Small and Medium-sized Enterprises: Great Yarmouth

Robin Millar Excerpts

Wednesday 7th June 2023 Commons Chamber

[Brandon Lewis (Great Yarmouth) (Con)]

First, I direct the House’s attention to my entry in the Register of Members’ Financial Interests. I do so specifically, not least because I feel passionately about small and medium-sized enterprises. I worked in them and ran them before I came to Parliament, and now I am again working with family businesses. A constituency such as Great Yarmouth is absolutely reliant on those SMEs—in fact, it is not so well known that our whole economy is. I will explain that in a moment.

My father ran a business, and I have always had a strong relationship with Great Yarmouth because his business—an SME that employed people—had a factory there. Because of how SMEs integrate into the community, even today, some 30 or 40 years since my father left that business, people who worked for him are still running a part of that business in Great Yarmouth. They are employing people who will go on eventually to run that business, and maybe they will set up their own businesses to form part of the Great Yarmouth business community.

Some 37,000 people in my constituency—roughly half of my voting constituency—work in SMEs. There are some 3,000 SMEs in Great Yarmouth. That sounds like a lot, but it is no surprise because across the country something like 99% of businesses qualify as SMEs. More than 50% of our working population work for SMEs. That is a huge number, and that is important, because these businesses drive our economy.

I have a strong interest in the housing industry. I was the Housing Minister, and I remember working with great house builders and household names, and some of the great multinational companies that we see started as sole traders and grew to be the big names that we know today. In sectors across our economy, there are big-name brands and companies employing people globally who started as family businesses. Some of them still are family businesses.

We need today’s S’s to become the M’s of tomorrow and then to become the big companies that grow our economy. We get very focused on the big names, and they play a hugely important part, but for constituencies such as Great Yarmouth—particularly coastal communities where the tourism and hospitality industry plays such a key role—SMEs are at their heart.

SMEs play a part for the big companies as well. The oil and gas and renewable energy industry has a huge presence in Great Yarmouth, particularly in servicing. Companies such as Seajacks, which work around the world, are from and based in Great Yarmouth. They are there because an entrepreneur from the oil and gas industry had an idea, took the risk and developed it in Great Yarmouth. Now, he is employing people from across Great Yarmouth. When clients come to companies like Seajacks and others in the energy industry, they often take their clients, visitors and customers for lunch in places like the Imperial Hotel in Great Yarmouth, and restaurants like the Waterside, or Planet Spice in Ormesby. Those businesses are integral to big and medium-sized businesses. It is a symbiotic relationship. Our economies work because of all of those layers.

Small businesses are generally family-owned businesses. If not, they are at the very least locally owned or locally run. That means they have a very keen interest in the community, which they show by sponsoring local sports teams or cub scouts, or just by being involved in the community and knowing their staff who are a part of the community. The businesses are an important part of it. We have spoken in this Chamber a lot, and in my roles in government I have spoken a lot, about the pub industry and why pubs are so important to our communities. They are SMEs and a hugely important part of the community. Like many other businesses, if they have a regular customer who has not been in the pub that day, they may be the first in the community to realise there is a problem.

An SME owner or manager will generally know all their staff. In my business, before I came into Parliament, I knew all our staff by name. That does not happen in a conglomerate, but it happens in small and medium-sized businesses because their owners and managers are a part of that business and community. They also respect the local community in a different way—not to say that big companies do not respect their communities—because they are so reliant on it for their customers and their staff. They are much more integral to the local community, and much more focused on how they can work for it and support it. That matters, because that is what binds our communities together. It also ensures we can deliver social mobility. People can move and work in businesses in different sectors across the country, knowing that wherever they need to move to and wherever they want to work, there is a community they can be a part of; not just a housing estate or a business but a community, and the business will be a key part of that.

