The 2012 small business survey reported that 55% of SMEs, 53% of small businesses and 46% of micro-businesses say that large companies are not paying their bills on time. The most recent Federation of Small Businesses survey suggests an even worse picture. Seventy-three per cent. of businesses say that they were paid late

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in the past 12 months, and one in five say that half of all invoices are paid late. Interestingly, 70% say that the problem has got worse in the past 12 months and that the private sector is the biggest culprit.

Research by the Forum of Private Business last year indicated that late payment is having a significant impact on businesses development, productivity and growth. Access to, and the cost of, finance, and credit trade insurance, were cited as problems linked to late payment. Late payments have a knock-on effect, leaving many small businesses in a vicious cycle of late payment. The FPB’s economy watch panel indicates that 42% of SMEs believe that late payments were not seen as important.

As we have heard, the impact of late payment can be disastrous. It is estimated that, during the 2008 recession, 4,000 businesses failed as a direct result of late payments. No official data have been collected, but the situation needs to be monitored. There is growing evidence that late payments to SMEs are hurting our economic recovery. Office for National Statistics data show that SMEs make up to 98% of the total number of organisations, providing 59% of all private sector jobs and 45% of all employment, and generating 46% of the UK’s income.

What is being done to tackle the problem of late payments? The previous Government introduced the Late Payment of Commercial Debts (Interest) Act 1998, but it was not used, because companies feared being blacklisted. The prompt payment code, a tool introduced by the Institute of Credit Management, committed signatories to pay suppliers on time under the terms agreed without attempting to change payment terms retrospectively, enabling every level of the supply chain to meet the terms. However, the code has had mixed effects. First, there is a very poor take-up by FTSE 100 companies.

Mr Bain: My hon. Friend makes a powerful argument. What does she make of the National Audit Office recommendation that Government Departments need to work more closely together, and that the Department for Business, Innovation and Skills and the Treasury need to work harder to support small businesses in the way she indicates?

Debbie Abrahams: My hon. Friend makes a good point. We need to encourage that.

People are abusing the prompt payment code. They are either signing up and changing their terms, or changing their terms prior to signing. Most recently, the EU late payment directive stipulated that public authority-to-business invoices must be paid in 30 days, and that business-to-business invoices should be paid in 60 days. However, there have been problems with the transposition into UK law. Section 7 of the directive has not been taken up and independent organisations will be unable to use it to help small businesses.

Another development last year was the introduction of the small chain finance scheme. That is another difficult problem.

2.4 pm

Mary Macleod (Brentford and Isleworth) (Con): I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on introducing this extremely important debate on small businesses. Some of the facts and ideas that have been discussed are important. Those

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ideas could make a difference. We heard the numbers from the hon. Member for Oldham East and Saddleworth (Debbie Abrahams)—of the 4.9 million private sector businesses in the UK, 99% are SMEs, which employ more than 14.4 million people. The debate matters to all hon. Members’ constituencies and every sector.

We should recognise that, in the past three years, 400,000 more businesses were created. I congratulate the Government and the Minister on the work he has done in enabling that to happen. In my constituency in the past two years, 825 new businesses were set up. It is one of the top 10 places in the UK to set up a new business. The Government’s initiatives to help small businesses have made a difference.

Locally in my constituency, whether in Chiswick, Brentford, Isleworth, Osterley or Hounslow, I meet my businesses, large and small, regularly, because I believe it is important to hear of their success and of the challenges they face. I have worked with them and the local council to enable 30-minute free parking in the local town centres across my borough—the businesses have asked for it.

Andrew Percy (Brigg and Goole) (Con): May I offer my hon. Friend a practical example from North Lincolnshire council of the success of exactly that free parking policy? When we scrapped Labour’s parking charges and introduced two hours’ free parking for businesses, local businesses reported a big increase in trade in our town centres, even at a time of difficult economic circumstances. We are extending that support further by providing free wi-fi in our town centres, which she might want to consider.

Mary Macleod: That is an absolutely brilliant example—that is something I would like to do to support my local businesses in west London.

I meet my Chiswick traders regularly. Last time, we met in Club Workspace, which I recommend to hon. Members. It is a much more creative and innovative way of allowing entrepreneurs to have the space to work. It is not as rigid and long-term as things used to be, but more flexible and modern. It is very effective.

I have also done apprenticeships seminars to encourage small businesses to take on apprentices. I met Mumpreneur, Athena and other groups that support small businesses.

Naturally, we are supporting small business Saturday. We will be doing lots of things during the day for it. It has galvanised my local businesses to work together. Between them, they came up with all sorts of things to do, which was brilliant to see. I have also run workshops on women and enterprise, because I believe we do not have enough female entrepreneurs, which I will address in a moment.

I wanted to mention to the Minister some of the issues that have been raised with me locally, including business rates, to which I will return, access to funding, legislation, red tape and parking. Where do businesses go to find help? More clarity and simplicity on helping small businesses would be useful.

I have a role in helping the Minister as a small business ambassador for London. Only yesterday, I went to the meeting of the London enterprise panel’s SME working group. It had four key priorities—finance and equity; the availability of work space; trade and

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exports; and business support—but added another at the meeting: the skills shortage. The suggestions that hon. Members have made to do more in schools, colleges and universities are important. Strangely enough, in Prime Minister’s questions this week, I asked him how we can create enterprise and business champions in each of our secondary schools—we could arguably do so before that, but perhaps we should start with secondary schools—to foster and inspire the next generation of entrepreneurs. We want young people to think of entrepreneurship as an option when they finish school, college or university. There are special financial packages for them.

Last week, I asked the Prime Minister about business rates—I was fortunate enough to have questions at Prime Minister’s questions two weeks in a row. I am glad to say that he has agreed to meet me next week to discuss reform of business rates.

Simon Danczuk (Rochdale) (Lab): I support the hon. Lady in her concerns about business rates. Does she support the Labour leader’s proposals to freeze and then reduce business rates for smaller businesses?

Mary Macleod: I want reform of business rates and for them to be looked at very differently. In London, businesses are treated unfairly and we want fair taxation. The turnover of many small independent shops in my constituency is not as high as one might expect in London, so they are penalised by the high business rates in London. They also question what they get in return for business rates. That could be clearer—police, fire or other services. All they know is that the £27 billion raised from business rates is spread across the country. I favour a localised approach, so that we are able to reinvest in our local areas.

The Government have done a lot for local businesses. One of the big measures, which was mentioned by my hon. Friend the Member for Norwich North (Chloe Smith), was to remove £2,000 from national insurance bills. Other measures include: business mentors, £50 million- worth of £10,000 start-up loans and cutting red tape. The Prime Minister visited my constituency three years ago to meet Octink, another great local business in my patch, to consider how we can simplify employment legislation—another important issue for small businesses.

There are three key points in particular that I would like the Minister to consider. First, there should be enterprise education in schools. Businesses and entrepreneurs should be encouraged to allow students and pupils to do work experience in their businesses, and perhaps all hon. Members can help to facilitate that with their local schools. Secondly, we have already discussed business rates and I will be talking to the Prime Minister about that next week. Thirdly, returning to women and enterprise, if women were setting up businesses at the same rate as women in the US, we would have 600,000 more businesses. That would add £42 billion to the economy—a huge amount. I run workshops in my constituency, with the support of StartUp Britain and the chamber of commerce, to encourage women to think about setting up businesses. We have fabulous businesses, such as Shavata and My Plumber from Chiswick, and inspiring women who have done it for themselves and are successful.

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The Government have done much and there is probably more that all of us as hon. Members can do to support the small business community. I look forward to encouraging more and more businesses in the months and years to come.

2.12 pm

Simon Danczuk (Rochdale) (Lab): It is a pleasure to follow the hon. Member for Brentford and Isleworth (Mary Macleod). I share many of her concerns about business rates and agree with some of the solutions she proposes. I thank the hon. Member for Newton Abbot (Anne Marie Morris), who has done an excellent job in securing the debate. It is important that it is taking place before the autumn statement, so I thank the Backbench Business Committee for helping to make that happen. Before I begin my comments proper, let me declare an interest. On small business Saturday, my wife and I will be opening a small business of our own: Danczuk’s Delicatessen in Rochdale. I encourage all hon. Members to visit and spend their hard-earned money.

Huw Irranca-Davies: I am aware of the opening of this fantastic new deli. I am sure my hon. Friend will be stocking exotic produce, but will he be making an effort to stock local produce—the food that makes his area special?

Simon Danczuk: We will stock a variety of local produce. There will be some continental produce, but there will be traditional Lancashire produce too. It will be well worth a visit and opens a week on Saturday.

The first thing to say in a debate about small businesses is what a great contribution they make not just to our economy, but to our culture, our communities and the way we live our lives. As the hon. Member for Newton Abbot said, we need to spend more time celebrating the work of smaller businesses and the people who run them. It is these business people who are the backbone of our economy. They create the vast majority of jobs, and export their goods and products across the world. They are at the heart of innovation, which is often copied by larger businesses, and drive growth throughout the United Kingdom. They also carry the burden of worry and stress of managing risk every day of the week. We need to do more to celebrate what they do.

Small businesses are vital to our economy, but they are also vital to our society: they are one of the most powerful forces for social mobility. Academics and politicians often talk about the importance of education with regard to social mobility. That is important, but by starting and growing businesses people can thrive and prosper. They are vital in encouraging and establishing social mobility.

Mark Pawsey: Was the hon. Gentleman as struck as I was by the assertion at a recent breakfast meeting that the top entrepreneurs were those people who had not been to university, did not have degrees and had had to work from the bottom up?

Simon Danczuk: I thank the hon. Gentleman for that comment, because that is exactly the point I am making about social mobility and supporting entrepreneurialism and the growth of small businesses.

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Let me tell hon. Members about one of my constituents. Ian lives on the Falinge estate in Rochdale, which has achieved notoriety for having the highest number of benefit claimants in the country. Like others there, Ian was unemployed. He was determined to get out of that situation, so he decided to start his own business. He cashed in his pension and set up his own fish and chip shop. He learned the ropes by working for free in another nearby chippy and then set up his own shop in the town centre. I used to pop in and have a chat with him every now and again. He was making a good fist of it and there were always plenty of customers coming through the door. In his first year, he won an award at the town’s annual business awards. Despite all that success, Ian was forced recently to close his shop simply— I do not exaggerate—because of business rates. He was paying double in business rates what he was paying in rent, and that was not sustainable.

Ian’s case is a tragedy for him and for social mobility. It demonstrates that unrealistic business rates are damaging our economy and our society. The Government need to do more on business rates and should have gone ahead with the revaluation. Hon. Members will not be surprised to hear that I support the Labour leader’s proposals to freeze and then reduce business rates for smaller businesses in particular. Business rates are not the only issue, however. Let me provide another example: banking.

Hanson Springs, a very successful family business in my constituency, was in 2009 dragged by RBS into what we now know to be the Global Restructuring Group scandal. Let me briefly explain. RBS in my opinion deliberately undervalued a property it had a loan against and used that as an opportunity to push Hanson Springs into its Global Restructuring Group. At the first meeting with GRG, Hanson Springs was introduced to a solicitor who had been brought along to discuss taking an equity stake in this family business. GRG then forced a business review with Zolfo Cooper on to it at a cost of £20,000. Its GRG manager had previously worked for Zolfo Cooper—I am sure that was a coincidence. Hanson Springs was then given three options, none of which was acceptable. As the family pointed out to me, if the business had not been cash-flow rich and if they had not had the personal resolve, the company would have been forced to close.

Hanson Springs is now 50 years old—we have moved on four years. It turns over £20 million each year, employs 180 people, exports 85% of what it produces, and since the problems with RBS, has paid in excess of £l million in corporation tax. If RBS had had its way, we would have lost hundreds of jobs and the money from taxation, and we would have had people claiming benefits and yet more manufacturing moving abroad. Hanson Springs is a perfect example of business at its best. It is a great example of a family pulling together to create something great and is probably a perfect example of social mobility, but look how it nearly all went badly wrong because of RBS’s behaviour. Ultimately, it is down to us politicians to intervene and set up the right regulatory process to ensure that banks treat our businesses better.

