Oral Answers to Questions

Mark Pawsey Excerpts

Monday 15th June 2015 Commons Chamber

[Nicky Morgan]

I welcome the hon. Lady to her position. The answer is 133. As I have set out, this Government take swift action to turn around all failing academies, and we want that same opportunity for children who are in failing local authority maintained schools.

[Mark Pawsey (Rugby) (Con)]

T7. Many parents in Rugby have told me of their concerns about the dangers posed by congestion around school gates as they drop off their children for school. What steps is the Secretary of State taking to encourage more children to walk and cycle to school? What discussions has she had with other Departments about enforcing parking restrictions around school gates?

[The Minister for Schools (Mr Nick Gibb)]

I am grateful to my hon. Friend for raising this issue, because we have the same problem in my constituency, too. The local authority is responsible for enforcing parking restrictions around schools, and it should do that. The authority must also promote sustainable travel and transport, in order to reduce the number of car journeys to schools.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 26th February 2015 Commons Chamber

[Mr Speaker]

I do not know why that question was not grouped with Questions 12 and 13—these people are sometimes a law unto themselves—but if the Members who tabled those questions wish to come in, they are welcome to do so.

[Mark Pawsey (Rugby) (Con)]

12. Today the civic buildings and street lamps across Rugby are festooned with dressing for the rugby world cup, which will be held later this year, celebrating Rugby’s status as the home of the game. During the tournament, visitors will be able to visit a fan zone and see where it all started back in 1823. Does the Minister agree that people coming to this, the third largest sporting event, provides a valuable economic opportunity not only to Rugby, but to venues across the UK?

[Mrs Grant]

Yes, I absolutely agree. These major sporting events are absolutely fabulous for the economy and for tourism, and of course they inspire people to participate in sport.

Grammar School Funding

Mark Pawsey Excerpts

Tuesday 13th January 2015 Westminster Hall

[Mark Pawsey (Rugby) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I add to the congratulations given to my hon. Friend the Member for Gainsborough (Sir Edward Leigh) on bringing this important issue forward at this time, when there a great deal of interest in the role of and proposals for grammar schools.

I am fortunate to have grammar schools in my constituency, and they remain extremely popular. One measure of that popularity is the distances from which parents apply to them because of the high quality of education pupils receive there. Like other Members who have spoken, I should declare an interest, as I am going to give some examples from the grammar school in Rugby where my own daughter is a pupil.

As with other grammar schools, a feature of grammar schools in Rugby is that their sixth forms are very large. They provide post-16 education for many feeder schools across the town, and those who start their secondary education in one of our—very good quality—comprehensive schools very much aspire to have the opportunity to move to a grammar school sixth form, so sixth-form funding is particularly important.

We had a previous debate about funding for education in this Parliament, and the cross-party F40 campaign—a very effective campaign organised in this place by my hon. Friend the Member for Worcester (Mr Walker)—has drawn attention to the differences in education funding per head. The Government have, appropriately, provided an extra £390 million for the 69 worst-funded authorities, of which Warwickshire is one. That is a welcome attempt to address the problem, but it is not a cure, as substantial differences remain in per-pupil funding.

To give a local example, the average student is allocated £917 less funding in Warwickshire than the self-same student would be allocated in Birmingham, a difference of 21%. There is no dispute today that the impact of deprivation needs to be addressed and that additional resources should be targeted at it. However, that should not affect the majority of schools nor those schools with larger proportions of brighter children or children who do not attract additional funding. In Warwickshire, a student with no characteristics attracting additional funding is allocated just £3,569 of funding—£381 less than the DFE’s minimum funding level of £3,950 for a key stage 3 student.

[Neil Carmichael]

Does my hon. Friend agree that his points effectively prove the need for floor funding, so that funding is fair and decent for all forms of education, including grammar schools and other good schools, and that that is the way forward, certainly when we bear in mind additional funding from the pupil premium and other such funding streams?

[Mark Pawsey]

My hon. Friend is entirely right. In this debate, we are calling for a fairer funding formula for schools across the board. I am concerned that pupils in Warwickshire are receiving less than the DFE’s own minimum.

