Self-Employment

Julian Smith Excerpts

Tuesday 24th January 2012 Westminster Hall

[Richard Harrington]

That is a very valid point. It could help and it is part of the whole picture that I want to build up in this brief speech.

We have to tell young people that setting up a business and employing people is socially acceptable and good for the country, and that they will make a lot of money. If they want fast cars, big houses and all that stuff, providing they pay their taxes, well done to them. It is very easy in politics to take examples of capitalism not working, of people being paid large amounts of money without doing much work for it and of people avoiding tax. We all have our views on those things and I think that everyone would agree that many of those issues need correcting. However, my fear is that such matters help to fuel the view among young people that business is not a very cool thing to be in, which is not right.

A socially responsible young person should be told, “Yes, you can do the kind of occupation that is directly socially responsible. You can be a teacher; you can be a nurse; you can qualify as a doctor and help to cure cancer; you can be a social worker. Those are all very good. But if you decide that you want to go into business and employ people, providing you pay your taxes, that is as much use to the country, if not more, because you are helping many people in their way of life. You are helping to fund the teachers, the doctors and the social workers and it is a very, very creditable thing to do.” Society should say to such a young person, “Well done to you. You have done something that is very worth while. Do not believe the stuff about Gordon Gekko and greed is bad. Actually, greed is quite good. Providing you pay your taxes and employ people, you are really contributing a lot to society.”

One of the big problems in this country is leaping over that barrier to make people think. Let us consider the notion of wanting things. People will only go into business to make money. I did it to make money. I did it because I did not have any money, and I did not like not having it. There is nothing wrong with that. People have to understand that going into business is a good thing to do. When I got my business to the level of employing 600 people, it was a constant nightmare. I was often worried. I did not sleep at night for thinking, “Have I done the right thing?” My wife once told me at 4 o’clock in the morning—she did not help matters; she never says things at 4 o’clock in the morning that help matters—that I was directly responsible for the lives of nearly 2,000 people. That is quite a burden of responsibility. People might think, “He’s filthy rich,” or, “He makes loads of money.” However, whatever people think and say about those in business, they do not believe that they are performing a socially responsible function.

I want the Government and all of us who are in the opinion-forming business—that is what politics is, irrespective of what party hon. Members belong to—to realise that something has to be done to change that attitude, because it is in the national interest.

[Julian Smith (Skipton and Ripon) (Con)]

Does my hon. Friend agree that teachers have a major role to play? What does he think teachers need to be doing and saying to young people on the subject of enterprise?

[Richard Harrington]

I thank my hon. Friend for that comment. The problem is that teachers by definition have chosen teaching as a career, so it is very hard for them to communicate on that. I do not want to take much more of this Chamber’s time, but I will come on to a proposal that I think answers my hon. Friend’s question.

I am not being critical of what the Government are doing. Yesterday, the Prime Minister and other Ministers made an announcement about this year being the year of the business and said that a minibus will go around different institutions, helping to give people the idea to set up businesses. All that is very good, but the cream of young people who are thinking, “I’m going to go to Goldman Sachs,” or, “I’m going to become a top man or woman at the Bar,” or, “I’m going to be a partner at Deloitte,” need to think, “Actually, the status of my setting up my own business and employing people will launch me to a higher level in society. I will be applauded and not thought of as a person who tries to avoid taxes and should hide the fact they have bought a decent car.”

The last vestige of the class system in this country is contained in the attitude that business is a bit grubby, something to be looked down and not something that proper chaps do. Until we change that attitude, we will not have enough people setting up businesses, employing people and providing the growth that we need in the future.

--- Later in debate ---

[Mark Garnier]

Yes, absolutely. I agree with the hon. Lady. She is absolutely right on UK regulation, but we should also do that on European regulation. We simply cannot have endless regulation coming through, and we really need to see whether it is worth having.

[Julian Smith]

Does my hon. Friend agree that, with very small businesses and start-ups, the Government might need to be more radical than they are being at the moment? On issues such as flexible working and the right to request training, there may be an argument for exempting very small businesses and new businesses from legislation. We should seriously think about more radical measures, such as making it easier for small businesses to get rid of staff. That is politically difficult, but I would like to encourage the Government to think carefully about those proposals from Adrian Beecroft.

[Mark Garnier]

My hon. Friend could have been reading my speech, because my very next point was exactly that. It is vital that we help businesses. Ronald Reagan introduced a law under which businesses with fewer than five employees were exempt from a lot of business regulation, and he increased the number of jobs by 30 million as a direct result.

On a practical point that is deliverable, rather than necessarily doing something wholesale, it is vital that we have a system under which we exempt micro-businesses with fewer than, say, five employees from new legislation. We should also give such businesses a holiday when new measures are introduced. If we introduce new regulation—to follow on from the comments of the hon. Member for Solihull (Lorely Burt)—we need to see how it beds down with those organisations that can afford to implement it. If it works and it is sensible, we can translate it through to smaller businesses when we know how to implement it. We should not load it on to small business right at the beginning and expect them to tackle it and to be the crash-test dummies, when they do not really have the resources to deal with such regulations.

Another problem with regulation is that its introduction is like Chinese water torture, with one drip after another throughout the year. It is quite difficult for many businesses to tackle that drip-feeding of regulation. If we are to bring in regulation, we should bring it once a year. That would make it a lot easier for businesses to focus and comply.

Finally, there is no doubt that the Government have plenty of opportunities to help businesses on cash-flow issues. They have quite a lot of money, although, admittedly, not as much as they used to, and they have a useful cash flow. When they take on contractors, particularly SME contractors, they could achieve a number of things by having a process whereby invoices were paid within 10 days. First, that would set an incredibly good example to the business community and show that early payment is important. Secondly, the Government could push such early-term payments from the contractors to the sub-contractors. Such a process would also give them the ability to persuade their sub-contractors and contractors to sign up to an agreement to help businesses by adopting better payment terms. Those are just a few suggestions, and I am sure that hon. Members will have many others.

I am heartened to see the Minister in his place. He has been in the private sector and has worked hard in business in the past. It is incredibly heartening to see so many business people here, including the Minister. I have every confidence that he will have some helpful comments when he winds up. Much more importantly, when he goes back to his civil servants, he will have a zeal and an enthusiasm for helping small businesses that can come only from somebody who has first-hand experience of the business world.