Small Businesses

Debate between John Stevenson and Anne Marie Morris

Thursday 28th November 2013 Commons Chamber

[Anne Marie Morris]

My hon. Friend makes a valuable point.

The next area that should be addressed is the VAT cliff: if a business’s turnover reaches £79,000, it is suddenly hit by having to find VAT. It will hardly want to increase prices to its customers by 20% overnight. We could have a ratchet mechanism or go to the EU, which would be perfectly possible. I urge the Government to do so, because we need a derogation.

The Government, but particularly the Treasury, should consider the removal of class 2 national insurance contributions. The self-employed have to pay two classes of contributions, and they find that incredibly confusing. We have a great record on corporation tax, but could we not do more, including by looking at a new, simplified flat tax for the smallest businesses?

We should talk not only about BIS and the Treasury, but the Department for Education, because education is critical to our having a true and sustainable supply of new small businesses. The Government’s introduction of financial education is a fantastic first step, but that is only one piece of the enterprise skill set that an entrepreneur needs.

It is great that apprenticeship schemes have grown under this Government, with 858,000 individuals participating in those schemes this year, but we need more. We need enterprise education for six to 60-year-olds. The World Economic Forum has recommended that there should be enterprise education in every country throughout the period of education. I suggest that we ask Ofsted, which looks at community engagement to measure what schools do, to consider not only that point but business engagement as well.

In relation to funding in the tertiary sector, we should also look at whether institutions are offering enterprise education, which I believe should be available whatever discipline students are reading. Although I applaud Lord Young’s comments about business schools taking a lead, we should remember that they are not the only such place. There is a role for universities to work much more closely with local enterprise partnerships, a point to which I shall return.

[John Stevenson (Carlisle) (Con)]

Does my hon. Friend agree that in many cases it would be beneficial for universities to be represented on LEP boards?

[Anne Marie Morris]

That is an excellent idea.

The Department for Work and Pensions also has a role to play. It has done some good things—it has delayed auto-enrolment for pensions, and we heard this morning that there may be a cap on pension charges—but the Work programme needs to offer the potential for proper self-employment. Research undertaken by the all-party group on micro-businesses has found that almost half of the businesses offering the Work programme did not have an adequate skill base to enable people to go back into work as self-employed individuals. The DWP could consider what it might do to help late returners. Organisations such as PRIME—the Prince’s Initiative for Mature Enterprise—help them to return to work, but there is very little else, although that matter is important.

Let us not forget the Department for Culture, Media and Sport. It has done some great things for businesses. High-speed broadband is absolutely critical, and the fact that there are now broadband connection vouchers for small businesses in 22 cities is very welcome. However, more is needed, because rural areas are really suffering.