Smaller businesses are exceptionally fragile entities. It is our responsibility not to take them for granted and our duty to remember that these businesses are the lifeblood of our country.

2.21 pm

Sir Bob Russell (Colchester) (LD): The motion is entitled, “Issues facing small businesses”, and talks about

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“addressing the complex tax structure”.

I will follow the last two speakers and confine my contribution to business rates. Indeed, what I am about to say could easily have been said in the Westminster Hall debate under way at this very moment on retail and the high street.

I note the pledge from the hon. Member for Rochdale (Simon Danczuk) that Labour would freeze and then reduce business rates, but for 13 years it went nowhere near it. In fact, it went in the opposite direction, as I will make clear in a minute. We now know, however, that Rochdale is the home not only of the Co-op, but of Danczuk’s Delicatessen. We await the growth of that organisation in the same way as the co-op movement has grown over the past 160 years or so.

I want to suggest something that I first proposed long before I became a Member of this House: the abolition of business rates for neighbourhood community and village shops, post offices, community stores, pubs and things like that. The way to make that fiscally neutral, which the Treasury would require, would be to put a charge on out-of-town car parks. That is exactly what the Labour Government proposed in 1997-98, before they were clobbered by the Tescos of this world, which in those days had the sort of power over the Labour Government that the trade unions today have over Her Majesty’s Opposition.

Generally speaking, business rates are assessed under two headings: the net internal area or the gross internal area. The NIA is used for small and medium-sized shops and businesses in town centres and neighbourhood communities, while the GIA is used for industrial properties, such as warehouses, factories and distribution centres, but now also supermarkets and large stores, mostly out of town. In that respect, the same principle should apply to the treatment of supermarkets as applies to neighbourhood stores.

What makes it even worse, as I am advised, is that the valuation office instructs surveyors when evaluating rates not to make an addition for customer car parking. The average rateable value for small and medium-sized shops in Colchester town centre is about £225 per square metre, whereas the average rateable value for supermarkets and other large out-of-town store premises is about £40 per square metre, so we are nowhere near a level playing field. The NIA system is assessed, in part, on benefits—shop windows, for example. To make it fair, supermarkets should be assessed on their benefits, which include free customer car parking and the other bits and pieces that go with it.

The two systems are obviously extremely unfair and biased against shopkeepers in town centres, neighbourhood communities and villages. I am grateful to Mr Ian Berry, a retired gentleman with an interest in the unfairness of rating values for small businesses. On behalf of him and just about every small shopkeeper in the country, I wish to put the following questions to the Government. Is it fair that shops in Colchester and other town centres have a rateable value five and a half times that of the out-of-town giants? Is it fair that shops with parking spaces in Colchester town centre are assessed at £500 per parking space, when those out of town are not? I am advised that one shop on Colchester high street is rated at £213 per square metre, whereas Amazon, which is in direct competition and which, incidentally, pays very little corporation tax, is rated at only £39 per square metre on its premises in Peterborough.

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Let us have a level playing field. The last Government rightly referred to sustainable communities, and the coalition Government have rightly referred to localism, so let us have some fairness. One way of having fairness would be to put a levy on out-of-town car parks and abolish business rates for small shops, community stores and public houses.

2.26 pm

Huw Irranca-Davies (Ogmore) (Lab): I welcome this debate and compliment the hon. Member for Newton Abbot (Anne Marie Morris) and the other Members who secured it through the Backbench Business Committee.

I want to begin by putting a human face on this debate. Several people have talked about the definition of small businesses. For me, that definition could include Worgan’s in Llanharry, a small, family-run enterprise that started as a small gift shop selling various things for the local community, but which extended by opening a café in the next-door premises and then a mobile chip shop. The definition could also include the former Sony site in Bridgend. Sony went through a difficult time when the market for cathode ray tube televisions completely fell apart—when flat-screen televisions came in, those jobs quickly went abroad—but the management retained the skilled work force and rebuilt the business on the basis of high-end engineering and their massive expertise in design, engineering and manufacturing. Working alongside other companies, it has built itself back up and now has 500 employees onsite, 150 of whom work in 28 incubation companies—small companies, built up with the assistance of Sony expertise, working in digital media, graphics, television and many areas, and supported as they grow from micro-businesses into small businesses and, we hope, into the giants of tomorrow.

The definition of small business could also include Ferrier’s, a local estate agent on Commercial street, in Maesteg, where my office is based. It was established in 1918—by coincidence, that was the same year Labour first won the seat of Ogmore, so I hope we will both shortly be celebrating our 100th anniversary—and it has extended to open other outlets in Kenfig Hill and elsewhere. There is a wide range of businesses. I think of Cwm Tawel Yurts, a tourism enterprise in a beautiful little valley around Betws, and of the Food Box. Then there are two brothers on the Maesteg industrial estate who left my state comprehensive school, one going on to study applied sciences, the other, following a different path, management. They came back together and established a 3D engineering company that did all the things expected from 3D engineering, but which has also now extended into life sciences. It applies 3D engineering to the life sciences, uses 3D modelling in the development of things such as heart valves that grow organically within the body and it supplies tiny parts that help the space station run.

In talking about the 99% of small and medium-sized businesses, we recognise that they are diverse, which gives them some resilience; that they are fragile, as my hon. Friend the Member for Rochdale (Simon Danczuk) said; and that they need the right support structures in place to assist them to thrive and grow.

Mr Bain: We have a burgeoning life sciences sector in Glasgow, too. Does my hon. Friend agree that the National Audit Office made a powerful point when it

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said that there is a potential funding gap of some £22 billion in the finance available to small businesses between now and 2017. Would it not help small businesses in his constituency and mine if the Government did something with the banks to help plug that gap?

Huw Irranca-Davies: My hon. Friend makes a valid point. There has to be cross-party agreement to take this forward and to ensure that finance is available.

Let me mention one stark figure. Even though there are signs of optimism in some parts and some sectors of the Welsh economy, a recent survey of members of the Federation of Small Businesses in Wales showed 55% of them reporting that credit was unaffordable, while 65% said it was not only unaffordable but completely inaccessible. The idea that these businesses can grow by getting affordable and accessible lending is simply not happening, which is a tragedy.

Simon Danczuk: Is my hon. Friend aware that some small businesses are afraid of approaching their banks about credit or getting an extension of their overdraft because they fear that the banks will rein things in and make it even more difficult for them?

Huw Irranca-Davies: Yes, indeed. There is a big argument not only for more localisation of the traditional banks, but for the regional bank model that Labour Members support. When I made the point earlier that that model should not be bureaucratic and civil service-driven, I was speaking from experience based not only within this country but in other European countries. That model works best where it is very locally focused and entrepreneurial, with managers of the account streams fully understanding the businesses with which they deal. Access to finance is indeed a big issue.

I will not go over business rates again, as others have done so, but it is a real issue. I believe that the proposal from Opposition Front Benchers to freeze and then reduce them is a good one. As to Ministers saying we never did it, I simply say that the proposal is there on the table for them to support if they want to do so.

I turn my attention to one area about which I have particular knowledge and concerns. I refer to supporting small businesses where the potential for employment growth is the biggest—namely, through the application of green technologies, such as solar power or insulation for greater energy efficiency in homes, and so forth. I was intimately involved in the incubation phase of the Energy Bill that the Government brought forward, and I pointed out some of its potential pitfalls. If it had succeeded, however, particularly the green deal with the associated energy company obligation, it could have provided massive incentives for tens of thousands of small businesses. I am talking about all those people who have been installing loft insulation for years and those who have switched to installing solar panels with the feed-in tariffs. They could have had a new opportunity to take on apprentices, perhaps young people in my area who cannot find jobs. The green deal work could have produced a massive expansion of the sector.

We had to highlight the problems, however. We noted that the finances did not seem to work and that it might not be possible to sell the green deal to people. Consumers are pretty intelligent people who, as they look at it, will run a mile. We said, too, that there were rogues out there

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who would blacken the reputation of the green deal before it even took off and, with deep regret, I have to say that that has now come true. The Minister put forward an aspirational target of 10,000 installations linked to the green deal. That would have provided one of the biggest employment boosts in the small business sector right across the country and in every single community—rural, urban or whatever. Out of that 10,000, we now know that there have been just over 200 installations. It does not matter how many installations were in the plans; they have not taken place.

We are looking to find agreement on areas that require better support—through access to finance, for example. We might have different solutions—how best to enhance access to finance, to reform business rates and so forth—but a proposal that would make a material difference tomorrow, if we got it right, is dealing with cold homes and businesses that have runaway energy costs. That means getting energy-efficiency right and getting the energy installations right. We are failing—miserably—and companies are shutting their doors on the scheme. It is a tragedy. I am sure that the Government have all the best will in the world to turn this around, but we see no sign of them putting measures in place to achieve that.

There has been considerable agreement in today’s debate about the importance of small businesses. Some will choose to stay small, but many will grow and grow, and they will thrive. Tata Steel and Ford in south Wales have a huge impact on the local economy, but they are dwarfed by the impact of all the small and medium-sized businesses that need our support.

2.35 pm

Jake Berry (Rossendale and Darwen) (Con): I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing this important debate. Before I go on to talk about the challenges that businesses face—I am sure we would all recognise them from our constituencies—I would like to celebrate some of the successes of small businesses, particularly those in east Lancashire.

Moving from having a salary paid by someone else to going into a business where individuals are responsible for paying their own salary every month is a huge risk. I pay tribute to all the people throughout the country who have set up new businesses, often risking their home, their savings and everything they own to realise the dream of owning their own small business.

I would like to celebrate the success of some businesses in my own constituency. Riley’s the Butchers is one of them. We often say that butchers cannot succeed in the current environment when they have to compete against supermarkets. This is a small, family-run butchers that is beating the supermarkets at their own game with a fantastic product and a personal bespoke service to everyone who shops there. We also have businesses such as Parrock Lumb Cottages, which develops local tourism, but not at the expense of our environment. Environmental concern lies at the heart of this firm’s economic growth, showing that economic growth and environmental concern do not necessarily have to come at the expense of each other. Each of these firms is a small business; each is unique; and each is succeeding in the Rossendale valley, the home of enterprise. If anyone is tempted to visit either of those businesses, I would recommend it, but not without stopping at Love Umbrellas, which makes

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bespoke, hand-made, high-fashion umbrellas, showing how small businesses can succeed by using social media to market their enterprises.

If it rains all the time in Wales, it does in Darwen, too, where there is business called Minerva Craft, which has moved from Blackburn market into a large industrial unit, with both retail and internet sales based in the same site. DHJ Weisters is a weaving firm in my constituency making ties and bridal fabrics, showing that small businesses that invest in their work force, their machinery and their premises can keep manufacturing onshore, rather than having to send it offshore.

The business community in my area has grown during the last three years, and this has been the real driver of the transformative change that we have seen in unemployment. Rossendale and Darwen has the lowest unemployment rate since 2010. It is half the national average, despite it arguably being in a deprived part of east Lancashire. Our unemployment rate has come down by 20% in the last year alone, showing that small businesses growing and succeeding can transform the local labour market.

Small businesses continue to face challenges. In Rossendale and Darwen, the biggest one relates to the skills gap. Since 2010, we have seen over 4,000 people start apprenticeships in my constituency, while we have run two “100 in 100” campaigns this year. Working with local business, we recruited 200 new apprentices in 100 days. We are an area predominantly concerned with manufacturing, so many of these apprenticeships were highly technical and skilled engineering apprenticeships. Many were also in the high-level service sector, with apprentices taken on in accountancy and hairdressing. One apprenticeship was even based in my office with a training caseworker. That shows how important small businesses are to our economy. Small accountancy firms such as Hindle and Jepson have opened to support the new, expanded business community.

Business rates remain a threat to the future prosperity of businesses, but its important to say how much I welcome what the Government have already done. The automatic exemption of small firms from business rates has helped 330,000 businesses, which not only pay no rates, but no longer have to engage in the time-consuming task of filling in highly complex forms. I welcome all that has been done to support small businesses through business rate relief, but I urge my hon. Friend the Minister to think about what more could be done in that regard.

