encouraging small community-based businesses
encouraging small community-based businesses

The most important issue in Aberconwy, like much of the rest of the country is jobs and the economy.  The latest estimate is that there are 3,400 people in the constituency looking for work. Last year in his conference speech Ed Miliband talked about changing our economy to support producers and tackle predators. A key component of this is allowing small and micro businesses to compete on a level playing field.

The Welsh Labour government was elected on a manifesto which included embedding a more entrepreneurial culture in Wales.  My private member’s bill would be aimed at encouraging home-grown small businesses. The first area where we need to prioritise local SMEs is in public procurement.  I’d set a limit on the proportion of the market in a particular area any particular bidder for a public sector contract could have.  It makes sense from a point of view of local regeneration and economic opportunity to prioritise smaller local businesses, but it also makes sense for the procurer.

Having too many eggs in one basket, or even a few, baskets, can put the public authority in a difficult position if there are problems with a provider and can also, particularly if there are takeovers, enable providers to eliminate competition and then hold the public authority over a barrel with regard to price. Secondly, too few public sector procurement processes are won by SMEs because of the way they are structured.

We should look at similar provisions to those in the US, where the Office of Government Contracting requires that a certain proportion of expenditure has to go to SMEs and some procurement exercises are reserved solely for SMEs. The OGC also has a remit to focus on ensuring small, disadvantaged, and women-owned small businesses get their fair share of public procurement.  Perhaps, because the US has historically had much less public provision and has therefore focussed more on managing market failures it is more progressive than us in this area. Of course these are not the only areas for action to support SMEs. Late payments, often by large public sector bodies, are a perennial problem where action needs to be taken.

We also need to find ways to encourage and incentivize banks to lend to SMEs, social enterprises and disadvantaged groups and encourage local SMEs and social enterprises to come together perhaps using co-operative models in the way independent private parma ham producers in Italy do for marketing purposes. I hope we will see some suggestions on this from the Welsh Commission on Co-operatives and Mutuals. Finally, we’re increasingly seeing certain types of goods being sold on the internet, making internet trading platforms a key gateway to the market.  With the scandal of Amazon avoiding paying corporation tax, many of us have been looking for alternatives. But not only do products sold through Amazon appear higher up in internet searches, Amazon can impose conditions on traders to prevent them supplying goods direct. Where a provider is in such a dominant position, it is important that they are regulated. My bill would require the new Competition and Markets Authority to look at such arrangements to ensure the fees charged are reasonable and that their business practices are fair. We could also consider whether any changes are needed offline too.

There’s currently a debate raging in the North Wales media about whether supermarkets should have an aisle for local produce as in France or whether that would adversely affect local shops. There are a lot of ideas out there. Let’s look at the best evidence from elsewhere and adopt them to build a Britain that is far more open and encouraging to small community-based businesses.

Mary Wimbury is the Labour candidate for the target seat of Aberconwy. A version of this article was originally published on progressonline

Boosting Local SME Sector and Jobs Growth
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