Lord Graham of Edmonton
Main Page: Lord Graham of Edmonton (Labour - Life peer)Small and Medium-sized Enterprises: Government Policy
Lord Graham of Edmonton Excerpts
Lord Graham of Edmonton
My Lords, it is a joy and a pleasure to speak in this debate initiated by my good friend the noble Lord, Lord Sugar. When I first met him in the House, I looked him straight in the face and said, “PCW 9512 - Amstrad”. He laughed and said, “You haven’t still got one of those, have you?”. I said, “Yes. For our ruby wedding anniversary 20 years ago, my wife bought one of these and, give or take the odd little hiccup, it has served me well”. He said, “Get another one. Bring it up to date. There are better models out now”. He tried very hard but failed. I am sorry to say to my noble friend that it still works and gives me pleasure.
By now, my noble friend Lord Sugar should know that if you come into this House preceded by a reputation and a record of achievement, that speaks much louder than the words that you use and the speeches that you make. So we thank him very much for initiating this debate and for opening it so brilliantly.
I see from the Annunciator that the subject of the debate is “The Effect of Government Policies on Entrepreneurship and Small and Medium-Sized Businesses”. Of course, one cannot cover the whole spectrum, but we have had a feast today with various people speaking from different points of view. However, I want to speak from the perspective of the small business that has grown into a big business, and, with the support of this Government, as with the previous Government, there is more to come. I refer to credit unions and co-operatives. I tried to intervene during a Question on that subject this morning but did not manage to do so. The point I was going to make was that only last year the Department for Work and Pensions reported that those who used the services of a credit union paid £86 million less in a year than they would have done if they had borrowed the money from what one might call loans sharks, or small businesses that appear to be generous and fair but are not. In the context of the billions that we are talking about, £86 million is not a lot of money, but I am talking about little people.
Coming from the background that I did, one thing that inspired me was the realisation that one needs capital and capitalists, as well as big business and experience. We should not forget that invariably every big business was once a small business that was well managed, well directed and lucky, where those running it hit upon something that was not already available.
My main experience is of the Co-operative movement, and I shall come to that in a moment. However, in my view credit unions are a success story, and I know, because of what she said earlier, that the Minister will agree that they need to be encouraged and supported. I am not talking about large sums of money; I am talking about being loved and wanted and being part of the big picture. Nothing has pleased me more in life than going into a boardroom or a committee meeting and coming across what I would call ordinary people—men and women who have no pretence to be accountants or experts—who have taken on the running of a business, such as one in the Co-operative movement or a credit union, and are doing so because their heart is in it. They are not in it to get big fees or to make a profit from selling shares but because they know that their community needs it to keep going.
When I was very heavily involved in the Co-operative movement, there was a saying that the Co-op never made a millionaire or a pauper. I would rephrase the first part, as I think that they have made a few millionaires over the past few years. However, because of the soundness and ambition of the people that run them, no one has ever lost their money. I am talking about ordinary people who see a need in their community.
In Rochdale in 1844, weavers and mill workers, bereft of what you might call the wherewithal, having been failed by the churches and the Chartists, decided to form a co-operative, and from 28 people the movement grew. Now, the Co-operative movement is big business. It takes over building societies and successful retailers; it employs hundreds of thousands of people; and it is a success story. It has ambition. The great ambition of the Co-operative movement is to become mainstream in relation to the business community. What does that mean? It means simply that our rules, regulations and legislation have inhibited the spread of co-operatives. When the Minister replies, it would be helpful if she could say something about the ongoing relationship between the Government, the departments and the Co-operative movement.
At one time we knew the Co-operative movement as the CWS, the Co-operative Wholesale Society. It has now changed its name to the Co-operative group. When I was involved, the other body was the Co-operative Union which changed its name to Co-operatives UK. It is astounding that, many years ago, if one talked about the Co-op, one simply referred to the shop on the corner because, in the main, the Co-op was primarily a consumer-oriented business. We now know that the Co-operative movement is much more than that. It has always been and still is the biggest farmer—not a landowner—in the country. It has a big business in banking and insurance. I am not taking this as an opportunity to knock the banks, bankers or big institutions. Their reputation has taken a knock recently and people are examining the term “trust” in relation to the banks.
This could be a golden opportunity for the expansion of people-oriented businesses. What do I mean by that? The amount of money required to establish a credit union is very small, but they do a big job. I do not wish to bore the House, but I have some statistics. Partnerships with credit unions are big business: 60 per cent of credit unions work with schools; 60 per cent with employers; 57 per cent with housing associations; 50 per cent with citizens advice bureaux; 26 per cent with Jobcentre Plus; and 12 per cent with prisons.
The idea of a credit union is that one regularly contributes a small amount of money and so has access to loans. Twenty years ago, one of the fears was that they were being run by amateurs, people who did not understand accountancy and so on. That has all changed. They are now very successful businesses. Perhaps the Minister could tell us about the marvellous concept of marrying the credit unions with the Post Office network. The Post Office is struggling to maintain business, but with the nexus of credit unions, it could provide a banking service, built on reserves and backing from a wider movement. It could be a kind of people's bank, and it would be an opportunity to marry the two together.
I see that my time is up, although there is a great deal more that I could say. I am grateful to the Minister, who is a friend of mine. I respect her record in this area. I know that she will be good for the department where she works. I thank my noble friend Lord Sugar, as his presence in this House will be good for all of us.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, I congratulate the noble Lord, Lord Sugar, on securing this debate and giving us the opportunity to discuss these issues which are so critical to our country’s future. The noble Lord, Lord Graham of Edmonton, said the most encouraging things about the noble Lord, Lord Sugar; I shall leave that with him because he knows him so well. The noble Lord, Lord Graham, also spoke on behalf of credit unions and the Co-operative movement. I know him to be an expert and passionate supporter of them, and I wonder whether he will be prepared to let me write to him on them more fully after the debate.