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Meg Munn MP - Sheffield Heeley's voice in Parliament | Welcome
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Supporting Sheffield Business

Sunday, February 27, 2005

Meg was invited to give a speech at the Sheffield Business Club luncheon.

She spoke about the support the Government is giving business, and opportunities for business in the European Union.

 

Thank you for inviting me to your lunch.

 

Small and Medium Enterprises (SMEs) employ more than 56% of the private sector workforce - almost 13 million people. 97% of UK businesses employ fewer than 20 people - some four million firms. This means that each individual MP will have, on average, about 6,000 business owners in their constituency. I know that in my own there are no large employers, and while it might be described as mainly residential, there are a number of small businesses - shops, small manufacturers, many people working from home or in small offices. SMEs are enormously important to the national economy, to our regional economy and we need more.

 

Today I want to talk about what Government is doing to support business, and also as we approach our annual Europe week in Sheffield, to talk a bit about Sheffield business in the European Union. Government, in my view, needs to focus on four aspects; encouraging enterprise, innovation, skills and regulatory reform - and I shall say a little about each.

 

Encouraging Enterprise

 

The bedrock for encouraging enterprise has to be a sustained and growing economy - which gives people the confidence that an idea they have has the chance to become reality.

 

Nationally, job creation by small business is strong. It is estimated that 55 per cent of start up businesses create up to 11 jobs.

 

Differences in job creation across the country are stark, with the Eastern region and the South East near the top of the list, and, unfortunately, Yorkshire much closer to the bottom. Interestingly, there are gender differences in entrepreneurial activity. A survey a couple of years ago showed that women in Yorkshire are more entrepreneurial than men. Generally however this is not replicated across the country.

 

If women were setting up businesses at the same rate as men there would be an additional 100,000 new businesses every year. Improved child care resources are not only making it possible for more women to go to work, but women are going into the business sector of child care.

 

The provision of childcare matters - but a child-friendly society would also need ‘parent-friendly’ workplaces. There is evidence to show that family-friendly companies are more productive and economically successful. Finland has achieved the enviable goal of becoming one of the most productive economies in the European Union (EU), with high levels of female participation in the workforce and the EU’s highest birth rates. 

 

The Small Business Service is the key Government means of supporting smaller firms along with the Business Link network. Last year over 430,000 small businesses were helped. It is essential that this help is of good quality and it is pleasing to see that the latest client satisfaction survey has improved and is high at 87%.

 

I’m also pleased that Government is supporting the setting up of social enterprises - businesses that also provide a social benefit. We already have excellent examples in Sheffield - such as Heeley City Farm in my constituency and Rebuild. With the Sheffield Co-operative Development Agency, it is good to see this sector in areas such as child care and care of the elderly.

 

Innovation

 

Innovation is important for business if they are to remain competitive. Last year I was delighted to host an event organised by NESTA (the National Endowment for Science, Technology and the Arts), the organisation that backs UK creativity and innovation, at the Sheffield Millennium Galleries. The event focused on funding for innovation and was attended by nearly100 local inventors, entrepreneurs, artists and businesses seeking to expand.

 

This event focused on creativity and innovation, as Sheffield is home to the largest cluster of creative production in the region. We know that for each success story there's also someone not able to get their ideas off the ground.  So support of this kind is important.

 

The seminar informed budding inventors and entrepreneurs about funding opportunities, and brought them together with groups and organisations that make awards. I am conscious that sometimes there can seem to be so many organisations that it’s hard for SMEs to know who to turn to get the particular help they want. The local Business Link was also involved as a key partner, not just helping businesses get off the ground but in providing advice on development.

 

Information about the National Business Angels Network was also available. A network supported by Government, that provides the direct help of experienced business people to young businesses. Such help can be invaluable.

 

Innovators who have recently benefited from NESTA funding include a team at Sheffield Hallam University. They are exploring how a Science Academy could inspire young people with a talent in science, to become the outstanding engineers, research scientists and entrepreneurs of the future.

 

Skills

 

Since I was elected to parliament in 2001 unemployment in my constituency has fallen dramatically - a cause for celebration. Last year Sir Bob Kerslake, Chief Executive of the City Council, said that he could foresee the time when Sheffield would need to import labour - that there would be more jobs than citizens seeking work. But that’s in the future, now I know that in some areas of my constituency people are struggling to take up the jobs that are available because they lack the necessary skills.

 

A number of businesses complain of the difficulties in recruiting appropriately qualified staff. Sometimes it is basic skills, but other times it it’s the skills that modern technology requires. Many of my constituents understand this - the most demanded courses by local people are for computer courses. Government has recognised this as well with its Skills Strategy and with the important announcement this week about education for 14 - 19 year olds.

