Small Business Saturday

Matt Hancock Excerpts

Thursday 4th December 2014 Westminster Hall

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

It is a pleasure to respond to this debate about small business Saturday, so ably and eloquently opened by my hon. Friend the Member for City of Chester (Stephen Mosley), who represents the city of my birth. He is a great ally and friend of small businesses in Chester and beyond. He talked about the difficulties of retail space in Chester—its cost, and the accompanying business rates—and I know very well what he was talking about, because it was the pounding ground of my youth. I am sure that shopkeepers, whether their shops are old or new, will welcome the increase of small business rate relief for retail outlets to £1,500, which was announced yesterday. I hope it will allow them to put the small business Saturday card in their windows, and participate in the day, with even more enthusiasm.

The debate has been positive and cross-party, and small business Saturday has strong cross-party support. I want to answer the first of the questions put to me by the hon. Member for Chesterfield (Toby Perkins)—I almost called him my hon. Friend; we spend so much time together these days that it is almost coming to that—about what the Government are doing to promote small business Saturday. We are putting a huge amount of effort into doing that, but crucially it is a bottom-up, small business-led campaign.

The idea came, of course, from the United States of America, and when we were approached to build it up in the UK we were very keen. However, we are also keen that the Government should not take the lead. I acknowledge the work done by the Opposition Front Benchers to ensure that the enterprise is truly cross-party. Therefore, although the Government have put effort in, we have chosen not to take a lead. It is far better for small business Saturday to be led by the hundreds of thousands, and hopefully in due course millions, of small businesses that participate.

[Toby Perkins]

I agree entirely with the Minister; but he does not usually hide his light under a bushel, so can he be a little more specific? He said that the Government have put in a huge amount of effort, so what specifically have they done?

[Matthew Hancock]

Most of the support has been on the communications front, through the brilliant Michelle Ovens, to whom I pay tribute for leading the private organisation for small business Saturday. The communications effort last year included hosting the small business Saturday bus in Downing street and ensuring that the Government communication machine came in behind small business Saturday. This year we will hold a street market in Downing street, and we have invited 100 of the most exciting small businesses in the country. The street stalls are already being constructed in Downing street, to make it an exciting part of the day. The market will run from tomorrow, in advance of and into small business Saturday. We will have Ministers from the Prime Minister down fanning out across the country to celebrate the day, and I am sure that even the Business Secretary will get involved.

What we have done has mainly been on the communications side; but to that must be added the policy changes we have made. The Government are incredibly enthusiastic about small business. Of course, a stable and growing economy is the No. 1 thing that can help small business. My hon. Friend the Member for High Peak (Andrew Bingham) talked about the problems of late payment, and the effect of a big customer going bust or going into liquidation. That happened to my family business when I was growing up. It is a very painful memory, because we were days away from going bust, which would have had serious consequences not only for the 20 or so people we employed, for whom we felt a responsibility, but for my mother and stepfather, who worked in the business. I thought my hon. Friend put it incredibly powerfully. Of course, not only is High Peak one of the most beautiful parts of the country, but it has had 2,600 start-ups since 2010, when he became the local representative.

The stable macro-economy makes an important contribution to small businesses. On tax, the hon. Member for Chesterfield said that it was not important to reduce taxes on profits. I know it is his party’s policy to oppose that reduction, and I do not want to get too much into that, but the point is that reducing corporation tax sends out a signal that we support and celebrate businesses of all sizes and allows businesses to be attracted to the UK. At the same time, we have to tackle business rates, and we propose to do so with a review, which will report after the election. Business rates raise over £20 billion, so they make a significant fiscal contribution, but the complaints I receive are mostly about their design; they become an overhead, rather than being related to the amount of turnover or profit. They are a higher-risk tax than either corporation tax on profits or taxes on the pay of employees, such as national insurance.

[Toby Perkins]

The Minister will be glad to know that my right hon. Friend the Member for Morley and Outwood (Ed Balls) has declared that we will continue to have the lowest corporation tax in the G8. On business rates, when Government set out on a review, they usually have an idea of what they want to find at the end of that. We accept that a lot of evidence will come in before the report’s final make-up becomes clear, but will the Minister give us an idea of what the Government see the end point looking like?

[Matthew Hancock]

We announced the review yesterday, so the hon. Gentleman will not be surprised to hear that I do not have its conclusions today. However, we can see the direction of travel. We have reduced the impact of business rates on retail outlets and capped the increase in business rates. We have also extended the discount through small business rate relief, which, when the previous Government left office, was about to close. We have continually extended that—we have done so for a further year from 1 April this year, so we can see the direction of travel.

We will want to get the details right, so we are very keen to hear about how we do that from small businesses, their representative bodies and others with an interest. However, I take the point, made by my hon. Friend the Member for High Peak, that small business people do not have the time to go and lobby their MPs because they are too busy running their businesses. He is absolutely right about that.

