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21 Jan 2009 : Column 267WH—continued
Tony Baldry (Banbury) (Con):
My hon. Friend mentions a number of companies that are having specific problems and concerns. I suspect that all of us in the coming months will be meeting constituents in the same position. I am very conscious that the Minister is the only uncluttered
Minister in the Department for Business, Enterprise and Regulatory Reform in the Palace, and as he has no Under-Secretary of State, we will have to keep on dragging him into Westminster Hall for Adjournment debates, which will be difficult for him. Just as the Home Office has surgeries to which we can take our immigration cases, would it not be sensible for him to organise officials from the small businesses department to have surgeries from time to time to which Members of Parliament can take individual constituency cases—
Mr. Mike Hancock (in the Chair): Order. That is becoming very much like a speech.
Tony Baldry: It was a very bright idea.
Mr. Hollobone: I am most grateful for that very helpful intervention and bright idea from my hon. Friend. I can recall Lord Rooker from the Department for Environment, Food and Rural Affairs offering a similar facility in recent agricultural crises. I hope that my hon. Friend’s initiative is taken up by the Minister, because it would be extremely helpful for many Members of Parliament.
Peter Luff: Baroness Vadera is responsible for small businesses, so that would help with the accountability issue, which is of concern to the Select Committee on Business and Enterprise as well. I had a letter this morning from DBERR, dated 14 January, in the name of the previous Secretary of State, now the Secretary of State for Defence, acknowledging receipt of a letter from me, dated 28 October, concerning a small business in my constituency. His letter says that on consideration, the letter was not for that Department, but for the Treasury. It took nearly three months to get a letter from the wrong Minister referring me on to the Treasury. There is a need for urgency when dealing with the problems of small businesses.
Mr. Mike Hancock (in the Chair): Order. Interesting though that was, I do not think that it had too much relevance to the issue that is before us. If every hon. Member is to be able to speak, we need to be more courteous to each other in interventions.
Mr. Hollobone: I am most grateful for the idea of Baroness Vadera attending such surgeries because she could help each of us to spot the green shoots of recovery in our constituencies.
The Northamptonshire chamber of commerce kindly came back to me with views from its businesses across the country and with many excellent ideas. It said:
“A good number of our Members said that they would like to see tax relief/concessions for firms at this difficult time. Interestingly, a quarter of our respondents said that the lowering of VAT had been of no help to their business whatsoever, indeed had caused more work for some.”
Another sensible suggestion was:
“Tax concessions for businesses providing pension schemes. Increase or reinstatement of Capital Allowances—a couple of businesses mentioned this one, so that they might have the flexibility to sanction investment decisions.”
It also mentioned corporation tax holidays and reductions. As one member said:
“What is the incentive for companies to develop additional business, sales and profits when as it appears now all we will be achieving is to pay an ever-increasing amount of tax.”
Many members want to extend time scales for the payment of VAT and pay-as-you-earn. There is also a big call for a temporary reduction in business rates.
There is an overwhelming call for a reduction in red tape and bureaucracy, and complaints about
“slow and unresponsive government bodies”.
The chamber said that it has heard of a great deal of frustration
“at the ineffectiveness of the Valuation Office Agency who deal with Appeals against the Rateable Values of business premises. The Agency has a new system of programming which they instituted to deal with Appeals more efficiently, which is in a state of disarray with many Appeals not even entered into the programme.”
“more flexibility in taking on casual labour—at a time when businesses need to be flexible in where and when work is coming in”,
and for the Government offices to stop erroneous red tape requests. It said:
“One Member cited an example of a survey they received from the Office of National Statistics Annual PRODCOM Survey, Products of the European Community, which seemed certainly superfluous to their business commitments...but they have been warned they might be liable to a fine if they do not complete it.”
Again, the collapse of the credit insurance market was mentioned. The chamber said:
“A number of Members highlighted the huge problem of the ready availability and cost of credit insurance, particularly for firms in the construction sector. Apparently, the insurance industry has withdrawn £10bn of cover from the market.”
There were concerns about the bank lending crisis, and a great deal of scepticism that the efforts of the Government’s latest banking rescue packages would feed down to member firms.
Local authorities can also do things to help their local businesses. I am pleased to report that Kettering borough council has one of the best records in the country for paying local invoices on time. There is also an opportunity for local councils to be innovative in getting money back into the local economy. Despite huge scepticism about the VAT cut, Kettering borough council used the opportunity to introduce what it calls a pop-and-shop parking scheme for shoppers in Kettering town centre. The council was set to save £16,000 from the reduction in VAT on revenue it raises from the parking charges in its car parks, but it has decided to plough the money back by providing a number of pop-and-shop parking spaces in the town centre, in which local car owners can park for an hour at only 10p a go. The idea is to encourage more shoppers to come to the town centre to spend their money in the small shops on the high street.
The county council is prioritising capital schemes such as £22 million for Kingswood school in Corby, £31 million for the Isham bypass, and £29 million for schemes in the local transport plan, to inject capital into the local construction industry.