I should like the Government to consider introducing a fractional payment option, enabling businesses to pay their rates weekly or monthly. I should also like the Minister to tell us what information he has about the use by local authorities of the business rate flexibility that enables them to give businesses in their areas a 25% discount. If he had still been in the Chamber, I would have asked the hon. Member for Rochdale (Simon Danczuk) whether his local council had offered that discount to the business that he mentioned. In April, there will be a further big boost for businesses when the employment allowance is introduced. We are reducing every business’s jobs tax by £2,000, which means that a third of employers will pay no jobs tax at all.

Small business Saturday is hugely important, and it is great to see the television advertisements supporting it. I shall be working at Gilly’s sandwich stall in Darwen market, so if any Members want to come and do their Christmas shopping early, I should like to see them.

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2.41 pm

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): I am pleased to have an opportunity to speak. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) and her colleagues on persuading the Backbench Business Committee to grant the debate.

Small businesses play a major role in all our constituencies —mine is certainly no exception. They are important to the economy not just in their own right, but because they provide vital underpinning for many larger businesses in other economic sectors. They also play a vital role in maintaining healthy local communities through, for instance, their presence in shopping centres.

It is understandable that Members want to be positive in such a debate. Most of what I say will certainly be positive, and Government Members will obviously want to highlight what they see as the Government’s achievements. However, we should not forget the mixed experience that many small businesses have had over the past few years. Many have survived, and are surviving now, only with great difficulty. According to the Forum of Private Business—we will all have received its briefing yesterday—94% of small businesses are reporting increases in cost pressures, and many small business proprietors have managed to survive only by cutting their own wages and those of their staff. Small businesses are not in any way exempt from the cost of living crisis that is affecting so many of our communities and constituents.

As I have said, however, I want to be positive and to focus on what can be done to strengthen and support small businesses, which I have discussed with representatives of various small businesses in my area. Several hon. Members have talked about the need for more sympathetic treatment by the banks. I do not have time to repeat the horror stories that we have all heard, but some of my constituents have reported awful experiences with RBS’s global restructuring group. I hope that the Minister will be able to update the House on what his Department is doing in response to the allegations about that organisation. Even if we leave aside some of the more dramatic examples, it is clear that businesses need more sympathetic treatment by banks. The banks should recognise the difficulties that have been caused by branch closures, and, of course, there needs to be more competition and choice in banking. Labour has made some important proposals in that context.

Other organisations, and indeed areas of government, can also provide funds and other support for small business, and Edinburgh city council has taken a number of important steps in that regard. It has provided the Creative Exchange, an incubator space that opened recently in Leith to provide affordable work space for up to 80 staff. A further example is the council’s procurement policy, which covers a £20 million information technology tender. The council wants at least 25% of the work to go to small businesses; the present contract is held by a single large company.

Small business lending is also important. I was pleased to learn about discussions between the council and Capital Credit Union about the possibility of the union contributing an extra £1.3 million to the East of Scotland Investment Fund, which could provide loans for small businesses. The credit union is able to do that because of changes to corporate lending rules that allow community-based mutuals to offer loans to businesses. As someone

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who has a very small investment in Capital Credit Union, I am glad that it is at the forefront of that project. It is important to point out that the European regional development fund is also providing support, given the rather negative comments about Europe that we hear from certain Members in the House.

Mr Bain: In Edinburgh, as in Glasgow, there are many small exporting companies. Does my hon. Friend agree that the Government should be doing much more to establish a more proactive relationship with such companies through UK Trade & Investment? I had to draw the attention of a company I visited recently to the services provided by UKTI. Would not such action by the Government benefit small exporters in Edinburgh as well as those in my constituency?

Mark Lazarowicz: It would obviously benefit businesses in constituencies throughout the United Kingdom.

Another initiative undertaken by the city council is the Edinburgh guarantee, which brings together local government, businesses, colleges, the voluntary sector and national programmes at Scottish, UK and European levels to create opportunities for our young people. Since its establishment just over two years ago, it has generated more than 1,000 job, apprenticeship and internship opportunities for school leavers. Many small businesses have been closely involved in the project, and I congratulate the council on what it has achieved.

However, if councils are to provide all the support for small businesses that they ought to be able to provide, they need to have the powers that would enable them to do that to the full. Local government powers in Scotland are obviously the responsibility of the Scottish rather than the United Kingdom Government, but the fact remains that local authorities can perform an important task in supporting small business. Those that are already doing a good job should be congratulated, while those that are not should learn from them.

Although I want to be positive, I should add that we must not ignore the real pressures on small businesses. Cost pressure is an important factor that needs to be addressed. During Energy and Climate Change questions, the Government once again refused to accept the merits of Labour’s proposal for an energy price freeze, which would be of real benefit to small businesses as well as householders. It is disappointing that the Government still refuse to accept the strength of our argument, but in a world of Government U-turns, who knows what their policy may be next week?

2.48 pm

Justin Tomlinson (North Swindon) (Con): It is a real pleasure to have the opportunity to speak now, which is in no small part because I am due in Westminster Hall at 3 o’clock to lead a debate on retail and the high street. I shall therefore be relatively brief. I pay tribute to my hon. Friend the Member for Newton Abbot (Anne Marie Morris) not only for securing this debate, but for delivering a speech in which she was characteristically passionate about business. It is a credit to her campaign that so many Members on both sides of the House have come to support today’s important debate.

I am passionate about this subject. At school, I was for ever wheeling and dealing. If anyone needed anything, I was the man to speak to. Shortly after graduating, I set up my own printing and marketing company, which

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employed local people in my constituency. I sold it as soon as I got elected, however; it is a busy lark being an MP. I was incredibly proud to be given the opportunity to be a small business ambassador and, obviously, to work with the fantastic Minister for Skills and Enterprise, as well as the inspirational Karren Brady, which certainly impressed my wife, who very much liked her book.

I want to talk about some of the positive things the Government have done. We can all celebrate the fact that there are more than 400,000 new businesses, which have helped to create 1.4 million new jobs. The new employment allowance, which comes in on 1 January, is a welcome measure from the Government that will help to push that even further forward. We can celebrate the fact that we now have an extra 500,000 apprenticeships. The start-up loans scheme has celebrated its 10,000th loan, with its loans totalling £50 million. Crucially, that scheme has allowed those 10,000 firms to take on a further 10,000 people, so for each new firm, an additional job has been created, which is fantastic. The red tape challenge is also brilliant, not least because we have asked businesses to suggest which pieces of red tape need to be removed.

Neil Parish (Tiverton and Honiton) (Con): My hon. Friend is making very good points, and I would also like to congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing the debate. Many small businesses and micro-businesses believe that they get by despite the actions of the Government, rather than because of them, so all the things that we are doing to roll back red tape are absolutely right. Small businesses are creating jobs, but they want to be loved, especially by the Government. Over the years they have not felt loved, and that is what I am looking to the Minister and the Government to deliver.

Justin Tomlinson: I very much love businesses, so I will send some love to my hon. Friend’s constituency.

It is great that businesses are suggesting the areas of red tape that need to be looked at, because they are very much at the coal face. Removing two regulations for every one introduced is a real challenge, but the initiative has certainly been welcomed by businesses in my constituency.

Several Members have talked about opening up local authority procurement, which is worth about £4.4 billion a year, and the Government have the commendable aim of getting SME participation in that to about 25%. My hon. Friend the Member for High Peak (Andrew Bingham), who has had to leave the Chamber, has got hold of some of the forms that small businesses have to fill in when bidding for such contracts. I know that, when I ran a business, it simply was not worth the hassle.

I also very much welcome the increase in the annual investment allowance from £25,000 to £250,000. One problem that we identified was the fact that, for the first time in living memory, businesses had more money in their current accounts than they were choosing to borrow, because they were worried about uncertainty in the market. Increasing the allowance is a brilliant way to encourage businesses to start unlocking some of that money, which will drive forward growth.

Cutting corporation tax always brings a cheer from Conservative Members. Although Labour says that it supports business, it is telling that that support seems to

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vanish as soon as a business makes a profit. I also welcome the extension of small business rate relief.

Toby Perkins (Chesterfield) (Lab): The hon. Gentleman talks about corporation tax. Will he tell the House the rate of corporation tax when Labour came to power in 1997, and what it was when we left office in 2010?

Justin Tomlinson: I can tell the hon. Gentleman that, by 2015, we will have the lowest corporation tax market in the G8. That is what businesses are talking about, and I very much hope that the hon. Gentleman will join us in supporting that aim.

Many Members have highlighted the need to look at business rates. Greater minds than mine will solve the dilemma, but it is important to recognise that the world is changing. My hon. Friend the Member for Colchester (Sir Bob Russell) mentioned Amazon’s advantages over a traditional high street retailer because of the business rates that it pays. We must recognise that the world is changing and take that into account if we are to achieve a fair business rates system. The 27,000 business mentors are also crucial—I will come back to that subject in a moment—and the enterprise zones and the regional growth fund are kick-starting growth in key areas, which is most welcome.

Staying with the good things, I know that the Minister is particularly excited about the request that I am about to make—it is one that I make repeatedly—and that he is absolutely going to deliver on it. We as a Government are doing many good things, but business people are by their nature extremely busy and, all too often, these good schemes simply pass them by. However, the one thing that they cannot avoid is their bills, and every year they are sent a business rates bill. Even if they have nothing to pay, they are sent a bill telling them how much they would have had to pay but for the fact that the Government are allowing them not to do so. We should be communicating all the Government’s schemes through that mailer. The taxpayer has already paid for the mail, so let us include with it information on all the things that we are encouraging businesses to sign up for, and particularly on the advantages of taking on apprentices and of working with UKTI to develop exports.

I want briefly to focus on championing young entrepreneurs. I was the only one of the 350 students on my business degree course who went on to set up their own business. We all arrived at university keen to do just that, but we had entrepreneurial flair and risk-taking talked out of us. I obviously was not paying enough attention, because I ended up running my own business. The Government help to fund an organisation called the National Association of College and University Entrepreneurs, which encourages young people to take up practical, real-life opportunities for running a business. I have met a number of the young people who have taken advantage of those opportunities and who are now going on to be part of the next generation of wealth generators.

We need to look at what happens in business degrees. Along with all my fellow students, I was given a placement job in the corporate environment, rather than having the opportunity to test running my own business. We could use spare space at a university to run a retail business—that is very apt, given my forthcoming Westminster Hall debate. We could also consider whether

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part of a placement year could be spent running a business, as that might allow us to encourage a few more of those potential young entrepreneurs to take the step towards that.

We can also do a lot more for people before they go to university. For people who want to go to university, the UCAS system is in place—the conveyor belt is there. People choose their course and, if they get their grades, they head off to university. If people want to be an apprentice, they can look at the fantastic websites available, see what type of thing they would like to be an apprentice in, and go forward to the interviews. However, if someone wants to start their own business, it is pretty much up to them to work out how to do that, so we need to do a lot more to get those 20,000 business mentors to young people.

We have to celebrate schemes such as the Young Enterprise challenge, but we need to ensure that they are not just a one-off opportunity for enjoyment. I took part when I was at school—we worked for a week, made quite a bit of money and really enjoyed it. I recently did something with Swindon college students whereby we got stalls in the local market—a tough trading environment. Seven teams were each given £10 of seed money, and all the money raised on the day went to charity. We raised about £800 for the Prospect hospice, but the crucial bit was that we did not have mentors just at the beginning; we had them at the end.

One lady called Jessica ran a cake stall. Millions of people think about running such a stall, but she realised that the market had an older customer base, so she set up a 1950s-themed cake stall. She made more than £100 on the day. She realised that she had the customer service ability, the skills and the innovation to set up her own business, and now that she has finished at college, she has set up the Little Lemon & Poppy Bakery. We made sure that mentors were in place to help to guide her after she used her initial burst of enthusiasm and went on to do that. I ask the Minister to do all that he can to encourage young people. They have the energy and the enthusiasm, so let us make sure they are a key part of that next generation of wealth generators.

Several hon. Members rose

Madam Deputy Speaker (Dawn Primarolo): Order. I have to inform the House that we have another debate this afternoon and we are running out of time. The Minister and the shadow Minister need to be on their feet by 25 past 3. I am going to set a time limit of five minutes and I ask the remaining Members to make sure they share that fairly among themselves. If they do not do so, somebody will not get to speak. In other words, if there are lots of interventions, somebody will fall off the end of today’s speaking list.

