Small Business Saturday

Andrew Bingham Excerpts

Thursday 4th December 2014 Westminster Hall

[Andrew Bingham (High Peak) (Con)]

Thank you, Mr Hollobone, for calling me to speak. It is a pleasure to serve under your chairmanship again.

I congratulate my hon. Friend the Member for City of Chester (Stephen Mosley) on securing this important debate. As a former small business man myself, I know and appreciate the value of small businesses, both to our local economies in our own constituencies and to the national economic recovery. Every debate in Westminster Hall is important, but this one has an extra level of importance, and coming today—just two days before small business Saturday—it could not be better timed.

People wonder what the definition of a small business is. Companies employing fewer than 50 people often fall into the category of “small business”, and I suppose that if we compare that number with some of the larger conglomerates in the country, that is a fair description. However, I will focus on what are, in my view, the small businesses—the really small businesses, or the micro-businesses.

I ran a micro-business for 20-odd years and I can assure Members that running one is not easy. Employing only a handful of people, as I did, I used to have to deal with customers of all different sizes and types. I was salesman, credit controller, debt control, buyer and human resources manager all at once, and many small business operators are in the same boat. To do all those roles, they have to work late into the night, putting in many hours. They take their work home and they live, eat and breathe their business.

In High Peak there are 3,520 businesses and 98.5% of those have fewer than 50 employees. It is all too often too easy to forget them because of their size. One small business man said to me, “I don’t have time to lobby my Member of Parliament or to go to meetings. I’m too busy trying to earn a living.” It is up to us as MPs to go to them, to tell them that we support them and want to help them.

As politicians, we would always seek to claim the glory of any economic recovery and, yes, we play a significant part, because we can legislate to help and support these businesses. I am proud that this Government are on the side of the small businesses. We do not regard “profit” as a dirty word and we want to help them into profit, because they can reinvest that and create more jobs and employment in our constituencies. Any economic recovery is driven by businesses, including small businesses. The figure that I cited—the 98.5% in my constituency—shows that small and micro-businesses are very much at the forefront of that effort and the recovery that we see today.

There is a perception among some that the typical small business owner sits there with an expensive cigar, counting the money, but I assure hon. Members from all parties that that is not so. They have staff to look after, debts to service and overheads to worry about and, above all, they have customers whom they have to service and please.

Often a small business’s strongest asset is its staff. Although there were never many of us, my staff were the most important: they were the ones who spoke to customers. The staff in a business operating in a specialist field are trained in a certain specialism, making them even more important. A customer once said that he did not have one mortgage on his house, but had 25 mortgages to service, because his 25 employees relied on him for their income and the ability to pay their bills.

The small business has no human resources or personnel departments and no credit control. The owner has to juggle all the different roles and responsibilities, to provide jobs for people, generate profits and pay his or her taxes. I hesitate to say it—and many hon. Members in the Chamber from all parties have worked in small businesses—but unless people have been in the situation, it is difficult to understand and comprehend it.

I remember many experiences well. I remember the day when my two best customers went into liquidation. Anybody who has been in a small business may know that liquidation letters usually arrive on a Monday. Looking at the letter from a firm of solicitors, people will think, “Oh dear, what’s this?”, and open it up to find that XYZ Ltd is in liquidation. The first thing to do is see how much is owed, although we all know fine well that we will not get the money back from that limited company.

I remember being faced with the fact that I had lost a significant sum—not only that, but I had lost my two best customers. Such a situation leads to cash-flow problems and affects the ability to earn that money back. It was not the greatest day and it will live with me for a long time. That is why I say that we should pay particular attention to the experiences of people who have to run these businesses and face such challenges daily.

We should remember that all big businesses usually start as small businesses. My company used to sell air compressor machinery. I am not sure whether many hon. Members know what an air compressor is. I could tell them in great length if they wanted and, since we have plenty of time this afternoon, we could have a great lecture on air compressors.

