SMEs and the Net Zero Target

Debate between Nusrat Ghani and Kevin Hollinrake

Tuesday 17th November 2020 Westminster Hall

[Kevin Hollinrake]

I absolutely agree with my right hon. Friend, and commend her on the work she did when she was in the Department for Business, Energy and Industrial Strategy as energy Minister, providing a long-term framework that businesses can work within to phase out coal over that period of time: she was very far-sighted with her interventions. I am sure that my hon. Friend the Member for Grantham and Stamford (Gareth Davies) will talk about a development bank in his remarks in a few minutes.

One other area in which we need to look at a more strategic framework is that of the green homes grants. In our manifesto, we committed to about £9 billion for retrofitting, and I think we have committed about £2 billion so far through those grants, which is very welcome. One of the difficulties, as I have communicated to the Minister, is finding installers in our area. A lot of installers are thinking that £2 billion will go very quickly and, therefore, what is the point of applying?

The Federation of Master Builders has some data on that. There have been 180 inquiries to the Federation of Master Builders and only three have completed the paperwork because it was seen as too short a timescale. If we have a longer timescale, businesses will be more likely to invest in the training and the necessary other actions they need to take to qualify as a registered installer for that grant. A long-term, stable framework will encourage much-needed investment.

I will go back briefly to 2008. I am representing here, as I often do as co-chair, the all-party parliamentary group on fair business banking. Much of our work of the past 10 years—including the three years I have been involved—has been around trying to clean up the mess of 2008, when we withdrew support from lots of SMEs, unfairly and far too quickly, and did not give them the chance to transition into a different kind of business or even rebroker their finance.

We need to learn from that in terms of a timescale and a structure for that change and forbearance, in which the APPG has much experience. We need to learn from history. Warren Buffett once said,

“What we learn from history is that people don’t learn from history.”

It would be good to have a focus on that particular episode in our banking history.

With regard to banking, I mentioned before that banks are seeing some shareholder action in the businesses and sectors they will support in future. Access to capital being the most fundamental requirement of any business, this is a hugely important topic. As such, the APPG has come up with a project called Bankers for NetZero. It is engaging with the banking sector and others. It is supported by Volans, the sustainability think-tank, and Re:Pattern, who specialise in business transformation social impact. It is developing policy recommendations to lead to COP26, looking at the regulatory environment and the part banks play in financing; engaging with businesses on net zero challenges; and looking at opportunities and obstacles for banking, while trying to formulate some evidence-based, targeted policy, and to make recommendations on legislation and regulation, in accordance with the United Nations environment programme finance initiative, or UNEPFI, for short. The key objective is that no willing SME is left behind in this vital change to our economy.

One big issue over the next few years is the expected transition of lots of businesses from dependence on fossil fuels to a completely different model. That will be at a time, of course, when a lot of those SMEs are burdened with a significant amount of debt. TheCityUK recapitalisation group report said that SMEs are currently burdened with around £35 billion of unsustainable debt, which will put around 780,000 businesses at risk.

As a result of the covid crisis, it will be very difficult for the two thirds of businesses whose leadership is more focused on being greener and better to make that transition. We know how important SMEs are to our economy: 99% of all businesses are SMEs and they employ 61% of private sector employees, that is, 5.9 million businesses in total. That is a business environment that has been a huge success under this Government.

SMEs are disproportionately positively represented in our levelling-up areas. That also fits into the Government agenda. A very high proportion of SMEs are in construction; 99% of all construction businesses are local builders. They are going to be vital to retrofitting and other measures that we require to modernise our housing stock. They employ hundreds of thousands of local workers and 70% of all apprentices. Other sectors that have a high proportion of SMEs are transport and retail.

I know the Minister’s Department is looking carefully at the next few months. In terms of immediate business support, we need to think about things such as bounce back loans. Not all businesses can access bounce back loans, which is a huge issue. Lots of our businesses are with non-bank lenders, such as Tide, which do not have access to the Bank of England’s term funding scheme for SMEs and therefore do not have the capital to lend to them. Businesses already face that challenge.

Many businesses are struggling to get the new top-ups that the Department has brought forward, which is welcome. As for the businesses that can access that liquidity, many are swamped with applications or are closed to applications from new customers. We are locking some SMEs out of support right now, and we are going to need them to provide us with the solutions to our economic challenges moving forward. There are also issues with the new measures to allow businesses to pay this debt over a longer period of time—the “pay as you grow” guidance. That will be key, as it will allow businesses to pay back the loans over 10 rather than six years.

