Baroness Wilcox
Main Page: Baroness Wilcox (Conservative - Life peer)Small and Medium-sized Enterprises: Government Policy
Baroness Wilcox Excerpts
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, I congratulate the noble Lord, Lord Sugar, on securing this debate and giving us the opportunity to discuss these issues which are so critical to our country’s future. The noble Lord, Lord Graham of Edmonton, said the most encouraging things about the noble Lord, Lord Sugar; I shall leave that with him because he knows him so well. The noble Lord, Lord Graham, also spoke on behalf of credit unions and the Co-operative movement. I know him to be an expert and passionate supporter of them, and I wonder whether he will be prepared to let me write to him on them more fully after the debate.
Baroness Wilcox
The noble Lord, Lord Sugar, has done a huge amount through his success, his television work and in visits to schools and universities to inspire the next generation of British entrepreneurs and young apprentices. He spoke passionately about apprenticeships, and it is a passion that I share. I still have my father’s apprenticeship deeds as a journeyman carpenter. He eventually became a master cabinet-maker, and I remember how proud he was of that journey and how it prepared him to become the successful businessman that he was and to encourage his son and daughter to train well. Here I stand today, so I am very grateful to him and to the apprenticeship system as it was then.
Our Government has already announced that £150 million cut from the Train to Gain programme will be reinvested to create up to 50,000 new apprenticeship places this year. The Government are determined that small and medium-sized enterprises should be supported in securing apprenticeships, and that is why we intend to introduce an apprenticeship bonus to help small businesses to participate. We also want to overcome other barriers that may make it difficult for such companies to take on apprenticeships, as well as to ensure that the training received is of high quality and brings real benefits to the individuals and to the businesses concerned.
The noble Lord, Lord Harrison, spoke about skilled workers. The ability to think innovatively and entrepreneurially is highly valued by employers, and utilising the skills and ideas of their employees will help all businesses to grow. Skills provision and training need to be accessible, relevant and responsive to the needs of business, and we want to free colleges to be able to respond quickly and flexibly to the skills needed in their communities and to harness the power of sector skills councils to improve skills and qualifications at all levels.
On fostering enterprise and driving growth, as a Government we are ambitious for Britain’s future, but we recognise that the private, not the public, sector is best placed to generate prosperity and jobs. Ultimately, it is Britain’s 4.8 million small and medium-sized enterprises that will lead that recovery. We believe that government can most help those businesses by securing the best possible conditions for their success and then getting out of their way.
We want a rebalanced economy—one built on strong enterprise and balanced, sustainable growth across industries and our country, and not one built, as in the previous decade, on a debt-fuelled spending boom, an inflated housing market and an overleveraged banking sector. That means, first, tough talking and tough measures to tackle Britain’s budget deficit. Next week, the Chancellor will set out in an emergency Budget how we plan to cut the bulk of that debt over this Parliament. Such constructive action is essential to strengthen market confidence, bolster investment and give our entrepreneurs the space they need to start businesses and prosper. To that end, we have already identified and agreed to cut over £6 billion of wasteful spending across the public sector. This is, however, just one—albeit crucial—part of the work that we need to do to sustain our economic growth in the decades ahead.
We want the next decade to be the most entrepreneurial and dynamic in Britain’s history, and we are prepared to start now. We are building the competitive business environment to make it happen, so that Britain’s entrepreneurs can get the support and capabilities they need to start and grow a winning business, without the burden of unnecessary red tape and regulation. The noble Lord, Lord Taylor, talked about keeping life simple. He also talked about black and minority-ethnic entrepreneurs, and I agree with him that we can do more to help those underrepresented groups. That is why we have committed to setting up the targeted national enterprise mentoring scheme for black, Asian and minority-ethnic individuals who want to set up their own business.
The noble Baroness, Lady Gould, talked about women entrepreneurs, which was very pleasant for me to listen to, and I thank her for highlighting their importance. We want to maintain an open dialogue with female small business owners and entrepreneurs to hear directly from them what it is they need, and what they see as the key barriers to starting and growing their businesses—barriers like failure in the education system to build aspiration and skills, the need to promote suitable role models, and problems accessing finance.