2.57 pm

Alok Sharma (Reading West) (Con): I, too, congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing this debate. She is a huge champion of small and micro-businesses, and more power to her elbow.

Before the last election many of us were going around meeting small businesses in our constituencies, and businesses in Reading were telling me three things. The

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first was that they were drowning in red tape and regulation. The second was that they had to deal with an excessive burden of taxation. The third was that they faced issues relating to access to finance. Many Government Members have already pointed out areas where the Government have made a real effort to address all three issues: the red tape challenge; the one-in, two-out policy; cutting back on the regulations that micro-businesses have to deal with; the upcoming deregulation Bill—perhaps the Minister will give us an update on that; the reduction in the headline corporation tax rate; extended small business rate relief; the funding for lending scheme; the enterprise finance guarantee scheme; and a plethora of schemes to get debt and equity provision for start-ups and growing businesses, which are on the Department for Business, Innovation and Skills website and are now starting to be delivered through the British Business Bank. Of course the one scheme that the Government have not been responsible for, which perhaps the shadow Minister could tell us about, is the Co-op bank soft loans scheme, which has been available to only a restricted number of people.

A friend of mine who works in business and is not particularly partisan politically has acknowledged that the Government have made a huge effort in cutting red tape. However, as he says, perhaps the time has come not just to take an axe to red tape, but to take a chainsaw to unnecessary red tape and regulation. I am pleased that we have gone from one-in, one-out to one-in, two-out, but why not one-in, three-out or none-in, four-out? One reason for not doing that is that the Government are constrained by EU regulation. I welcome what the Prime Minister said following the proposals made by his business taskforce on cutting back EU regulation. I understand that yesterday the Leader of the Opposition referred to a tweet containing “#greencrap”. I have just started tweeting, and am thinking about tweeting after this debate with #EUredtapecrap, because of the enormous amount of EU regulation that is holding back our businesses. The issue of increasing competitiveness is felt not just in the UK but by Governments in Berlin, Stockholm, Amsterdam and perhaps even Paris.

If Opposition Members really care about business, they should back the European Union (Referendum) Bill. I hope they will turn up tomorrow to support it, because that is the best way of delivering change in the EU and ensuring that we get rid of some of this regulation.

In the remaining two minutes, I have two quick points. One relates to simplifying the tax system overall through the merger or the simplification of income tax and national insurance, and the second is about closing the equity funding gap.

In the 2011 Budget, the Chancellor talked about merging national insurance and income tax. A consultation was held, and the decision was made not to take the idea forward. None the less, the idea is totemic. I know that it is difficult and that there are anomalies, but we should consider merging those two taxes. The reality is that national insurance is just another tax. People should understand that the tax they are paying is not 20% as a basic rate taxpayer but 32%. If they saw that on their pay slips and in their annual tax statements, they would realise that we are all paying a bit too much tax. They would end up preferring parties that propose cutting taxes rather than raising them. Perhaps we will hear something on that from the Minister.

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My final point is to do with equity finance. The start-up loan scheme is brilliant. It is a flagship scheme that has worked really well; it is simple and is able to get lending out very quickly. It would be great to see a British equity funding scheme, which would also help to deploy capital quickly across many areas of business.

I am running out of time, so I shall stop at that point. I acknowledge that the Government do a huge amount, but there is still some way for them to go. I am sure that the Minister will tell us of his plans.

3.2 pm

John Stevenson (Carlisle) (Con): I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on securing this debate. She was absolutely right to highlight the importance of small businesses to the success not just of our national economy but of local economies up and down the country. Clearly, we all support small businesses and we all want to see them succeed. Indeed all large businesses were once small ones, and the big businesses of tomorrow are the start-ups and small businesses of today.

However, it is all very well to talk about support, but there needs to be practical advice and policies in place that give start-ups, sole traders and small businesses the full support that they need to prosper and succeed. Most businesses in this country are small. The vast majority of those people employed in the private sector work for small businesses. In many respects it is the owners and workers in those enterprises who are the unsung heroes of our economy.

Let me take, for example, a small business in my constituency of Carlisle, with, say, five employees. That business pays business rates, which helps the local and national economy, employer’s national insurance and corporation tax. It will collect VAT, and it may well pay VAT itself. It makes a huge contribution to the national economy. It also conducts business with other local enterprises, helping to create a more economically active local economy. In addition, it provides employment to five families, providing them with a standard of living and supporting their lifestyles. There is also often a wider benefit to the community. The business owner may well live in the area, contributing socially to the community through membership of other organisations. They are often on school boards, local charities and sports clubs.

My principal contribution to this debate relates to the role that local government should play in supporting small businesses. We should remember that the vast majority of business people will have absolutely nothing to do with central Government or Government Departments such as BIS and, with the greatest respect to the Minister, will probably never come in contact with a Minister. The most important people in government with whom business people are likely to come into contact will probably be from the local council, a local councillor or perhaps an MP.

I accept that much is made of the contribution, involvement and policy decisions of central Government. Central Government clearly have a significant if not central role to play. They set the general environment in which business can or should flourish and create a framework within which business will function. Nevertheless, we should not and must not underestimate

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the role that local government must play in supporting and encouraging small businesses to flourish and succeed in their area.

Local councils, local councillors and officers can make a substantial difference in a number of key areas. The obvious one is planning, where the local plan can be made as business-friendly as possible. The administration process should be as efficient as it can be and issues for small businesses should be highlighted early so that they do not incur unnecessary costs. The second such area is property ownership. Local councils are often property owners; for example Carlisle city council, believe it or not, has about £100 million worth of commercial property. It can make a difference by using that to good effect. The third area, as has been highlighted, is procurement. It is not necessarily the big contracts that matter; the small ones can make a real difference to small businesses. Local enterprise partnerships are also important. Councils have a role and are often on the boards, and LEPs need to be pro-business and to help develop policies that support small businesses in flourishing.

There are two other key points. We need small business support and engagement with those local professionals who can help businesses: surveyors, accountants, bankers and lawyers. Indeed, we should encourage relationships with the local chamber of commerce or the Federation of Small Businesses, with encouragement on business plans, finance, employment and other such matters that will help businesses to succeed.

Most importantly, local government can provide leadership. It can give local small businesses a sense that the council supports and will support them and that there is a vision and a sense of direction for the area of which the businesses are a part.

I want to highlight that the responsibility to engage with and support small business from a government point of view does not lie merely with central Government; it is important that local government plays its part.

3.7 pm

Mark Pawsey (Rugby) (Con): I, too, congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) on introducing the debate. I particularly appreciate her work on the definition of “small business”. The Government’s definition of small business is one that employs 250 employees or turns over £50 million. That is a pretty substantial business and I applaud how she has raised the profile of what we would probably call micro-businesses. I suspect that most of the debate has been about micro-businesses rather than small businesses.

I ran a micro-business, a business I started from scratch in 1982, so I know about the pressure of ensuring that there is enough money in the bank account to meet the monthly salary bill. I am therefore delighted that the Government have recognised the importance of small businesses and the number of such businesses that have been created. Along with other Members, I champion the small businesses in my constituency that are raising their profile through small business Saturday. I shall visit four new businesses that have been formed in the past year and opened in the past four months. I am looking forward to seeing what they are doing.

I made the point in an intervention that every big business started out as a small business. Big businesses are often large employers, but if we want to provide

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employment for all our citizens, we need to consider how to encourage small businesses to grow. In my constituency, there are more small businesses than people looking for work and I suspect that that applies across the country. If every small business was encouraged to take on one additional member of staff, there would be no one looking for work. That hit me quite hard when I met a successful one-man band who was telling me how busy he was and that he was running around like a nutcase trying to keep all his customers happy. I said, “That’s great isn’t it? No doubt you’ll be expanding and taking on somebody else in the business.” He said, “No, I don’t want any of that trouble headache and hassle. I would much rather stick as I am.” We need to change that perception, so it is important for us to consider some of the obstacles that hold people back.

One of that small business man’s biggest concerns was employment legislation. I understand the concerns of Opposition Members that there should be a fair relationship between employer and employee, but in a micro-business the employer and employee get to know each other pretty well. They often work side by side in manufacturing the goods or delivering the service. I would argue that many smaller businesses may not need the employment protection measures that larger companies in need of more formal arrangements require.

The move from one year to two before an employee can bring a case in an employment tribunal is a step in the right direction, but we could look at one or two other areas such as parental leave rules. Transferable parental leave disproportionately disadvantages small businesses, which may lose a key member of staff, often at pretty short notice. We could consider making some exemptions for micro-businesses or those with a turnover of less than £5 million or fewer than 25 staff.

I am also concerned about access to suitable business premises as we move out of the recession. Jones Lang LaSalle reported in March that there was little speculative industrial property development taking place. I am worried that accommodation will not be available. My business started in very low-cost old buildings. Such buildings have now in many cases been demolished to avoid vacant business rates. I am bothered that access to the internet has encouraged lots of fledgling small businesses to start, often in niche markets, operating from home, perhaps in a residential area, and as they grow they will need small units, which we do not have. Developers have not been providing small units. It is much easier for a developer to provide one unit of 50,000 square feet than 10 units of 5,000 square feet, and we need to address that problem.

Lastly, I would like to deal with an issue that is not for Government but is about a culture change. As a salesmen in my business, I would like to see more appreciation for salesmen. They are the people who end the manufacturing process; the services would not get delivered were it not for the salesman persuading the customer to buy them. Salesmen have an unfortunate reputation, and I would like to see some credit given to the profession, with proper recognition and status. Their skills are invaluable, especially in export markets where not only our small businesses but the country as a whole prosper if the salesmen do well.

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3.12 pm

Chris Heaton-Harris (Daventry) (Con): I congratulate my hon. Friend the Member for Newton Abbot (Anne Marie Morris) and other hon. Members on securing the debate.

Before I came into politics, I used to wholesale fruit and veg. It was a family firm, which my father started and grew to a decent size. Then I had all the disputes that every son taking over a family firm has with their father, when they tell their sons that they are not doing it right, but we managed to sneak up the turnover of this fruit and veg business, working nights in New Covent Garden, to £7 million a year employing 17 people. We did it in spite of rather than because of the Government. Some of my points will be based on those old experiences, which small businesses in my constituency tell me they still face.

One of the best parts of our jobs as Members of Parliament is going to see small businesses and people taking risks to do good things and start employment in our constituencies. My constituency, like that of every other Member who has spoken, is full of amazing and surprising small businesses. I have a company called Bambino Mio, one of the largest companies dealing in reusable nappies. It started 15 years ago and now exports to almost 70 countries across the world. Another company is Daisy Roots. Many Members with children and grandchildren will have bought a pair of Daisy Roots shoes without knowing about it. EllaPure is a company direct selling all-natural skincare products. It was started by an 18-year-old lad two or three years ago, whom the shadow Minister met at a lunch with me not so long ago. He is a very impressive individual. Those three businesses all come from one small village, Brixworth.

I know that the Government have done lots of good stuff. I am delighted to be behind a Government who have created 1.4 million new private sector jobs since 2010, who are cutting national insurance, benefiting every firm by £2,000 next year, and who have allowed people to start 400,000 new British businesses. One of the things we do really well in this country is enable companies to set up quickly. It is a very simple process, which takes away a lot of the confusion. We have a very good scheme for enterprise zones. Neighbouring my constituency is Northampton, where the Northampton Waterside enterprise zone’s plans to change the face of the town for the better can already been seen.

However, there are many issues that affect micro and small businesses. My hon. Friend the Member for Rugby (Mark Pawsey) talked about employing people. Businesses take a massive risk when they start employing people. Perhaps some Members had never done that before taking people on in their offices here. Any Member who has had a dispute with an employee will understand how difficult it must be for a small business, which might have only one or two employees, when a relationship with an employee does not work and the risk that such employment involves.

Many small businesses complain about bureaucracy. I think we are doing reasonably well on that. Perhaps we could do more, but the thing that I think we could do better is to open up procurement in the public sector. I am sure that the Minister will tell me that we have got rid of a whole tranche of things and that businesses no longer need to provide three years’ worth of audited

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accounts before being able to bid for Government work. That might have been the policy change and what we are trying to implement, but a small business in my constituency called Mapcite, based in my village, was told that only a couple of weeks ago by the Department with which it was trying to deal. Then there are issues relating to rural broadband, which we are sorting out but which we need to get right. Rural broadband is ultra-important.

