Small and Medium-sized Businesses

Business, Energy and Industrial Strategy – in the House of Commons on 17th January 2023.

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Photo of David Simmonds David Simmonds Conservative, Ruislip, Northwood and Pinner

What steps he is taking to support small and medium-sized businesses.

Photo of Maggie Throup Maggie Throup Conservative, Erewash

What steps he is taking to support small and medium-sized businesses.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

What steps he is taking to support small and medium-sized businesses.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

It is absolutely right that we direct support where we can to our SME community. We have reversed the national insurance rise, saving SMEs approximately £4,200 a year on average; provided £13.6 billion of business rates support over five years; cut fuel duty for 12 months; and raised the employment allowance to £5,000. The energy bill relief scheme is also protecting SMEs from high energy costs, as will, from April, the energy bills discount scheme.

Photo of David Simmonds David Simmonds Conservative, Ruislip, Northwood and Pinner

Before Christmas I held a session with hospitality businesses in my constituency. Although they were appreciative of the energy bill relief scheme, they expressed some concern that they were not necessarily seeing it reflected in their bills. What assurances can my hon. Friend provide to ensure that companies, such as Hop and Vine in Ruislip High Street, see Government support reflected in reduced energy costs?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The £18 billion energy bill relief scheme is set out clearly in legislation, so it should be applied in a uniform way by all licensed suppliers. The regulations include a robust monitoring compliance and enforcement regime. Suppliers are required to inform customers about the details of support, including the amount of the discount and the supply price, to ensure transparency. That will also be the case with the energy bills discount scheme, which starts in April.

Photo of Maggie Throup Maggie Throup Conservative, Erewash

Many SMEs are facing increasing pressure to agree lengthy payment terms of up to 90 days as a prerequisite to securing contracts with larger firms. That has significant cash-flow implications for businesses that already operate on a tight margin. To support further SMEs such as those operating across Erewash, will my hon. Friend commit to working with Treasury colleagues to review the UK’s payment terms regulations with a view to reducing the maximum credit period, as has happened in Germany?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I thank my hon. Friend for raising that point. This is a very significant problem for many businesses, particularly micro-businesses. Our prompt payment and cash flow review will examine business behaviours and small business experience of late payment and long payment terms, to help ensure that the UK has arrangements in place to best support small businesses. It will include looking at the payment reporting obligations and a review of the role of the Small Business Commissioner.

Photo of Stephen Hammond Stephen Hammond Conservative, Wimbledon

Wimbledon’s clubs and pubs are at the heart of our community and, like my hon. Friend David Simmonds, several have asked me how the Government will ensure that the scheme meets the needs of hospitality. Will my hon. Friend ensure that Ofgem takes action against suppliers whose actions damage small businesses in my constituency and across London?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My hon. Friend raises a very important point. My r hon. Friend the Minister for Energy and Climate and I recently had a roundtable with energy suppliers to discuss exactly that point: ensuring that the support the Government are providing is passed on to SMEs. The energy suppliers assure us that that is happening. We have asked Ofgem to take a closer look at that and it will report back to us shortly.

Photo of Darren Jones Darren Jones Chair, Business, Energy and Industrial Strategy Committee, Chair, Business, Energy and Industrial Strategy Committee, Chair, BEIS Sub-Committee on National Security and Investment, Chair, BEIS Sub-Committee on National Security and Investment

Britishvolt, the once valued £3.8 billion site of national importance for the production of electric vehicle batteries in our country, is today going into administration. Does the Minister agree with me that the future of UK car manufacturing relies on UK battery production? If so, what is he going to do about it?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The hon. Gentleman raises a very important point. It is important to note that we have not withdrawn any money from Britishvolt, but clearly British taxpayers’ money is important and it is important that we dispense that money in a responsible way. There are clear milestones that we expect anybody in receipt of public money to hit. We are looking at the situation very carefully to make sure that they are doing so.

Photo of Samantha Dixon Samantha Dixon Labour, City of Chester

In Chester, we are fortunate to have a high street full of wonderful small and medium-sized businesses. The Chancellor’s announcement of cuts to the energy bill relief scheme from April will be devastating to many of those businesses. The cost of living crisis continues, yet the support is being pulled. Does the Minister agree that businesses need support to continue driving our economy?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I do agree that we need to continue to support businesses. The £18 billion energy bill relief scheme package was very generous. We are now seeing prices moderate, which will help lots of SMEs, and particularly the high street businesses to which the hon. Lady referred. The replacement scheme—the EBDS—is another £5.5 billion of taxpayers’ money. We have to be careful in terms of balancing the books and being responsible with the public finances, but I absolutely agree that businesses need continued support, which is what they are getting from the replacement scheme and from several other measures I mentioned in my first answer.

Photo of Gregory Campbell Gregory Campbell Shadow DUP Spokesperson (International Development), Shadow DUP Spokesperson (Cabinet Office)

In the next few months small businesses will, like many others, face massively increased council tax bills here in Great Britain and rates bills in Northern Ireland. Does the Minister agree that the early payment discount scheme should be looked at and revised to 4% or 5% across both domestic and non-domestic council tax and rates payers?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Most of the businesses that we deal with pay business rates rather than council tax, but we nevertheless have to make sure that the schemes are as affordable as they can be, which is why we have stepped in with £13.6 billion of business rate discounts, targeted at SMEs. We have to look at the ongoing situation and make sure that support is available, as we are doing in many different respects, not least by helping those small businesses that have premises.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy)

AMLo Biosciences is a Newcastle University spin-out whose groundbreaking research will save lives by making cancer diagnosis easier and more accurate. AMLo spends millions on research and reinvests all its research and development tax credits into R&D. The Government’s tax credit changes will halve what AMLo can claim, meaning less research and fewer new jobs. Its investors may ask for it to move abroad, where R&D is cheaper. Many Members have similar examples in their constituencies. Will the Minister explain why the Government issued no guidance, gave no support and had no consultation on the changes to SME R&D tax credits? Does he accept that whether in respect of hospitality heating bills or spin-out science spend, the Government are abandoning small businesses?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Clearly, we have to balance the interests of the taxpayer with the interests of small business. We have to make sure that the money that is being utilised for R&D is properly spent, and there were concerns about abuse of the small business R&D scheme. It is good that the Treasury is now looking into the matter and looking to move towards a simplified universal scheme, which I would welcome and on which there is a consultation. I absolutely agree that we need to make sure we have the right support for research and development in this country, not least for SMEs.