---

Economy: Enterprise, Taxation and Manufacturing

My Lords, ““enterprise”” is a word that is synonymous with much of the history of these islands. Being enterprising comes naturally, as they say. We must encourage enterprise in a specific field—that is, business—but also in a wider way, by encouraging people, through our educational system and community outlook, to be innovative, ambitious and open-minded. The dead hand of officialdom can sometimes kill off enthusiasm; it must not. While coming up to Parliament this week, I read about small businesses in Wiltshire being threatened with prosecution by the council if they did not remove signs from roadside fields, indicating who, what and where they were. For example, according to the Western Daily Press, Tony Dene, who runs the Farmer Giles Farmstead, received a letter from the council giving warning. It was a bolt from the blue. He said: "““These are modest signs, about 3 feet square, which have alerted motorists to our presence for many years. We strongly rely on this sort of trade. Now, after all these years, we have been ordered to take the signs down””." Pubs and a hotel were also included in this threat. It seems that the Highways Agency made a complaint and the local council was quoted as saying that it was duty bound to take action. My point is that we all need to encourage enterprise—local government, national government, the community and, indeed, those in business themselves. Before entering Parliament 10 years ago I spent my working life in small business, latterly as managing director of a plastics manufacturing company. In my early years I came up against a ““can’t do”” boss. The result was that we ““didn’t do””. This could have put me off business for life. It did not, but business in this country needs to be inspirational and welcoming to newcomers. This leads me to apprenticeships, which are seen as an extension of education, in a way. The Government will, I believe, bring in legislation; we on these Benches look forward to examining it. We welcome the initiative, but it is important that there should be wide consultation. ““Consultation”” is a much used word, but it is sometimes not carried out terribly well. To encourage business and enterprise, businesspeople must be fully engaged. I have raised this before, but say again that addressing skills in this way is important. Small businesses in particular need to be involved and helped—including financially—to participate. Only yesterday, for example, Parliament was lobbied by the YWCA, which helps disadvantaged young women. I am not suggesting quotas, but encouragement is needed for young women, as for others, and for those who are disadvantaged. I hope this will be taken on board. I thank the noble Lord, Lord MacLaurin of Knebworth, for securing this debate, which gives us an opportunity to range over a wide and important area. The noble Lord spoke about inflationary pressures, the credit crunch and, along with other noble Lords, regulation and the importance of small business. The Government have launched a new enterprise strategy and I headline the points: a culture of enterprise; knowledge and skills; access to finance; regulatory framework; business innovation. There are fine words from the Government about enterprise, but there need to be tangible actions and an economic regulatory and financial background to achieve those aims. It is welcome that the Government have over the past few years listened to the strong call for stability. Modestly, I would say that their adoption of the independence and detachment of the setting of interest rates from government has helped. I do not why I should be modest about this, since it was, and still is, a fundamental policy of the Liberal Democrats which we were glad to see adopted. It is also welcome that since this Government have been in office we have had a good record on employment. We have had consistently low unemployment, which is currently below the average EU, G7 and OECD rates. But it is forecast that our unemployment rate will rise above that of the OECD for this year and next year, which is a concern. Indeed, we see from a newspaper headline today that more firms are to cut staff. I well remember how when the Conservatives were in power, those years were marked by the phrase, ““boom and bust””. We still have the basis for stability of interest rates, but it is disturbing to hear the words boom and bust again when referring to the cycle in bank lending, which has contributed to the instability of the housing market, and in general lending. It therefore has a spill-over effect for business and industry in all sorts of ways. More could have been done to deal with this, but we are where we are. Note should be taken of concerns expressed recently from the City, which was referred to earlier, about the uncompetitiveness of the UK tax regime against others. But a recent report from the City also raised concerns about the certainty of interpretation, the predictability and the attitude of the tax authorities. Certainty and stability are important to business. The Government need to listen to business to emphasise that they are business-friendly and, in particular, that they are the friend of small business, to which I shall refer later. A recent press release from the Federation of Small Businesses asked the Government to lay off small firms. It said that the taxation of small businesses is disjointed and inconsistent. The Liberal Democrats would simplify the tax system and reduce corporate tax by 1 per cent, as well as simplify and clarify the system. We would also offer substantial business rate relief for small businesses with less than £25,000 rateable value and provide a continuance of independence when setting interest rates. The game is for the Government once again to focus on working with business. Small business has recently felt a bit neglected. The Government made a good start 10 years ago and they must renew their efforts. In past few years, there have been a number of initiatives. The late payment of debt was addressed by a Bill, but efforts need to be renewed. I ask the Minister to look particularly at the Government’s record with regard to paying Bills. It is welcome that they have a goal to give at least 30 per cent of procurement to small and medium-sized businesses. That will need to be backed up with action. As has already been mentioned, renewed efforts are needed on regulatory impact assessment. That has been one of my hobbyhorses since I have been involved in Parliament. We have seen improvements but we must be careful to ensure that these are kept up or improved. I should like to see an organisation which is independent of government to carry out these assessments. We must keep down the regulatory burden. Ten years ago, the Government laid a lot of emphasis on small business being at the heart of government, perhaps with a tsar. The Small Business Service was good in theory, but in practice it was not independent enough. As the noble Lord, Lord Bilimoria, rightly said, there is a constant need for focusing on small business and for a high-profile Minister for small business who is not for ever chopping and changing. We need constant emphasis on the small business sector. I urge the Government to get back to that. They started well, but they need to renew their efforts. We need a business-friendly climate, stability and a stepping up of our emphasis on skills.