I turn now to the effect on sixth forms. They are at an additional disadvantage as a consequence of the good intention to equalise post-16 funding between sixth forms and further education colleges. That decision did not allow for the fact that schools provide supervised study, teach additional elective subjects and provide sport and other enrichment programmes, so there is more teaching time in schools than at further education colleges, where students often have a proportion of free time. In some instances, that has led to a loss of £1,000 per student.

This has had a particularly adverse effect on Rugby high school. If it had been an 11-to-16 school and its numbers had remained the same each year, its funding would have been static at £2,042,000. Unfortunately, the changes in post-16 funding have resulted in a 15% reduction in the school’s sixth-form funding—the equivalent of the salaries of 6.7 teachers paid at point 6 on the main professional scale. Schools such as Rugby high school, whose academic sixth forms are large in relation to the remainder of the school, have been particularly affected, although, of course, the issue also affects high-performing comprehensives.

The result is that Rugby high school receives less funding for post-16 students than for students aged 11 to 16. The figure is £4,080 for students post-16 and £4,350 for students aged 11 to 16, so there is £270 less per pupil when students transfer from GCSE courses to A-level courses, despite general agreement that the curriculum becomes more expensive to deliver as students pass through secondary school. We are perhaps getting to a situation where funding for 11 to 16-year-olds is having to subsidise sixth-form students because of a lack of sixth-form funding. That £4,080 represents just 45% of the £9,000 a top university would charge in tuition fees when students move on from sixth form. That massive difference cannot possibly be the best way to ensure that those studying for A-levels and preparing for entry into university get a top-quality education.

The funding issue has meant that schools such as Rugby high school have had to be very creative in balancing their books. The school has a particular problem because it is the only secondary school in Rugby without a sports hall and cannot provide sport. In addition, it has had to increase class sizes, reduce teaching time and, most significantly, drop some subjects. Particularly vulnerable subjects, which may disappear from the curriculum altogether in coming years, include modern foreign languages, music and Latin.

The solution to the problem is twofold. First, we need to speed the move towards a national formula that will provide agreed national minimum funding per pupil at each key stage. Secondly, we particularly call for an end to the anomaly of post-16 students being funded at a lower level than pupils aged 11 to 16.

I have a great interest in supporting the excellent education provided by grammar schools and good comprehensives, and I very much look forward to the Minister’s response to the points that have been raised.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 27th November 2014 Commons Chamber

[Mrs Grant]

As has already been clearly stated by my right hon. Friend the Secretary of State, the Government believe that organisers, promoters and ticket agents should do everything they can to find solutions to deal with the secondary market. Successive Governments and Select Committees have ruled, found and concluded that regulation should be a very last resort.

[Mark Pawsey (Rugby) (Con)]

Does the Minister agree that the 2015 world cup will be a fantastic celebration of the game of rugby? There will be plenty of tickets available at large stadia venues around the country, including Brighton, Milton Keynes, Newcastle and Leicester. That means that anyone wishing to watch a game during the rugby world cup will be able to do so.

[Mrs Grant]

I thank my hon. Friend for his wonderfully positive remarks. We are of course aware of concerns, but we remain confident that this will be a great event and that tickets will get into the hands of genuine supporters and fans.

--- Later in debate ---

[Sajid Javid]

The hon. Gentleman will have to wait to see what is in the autumn statement, but he raises an important point. I remember the discussions we had about crowdfunding, and he is right about the importance that it has for businesses and for cultural activities. I have discussed that on many occasions with colleagues.

[Mark Pawsey (Rugby) (Con)]

T4. My right hon. Friend will be aware that the town of Rugby is the birthplace of the great game in which England’s men were world cup winners in 2003 and they were awarded the freedom of the borough of Rugby. Will he join me in congratulating England’s women rugby players on winning their world cup earlier this year and on their award of the freedom of the borough of Rugby, which will be made at a ceremony in Rugby next month?

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)]

It is fantastic that the women’s team is visiting Rugby on 10 December. I am very pleased that they are being rightly recognised in the same way as the men were when they won the world cup in 2003. The support that our women’s team has been receiving is brilliant.

Oral Answers to Questions

Mark Pawsey Excerpts

Monday 27th October 2014 Commons Chamber

[Nicky Morgan]

I agree with the hon. Gentleman that regional hubs offer an important opportunity for schools. I hope that all hubs are working in particular with local enterprise partnerships, which offer great opportunities. Many of them have already bid for skills projects as part of the city deals and regional growth funding granted by the Government. I shall certainly look at the funding, but I would never like to pre-empt any Treasury approvals.

