Small Business Saturday

Philip Hollobone Excerpts

Thursday 4th December 2014 Westminster Hall

[Mr Philip Hollobone (in the Chair)]

The subject of this afternoon’s debate is small business Saturday, which occurs in two days’ time on Saturday 6 December. The debate will be ably led by the hon. Member for City of Chester (Stephen Mosley).

[Stephen Mosley (City of Chester) (Con)]

Thank you, Mr Hollobone, for the opportunity to highlight the crucial importance of having thriving, popular and successful small businesses in our towns and cities, and to emphasise the important role that small business Saturday plays in helping small businesses to achieve their potential. Small businesses are the lifeblood of our economy. They account for 99% of all businesses in the UK. They employ some 15 million people across the country and they account for half our private sector GDP. Small businesses play such an important role in our national economy that if every small business took on one new member of staff, we would eliminate unemployment overnight.

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[Stephen Mosley]

I quite agree that the Government have done a lot, whether on small business rates relief, the doubling of rates relief or the rebate. I totally support those actions, and I support the announcement yesterday of a future review of business rates.

The measures on business rates and corporation tax allow small businesses to keep more of their hard-earned cash—money they can use to take on more staff, invest in new equipment, or simply pay down debt. To help small businesses raise the cash that they need to start or grow, the Government have also launched the British Business bank, providing up to £4 billion in funding for business on top of the successful start-up loans scheme, which has already provided £150 million to enable more than 20,000 entrepreneurs to follow their dreams and start their own small companies. I am sure that the Minister will highlight many more of the schemes that he and his Government have introduced to help small business in his response to the debate.

Since 2010, hundreds of thousands of new businesses have been launched every year, so that, as we heard the Prime Minister say at questions yesterday, there are now more than 760,000 more businesses in the UK. In my constituency of Chester, new business start-ups have increased by 300%. Small businesses have been responsible for nearly half the job creation in the UK. They employ about 15 million people and make up about half of our private sector economy. Small business has an absolutely fantastic story to tell, and small business Saturday is an opportunity for us all to shout from the rooftops about how important our small and local shops and businesses are.

Although the Government have done a lot to help, it is also crucial that local communities, groups and businesses come together and celebrate all that is great about our small businesses and the contribution they make to our economy and our high streets, because the people who benefit the most from having successful, popular and thriving local shops are local communities themselves. I will be shopping small and local in Chester this Saturday, and I hope that the Minister and other Members will back small business Saturday too.

[Mr Philip Hollobone (in the Chair)]

An excellent example for us all.

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[Andrew Bingham (High Peak) (Con)]

Thank you, Mr Hollobone, for calling me to speak. It is a pleasure to serve under your chairmanship again.

I congratulate my hon. Friend the Member for City of Chester (Stephen Mosley) on securing this important debate. As a former small business man myself, I know and appreciate the value of small businesses, both to our local economies in our own constituencies and to the national economic recovery. Every debate in Westminster Hall is important, but this one has an extra level of importance, and coming today—just two days before small business Saturday—it could not be better timed.

People wonder what the definition of a small business is. Companies employing fewer than 50 people often fall into the category of “small business”, and I suppose that if we compare that number with some of the larger conglomerates in the country, that is a fair description. However, I will focus on what are, in my view, the small businesses—the really small businesses, or the micro-businesses.

I ran a micro-business for 20-odd years and I can assure Members that running one is not easy. Employing only a handful of people, as I did, I used to have to deal with customers of all different sizes and types. I was salesman, credit controller, debt control, buyer and human resources manager all at once, and many small business operators are in the same boat. To do all those roles, they have to work late into the night, putting in many hours. They take their work home and they live, eat and breathe their business.

In High Peak there are 3,520 businesses and 98.5% of those have fewer than 50 employees. It is all too often too easy to forget them because of their size. One small business man said to me, “I don’t have time to lobby my Member of Parliament or to go to meetings. I’m too busy trying to earn a living.” It is up to us as MPs to go to them, to tell them that we support them and want to help them.

