Michael Fallon

Michael opened the newly refurbished swimming pool at Amherst School today.  Funds had been raised by parents, staff and Sport England.  The Headmaster, Mr Derry Wiltshire officially thanked School Secretary, Mrs Jane Parish, who had worked extremely hard to co-ordinate the whole team effort and secure the funding for an all-year activity for the whole school.  Congratulations go to all involved.

Today Michael visited Haywards, one of the south-east’s fastest growing vehicle dealerships to launch Lumina, a new free of charge brokerage service brought to SMEs by Kent Count Council.
With gas and electricity representing over one third of most businesses’ total turnover, rising energy costs in a challenging economy are a major concern for most Small and Medium Enterprises (SMEs).

Minister Michael Fallon said: With my ministerial focus on both business and energy, I am delighted to launch this service, which is free to SMEs. By taking advantage of the savings to be made by collectively purchasing energy through firms like Lumina, businesses can keep their energy bills down. Money saved on costs is money that can go towards investing in a business, hiring new staff and generating growth and that’s why I welcome it.

According to Derek Hayward, Managing Director of Haywards: “It has been a difficult couple of years for the economy and, like most businesses, we have had to work hard to bring in new clients. It has also prompted us to look at our costs and overheads, bringing them down where possible.
“In 2012 the total gas bill for our sites in Medway and Sevenoaks was nearly £4,500. Lumina analysed one of our gas meters and recommended switching to a new supplier which will save us over 50 per cent on our estimated gas bill for 2013. We opted for Lumina’s fully-managed service and our account manager, Eamon Grimes, is currently looking at our electricity consumption.  Eamon predicts that we should also save a further 30 per cent on our existing costs. Lower energy costs are contributing to our business security and mean we can offer better deals to our customers”.

Lumina is a sister organisation to LASER Energy Buying Group which brokers energy on behalf of over 110 local authorities every year. LASER has harnessed the experience, supplier relationships and bespoke systems developed over 20 years for the public sector to design a service specifically for SMEs and its profits are returned to the local authority.

Rob Morgan, LASER director of energy said: “SMEs have already shown a great deal of interest in Lumina’s lower energy costs and additional services which will benefit their bottom lines, but business owners are also supportive of the reinvestment of Lumina’s profits in the local community. We offer a flexible service and customers do not pay for the market review or switching process. Between October 2012 and March 2013 we saved businesses around £150,000 – an average of £450 per meter pa – and we have a growing list of over 1,000 potential clients who have asked us to test the market a few weeks before their current renewal date and present the most competitive options available.”

For further information about Lumina, please call 0203 6577071 or visit their website

Speech to local business leaders at a conference organised by UK Trade & Industry South East

Good morning everyone and welcome.

My ministerial colleague, Lord Stephen Green, issued a challenge, as Minister for International Trade and Investment, to all Members of Parliament.  The challenge was this.  Go to your constituencies and tell all that will listen about Exporting for Growth.

This is why Greg Clark and I have invited you here today.

The Challenge
If you look at the economic textbooks, they will tell you that there are four drivers of economic growth. In the current situation, we cannot hope for growth from increases in private or government spending, the only other options are trade and investment.

Investment has been enormously important to the South East and the UK as a whole, creating tens of thousands of jobs. I’m pleased to note that UK Trade & Investment, the Government department responsible for increasing foreign direct investment, played a role in landing over half of these projects. It will continue to work on attracting FDI into the region.

However, the real challenge lies in boosting UK exports.  For far too long, trade has been a drag on growth. We need to pay our way in the 21st century.

We need to raise the number of small and medium-sized firms that export to one in four from one in five. If we do that, we can effectively wipe out the trade deficit.

This is our national challenge
And we have Government support to do it.

The Budget
Just a few weeks ago, Chancellor George Osborne set out his budget: a further £70m to help UK small and medium-sized firms to export.

Overall, the message is clear and direct.  We can do it, and have to.

We have to, because the old economic model of the years running up to the financial crisis is bust.  For all of the insecurities we face – in a world economy beset by worries about sovereign debt, woes in the Euro zone, weakening global demand, and so on – there is one thing we all know for sure.  We know we cannot rely on consumption fuelled by debt, or on government spending funded by debt, to drive growth.  The only suitable way of driving growth and creating jobs is through investment and trade.