I remember well a company coming to see me that wanted a machine that cost £400 plus VAT. It was just starting up and did not have the money and said that it could just about squeeze £200. I did a deal with them and it paid half up front and the rest on a post-dated cheque. That company, which makes ready meals, now employs 270 people—it might even be in the constituency of my hon. Friend the Member for Cheadle (Mark Hunter). That company dealt with us for many years, because we had a bond of loyalty, and I was always grateful to it for that reason. Credit is due to it for growing into a large company. We should remember such examples and never forget small businesses. Small business Saturday is so important, because it gives us a chance to support them.

Pretty much every shop on every high street is a small business: every pub is a small business, for example. As well as the retail outlets that we have heard about, we should remember and support plumbers, joiners and electricians—all small businesses in their own right that people can support on small business Saturday. However, I make a plea on behalf of the small and micro-businesses to all residents in my High Peak constituency, and others: do not make small business Saturday an exceptional day in your year’s shopping. People who use a small business should make every day a small business day, not just one day a year—with the greatest respect, that is not much use to people who run small businesses. They cannot make a year’s profit and turnover in a day, so make it every day.

As well as retail and public-facing small businesses, there are trade businesses. I did very little business with the general public; I was doing business with other companies. I make a plea to the Minister on behalf of such businesses. Big companies, multinationals and especially the public sector, whether councils, Government agencies or Departments, should all embrace this small business ethos and small business Saturday, as I have said before in the House. I venture that such organisations may not work on Saturdays, so they should think of other days and embrace the concept of dealing with small businesses.

I have said it before and I say it again: take the lead, give the small businesses and the micro-businesses a chance to supply Government agencies and local councils, because they can often provide a better product at a better price. Do not put ridiculous surveys, questionnaires and assessments, and all that sort of thing, in their way. Look at their products, what they can offer and their prices. Do not have the same revolving merry-go-round of big organisations dealing with big organisations. Let the small company feed at the table as well. As I have said before, public sector companies would do better to use small businesses wherever they can, because they would get a more personalised service and a better product at a cheaper price.

I am sorry if I am getting a bit evangelical about this, Mr Hollobone, but, as I said, I spent many years trying to deal with big organisations and local authorities, knowing that I could do them a better deal. I remember dealing with a local authority, knowing full well that my product was the same and my service was better, but I did not have certain bits of paper with certain ticks on them. I was facing somebody with an agenda to get all the forms ticked and filled in and knew that I was not going to get the work. It was work that I wanted to get and I knew that I could provide a service at a better rate. Unfortunately, the taxpayer was being short-changed, because those organisations were paying a higher price for the product.

I applaud small business Saturday, but let every day be a small business day. The big businesses—the conglomerates—can shout up for themselves; they have people on their payroll who can do that for them. I am here to shout up for the small business man and woman—incredibly hard-working small business owners in the High Peak and across the country who do so much and create so much for my constituents, yet they are forgotten, overlooked and not recognised for their efforts. My message to them is and always has been clear. I will support them and I am proud that the Government support them. As we near Christmas, I salute every one of them for the sleepless nights, the hard work and the graft that they put in to help our economy. I salute them for what they have contributed over this last year.

While I am on my feet, I have to be honest and say that I am not a big lover of the Christmas festivities—[Hon. Members: “Bah, humbug!”] Yes—bah, humbug! Absolutely. Lent is more my ethos. Anyway, while I am on that theme, I wish small business owners a very merry Christmas and, more importantly, a prosperous Christmas and new year.

[Mr Philip Hollobone (in the Chair)]

It is perfectly in order to be evangelical.

--- Later in debate ---

[Maria Miller (Basingstoke) (Con)]

It is a great pleasure to serve under your chairmanship, I think for the first time, Mr Hollobone, in this important debate. I congratulate my hon. Friend the Member for City of Chester (Stephen Mosley) on securing the debate. I had the great pleasure of visiting Chester with him recently, so I know how wonderful that city is and about the important investment that is going into the city centre.

I pay tribute to my local branch of the Federation of Small Businesses, in particular Tim Colman, the regional vice-chairman, who does an extraordinary amount to support local businesses in my area. In the work that he does, he goes above and beyond the call of duty.

