Small and Medium-sized Businesses: Access to Finance

Lord Taylor of Warwick Excerpts

Thursday 30th January 2014 Lords Chamber

[Lord Taylor of Warwick (Non-Afl)]

My Lords, I thank the noble Lord, Lord Berkeley, for making this timely debate possible.

One evening back in 2007, I was half watching the BBC TV business programme “Dragons’ Den”. A number of people with various hopeless and hapless business ideas had been crushed and humiliated by the comments of the panel. Then, up the stairs walked somebody completely different. He was a black gentleman with dreadlocks named Levi Roots. Instead of the traditional business presentation, he decided to sing his application while playing a guitar. It was such an impressive performance that Peter Jones and Richard Farleigh decided to invest in Levi’s Reggae Reggae Sauce.

Since then Levi has become a multi-millionaire and his sauces and ready meals sell in major supermarkets here and abroad. I was privileged recently to interview Mr Roots for the media. In addition to the surprise of hearing that Levi Roots’s real name is Keith, he was very frank and open about his success. He said that although he always knew he had a good product, he realised he could not take it further without the sort of mentoring and financial backing that he got from the Dragons. The banks were not interested. Levi was one of the lucky ones. But I wonder how many other Levi or Lavinia Roots there are out there.

The ethnic minority business sector contributes an estimated £30 billion per year to the UK economy, but evidence from the Black Training and Enterprise Group shows a gap between the aspirations of minority groups to set up their own business and the actual number who do. Only about 6% do, and the majority fail in the first year of operation.

In July last year, the British Bankers’ Association produced its Ethnic Minority Business and Access to Finance Report. It found that the banks need to do far more to reach underrepresented groups in the SME sector. It also encouraged ethnic minority groups to make full use of initiatives such as the website Mentorsme.co.uk, which helps provide business mentors; and it recommended a series of roadshow events across the country, focusing on inner cities. It also urged banks to link up with the various ethnic minority business groups.

There is something that the report did not mention which I would recommend. The banks and relevant government departments should build stronger relationships with faith groups, because many business people from ethnic minority communities are also members of the Pentecostal church, the mosque or the temple, depending on their faith.

Although the main theme of the debate is finance, I argue that mentoring is just as important, if not more so, in the early stages of a small business. A black teenager was dyslexic in a west London school in the 1980s. It was assumed that he was stupid, so he was put in a remedial class. He left school as a failure, but somehow he got into art college. A few people began to encourage and even to mentor him. That young man eventually went on to win the Turner prize, a Golden Globe and the New York Film Critics Circle prize, and his latest film, which he directed, called “12 Years A Slave”, may win an Oscar and is set to gross hundreds of millions of dollars. His name is Steve McQueen and he has become a huge UK film export. It is a British film because he and many of the main actors are British. Like Levi Roots, everything turned out well for Steve McQueen, but it could so easily have gone the other way. How many other Steve or Stephanie McQueens are we missing out on?

This is my last point. The Lord Mayor of London, Fiona Woolf—only the second female lord mayor since 1189—last week launched the Power of Diversity programme, a series of lectures and conferences to promote diversity. I am glad to say there are some banks involved in that. Hopefully we can soon say, truly, that diversity means business.