[Mark Pawsey (Rugby) (Con)]

Does the Secretary of State agree that evidence of effective careers advice can be seen in the increasing numbers of pupils taking STEM subjects—science, technology, engineering and maths—which is important in meeting the needs of industry? Will she join me in congratulating Rugby high school in my constituency where, in the past three years, the number of those taking maths at A-level has increased by 50%?

[Nicky Morgan]

I certainly congratulate all those involved at Rugby high school in encouraging our young people to take maths and to continue to study all maths and science subjects. As we have already heard, it is absolutely essential that our young people continue to study STEM subjects, because there is a real need for them among the businesses in our economy.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 23rd January 2014 Commons Chamber

[Mr Willetts]

There is a lot of interest in our new centres for agricultural innovation. We expect to announce the bidding process for the first one in the spring and we will consult on themes for the other centres. I congratulate my hon. Friend on reminding us of the case for York as a possible centre. Of course, my right hon. Friend the Secretary of State was brought up there, but we will try not to allow that to affect our decision.

[Mark Pawsey (Rugby) (Con)]

9. What steps he is taking to support small businesses.

[The Minister for Skills and Enterprise (Matthew Hancock)]

We are passionate supporters of small businesses. More than 12,000 start-up loans have been approved; over the past year, UK Trade & Investment has helped more than 30,000 businesses to export; and, in April this year, a new employer allowance will cut £2,000 from the national insurance bill of every company in the country.

[Mark Pawsey]

Located at the crossroads of the UK motorway network, Rugby is a great place to do business. Our excellent small businesses can benefit from the initiatives that the Minister has outlined. What would he say to small businesses that want to grow as the economy expands, but are unable to find larger premises because many of the older buildings have been demolished and speculative development of the type they need has not taken place?

[Matthew Hancock]

Ensuring that the commercial property market works effectively is an important part of reforming the banking system and getting it back on its feet after the crisis. That market is one of the main routes through which we can open up more development and ensure that there is more capacity, so that when small businesses want to expand, they have the physical space in which to do so.

Small Businesses

Mark Pawsey Excerpts

Thursday 28th November 2013 Commons Chamber

[Anne Marie Morris]

That is an excellent idea.

The Department for Work and Pensions also has a role to play. It has done some good things—it has delayed auto-enrolment for pensions, and we heard this morning that there may be a cap on pension charges—but the Work programme needs to offer the potential for proper self-employment. Research undertaken by the all-party group on micro-businesses has found that almost half of the businesses offering the Work programme did not have an adequate skill base to enable people to go back into work as self-employed individuals. The DWP could consider what it might do to help late returners. Organisations such as PRIME—the Prince’s Initiative for Mature Enterprise—help them to return to work, but there is very little else, although that matter is important.

Let us not forget the Department for Culture, Media and Sport. It has done some great things for businesses. High-speed broadband is absolutely critical, and the fact that there are now broadband connection vouchers for small businesses in 22 cities is very welcome. However, more is needed, because rural areas are really suffering.

[Mark Pawsey (Rugby) (Con)]

My hon. Friend is setting out measures that will enable small businesses to grow. Let us not forget that every big business was once a small business, and, taken together, such measures should provide an incentive for businesses to get bigger.

[Anne Marie Morris]

That is absolutely right.

We need to spread the broadband initiative and encourage Ministers—sooner rather than later—to look at the 4G market. One of biggest concerns of small businesses is that they cannot get mobile reception, which is critical to them.

I ask the Department for Communities and Local Government to work with the LEPs and get them to engage better with the smallest of businesses. Please could it also look at procurement? Although central Government have done a good job in trying to meet their obligation of giving 25% of contracts to SMEs, the picture in local government is rather less rosy.

The Department of Energy and Climate Change also has a part to play. The £90 million scheme for clean-tech entrepreneurs is a very good step. There is a green deal specifically for small businesses, with a pay-as-you-save scheme. However, more needs to be done, including help with switching suppliers. Businesses currently find themselves moved automatically on to new contracts on disadvantageous terms.