SMEs, particularly in hospitality which is so vital to constituencies like Great Yarmouth, have had a really tough time. As we came through the covid pandemic, they arguably had some of the toughest situations to deal with. In many ways, it was one of the fastest industries to recover, because we all wanted to get out and about and do things while we had the opportunity to do so, but those businesses still need help. VAT has been an issue for them since it has come back up, particularly compared to some of our competitors around the world. They also have to deal with business rates. SMEs find business rates to be a challenge, as they have to deal with high street values and prices, while competing with conglomerates that have out-of-town business rate values and prices. Any business we talk to will say there is a need for us, at some stage, to ensure that we are cognisant of the challenge of business rates, seasonal worker schemes across hospitality—and agriculture in a constituency like mine—and the wider basis of regulation and tax.

We all want things to be safe and regulated, but we have to remember that big companies can deal with that more easily. They can put teams together to manage it. It will be a cost to them, but they can manage it. SMEs often do not have the resource to do that. They need flexibility to be able to work with their workforce. They often have very small margins and need to be focused on their customers, rather than on what is sometimes seen to be unnecessary regulation and red tape, so we all have a duty to focus on that.

The Minister will be absolutely cognisant of that. From conversations we have had over the years, before either of us were in government, I know how successful he was in the business sector and I know how well connected he is with the SMEs in his constituency, so I know we will be singing from the same hymn sheet. He has a reputation across the sector as someone who understands the sector and wants to deliver for it—something we all want to do. I just want to take this opportunity to be very clear about its value and importance, and to put on the record what we all know, which is why these businesses matter so much to our communities.

[Robin Millar (Aberconwy) (Con)]

My right hon. Friend is making a really interesting speech. There are many different points I would like to pick up on, not least the similarity with my own constituency, which is also a coastal community that is highly dependent on tourism for its economy. He made a very interesting point about pubs being close to the people and often being the first to detect when things are wrong—when people are missing. Does he agree that pubs and all hospitality businesses are very often the first to indicate when there are problems? Just today, I was with a group of colleagues talking about the impact of energy pricing on the pubs and hotels in their constituencies. The phrase, “They are the canary in the coalmine,” was used. Does he agree that that is the case, and that energy pricing is proving to be a real problem for them at the moment?

[Brandon Lewis]

My hon. Friend is spot-on. That challenge has been fed into me recently by a number of businesses: they have asked what more the Government can do to ensure there is collaboration between the Government and industry to deal with energy pricing. The rise in energy prices is one of the big challenges coming out of the problems of covid and particularly the abhorrent invasion of Ukraine by Putin. The Government have rightly put protection in place for households, and I congratulate them on that, but many businesses are still struggling with rate rises of up to 400%. They are often businesses working on small, single-figure margins—often of 1% or 2%.

The pub industry is tough: it is hard work making sure the client and customer is happy and has a good experience. We need to make sure that we have the support in place to not lose more pubs. We all know we are losing pubs and that lifestyles are changing. It is not necessarily the Government’s responsibility to fix all those issues, but we do need to be cognisant of what more we can do to work with the energy industry to ensure that we have the biggest possible impact for businesses, as some of their rising costs through inflation go back to the challenges from rising energy prices.

My hon. Friend is right, too, that the hospitality industry is one of the first to see any warning light for our economy, as, indeed, is the housing sector. If we want more houses to be built across our country, we need SME house building businesses to be building. I know some of the chief executives of our big house builders. One of them, who sadly has passed away now, always said to me when I had responsibility for the sector in government that one of the challenges today is that the regulation and the restrictions on housing make it very difficult for people to do what he and some of his competitors did in the past—those big house builders that started as sole traders—which was to borrow money and get through the planning process in order to build even one or two homes.

If we were able to invigorate SMEs in the housing sector to build those small numbers of homes in our villages and towns across the country—wherever we need them; in the right places and of the right quality—that would make a huge difference to our economy, because it has a knock-on effect. It is not just about the house, which itself improves social mobility; it is about everybody who is employed in building the house, and about the person who moves into it going to buy some paint or whatever else to decorate it. That all adds to the economic boost and growth for our country, and it is why we benefit by about 1% of GDP for every 100,000 homes built in this country.

Our hospitality industry is a canary in the mine showing what condition the economy is in, as my hon. Friend said. Those businesses I was talking about earlier—the larger and the medium-sized businesses—entertain clients and customers, and hospitality notices first if there are fewer of them, if those businesses are taking less time to entertain because they have fewer customers and visitors, and if we as individuals are spending less money in hospitality.