As politicians, we would always seek to claim the glory of any economic recovery and, yes, we play a significant part, because we can legislate to help and support these businesses. I am proud that this Government are on the side of the small businesses. We do not regard “profit” as a dirty word and we want to help them into profit, because they can reinvest that and create more jobs and employment in our constituencies. Any economic recovery is driven by businesses, including small businesses. The figure that I cited—the 98.5% in my constituency—shows that small and micro-businesses are very much at the forefront of that effort and the recovery that we see today.

There is a perception among some that the typical small business owner sits there with an expensive cigar, counting the money, but I assure hon. Members from all parties that that is not so. They have staff to look after, debts to service and overheads to worry about and, above all, they have customers whom they have to service and please.

Often a small business’s strongest asset is its staff. Although there were never many of us, my staff were the most important: they were the ones who spoke to customers. The staff in a business operating in a specialist field are trained in a certain specialism, making them even more important. A customer once said that he did not have one mortgage on his house, but had 25 mortgages to service, because his 25 employees relied on him for their income and the ability to pay their bills.

The small business has no human resources or personnel departments and no credit control. The owner has to juggle all the different roles and responsibilities, to provide jobs for people, generate profits and pay his or her taxes. I hesitate to say it—and many hon. Members in the Chamber from all parties have worked in small businesses—but unless people have been in the situation, it is difficult to understand and comprehend it.

I remember many experiences well. I remember the day when my two best customers went into liquidation. Anybody who has been in a small business may know that liquidation letters usually arrive on a Monday. Looking at the letter from a firm of solicitors, people will think, “Oh dear, what’s this?”, and open it up to find that XYZ Ltd is in liquidation. The first thing to do is see how much is owed, although we all know fine well that we will not get the money back from that limited company.

I remember being faced with the fact that I had lost a significant sum—not only that, but I had lost my two best customers. Such a situation leads to cash-flow problems and affects the ability to earn that money back. It was not the greatest day and it will live with me for a long time. That is why I say that we should pay particular attention to the experiences of people who have to run these businesses and face such challenges daily.

We should remember that all big businesses usually start as small businesses. My company used to sell air compressor machinery. I am not sure whether many hon. Members know what an air compressor is. I could tell them in great length if they wanted and, since we have plenty of time this afternoon, we could have a great lecture on air compressors.

I remember well a company coming to see me that wanted a machine that cost £400 plus VAT. It was just starting up and did not have the money and said that it could just about squeeze £200. I did a deal with them and it paid half up front and the rest on a post-dated cheque. That company, which makes ready meals, now employs 270 people—it might even be in the constituency of my hon. Friend the Member for Cheadle (Mark Hunter). That company dealt with us for many years, because we had a bond of loyalty, and I was always grateful to it for that reason. Credit is due to it for growing into a large company. We should remember such examples and never forget small businesses. Small business Saturday is so important, because it gives us a chance to support them.

Pretty much every shop on every high street is a small business: every pub is a small business, for example. As well as the retail outlets that we have heard about, we should remember and support plumbers, joiners and electricians—all small businesses in their own right that people can support on small business Saturday. However, I make a plea on behalf of the small and micro-businesses to all residents in my High Peak constituency, and others: do not make small business Saturday an exceptional day in your year’s shopping. People who use a small business should make every day a small business day, not just one day a year—with the greatest respect, that is not much use to people who run small businesses. They cannot make a year’s profit and turnover in a day, so make it every day.

As well as retail and public-facing small businesses, there are trade businesses. I did very little business with the general public; I was doing business with other companies. I make a plea to the Minister on behalf of such businesses. Big companies, multinationals and especially the public sector, whether councils, Government agencies or Departments, should all embrace this small business ethos and small business Saturday, as I have said before in the House. I venture that such organisations may not work on Saturdays, so they should think of other days and embrace the concept of dealing with small businesses.