But compared to our national competitors we are behind the curve.  Fewer British SMEs export or are part of exporting supply chains than is the case in our European competitors. To move towards the European average, we need to see significantly greater involvement by SMEs in overseas markets over the next four or five years.

On trade it is striking that in the five years since the financial crisis, and despite the depreciation in sterling, we have rated no better than 16th out of the G20 in balance of trade. While our exports to emerging markets have grown rapidly – between 2009 and 2012 goods exports to Brazil increased by 49%, to Russia by 133%, to India by 59% and to China by 96% – weakness in the Eurozone has acted as a major brake on the economy.
But that isn’t the full story.  Too few firms in fact export, and our competitors still do so much better.  Why does Germany export six times as much as we do to China?  Why does Italy export more than we do to Turkey?  Why is Britain ranked so low in exports to historically pro-English markets, like India – where we were 19th in 2012?   Why is that three quarters of those SMEs that export only did so first in response to external inquiries?

If we can increase SME involvement, we will not only find that we are making substantial inroads into our trade deficit.  We will also create new jobs.

And the businesses that rise to this challenge will benefit from what research clearly shows – that exporting brings substantial and rapid gains in efficiency.  Exporters have on average significantly higher growth prospects, more durability and higher profitability than other comparable businesses.

In other words, if we can do this we will not only address the country’s fragile trade position; we will strengthen the economic backbone of the whole economy.

As I have said, this is a national challenge. There is a role for Government; for individual businesses; and for their supporters, advisers and financiers.

Government must of course set the policy framework.  And it is clear what the strategy is.  One: fiscal consolidation.  Two: effective macroeconomic and prudential oversight through the new structures within the Bank of England.  Three:  business- friendly and competitive tax policies. Four: a commitment to the continuous hard work of minimising the burden of regulation.  Five: active support for investment in skills and innovation. Six: our commitment to reform the planning system so as to support sustainable business investment.  And seven: our commitment to ensure that we have a robust, competitive financial sector which is able to provide appropriate credit to support business growth.

All over the country, in every sector, there are businesses of every shape and size – hi-tech, traditional, in manufacturing, in services – that are innovative, that are outward-looking, have taken the risk and are growing globally.

This country has all the creativity and innovation that we need to compete on the world stage. We not only export cheese to France, we export sushi to Japan, caviar to Russia, sand to Saudi Arabia and potato chips to America.

But the challenge is complex.  Exporting is not risk free.  It’s often unclear where and how to start.  Financing is all too often a problem.  For a small company facing all the daily challenges of the existing business, tackling the unknown in the overseas markets will often be daunting, to say the least.

UKTI
This is where UKTI has a crucial role to play.  It will seek to double its client base from around 25,000 companies to around 50,000 over the next three years.

Its regional teams must be effective networkers – with businesses themselves, with their advisers, with banks, with the Chambers and Local Economic Partnerships.  Their job is to reduce the unknowns, to facilitate the contacts, to help companies see what is possible – and go for it.  You will hear later from Crispin Simon, Managing Director of UKTI’s Trade Development Group, about how UKTI can help companies of all sizes to grow their international business.

Trusted advisors
And importantly, this is where company’s supporters and trusted advisers come in?

Every SME has a banker, a lawyer and an accountant.  Many are members of their local Chambers or other business organisations.  Many are also members of trade associations.  So, if you fall into that particular bracket, can I ask you to consider whether you think that your clients are getting all the help they need to succeed in the international trade arena?

My colleague Greg Clark, will tell you about some of the local successes which can be an inspiration to other local businesses.

Conclusion
Britain has lived with a weak trade position for fifty years or so.  There are no magic wands to be waved.  This is hard work for all concerned: for government, for businesses, for their advisers, supporters and financiers.  We need to stick at this for ten years or more.  And we know there is no alternative.

But it is a marathon we can complete – if we keep going.  All the evidence is that we have the creativity and the innovativeness to do it.  We have world-class strengths in a wide range of sectors, in every part of the country.  Running a marathon takes determination, training and support.  This national challenge   of doing business internationally is a marathon; and I believe we have the stamina to stay the course and complete it.