My hon. Friend the Member for High Peak (Andrew Bingham) spoke about his experience as a small business man. His comments resonated with me because my father was a small business man, so I recognise exactly the challenges he described. Running a small business is a tough job, especially for those with families. We should all pay tribute to the people who take that risk—who put themselves out there and run businesses to generate income not only for their own family, but for other people as well.

[Andrew Bingham]

Like my right hon. Friend’s father, my late father set up his business at the age of 27. The whole family were part of that business, because dad set it up and we lived and fell by his efforts. We were born into that as we came through as the next generation.

[Maria Miller]

My hon. Friend is absolutely right that it is in the blood, and we can see that in him.

Small business Saturday gives us all an opportunity to think about and celebrate small businesses not only nationally, but in our own communities. It is important that people shop locally. Residents of Basingstoke can do that every day of the week, but they have an extra opportunity to do so next week, because on Friday the Hampshire farmers market, one of the largest in the country, will be in Basingstoke, showing that the ingenuity and entrepreneurial spirit is very much alive and kicking in my part of the world. I encourage everyone to go along and see the entrepreneurial spirit of Hampshire showcased there.

As I said, people in Basingstoke can shop locally every day of the week and our local council has played a great role in that achievement. The Viables Craft Centre on Harrow way is home to a number of small, local businesses, which have had the opportunity to come together to create the right environment for their products. They include the Butterfly Tree florists and Les Jolies Choses, which was set up by Lisa Wyatt—I know her well—who, starting from just an idea, set up a business that is now thriving. That is the epitome of what one thinks about when one celebrates small businesses.

Of course in Basingstoke we also have the top of town shopping area, our historic area, which many overlook. It is the site of our 900-year-old market and the Basingstoke assembly rooms, made famous by Jane Austen because they provided much of the material she used in books such as “Mansfield Park.” Whenever hon. Members think about shopping in Basingstoke, I urge them to think about its history as well as its modernity.

I mentioned the importance of local authorities in building small businesses and nowhere can that be more true than in Basingstoke. In the past year, we have seen more than 1,000 new businesses formed in Basingstoke—indeed, we have more than 6,800 small businesses, which account for 98% of the businesses in the borough. They grew by 6% in the past year and they are forecast to grow by a similar amount in the next 12 months.

Small businesses are the lifeblood of our economy and they have been nurtured by our local authority through a variety of measures. Our local council has a procurement strategy that helps to support local small businesses, so that they can tender more effectively for contracts—a really positive action that can make an enormous difference—and we have a small business concordat, which helps that come into play. The local council has also invested in small businesses. In particular, it has ensured that our top of town is small business-friendly. We have a shop-front grant scheme to help improve the appearance of the shops in the top of town, with up to £5,000 made available through the council, and we are continuing to develop that area as a centre of retail activity in the town. In particular, I thank Councillor Terri Reid, who spearheaded that initiative. I know that local retailers are also grateful. I think it is the teamwork and partnership between our local small businesses, the local council and parliamentarians that makes that work as well as it can.

We like to celebrate small business success in Basingstoke. We have the Inspire business awards, now the largest business awards in Hampshire. This year we celebrated small business of the year winner the Basingstoke Energy Services Co-operative, a fantastic organisation that I know well. An outstanding example of a co-operative run on sustainable values, it is a deserving winner of the Inspire award. This Saturday, I, like many other right hon. and hon. Members, will be going along to join small businesses in our market square to celebrate small business Saturday.

I would like to take a couple of minutes to comment on some of the announcements made by my right hon. Friend the Chancellor yesterday that will be of particular benefit to businesses in my constituency and indeed every constituency, such as the fuel duty freeze and the structural review of business rates, as well as the road improvements announced earlier this year. In my constituency, the improvements to the M3 in the Winchester and Fleet areas as well as the Black Dam roundabout improvements funded by the Government will make a huge difference to local businesses’ ability to get in and out of the town, improving their ability to trade effectively.

The abolition of employers’ national insurance contributions for those taking on apprentices is also a positive measure for small businesses, which are taking a real risk when they take on extra staff. The more the Government can do to mitigate that risk, the more likely small businesses are to take on extra staff, so I particularly wanted to put on record my thanks to the Chancellor for that measure.

