Support for small business: government plans
Sajid Javid sets out his priorities for supporting Britain's small businesses.
I’m delighted to be back in my home town of Bristol.
And to be here at Engine Shed – a place that captures everything that’s great about this city…
…past, present and future.
We’re in part of the original Temple Meads train station, designed by Brunel.
Today – thanks to Bristol University and the city council – there are promising start-ups here.
There are app developers and apprentices in residence – the business creators and skilled workers of the future. I’ve had the pleasure of seeing some fantastic examples already this morning.
It’s the perfect spot for me to talk about the government’s plans for business…
…in the city where I learned almost every important thing about business.
The business in question was beneath the flat on Stapleton Road – which I shared with my parents and 4 brothers.
It was a clothes shop…
…the basis of my deep knowledge of ladies’ clothing.
I’m certain no male MP knows more about womenswear. At least, I think that’s true.
But, most important, it was the culmination of my parents’ ambitions.
They came to this country in 1964 with dreams of a better life.
My dad started off working in a cotton mill.
Then he drove buses.
And, at weekends, he ran a clothing stall at the local market.
As trade grew, he got extra pitches – in Rochdale, Manchester and Liverpool.
Meanwhile my mum was back at home – looking after us and making clothes for the stall.
The sound of my childhood was her Singer sewing machine hammering away in the background.
Later, we got the shop on Stapleton Road.
Therein lay the soul of my family.
It was a 24/7 concern.
We all mucked in. I remember, aged 10, properly helping Dad.
Wearing the moneybelt, helping the customers, being in control.
Our fortunes, our happiness – they fluctuated with the day’s takings.
It instilled in me an unwavering belief in enterprise, opportunity and reward for hard work.
Above all, I know what it’s like to run a small business.
That’s why I’m here today to talk about what this government will do to support you.
I’m here to expand on what David Cameron said while visiting the Tetley factory in Stockton-on-Tees last week.
To add another tea bag to the pot.
The Prime Minister said this would be a government delivering for working people.
For hardworking taxpayers.
For men and women giving them the dignity of a job and the pride of a pay check.
He promised we would train 3 million more apprentices.
Improve childcare for people who want to work, or work longer.
And cut taxes.
The momentum we’ve gained over the last 5 years is for all to see.
2.2 million private sector jobs created since 2010…
…meaning we now have in the UK record employment.
750,000 more businesses created since 2010.
Almost 28,000 recipients of start-up loans…
…realising the dream of running and owning a business…
…in places like Bristol.
Make no mistake.
Government isn’t responsible for this entrepreneurial boom.
That’s down to individuals alone.
People with the guts and gumption to risk everything on starting something from scratch.
Meaning parents can bring home a family wage.
Putting communities back to work locally.
Planting the seeds of regional recovery and economic recovery.
…the strongest in the G7, the healthiest in Europe.
Thanks to them – thanks to you – Britain can look forward with greater confidence.
Yes, Britain is a nation of shopkeepers…
…of plumbers and hairdressers, florists and café owners.
Our great nation – together, strong, on the road to prosperity, as one.
And we’ve been on the side of business.
We cut corporation tax so the UK rate is now the lowest in the western world.
We cut national insurance contributions.
We cut the cost of regulation on UK business by some £10 billion.
And by getting on top of the deficit, we helped keep interest rates and funding rates low.
During the election, we promised to do more for business. Much more.
As one of our first acts, we’re introducing the enterprise bill.
Some people might know my love of Star Trek.
I wanted to call it the Starship Enterprise Bill, but the Prime Minister wasn’t convinced.
First and foremost, it will serve the interests of small business.
Second, it will simplify and clarify the business environment in this country.
And third, it will focus on jobs…
…so employers can create those additional 2 million jobs
…and their focus on growth isn’t obstructed by disproportionate industrial action.
So let me describe the next steps on deregulation – on paring back bureaucracy.
The manifesto promises a further £10 billion of cuts in red tape over the coming Parliament.
This £10 billion is going to be harder to slash than the previous £10 billion.
Recent reforms have already started to make a big difference.
Simpler audits for small business.
Less bureaucracy for house builders and developers.
Fewer employment disputes reaching costly tribunals.
Car mechanics and valets no longer have to do training that’s only useful to lorry drivers.
Child-minders no longer have to self-register as a food business.