I welcome the Government’s focus on moving forward to a greener future. The Pension Schemes Bill that was before the House yesterday certainly moves us towards the net zero horizon. Last week, the Chancellor announced a taskforce for climate-related financial disclosure for large companies and financial institutions by 2025 to report on their progress in those areas. We also have the new green taxonomy and a plethora of policies in my right hon. Friend the Minister’s Department on the clean growth strategy.

In terms of where we need to go, first we need to ensure that we have diversity in finance provision. We need to solve the non-bank lender problem. However, I would also like us to invest in a new type of bank: a regional mutual not-for-profit bank that has a much more patient approach to providing finance to SMEs. During the financial crisis of 2008 and all the way through to 2013 in Germany, lending rose by 20% because of the regional banks. In the UK, lending to SMEs dropped by 20%, showing that patient capital works much better when it is provided by a diverse range of providers.

We need a sector-specific just transition road map that looks at every different sector. If some of the current provisions for hospitality, such as the VAT cut, were extended or made permanent, that would be welcome. The British Business Bank needs a role in supporting and advising SMEs. We need to standardise just-transition restructuring, so that if businesses are seen as being in a sector that banks do not want to support, there is a proven standardised process for taking those SMEs from where they are today into the greener future. The shared prosperity fund should be used to support SMEs to make the transition and we should have a fiscal policy that is conducive to allowing SMEs to make the transition, with tax breaks, for example, to decarbonise.

My final point to the Minister—and I know he gets this—is please, please, please let us have no cliff edges, but a strategic approach and a long-term stable framework towards that net zero future.

[Ms Nusrat Ghani (in the Chair)]

Contributions are limited to four minutes.

Disabled Access: Thirsk Station

Debate between Nusrat Ghani and Kevin Hollinrake

Wednesday 26th June 2019 Commons Chamber

[The Parliamentary Under-Secretary of State for Transport (Ms Nusrat Ghani)]

I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate and giving the House an opportunity to address the important subject of accessibility on the railway network. I recognise how important it is for his constituents to have access to the railway, not only to travel to and from work but to see family and friends and go about their daily lives. I must place on record what a strong advocate he has been for his constituents. I know that he is bitterly disappointed by the result of the bid, and I hope that he will allow me to try to explain it.

I see that my hon. Friend the Member for Hexham (Guy Opperman) is also in the Chamber. I believe that he was also very disappointed by the result, and that he, too, campaigned very boldly on behalf of his constituents. I hope that he will remain for the entire debate so that he can hear what more can be made available for his local stations.

Delivering a transport system that is truly accessible to all is of great importance to me. I know that my hon. Friend is aware of the Department for Transport’s inclusive transport strategy, which was published last July. I hope that he takes it as evidence of the Government’s commitment to action to safeguard and promote the rights of all disabled passengers. We do not deny that our strategy is ambitious, but we are determined to deliver it. We want disabled people to have the same access to transport as everyone else by 2030, and if physical infrastructure remains a barrier, assistance will play a role in guaranteeing those rights. I am always told that I am not allowed to repeat this, but I believe that ours is the only country to have such a bold strategy in place. An accessible transport network is central to the Government’s wider ambition to build a society that works for all.

I was pleased to have an opportunity to discuss the specific issues at Thirsk with my hon. Friend back in April. The station was nominated for the additional funding that we are making available over the next five years for the Access for All programme, but it was not successful. As I explained to my hon. Friend when we met, the available funding was heavily over-subscribed. Other stations nominated in the Yorkshire and Humber area had a higher-weighted footfall, which made it difficult to justify Thirsk’s inclusion ahead of other busier stations in the region.

In the event of any future funding bids for Thirsk and, indeed, other stations—I ask my hon. Friend the Member for Hexham to reflect on this—the stations will need to be given a high priority by the industry. The bids will need to be compelling and to have local support, and, ideally, there will be match funding. In the case of most of the new Access for All projects announced in April, significant levels of third-party funding were included in the bids.

As my hon. Friend knows, step-free access is technically available throughout Thirsk station. However, customers must be aware that access to all platforms is via a barrow crossing, which is reliant on staff assistance and cannot be accessed outside staff hours. As my hon. Friend said in his speech, it is not the easiest space to be in for the able-bodied, let alone disabled people. That reflects the fact that most of our stations are Victorian. Those 19th-century stations were not built with the needs of 21st-century passengers in mind, which has left us with the huge task of opening up the rail network to disabled passengers.

