Meeting with Lord Mandelson

Meeting with Lord Mandelson

Meeting with Lord Mandelson image
Lord Mandelson
Image courtesy of Bruce Adams

A couple of weeks ago I was invited to be a part of a group meeting with the Secretary of State for Business, Enterprise and Regulatory Reform, Lord Mandelson at the ICC in Birmingham.

The meeting would consist of a number of other fellow business owners from the West Midlands, plus representatives of various Business organisations from across the region. Answering questions were Peter Mandelson, plus Mick Laverty – Chief Executive of Advantage West Midlands, and Ian Austin – Regional Minister for the West Midlands. I’d estimate there were about 100 people in attendance in total and I was lucky enough to be sat front and centre to watch politics in action!

The hour long meeting began with the announcement of the Transitional Loan Fund for the West Midlands – a £4million fund to help established and viable Small Businesses within the region who are experiencing short term cash-flow issues with the goal of preventing them from going under. Mandelson advised that this fund had been made available in part due to the confidence gained by the way the Longbridge Rover crisis was handled within the region. He re-iterated that the West Midlands remained an important base for both the manufacturing and service provision industries.

Talk naturally turned to the “Credit Crunch” and Mandelson stated that the Global Financial Market had not faced a situation like this since the 1930’s. The goal for the Government would be to keep cash-flow for SMB’s running and as such, they had taken steps to ensure that suppliers to the Government would be paid within 10 days – reduced from 30 days. When queried on this statement later in the day, he did clarify that this applied to suppliers to central Government only – local Government suppliers were not covered. Our experiences as a supplier to to Local Government suggest payment terms in excess of 90 days, and many others I heard from in this meeting suggested this was the norm to.

Mandelson went on to suggest that the Government realised that they needed to apply pressure to big businesses to apply the same payment terms to their suppliers. Ain’t that the truth!

Finally, there was the announcement that the Government would be stepping up pressure on banks to provide credit to SME’s as they have before.

The remainder of the hour was then spent with the Minister answering questions from the audience. Here are a selection of those questions:-

Q: Bruce Undi – the Infrastructure in the West Midlands is awful. Congestion and lack of facilities causes economic restrictions. Additionally the recent change in ratings of Industrial properties is causing issues.

A: Regarding the Industrial Properties rating scheme, he had heard these complaints before and had flagged them with the Chancellor who is investigating. Regarding Infrastructure issues – Government is committed to helping enterprise move these large projects along – at the moment they are taking far too long.

Q: Andy Mangle – Does the Government have any plans to help businesses where Debtors go bad?

A: The Government is looking at flexibility of payments for both VAT and Taxes.

Q: Peter Steer, IOD – Provided examples of members of the IOD having to wait 90 days+ for payments from Government.

A: Asked that the examples be given to his aide so they could be investigated.

Q: Mike Hill – provided an example of an SMB he knows having their Interest rate increased and their Overdraft limit reduced – and only given 48 hours to comply. The bank in question was RBS.

A: What’s important for RBS, re-assuring words apart, is that what is happening at Head Office level is being reflected at Branch level. He had seen examples of Branch offices taking instruction from Head Office too literally. Would like to see banks providing hotlines directly to Head Offices so that any issues can be escalated for resolution. Advised any businesses experiencing problems with Branches to seek advice from Head Offices.

Q: Parminder Singh, a retailer – Retailers are hampered by legislation, business crime and pressure from large retailers. Profits are going down and costs are rising. Believes retail is a stepping stone for the working classes to own a business.

A: Government are working hard to improve consumer confidence which will in turn help local retailers.

Q: Rob Hill – Credit Insurance is becoming a huge issue for exporters. Credit Insurance is being withdrawn or becoming overpriced, meaning SMB’s are having to take the risk of exporting on themselves – with the obvious consequences if things go wrong.

A: Had been provided with a number of examples of this problem and is investigating.

Q: Peter Matthews, Black Country Chamber of Commerce – Government needs to improve support for export businesses.

A: Government realises importance of foreign markets and is committed to supporting growth in these areas.

Q: Barry Williams – suggested the Government should initiate a program of short term help for businesses so that they don’t have to lay off staff. A similar scheme was run in the 1980’s to great success.

A: Agrees this is a good idea, even if the original idea in the 1980’s came from the Conservative party, a good idea is a good idea. 🙂

Q: There are too few training initiatives to encourage youngsters to take up Manufacturing roles within the West Midlands.

A: Absolutely agreed. Manufacturing needs to show youngsters that such job within it’s industry are exciting. It needs to demonstrate that such businesses are a place to sparkle and excite youngsters imagination at a school level.

Q: Louise Hewitt – Concern over the Agency Workers Directive. Temporary Staff are now getting Permanent Staff benefits after as little as 12 weeks in a role.

A: Suggested that opening a dialogue with Regional Trade Union leaders was the way to register opinions on such matters effectively.

Q: Bob Osbourne – Salaries keep going up, workers benefits are increasing all the time. Government should consider the impact on business owners and the cost to SMB’s before implementing such reforms.

A: Admitted that Government cannot know that cumulative impact of all legislation it passes.

Q: Alison White, Business Link – Energy Suppliers are incredibly laid back and unprofessional when dealing with SMB’s. Gave an example of one energy supplier charging an SMB an incredible amount for a new Electricity Supply, then taking six months to complete the installation.

A: Mandelson had not heard this before. Many many voices in the audience backed up the claim that Energy providers are taking liberties with SMB’s.

***

One amusing segment came when a representative of the bank Lloyds TSB spoke up from the audience. He was roundly boo’ed and heckled by everyone in attendance. 🙂 He did go on to suggest though, that the governments “Small Firm Loan Guarantee Scheme” is of little use – with an APR of 15% it simply wasn’t competitive and banks aren’t interested in the scheme. Mandelson countered that the banks need to tread carefully – how they deal with customers in the next six months will determine relationships with clients over the next five years.

There was also a question about the appalling state of the housing market and how it made for truly terrifying times for suppliers relying on home sales. Mandelson responded that he felt it would be the first Quarter of 2010 before the housing market improved significantly, and it would be incredibly difficult to encourage companies to invest in building new homes when there simply isn’t a demand at the moment.

A few people commented that there was a definite feeling of this being a “frightening time” for SMB’s – order books are empty, and many people were asking the Chancellor to be kinder to SMB’s in the interim.

After an hour of questions, Lord Mandelson was hurried off to his next appointment but before he he went he suggested that anybody who had questions that he hadn’t addressed today was more than happy to drop them to Steve Kennett of the Government Office of the West Midlands – e-mail address st***********@go**.uk

Overall – a very interesting meeting which I was glad to be invited to. Despite chatter about “sleaze” and jokes about Mandelson’s various publicly documented misdemeanours in the mingling with fellow business owners before and afterwards, Lord Mandelson came off very well in person and seemed very aware and turned on to the issues facing SMB’s.

It was very interesting to get involved in such an event and seeing Government debate up close and personal!

RICHARD TUBB

Richard Tubb is one of the best-known experts within the global IT Managed Service Provider (MSP) community. He launched and sold his own MSP business before creating a leading MSP media and consultancy practice. Richard helps IT business owner’s take back control by freeing up their time and building a business that can run without them. He’s the author of the book “The IT Business Owner’s Survival Guide” and writer of the award-winning blog www.tubblog.co.uk

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