Enterprise Bill [Lords]
(8 years, 9 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 300 / Noes: 62 - Question accordingly agreed to.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
I beg to move, That the Bill be now read a Second time.
On my Christmas reading list was a book by Labour's policy adviser, Andrew Fisher. I am not going to throw a copy at the hon. Member for Wallasey (Ms Eagle), because I am sure that she already has a copy of her own.
Sajid Javid
I wonder, then, whether the hon. Lady agreed with one of the comments that Andrew Fisher made in his book:
“The sole focus of economic debate today seems to be about what leads to economic growth.”
“Why”, he asks,
“are we so obsessed with economic growth?”
In the blurb, the shadow Chancellor called it the best thing he has read in years. On the Government Benches we know why sensible people are obsessed with economic growth: it means more jobs, it means prosperity, it lifts people out of poverty, it pays for our health service and our schools, and it allows us to invest in the future of our nation.
We know that growth is not created by politicians or by civil servants. It is not delivered by Whitehall diktat, or by printing money, or by creating an ever-expanding public sector. Economic growth comes from one thing, and one thing alone: successful private businesses.
The role of Government is to create an environment in which businesses can thrive. So, while Labour’s policy chief dreams of handing taxpayers’ money to trade unions so they can buy out companies, this Government are taking action to back British business.
Margaret Greenwood (Wirral West) (Lab)
In November of last year the green investment bank announced it had raised £10 billion in green infrastructure investment in the last three years. At the time the Secretary of State said:
“As this milestone shows, the Green Investment Bank is going from strength to strength and is having a major impact supporting renewable energy projects across the whole of the UK.”
This, at the moment, is not a private company—
Madam Deputy Speaker (Natascha Engel)
Order. Lots of Members wish to speak. If the hon. Lady would like me to put her name at the end of my list of those wishing to speak, I will do that, but otherwise interventions must be short, as must the responses.
Sajid Javid
I have got the hon. Lady’s point, Madam Deputy Speaker. I will come on to the green investment bank, and she will see that, because I agree with her main point—I want to see it raise more money—we are setting it free.
We have cut corporation tax and red tape. We are devolving the power to cut business rates and have doubled small business rate relief. We have lifted nearly half a million employers out of national insurance contributions. We have supported more than 30,000 companies with start-up loans. And we have launched a five-year programme to help British businesses make the most of export opportunities around the world.
All this work is paying off. In 2016, Britain is home to more private businesses than at any point in its history—almost 5.5 million of them. Over the past eight years more than 600,000 people have made the courageous decision to become self-employed, many in highly skilled professions, but I want to do more.
Fiona Bruce (Congleton) (Con)
The Secretary of State is making a powerful speech about this Government’s support for the creation of businesses, particularly small businesses, which of course requires not only the energy of the individual entrepreneur, but the support of their family. Will the Secretary of State outline how the family impact test has been applied in developing this Bill?
Sajid Javid
My hon. Friend makes an important point about the support offered to successful businessmen and women by their families. Whenever we develop any of these policies, we will carefully consider the impact on families, and I hope my hon. Friend will see that that is indeed the case as I progress through my speech and we release more detail on the Bill.
As I was saying, 600,000 people have become self-employed over the past eight years, but we want to do more, because, for my sins, I am obsessed with economic growth. That is why I am proud to have introduced the Bill before the House today.
The Enterprise Bill will strengthen the UK’s position as one of the best places in the world to start and grow a business. It will cut the red tape that too often strangles growth. It will support investment in the skills that British businesses need to be competitive now and in the future. And it will help deliver the economic growth and security that benefits every single one of us in this country.
Toby Perkins (Chesterfield) (Lab)
For someone who is obsessed about supporting small business growth, the Secretary of State’s Bill shows very little ambition. Can he say a little more about business rates, because the level of business rates is one of the major barriers to small businesses? It also impacts on manufacturing firms and retailers. Can he tell us more about what he will do to reduce the business rate bill of small businesses?
Sajid Javid
The hon. Gentleman will know that we have already done a lot to cap business rates and slow their growth. We have an ongoing review of business rates at the moment, and there will be more information at the next Budget.
It sounds to me as if the hon. Gentleman does not agree with his own leader, who has proposed
“adding 2% to corporation tax—“[Interruption.]
Yes, it is a quote, and the quote continues: he wants to do that to fund a “lifelong learning service”. On top of this, he proposes
“increasing corporation tax…to fund maintenance grants.”
So perhaps the hon. Gentleman agrees with his leader, who wants to see business taxes increase.
Let me turn to deregulation. According to the British Chambers of Commerce, regulations introduced by the last Labour Government cost British businesses almost £90 billion. No doubt this contributed to Labour’s great recession, destroying thousands and thousands of jobs across the country. That is a staggering burden for any employer, but it is a particular problem for Britain’s millions of small businesses, because when people are running their own company they do not just have one job: they have to be a manager; they have to be an accountant; they are in charge of human resources and procurement; they have to issue and chase invoices, source new suppliers and arrange marketing and advertising. All that on top of the day job. There are not enough hours in the day as it is, and the last thing they need is the Government on their back, weighing them down with petty rules and regulations.
Caroline Flint (Don Valley) (Lab)
The Secretary of State talked about how this Bill will contribute to greater growth. Can he be a bit more specific? Will he itemise under the different clauses just how much growth he expects to see as a result of these proposals?
Sajid Javid
I respect the right hon. Lady, but I hope she understands how growth is generated by the private sector. The Government deregulate, cut taxes, get out of the way of businesses and set entrepreneurs free. She has to understand that we cannot just pass a law that will grow businesses. Perhaps she agrees with the leader of her party when he says he wants to restore clause 4 to Labour’s constitution; perhaps she thinks that is the way to help growth and help businesses?
One way in which we certainly do help businesses is through further deregulation. That is why in the last Parliament we scrapped £10 billion of Labour’s red tape. We have already committed to scrapping another £10 billion between now and 2020. But business owners have told us that the actions of regulators are just as important as the content of regulations. So this Bill will extend the deregulation target to include statutory regulators, and it will increase transparency with a new annual reporting requirement for regulators subject to the growth duty and regulators’ code. It will also extend the hugely successful primary authority scheme to give more businesses access to reliable, consistent regulatory advice. This will save them money, and give them the confidence they need to invest and grow.
The Enterprise Bill will also end the “Whitehall knows best” approach to the regulation of Sunday trading. We are a one nation Government and we want to see the benefits of economic growth being felt in every corner of our country. But no two parts of our great nation are identical. The needs and wants of a small rural community in the south-west may be very different from those of a bustling city in, say, the north-east. The people living and working in those communities understand them far better than any Minister or civil servant sitting in a comfy London office. So we will introduce amendments in this Bill to allow local authorities to decide whether to extend shopping hours in their areas. Central Government will not be dictating how to use this power. The decision will be entirely local, reflecting local preferences, shopping habits and economic conditions. If the people of Bromsgrove or Barking say they want to see longer Sunday opening hours, who are we here in Westminster to stand in their way?
Louise Haigh (Sheffield, Heeley) (Lab)
It is fantastic to hear that the Government’s policy is that Whitehall does not just know best, which is indeed what I thought the Government’s policy was before. Why then is the Secretary of State closing the BIS office in Sheffield and moving it to central London where, by default, decisions on investment will be much narrower and much more focused to central London, away from the so-called northern powerhouse?
Sajid Javid
First, the hon. Lady will know that no one makes this kind of decision lightly. The Government have a duty to spend taxpayers’ money wisely, and that is what we do with every single penny. She is quite wrong in her accusation that this will centralise decision making in London. Once the Department has completed its restructuring by 2020, there will be fewer people in London and the vast majority of officials who work for BIS will be outside London.
Ms Angela Eagle
The Secretary of State has just effectively announced that there will be changes to the Sunday trading rules. Why on earth did he not put them in the Bill? Why is he introducing them at this late stage?
Sajid Javid
The hon. Lady will know that we talked last year about our plans to change the Sunday trading rules, and we had a consultation, to which I am sure she has contributed. The Government’s intentions have been clear. It is a question of finding the right vehicle to make those changes, and they will be in this Bill by way of an amendment.
Andrew Griffiths (Burton) (Con)
May I draw the Secretary of State’s attention to a letter that I received from the owners of the Octagon Centre in Burton? The businesses in that centre are urging me to support this important initiative from the Government because they say that it will help their businesses and that they would employ more people as a result.
Sajid Javid
My hon. Friend is right to point out the economic impact of this measure. As I have said, it might not be right for every area but it is surely correct for each local authority to decide what is best for its area, and if that leads to more jobs and growth locally, that is exactly the reason why we should follow through on this policy.
If any of our friends in the Press Gallery have spent time freelancing, they will be all too aware of the problem of late payments—[Interruption.] There are friends up there. If they are not up there, they are listening somewhere else. I have heard of one writer, who may well be listening now, who says that he still has not been paid for copy that was filed two years ago. The most shocking aspect of this problem is just how common it is. In my six years as the Member of Parliament for Bromsgrove, I have been contacted by many dozens of local business owners who have been pushed to the brink by one thing: the failure of large corporations to pay up on time.
Toby Perkins
May I just take the Secretary of State back to the point about Sunday trading? I cannot remember a similar situation in which a Secretary of State has stood up and made a speech about a provision that is not even in his Bill but that he wished was in it. People are going to be voting tonight on the Bill’s Second Reading, and he is announcing measures that they are going to be asked to approve but which they might well be against, and which are not even in the Bill. Is not this entirely the wrong way to legislate?
Sajid Javid
We get this every day from those on the other side of the House. They are obsessed by process. They do not want to focus on the substance at all. They have no respect for the substance.
Ms Angela Eagle
The right hon. Gentleman is asking us to vote on Second Reading tonight on the substance of a Bill which, at the moment, does not contain anything about Sunday trading. We have not seen the response to the consultation; it has not been published. We do not know whether the Government are going to table an amendment or a new clause. He is expecting us to comment on something that we have not even seen, and that shows contempt for this House.
Sajid Javid
The hon. Lady has had plenty of time to consider the issue of Sunday trading and whether she supports the principle or not. There will be plenty of time to discuss that in the House. It will also be discussed and voted on in Committee, so there will be plenty of time for input. It would be far better if she and her party focused on the substance of the issues rather than on process after process.
Kevin Brennan (Cardiff West) (Lab)
On a point of order, Madam Deputy Speaker. Is it in order for the Secretary of State to come to the House in the full knowledge that he intends to amend the Bill and to ask Members of this House to vote on Second Reading on clauses that have not even been published? Is not that a gross abuse of power?
Madam Deputy Speaker (Natascha Engel)
As the hon. Gentleman knows, it is perfectly in order to do so—[Interruption.] Order. This is the Second Reading of a Bill, and if we listen to the Minister, this information might come at later stages. It is in order. The Second Reading of a Bill can be wide ranging. The Secretary of State can mention these things but he does not have to do so, and what happens in the later stages of the Bill is a matter for those later stages.
Kevin Brennan
Further to that point of order, Madam Deputy Speaker. I am grateful for your ruling—[Interruption.] I am sorry, do hon. Members have something to say? Further to that point of order, would it be in order for the Secretary of State to ask his officials now to go away and publish the new clauses that he intends to insert into the Bill, so that Members taking part in the Second Reading debate today can go to the Library to get that information and incorporate it into their remarks?
Madam Deputy Speaker
I think I have got the gist of the hon. Gentleman’s point of order—[Interruption.] Order. Of course it is in order for the Secretary of State to ask his officials to do that, but that is up to him. I think that we really ought to move on. This is a Second Reading debate and 28 Members are seeking to catch my eye—[Interruption.] Order. Let us move on.
Sajid Javid
Thank you, Madam Deputy Speaker.
When it comes to late payments, my Department leads by example. We pay more than 95% of invoices within five days, and more than 99% within 30 days. But many organisations are less scrupulous, including some in the public sector. The average British small business is owed almost £32,000 in overdue invoices. That is a huge sum, and for many it can mean the difference between success and failure and between keeping going for another year and throwing in the towel. However, it is not easy for a small business or sole trader to challenge a larger firm. They might not be happy, but they need that contract. They cannot afford to bite the hand that feeds them. That is not right, and it is not fair, and this Bill will do something about it.
Melanie Onn (Great Grimsby) (Lab)
On that point, is the Minister confident that none of those late payments is being made by the Government or any of their subcontractors to small businesses, some of which might be waiting for payment for 60 days or longer?
Sajid Javid
I am confident that, over the past five years, the Government have done a huge amount of work to ensure that central Government and parts of the public sector pay more promptly, but I also think that more work is required.
That is one of the reasons that we are establishing a small business commissioner with a remit to handle complaints by small businesses about payment-related issues with larger businesses. The commissioner will also have the resources to give general advice and information to assist small businesses with supply relationships and direct them to mediation services.
It is not just the late payment of invoices that is a problem. As we have seen all too graphically with the recent flooding, it is vital that insurance companies also pay out quickly. Doing so helps small businesses to help themselves and gets them back on their feet, but it does not always happen. Unnecessary delays by insurers can spell the end for vulnerable small companies, which hits employees, suppliers, the wider community and the economy. The Bill will create a legal obligation on insurers to pay up within a reasonable timeframe.
Insurance can protect many of a business’s assets from floods, theft, or fire, but at any company, the most precious asset is not the bricks and mortar or the stock in the warehouse. It is not even money in the bank. It is the skilled, dedicated workforce without which no business can succeed. Developing and growing our skills base is the key to unlocking increased productivity. It is the key to raising living standards and driving that all-important economic growth. That is why the Government have committed to 3 million new apprenticeships by 2020. We have also introduced a new apprenticeship levy on the very largest employers to help to pay for them. The Enterprise Bill will build on that success. It will introduce apprenticeship targets for public sector bodies in England. It will protect the apprenticeship brand. Unscrupulous providers will not be allowed to offer shoddy training, undermining businesses and letting down apprentices.
I am proud to say that the Bill will also create an institute for apprenticeships. An independent employer-led body, the institute will regulate the quality of apprenticeships and see that standards are driven by the needs of employers. As well as quality assurance and approval functions, the institute will have an advisory role on some funding allocations for apprenticeship standards. We will also be introducing amendments to give employers genuine control of apprenticeship funding through digital accounts as part of the digital apprenticeship service. Together, those measures will make it easier than ever for young people to access vocational training and, just as importantly, for businesses of all sizes to develop the skilled workforce they need to innovate, compete and grow in the years ahead.
Of course, it is much easier to achieve that growth if the taxman is not hovering over people’s every turn. I have already talked about how we have slashed corporation tax, ending years of punishing entrepreneurs for their success, but that is not the only tax issue facing Britain’s high streets. It is often said that small business owners are working for themselves, but because of flaws in the business rates system entrepreneurs can sometimes feel as though they are working for their local authority. We have started to tackle that by capping business rate rises. We know the appeals system also needs reform, so we are working with ratepayers to develop a modern, business-focused approach to local taxation. The Bill will further reduce the burden on businesses by applying the Government’s “tell us once” policy to business rates, and it will put in place provisions to pave the way for better information sharing between local government and the valuation office.
I am sure we all agree that local businesses are the heart of the communities they serve, and nowhere is that truer than in the great British pub. I assume that is one type of business all right hon. and hon. Members are familiar with—if they are not, they can always visit The Little Ale House in Bromsgrove, which I highly recommend. The Small Business, Enterprise and Employment Act 2015 required the creation of a pubs code. When enacted, the pubs code regulations will make life a little fairer for more than 12,000 tied pub tenants across England and Wales. We have just completed a consultation on those regulations and will publish the final version in time for the code to be in place from the end of May.
Many responses to the consultation raised an issue concerning the market rent-only option—the MRO. Specifically, they said that the eligibility of a tenant to choose the MRO at the point of rent assessment should not be contingent on the rent being increased. Good government is all about listening and responding positively. Clearly, that proposal would have had an effect we did not intend, so I am happy to announce that we will be accepting the argument regarding the MRO. Members in the other place tabled amendments to the Bill on that issue. Obviously, we now accept their intent, and we will be tidying them up in Committee.
Charlotte Leslie (Bristol North West) (Con)
I am sure that, if my right hon. Friend is getting the rounds in, we will be very happy to join him at his local pub. As he knows, I have been a strong advocate for a pubs code and pub company regulation, which are very long overdue. I therefore welcome the MRO extension and urge him to continue working with our pubs, which are the enterprise heart of our country, to see how that affects them and to make sure they keep their place as that heart.
Sajid Javid
My hon. Friend rightly says we should always look to see what more we can do to help the pubs in our community. Perhaps we can welcome this measure in The Mouse in her constituency, which is a very fine pub.
Andrew Griffiths
As somebody who opposed the initial proposal for the MRO legislation, I welcome the constructive way in which the Minister and the Government have worked with all sides to find a solution. The key to pubs’ futures is investment in their estates, so I welcome the Government’s recognition that that is most important.
Sajid Javid
My hon. Friend is correct about that. We want to see more and more investment in our local pubs, and I hope that these measures, taken together, will help to achieve just that. Let me also take this opportunity to commend him for the work he has done for pubs ever since he joined this House, not just on this code, but the huge amount of work he did to get the first cut in beer duty in almost 50 years.
Lady Hermon (North Down) (Ind)
The Secretary of State began with the words, which I endorse, about being a one nation Government. The Wetherspoon chain, whose interiors I am not familiar with, has 10 pubs in Northern Ireland and also believes that the United Kingdom is one nation. Does he believe that the pubs code should extend to Northern Ireland, where that chain operates pubs?
Sajid Javid
The hon. Lady raises an important point about the pubs code, specifically wanting to know whether we can apply it to Northern Ireland. I will discuss that with my Northern Ireland counterparts to see what can be done and to review what is currently being done to see whether there is any way we can assist.
