Skip to main content

Entrepreneurs

Volume 459: debated on Thursday 3 May 2007

Women’s entrepreneurship is a key element in the UK’s productivity and competitiveness. Each year, businesses owned by women contribute about £60 billion to the UK economy which is why, for example, we set up the taskforce on women’s enterprise. A national network of 1,000 female entrepreneur ambassadors is being recruited to support women setting up their own businesses.

I know that I have had a go already, Mr. Speaker, but I am due for another go.

I am grateful to the Minister for that reply. Does she share the concern expressed by the CBI and the Federation of Small Businesses that the recent Budget proposals to increase the small firms corporation tax rate is very damaging for entrepreneurs and definitely will not encourage female entrepreneurs? Does she agree that the majority of female entrepreneurs run non-capital-intensive businesses, and so obviously will not benefit from any increase in capital allowances? This is proving to be a very damaging and short-sighted Budget measure. Given her influence in the Cabinet, will she speak to the Chancellor before it is too late?

I am afraid that I cannot agree with the hon. Gentleman. As he knows, the main rate of corporation tax was cut quite dramatically in the Budget, for a very good reason, which is to maintain the competitiveness of the UK economy. At the same time, there were changes to the UK small business rate, with the intention of trying to encourage investment in small businesses. That is the right environment in which small businesses should be operating to incentivise investments within what is still a very competitive tax regime. The important thing is to get our rate of female entrepreneurship up closer to the rates in the US, for example. We have a huge challenge in trying to close that gap, but I am delighted to report to the House that we are making very good progress.

The Minister will be aware that one of the reasons why many fewer women are becoming entrepreneurs in the UK than in the US is their difficulty in accessing financing. She will know that women start with only about one third of the capital that men get and that they are charged higher interest rates; indeed, many are forced to resort to their credit cards. What strategy is she pursuing with the banking industry in order to change that fundamentally?

The hon. Lady makes an excellent point. It is sometimes more difficult for women to set up their own businesses than it is for men. One of the factors that could be involved is that they are getting a less good deal when they walk into a bank compared with a man in a similar situation. If that occurs, it is completely unacceptable. My right hon. Friend the Minister for Industry and the Regions is already conducting talks and is involved in negotiations with the British Bankers Association to find out whether there is a penalty involved in being a woman and to see what measures the banking industry might take to overcome that.