There are a number of other measures that I could talk about, but it is important that the House notes the positive way in which the Chancellor’s autumn statement was received by businesses in Hampshire. The Hampshire chamber of commerce said that the Chancellor’s statement will help to create jobs and stimulate economic activity. The Federation of Small Businesses in Hampshire has specifically welcomed the extension to the funding for lending scheme, which will help to provide cash for small businesses. Access to finance can be the difference between a business succeeding and it not succeeding, so it is that sort of insightful announcement that has done so much to generate such a positive reception from businesses in Basingstoke and throughout Hampshire.

If we are to make sure that our economy is the success that we need it be, we must look to the future. I have three questions for the Minister about how we ensure the health of businesses, and small businesses in particular, in the future. In Basingstoke, we are incredibly fortunate to have been nominated by Surrey university to be a hub for the development of 5G technologies, translating 5G research and development into businesses of the future. We will be working with Surrey university’s innovation centre and a consortium of Huawei, Samsung, Fujitsu and many others to ensure that that incredible research is grown into British businesses. That is an exciting opportunity for my community and something that we are well placed to do, because of the incredible skills that we have in our local work force.

My question for the Minister is: is he satisfied by the progress being made in connectivity for small businesses? If we are to exploit not only 4G but 5G technologies to their utmost, we need to make sure that small businesses have the sort of connectivity that enables them to do that. In bygone years, connectivity was all about transport—trains, roads and aeroplanes. Those remain important, but into the millennium and the next century we will need to ensure that broadband connectivity is at the heart of that as well.

My second question for the Minister is about the role of small business in getting more people into work. I am particularly interested in the fact that under this Government we now have record numbers of women in employment, which should be applauded. There has been a global rise in the number of female entrepreneurs, and the gap between the number of women and of men entrepreneurs is closing. Interestingly, the Harvard Business Review recently produced a report stating that 37% of enterprises globally are run by women; 126 million women are running businesses around the world. Dow Jones research has shown that venture-backed companies found to be successful had twice the number of women involved in forming them. Women have a critical role to play in successful businesses. The Government have already done a huge amount to support women into employment, but what else is the Minister planning to make sure that women play a full role in the economic success of this country?

On the back of that, for me, social enterprises are a hugely important part of the ability of this country to form new and small businesses. I pay tribute to Sue Dovey, the chief executive of Action Hampshire, who runs the School for Social Entrepreneurs in Hampshire. We have numerous success stories coming through that organisation of women setting up businesses and social enterprises that are hugely successful and beneficial to our community. In particular, I pay tribute to the work of Catherine Waters-Clark, who set up Inspero, a social enterprise giving young people the opportunity to grow vegetables and their own food and then to learn how to cook it. What a wonderful example of how social enterprise can start up a small business that is incredibly important and useful to our local community. My question to the Minister is, what more will he do to support social enterprises, which are a fantastic opportunity for women and men to get into employment or set up their own businesses?

Last but by no means least, there is the important role of enterprise in the lives of young people in this country. In Hampshire, we have an active Young Enterprise organisation. Young Enterprise is the largest business and education charity in the UK, supporting 250,000 young people to learn about business, and it is active in my constituency. One of the most important things that we can do during a child’s education is to teach them about enterprise and the opportunities of entrepreneurship. I will be interested in the Minister’s comments.

Small business is the foundation of British business. The Government’s long-term economic plan provides the right conditions for small businesses. What we have to do is unlock the entrepreneur in all of us, so that we can see our economy thrive and do as well as we need it to in the future. I look forward to the Minister’s responses to my questions.

--- Later in debate ---

[Toby Perkins (Chesterfield) (Lab)]

Thank you for that advice, Mr Hollobone. I will take both parts of it seriously. It is a pleasure to serve under your chairmanship, for what I believe is the first time.

I congratulate the hon. Member for City of Chester (Stephen Mosley) on securing what has been an excellent and timely debate about small business Saturday. The debate has ranged over a variety of issues, but has had at its heart a recognition of the exciting opportunity the day brings. For Members across the House to have a chance to speak about the importance of small businesses and of small business Saturday just two days before the event is very welcome.

