I will call Mark Pawsey to move the motion and then I will call the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up.
That this House has considered business to business selling and encouraging jobs and growth.
It is a pleasure to serve under your chairmanship, Sir Mark. I am delighted to have finally secured this important debate to consider the importance of business-to-business selling, which I will refer to as B2B; why there needs to be a selling revolution; and what needs to be done to upskill the B2B sales workforce—particularly in small and medium-sized enterprises—and to encourage more people to train in B2B selling. Finally, I will set out some measures that the Government could take to encourage professional sales both at home and abroad.
This debate was prompted by my chairmanship of the all-party parliamentary group for professional sales and by my 25 years’ experience of selling. Like most people who end up in sales, I had no intention of becoming a salesperson. Few people set out to make that their career path, but they end up there through other routes. As a business-to-business salesperson, I spent 25 years driving the motorways of Britain to talk to my customers and understand their needs. As a manager of B2B salespeople, I helped my sales team to win business, grow the business I was working for and drive prosperity.
It is with the benefit of that personal experience that I argue that the UK would not function without business-to-business selling. It is a huge and important part of the economy. In many businesses there is a saying: “Nothing gets made until a salesperson has taken an order.” That is the importance of the sector. Since I left the profession to come to Westminster 12 years ago, the job has become more demanding: it requires deep product knowledge but always with a high need for customer insight, empathy, communication skills, collaborative working, strategy and critical thinking.
Why is selling to business important? It is important to the economy and to create wealth, and it supports 10 million jobs. It is skilled work, and it was recently re-categorised as a profession by the Office for National Statistics. That upgrade in status was based on evidence that the majority of B2B sales job postings call for a degree and five years’ experience. It is an important fact that 80% of UK businesses make part or all of their turnover from selling to other businesses.
I congratulate the hon. Gentleman on bringing forward this debate. As a salesman in my father’s shop way back in the very early ’70s, and then with Henry Denny, a pork products firm in Portadown, I fell into sales by accident, perhaps, but I recognise its importance. Does the hon. Gentleman agree that with trade deals across the world potentially coming through, there is a greater need for more salespeople to push buyers and achieve greater economic growth for all of the United Kingdom of Great Britain and Northern Ireland—always better together?
The hon. Gentleman anticipates many of the points I will make, and he draws attention to the distinction between retail sales and business-to-business sales. I note that he did not set out to go into sales—as I mentioned, few people do.
Business-to-business sales are believed to be 44% of the UK’s gross value added—economic output—worth an estimated £1.7 trillion. Companies involved in B2B pay nearly £22 billion in corporation tax and, as I said, employ more than 10 million people. Looking ahead, as the hon. Gentleman mentioned, the UK will rely on a massive amount of business-to-business selling overseas, to take advantage of the opportunities that we have, having left the European Union, in the development of new markets.
One concern is that there seem to be too few statistics collected about business-to-business sales. There is some confusion between retail sales and B2B sales, despite business-to-business sales being about four times more valuable. When official statistics are collected, no distinction is made between retail sales—what we would call consumer shopping or business-to-consumer sales—and business-to-business selling. That hampers understanding, as the two sectors are very different. Being an effective B2B seller takes skill and experience, whereas a retail sale is often a quick transaction.
Selling to another business is typically a lengthy and complex activity with many people involved on each side, and deals can have multiple stakeholders. For example, if we consider the arrangement of a business-to- business contract for the just-in-time supply of components to an automotive manufacturer, or to supply financial technology to a multinational bank, the salesperson involved will need extensive market insight, an under-standing of the customer’s needs, good negotiating skills, and often the ability to find solutions to legal and logistical problems. Consider the examples I have just given: B2B sales can be very high when compared with retail sales, and strategic outsourcing contracts can run into billions of pounds and take many years to negotiate. For those reasons, B2B selling requires a professional level of proficiency.
It is a pleasure to serve under your chairmanship, Sir Mark. I am grateful for the opportunity to respond. I am also grateful to my hon. Friend the Member for Rugby (Mark Pawsey) for securing this debate so that we can highlight the fantastic work that British industry and businesses do every day throughout the year. The ability to talk about that even for a few minutes is a great opportunity to celebrate their fantastic work.
I congratulate the APPG and my hon. Friend the Member for Rugby, who chairs it, on the work done under his chairmanship and under the chairmanship of the much-missed former Member for Stirling, who we all wish was still in his place. I was at the initial APPG meeting. I admit this was not an area of huge knowledge to me, but the former Member for Stirling was looking for Members to attend and managed to achieve quite a large number at the initial meeting. That was a testament to the former Member’s powers of persuasion and to the continuing ability of my hon. Friend to highlight this important issue.