Mr. Peter Bone (Wellingborough) (Con):
My hon. Friend is making a fine speech on behalf of his constituents, people in Northamptonshire and the whole country, as
always. However, should not another public body—the NHS in Northamptonshire—be encouraging capital growth? Does he agree that it should be building a new out-patient facility in my constituency? The NHS has the land, and the facility is needed, but it seems unable to commit to building it.
Mr. Hollobone: My hon. Friend is leading a very successful campaign to highlight the wishes of people regarding where that facility should be built, and he makes an extremely sensible suggestion that I hope the local NHS trust considers carefully. One good piece of news from the local NHS trust is that it has also decided to pay its invoices as quickly as possible, especially to local businesses.
May I make a plea to the Minister on the so-called growth areas? Kettering council has applied, with other authorities, for growth-area funding, and it has been given £22 million over a number of years. Easily, £45 million could be spent on schemes that are already designed and ready to go, which would really help the local economy, especially small businesses. Will the Minister get together with people from the Department for Communities and Local Government to look at ways in which local pump-priming initiatives can be got up and running as quickly as possible?
Finally, on the front line, with our local small businesses, the difference between success and failure is often a few pounds a week. If the Government can get down to the nitty-gritty of business survival and get away from the idea that all they have to do is throw £10 billion at this and £100 billion at that, and look instead at targeted, practical help, many thousands more local businesses will survive the recession than would otherwise be the case.
Mr. Mike Hancock (in the Chair): Order. It is my intention to begin the wind-ups at around 3.30 pm to give adequate time to the Front-Bench spokespersons and the Minister. If we are courteous to each other, and if we look at the clock from time to time, everybody will get in. Five Members wish to speak. Mr. Smith has already apologised to me, and through me to you, Mr. Hollobone, for coming late. He was, I think, detained at a sitting of a statutory instrument Committee.
3.4 pm
Mr. Andrew Smith (Oxford, East) (Lab): Let me repeat that apology and say that I was detained—mercifully—for only a short while in the Committee.
I congratulate the hon. Member for Kettering (Mr. Hollobone) on raising this important debate, especially at this critical time. In the bits I heard—I am sorry about the part I missed—he made his points well, notably on the important contra-cyclical contribution of small suppliers and sub-contractors in the construction industry. That is critical as an engine of recovery, and I agree with him about VAT on repairs. At this time of environmental challenges, climate change and economic recession, we must be mindful of the contribution that energy conservation measures can make, both to job generation and to combating climate change. I am pleased with Government initiatives on that, but as the hon. Gentleman said, we must be absolutely sure that the smallest businesses and contractors can benefit.
This debate is an opportunity to place on record my appreciation of the work of small businesses and co-ops in my constituency, and their representative bodies such as the chamber of commerce and the Federation of Small Businesses. I owe a debt of thanks to members of those organisations for their comments, and they will inform my remarks.
We are all mindful that as and when recovery comes, and as we look for job generation on the necessary scale, small businesses, as ever, will make the lion’s share of the contribution. Not only that, but they do the lion’s share when it comes to saving jobs in the face of the present challenges. Those things must be uppermost in our minds.
I know that time is short and that other hon. Members wish to speak, so I shall concentrate on four main points. First, as the hon. Gentleman said, the availability of credit is critical to small businesses. It is galling for small businesses that are under the cosh to see the headlines that tell of hundreds of millions and billions going to the banks, especially because they are under the cosh from the banks that are in receipt of that money. Will the Minister continue to do everything that he can to put pressure on the banks to ensure that credit is available?
With 2012 on the horizon, tourism and hospitality is an important sector that is dominated by small businesses. They need support, especially given the attraction to overseas tourists of the weaker pound against the euro and the dollar, yet I have been advised that at least one major bank has made a blanket decision not to invest in hospitality projects, even when the local bank manager thinks that the project and the business is worth investing in. I am still checking which bank that is, and I will let the Minister know. Clearly, the Government need to ensure through their shareholdings in, and influence over, the banks that such ludicrous blanket policies are not applied and that sympathetic and proper consideration is given to every small business project proposal on its merits.
Secondly, I should like to stress the importance of self-employment. In our area, something like 18 per cent. of the private sector work force is self-employed, which puts a premium on the Government, local authorities and agencies being as user-friendly as possible to the self-employed. There are a number of questions to be asked about that. Highly valued apprenticeship schemes, other training and funding are available to small businesses, but is it as accessible as possible to the self-employed? Could more specific training and assistance be developed to ensure that the self-employed can make the most of their business opportunities? Can action be taken on ensuring that schemes are available for unemployed people to get back into work through self-employment when that is a realistic prospect? People are attracted to the idea of self-employment and explore the idea when they get over the immediate shock of redundancy, and many have good ideas, but they need support to make the most of them.
