Small Businesses

Justin Tomlinson Excerpts

Thursday 28th November 2013 Commons Chamber

[Justin Tomlinson (North Swindon) (Con)]

It is a real pleasure to have the opportunity to speak now, which is in no small part because I am due in Westminster Hall at 3 o’clock to lead a debate on retail and the high street. I shall therefore be relatively brief. I pay tribute to my hon. Friend the Member for Newton Abbot (Anne Marie Morris) not only for securing this debate, but for delivering a speech in which she was characteristically passionate about business. It is a credit to her campaign that so many Members on both sides of the House have come to support today’s important debate.

I am passionate about this subject. At school, I was for ever wheeling and dealing. If anyone needed anything, I was the man to speak to. Shortly after graduating, I set up my own printing and marketing company, which employed local people in my constituency. I sold it as soon as I got elected, however; it is a busy lark being an MP. I was incredibly proud to be given the opportunity to be a small business ambassador and, obviously, to work with the fantastic Minister for Skills and Enterprise, as well as the inspirational Karren Brady, which certainly impressed my wife, who very much liked her book.

I want to talk about some of the positive things the Government have done. We can all celebrate the fact that there are more than 400,000 new businesses, which have helped to create 1.4 million new jobs. The new employment allowance, which comes in on 1 January, is a welcome measure from the Government that will help to push that even further forward. We can celebrate the fact that we now have an extra 500,000 apprenticeships. The start-up loans scheme has celebrated its 10,000th loan, with its loans totalling £50 million. Crucially, that scheme has allowed those 10,000 firms to take on a further 10,000 people, so for each new firm, an additional job has been created, which is fantastic. The red tape challenge is also brilliant, not least because we have asked businesses to suggest which pieces of red tape need to be removed.

[Neil Parish (Tiverton and Honiton) (Con)]

My hon. Friend is making very good points, and I would also like to congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing the debate. Many small businesses and micro-businesses believe that they get by despite the actions of the Government, rather than because of them, so all the things that we are doing to roll back red tape are absolutely right. Small businesses are creating jobs, but they want to be loved, especially by the Government. Over the years they have not felt loved, and that is what I am looking to the Minister and the Government to deliver.

[Justin Tomlinson]

I very much love businesses, so I will send some love to my hon. Friend’s constituency.

It is great that businesses are suggesting the areas of red tape that need to be looked at, because they are very much at the coal face. Removing two regulations for every one introduced is a real challenge, but the initiative has certainly been welcomed by businesses in my constituency.

Several Members have talked about opening up local authority procurement, which is worth about £4.4 billion a year, and the Government have the commendable aim of getting SME participation in that to about 25%. My hon. Friend the Member for High Peak (Andrew Bingham), who has had to leave the Chamber, has got hold of some of the forms that small businesses have to fill in when bidding for such contracts. I know that, when I ran a business, it simply was not worth the hassle.

I also very much welcome the increase in the annual investment allowance from £25,000 to £250,000. One problem that we identified was the fact that, for the first time in living memory, businesses had more money in their current accounts than they were choosing to borrow, because they were worried about uncertainty in the market. Increasing the allowance is a brilliant way to encourage businesses to start unlocking some of that money, which will drive forward growth.

Cutting corporation tax always brings a cheer from Conservative Members. Although Labour says that it supports business, it is telling that that support seems to vanish as soon as a business makes a profit. I also welcome the extension of small business rate relief.

[Toby Perkins (Chesterfield) (Lab)]

The hon. Gentleman talks about corporation tax. Will he tell the House the rate of corporation tax when Labour came to power in 1997, and what it was when we left office in 2010?

[Justin Tomlinson]

I can tell the hon. Gentleman that, by 2015, we will have the lowest corporation tax market in the G8. That is what businesses are talking about, and I very much hope that the hon. Gentleman will join us in supporting that aim.

Many Members have highlighted the need to look at business rates. Greater minds than mine will solve the dilemma, but it is important to recognise that the world is changing. My hon. Friend the Member for Colchester (Sir Bob Russell) mentioned Amazon’s advantages over a traditional high street retailer because of the business rates that it pays. We must recognise that the world is changing and take that into account if we are to achieve a fair business rates system. The 27,000 business mentors are also crucial—I will come back to that subject in a moment—and the enterprise zones and the regional growth fund are kick-starting growth in key areas, which is most welcome.

Staying with the good things, I know that the Minister is particularly excited about the request that I am about to make—it is one that I make repeatedly—and that he is absolutely going to deliver on it. We as a Government are doing many good things, but business people are by their nature extremely busy and, all too often, these good schemes simply pass them by. However, the one thing that they cannot avoid is their bills, and every year they are sent a business rates bill. Even if they have nothing to pay, they are sent a bill telling them how much they would have had to pay but for the fact that the Government are allowing them not to do so. We should be communicating all the Government’s schemes through that mailer. The taxpayer has already paid for the mail, so let us include with it information on all the things that we are encouraging businesses to sign up for, and particularly on the advantages of taking on apprentices and of working with UKTI to develop exports.

I want briefly to focus on championing young entrepreneurs. I was the only one of the 350 students on my business degree course who went on to set up their own business. We all arrived at university keen to do just that, but we had entrepreneurial flair and risk-taking talked out of us. I obviously was not paying enough attention, because I ended up running my own business. The Government help to fund an organisation called the National Association of College and University Entrepreneurs, which encourages young people to take up practical, real-life opportunities for running a business. I have met a number of the young people who have taken advantage of those opportunities and who are now going on to be part of the next generation of wealth generators.

We need to look at what happens in business degrees. Along with all my fellow students, I was given a placement job in the corporate environment, rather than having the opportunity to test running my own business. We could use spare space at a university to run a retail business—that is very apt, given my forthcoming Westminster Hall debate. We could also consider whether part of a placement year could be spent running a business, as that might allow us to encourage a few more of those potential young entrepreneurs to take the step towards that.

We can also do a lot more for people before they go to university. For people who want to go to university, the UCAS system is in place—the conveyor belt is there. People choose their course and, if they get their grades, they head off to university. If people want to be an apprentice, they can look at the fantastic websites available, see what type of thing they would like to be an apprentice in, and go forward to the interviews. However, if someone wants to start their own business, it is pretty much up to them to work out how to do that, so we need to do a lot more to get those 20,000 business mentors to young people.

We have to celebrate schemes such as the Young Enterprise challenge, but we need to ensure that they are not just a one-off opportunity for enjoyment. I took part when I was at school—we worked for a week, made quite a bit of money and really enjoyed it. I recently did something with Swindon college students whereby we got stalls in the local market—a tough trading environment. Seven teams were each given £10 of seed money, and all the money raised on the day went to charity. We raised about £800 for the Prospect hospice, but the crucial bit was that we did not have mentors just at the beginning; we had them at the end.

One lady called Jessica ran a cake stall. Millions of people think about running such a stall, but she realised that the market had an older customer base, so she set up a 1950s-themed cake stall. She made more than £100 on the day. She realised that she had the customer service ability, the skills and the innovation to set up her own business, and now that she has finished at college, she has set up the Little Lemon & Poppy Bakery. We made sure that mentors were in place to help to guide her after she used her initial burst of enthusiasm and went on to do that. I ask the Minister to do all that he can to encourage young people. They have the energy and the enthusiasm, so let us make sure they are a key part of that next generation of wealth generators.

[Several hon. Members]

rose—