in another language.

In the year to March 2013, the annual export value from all regions in the UK fell, except in two regions: East Midlands and West Midlands. It cannot be a coincidence that, for example, UKTI East Midlands has been proactive in taking advantage of the diversity of its workforce. Its initiatives include developing the understanding of the business culture of the country which it visits on trade missions. It organises day-long language and culture sessions for people travelling overseas. It liaises with translators, interpreters and training providers. It identifies opportunities to use overseas students. There is an annual international communication masterclass, which is a day-long seminar, attracting about 100 delegates.

Understanding cultural and linguistic diversity, both domestically and overseas, is key if we are to increase trade and exports. There have been several reports in recent years demonstrating beyond doubt that diversity is good for business. It is not just about equal opportunities. Diversity produces new ideas, new markets and new customers. The Federation of Small Businesses, the Confederation of British Industry and the Institute for Small Business Association have produced ample evidence for this. As for immigration, immigrants are on average younger, more highly skilled and more likely to be of working age than their host counterparts. Black and ethnic minorities in Britain are now having a real impact on small and medium-size businesses. I give as an example my home city of Birmingham. Only last summer, Prince Charles presented a Jamaican bakery company, based in Birmingham, with the prestigious UK Small Business of the Year award. Indeed, Prince Charles was so keen to test the evidence that the company sent a few of its delicious pasties to Clarence House for, shall we say, closer scrutiny. The owner of that company had left Jamaica with his family in the 1960s and started a very small bakery in 1988. Now it has a factory employing 50 staff and supplying the five major supermarkets. We need to utilise the skills of men such as that. About 12 miles from Birmingham is Wolverhampton. There, another Jamaican started a medical technology company in 2004. Now it has 200 employees and has produced award-winning equipment such as a device to reduce the risk of deep vein thrombosis.

I should point out that I have no connection with either of the two companies but each is another success story. They were immigrants who came to Britain with nothing. Immigrants are coming from more countries than in the past, including Poland, China and India. In our business community there is potentially more access to different language skills and knowledge of different cultures when it comes to trade delegations representing Britain abroad. Through our universities, we have access to overseas students who can help us bridge the language gap that the noble Baroness, Lady Coussins, spoke about. We know that Mandarin is now very much the language of business and we have Mandarin speakers in our localities. We need to capitalise on their skills and experience.

Many in the small business community have the energy and ambition—the get up and go as the noble Lord, Lord Haskel, described it—but lack awareness of the help available to them. While I am pleased that the Department for Business and BBA have a national mentoring portal, Mentorsme.co.uk, there is evidence that the small business community is unaware of these kinds of facilities. I am very impressed by the Get Mentoring project where small business owners can get free access to experienced business people for advice. But the small business community is not aware of that and more needs to be done to publicise these excellent initiatives.

My next point may surprise noble Lords but, in my submission, faith groups can play an effective role in promoting small business both here and trading abroad. A new report, Faith in the Community, provided fresh insight into the role of churches and other faith groups, and the ways they can liaise with business. The report contains information from 150 local authorities which shared how church and other faith groups help them carry out many of their tasks, especially in liaising with local business. Many black and ethnic minority businessmen have their roots in the churches, and indeed in mosques and temples. Again, I urge the Minister to look at the faith groups and churches, because therein lies a tremendous reservoir of talent that it seems is being ignored.

There is one Government policy of great concern to the Caribbean business community: the air passenger duty. This tax is charged on every airline ticket from the United Kingdom. The problem is that it is based on a price-banding system related to the distance to a country’s capital city. That means it can be cheaper to fly to more distant locations in the United States than to destinations such as Jamaica or Barbados. The levy is set to rise each year by the rate of inflation, pricing many in the UK Caribbean community out of being able to travel to the region on business.

The Select Committee did not have a lot to say about diversity but the issue is crucial to Britain’s future economic growth. The Prime Minister set a target of doubling UK exports by 2020. Does the Minister feel we can attain that target? This is an excellent report but it has to be acted upon if the target is to be achieved.