Archive | April, 2013

Toby at Market Stall 2

Plans for regional banks are a radical leap for Britain

Toby Perkins MP, Labour’s Shadow Small Business Minister, describes how Labour’s plan to establish a network of regional banks is a step towards a fundamental reshaping of the UK economy.  A version of this article originally appeared on the OpenDemocracy website, here.

Outside the banking sector and its critics, not everyone grasped the radicalism of Ed Miliband’s announcement a few weeks ago that the next Labour government will establish a network of regional banks. But this was policymaking at its best, signalling a commitment to radically reform the relationship between finance and the real economy and a determination to make Labour the party of small businesses across the nation.

The British banking system is astonishingly uncompetitive: 89 per cent of all our businesses are dependent on the five major clearing banks. Yet over the last 30 years these banks have become disconnected from the needs of these businesses, seeking quick profits in the City and in the property markets rather than long term investments in the industries and regions outside the southeast. Duncan Weldon has calculated that, in the decade before the crisis, 84% of the money lent to British residents by British banks went into property and financial services.

Toby at Market Stall 2

The crisis has exacerbated this problem, with net lending to businesses down by £4.5bn in the last quarter of 2012. Newsnight’s Paul Mason has set out this problem with regard to Barclays, one of the largest lenders to SMEs in Britain, showing that the bank has reduced the amount it lends to non-finance, non-property businesses by a quarter (from £52bn to £38bn) since the crisis hit in 2008. In the process, Mason says, ‘the bank – single-handedly – has taken £3bn of capital out of manufacturing, more than £3bn out of retail/wholesale, while ploughing an extra £10bn into home loans and £6bn into property.’

The upshot is that many small businesses and entrepreneurs across the country are struggling to access the finance they need to innovate and grow, hampering economic recovery. The lack of long-term finance also makes it harder for firms to make long-term investments in training, R&D or infrastructure. Research by the EEF found that more SME loan applications are unsuccessful in the UK than in our main competitor countries, leaving most firms that wish to expand dependent on credit cards and overdrafts with short term repayment conditions. This has contributed to deeply-entrenched regional inequalities in the UK, with business surveys finding regional disparities in both the provision of unsecured lending and refusal rates.

Research conducted as part of Labour’s policy review has also drawn attention to this problem. The final report of the Small Business Taskforce – a group of leading businessmen, entrepreneurs and academics commissioned by Labour to examine how to support small businesses to thrive – highlighted widespread dissatisfaction with the ability of the big banks to meet the financing needs of small businesses. Local banking staff have long been stripped of the local knowledge or skills required to make informed lending decisions, and many businesses complain that the power to lend now rests with centralised credit teams that have no direct contact with their customers and thus no understanding of their needs.

A key recommendation to emerge from the Taskforce was that Labour should set up a new network of local banks to address these long-standing issues, learning from the German Sparkassen system. The Sparkassen are restricted to only lend to businesses and entrepreneurs within a defined geographic area, and so are unable to pursue high risk investment strategies. They are commercially run civic institutions that seek to support growth and innovation in their local areas, not maximise profits for shareholders. And they are built on well-trained staff that know and understand their customers.

There are many ways in which regional banks could be set up and run in the UK context – but it is these principles that we should seek to embed in the British banking system. If we succeed, Ed Miliband’s commitment to a regional banking system, acting as the delivery arms to the British Investment Bank we have already called for, could represent a life-line to Britain’s small businesses, and the bedrock of a One Nation economy that is built by the many and not just a few at the top.

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Ed Miliband taking questions

Ed Miliband visits Chesterfield

Ed Miliband in Chesterfield Market

Ed Miliband in Chesterfield Market

Labour Leader Ed Miliband visited Chesterfield to support his Party’s bid to retake Derbyshire County Council.

Welcomed in the Market Square by Chesterfield MP Toby Perkins and Derbyshire Labour Group Leader Councillor Anne Western, Mr Miliband spent over an hour meeting stallholders and shoppers before taking questions on his soap box from an assembled crowd.

Commenting on his visit, Mr Miliband said: “People in Derbyshire are being squeezed by this Tory-led government’s failed policies.

“David Cameron and Nick Clegg have brought in a tax cut for millionaires whilst working families have their living standards cut. Only a vote for Labour next week can guarantee a real alternative for Derbyshire.”

Councillor Western said:“Labour has a golden opportunity to retake control of the County Council on Thursday.

Ed Miliband taking questions

Ed Miliband taking questions

“The current Conservative administration has spent the last four years undermining services for young people, the elderly and disabled – services we are promising to maintain. They even cut the road gritting budget causing serious economic pain to commuters and businesses this last winter.”

