Examination of Witnesses (Questions 80-86)
DAVID CARO,
DENISE CRAIG,
CHRIS ROSIER,
BARRIE WILLIAMS
AND GARY
WOODMAN
11 MAY 2009
Q80 Mr Plaskitt: Sure, but an
awful lot of cars manufactured in the United Kingdom might have
a foreign badge on the front—there is a lot of assembly
that takes place here. Do you think that the scrappage scheme
will help lift demand for cars and therefore have some impact
on the suppliers of parts going into cars that are built in the
United Kingdom?
David Caro: I would hope so. I
am a little sceptical on whether it will, because we don't produce
that many cheap-end cars in the UK. Most of them tend to be mid-sized
family cars or the upper end. We've got the Mini, but it's an
expensive small car. We have the Micra, which is about the only
one I can think of that fits the bill, but I haven't seen any
discounting yet on the Micra—hopefully, that will follow—and
that is really the only one that might benefit from this.
Q81 Chairman: Obviously, the scheme
has not yet come in. May I ask you about the issue of small business
rate relief, something that the FSB has been lobbying fairly extensively
for recently? What is your experience of what is happening at
the moment with that? You made a comment about the Budget, but
I also understand that some local authorities have been fairly
active in promoting the availability of rate relief to businesses,
to increase the take-up, others less so. What is your impression
of what is happening?
Denise Craig: I think that if
it was brought in as an automatic thing, it would reduce the work
of local authorities for a start. Baroness Vadera said recently
that the concern about introducing it was to make sure that McDonald's
did not end up claiming it. But consider the amount of work and
costs involved in constantly sending out leaflets to inform small
business rate payers that they are entitled to this. They know
how much the rates are on the individual businesses, but the legislation
could be framed so that the onus—the responsibility—was
on the business owners, if they knew that they were not eligible,
to declare that ineligibility. That would really help small businesses.
In a small way there is an extra cost, but it is a cost that would
reduce for them. An extra administrative burden would be removed.
One of my members once described these extra little costs—in
themselves, one individual cost does not sound unreasonable, but
for small businesses there is a cumulative effect. It is not just
small business rate relief but so many new regulations constantly
being added to the pile while nothing is taken off—that
is where the difficulty comes. We would like to see small business
rate relief made automatic. They've managed it in Wales, so why
can't we do it here?
Q82 Chairman: I understand the
desire for automatic relief, but given that that is not available
at the moment, and bearing in mind that this is a West Midlands
inquiry, are there things that you feel could be done in this
region—I guess that local authorities would be the key area—more
effectively to promote the availability of that rate relief? Are
there examples of good practice, or of local authorities that
you feel are not doing enough?
Denise Craig: I can't give you
an example of good practice, and I apologise for that. My remit
tends to cover things at the regional level rather than right
down to local authority level. But, having said that, I think
that local authorities could include the information in the rates
demand, and state that business rate relief is something that
does not necessarily need to be reapplied for for the longest
period going. I know that some councils offer that. There is no
need for glossy leaflets, fancy advertising campaigns or any of
those nice-to-do things. A straightforward letter inside the rates
demand will be enough; not an insert, not something printed up
beautifully and all the rest of it, just a straightforward letter
saying that your rateable value indicates that you might be eligible
for this.
David Caro: I would go even further
and say print that on the bill itself, because most of the stuff
that comes in does not get read, it gets put in the bin. You keep
your bill. Print it in bold on the bill itself, "You could
be eligible—please apply." Do that on that section
at the bottom. You will see it and might well then do it.
Denise Craig: Simple and straightforward.
Barrie Williams: Would it be helpful
for the West Midlands LGA to advise its members of best practice?
Chris Rosier: I think that small
businesses are not aware of the rate relief.
Q83 Chairman: You think that a
lot of them are not?
Chris Rosier: I think that a lot
of them are not aware of it; there is an awareness issue.
Gary Woodman: In many local authorities
bits are done around billing time, but outside of that it drips
into the sand.
Q84 Chairman: Okay. We are just
about at the end now. There is one final question, and you are
under no obligation to make any suggestions here, because we have
covered a lot of ground and what you have said has helped us a
great deal. However, if you were going to pick one extra thing
that you felt the Government should be doing to try to help businesses
through the current economic downturn, what would that be?
Barrie Williams: I am very clear
in my own mind about that.
David Caro: Barrie is going to
say the same as me, I think.
Barrie Williams: There should
be help for manufacturing and automotive-related sectors and some
parts of the construction industry; support to keep existing work
forces in place rather than seeing continued redundancies; we
are into about the third round of redundancies.
Q85 Chairman: Something like a
temporary wage subsidy, for example?
Barrie Williams: Yes. Unless that
happens, when the upturn comes the difficulties will be extended
considerably because skills will have been lost; some people will
come back, but some won't. Recovery will be much more difficult;
its rate will be slowed considerably. It is costing businesses
a good deal of money, and it is costing the state a good deal
of money in benefits. And there is the confidence factor that
goes with that. As people see the unemployment figures soar every
month, the confidence factor is difficult to change. So I think
that it is something that is long overdue, and I find it very
difficult to understand why the Government have not acted in this
regard.
David Caro: Especially when so
many of our rivals on the continent—
Barrie Williams: On the continent
it is a common thing to do.
David Caro: With a small business,
you have the problem of it not being able to afford the wages.
Most of the employees might have been in the company for a long
time and it might not be able to afford the redundancy payments
if it goes to the wall. A little help on short-term working systems
could keep those companies alive and keep the skills in the company
so that it is ready to grow. I would add electric vans to the
electric car proposals, because vans are big polluters. The West
Midlands is at the forefront of world electric van technology.
Modec in Coventry and Zytek in Tamworth are massive developers
of electric van technology. Electric vans should be added to the
electric car proposals.
Denise Craig: It's not just LDV,
but Modec and Zytek as well.
Chris Rosier: There are two issues
with property. One is void rates, which are a real killer. The
other, which has been mentioned, is AWM gap funding, which has
been tremendously successful. We want to see that continue. The
take-up in the previous round was 28 applicants, with 27 applications
completed successfully. That £140 million is a big chunk
of money, which is very important to property and construction.
Gary Woodman: It is empty property
for me, and the export credit insurance that we have talked about.
Denise Craig: I agree with all
the others, but would ask whether we can have a moratorium on
new legislation, particularly the employment fees.
Q86 Chairman: That would include
the legislation you have been asking for, would it?
Denise Craig: You know what I
mean. So many things are introduced. Businesses would like to
settle down and cope with what we have got without too many new
initiatives being added.
Chairman: I thank you very much. We are
not able to make you any promises. That is one of the advantages
of exercising scrutiny rather than holding executive power. Your
evidence has been useful and comes on the back of the evidence
we have taken from the banks. We will take further evidence over
the coming weeks. When we write our report, the information we
have received will be very helpful. Thank you very much.
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