Businesses and SMEs - Motion to Take Note

Part of the debate – in the House of Lords at 12:30 pm on 6th July 2017.

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Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Conservative 12:30 pm, 6th July 2017

My Lords, I congratulate my noble friend Lord Leigh of Hurley on securing the first government day debate of this “long Parliament”—at least, I hope it will be a long one, given the scale and the importance of the Brexit challenge. I pay tribute to my noble friend’s contribution to business and to his excellent speech, with such compelling examples of positive modern capitalism. We started in this House together, and there have been many advantages in sitting on these Red Benches. Debates and parliamentary scrutiny are laced with knowledge and experience, and Members of this House on all sides bring genuine insights. They are not always listened to in a world of trivia, partisanship and short-term horizons. Our committees produce distinguished and perceptive reports, as is often commented on, but, as my noble friend Lord Sherbourne of Didsbury said on 27 June, we need a better system for holding Ministers to account on whether and how they have taken account of such reports.

It is fair to say that I have had one big disappointment in discussion in your Lordships’ House. I fear that it is the lack of appreciation and understanding of the importance of business—although not today—not just economically but in several other ways. I want that remedied, because of the wealth that business provides, the taxes that it pays, the many millions of jobs for which it is responsible and—this is important for today—the social cement created by businesses up and down the country.

I say that having worked in several companies large and small in retail, in food manufacturing, in broadcasting and digital, and in services. I know from experience that businesses that are well connected to their communities are successful and improve the economies and societies in which they operate, through leadership, management, jobs and training and the creation of value for the customer or consumer.

A simple example would be the regeneration schemes that we pioneered in Tesco around some of our stores in some of the poorest city areas. We gave jobs to the long-term unemployed, we improved diet because more fresh fruit was eaten, and we made people in the company proud to make a social contribution. This is a good example of community actors, to pick up one of the terms used by my noble friend Lord Leigh.

I would say that small business—I worked in small business and came from a farming background—is the salt of the earth, and plays a huge part in creating wealth. Less well-known is the fact that, according to the Federation of Small Businesses, small businesses provide more employment for those who are disabled than medium-sized or large businesses: 11.4% of those who work in businesses with fewer than 50 employees are disabled, compared to 10% for medium-sized businesses and 10.3% for large businesses. The FSB also supports the Conservative manifesto proposal for a national insurance holiday to encourage employment of those with mental health problems and disabilities, as well as veterans and ex-offenders.

I am especially delighted that my noble friend Lord Younger has now taken on responsibilities at the business department, as well as for education and skills, because bringing those together is so important to today’s debate. It is also great to see my noble friend Lady Sugg on the Front Bench. On the needs of small business, where are we on implementing the various legislative provisions on late payment and when will the Small Business Commissioner start work? I ask that because late payment cheats the creditor and erodes the social cement that we see in strong societies.

Since services represent 80% of our economy, it would be wrong not pay tribute to our financial, professional and business service industries, all of which I had the pleasure of dealing with as a Minister. I was always amazed at their support for talent and training. Moreover, the financial and professional services sector alone contributes £71 billion a year in tax, with the City Corporation being a historic example of corporate philanthropy and pioneering apprenticeships. The City and guilds together have contributed huge sums over generations to help the disadvantaged and dispossessed, and also to support music and art. My noble friend Lady Bloomfield gave us the example of Nominet. I loved her comment that the highest form of charity is to create a job.

In preparation for this debate, I asked various business people what they thought would make the most difference to business prosperity over the next five years, and three themes emerged. The first was visibility and stability. It is difficult to make plans and to invest, given the regulatory and other uncertainties arising from Brexit. Even worse, they said to me, is the political uncertainty: the risk that an extreme Government—a bigger risk perhaps now than they thought only a few weeks ago—might throw prudence to the winds, trash the economy, intervene before dinner, tea and breakfast, and destroy the tax incentives that have helped to fuel UK growth and employment. The consequences of that could be worse than in the seventies, which my noble friend Lord Leigh mentioned and which is etched on my memory as a young person entering the workforce— dustbins piling up, the three-day week, and so on. One business person even said that a Brexit settlement with safeguards—for example, limits on state aid—could help to limit the damage of that political scenario. On our side of the House, we are determined to avoid a nightmare scenario.

The second theme was that business people want us to create a better business environment in the UK; they want us, the politicians, to do that, so that we can attract investment—meaning world-leading investment in infrastructure, especially transport, in housing, as mentioned by the noble Baroness, Lady Dean, and in skills and digital. We need lower costs for doing business, not a constant process of accretion of cost and regulation. I was not in the same place as the noble Lord, Lord Shipley, but we did agree on some points; we agreed on late payment, and I also very much agree with him about the importance of reviewing business rates, which the Government have undertaken to do. It is also important to find a way of keeping women in the workforce, with flexible working to suit those with family pressures, provided that that does not create disincentives to their employment in the first place.

Thirdly, we need to articulate the opportunities for the future—for example, new trade agreements. If we could set out a clear plan over the next two to five years for Brexit and global trade, it could be tested, debated and invested behind. Business needs the same sense of vision and options for the new post-Brexit world. Perhaps the Minister could kindly update us on the Government’s intentions.

Finally, tone and attitude are important. Businesses feel unappreciated by us politicians, and the butt of savage challenge and blame if things go wrong. Working collaboratively on opportunities where business is bringing its strength and expertise to build the future would be an enormous help.