Mr Perkins said: “It was great to welcome Ed to Chesterfield today.

“Next week, by voting Labour, Chesterfield can send David Cameron a message he can’t ignore and guarantee a fair deal for Derbyshire.”

 

To read more about Labour plans for Derbyshire, visit: www.derbyshirelabour.co.uk

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Toby Outside Big Ben

Shadow Pubs Minister’s reaction to new Code of Practice announcement

Toby Perkins MP, Labour’s Shadow Pubs Minister, today gave his reaction the Department for Business, Innovation and Skills’ announcement this morning that they would be bringing forward consultation on a new statutory code to regulate large pub companies, known as PubCos.

Toby said:

“Labour has led calls alongside a broad coalition of campaigners for a proper statutory code to support landlords, protect local pubs and help turn around the rising tide of pub closures.

“There remain suspicions that the Government won’t deliver on the scale of change needed, particularly in light of the months of delay and recent suggestions that plans for a statutory code were being shelved. But today’s step by the Government towards Labour’s position is to be welcomed and if ministers have the courage to do the right thing they will have our full support.

“If the Government’s consultation leads to landlords having the freedom to sell whatever product they choose, to get their rent independently reviewed and the setting up of a truly independent adjudicator as Labour has been demanding for almost two years then this will make a real difference for Britain’s pub trade. It is vital that today’s announcement leads to reform of the industry more widely.”

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Flying the flag for Derbyshire food in Westminster!

This week in Parliament, Chesterfield MP Toby Perkins was delighted to welcome a group of local food and drink producers to food fair promoting the culinary delights of Derbyshire.

Derbyshire Food and Drink Day was hosted in the Houses of Parliament by a cross-party group of Derbyshire MPs.

Represented at the event were large local firms such as Thorntons and independent suppliers producing unique products such as the original Bakewell Pudding Shop.

Also present were Chesterfield’s very own Cheese Factor (based in the Market Hall) and the Brampton Brewery.

Visitors to the food fair included speaker of the House of Commons, Rt Hon John Bercow.

Toby Perkins said:

“I was delighted to welcome so many local producers to Westminster and have the opportunity to show off the fantastic culinary delights of

“With the growth of the slow food movement and increasing interest in locally-sourced produce, purveyors of distinctive high-quality Derbyshire cuisine are well placed to do well in a growing sector.”Derbyshire to the rest of Parliament.  It was a fantastic platform to promote not only our local businesses, but our county as a whole.

 

 

 

Toby and Natascha Engel, the MP for the neighbouring North East Derbyshire constituency, also proudly flew the Derbyshire flag on the door of the office they share in Westminster to mark the day.

 

 

 

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Toby Perkins MP: "Derbyshire-produced food and drink is important to the local economy"

Shadow Pubs Minister tells government: “You must come clean on plans for pubs”

Toby Perkins MP: "Derbyshire-produced food and drink is important to the local economy"

Labour’s Shadow Pubs Minister, Toby Perkins MP, has reacted with alarm to suggestions in this weekend’s press (read more here) that the Tory-led government is about to walk away from commitments given to Parliament in January that they would be introducing a new statutory code for large pub companies, known as PubCos.

At a debate on 9 January 2013 the Secretary of State for Business, Vince Cable confirmed the government would introduce statutory regulation and begin the process of consultation in the spring.

But a report in the Mail on Sunday on 7 April suggest that has been over-ruled by the Chancellor George Osborne.  This report appeared in the week when the consultation was due to begin but as the consultation has not started, the concerns of those in the pub trade have been heightened.

As Shadow Pubs Minister, Toby Perkins MP has written to the Secretary of State to demand answers.

Vince Cable letter – 12 April 2013.

Labour has consistently supported the calls of the BIS Select Committee for statutory of the relationship between pubcos and licencees and have worked closely with a broad coalition of groups in the pub trade who have all supported this call.

This group includes:

  • CAMRA
  • the Federation of Small Businesses
  • the BIS Select Committee – which has a majority of coalition members
  • the Liberal Democrat Member for Leeds North West
  • the Conservative Member for Northampton South
  • the All Party Parliamentary Save the Pub Group
  • UNITE the Union
  • the Independent Pub Confederation
  • Fair Pint
  • the GMB Union
  • the Association of Licensed Multiple Retailers
  • the Guild of Master Victuallers
  • the Society of Independent Brewers
  • the Forum of Private Business

The group has been shocked by the possibility of a u-turn and is seeking clarity from the government.

