Queen's Speech — Debate (3rd Day)

Part of the debate – in the House of Lords at 7:32 pm on 8th December 2008.

Alert me about debates like this

Photo of Lord Cotter Lord Cotter Spokesperson in the Lords (Small Businesses), Department for Business, Enterprise and Regulatory Reform, Spokesperson in the Lords (Skills), Innovation, Universities and Skills, Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson 7:32 pm, 8th December 2008

My Lords, today we get the chance once again to address the issue of business and the economy. We have had much activity in recent weeks, with Statements, the Pre-Budget Report and the Queen's Speech; but still there is much to do in a continuing scenario. I will concentrate on the small business sector, which provides six out of 10 jobs. My whole working life outside Parliament has been in that sector. Business needs work, a job to do. But small business also needs a fair chance. The Government still have much to do.

One in five small firms is spending more than 10 per cent of its annual turnover on energy costs. Utility bills have become the second biggest expense for companies. There has been a concentration, rightly, on banks; but recent surveys have shown dissatisfaction with energy supply within the business sector. None of the big electricity companies received even a "satisfactory" rating in a recent survey of more than 2,400 small firms. There are complaints about costs: prices go up but take a long time to come down again. There are many examples of inaccurate billing, infrequent meter reading and pressure for payment even when errors have been made. Complaints to utilities are often dealt with poorly. This adds to the pressure on struggling businesses. The Government have called the banks together. I hope that they are doing the same with the utilities.

In the past few days, a report from the OECD showed that in October British energy bills rose at the fastest rate of any EU nation—by twice as much as the second fastest rate in the EU. We have seen great competition day by day at the petrol pumps among those delivering petrol to the consumer; but in the energy field, not so much.

The Queen's Speech was light in many respects, and in others somewhat concerning. Under the latter heading I would place the Business Rate Supplements Bill, which many see as a burden on small and medium-sized enterprises. The British Chambers of Commerce, along with other small business organisations and we on these Benches, are concerned. It does not seem to be a good time to introduce an additional cost for businesses that are struggling to survive in a time of economic crisis. Business rates are seen as a big burden for small businesses. I refer to our small shops sector in particular. Small shops provide much employment and are vital to local communities. That is why this year I introduced my Retail Development Bill, which has passed through this House and is being supported by the Federation of Small Businesses and many other small business organisations. One of the Bill's main proposals calls for the Government to implement an examination and assessment of the proportionate costs of business rates on small shops and large supermarkets. It is said that small shops can pay anything from 15 per cent to 35 per cent of their money on rates, as opposed to 5 per cent for supermarkets. I hope that Ministers will look at this with urgency, and at least, as an interim measure, re-examine rate relief schemes for small, local shops.

A government Minister recently called for business to use this difficult time to provide training opportunities for the workforce. It is a very welcome idea; better to do something than nothing. I respond by saying that the Government are going to introduce the education and skills Bill, which will provide a statutory basis for the apprenticeship programme referred to by the noble Baroness, Lady Sharp. Apprenticeships are vitally needed and, as I have said previously, it is crucial that small businesses get genuine financial help to enable them to carry on the apprenticeships scheme.

There is a continuing need in business finance for support from the banks. There is much still to be done. However, I was encouraged to hear from Lloyds Bank—the Minister referred to this—that it is stepping up lending to small businesses. This is something that I have confirmed through my local commercial department of Lloyds Bank in Weston-super-Mare. I hope that this trend is maintained, and that other banks follow suit.

Payment of bills is vital. This has been raised before, and I hope that the Government are monitoring their welcome commitment to payment within 10 days, and also ensuring that this payment practice extends to all government agencies and departments.

It must be emphasised that many firms need help to understand money and finance. The Association of Chartered and Certified Accountants points out that a large proportion of small businesses lack skills in this area. The ACCA has called for support and mentoring. I hope that the Minister will recall his announcement of 22 October on assistance for small businesses in which he talked about advice being delivered through Business Link. I again put to the Minster the concerns out in the wider world that the Business Link service is variable. In some areas it is very good; in others, not so good.

Financial advice is of key importance. I saw for myself as a Member of Parliament how banks can help small businesses to understand finance through seminars. I understand that such seminars are currently planned. I hope the banks can be helped or encouraged not to put a further burden on this sector, but to have seminars so that the key ingredient for business—understanding finance, and how to run businesses financially—is carried forward.