I was involved in business for most of my career prior to coming to this place five years ago, so I have a little bit of experience in business-to-business selling. I used to be a management consultant and I would try to find somebody else who could do the business-to-business sales because I was not particularly good at it. I also worked in a bank for several years, building processes so that we could sell financial products to businesses. That brought home to me the importance of capable and competent individuals—and they were not easy to find, as my hon. Friend the Member for Rugby has correctly indicated. They have an incredibly difficult skillset, and I am in awe of those people who can walk into a room and sell at the level of technicality, competence and ability that so many B2B and professional salesmen have.
Does the Minister think that having a chartered status for sales professionals would raise the esteem of the sector, and encourage more bright and capable people to consider it as a career option?
That is an interesting question, and one that many industries are debating. There is huge value in chartered status and the accreditation that it provides. At the same time, we must ensure that in creating those things—I am sure it will not be the case in this sector—barriers to entry are not raised at the same time, as that could exacerbate some of the challenges that my hon. Friend has rightly highlighted throughout the debate.
In the few moments I have left, I will touch on productivity and highlight the importance of the schemes already in place, such as Help to Grow: Digital and Help to Grow: Management. Help to Grow: Digital provides businesses with free, impartial online support and guidance on how the digital technology that my hon. Friend rightly highlights can boost their performance. Up to 100,000 eligible businesses can take advantage of discounts of up to 50%, worth up to £5,000, to buy some of the basic productivity-enhancing tools highlighted by my hon. Friend, such as customer relationship management and accountancy software.
On top of that, Help to Grow: Digital enables people to consider the best way, from an e-commerce perspective, to help businesses make the best of selling online. That will be useful for many people, but does not take away from the important point—highlighted by my hon. Friend the Member for Rugby, and the hon. Member for Strangford (Jim Shannon)—about people understanding what they are selling and having the capability, competence and technical knowledge to do so.
This has been a hugely important, if quick, debate. I am grateful to my hon. Friend the Member for Rugby and the APPG for continuing their important work in this sector. There are parts of commerce that do not often speak as loudly as others; they just get on with the job and do brilliant work, day in and day out. This is one of those examples—people who are really pushing UK plc to do more. They are working through how we can grow, do better, and collectively take on more jobs. I congratulate the sector on all the work it has quietly done over so many years; as the Minister for industry, I offer my personal support.
1:29 am
Sitting suspended.
The impact of the pandemic has made it more important for policy makers to distinguish between retail and B2B. We know that jobs in retail are disappearing as consumers move to digital self-service; by contrast, the number of B2B selling roles is steadily growing. Unfortunately, however, many of those posts are hard to fill, and the sector suffers from a skills shortage. We need more and better salespeople to enable us to recover from recession and boost overseas trade. The CBI anticipates that if the UK can achieve its upskilling and retraining needs, that will boost the economy by between £150 billion and £190 billion a year by 2030.
I referred earlier to the all-party parliamentary group for professional sales, and I want to talk about some of the work that we have done. The group was founded in 2018 by Stephen Kerr, who was then the MP for Stirling and is now a Member of the Scottish Parliament. The mission of the all-party group is to
“improve the global recognition of the importance of sales and its impact on the UK economy; to promote and advance the sales profession and boost the success of British industry, especially in international trade.”
That is what I am hoping to achieve through this debate. I mentioned that my background led me to become a founding member of the APPG, and as its chairman, I am proud of the work that we have done. In particular, I am proud of two recent policy reports.
The APPG’s first inquiry, in 2019, looked at why so many small and medium-sized enterprises were under-performing at this essential business activity. In our report, “The Missing Link: Inquiry into the role of sales in increasing the productivity of small and medium-sized enterprises,” we highlighted how many small businesses had too few B2B sales, we mentioned the lack of status of the salesperson within the organisation, and we commented on how slow SMEs in particular were at taking in new technology. We felt that the status issue was stopping good recruits coming into the profession, and we concluded that if we were able to fix some of those problems, it would assist the economy in enjoying significant growth. We stated:
“Our report identifies a critical shortage of professional salespeople that affects every business, but SMEs in particular. It also highlights a negative attitude in Britain towards selling that is holding the economy back. The government needs to intervene to close the skills gap, and to promote a more businesslike attitude towards selling.”
I mentioned the impact of the pandemic; shortly after that report was published, covid-19 hit, and it caused a revolution in the way that people sell. Our second report, which we published in March 2021, was entitled, “Supercharging Sales: Investing in B2B selling for jobs and growth,” and it looked at the changes that had arisen as a consequence of the pandemic and the lessons that needed to be learned. It made three recommendations—about the need to recognise the importance of B2B selling to the economy, to encourage more entrants into the sales profession at SME level, and to promote better sales skills and greater uptake of digital sales technology.
