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Nigel Griffiths MPCBI SME Council Speech |
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It's a great pleasure to be here to today to meet one of the most important committees of any industrial group anywhere in the world. Within two days of my appointment, I came to this building. The CBI was one of the first business organisations I consulted, and Sarah and Alison Bye came to brief me on the key issues facing SMEs. I pay tribute to the CBI which has many accomplishments in its long history. You are key contributors to the economic prosperity of our nation - the challenge for the future is to ensure that in an increasingly competitive world, we pull out all the stops to maintain the enormous dynamism and success which goes with being the world's 4th largest economy, yet having only the world's 20th largest population. In praising the CBI, honesty compels me to say that for decades this was not always the perception of the CBI held by many in the Labour Party - when it seemed as though CBI stood for 'Confrontation with British Industry'. Well, now I'm pleased to say CBI for us stands for "Co-operation with British Industry." I visited a manufacturing SME in Doncaster - a company which, among other accomplishments supplies Walmart in the USA with metal grills. It makes the grills and it makes the equipment which makes them. It's about to open its second factory in Houston Texas. It had help from the DTI for overseas visits to South Africa, Australia and China to expand in one of these countries, and it is hoping for a £250,000 grant to invest now, rather than in 18 months' time. We really are helping British Business get to the future first. Small businesses play a vital role in our economy. I don't have to tell you, with 3.7 million SMEs employing 12 million people and an annual turnover of one trillion pounds - that this government does not take their contribution for granted as many have done before. Let no-one say we lack a spirit of enterpreneurship. Since 1997 there have been 1.3 million start-ups. My Role as Minister for Small Business I see you are considering creating a dedicated directorate for SMEs. You have checklisted some of the requirements:
I just might apply for the job. It parallels my thinking and reflects some of the role I am playing as Minister. I have four goals
Our SBS is playing a leading role. Since it was established just over a year ago, it has a number of notable achievements. It has:
No wonder I told David Irwin the first time I met him that I didn't want to push a single new initiative for a year! However, it is important that we review DTI and of Government Support for Small Business. One of the ways in which DTI helps businesses is by providing financial support to business. This support is a vital part of DTI activity. We spend around £1 billion a year, delivered direct to firms or through intermediaries such as Business Links. But these schemes are too fragmented. Some are long standing schemes set up to meet local or industry needs. Others are newer, and take advantage of newer delivery channels such as RDAs and Business Links. They serve a useful purpose. But the result is that we have too many inconsistent and overlapping schemes. This is not good value for money, and is confusing for business. I believe we need a more coherent and rational approach. The Secretary of State has set in hand a review of business support schemes. As part of this, we are consulting our stakeholders and customers to see how they believe the Govt's support for business could be better focused. The first strand of this review looked at industrial support and manufacturing, the second on wider business support. There is also a cross-cutting review of all government support for small business which the SBS is leading for the DTI, working jointly with the Treasury. My prediction is that these reviews will lead to even more emphasis on small firms and much higher expectations of what I and the SBS can do to help them. And a good thing too. I'm not into limbo dancing - it's the pole vault we're aiming for. How can you get involved? The CBI has already been asked to contribute its views to this review. As business people in your own right, however, you may want to submit your own advice direct. If you wish to do so, you can visit the DTI website where you can complete a form online,at www.dti.gov.uk/dtireviews.html Cultural Change My job is not an easy one. Firstly - and most difficult of all - I want to change the culture. As a Government we are committed to making the UK more enterprising and more entrepreneurial - because we believe enterprise is the engine of this economy. I'm very pleased that the CBI shares this view: I greatly appreciate the work CBI has been doing on "Enterprise Insight" with the SBS, the BCC and the IoD to improve the opportunities young people have to engage with business people, to learn about enterprise, and to develop enterprise skills whilst still at school. But we have a long way to go to bring about such cultural changes. Our objective must be a dynamic knowledge-based economy founded on enterprise, innovation and opportunity in all regions. To have a culture which encourages business start-ups and