Businesses: Small and Medium-Sized Enterprises

Lord Cotter Excerpts

Tuesday 6th May 2014 Lords Chamber

[Lord Cotter (LD)]

I thank the noble Lord, Lord Cope, for initiating this very important debate. It is very important for our country’s growth and it is so essential that the committee has addressed the issue of exports.

SMEs in particular need every possible help they can get to enable them to negotiate such a difficult and challenging path of business growth. There are many issues to raise and I shall quote from the Federation of Small Businesses which made four key points. It called for more effective sign-posting of existing export support and said that finance is important for small businesses. It talked about more effective targeting of support to microbusiness exporters and said that UKTI should perhaps consider setting up a microbusiness first-time exporter desk in each region so that businesses starting out had an accessible place to go for advice. It also wanted more readily available advice on export finance at local level with the UK export finance regional advisers.

A number of colleagues have already raised the issue of financing. It is a continuing issue for SMEs generally. The business bank was mentioned in the report. In practical terms, will the Minister say how the business bank is operating, in particular with regard to exports? How is it bedding down and doing the work that it needs to do? When it comes to finance for SMEs, in times past there used to be a strong local focus, whereby the local branch manager generally had a good understanding of local businesses. I can attest to that as back in the 1980s and 1990s I was managing director of a small plastics manufacturing company of tubing, cables, and such like, which went to the aircraft and defence industries. We were able to export successfully, but it was very much with the help of a local bank and a local bank manager. The importance of regional finance is just as important today.

Perhaps I may raise a general point on the issue of late payment, which particularly affects small businesses. It comes to quite a point of concern when many small businesses have to wait for 30 or even 60 days to get paid by big contractors, some of which have been given contracts by the Government. This is a general issue, but of course if a small firm has difficulty in financing, it will have difficulty in being able to export.

Will the Minister look into a specific issue that came into the report about UKTI and the Overseas Market Introduction Service? Concern about the Government’s discount scheme, which is covered by OMIS, has been raised because until recently the Government had a discounting scheme whereby 50% was taken off the charge by OMIS to small businesses with their first order. I understand that will not continue after 31 March because the Government say that discounting is not sustainable. But it is really helpful as a doorway for those firms that need this help to get it. Has there been any assessment of how discounting has helped in the past in increasing exporting? It is so important for businesses and this country. Has an examination been done about how the discounting, which will no longer be available, has helped?

Many points have been made by colleagues and we look forward after this debate to the Minister and the Government looking to address the many issues that have been raised. In passing, I would like to ask the Government whether they feel that the local enterprise partnerships have a strong enough focus on export towards the firms in their areas. This debate has been very worth while and I hope that it will encourage more and renewed efforts to help SMEs to export.