Richard Fuller (Bedford) (Con): I am grateful to my hon. Friend for giving way, not least because it allows me to wish him all the best of luck for his special day. He said that he started working in his family business. Will he also herald the value that family businesses provide in our economy and, in particular, the work of the Institute for Family Business?

Chris Heaton-Harris: Yes is the simple answer to my hon. Friend. I have noted the time, Madam Deputy Speaker, and promise to finish on time.

We need to be positive about entrepreneurship in this country. We have a very good reputation across the globe. Amway, one of the biggest direct sellers in the United Kingdom, has 40,000 small businesses working for it. It did a big survey of people’s attitudes to becoming entrepreneurs, and we did not have a bad rate, because 77% of people thought that we have a positive atmosphere in which to build entrepreneurship. However, factors that worked against coming into business included fear of failure, which is a big deal. It is a psychological barrier that a person has to get over when they start a small business. Public funding and start-up loans are pretty indispensible in helping to get over the fear of failure, because people know they have something behind them when they start in addition to their brilliant idea.

I will be celebrating small business Saturday at the iCon centre in Daventry, where there will be a huge networking event for small businesses in my constituency. I congratulate my hon. Friend the Member for Newton Abbot once again on securing the debate.

3.17 pm

Sir Andrew Stunell (Hazel Grove) (LD): Thank you, Madam Deputy Speaker, for finding time to fit me in. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing the debate. We have heard some very good contributions indeed. In the short time available, I want to focus on the part of the motion that refers to encouraging the Government to improve access to finance. The Government have certainly done some very good things in the past three years. They have worked nationally and locally, and I refer in particular to the work UK Trade & Investment has done in my constituency, the work of GrowthAccelerator and the success of the apprenticeship scheme.

I will focus briefly on access to finance from banks for my local businesses. Twelve months ago I secured an Adjournment debate on that topic, bringing to the House the cases of four businesses in my constituency and the difficulty they have had in gaining access to finance from four different banks. As a consequence, I took a deputation of local businesses to see the banking Minister. We met the British Bankers Association and had a representative of the Federation of Small Businesses with us. That discussion produced an assurance from

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the BBA that it would increase its publicity on access to the appeals system, because if a business is refused a loan there is an appeals system.

The BBA announced with some pride that in the first two years of the appeals process run by the banks, a satisfactory lending agreement was found in 40% of cases where the decline of a loan to a business was appealed against. This was said to be a cause for congratulations. Let me point out that in any appeals system, an approval rating of 40% suggests that there is a problem with that system. Will Treasury Ministers inform me of the distribution of that 40% appeal rate between different banks? Which banks succeeded in getting it right and which failed to do so? Will the Chancellor of the Exchequer consider requiring banks to notify in writing all small businesses whose loan application is declined that they have a right of appeal, because this was not known to many of the businesses in my constituency that had had such a refusal?

I have to say to the Minister that the answer I received on 30 October was rather bland and unhelpful. It was, in essence, a reprint of the BBA’s press release, and it added no further information. I want to see whether he can improve on that, either in what he says today or by reference to his Treasury colleagues as to what they might supply to the House subsequently. The answer did not explain or offer any view on whether a 40% overturning rate for the appeals system was a sign of success or failure. It was also entirely silent about whether there was to be any requirement on banks to follow through refusals of loans with better information for companies on how to appeal.

In the past three years, we have done excellent work that has paid real dividends, but local businesses in my constituency still have a fundamental problem in getting the access to finance to which they are entitled. One of the ironies is that one of those companies, which was refused a loan of £12,000 for business development, was subsequently offered—by the same bank—an unsecured loan of £16,000 to purchase a car. That emphasises the problems that the system still faces.

3.22 pm

Toby Perkins (Chesterfield) (Lab): It is a tremendous pleasure to speak in what has been an excellent debate. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing it. She speaks about small businesses with passion, dedication, enthusiasm and considerable vim, which I can inform the House, having been at the National Association of Commercial Finance Brokers dinner with her on Tuesday, is also the way she dances.

We have heard a tremendous amount about the importance of small businesses. As the challengers of tired orthodoxies and the drivers of social mobility, small businesses share one nation Labour’s values completely. It is a path that several of us have followed, as reflected in the debate. I worked in the private sector for my entire life and was running a small business when I became a Member of Parliament. From my perspective and, clearly, that of hon. Members across the House, there are few more important questions for us to consider than how we support small firms, which we all know are the engines of growth, the biggest employers of the long-term unemployed, and key drivers of economic recovery.

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It is important that we listen to what the voices of business are saying. On Monday, I was in Harlow in Essex with the local chamber of commerce, meeting small businesses there and listening to their priorities. Another organisation right at the forefront of the fight to support small firms is the Federation of Small Businesses, which does a tremendous job. A report in the Leicester Mercury this week highlighted how a delegation from the east midlands, led by David Nicholls, chairman of the Leicestershire branch of the FSB, got the chance to lobby the Chancellor on the issues that he should address in his forthcoming autumn statement. What did the delegation choose to highlight? Interestingly, the Leicester Mercury tells us that they demanded action on energy prices, a reduction in businesses rates, and the Government taking responsibility for setting up a business bank—very wise indeed.

I pay tribute to the hon. Lady for securing the debate, but think she may have done so with a slightly heavy heart, because when it comes to the main issues being raised by small businesses, it is Labour that is leading the way. I want to reflect on some of the contributions to this balanced debate that have demonstrated that.

In her excellent speech, the hon. Lady talked about the need for a culture change that recognises the importance of small business across Government. We could not agree more. My right hon. Friend the Member for Doncaster North (Edward Miliband) made making Labour the party of small business a priority in his first conference speech and he has talked about it many times since. There are some good Government schemes out there but, as the hon. Lady said, many businesses do not know about them. The signposting is weak, and she was right to say that.

My hon. Friend the Member for Glasgow North East (Mr Bain) discussed the lessons we can learn from the Sparkassen in Germany. He was right to say that, under the German system and at the height of the banking crisis, they lent more to small businesses, not fewer, as happened here. He was also right to focus on the important issue of the number of businesses claiming that access to finance is still their No. 1 priority, a theme that the right hon. Member for Hazel Grove (Sir Andrew Stunell) returned to a few moments ago.

The hon. Members for Norwich North (Chloe Smith) and for High Peak (Andrew Bingham) were right to focus on the difficulty faced by small and medium-sized enterprises in getting on to Government procurement lists. It has been an issue for many years and clearly there is a long way to go.

My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) also spoke.

Debbie Abrahams: My hon. Friend is making a powerful speech. He will be aware that earlier this year I chaired an all-party inquiry into late payments. The key finding was that late payment is a cultural issue that needs to be seen as just as toxic as tax evasion. Does he agree that we need to push the Government to make progress towards ensuring there is a cultural change so that late payment is unacceptable?

Toby Perkins: I certainly do. I was in the process of paying tribute to the work my hon. Friend has done on that issue. She is absolutely right.

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The hon. Member for Rugby (Mark Pawsey), whom I usually regard as a sound voice on the issue of small business, said that if someone is paid late they should refuse to supply the company, but that does not recognise the difference in the relationship between a powerful customer and a struggling supplier. Every year, 2,000 businesses go under simply because they are not paid money that is owed to them, so I think he was wrong about that. My hon. Friend is right to say that we need the Government to be at the forefront of not just encouraging people to pay on time, but ensuring that that culture change passes right down the public sector procurement chain to second and third-tier suppliers.

My hon. Friend the Member for Rochdale (Simon Danczuk) made a lengthy advertisement—I sense it was somewhat to his embarrassment—for Danczuk’s deli. Numerous Members wanted to know about the excellent wares he will be providing. He has been in business before and it is great that he and his wife are opening a delicatessen in the centre of Rochdale and that he is putting his money where his mouth is.

The hon. Member for Brentford and Isleworth (Mary Macleod), my hon. Friend the Member for Rochdale and the hon. Member for Colchester (Sir Bob Russell) spoke, among many others, about the tremendous difficulties caused by the increase in business rates, which I shall return to.

My hon. Friend the Member for Ogmore (Huw Irranca-Davies) promoted the value of local innovative firms and also focused on access to finance. The hon. Member for Rossendale and Darwen (Jake Berry) is not in his place. [Interruption.] I see that he has moved—I do not know how I managed to miss that moustache. He encapsulated the bravery and pioneering spirit required to set up a business and he was right to say that it doesn’t half set the pulses racing. At such moments, people realise what colour adrenaline is.

My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) was entirely right to say that small businesses are undergoing a cost of living crisis, which I will reflect on in a moment.

The hon. Member for North Swindon (Justin Tomlinson) said that Labour always liked to increase corporation tax. If he was still here, he would be surprised to discover that corporation tax was actually 3% less after 13 years of Labour Government. Perhaps he should talk to the former Prime Minister about that.

The Minister for Skills and Enterprise (Matthew Hancock): Will the hon. Gentleman confirm whether it is still Labour’s policy to increase corporation tax?

Madam Deputy Speaker (Dawn Primarolo): Order. Before the shadow Minister answers the Minister, will they please remember that I will stop the debate at 3.45 pm? If the Minister is still on his feet at that point, he will lose the time, because we will have to start the next debate.

Toby Perkins: Our policy is well known, but I will go through it at length in a moment.

The hon. Member for Reading West (Alok Sharma) spoke for only five minutes, but he was wrong about just about everything he said. I will give two examples. He said that businesses want an EU referendum, but very

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few businesses are telling me that. He extolled the virtues of the arbitrary one-in, two-out red tape challenge and seemed to think that the Government have a good record on red tape, but he was unable to name any of their innovations that have made a difference.

The hon. Member for Rugby made an incredibly significant point about the importance of sales skills. I am sure he will be delighted to know that the Labour party is undertaking a large programme—headed by Kate Walsh, formerly of “The Apprentice”—on the importance of sales skills, and we will report on its work shortly.

The hon. Member for Carlisle (John Stevenson) focused broadly on the importance of small firms. The hon. Member for Daventry (Chris Heaton-Harris) was absolutely correct to say that the UK is right at the forefront of those places where it is easiest to set up a small business. The World Bank said that Britain was the fourth easiest place to set up a business in 2010.

I do not want to focus on the Government’s failures, but on the successful moves that a future Labour Government will make. We are considering the future of vital small firms, and Labour has the answers to their questions. The cost of living crisis for small firms is taking many of them to the brink, but Labour’s pledge to freeze energy prices until 2017 would save the average British small business £5,000. Hon. Members will be shocked to learn that business rates have risen by £1,500 a year on average under this Government, and that they face a further hike in April 2014.

To answer the Minister’s question, Labour proposes not to take forward the Government’s planned 1% corporation tax cut for 80,000 large firms, but instead to use all the money to cut the business rate bills of 1.5 million small firms. In a week of U-turns, it would be incredibly—

Madam Deputy Speaker: Order. I am sorry, but the hon. Gentleman has now had 10 minutes. This is a Back-Bench debate, and it will be followed by another Back-Bench debate. I want him to conclude in his current sentence, so that I can call the Minister, who will also have 10 minutes.

Toby Perkins: I will, Madam Deputy Speaker. On a range of issues from micro-business support to the need for Government to provide the necessary skills, small businesses are saying that the Government have more work to do. Labour is responding to that call from small businesses, and our message to them is, “We know how vital you are, and we are right behind you.”

3.32 pm

The Minister for Skills and Enterprise (Matthew Hancock): This Government are passionate, as am I, about supporting small business. I grew up in one, and I hope that I not only listen to and speak for small business across Government, but understand what life is like in one, as do so many hon. Members who have spoken. The debate has reflected the strength of feeling across the House in support of small businesses, which we should do more to encourage and for which we should do more to make life easier. Why are we so passionate? Because, at root, small businesses are the ultimate fount of prosperity and jobs in our country.

