Q&A with the small business commissioner

Q&A with the small business commissioner

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Calling time on late payment

Small businesses often get hit the worst when it comes to late payments or even non-payments, and this can sometimes lead to their companies going under. In a bid to combat this widespread issue and be a voice for the self-employed, in 2015 IPSE suggested to the government to bring in a new role – a small business commissioner.

The then Conservative government pledged to bring in this new role and now, almost two and a half years later, Paul Uppal (pictured), former MP for Wolverhampton South West, has been appointed as the small business commissioner. Modern Work spoke to the 50-yearold father of three, to find out what he plans to do.

What made you think you could be the UK’s first small business commissioner?
When I saw the position advertised, I was immediately attracted to it, because I come from a small business background myself and the issue surrounding late payment is an area that certainly needs to be addressed. We have a cultural practice in the UK of late payment and I want to be part of a process which can change that. It was also a position that allowed me to marry my small business and political background.

Can you tell us about your background as a small businessman?
It’s in construction and real estate, although as I have got older it has become less construction and more real estate. In the early wild days, if you like, I was a contractor and would direct builds ourselves, predominantly for industrial units, but some residential.

On the business side of things, it was a pretty lonely and interesting experience. It taught me a great deal about financing, developing long-standing, trusting business relationships. Although I was born in Smethwick, Birmingham, I have an East African background – my family used to run an electrical business in Kenya and when they came to the UK they started again.

What made you shift from working in construction/ real estate to politics? 
Politics was always spoken about at the breakfast and dinner table in my family. I studied politics at Warwick University and then just forgot about it.

I asked my uncle once for some advice about getting involved in politics. And he said: ‘Forget about it, go get a real job for a while’. So that’s when I started my own business and did a ‘properjob’. I was lucky, I made some money and things fitted nicely into place.

But I have always had a bug about politics. Then I think I was just fortunate – a seat in Wolverhampton South West was allocated so I pursued it, managed to win it in 2010 and then lose it in 2015.

In both your business and political careers, what has been the biggest challenges you have faced?
In business, in the early days when you are establishing yourself, there are huge challenges and there are risks you have to take, from funding projects to making sure you are paid on time.

I was quite fortunate; I received some good advice from my peer groups and extended family about chasing late payments and it is something I made a priority. I wouldn’t say I had the best business model in the world, but I was very conscious of cash flow and I think I knew this from my other business partners.

They didn’t always want to get involved in the cash flow element and in chasing payments. People get personally embarrassed by this, but I didn’t have that… well I did when I was very young, but I certainly didn’t afterwards. I became quite good at chasing payments, by basically making myself a nuisance.

In the early days, it really was a bit tight and there were some challenges there.

And it is a really steep learning curve – you do go in very green and you learn on the job very sharp. If you don’t, then your business will go under. Of all the things I have done in my life, those early years were particularly tough – they were particularly rewarding too – having been through that and surviving it, I’m quite happy about it.

Who did you turn to for advice?
My father was crucial. I was lucky in that respect… it can be an incredibly lonely experience, so having somebody give you a different perspective can be really useful. And of course, there is no agenda there, they want you to succeed, so I was quite fortunate then.

How did you deal with loneliness when you were self-employed?
Not very well. I’m quite a social person, but you’ve just got to understand that is part of the course. If you want to pursue your own business, you’ve got to accept that is part of your life… and you’ve just got to try and enjoy it.

I actually found that making business contacts and business partners, later on as the business developed, to be quite enjoyable. As you build the business up, those do become personal friendships. 

What will be the main purpose of your role as the small business commissioner? 
The main purpose of the role is to have an impact on the issue and culture of late payment. The one thing that I find that really resonates with people when they ask me this question is by saying to them: “At the end of the month, if the firm that paid your wage decided to take a 20 per cent discount – so you only got 80 per cent of your wage – how would you feel about it?”

I then see their eyes light up, because they can actually see how pernicious this can be and how the relationship can be. It’s sometimes bringing things home. Your costs, your overheads are fixed. However, I just think we have a cultural issue here, where sometimes businesses feel they can take advantage of the commercial situation they are in and I want to be part of a process to change that culture.

And more long term, being a champion for small businesses. I know that’s not specifically in the remit advertised, but I think small businesses do need a voice within government. Big businesses can look after themselves, I’ve seen that through my political career.

Organisations like IPSE do a good job and they have a good ear with government, as do various other stakeholders, but I think it would be good through my role to bring these bodies together and have one single voice and have some basic priorities of what we can achieve, particularly within the Brexit environment that we have got at the moment.

What do you want to achieve with the post?
Prompt payment – at some point we will be issuing a report and I want to feed back into government my initial findings here. So, at the moment, I am in listening mode. It is about having those conversations and opening up the office for people to come and talk to us. Obviously, if they have got issues around late payment, we have got a website, which they can approach us on. We have a procedure on what we can and can’t do. And we can certainly have conversations too and that’s going to be a big part of the job.

Do you think the role has been give the powers it needs to go out and make a real difference?
We are where we are in the roles that we have, and we have statutory regulations, which is very much about naming and shaming. I have met with Mark Brennan [former Australian small business commissioner] and we talked about his experience in dealing with that and late payment.

Something Mark mentioned to me, and I’m interested to see, is at various points in the year, having meetings with small businesses as well as large businesses and then having meetings where we bring small businesses and large businesses together.

I don’t want to ambush anyone. But this is my job. We would like to do this with the co-operation of businesses. I’m not always sure legislation or being very draconian about it is going to be that helpful. But if we get to a point where we can’t get around and provide some solutions, then that decision-making process may be taken out of our hands.

And if there comes a point where we need to address the issue of more powers, I’m not going to be backwards in coming forwards in that.

The smallest businesses often find it the toughest when a client, who may be 90 per cent of their business, decides to change the payment terms from say 60 days to 75 days. How do you make them feel confident in coming forward with these issues without jeopardising their business relationship?
Part of the legislation that has established us is very specific, it’s there in black and white. We cannot do anything that is going to be detrimental to anybody that approaches us as a small business. There are a couple avenues here:
•Anonymity – the actual logistics of this sometimes may mean that even if we don’t name a businesses, it could be quite obvious as soon as we’re speaking on their behalf.
•Then there is a question of looking at other businesses who may be experiencing the same and make it slightly more generic. Here, we can pick up the phone and speak to the firm, asking, ‘Are you aware there is a problem here? – your name keeps cropping up.’
•Balance and fairness – we are there to address the issue, not bang one business over the head or materially damage them. But I am aware for small businesses, one supplier can have a huge influence over your business, so there is a huge amount of frustration there. 

What I want to do is to provide a vent for that frustration. You can approach us and ultimately everything we are going to do is with your consent.

There may be some small businesses who are more prepared to do this than others. We can go in and vet for you, but we need you to step up to the plate too.

Details: smallbusinesscommissioner.gov.uk