(12 years, 7 months ago)
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Yes. Being a small business man is quite an isolating experience, as many hon. Members will know. People are out there on the front line, struggling to get more business in. They can join network groups and all the rest of it, but they feel like they are in a foxhole, with letters in brown envelopes coming at them from HMRC and all sorts of regulators. That is not necessarily a particularly enthralling experience. My hon. Friend is right.
In addition to accountants and tax specialists to handle tax compliance, a plethora of organisations offer advice on human resources, fire and emergency, health and safety and other things. All that is welcome and they provide an excellent service, but the fact that they are needed and that a sub-class of business advice has been created shows the amount of regulation that we have to face.
The Government have made some progress on access to finance and cash flow. I do not want to be an apologist for the banking crisis. I have to declare an interest here. I was an investment banker and one or two other hon. Members here were, too. It is important to understand that banks have an aversion to risk. Part of the problem faced by the banks is that the Basel III and the Vickers’ recommendations, and so on, are trying to deal with the problem of not wanting the banks to fail. On one hand the banks are being asked to tighten their balance sheet, and on the other they are, rightly, being asked to lend more money. For the banks, those are opposing requests. We need to take great consideration of that as we go through the process of implementing the recommendations of the Independent Commission on Banking, because we cannot ask the banks to take on more risk and expect them not to go bust. That is a contradiction.
Is my hon. Friend aware that in my constituency—with particular reference to the fishing industry—someone receiving training who then wants to start a business needs to purchase a fishing vessel? The banks will not just accept that fishing vessel, although it is a valuable asset, as collateral for a loan. They ask for additional collateral, such as a charge on a property, which a lot of young people do not have. That is stopping industries that support our coastal communities from expanding. Does my hon. Friend think that there is an answer to that?
My hon. Friend raises two important points. First, on the general point about raising finance for businesses, part of the problem is that, in the past, loans have not so much been business finance loans as mortgages, where a bank has taken a secure guarantee, such as a property, thereby effectively giving a mortgage used to finance a business and the cash flow out of the business is used to service that debt. The feeling that I get out there is that banks have slightly morphed away from being business financers to being mortgage companies dressed up as business financers.
Secondly, my hon. Friend mentions marine finance. We have one of the finest marine businesses in the world. We produce the most fabulously made yachts—we are world class. I hope you will forgive me for getting in a plug for one of my constituents, Mrs Riordan, but Sealine in the middle of landlocked Kidderminster builds very good ocean-going yachts, and if you ever get a chance to take one out, you should. However, this country does not have a significant marine financing industry, and that is a real problem for all the marine industry, whether we are talking about luxury yachts or working fishing boats. I am working with constituents and various marine industry representative bodies to see whether we can address that point, because we must look at it specifically.
In addition to problems with equity and debt, part of the problem businesses face lies with cash flow. All too often, small businesses suffer as a result of delayed payments. To return to the FSB, three quarters of its members have received late payments in the past 12 months, while nearly half claim that a third of invoices are paid late. That is costly in terms of the time spent chasing invoices. In addition, a fifth of the claims for money owing to those businesses are for more than £20,000. Many businesses go bust not because they do not have enough capital or customers, but because of their cash flow. The problem is that, although a business is perfectly viable, it can easily go bust because of a late payment.
(12 years, 8 months ago)
Commons ChamberI am proud to be part of a Government who have seen the biggest boost ever in the number of apprenticeships. We have seen a rise of new apprenticeship starts of only 10% in my constituency, but that is partly because traditionally people from South East Cornwall have travelled across the Tamar to the constituency of my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) for training. That has gone on historically and it continues and grows.
I want to tell the House about one young lady from my constituency whom we have helped. Charlotte Rose is doing an apprenticeship learning school administration through first-hand experience at St Martin’s Church of England school in Liskeard. This apprenticeship was made possible only through the cash incentives that the Government announced in November, offering employers £1,500 if they had 50 employees or fewer. Charlotte told me that she had planned to go to university, but she saw this as an opportunity, and I applaud Charlotte and the school for making that possible.
On Friday, I visited the Grayhound project in my constituency, and I was delighted to see that at last, through the apprenticeship scheme, shipwrights and marine electricians are getting training. It is easy for a shipwright to find work as a carpenter on a building site, but a trained carpenter cannot work in a shipyard and become a shipwright. The same applies to marine electricians. These skills have been traditional throughout South East Cornwall and they have been lost. I am delighted to be part of a Government who are providing the training, facilities and employers for those lost trades to continue. That is why I applaud what the Government are doing today.