Economy

Lord Cotter Excerpts

Thursday 10th September 2015 Lords Chamber

[Lord Cotter (LD)]

My Lords, today we are considering the economy. Growth is generated through businesses, of course, but the Government, as ever, have a role to play. SMEs are crucial, so the Government’s commitment in the Queen’s Speech to cut red tape for business by £10 billion is very important. So often business has been held back by unnecessary red tape and bureaucracy—I have experienced that myself in another life. Many Governments before have said that they will cut red tape, but this time I look to our Government to give us feedback and indicate how the cut-back is being achieved.

It was interesting that the Government said they would create a small business conciliation service to help settle disputes between small and large businesses. That initially brings to mind a continuing problem for SMEs—namely, the late payment of debt, which is a frequent problem that arises between small and large businesses. The larger-capacity businesses have the money but they often do not pay their debts promptly, and I look to the conciliation service as perhaps a way forward. Business Ministers have in recent times addressed FTSE companies, urging the many which have not done so to sign up to and implement the Prompt Payment Code. I ask the Minister how successful their request to FTSE companies has been and whether they will carry on pressurising those big companies to pay their debts on time.

There is much to say on the economy but I shall touch on just one or two other points. The need for exports to increase is key, as is enabling, helping and encouraging the business sector to get finance specifically for exports. I know that many smaller companies are discouraged from exporting for lots of different reasons, among which is the need to get finance to expand their exports. I ran a small business and at the time we were fairly fortunate in being able to export for various reasons. Therefore, there is a need for UK export finance to be brought on to a par with the world’s best export financial agencies.

Productivity has been debated already. At this stage, I thank the noble Lord, Lord Haskel, very much for initiating this debate and for the points that he made on productivity. I agree very much with him that lack of productivity can sometimes be the result of poor workplace relations. I had experience of that some years ago when I was asked to take on, as managing director, a small manufacturing company which for decades had been run poorly by management on a “them and us” basis. The approach from the top was very poor and the workforce naturally felt disengaged and uninspired to work hard. In a short time, having been asked to take on the company as managing director, I changed all that, establishing a very different culture of working as a team. Within a very short time, the company lifted off, and I was able to achieve that through my long-standing commitment—in thought anyway—to a team approach, not a “them and us” approach, when it came to business. Therefore, I hope that management training nowadays emphasises, among other issues, how important it is to have good workplace and management relations.