I’m delighted to be here - and to be joined by Nigel Griffiths, our Small
Business Minister.
I want to start by paying tribute to the Federation of Small
Businesses. 30 years old today. You have provided successive Governments
with in-depth knowledge and expertise of what it’s really like to run a
small business.
Knowledge that is invaluable to us in Government, vital to better
policy making. And you’ve held politicians - regardless of party - to
account in the interests of your members.
I worked closely with you as small firms Minister, as Nigel does today
- and we listen to what you say.
You told us the Small Firms Loan Guarantee was too restrictive. We
changed it - extending it to retail, hotels and catering, garages - and
the result is 40% more applications already this year.
You told us bank charges were too high. We dealt with it - now every
bank has to offer you interest on your current account or free banking.
You told us not to increase national insurance contributions again.
Gordon listened - and NICs are unchanged.
You told us the VAT forms were a headache - so we introduced the
simplified VAT scheme - and kept our VAT threshold the highest in Europe.
And you told us your weren’t too thrilled about administering tax
credits. So the Chancellor announced this week that he will move to direct
payment of tax credits to employees, cutting the cost of payroll for over
1 million small firms.
I know how hard you work. I know how insecure it can feel when you go
self-employed. I know what it’s like to be the person responsible for
getting in enough money to pay the wages at the end of the month. I know
the risks that you take when you put your home and your savings on the
line to start and grow a business.
And I know that the prosperity of the British people depends upon you
and the hard work of millions of people like you.
12 million people depend upon smaller businesses for their job. Half
our national wealth. And a staggering 9 out of 10 new business ideas.
But I’m not sure the public always appreciates that. I sometimes think
that if you spend £1 on a lottery ticket and win millions, you get more
adulation than if you work day in, day out, build up a business and make a
decent living for yourself and your team.
We need to keep changing those attitudes. I’m delighted that the
Federation is working with the Mirror and Lloyds TSB to create Small
Business ‘Oscars’. We’re joining The Express and HSBC on an awards scheme
for entrepreneurs. Proper recognition for the real heroes and heroines of
the British economy.
But of course, the most important thing we can do for you is to keep
the economy strong and stable.
The lowest interest rates in thirty years, the lowest inflation in
forty years, the highest employment ever.
As the Chancellor said on Wednesday,
- this is the longest period of sustained economic growth for more
than 200 years, since the beginning of the industrial revolution;
- over the last four years, Britain’s growth was ahead of Germany,
Japan, Italy, France, the euro area and even the United States.
We will never risk this. It’s because of stability that survival rates
are up. Optimism is up. And failure rates are down.
But we can never take economic success for granted.
Every day, we face new sources of competition, new challenges - and new
opportunities.
- China joining the WTO
- India producing 220,000 Science and IT graduates a year
- Ten more countries joining the European Union in a few months.
Technology and consumer demands changing so fast that one year's up to
date skills or new products may be out of date just a few years later.
We know we have to raise our game in government.
Yes, we’re investing in more schools, in health, in transport and our
science base.
But we’re reforming too - so that we become more productive in the
public sector, we cut out waste and get value for your money.
We’re already getting standards up in our schools. But we know there’s
far more to do if you’re going to be able to recruit the people you need.
And we’ve now got business people up and down the country helping to
design and deliver modern apprenticeships, making sure that in every
sector we’ve got practical training programmes and the right
qualifications.
And we’re also turning around business support.
You told Nigel and me that the Business Links advisory service wasn’t
good enough.
We’re changing it. We’ve got more private sector involvement, more
competitive tendering, much more focus on what you, the customer, want.
Last year Business Link helped over 310,000 small businesses.
Satisfaction is up to 87%, and market penetration is up by over a quarter.
We’ve backed it up with the Manufacturing Advisory Service -
specialist, hands-on advice that has already helped thousands of smaller
manufacturing firms cut costs and raise profits.
And next year we’ll be integrating regional and local Business Link
services with the Regional Development Agencies. We will keep a strong
national framework of quality and standards, so that we don’t go back to
the old days of a postcode lottery in business support. But the RDAs -
with their business leadership and their responsibility for regional
economic strategies - will be able to join up business support with
everything else that is happening to promote enterprise and strengthen
regional economies.
In the past 12 months alone:
- UK Trade and Investment helped 30,000 businesses.
- Over 1,000 of our brightest businesses were given research and
development grants.
- Applications to the Small Firms Loan Guarantee scheme went up by 45%
- And Regional Venture Capital Funds provided more than £300 million
funding for small firms.
We’re consulting on a new Enterprise Capital Fund programme, copying
the hugely successful US Small Business Investment Company programme,
which helped turn companies like Intel and Apple into world-beaters.
We’ve heard you. I know that small firms often carry a
disproportionately large burden from regulation and we’re committed to
reducing it whenever we can.
And with more of our regulation coming from Europe, we have led the way
in putting better regulation on the European agenda.
We’ve got an agreement that European regulations are put through the
same proper cost benefit analysis that we do here - and we’ll be asking
for your help to make sure it actually happens. It’s very simple - no new
regulation unless it passes the test: will it promote jobs? Will it open
markets? Will it sustain our competitiveness globally?
We’ve funded a Small Business Office in Brussels - so that your voice
is heard early on, when a regulation is just a gleam in an official’s eye.
And by getting stuck in early on the proposed Chemicals Directive - which
would have been a disaster for small and large firms all over our country
- we’ve already stripped out billions of euros of extra costs - and we
haven’t finished yet.
We’re also looking at the Working Time Directive.
We all know that business needs to work more flexibly to meet the needs
of customers.
So when we changed the law to give parents of young children more
choices about the hours they work, we did it in a way that would help
business too. And the indications are its working.
But when people say they want more choice that includes the choice to
work more hours as well as less. I know you all do it, whenever your
business needs you. And there a over a million people working paid
overtime - and doing so because of the opt-out from the Directive.
Some people want to get rid of the opt-out.
We’re not prepared to do that. The Working Time Directive is a health
and safety measure - and we’ll all sign up for health and safety. But I’m
proud of the fact that our country has the best health and safety record
in Europe. And working hours - which had been rising for over a decade -
have been falling for the last six years.
The choice to work long hours has to be real. But removing it would be
bad for business, and bad for hard working families.
We are making the argument and we’re winning support for it. We’re
making the argument in Europe and winning it. There is no point in having
wonderful laws to protect people in work if the price you pay is more
people out of work
Let me close by saying we value you, we listen to you, we’re committed
to working with you to help you succeed and thrive.
You told us you needed greater stability, better support and better
regulation. We’re committed to giving that to you. Finally, I wish all of
you in the FSB a very happy birthday.
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