It plays an important part in the economy. People think of hospitality in places like Great Yarmouth as being just there for visitors, but it is there for business as well. In Northern Ireland, I spoke regularly to businesses who would use the hospitality pull of Northern Ireland as part of the sales pitch for their business in the engineering sector. It is a very important sector for our economy, and it thrives and relies on those SMEs.

The majority of that sector is SMEs. Big companies like Haven Holidays have a huge presence in constituencies like mine, but it is the small businesses that knit things together and support people across the villages and the coastal towns. I have seen that at first hand in Hemsby in Great Yarmouth, where almost all the businesses are independent or family-owned. They have come together to protect the coastline and literally defend the homes of people, and they have helped people who have lost their homes when they have fallen into the sea because of the coastal erosion we have had over the last few years. There have been some very dramatic circumstances. The businesses with a sense of passion for their community —the publicans and business owners in Hembsy—have come together to drive the campaign to make sure we get the support for the residents who need it, as much as for the businesses themselves and the visitors who come to enjoy the beach that we want to protect.

I have seen time and again the importance of SMEs across the whole of the UK economy, as I have outlined. Many people—the majority in our country—are employed in SMEs. I know the Minister is cognisant of this, but in everything we do we should always be thinking about what more we can do to help today’s sole trader become a small business, and today’s small business become a medium-sized enterprise, with a view to how they grow into the big plc of the future; because without doubt for me in Great Yarmouth, our small and medium-sized, predominantly family-owned, businesses are the heartbeat of the constituency, and they end up being the heartbeat of our country.

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[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I am sorry that I cannot emulate my right hon. Friend the Member for Great Yarmouth (Brandon Lewis) by speaking without notes, but I will do my best to ad lib a little. I thank him for securing this important debate. I love his words that SMEs drive the whole economy. It brought back the words of Winston Churchill about the private sector; he said that some people see private enterprise as a predatory tiger that needs to be shot. Some people see it as a cow that needs to be milked. Few people see it for what it really is: the strong horse that pulls the whole cart. That is exactly right. Everything we see in the public sector and in this House is paid for by the private sector, the taxes it raises and the jobs it creates.

I totally agree with my right hon. Friend on the title and the primary content of this debate—SMEs are the most important part of the sector. As he said, I started a very small business and grew it over time, but the pressure we were always under as our business grew was from smaller businesses starting up and putting pressure on our market share. I listened carefully to his points about his father’s business and the legacy effect it has had on Great Yarmouth. That is my experience. Many people go into business for the potential financial reward, but also for the legacy: the jobs they can create and the business that they leave behind. That has a long-lasting effect on towns such as Great Yarmouth.

The Department for Business and Trade is seeking to make the UK the best place to do business in the world. We want to make it easier to do business every single day. My ministerial colleagues and I, as well as many others including my right hon. Friend, the Chancellor and the Prime Minister, are for business because we are from business. We understand how this works.

My right hon. Friend made the point about smaller businesses that start up and grow to become larger businesses. That is the fundamental basis of our strategy to scale up Britain. We want the start-ups to become scale-ups. That is one of our areas for development. We are No. 1 in the OECD for start-ups per capita, but in a survey of 14 OECD nations, we were 13th for scale-ups—businesses that have 10 employees or more after three years. That is our focus, and there are three key focus areas underneath that: access to finance, support and advice, and removing barriers and red tape. Those are critical issues for the SMEs I speak to.

When we speak about business, it is important to speak about the entire world of businesses in all sectors. Hospitality is very important in Great Yarmouth, where 23% of all jobs are in the tourism industry. In his intervention, my hon. Friend the Member for Aberconwy (Robin Millar) rightly said that the hospitality business feels that cold wind first, but also sees the benefit of the improvement in the economy first, too. It is truly the canary in the coalmine, as he put it.

In Great Yarmouth there are some fantastic opportunities for the future, not least in green energy. My right hon. Friend pointed out the businesses that are benefiting from that. I am aware of ASCO, which employs more than 100 people, providing services to the North sea opportunity that is green energy—30 wind turbines on the Scroby sandbank. There are many more opportunities in that sector.

