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Meg Munn MP - Sheffield Heeley's voice in Parliament | Welcome
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Meg Munn’s Finance Bill Speech - business in the region

Tuesday, May 6, 2003

Ms Meg Munn (Sheffield, Heeley): In particular, I should like to address issues affecting small businesses, which I want to set in the context of regional development proposals and issues affecting regions?issues that have been mentioned by other Labour Members, as we are beginning to see the Government develop a strong regional agenda.

Historically, there have been significant differences between the regions of Britain for many years. Some 20 years ago, I found myself working in the south-east. Indeed, I worked in Wokingham, although I see that the right hon. Member for Wokingham (Mr. Redwood) is not in his place. It was an interesting experience. I ended up working in Wokingham not out of choice?although I should say to the good people of Wokingham that I did not regret my period there?but because it was a time, under another Government, when the country was experiencing high unemployment. A certain gentleman who is now in another place exhorted those of us who were without work to get on our bikes to look for it, and that is indeed what I did. When I applied for the job I did not even know where Wokingham was, so I had to ask for directions to the interview. A huge contrast was evident between the situation of people living in that part of the south-east and that of those living in my home town of Sheffield. When I went back at weekends or for holidays, I saw that contrast very clearly in the real deprivation that people suffered. The biggest indicator was that a pub in the south-east would have people in it during the week, which would not be the case in the north.

We still have regional disparities, but I am pleased to say that deprivation in my part of the world is nowhere as near as bad. People have benefited greatly from the stability of the economy and the measures implemented by this Government. Since I was elected nearly two years ago, I have seen a real improvement in the local economy, especially in terms of small businesses starting up. Parades of shops with significant numbers of empty properties are now occupied, because people are confident about starting up a business and operating effectively in the economy. However, earlier on under the Labour Government some parts of the economy did better than my part of the world. We must address that disparity between the regions. I therefore welcome the establishment of the regional development agencies. I particularly welcome the fact that when they were consulted on many of the issues that were dealt with in the Budget, they focused their input on enterprise, innovation, skills and regulatory reform?four aspects that all hon. Members would agree are important to the development of the economy, especially the small business sector.

It is crucial for the Government to encourage enterprise, not just take a laissez-faire approach that lets the market do what it will. In February, I was pleased to note that a survey by Global Entrepreneurship Monitor showed that of women in all the regions, those in Yorkshire are the most entrepreneurial. When I made that point previously in the Chamber, the hon. Member for Lichfield (Michael Fabricant), who is not here, remarked that the technical term was "lasses", so I should perhaps say that Yorkshire lasses are the most entrepreneurial of all women in the UK. However, that masks the fact that women generally are not as entrepreneurial as men: only half as many women as men see themselves as likely to go into business. Moreover, the highest level of entrepreneurial activity by men, which is in the east of England, is more than twice that of entrepreneurial Yorkshire lasses. It is enormously important that the Government do what they can to support small business creation. The same survey showed that job creation by small businesses is strong. It is estimated that 55 per cent. of start-up businesses create up to 11 jobs. Many more people now believe that they have entrepreneurial skills; 43 per cent. think that they have the appropriate skills to start a business, compared with 40 per cent. in the previous year. In place of the rather bleak picture that was painted by the hon. Member for Boston and Skegness (Mr. Simmonds), we can see a much faster-developing and encouraging picture.

Representing a Yorkshire constituency, in Sheffield, I particularly welcome the focus of resources on deprived areas, where traditionally people have not been so entrepreneurial, have not looked to develop their own businesses and, indeed, have not had the resources behind them in order to do so. As well as containing measures that will benefit all start-up businesses, the Finance Bill specifically identifies ways in which businesses in deprived areas can be supported. The extension of the Phoenix fund is intended to promote enterprise for disadvantaged groups and areas. That is supplemented by the development of enterprise areas, some of which are in my constituency. My right hon. Friend the Chief Secretary explained how measures such as relief on corporation tax and first-year allowances will help start-up businesses.

Once established, small businesses need to develop. I therefore welcome the Government's focus on innovation and their support for research and development. There are many ways in which businesses need to develop, and having met many representatives of small businesses in and around my constituency, I know that they are seeking that help and support, but sometimes feel that it is not so well advanced in our region for businesses of their nature. For example, people from Diva, a public relations company, told me that it was more difficult for them to develop the links and networks that they could build up if they were based in the south-east. That needs to be addressed further, not only through supportive mechanisms such as the business links programme, but through new mechanisms. In South Yorkshire, we have the benefit of objective 1 European funding, and strong developments are taking place as a result. Strong links between the regional development agency, business links and objective 1 are beginning to deliver many more benefits to small businesses.