Hundreds of live music and community events now exempted from entertainment licensing.
Thousands of regular businesses no longer face health and safety inspections.
And there’s less of the stuff that sometimes invites utter derision.
So no more slaps on the wrist for no-smoking signs in the wrong size or in the wrong place.
No need anymore to report any sightings of grey squirrels on your property.
If you leave your sandwich on the bus, the bus company no longer needs to hold on to it for 48 hours before putting it in the bin.
And, come Christmas, you can buy a box of crackers without having achieved the age of consent.
We already have the lowest burden of regulation in the G7.
But now we’re going to tackle European regulation head on…
…pressing EU institutions to reduce needless burdens on business…
…ensuring we implement EU law in a way that doesn’t put UK business at a competitive disadvantage.
Over the next 5 years, we’ll build on the success of ‘One in, two out’ to put a strict brake on new regs.
For the first time, the actions of regulators will be counted towards achieving the overall £10 billion in cuts.
This will be the first time in modern history that government has successively reduced red tape and continued with reductions in the next parliament.
And business will be our partner…
…giving us the evidence we need to roll back the state.
One crucial aspect of this roll back will be the extension of the rule that is known as Primary Authority.
Primary Authority allows a business to get advice on regulation from a single local council.
This advice must then be respected by all other local councils…
…reducing the time and cost to businesses of having to obey multiple masters.
When Primary Authority came in, the purpose was to help larger firms trading nationwide.
But it was so successful that we opened it to small business in 2013.
Today, more than two-thirds of the businesses taking advantage of Primary Authority are small businesses.
It frees them from inconsistent and confusing red tape.
It reduces their operational costs, and allows them to focus on expansion.
Butchers’ shops, convenience stores, restaurants, manufacturers.
Thanks to Primary Authority, cheese makers don’t have to display their cheddar on wooden boards in one place and on steel platters in another.
Yet only a tiny fraction of small businesses who could benefit are actually doing so.
So we’re going to simplify Primary Authority itself…
…making it far easier for small businesses to access the scheme.
And we’re going to extend its reach.
There’s one more area I wish to cover this morning.
It’s a subject that’s exercised me for some time.
There’s a situation familiar to small business owners up and down the country.
A letter turns up from a larger customer changing payment terms…
…or charging them to remain a supplier…
…and in some cases even deducting that charge on the spot against payment owed.
This pattern of behaviour is an outrage.
It’s bullying – pure and simple.
In 2008, late payment alone cost British business £19 billion.
This year, that’s set to exceed £40 billion.
The average amount owed to a small business is more than £30,000.
You know as well as I what figures like that can do to the cash flow of small businesses.
It’s enough to force a company into insolvency.
We’ve not been blind to these issues.
During the last Parliament, we introduced legislation requiring the UK’s largest companies to report on their payment practices.
That’s going to shine a light on poor performance when it comes into effect next April.
Recent U-turns show that public scrutiny can make big firms mend their ways.
We also strengthened the Prompt Payment Code to introduce a maximum 60 day payment term…
…and promote 30 days as the norm.
Government has rightly been leading by example.
We pay our suppliers within 30 days.
We’ve brought in measures requiring all public sector contracts to pay out within 30 days…
…all the way down the supply chain.
Now, we’re going to widen the powers for representative bodies to act on behalf of their members to challenge grossly unfair payment terms.
There’ll be a consultation on this later this year.
And we will fulfil the manifesto pledge to set up a Small Business Conciliation Service…
…to help small businesses settle their problems with large corporations.
The purpose is to avoid expensive legal costs and maintain business relationships by reaching mutually satisfactory agreements.
This model has worked in Australia.
We will explore it, and other models, and find what works best here in the UK.
Now this isn’t the sum total of what we’re planning to do.
Far from it.
We’re going to review business rates.
From April next year, no employer will pay national insurance for apprentices under 25.
Some of this action will require legislation and will be announced in the Queen’s speech. Some won’t need new legislation.
Either way, my message to you is clear.
If you believe in the values of hard work and enterprise, then we think along exactly the same lines.
If you’re behind a shop counter, behind the wheel of the van, behind a new invention…
…then we are right behind you.
If you’re striving to do what my parents did a generation ago – here in Bristol or anywhere else in Britain…
…build a business, create jobs, improve the prospects of your children…
…then you have my utmost respect, and you will have my total support.