What more could UK Trade & Investment and the Foreign Office do? UKTI has done a really good job, but it needs to do more to help the smallest businesses, and there is a call for greater support at embassy level.

Let us not forget the Department for Environment, Food and Rural Affairs, which after all represents a fifth of our economy in the form of rural businesses.

--- Later in debate ---

[Chloe Smith]

My hon. Friend could not have made a better intervention because I was pleased to be able to contribute to solving that exact problem when I was a Cabinet Office Minister.

Given a few tools, we can all do much more in our constituencies, and Lord Young is continuing to work on that issue in association with my hon. Friend the Minister for Skills and Enterprise. We must encourage small and medium-sized firms to use Contracts Finder, on which they will find a clear record of all available Government contracts. We should urge local authorities and others to put their contracts on that portal to allow the operation of a comprehensive marketplace.

We should also encourage constituency businesses to use the mystery shopper scheme that the Cabinet Office has introduced, which will help to solve the problem raised by my hon. Friend the Member for Newton Abbot. When small businesses that seek simply to get on and do business encounter poor practice or communication from the public sector, they need a way to solve the problem. The mystery shopper scheme does exactly that, and also gives us a chance to do more to encourage public authorities—whether local government, health, police or fire services, or any similar service—to do more to make their procurement SME-friendly.

Small firms can encounter many problems such as the prevalence of pre-qualification questionnaires and late payment. A care company in my constituency deals with customers who are particularly vulnerable, and tragic havoc can be wrought if a health body makes a late payment to such a company. The motion rightly calls on local government to do its part, and I suggest that better procurement forms an important part of that.

[Mark Pawsey]

My hon. Friend mentioned pre-qualification questionnaires. Once a small business has managed to jump through the hoops demanded by one authority, should not that be good enough for another authority? Perhaps we should have some form of qualification certificate.

[Chloe Smith]

That is my view. To the best of my knowledge, the Government are bringing forward proposals to put in place exactly that, which I support wholeheartedly, having started that work some months ago.

The motion refers to red tape, but again there is no way to solve that problem except through a methodical approach. I applaud the opening provided by the mystery shopper service to which I referred as it allows us to be methodical by making a list of things that have gone wrong and solving them one by one. That is the only approach that will work for regulatory problems. We must hear from small firms that regulations have served ill, and then we can go about solving the problems. I always say as a constituency MP that I cannot attempt to help a constituent to solve something if I do not know the detail of what the problem is.

Like many others, I am sure, I encourage firms to use the red tape challenge that the Government have rightly set up, and I welcome the results of the initiative so far. To date, more than 3,500 regulations have been identified for reform, saving businesses more than £215 million per year. That is worth doing, and I am sure that the Minister will update the House about how we can extend that approach to European regulatory burdens. On behalf of my constituency businesses, I care very much about that issue.

In the remaining two minutes available, I will conclude by talking about recruitment, which is crucial for small and medium-sized firms. Of course we all want such businesses to become larger firms, if that is their ambition, but to do so they need great people to become their employees. I run a large campaign in my constituency called Norwich for Jobs, which does what it says on the tin. It seeks to create more jobs in Norwich, especially for those aged 18 to 24, and we aim to halve youth unemployment in Norwich in two years. I am pleased that local firms have responded to the call and that more than 800 jobs and apprenticeships have been pledged to the campaign. Although the campaign has been going for only 10 months, 400 young people have been helped into work so far. I want to ensure that small firms have pride of place in that campaign. I will soon run an event with the Federation of Small Businesses and a sister campaign called Swarm. We will consider how to encourage small businesses into such operations, and help them to find the talent they need among local young people. That not only helps the community and young people, but places small businesses in control of their recruitment.

I hail the £2,000 reduction in national insurance that is coming forward in the shape of the enterprise allowance, which will be important for cutting small firms’ jobs tax from Easter next year. I also note the success of start-up loans. So far there have been about 30 of them in Norwich, and 10,000 nationally, which is to be welcomed as it is all to the good of small businesses.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It is a pleasure to follow the hon. Member for Norwich North (Chloe Smith) and to co-sponsor this debate, and I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing it. I am pleased to speak in this debate, which considers how we can overcome the issues facing small businesses. Small businesses, which in my definition are those with fewer than 50 employees, are the powerhouse of the economy. They contribute 46% of the UK’s income in the private sector—a massive £l,558 billion—and constitute more than 99% of all businesses. Ultimately, a sustained recovery will be built on their backs, as has been said, and that must be recognised.