The Opposition have a renewed enthusiasm for seizing control of the means of production, distribution and exchange. I think it is fair to say that Conservative Members do not share that enthusiasm, but we are committed to delivering the best possible value for money from those assets where the taxpayer retains an interest.
Last May, the Chancellor announced plans for a new company, UK Government Investments Limited, to better manage taxpayer stakes in businesses across the economy. This Bill contains a provision on UKGI, ensuring that the necessary funding powers are in place so it can carry out its vital work. That will include overseeing the sale of government assets in a way that will benefit the taxpayer—that will include the sale of the UK Green Investment Bank.
Established in the previous Parliament to address a failure in the market, the GIB has demonstrated to the wider world that investment in green projects makes good business sense. In fact, that bank has proved so successful that it has outgrown the need to be financed by the taxpayer. Moving the bank into private ownership will give it access to a much greater volume of capital, mobilising more investment and getting more green projects financed. The Bill contains provisions that will ensure that that move to the private sector can take place effectively and transparently. That will mean the GIB can continue to go from strength to strength, delivering its ambitious green business plan. It is that expertise and that green business plan that private investors will be buying into. As the name suggests, green investment is what the Green Investment Bank does—it is what has made the bank such a success. No sensible investor would look to change that.
Melanie Onn
Investor confidence in the UK renewables industry is at a record low. Does the Minister really think that selling off the GIB sends any signal other than that the Government are stepping away even further from the renewables industry?
Sajid Javid
I will come on to one of the measures we will put in place to make sure that the GIB keeps its mission—something the bank itself has come forward with—but I do really think this move will mean more green investment, because the bank is restricted by being on the Government’s balance sheet. If we can take it off that, it will have its own freedoms and ability to raise capital, whether equity or debt, and that will lead to more investment.
Huw Irranca-Davies (Ogmore) (Lab)
I wish to ask the Minister a legal and technical point. Did he and other Ministers challenge the advice they received about retaining even a minority share? Would that approach in any way compromise the bank’s ability not only to retain its green credentials, but to borrow openly and thrive and prosper, as we all want? Have they just accepted the one piece of advice they have been given, or have they challenged it, asking whether they could retain a minority stake?
Sajid Javid
The hon. Gentleman raises an important issue, and what I am about to come on to perhaps addresses some of the concerns. Similar concerns were raised in the other place, as I am sure he was aware. The GIB will create a special share, which will ensure that its green mission is guarded by an independent party once the bank is sold, and that share will be put in place without legislation. Mandating that in legislation is entirely unnecessary and it is unlikely to work, but the GIB has assured us that that will happen.
Ms Angela Eagle
The Minister will know that a new clause in the other place tried to mandate the green target and focus of the bank. Is he saying in what he has announced today that the Government will be taking that clause out of the Bill and replacing it with something else?
Sajid Javid
I am well aware of that clause, but what I am saying is that it is no longer necessary as the same objective can be achieved if the GIB puts in place a special share that will guard its mission, and that share will be held by an independent party.
Ms Eagle
I thank the Secretary of State for giving way again, and this is an inevitably technical bit of the Bill. Has the Office for National Statistics approved this change and will it accept it for the purposes that the Government intend? In other words, will the GIB’s assets be on or off the Government balance sheet?
Sajid Javid
The ONS does not need to approve anything that the Government do, but I am comfortable that the structure I have just mentioned allows the Government to meet their objectives for the GIB.
Huw Irranca-Davies
I thank the Secretary of State for his generosity in giving way and regret that I will not be able to speak at length today. It will be interesting when the Bill goes to Committee. The cross-party Environmental Audit Committee, which, until recently, I chaired, made several recommendations, the detail of which I cannot go into because of the time constraints. One was:
“The Government should provide an evaluation of whether a ‘phased approach’ involving alternative recapitalisation options would be possible. This could allow for greater consultation, transparency and market testing on the form of any eventual privatisation.”
Is the Secretary of State open to alternative options being proposed in Committee or not?
Sajid Javid
I am aware of the Committee’s recommendation. Some of the work that I have just announced that will be done by GIB will help to meet some of those concerns. I will not pretend that all the Environmental Audit Committee’s recommendations will be met, but I hope that the hon. Gentleman is reassured that we have considered them carefully and that as we proceed with the Bill we will take many of those issues into account.
Sajid Javid
I need to plough on, because a number of hon. Members wish to speak.
Finally, the Bill will bring the public sector into line with private sector best practice on exit payments. Too many public sector fat cats are handed six figure pay-offs when they leave a job, which are often little more than a reward for failure. That is an insult to the hard-working taxpayers and business owners who finance them. The Enterprise Bill will end that practice.
Jim Shannon
I apologise that I was not in the Chamber when the Secretary of State referred to Sunday trading and the hours that workers would have to work. I understand that, according to a Populus poll, 66% of the British public said that they were against any changes to Sunday trading and 91% of people who work in shops do not want any change either. Will the Government assure us today that there will not be any changes in the Bill to Sunday opening times ?
Sajid Javid
I can clarify that the Government will not mandate any part of the UK to extend Sunday trading hours. We will devolve the power to local authorities so that they can make that decision on behalf of their local community.
When Napoleon called Britain a nation of shopkeepers, he—[Interruption.]
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Members are starting to make points of order again on this one issue—
Madam Deputy Speaker
Order. We have had points of order on Sunday trading and if the hon. Gentleman wants to make a point of order at the end of the debate, I am perfectly happy for him to do so, but for now we must move on with the debate. We are getting bogged down in this one issue. The hon. Gentleman has his name down to speak, and I will happily call him, and he can also make an intervention, if the Secretary of State wants to take it, but these are not points of order.
Sajid Javid
When Napoleon called Britain a nation of shopkeepers, he meant it as an insult, but I see it as a badge of honour. I grew up above the family shop and I saw for myself how hard my parents worked day and night, seven days a week, to make their business a success. It takes a special kind of dedication to build something like that from scratch and to keep it going for 30 years or more. Before becoming an MP, I spent two decades at the other end of the business spectrum, working for some of the world’s largest multinational companies. For as long as I can remember, I have been surrounded by people who have created, managed and grown successful private businesses. When they create businesses, they create jobs. They create prosperity. They create opportunity.
Businessmen and women are the heroes of Britain’s economic recovery and whether they are running an international corporation from Canary Wharf or a one-woman start-up from a kitchen table, they deserve our respect and our support. The Enterprise Bill gives them all that and more and I commend it to the House.
Ms Angela Eagle (Wallasey) (Lab)
I compliment the Business Secretary on one thing at least, and that is the title of this Bill. Just listen to how it sounds when you say it aloud, Madam Deputy Speaker: the Enterprise Bill. It sounds important, dynamic, even exciting. To me, that is the title of a Bill that should be heralding a huge change in how we do business in this country. In time, it ought to be one of those Acts of Parliament that historians will look back on and describe as the most important of the age. After all, it is clear that the world is now on the cusp of the fourth industrial revolution, and if we are not ready for the wave coming toward us, we will miss it. I want us to take advantage of what will be an age of rapidly advancing digitalisation, and an age of robotics and big data that is expected to transform our lives out of all recognition—and to do so much more quickly than we might expect. It will be an age that confronts us with profound questions about how to generate and share prosperity and fight for a fairer outcome for everyone in our society.
As the first industrial nation, we need to react to that challenge if we are to mould it to our advantage. To guarantee our future prosperity and to earn our way in this rapidly changing and competitive world, we must be ready to seize the opportunities. So, do we have a Government who realise the importance of change and transformation at this particular time and who are willing to legislate accordingly for a more active, enabling and agile state? Do we have a Government who will rise to the challenge? On the basis of the contents of the Bill, we do not. We cannot fault their high-flying rhetoric, however. According to the Government, the Bill is meant to be about creating an open, enterprising economy, transforming Britain’s business culture. It is supposed to
“reward entrepreneurship, generate jobs and higher wages for all, and offer people opportunity at every stage of their lives”.
In the other place, Baroness Brady even claimed it was “an exciting attempt” to improve the business ecosystem. All I can say is that she gets excited pretty easily. We have before us a Bill that has been variously described in the other place as a curate’s egg, a hotch-potch of minor measures, a legislative herbaceous border, a dog’s breakfast and even
“a big legal pudding made up of all sorts of ingredients”.—[Official Report, House of Lords, 12 October 2015; Vol. 765, c. 43.]
The last was from someone who supported the Bill.
We have a hugely ambitious title hiding a collection of worthy but minor and underwhelming measures that it is hard for anyone to oppose in principle—that is, in the Bill as written, although we have heard about new things that might change our minds. What we do not have is a piece of legislation that remotely meets the challenges that we know are ahead. We do not even have a Bill that matches the ambition of the Government’s own rhetoric.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Despite all the hon. Lady’s flowery words, I must tell her that small businesses being paid on time will make a huge difference, that 3 million apprenticeships that give people a real opportunity in life and that are good for business will make a real difference, and that curtailing the big payments to fat cats which were the norm under Labour will make a huge difference. She should be embarrassed by her speech and I advise her to rethink her opening remarks.
Ms Eagle
I am now rather embarrassed that I gave way to the hon. Gentleman.
Hon. Members should make no mistake: our economy faces huge challenges. We have a current account deficit made up primarily of the country’s deficit of imports in relation to exports. That now stands at 5.1% of GDP, which is higher than at any point in peacetime since 1830. We also have an export target that the Government are set to miss by a third. Rather than taking action in the Bill, the Government are moving to get their excuses in early, with the Trade Minister recently describing that target as a “big stretch”.
We see no sign of the rebalancing the Chancellor promised six years ago, let alone of the march of the makers that he promised would be carrying us all aloft by now. British manufacturing has been in recession since last year, and output is still falling short of where it was in 2008. A complacent attitude to the UK steel industry is just one symptom of the Government’s neglect of manufacturing and our industrial base.
Just six weeks after presenting an optimistic comprehensive spending review, the Chancellor abruptly changed his mind. He turned up in Cardiff, warning ominously that our economy was suddenly facing a “cocktail” of threats in January that he had apparently failed to perceive in November. Instead of presenting radical action to deal with those threats, the Bill bears all the hallmarks of a frantic search by officials around the far-flung recesses of Whitehall for things to put in it. As a result, it has nine parts—mostly unrelated—dealing with issues ranging from the creation of a small business commissioner with little statutory power to the requirement that insurance pay-outs are made in a timely fashion and that regulators should be mindful of their effect on small business.
There is a welcome extension of the primary authority scheme, which was introduced by the last Labour Government, and which has been a great success. The Bill allows Ministers to set targets for apprenticeship numbers in the public sector, but without explaining where the money to pay for that will come from. It also puts a cap on exit payments, which may have unintended consequences for public sector reform.
Ms Eagle
The hon. Gentleman mentions the apprenticeship levy, but it will have to be paid by the public sector, which is being squeezed very hard by Government cuts, so there is no explanation of where the money will come from—if the hon. Gentleman has one, he can stand up and give it to the House now. [Interruption.] Well, the Bill amends the Industrial Development Act 1982 in an entirely sensible but minor way, and it tinkers at the edges of non-domestic rates, when what we probably need is major reform of the workings of the valuation office and, indeed, of the entire business rates system.
Richard Fuller (Bedford) (Con)
I am intrigued by what the hon. Lady has said about the IDA change, which will allow the Government to increase the amount they can spend without parliamentary oversight from £10 million to £30 million. Does she think this is a good time, with public spending under control, to give that authority to the Government without parliamentary scrutiny?
Ms Eagle
This is a minor change, which Opposition Members will support, simply because it updates the Act. It does not actually allow the Government to spend any more in real terms than the Act did—it just updates the Act to reflect inflation since the Act was passed. If it went a lot further, Parliament would, of course, want to keep a closer eye on this, but this is such a minor change, although it is welcome, that Opposition Members do not feel we need to oppose it.
Richard Fuller
I am interested in the hon. Lady’s comment about the inflation increase. She indicated that the Opposition would favour a more substantial increase in the Government’s opportunities to use money under the IDA. Will she explain a bit further what the Labour party’s position on that would be? If she describes what the Government are doing as minor, what does she have in mind?
Ms Eagle
The changes to the Act are minor, simply because they restore in real terms the original import of the Act—that minor change merely brings the Act up to date. There is no reason why any Opposition Member should worry about that change. It is aimed at a part of the rural broadband roll-out that is very important for a lot of people in rural areas, so it is wholly acceptable, certainly to the Opposition, although I am not sure whether the hon. Gentleman is opposing his own Front Benchers on this issue.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
We are trying to find out what you would do.
Ms Eagle
I am saying what we will do. We support this part of the Bill, because it makes a minor extension that just restores the intention of the original Act.
There are many modest measures in the Bill with which we agree; indeed, the Government resisted many of them during the passage of the Deregulation Act 2015, the Consumer Rights Act 2015 and the Enterprise and Regulatory Reform Act 2013 in the previous Parliament, and we welcome the fact that the Government appear to have come round and accepted them now.
However, there are a number of measures in the Bill with which we are not in agreement.
Ms Eagle
Let me just get on with this section, and then I will be happy to give way.
The Opposition will be working hard to secure assurances on amendments on some of the issues I have mentioned as the Bill goes through the Commons. I commend the hard work of Labour colleagues in the Lords, who successfully won some welcome concessions and clarifications as the Bill went through the other place.
Richard Graham
There are two ways of looking at the apprenticeship levy. One is that it is a threat to the public sector, but the other is that it is an opportunity for the public sector to hire more apprentices. Does the hon. Lady not see that as a real opportunity in the Bill?
Ms Eagle
The Opposition are in favour of the apprenticeship levy in principle, but we are taking a very close look at how it will be introduced in practice, and we have an idea that the devil will be in the detail. We will therefore be keeping a close eye on how the levy is introduced and particularly on how it impacts on companies that are charged far more in the apprenticeship levy on their payroll tax than they can actually have in terms of apprentices. What then happens to that money? Can it be driven into the sector’s supply chain, for example? There are issues about how this will impact on public sector spending, and we need to keep an eye on those. As the Opposition, even though we agree in principle with an apprenticeship levy, it is our role to hold this Government—the hon. Gentleman’s Government —to account on the detail as it becomes clear.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
My hon. Friend is raising some very valid concerns about the Bill and particularly about the apprenticeship levy. A lot of confusion is being expressed out there to Members of the House about how the levy will work. Ultimately, 90% of apprenticeships are provided in small and medium-sized enterprises that will not be paying the levy, and it is not clear how they will receive any support for apprenticeships. Much greater clarity from the Government is required.
Ms Eagle
Well, we are waiting for the Government to come forward with more detail about how the apprenticeship levy will work. The hon. Gentleman loves being in meetings. He told us that earlier in the day. He was waxing lyrical about how excited he was being in vast numbers of meetings every day. He made even the most banal meetings sound fantastically interesting. I am glad that he enjoys his job. The Opposition would certainly be more than happy to embroil him in even more meetings.
Catherine McKinnell
My hon. Friend is doing a marvellous job. The Minister for Skills, who is chuntering from a sedentary position, had the opportunity to provide much greater clarity on this issue in a debate with MPs from the north-east, but he absolutely and categorically failed to do so.
Nick Boles
I just want to clarify that the debate that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) mentioned, which lasted for an hour and a half and in which she spoke very well, was on further education colleges in the north-east. “Apprenticeships” was nowhere in its title, and so I am not even sure whether it would have been in order for me to discuss these issues. However, I am happy for her to come and see me with any questions she likes, as often as she likes.
Lucy Frazer
The hon. Lady suggested that these provisions are minor. I am surprised that she does so in circumstances where R3, the body that represents insolvency practitioners, says that some of its members feel that late payments contribute to 25% to 50% of small company insolvencies. Does she think that the difference between solvency and insolvency is a minor issue for many of our small companies?
Ms Eagle
No, I do not, but I think the hon. and learned Lady should read the Government’s own impact assessment. The provision on the small business commissioner that the Bill proposes is so minor that the Government’s own impact assessment says that they will be able to deal with only 500 cases a year, and yet we know that late payment is a huge issue. I am not saying that the issue of late payments is trivial; I am saying that in dealing with it, the Government’s response is far too limited and very disappointing.
Toby Perkins
As a former small business owner, I entirely endorse what my hon. Friend says. The problem with the Government’s proposal is not that they are attempting to tackle late payments but that it is an utterly inadequate attempt to tackle one of the great scourges of all business, but particularly small businesses—late payments.
Ms Eagle
I could not agree more with my hon. Friend’s words.
Part 1—clauses 1 to 13—deals with the small business commissioner, so let me come on to the Opposition’s view on this. In the previous Parliament, Labour argued for the establishment of a small business administration that would be specifically tailored to focus on the very specific needs of small businesses.
Ms Eagle
No, because I have given way to the hon. and learned Lady.
This Bill contains a much more modest aim in seeking to establish a small business commissioner to assist in late payment disputes and signpost advice services for small businesses. The Opposition will support this, but we are disappointed by its small scale and its very limited remit. Indeed, the small business commissioner’s budget is to be a modest £1.3 million a year, and only because of an Opposition amendment accepted in the Lords will the commissioner be independent and able to appoint their own staff. Moreover, the Government intended to allow the role to be abolished by ministerial order without parliamentary scrutiny—a situation that was changed by another Lords amendment. We support the idea of a small business commissioner, but it remains to be seen whether such a modest proposal can really counter the huge imbalances of market power that exist, especially between huge companies and their much smaller suppliers. I certainly wish the new commissioner, whoever they are to be, well in the work ahead, not least because figures showing that the amount owed to small and medium-sized enterprises in outstanding invoices has increased by more than 70% in two years and that almost a third of small businesses are expecting things to get worse this year.
Ms Eagle
No. I have given way to the hon. and learned Lady and I do not intend to do so again, because I am getting on to other aspects of the Bill.
