Small Businesses

Richard Fuller Excerpts

Tuesday 7th September 2010 Westminster Hall

[Richard Fuller (Bedford) (Con)]

I am indebted to my hon. Friends the Members for Solihull (Lorely Burt) and for Mid Norfolk (George Freeman) for being brief in their remarks because it means that I can avoid talking about financing for small businesses in the manner of “Just a Minute”. I shall try to avoid deviation, repetition and whatever else I am supposed to avoid. I must declare an interest; I am chairman of a number of small businesses and a participant in a venture capital fund, all of which are in the Register of Members’ Financial Interests. I must also declare an ailment; I have a very sore throat and so may cough at inappropriate moments. Although I do not want to make too much of a partisan point, I am intrigued by the absence of Opposition Members in the Chamber today. The debate is important to the well-being of constituents and to the future of our country. As many hon. Members have said, we welcome having a Minister in office who is such an extraordinarily good and knowledgeable friend of small businesses, and we hope that he will be a strong friend during his time in office.

To encourage the Minister in his endeavour to be a strong friend, may I make a couple of high-minded points? First, starting up a small business, whether it is for profit or it is a social enterprise, is one of the noblest endeavours that one can undertake. A person does not go into small business just because they want to get rich; often, they do not want to be rich at all. If one is running a social enterprise, being rich is not even on their map. People do it because there is something inside them. It may be creativity, drive and the sense of trying to create something for themselves, their family and their community. It is a noble endeavour, and it is an important endeavour to promote. The motivations of people who start up small businesses are important.

Secondly, it is a vital endeavour for our country. When it comes to employing the next generation of Britons, “there is no alternative”—to quote a former Prime Minister—to strengthening the small and medium-sized enterprises in our country. That is something that we sitting in this Chamber have a responsibility to do as we face the difficulties of the great recession and the responsibility of dragging our economy and country out of it. It is also the source of our long-run national opportunity. I want us to sell into those international markets and to take advantage of technological innovation, which is what my hon. Friend the Member for Mid Norfolk has been talking about. That will only come with those sparks of ingenuity or insights and with supporting our entrepreneurs and small-business people. I say to the Minister, please be brave, strong and radical.

Given that many comments today have been about how we can encourage and strengthen the banks to lend to small businesses, let me say this: “Don’t bother.” The banks are failing small businesses; they are not structured to understand the problems and they are not ready to provide the capital. Be bold and radical and find alternatives. Challenge the banks on that turf. Do not rely on them because it will be a waste of time and of another generation. When we seek finance, the banks often stand in our way. They are poor both in terms of availability and of the cost of finance. The administrative burden of securing even the smallest overdraft does not make any sense and that burden is increasing. The terms and conditions for small businesses to get started and then for when they get into trouble are just too much bother. Why try and ask the banks at all? Just gravitate a bit and improve their little bits over here and there, but look for alternatives. Hon. Members have encouraged the Minister to consider reviving the 3i model, which is an exceptionally good idea. We have talked about trying to find ways in which we can create community funds that tap into local people who want to support local businesses and tying that to the changes in local enterprise partnerships. In Bedford, we are ready to do that. Give us the encouragement to do it; we will stand up and do it in our local community. By providing competition to the banks that have failed our local businesses, we will find ways in which we can achieve the support that is needed to help our next generation of entrepreneurs and the creation of jobs in our economy.