Small Business Saturday

Ronnie Cowan Excerpts

Tuesday 1st December 2015 Westminster Hall

[Ronnie Cowan (Inverclyde) (SNP)]

I beg to move,

That this House has considered Small Business Saturday

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the powers that be for selecting this topic for debate. I am delighted that we have the opportunity to discuss how vital small businesses are to the prosperity of the UK’s nations.

The importance of small businesses should be self-evident. Indeed, 99% of businesses in the UK have fewer than 49 employees, accounting for 48% of total employment and 33% of turnover. That amounts to 15 million people in the UK being directly employed by small businesses, with a turnover of £1.75 trillion. They are the drivers of economic growth, creating jobs and serving the requirements of our communities. Whether they are—in no particular order—local tradesmen, retailers, service providers or catering outlets, the benefits of small businesses extend beyond the employees they hire. Just under a fifth of all small and medium-sized enterprises in the UK operate in the construction sector and 15% operate in the professional, scientific and technical sectors, and those businesses complement the success of associated industries such as manufacturing. We should therefore recognise that the influence of SMEs cannot easily be quantified simply by looking at their own output as it extends into the wider economy and communities.

In bringing forward this debate, I wanted to stimulate the discussion around how we can continue to support small businesses and to highlight the challenges that they face. For the last three years, Small Business Saturday has provided the opportunity to focus the minds of consumers, business people and policy makers on the indispensable contribution made by small businesses.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Gentleman on obtaining this debate. One issue that our small businesses, whether they are on the high street or are another form of SME, face today is that of business rates, which are crippling many companies. I am sure he would agree that they need to be looked at.

[Ronnie Cowan]

I certainly do, and that is a topic that I hope to cover later on.

Last year, 16.5 million UK adults supported a small business on Small Business Saturday, and I am sure that this year’s campaign will be equally successful when it takes place on Saturday 5 December. However, although it is important to raise awareness of the challenges small businesses face on the first Saturday of every December, we must ensure that the campaign leaves a positive and lasting impact on small businesses all year round.

[Mr Chuka Umunna (Streatham) (Lab)]

I congratulate the hon. Gentleman on securing this debate. I want to pay tribute to the others, along with myself, who instigated the bringing over of Small Business Saturday from the US to the UK, including the Federation of Small Businesses, the Institute of Directors, the British Chambers of Commerce and the British Independent Retailers Association, and to thank Michelle Ovens and the team at Small Business Saturday UK above all for setting it up. Does the hon. Gentleman agree that it is important to acknowledge that Small Business Saturday is not all about shopping? Our small businesses do a lot more than just provide retail services and products and do so much more for our economy. Small Business Saturday is as much about people outside of retail as it is about those within it.

[Ronnie Cowan]

I absolutely agree. It is easy for us to focus on shopping and the high street, particularly pre-Christmas when that is what it is all about. Retail is a large part of it, but small businesses employ people in all sorts of sectors and many of them, such as my business in my previous existence, which I hope to touch on later, do not have the high visibility of the high street.

Other hon. Members will be able to relate to concerns about decline, as shop closures and empty retail units are an issue that stretches right across the UK. As in other constituencies, the situation in Inverclyde varies considerably. The largest town of my constituency, Greenock, is primarily served by an enclosed shopping centre populated by larger retail outlets which has struggled in recent years with closures and has failed to live up to the potential that the centre of Greenock has to offer. In other parts of my constituency, the smaller towns of Gourock and Kilmacolm have been comparatively successful in maintaining more vibrant town centres, mainly populated by small, independent businesses. However, they are not helped when large banks withdraw their high street presence and contribute to the reduction in footfall.

There are no easy answers when it comes to regenerating our high streets, but Inverclyde provides a valuable lesson: smaller, independent retailers are an integral part of creating thriving town centres.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Small Business Saturday is an opportunity to highlight the vital work of local authorities in supporting high streets. His point about empty shops is important and I congratulate the Vale of the White Horse District Council, which has halved the number of empty shops in Abingdon and has put on free parking for Small Business Saturday. It also helps to throw the important Abingdon extravaganza to support local shops. Does the hon. Gentleman agree that Small Business Saturday’s message is that we will see lasting improvements for small businesses only when local communities support them, whether retail or not, throughout the year?

[Graham Stringer (in the Chair)]

Order. I remind hon. Members that interventions should be short and to the point.

[Ronnie Cowan]

I thank the hon. Lady for her point.

One business in my constituency that is contributing to the success is the Pirate and Bluebelle, a gallery operated by Heather McCulloch and Nick Summers. It is a small business in the very literal sense of the word. Their shop is just 2 metres by 4 metres and is one of the smallest galleries in Scotland, if not the UK. Heather and Nick established the business in order to sell artistic photographic prints and by doing so they are now supporting a number of emerging local artists and crafters. Like many small business owners, Heather and Nick are self-motivated, have been prepared to take risks and are driven by a desire to benefit not only themselves, but their local community. In the words of Heather herself:

“We feel that the rewards far outweigh the cash.”

I hope other Members today will join me in commending Heather and Nick’s community spirit in creating a successful small business. Their experiences should be noted by policy makers in this Parliament and elsewhere. For example, Heather and Nick are concerned that the business registration process was difficult to understand and noted that the guidance on what was expected of them on tax and national insurance contributions could have been more clearly stated. Furthermore, Heather and Nick feel that the personalised support from Business Gateway made a positive contribution to the establishment of their gallery. An adviser has been available to answer questions specific to their circumstances and that specialised knowledge has assisted in developing the business in its first year of operation. I would echo that sentiment as I ran my own small IT business for 12 years and the burden of the paperwork required by Her Majesty’s Revenue and Customs distracted from the enjoyment of being self-employed.