Part 4—clauses 20 and 21—deals with apprenticeships. This Government are presiding over what employers have described as a “skills emergency”, and productivity in the economy continues to be revised down year by year. The Bill contains welcome measures that aim to strengthen the quality of apprenticeships and to give statutory protection to the term itself. Labour Members have consistently supported the drive to deliver more high quality apprenticeships, but we worry about imposing an arbitrary numerical target, not least because it could militate against high-value, high-quality provision. We note that the Bill gives Ministers the power to set targets for apprenticeships in the public sector but is silent on how these targets will be met when the round of savage public sector cost-cutting continues unabated and FE provision is being decimated.
Clauses 30 to 32, in part 7, deal with the UK Green Investment Bank. The bank has only just been established and the Government are now seeking to flog it off—or, as I think the Secretary of State said, “set it free”. In the light of the Paris climate conference, where Governments, investors and businesses across the world agreed to accelerate the transition to a low-carbon economy, it is absolutely extraordinary that he has allowed the Chancellor to sell off the bank, setting back efforts to build a greener low-carbon economy.
Michelle Thomson
The hon. Lady may have noticed that the Chancellor said:
“With the turbulent conditions we see in financial markets, I hope you agree with me that now is not the right time for that share offer.”
Does she agree that if it is not the right time for Lloyds, why is it the right time for GIB?
Ms Eagle
My view is that the Chancellor should have allowed the Green Investment Bank time to establish itself and certainly not have considered virtually privatising it as soon as it was established. The hon. Lady will know that we are now in a tussle to see whether we can preserve the focus of the bank on sustainable development and a low-carbon economy. That is where the battle has been raging in the other place as the Bill went through its stages there.
Even more extraordinarily, under the Bill as introduced in the Lords, there was a real risk that the bank’s focus on green investment would be completely destroyed. Fortunately my Labour colleagues in the Lords were able to come up with a formula that safeguards its green focus even if it is sold, but we have heard today from the Secretary of State that their amendment is going to be removed. I promise him that in Committee we will look very closely at what he intends to replace it with and whether it actually does the job of safeguarding the bank’s green focus. We will also focus, in a non-green way, on ensuring that the proposals that the Government come up with are fit for purpose.
Clauses 33 and 34, also in part 7, deal with pubs reform. In January, when it was clear that there was a majority in the Lords for ensuring a fairer deal for the landlords of tied pubs, Ministers forestalled a vote that they would have certainly lost by promising to legislate for a fair market rent only option. Their promise was taken in good faith, but they then abandoned their previous commitment, causing uproar in the other place. If it is possible to believe that the other place is capable of uproar, this particular event caused it. Yet another U-turn was inevitable, and it was duly announced, much to the relief of us all. The Government must stick to the promises they made to pub tenants and stop dragging their feet. They should legislate on the promises they have made. It is clear that a rent assessment and a market rent only option at rent renewal are the bare minimum that would be required to make good on those promises. This would create a fairer system for pub tenants and pub companies, and it has widespread support from businesses and beer drinkers alike. Again, we will take a close look at what the Government come forward with in Committee.
Clause 35, in part 8, deals with public sector exit payments. Labour Members are concerned that this measure will have unintended consequences.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I think we would all agree that nuclear decommissioning is both essential and highly specialist, yet this Bill will undermine workforce confidence and human resource planning at Magnox sites. Does the hon. Lady agree that the unique skill sets of this workforce should be safeguarded from the effects of the Bill?
Ms Eagle
That is another example of where something being sold as an attack on what the Secretary of State somewhat insultingly called “public sector fat cats” has a direct effect on private sector workers doing some of the most difficult and dangerous work, which we need to ensure can be carried out properly.
Sammy Wilson (East Antrim) (DUP)
I may take a different view from the hon. Lady on the point that she is making, but unfortunately this provision will not apply to Northern Ireland because, despite the financial problems there, Ministers and the Assembly have decided that Northern Ireland should not be covered by the Bill. Does she share my concern that the serial payers of huge pay-offs are exempted from the provisions? For example, the BBC, which seems to hand out public money hand over fist to directors, heads of religion and so on, will not be covered by it.
Chris Stephens (Glasgow South West) (SNP)
The term “public sector fat cats” surely does not apply to a civil servant who earns less than £25,000 a year, whose length of service may be 30 years or more. The unintended consequence of the policy is that it will impact on the longest-serving employees.
Ms Eagle
There are what I have rather politely and generously, in my view, referred to as unintended consequences of the cap, and I noted with some distaste the Secretary of State’s use of a pejorative term such as “public sector fat cats” to justify the existence of the proposed cap. It is clear that the cap could impact, as the hon. Gentleman says, on those on moderate and even lower pay with long service, and it could impact on pension “strain” payments for workers, rather than on those on the highest salaries with much shorter service.
The Cabinet Office has confirmed that some civil servants earning less than £25,000 a year could be affected by the cap because they have long service. Surely this was not the intention. Again, the Opposition will explore some of the consequences. We have even heard that essential restructuring in some public services is being held up by the unintended consequences of this crude measure.
Dr Julian Lewis (New Forest East) (Con)
I am conscious of the fact that I was not present for the Minister’s opening speech so I may have missed something, but I am aware of concerns raised not only by the Prospect union but by one of my constituents about the fact that as someone who has always earned less than £28,000 a year, he may, as a result of early retirement, be unintentionally caught by this provision. I hope we will get some assurance from the Government Front Bench either that that will not happen, or that an amendment will be accepted to make sure it does not happen.
Ms Eagle
The right hon. Gentleman raises precisely the kind of case that has no doubt been raised with other hon. Members in all parts of the House. The only thing he missed was his own Secretary of State calling everyone who worked in the public sector, presumably including his constituent who would be affected by this cap, a fat cat. We will wish to give the provision particular scrutiny in Committee.
I turn to a subject which is not currently on the face of the Bill, but on which the Secretary of State has chosen to make announcements today. It is important that the Government publish their Sunday trading consultation response, along with all submissions. I was rather hoping that it might turn up while we were speaking today so that we could look at it before we vote on Second Reading. The Government must publish it in full and immediately, and tell us what form amendments to the Bill or new clauses relating to the deregulation of Sunday trading will take.
We all await all the details, but it is deplorable that at this late stage in the Bill’s passage through Parliament— after the Bill has gone through the House of Lords—the Government have seen fit to introduce these changes.
Toby Perkins
My hon. Friend will be aware that a huge number of Members are not present in the Chamber. They may well have read the Bill and may be coming at 7 o’clock to vote on it. We know that a number of Government Members feel very strongly that, for Christian reasons, they do not wish to support further extensions to Sunday trading. They may well unwittingly vote for the Bill, not knowing what has been announced from the Government Dispatch Box.
Ms Eagle
That is right, but God does move in mysterious ways Her wonders to perform, so perhaps between now and 7 o’clock those with an interest in the matter will realise what is going to be in the Bill, or the Secretary of State might even do the decent thing and publish the paper and the changes that he is proposing so that we can have a look at it before all of us go through the Lobby tonight.
Let me remind the House that this is a policy that was not in the Conservative manifesto, which the Government tried suddenly to crow-bar into the Cities and Local Government Devolution Bill, but which they wisely abandoned at the last minute in the face of widespread opposition, not least from their own Back Benchers. The current arrangements were legislated for separately in a stand-alone Bill which received Royal Assent on 5 July 1994. I should know, because I served on the Bill Committee. The current arrangements work well and mean that retailers can trade, customers can shop, and shop workers can spend time with their families on Sundays.
Catherine McKinnell
I apologise for interrupting my hon. Friend’s flow. Does she share my concern that the Government’s approach appears to be either underhand or incompetent? Will she seek reassurance from the Government that it is neither of those?
Ms Eagle
The Government have spoken. They keep acting as though we know what the changes are, when we do not. They have chosen not to give us any warning that they were going to be in the Bill, not even a private tip-off, so we have to react completely in the dark. Other than what was said from the Dispatch Box, we have no idea what will be in the Bill. [Interruption.] The Minister for Small Business, Industry and Enterprise chunters away from the Front Bench, saying that these changes are minor, but we do not know whether they are minor until she publishes them and we read them. If she would like to publish them now, we can have a five-minute break, go out and read them and check whether she is telling us the truth.
Anna Soubry
The hon. Lady was obviously present during BIS orals, so she heard me say, for example, that this is about devolving power down to a local level. [Interruption.] Hang on! Chill out! Calm down! It therefore gives local authorities the power to decide whether they will extend Sunday opening hours to a very small number of shops. That is what it is about. It is not some huge, major measure. I would be the first to say that this is about the devolution of power. I think the hon. Lady has a problem with letting people at a local level make the decisions in the interests of local people.
Ms Eagle
I have no problem whatsoever with letting people decide locally, but it is not for a Government Minister to tell the Opposition what their attitude to something should be before we have actually seen what the proposed clauses say. The Government are asserting, even as we speak, that the public sector exit payments are all about fat cat public sector pay-offs, but we have discovered—because this has actually been printed in the Bill—that those fat cat payments apply to people on £25,000 a year. The right hon. Lady’s view of reality may not be the same as that of the Opposition. As a Minister, she should realise that, if she wants the Opposition to take a view on something, she should publish it.
Anna Soubry
Does the hon. Lady accept that the exit payments will apply to only some 5% of workers, because we are talking about a redundancy payment of £94,000?
Ms Eagle
By the Secretary of State! They earn as little as £25,000 and have given their lives to long public service. We know that because the clauses have been printed. The right hon. Lady should publish her Sunday trading clauses. The Government should have published them a lot sooner, if they were going to put them in the Bill.
I can only assume that the Government chose to introduce the changes to Sunday trading at such short notice in the hope that they can bounce them through the House with minimum opposition and scrutiny. This is yet another example of them governing from the shadows. It treats the House of Commons with the utmost disrespect, and it treats the House of Lords with contempt. Given that the Cities and Local Government Devolution Bill was subject to scrutiny by a Committee of the whole House, will the Secretary of State do the same for the Sunday trading amendments that the Government will table to the Enterprise Bill? That is the least he can do in the circumstances.
Unless something else comes to light, we do not intend to oppose the Bill’s Second Reading, but we are disappointed at this legislative pudding. We are even more disappointed at the developments on Sunday trading, and we will hold this Government to account as the Bill goes through Committee.
Mr Jonathan Djanogly (Huntingdon) (Con)
I declare my interests as stated in the Register of Members’ Financial Interest.
I am always happy to welcome Conservative-proposed legislation that is aimed at assisting the conduct of business, particularly small business, not least because I represent a constituency with one of the largest proportions of small business ownership in the country.
I want to address the role of the small business commissioner proposed by part 1 of the Bill. I am not concerned about the concept of the new role per se—I thoroughly welcome it—but I want to explore its scope and interaction with existing schemes.
On capacity, the new £1.1 million SBC website should handle 390,000 disputes from 70,000 businesses, yet the SBC will deal with only 500 complaints a year. That gives rise to the question of what will happen with the rest of the disputes and what the real impact of the proposal will be. Could the site cope with the workload of significant numbers qualifying for assistance? That remains unclear.
I am also concerned that the background papers are light in identifying what is currently being done to give advice and information to small firms. In other words, is this going to be a consolidation of various existing advice givers, or will it be something new, delivered in a new way?
The law already forces large companies to report payment practices on a six-monthly basis. Likewise, the prompt payment code has been strengthened to start a 60-day maximum payment period. Importantly, the Government have been leading the way by imposing strict payment terms on themselves. All of that is very good, but it would be helpful to further assess whether those issues are working and where the remaining gaps are. I am surprised that the remit of the SBC covers only large private organisations, not public sector ones. I am not sure why that is.
There is also a regime for statutory interest on late payments where there is no contractual provision. Should we not be asking why that has not worked? Can we assume that to be the case, given this proposed legislation? If so, should we not be getting rid of the old fixed interest legislation? Indeed, where it applies, is it simply being ignored by large firms that might be threatening small firms that try to enforce it?
It is impressive that we have a Small Business Minister—the role in itself is a statement of this Conservative Government’s support for small business—and she is doing an excellent job. However, it would be interesting to hear a little more about how the Minister and the commissioner will interact and divide their jobs.
That leads us on to examining what the SBC will actually do. The SBC will take a non-legislative approach and will not give legal advice. There are no proposals to change court rules, and nor do we propose to go down the statutory route for enforced interest or penalties. That is my position, but it would be helpful to hear further justification for discounting the alternatives.
What has been proposed is more mediation and general advice, the complaints procedure and a statutory means for the SBC to make recommendations to the Secretary of State about the publication or provision of advice and information to small businesses. The question is whether the SBC should offer mediation, and the Government are saying no. My concern is that both parties need to agree to mediation, so if the late payer sees that mediation will remain as the low-cost option after a debt summons has been issued against it, why would it bother settling early, especially if one has to pay for mediation recommended by the SBC? I think the position might need to be reviewed. If the position is maintained, it might be smarter to have some kind of penalty or cost implication if one party has refused to attempt mediation before court.
I am also slightly unsure how the SBC will be encouraged to engage in signposting help at an early stage. We will need to tread carefully so as not to allow signposting to become legal advice. On the other hand, the SBC will be able to consider complaints by small companies at an early stage, and that could provide room for conflict. When it comes to providing advice, will that be generic or relevant to the sector in which a company operates, where, for instance, invoice payment times may vary significantly?
The notes focus on late payment advice, but that is only one aspect on which small businesses need help. For instance, a small business may well not have the resources or manpower to check the environmental or child labour practices of a large foreign supplier. Will the SBC help on such an issue? A lot of such signposting activity is currently carried out by business organisations, such as the Federation of Small Businesses and chambers of commerce. Will the SBC be expected to work closely with such organisations?
On the complaints side, the SBC can demand and order little. For example, the commissioner will not be able to order the production of documents from a company that has been complained about. Given the lack of hard powers for the SBC, the question is how effective they will be. I think that a big part of the answer will be the SBC’s ability to name and shame. Will the Minister explain how that will be carried out and publicised? The other key issue will be to have a charismatic leader, who will not be overwhelmed by the number of businesses involved or the lack of powers that go with the job.
That leads to the broader question of what the SBC should be about. In the other place, there was a description of the broader powers of the Australian SBC, and the Minister, Baroness Neville-Rolfe, responded that despite the success of the position in Australia, the Government had deliberately decided not to give our SBC as wide a remit. However, she did not really explain why that was the case, and an explanation would be helpful. Are there, or will there be, provisions in the Bill that will allow the role to be adapted, as is likely to be required? I know that the FSB wants there to be an advisory panel for ongoing consultation. Will that be provided?
Of course, it is not only Australia that has a champion for small businesses. The United States has had a Small Business Administration since 1953, and I once had the pleasure of visiting it in Washington DC. With more than 3,000 staff and a series of forthright commissioners who happily make a huge fuss about proposed Government regulations on business, it is pretty formidable. It has many other roles. Importantly, it leads on efforts to deliver 23% of prime federal contracts to small businesses, and it provides loan guarantees of up to 90% to small businesses. Although I am not saying that we should necessarily copy those foreign small business commissioners, will the legislation enable an ongoing review of what is required for the SBC to ease the way through the difficulties and regulation that we know hinder all small business?
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I advise Members, before the Front-Bench team come in, that there will be a seven-minute limit after Hannah Bardell.
Hannah Bardell (Livingston) (SNP)
I rise to speak for the SNP, and, unfortunately, against the Enterprise Bill, which contains the typical Tory agenda of the privatisation of public assets, and the penalisation of public sector workers. Although we support the long-overdue creation of a small business commissioner, the action to support small businesses does not go nearly far enough. The Bill is, in our view, a wasted opportunity to back small business, incentivise investment and innovation, and encourage entrepreneurship.
The ill-conceived and badly drafted nature of some aspects of the Bill are particularly disappointing. Our key concerns lie in three areas. First, we are concerned about the level of support for small business. We welcome the concept of a small business commissioner, and it is important that the office has real power and teeth to address critical issues facing small businesses. The picture on private sector late payments is getting worse, and the SNP will press for further protections for small and supply-chain businesses around late payments and retentions. The SNP Scottish Government have a proud record of supporting small and medium-sized businesses, and we want the UK to do all it can. Unfortunately, a commissioner with no powers of reprimand is of little value, and it comes at a significant cost to the taxpayer.
Secondly, we feel strongly that the UK Green Investment Bank has acted as a core investor in the UK’s green economy, and it should continue to do so by sticking to its green objectives. The SNP opposes plans to privatise it, which would result in the loss of a significant public stake and of the bank’s green objectives. The GIB is an established means of managing the pressing and vital transition towards a low-carbon economy.
Sadly, the UK Government are not only failing to give the right support to our oil and gas sector, but simultaneously pulling the plug on renewable technology subsidies and projects, while also privatising the very bank set up to help the UK to meet its green objectives. That is a triple whammy of destruction for the future of our energy industries. The SNP support the Government maintaining a significant public stake in the GIB. Given the impact of devolved law, any privatisation of the GIB in part or in full will require a legislative consent motion in the Scottish Parliament.
Thirdly, one of the more poorly thought out and drafted parts of the Bill is the capping of exit payments for public sector employees. Despite the UK Government’s rhetoric, that will affect many public servants on low and moderate salaries—midwives, nurses, librarians and social workers—who have given long service to the public sector, as we have already heard. Some parts of the Bill are so poorly drafted that they make little sense. The Bill does not properly reflect the results of the consultation undertaken by the Government or the initial plans drafted following the consultation.
Chris Stephens
Does my hon. Friend share my concern, and that of the Public and Commercial Services Union, that the consultation period did not follow the Cabinet Office consultation principles, under which there should be a 12-week consultation? The consultation on the exit payments lasted four weeks and took place during a peak holiday period for the civil servants involved.
