HC Deb 04 November 1999 vol 337 cc473-5
9. Mr. Brian White (Milton Keynes, North-East)

What plans he has to improve access to business information, advisory and support services for small businesses. [95830]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt)

May I congratulate my hon. Friend on single-handedly saving the small business in his constituency that leads the world in the production of vellum? As he knows, we are in the process of establishing the new Small Business Service, which will deliver a number of services nationally and establish a network of franchises to deliver high-quality world-class business support for small and medium-sized enterprises in every part of the country. The new Small Business Service will be established by April 2000, and the network of local franchises will be up and running by April 2001.

Mr. White

The Minister will be aware that the people running small businesses do not have the time to go and see what is happening in other firms and other industries. Will she assure the House that the Small Business Service will be proactive and go out and give examples of good practice, especially concerning the opportunities provided by the internet? People who run small businesses may not be aware of those, because they are too busy getting on with their job.

Ms Hewitt

I am happy to give my hon. Friend the assurance that he seeks. Indeed, I recently launched at the DTI a new interactive benchmarking service to enable any self-employed person, sole trader or small business that is on-line to use the benchmarking service that helps to spread best practice among SMEs.

At the heart of the Small Business Service will be a single gateway—an electronic network of databases providing information, knowledge and interactive services, which will be accessible by SMEs both directly and indirectly, through the telephone, through local Business Links or trade associations, or through a private sector support organisation.

Mr. Brian Cotter (Weston-super-Mare)

In view of a comment the Minister made earlier, will the service be truly accessible to the smallest businesses? Given the comments she has just made about quality, it is important that business advisers should be accredited and properly trained. As many hon. Members will know, in the past, people have set themselves up as business advisers with poor qualifications and no real ability to advise.

Ms Hewitt

I agree with the point that the hon. Gentleman raises, but I am sure that he will agree that there are some outstanding personal business advisers working in the Business Links network. However, the quality of the Business Links service is patchy around the country and we will make it clear in the bidding guidance for the new franchise areas that we expect to see proper training and development, as well as the use of accreditation services for the new Business Links franchise services. We are determined to ensure that the best possible business support services are available in every part of the country to all our small business community.

Mr. Roy Beggs (East Antrim)

What assessment has been made of those small businesses that fail because of the inadequate financial management expertise of their proprietors? Can the Minister assure the House that Government Departments will not be over-zealous in claiming VAT, income tax and national insurance payments when a company has cash-flow problems and that no Government Department will force a small business into bankruptcy when other creditors are confident that, given time, the company may trade out and become profitable?

Ms Hewitt

The hon. Gentleman raises an important issue, because too many owner-managers and self-employed people do not have the basic financial skills that are needed to run an efficient and successful small business. Therefore, part of the service that will be provided through the Business Links franchises will support those people in gaining those basic financial skills. As I am sure that he will be aware, we are reviewing bankruptcy law, in co-operation with the Treasury, to ensure that businesses that could be managed through a period of difficulty into survival and subsequent success are given the chance to achieve that.

Mr. David Taylor (North-West Leicestershire)

I welcome my good friend and constituency neighbour to the Front Bench. I also welcome the measures taken so far to help small and medium-sized enterprises by the Government, including the Small Business Service. Can my hon. Friend reassure me that that service will be able to help the microbusinesses—the one-man or one-woman bands—that are so numerous in parts of the midlands? When I last had a proper job, before May 1997, I was an accountant for many such organisations and I know what difficulties they have in grappling with the regulatory burden and updating their trading skills. Will she focus on that issue?

Ms Hewitt

I am grateful to my hon. Friend for his kind remarks. I can certainly assure him that the new Business Links franchise in Leicestershire, as in other parts of the country, will meet the needs of small businesses of all sizes and different stages of development, including the pre start-up or start-up phase through to the high-growth potential companies. The electronic network of information and knowledge to which I referred a moment ago will make it much easier and more cost effective for Business Links franchises to provide high-quality support to the self-employed and sole trader as well as the more intensive support that is needed by the high-growth potential companies which have in the past tended to be the clients on which Business Links have focused.

Dr. Julian Lewis (New Forest, East)

Would not the greatest service that the Government could give to small businesses be to respect their overwhelming opposition to British entry into the single currency? According to the latest ICM poll, that view is shared by 64 per cent. of the population.

Ms Hewitt

I wondered how long it would be before we heard the true anti-European voice of the modern, extremist Conservative party. Given that half our trade is with our fellow European Union members, withdrawal from the EU would be a disaster for our business community, small and large.

I had hoped that the hon. Gentleman was going to congratulate the Government on the fact that there have been more business start-ups this year than last year. More small businesses are surviving, fewer are failing, and we have reversed the 1992 situation, when start-ups hit their lowest level in recent years.