A whole range of different factors affect the success and even the viability of small businesses, including access to finance, the high costs of business rates and energy bills, but I will focus my remarks specifically on late payments. Hon. Members may know that for the past two and a half years I have run a campaign on late payments. It started as a small, local issue after a haulier came to one of my surgeries and said that he was going to go out of business because of late payments. The average term he was being given was 30 days, but he was often not being paid for 90 days. That is a common story that I wanted to look into in more detail.

I tried to discover the scale of the problem and it was striking that so few businesses would come forward and describe what they were experiencing. That was until one brave local couple, who started a plumbing business 35 years ago, came to me and said that their business was going under—as indeed it did with debts of more than £150,000 due specifically to late payment.

[Mark Pawsey]

Is the hon. Lady confusing late payments with customers who refuse or do not have the means to pay? Those are totally separate issues and if a business wants to avoid the problem of late payment, it can refuse to supply goods to the customer until the account has been paid.

[Debbie Abrahams]

I thank the hon. Gentleman for his intervention, if slightly patronising. I have gone into the issue in quite a bit of detail, and it was a specific point about late payments.

Let me give a bit of background to this case. As I said, the story of Ann and Harry Long is far from unique and is a particular problem for small and micro-businesses that do not have the cash-flow buffers of larger companies. I have a particularly a high level of micro-companies in my constituency—more than 85% of companies have fewer than 10 employees—and a number have gone into administration, primarily as a result of late payments.

Nationally, we know from Bacs that more than £31 billion is owed to small businesses, and more than half—58%—of the country’s 1.7 million SMEs say that large companies choose when they pay. In 2011, only £24 billion was owed, so the problem is increasing. If we compare what is owed in late payments to the amounts being lent by high street banks, which last year was £56 billion, we sense the scale of the problem.

According to Bacs data, the average SME is owed £31,000 at any one time and waits an average of eight working weeks for payment, which is nearly double the contract terms. I am particularly concerned about the gaping north-south divide. Small businesses in the north say that they are owed an average of £39,000, which is almost double the £23,000 owed to the average southern business.

The 2012 small business survey reported that 55% of SMEs, 53% of small businesses and 46% of micro-businesses say that large companies are not paying their bills on time. The most recent Federation of Small Businesses survey suggests an even worse picture. Seventy-three per cent. of businesses say that they were paid late in the past 12 months, and one in five say that half of all invoices are paid late. Interestingly, 70% say that the problem has got worse in the past 12 months and that the private sector is the biggest culprit.

Research by the Forum of Private Business last year indicated that late payment is having a significant impact on businesses development, productivity and growth. Access to, and the cost of, finance, and credit trade insurance, were cited as problems linked to late payment. Late payments have a knock-on effect, leaving many small businesses in a vicious cycle of late payment. The FPB’s economy watch panel indicates that 42% of SMEs believe that late payments were not seen as important.

As we have heard, the impact of late payment can be disastrous. It is estimated that, during the 2008 recession, 4,000 businesses failed as a direct result of late payments. No official data have been collected, but the situation needs to be monitored. There is growing evidence that late payments to SMEs are hurting our economic recovery. Office for National Statistics data show that SMEs make up to 98% of the total number of organisations, providing 59% of all private sector jobs and 45% of all employment, and generating 46% of the UK’s income.

What is being done to tackle the problem of late payments? The previous Government introduced the Late Payment of Commercial Debts (Interest) Act 1998, but it was not used, because companies feared being blacklisted. The prompt payment code, a tool introduced by the Institute of Credit Management, committed signatories to pay suppliers on time under the terms agreed without attempting to change payment terms retrospectively, enabling every level of the supply chain to meet the terms. However, the code has had mixed effects. First, there is a very poor take-up by FTSE 100 companies.

--- Later in debate ---

[Simon Danczuk]

We will stock a variety of local produce. There will be some continental produce, but there will be traditional Lancashire produce too. It will be well worth a visit and opens a week on Saturday.

