Response to interpellation 2022/23:336 on small businesses

Energi- och näringsministern Ebba Busch (KD)

Mr. Speaker! Lorena Delgado Varas has asked me what measures the government and I plan to take to support small businesses during the ongoing crisis. I would like to begin by emphasizing that I appreciate this question and this perspective.

We in the government are well aware of the challenges that both households and companies, not least small companies, face today due to an uncertain economic situation. There is no doubt that the corona pandemic, the energy crisis, and the inflation situation have affected and continue to affect many Swedish companies through, among other things, delivery challenges, increased costs, and declining demand. An important and prioritized task for the government in this situation is to ease the pressure on households and companies without further fueling inflation.

The high electricity prices are an important cause of the high cost level and pressing circumstances for both households and companies. Since the start of the electricity crisis, the Government has launched a series of measures to mitigate the consequences for both jobs and companies. This involves both long-term efforts to strengthen the energy supply and support for electricity-intensive companies to support and facilitate for the companies due to the high electricity prices during the winter.

The application period for the electricity support to electricity-intensive companies opened on 6 March 2023, and in order to make it possible for more companies to apply for the support, the application period has recently been extended to 18 June 2023. The support is aimed at companies that have had a significant increase in costs for electricity during the period October-December 2022 compared to 2021. Many of these companies have until the electricity price increase been viable while operating in a global market and have small opportunities to raise the price to their customers.

Furthermore, on May 8, 2023, the government made a decision on the rules for electricity support to companies and organizations in electricity area 3 and 4. The support is proposed to amount to 50 and 79 öre per kilowatt-hour respectively and is calculated based on the electricity consumed during the period October 2021 to September 2022.

In order to reduce the risk of liquidity problems for companies that are fundamentally sound and viable, the possibilities for companies to temporarily obtain a deferral of tax payments have also been expanded. The expansion means, among other things, that the upper time limit for deferral has been moved from 12 February to 12 September 2023 and that deferrals may be granted for accounting periods that occurred during April-June 2022.

Deferral of payment of the deducted preliminary tax on wages and employer contributions can be granted for a maximum of twelve months instead of the nine months that have applied previously. The same applies to VAT for companies that report VAT monthly or quarterly. Companies that report VAT annually may also continue to postpone two years of VAT. Furthermore, the government has decided on an extra service grant to grocery stores in service-sparse areas of 25 million kronor in 2023.

When households' margins decrease, many small companies are affected through declining demand. The measures the government implements to support households, such as electricity support, are also expected to contribute to keeping demand up to some extent and thus also benefit companies, not least in the trade and service sectors.

With new, innovative and sustainable technology, competitive advantages are created for Swedish business and entrepreneurship. The Government is working purposefully and actively with measures on a national level to simplify and speed up permit processes and increase the pace of the energy transition. We focus on issues that make a difference for companies and the local community. This applies in particular to the important simplification work, where simplified regulations and reduced administrative costs can support the business sector's recovery.

In summary, I completely agree that small companies are an important engine for Sweden's business sector, and the government is actively working to mitigate consequences and long-term strengthen the competitiveness of Swedish companies. One of the government's most important tasks during this mandate period is to implement reforms that increase productivity and get more people into work. This benefits Swedish business and the Swedish economy.

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Lorena Delgado Varas (V)

Madam Speaker! I thank the Minister for the answer.

I believe that all parties agree that when small businesses do well, Sweden does well. If they increase in number or strengthen their profitability, more jobs are created. This means that if bankruptcies increase among small businesses and the number of new companies created decreases, one risks very many jobs, future development of the business sector, and revenues, for example, to municipalities.

For me, it feels like the answer shows the government's passivity when it comes to acting in a situation that requires both short-term and long-term solutions. The Minister mentioned the households' margins, for example, and they are very small today. This has the effect that people cannot afford to consume as they did previously, and that obviously affects small businesses. But nothing has actually been done so that households can have a dignified economy. The Minister mentioned the electricity subsidy, but the electricity subsidy has hit very differently and has not been completely fair. The person living in a rental apartment perhaps received 400 kronor in electricity subsidy. My twelve-year-old nephew shrugged at that and said: "As if that were going to be enough for anything."

The electricity price support has been heavily criticized for not being a real solution and for not being fair. It shows the government's difficulties in providing concrete or more long-term solutions. The band-aid solutions are bad for both private individuals and companies and are also quite expensive.

Vänsterpartiet has presented proposals on Sweden prices which could provide fairer prices for consumers in Sweden - both people and companies. We have support from, among others, Villaägarna and Småföretagarnas Riksförbund. The issue is positive for the whole society and could provide a permanent solution to the price issue without sacrificing the opportunities to export.