More than 150 local small and medium-sized businesses gathered in the Stag Communities Arts Centre to attend a free seminar given by Google.  The team from Google met Sevenoaks business owners to offer advice and tips on how to make the most of the Internet and grow a business online.

The workshop was part of Google’s drive to help small businesses grow using the Internet and to help business owners harness new ‘e-skills.’  By encouraging and supporting a variety of businesses to use the Internet effectively, from entrepreneurs and one-man-band start-ups, to larger companies, the workshop aimed to improve the country’s level of technical competence.

Michael said:  “I know from my role as Business and Enterprise Minister the vital importance of the digital economy. Not only has it grown fast – Government figures estimate one third of goods are purchased online already – but it is set to grow much further.

“This is a real opportunity for British business if we have the skills to make use of it. Currently, we export £2.80 of e-commerce goods for every £1 we import, so expanding e-commerce has a vital role to play in our economic recovery.

“However, if we can export our goods abroad so easily, that means our competitors in the global race can do just the same to us. It’s important businesses have the right e-skills to compete online and that’s why I was happy to arrange for Google to come to Sevenoaks to train up our local businesses.  Sevenoaks is going digital.”

Thank you for your kind invitation to speak at Voluntary Action Within Kent and to allow me to thank you for the vital work you do in our community.

As the theme of the conference is ‘resilience’, I want to take this chance to talk about what the Big Society is and how I see the development of Big Society as a crucial way of fostering resilience in individuals and in communities.  I recognise that, with the state of the economy, this is not an area that has as prominent a place on the agenda as it did before; it remains highly important and organisations like yours continue to be extremely valuable.

So, what is Big Society? It is a concept which has been as much misunderstood as it is important. The central idea is about shifting power away from Whitehall to local communities. We want to see people able and encouraged to play a more active role in society.

The Big Society is not, as its critics of have painted it, the state withdrawing from responsibilities it ought to fulfil.

Instead, Big Society is a philosophical objection to the idea that people are simply passive ‘users’ of ‘services’  provided for them by a government which deems itself to be more capable of knowing about and responding to the life of an individual than that individual does himself.

The Big Society has a much more positive conception of what it is to be a social human being. It assumes not only that people are likely to have the best knowledge about their own lives and their own communities – what those communities need and how they should work together to fulfil those needs – but it also assumes that people are autonomous agents with imagination and the desire to be creative. Rather than thinking people simply wish to be provided with services by the state, it assumes people are not only gregarious but that they have a natural urge to come together to change, personalise and improve the environment around them.
I hope that convinces you that Big Society is not an empty term. It is a radical departure from the Big State and a desire to empower individuals to work together and run their own lives instead of having the state do it for them.

As a Minister in the central government this can be a peculiar topic to talk about. When we put forward a policy idea the normal questions to ask would be ‘how will it work?’, ‘how much will it cost?’, ‘how will be measure success?’ but the entire point of Big Society is we want to encourage individuals to come forward and form their own voluntary associations to work on whatever their problems are. We can’t specify the policy, the mechanisms, the desired outcomes, etc. because that is something we want individuals to do themselves.
Chairman Mao’s ‘Great Leap Forward’ provides an excellent historical example of bad centralised policy.  Between 1958 and 1961 communist Chinese government, in a desire to transform the economy from an agrarian to a modern industrialised one, specified all aspects of the economy’s operation.

Perhaps the most striking single example of the policy’s myopia was the insistence on the use of backyard furnaces: Mao mandated that neighbourhoods must produce a certain amount of steel from scrap metal in these furnaces. However the targets, which had to be met, were ludicrously high and the local peasants had their pots, pans, and other metal artefacts requisitioned to supply the “scrap” for the furnaces which was then turned into useless pig iron. This also led to the local environment being stripped of trees and doors and furniture taken from peasants’ home to provide wood to fuel the furnaces. Mao’s centrally dictated ‘Great Leap Forward’ ended in catastrophe, costing 18 million to 45 million lives. It was also the only 3 years between 1953 and 1983 where China was in a recession.

This is an extreme example, and a salutary warning, of making policies blindly from central government. It is also why all socialist or communist economies must fail – those making the decisions in government from the centre cannot know enough to make good decisions. The Big Society is the opposite of this. We take the power from government, give it to local people and both encourage and trust them to find their own solutions using the best local knowledge.