My right hon. Friend the Member for Basingstoke (Maria Miller) made a powerful speech about small businesses in Basingstoke. Let me answer her questions specifically. Am I satisfied with connectivity for small businesses? No, I am not. We are rolling out broadband and increasingly the country is being covered by superfast broadband. The roll-out of 4G has helped with connectivity, but none of these things is complete. I have visited a centre that conducts research into 5G, which is an exciting technology, but the most exciting thing about it is that the research began even before the roll-out of 4G started, which is a sign that we have our eyes on the future. There is a lot of work to do to get all that right. Places in the world such as South Korea are absolutely miles ahead of us on this issue, and we need to keep pushing hard.

My right hon. Friend asked about women in work and promoting female entrepreneurs, and she and I have worked on that in the past. A record number of women are in work, and I am also glad that the gender pay gap has come down to a record low. The details show that for those under the age of 40, the gender pay gap has all but been eliminated. I would like to see it eliminated altogether, but that is a big, positive change.

Undoubtedly, the most important things for female entrepreneurs are exactly the same things that help male entrepreneurs—making it easier to employ people, making it easier to start a business and having a stable macro-economy—but there are specific things that can particularly help. My right hon. Friend spoke about the challenges of running a small business while supporting a family, and in many cases being the primary support for a family. I know about that very well—not as a mother, but as a son—because my mother ran our family’s small business. I remember very well sitting on her knee as a child while she worked on the finances of the business. She truly was juggling things, almost literally. We have tried across this Parliament to push the extension of support for child care, and I know that Members on both sides support that.

My right hon. Friend asked specifically about social enterprise. The things that make it easy to run an enterprise that is primarily for profit are the sorts of things that can help expand a social enterprise, but we can do—and have done—more specific things to support social enterprise. That, again, is a cross-Government piece of work, because work comes out of all the different Departments to make it easier to grow social enterprises. I am glad to see that the number of social enterprises is rising as well as the number of small businesses.

The hon. Member for Feltham and Heston (Seema Malhotra) also discussed women in business. She talked about local heroes, some of whom I had not even heard of, so I was very glad to hear about those. She spoke specifically about linking enterprise to schools—that is a big agenda that she may hear more about in coming weeks—and particularly about ensuring that schools promote enterprise and business as an exciting and viable future. We have tried to get more people from all sorts of walks of life, including from business, into schools directly to interact with pupils. In fact, we have put a duty on schools to open up to external employers, business people and others, in order to lift horizons and engage more with students. I know that there is more to do on that agenda.

The next steps we need to take are these: we need to make sure that we continue the drive so that where regulation is necessary, it is easier to navigate, and we need to deregulate where possible. We have saved businesses over £1.5 billion in annual costs. We have scrapped or improved 84% of health and safety regulations; thousands of small businesses have been removed from proactive health and safety inspections, for example.

We also have to do more on exports, which were mentioned by the hon. Member for Glasgow North East (Mr Bain). When our major trading partners are struggling and, in some cases, in recession, exports are more difficult, but many small businesses get into exports either by accident or because they have found a particular niche. Many small businesses increasingly find that if they start a website with their product on it, they end up fulfilling an order somewhere else around the world, and that is how they get into exporting. However, fewer than half of businesses have websites through which they can trade—that is, websites on which money changes hands. That point is linked to the one about expanding connectivity, because being able to trade through a website is important.

We are also simplifying and streamlining how businesses access our support services. The website greatbusiness.gov.uk is a single place where businesses can now go for all support from Government and others. We heard the reports from small businesses that the offer of support from Government was often confused and in lots of different pots, so we have brought it all together in one place.

Several hon. Members mentioned the business bank and the need for such a bank. That is absolutely right, so I am delighted that on 1 November the British business bank was given independent status and is now fully functioning. Yesterday, in the autumn statement, it got £400 million of extra support. I am excited about the potential of the business bank. I have already seen it in action—I have visited some of the schemes that it supports—and it is undoubtedly helping with access to finance. However, the biggest thing that we can do to support access to finance is to get the banking system as a whole on an even keel and supporting small businesses. I welcome news of moves in that direction by some of the big banks. There is undoubtedly more local engagement, but this is a long journey after a long journey in the wrong direction in the previous decade or more.

There are 760,000 more small businesses now than there were in 2010. There is a record number of small businesses in the UK—5.2 million. These are the vast majority of businesses in the UK—we could call them the 99%. Conservative Members support them wholeheartedly. There is support across the House for small business Saturday and the work that its promoters are doing to make it a first-rate success. I know that 40% of local authorities were involved in small business Saturday last year. For the first year of an enterprise, that was pretty impressive, but we want to do better and we want small business Saturday to grow and grow.

In my hon. Friend the Member for City of Chester, small businesses have someone who is passionate in his support of them. There are few who would be a better champion of them; there are few whom it would be better to have on their side. I pay tribute to him and the work that he has done, not only as the Prime Minister’s small business ambassador for the north-west of England but nationally, through this debate and many other activities, to ensure that people know about small business Saturday this Saturday. I hope that people will shop small, shop local and support small businesses on Saturday and throughout the rest of the year.