In the coalition document we set out our commitment to get banks lending again to viable SMEs. The Government are determined to ensure that the banks, including those part-owned by the state, honour their agreements to supply credit on acceptable terms to SMEs. The noble Lords, Lord Sugar and Lord Taylor of Warwick, both raised the issue of the detail and nature of feedback given to SMEs when their applications for lending are turned down by banks. Currently, in the banks’ lending code, they will offer feedback should applications be rejected on request. In some cases the detail of this feedback is dependent on the size of the business. Smaller companies may get a brief automated response, while larger ones may get more comprehensive information on why their application was not approved. We are working to strengthen the voluntary codes with the banks, and this is ongoing. It is also important that banks recognise the need to rebuild trust and relations with their business customers, as well as continuing improvements to business education on financial matters. We will work with the industry to take that agenda forward.
With regard to the proposed credit adjudicator, we believe there would be serious market implications to the state intervening directly in banks’ commercial decisions, and that would not be appropriate. The creation of this body would also add to a field where professional support from trade bodies, accountants and financial advisers is available to help SMEs access credit. In our consideration of the most effective way to provide support and education to businesses, we will engage with these experts on provision of advice.
The noble Lord, Lord Sugar, spoke about efficiencies of Business Link. I share his view that there are efficiencies to be made in how we deliver business support. No decisions have yet been taken on this; however, the Government’s business support offer needs a rethink. We are prepared to do that and will look to him to help us, if he feels able to do so.
In this context, we must make sure that publicly funded support at all levels is more effective and works in partnership with private sector services. That is why we want to enable local authorities, located in natural economic areas, to work with business to form local enterprise partnerships. In reply to the noble Lord, Lord Corbett, these may cover the same geographical area as an existing RDA if that is what works best in that locality. Equally, however, they may take a different form elsewhere if that is what local business wants. We have an opportunity to create a modern, cost-effective business support system targeted at what business needs. It is a complex issue, however, as those of you who have been in government and have worked through this over the last 10 years will recognise. We need to consider all the options carefully and we will work closely with the business community. We are also in discussion with the RDAs as they continue to deliver existing business support services.
A World Economic Forum report now ranks the UK 84th out of 133 countries in terms of the competitiveness of our tax system, and 86th for regulation. These perceptions stifle good ideas and deter valuable investment and, over the next few months, we will reform our corporate tax system to make it more competitive, simplifying reliefs and allowances, and tackling avoidance to reduce headline rates.
We are already working to stop the most damaging effects of the previous Government’s tax on jobs. In addition, we want to make sure that all eligible small businesses benefit from small business rate relief, and we are looking for practical means to automate this, freeing up SMEs to get on with growing their own businesses. Taxing capital gains made by individuals and trusts helps raise revenue, ensures a fairer tax system, and reduces opportunity for tax avoidance. To be truly effective, however, a CGT system must also encourage enterprise and support entrepreneurship.
For business owners, entrepreneurs' relief provides a CGT rate of 10 per cent up to a lifetime limit of £2 million. This relief covers the vast majority of entrepreneurs in small and medium-sized enterprises. The coalition agreement commits the Government to maintaining generous reliefs for entrepreneurial business activities. Further detail on CGT reform will be provided at the emergency Budget on 22 June. I am obviously not able, therefore, to say more at this stage.
Our Government are also determined to make the UK the fastest place in the world to set up a business. We believe every small business could do more, and grow more, if small business owners did not have to spend so much time on pointless bureaucracy. We are starting a revolution in Whitehall. We are cutting red tape by introducing a “one in, one out” rule for regulations; we are empowering the public to challenge the worst regulations; we are ending the culture of tick-box regulation and, instead, targeting inspections on high-risk organisations. We are establishing a new committee of experts to end unnecessary regulation; we are imposing sunset clauses on regulations and regulators to ensure every regulation is regularly reviewed; we are ending gold-plating of European Union rules so that British businesses are not disadvantaged relative to their European competitors; and we are making it easier to set up a limited company with a new one-click registration process.
It does not end there. We want to open up the opportunities for Britain’s SMEs to sell their goods and services around the world with the support of UKTI, and to enable these companies to win their share of valuable public sector contracts right here at home. We are the first Government to set out an ambition that 25 per cent of government contracts should go to SMEs. We are also going to do whatever we can to make it simpler for more of Britain’s small and medium firms to bid for, and secure, this business.
In conclusion, our commitment to a five-year coalition Government gives us, I believe, the long-term institutional stability necessary to make the right choices about the future for our country. We know what we need to do and what the private sector wants us to do. This Government are focused on restoring balanced, sustainable growth to Britain’s economy and fostering enterprise must be at the heart of our efforts.
I again thank the noble Lord, Lord Sugar, and all noble Lords for their valuable contributions to this important and interesting debate. I have been able to answer only one or two questions in the time allocated to me and I hope that your Lordships will allow me to write in reply to those I have not answered.