My Lords, I stand here in some trepidation, having heard the comments that the noble Lord, Lord Marland, made to my noble friend. I dread to think what he will say about me. Even before I had the position of shadow Business Minister, I have spoken consistently on the subject of SMEs, on how important they are to this country and on how they require certainty, clarity and consistency. That is very important as regards their ability, in the future, to make a contribution to the growth of this country.
By way of a statistic, the UK has slipped from third position to seventh in world green technologies and I hope, with the introduction of the Green Investment Bank, if it is properly constructed, that we will be able to do better in this vital industry. The Green Investment Bank should be an opportunity to help SMEs explicitly. I shall come back to that a little later but it is really important that SMEs—not just large companies—are helped in this. In addition to its green obligations, it is important that there are investment obligations that are vital to its work. A key part of its remit is boosting growth and creating jobs in the UK economy. Time
will rightly be spent talking about the policy and the fact that large companies need to make investments in our transition to a large green economy.
That was evidenced by the letter from seven of the world’s largest energy and engineering firms to the Prime Minister, the Chancellor and the Secretary of State for Energy and Climate Change, a couple of months ago—companies such as Siemens, Alstom UK, Mitsubishi Power Systems, Areva, Doosan, Gamesa and Vestas. However, the importance of SMEs to economic growth cannot be underestimated. According to the European Commission, 85% of net new jobs in the EU, for example, between 2002 and 2010, were created by SMEs, with 23 million SMEs accounting for 75 million jobs in the EU. The Bank of England has recently released figures on funding for lending and today there are a few quotes in the Financial Times, one of which came from Mark Swift who is a spokesman for EEF, the manufacturer's trade body. He said,
“The challenge remains for UK lenders to re-engage with SMEs and support them with their investment plans in challenging economic times”.
John Walker, chairman of the Federation of Small Businesses has said,
“What is needed is more competition and choice for small businesses to access finance”.
Time and time again, it is made clear that support for SMEs is key. We would like to see the Green Investment Bank have SMEs in forefront all the way through.
More investment in SMEs could lead to a significant saving in capital investment costs. In the case of offshore wind, recent research suggests that capital expenditure costs could fall by more than a third during the course of the next decade if more of the components were made in the UK. SMEs face considerable start-up costs, but an active Government, working with the private sector, could remedy that. The Green Investment Bank has the potential to enhance green supply chain possibilities, opportunities and capabilities. As we have discussed many times, SMEs are struggling for investment in the current climate, with negative net lending to such companies since the second quarter of 2011. While demand is down due to the depressed economy, there is clearly a problem with SMEs not getting access to credit. A particular bugbear of mine is that perhaps the Green Investment Bank could insist that everyone it deals with and everyone it invests with has a clear mandate for prompt payment of invoices. Nothing is better for an SME than knowing that it will get its money.
Last year’s Lords Science and Technology Committee report on public procurement as a tool to stimulate innovation also made it clear that SMEs still face difficulties when government contracts are put out to tender. We should ensure from the outset that the GIB has a responsibility to help SMEs be part of the new green economy. This amendment encourages the Green Investment Bank to support investments that offer clear opportunities for British SMEs to be awarded contracts. Does the Minister share our support for the promotion of SMEs? I beg to move.
3.45 pm