In our report, we found that the owners of SMEs would need to learn to sell in a new way; no longer would it be suitable to charge up and down the motorway for personal visits. We have seen the adoption of digital technology, but in many cases B2B salespeople have been slow to adapt to that technology. They need to be upskilled, and more of them need to be trained. As an APPG, we called for the Government to tackle the skills shortage; we know that would have a positive impact on the economy.
If businesses embrace a digital landscape and enter a selling revolution, we can grow the economy. We know that digital methods will be important, but when it comes to selling there remains a wide gap between the digital haves—usually big businesses and growth-orientated SMEs—and the digital have-nots, which are usually smaller businesses.
As I have mentioned, SME salespeople have struggled with obstacles that have hindered them from switching smoothly to the digital marketplace. Those obstacles include, in the first instance, a lack of sales skills. Before the pandemic, skilled B2B sellers were in short supply; from March to September 2020, there were 197,000 job postings for B2B sellers, in a profession that numbers only about 540,000 people. We found that the skills deficit was greatest for SMEs, which often do not train their staff.
The second major obstacle to growth was the shortage of management skills. Covid-19 made it urgent for businesses to adjust their sales model, but many business owners were too busy and needed help developing a strategy. The majority of SME owners are yet to adopt efficiency-oriented management practices and do not use customer relationship management software. The software exists, and it needs to be used. In addition, a lack of understanding of sales often leads SME owners to make mistakes when hiring salespeople, because the business owners themselves do not understand the sales process fully.
The third major obstacle that we identified was a shortage of digital skills. We know that the UK is only 12th among OECD member countries for technology adoption. We also know that covid-19 has spurred many salespeople to use more digital tools. However, SMEs have stopped evolving their tech use, while larger companies have carried on. SMEs will not adopt the next wave of sales technology if they do not first adopt the basics, which are about having a good online presence and using cloud computing and CRM software.
We know that jobs and skills are challenges for the UK economy as we exit the pandemic. New skills will help Britain to commercialise its research and development innovations. We know that we are an innovative country and new skills will facilitate overseas trade. However, we have struggled to recruit and train the B2B salespeople that the economy needs, and we need support from the Government in promoting awareness of and respect for business-to-business selling, and in stimulating demand for sales learning. Such Government support would be very welcome in the sector.
Members of the APPG believe that sales should, at some point, be referenced in the curriculum at school, college and university. There should be more work-based qualifications to create pathways into the profession, and the professional body, the Institute of Sales Professionals, has an aspiration to see a chartered professional body. We would like to see B2B given a higher priority by policy makers in skills and education. There are few Government-supported educational programmes for building commercial sales skills for those entering the workforce, and I am afraid that there is little or no discussion of sales in the MBA courses that are run in this country. That contrasts strongly with US universities that provide the same qualification.
We want the Government to use what influence they have to promote awareness of business-to-business selling and stimulate demand for sales learning, and I have a number of asks for the Minister, which I hope he will respond to in his remarks. The all-party group would like to see more on-the-job learning, and more courses and qualifications in professional sales, which could be backed by the Department for Education—I know that the Minister here today is a Business, Energy and Industrial Strategy Minister. We think courses should be eligible for funding under the lifetime skills guarantee. We would like more teachers of sales skills in our further education colleges, and more such teaching in the growth hubs, wherever possible supported by professional people who are actually doing the job. Perhaps there could be more mentoring and support for businesses that are involved in business-to-business sales. Perhaps representatives of the profession could participate in Government and industry advisory groups, as the salesperson is often overlooked.
The all-party group would like to see more apprenticeships. We would like to see the bureaucracy of the Education and Skills Funding Agency cut, with growth hubs offering support to SME owners. We think the Government could also help by setting national targets for the adoption of proven digital technology by SMEs, including cloud computing and customer relationship management software. Let us provide an incentive for businesses to take on that new technology. SMEs will need some support in funding their training needs. We would be happy for there to be financial incentives for SMEs to do that, and we would like to see extra funding for growth hubs to carry out sales courses and peer networking.
My remarks so far have focused primarily on the domestic need for business-to-business selling, but we must also consider the role that professional sales can play in the international landscape. The Government have an export strategy, which was published by the Department for International Trade on 17 November. Its 12-point plan mentions sales five times, and professional sales are involved in almost all of the 12 points. Approximately one third of the UK economy is international trade, and that is about business-to-business commerce. To be successful on the world stage, we need experts who can compete with salespeople from other countries to ensure that our goods and services are bought in preference to others’.
