(5 years, 10 months ago)
Commons ChamberI thank the hon. Lady for her points, which she has raised with great sincerity and conviction, as always. I am sure that food is an important priority for the businesses in her constituency; it certainly is for many of us as well. She made an important point about discussions with small businesses. The Food Standards Agency, with whom I have been speaking this afternoon, is responsible for policy, and our local authorities work hard to take forward enforcement. In those conversations, it is clear that we are taking forward campaigns to improve awareness among consumers and businesses.
The hon. Lady also made important points about the steps that Pret a Manger is taking. It has set out what it is going to be doing initially, and it will—like the rest of us, particularly officials in the Department for Environment, Food and Rural Affairs—be studying the coroner’s report carefully, as it sets out some challenging conclusions. Pret will want to consider how it will approach its business in the light of those conclusions. I hope that I have set out clearly that it is a priority that we take action here, and as I have said, this is something the Secretary of State talked about in January, saying that we wanted to move this forward. Clearly, because of these tragic cases, that work needs to be accelerated with real pace.
These are tragic cases, and it is clear that the law needs to be updated. Will my hon. Friend tell us how quickly he expects the law to be changed in this regard? Will he also say more about what the Government are doing to provide guidance to retailers, to ensure that this type of tragedy does not happen again?
I thank my hon. Friend for his questions. As I have said, we are taking this review forward at pace, and it is now being accelerated so that we can take forward a review of food standards and food labelling at real pace.
The other thing that we have been doing—clearly, in the light of these cases, we need to do more—is to make consumers and businesses aware of the options available, particularly to consumers. It is worth highlighting that we need to find ways of communicating to 16 to 24-year-olds, who are very vulnerable, the ways in which they can find the important information that they need when making food choices.
(13 years, 11 months ago)
Westminster HallWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
I thank my hon. Friend for her comments, and I will be interested to hear the Minister’s views about HMRC. I, too, have heard of small firms in my constituency struggling to balance their cash flow when they have large VAT bills to honour.
We must acknowledge that we perhaps need to exert some influence on larger businesses over terms of credit and, as my hon. Friend the Member for Burton (Andrew Griffiths) put it, showing some social responsibility. However, we also need to acknowledge that the Government are limited in how far they can interfere with the way in which businesses are run. In addition, we need to be mindful of the global competitiveness of larger businesses in the modern day.
Will the Minister consider what the Government can do to encourage better payment terms for our small businesses? The extension of the credit terms and conditions of small businesses has inevitable consequences. It is vital that many firms be able immediately to access a bank overdraft when faced with the measures used by larger businesses. However, evidence from my constituency suggests that banks can be unwilling to give such credit facilities, even to long-standing businesses with strong trading records, without demanding security in the form of the business owner’s home, which is often quite an issue.
I have obtained information from the Forum of Private Business suggesting that interest rates on loans that are not secured against the business owner’s property can often be double those on loans secured against commercial or residential property, and one of my colleagues alluded to that. The problem is that many business owners, and particularly long-standing ones, do not necessarily want to put their homes on the line, particularly if they are reaching retirement age and do not consider it worth taking the risk.
That is what happened in the case of a manufacturing business in my constituency that I heard from during the general election campaign. The firm has not been afforded the credit that it needs, even though it has a strong order book. It has been trading for 50 years and employs about six people, but it is on the verge of ceasing to trade. It will close the doors and sell its commercial property because that is a better proposition for the business’s owner than keeping trading and employing people.
If such things keep happening, they will have an extremely negative effect, particularly in the engineering sector, where many small business owners are probably of a reasonable age, given the deteriorating uptake of new people into the industry. Many people will be in their late 50s or early 60s and might consider it better to close their firms than to keep going. That would have a very negative impact on what we are trying to achieve.
My hon. Friend makes some excellent points about the way in which banks are treating small businesses, and we have heard other examples from my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). Things are getting quite out of hand, and we are seeing similar examples in Macclesfield. Does my hon. Friend the Member for Nuneaton (Mr Jones) agree that we should perhaps work more closely with the Federation of Small Businesses and other industry groups to gather data so that we can put extra pressure on the banks and use an evidence-based approach to demonstrate to the Government what is actually going on? There are a lot of ad hoc data flying around, and we need to get them into a more user-friendly form so that we can use evidenced-based approaches to show what banks are doing. When we have the data, we will be better able to put further pressure on the Government and the banks to provide greater support to small businesses. I do not know whether my hon. Friend agrees with that sentiment.
I thank my hon. Friend for that intervention and agree with his sentiments. Later I shall talk about what I think is progress in that direction. I am sure that the Minister, who has had a lot to do, will be heartened by the quite positive comments I want to make.
As to firms in my constituency that have had problems with credit, I have been made aware of firms around the country whose credit facilities have been reviewed by banks at very short notice. Banks often vary overdraft terms without warning and dramatically increase loan rates at short notice, which makes it difficult for small businesses to respond. I have received figures from the Engineering Employers Federation that quantify those concerns. During the first quarter of this year the cost of finance increased for almost 35% of companies, whereas it decreased for only 3%. That is obviously difficult in the current economic climate. I fully understand that the banks are trying to repair their balance sheets, but at a time when we have the lowest interest rates in living memory, that seems counterproductive. It is no wonder that the number of complaints about banks by SMEs has risen in the past year by 119%. I am therefore heartened to see that, in their Green Paper “Financing a private sector recovery”, the Government have started to make the banks reconsider their position slightly. That is after much talk from the previous Government about making banks lend to small business, all of which seems to have had little effect.