With the General Election less than a year away, Tory small business minister Matthew Hancock argues the case for sticking the course with the Conservatives, with or without a coalition government.
What do you think is the government’s biggest achievement in terms of helping small businesses?
Undoubtedly the biggest achievement has been turning the economy around. We’re unambiguous supporters of business, big and small - because only by businesses creating jobs and prosperity can we create a prosperous Britain. There’s a whole plethora of policies which go into doing that, but the biggest has been having a long-term plan to deal with the deficit and create a more confident Britain, which is the foundation stone upon which the government is built.
Many of our readers say traditional banks still won’t lend to them. Is there more you can do to increase small businesses’ access to finance?
Fixing the banks is a huge part of turning the economy around and it’s only starting to pick up. We’ve got the British Business Bank, but there’s also an increasing number of ‘challenge’ banks which offer in some cases niche small business products - and the big banks are starting to focus more sensibly on small business credit. But it’s undoubtedly tough, not least because the banks themselves got so over-reached before the crash. I think from this Christmas the focusing of the funding-for-lending scheme on small business - rather than also including mortgages - is starting to have an impact. Gross lending to small businesses is getting better. But a lot of small businesses are paying down debts too - so the net figures still need to improve.
“The overall Labour approach is so anti-business in rhetoric that the idea they’ll be supportive of the business community doesn’t hold much credibility. Its focus is small business? Divide and conquer is not the right approach”
What do you think of Labour’s plan for a local banking network?
It’s happening. The Cambridgeshire regional bank is a new bank that has really started to grow under this government. In Germany the [regional] Landersbanks, on which this idea is based, were some of the weakest performers in the crash, and giving their record on management of the financial system, I’m not sure they’ve got much credibility. But certainly increasing the number of competitor banks is a really good thing and I’m pleased they appear to be supportive of it.
So are you saying Labour doesn’t need to set up a local licencing framework?
It’s happening. It used to be extremely difficult to set up a bank, and before Metro bank which was set up under us, there hadn’t been a new bank for generations, and we’ve made it much easier to bring competitor banks into the market and there’s about two dozen licences in application at the moment. So there’s more banks coming down the track, some general and some focused only on lending to small businesses, and they’re starting to have a real impact - some are local and some national. The other thing that’s having a big impact in this area is crowdsourcing finance, some of which has been supported through the British Business bank. That’s a very positive development and can be a real challenge to the banks over the long term. It’s starting to get to scale - around a billion transactions have been made, which means it’s starting to have some impact. We’ve all seen the Bank of Dave on Channel 4, describing how hard it is to start a bank.
Do you agree with MPs on the BIS select committee that business rates are no longer fit for purpose?
There are problems with how business rates are levied, and we’ve committed to a full review by 2017 when the next revaluation is due to take place. But we need more urgent action so we’ve capped the increase and brought in the £1,000 off for retailers which shows our commitment to take action within the constraints of tight finance. A saving of £1,000 is not to be sniffed at.
What’s your response to Labour’s plans to cut business rates to 2011 levels by increasing corporation tax?
Trying to sell yourself to the business community by saying you’re going to put up corporation tax doesn’t go down well, and businesses I talk to - large and small - don’t want to be split into two and told we like you but don’t like others. We have an unambiguously pro-enterprise, pro-business approach, because it’s business - large and small - that’s going to build our future economy. The overall Labour approach is so anti-business in rhetoric that the idea they’ll be supportive of the business community doesn’t hold much credibility. Labour says its focus is small business? I don’t think divide and conquer is the right approach.
When Sunday Trading laws were relaxed during the Olympics it caused c-store owners a lot of concern that it would become permanent. Our readers want reassurance that the law won’t change because it is a crucial point of difference against the supermarkets.
There are no plans in government to change the laws.
The National Planning Policy Framework is failing to stop the growth in out of town retail development despite being designed to protect town centres. Are you aware this is an issue and do you agree the NPPF needs to be tightened up?
This is an issue we’re very alive to. Brandon Lewis (planning minister) is working actively on it. We’ve recently announced a consultation to provide some flexibilities to allow councils to respond to needs locally. The good news is that high streets are filling up with the economic recovery.
Do you want to give more powers to local areas to decide on whether pubs can be converted into convenience stores, similar to Labour’s plans?
We’re consulting on changes in this space and it’s all about making sure high streets are more vibrant. Sometimes change of use is an important part of that because an ugly unused building that’s restricted by planning can be a problem, but it’s got to be done sensitively in a way that supports the businesses that are there.
The ban on selling below cost alcohol plus VAT has been widely dismissed as ineffective. Do you think there is merit in minimum unit pricing for alcohol?
Undoubtedly there are arguments on both sides!
One of Mary Portas’ recommendations was for all out-of-town retail applications to be called in by the secretary of state. But the government didn’t adopt this recommendation which is seen as one reason out-of-town growth has not slowed down.
We’re trying to decentralise some of the powers here and give local councils more of a say. So there’s a limit to the amount of things you should decide at a national level. Councils are democratically elected too and they know the need for support for their high streets. Some of the Portas Pilots have been very successful. We’ve certainly learned a lot, not least about what’s actually happening on the ground. It has really brought the high street together.
Often shoppers can park for free in out-of-town retail centres, while they have to pay for parking in town centres. Aside from the NPPF, how else can this be addressed?
Parking fees are set by local councils, but the government is clear that it is wrong for councils to use parking fees and fines as a stealth tax to raise revenue. Under Labour’s watch, revenue from parking soared from £608m in 1997 to £1.3bn by 2010. Raising parking charges undermines local shops and damages living standards. This is why we have scrapped Labour’s rules which told councils to hike up parking charges and adopt aggressive parking enforcement. We want to focus on supporting local businesses and motorists, not work against them. By making sensible changes, such as providing more parking spaces for local shoppers, councils can help ease traffic flow whilst supporting our vibrant high streets.
Do you feel the Police and Crime Commissioner (PCC) scheme has been worth the time and expense? And can you see the scheme lasting beyond the next PCC election in May 2016?
The Police and Crime Commissioner scheme has definitely been worth the time and expense. In my own constituency Tim Passmore has done an excellent job, really listening to the local people and acting on their needs. Crime rates are down, bureaucracy is down and Tim has kept the control room in Suffolk. I am delighted that he is delivering for Suffolk and that we are seeing real results on the ground both there and elsewhere in the UK.
More calls on shoplifting are being redirected to 101 now, with more being treated as slow time crime. Surely theft should be treated as a burglary once the offender is banned?
The differences between burglary and theft are very technical and involve complex legislation. Our courts work hard to ensure fair trial and our police forces take all crimes very seriously. Crime has fallen under this government because we have cut police red tape helping to build better, safer communities. There is still a lot more to do but we will continue to fight to reduce all crime.
One of our readers wanted to flag up how successful his local ‘shop safe radio network’ is. Given the amount of crime that it has reduced and the time it has saved officers and control room, could this not be a council-funded initiative run in conjunction with the police?
The ‘shop safe radio network’ is an excellent initiative which has really helped to cut crime in local areas. The scheme relies on local councils and police working together and it is for stores to decide if they want to sign up to the scheme or not. Money is secured from the Crime and Disorder Reduction Partnership to fund the Shopsafe radios.