Small Businesses

Matt Hancock Excerpts

Thursday 28th November 2013 Commons Chamber

[Toby Perkins]

I certainly do. I was in the process of paying tribute to the work my hon. Friend has done on that issue. She is absolutely right.

The hon. Member for Rugby (Mark Pawsey), whom I usually regard as a sound voice on the issue of small business, said that if someone is paid late they should refuse to supply the company, but that does not recognise the difference in the relationship between a powerful customer and a struggling supplier. Every year, 2,000 businesses go under simply because they are not paid money that is owed to them, so I think he was wrong about that. My hon. Friend is right to say that we need the Government to be at the forefront of not just encouraging people to pay on time, but ensuring that that culture change passes right down the public sector procurement chain to second and third-tier suppliers.

My hon. Friend the Member for Rochdale (Simon Danczuk) made a lengthy advertisement—I sense it was somewhat to his embarrassment—for Danczuk’s deli. Numerous Members wanted to know about the excellent wares he will be providing. He has been in business before and it is great that he and his wife are opening a delicatessen in the centre of Rochdale and that he is putting his money where his mouth is.

The hon. Member for Brentford and Isleworth (Mary Macleod), my hon. Friend the Member for Rochdale and the hon. Member for Colchester (Sir Bob Russell) spoke, among many others, about the tremendous difficulties caused by the increase in business rates, which I shall return to.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies) promoted the value of local innovative firms and also focused on access to finance. The hon. Member for Rossendale and Darwen (Jake Berry) is not in his place. [Interruption.] I see that he has moved—I do not know how I managed to miss that moustache. He encapsulated the bravery and pioneering spirit required to set up a business and he was right to say that it doesn’t half set the pulses racing. At such moments, people realise what colour adrenaline is.

My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) was entirely right to say that small businesses are undergoing a cost of living crisis, which I will reflect on in a moment.

The hon. Member for North Swindon (Justin Tomlinson) said that Labour always liked to increase corporation tax. If he was still here, he would be surprised to discover that corporation tax was actually 3% less after 13 years of Labour Government. Perhaps he should talk to the former Prime Minister about that.

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

Will the hon. Gentleman confirm whether it is still Labour’s policy to increase corporation tax?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Before the shadow Minister answers the Minister, will they please remember that I will stop the debate at 3.45 pm? If the Minister is still on his feet at that point, he will lose the time, because we will have to start the next debate.

--- Later in debate ---

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

This Government are passionate, as am I, about supporting small business. I grew up in one, and I hope that I not only listen to and speak for small business across Government, but understand what life is like in one, as do so many hon. Members who have spoken. The debate has reflected the strength of feeling across the House in support of small businesses, which we should do more to encourage and for which we should do more to make life easier. Why are we so passionate? Because, at root, small businesses are the ultimate fount of prosperity and jobs in our country.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Does the Minister agree that one great virtue of small businesses is that they are embedded in their local communities and are often loyal to them, unlike npower in my constituency, which has just offshored 400 jobs? Will he use the power of his Department to work with local authorities, the LEP and the chamber of commerce to do its best to mitigate that loss?

[Matthew Hancock]

The Department is of course doing what it can to mitigate the impact of that decision. The hon. Gentleman is quite right, as is my hon. Friend the Member for Carlisle (John Stevenson), who spoke passionately about the impact of small businesses, which are embedded in their local communities through jobs and their contributions to local and national life, as well as the role of local authorities in planning, property and procurement.

There have been some fantastic contributions to the debate. My hon. Friend the Member for Brentford and Isleworth (Mary Macleod), as well as recounting the various questions that she has asked at Prime Minister’s questions in the recent past, spoke about drilling enterprise through our education system, which I strongly support. My hon. Friend the Member for North Swindon (Justin Tomlinson) also made that argument. Every time I speak to him, he seems to have another idea about how we can get more content about enterprise into the education system.

Many Members raised the issue of red tape, not least my hon. Friend the Member for Reading West (Alok Sharma), who spoke about the impact of EU red tape. Members across this House must recognise that problem. It is wrongly dismissed by some, but it is an important issue that we need to address. We are doing so through the Prime Minister’s challenge to the EU. The taskforce of six business leaders who are looking at reforming EU regulations is putting the voice of business at the heart of the debate. It has made 30 recommendations on how to remove or improve the most burdensome EU rules. We are working with business to encourage the EU to take up those recommendations over the next year.