In the Lowestoft and Great Yarmouth enterprise zone in his constituency, South Denes energy park and Beacon Park are boosting innovation and growth in the region. More recently, investment through the Great Yarmouth town deal and the future high street funds, building on previous support from the local growth fund, is helping the local area by supporting jobs and growth in that region.

I will go into some specifics about the three areas of focus I referred to earlier. First, access to finance is one of the primary concerns for small businesses as they open their doors and grow. We work closely with the British Business Bank to improve access to finance. I am pleased that as of March 2022, the British Business Bank programme has supported over 96,000 small and medium-sized businesses nationally with over £12.2 billion of finance. The programme is designed to bring benefits to start-up businesses, businesses with high-growth potential looking to scale up and businesses looking to stay ahead in the market.

I know my right hon. Friend the Member for Great Yarmouth has supported many initiatives in his time in this place, such as the important start-up loan scheme, which has delivered around £1 billion of finance to 100,000 companies. Those unsecured loans are vital to many people who cannot access finance to start a business. In his constituency, 95 loans have been provided, to a value of almost £800,000.

Inclusion is a priority of this Government, so I am pleased that in terms of all the start-up loans issued up until April 2023, 40% went to women, 20% went to people from a black, Asian or minority background and 32% went to people who were previously unemployed. Those are all disproportionately high numbers, which we should welcome.

Within the space of access to finance, we are also undertaking the payment and cash flow review. We know that is an issue for SMEs and we want to make it easier for them to be paid, as that is another source of finance. We have improved our equity finance offering through schemes such as the regional angels programme, supported by the British Business Bank, and the enterprise investment scheme, the remit of which has been extended.

We are looking at potential new opportunities on the back of open banking. Open banking was a huge success in this country and has been emulated around the world. There are now 7 billion API calls every month for open banking, connecting one banking app with another, and there are other fintech solutions. Open finance provides the opportunity to completely liberate opportunities for SMEs to access finance. Rather than going to their own bank and asking for a loan, they can ask many different providers for that finance, which will increase choice and opportunity.

[Robin Millar]

The Minister is following the speech given by my right hon. Friend the Member for Great Yarmouth (Brandon Lewis) with another very interesting and helpful speech about what SMEs need. He is describing the Government’s role in creating an environment in which SMEs can flourish. Will he comment on the importance of the regulation to which he referred, not just to say that there should be as little of it as possible but to set out what regulation is effective? Will he comment on whether it is right for the Government to intervene when the market is failing?

Workers (Predictable Terms and Conditions) Bill

Robin Millar Excerpts

3rd reading
Friday 24th March 2023 Commons Chamber

[Imran Hussain]

Yes, it absolutely is, and I will go on to clarify that in my remarks. The Government’s only excuse for their refusal to tackle the exploitation of working people before their support for this Bill is that Ministers were too busy hailing the alleged benefits of being on zero-hours contracts. The reality is that the advantages of these contracts asserted by the Government are frankly alien to people on them. What they face is no utopia of flexibility, but a prison of exploitation by bad bosses at worst or a world of uncertainty at best. As has been pointed out during the passage of the Bill, people are often compelled to accept shifts that they do not want—and so they struggle to work—because they know that if they turn them down, they may not get any hours at all in future.

[Robin Millar (Aberconwy) (Con)]

I am listening carefully to what the hon. Member says, and I note his response to my hon. Friend the Member for Crewe and Nantwich (Dr Mullan). My Aberconwy constituency is known for its tourism, hospitality and all that comes with that, including shift working. The reality for many residents in my constituency is that zero-hours contracts give them flexibility to juggle family and other commitments and to balance a range of employment. Does he accept there is some virtue of this model for some people some of the time at least?

Employment Relations (Flexible Working) Bill

Robin Millar Excerpts

3rd reading
Friday 24th February 2023 Commons Chamber

[James Daly]

I think I am going to have to say “I agree” a lot in respect of these interventions.

