My Lords, Amendment 1 asks that we report on the long-term needs of small and medium-sized businesses. In moving it, the noble Lord, Lord Mitchell, touched on the wider issues surrounding small business. I do not want to give the Committee another Second Reading speech. A lot of the issues that the noble Lord raised will come up on the various amendments that we discuss today, but I feel that we have done more to help small business than any Government before. This Bill is the latest evidence of that process.
In particular, I refute the claim that the Government are not doing enough to increase lending to small businesses. While the annualised figures remain negative, the tide is turning and there is a significant upward trend. According to the SME Finance Monitor report of November 2014, 71% of all loan and overdraft applications within the previous 18 months were successful. We support small business in many ways. Of course, a recovering economy—which this demonstrates—after probably the worst recession in history is a very important way to help entrepreneurs.
Turning to the amendment, first and foremost, through our industrial strategy the Government are working in partnership with industry to understand the future needs of all businesses and to set the long-term strategic direction. In each of our sector strategies we have joined forces with industry to set ambitions for the sector and our commitment is to invest in helping firms—including small firms—to access finance, skills, innovation and export opportunities so that we can compete internationally. I share the noble Lord’s aspirations for international success.
As well as engagement, we undertake in-depth research and analysis every year to fully understand small and medium-sized business needs. I draw attention in particular to the Small Business Survey, BIS’s flagship annual research project. Results from this are used to develop our business support policy and are also published so that private sector organisations working with small businesses can benefit from the insights. The survey is considered the country’s foremost source of knowledge about small business needs and is widely referenced.
Amendment 1 refers to specific areas of policy relating to small business. This is a good list and I take this opportunity to reassure the noble Lord that the Government are already researching and reporting on the needs of small businesses in these areas. I will give some examples. Last year, the British Business Bank published its strategic plan, setting out a long-term vision for the organisation that will deliver for smaller firms. Only last month, the bank published its first report on trends in business finance markets. The
market gaps identified through this in-depth market analysis are feeding into the bank’s product development process. Important and interesting conclusions include the following: more businesses will seek finance for growth; a more diverse and vibrant supply of finance is needed—this Bill helps with that; and awareness and understanding of the range of finance options is not yet comprehensive enough. I am placing a copy of the report in the House Library. We expect future reports to be published on an annual basis.
Secondly, last year, UKTI published Britain Open for Business, an update to its five-year strategy for providing practical help to exporters. UKTI last year worked with 42,684 SMEs to provide a range of services designed to help companies enter new markets. This hands-on relationship allows UKTI to understand and catalogue the needs and challenges faced by these companies and to develop specific programmes to overcome perceived barriers to exporting. Last year, this included a first-time exporter’s package, a medium-sized business programme and an e-exporting initiative.
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On skills, in 2012, we published the Holt review, which was the result of in-depth research into how apprenticeships can be altered to meet the future skills needs of small businesses. The UK Commission for Employment and Skills carries out a biennial skills survey of UK employers to understand their needs and motivations when investing in training. Our current employer ownership pilot is testing how we can reform other parts of the skills system to be more responsive to employers’ needs.
Turning to Amendment 33, which seeks to require publication of an annual report on the impact of our policies on SMEs, I am pleased to say that every government department is already required to lay before the House an annual report, alongside their accounts, which covers the achievements in the past year. HMT guidance on the content requirements of annual reports sets out requirements for departments to report on, such as the material policies that they have allocated resources to during the year. Therefore, departments involved in business policy should include that information in the annual report. Further, the guidance includes the need to report—specifically in relation to small business—on action taken to mitigate regulatory burdens on small business and progress made towards procuring 25% of contracts from small and medium-sized business. Given what we do already, our view is that there is no need for the legislative requirement that is proposed.
I would add that the Government are also committed to transparent and open working and setting out priorities for supporting small and medium-sized businesses. Twice each year, at the Budget and the Autumn Statement, we update the House on our policies designed for small businesses, such as research and development tax credits and small business rate relief. Indeed, the noble Lord mentioned rates. I agree with him that this is a very important area. Of course, the right honourable George Osborne, the Chancellor, made an announcement in relation to rates only in December.
In December 2013, we published Small Business: GREAT Ambition, which is our commitment to supporting small businesses. My colleague in the other place, the right honourable Member for West Suffolk, who is very enthusiastic about his portfolio and takes it very seriously, has said that BIS is committed to continuing this proactive and transparent approach to communicating our offer to small businesses. As an example of this, last year we launched a new website—GREATbusiness.GOV.UK—to be a single point of information about what this Government are doing to support small businesses.