[Jim Sheridan in the Chair]

Today the small business Saturday bus tour reaches its conclusion, as it visits Camden. Last year, memorably, it drove up Downing street and was given a prominent and welcome salute. Whether moving from Westminster to Camden is going up in the world or down is a matter of opinion—I will let individual Members make up their own mind on that—but the tour has been very successful, going out into communities to let businesses know what they can do to promote the day, and ensuring that people know it is happening and that they have an opportunity to support it.

Many hon. Members have been on the bus when it has visited their constituency. It has made 14 visits over the past three weeks. I was there for the tour’s launch in Leeds on 17 November, and very impressive it was, too. I was delighted when on 24 November it came to Chesterfield and I had the opportunity to promote what small business Saturday is all about in my own constituency. The bus tour has been right around the country, to Leeds, York, Edinburgh, Belfast, Manchester, Nottingham, Norwich, Birmingham, Cardiff, Bristol, Plymouth, Lambeth and Camden, as well as to Chesterfield, and has been well saluted. Anyone who has been on it and had the opportunity to see people’s response will have a sense of how strongly people in our communities feel about how important small businesses are, a feeling that has been reflected in the debate.

Small business Saturday in 2013 was a massive success. It drove hundreds of millions of pounds of extra trade to British small businesses and 48% of UK consumers were aware of the day. The hon. Member for City of Chester said there were 1.5 million Facebook views and that #SmallBizSatUK was trending in the top three on Twitter all day. Some 40% of all local authorities supported the campaign and hundreds of events took place across the UK. It was probably the biggest celebration of small businesses the UK has ever seen.

The hon. Gentleman was generous in his recognition of the role of my hon. Friend the Member for Streatham (Mr Umunna) and the fact that this event has been taken up right across the political sphere. It is another example of what happens when everyone in Britain gets together in support of Labour party ideas. It shows what can be achieved, and he was generous in reflecting that. It is right to recognise that wherever the idea started, the most important thing is that it is being supported universally. It also demonstrates what can be achieved in these straitened times without necessarily having a big pot of Government money. Innovative ideas are often what matter, and campaigns that start from the bottom up are incredibly powerful. That was good.

I want to reflect on some of the contributions to this excellent debate. The hon. Gentleman was right to emphasise the importance of small business Saturday. We often think of it in the context of retail and shopping, but it is about much more than that and his comments reflected that. If anyone thought of small business Saturday purely in the context of retail, the fact that a funeral director won the award in his constituency may have removed that misapprehension. The hon. Gentleman made a great speech and I was pleased to hear it and to take up some of the challenges he offered.

The hon. Gentleman listed measures that he thought were positive and then said he did not want a party political debate. He might have hoped for a little too much there, but his point about business rates is incredibly important. He asked me whether the Labour party supports the Government’s aims for the review of business rates. I am not entirely clear what those aims are, but the fact there will be a review is positive. Increasingly in the last few years, the level of business rates has been seen as punitive. We have the highest level of corporate property tax in the G20, corresponding with the lowest level of corporation tax in the G7. We have said we want to maintain the lowest level of corporation tax, but a focus on constantly reducing profit tax and having ever spiralling corporate property tax encourages an economy in which businesses bring their books to the UK, but do not bring their jobs and manufacturing or a presence on the high street. I totally support a review of business rates, but whether I support what the Government want that review to find, I am thus far unable to enlighten the hon. Gentleman, because I am not entirely clear what their aims are. I certainly welcome the fact that there will be a significant debate.

My hon. Friend the Member for Glasgow North East (Mr Bain) made a wide-ranging speech focusing on the importance of a small business administration at the heart of Government. He will be pleased to know that a future Labour Government will want to introduce that, in recognition of the need for Departments throughout Whitehall to work together to support businesses, particularly small businesses. He also focused on procurement, which is an area where the Government could do much more to support small businesses. That point was echoed by other hon. Members.