The sad death of Margaret Thatcher this week reminded me of what it probably her most famous and most misunderstood quote:   There is no such thing [as society].   This is not supposed to mean, as it was often taken by her critics on the left, that we should abandon all ties of civility to one another. Rather, it was an attack on the idea that ‘society’ was some nebulous abstraction: that it was comprised of other people, people we had not met and did not know. The rest of the quote explains the sense of that first line:
There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour [...] life is a reciprocal business

Society is not an abstract concept: it is simply the association of two or more people. Big Society is simply the association of people to engage in an altruistic activity.

What the ‘Big Society’ means therefore has to be slightly vague: it will be different things for different people in different places. It might be a gym in south London that teaches boxing to deprived children; it might be a group in a Welsh seaside town that picks litter off the beach; or it might be an organisation like Voluntary Action Within Kent that reaches out across this great county to others within it.

So, how does the Big Society help and how does it build resilience?

The evidence shows that, when people feel they have control over what happens to their own lives and can take action on their own behalf, their physical and mental well-being improves.

When individuals and groups get together in their neighbourhoods, get to know each other, work together and help each other, there are usually lasting benefits for everyone involved: networks and groups grow stronger, so that people who belong to them tend to feel less isolated, more secure, more powerful and happier. This is what builds resilience – Big Society groups forging bonds across the community to give others support.

There are limits to what the Government can do directly. As I said already, by its very nature the very nature the Big Society project cannot be controlled by the state.

What the Government can do is to act as an enabler of local communities and to exhort individuals to step forward, as you have all done, and give something back. There are 4 ways in which we are doing this.
We are encouraging volunteering:-
•    We launched the National Citizen Service scheme which brings together young people from different backgrounds to work together and give something back. It is a voluntary programme that includes fun and challenging activities, away-from-home residential experiences and a self-designed social action project. 30,000 young people will take part in it this year, 90,000 next year it is our ambition that there will ultimately be places available for all 16-year-olds.
•    We are training Community Organisers to identify local leaders and bring people together to act on what matters to in their communities. Over 100 Organisers have either completed or started their training and we plan to deliver 5,000 overall. The most famous community organiser in the world is Barack Obama – that was how he started his political life.
•    We have established an £80 million Community First fund to provide small grants to community groups and local social action projects and establish an endowment that communities can draw from for years to come
We are stimulating charitable giving:-
•    We have reduced inheritance tax from 40 per cent to 36 per cent for those leaving 10 per cent or more of their estate to charity.
•    We have increased the Gift Aid benefit limit from £500 to £2,500 to enable charities to give ‘thank you’ gifts, to recognise the generosity of significant donors.
We are making Government more transparent so that big society can step in.
•    All central government contracts worth £25,000 or more are now being put on-line for the public and business to scrutinise.  Crucially, at least 25 per cent of those contracts must now go to small and medium-sized companies.  Local councils, including Sevenoaks District Council, must now put spending of £500 or more up on their websites.
•    With transparency comes competition.  We will see a number of voluntary organisations, charities and private companies contracting to run training programmes for the unemployed, courses for the rehabilitation of offenders, and a range of other services over which the state previously had a monopoly.  Public services do not, of course, have to be delivered by public sector organisations.
Finally, we are creating Big Society Capital – the first ever social investment bank.
•    Big Society Capital invests in social investment finance intermediaries, developing their capacity to provide social sector organisations with access to new, appropriate and affordable sources of finance to increase their social impact. This will ultimately have an estimated £600 million of equity, of which £400 million will come from dormant bank accounts and £200 million will be provided by the UK’s largest high street banks.

However, we know there are limits to how far Big Society can go. It is not a panacea for all social ills. People can only participate in the Big Society is they have time and resources on their hands. That means that areas like Kent, which is largely prosperous, will have a much stronger civil society that would more deprived areas in the north of England. The state has to have a role as the only universal provider of support.

To conclude, the way we build resilience within our communities is by championing the Big Society and seeking to expand it, which is why I am pleased to thank you for the work you do.

I don’t want an overbearing state that depletes our capacity to help ourselves. The aim must be to transform the way the state works with and connect to its citizens to empower them to take charge of their own communities.

A small state, big citizens and a big society; that is our aim.

12th April 2013