Small Businesses

Jake Berry Excerpts

Thursday 28th November 2013 Commons Chamber

[Jake Berry (Rossendale and Darwen) (Con)]

On the issue of late payment, my hon. Friend may be aware that the court system can make judgments on small business interest rates whereby a punitive rate of interest is paid by a large business to a smaller one if it fails to pay. Would she welcome the introduction of such a provision to other small business contracts?

[Anne Marie Morris]

I would indeed. That is a very sensible suggestion and I am sure the current review will look at it.

When people start up a small business, they are concerned about mortgaging their house and having to give personal guarantees. Can we not separate the liability of the business from the home and secure it instead on the business asset? We could do that if we introduced limited liability for sole traders and reintroduced the potential for banks to take a fixed charge over book debts.

The Government have welcomed the plethora of new so-called challenger banks and new alternative lenders, but let us be clear that they need more support. We need to look at the right sort of light-touch regulation in order to make them safe funding institutions in the fabric of our society. More importantly, the Government need to ensure better communication, because businesses do not know what is out there or how to assess it.

We also need to address the issues of European Union regulation, because the micro moratorium addressed only domestic regulation. The EU red tape taskforce has identified 30 areas to be addressed, which is welcome, but more needs to be done. I would ask the UK better regulation taskforce to look not just at what we can do to encourage EU initiatives, but at how we make regulations in this country. My understanding is that most of the review looks at whether a piece of legislation will be burdensome for the SME community as a whole, without really addressing the issue of very small start-up businesses.

The Treasury has been good. It has introduced small business rate relief and extended it, and I hope it will be extended further in the Budget. It has reduced corporation tax: we are ever closer to 20% all around. Perhaps most valuable is the national insurance employers’ allowance, meaning £2,000 off the employer’s contribution. That is good news.

Again, however, more needs to be done. Business rates are one of the biggest challenges. They need to be seen as fair and transparent. A firm with a business on the high street that is not the main footfall area of the town still pays high rates, and yet the rates for an out-of-town retailer covering the same amount of square feet seems disproportionately low.

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[Jake Berry (Rossendale and Darwen) (Con)]

I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing this important debate. Before I go on to talk about the challenges that businesses face—I am sure we would all recognise them from our constituencies—I would like to celebrate some of the successes of small businesses, particularly those in east Lancashire.

Moving from having a salary paid by someone else to going into a business where individuals are responsible for paying their own salary every month is a huge risk. I pay tribute to all the people throughout the country who have set up new businesses, often risking their home, their savings and everything they own to realise the dream of owning their own small business.

I would like to celebrate the success of some businesses in my own constituency. Riley’s the Butchers is one of them. We often say that butchers cannot succeed in the current environment when they have to compete against supermarkets. This is a small, family-run butchers that is beating the supermarkets at their own game with a fantastic product and a personal bespoke service to everyone who shops there. We also have businesses such as Parrock Lumb Cottages, which develops local tourism, but not at the expense of our environment. Environmental concern lies at the heart of this firm’s economic growth, showing that economic growth and environmental concern do not necessarily have to come at the expense of each other. Each of these firms is a small business; each is unique; and each is succeeding in the Rossendale valley, the home of enterprise. If anyone is tempted to visit either of those businesses, I would recommend it, but not without stopping at Love Umbrellas, which makes bespoke, hand-made, high-fashion umbrellas, showing how small businesses can succeed by using social media to market their enterprises.

If it rains all the time in Wales, it does in Darwen, too, where there is business called Minerva Craft, which has moved from Blackburn market into a large industrial unit, with both retail and internet sales based in the same site. DHJ Weisters is a weaving firm in my constituency making ties and bridal fabrics, showing that small businesses that invest in their work force, their machinery and their premises can keep manufacturing onshore, rather than having to send it offshore.

The business community in my area has grown during the last three years, and this has been the real driver of the transformative change that we have seen in unemployment. Rossendale and Darwen has the lowest unemployment rate since 2010. It is half the national average, despite it arguably being in a deprived part of east Lancashire. Our unemployment rate has come down by 20% in the last year alone, showing that small businesses growing and succeeding can transform the local labour market.

Small businesses continue to face challenges. In Rossendale and Darwen, the biggest one relates to the skills gap. Since 2010, we have seen over 4,000 people start apprenticeships in my constituency, while we have run two “100 in 100” campaigns this year. Working with local business, we recruited 200 new apprentices in 100 days. We are an area predominantly concerned with manufacturing, so many of these apprenticeships were highly technical and skilled engineering apprenticeships. Many were also in the high-level service sector, with apprentices taken on in accountancy and hairdressing. One apprenticeship was even based in my office with a training caseworker. That shows how important small businesses are to our economy. Small accountancy firms such as Hindle and Jepson have opened to support the new, expanded business community.

Business rates remain a threat to the future prosperity of businesses, but its important to say how much I welcome what the Government have already done. The automatic exemption of small firms from business rates has helped 330,000 businesses, which not only pay no rates, but no longer have to engage in the time-consuming task of filling in highly complex forms. I welcome all that has been done to support small businesses through business rate relief, but I urge my hon. Friend the Minister to think about what more could be done in that regard.

I should like the Government to consider introducing a fractional payment option, enabling businesses to pay their rates weekly or monthly. I should also like the Minister to tell us what information he has about the use by local authorities of the business rate flexibility that enables them to give businesses in their areas a 25% discount. If he had still been in the Chamber, I would have asked the hon. Member for Rochdale (Simon Danczuk) whether his local council had offered that discount to the business that he mentioned. In April, there will be a further big boost for businesses when the employment allowance is introduced. We are reducing every business’s jobs tax by £2,000, which means that a third of employers will pay no jobs tax at all.

Small business Saturday is hugely important, and it is great to see the television advertisements supporting it. I shall be working at Gilly’s sandwich stall in Darwen market, so if any Members want to come and do their Christmas shopping early, I should like to see them.