Small Business Saturday

Seema Malhotra Excerpts

Thursday 4th December 2014 Westminster Hall

[Stephen Mosley]

I support what the hon. Gentleman says. He raises the points that I wanted to raise in my conclusion, so he is denying me all the glory of raising those issues myself.

By working together, local communities, local groups and local businesses can boost their small shops and therefore boost their local area. One of the most inspiring, exciting and successful ideas for doing that is small business Saturday. Simply, small business Saturday exists to support, inspire and promote small businesses. It started in the United States of America in 2010, and it has been a key feature of the pre-Christmas shopping period and become established on the first Saturday after Thanksgiving. Small business Saturday was conceived, launched and is still heavily backed by American Express, with the intention of encouraging shoppers to patronise small, local bricks-and-mortar businesses.

In America small business Saturday has been heavily promoted via a nationwide radio and television advertising campaign, with a heavy focus on social media that has generated more than 1 million Facebook likes and hundreds of thousands of tweets using the Twitter hashtags #SmallBusinessSaturday and #SmallBizSaturday. Many politicians and business groups in the US have backed the campaign, with many launching campaigns in their local area. Last weekend, on small business Saturday in the US, President Obama and his daughters, Malia and Sasha, went shopping at the Politics and Prose bookstore in Washington DC, where they picked up 17 books. Additionally, many small business owners in the US have started to run marketing specials on small business Saturday to capitalise on the boost in foot and online traffic, as most customers at this time of year are actively shopping for the Christmas period.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I congratulate the hon. Gentleman on securing this debate. My hon. Friend the Member for Streatham (Mr Umunna) played a key role in bringing small business Saturday to the UK. The hon. Member for City of Chester (Stephen Mosley) is outlining a number of areas where small businesses in America have come forward, but does he agree that we can do a lot more and use small business Saturday to help our local businesses gain the confidence to come forward, market themselves more and feel that they can be much more present, and proud of their presence, in our communities?

[Stephen Mosley]

I totally agree. Small business Saturday started in the United States, and it is thought that last year US consumers spent $5.7 billion, which is about £3.6 billion, in small, independent retailers on small business Saturday. Following its success in the United States, small business Saturday first burst on to the scene in the UK in 2013. I am aware that the hon. Member for Streatham (Mr Umunna) was very much involved in bringing small business Saturday over to the UK.

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[Seema Malhotra]

My hon. Friend is making an excellent speech. He rightly raises the issue of access to finance and creative ways in which banks might now start to provide that access. Does he agree that there might be more opportunity to think about how businesses are reached? When I was in India earlier this year, I met the founder of the Mann Deshi bank, which uses mobile banking—a bit like our chip and pin system—to go out into communities and deliver services on the doorstep. That makes a huge difference to people, particularly women, who are setting up their businesses.

[Mr Bain]

My hon. Friend makes an excellent point. Indeed, one of the trends that we have spotted in the last few years is the number of women becoming increasingly keen to start up their own businesses, which policy in politics and the financial system should seek to promote. She made her point very well indeed.

There is a need for structural banking reform and for the Government to emphasise more the role that our small and medium-sized businesses can play in terms of exports. It was disappointing yesterday, after the autumn statement, to read in the fiscal report by the Office for Budget Responsibility that it has had to downgrade its forecast for the contribution that net trade will make to growth in this country for each of the next five years. That is a desperate position and Members from all parts of the House should be concerned about it.

I urge the Government, following this debate, to take more steps to make UK Trade & Investment much more proactive, to build on the work that our excellent exporting SMEs are doing in all our constituencies, and to ensure that the Government not only react to businesses but proactively engage with them and open up new markets. That is what the small businesses in my constituency tell me is needed, and it is an urgent priority for the Government during the next year.

We have heard, quite rightly, tributes to my hon. Friend the Member for Streatham (Mr Umunna)—small business Saturday in this country is his initiative. However, we should also follow some examples that originated, in principle, in the United States. That would be helped by having a small business administration within the Department for Business, Innovation and Skills. When small businesses speak to me, too many of them say that they feel there is too much of a silo mentality in Government, with too many Ministers in different Departments but not enough working together to produce the best approach—particularly when it comes to our manufacturing exporters. I hope that a small business administration within BIS would begin to break down that silo mentality, so that we would see improvements.