Hannah Bardell
I share my hon. Friend’s concern. If we are going to have consultations, we should let them run for the full period and take proper cognisance of their results.
The SNP opposes the Government’s plans for caps on public sector exit payments. We note the specific concerns raised in the other place regarding the complete lack of an impact assessment alongside the Bill. That is regrettable, but not unsurprising, as this Government seem to lurch from one piece of disastrous legislation to another.
A small business commissioner may be a great idea on paper, and perhaps even in practice, although I am not entirely sure that, at a cost of about £1.1 million, we will get value for the price paid. If the commissioner has no powers to reprimand, how can decisions be enforced? In 2011, research by the Federation of Small Businesses found that 73% of small businesses had experienced late payment in the previous 12 months, with half having outstanding invoices of £5,000 and a fifth of £20,000. The Department’s own impact assessment sets out research by the payments service BACS, undertaken in January 2015, which shows that the average small business is waiting for £31,900 of overdue payments and that late payment is costing small and medium-sized businesses nearly £27 billion every year.
In Scotland, research released by the Bank of Scotland at the end of January 2016 showed that the amount the typical Scottish SME is owed has ballooned by about 60% in the past two years alone. The research found that the average amount owed to Scottish SMEs on invoices has increased from £50,000 in 2014 to £80,000 in 2016. Late payments were identified as the biggest challenge facing firms. FSB Scotland’s Colin Borland has said:
“One in four smaller businesses will go bankrupt if the amount outstanding grows to £50,000.”
We need stronger and more stringent legislation in this area.
The picture on private sector late payments is therefore getting worse. As I have said, we welcome the Bill’s creation of a small business commissioner, who would assist small businesses. However, the SBC does not have the necessary powers to do the job. We share the FSB’s concerns that little detail has been provided about the exact powers and resources the commissioner will have at his or her disposal—for example, the powers to refer cases to the Competition and Markets Authority or to make legally binding rulings. The UK Government could do much more in the Bill to remedy problems in the private sector caused by moneys being withheld from the supply chain.
I recently met those involved with the Specialist Engineering Contractors Group, which represents 60,000 specialist engineering firms in the UK construction industry. They have called for the Bill to provide for a retention deposit scheme. They explained to me that withholding retentions is a common feature of construction contracts and the devastating impact that has on small and medium-sized businesses. At any one time, £3 billion is held in retentions, and £40 million was lost by UK construction firms in retentions in 2015 due to the insolvency of the main contractor.
We believe that a retention deposit scheme could take the form of the project bank accounts piloted by the Scottish Government. I urge the Minster to engage with my colleague Fergus Ewing MSP, the Minister for Business, Energy and Tourism, to hear how well that scheme operates in Scotland. Our Deputy First Minister, John Swinney, announced in April 2013 that we intend to trial project bank accounts. Trials are taking place in NHS Lanarkshire, Transport Scotland’s Inveramsay bridge project and the Scottish Borders Council’s Galashiels transport hub project.
The Scottish Government have also taken action on prompt payment in public procurement. We implemented our prompt payment policy in 2009 by introducing a contract term for all public bodies to ensure that supply chain firms were paid within 30 days under all public contracts. We expect all public bodies in Scotland to follow our lead by implementing and enforcing prompt public payment policies that deal fairly and transparently with businesses, and to publish their results. We hope that they will follow suit and consider those points. Our action on private sector late payments has been supported by the chief executive of the Scottish Chambers of Commerce, Liz Cameron, who said:
“In the current economic climate, businesses need the confidence to invest and grow. Late payments can hold this back and the culture must be tackled from the top down.”
The SNP Government will continue to support the small business bonus scheme, which is delivering rates reductions for more than 100,000 firms across Scotland. We heard earlier at Business, Innovation and Skills questions that there is pressure on the UK Government to look again at that issue. We know that they are considering it and we look forward to hearing the results.
Since its inception, the GIB has acted as a core investor in the UK’s green economy. The SNP wholeheartedly opposes the plans for yet more privatisation, which in the case of the GIB will result in the loss of a significant public stake and the bank’s green objectives. The UK Government must provide assurances that the bank will remain headquartered in Edinburgh and that the full £3.8 billion commitment to the bank will be carried through. We also seek assurances that the UK Government will remain committed to maintaining a significant public stake to ensure that the GIB retains its original purpose as a green bank.
Industry experts have warned that the move to privatise the GIB could deter private sector investment in the UK’s low-carbon economy. Concerns have further been raised over the potential impact that it could have on the tension between the GIB’s longer-term, higher-value projects and the temptation to invest in projects that create short-term returns.
We are particularly conscious of the concerns raised by the Environmental Audit Committee in its 2015 report, which said that
“two key risks to GIB cannot be avoided merely by protecting its green purposes: first, the risk that GIB will move its focus away from novel and complex projects which struggle to find funding in favour of easier and less complex projects, and second, the risk that a privatised GIB could invest in areas which may damage its reputation and undermine its role and leadership in the green economy.”
If a Committee of this House is so concerned, why are the Government not concerned and why are they not taking action in this regard?
It is the firm view of the SNP that the Enterprise Bill’s removal of public sector controls on the GIB would require a legislative consent motion in the Scottish Parliament, given the impact on devolved law. That view is supported by Aileen McHarg, the professor of public law at Strathclyde University, who said it was “incontrovertible” that the green purposes included in the legislation related to devolved matters and that Scottish consent would be required for any change that might
“have implications for future investment in green technologies”.
I hope that the Minister and the Government heed that point and remember that we have devolution for a purpose, not just to mitigate the dire decisions of this UK Government and to pick up the pieces of Tory policy, as is so often the case.
A number of the bank’s investments are relevant to Scotland, including a £2 million investment in a sewage heat recovery system installation programme in locations across Scotland; nearly £30 million of equity investment in the construction of Levenseat Renewable Energy Ltd’s energy waste recycling plant; and a £6.3 million loan to Glasgow City Council to enable the replacement of its streetlights with lower-energy lights. The list goes on. All those projects are significant to the local communities of Scotland and to Scotland as a whole. We do not want any of these opportunities to be lost to yet more privatisation.
Finally, I turn to the plans in the Bill to cap exit payments for public sector employees, which will, despite the UK Government’s rhetoric—and it has been poor rhetoric at that—affect many public servants on low to moderate salaries. The SNP shares the concerns of the union Unison, which opposes the Government’s plans for caps on public sector exit payments. The Cabinet Office has confirmed that some people who earn less than £25,000 a year could be affected because of their long service—that is, serving the public, often for salaries below those in the private sector.
The trade union Unison has pointed out that the proposed cap would affect redundancy payments for a wide range of NHS staff and would not be limited to groups that the public view as executives. Because, as we have heard, redundancy calculations are made on the basis of length of service and earnings, and because a significant number of NHS staff work unsocial hours, capping the payments could affect staff in band 6 and above. The jobs that fall into band 6 include nurses, midwives and paramedics. Are we really saying that those people are fat cats and that they do not deserve such payments at the end of very long, difficult and challenging careers?
In January 2015, the Minister for Employment promised an exemption for low-paid public sector workers. She said:
“This commitment, which will be included in our 2015 General Election manifesto, will cap payments for well-paid public sector workers…Crucially, those earning less than £27,000 will be exempted to protect the very small number of low earning, long-serving public servants”.
Unfortunately, the Bill does not reflect the promise made by the Conservative Government.
The Government’s plans have also failed to take account of inevitable inflation and earnings growth. If this cap is introduced, there must be a commitment to index-link the cap, to ensure that it meets its original intention without becoming more and more punitive over time. The Local Government Association has criticised the Government’s plans, stating:
“The consensus among the respondents to our consultation exercise felt that the policy as drafted with a cap set at £95,000, which includes strain on fund costs, unjustifiably penalises older, longer serving, junior to middle ranking employees in local authorities.”
Unison highlighted a particularly poorly drafted and concerning section of the Bill—well, perhaps it was intended. Under section 5, payments made in respect of death are outlined as exempt, but in the Government’s hurry to introduce those harsher regulations at the last possible moment before the Bill is enacted, they seem to have decided that dead people might be worried that their exit benefits might be affected if they decide to return to work in the public sector. That does not make sense, and it needs reviewing and proper thought.
The rhetoric of the Tory Government on the pay and conditions of our vital public servants stands in stark contrast to the record of the SNP Scottish Government. The Scottish Government introduced the living wage to the public sector pay policy in 2011, initially helping 6,000 public servants and benefiting around 3,000 workers each year. The living wage of £8.25 per hour is now paid wherever the Scottish Government control the pay bill.
In Scotland, the SNP Government highly value our NHS staff. We have not imposed the same unfair contractual changes on junior doctors that the Tories at Westminster are attempting to impose, and we have protected the nurses bursary, which the Tories have scrapped in England. We have maintained a no-compulsory-redundancy policy, while in NHS England there have been more than 17,000 compulsory redundancies since 2010. Overall, there may be some good intentions buried among some bad ideas in the Bill, but the SNP feels that it is a missed opportunity to back small business, incentivise investment and innovation, and encourage entrepreneurship. It is more “bits and bobs” than the bigger picture.
Chris White (Warwick and Leamington) (Con)
The Bill contains a wide range of measures, but I shall focus specifically on the Government’s further action on apprenticeships. The target of 3 million apprenticeship starts by 2020 is a welcome ambition, but we must ensure that they are of sufficient quality to equip those enrolling on an apprenticeship with the necessary skills, and to increase the flow of talented individuals into the workplace. Addressing the skills gap must be an absolute priority.
I have seen many examples in my constituency of the value of apprenticeships to all parties, and I am pleased to report that since 2010 there have been 3,450 apprenticeship starts, no doubt assisted by the demand created through the strengthening of our economy. Some 99.3% of businesses are SMEs, and it is therefore essential that we incentivise and encourage them to take on apprentices. I welcome the fact that the apprenticeship grant for small businesses has been extended for another year.
The Secretary of State wrote in The Daily Telegraph about an imminent fourth industrial revolution, and stated:
“We led the Industrial Revolution over 200 years ago when scientific leaps and technological innovations brought enormous economic benefits and improvements to living standards.”
Industry 4.0 refers to the fourth industrial revolution and the rapid advancement of technology that will change our economic landscape further. Such technology includes machinery that can improve efficiency and productivity. It is therefore vital that our workforce are sufficiently skilled to use that new innovation.
Warwickshire College, in my constituency, is doing its bit to equip young people with the skills necessary to succeed. It has recently opened an engineering block, with provision for a further 285 advanced apprenticeships and 253 higher apprenticeships. As I mentioned in a debate last year on vocational qualifications, we must work harder to achieve parity of esteem between academic and vocational courses.
Melanie Onn
I fully support apprenticeships; indeed, I am taking on an apprentice in my office, which I hope exemplifies the point. Government data published this week show that young people from low-income households in north-east Lincolnshire are less likely to receive post-16 qualifications than those in other areas of the country, even though they are more likely to get good GCSEs. My concern is that there is an over-emphasis on apprenticeships and insufficient support for other training opportunities, with apprenticeships being the only game in town. I am concerned that insufficient training is available for young people in post-16 education to meet the skills gap that so obviously exists.
Chris White
I appreciate the hon. Lady’s comments. We should ensure that each part of our society and all parts of our education system recognise what our young people need to succeed. The target of 3 million apprenticeships by 2020 is a major step towards achieving that, but we must recognise that there are other needs as well.
It is important to recognise that our young people need to see the benefits of earning and learning. The Government measure to protect the term “apprenticeship”, in the same way that the term “degree” is protected, is excellent. If the target of 3 million apprenticeships is reached, the achievement will, of course, be more significant if they are high quality.
The move will add to the strengthening of the reputation of apprenticeships as a good way to start a career. It may be worth the Government investigating the possibility of allowing those who have completed an apprenticeship to use a suffix after their name, similar to the recognition given for achieving a degree. Coventry City Council offers the freedom of the city to those who have completed an apprenticeship. I understand that it is the only local authority in the country to do so. I see such initiatives as an excellent way to build prestige around apprenticeships. I encourage other local authorities to do the same.
The all-party group on manufacturing and industry leaders, in discussing the future of the sector, made it clear that we need to make a concerted effort to invest in skills to improve our productivity and competitiveness on the international stage. Apprenticeships can be instrumental in addressing the skills gap, which is absolutely vital for the future of the UK economy.
I welcome the measures in the Bill that allow the Secretary of State to set targets for public bodies in relation to the number of apprentices employed. Progress has been made, with a number of apprentices working across Whitehall, but the new powers will ensure that the public sector is a part of that ambition. I would like to touch on the use of the Public Services (Social Value) Act 2012 and the positive effect it can have on apprenticeship schemes. Partnerships between the public and private sectors to deliver projects have resulted in the commissioning of tenders that include an aspect of social value, such as the creation of additional apprenticeships.
We have come a long way since the concept of apprenticeships began in this country in the 12th century, but their value cannot be overstated. With 2.3 million apprenticeship starts in the previous Parliament, we have made great strides. The further Government target for 2020 is to be welcomed. I sense a tipping point with apprenticeships and I, for one, look forward to a new generation benefiting from these schemes and to how strongly the initiative will contribute to our economy.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to follow the hon. Member for Warwick and Leamington (Chris White), my colleague on the Business, Innovation and Skills Committee.
In the main, notwithstanding the concerning revelations about future unknown clauses relating to Sunday trading, this is not a bad Bill. There is a bold and lofty ambition to the rhetoric accompanying the Bill, which is, I would suggest, somewhat at odds with reality. I think even the Minister would have to accept that the impact of the Bill will be very marginal in promoting a step change to improve the productivity, profitability and competitiveness of firms.
It is excellent news that the number of UK business births has increased to 351,000—the highest number since comparable records began in 2000—and I am particularly pleased that the north-east has the highest proportion of new business starts, albeit from a smaller business base. The increase in the number of start-ups is a commendable achievement, and it would be churlish not to acknowledge the Government’s positive role in helping to bring it about.
The Government hope that the Bill will continue that trend, stating that it
“will cement the UK’s position as the best place in Europe to start and grow a business”.
I support that ambition, but I doubt it will be achieved. Although they have been successful in encouraging business start-ups, they have been less so in facilitating business survival and growth. It is difficult to see how the Bill will change that. In the same period as we saw a record number of business births, we also saw a marked increase in the number of business failures: the number of business deaths increased to 246,000, which was three times the rate of business births.
That could be seen as the natural churn of a dynamic economy—it is a function of a market that businesses are born and naturally die—but business survival rates are worrying. The UK does well on firms that survive their first year in business—the average of 93% is well above the EU average of 83%—but the more sustained survival rate for British enterprises is poor. Less than 40% of UK companies last more than five years. Only Latvia, Slovenia, Portugal and Lithuania fare worse. A failure to last for any length of time limits British companies’ ability to scale up and become more resilient, innovative and outward-looking, thereby taking market share, winning export orders and employing more people.
Sherry Coutu’s report on scale-ups showed that a 1% growth in firms scaling up in Britain would create an additional 238,000 jobs and add £38 billion in gross value added to the UK economy. Similarly, the recent report by Octopus Investments on high-growth small businesses showed that a tiny number of firms—22,740, or just 0.43% of the business stock in the UK—accounted for an unbelievable one in three new jobs in 2014 and 20% of all growth in the UK economy. These firms have the potential to do so much more, yet one in four finds it difficult to get the funding it needs and three quarters say that lack of access to funding is a significant barrier to growth. The problem of access to finance remains a pertinent issue for firms, which is why the Select Committee has launched an inquiry into it. If the Bill’s purpose is to make the UK the best place in Europe to grow a business, why does it not tackle access to finance? If the Government are serious about ensuring growth, why does the Bill not put in place measures to facilitate an expansion of scale-ups to power employment and economic growth?
A recent report by the RSA said that the complexities of the UK tax system, a lack of bank lending and the cost of running a business were the top reasons for failure and early corporate death. That being the case, why do the Government consider tax changes to be out of the scope of the Bill’s deregulatory activities? Given that complexity in the tax system is seen as a drag on economic and business growth, to the point of often fatally overwhelming firms, why is tax not considered part of the business impact targets? The Government propose to make small businesses file their tax returns on a quarterly basis. That will have an enormous impact on small firms and place a regulatory burden on business. Should that sort of thing not be within the scope of the Bill?
Richard Fuller
I thank the hon. Gentleman, a fellow member of the Select Committee, for giving way. His Front-Bench team talked about the Bill being more ambitious, and he is talking about cutting taxes and looking at ways to create more innovative financing. May I urge him to table his own amendments, from his own experience, so that the Government can come up with an even better Bill?
Mr Wright
I thank my colleague from the BIS Committee for his intervention. We share the same view about freeing businesses from unnecessary regulatory burdens. I want the Bill to be more ambitious and to bring about a step change. I mentioned the business impact target in clause 14. Is the Minister aware that, as drafted, the Bill imposes an additional cost on businesses? The accompanying impact assessment states that the best estimate of the cost of the business impact target is £10.5 million a year, with “no monetised benefits identified”. How can she justify that for a Bill that is intended to free up small businesses?
On taxation, small and medium-sized firms believe that the rules are applied rigidly against them, and that the larger and more powerful a company becomes, the more the payment of UK tax becomes almost an option—something like a casual thing to consider. That bullying and intimidation also applies to payment of suppliers by large companies. In that regard, the introduction in part 1 of the small business commissioner to handle complaints by small businesses about payment matters is a welcome step. I am pleased that the Government are establishing that.
As has already been said in the debate, the commissioner’s powers are rather narrow. Part 1 grants the SBC the power to provide only “advice and information” to small firms, rather than enforcement powers. The commissioner has the capacity to consider in the region of only 500 cases a year. I question whether that is appropriate, given the huge, often endemic and structural problems certain sectors face with late payment. As the hon. Member for Huntingdon (Mr Djanogly) mentioned in a good speech, the commissioner could be too limited in scope; something akin to the Small Business Administration in the US may be more appropriate. For over 60 years, the SBA has been a consistent part of the small business support ecosystem, providing funding, access to public procurement and mentoring to small businesses. Have the Government considered something similar here?
