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Debate between Lord Bilimoria and Lord Popat
Lord Popat (Con)
If you cannot be here at the beginning of the debate, you cannot speak in this gap period. My apologies.
Start-up Loans
Debate between Lord Bilimoria and Lord Popat(10 years, 5 months ago)
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Lord Popat
The noble Lord makes a very important point. When I ran an SME I had easy access to my branch manager. To borrow money was not that difficult and the turnaround of applications was very quick. I agree with the noble Lord that we need to focus at regional as well as at local level. What is now happening is that a large number of clearing banks have a central office which does underwriting through computers. I am sure that servicing the customer at a local level will become more important. The good news is that we have brought competition into the banking world. Aldermore, Metro Bank and Cambridge & Counties all have branch managers, so a large number of SMEs can deal directly with the branch manager rather than having an application going to the central level. With the demand for money and banks hungry to lend more, I am sure that, given time, banks will surely set up a branch manager network. That was a successful model in the 1970s and 1980s.
Lord Bilimoria (CB)
My Lords, I congratulate the Government on the start-up loans scheme. It is an excellent initiative and I am delighted that the Minister, a fellow entrepreneur himself, is answering these questions from personal knowledge. I started a business from scratch. I know how difficult it was to raise those first few thousand pounds. To get my first overdraft of £7,500 was amazing. I see that the sums involve an average of £6,000. The average start-up loan is up to £25,000. I hope that the Government will increase that figure because the bigger it is, the better the start-up. I notice that the Prince’s Trust is one of the delivery partners. Can the Minister confirm what the effect of this scheme has been on the Prince’s Trust, which has done excellent work in this area over the years? Is it actually giving out more money as a result of start-up funds in the scheme or less? Secondly, what are the Government doing to help the people who get these loans go on to get the further funding that they need? This is only the start. The Government’s small firms loan guarantee scheme is excellent. How many of these start-up loan recipients have gone on to government-guaranteed schemes, which are absolutely essential? Finally, are the Government encouraging this group of entrepreneurs to network in the future, creating environments and events that these people can attend so that they become a community and the Government can identify the high-growth companies which will be creating the jobs that will power this economy ahead?
Lord Popat
My Lords, we will remove the age limit. The limit on lending is £25,000 for a period of five years, at a 6% interest rate. We will look at this over a period of time once we have looked at the success of the scheme. The scheme is proving to be successful. There are a few examples, which I have in my folder here, of people who have traded very successfully, done well and gone to the clearing banks to borrow more money to make sure that their businesses grow. The people who participate in the Prince’s Trust are actively encouraged and are quite often mentored free of charge to help them set up their own businesses.
EU: UK Trading Deficit
Debate between Lord Bilimoria and Lord Popat
Lord Popat
My Lords, our trade with the European Union, and the deficit of £46 billion, is counterbalanced by our surplus on invisible trade. Our membership of the EU is still in the best interests of the UK. It provides tariff-free access to a market that is worth around £11 trillion and has half a billion customers, and its trade with the UK enables 3.6 million employers in this country.
Lord Bilimoria
My Lords, the EU trade deficit is all very well, but do the Government agree that to tackle our overall trade deficit we should be encouraging exports to countries such as India? I despair to this day that when I ask businesses in this country if they export to India, only a handful of hands go up in an audience of 300. Will the Government consider rolling out the GREAT Britain campaign, which is doing an excellent job in promoting Britain abroad, here in the UK to give our businesses confidence to export to countries such as India?
Lord Popat
My Lords, for the long-term economic health of the UK we need to develop further our economic relations with fast-growing, emerging markets, including India, which the noble Lord mentioned. This is why the Prime Minister has been leading trade missions to these countries. We are doing everything possible to support our trade with emerging markets, including India, but we are also supporting a large number of UK companies, through UKTI, to help them to internationalise and to do more trade with those emerging markets.
UK Industry: Competitiveness
Debate between Lord Bilimoria and Lord Popat
Lord Bilimoria
My Lords, would the Minister agree that we are all very proud that a British university, Cambridge, has won more Nobel prizes than any other university in the world? However, would he also agree that that is in spite of this country underfunding research and development expenditure as a proportion of GDP? We spend less than both the EU and OECD averages. We spend half of what a country like South Korea spends. Do the Government not believe that we should be targeting to spend a proportion of GDP at least equivalent to the EU or OECD average to maintain our competitiveness? Otherwise, we are going to be penny wise and pound foolish.
Lord Popat
My Lords, this issue has been raised by the noble Lord in the past. Education is our fourth largest export earning. I agree with the noble Lord that we need to spend more money both on research at universities and on further investment in training provided by businesses. I will take the noble Lord’s point into account and will be happy to ask my colleague in the office to write to him to see what investment we are making in research at our universities.
UK Trade
Debate between Lord Bilimoria and Lord Popat(11 years, 3 months ago)
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Lord Popat
I thank my noble friend for endorsing my appointment and for giving me the privilege to answer, for the first time, one of his Questions. I turn to the Business Secretary’s foreword to the 2011 trade White Paper, where he says that we must,
“restate the case for open markets”,
and resist,
“the temptation to put up trade and investment barriers”.
I agree that we should take action to support domestic industries, and we are doing this through the growth review and industrial strategy, and by providing help and advice to exporters, in particular our SMEs.
Lord Bilimoria
My Lords, I welcome the noble Lord to the Front Benches. I have seen, as the founding chairman of the UK India Business Council, the help that the UK Government give through UK Trade & Investment to businesses to export. However, can the noble Lord tell us what more the Government are doing to help exporting, particularly to BRIC countries, and explain why UK Export Finance levels of finance seem to have fallen and there is very little take-up of new UK Export Finance products?
Lord Popat
The noble Lord asks a very interesting question that covers a wide range of subjects. Let me start with emerging markets. The world has changed; we are repositioning ourselves again and emerging markets are key for us—we give them a special priority. Within those emerging markets are the BRIC countries. I know the noble Lord’s interest and I pay tribute to his work for UKIBC. I was in India two weeks ago with UKTI, our excellent high commissioner in Delhi and a UKIBC colleague of the noble Lord’s. They work with India to make sure that we double our exports there by working with large numbers of corporations both in the UK and in India.
To answer the third part of the noble Lord’s question, insurance is being looked at and reviewed. I agree that we need to make a number of schemes available to our exporters, and it is up to UKTI—as it is well aware—to make the people who export aware of it, too.