Jobs and Work

Simon Danczuk Excerpts

Wednesday 11th June 2014 Commons Chamber

[Simon Danczuk (Rochdale) (Lab)]

Let me start by saying that I found the comments of the hon. Member for Warwick and Leamington (Chris White), particularly about manufacturing, of real interest.

As the economy recovers, we have a genuine opportunity to think about how we are shaping it and about how Britain succeeds in the modern world. My view has always been that Britain succeeds when its small businesses succeed. It is the Government’s job to get behind small business and create the conditions for British SMEs to thrive. I therefore welcome the inclusion of a small business, enterprise and employment Bill in the Gracious Speech. I hope that it will offer an opportunity to have a serious discussion about some of the very real challenges that face small business in Britain.

Having recently set up a small business in Rochdale—Danczuk’s Deli, for which I declare an interest—I can testify to how real some of these challenges are. Whether it is access to finance, late payments or being shut out from the tendering process for local procurement contracts, too many small businesses feel that Government do not always give them the proper level of support.

I have two important concerns. The first surrounds aspects of the small business, enterprise and employment Bill where I do not feel the Government are showing the necessary ambition to tackle the big challenges. For example, the Government talk about increasing access to finance, but they are unclear about what they actually intend to do about it. This country needs an ambitious programme based around regional investment banks aimed at getting banks lending to businesses again. In Germany, where thriving SMEs form the backbone of economic success, nearly 2,000 institutions lend to small businesses. In the UK, fewer than 400 do that. Any Government that are serious about tackling this issue would start by reforming the banks. My first concern is therefore about a potential lack of ambition in the Bill.

My second concern is that the Government still have their head in the sand on business rates. I guarantee that at any event with people from the small business world, the subject of business rates will be raised pretty quickly. Business people think the system is broken, and they rate that as their No. 1 concern. They are right to be angry about it.

The business rates system is based on a view that the profitability of a business is linked to the physical size of the premises. That is complete madness in the modern world where many businesses trade online with no physical shops or factories. When we add to that the ridiculous and arbitrary valuation system, we have one of the most unfair and ineffective systems of taxation that can be thought of. The Gracious Speech is a final indication that reform of business rates has been kicked into the long grass for the foreseeable future. If the Government are not prepared to act, will they please give up the empty rhetoric about business rates?

Finally, we need a serious discussion about some of the other proposals in the Bill and how they will work in practice. For example, Jill Nagy from Rochdale Training in my constituency has raised concerns about how the new apprenticeship arrangements will work. She feels that those arrangements will push more bureaucracy on to employers and take it away from training providers, which could cause problems for SMEs hiring apprentices. That is a real issue that could create more bureaucracy and red tape for small businesses, and we need to look at it again.

I hope that many of these issues can be ironed out during the year, and that the small business, enterprise and employment Bill will give us the chance to push for more action on access to finance and business rates reform. Small businesses in this country are all different, but they are united by a sense of ambition and optimism about the future. It is time for the Government to match that ambition.