I shall finish with some comments about clause 21 and what can be defined as an apprenticeship. As the hon. Member for Warwick and Leamington, who sits on the Select Committee, said, this is a welcome step. Yesterday, we published our report on the Government’s productivity plan, and we welcome that part of Government policy, although we are slightly more critical of other parts. However, there is a risk. The Minister will want to do all he can to ensure that the 3 million apprenticeships target will be met by 2020. In that context, there may be a temptation to double-count or rebadge apprentice numbers. Is that still possible under the Bill? Subsection (2) of new section A11 in clause 21 states where employers do not commit an offence if they describe a non-statutory apprenticeship as an apprenticeship. Will the Minister reassure me that only statutory apprenticeships will be included in the 3 million target?
In the main, this is not a bad Bill. It will help in some ways around the edges, but it will not provide the step change that small businesses need to scale up.
Alberto Costa (South Leicestershire) (Con)
Today the Government have brought before us an exciting and much needed Bill that, if passed, will significantly and beneficially impact on enterprise in my constituency and, indeed, throughout our United Kingdom.
I would like to focus on the particular benefits brought by part 2 regulators and the business impact targets. This measure is an excellent way for the Conservative Government to help fulfil our manifesto commitments to our country by promoting a much better environment for business and enterprise to thrive.
As we have heard from my hon. Friends, Labour’s record on regulation is appalling. When last in government, Labour oversaw the creation of six new regulations every working day, and that new red tape cost British businesses billions of pounds from 1998 onwards. Indeed, Labour Members do not understand the needs of businesses—and, worse still, they appear not to want to understand those needs on the basis of what we have heard from the Opposition Benches today. Under the last Labour Government, taxes on businesses were too high, and by all accounts, Labour planned to increase the rates of national insurance.
Achieving £10 billion of regulatory savings for businesses over the course of this Parliament is a key manifesto commitment—I stood on it—of this Conservative Government. This will build on the success of the previous Government’s deregulation agenda, which itself delivered £10 billion of deregulatory savings over the course of the last Parliament.
Businesses constantly tell me and, I am sure, many Members that the actions of regulators are as at least as important as the content of legislation in determining their experience of regulation. For example—and this was mentioned earlier—according to recent business perception surveys, 46% of businesses agreed that preparing for inspections or dealing with inspectors was burdensome, 49% considered that they did not receive good enough advice from regulators to make confident investment decisions, and 73% of scale-ups thought that they would be able to grow faster if dealing with regulators were easier.
David Rutley (Macclesfield) (Con)
My hon. Friend is making a very considered speech. I agree that cutting red tape is a huge priority. We made progress in that respect during the last Parliament, and we intend to cover much further ground by means of the Bill. Does my hon. Friend agree, however, that it is also vital for us to push back regulation from the European Union, and that the European Union could learn from us? Does not Tusk’s latest announcement show that even the EU is now learning from what we are doing in this important area?
Alberto Costa
I welcome any measure that cuts inappropriate regulation, whatever the source of that regulation.
Considerable progress was made under the last Government through initiatives such as “one in, two out” to help businesses achieve regulatory compliance while not hindering growth. My own local enterprise partnership, covering Leicester and Leicestershire, served as a pilot in various initiatives to strengthen the relationship between businesses and regulators, which ranged from considering ways of improving information-sharing between regulators to working with groups such as the Federation of Small Businesses and chambers of commerce. That has been a priority, and we have seen some early successes which the Bill will undoubtedly further encourage.
According to the 2015 Leicester and Leicestershire business survey, 94% of employers saw regulators as professional and courteous, but just 49% felt that they were consulted by regulators when developing policies. [Interruption.] Opposition Members might want to listen to this. They might learn a few things about the importance of the Bill.
Those findings showed that there was considerable scope for further joint working and improvements that might be made by means of the Bill. [Interruption.] “Listen and learn” is the key today. [Interruption.] Opposition Members are more than welcome to intervene.
The Small Business, Enterprise and Employment Act 2015 commits future Governments to publishing, and then reporting on, their performance against a deregulation target, the business impact target. Little has been said about that by the Members who are now chuntering from a sedentary position.
Alberto Costa
The hon. Gentleman is more than welcome to intervene and comment on its benefits if he wishes to do so.
The Bill will extend the business impact target to include the actions of statutory regulators, and will ensure that they must carry out assessments of the economic impacts on business of any changes in their regulatory practices or policies. That will provide a wider focus for the Government to reduce regulatory burdens on businesses, thus enabling them to free up resources and boost productivity. It will ensure that there is even greater transparency in relation to the impact of regulation on business, as opposed to the opaqueness that we saw during the 13 long years of Labour misrule. It will enable regulators to contribute to the Government’s deregulation target of £10 billion of regulatory savings during the current Parliament, and—very importantly—it will give regulators more incentives to design and deliver policies that better meet the needs of British business.
Bringing the activities of regulators into the scope of the business impact target will ensure that the impact imposed on business by regulators is routinely measured and reported on—a move that was scorned by Opposition Members a matter of hours or even minutes ago. It will increase the clarity of the system, and give businesses greater assurance that any costs and benefits that are imposed on them will be thoroughly assessed. Legislating to extend the business impact target will most comprehensively achieve the increase in transparency that I have mentioned, and will bring about the reduction in burdens on businesses that Conservative Members wish to achieve. It represents not a small ambition, but a significant ambitious development of previous policies designed to improve the ways in which regulations are enforced.
This Bill will help to make sure that our United Kingdom is the best place in Europe to start and grow a business, and that people who work hard and start and run a business have the opportunity to succeed without inappropriate regulatory burdens suffocating their much needed enterprise.
Alberto Costa
No, I am going to wind-up. [Interruption.] I did offer many Members on the other side of the House the opportunity to intervene, but they chose not to do so.
This Enterprise Bill will help to promote a real reduction in red tape, which the Members opposite simply do not seem to understand, and it will encourage businesses to expand and in so doing create more jobs and help people in our country thrive. That is the key to a successful Enterprise Bill. This Bill will allow British enterprise to flourish in my constituency of South Leicestershire as well as across our United Kingdom.
Caroline Flint (Don Valley) (Lab)
May I start by apologising for having to leave shortly after my contribution, but I am meeting the prisons Minister, the hon. Member for South West Bedfordshire (Andrew Selous), about enterprise in prisons and enterprising criminals—a debate about criminal entrepreneurs is for another day!
It is a pleasure to follow the hon. Member for South Leicestershire (Alberto Costa). He made quite a big deal about how Labour does not understand the needs of business. I gently remind him that it was his Government who announced the introduction of a new national living wage, and quite a lot of concern has been expressed by small businesses about how that is going to affect them, because there has been little consultation—[Interruption.] —as my hon. Friend the Member for Great Grimsby (Melanie Onn) reminds me.
Caroline Flint
No, I am going to make some progress.
I have to say that I think it is quite fraudulent to call this an Enterprise Bill; it would fail under the Trade Descriptions Act. What do we actually have? We have the creation of a small business commissioner, and, as has been said, we are not against that, but the hon. Member for Huntingdon (Mr Djanogly), who has now left the Chamber, made it very clear that the danger in the creation of this post is that it will be meaningless—that the small business commissioner will not have the authority and power to do something about small businesses not being paid for their services in good time, which we have discussed so many times over so many years.
Also under this Bill, Ministers are considering how they can give regulators more responsibility for looking at the impact of anything they do on the businesses they regulate. I understand that as well; sometimes I think it would be simpler if we just put on every civil servant’s screensaver the words, “Why am I doing this, and is this really necessary?” to nudge them into thinking about what they are doing and how it is affecting not only businesses but other areas of public policy.
As for regulation, however, we have been here many times before. When the last Government had a policy, they talked about “one in, one out”. They advertised on websites for what regulations to scrap, but the problem was that they received many more suggestions for more regulations, not fewer, even from businesses themselves.
I would love to know the Government’s regulation scorecard. The Secretary of State did not talk about the savings for business, but the truth is that many Governments often leave their term in office with more regulations in place than they inherited. For me, regulation has to be shown to have a purpose, and I have no problem with getting rid of regulations that are out of date or need updating, but they are important to make sure we keep products and people safe, and to ensure fair competition. If this Bill is hinting that the reason why enterprise in this country is not succeeding is purely down to centrally imposed regulation, I suggest that the Government do not understand what we need to do. I do not believe that the banking collapse, which affected people in this country and around the world as both consumers and businesses, was to do with over-regulation.
Let us look to the European Union in this regard as well, because the EU REFIT programme has already led to the withdrawal—[Interruption.] I will thank my hon. Friend—[Interruption.] It would be great if the shadow Front-Bench spokesperson, my hon. Friend the Member for Cardiff West (Kevin Brennan), would let me finish my speech instead of taking interventions from those on the other side. As the House of Commons Library has confirmed, the EU REFIT programme has already led to the withdrawal of more than 400 proposals and to the repeal of some 6,000 legal measures in the past decade. That is good; that is what we want to see from the European Union.
To me, what is really important is the way in which Governments support and assist the development of foundation industries such as steel as well as the new emerging sectors in which businesses of all sizes have a stake. Truly, this Bill is disappointing in that regard. For those areas, it will be largely irrelevant. It could have done something to promote and protect responsible enterprise. It could also have brought in measures to protect UK-based firms that pay fair and responsible taxes from being undercut by global firms that offshore their profits beyond the reach of HMRC.
The Bill is also disappointing on apprenticeships. I welcome apprenticeships. For too long, there has been an imbalance between the support for those who go to university and the support for those for whom the way into a good career and job prospects is through an apprenticeship. I have some questions, however. I welcome the clearer definition of an apprenticeship. There was concern in the last Parliament about too many arrangements being badged as apprenticeships and not quite meeting the test.
I also have some questions about the Minister’s setting of targets for apprenticeships. The Bill appears to set out how the Government will meet their own apprenticeship target by creating obligations only on the public sector to provide those apprenticeships. If that is to be followed by specific targets for different public sector bodies, will she tell us what proportion of the Government’s target of 3 million apprenticeships is to be created by the public sector rather than by private business? I, too, want the public sector to be model trainers, to grow the future workforce and to have model apprenticeships. We should be aware, however, that many local authorities will soon be less than two thirds the size they were in 2010. Many have been forced to shed thousands of experienced public sector staff. If they are now to take on more apprentices, this could appear to be a case of sacking experienced staff and backfilling with apprentices.
If public sector bodies are to be required to help to meet the apprenticeship targets, why does the Bill not extend the right of public bodies to require apprenticeship quotas in their public procurement contracts, in the way that the Government have done with centrally issued contracts over a value of £10 million? By imposing targets only on the public sector, the Government appear to have little confidence that the private sector will step up to deliver the apprenticeships that the Government and the country need.
The UK Green Investment Bank was intended to be a body that could make long-term investments in green and sustainable technologies, and I think it has done a good job. It worries me that it is being privatised just to get it off the balance sheet, but I hope the points that have been made about the special share situation will ensure that its green ambitions are protected.
I am looking forward to serving on the Bill Committee. I am sure that we will have further discussions about Sunday trading, and I hope we will be able to ensure that the Bill adds up to more than it does at the moment.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I thank the right hon. Member for Don Valley (Caroline Flint) for at least being supportive of the apprenticeship agenda. Let us see whether she votes for the Bill tonight. I support the Bill and would like to congratulate the Minister for Skills on the excellent measures relating to apprenticeships. He took the time last week to speak at the national apprenticeship awards, which, as the Prime Minister’s adviser on apprenticeships, I hosted. The Minister showed the commitment of this Government to recognising the brilliant achievements of existing apprentices and the desire to spread those opportunities even more widely.
I start by mentioning the national apprenticeship awards because they are a perfect illustration of the success that apprentices can achieve, and this Bill will play a key part in expanding that success even further. The event was attended by more than 800 apprentices and business people, all of whom had come together to celebrate. It was a celebration of what an apprenticeship had done for them personally or for their business—even though the great and the good of Great Britain plc and the future stars of our economy had to sit through almost five hours of me co-hosting the event.
I can share with the House the fact that the overriding emotion of that evening was huge optimism. There was optimism about the great careers stretching out before those apprentices, the extent of which those young people were just starting to glimpse for themselves. There was optimism about the new, well-skilled workforce that is pushing businesses to the next level, and about the better products and greater services that those apprenticeships can help to create. It was a humbling moment standing in that room and seeing what apprenticeships can do for both apprentices and businesses. This Bill is all about extending these opportunities.
One nation Conservatism—compassionate Conservatism —has to be, at its root, about providing opportunity: an opportunity for everyone, wherever they have come from, whoever they are, whatever they dream of doing or being, to be provided with the resources they need to achieve that. Great Britain is a country of great opportunity. We sometimes forget that much too easily, but I know it so well, having come from Iraq to being a Member of this House. I want everyone—every single person in this country—to have the opportunities I had. This Bill provides the measures to ensure that the next generation can find opportunity in this country, through apprenticeships, a route often as good, if not much better, than a traditional university degree.
I am delighted by the measures in this Bill to expand apprenticeships in the public sector and protect the quality of the brand.
Ian Paisley (North Antrim) (DUP)
I appreciate what the hon. Gentleman is saying about apprenticeships, but does he also accept that there must be a rebalancing and that that cannot be at the expense of public sector workers? It has to be done thoughtfully and in a fair way.
Nadhim Zahawi
The hon. Gentleman makes a good point, and I will address the public sector element of what I think is a very positive measure in a moment.
As someone who worked in marketing in a previous life, I know that when trying to sell something to someone, it is very important that the product is high quality. That is why I congratulate the Minister on adding legal protection to the term “apprenticeship”. It is vital that that is done; apprenticeships must be aspirational, and any misuse of this word on low-quality courses can be extremely damaging. Both the apprentice and the employer are let down by poor-quality courses, and have their time wasted. Even worse, it could mean that they are put off from being involved in the apprenticeships agenda ever again. Even a small minority can damage the brand and detract from the majority of good news stories which should be shining through. In my work as the co-chair of the Apprenticeship Delivery Board, I have spent time speaking to many businesses, both small and large, and I have found that there is a real appetite to hire apprentices, bring younger people into the company and protect the skills base for years to come. We cannot let them down with poor quality and chip away at this good will.
The hon. Gentleman mentioned the public sector, and the 2.3% public sector apprenticeship target is equally important. As we move towards achieving 3 million apprenticeship starts, it is only right that the public sector delivers its fair share. The public sector employs 16% of England’s workforce but lags behind on apprenticeships, and that is a real shame. There are many brilliant careers both in this country and on offer in our public sector. I am delighted that apprentices will be given a route into our civil service and have this great opportunity provided to them. But this is not just about providing opportunities for apprentices; I believe this provides a huge benefit to the civil service itself.
David Simpson (Upper Bann) (DUP)
Does the hon. Gentleman agree that in order to achieve that higher level of apprenticeship and to create the apprenticeships themselves, there needs to be a working relationship between further education colleges, universities and the business community?
Nadhim Zahawi
That is absolutely right, and the hon. Gentleman raises a very important point. It is why we are organising a roadshow for FE colleges so that best practice can be shared. The Secretary of State has met all the universities, including the Russell Group ones, to explain to them the opportunity here, in both the public sector and the private sector. Degree apprenticeships are going to be a massive opportunity for our universities and for our public sectors. Employers have told me that they are likely to run graduate recruitment alongside apprenticeships, as a means of using the apprenticeship levy funds. That is a real opportunity for universities, because a lot of those employers will be looking for degree apprenticeships. They want to hire the best people as apprentices at a young age, getting them into their company earlier, so that they can develop their skills, build loyalty and enhance productivity. It would be a real shame if the public sector lost out on those talented men and women by not offering enough places and not competing for that talent. I am a firm believer that for any organisation, the most important resource is the human resource.
Good government requires excellent people. Apprenticeships are key to ensuring that that resource remains strong and that the public sector can compete for talent. We must remember that 3 million apprenticeship starts are 3 million chances—3 million opportunities to expand one’s skills, to get a real job, to earn a wage, to contribute, to take part and to get on and do better. The measures in the Bill are vital in meeting that target and we must welcome them. I am delighted to support them tonight.
Albert Owen (Ynys Môn) (Lab)
It is a pleasure to follow the hon. Member for Stratford-on-Avon (Nadhim Zahawi). This is a big, clunky Bill that covers four Departments, but today we have the captain of the ship, the Minister for Small Business, Industry and Enterprise, to take it through on her own. She is the sole survivor on the Government Front Bench. I hope that she will be a listening Minister, and will show that when she responds to the debate.
This is not an inspiring Bill, as many have said, but it does support apprentices, and I welcome that. The provisions in part 7 on industrial development will assist the roll-out of telecommunications and broadband to reflect the economic realities of the 21st century. My main issue is with part 8, which covers the restrictions on exit payments.
On apprentices, I am sure that we all agree that training and providing young people with skills and workplace experience is a good thing, but it is vital that we have real training for real apprentices, and that we have real skills for the future. We should not consider the targets alone; we should consider not just the quantity but the quality of apprenticeship schemes.
Part 4 applies mainly to apprenticeships in England, but some provisions apply to England and Wales. Indeed, the Employment and Training Act 1973 applies to Scotland, Northern Ireland and Wales. Contracts for apprenticeships are contracts for employment as defined in the Employment Rights Act 1996, so conditions for apprentices are UK-wide. English votes for English law might apply to the Bill, so I want clarification from the Minister on that point. I know that now is not the time to go over the anomalies of EVEL, but it is important that there is clarification because of the cross-border issues. People in Wales might have apprenticeships with companies in England, and such provisions would therefore apply to them. However, it is good that the Government are valuing apprenticeships and I support them on that.
