Small Business Service (Hansard, 10 February 2005)

§ Lord Harrison
asked Her Majesty's Government:
What plans they have to develop the Small Business Service.

§ Lord Davies of Oldham
My Lords, the Small Business Service will halve in size from its current complement of 400 to 200 staff by April 2006. It will have less direct involvement in the delivery of programmes. It will focus increasingly on providing a centre of expertise, leadership and challenge on small business matters within government and across the regions. It will influence policies and behaviour in pursuit of the Government's enterprise agenda.

§ Lord Harrison
My Lords, I thank my noble friend for that Answer. What more can the Government and the SBS do to promote SME formation among women, ethnic minorities and in the 15 per cent of regional areas of Britain that are most deprived? According to the recent SBS report, there have been hardly any increases in the numbers of SMEs among those groups and in those areas.
Secondly, given that the Labour Party is now the party of small business, will my noble friend take this opportunity to repudiate the proposal in the James report to abolish—indeed, to kill—the Small Business Service?

§ Lord Davies of Oldham
My Lords, my noble friend is quite right: the Labour Party is indeed the party of small business. It will be noted on all sides of the House that the James report indicates that the Opposition have a proposal to remove this service. Our intention with the devolving of Business Link to the regional development agencies is of course to strengthen the regional aspect to which my noble friend made reference. We are aware that particular sections of the community need support in these terms and we will extend and continue to provide that.

§ Lord Razzall
My Lords, does the Minister accept that, whether or not the Labour Party is the party of small business, it is certainly not the party of small government? Does he not agree that his own Answer demonstrates that perhaps the moment has come for the Government to demonstrate a movement towards being the party of smaller government by abolishing the Small Business Service and spending the money helping small businesses in many of the other ways 896 with which I am sure your Lordships could help the Minister? The obvious example would be raising the threshold at which small businesses pay business rates.

§ Lord Davies of Oldham
My Lords, the House will know that the noble Lord has put a most modest gloss on the Liberal Democrat proposals, which are of course to abolish the DTI entirely, with all the consequent ramifications for the valuable work done by that department. I emphasise that the Small Business Service is valued by small businesses. The increased use of its website and the increased indication of small business customer satisfaction with the provision of the service is testimony to that. It should be recognised that, among many sections of our community, setting up a small business involves a very great risk indeed, and that help, advice and guidance are welcomed. We intend to continue providing that service.

§ The Countess of Mar
My Lords, with the decline of agriculture and farming in rural communities, what is the Small Business Service doing to encourage people to open businesses in order to keep the rural communities intact?

§ Lord Davies of Oldham
My Lords, that is a very important point indeed. We are conscious that often the strategy for people who are in occupations where significant change is taking place—obviously farming is one of those—are in need of help and advice on how resources can be redeployed. They may even need access to a certain amount of capital support to get them started. It is the role of the Small Business Service to provide that support, often to individuals who have limited experience of setting up such a business. We recognise the strength of the noble Countess's point.

§ Baroness Miller of Hendon
My Lords, what is the Government's response to the report by the Small Business Network—the very people that the Small Business Service is supposed to help? The report states that, the SBS is a bureaucratic waste of time and money-.

§ Lord Davies of Oldham
My Lords, we have had many other communications from those who use the service which show how well valued it is. There have been 5 million visits to the information website over the past year. We have responded to the needs of small businesses. I will single out one obvious area that is often referred to by the Opposition and other parts of the House—the need to control regulation and the extent to which small businesses have to keep up with the necessary regulation imposed on them. In consultation with them, we have agreed to limit the dates on which regulations come into force each year. We have brought a whole new area of regulation within that framework so that instead of small businesses being anxious about regulations coming in severally on dates throughout the year, everything is 897 concentrated in one period. We are able then to give them advice and support on how to comply with those regulations.

§ Lord Taylor of Blackburn
My Lords, does my noble friend agree that, unless the economic competitive climate is right in rural areas, no matter what the Government do people will not take up the initiative?

§ Lord Davies of Oldham
My Lords, that is absolutely right. Small businesses have as much need as any other part of our society for a strong, vigorous and competitive economy. My noble friend will recognise the Government's achievements in terms of this broader framework which is leading to the establishment of greater numbers of small businesses than we have ever seen before.

§ Lord Patel of Blackburn
My Lords, I totally agree that the Government have an excellent policy for small and medium-sized businesses. At the same time, however, I am sure that the Minister will agree that ethnic minority businesses have a different culture. For that reason, they are not in a position to take advantage of what is offered to them. What steps are the Government taking to ensure that ethnic minority businesses are also benefiting from our policies?

§ Lord Davies of Oldham
My Lords, my noble friend makes an exceedingly important point. We are all conscious that many in the ethnic communities prove to be enormously successful in the development of small businesses. But we can always extend services, especially against a background where some of our ethnic communities are concentrated in areas where other opportunities for work are fewer. We are keen to expand the service in those areas. That is why the emphasis from Business Link and the regional development agencies is an attempt to bring the whole strategy closer to people so that the areas can in fact meet discrete needs such as my noble friend indicated.