Businesses and SMEs — House of Lords, 2017-07-06
Topic: Macroeconomics
Dolar Amarshi Popat (Conservative, Centre-right): My Lords, I too thank my noble friend Lord Leigh for initiating this important and timely debate. Since the financial crisis, businesses have operated under a cloud of scepticism. As the search for someone to blame has grown, profit has become a dirty word, risk has become something to be avoided and the private sector has retreated into its shell As my noble friend Lord Leigh rightly pointed out, businesses are an unrivalled force for good. They create millions of jobs; they generate billions in tax revenues that pay for welfare and the NHS; they innovate and produce life-changing products; and they sponsor countless good causes with corporate and community responsibility. Having been an SME myself, I know that Britain’s businesses are the greatest ally we have for the challenges we face It is time for our entrepreneurs, innovators and executives to pick themselves up off the mat and start fighting their corner. We should not be shy about making the case for what businesses have achieved and can achieve in this country, and we should not be ashamed of the values of hard work and aspiration We speak of the priorities of businesses far too infrequently in this House. We cover topics such as public services, international development and the economy more broadly on a regular basis, but supporting and understanding businesses is often overlooked. I hope we can begin to correct that, because we will need them, not only post Brexit but if we are going to overcome the economic hurdles that lie ahead of us We should be absolutely clear that, since 2010, tremendous strides have been taken to make Britain a more business-friendly country and our economic record is hugely impressive: a higher minimum wage for the low paid; record levels of employment, with more or less full employment; controlled levels of inflation; lower interest rates; lower capital gains tax, with higher revenues received; and, until recently, the highest level of economic growth of any country in the G7 But we should also be very clear about the challenges that face us. The economic climate we find ourselves in is undoubtedly one of the most challenging scenarios this country has faced in recent history. The origins are long-standing for most of these issues and have been neglected by Labour and Conservative Governments. For nearly 30 years, there has been too much public sector borrowing. Our debt is terrifyingly high, and too many politicians lack the will to tackle it As my noble friend Lady Neville-Rolfe rightly said, we have had too little investment in infrastructure, housing and research. There has been too much reliance on the City and service industries, and too much regulation, taxation and compliance. That has not often been understood by politicians. There has not been enough reform of education or enough exporting to high-growth economies. Our balance of payments deficit has been a constant for the past four decades. This year, we will end up with a trade deficit of some £50 billion, which shows that we do not export enough to pay for imports We have a major productivity problem. It takes workers in France and Germany four days to produce what we do in five. Either we are not working hard enough, or we are not investing enough in new technologies. In addition, we have a terrible planning system. Quite simply, we continue to fail to create the environment needed for SMEs to grow and succeed We have made progress since 2010 on making the lives of those running our small businesses easier, but there is a long way to go. We need to see action, to see a Government who are bold in their support for business, who are willing to take the steps necessary to put Britain at the heart of the global economy again There are four main areas where we need to see drastic improvements. First, our aviation capacity is a cruel and long-running joke. We are at least 30 years behind where we should be. Through political dithering, we have reached a stage where our main airports are full, and our USP as a hub destination is being eroded. New airports are being built around the world that start with four runways; we are unable to add a third to one of the world’s busiest airports. Post Brexit, if we are to be an outward-looking country that exports to the world, we need to be able to fly to our key markets. Let us crack on and build the third runway at Heathrow and the second at Gatwick; we cannot keep kicking the can down the road The second area is communications at home. Our mobile phone reception is poor. High-speed broadband rollout is too slow. Road and rail systems are too slow and too full. The Government are trying, but we need to be bolder, faster and more aggressive Thirdly, we need to build better links with emerging markets, in particular Africa. As the Prime Minister’s trade envoy to Rwanda and Uganda, the country of my birth, I see the trade envoy programme as a strong addition to our diplomatic arsenal, bridging the gap between the private and public sectors. Africa has six of the highest-growth markets in the world. Uganda is on course to be the fastest-growing economy in the world by 2025. Not long ago, our share of trade with Africa was 30%; now it is less than 4%. In fact, China has become the imperial power in Africa, in the very colony where we were a power some years ago. We need such bridges to enable us to do more trade in Africa, because it is a high-growth market. We do not see many ministerial visits there, except those relating to DfID and aid; Africa is more interested in trade. Barclays Bank, which has been in Africa for 100 years, is soon to sell out because of the way in which legislation has been passed in this Chamber. I bet that the Chinese will acquire that bank. British Airways, which used to fly to many cities in Africa, has more or less stopped flying there, because no slots are available or because it has sold its slots to the Qataris and others for a very good profit. We need ease of doing business and a different approach to our businesses to make sure that they become successful. Infrastructure and connectivity are vital to business in the 21st century. If we want more small businesses to export, we must give them opportunities to reach emerging markets. Trade envoys and the Department for International Trade can help if we can get a business into a country, but we need help from the Department for Transport, the Foreign and Commonwealth Office and the Treasury to make that happen Businesses are an overwhelming force for good, but, for too many, the Government tie one hand behind their back. Our exiting the European Union gives us a fantastic opportunity to right that wrong, and to start to deliver the solutions that businesses need. Now is the time to be bold, which I hope the Government will be.