I have said it before and I say it again: take the lead, give the small businesses and the micro-businesses a chance to supply Government agencies and local councils, because they can often provide a better product at a better price. Do not put ridiculous surveys, questionnaires and assessments, and all that sort of thing, in their way. Look at their products, what they can offer and their prices. Do not have the same revolving merry-go-round of big organisations dealing with big organisations. Let the small company feed at the table as well. As I have said before, public sector companies would do better to use small businesses wherever they can, because they would get a more personalised service and a better product at a cheaper price.

I am sorry if I am getting a bit evangelical about this, Mr Hollobone, but, as I said, I spent many years trying to deal with big organisations and local authorities, knowing that I could do them a better deal. I remember dealing with a local authority, knowing full well that my product was the same and my service was better, but I did not have certain bits of paper with certain ticks on them. I was facing somebody with an agenda to get all the forms ticked and filled in and knew that I was not going to get the work. It was work that I wanted to get and I knew that I could provide a service at a better rate. Unfortunately, the taxpayer was being short-changed, because those organisations were paying a higher price for the product.

I applaud small business Saturday, but let every day be a small business day. The big businesses—the conglomerates—can shout up for themselves; they have people on their payroll who can do that for them. I am here to shout up for the small business man and woman—incredibly hard-working small business owners in the High Peak and across the country who do so much and create so much for my constituents, yet they are forgotten, overlooked and not recognised for their efforts. My message to them is and always has been clear. I will support them and I am proud that the Government support them. As we near Christmas, I salute every one of them for the sleepless nights, the hard work and the graft that they put in to help our economy. I salute them for what they have contributed over this last year.

While I am on my feet, I have to be honest and say that I am not a big lover of the Christmas festivities—[Hon. Members: “Bah, humbug!”] Yes—bah, humbug! Absolutely. Lent is more my ethos. Anyway, while I am on that theme, I wish small business owners a very merry Christmas and, more importantly, a prosperous Christmas and new year.

[Mr Philip Hollobone (in the Chair)]

It is perfectly in order to be evangelical.

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[Andy McDonald]

I entirely endorse what my hon. Friend says. That local initiative was important, because we all face the challenges of out-of-town shopping centres. We want to ensure that people have an equal opportunity to come into town centres to shop. He is absolutely right when he talks about the sense of place and identity and people supporting their sub-regional centres, which is vital.

In conclusion, I put on record my enthusiasm for small business Saturday. We got off to a good start last year, when the event added some £500 million of trading to GDP in 24 hours. I strongly suspect that with the momentum and capacity that has built up over the past 12 months, this year will be even better. I welcome the initiative and congratulate the hon. Member for City of Chester on securing the debate.

[Mr Philip Hollobone (in the Chair)]

We will now go to a right hon. Lady in striking blue, who will be followed by an hon. Lady in striking red. I call Maria Miller.

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[Seema Malhotra]

My hon. Friend makes an important point. I worry about the extent of the cuts and the damage that they will do. We absolutely need to respond to those cuts and listen to our businesses and local councils in the debate about them. Reform is also important. We have seen some innovations such as the sharing of work between local authorities and the police, as has happened in Hounslow, with them working together, co-locating and sharing budgets. That will make a huge difference.

Another issue is skills and relationships with local schools. There are some excellent examples—from abroad as well as from this country—of young people in schools getting access to work experience. That gives access to the world of work and an understanding, through experience, of its opportunities and satisfaction; it also allows young people to experience some of the challenges of running an enterprise.

Will the Minister tell us to what extent building links between local businesses and schools is part of a programme for work experience development, including for under-16-year-olds in schools? To what extent is that embedded in strategies for local enterprise partnerships and other parts of our economic infrastructure? Support for small businesses on skills and on the ways in which they connect to their communities should be part of a coherent national strategy—it should not just be subject to what a local authority does.

I will close by saying that it is important that we should have had this debate and shared some perspectives from small businesses in our constituencies. As politicians, we must stay live to the reality. Small businesses are the backbone of our economy, and the giants of the future often start small. Supporting businesses when they start up so that they can grow is an incredibly important challenge and one on which we must maintain a national focus.

[Mr Philip Hollobone (in the Chair)]

If the Front Benchers wish to split the remaining time between them, they will have 45 minutes each, but it is not compulsory for them to do so.