Speech by Rhoda : Business Support Enquiry debate


22 May 2019

I welcome the committee’s report on business gateway.

If we are to grow our own economy, we need to grow our own businesses.

Because home-grown businesses are rooted in Scotland, they stay here and are much less likely to move abroad.

As a result, they pay their taxes here, employ their workers here and build local economies, and we need an industrial strategy that puts indigenous businesses at the heart of things and seeks to help people to establish and grow them.

Although many people have ideas for what they would want to create a business around and know what they want to do, they have no knowledge of business regulation or access to finance, and they need to be supported in that respect.

Business gateway was set up as a one-stop shop for signposting support, but it does not, from the committee’s report, appear that it has integrated with other agencies.

In fact, Susan Love of the FSB told the committee: “I have not seen a commitment from other parts of the public sector to support business gateway as a gateway.

Most agencies have been preoccupied with their own brands and programmes .

The Scottish Government has not helped with that by funding a lot of additional programmes”.—[Official Report, Economy, Energy and Fair Work Committee, 13 November 2018; c 17.]

 

Although it is always good for the Government to announce new initiatives, it appears from the report that such initiatives are causing rather than solving problems.

As the committee has pointed out, business gateway has not been included in the enterprise and skills review, and I find that incredibly disappointing.

After all, if the very vehicle for facilitating entry into the enterprise support system is not included, how can those organisations be expected to work together?

The committee is critical of that in its report and has recommended—I believe, rightly—that business gateway be included in the review.

Phase 2 of the review recommends a single access point for business assistance to ensure a more coherent and joined-up system, but it appears that if the review itself had covered business gateway, it might have had a better idea of the business support landscape and would have considered what needed to be changed to help the gateway to fulfil a role that it is recognised is required.

I also note that there are around 100 employee-owned businesses in Scotland with a total turnover of £940 million, which averages out at approximately £9.4 million per business.

 

In comparison, the average turnover for other businesses with at least five employees is £5.66 million per business, which shows that the turnover of employee-owned companies is much greater.

 

Surely, given that rate of return and the likelihood of most of that money being retained in our communities, we should be encouraging such enterprises.

 

Of course, the Scottish Government will point to Co-operative Development Scotland and Community Enterprise as two bodies that are able to give help and assistance, but if they cannot be reached through business gateway, they will not be accessible where they are most needed.

Jamie Hepburn: I very much concur with the member’s point about employee-owned businesses. Does she therefore welcome the creation of the industry leadership group, which I will co-chair and whose ambition is to rapidly and greatly increase the number of employee-owned businesses? We already have above-average ownership compared with the rest of the UK, but we want to go much further, and that is what we are going to do.

Rhoda: I do indeed welcome that, but it must be accessible to people who might set up such a business.

One way of doing that is to ensure that business gateway can signpost them to the organisations that can help.

Small businesses, which are also rooted in our communities, are critical to our economy, too.

We recognise that they require additional support—for example, through a small business strategy—to help them to grow, and they will need access to the proposed Scottish national investment bank and Government procurement.

Currently, only around a fifth of Scotland’s £12 billion procurement budget goes directly to small businesses, even though they account for 98 per cent of the Scottish business community.

Scottish Labour would break procurement contracts into smaller units so that it would be much easier for SMEs to bid for them.

We would also tackle the culture of late payments, which are a huge problem for SMEs, by requiring any company bidding for public sector work to ensure that it paid its suppliers within 30 days.

It appears from the committee report that the landscape for support is cluttered, which makes it difficult for organisations to know who to contact.

Highlands and Islands Enterprise and Scottish Enterprise have narrowed the range of organisations and sectors that they assist.

The committee gave the example of the Bad Girl Bakery in Muir of Ord, which did not receive assistance from HIE to expand to Fort William because it was categorised as retail. When a business is able to expand and grow, surely it qualifies for support.

The committee report is a wake-up call to the Government to create an integrated business support system that helps the start-up and growth of Scottish businesses, and I hope that the Scottish Government takes heed.



 

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