Thirdly, as more small businesses now operate from home—let us remember that there are environmental benefits from that, such as reducing congestion and so on—will we encourage local authorities and other agencies to be as supportive as possible? There is a balance to be struck, and there could be a nuisance to neighbours, but with imagination and sympathy, some things should be
considered. Could we allow small quantities of office waste from home-based offices in the domestic recycling rather than over-policing it? Could more grants be made available for the installation of business lines and broadband for home-based businesses? Could more support be made available for local, community-based business networks, so that small businesses are in a position to help each other with advice and marketing opportunities?
My fourth point was mentioned by the hon. Member for Solihull (Lorely Burt). It is crucial that we tackle small business access to public sector procurement, a long-running frustration for many small businesses. I know that the Government and the Department have made efforts in that direction, but more needs to be done, especially now that the Government are planning, quite rightly, to spend £10 billion on contra-cyclical public works projects to provide economic stimulus and drive job creation.
As I said, those jobs will come disproportionately from small businesses. They need a fair slice of the action when it comes to getting contracts. To offer the maximum return for input, procurement contracts must be packaged so that they can be small-scale and short-term where appropriate; they must be easy to access; and they must be marketed to small businesses at the local level. More could be done to avoid protracted procurement schemes, planning issues and gestation periods, which are often a barrier to small businesses’ access to procurement opportunities.
I endorse the idea proposed by my good constituency colleague from Oxfordshire, the hon. Member for Banbury (Tony Baldry), of advice surgeries for Members and small businesses in their constituency. It is a good suggestion that would enjoy all parties’ support, and I hope for a favourable response.
These are unprecedented times; we all know that. The challenge is huge. The Government are doing a great deal, but they need to do still more to ensure that small businesses can survive, keep providing invaluable jobs and play a full part in recovery. I urge the Minister and his colleagues to take a checklist through the Department’s policies and related areas and ensure as much as possible that they are targeted, appropriate and user-friendly for small businesses.
3.12 pm
Daniel Kawczynski (Shrewsbury and Atcham) (Con): I congratulate my hon. Friend the Member for Kettering (Mr. Hollobone) on securing this important debate. I have great admiration for the men and women in my constituency who have set up their own small firms. I never had the guts to go into business and set up my own company, because I was always worried about paying people at the end of the month, generating enough money to pay for it all and having enough for my mortgage. I always worked for big business, which provided the safety net of knowing that I would always get paid at the end of the month and that I could look after my family. I admire the men and women with the guts and determination to set up their own businesses.
My favourite expression in politics is that business is the workhorse that pulls the social welfare cart. I use that phrase over and over again when talking to my constituents. If we overload that horse and make life
too difficult for him, like the horse in “Animal Farm”, he will collapse under the weight of red tape, taxation and everything else. That is why it is imperative for the Government to do everything possible to ensure that the environment for those businesses is healthy and that they can get through these difficult circumstances.
I am disappointed by the lack of attendance at this important debate. Apart from the Minister and his parliamentary assistant, there is only one Labour Member here. That is disconcerting when we know how much our businesses are struggling. In fact, there are more civil servants here than Labour MPs. If the title of the debate were “Support for Trade Unions”, we would not be able to get into the room, because it would be filled with Labour MPs. I worry about the lack of care and interest in small businesses shown by the Labour Government. Very few Ministers have run businesses or have been involved in them.
What will the Minister do to help councils streamline the tendering process? I get frustrated with Shropshire county council’s tendering process. I recently went to see the head teacher of a primary school, who told me that, if the school wants to get a small wall built, it cannot just get quotes from three reputable companies in Shrewsbury but must go through a hugely long-winded tendering process. It can employ the services only of companies on the special preferred list, many of which are not even from Shropshire but from Birmingham, Manchester or Leeds. More should be done to help local companies in Shropshire get through this terrible crisis.
I went recently to Radbrook primary school, where I saw the state of the young children’s toilets, which were totally inappropriate. I would love to help Radbrook primary school employ the services of a reputable local builder to build that vital extension, but I was told that that was simply not possible, because the school must go through an extremely long-winded process. I recently had a meeting with Shropshire county council’s director of finance, Laura Rowley, who promised me a conference at which local businesses could meet the county council’s procurement officers in order to start more effective dialogue, but it is imperative for the Government to do more.
Shrewsbury is the county town of Shropshire. We depend on people coming into our town to shop, but so many shops and small businesses have “To Let” or “For Sale” signs. Too many of our high street businesses have those signs, which have a lot to do with the high rates that businesses pay. Again, Shropshire receives only a fraction of the funding received by other parts of the country—particularly inner-city Labour constituencies—so the council is grappling with a huge deficit. That is one of the reasons why rates are so desperately high. I have talked to Councillor Judith Williams, one of Shrewsbury’s best councillors, about her shop in the centre of town that sells carpets and furniture. She told me how stressful it is to grapple with the rates and overheads at the end of every month, which is one of the reasons why she has closed it.
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