[Kevin Hollinrake]

I understand that other stations are in a similar position, but how unusual is it for a station to provide no access to either platform, for either inbound or outbound trains, apart from a barrow crossing, because there is an island platform and an island ticket office?

[Ms Ghani]

Thirsk has particular, unique circumstances, but it is not the only station that is not fully accessible at all times, which is why I think it important to ensure that any bid for Thirsk is rated highly by the train operating company and also comes with match funding. However, I entirely accept that it is not the easiest place to be when trains are whizzing past at high speed.

We must recognise that 75% of journeys are through step-free stations, but that is not good enough; we want to ensure that even more journeys are accessible as well. That is why we continue the Access for All programme. The inclusive transport strategy included a commitment to extend our Access for All programme across control period 6 between 2019 and 2024, with an additional £300 million of funding from the public purse. Those funds will allow design work to restart on all the projects deferred by the 2016 Hendy review into Network Rail delivery and to include even more stations in the programme.

We asked the industry to nominate stations and received more than 300 nominations. Often these nominations were in partnership with local authorities and Members of Parliament, and we must not forget the important local councillors as well. Back in April, we announced that 73 stations would receive funding, including 46 new stations and 27 stations from CP5 deferred by Sir Peter Hendy.

I know that my hon. Friend the Member for Thirsk and Malton will be pleased to hear—I am also pleased to inform the House of this—that I have also made £20 million available for mid-tier Access for All projects. The criteria—[Interruption.] Yes, we will be waiting for those applications for stations to come in, but the criteria for selecting projects will be different from the main programme, as we will focus on stations where accessibility improvements can be delivered with up to £1 million of Government support alongside—I must stress this—significant third-party match funding.

Details of how this funding will be allocated are being finalised now, and we intend to open the nomination process shortly. I will write to all hon. Members to inform them when this happens, and of course I will drop a personal note to my hon. Friends to ensure that they do not miss the deadline for the application.

I want to reflect on the industry’s obligations. It is obliged to ensure that disabled passengers are supported. Each operator is required to have a disabled person’s protection policy in place as part of its licence to operate services; the policy sets out the services that disabled passengers can expect and what to do if things go wrong and commits the operator to meeting its legal obligations by making reasonable adjustments to its services to allow disabled people to use them—for example, by providing an accessible taxi free of charge to anyone unable to access a station.

The Office of Rail and Road recently consulted on revised disabled people’s protection policy guidance, and I have also encouraged the ORR to take enforcement action against train and station operators who are not meeting their disabled people’s protection policy obligations. Every disabled passenger should be confident that the assistance they have booked will be provided. The Department has worked with the Rail Delivery Group to create the new passenger assistance application, which will make it much easier for disabled passengers to book assistance. Many Members will have attended the event organised by the RDG last week to showcase this work.

We also support the ORR’s proposal to introduce a handover protocol as part of the revised disabled people’s protection policy guidance, and we have actively supported the establishment by the industry of an independent rail ombudsman with powers to deal with unresolved passenger complaints.

I hope that I have demonstrated that the Government are committed to improving access at stations for disabled passengers through both specific projects such as Access for All and improvements delivered as part of our wider commitment to improving the rail network. I hope that my hon. Friend the Member for Thirsk and Malton has been reassured that the Government remain committed to investment that will improve rail services and accessibility on the network, and I look forward to receiving an application on behalf of his station, Thirsk, in the next round of funding. I wish him and my hon. Friend the Member for Hexham well.

Question put and agreed to.

Flybmi

Debate between Nusrat Ghani and Kevin Hollinrake

Monday 18th February 2019 Commons Chamber

[Ms Ghani]

My hon. Friend makes a valuable point. If we look at Flybmi’s accounts, we see that they were not healthy for many years, even before the referendum. Smaller airlines across Europe are also struggling, and I mentioned some earlier: VLM in Belgium, Germania, Cobalt and Primera. So this is not a UK thing; it is tricky for small airlines to operate, especially if they are regional, in a global sector.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

If I was the chief executive of a recently failed business, I would probably blame Brexit, too, but the reality is that Ryanair warned only last month of significant overcapacity in the budget airlines sector. Does my hon. Friend agree that this is far more about competitive markets than it is about Brexit?

[Ms Ghani]

Absolutely. The reason for Flybmi going into administration is that the business has just reached the end of its road. We have an overcapacity here and the power is with the passengers in the choices they make. Those passengers who are now struggling to get home and in distress must be recognised as well, but that is the market we are in.