Toby Perkins said:

“The number of weekly pub closures has recently reached 18 and I am on the side of licencees and the millions of Great British pub goers who believed the government would stand by them.  It would be a devastating blow to the pub trade if coalition ranglings meant these much needed reforms were not brought forward.

“I have therefore written to Dr Cable to demand that he clears up the situation for all concerned.”

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Toby at Market Stall 1

Becoming the Party of Small Business

Toby Perkins reflects on the work of Labour’s Small Business Taskforce and Labour’s commitment to regional banking.  You can read the full Small Business Taskforce report here.  An edited version of this article also appeared in this month’s edition of Progress magazine.

“In his first conference speech as leader, Ed Miliband expressed his determination to make Labour the Party of small business, and this month we have made another huge step towards this goal.

As the challengers of tired orthodoxies and the drivers of social mobility, small businesses share our values.  They will also be a vital part of the new One Nation economy we need to build.  Ninety per cent of people moving from unemployment into private sector employment do so with small businesses. Within the ranks of the almost five million small firms lie the seven per cent of high growth businesses that create more than half of all new jobs.

Growth and small business success go hand in hand and we cannot deliver excellent public services without the contribution they make to the economy and the Exchequer.

This is why a key plank of our policy review was the instigation of the Small Business Taskforce which had a single goal: how can the next Labour government make Britain the best place it possibly can be to set up and grow a small business?

The Taskforce was initially chaired by Nigel Doughty a man who embodied the values of responsible capitalism and was a great advocate for Labour in business.  Following his tragic death last February the Taskforce has been led by Bill Thomas the former Senior Vice President of Hewlett Packard and the driving force behind the International Centre for Programme Management at Cranfield University.

We held a groundbreaking event in Brixton Market this week to mark the report’s completion, attended by hundreds of entrepreneurs and business owners reflecting the changing face of British business, and away from the Westminster bubble.

Bill affectionately describes the membership of his Taskforce – which includes leading businessmen, entrepreneurs and academics – as a group of “unreasonable people”.  They are “unreasonable” because they are not prepared to see the world as it is and get along.  They want to build a better world for everyone.

Their work has involved widespread consultation across the UK with individual business people, business organisations such as the FSB and British Chambers of Commerce, trade unions and trade bodies.  New academic research was produced and international best practice was studied during visits to Singapore, Germany and the United States.

The 100 recommendations in the final report cover the full spectrum of small business policy – from access to finance and insolvency to skills and the machinery of government – and they are as radical as they are diverse.

This is best demonstrated by their ideas around  access to finance, which small businesses tell me is the most pressing issue facing them today.  Business lending has fallen in every quarter of the last two years and this is at least partly a result of our uncompetitive banking sector where 89% of all our businesses are locked into the five big banks.

Rather than tinkering around the edges of this problem, or simply looking to introduce one more bank to the mix, the Taskforce has examined how we can transform the existing culture of British banking.  Our European competitors, particularly Germany, have maintained higher levels of small business lending in recent years with commercial banks which are focused on supporting the real economy not maximising their own profits.

The Taskforce report analyses how local lending principles of the German Sparkassen savings banks could be brought to life in a British context.  They do not recommend an exact replica but this idea has the potential to fundamentally transform the banking sector to the benefit of small businesses and Ed Miliband has committed to creating a network of regional banks under the next Labour government.

The Taskforce also recommends radical reforms to the machinery of government.  They propose the creation of a small business agency at the heart of government.

The report reveals a failure of ambition on procurement.  Whilst US Federal laws ensure that a proportion of their procurement spend goes to American small businesses, we have no similar legal requirements and the Taskforce recommends how we can catch up.

Self employment is a challenging but empowering path out of unemployment and the Taskforce call on government to provide support for those who have the potential to move into self employment and a wider push to boost entrepreneurial skills in school and beyond.

The report also focuses on innovation and calls for a unified strategy to boost British research and development. It calls for faster access to broadband for Britain’s start ups, help for smaller firms to export and a new approach to regulation which takes into account quality, as well as quantity.

These ideas and many more demonstrate how the next Labour government can be the wind at the backs of British small business and they will form a valuable part of our ongoing policy review.”

Toby Perkins MP
Shadow Small Business Minister – Member of Parliament for Chesterfield

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Welcome

I am Toby Perkins, Labour's Member of Parliament for Chesterfield. If you would like to get in touch with me, my office is open and can be reached by phone on 01246 386 286. I also hold regular surgeries in Chesterfield and Staveley so that constituents can meet me and I can take up their concerns. If you would like to make an appointment then please do contact my office. Thank you for visiting.

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Tel: 01246 386286
Email: toby.perkins.mp@parliament.uk
Post: 113 Saltergate, Chesterfield, S40 1NF

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