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Mr Adrian Bailey (West Bromwich West) (Lab/Co-op): Does the Minister agree that one great virtue of small businesses is that they are embedded in their local communities and are often loyal to them, unlike npower in my constituency, which has just offshored 400 jobs? Will he use the power of his Department to work with local authorities, the LEP and the chamber of commerce to do its best to mitigate that loss?

Matthew Hancock: The Department is of course doing what it can to mitigate the impact of that decision. The hon. Gentleman is quite right, as is my hon. Friend the Member for Carlisle (John Stevenson), who spoke passionately about the impact of small businesses, which are embedded in their local communities through jobs and their contributions to local and national life, as well as the role of local authorities in planning, property and procurement.

There have been some fantastic contributions to the debate. My hon. Friend the Member for Brentford and Isleworth (Mary Macleod), as well as recounting the various questions that she has asked at Prime Minister’s questions in the recent past, spoke about drilling enterprise through our education system, which I strongly support. My hon. Friend the Member for North Swindon (Justin Tomlinson) also made that argument. Every time I speak to him, he seems to have another idea about how we can get more content about enterprise into the education system.

Many Members raised the issue of red tape, not least my hon. Friend the Member for Reading West (Alok Sharma), who spoke about the impact of EU red tape. Members across this House must recognise that problem. It is wrongly dismissed by some, but it is an important issue that we need to address. We are doing so through the Prime Minister’s challenge to the EU. The taskforce of six business leaders who are looking at reforming EU regulations is putting the voice of business at the heart of the debate. It has made 30 recommendations on how to remove or improve the most burdensome EU rules. We are working with business to encourage the EU to take up those recommendations over the next year.

My hon. Friends the Members for Rugby (Mark Pawsey) and for Daventry (Chris Heaton-Harris) raised the issue of regulations on employers, especially with regard to micro-businesses. We have made progress by ensuring that employees cannot go to a tribunal until they have been employed for two years and by introducing fees for tribunals. We need to keep this area under constant review because, fundamentally, what we must do is make it easier to employ people and create jobs. That is what growing small businesses is all about.

It is a great pleasure to see you take the Chair, Madam Deputy Speaker. This is the first time that I have been in a debate that you have chaired.

My hon. Friend the Member for Norwich North (Chloe Smith) was here earlier, but apologised that she had an engagement with some small businesses. I pay tribute to the work that she did to open up procurement to small businesses. However, as my hon. Friend the Member for Daventry said, what we are doing in that area is not complete. There is much more to do to improve the formal rules and to ensure that they are seen, exercised and stuck to not only across central Government, but throughout the public sector, including in local authorities. The Department for Business,

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Innovation and Skills has just reached the target of sending 25% of its invoices to small businesses. That target applies to the whole of central Government and all other Departments are working towards it.

Many hon. Members raised the issues of access to finance and late payment, not least the hon. Member for Oldham East and Saddleworth (Debbie Abrahams). The Government pay more than 85% of undisputed invoices within five days. That is a big change and an impressive feat.

Debbie Abrahams: Will the Minister confirm whether that includes suppliers in all tiers? I think that he is referring just to tier 1 suppliers.

Matthew Hancock: I was coming on to exactly that point. That figure refers to tier 1 and there is much more to do to drill prompt payments through the supply chain. We must spread that culture across the private sector as well. I will reflect on the hon. Lady’s point that we should make late payment just as culturally negative as tax avoidance and evasion. We will be launching a consultation on late payment shortly.

The right hon. Member for Hazel Grove (Sir Andrew Stunell) raised the issue of the banking appeals system. I do not want to pre-empt what my right hon. Friend the Chancellor will say in the autumn statement in a week’s time, so I recommend that the right hon. Gentleman attends the House on that day.

Opposition Members raised various issues and spoke from different perspectives. The important issue of GRG and the treatment of small companies that have got into difficulties with the banks was raised. The Financial Conduct Authority is looking into the report that was published this week and RBS has appointed Clifford Chance to go through the cases that were raised in detail.

The hon. Member for Glasgow North East (Mr Bain), in typically ebullient fashion, called for firm action and better communication of what we are doing. I certainly agree with him about firm action. That is what I hope to achieve.

On better communication, we have launched the Business is Great campaign, which Members may see on billboards and social media across the country, and the Great Business website brings together in one place the different things the Government and private sector are doing to support small businesses. It is a single portal——and worth exploring.

The hon. Member for Ogmore (Huw Irranca-Davies) mentioned access to finance, and particularly green measures. Although the Government have reduced the subsidy from energy bill payers and taxpayers to sponsor solar, by ensuring that the scheme was proportionate but still affordable, more than 1 million people are now living with solar panels on their roofs. The hon. Member for Rochdale (Simon Danczuk) spoke passionately about starting his own business with his wife. I hope he gets the chance to have a word with the Leader of the Opposition, who says he wants to ban Members from engaging in any outside employment, including a small business. I strongly hope that the idea that someone can

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run a small business and be an MP at the same time will continue because of the wealth of insight it brings to people in this place.

There were good speeches from Opposition Members, and it was a pity there were so few of them, given that support from the Government Benches was very powerful. The hon. Member for Colchester (Sir Bob Russell) and my hon. Friend the Member for Rossendale and Darwen (Jake Berry) raised the important issue of business rates. I am glad that one of the first things this Government did was stop the extension of business rates proposed by the previous Government because that would have been a great mistake. In fact, we have extended business rate relief every year, but I have no doubt that had the previous Government remained in office, they would have put up and extended business rates because that is what they were planning.

Julian Sturdy (York Outer) (Con): Does the Minister agree that one of the key things for helping small businesses is encouraging them to reinvest? The Government have done a lot in extending the capital allowance scheme, but will he consider extending it beyond 1 January 2015?

Matthew Hancock: Yes, I will, and I conclude by saying that Members across the House—especially Government Members—argued passionately in favour of small businesses, the values they bring, the hard work but the payback, and the benefits in terms of jobs and prosperity for their communities. None more so than my hon. Friend the Member for Newton Abbot who initiated the debate, and I pay tribute to all her work. If I have not addressed any point on the long list of issues she raised, I will write to her with a detailed response on each and every one. She is a great credit to herself and to small businesses that need such passionate support, and I know they are thrilled to have her at their side.

3.42 pm

Anne Marie Morris: This has been an incredible, energetic debate and I pay tribute to and thank my fellow sponsors and all those who have contributed with great knowledge, passion and understanding. Let the nation be in no doubt: this House supports small businesses in all their different guises, and they are key to growth and social mobility. I hope the Minister realises that more than 100 ideas have been raised today, so if he takes them all up it will be quite a long letter. I hope that the Minister and the Chancellor will demonstrate that they are listening in the autumn statement and indeed the Budget, but let us conclude this debate by celebrating small businesses and telling them, “We love you, and we will show that on small business Saturday on 7 December.”

Question put and agreed to.


That this House encourages the Government to consider what further measures can be taken to encourage small business to flourish and prosper, including reducing the burden of red tape, addressing the complex tax structure, improving access to finance and gaining support from local government.

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G8 Summit on Dementia

3.43 pm

Tracey Crouch (Chatham and Aylesford) (Con): I beg to move,

That this House has considered the G8 summit on dementia.

It is a pleasure to see you in the Chair, Madam Deputy Speaker; this is the first opportunity I have had to give you my warm congratulations on your election.

I am incredibly grateful for the support of the right hon. Members for Salford and Eccles (Hazel Blears) and for Sutton and Cheam (Paul Burstow), and others, for helping to secure this debate. I thank the Backbench Business Committee for allowing Members time to contribute—albeit briefly—to a debate on what many believe is one of the most important issues facing our health and social care system in the future. I shall keep my opening comments as brief as possible, as I know that others wish to speak, but it is important to congratulate the Prime Minister on using the opportunity of hosting the G8 summit on 11 December to focus on international efforts to prevent, delay and effectively treat dementia. The debate will allow parliamentarians an opportunity to shape discussions at the summit, following on from wider and commendable consultation with the public. Collaboration, which is at the heart of the conference, is the basis of my contribution to the debate.

Before addressing the specifics, it is important to set out the global perspective. Dementia affects more than 35 million people worldwide and is now considered to be one of the greatest global health challenges of our time. It is estimated that, by 2050, more than 150 million people will suffer from dementia.

Hon. Members will have seen the devastating human cost of dementia if not in their families, then in their constituencies. We know of the suffering of those with the condition and those who become carers for their loved ones. However, we perhaps do not so obviously see the huge economic effects of dementia, the worldwide cost of which is estimated to be about £400 billion, which is the equivalent of 1% of world gross domestic product. Without urgent action, that figure will increase in line with the number of people who are anticipated to get dementia, which is why global collaboration is essential. The more we can do together globally, the better the outcomes we can secure nationally.

Mr Simon Burns (Chelmsford) (Con): My hon. Friend makes an extremely important point. Does she accept, however, that it is equally important to do more on seeking diagnoses? About 350,000 people in this country are undiagnosed and go without the help and support that those who have been diagnosed receive.

Tracey Crouch: I agree entirely with my hon. Friend. The all-party group on dementia recently produced a report on diagnosis. Shockingly, only about 42% of people get diagnosed, which leaves a massive diagnosis gap. The earlier people are diagnosed, the better their treatment and pathways.

Andrew Miller (Ellesmere Port and Neston) (Lab): I congratulate the hon. Lady on introducing the debate. I hope she will hear later some of the evidence that the Science and Technology Committee has taken on variant

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Creutzfeldt-Jakob disease, and of the important work of the Medical Research Council prion unit, which could lead to exciting new possibilities for the treatment and diagnosis of people with all sorts of dementia. Does she agree that it is important to maintain such research programmes?

Tracey Crouch: I agree entirely with the hon. Gentleman, and I will hear more later of the initiatives his Committee is examining. The importance of research is very much the basis of my speech.

Hon. Members may talk about many aspects of dementia, but I shall address four, the first of which is investment. The statistics are gloomy, but there is a good-news story underlying the negative numbers: people are living longer and people can live well with dementia. We need to capitalise on best practice and ensure that we maximise people’s ability to maintain long-term well-being, despite their debilitating condition. Although we do not have a cure for dementia, we have come on leaps and bounds in recent years. A cure is hopefully no longer a lifetime away, but to ensure that we make that cure happen, we need to take action.

Dementia costs the UK economy £23 billion a year, which is more than cancer, stroke or heart disease, but the annual research spend on dementia is about £51 million. The research spend on cancer is £521 million —10 times more—yet dementia costs society much more than cancer annually. I therefore welcome the increase in investment in dementia research through the Government’s themed initiatives, which has resulted in Government investment more than doubling over four years. However, the investment comes from a low base and represents less than 1% of the overall science budget.

Zac Goldsmith (Richmond Park) (Con): I congratulate my hon. Friend on securing this important debate. It is widely believed—it has recently been widely reported in scientific journals, including by scientists who will take part in the G8 meeting—that up to half of all Alzheimer’s cases can be attributed to modifiable and therefore preventable risk factors. If that is the case, and there seems to a general consensus along those lines, does she share my disappointment that, as far as I can see, none of the additional £22 million allocated for dementia research has been spent on prevention research?

Tracey Crouch: I am sure that the Minister will have heard the good point that my hon. Friend makes. I would like to concentrate on the fact that there has been an increase in investment for research. There are various reasons why we need research, and I am sure the Minister will address my hon. Friend’s comments in his response.

Huw Irranca-Davies (Ogmore) (Lab): The hon. Lady rightly talks about the low investment base from which we are starting on dementia research and prevention. One way to make limited resources go further is to co-ordinate properly and better across the regions and nations of the UK. There is good work going on in Wales, but that is also from a low base.

Tracey Crouch: I agree entirely with the hon. Gentleman. We need greater co-operation and collaboration across the world, and if that is needed across the world, we certainly need it at home.

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We should recognise that the USA is committed to spending $550 million on dementia research, which is a reflection of the importance of the condition to its society. To be frank, however, the combined investment by the USA and the UK is small fry compared with the investment in research by the pharmaceutical industry. Any collaboration needs to include the global pharma leaders to ensure that they are financing research, bringing together their world-leading scientists and helping to achieve the breakthrough in the prevention and treatment of dementia that we all want. One of the most important outcomes I would like from the G8 summit is a long-term commitment to double investment in research to provide stable and predictable funding so that we can get closer to finding a cure and improved care.

