My Lords, our future economic success depends on encouraging more women to start and grow their own business successfully. Matching US levels of female entrepreneurship would contribute an additional estimated £42 billion to the UK economy per year. We are implementing the recommendations made by the Women’s Enterprise Task Force, and are working closely with the banks to ensure that women do not face barriers in accessing finance. This includes continuing to implement the Aspire fund, which provides equity funding and increasing networking support for women-led businesses.
My Lords, I thank the Minister for his reply, and declare an interest as a trustee of Arcubus, a charity that has been set up to bring microfinance opportunities to Mozambique and Tanzania. In these countries, the most effective start-up funding is that given to women, who use immense ingenuity and hard work with very scant resources to set up self-sufficient businesses. By contrast in the UK, women are only half as likely to start up their own businesses as men. My honourable friend the Member for Solihull has started an all-party group on women in enterprise. Will the Government consider reinvesting in initiatives such as the Adult and Community Learning Fund, which is a local resource for women, to give them both the information and the confidence to start up businesses?
I am not sure whether that was a win for the Contents or the Not Contents.
I agree with the noble Baroness. We in the UK have provided funds for ethnic minority groups. We also have an Aspire fund, as I have said, which provides about £12.5 million. It was launched in November 2008, and is aimed at co-investing and investing in women-led enterprises. Additionally, the community development finance institutions have £50 million, and the regional development agencies are also doing a great job. Collectively, we are doing a huge amount to inspire and finance small businesses that are women led.
My Lords, we have plenty of time. Shall we hear first from my noble friend Lady Whitaker, and then from one of the other noble Baronesses who stood up?
Is the Minister aware of the survey of SME finances, conducted by Warwick University, which found that the interest rate that is charged on loans to female-owned businesses was 1 per cent higher than that charged to male-owned businesses? Is this still the case, and if it is, can the Government do anything about it?
The 2004 report showed that women-owned businesses paid more for term loans compared with male-owned enterprises. However, the 2007 report suggests that there are no gender differences in the cost of term loans. I do not often compliment the banks, but I have to give credit to the Royal Bank of Scotland, Lloyds and HSBC, which have a whole variety of schemes to support women-led businesses.
I am not sure whether that relates to the original Question or to the question that I am addressing now. We are, as I have said, a nation of 4.8 million SMEs. It is estimated that there are some 710,000 women-led businesses. The reality is that if we had the same percentage of women in business as America has—this is very much a cultural thing—we would have another 600,000 to 700,000 businesses in the UK. This is something that we have to put right.
My Lords, given that the Sex Discrimination Act is now 40 years old, that only 5.2 per cent of executive directorships of the British FTSE 100 companies are held by women, and that, believe it or not, 25 of those companies do not have a single woman on their board, what extra resources and plans will the Government use to ensure that women’s entrepreneurial talents will emerge to the necessary managerial levels for the UK to compete successfully in an increasingly global market?
As I said before, it is not acceptable that 25 per cent of the FTSE 100 companies do not have women on their boards. In my view, progress has been far too slow; a large number of extremely able women just below the boardroom level are unable to get onto boards. Therefore, we today published a letter to the Financial Reporting Council, basically asking every public company to explain why they do not have a woman on their board, and we will name and shame those companies. We need to put this right.
My Lords, is the Minister prepared to explain why we do so much worse in this area than, for example, Canada? In Canada, the number of women in professional occupations in business and finance has risen by more than 50 per cent in the past decade, four out of five businesses are now started by women, and almost half of all small and medium-sized companies have at least one female owner.
It is important to put this in context. I think we do match the G7 in terms of the percentage of women in business, but we do not match the US. The Women’s Enterprise Task Force is implementing those recommendations, but it needs a partnership between business, the RDAs, Business Link, and Enterprise UK. The Prime Minister and I had breakfast this morning with 20 leading women across a whole range of sectors. We need better role models, better mentoring and a fundamental change of culture in the UK.