In the aftermath of the UK’s leaving the EU, we have the freedom to trade on our own and in new territories. I know from my business career that new business is not easy to secure, and that certainly is not possible without a competent and skilled team of salespeople. Fulfilling the ambitious trade deals that the Government have put in place will not be possible without those skills. A trade deal is a listing—an entitlement to deal with somebody—but we now need skilled salespeople out in those markets to take advantage of those deals.
As the Government’s priorities shift away from job retention and towards retraining people for the skilled jobs of the future, B2B sales must be a top priority for the UK. There will be massive benefits if we can ensure that SMEs adopt digital sales technology and gain professional skills. The pandemic has presented us with an opportunity to look afresh at difficult economic problems. Much of the cost of upskilling can be borne by employers, but I reiterate our ask for Government action to encourage that training by signalling the importance of sales skills.
Many positive benefits will flow to the UK if we can get businesses to adopt these new skills and gain new abilities. If we can turn around our attitudes and upskill our workforce, business-to-business selling will be a major force enabling us to grow our economy, create jobs and build new markets overseas. The cry should be: “Let’s get out there, and let’s get selling.” I look forward to hearing the Minister’s response.
Such a skill takes many years to hone. We have an understanding in government that that skill is difficult to procure and not easily taught. It is often learnt on the job, but it is hugely important. My hon. Friend pointed out the difference between retail sales and business-to-business sales, which are often merged together but should be considered separately because they have very different skillsets. From a BEIS perspective, I assure my hon. Friend that the Department absolutely recognises the importance and value of business-to-business selling in the UK.
We know that the sector has been through a significant challenge, as every sector has, over the past couple of years. The pandemic has brought many difficulties for businesses and sectors all around the country, so I will take this opportunity to thank the sector for its work, its efforts and its contribution to the UK during that difficult time. I affirm that the Government value and wish to continue to support the sector where they can.
We have near full employment and lots of vacancies, but there are challenges regarding the skills that are more difficult to procure and create in the type of selling that we are talking about. In the past couple of years, gaps have appeared or been exacerbated. Covid has taught us that many business activities can be conducted successfully anywhere and that technology can allow us to get past geographical barriers, but ultimately it is the sales and the techniques that are hugely important.
My hon. Friend the Member for Rugby highlighted the international opportunities to go out and sell UK plc if we have the right skillsets in UK businesses to do so. We are proud to have already delivered a trade agreement with the EU, which came into force last year and has been debated many times in this place and beyond. It is the first that the EU has signed that grants tariff-free and quota-free access to its market, ensuring that British businesses can continue to have a strong trading relationship with our European neighbours and build on the skills that we have been talking about. It is the most liberal market access that either party grants to any trading partner, and gives us opportunities to sign new trade deals—the first opportunity in 50 years.
We have already signed trade deals with Japan, Australia and New Zealand, and this gives us the opportunity to use the skills already in place in UK plc and to seek new opportunities as we build that skillset even further. We will continue to support British businesses to be able to make that case all around the world—not just in the EU, but in all the new markets that are opening—through measures such as the 12-point plan, which will support SMEs to manage import controls, and the export support service, which provides a single point of entry and support for businesses exporting to Europe.
We have included a chapter dedicated to protecting the interests of SMEs in the trade and co-operation agreement, and have various helplines for customs and international trade. All those measures seek to give our businesses and salespeople, and the B2B people who are selling in and around these markets, the tools and the ability to help them with the knowledge and expertise to do what they do best—to find business and help UK businesses grow.
I turn to the importance of skills and productivity in sales. My hon. Friend the Member for Rugby is right to highlight the maxim that nothing gets made until a salesperson ultimately takes an order. There is the challenge of building skills in those who are just coming into the workforce, and of augmenting skills for those who are already there.
B2B sales can be a dynamic and lucrative business activity, which can attract young talent. It is for employers, ultimately, to convey the benefits of those roles for prospective workers. The Government are keen to highlight the opportunities in the B2B market, and the abilities and fantastic capabilities in UK plc. As Minister for industry, I look forward to doing more where I can, and I know that my colleagues elsewhere, in BEIS and beyond, are also keen to do so.
If it is helpful to my hon. Friend, I am happy to talk to the APPG on a different occasion, in more detail, about how we can work together on this issue. I am keen, if we can, to do a visit—or something along those lines—so that we can see, publicise and highlight all the great work in this sector, which has done so much over recent years to put UK plc in such a good position, and will continue to do so in the years ahead.