Mrs Madeleine Moon (Bridgend) (Lab): Does the hon. Lady agree that part of the problem is the fact that we use the term “dementia” as if it is just one thing? There are many dementias and we must not focus just on Alzheimer’s. We must be aware of frontotemporal dementias, which affect younger people in particular, and ensure there is funding for research into that.

Tracey Crouch: I agree entirely. This is something that blights many conditions, including cancer. We talk about cancer investment, but there is little or no research funding for some cancers. Mesothelioma is a classic example, about which there is a debate on Monday.

It is essential that research focuses on investment in infrastructure. Training and development for researchers is also crucial if we are to see swifter progress towards treatments and cures for dementia. However, it remains hard for an academic with a good idea to spin that off to a company, especially compared with the situation in America. The Government must do more to promote the commercialisation of research as these companies become a vital part of the ecosystem. Large companies and academia can then be partnered in the innovative collaborations that the Government seek.

Research on the provision of care is equally important. Four out of five people with dementia live at home. We want to keep it that way and to ensure that they can live there safely for as long as possible. Research comes in many different forms, including the identification of what works. We know that dementia costs the UK £23 billion, but arguably that money is not being spent properly or efficiently. Prevention is key. Avoiding unnecessary hospital admissions is vital to ensuring that funding is used effectively and, more importantly, makes a huge improvement in quality of life. Researching best practice in care is essential. An economic case developed by the Alzheimer’s Society estimated that if just 5% of admissions to residential care were delayed for one year as a result of dementia-friendly communities, there would be a net saving of £55 million a year across England, Wales and Northern Ireland.

There needs to be a change in the language we use when we talk about care. If we talk about weekly art lessons that are provided to help to improve cognitive function as therapy, rather than an activity, we could hope to see a change in attitude towards research and investment in this area. Many good ideas are having a positive impact in local communities. For example, Medway council, which covers part of my constituency,

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is promoting telecare as a means of supporting people with dementia, and there are lots of non-clinical treatments that could be further researched, such as the benefits of pets and petting animals for people with dementia, memory rooms and memory boxes. I have even heard of amazing innovative products such as wristbands that monitor someone’s usual actions so that they will detect if they have a fall. We need to consider all those things in the whole pod of research.

We should not forget to consider support for carers. Family carers of people with dementia save the economy £7 billion a year, but evidence shows that they struggle to do that, which can lead to avoidable crises in care, hospital admissions or early entry into care homes, all of which are very costly. The Dementia Action Alliance’s “Carers Call to Action” campaign, which I support, is calling for timely and tailored support for carers, whom I am sure we all agree are an important cog in the wheel of treating and providing for those with dementia.

On best practice, it is important that international collaboration includes the beneficial sharing of successes and failures. In utilising our resources, it is important that we do not duplicate unsuccessful investments and that we champion successful and effective progress. The summit should therefore ensure that all publicly funded dementia research data and results are made available, thereby allowing common factors in national research responses to be shared.

Sir Roger Gale (North Thanet) (Con): Before my hon. Friend moves deeply into the main subject of the debate, which is the G8 summit, does she agree that we need much greater public understanding of, and support for, those who are caring for people with dementia and those with the condition, which can strike not just elderly people, but younger people? Some of us remember a former and much-loved Member of this House who, while still an MP, suffered from the disease. This is something that we have to ram home to people.

Tracey Crouch: I agree entirely with my hon. Friend. It is important to note that society has made much progress in the past 20 years and that dementia is not the taboo subject it perhaps used to be. We have changed how we think about it and now treat people with dementia much better, but we still need to get away from the idea of saying, “Nan’s gone a bit dotty.” We have to understand that something can be done about dementia and that proper care pathways exist to ensure that people can live well with it, and we have to support carers as best we can.

On the G8 summit, I turn to my final but no less important point: long-term strategies. The Prime Minister’s challenge on dementia for England has provided a welcome focus on the treatment and care of people living with dementia and the search for a cure, but there is a danger that the focus will be lost, especially as the initiative is not UK-wide but covers only England. Many countries have dementia strategies or brain bank initiatives, and the UK needs a new long-term strategy, because the current one is due to expire in 2014. I would be grateful if—not today but soon—the Minister could outline his plans to evaluate the national dementia strategy for England and tell the House when he will commit to a new strategy following the current strategy’s expiration next year. Notably, the US has a dementia strategy in place until 2025, which means that we could

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be left in the embarrassing situation of the UK Government leading the G8 in a discussion on dementia without a national long-term commitment comparable with that of many of their international partners.

In conclusion, it is fantastic that the UK Government, under the Prime Minister’s personal commitment, are using the G8 summit to champion a more collaborative approach to preventing, treating and curing dementia, but it is essential that the legacy of this summit goes further than the G8 and that the declaration and communiqué of the summit makes firm long-term commitments to the doubling of research funding, to sharing best practice, and to delivering an international ongoing collaboration on defeating this devastating disease, which affects so many people and their families.

Madam Deputy Speaker (Mrs Eleanor Laing): Order. Several hon. Members have indicated that they wish to speak, but we have only one hour remaining, so I shall impose a limit of six minutes on Back-Bench speeches.

3.59 pm

Hazel Blears (Salford and Eccles) (Lab): It is a great pleasure to follow the hon. Member for Chatham and Aylesford (Tracey Crouch), my colleague on the all-party group. It is also a great pleasure to see you in the Chair, Madam Deputy Speaker. This is my first opportunity to contribute to a debate under your chairmanship, and I would like to congratulate you on your election.

While I am handing out congratulations, I would like to congratulate the Prime Minister, too, on the personal commitment he has shown on dementia. [Interruption.] Credit where it is due. Those who have the presidency of the G8 have an opportunity to name a subject around which they would like to mobilise the international community. In playing his card at the G8, the Prime Minister has chosen dementia. I commend him for taking that action. I believe that international collaboration will be the way to achieve the next big leap forward, particularly on the research agenda. I support what the Prime Minister said at Prime Minister’s questions yesterday—that this issue is not a matter only for world leaders, important though they are; it is a matter for every single person in the community, whether they be a world leader, a health Minister or an ordinary citizen. Everybody has a role to play.

I shall start with the people who have dementia, along with their families and their carers. When we promote policy, do collaboration or talk about international research, we must constantly remind ourselves that the people with the disease and their carers and families are usually the most expert people in the system. Therefore, the services that we provide, the quality of care and the innovations we develop have to be shaped and guided by those people. We must empower them to make their voices heard in this debate. When we bring together our creativity, our imagination and the huge brain power in the research community, we must always bring to this issue, too, our own humanity. We must remember that people with dementia are valuable and loved human beings. If we can keep that at the forefront of our minds, we will make progress and be doing absolutely the right thing.

During Question Time yesterday I mentioned a lady called Joy Watson. I met her a little while ago. She is only 55, but she has early-onset dementia. Her family

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was devastated. When she went into shops, she might be a little confused over her change or what she needed to order, and the shops—and sometimes the customers—would be irritated with her, tutting and asking her to hurry up. She took to wearing a badge, which she designed herself, saying “I have got Alzheimer’s; please be patient with me”. She should not need to do that. Nowadays there is a scheme—I think it is called the purple angel scheme, and Joy is promoting it—so that people can wear a purple angel on their T-shirts as a means of raising awareness in every single part of our community.

In Salford, we have worked on this agenda for a number of years. We have just formed our dementia action alliance, with 30 organisations now committed to action plans to make us, I hope, the first dementia-friendly community in Greater Manchester. As well as health, education and housing bodies, we have the Lowry arts centre and our shopping centres included in the scheme. I think we have the first private-hire taxi firm in the country to be involved in this, Mainline Sevens taxis. It has trained 400 drivers and has an account system so that people with dementia do not have to fiddle with their money when they get in a taxi. All those groups are now dementia aware. That shows the really practical things that can be done.

On the research side, I am delighted to say that tomorrow, Salford university will launch the Salford Institute for Dementia, bringing together the faculty of health and social care with departments dealing with the built environment, computers, IT, arts and media—showing the multidisciplinary approach that will apply. That group will draw together and disseminate research on living well with dementia. I think this is a fabulous academic development.

Mrs Moon: I cannot say how much I admire my right hon. Friend’s championing of this cause. When it comes to universities, there are examples of research that have focused on ideas for prevention. We heard yesterday from Professor A. David Smith from Oxford about the vitamin B6 and B12 levels as a means of achieving this. Currently, it is not possible within the health service to have a test of homocysteine levels that would help to identify the problem. Could we not put that prevention in place; should we not be doing that now?

Hazel Blears: My hon. Friend is absolutely right. I was horrified to learn yesterday that only 0.1% of research on dementia is spent on prevention. In every other area of public policy, such as education and social mobility, we are aware of the importance of investing in prevention, but in this area there is virtually no grant support, and that must change. I understand that in Norway and Sweden, tests for dementia are the norm. They are cheap once the investment has been made in the equipment, and the vitamin B12 research looks extremely promising. I hope that when the Minister responds he will say that that is something that our own national health service should take up.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Is the right hon. Lady aware of the excellent work that is being done in Plymouth, not just at the university but, much more important, by the local authority and the Royal Navy at Devonport? They are taking a

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lead by ensuring that all their employees are aware of the dementia issue, and that, if they need time off, they can have it in order to look after their relatives.

Hazel Blears: I am delighted that the hon. Gentleman has mentioned Plymouth, because it is one of the pioneers in this area. Plymouth, Torquay, Bradford and other towns all over the country want to ensure that dementia is not something shocking that we do not know how to deal with, and that everyone is dementia-friendly and aware. They are tackling the stigma, which is a huge issue. People do not like to talk about the fact that their families and friends are afflicted with this disease.

The search for a cure is essential. No one wants to have dementia, and everyone wants to be able to cure it. However, at the G8 I want just as much importance to be ascribed to research on the quality of care. The Evington initiative, which is backed by a number of business leaders including Terry Leahy—who used to chair Tesco—and Sir Marc Bolland are putting their weight behind that initiative. They are asking two questions. First, how can we change the system so that it is driven by users and carers rather than simply by clinicians and producers? Secondly, how can we establish a good, rigorous evidence base in relation to therapeutic interventions, quality and consistency of care and tackling stigma, so that clinical commissioning groups can be confident that the services they are commissioning actually work?

I think that the research is very exciting, but we are not likely to find a cure for 10, 15 or 20 years, and in the meantime 800,000 people are living with dementia. At present, there is virtually no evidence base relating to the quality of care. “Singing for the brain” is fantastic, but does it work, and if so, why does it work? Then there are the arts, the drama, and all the memory work that goes on. We need that rigorous evidence base, so that the commissioners can take the right packages off the shelf.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): Will my hon. Friend give way?

Hazel Blears: I am afraid that I do not have enough time.

We also need research on prevention. The Alzheimer’s Society is working on a system that helps care home staff to reduce the use of anti-psychotic drugs by intervening in other ways to deal with people’s behaviour. That system is being rolled out in 150 care homes, and has reduced the use of anti-psychotic drugs by 50%. It is saving money, and it is making a huge difference. The G8 presents us with a fabulous opportunity to press for further research. I do not want it to be a one-off: I hope that there will be another summit of this kind next year. I also hope that work will continue between now and the next summit. This issue is not going away—it will be with us for a long, long time—and it would be fabulous if we could secure that international collaboration.

I invite the Minister to visit our university institute after we have launched it tomorrow, so that he can observe the fabulous work that is being done there and,

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perhaps, meet some of the people in Salford who are taking a whole systems approach that I think will prove helpful.

Let me end by saying that we owe a duty to every single one of the people who have dementia or are caring for people with the condition. It is the worst thing in the world to lose the person with whom you once had a connection. We have an absolute duty to do whatever we can, here in the House and in our communities, to give those people support and help.

3.59 pm

Richard Graham (Gloucester) (Con): It is a pleasure to follow the right hon. Member for Salford and Eccles (Hazel Blears), who has spoken so well and done so much work on this subject along with her colleagues, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) and the right hon. Member for Sutton and Cheam (Paul Burstow). All three major parties now have at least one significant dementia champion to raise this important issue. I know that the Minister will enjoy responding to the debate, because he has covered a number of debates on the subject before. Much has been said on dementia, and much action has been taken. The right hon. Lady was right to mention the Prime Minister’s initiative and his championing of this issue. Many people are suffering as a result of dementia, not only those suffering directly from the disease, and there is still no cure, so it remains a significant challenge for science and society.