My hon. Friend also spoke about the universal broadband commitment. In my time in my present role, I have been to 45 areas of the country doing small business consultations, and at almost every one broadband access was raised. A few days ago, at a lunch with the Rural Shops Alliance focused on the needs of rural businesses, the alliance spoke strongly about the importance of a more universal offer on broadband.

The hon. Member for High Peak (Andrew Bingham) reflected on the many different roles that a small business owner has. I tried to combine those with being a parliamentary candidate so I know how difficult it is.

[Andrew Bingham]

indicated assent.

[Toby Perkins]

The hon. Gentleman is indicating that he did the same. It was no easy task. In what he described as an evangelical contribution, he highlighted the importance of support for business owners, who often have brilliant business ideas but do not instantly have the different knowledge bases needed. The Government should take some responsibility for supporting access to skills development, so that small businesses are not shut out of Government contracts because they cannot find their way through complicated procurement processes. We must ensure they have access to apprenticeships and Government schemes such as funding for lending. There are pieces of knowledge that are found in big businesses, but not when someone starts a small business. Providing such support for small businesses is incredibly important.

The hon. Gentleman argued that we should make every day a small business day, and won support from other hon. Members. That was an interesting idea. He and I are former small business owners, and all small business owners I speak to do not want special favours or expect people to shop with them as a favour. All they want is a fair chance for people to consider what they have to offer and whether it is worth buying from them, taking a step off the beaten track and looking down some of the small arcades where many of those businesses are located.

Small business Saturday is not about saying that big businesses are bad, or suggesting that we do not need to support all our retailers. We are not in any way demeaning the contribution that big businesses make. What it says is that on one day every year, let us all take a bit of extra time to look at the hidden gems on our high streets or just off them. When we have visited them and perhaps spent money with them, we may return to them naturally because we found things that we did not know were out there. To my mind, that is what small business Saturday is all about.

[Andrew Bingham]

The hon. Gentleman is right. Our business did not want or expect special favours; we just wanted a fair chance to ask people to look at the product, to look at the price and to give us a fair crack of the whip. We just wanted an even playing field and a fair chance to compete with the big boys.

[Toby Perkins]

I am grateful to the hon. Gentleman for saying that because it fits in with something I will say in a few moments about the Government’s role of ensuring that all businesses in a free market get a fair chance. His contribution was powerful in several ways and I look forward to returning to it.

My hon. Friend the Member for Middlesbrough (Andy McDonald) reflected on the fact that small business owners often work incredibly long hours to keep the wheels of commerce turning, and he was right to point that out. He also said that they are often the last to be paid, both personally in terms of taking money out of the business, and often because they are way down the list of supplier payments. As he knows, the Labour party feels passionate about that, and there is a role for the Government to ensure that we do more to eradicate the scourge of late payment to small businesses.

The sense of excitement and anticipation my hon. Friend feels as he looks forward to small business Saturday positively crackled out of every word of his contribution. He demonstrated his wide-ranging—almost encyclopaedic—knowledge of the small businesses in Middlesbrough, and he particularly promoted the fabulous fashions available there. He did not let us know whether he was dressed in one of the latest of those fashions, but I suspect that he and my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who was here a moment ago, are examples of just some of the fashions available on the Middlesbrough high street, and what fine examples they are too.

The hon. Member for Cheadle (Mark Hunter) paid tribute to the businesses that go the extra mile. He made an incredibly important point about the contribution businesses often make to the vibrancy of the high street and the community by supporting initiatives, either with local authorities or as part of the business community, and business improvement districts have been important contributors in that respect. It is important that everyone gets together to make sure our high street has a vibrant offer.

Many hon. Members reflected on the progress that has been made on woman entrepreneurs and on their importance, and that is an incredibly important issue. One of the key challenges the country continues to face is how to develop women’s entrepreneurial potential further, particularly after they have had children. We continue to do less well than we could, because of the impact of child care costs and the fact that we are a time-poor society in many ways. Broadband is important, because women entrepreneurs often want to run businesses from home. There are therefore a huge number of challenges the Government should look to take up, and it is great that Members have reflected on the importance of the issue.