Small Businesses — Question

– in the House of Lords at 3:06 pm on 9th February 2011.

Alert me about debates like this

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

My Lords, small businesses are the cornerstone of our economy and have a vital role to play in growing the big society. Businesses already make a significant contribution in supporting local voluntary and community organisations by sharing assets and expertise, philanthropic donations and exchange of staff. In December of last year, we launched Every Business Commits, asking businesses to do their part in growing the economy as well as in helping to tackle social problems and building stronger communities.

Photo of Lord Harrison Lord Harrison Chair, EU Sub-Committee A - Economic and Financial Affairs, and International Trade

Given the Government's failure to define the big society and, indeed, the role of small businesses within it, especially in helping to strengthen local communities, will the Minister look again at the regional growth fund, whose administrative possibilities-the £1 million threshold that it applies and the early closure date-mean that there has been a restriction on small businesses? Also, given the Government's failure in their tepid approach to getting the banks to help out small businesses, will she take up the idea proposed by the chairman of the London Stock Exchange to encourage blue chip companies to contribute to funding small businesses, especially those that are regional and have an innovative flair to them?

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

My Lords, the big society is defined by many in this House as being what most of them have done for most of their lives. It is a volunteering, social action, philanthropic approach to life, but it is also about the opening up of public services to local control and devolution of power. The regional growth fund is a discretionary fund to stimulate economic growth and employment and will operate over a period of three years. In particular, it will help those areas and communities that currently depend on the public sector to make the transition to sustainable, private sector-led growth and prosperity. Small and medium-sized enterprises have a vital role to play in that.

Photo of Lord Laming Lord Laming Crossbench

My Lords, does the Minister accept that, if the big society means nothing more than what many of us have been doing for most of our lives, that would be a disappointment? I say this on a purely non-political basis. We now have an opportunity to regenerate local communities and to help them to become much more involved in their own quality of life. However, we can do that only if we get out into local communities and stimulate people to become involved.

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

I agree with the noble Lord's comments. Indeed, the big society goes beyond what noble Lords have been doing because, as I said, there will be devolution of power and an opening up of public services to local control. However, I am sure that noble Lords around the Chamber will agree that we can always do more.

Photo of Baroness Browning Baroness Browning Conservative

Does my noble friend agree that for small businesses to play their part in the big society they need more of what the Government have already started, which is to remove the burden of regulation imposed by the previous Government, such as the burden of proof in disputes in court cases? I am also thinking of reducing the employers' national insurance contribution and, particularly, maintaining a stable economy. In that way, small businesses will thrive, create jobs and play their part in society.

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

I agree with my noble friend. We must also ensure that we cut back the red tape that stifles those businesses. Indeed, the Cabinet Office and the Department for Business, Innovation and Skills are jointly working on a task force to do just that. It is also important that we open up public and government contracts to small and medium-sized enterprises to ensure that they have a part to play not just in helping communities but in bidding for and having access to all government funding.

Photo of The Bishop of Hereford The Bishop of Hereford Bishop

My Lords, I know that the Government share the concern of all of us who live in rural communities that small businesses in rural areas should also be encouraged. I also know that there has been a commitment to widen broadband and speed it up. However, the two things throttling small businesses in the countryside, which has a higher ratio of self-employed people than elsewhere, are broadband and fuel and therefore transport. Will the Government say something about the urgency with which they take those issues, so as to encourage small businesses in rural areas as well?

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

The right reverend Prelate raises some important points. As your Lordships may be aware, one of the first vanguard areas for the big society was in Cumbria and it dealt with that very point: the extension of broadband to rural communities. However, I take on board the other concerns as well.

Photo of Lord West of Spithead Lord West of Spithead Labour

My Lords, I declare an interest as the secretary of the micro-business APPG. I became very aware as a Minister of the value of SMEs, VSMEs and micro-businesses to the security environment. Today, almost 105 years to the day since the launch of the "Dreadnought", built by British workmen and enterprise in 12 months, can the Minister please assure me that we will reduce the red tape that is between those small companies and the Government? That is across government but particularly with the MoD, where it damages the ability of those companies to really help us.

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

My Lords, we are committed to reducing red tape in all sectors. Noble Lords will agree, and the Benches opposite will recognise, that business has been stifled over the past decade by excessive red tape.

Photo of Lord Strathclyde Lord Strathclyde Leader of the House of Lords and Chancellor of the Duchy of Lancaster

My Lords, there is time for both Peers. Perhaps we could have my noble friend Lord Cotter first and then, if it is the will of the House, the noble Lord on the Cross Benches.

Photo of Lord Cotter Lord Cotter Liberal Democrat

My Lords, it is well recognised that small businesses are a crucial part of the local community and are ready to deliver on the big society. Local enterprise partnerships were recently established to do this and to help small businesses. However, I point out to the Minister that there is great concern that big business is overshadowing small businesses in the local enterprise partnerships, which were intended to give opportunities for small businesses in the community to provide employment for local people. Will she look at that issue?

Photo of Baroness Warsi Baroness Warsi Minister without Portfolio , Co-Chair, Conservative Party

My Lords, business has always played a vital role in the community. The organisation Business in the Community has been doing that for many years. In light of the fact that 60 per cent of those employed in the private sector work in small and medium-sized enterprises, it is vital that small businesses play a role when local communities are planning local regeneration as part of the local economic partnership.