Let us continue on the track of household margins and the impact on small businesses. There are further proposals for improvements. There is a high debt-to-income ratio in Sweden. The Swedish people have been forced to take out mortgage loans because the housing issue has been neglected for many years. It affects people's finances, and it also threatens the possibility of creating a home. People must prioritize; keep the home or consume more. I believe the answer is obvious.

The same applies to food prices. The government has also not acted there, and the price is that small businesses and food producers must pay while the food giants move forward with enormous profits during the current crisis.

The Minister pointed out that the period for deferral of tax payments has been extended. But does the Minister not know that today there are many companies going bankrupt precisely because of the deferrals? A time comes when one must pay back, and we have moved from a pandemic to an economic crisis. Today, there are many companies in that situation.

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Energi- och näringsministern Ebba Busch (KD)

Madam Speaker! There were many important points from Lorena Delgado Varas in her contribution regarding the importance of small businesses. I think it is something for more people to take note of: If it goes well for small businesses, it also goes well for Sweden. In many ways, they are a thermometer of what is moving. Our large companies have at some point started as small companies, even if there is not always an inherent value in that. But they have to start somewhere, and that is an important perspective that is sometimes lost in the business debate.

It is worth noting that generally speaking, company size does not have a decisive significance for how companies are affected by cyclical fluctuations. There is not much that suggests otherwise. It becomes even more true that they are an important indicator of what is happening with the entire industry. For example, a decreased demand in the economy results in a weaker development of the number of employees and turnover and processing value for companies of all sizes. On the other hand, it is common for differences to arise between different industries and there are always differences between individual companies.

Let us look at the growth rate in the business sector's production. It is weaker than normal – weaker than the historically average growth rate. But there are still no clear indications that production is decreasing overall. But there is reason to be cautious here.

Employment in the business sector continues to grow. There are tendencies that employment in the business sector is not increasing as quickly as some time ago, but it is clear that employment is growing.

Let us look at the bankruptcies. They were significantly higher in the autumn and in January; approximately 100 more than normal per month. After the autumn and January, they have remained close to the historically average levels. Year-on-year comparisons point to an increase in the number of bankruptcies, but one must be aware that these mostly are due to the fact that there were fewer bankruptcies than normal one year ago. Much is due to the state deciding to keep some companies afloat during the pandemic. It was companies that perhaps otherwise would have gone bankrupt but made it through the pandemic thanks to the support, or it was companies that, despite the support, were still not viable in the long term.

Madam Speaker! I want to emphasize what the member raised, namely that the possibility of deferral is not a long-term sustainable arrangement. It risks creating a situation for companies where it becomes an accumulated amount in the company that is to be deferred. Therefore, we must look at what makes it attractive in the long term to be a sole proprietorship or a small company in Sweden.

I intend to return to these parts, but I want to point out that it concerns, among other things, taxes and regulatory simplifications and also skills supply. This government has placed a particularly heavy focus on regulatory simplifications in these economic times. I will gladly return to this in the next contribution.

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Lorena Delgado Varas (V)

Madam Speaker! I thank the Minister for the answer! We agree on much, but the solutions differ.

The government has talked a lot about simplifying regulations. Authorities must speak with each other and share information. I believe everyone agrees on that. But the problem today is that the authorities and institutions we are talking about do not have a budget that provides room to work on improvements. On the contrary, several of them have flagged that they have a reduced budget. For changes, one must first create space to be able to introduce them, so that authorities and organizations do not have to run around to save operations. If those resources are not there, little will be done.

Another thing that affects small businesses and which one often does not talk about is the budget of municipalities and regions. The public sector contributes to the survival of many companies through the procurement of materials and food, the construction of housing and infrastructure. When I have met representatives for the companies, they mean that the public sector during these crises has nevertheless provided the stability that they otherwise would not get. Usually, the public sector has long-term plans, which means that the small businesses can rely on that at least some form of revenue will come via the public sector.

When we talk about small businesses, we forget that some of them are innovation companies. Once again, we see that colleges and universities are having to cut their budgets. Many have signaled that they must reduce laboratory premises and teacher-led hours. This will also have its effect. The innovation companies that might have been formed in a year or two will not be formed because there has been no one to lead the research forward or had the opportunity to do so.

Some of the companies have also flagged that they lack incentives to further develop, for example, the green tech industries, for which Sweden is known.

I intended to continue with that list where I feel the government is doing the opposite of what should be done. One thing that many companies mention, for example, is the supply of skills. Here, it has been decided that the vocational schools should be placed on the municipalities. Many companies say that the schools are important. By placing them on the municipalities, it depends on the municipality's budget whether there is a vocational school or not. With the budget that exists today, they probably will not manage this. Then we lose the important supply of skills.

I had really hoped for a proactive government in these matters, one that dares to invest and show the way for all small businesses. We from Vänsterpartiet have been active in providing proposals to meet the crisis, but unfortunately, we have not been heard.

