Tuesday, 15 July 2014

A rare Parliamentary Bill to provide real help for small businesses

Despite nearly a decade in Parliament under my belt, I cannot deny that my primary instincts remain that of a small businessman. I am the proud founder of two small businesses which have grown to employ several hundred people, and the contribution of entrepreneurs is fundamental to the prosperity of all of our communities.

It’s not difficult to find people speaking up for small businesses in the House of Commons; but it is rare to find an answer dreamt up by politicians that truly will resonate positively with those closing commercial deals in every part of the country. Too often, the answer to solve a problem results in more work more regulation and proves less effective than intended. Yet, the Small Business, Enterprise and Employment Bill is one which I believe will confound that all-too-common criticism.

The Bill, due to receive its second reading in the House of Commons on Wednesday, promises to deliver real action in a number of priority areas for small businesses. From access to finance, through regulatory reform to public procurement, the Bill promises sensible measures to make business easier. Deregulation will be written into law as a target, and a healthy approach to streamlining the regulatory quagmire which larger enterprises assign to a department assigned to securing compliance.

The Bill will also create a statutory adjudicator for pub tenants running tied pubs – something which I have championed as a senior member of the Business, Innovation & Skills Select Committee.  Many of these tenants have been ripped off for far too long, and my only disappointment is that the Government has not moved more quickly in introducing these measures.

Schools will be able to take two year olds easier, and education outcomes will be monitored with a clearer focus on employability. Small businesses need to have confidence in the education system, and I believe that it is good that schools will have half-an-eye on the sustainable employability of their pupils – particularly those aged over fourteen or sixteen.

The Bill will also deliver some changes to the cumbersome employment regulatory baggage which any small employer has to wrestle. I welcome measures to reduce the opportunities to prolong the already slow-moving employment tribunals’ process, the simplification of filing company reports and accounts, as well as efforts to modernise the insolvency process.

All-in-all, this seems to be a very good Bill, and one which should command much confidence with the small business community in this country. I suppose that, had I to find a reservation with what is being proposed, it is that it does not yet go far enough on exemptions for micro-businesses. These enterprises, consisting of just a few employees (if that), have been most vulnerable to the inevitable consequences of the good ideas of policy-makers. They are the constituency who most need this Bill – but it remains to be seen whether or not the measures which I support will go quite far enough to give them the break that they need to deliver that prosperity that local economies so desperately need. 

Friday, 4 July 2014

Beware the ‘London bubble’ which threatens to de-rail our recovery

Responsibility for interest rates has formally been the responsibility of the Bank of England since 1997. Although the potential for politics to interfere with economics was undermined from the time that the Bank of England’s ‘guidance’ to the Chancellor was published well before that change, nobody would suggest that any change be made to the current arrangements.

On the other hand, few would envy those Monetary Policy Committee members their current task. We have a recovery which is gaining stronger momentum every day, but the dangers to recovery are still present and very real. The path to securing the effective management of our debts – both public and private – whilst restoring a calm, steady growth requires the wisdom of Solomon.

After the longest period of ultra-low interest rates, it is reasonable to assume that the next direction will be upward in nature. Savers have been penalised especially hard as the squeeze between high inflation and low interest rates have devalued the pots of money carefully put to one side. Those who elected to consume tomorrow’s wealth yesterday – including the previous Government – are left teetering on the brink of even more pain when the inevitable interest rate rise occurs. And before we get too carried away with the confidence of growth, we should not forget the debt overhang which still affects us all and will need carefully to be managed.

In that scenario, it is not surprising that speculation is under way about when interests might rise and to what extent. And as house prices in London and the South East spiral yet further beyond the reach of those earning relatively impressive salaries, the pressure to raise interest rates acquires a fresh poignancy: even appearing to some to be an emergency requirement to calm the acceleration in house prices down.