The provisions on industrial development allow financial assistance of £10 million to £30 million to be given to projects under section 8 of the Industrial Development Act 1982 without a resolution from the House of Commons. As my hon. Friend the Member for Wallasey (Ms Eagle) said, that is a good thing, but a very small thing. Again, I want clarification from the Minister—who is concentrating, I am sure—that this applies to Welsh Ministers. If it is a UK project in Wales, will Welsh Ministers have the resources to roll out broadband in Wales?
I welcome these provisions, which are designed to get telecommunications rolled out across the United Kingdom. I have long been an advocate of universal broadband and I welcome the Prime Minister and the Government’s U-turn on universal coverage. From time to time—[Interruption.] The Minister says “What?”, but if she had listened to Department for Culture, Media and Sport Ministers she would have known that they were dead against it up until Christmas, and that they have now changed their minds. I hope that roll-out will now happen. I would like a pilot scheme on the Isle of Anglesey. It is an ideal place to have it: an island community on the periphery of this country. If it works there, it can be rolled out across the rest of the United Kingdom.
The Bill will cap exit payments, and that is important. The proposal is designed for city hall chief executives, but the hon. Member for Stratford-on-Avon (Nadhim Zahawi) was wrong to say that it will apply just to fat cats. Nurses are not fat cats, and workers on nuclear installations in my constituency are not fat cats. We need to look at this issue.
The Treasury has the power to restrict the public sector workers covered by this measure. I would add to the list of exclusions, which already includes employees of the Royal Bank of Scotland, the Magnox employees in my constituency, who do difficult, dangerous nuclear decommissioning work. They have been caught up in this because the ONS deems them to be in the public sector. The Secretary of State said, “We don’t listen to the ONS.” I would ask the Government to look at exemptions for Magnox workers. There are 23 constituencies that have Magnox estate, with Magnox workers, in them—14 are Conservative, five are Labour, three are Scottish National party and one is Plaid Cymru, so this is not a partisan trade union issue. This is indeed important.
These workers feel let down. One of the 120 constituents who have written to me said:
“To retain highly skilled workers in the nuclear sector, employees were promised that their contractual employment and pension arrangements would be safeguarded”.
If the Bill passes in its present form and does not exempt Magnox workers, they will be unfairly penalised. I think that that is an unintended consequence of the Bill, which is, as I said, intended to get the so-called fat cats. However, I am talking about decent, hard-working men and women on the Magnox estate who have been in the sector for a long time. When they negotiated their wages and their terms and conditions, they would often forgo wage increases to better their pension pots. They feel let down that the Government are looking to take away their conditions of service.
Kevin Brennan
Is it not also important to note not just that these workers should be classified by the ONS as being in the private sector, but that they are in fact private sector workers, yet they are being caught up in this Bill very unfairly?
Albert Owen
Yes, the Government recently put the estate out to tender, and it was won by a private company. Although, technically, these are Magnox workers, they work for various private companies in the decommissioning sector. I do think that this is an unintended consequence.
I ask the Minister to talk with her Treasury colleagues about this issue to get an exemption. Leaving this to mandarins in the Treasury is not good enough. Magnox workers feel let down by the Government, and the Government can and should act to exempt them from the Bill. I repeat: they are not fat cats, but decent workers.
If I had more time, I could talk about the Green Investment Bank, which I supported under the last Government. I worry about its privatisation, and my concerns about moving it to the private sector are very real.
I am surprised to see Sunday trading as part of this process. We should have a proper debate about the issue, and it should have been in the Bill so that we could see exactly what the proposals entail. The public do not want changes, although some businesses do, and I understand that. However, I think we have the balance right as it stands now on Sunday trading, and that is why I oppose changes to leave decisions on Sunday trading to individual areas. We should keep Sunday special—that is what the House agreed when it had the opportunity to have a full debate, but it has been denied that opportunity now.
Let us get those exemptions for workers, let us support apprentices and let us roll out broadband through grants.
Andrew Griffiths (Burton) (Con)
I am delighted to be called so early to speak in the debate. It will not surprise colleagues that I want to talk about one specific element of the Bill: pubs. I should draw the attention of the House to my entry in the Register of Members’ Financial Interests, not just because I am the chairman of the all-party beer group, and I see lots of our members in the Chamber today, but because Burton is the home of not only beer and British brewing, but three of the country’s largest pubcos—Marston’s, Punch and Greene King. Obviously, therefore, the issues in the Bill are hugely important to not just my constituents and the people employed in those companies, but publicans and communities across the country.
Graham Evans (Weaver Vale) (Con)
These days, pubs are not only competing with other pubs—they also have to compete with high-street cafés such as Starbucks. Does my hon. Friend agree that it is therefore essential that we encourage investment in pub facilities?
Andrew Griffiths
I congratulate my hon. Friend on the work that he does to support pubs, not just in his constituency but in this Chamber, in standing up for British pubs and British brewing. He is absolutely right: this is a competitive business. Pubs are not just competing with each other for trade—for business—but with the likes of Starbucks. It is therefore absolutely essential that we allow them to invest in their estates. I will come on to that point later.
I have to admit that I was one of those who opposed the market-rent-only legislation when it first came in during the previous Parliament, because I was concerned about unintended consequences. We all want our to pubs to thrive, our pub estate to grow, and our pubs to be successful and pay a good living to the publicans who run them, but we must also be aware of unintended consequences. I warned of repeating the mistakes we made with the beer orders. I know, Mr Deputy Speaker, that you are not old enough to remember the beer orders coming before this House, but that mistake, with the Government intervening in the marketplace and sticking their oar in, led to the break-up of the successful breweries and, indeed, to the pubcos that we have today. We have to be very careful.
The debate on this subject has been contentious; there has been a great deal of heat, and sometimes it has become somewhat unpleasant. I congratulate the Minister on the work that she has done in finding a way through this. She has not only shown an immense interest in the subject in talking to both sides and properly understanding the implications of what we do as a Government, but has not been shy in standing up to both sides. We know that there is a famous tradition of female Conservative MPs handbagging people around the table in order to get the best deal possible, and that is what the Minister has done to find a way forward. We must not forget that pubs are not charities—they are businesses that employ 1 million people across our country and raise £21 billion for the Exchequer. We must therefore make sure that we have the right conditions to allow them to grow as businesses, and that is what the Minister is able to do.
My hon. Friend the Member for Weaver Vale (Graham Evans) mentioned investment. I am pleased that the Minister’s proposals allow publicans to opt out of—to waive their right to—an MRO for the purpose of significant investment. It is absolutely right that our pubs need to be the best offering possible. They need to have good facilities, nice loos, and good heating. They need to be pleasant environments if people are going to go there and spend their money. He is absolutely right that they are competing with the likes of Starbucks. If we want people to pump money into our pubs, we have to give them security in making that investment. Why would the likes of Punch in my constituency invest a couple of hundred thousand pounds, perhaps even £300,000, in a pub to renovate it if it was likely to lose control of it in just 12 months’ time? The simple answer is that it would not. The Minister’s decision to allow the opt-out from—the waiving of the right to—an MRO will give some comfort to the industry and allow such important investment to go ahead.
I am concerned about red tape. The adjudicator, when introduced, could potentially have to deal with some 14,000 pub tenants. There is therefore a real risk that the adjudicator could be swamped with complaints. I hope that the Minister will be well aware of that when she brings forward the secondary legislation on how this thing will actually work. I am also concerned about the amount of red tape when somebody signs up for a pub tenancy.
Toby Perkins
Given how busy publicans are, they do not want to spend their time at the adjudicator. They want to be serving punters and getting on with running their business. What does the hon. Gentleman think it says about the way the industry is currently working if the setting up of an adjudicator creates the likelihood that it will be swamped because all those publicans are so unhappy?
Andrew Griffiths
I do not think creating an adjudicator does that at all. Very few tenants come forward with complaints under the current voluntary scheme. But as in any other sphere, when a new way to complain is advertised, people will undoubtedly come forward. Some of those complaints will be valid, but many will not be. We need to make sure that we do not ruin a perfectly workable system by allowing it to be flooded with the wrong kind of complaints.
The requirement first set out by the Government would have meant that a pubco had to provide more than 80 pieces of information to somebody who wanted to sign up for a tenancy, and those would all have had to be checked off and a receipt accepted. That compares with about 10 pieces of information that have to be provided to somebody signing a normal commercial lease. I agree that we should make sure that tenants walk into the arrangement with their eyes open and with all the information, a business plan, advice from a financial adviser and a clear understanding of what that business is currently doing and what their earning potential is, but we should not make it impossible for a pubco to sign up a willing tenant who understands the business and understands what they are taking on.
On time scales, the suggestion is that the measure will come in at the end of May. Time is ticking and I hope the Minister will be attuned to the fact that this is a huge thing for tenants and pubcos to understand. Will she consider some interim measures to make sure that the measure can be introduced in a manageable way, and that the information does not swamp both tenants and pubcos?
Finally, I wholeheartedly support Sunday trading, as it would be good for the pub trade. The Association of Licensed Multiple Retailers and the British Beer and Pub Association say that encouraging people to come into our town centres on a Sunday to do shopping would also be good for our pubs. I entirely support that, but I remind the House of a letter that I received from Peter Hardingham, the manager of the Octagon shopping centre in Burton. Urging me to lobby for the important devolution to councils of Sunday trading regulation, he wrote: “Such a change in the law is critical to allow bricks and mortar retailers to compete with online retailers and to satisfy the customer demand that exists.” That is absolutely right.
The legislation, devolving the power to local authorities, giving our local councillors control over what is best for their high streets, will allow our shops to compete with online retailers. We can order from the internet on our phone and get something delivered on a Sunday afternoon. How can our shops compete with those retailers? The measure is a great idea and I hope the House will get behind it. I thank the Minister for her work on pubs. Please listen to our concerns, and I will be in the Lobby supporting Sunday trading.
Michelle Thomson (Edinburgh West) (Ind)
I am grateful for the opportunity to contribute to the debate. In general terms, I have to describe the Bill as a missed opportunity. On the occasions that I have spoken in the House, I have reiterated my support for enterprise and how important I consider business to be, particularly small business, not just in creating wealth and jobs, but for the vital role it plays in our society and on our high street. In my maiden speech I commented that I will be
“watching to see whether . . . an appropriate level of ambition and vision”
is in place, and I asked whether the Enterprise Bill would
“provide measures that really encourage and support small businesses?”
I added:
“Will it start to take steps to address the chronic lack of available liquidity for those businesses?”—[Official Report, 3 June 2015; Vol. 596, c. 630.]
I reiterate the comments of my fellow member of the Business, Innovation and Skills Committee, the hon. Member for Hartlepool (Mr Wright), that something must be done, and I am glad that BIS is taking that forward. The problem is not just liquidity, but tax. The hon. Member for Bedford (Richard Fuller), who is no longer in his place, talked about tax cuts. However, it is complexity and the regulations that still inhibit businesses with ambition that start to grow. Much, much more could have been done in that respect.
Where are the measures to encourage research and development, by which I mean grants, not loans? Where are the measures for innovation, for emerging sectors such as technology, and for manufacturing, which still trails behind at 10%?
The Federation of Small Businesses is correct to ask what specific powers the small business commissioner will have. I and businesses are worried that it is this voluntary regime that will be trying to effect serious change. It is almost like Sergeant Wilson from “Dad’s Army” saying, “I wonder would you mind awfully if you could pay this bill at some point.” I do not think that that is going to work. I issue a challenge to the UK Government. The Scottish Government have had measures in place since 2009 whereby public sector bodies have to pay their supply chain after 30 days. How is it possible for us to do that, but not the UK Government?
My biggest concern is about the UK Green Investment Bank, which nestles on the border of my constituency and was one of the coalition Government’s few success stories. It was set up in November 2012 and has invested in the green economy in every nation in the UK. I understand that it was always planned to become an enduring institution that operated independently of Government, but I am concerned that that process is being rushed for political reasons and that its green focus and its headquarters in Edinburgh will be put at risk as a result.
The GIB has made a positive contribution. It has become the No. 1 investor in the green economy, taking a 50% share of the green investment market. Projects it has funded have removed millions of tonnes of waste from landfill; increased the amount of energy produced from renewables to power the equivalent of 3.9 million homes; and cut this country’s CO2 emissions by more than 4 million tonnes.
More importantly, the bank is now making a profit, which could have been reinvested in any number of ways. As a state-owned institution, the money it makes could be of benefit to the taxpayer. Why do Government asset sales privatise profit and nationalise debt?
The green focus of the bank must be maintained. The Environmental Audit Committee has suggested that there is a
“risk that a privatised GIB could invest in areas which may damage its reputation and undermine its role and leadership in the green economy.”
That said, I welcome the amendments tabled by Lord Teverson, who suggested setting up a structure with a single special share owned by a charitable company, whose trustees would have to agree unanimously to any changes to the company objectives, with “no public input whatever”. That is absolutely vital.
Lord Kelvin has provided reassurances that he sees no need to move the bank away from Edinburgh, which was chosen as its headquarters, but that is not the point. During my lifetime in business, I have seen a steady drip of key functions that should be maintained at a headquarters being moved to London. That is what I am concerned about—not a wholesale, lock, stock and barrel move, but a dripping, corrosive effect that many areas of the UK have experienced to their detriment. The Scottish Government’s view is that a legislative consent motion could be required, because, if there is a softening in the focus on the importance of green projects, that could impact on what the Scottish Government are trying to do.
In general, the Bill clearly has some positive elements, but it is nowhere near ambitious enough and nowhere near the sort of vision that I would personally like to see in supporting business, particularly small business.
Amanda Solloway (Derby North) (Con)
It is an honour to follow my fellow member of the Business, Innovation and Skills Committee, the hon. Member for Edinburgh West (Michelle Thomson).
The Bill will contribute to the UK continuing to be a leading nation in supporting businesses that show the initiative and courage to start up on their own. I want to touch on three provisions—those relating to late payments, late insurance payments and the capping of exit payments —all of which not only highlight the positive changes being made to business culture, but support the Government’s offer to businesses.
I have always believed that to ensure that the economy continues from strength to strength, we must start by repaying the contributions made to it by the smaller businesses in the UK. They employ more than 15 million people across the UK; that is 48% of our private sector employment. The provisions in the Bill aimed at making the UK a better place for them to go into business should create an encouraging environment in which they can carry out their day-to-day work and thrive at business.
The proposed small business commissioner will address many of the issues that smaller firms face when dealing with larger firms. Late payments are a problem that most small firms have to deal with regularly, and securing those payments can prove to be a costly and long-drawn-out process. I was shocked to read the numbers: SMEs in the UK collectively spend more than £10 billion a year on trying to recover late payments. That figure is simply unacceptable. I have first-hand knowledge of how late payments by larger businesses, which often have a late payment policy, can cripple small businesses.
In the current system, too often, payment disputes cannot be resolved without cases going to court. That process is limiting for small businesses, and the costs can spiral out of control, which makes it a barely viable option for SMEs. A recent study found that one in five businesses in the Derby region is the victim of late payments. Those late payments are a primary factor in a fifth of corporate insolvencies. That element of business culture must change. We must show smaller businesses that other options are available to them, that advice and support are on offer, and that we will not directly hit their business cash flow. Of course, large firms can, if they choose to, fund such procedures, but the expectation that SMEs will do so is unreasonable.
Andrew Griffiths
My hon. Friend is making an effective and strong case in support of small businesses, and in describing the problems that they face with late payments. Does she also find that small businesses are struggling with deferred payments, over longer terms? The fact that they are not being paid by bigger firms within 90 days, or even 180 days in some cases, is severely affecting their ability to survive.
Amanda Solloway
Absolutely, and the insolvency record proves that that is the case. We need to stop that awful practice.
It is important to maintain the ability of any business, large or small, to trade. Incidents sometimes unfold that are out of the control of the business owner, and they often necessitate insurance claims. The pay-out is often vital to the survival of the business but, as things stand, there is no legal obligation to pay valid insurance claims within a reasonable time. With no timeframe, businesses are often left in limbo about when they can realistically expect to start trading again, and the knock-on effects can be disastrous. I welcome the Government’s commitment to combating unreasonably late payments.
Finally, I want to mention the six-figure exit payments to public sector workers. Such payments are required for a variety of reasons, such as voluntary or compulsory redundancies, and although I acknowledge that it is important that those payments be fair, we need to make sure that they are not disproportionate to the modern place of work. I reference Derby City Council, where a couple of redundancies led to payments of £140,000 and £180,000 respectively. It does not seem right to me that the taxpayer has to fund extortionate pay-offs for public sector workers.
I have no doubt that the Bill will contribute to a much more transparent, friendly and desirable business culture in the UK. It will create an environment that encourages more people to start a business here, and it will cement the UK’s position as one of the world’s leading nations in supporting business and enterprise.
Toby Perkins (Chesterfield) (Lab)
I start by drawing the attention of the House to my entry in the Register of Members’ Financial Interests.
Whenever I hear the Secretary of State speak, I am struck by the fact that I am listening to someone who appears to believe that Government do not work very well, and that business always knows better than Government. Indeed, he has set out to prove that by bringing to us a Bill that does not even contain its most contentious element. I am very concerned about the Sunday trading legislation, both because the Government are heading in the wrong direction and because this is a really important democratic matter.
The hon. Member for Enfield, Southgate (Mr Burrowes) —he has not been with us today—is very passionately against any extension of Sunday trading. Having read all the briefings and the Bill, he may very well walk into the Lobby at 7 o’clock in support of the Bill, without realising that he is actually supporting an extension of Sunday trading, as he would have heard had he been in the Chamber. He may very well be contacted by people who had previously been in touch with him, saying, “Why did you vote for Sunday trading?” He would reply that he did not know that he was doing so. How the Government are dealing with Sunday trading is an important democratic matter.