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Energi- och näringsministern Ebba Busch (KD)

Madam Speaker! I shall elaborate on some of the things we do in this area.

The government has clearly stated that companies need to have better incentives to increase investments in research and development.

The government has slowly started work on improving the conditions and rules for people who work with research and development. It is an investigation into the R&D deduction as well as the experts tax for foreign experts, researchers and other key personnel. Some of the complications could be remedied with, for example, the experts tax rules. But I agree that more needs to be done here. One could perhaps cooperate across party lines and between the Riksdag and the government in this matter.

Given the difficult economic situation we are in now, there is a great risk that the good situation that Sweden actually has in the long term, i.e., beyond this economic winter, will pass us by because, out of fear of making mistakes and fueling inflation, we cannot make the investments that we otherwise would have pushed for in a normal recession without high inflation. Here, I am open to discussing how we can manage to do both.

I believe that we need to signal somewhere to the Swedish people, to all those who have just graduated and to all the worried parents who wonder if their children, who are now entering the working life, will step into unemployment forever: No, there are very good opportunities for work, not least in the green transition on the other side of this economic winter. But how can we then ensure that the long lines that research and innovation entail, where it can take years before one can reap the fruits and achieve enough commercialization to create job opportunities in any significant amount, do not disappear? I am happy to cooperate on those issues.

So, moving on to regulatory simplification. We announced an implementation council in the budget bill last autumn. This shall, among other things, prevent gold-plating. We have had a tendency to over-implement the EU's rules in Sweden, which affects, not least, smaller companies.

In the budget proposal, the business portal Verksamt.se was also strengthened. For those who are not business owners and who have never been on Verksamt.se, it may seem a bit strange, but this is an authority portal that is highly appreciated by many business owners. We are strengthening it and trying to continue the good work that has been done previously also in this area.

Through the budget bill in the autumn, the work of the Council on Legislation was also strengthened in reviewing impact assessments of proposals that may have effects of significance for companies. It is a challenge when we, for example, to be concrete, in the justice area want to tackle fraud within the welfare sector. We have seen that it is a completely different type of company that has established itself there, which exploits people in need of the welfare's help and support. When one wants to tackle that, more rules are introduced that increase the burden on everyone else, even on those who behave themselves. There is also a risk that it spills over into other areas.

That is why I think it is an important proposal to develop a reinforcement of the Rule Council's work to keep track of what burden the regulatory proposals can become, despite good intentions, so that we can keep it down.

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Lorena Delgado Varas (V)

Madam Speaker! I am completely in favor of simplifying as much as possible. If one has a small business or is a sole trader, there are incredibly many things one has to answer, sometimes to different authorities because they do not share information with each other. One has to pay for the various controls that are carried out by the company and so on.

I truly believe that much more needs to be done, but unfortunately, this work has been quite stagnant. I met with Småföretagarna yesterday, for example. They wonder if they should even continue working on this issue together with the Regelrådet because they see that nothing is happening. I definitely believe that one needs to provide some hope for the future by improving these things.

The Minister also mentioned the portal Verksamt.se. It is very important. I met about thirty small business owners with Latin American roots who have organized themselves. They highlighted the need to be able to access information in other languages. The fact is that many small business owners are newcomers or perhaps have not lived here in Sweden for very long, but they want to do things correctly and therefore want to receive that information.

More training or networks are also needed where small businesses can support each other regarding the administrative burden that they nevertheless must face.

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Energi- och näringsministern Ebba Busch (KD)

Madam Speaker! I could speak about many things, but I intend to take a part of the direct reports from meetings during the spring that Member Delgado Varas takes up here.

I would like to take the opportunity and conclude where I began by thanking you for the interpellation. It is, as said, an honor to be available here and to speak about, for example, electricity support. But we have a situation now where I encounter great frustration in the business community, where it is felt that in the media's reporting, energy issues have completely overshadowed business issues in large part.

I suspect that the member himself, who has worked with business issues in various ways for a long time, remembers the time when we actually had a lot on the agenda that was pure business policy and not energy issues. I believe that we here in the chamber have a responsibility, and I know that there are more members who have an interest in it, to see that we need to solve the energy issues but that there is very much that concerns the business sector that is not just energy. We must not lose sight of that in the middle of the energy crisis we are in. Then we run the risk of ending up in the situation that Delgado Varas has returned to on several occasions during this interpellation debate, where short-term emergency measures take all the focus away from what needs to happen in the long term.

In conclusion, I want to say something about skills supply. In the budget, we are making a significant reinforcement of vocational education at the upper secondary level within komvux. We are also providing additional funds to the university college (yrkeshögskolan) and transition support mid-life. There are many who want to be able to change jobs, study, and retrain for something else. These are the types of priorities we need to continue to make.

I am happy to have a direct conversation further specifically about the vocational schools, as that is something that lies in the interest of the entire country.

The interpellation debate was hereby concluded.

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