Commons Sense

House of Commons · Westminster Hall

SMEs and the Net Zero Target

17 November 2020 · 6 other contributors · 7,947 words

Opened by Kevin Hollinrake Con Thirsk and Malton

Responding minister: Kwasi Kwarteng

ClimateBusiness & Trade

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Kevin Hollinrake raised concerns about smes and the net zero target in Westminster Hall. A government minister responded.

Key points

  • Concerns raised about small businesses facing difficulties in transitioning to greener processes due to lack of financial support and ethical considerations from banks.
  • Issues highlighted with the green homes grants programme, including installer hesitation due to short timescales.
  • Minister emphasized the Government's commitment to net zero by 2050 and discussed strategies aimed at small businesses and job creation in the green economy.

Key requests to Government

The government should ensure that interventions by financiers and regulators are comprehensive, well considered, strategic, and stable, providing a long-term framework that avoids abrupt changes and allows businesses to transition smoothly towards net zero. I also ask the Minister to address issues with access to finance for SMEs through non-bank lenders and to consider diversifying finance provision with regional mutual not-for-profit banks.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Kevin Hollinrake Con Thirsk and Malton

I am concerned about businesses being treated as collateral damage in the rush to achieve net zero. I highlighted an example of a small business in my constituency that uses fossil fuels and may face difficulties obtaining financial support for transitioning to greener processes due to ethical considerations from banks. Additionally, I mentioned issues with the green homes grants programme where installers are hesitant to apply due to short timescales. There is also concern over the transition away from fossil fuel cars, which presents challenges for businesses in related supply chains.

Other contributors (6)
  • Alex Sobel Lab Co-op Leeds Central

    Sobel highlighted the critical role of SMEs in the UK economy and their potential to contribute to net zero targets. He provided examples from Leeds, such as Seagulls Paint's efforts to recycle paint and other innovative environmental initiatives by local SMEs. Sobel also noted that over half of SMEs have taken steps to green their businesses in the past 18 months, with many optimistic about the financial benefits of a transition to a greener economy. He called for support measures such as area-based retrofit programmes and incentives for community-led schemes.

  • Andrea Leadsom Con South Northamptonshire

    My hon. Friend makes a really good point about giving sufficient notice. He also points out that businesses will always overachieve, and he might recall that back in 2015, the announcement was made that we would be taking coal off the system by 2025. It has indeed been the case that businesses have overachieved, because coal is almost off the system and it is only 2020.

  • Gareth Davies Con Grantham and Bourne

    Davies acknowledged the dual role of SMEs in contributing to climate change while also being a potential solution. He cited FSB data indicating that 16% to 18% of emissions come from SMEs, but emphasized their capacity for innovation and opportunity capture. Davies pointed out a £22 billion financing gap hindering SME progress on net zero targets and proposed solutions including increased funding for the British Business Bank through green gilts.

  • Matthew Pennycook Lab Greenwich and Woolwich

    SMEs need targeted support for the transition to net zero, including information and guidance on how to decarbonise, access to financing, and workforce skills development. The Government has not provided sufficient clarity or a comprehensive strategy.

  • Richard Thomson SNP Croydon South

    Stressed the importance of innovation in banking and the need to ensure that banks do not exploit SMEs. Highlighted the challenges faced by SMEs in accessing CBILS and BBLS, especially through non-traditional lenders. Emphasised the role of local authorities in promoting carbon budgets and noted difficulties in making progress once low-hanging fruit was exhausted. Advocated for clarity on devolved funding to enable strategic decisions and outlined initiatives from the Scottish Government including a green jobs fund and youth guarantee for apprenticeships.

  • Scott Mann Con North Cornwall

    Echoed support for SMEs playing a crucial role in climate change obligations. Emphasized the importance of green businesses and highlighted local companies such as Water Powered Technologies, Balaena Offshore Utilities, CleanEarth Energy, and the Bude ReFILL shop that are contributing to reducing CO2 emissions and plastic pollution.

Government Response

Kwasi Kwarteng

Stated the Government's absolute commitment to achieving net zero by 2050, praised small businesses for their role in economic growth. Mentioned the net zero small business engagement strategy, the green jobs taskforce aimed at creating opportunities within the green economy, and discussed potential national institutions focusing on net zero post-EU membership. Acknowledged the need for further impetus while balancing the urgency with inclusivity of all sectors.

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