Shriti Vadera – 2008 Webchat on Business and Competetiveness Issues
The text of the webchat from Shiriti Vadera, the then Business Minister, on 17 September 2008.
Moderator says: Number 10 will be hosting a webchat on 17 September with Shriti Vadera, Parliamentary Under Secretary of State for Business and Competitiveness at the Department for Business, Enterprise & Regulatory Reform. Following the publication of the broadband review on 12 September and the recent manufacturing review, she will be answering questions about the Government’s strategy for business.
Moderator says: There’s still time to get your questions to us in advance of the Minister’s arrival. Just use the box below.
Shriti says: Hello – I am looking forward to answering your questions and to having a discussion.
Graeme Pirie: The government claims to be on the side of small business. In the UK more than half the economy is generated by small business yet they continue to increase taxes year on year. Why?
Shriti replies: I know that small firms are the life-blood of the economy, not only do you generate more than half of GDP, you are more productive and employ more people than large businesses and very importantly you challenge large businesses. I appreciate that the burden of tax is felt more keenly by smaller firms. That is why we have a small companies rate of tax which is lower than that of large companies and lower than the level we had in 1997. It is true that this has increased in recent years but that is because that very attractive rate became an avenue for self-employed people to incorporate into businesses and unfairly reduce their tax bill. But to ensure that we supported small businesses that choose to in invest and grow we introduced “the annual investment allowance” which provides full tax relief for their capital investment and we have a payable R&D tax credit of 175 per cent for our innovative small businesses. We are seized of the need to make the tax system simpler for small businesses.
A Coger: I saw the Government’s broadband review recommended that no public money be spent on broadband. But why not use some of the TV licence money to pay for poor and elderly people to get broadband in the same way that it is being used for them to get digital TV? That would benefit both them and the wider economy.
Shriti replies: More than 99 per cent of households have access to Broadband but the take-up is 58 per cent – still one of the highest in the world. We continue to look at why people do not take up Broadband when they could and find that lack of interest, lack of confidence, and lack of skills are a major reason. Cost is not often the reason people do not connect themselves to Broadband. And, in any case, while we would love to use the BBC’s licence fee money for this it does in fact belong to the BBC and not to us! We have to find a broader approach that encourages people to feel comfortable with the internet.
I am very excited by technological possibilities of people connecting to the internet by any means they feel comfortable with, for examples telephones or television and not just PCs. Digital inclusion is a key Government concern. That is because it is fair and just but also really important to the economy. We shall be publishing ideas for consultation next month on how to increase access, particularly for poor and elderly people.
Holly: Why are many Internet service providers “capping” people’s internet connections in homes?
Shriti replies: Internet service providers do that because very heavy users are using more capacity in effect than they have paid for. For me the most important thing is that customers are told in advance and are clear about how their service will be provided and that it could be capped under certain circumstances. OFCOM the Regulator has therefore agreed with all the main internet providers that they will tell their customers at the point of sale what they can expect so that everyone has a choice. If you or anybody you know finds this is a problem you should contact OFCOM (www.ofcom.org.uk).
sean o’callaghan: The debate over high speed broadband is really interesting. In my view, having fibre to the home is the equivalent to having motorways for freight. The danger is that if the Uk allows other countries to update their internet infrastructures ahead of us then there will be a talent-drain out to those countries. If the Uk wants to stay competitive then it is vital we invest in the infrastructure of the web. What is the Minister’s view?
Shriti replies: It is exactly because I was worried about other countries getting ahead of us that I commissioned Francesco Caio to do a Review of how the UK should get high speed Broadband and not be left behind. Ten years ago we had a vision for digital Britain but virtually no Broadband connections. We have made that vision a reality today with one of the most extensive Broadband networks in the world. 99.8 per cent of households have access to Broadband and 58 per cent of households are connected. But we now want it to be faster and better and of course we want everyone connected. What Francesco found was that in fact we are not being left behind although we must not be complacent and Government must show leadership and stay vigilant. I have every intention of doing that. He also gave us a specific number of recommendations to ensure high speed Broadband is delivered, which we will be taking forward. BT and Virgin have already made announcements which would provide about half the population with access to high speed Broadband in the next couple of years. And that is just the start. I also think we should be aware that high speed Broadband could be provided not just by fibre but by wireless, mobile or satellite which opens up a whole new set of possibilities. We want to make the vision of everyone connected to high speed Broadband a reality in Britain.
Nigel Hargreave: I’m worried by your deal between UK internet service providers and the record industry which attempts to clamp down on illegal file sharing. The fact that record companies will be able to send details of suspected file-sharers on to ISPs is an attack on civil liberties for a start. Furthermore, giving ISPs the power to cut off their internet connections is a hugely disproportionate response. Do you agree?
Shriti replies: I should be absolutely clear that record companies do not have details of file sharers and in fact cannot and will not be providing them to ISPs. What they do is go online to file sharing sites and download copyright material which enables them to track where the material is available from. This information does not include any personal details, just the time and date of the event, the IP address and the copyright material involved. Anyone can get this information. The ISP can match this information with the individual subscriber and, in the deal that was agreed, will write to them. They will not pass any personal details on to record companies. The letters will, I hope, also tell people how to get music on-line legally in a way that customers like. And I totally agree with you that cutting off internet connections would be a hugely disproportionate response and is not contemplated in the deal that was signed. We need to find the best way of ensuring that people can enjoy the music they want, in the way they want, at a reasonable price, that values the content that musicians created.
Malcolm Bryce: What help is there out there for young entrepreneurs in this financial climate?
Shriti replies: Hi Malcolm – I hope you are a young entrepreneur? I know that this is a very difficult climate for all entrepreneurs and we are doing everything we can to help, including help and support and advice, helping mentoring networks, making sure that entrepreneurs prepare for investment, providing funding for Start-Ups and growth through enterprise capital funds, supporting lending by banks. And we also have a debt-line 0800 197 6026. Entrepreneurship for me is the key to Britain being successful and inspiring young entrepreneurs is the best way to ensure a lifetime of innovation and creativity. I am really pleased that there are 200,000 more young people in the last five years interested in starting businesses. If you are interested in starting a business there’s a lot of helpful information at http://www.businesslink.gov.uk
Andrew Jackson: I want to start a business that uses Ordnance Survey maps – a business that I hope will generate lots of tax revenues for the Treasury. However, for a startup there’s no way I afford the costs or deal with the infuriating bureaucracy of dealing with this organisation. How are you going to take this millstone off of small, innovative IT businesses like mine, so that we can get started, let alone have a chance of success?
Shriti replies: I am delighted you wanted to start a business and would like to do anything I can to help. I know entities like Ordnance Survey and the Met Office and others have important information that can be used by businesses for the benefit of the whole economy. That is why at the Budget this year I set up – with the Chief Secretary to the Treasury – a review to look at how we can make this information available easily to businesses. I am hoping to see the recommendations soon and we will act on them as soon as we can. I appreciate this may not fit with the timetable of your business plan but I will speed this work up as much as I can.
Graeme Pirie: Has anyone in government ever actually had a real job in indusrty?
Shriti replies: yep – I have! In the financial services sector. And I am pleased we now have more people in the private sector in Government than before – for example in the shareholder executive.
Shriti says: Thanks for all your questions. I really enjoyed them and seem to have run out of time. Apologies to those I did not get around to answering. I hope I can do this again.
