Department for Business, Innovation and Skills (Performance)

Debate between Baroness Burt of Solihull and Mike Weir

Wednesday 2nd February 2011 Commons Chamber

[Lorely Burt]

The Government have been particularly generous to small businesses for the coming year. The hon. Gentleman is right that no one wanted to increase VAT, but unfortunately the alternatives were even less palatable.

[Mr Mike Weir (Angus) (SNP)]

Will the hon. Lady give way?

[Lorely Burt]

In a moment.

There is also the national insurance contributions holiday for the first 10 employees in the first year of business for new companies outside London and the south-east. The regional growth fund has been much maligned today, but I think it will play an important part in stimulating growth.

--- Later in debate ---

[Mr Mike Weir (Angus) (SNP)]

I am very pleased to follow a typically robust speech by the hon. Member for Northampton South (Mr Binley). I assure him that I ran a small business before coming into the House, and it is small businesses on which I wish to concentrate.

Many Conservative Members have talked about what has been done for small businesses, and they have mentioned the reduction in corporation tax. That is fine, but I remind them that very many small businesses do not pay corporation tax, because they are self-employed individuals or partnerships. They pay income tax, so a reduction in corporation tax does not in fact help them. They are suffering as much as anyone else who pays income tax.

I also note that towards the end of Labour’s time in government, Her Majesty’s Revenue and Customs made the situation slightly worse by examining small companies and deciding that many of them were not real companies, because they were operated by a husband and wife. They therefore had to come back out of the corporation tax system and pay income tax again. Many people are not being helped by what the Government are doing on corporation tax, so I ask them to consider how those people can be helped.

[Lorely Burt]

I am glad to inform the hon. Gentleman that we are indeed examining a lot of those issues, particularly the vexed issue of IR35, which the previous Government did not manage to sort out. It is difficult to do so, but I am sure it is not beyond the wit of man to make tax fair for all small businesses.

[Mr Weir]

I hope that is correct—but action is needed, not just talk. The situation has been going on for a long time, and many small businesses in my constituency and rural constituencies throughout the country are in serious difficulties and struggling to keep their heads above water. They need help now, and the Government have to move on that.

The motion mainly concerns growth in the economy, which I understand, and I wish to talk about some of the things that small businesses need in order to grow. Many of the points in the motion are specific to England, but I wish to mention two matters that cover all small businesses, including in Scotland.

The Minister may know that, just today, the First Ministers of all the devolved Administrations have issued a joint declaration calling for action to protect the economy. The second point made in it is about addressing access to finance, and it states:

“It is clear that securing affordable finance remains a considerable challenge for many of our companies. This is particularly true for many small and medium sized firms—the bedrock of the Scottish, Welsh and Northern Irish economies.

It is unacceptable that many businesses are being prevented from expanding or are faced with significant increases in lending charges and we need to ensure there is in place transparency and accountability in the flow of finance for SMEs. We must also ensure that the planned £1.5 bn Business Growth Fund is implemented now to support lending to viable companies.”

That is the vital point. Many companies in my constituency are finding it very difficult to access finance, and even when they can, it is at a high cost. At a time when the Bank rate of interest is 0.5%, probably the lowest in recorded history, it is ludicrous that small businesses are having to pay ever-higher charges to banks to get finance, if they can get it at all. It is worrying to small business people to read daily in the papers that the Monetary Policy Committee is being pressed to raise the interest rate to deal with fears of inflation, because that would hit small businesses seriously.

For all the talk of making banks pay more to small businesses, there is no sign of that actually happening. The mood music from the Davos summit, which the Prime Minister and the Chancellor attended, appeared to be that the banks are not interested in that any more. They seem to think that they have got through it all and can get on with business as usual, which is totally unacceptable. The issue has to be tackled now. My constituents do not understand why so much taxpayers’ money bailed out the banks yet they are unable to get finance and help local employment. The banks have a duty to help the people who helped them when they were in trouble.

Postal Services Bill

Debate between Baroness Burt of Solihull and Mike Weir

Wednesday 12th January 2011 Commons Chamber

[Lorely Burt]

I take the hon. Gentleman’s point, and I have a great deal of sympathy with it. It is a great shame that that happened, but now we have to pave the way for a change in how the rules operate, and the Bill will empower Ofcom to examine how the regulations in question apply.

As far as I understand it—I am sure the Minister will comment on this—current EU rules do not allow specific periods to be imposed on inter-business agreements. Donald Brydon pledged in his evidence to the Public Bill Committee that before any privatisation of Royal Mail, a continued long-term commercial contract would be in place between the two businesses for the longest duration that was legally possible. I do not know whether 10 years is the right period, but that decision has to be made between the two organisations. I know that there is a great will in Royal Mail to ensure that there is an inter-business agreement between the two parties that guarantees a safe, secure and productive future together.

[Mr Weir]

Let me remark in passing that I have spent many years standing in this spot defending post offices. It is somewhat disconcerting to find after the general election that, with a few honourable exceptions, everybody else has changed sides, while I am still standing in the same place, making the same point. However, it is good to see the hon. Member for Colchester (Bob Russell) come at least partly back into the light. We shall be supporting his new clause 2 this evening if he pushes it to a vote, which I hope he will.

Independent Retailers

Debate between Baroness Burt of Solihull and Mike Weir

Wednesday 24th November 2010 Westminster Hall

[Lorely Burt]

Absolutely. I could not agree more with the hon. Gentleman. The point of local government is to show good political leadership.

The hon. and learned Member for Torridge and West Devon talked about the needs test and the local interest test, which would be a tremendous help. If we had that now, we might not have the situation that we have in my constituency of Solihull, where a huge Asda is being built on 3 acres of parkland on the main shopping street of Shirley. Will that stimulate custom for small independents on the rest of the high street? I doubt it. I think that it will bleed them dry, but we shall have to wait and see.

I welcome the help that the Government are already giving. With regard to regulation, we have the one-in, one-out policy and the sunset-clause policy and all the other aspirations that we are moving strongly towards. I would like to suggest consideration of small business as an automatic part of any pre-implementation review of new regulation and of the post-implementation review. It would be very good to build that into whatever legislation we produce.

With regard to the banks, I have a constituent who has an independent retail company. She applied for some help from the banks and was told, “Sorry. You’re in the wrong sector.” My right hon. Friend the Secretary of State for Business, Innovation and Skills is examining that, and I hope that he has a good go at ensuring that the banks give small business, independent retailers and everyone else who needs it the help that they deserve.

[Mr Mike Weir (in the Chair)]

I now call Justin Tomlinson, but remind him of the need to allow time for the winding-up speeches.