My hon. Friends the Members for Rugby (Mark Pawsey) and for Daventry (Chris Heaton-Harris) raised the issue of regulations on employers, especially with regard to micro-businesses. We have made progress by ensuring that employees cannot go to a tribunal until they have been employed for two years and by introducing fees for tribunals. We need to keep this area under constant review because, fundamentally, what we must do is make it easier to employ people and create jobs. That is what growing small businesses is all about.

It is a great pleasure to see you take the Chair, Madam Deputy Speaker. This is the first time that I have been in a debate that you have chaired.

My hon. Friend the Member for Norwich North (Chloe Smith) was here earlier, but apologised that she had an engagement with some small businesses. I pay tribute to the work that she did to open up procurement to small businesses. However, as my hon. Friend the Member for Daventry said, what we are doing in that area is not complete. There is much more to do to improve the formal rules and to ensure that they are seen, exercised and stuck to not only across central Government, but throughout the public sector, including in local authorities. The Department for Business, Innovation and Skills has just reached the target of sending 25% of its invoices to small businesses. That target applies to the whole of central Government and all other Departments are working towards it.

Many hon. Members raised the issues of access to finance and late payment, not least the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). The Government pay more than 85% of undisputed invoices within five days. That is a big change and an impressive feat.

[Debbie Abrahams]

Will the Minister confirm whether that includes suppliers in all tiers? I think that he is referring just to tier 1 suppliers.

[Matthew Hancock]

I was coming on to exactly that point. That figure refers to tier 1 and there is much more to do to drill prompt payments through the supply chain. We must spread that culture across the private sector as well. I will reflect on the hon. Lady’s point that we should make late payment just as culturally negative as tax avoidance and evasion. We will be launching a consultation on late payment shortly.

The right hon. Member for Hazel Grove (Sir Andrew Stunell) raised the issue of the banking appeals system. I do not want to pre-empt what my right hon. Friend the Chancellor will say in the autumn statement in a week’s time, so I recommend that the right hon. Gentleman attends the House on that day.

Opposition Members raised various issues and spoke from different perspectives. The important issue of GRG and the treatment of small companies that have got into difficulties with the banks was raised. The Financial Conduct Authority is looking into the report that was published this week and RBS has appointed Clifford Chance to go through the cases that were raised in detail.

The hon. Member for Glasgow North East (Mr Bain), in typically ebullient fashion, called for firm action and better communication of what we are doing. I certainly agree with him about firm action. That is what I hope to achieve.

On better communication, we have launched the Business is Great campaign, which Members may see on billboards and social media across the country, and the Great Business website brings together in one place the different things the Government and private sector are doing to support small businesses. It is a single portal—greatbusiness.gov.uk—and worth exploring.

The hon. Member for Ogmore (Huw Irranca-Davies) mentioned access to finance, and particularly green measures. Although the Government have reduced the subsidy from energy bill payers and taxpayers to sponsor solar, by ensuring that the scheme was proportionate but still affordable, more than 1 million people are now living with solar panels on their roofs. The hon. Member for Rochdale (Simon Danczuk) spoke passionately about starting his own business with his wife. I hope he gets the chance to have a word with the Leader of the Opposition, who says he wants to ban Members from engaging in any outside employment, including a small business. I strongly hope that the idea that someone can run a small business and be an MP at the same time will continue because of the wealth of insight it brings to people in this place.

There were good speeches from Opposition Members, and it was a pity there were so few of them, given that support from the Government Benches was very powerful. The hon. Member for Colchester (Sir Bob Russell) and my hon. Friend the Member for Rossendale and Darwen (Jake Berry) raised the important issue of business rates. I am glad that one of the first things this Government did was stop the extension of business rates proposed by the previous Government because that would have been a great mistake. In fact, we have extended business rate relief every year, but I have no doubt that had the previous Government remained in office, they would have put up and extended business rates because that is what they were planning.

[Julian Sturdy (York Outer) (Con)]

Does the Minister agree that one of the key things for helping small businesses is encouraging them to reinvest? The Government have done a lot in extending the capital allowance scheme, but will he consider extending it beyond 1 January 2015?

[Matthew Hancock]

Yes, I will, and I conclude by saying that Members across the House—especially Government Members—argued passionately in favour of small businesses, the values they bring, the hard work but the payback, and the benefits in terms of jobs and prosperity for their communities. None more so than my hon. Friend the Member for Newton Abbot who initiated the debate, and I pay tribute to all her work. If I have not addressed any point on the long list of issues she raised, I will write to her with a detailed response on each and every one. She is a great credit to herself and to small businesses that need such passionate support, and I know they are thrilled to have her at their side.