The first thing to say in a debate about small businesses is what a great contribution they make not just to our economy, but to our culture, our communities and the way we live our lives. As the hon. Member for Newton Abbot said, we need to spend more time celebrating the work of smaller businesses and the people who run them. It is these business people who are the backbone of our economy. They create the vast majority of jobs, and export their goods and products across the world. They are at the heart of innovation, which is often copied by larger businesses, and drive growth throughout the United Kingdom. They also carry the burden of worry and stress of managing risk every day of the week. We need to do more to celebrate what they do.

Small businesses are vital to our economy, but they are also vital to our society: they are one of the most powerful forces for social mobility. Academics and politicians often talk about the importance of education with regard to social mobility. That is important, but by starting and growing businesses people can thrive and prosper. They are vital in encouraging and establishing social mobility.

[Mark Pawsey]

Was the hon. Gentleman as struck as I was by the assertion at a recent breakfast meeting that the top entrepreneurs were those people who had not been to university, did not have degrees and had had to work from the bottom up?

[Simon Danczuk]

I thank the hon. Gentleman for that comment, because that is exactly the point I am making about social mobility and supporting entrepreneurialism and the growth of small businesses.

Let me tell hon. Members about one of my constituents. Ian lives on the Falinge estate in Rochdale, which has achieved notoriety for having the highest number of benefit claimants in the country. Like others there, Ian was unemployed. He was determined to get out of that situation, so he decided to start his own business. He cashed in his pension and set up his own fish and chip shop. He learned the ropes by working for free in another nearby chippy and then set up his own shop in the town centre. I used to pop in and have a chat with him every now and again. He was making a good fist of it and there were always plenty of customers coming through the door. In his first year, he won an award at the town’s annual business awards. Despite all that success, Ian was forced recently to close his shop simply— I do not exaggerate—because of business rates. He was paying double in business rates what he was paying in rent, and that was not sustainable.

Ian’s case is a tragedy for him and for social mobility. It demonstrates that unrealistic business rates are damaging our economy and our society. The Government need to do more on business rates and should have gone ahead with the revaluation. Hon. Members will not be surprised to hear that I support the Labour leader’s proposals to freeze and then reduce business rates for smaller businesses in particular. Business rates are not the only issue, however. Let me provide another example: banking.

Hanson Springs, a very successful family business in my constituency, was in 2009 dragged by RBS into what we now know to be the Global Restructuring Group scandal. Let me briefly explain. RBS in my opinion deliberately undervalued a property it had a loan against and used that as an opportunity to push Hanson Springs into its Global Restructuring Group. At the first meeting with GRG, Hanson Springs was introduced to a solicitor who had been brought along to discuss taking an equity stake in this family business. GRG then forced a business review with Zolfo Cooper on to it at a cost of £20,000. Its GRG manager had previously worked for Zolfo Cooper—I am sure that was a coincidence. Hanson Springs was then given three options, none of which was acceptable. As the family pointed out to me, if the business had not been cash-flow rich and if they had not had the personal resolve, the company would have been forced to close.

Hanson Springs is now 50 years old—we have moved on four years. It turns over £20 million each year, employs 180 people, exports 85% of what it produces, and since the problems with RBS, has paid in excess of £l million in corporation tax. If RBS had had its way, we would have lost hundreds of jobs and the money from taxation, and we would have had people claiming benefits and yet more manufacturing moving abroad. Hanson Springs is a perfect example of business at its best. It is a great example of a family pulling together to create something great and is probably a perfect example of social mobility, but look how it nearly all went badly wrong because of RBS’s behaviour. Ultimately, it is down to us politicians to intervene and set up the right regulatory process to ensure that banks treat our businesses better.

Smaller businesses are exceptionally fragile entities. It is our responsibility not to take them for granted and our duty to remember that these businesses are the lifeblood of our country.

--- Later in debate ---

[Mark Pawsey (Rugby) (Con)]

I, too, congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on introducing the debate. I particularly appreciate her work on the definition of “small business”. The Government’s definition of small business is one that employs 250 employees or turns over £50 million. That is a pretty substantial business and I applaud how she has raised the profile of what we would probably call micro-businesses. I suspect that most of the debate has been about micro-businesses rather than small businesses.