 

The Skills Strategy sets out to work with employers and employees; providing better information to employers about training and development opportunities and for employees opportunities to learn. Free tuition for any adult without a good foundation of employability skills and additional support for those studying for technical and professional skills. ICT is now regarded as a basic skill alongside literacy and numeracy.

 

The announcements on 14 - 19 year olds education include imaginative new proposals designed to get rid of the age old divide between vocational and academic education. New diplomas will integrate academic and vocational qualifications, ensuring that children and young people have the basic skills, but also develop knowledge and experience that will enable them to gain employment. The new vocational diplomas will have business people at the centre of their design.

 

Regionally the ‘Regional Economic Strategy’ produced by Yorkshire Forward focuses on the skills that will be needed over the next ten years. Their approach develops particular sectors in our region, helping develop support for skill development but also increasing the distinctiveness of regions. In the past Sheffield was known for steel, for cutlery - we now have a cultural industries quarter, we’re developing digital industries. When looking at marketing into Europe this sector development can be a real asset.

 

Regulatory reform

 

If I were to ask you ‘do you want less red tape and less regulation?’ -  I think I know what the answer will be. The Government recognises the burdens of regulation on small business and over the past few years has sought to simplify and reduce requirements. Accounting procedures have been made less onerous.

 

There are a number of regulations which the Government has introduced which I know are at times demanding for small businesses, but essentially they set out to improve employment conditions and to try and develop a more family friendly society - issues such as the minimum wage, paternity and maternity leave and health and safety requirements. Having a healthy and happy workforce is a benefit for business.

 

On the other side of the equation - 900,000 companies have been exempted from the regulatory arrangements. We have the highest VAT threshold in Europe. The Prime Minister, in a speech to the CBI last October, committed the Government to further reductions in regulation and to a simpler approach in bringing in new regulations. The Better Regulation Taskforce is looking at having a “one in one out” rule for regulation to seek to ensure that new regulations are matched by deregulatory measures.

 

The main rate of corporation tax has been reduced for small companies with a 0% starting rate for small companies to support enterprising individuals starting up their own companies.

 

Crucially, tackling the culture of late payment has been important.  We know that the model in the past has been for big companies to delay paying their bills to their suppliers, who in turn delay paying theirs. Small concerns have been left, and the smaller concerns needed the cash flow.

 

Europe

 

So often in the press we read negative stories about Europe. Having common rules for businesses helps create a level playing field where firms can compete on their merits, not on whether they have privileges of state protection. Generally speaking the European Union doesn’t create its own rules, but instead seeks to harmonise those that exist in national legislation. Having these harmonised rules can actually help business export. Firms can produce to an agreed set of technical standards, have a single certification process, and thus cut red tape and bureaucracy.

 

We’ve persuaded our European partners to agree a Small Business Charter, including a commitment to screen all new regulations at both a national and EU level to assess their impact on small businesses and entrepreneurs.

 

In our region we have benefited from European Social Funds, as we were one of the most deprived areas of Europe. Organisations across South Yorkshire have helped channel funds to businesses in a variety of ways. Beta Technology, which I visited in Doncaster, helps businesses with technical solutions - particularly through research and development. They help channel European funds to businesses with which they were working. The period for Objective 1 funding is coming to an end. With the enlargement of the European Union to 25 countries we are obviously no longer one of the poorer regions, but in addition there is clear evidence that the funds have been well invested and have helped lifted our performance. We are likely to qualify for some continued additional regional assistance but as yet it is unclear what this will be.

 

The enlarged Europe provides new markets and new opportunities for businesses. Britain remains a competitive and business friendly environment in which to operate. International surveys show that the UK continues to have amongst the lowest administration burdens of any industrialised country in the world.

 

Any discussion on business in Europe in Sheffield cannot fail to mention the South Yorkshire International Trade Centre. The range of support they offer to businesses is excellent, from advice through to language skills. They undertake trade missions focusing on particular areas; provide advice on markets and help with the details of export documentation. To have such a facility in our town must be an advantage for local businesses.

 

Conclusion

 

Finally I cannot finish without returning to the enormous importance of a stable economy in which to do business. Being reasonably certain that costs will remain relatively stable, that the economy overall is in good shape, is fundamental to business confidence. It’s fundamental to the decisions that small businesses take when considering expansion - whether through innovation, research and development, new markets or taking on staff to meet new demand.

 

We have that stable economy, it quickly gets passed over, part of the scenery, what we have come to expect. But it didn’t happen by accident. I’m not claiming that it is solely down to government, but government can take a good part of the credit. Government taking the long view, like business, can be difficult - there are always pressures for immediate action, reasons to change direction. But a sound economy does not develop from short-term decision making - nor do good business.

 

The photo shows Meg being greeted by Bob Teasdale, Chair of the Sheffield Business Club.


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