Small and medium-sized businesses deserve other help from Government when it comes to procurement. This Government, I remember, came to office and pledged that a quarter of all Government procurement contracts would go to SMEs. That simply has not happened; that target has not been met. It is clear that the next Government, whichever complexion they have, will have to do substantially more to make up for the underperformance of the Cabinet Office during the last four and a half years. An emphasis across Government on how the procurement system can help SMEs has got to be a priority of Government policy.

Small businesses also tell me about the problem they face in gaining access to broadband. Again, the previous Government had a commitment to universal access to broadband by 2012. This Government decided to scrap that commitment; they made new commitments about superfast broadband, but in the last year or so those have been put back to 2017. With more and more people shopping online, even with local firms, it must be a priority of Government to ensure that as many people and as many small businesses are online as quickly as possible. That involves both getting support from the Department for Business, Innovation and Skills and dealing with issues such as payroll, tax and benefits. If we are to have an infrastructure in Britain that is fit for the 21st century, it is an absolute priority that we see businesses online as quickly as possible and with a good, reliable broadband speed; small businesses also regularly complain about their broadband speed.

Another issue critical to small businesses is Government policy on skills. Commenting after yesterday’s autumn statement, the National Institute of Adult Continuing Education said that it was disappointed that the measures in the statement did not tie up with rhetoric that we had heard beforehand. NIACE particularly points to the issue about adult skills and workplace training. The Minister and I have regularly conversed about it.

Given the OBR’s verdict on productivity and investment, it is absolutely critical for the future of small businesses that they have a willing partner in Government to ensure that investment in a skilled work force is a priority and is improved in the coming years. The Federation of Small Businesses, among others, is very concerned about this issue.

It has also become clear this week that there are still very disappointing numbers on earnings growth, and that is borne out by our experience as constituency MPs every weekend. If we consider the information that came out from the Office for National Statistics this week about the annual survey of hours and wages, we see that wage growth in SMEs is becoming a particular problem. The number of workers across Scotland and the rest of the UK being paid less than a living wage has risen this year compared with last. That makes the case for having a more proactive approach from Government, to support small businesses that want to pay the living wage and that will see the benefits coming from the Government’s taking more action on it.

I simply commend the idea of having a fiscal incentive. Labour Members have sought to put that incentive together in the form of “make work pay” contracts. The Government ought to be looking at that type of incentive as well, so that we can go ahead on a cross-party basis, as the hon. Member for City of Chester has asked us to. Such an incentive would do a great deal to help businesses feeling pressure from lack of access to finance to be able to benefit from the living wage, where that is affordable, as well as help the workers who do such great work for those businesses.

I am optimistic about the future of our small businesses. They have a huge amount to provide, not only for our domestic growth but for the export-led growth that all of us, from all parts of the House, want. However, we need a more active Government who take action on skills, finance, procurement and investment, and I hope that that will be one of the consequences that follows from this excellent debate this afternoon.

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[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to make a contribution to this important debate marking our national small business Saturday this weekend. I again congratulate the hon. Member for City of Chester (Stephen Mosley) on securing the debate. I also thank my hon. Friend the Member for Streatham (Mr Umunna), who helped to build the coalition of support to bring small business Saturday to the UK last year.

I grew up in my parents’ small shop in Hounslow. It was very much a community shop and in many ways it was there that I learned the value of feeling part of and serving in a community. Through that experience, I gained a love for small businesses and an appreciation of the role that they play. Growing up in a shop is a different kind of family lifestyle—although it is a common experience for many in my constituency, as I am sure it is for many in other constituencies. The lifestyle is different because it can sometimes be much harder to separate work and home. The shop or business can be a passion for those who are running it, and it becomes part of the whole family life.

Such a life is also a great challenge, with many small business owners sometimes having a day-to-day struggle to make ends meet. They need all the skills—whether being the strategist, the marketing expert, the one who sorts out technology, the accountant or the financial manager. I recall many instances of my father being up late at night dealing with the accounts after putting the kids to bed. When we think about and thank small businesses and their contribution, it is important to recognise the daily challenges faced by many of them.