[Robin Millar (Aberconwy) (Con)]

My hon. Friend only has himself to blame for this: he has opened up a rich vein, because this is important. Only this week, I had the opportunity to sponsor an event in the House with the charity Hft, which works with people with learning difficulties, particularly on such simple issues as addressing obstacles to the workplace. Does my hon. Friend agree that, in the work equation we all make, and that as employers we need to make as well, there are important things such as dignity and meaning attached to work, and reducing barriers and improving the flexibility of working arrangements is key to unlocking that for so many people?

[James Daly]

I agree. As has been said in relation to the importance of flexible working for family and all sorts of other reasons, it is important that a statement is made in law. Flexible working is already in the legislation that has been referred to, but we must make it very clear that this Parliament supports it if it can happen.

One of the things that concerns me about flexible working is the definition. We have already discussed the best form of flexible working, and there are sectors of the economy and parts of the workforce that are currently enjoying it, but I want to make this serious point. During the pandemic, flexible working was a necessity. My local authority decided to allow the vast majority of its staff to continue working from home. That may be a good or a bad thing—who knows?—but that was its decision.

However, there are considerations to be made. I have serious concerns about the impact of taking a huge sector of the workforce out of Bury town centre because the money that those people bring in to the urban centre is very important. I support flexibility in the sense that the hon. Member for Bolton South East set out, but it is not an open invitation to local authorities simply to continue arrangements that were put in place during the pandemic. What we are looking for is not flexibility for flexibility’s sake, but a system that allows proper access to the workforce for people who are being excluded and gives flexibility to people who have very good reasons to request it.

We often talk in the generality about a lot of things in this place, but the vast majority of the workforce in this country work in small and medium-sized enterprises of nine employees or fewer, such as in the sector that I worked in all my life. We must not underestimate the requirements on small businesses. Politicians can stand up and say words that make them feel good about themselves, but people still have to pay wages. There has to be a business there to allow flexible employment. Flexible employment cannot be imposed upon a business that cannot afford it. In vast sectors of the economy, it is simply impossible because people need to be in an office.

In my sector—this is why I mentioned my entry in the Register of Members’ Financial Interests—the challenges during the pandemic of being a conveyancing solicitor working from home were incredible. I would argue strongly that people in my sector need to be in the office. There needs to be that team environment, because it increases productivity. I am sure that it would work very well in other sectors of the economy, but we have to be open and honest about this. We cannot just impose principles on business if they cannot afford to pay the bills.

--- Later in debate ---

[Greg Smith (Buckingham) (Con)]

For the second debate running, it is a pleasure to follow my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon).

Over recent years, not just since the pandemic, flexible working has revolutionised the way people go about their employment, their business and their day-to-day lives. That is visible in my constituency on the daily commute: getting on the train at Haddenham & Thame Parkway on a Monday or a Friday, the car park is noticeably emptier. When people get to Marylebone and try to get on the tube, they can get on the platform at the first time of asking; if they try it from Tuesday to Thursday, they have to wait four or five tube trains before they can get on one to get wherever they are going. On the trains, on the underground and on public transport generally, the sheer volume of people who have gone on to a more varied working week is clearly visible—the days of nine-to-five are well and truly gone, and people are working in much more flexible patterns.

I congratulate the hon. Member for Bolton South East (Yasmin Qureshi) on her Bill. As others have said, it seeks to provide greater balance by giving everybody—no matter who they are, no matter how senior or junior they are, and no matter what their station within their particular business—the ability to better engage to get a working pattern that is right for them and for their business and that ensures we have a buoyant, growing economy. The growth of technology such as Zoom, Teams and all the other video conferencing software has, to a great extent, enabled the ability to work remotely that others have spoken about—to do three days in the office and two days at home, or whatever it might be.

However, I have considerable sympathy with the view expressed by my hon. Friends that we cannot just take that technology to be a replacement for the office. We cannot say that Zoom and Teams mean that everybody should always be able to work from home and never go into the office, because that brings many disadvantages—not least, from my perspective, for people starting out on their careers and trying to get up the ladder in their places of business. I would argue that it has always been the case that graduate entrants, apprentices or people starting off in whatever business or profession they have chosen do not learn the most from textbooks, from university or from whatever degree they have done, or by some process of osmosis; they learn from the people further up the ladder. They learn from going to the next rank up and saying, “I’m struggling with this particular bit of work, I’m struggling to get my head around this.” They learn by asking for the advice of more senior colleagues.