Melanie Onn
Does my hon. Friend agree that the current Sunday trading laws represent a great British compromise? They allow retailers to trade, customers to shop and staff to work, while Sunday remains a special day, permitting shop workers to spend time with their family.
Toby Perkins
I absolutely agree. We had long and very passionate debates about that during the last Parliament, particularly in the run-up to the Olympics, when the Government made what they said at the time was a short-term change to the Sunday trading legislation.
I have an interest in this matter in that my son works at Morrisons and is often there on a Sunday. One thing that will happen—I have had very few representations in favour of this—is that the supermarkets, finding that the others are opening, will have to start to open. That will not add any extra business, but it will extend or spread out the shopping week. It will mean that people have to work very late on Sundays, and people wanting to work during the week will find there are fewer shifts available during the week. No more business will be created; it will just be spread over a longer period. The period after 4 o’clock on a Sunday is vital to the convenience store sector, which is under incredible pressure.
Andrew Griffiths
I am listening carefully to the hon. Gentleman and I understand his concerns, but why does he think that the workers in Sainsbury’s and Tesco deserve to have their Sundays protected as special, but not the workers in Sainsbury’s Local or Tesco Express? They work for the same business, but one set of workers gets protection and the other does not.
Toby Perkins
The hon. Gentleman asks a legitimate question. All of those questions were debated at the time of the original legislation. As my hon. Friend the Member for Great Grimsby (Melanie Onn) said, a compromise was reached. The existing compromise is vital for the convenience store sector. The number employed in large Tesco, Morrisons or Sainsbury’s stores far outweighs the number employed in those other stores. I will not say anything more about that matter, but the exchange between the hon. Member for Strangford (Jim Shannon) and the Secretary of State entirely exposes the fact that many people do not entirely understand what they are being asked to vote for today.
I come to this subject as someone who ran his own small business for five and half years before entering this place and who spent the previous 20 years working in a range of medium-sized businesses—I was once a human being. I have also had the opportunity, as a shadow Business Minister, to debate many of the issues.
I was struck by what the hon. Member for Derby North (Amanda Solloway) said about the impact of late payments on small businesses in particular. Late payments beget late payments: when someone receives payments late from their customers, they end up being late payers to their suppliers, and so it goes on. She is absolutely right to say that action needs to be taken. She may want to research the amendments that we tabled to the Small Business, Enterprise and Employment Bill during the last Parliament. Those were far more powerful proposals, and I may encourage my Front-Bench colleagues to dust them off and have another look at them. Those serious legislative proposals would have outlawed late payment and removed the incentive for late payment.
When discussing late payments, we must understand why they exist. Payments are made late because businesses like to keep the money in their account for the purposes of cash flow. There will be an opportunity for a small business to go off to the commissioner and report their customer, but in the course of that process the big company may well have paid the small business. That will not get the small business paid any quicker; it just puts in place a bureaucratic process. The idea of a small business commissioner in itself is not a bad one—it may well deal with some of the disputes between suppliers—but the idea that it is the solution to late payments is entirely wrong. It will make very little difference to whether or not companies are paid late.
The hon. Member for Burton (Andrew Griffiths) spoke about major companies that are setting out with purchasing terms of 90 or 180 days. They are paying after 90 days and they are not even late. The Government may say that, if companies do not pay within 60 days, they cannot be classified as a prompt payer under the prompt payment code, but these are relatively small measures. They do not provide legislative protection against major firms in the way that the amendment I proposed in the last Parliament would have done. I urge the Government and all members of the Bill Committee to look at how we can strengthen the proposals, because this is a matter of real importance.
It always strikes me that the Secretary of State believes all regulation to be a bad thing. Recently, I met the UK Weighing Federation, which had a reception in Parliament. It said that the lack of policing of the regulations in the weighing industry leaves the UK market open to cheap foreign imports that are not compliant and that undercut good-quality British manufacturing.
I agree with my right hon. Friend the Member for Don Valley (Caroline Flint) that we do not want unnecessary burdens, but we do want a regulatory regime that protects not only the consumer, but British businesses that are doing things in the right way. A similar case was made by NAPIT recently in respect of the electrical competent persons register and the lack of policing of building regulations.
Part 7 includes measures on the pubs code. I was pleased to hear the Secretary of State say today that the Government have listened and learned from the discussions in another place, and that the four triggers that were originally put in place when the legislation passed in that famous defeat of the Government in the last Parliament will be retained in the pubs code. It is incredibly important that the code continues to operate in that way.
It is important to remind Members who were not here in the last Parliament why we decided to legislate for the pubs industry in a unique way; we have not used that for any other industry. There was a simple unfairness in the relationship between the major pub companies, with all the power they had, and the small individuals who owned a single pub, who often put their life savings into it, only to find that the information that they had going into the relationship was very misleading. As a result, those people often found that they were not in a position to get the deal that they thought they were signing up to. It was incredibly important that we came up with an arrangement where they had the opportunity, at certain trigger points, to say, “I don’t think this relationship is working for me. I’d like to take my chances on the open market and buy beers from wherever I can.”
Greg Mulholland (Leeds North West) (LD)
Is the hon. Gentleman concerned that pubcos are misrepresenting their investments and seeking, via that loophole, to game the legislation and avoid the market rent-only option?
Toby Perkins
I am very concerned about that and I think that we need to inspect it. We want to encourage investment into the industry, but it is wrong if publicans are being told that an investment that was basically just to tidy the place up means that they no longer have the MRO option.
In summary, the Bill will do very little harm but will not do anything like the amount of good it could do. We have an opportunity to make it a Bill that is transformational for small businesses by ending the scourge of late payments, having a regulatory framework that really supports British businesses, and ensuring that publicans are supported and that small businesses have a fair opportunity to compete. At the moment, the Government are missing that opportunity. I hope that they put that right.
Several hon. Members rose—
Mr Speaker
I am afraid that the time limit for Back-Bench speeches has to be reduced to six minutes, with immediate effect.
Edward Argar (Charnwood) (Con)
The Bill contains a wide range of specific provisions that are diverse in their detail but united by a common thread: a belief in business, particularly small and medium-sized businesses, as the driver of growth and jobs, and a determination to support businesses and make this country the best place in Europe to start and grow a business. Indeed, there is a determination to make this country a place where those who strive and work hard have the opportunity to flourish—something that the Minister for Small Business, Industry and Enterprise is very committed to.
The past five years have seen the deficit halve, the number of jobs go up and growth go up. The economic recovery in this country has been driven by businesses and workers, and by those who have taken the brave decision to set up a new business. We should be in no doubt that businesses have done the heavy lifting of economic recovery, and it is they, not the Government, that have delivered growth. However, the legislative and regulatory environment plays a large role in their ability to do so, which is why I welcome the intent and content of the Bill. Before my election to this House I worked in businesses that ranged from small privately owned firms to FTSE-listed companies, so this is a subject close to my heart.
On the specifics of the Bill, I welcome the establishment of a small business commissioner. I know that in the other place some called for that role to be strengthened, and I agree with the comments of my hon. Friend the Member for Huntingdon (Mr Djanogly). None the less, I believe that the proposal represents a significant and important step forward in helping to redress the balance between small and large businesses in respect of late payment. As my hon. Friend the Member for Derby North (Amanda Solloway) set out, to a small business late payments are not some minor matter because they can have a huge effect on cash flow. A large business may be able to absorb late payments or use their lawyers to pursue payment, but for a small business it can be the difference between that company’s survival or collapse. I hope that further consideration will be given to the role of small business commissioner, and to extending its scope to include the public sector and possibly late repayments by HMRC. Although HMRC is keen to be paid swiftly, it often repays rather less quickly. Similarly, the prompt payment code continues to play an important role, and I hope that its effectiveness will continue to be monitored and reinforced.
Another sphere in which late payments can be a problem is late insurance pay-outs. Following a flood, fire or similar event, getting a swift insurance pay-out can mean the difference between a business rising, phoenix-like, from the ashes, or not rising at all. Although concerns were raised by Lord Flight about the impact of the Bill’s provisions on insurance markets, I welcome them. I hope, however—like all of us, I am sure—that insurers will seek to pay promptly, regardless of any legislative stick.
In my remaining minutes, I wish to touch briefly on other aspects of the Bill. First, this Government have an impressive record of increased apprentice numbers, and an ambitious but achievable target of many more. Apprenticeships are real jobs that teach real skills and help the long-term employment prospects of many people, and I believe that the public sector should play its part and welcome the skills of those talented young people. It is vital that apprenticeships do what they say on the tin, and that they are genuine apprenticeships in which everyone can have confidence. Like guilds in the middle ages and the original apprenticeships, the Bill seeks to protect that quality and the apprenticeship brand, which I welcome.
Finally, part 7 of the Bill increases the maximum amount of aid payable before parliamentary authorisation is needed from £10 million to £30 million, which is a sensible reflection of inflation and cost since the 1980s. I also welcome the extension of the provision to include broadband services. Broadband is increasingly a vital public service, and it is essential to businesses, especially SMEs in rural areas and places such as my constituency. I hope that such support ensures that a good deal is achieved for the customer and not just for telecommunication companies, and that public money does not inadvertently create or reinforce market share or quasi-monopolistic provision by particular telecoms providers, but instead fosters competition and drives a customer-focused service. That means not just coverage, but new firms being connected swiftly and not facing myriad delays, obstructions and a poor service when getting themselves up and running.
Britain is growing and jobs are increasing, and that success is down to the work of businesses and those who work in them in this country. I am proud to support a Government and Minister who are placing trust in business, and the creation of conditions in which it can thrive, at the heart of the Government’s agenda. The Bill helps to deliver that and should be welcomed by businesses and workers alike, and indeed by all Members of the House.
Louise Haigh (Sheffield, Heeley) (Lab)
This debate is vital for our economy, particularly if the Government are ever to put any meat on the bones of the so-called northern powerhouse. In a week when jobs have been moved from Sheffield to central London, and amid rumours that the chief executive of Tech North has resigned because of attempts by Whitehall to centralise that company in London, Ministers should be increasingly worried about how they can justify such a lofty term.
The missed opportunities the Bill represents have been admirably expressed by hon. Members and by those in the other place, whether on improving finance to SMEs, a broadened scope and sharper teeth for a small business commissioner, or some real vision for our renewables industry rather than a further undermining of investor confidence and security.
The focus of my remarks today will be on the cap for exit payments for civil servants. Labour Members are all for the best possible use of taxpayers’ money. We are well aware that the headlines that disguise the real impact of the measures—to clamp down on pay-outs for so-called fat cat civil servants—will be very appealing, particularly at a time when so many people are still struggling. The Government know all too well, however, that that is not the whole tale.
On the face of it, this is a wholly reasonable policy. There are, however, several issues relating to employer flexibility, the public purse, people suffering from ill health, whistleblowers and staff morale at a time of huge change. I hope they can be ironed out in Committee. The proposals come at a time when we are about to see changes to the rules on recovery of exit payments and a consultation on reducing redundancy terms across the civil service. The latest proposals unilaterally override recently revised terms and conditions, and undermine agreements made at the highest levels of the Government’s own employer representative organisations.
The recent exit payment policy for the NHS was signed off by the Secretary of State in February last year, when NHS trade unions entered into an agreement with NHS Employers and the Department of Health to apply an absolute cap on exit payments. After extensive negotiations, it was agreed that section 16 redundancy payments would be set out by a formula that recognises length of service as its key element. This was implemented in only April last year and is on the back of Lord Maude telling civil servants in the previous Parliament that their settlements would be sustainable for a generation. We know from the Government’s own survey work that morale in the civil service is at an all-time low, with workers feeling year on year that they do not trust their leadership. Is that any wonder, when the rug is constantly being pulled from under their feet?
Toby Perkins
My hon. Friend is making an incredibly important case. Does she agree that there is a bitter irony in a Secretary of State, who obviously does not believe in government, spending £200,000 on employing consultants to come up to the northern powerhouse, shut the Sheffield office and move all the jobs down to London?
Louise Haigh
I completely agree. That point was made forcibly in the urgent question last Friday. Department for Business, Innovation and Skills workers were watching and were horrified by the Minister’s response to that question. It is not understandable that those people should be concerned that their jobs are only secure for the time being, until the Government can force through weakened redundancy terms? Given the announcement last week, people across the civil service will understandably be further concerned.
On the specific issues, people who have given long service to the public sector—midwives, nurses, librarians, social workers; people whom we, on either side of the House, could not describe as fat cats—have dedicated their lives to improving society. Is the Minister comfortable that these incredible workers will be impacted by the cap on exit payments? Why, when this policy was proposed last year by the Minister for Employment, the right hon. Member for Witham (Priti Patel), were people earning less than £27,000 explicitly exempted to
“protect the very small number of low earning, long-serving public servants”?
Christian Matheson (City of Chester) (Lab)
Does my hon. Friend share my concern that, on the one hand, the Government are always ready to praise the work and contribution of public sector workers, in particular at the lower end of the scale, but that, on the other, it seems they are not ready to recognise that financially when those workers come to the end of their careers and face the difficult decisions that have to be taken by management?
Louise Haigh
Exactly. That is a really important point, given that this is a clear U-turn in Government policy following the announcement last year. There is absolutely no such exemption in the Bill. In the NHS, for example, even without the inclusion of pension strain payments, according to research by the union Unison, the proposed cap will affect nurses, midwives and paramedics with long service. These issues were the subject of very high level negotiations, where a higher level cap was set to mitigate against penalising long service in key front-line services. For this reason, will the Minister consider exempting people with salaries on or below average earnings?
On industrial relations, the exit payment cap will be implemented across a range of public service areas that already have fair, transparent and effective procedures in place which arise from collective agreements negotiated between employers and trade unions that are sensitive to the specific issues facing each sector. If we have anything to learn from the junior doctors’ action, it is that good industrial relations are vital and that we should not legislate haphazardly to weaken terms and conditions.
The Secretary of State said we should move away from the “Whitehall knows best” attitude—I could not agree more—but the Bill weakens that ambition by imposing an arbitrary cap across the civil service on exit payments and by restricting the freedom and flexibility that employers require to manage restructuring and redundancies effectively, at a time when public sector employers require it most. The public sector is in the middle of its most dramatic budget cuts in decades, and employers are having to restructure almost every aspect of public services to meet their new budgetary constraints. In moving the goalposts in the middle of an extended period of large-scale reorganisation, without an initial period of protection, particularly for staff over 50, the Government are further limiting the opportunity for employers fairly to reconsider strategic and operational decisions made in previous reorganisations and planned to be effected in stages on the assumption that current agreements and policies would apply. Will the Minister therefore consider a grace period for public sector employers undergoing reorganisation?
On the public purse, the Government seek to justify the cap solely on the basis of the cost of payments to staff in the public sector between 2011 and 2014. This is the only evidence provided in their consultation, but it fails to recognise that, during the same period, employment in the civil service fell by 107,350, under the current civil service compensation scheme arrangements. No evidence is provided to demonstrate that the cap will deliver value-for-money savings, as changes in the compensation payments naturally affect the number of staff willing to exit the public sector, which might engender higher costs elsewhere.
As for the coalition Government’s early conciliation scheme, which has actually worked quite well, the proposals could have a perverse impact by diverting people to tribunals, where settlements will not be capped, and avoiding settlements at this optimal stage. Ministers should therefore consider exempting such conciliation payments from the cap.
Finally, two more important exceptions should be considered: first, whistleblowers, and secondly, people retiring on ill-health grounds. Whistleblowing is a vital part of our democracy, and capping settlements in such cases could easily deter people from blowing the whistle, given that this often puts their livelihoods and reputations at risk. The Government have made clear their intention not to include those retiring on ill-health grounds and that this will be put in secondary legislation, so will the Minister take this opportunity to make it clear that this is the case and that such people will be explicitly exempted?
David Mackintosh (Northampton South) (Con)
I believe that, thanks to the Bill, small businesses will be able to achieve their goals. We are removing red tape and implementing policies that will let them get on with running their businesses and helping to grow our economy further, on both a national and, equally importantly, a local scale. I am sure that all colleagues would welcome that.
In my constituency, it is possible to see how enterprise has been able to flourish in recent years. Since 2010, some 5,800 new apprenticeships have been created, thanks to the Government’s long-term economic plan—that means over 5,000 more young people in my area in work and learning valuable skills that will help them to pursue a full-time career and get on in life. Every apprentice I have met when I have visited businesses in my constituency has been positive about the experience and their future plans. It is crucial, therefore, that the Government meet their goal of delivering 3 million apprenticeships and continue the great progress being made in constituencies such as mine.
Apprenticeships are crucial to allowing young people a valuable insight into industry and teaching them many valuable skills they could not have picked up in the classroom. We all acknowledge that university or college is not for everyone. Apprenticeships allow everyone an equal opportunity to enter the workplace. I saw just last week on a visit to the Royal Opera House in Covent Garden how important apprenticeships were to the performing arts industry. From set designers to costume makers and stage managers, apprentices are crucial to passing down knowledge from one generation to the next. Those skills benefit other industries, as apprentices go on to work in other areas, such as fashion design, and secure the survival of the creative industries. I am sure that the award-winning theatre in my constituency, the Royal and Derngate, will also benefit.
For that reason, I fully support the Bill and its aim of protecting the term “apprenticeship” from misuse, so that it will be treated in the same way as a traditional university degree. I am sure there can be nothing more frustrating for students than to learn that an opportunity labelled as an apprenticeship is not quite the real thing, when they have tried hard to be accepted on the programme and then put in so many hours. This is a move that I hope will be welcomed across the House—one that will ensure that apprenticeships are here to stay. I hope this means that they are now respected as much as a degree is—they rightly deserve to be.