I have just a few points to add to what has already been said. The Minister will recall that I led a debate recently in Westminster Hall on what was being done about dementia in Gloucestershire and on the ways in which I believed we had adopted best practice. However, a critical question is: do we really know what best practice is? How do we measure the quality of what is being done in our local hospitals and care services? How do we measure the contribution of organisations such as the Barnwood Trust, a mental health charity specialising in these conditions which we are lucky enough to have in our area?

As the right hon. Lady said, it would be useful if the Minister could share his thoughts on a guide to best practice, not only for commissioners—although I agree that that is important—but for MPs. Representatives of the Gloucestershire family of NHS services recently told me in a meeting that they had received an award for the care and services they provided for old people in general and for dementia sufferers in particular. That was terrific news—I am always delighted when people win an award—but it would be useful to know what we are doing best, and what is being done better in different areas, so that we can have a nice, easy frame of reference. People could then see whether their area offered a four-star or a five-star dementia service, for example, and we could assess how we might attain a higher standard if we did certain things differently.

Debbie Abrahams: Is the hon. Gentleman suggesting that, in addition to building up the evidence base through randomised controlled trials that establish a causal relationship between therapies and outcomes, some kind of action-based research would be appropriate? Such research could be carried out and interventions could be offered and evaluated while providing the service at

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the same time. It would be a case of learning as we went along. Does he agree that we need different approaches because of the scale of the issue that we are facing?

Richard Graham: I think I agree with the hon. Lady. Different things need to be tried. Singing and music were mentioned earlier. In my mother’s case, they were the last things she was able to relate to and enjoy before Alzheimer’s closed over her. So I agree that different things are always worth trying, and that is where the charities can play a role as well.

My first question to the Minister is: could we have star ratings for dementia services and, if so, how would we identify and measure best practice? My second point relates to how we are using the Prime Minister’s initiative to get dementia on to the G8 summit agenda for the first time. We should work with other countries on this. A number of us have received briefings suggesting that the United States and France, among others, are also doing great things in dementia research. Should we not all be able to share our findings? Perhaps we could have what is known as a global inter-operative data sharing base, so that all the work being done by organisations such as Alzheimer’s Research UK could be shared, rather than being duplicated. Effort could then be spent on taking research forward, rather than replicating it.

The aim of trying to join up what organisations around the world are doing is a key reason for the Prime Minister getting this topic on to the G8 summit agenda, and I hope that the result will be an international plan involving more pooling of thinking, research and ideas. I sense that science is beginning to feel more confident about finding solutions to this ghastly disease, and if the G8 summit can give an enormous turbo-boost to pooling research and getting closer to finding solutions, the actions of the Prime Minister and the Government will have been worth while, not only for the 800,000 people in this country who have dementia today but for the many millions who will suffer in the future.

4.14 pm

Steve Rotheram (Liverpool, Walton) (Lab): In my first speech in this House this year—I believe it was on 10 January when we debated dementia and mental health—I discussed my mother’s case. The debate was filled with passionate contributions from Members across the House, although I was particularly moved by the personal accounts from my hon. Friends the Members for Bridgend (Mrs Moon) and for Oldham East and Saddleworth (Debbie Abrahams).

I also spoke of my pride that a decade after my mother’s passing the city of Liverpool earmarked 2013 as the year in which it would focus efforts on dementia awareness and promote innovative approaches initiated by organisations in our city. Our work complements the findings of the report from the G8 summit on dementia. Right across the Liverpool city region, our health care providers, arts organisations and academic institutions have embraced a collaborative approach to increase awareness of dementia, early diagnosis and patient-friendly treatment, with the mission being to make dementia everybody’s business. I stand in this House proud and confident that Liverpool is well on its way towards creating dementia-friendly environments in workplaces, public areas and communities.

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One of the most high-profile projects—the Prime Minister might like to bring it to the attention of G8 colleagues—is the National Museums Liverpool House of Memories project, which now has a staggering 1,000 participants. Since I spoke on the issue earlier in the year, the team, led by David Fleming, has developed its innovative approach even further, branching out into the housing sector, in partnership with local registered social landlords. In total, four north-west housing providers have joined together to fund a re-modelled initiative which has taken the House of Memories project—using art, dance, music and creativity—to 600 homes. That is set to be further expanded next year. I am pleased to report that the ambition of the House of Memories team knows no bounds. Despite our year of dementia finishing in just a few short weeks, the team already has an even more ambitious plan for 2014 to help dementia patients.

I made it clear in January that I did not see any reason why the project running in Liverpool could not be extended across every region of the UK, so it is particularly pleasing to be informed that the Minister’s Department has confirmed that £135,000 will be awarded to take the House of Memories project to the midlands region in March next year, and I thank him for that. As if that were not enough, the team are even developing an app for iPhones and iPads on behalf of, and working with, dementia sufferers, which will also be launched next spring.

The House of Memories is by no means the only successful project operational in Liverpool, so I make no apologies for bringing a number of other local initiatives to the attention of the House. The unique Sedgemoor specialist dementia support centre was opened in Norris Green, on the border of my constituency, in May, at a cost of £1.2 million. The centre features a high-tech, interactive 4D theatre, where people can immerse themselves in the sights, sounds and even the smells of the past, through old videos, cinema footage, photographs, music and even relevant scents, which trigger reaction and stimulate conversation.

There have been more highlights of Liverpool’s year of dementia. Everton in the Community, the community arm of Everton football club, is performing reminiscence work with Mersey Care. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) mentioned universities, and Liverpool Hope university is providing a dementia centre of excellence, which is a physical location where members of the public, clinical services, charities, businesses and third sector organisations get the chance to meet and share expertise.

I pay particular tribute to the React service in Liverpool, the personal care services, community support service and external day services. I also praise Age UK Liverpool, Telecare, Livability and CEDAS for the work they do. Discussions are at an advanced stage to refresh the city’s joint strategy for dementia and ensure that the dementia alliance is developed and fully operational for 2014.

I urge the Minister to spend time with me, if he is going to Salford, to see first hand the differences that we are making on Merseyside. The G8 summit on dementia gives us the opportunity to push for more research into a whole host of dementias, and highlights the innovative approaches to tackle the condition—and in that Liverpool leads the way.

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4.20 pm

Paul Burstow (Sutton and Cheam) (LD): It is a great privilege to take part in this debate and to be presided over by you, Madam Deputy Speaker, for the first time. I congratulate the hon. Member for Chatham and Aylesford (Tracey Crouch) and the right hon. Member for Salford and Eccles (Hazel Blears) on their tenacious pursuit of these issues and on ensuring that we have had two Back-Bench business debates on the subject in less than a year. That gives notice of the fact that this is an issue about which the House and its Members feel passionately and to which they want more attention paid.

Last Thursday, I took part in a local dementia forum in my constituency, which was organised by the Sutton Alzheimer’s Society. It brought together a range of organisations to listen to and engage with people who are experiencing dementia—either as carers or as sufferers who have the diagnosis and are living with its consequences. That was an incredibly powerful experience. At the heart of this issue is how we ensure that people have a good life and maintain good relationships, because dementia can rob them of that. We need to think about how we can ensure that people, whether they be a professional, a carer or someone who is working in another part of the public or private services, understand and are aware of the issues about dementia. We need to build a community that is more friendly towards those who suffer from dementia. Good communication is at the heart of that. The one message that all of us who were speakers at the event got from both the carers and the people with dementia was to slow down. We were gabbling and talking at great pace, because we were trying to get across too much in too little time. With just over three minutes left, I will not manage to achieve that requirement now.

I want to take a slightly different tack from the contributions we have heard so far and argue that the G8 summit on dementia needs to address the impact dementia will have on the development of low and middle-income nations across the planet. As Dr Margaret Chan, the director-general of the World Health Organisation, says:

“The need for long-term care for people with dementia strains health and social care systems, and budgets. The catastrophic cost of care drives millions of households below the poverty line. The overwhelming number of people whose lives are altered by dementia, combined with the staggering economic burden on families and nations, makes dementia a public health priority.”

That is why having a G8 summit on it is correct.

We are living through an extraordinary time in human history. A revolution is taking place on this planet, which is remaking societies, the state and so much that we have taken for granted. It is really a revolution in terms of human survival. We are living longer, which is something that we should celebrate. It is a triumph of human ingenuity that is all too often portrayed as some sort of disaster. It is not a disaster, but something that we should celebrate.

Let me put some numbers into my argument. In 2010 it was estimated that, across the world, 35.6 million people had Alzheimer’s disease and other dementias. That number will increase to 66 million by 2015 and to 115 million by 2050. The majority of that increase will not fall in the developed world; it will be in low and middle-income countries where more than 70% of people with dementia will be living by 2050.

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As I have said, the number of people with dementia in 2050 will rise to 115 million, but the number of people who will develop dementia worldwide between now and then is estimated to be 600 million, which is roughly one new case every four seconds. In the UK, the national dementia strategy, which, as we have heard, runs out next year, and the Prime Minister’s dementia challenge, on which I had the privilege of working when I was care Minister, recognise the challenge posed by dementia, that dementia is not a normal part of ageing and that concerted action is required.

The G8 summit requires a focus that is not just about the developed world’s research spend; it must also understand the impact of dementia elsewhere in the world.

Oliver Colvile: Is my right hon. Friend aware of the stigma of dementia in black and ethnic minority communities? I recently took part in an inquiry in which it became apparent that that is an issue.

Paul Burstow: The hon. Gentleman’s point is spot on and leads me on to my next point about an example of research in India. It is estimated that in 2010 there were 3.7 million people with dementia in India, which will rise to more than 14 million by 2050. Approximately half those people will be over 75 and almost 2 million will be over 90. There is a serious lack of awareness about the issues in low and middle-income countries, especially those in Africa. Almost three quarters of people with dementia will live in those countries and that is why I want to ensure that the Minister, as he feeds back into the process of preparing for the summit, will make sure that such issues are on the table.

Hazel Blears: The hon. Gentleman is bringing a new perspective to the debate and he has made me think about the commitments made on AIDS and HIV. We need only think how ambitious the world was in tackling HIV at a time when many of us thought that it was an irresolvable problem. The promises on antiretroviral drugs were hugely ambitious and the progress we have made has been tremendous. Will he join me in urging the Minister and Prime Minister to be just as ambitious on this agenda as we were on HIV/AIDS?

Paul Burstow: As a number of us have made clear, the global scale of the challenge is such that it requires the galvanisation of a global response. The summit is a unique opportunity to do that, but it must have the reach and ambition that the right hon. Lady is talking about. It could take as its model the successful work that has been done so far on HIV.

Although epidemiologists often say that the figures I am citing are undercounted, the disease is none the less regarded as the second-most burdensome chronic disease and, among all those with chronic non-communicable diseases, accounts for almost 12% of years lived with disability.

In most developing countries, the problem with dementia is hidden. I have mentioned India, and the “Dementia India Report 2010” was published by the Alzheimer’s and Related Disorders Society of India, helped partly by funding from the UK Alzheimer’s Society. It has

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provided invaluable insight into the prevalence of the disease and ways in which India can respond to the challenge.

Let me ask the Minister a couple of questions. The first is about the research spend. The hon. Member for Chatham and Aylesford asked about the ambition of doubling that spend every five years, but it is not good enough for just our Government to do that. We need other Governments to agree to the same thing at the G8 summit. We need to know how much is being spent in the G8 on such things. There is no published figure—that is extraordinary—and when I tried to find a figure for the debate, I could not. We need a baseline to know whether we are making progress.

This country’s leadership on such issues will be in doubt if we do not hear soon that the Government intend to have a new dementia strategy. I hope that the Minister will be able to give us some indication of when that will take place. Finally, in having such an ambition on research, we need to learn from the journey that cancer has gone on. Cancer research has for many years had ambition, reach and strategy. We have an Institute of Cancer Research and it is time this country had the same for dementia. That could deliver such a big prize for all our citizens.