I ran a micro-business, a business I started from scratch in 1982, so I know about the pressure of ensuring that there is enough money in the bank account to meet the monthly salary bill. I am therefore delighted that the Government have recognised the importance of small businesses and the number of such businesses that have been created. Along with other Members, I champion the small businesses in my constituency that are raising their profile through small business Saturday. I shall visit four new businesses that have been formed in the past year and opened in the past four months. I am looking forward to seeing what they are doing.

I made the point in an intervention that every big business started out as a small business. Big businesses are often large employers, but if we want to provide employment for all our citizens, we need to consider how to encourage small businesses to grow. In my constituency, there are more small businesses than people looking for work and I suspect that that applies across the country. If every small business was encouraged to take on one additional member of staff, there would be no one looking for work. That hit me quite hard when I met a successful one-man band who was telling me how busy he was and that he was running around like a nutcase trying to keep all his customers happy. I said, “That’s great isn’t it? No doubt you’ll be expanding and taking on somebody else in the business.” He said, “No, I don’t want any of that trouble headache and hassle. I would much rather stick as I am.” We need to change that perception, so it is important for us to consider some of the obstacles that hold people back.

One of that small business man’s biggest concerns was employment legislation. I understand the concerns of Opposition Members that there should be a fair relationship between employer and employee, but in a micro-business the employer and employee get to know each other pretty well. They often work side by side in manufacturing the goods or delivering the service. I would argue that many smaller businesses may not need the employment protection measures that larger companies in need of more formal arrangements require.

The move from one year to two before an employee can bring a case in an employment tribunal is a step in the right direction, but we could look at one or two other areas such as parental leave rules. Transferable parental leave disproportionately disadvantages small businesses, which may lose a key member of staff, often at pretty short notice. We could consider making some exemptions for micro-businesses or those with a turnover of less than £5 million or fewer than 25 staff.

I am also concerned about access to suitable business premises as we move out of the recession. Jones Lang LaSalle reported in March that there was little speculative industrial property development taking place. I am worried that accommodation will not be available. My business started in very low-cost old buildings. Such buildings have now in many cases been demolished to avoid vacant business rates. I am bothered that access to the internet has encouraged lots of fledgling small businesses to start, often in niche markets, operating from home, perhaps in a residential area, and as they grow they will need small units, which we do not have. Developers have not been providing small units. It is much easier for a developer to provide one unit of 50,000 square feet than 10 units of 5,000 square feet, and we need to address that problem.

Lastly, I would like to deal with an issue that is not for Government but is about a culture change. As a salesmen in my business, I would like to see more appreciation for salesmen. They are the people who end the manufacturing process; the services would not get delivered were it not for the salesman persuading the customer to buy them. Salesmen have an unfortunate reputation, and I would like to see some credit given to the profession, with proper recognition and status. Their skills are invaluable, especially in export markets where not only our small businesses but the country as a whole prosper if the salesmen do well.

Start-up Loans

Mark Pawsey Excerpts

Wednesday 20th November 2013 Commons Chamber

[Matthew Hancock]

We are finding that lots of business men and women are interested in mentoring, partly because they feel that they got so much out of growing their business and want to give something back. Engaging more mentors is a vital part of the scheme, but that is not a constraint on expansion owing to the enthusiasm—to which I pay tribute—of business men and women who want to help others to get the sort of start that they had.

[Mark Pawsey (Rugby) (Con)]

As someone who started and ran a small business, I know about the challenges that are faced by people who want to run their own business, particularly in accessing finance. I was pleased to join the start-up bus when it visited Rugby. Does the Minister agree that the start-up loans scheme shows that the Government are providing real help to small emerging businesses, unlike the Labour party, which took advice on business and industry from the man who managed the decline of the Co-op bank?

[Matthew Hancock]

My hon. Friend makes an important point. It is surprising to see the Labour Benches almost entirely empty when the House should be uniting in support of the excellent start-up loans scheme. I pay tribute to my hon. Friend, who started his own business and who does much in this House to promote those who start their own businesses.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 24th October 2013 Commons Chamber

[Dr Julian Huppert (Cambridge) (LD)]

4. What steps he is taking to support small businesses.

[Mark Pawsey (Rugby) (Con)]

14. What steps he is taking to support small businesses.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

We are doing more than ever to support small business. More than 7,000 start-up loans have been drawn down since the scheme’s launch in September 2012. Over the past year, UK Trade & Investment has helped 31,800 businesses to export, the growth accelerator scheme has supported more than 9,000 small businesses, and the regional growth fund has helped a further 3,000.