In encouraging flexible working, although I am a huge fan of it, we absolutely must not throw the baby out with the bathwater by going too far. I say that without any technical interest to declare, Madam Deputy Speaker, but I do have three small children at home. Without flexible working—particularly for my wife, because we all accept that being an MP is not particularly flexible and that we absolutely have to be here at certain hours—our childcare arrangements would be an absolute nightmare, and that would certainly be to the detriment of my children.

I will focus most in my comments on the issue of childcare. Enormous steps forward have been made, not least by Governments since 2010, in supporting families with childcare—the 30 free hours that the coalition Government brought in is one example. However, I know from my own constituency that lots of parents struggle with childcare and with being able to pursue the careers that they want. They find that difficult within the confines of many working practices and set-ups around the country. Everything we can do to ensure that working parents are able to pursue their career of choice and fulfil their professional dreams, while not being punished for having, loving and wanting to bring up children, is to the good.

When the Minister responds to the debate, I urge him to look beyond the Bill, which is a strong starting point, and to ensure that we continue to lock in family-friendly practices, where necessary through regulation—although I am generally sceptical about whether we have to regulate for everything to get the best result—so that we are as family-friendly as possible.

Another point that came up earlier highlights or double-underlines the need for there to be a balance—a balance that, as I said a few moments ago, the Bill does support. I am thinking of the impact that flexible working can have on localities and geographies: towns, villages and cities where business plays a big part. Think of the impact on hospitality during the rail strikes in December, when no one was able to come into London—on the cafés, pubs and bars, and all the businesses set up over the years to support workers who buy their cups of coffee and get their lunches on their way into work and socialise with colleagues or friends after it. We cannot allow too much remote working to undermine our towns and cities and the businesses set up within them.

To conclude, I would like to briefly commend the comments made earlier, not least by my hon. Friend the Member for Bury North (James Daly). We can use flexible working not just to support those with childcare needs or the other things I spoke about earlier, but to ensure that there is a clear path into employment for those who, as my hon. Friend mentioned, suffer with autism or other disabilities—to break down those barriers and ensure that there is a place of work, a career and a professional path for absolutely everybody in our society. That might mean slightly different hours or some days at home and some in the office, but we have to be certain that the Government, the state and this Parliament have made things as accessible and open as possible for everybody with a particular need, in a way that the old system—if I may call it that—did not allow. The Bill goes a very long way towards redressing the balance and opening up much greater flexibility.

[Robin Millar]

It strikes me that the argument my hon. Friend is making is that such flexibility must be inherent in our response to the changes we are seeing in society. There are changes in personal circumstances, such as the points he made about caring for his children—I was glad to hear that he would not throw them out with the bathwater. There are changes in the marketplace and, indeed, in the travel patterns of consumers—I think of my constituency of Aberconwy, which has a tourism-based economy that relies heavily on seasonal working. Is that the thrust of his argument?

[Greg Smith]

As ever, my hon. Friend puts it far more eloquently than I could. He has hit the nail on the head, certainly on the seasonal aspect of some businesses and the changing times that we have all seen, not just through the pandemic but in recent years. If we want to have the most dynamic, growing, buoyant economy, we have to ensure that the paths into employment and by which people hold down employment—seasonal, permanent or whatever it might be—are allowed for in regulation. It is important that we do not dictate too firmly to businesses how they must go about their practices, but we must ensure that they are fair and open with their employees, so that nobody feels left behind, unable to enter the workplace or held back in some other way.

Indeed, that principle goes beyond business and into the public sector. To back up an argument I made a few moments ago, I am a member of the Transport Committee, which has looked at the Driver and Vehicle Licensing Agency and the Driver and Vehicle Standards Agency. All right hon. and hon. Members probably grappled with delays in the issuance of driving licences and heard nightmare stories from their constituents. One of the causes of those delays, stemming from the pandemic, was the inability of DVLA staff to access the weight of documents that people had posted to Swansea and to process them from home.