Small Businesses

Mary Macleod Excerpts

Thursday 28th November 2013 Commons Chamber

[Anne Marie Morris]

I entirely agree with my hon. Friend that there needs to be root-and-branch reform. The whole way in which rateable value is calculated is a mystery. The rulebook has got a bit like the tax code. Why are some pubs assessed on turnover, while others are assessed on freehold or rental value? That is arcane and requires a thorough overhaul.

[Mary Macleod (Brentford and Isleworth) (Con)]

Does my hon. Friend agree that in London, where my constituency is, small businesses are penalised because the higher rateable values there mean that rates are extortionate?

[Anne Marie Morris]

My hon. Friend makes a valuable point.

The next area that should be addressed is the VAT cliff: if a business’s turnover reaches £79,000, it is suddenly hit by having to find VAT. It will hardly want to increase prices to its customers by 20% overnight. We could have a ratchet mechanism or go to the EU, which would be perfectly possible. I urge the Government to do so, because we need a derogation.

The Government, but particularly the Treasury, should consider the removal of class 2 national insurance contributions. The self-employed have to pay two classes of contributions, and they find that incredibly confusing. We have a great record on corporation tax, but could we not do more, including by looking at a new, simplified flat tax for the smallest businesses?

We should talk not only about BIS and the Treasury, but the Department for Education, because education is critical to our having a true and sustainable supply of new small businesses. The Government’s introduction of financial education is a fantastic first step, but that is only one piece of the enterprise skill set that an entrepreneur needs.

It is great that apprenticeship schemes have grown under this Government, with 858,000 individuals participating in those schemes this year, but we need more. We need enterprise education for six to 60-year-olds. The World Economic Forum has recommended that there should be enterprise education in every country throughout the period of education. I suggest that we ask Ofsted, which looks at community engagement to measure what schools do, to consider not only that point but business engagement as well.

In relation to funding in the tertiary sector, we should also look at whether institutions are offering enterprise education, which I believe should be available whatever discipline students are reading. Although I applaud Lord Young’s comments about business schools taking a lead, we should remember that they are not the only such place. There is a role for universities to work much more closely with local enterprise partnerships, a point to which I shall return.

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[Mary Macleod (Brentford and Isleworth) (Con)]

I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on introducing this extremely important debate on small businesses. Some of the facts and ideas that have been discussed are important. Those ideas could make a difference. We heard the numbers from the hon. Member for Oldham East and Saddleworth (Debbie Abrahams)—of the 4.9 million private sector businesses in the UK, 99% are SMEs, which employ more than 14.4 million people. The debate matters to all hon. Members’ constituencies and every sector.

We should recognise that, in the past three years, 400,000 more businesses were created. I congratulate the Government and the Minister on the work he has done in enabling that to happen. In my constituency in the past two years, 825 new businesses were set up. It is one of the top 10 places in the UK to set up a new business. The Government’s initiatives to help small businesses have made a difference.

Locally in my constituency, whether in Chiswick, Brentford, Isleworth, Osterley or Hounslow, I meet my businesses, large and small, regularly, because I believe it is important to hear of their success and of the challenges they face. I have worked with them and the local council to enable 30-minute free parking in the local town centres across my borough—the businesses have asked for it.

[Andrew Percy (Brigg and Goole) (Con)]

May I offer my hon. Friend a practical example from North Lincolnshire council of the success of exactly that free parking policy? When we scrapped Labour’s parking charges and introduced two hours’ free parking for businesses, local businesses reported a big increase in trade in our town centres, even at a time of difficult economic circumstances. We are extending that support further by providing free wi-fi in our town centres, which she might want to consider.

[Mary Macleod]

That is an absolutely brilliant example—that is something I would like to do to support my local businesses in west London.

I meet my Chiswick traders regularly. Last time, we met in Club Workspace, which I recommend to hon. Members. It is a much more creative and innovative way of allowing entrepreneurs to have the space to work. It is not as rigid and long-term as things used to be, but more flexible and modern. It is very effective.

I have also done apprenticeships seminars to encourage small businesses to take on apprentices. I met Mumpreneur, Athena and other groups that support small businesses.

Naturally, we are supporting small business Saturday. We will be doing lots of things during the day for it. It has galvanised my local businesses to work together. Between them, they came up with all sorts of things to do, which was brilliant to see. I have also run workshops on women and enterprise, because I believe we do not have enough female entrepreneurs, which I will address in a moment.

I wanted to mention to the Minister some of the issues that have been raised with me locally, including business rates, to which I will return, access to funding, legislation, red tape and parking. Where do businesses go to find help? More clarity and simplicity on helping small businesses would be useful.

I have a role in helping the Minister as a small business ambassador for London. Only yesterday, I went to the meeting of the London enterprise panel’s SME working group. It had four key priorities—finance and equity; the availability of work space; trade and exports; and business support—but added another at the meeting: the skills shortage. The suggestions that hon. Members have made to do more in schools, colleges and universities are important. Strangely enough, in Prime Minister’s questions this week, I asked him how we can create enterprise and business champions in each of our secondary schools—we could arguably do so before that, but perhaps we should start with secondary schools—to foster and inspire the next generation of entrepreneurs. We want young people to think of entrepreneurship as an option when they finish school, college or university. There are special financial packages for them.

Last week, I asked the Prime Minister about business rates—I was fortunate enough to have questions at Prime Minister’s questions two weeks in a row. I am glad to say that he has agreed to meet me next week to discuss reform of business rates.

[Simon Danczuk (Rochdale) (Lab)]

I support the hon. Lady in her concerns about business rates. Does she support the Labour leader’s proposals to freeze and then reduce business rates for smaller businesses?

[Mary Macleod]

I want reform of business rates and for them to be looked at very differently. In London, businesses are treated unfairly and we want fair taxation. The turnover of many small independent shops in my constituency is not as high as one might expect in London, so they are penalised by the high business rates in London. They also question what they get in return for business rates. That could be clearer—police, fire or other services. All they know is that the £27 billion raised from business rates is spread across the country. I favour a localised approach, so that we are able to reinvest in our local areas.

The Government have done a lot for local businesses. One of the big measures, which was mentioned by my hon. Friend the Member for Norwich North (Chloe Smith), was to remove £2,000 from national insurance bills. Other measures include: business mentors, £50 million- worth of £10,000 start-up loans and cutting red tape. The Prime Minister visited my constituency three years ago to meet Octink, another great local business in my patch, to consider how we can simplify employment legislation—another important issue for small businesses.

There are three key points in particular that I would like the Minister to consider. First, there should be enterprise education in schools. Businesses and entrepreneurs should be encouraged to allow students and pupils to do work experience in their businesses, and perhaps all hon. Members can help to facilitate that with their local schools. Secondly, we have already discussed business rates and I will be talking to the Prime Minister about that next week. Thirdly, returning to women and enterprise, if women were setting up businesses at the same rate as women in the US, we would have 600,000 more businesses. That would add £42 billion to the economy—a huge amount. I run workshops in my constituency, with the support of StartUp Britain and the chamber of commerce, to encourage women to think about setting up businesses. We have fabulous businesses, such as Shavata and My Plumber from Chiswick, and inspiring women who have done it for themselves and are successful.

The Government have done much and there is probably more that all of us as hon. Members can do to support the small business community. I look forward to encouraging more and more businesses in the months and years to come.