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[Vince Cable]

As an avid cinema-goer and, indeed, someone who used to go to that cinema, I have some sympathy with my hon. Friend, but the process is this: the Competition Commission has come to a resolution and the next step has to be to go to the Competition Appeal Tribunal. I suggest to my hon. Friend that, since the Cambridge law faculty has some of the best minds in the country, including that of his predecessor, it may want to take on this issue on a pro bono basis.

[Mark Pawsey]

Having run a small business, I understand exactly the burden of regulation that small businesses have to deal with, and I know how pleased small businesses in Rugby are about the Prime Minister’s commitment to make this Government the first in history to cut the overall amount of regulation. Will the Secretary of State confirm that his Department will lead the efforts to cut burdens that hold back small businesses from growing and taking on more staff?

[Vince Cable]

We are totally committed to that task. Under the red tape challenge—the one in, two out system that my colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) is leading admirably—we estimate that we have probably already saved business about £1 billion a year, and there is a commitment to extend that process.

Oral Answers to Questions

Mark Pawsey Excerpts

Thursday 18th July 2013 Commons Chamber

[Vince Cable]

My hon. Friend is absolutely right. The Automotive Council has identified skills shortages as a key problem. As a result of the adoption of the strategy document, the industry has committed itself to a significant growth in the number of apprenticeships. We have already seen a considerable increase, but he is right to suggest that this is an issue not simply for the big original equipment manufacturers but for the supply chains, and a lot more needs to be done to make the car industry seriously competitive through skills.

[Mark Pawsey (Rugby) (Con)]

Will the Secretary of State comment on the success of the sector and the impact on the supply chain? On Friday, I had the benefit of meeting a small business in my constituency, Automotive Insulations, which supplies products to, among others, Jaguar Land Rover and Bentley. It is looking to move to a new 60,000 square foot building, to employ a further 60 people and to generate £1 million- worth of investment over the next few years.

[Vince Cable]

This is indeed a very successful industry. Over the last couple of years, we have had commitments to something in the order of £6 billion-worth of new investment. One factor has undoubtedly been the confidence that the Government are fully supportive of the industry and are working with it through the Automotive Council. The confidence factor is indeed spreading into the supply chain. There are very good economic reasons why a significant amount of the supply chain that has been offshored should now be onshored—and that process is beginning. We want to do everything we can to encourage it.

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[Jo Swinson]

The first thing I would say to the hon. Lady is that our lightly regulated employment market is an asset to the British economy. It helps the economy to grow and it is one of the reasons why, despite the very challenging economic circumstances we have seen and despite the fact that unemployment is still too high, we have seen employment rates bear up rather better than in some other countries. It is important that we simplify employment law—I would have hoped that there would be cross-party agreement on that—but of course it is also important for a functioning economy that we ensure that basic protections remain in place for workers.

[Mark Pawsey (Rugby) (Con)]

rose—

[Mr Speaker]

Order. In conformity with long-standing convention, the hon. Gentleman cannot come in a second time on substantive questions. His enthusiasm and appetite are appreciated and he can try his luck during topical questions.

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[Vince Cable]

Coventry seems to have some problem in that area. I come from the city of York, which went through this misery, as many towns have done in the English league. I can certainly have a look at that; it is not immediately clear to me where I fit into the picture, but I am interested in football and want to see it healthy.

[Mark Pawsey (Rugby) (Con)]

On employment law reform, does the Secretary of State agree that there would be a significant boost to our country’s small businesses if the cost of attending employment tribunals was reduced, given that, according to his Department, the average cost of successfully responding to and defending a claim is £6,200?

[Jo Swinson]

The hon. Gentleman is right to raise that issue. It is fair to say that employment tribunals are costly in terms of time, money and stress for everybody involved, both employers and employees, so what we are trying to do through our employment law reforms is reduce the number of cases going to tribunal. We are streamlining the rules of procedure, which should also help to reduce costs, but the really important savings will come from getting more cases resolved through early conciliation, which is what the Government are pressing ahead with.