We hear the Governor of the Bank of England sucked into an almost daily commentary about what will happen. He accepts that interest rates are set to increase, and seems to toy with us about what we should expect. But I worry that his efforts to be helpful might backfire badly. Given the precipice upon which we stand, even small changes in interest rate policy could have major consequences for those with relatively high levels of debt or those making housing market decisions. The uncertainty which his interventions in response to more general speculation may be creating a wave which could drag us back into recession.

But a major thrust of the recovery is to re-balance the economy – with regions other than London and the South-East spearheading the march to growth. In Northamptonshire, we have certainly stepped up to the plate with an ambitious and pro-active Local Enterprise Partnership. Housing growth is a key part of the future for Northampton, and the Northampton Alive project has driven a regeneration agenda which has placed us firmly on the economic recovery map. And from our perspective, just a short distance up the M1, the economic conversation is quite different from that dominating Governor Carney’s agenda.

I do not envy Governor Carney in the exercise of judgement which he and his team of economists will have to make in the coming months, particularly in deciding how, when and by how much to change interest rates. But there is evidence of a bubble which does cause me some concern: and it is focused on London. Businesses and households need some degree of certainty in making their plans, and a long-term managed approach – such as a gradual increase in interest rates with further guaranteed stability for a period of five years or more – is essential. But in seeking to ‘burst the bubble’, I hope that all of these clever people will avert their gaze away from our capital city for just a few moments to realise that the needs beyond are quite different and have yet fully to be taken properly into account.

Thursday, 26 June 2014

It’s time for some straight talking about the future of Europe

Last month’s European Parliamentary elections could not have been more unambiguous about the frustrations felt by voters in various member states about the relentless slide towards ever-closer union.  The tussle over who is to become the next President of the European Commission is fraught with politics and neglects some fairly fundamental questions which have remained unaddressed for an unacceptable length of time.

That’s why I have spoken in favour of the work of Andy Gross, who presented a paper calling for an honest and open debate about the problems facing the EU and the need for a new model of governance. It’s not as if these are a few local difficulties which can be ignored without cost: our continent is beset with unhelpful demographics and a declining economic prospectus for the medium term. I don’t accept all of the conclusions that he reaches, but he is correct to identify the chronic need for a proper debate about where we are going and what is needed to bring that about.

I believe that there is much support across Europe for questioning the call to ever-closer union. We need a new model with stronger nation states. Recent experience has highlighted how impotent ordinary voters are from the ‘Eurocrat’ elite: we need to bring decisions closer to those affected by the consequences. The crisis which has afflicted the single currency has reinforced the need for a strengthening of ‘co-operation’ among those member states within the Euro which would be completely unacceptable to some of us who remain outside.

Why have people deserted the political mainstream in favour of those offering a ten-second soundbite in recent electoral contests across our continent? Well, a poll exploring some of these issues in Britain found that voters feel left behind, ignored. A toxic disconnect has festered between politicians and voters – with the EU and immigration cited as two major causes of their disengagement.

The Council of Europe, on whose Parliamentary Assembly I sit, does much good work – but is below the radar of most voters. It seems quite possible that a candidate completely unacceptable to the United Kingdom will assume the highest seat in the Brussels bureaucracy within a very short period of time, and that, if nothing else, might focus attention here on what the Government will do to bring about the successful negotiations that the Prime Minister has promised for after next year’s general election.

But I believe that we need to do more. Should Jean-Claude Juncker succeed in his bid to become the President of the Commission, the push for ever-closer union will not be reversed: rather, their ambitions will carry on regardless. Ignoring the expressed wish of the combined electorates can only serve to increase the attraction of those marginal political forces who depend upon reactionary commentary instead of credible argument. We need a far more convincing narrative to counter their simplistic assertions: in essence, ministers must use the period before the general election to paint the picture of what a Conservative vision of Europe would look, feel and smell like.

I believe that voters in Britain will embrace a more flexible and responsive collaboration with our European partners. We need to clarify our vision, and sell it hard at home and abroad. People across Europe will not be ignored for much longer, and we must be the champions of the alternative which has yet to gain genuine traction in Brussels. Give us the tools, Prime Minister, and we’re ready to start winning that case for our continent.