Small Businesses

Chloe Smith Excerpts

Thursday 28th November 2013 Commons Chamber

[Chloe Smith (Norwich North) (Con)]

I think that this is my first opportunity to congratulate you on taking the Chair, Madam Deputy Speaker. I also congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing the debate and all those who supported her at the Backbench Business Committee. To pick up on just one of the points that she made, I agree about the difficulties that are presented by the VAT threshold, which I saw recently in the case of a meals on wheels business that serves my constituents. It is just about to hit the threshold, but its customers are ill-equipped to deal with a hike in prices.

Like my hon. Friend, I look forward to celebrating small business Saturday in my constituency. I also look forward to a discussion that will take place shortly at Norwich business school, whose advisory board I sit on, about how such business schools can be anchor institutions for the small firms in their surrounding area.

In the report, “Growing Your Business”, Lord Young of Graffham drew out just how much more there is to do to open up public procurement to small and medium-sized firms. My hon. Friend the Member for Newton Abbot mentioned the Cabinet Office at the end of her comprehensive list, and I am sure that she would join me in congratulating the Minister for the Cabinet Office and Paymaster General on his work to give 25% of Government business to small and medium-sized enterprises. Surprisingly, it is often forgotten that the Government buy large quantities of goods and services on behalf of taxpayers, and there is no reason why small and medium-sized businesses should not take pride of place in that marketplace.

[Andrew Bingham (High Peak) (Con)]

Does my hon. Friend agree that small businesses find it difficult to deal with Government agencies because they are presented with a bewildering array of things such as pre-qualification questionnaires? Small and micro-businesses do not have a huge army of staff to deal with such nonsense, which increases costs not only for business, but for the Government, because they could have bought what they needed cheaper from a small business in the first place.

[Chloe Smith]

My hon. Friend could not have made a better intervention because I was pleased to be able to contribute to solving that exact problem when I was a Cabinet Office Minister.

Given a few tools, we can all do much more in our constituencies, and Lord Young is continuing to work on that issue in association with my hon. Friend the Minister for Skills and Enterprise. We must encourage small and medium-sized firms to use Contracts Finder, on which they will find a clear record of all available Government contracts. We should urge local authorities and others to put their contracts on that portal to allow the operation of a comprehensive marketplace.

We should also encourage constituency businesses to use the mystery shopper scheme that the Cabinet Office has introduced, which will help to solve the problem raised by my hon. Friend the Member for Newton Abbot. When small businesses that seek simply to get on and do business encounter poor practice or communication from the public sector, they need a way to solve the problem. The mystery shopper scheme does exactly that, and also gives us a chance to do more to encourage public authorities—whether local government, health, police or fire services, or any similar service—to do more to make their procurement SME-friendly.

Small firms can encounter many problems such as the prevalence of pre-qualification questionnaires and late payment. A care company in my constituency deals with customers who are particularly vulnerable, and tragic havoc can be wrought if a health body makes a late payment to such a company. The motion rightly calls on local government to do its part, and I suggest that better procurement forms an important part of that.

[Mark Pawsey]

My hon. Friend mentioned pre-qualification questionnaires. Once a small business has managed to jump through the hoops demanded by one authority, should not that be good enough for another authority? Perhaps we should have some form of qualification certificate.

[Chloe Smith]

That is my view. To the best of my knowledge, the Government are bringing forward proposals to put in place exactly that, which I support wholeheartedly, having started that work some months ago.

The motion refers to red tape, but again there is no way to solve that problem except through a methodical approach. I applaud the opening provided by the mystery shopper service to which I referred as it allows us to be methodical by making a list of things that have gone wrong and solving them one by one. That is the only approach that will work for regulatory problems. We must hear from small firms that regulations have served ill, and then we can go about solving the problems. I always say as a constituency MP that I cannot attempt to help a constituent to solve something if I do not know the detail of what the problem is.

Like many others, I am sure, I encourage firms to use the red tape challenge that the Government have rightly set up, and I welcome the results of the initiative so far. To date, more than 3,500 regulations have been identified for reform, saving businesses more than £215 million per year. That is worth doing, and I am sure that the Minister will update the House about how we can extend that approach to European regulatory burdens. On behalf of my constituency businesses, I care very much about that issue.

In the remaining two minutes available, I will conclude by talking about recruitment, which is crucial for small and medium-sized firms. Of course we all want such businesses to become larger firms, if that is their ambition, but to do so they need great people to become their employees. I run a large campaign in my constituency called Norwich for Jobs, which does what it says on the tin. It seeks to create more jobs in Norwich, especially for those aged 18 to 24, and we aim to halve youth unemployment in Norwich in two years. I am pleased that local firms have responded to the call and that more than 800 jobs and apprenticeships have been pledged to the campaign. Although the campaign has been going for only 10 months, 400 young people have been helped into work so far. I want to ensure that small firms have pride of place in that campaign. I will soon run an event with the Federation of Small Businesses and a sister campaign called Swarm. We will consider how to encourage small businesses into such operations, and help them to find the talent they need among local young people. That not only helps the community and young people, but places small businesses in control of their recruitment.

I hail the £2,000 reduction in national insurance that is coming forward in the shape of the enterprise allowance, which will be important for cutting small firms’ jobs tax from Easter next year. I also note the success of start-up loans. So far there have been about 30 of them in Norwich, and 10,000 nationally, which is to be welcomed as it is all to the good of small businesses.