Many small business owners have also faced such challenges as part of the cost-of-living crisis that we have experienced. I have met many running businesses in my constituency who were struggling to make ends meet. They talked about problems with banks and about taking out extra loans to get through tough times. They welcomed Labour’s commitment to freeze energy bills, because that would save not only families but small businesses significant costs of up to £5,000 a year.

Another important point about small businesses that has already been made is their social contribution. Small businesses make our communities feel so much safer and more friendly. They can make a difference by being open slightly later; when they shut early, local streets can feel deserted and far less safe.

I hope that this weekend we will see many more residents and visitors shopping in local businesses—not only celebrating their success, but helping them with their revenues and growth and making them feel much more valued as real actors and players in our community. It is an excellent fact that 43% of consumers who knew about small business Saturday last year said that they spent more on the day, which contributed to some £500 million in trade. I hope to see that figure exceeded this year. I am certainly looking forward to starting my Christmas shopping in Feltham and Heston in our small businesses.

Small business Saturday is also a chance to celebrate how local businesses can contribute on the national stage. One business in my constituency, Kool Cakes, was founded by Kulwinder Paul Kumar. He was one of the official cake makers for Her Majesty’s diamond jubilee and he made Frankie’s cake in the 2012 “Big Brother”. It is quite something to go into his small shop in Heston, where I often stop for tea and a slice of eggless cake, and to see pictures of such things on the wall and to think, “Actually, this is a local business.” Such people are heroes—national ones as well as local ones.

Many hon. Members have referred to women who run businesses. Last year on small business Saturday, I stopped for a cup of tea at Charlie’s Café in Feltham, which is run by Carol Chownsmith. She is another example of somebody who comes forward because they want to do something that is a passion of theirs and that will make a contribution to their community—a place where local people can come to meet, eat and share their lives. This weekend, I will also visit Heston Florist, which I know is doing some excellent special offers for Christmas—Christmas is, of course, at the forefront of many people’s minds.

I say all this because it is important to think about the character of our businesses. They serve the needs of members of the local community. It is important to have access to such vibrancy and to a range of businesses; it is so much more attractive than going into a supermarket, where the level of service is not nearly as personal.

I will touch on a few other matters. The first has already been raised by several hon. Members: the importance of creating an infrastructure of support and the important role of local authorities, chambers of commerce and others in helping to achieve that. In Hounslow, we have West London Business and the Hounslow chamber of commerce, which do a lot of work to help to network businesses and encourage training programmes.

Hounslow council also encourages the setting up of small businesses, and has made a big difference during the past year by introducing a free half hour of parking—something that many local traders had called for. I have seen the contribution that has made in my inbox, as I now have fewer complaints about the cost of being able to have access to trade on our doorstep. Parking costs had been stopping impromptu trade, so the free parking has made a big difference for traders in my constituency.

Alongside some of the positives, businesses have also raised some challenges with me. For example, they are often on the receiving end of antisocial behaviour. Also, if local authorities do not clear waste quickly enough from in front of their shops, that can be unsightly. Small business owners spend hours and hours in their place of work—they do not leave and come home—so that place is important to their well-being. I have been working with local police on tackling antisocial behaviour and the small crime that affects local shops. That kind of work is incredibly important and we must focus on it at the national level as well. It does not just help shopkeepers and small business owners to feel safe; it is better for the workers in those stores and creates a safe environment for consumers so that they can shop in and support local businesses, whether in the morning, afternoon or evening.

[Toby Perkins]

I am enjoying my hon. Friend’s contribution immensely. She focused on the important role for local authorities in supporting small businesses and on the connection between many different aspects of public services and the success of small businesses. Is she concerned about the autumn statement, in which we heard that there will be absolutely unprecedented cuts in public spending—much of which I suspect will fall on local authorities? We cannot sit in this place and say, “This is what we are doing for local authorities,” and then close our eyes to the impact of local authority cuts on the capacity of councils to support small businesses in their areas.

[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.