Also in South Yorkshire, in Doncaster, we have a company called Beta Technology Ltd., which is involved in helping businesses across Britain with technological solutions. Earlier in the debate, we discussed the importance of new technology and of developing, through research and development, different ways of delivering business solutions. When I recently went to visit the company, one of the interesting developments that I heard about was the way in which military technology can be applied in businesses to enable them to develop further. The company is channelling money from the European Union through to many businesses, making them stronger and more competitive and placing them at the cutting edge of the technology in their area of work, helping them to grow and ensuring that more people are employed. It is no surprise that the Budget was welcomed by the regional development agencies, whose involvement in the Budget processes was a new step. The process of dialogue with those agencies, which should be at the heart of the regions, is moving us forward.

Of course, no discussion of small business would be complete without mentioning regulations?I am surprised that no hon. Member has done so. Small businesses in my communities are no different from those elsewhere. If one asked them, "Would you like more red tape or less red tape?", they would say, "Can we have a bit less red tape, please?", because nobody likes having lots of bureaucracy and regulations. We must recognise, however, that it is a matter of balance.

The Government look to simplify company law whenever possible, especially for small businesses. They are making accounting procedures less onerous, but they are also ensuring that regulations that benefit overall business growth continue.

Many regulations exist to make employment better and deal with social issues about which Labour Members care greatly, including the minimum wage, paternity and maternity leave and health and safety. They ensure that the work force is valued and that the people who come to work in a company are fit, healthy and able to have a proper work-life balance.

Mr. Simmonds: Does the hon. Lady accept that many regulations deter employers from taking on more employees?

Ms Munn: I do not accept that. The hon. Gentleman cited many regulations that Conservative Members especially like to cite. However, many are traffic regulations or affect matters that do not impinge on businesses.

When I visit small businesses in particular, they tell me that they come across specific problems, but because they have fewer than 25 employees, they do not encounter them often, hence they do not know where to go for advice. Big companies or local authorities have personnel departments and probably specialists who know what to do. Exactly the same problems affect employees in small businesses, but the support is not always available for them.

Mr. Love: My hon. Friend was far too kind in not reminding Conservative Members that the former right hon. Member for Henley, who claimed morning, noon and night that he would get rid of regulation, was responsible for the greatest increase in it.

More than abolishing regulation, more than having access to finance and other support, small businesses want a good, stable economy, which the Government are providing.

Ms Munn: I agree. Small businesses value the low interest rates and knowing that they can continue to operate in a stable environment.

Much advice exists, and making it available to small businesses is important. I therefore especially applaud the work of the Yorkshire and Humberside chamber of commerce, which is working with partners such as the regional development agencies, local authorities, local business partnerships and the Yorkshire Post. It has established a red tape-busting roadshow, which is making its way around the county, advising on a range of issues such as employment legislation, the minimum wage, paternity leave, stakeholder pensions, health and safety, business taxation and environment taxation to ensure that people who run small businesses know where to go to get the advice to help them understand what they need to do. Business people are no different from the rest of us. Things often sound worse than they are and knowing that clear advice is available and where to obtain it is important.

Mr. Barry Sheerman (Huddersfield): In my hon. Friend's constituency, like mine, the entrepreneurial small business soon learns the access routes to information and grants. When there is money at the end of the rainbow, small businesses learn fast the way in which to deal with what they would normally call red tape.

Ms Munn: My hon. Friend makes a pointed comment, with which I agree. Small businesses learn what they need to do but that does not mean that it is not a good idea to ensure that people know about their responsibilities, which enable them to have a good, trained, healthy and happy work force. In the long run, that will increase their business profitability.

Britain is moving in the right direction. The Budget, the Finance Bill and the measures that the Government have introduced not only this year but in previous years have made Britain a good place in which to start and run a business. As I made my way down to Westminster yesterday evening, I listened to a programme on Radio 4 on which a range of French people were interviewed. They were clear that Britain was a much better place in which to start a business and that the regulations were much simpler and more straightforward than on the continent.

Small businesses have grown in my constituency. The Government support the growth and development of business and I welcome their acknowledgement that development is different in different regions. The regions must be given a key role in driving the agenda.

8.35 pm

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