growth. In all sections of industry and commerce and in all parts of the country. Barriers Secondly, I want to revolutionise SME finance. Your 1999 report "Connecting Companies" has greatly influenced me - indeed we've even poached one of your authors - Adrian Piper from the Bank of England. Small businesses often face particular difficulties accessing finance, so Government has a role to play in addressing this market weakness. John Windler of the Alliance & Leicester came in to give me a most informative briefing on one way to address this and the Small Business Investment Taskforce will support the SBS on SME financial issues. It will add real value to the work of the SBS, particularly in advising on the best ways to tackle market issues and stimulate the supply of finance to SMEs. Skills and Staff Thirdly I want to address skills and staffing issues. For some small businesses, finding and keeping the right people keeps them awake at night. The Small Business Service is addressing this through Business Links. Workforce development, retention and recruitment are all areas where small business customers need a range of solutions from Business Links . Practical solutions which will reap rewards for the nation's economy as well as the individual businessman and woman. It's a myth that small firms don't train. I take Margaret Murray and this Committee's views very seriously. Regulation/Red Tape I know that you are very concerned about "red tape." So am I. From Michael Heseltine, through John Major to more recent figures to much was promised and too little delivered. I make no promises. I don't take much comfort from the OECD's report that the UK has less regulation than other countries. Comparisons with other countries means nothing to the small business trying to stay afloat - here. So I'm encouraged by the new charge to all government departments to quot;Think Small First" - working through the SBS to make sure that every government department considers -from a small business perspective - the implications of their actions and communications. The SBS is working across Whitehall to ensure that this becomes a reality. And this is not a government initiative that will fall off the agenda in six months - this is a standard demand which will always be made of new legislation and existing regulations. I've met Lord Haskins to give him my fullest support in attacking over-regulation. I've discussed with our e-envoy the need to ensure that a telephone directory of guidance is not just transposed into the web - garbage in: garbage out. I've told William Carter to think the unthinkable when his committee simplifies the payroll tax - and to send the Chancellor the bill. The Government has shown that it is willing to listen to business' concerns about the things that we are asking business to do. That is why, for example, we amended both the National Minimum Wage and Working Time regulations to minimise administrative costs. It's why we're determined to go for light touch regulation on the parental leave directive. As long as we have fundamental minimum standards to safeguard workers and the public, and to protect honest and legitimate businesses from dishonest and illegitimate ones, then I firmly support the light touch - and so does the Secretary of State. I cannot say it often enough - I am a facilitator - I want to see businesses shine. I'm acutely aware of the CBI criticism of the planning regime. Barney Stringer has highlighted your concerns about delays and poor planning decisions which he says are compounded by the lack of local development plans. The Future for Small Business In the industrial economy of the 20th century, large corporations drove economic progress. The "nation of shopkeepers" were small business operators. In essence nothing has changed - the British are entrepreneurs, and in the knowledge economy of the 21st century, the drivers of change will be small businesses. Sir David Wright told me that twenty, and even ten years ago, when he was spearheading the effort to get Japanese firms to build plants in Britain, an announcement that a plant creating 1,000 jobs was a great result. Now, an inward investment creating 200 jobs is great news. But for me, jobs are not the be-all and end-all. We need to nurture and encourage enterprises which create products and services that can stand the test of time, and of fierce competition. Government support for support's sake, or solely to save un-viable jobs will not take us forward and would threaten to drag us down. In March this year the DTI published a "Foresight" report called Financing the Enterprise Society. It predicts that over the next ten years, small businesses - not large ones - will be the main drivers of economic growth, product innovation and job creation in our country. I believe we have an ideal opportunity to discuss these issues because it's right that those of us involved in policy making consider the impact that changing financial systems and regulation could have on SMEs. By working together, I believe that we can begin to shape that future. |
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Other speeches by Nigel Griffiths MP
(the following are available from the archive) |
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