The UK has an annual business death rate of 10% and the Pirate and Bluebelle is an example of why pre-planning is so important. Heather and Nick tested the market by attending local fairs and measuring the reception of their product with customers. They followed that up by securing premises on a shopping strip suitable for a small independent retailer and the type of products they wanted to sell. Many businesses fail within the first five years, and it is vital that potential business owners undertake the necessary preparation before fully committing.

[Hannah Bardell (Livingston) (SNP)]

I congratulate my hon. Friend on securing such an important debate ahead of Small Business Saturday. Does he agree that it is important to encourage more women to start their own businesses, as they often fail sooner than their male counterparts? As the world of work changes, we must ensure that businesses such as Decadently Pure in my constituency, which is run by Ros Milligan who recently won a West Lothian chamber of commerce award, are able to develop and flourish.

[Ronnie Cowan]

I would not for one minute believe that women were more likely to fail at small business than men—certainly that is not my experience in my community, where many of the businesses are run by strong, vibrant and intelligent women. I am surprised to hear that. Despite the challenges, long hours and potential risks of running a small business, Heather is optimistic about her future operating an independent business in Inverclyde. She said:

“Setting up and running a small business has been one of the most challenging things we have ever done but also the most rewarding.”

I am aware that a range of support is already available to small businesses such as the Pirate and Bluebelle—I should point out that Inverclyde and, indeed, Gourock have many other good small businesses dealing in fine art. Assisting SMEs must be a collaborative effort across different tiers of government and various other organisations. In Inverclyde small businesses have access to a variety of support, including from Inverclyde Council, the Scottish Government, Riverside Inverclyde, Skills Development Scotland, Business Gateway and Scottish Enterprise.

At local authority level, businesses in my constituency have access to grants that assist with capital expenditure, staff training and structural improvements to business premises. Inverclyde Council provides a small business loan scheme to improve the small business start-up rate. A west of Scotland loan fund is also available, providing loans of up to £100,000 for established businesses operating for more than two years, while newer businesses may borrow up to £30,000 through the same fund.

Such schemes emerged in response to the small business concern of finding credit increasingly difficult to secure. Another local organisation, Riverside Inverclyde, has complemented the work of Inverclyde Council to tailor solutions specific to my constituency. It has promoted the establishment of small businesses by providing quality office space, which is an important task, because Greenock, formerly a town of heavy industry, did not have enough office space suitable for a modern, digitally connected business. In establishing or refurbishing six offices and business centres, Riverside Inverclyde has helped to secure more than 850 jobs.

[Bill Esterson (Sefton Central) (Lab)]

I congratulate the hon. Gentleman on securing the debate. He is talking about the support needed by small business, which, as he said, is vital all year round. Does he agree that the Small Business Saturday team is becoming more of an all-year-round support and is securing support, not least with its bus tour, which has travelled throughout the country for many weeks, to show that support is needed every day of the year, not only on 5 December?

[Ronnie Cowan]

Absolutely. This coming Saturday is a focal point, which is all about raising awareness, as is the debate. As the hon. Gentleman says, it is all year round, because it is sometimes a day in, day out struggle for businesses to keep their head above water.

At national level small businesses have been eligible for the Scottish Government’s small business bonus scheme since 2008. Almost 100,000 businesses now benefit from having their business rates reduced or completely removed—a record amount since the introduction of the scheme. The scheme has provided indispensable assistance to businesses throughout extended periods of difficult economic circumstances. Since its 2008 introduction, the amount of money being saved by businesses throughout Scotland has more than doubled and because of that competitive advantage, businesses in Scotland can this year save up to £3,200 more under the scheme than equivalent businesses in England can. I welcome the First Minister’s commitment that the scheme will continue throughout the next Parliament, should the current Scottish Government be re-elected.

Cross-border collaboration also benefits small businesses, in particular on important infrastructure projects such as improving access to superfast broadband. Federation of Small Businesses research found that 99% of small firms rate the internet as “highly important” to their business. I note that the Scottish Government are ahead of schedule in meeting their target of 95% of premises covered by superfast broadband by 2017, so we can see in practical terms how collaboration between levels of government and other organisations is critical to giving small businesses the support they need to thrive.

If I may be allowed to indulge myself, I cannot end my speech without mentioning that Inverclyde has many advantages as a place to do business. It is within commuting distance of Glasgow, is a short distance from Glasgow airport and enjoys excellent rail connections. Anyone wishing to start a business in the area can expect excellent tailored support from Inverclyde Council and Riverside Inverclyde, in addition to the wider benefits that the Scottish Government provide.

[George Kerevan (East Lothian) (SNP)]

I, too, commend my hon. Friend for securing this important debate. He talks about collaboration between different agencies of government, but does he accept that one agency, HMRC, has not been helpful to small businesses recently? It is planning to close down offices throughout the UK, making it much more difficult for small businesses to get their tax forms correct.

[Ronnie Cowan]

I touched on HMRC earlier and I echo my hon. Friend’s sentiments.

In the lead-up to this year’s Small Business Saturday my message is clear: let us create more local jobs and vibrant town centres, and invest in the future of our communities by backing our SMEs.

[Graham Stringer (in the Chair)]

Before I call John McNally, may I check with the Minister that he has had permission to speak?