General matters

Stephen Metcalfe Excerpts

Tuesday 21st December 2010 Commons Chamber

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Thank you, Madam Deputy Speaker, for the opportunity to speak in what I am sure will be a wide-ranging and interesting debate.

I have a business background, and I am pleased to note that the Government have put support for business at the heart of their plan to rebalance our economy. They seem truly to value innovation and enterprise. The success of businesses of all sizes will be vital to our recovery. I have been fortunate enough to visit and meet representatives of many businesses in my constituency—that is one of the most interesting and informative parts of the role that I play—but all the company representatives whom I have met have highlighted particular challenges that they face in the current economic climate.

Places such as Basildon and Thurrock have the potential to lead our recovery. I believe that they will benefit from the change of Government and the new emphasis being placed on business, and will be able to play their role as the economic powerhouses that we need them to be. I am especially delighted that the Government have recognised the vital importance of our small and medium-sized enterprises. I think that Members throughout the House agree that they will have a major role to play in our recovery, but they face particular challenges. Let me give three examples.

The first challenge is access to finance, an issue that has been raised a number of times in the House and has been much discussed. We have lost many good businesses because of lack of support from the banks, either because the banks have become too risk-averse or because they have simply not liked the sector in which those companies operate. It is worth our reminding, certainly, the publicly owned banks that they need to do much more to support our businesses: I believe that they have a moral obligation to continue to support the companies that they have supported in the past. There is also a role for Her Majesty’s Revenue and Customs. I know of cases in which it has been too quick to pull the plug on companies, or too inflexible to recognise the cashflow problems that small companies may face. I hope that Ministers will think about whether more can be done to support them.

The second challenge is the burden of bureaucracy, red tape and regulation that falls on small businesses. I realise that it was designed to deal with the practices of unscrupulous employers, but I think we should recognise that the vast majority of SMEs value their employees greatly and treat them very well. Regulation must find a balance between dealing with unscrupulous employers and not overburdening responsible ones.

Many SMEs now have to employ external consultants to deal with ever-changing rules and regulations. They have to pay experts to help them to understand employment law and health and safety regulations. All that adds to the cost and burden of running their companies. While I recognise that employment law and health and safety regulations are vital to protect employees, there are sometimes unforeseen consequences. For example, if there were no statutory retirement age, it would be possible for an employee of many years’ standing to be dismissed on grounds of competency rather than being able to retire with dignity. Employers may not want to take this path but feel that they must in order to address their own commercial needs.

We need to make it easier for SMEs to employ people. The reality, or the perception of the reality, is that it is too difficult or too onerous to take on staff, so SMEs hold back longer than they might. I hope we will be able to find a way of easing that burden so that companies will take people on earlier and help reduce our rising or our high unemployment figures. We also need to do more to help people in the transition from unemployment to employment. In my time at work, there were occasions when we had to lend money to new starters because the cost of work was more than those people could afford as they moved from benefits to employment.

Finally, I want to encourage the Government to have a greater understanding of small and medium-sized enterprises. The Government are doing their best, but I want them to recognise that small businesses in particular are not a homogenous mass. A small business is more like a collection of micro-businesses. A company of 10 people could comprise a salesman, a production manager, a fitter, a driver and a designer, all of whom have separate skills and separate roles. They operate within separate spheres and cannot easily pick up the slack when one of the team members is on a prolonged absence. I hope the Government will recognise that when framing future legislation.

In summary, I truly believe that the Government have the best interests of business at heart and have got off to a great start, but will they please remember that not all businesses are the same and that size really does matter? We need a different approach, depending on the scale of the business. I know that, with care, we can deliver an environment to support our businesses and firms of all sizes, and that SMEs will happily play their role in rebuilding and rebalancing our damaged economy. With our help, they will grow to enjoy the bright and prosperous new year that I know we all wish them.