Commons Sense

House of Commons · Westminster Hall

Entrepreneurs from Ethnic Minority Backgrounds

20 December 2022 · 3 other contributors · 4,158 words

Opened by Stephen Timms Lab East Ham

Responding minister: Nusrat Ghani

Business & Trade

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

Read the full transcript on Parliament.uk

At a glance

Stephen Timms raised concerns about entrepreneurs from ethnic minority backgrounds in Westminster Hall. A government minister responded.

Key points

  • Minority-led businesses face significant barriers in accessing finance and are underrepresented among small and medium-sized enterprises in the UK.
  • The UK population includes 14% ethnic minorities, yet only 5% of SMEs are led by individuals from such backgrounds.
  • The Minister acknowledged the challenges and contributions of ethnic minority entrepreneurs, noting an economic contribution estimated at up to 25 billion.

Key requests to Government

The Minister should provide the Government's assessment on financial institutions' lending practices towards ethnic minority businesses and commit to more aggressive action in public procurement, such as establishing minimum target percentages for procurement from minority-owned businesses. Additionally, the Minister needs to address the lack of data collection on ethnic diversity in business.

How the debate unfolded

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

Opened the debate

Stephen Timms Lab East Ham

Minority-led businesses face significant barriers in accessing finance and are underrepresented among small and medium-sized enterprises. Statistics show that while 14% of the UK population is from an ethnic minority background, only 5% of SMEs are led by such individuals, and these businesses often struggle with lower earnings and higher failure rates due to difficulties securing funding. There is also a strong correlation between wealth disparity and business success among ethnic minorities.

Other contributors (3)
  • John Baron Con Billericay

    Agrees with the lead MP's concerns about finance access barriers and the need for better data, calling for strategic engagement between Government, businesses, and ethnic minority entrepreneurs.

  • Lisa Cameron SNP East Kilbride, Strathaven and Hamilton West

    Asked whether banks and the Government should take into account intersectionality between ethnic minority groups and disability or gender.

  • Peter Bottomley Con Worthing West

    Supported the debate on faith and society, mentioned an article by Oliver Shah in The Sunday Times about Wol Kolade's initiative 10,000 Black Interns, which aims to unkink the pipeline of black talent.

Government Response

Nusrat Ghani

It is a pleasure to serve under your chairmanship, Mr Hosie. First, I congratulate the right hon. Member for East Ham (Sir Stephen Timms) on securing the debate and raising this important issue. The Minister acknowledges the challenges faced by ethnic minority entrepreneurs and highlights their significant contributions to the UK economy, estimated at up to £25 billion. She notes barriers such as access to finance and discrimination, with 67% of black business people reporting experiencing some form of discrimination in entrepreneurial efforts and only 40% trusting banks. The Government is piloting data collection on the ethnicity of entrepreneurs applying for finance through action 55 and supports mentoring programs like Help to Grow Management. Since 2012, the Government-backed start-up loans programme has issued around 20% of its loans to black, Asian and ethnic minority businesses, with over £683.5 million in convertible loan agreements approved for companies with solely or partially ethnic minority management teams under the Future Fund. The Procurement Bill aims to address barriers facing SMEs, including diverse representation, and the Department engages regularly with ethnic minority entrepreneurs through forums like the all-party parliamentary group. The Minister also acknowledges the need for better representation of ethnic minorities in senior leadership positions and supports initiatives like the Parker review. On disability issues raised by Dr Cameron, the Government will explore these further.

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