There is some debate in my constituency on the issue of Sunday trading, but I fully support the measures that would let this be decided at local level. I support, too, the debate that would have to take place before my council could make any decision.
In a recent Centre for Cities report, Northampton was named the second-best place in the country, after London, for business start-ups. This is obviously great news and an amazing achievement by small businesses in Northampton. In the same period for 2013 and 2014, Northampton had the highest average increase in the number of businesses, at 9.9%, while it also had the UK’s second-highest rate of employment, at 78.6%.
I am pleased to have lobbied the Government for Northampton to receive an enterprise zone, which has played a vital role in the regeneration of the town, providing good-quality jobs and attracting high-calibre companies to Northampton. There are huge opportunities for businesses to grow there and to embrace the entrepreneurial spirit for which Northampton is rapidly becoming known. I know that this Bill will help the town’s businesses to continue to develop, and I know that its measures will be welcomed in my constituency and across the country.
Greg Mulholland (Leeds North West) (LD)
I share the view of other right hon. and hon. Members that this is a hotchpotch of a Bill that rather loses the focus on what it claims to be about in its title. In the limited time available, I shall rattle through a few key issues and spend a little time on the section that deals with pubs.
Let us remember that the Green Investment Bank has been a huge success. This bank, which was a direct result of Liberal Democrat policy, has invested £2.3 billion into the UK green economy, which then attracted a further £7 billion of private sector money. This means that it is already profitable. Considering that it was set up only in 2013 with a statutory purpose, the fact that it is being privatised now with such indecent haste really exposes the ideological decision making behind this rather than what the Green Investment Bank was set up to do. I pay tribute to my colleague in the other place, Lord Teverson, and congratulate him and other colleagues on inserting their clever initiative on special shares being looked after by green guardians. I ask Ministers to think about what message is being sent out by this Government’s record on hitting our climate change targets.
Small businesses are the driving force of our economy. There are 5.4 million private sector businesses and 99.3% of them are classified as small. However, there are not enough measures in the Bill, which is an opportunity wasted. I welcome the creation of the small business commissioner. It is vital for small businesses to have a champion with a statutory footing, but the reality is, unfortunately, that this commissioner has no teeth. Any recommendations for resolving complaints will not be legally binding. We believe that the commission should have real sanctions, particularly over late payments, where repeat complaints against the same larger companies should result in state-level sanctions or penalties.
There are a number of measures to widen the responsibilities of regulators and to ensure that decisions do not impact negatively on small businesses. Clearly, that is welcome, but the measures will have little real impact. Has any assessment been made of whether this will lead to a significant boost for small businesses, which is what we want to see? We also want to see greater use of the growth duty.
Apprenticeships, of course, were yet another Liberal Democrat flagship policy during the coalition Government. Conservative Members keep talking about “the Government” over the last five and a half years, but that is simply not honest. It was the Liberal Democrats who pushed the apprenticeship agenda, and it was the former Business Secretary Vince Cable who oversaw that policy and the creation of 2.4 million apprenticeships. We warmly welcome the decision to make it an offence to describe a programme as an apprenticeship scheme when it is not officially classified as one.
Late payment is clearly a huge issue for small businesses. In 2014 alone, £46.1 billion was owed in late payments, and that simply cannot continue. We need stronger measures to deal with it.
I agree with what has been said about public sector exit payments, but I should like to hear from the Minister why, given that local government workers, teachers, health workers, police officers and fire and rescue workers are included in the cap provisions, public financial institutions have been excluded. Fred Goodwin, former chief executive officer of the Royal Bank of Scotland, reportedly receives an annual pension of £342,500. The public will surely demand that banks that have been bailed out should be the first to be subjected to the cap.
In the limited time that remains to me, I want to say something about pubs. I declare an interest as chair of the British Pub Confederation. The confederation gives a new voice to pubs and publicans and enables them to stand up to the British Beer and Pub Association, which represents the interests of the pubcos. Its members include the Federation of Small Businesses and the Forum of Private Business, the two leading small business organisations. We warmly welcomed today’s announcement of a U-turn on the disgraceful clause 8.12 of the draft pubs code, which will not now go ahead. It should never have been there in the first place, and where it came from we can only surmise, but I think that it must have originated from pubcos or their supporters.
What concerns us most now is the current proposal for the pubs code to allow a waiver for investments before someone signs up to a tenancy. That would clearly enable the pubcos to game the position.
Toby Perkins
There is talk of substantial investment, but a substantial level of investment by a city-centre pub will be far greater than a substantial level of investment by a small pub on a street corner. Is it clear what the Government mean by substantial investment?
Greg Mulholland
It is not clear, and I do not believe that there is sufficient understanding of the reality of pub investment. I suggest that Ministers in the Department and other Members read an excellent article in The Publican’s Morning Advertiser by Robert Sayles, published on 6 January 2015, which exposes part of the myth that has been created by pubcos and their supporters. For instance, in 2015 Enterprise Inns invested £66 million—which sounds a lot, but only amounts to £13,200 per pub across the estate—and, interestingly, made a loss of £66 million at the same time, which it can offset against tax. Who is really investing in its pubs?
BIS has said that it will look at ways of preventing the pubcos from gaming the position. However, I want to deal with another myth. The last Conservative Government were right to introduce the Beer Orders in order to bring about competition. The fact that they gave way to industry lobbying and provided a loophole to allow the creation of the stand-alone pub companies was the problem, not the Beer Orders themselves. The Government must not do the same thing again. We must have a market rent only option that is triggered in the way that was intended in the legislation, and there must be no opportunities for the pubcos to game that, including abuses of the investment waiver. I look forward to continuing to work with the Minister and her team to deliver that.
Amanda Milling (Cannock Chase) (Con)
I am incredibly grateful for the opportunity to speak, and to speak after fellow members of the Business, Innovation and Skills Committee. I shall focus on clauses 20 and 21 in part 4, both of which relate to apprenticeships.
Addressing the skills gap is a key component in improving our productivity, and it is an issue that is regularly raised by businesses in my constituency. The Government's target of 3 million apprenticeships in England by 2020 is a key policy, demonstrating their commitment to addressing that gap. It is right for our young people, our workforce, our businesses and the economy. While university is the right choice for some young people, apprenticeships will suit others better, and it is time we recognised that.
If we are to achieve the overall 3 million target, all employers in both the public and the private sector must play their part. While there are examples where public sector organisations are already employing apprentices, such as in my local fire service in Cannock Chase, the measures set out in clause 20 will set targets on the public sector to ensure that they all fulfil their duty.
For too long there has been inequality between degrees and apprenticeships. This is why I welcome the measures set out in clause 21 to protect the term “apprenticeship” and ensure only those courses that meet the statutory requirements can be described as an apprenticeship. The term “degree” is protected in legislation so it is absolutely right that the term “apprenticeship” is put on an equal footing and protected too.
To achieve our 3 million target we must engage young people, parents, schools and employers. To reach this figure, we must increase awareness and understanding of apprenticeships, and also, critically, ensure that they are valued. The measures in clause 21 will strengthen and protect the apprenticeship brand and provide the foundations for increasing awareness and understanding, and enhance their value.
I was particularly pleased to hear the Secretary of State for Education’s announcement last week that will require schools to give access to apprenticeship providers and colleges to create a level playing field in terms of academic and vocational career options. To date, there has been an imbalance, and little incentive for schools to direct young people towards apprenticeships. In my experience, the best advocates are more often than not the apprentices themselves.
I ask the Minister, however, what other measures are being taken to promote apprenticeships. Exports are another Government priority and they are being promoted through the “Exporting is GREAT” campaign. May I suggest that we enter into a similar high-profile campaign to promote apprenticeships? I ask the Minister to update the House on whether such plans are being considered.
Simon Hoare (North Dorset) (Con)
My hon. Friend mentioned schools, and does she agree that it might be helpful for Ofsted, when it inspects schools, to ascertain how many pupils have been put on to apprenticeship schemes as part of how it measures a school’s success or failure? That could be a driver to encourage schools to engage more proactively with the apprenticeship scheme.
Amanda Milling
I agree that we need to do more, and there is a role for Ofsted in that, by promoting apprenticeships in schools.
I would like to draw the House’s attention to a number of facts which I believe go to show the value of an apprenticeship. Some 96% of businesses which have taken on an apprentice believe their company has benefited, and 86% of those who did an apprenticeship stayed in work afterwards, 67% with the same employer. We should contrast that with data that show that 47% of recent graduates who were in employment in 2014 were in “non-graduate roles.” A report published by the Sutton Trust in October 2015 suggested that the earning potential of the best apprenticeships rivals that of degrees. For example, level 5 apprenticeships result in greater lifetime earnings than undergraduate degrees from non-Russell Group universities.
I realise that in reality the majority of apprenticeships are currently level 2, but I am concerned that some of the commentary regarding level 2 can be quite negative, which, in my view, is rather dangerous. Level 2 apprenticeships give young people the opportunity to develop their skills and are a gateway to advancing on to higher levels. If we are not careful, we may create a two-tier apprenticeship system, replicating the very problem we have faced and are trying to address in terms of the inequality of qualifications. I therefore ask the Minister what measures we are taking to encourage level 2 apprentices to go on to level 3 and beyond.
To conclude, I welcome clauses 20 and 21 and believe they will provide the foundations to build awareness and understanding of apprenticeships and also to build their perceived value.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in the debate. I would like first to express my concern over the redundancy payments. Other Members have already done so, and I know that the Minister has taken note of their comments. I have been contacted by constituents who are civil servants, and they are greatly concerned that the commitment they were given on the capping of mobile exit payments has now, as they see it, been reneged on. Some of the employees that this will target earn less than £30,000 a year.
I welcome the Government’s commitment on apprentices. It is excellent to see that, but the Bill reminds me of the curate’s egg, in that it is good in parts. Unfortunately, not all its parts are good and some of its proposals are quite unpalatable. However, we are pleased with the Government’s commitment on apprentices. I also want to see more young ladies and girls getting involved in the science, technology, engineering and maths—STEM—industries, and particularly in engineering, which has some fantastic opportunities in Northern Ireland. We want to encourage that participation as well.
I commend the Minister for the strong stance that she took in the debate in Westminster Hall last week on late payments by big stores to small businesses and their suppliers. She will know that a lot of those payments are delayed, and that there have also been delays in the invoicing of receipts. The groceries ombudsman took the decision to penalise Tesco stores in particular, although it was unfortunate that they were unable to enforce a fine because of the timescale involved. However, the Minister clearly stated that she was pleased to see that decision, and we as MPs are also pleased by it. I commend her for her strong stance on that issue.
It will come as no surprise to hon. Members that I am about to raise the matter of the impact of the Government’s changes to the rules on Sunday shop opening. I want to talk about the effect that the changes could have on the staff who work in those shops. The Minister will know my stance on this issue. Pressure to make the changes will be placed on shops, mostly smaller ones, across the whole of the United Kingdom. I understand that this measure is England and Wales-oriented, but there will be an impact on the way in which the regional devolved Assemblies view the matter. There will be pressure from the big stores to ensure that the changes in Sunday opening also happen in those regions where this is a devolved matter.
The claim that the changes will help small businesses is simply not correct. Many people feel that extending the hours will simply mean an influx of shoppers to the big chain stores, with the small shops suffering as a result. Earlier in the debate, the Secretary of State mentioned the pluses for small businesses, but I am not convinced by his argument. Indeed, many Members here today and many people outside this Chamber are unconvinced. Let us look at the evidence. I remember asking a question about this when the hours were relaxed during the London 2012 Olympics, and I was told that the smaller shops had felt little difference. In fact, many of them lost money. Let us look at the facts. They had to pay staff to work extra hours but they did not generate enough extra business.
In an earlier intervention on the Minister, I mentioned that polling conducted by Populus in September 2015 had found that more than two thirds of the general public supported leaving the existing Sunday trading hours alone. In other words, don’t change them! There is no need to change them, and people do not want them to be changed. They want them to stay as they are. The same poll revealed that 91% of shop workers were against extending Sunday trading hours. Allowing large shops to open for longer hours will lead to a displacement of trade from the smaller stores.
Victoria Borwick (Kensington) (Con)
Is the hon. Gentleman aware that staff in many garden centres across the country are already working longer hours because they go in to feed the animals? So for some shops, more flexibility around opening on Sundays would be beneficial. I have been asked to make this representation on behalf of garden centres.
Jim Shannon
I am sure the hon. Lady knows we may have a different opinion on this matter, but I understand her point and accept that. She has put her point clearly to the Minister and I appreciate the intervention.
It has been stated that convenience stores lost some £26 million in trade during the Olympics, when Sunday trading rules were abandoned for eight weeks, although many Members in the House asked questions at that time to ensure that things would not go the wrong way. Only large traders would benefit from this move and no matter how the Government put it, the change to allow local authorities to do their own thing will lead to unfair competition, angst among some of the workers and a mishmash of Sunday trading laws. The Government have indicated that this will be introduced on Report, but let me make a final quick point on devolution to councils. Let us imagine that Manchester’s council changes the Sunday opening hours but Liverpool’s does not, that Burnley’s does but Blackburn’s decides not to, that Bournemouth’s changes but Portsmouth’s says, “No, we are not going to do it” and that Darlington changes but Newcastle does not—how ludicrous is that? What a mishmash, dog’s dinner of Sunday opening hours there would be across the United Kingdom. There would be no consistency—it would just be everyone for themselves.
Kit Malthouse (North West Hampshire) (Con)
Does the hon. Gentleman accept that it is for businesses to decide whether they open on Sunday, so it is perfectly possible to have that mismatch already when business owners make that decision for themselves?
Jim Shannon
I thank the hon. Gentleman for the intervention, but we disagree on the matter—he probably knew that before he got to his feet.
Let me just say this: don’t ignore 66% of the general public and 91% of the workers who say they do not want change. Whether you like or not, those are the facts and they have to be considered. On behalf of those with strong religious beliefs who want to keep Sunday special, those who have concerns about their family time being shattered and altered forever, and shop workers, whose opinions are being ignored, let me say gently to the Government that many Conservative Members are not happy with these changes either. It is not for me to say, because Ministers know their Members better than I do, but I am aware of a certain number who could be the difference between this legislation going through or not. I respectfully suggest to the Government that when we look at this on Report they should consider the hon. Members for Congleton (Fiona Bruce) and for Enfield, Southgate (Mr Burrowes), who are not in their places, and many other Conservative Members who have concerns. I believe that if the Government pursue this legislative change on shop opening hours, there is every possibility of them being defeated. They should consider this legislation carefully before they go forward with it. Let us keep Sunday special. They should not ignore the general public and they should not ignore their workers.
Neil Carmichael (Stroud) (Con)
I am grateful to be called to speak at this time, Mr Speaker. This is a good Bill, because any Bill dealing with enterprise should be removing shackles and this one does so, to a large extent. I therefore welcome it, but some aspects need to be discussed in more detail, one of which is the small business commissioner. I welcome that role, because some small businesses in my constituency complain frequently about payment problems and this allows me to reassure them and, in particular, the Federation of Small Businesses, that meaningful action has been taken. The Bill says that the commissioner will be giving out advice, and that is a good thing. I am not sure about the scope of this “advice”, but it has to include encouraging small businesses to grow and advice on how that growth might take place. This should be within the context of an interesting speech made by Andy Haldane, the chief economist at the Bank of England, who has noted that we need to ensure that firms think about long-term planning and strategic investment, rather than just exit routes, dividend payments and so forth. The Government should be thinking about how this commissioner might start moving firms in that direction.
Let me pick up a point made by my fellow Select Committee Chair, the hon. Member for Hartlepool (Mr Wright), who compared this commissioner’s role with that of the Small Business Administration in America. That is a worthy comparison to make and we should be thinking about it. We need more long-term planning and more strategic investment, potentially encouraged by some form of advice through the small business commissioner, in line with the Bank of England’s thinking.
The second question we should be considering is that of apprenticeships. It is absolutely right that an apprenticeship should be saluted and should be a cast-iron position. We must ensure that all 3 million apprenticeships that we hope to have in the course of this Parliament have a quality hallmark beneath their name and are successful. That is imperative. As for the institute that will be created, which should be up and running in April 2017, we should ensure that it has the capacity to ensure that the apprenticeships are of cast-iron quality. I hope that the Minister will be able to tell us that that is the case. Although it will be an arm’s length institution, it should not lose sight of other organisations in the world of education. We must ensure that we think not simply about universities and apprenticeships but about everything else that forms part of the process. It is all interlinked. I must put in a shout for the further education colleges, because they have an important role and we must ensure that that continues.
Neil Carmichael
No, I cannot give way, as I am already pressed for time. I apologise.
We need to emphasise the importance of technical and professional apprenticeships. That is what we should be calling them. Everyone has a vocation—I have a vocation, a shopkeeper has a vocation—but the question is what we are doing about technical and professional apprenticeships. Some reassurance on that front from the Government would be helpful and encouraging.
Let me make one last point about the UK Green Investment Bank. In the last Parliament, the Environmental Audit Committee did some work welcoming the GIB but said that it needed to be able to raise capital. If the Bill moves the bank in the direction in which the Government want it to go, that will happen. An added advantage is that it will not be hampered by EU state aid rules, and that will be a great benefit for the future. We must ensure that it sticks to being green, being investment-oriented and being a bank. I am making a serious point, as those three things could all be at risk. We do not want to end up with the GIB as some kind of fund or something else that is not in its original job description. In short, the bank should be a driver for more green investment. We need to see some coverage for the changes to energy, for example, that have led some firms to think that the subsidy has been reduced a bit too quickly. I do not agree, but we need to demonstrate some commitment to investment in technology in how the GIB will deliver.
On the subject of the small business commissioner, I absolutely welcome the focus on late payments, but we must think of a way of making our small businesses feel easy about wanting to grow and to feel successful in that growth process. Ultimately, that will deliver more exports, higher pay and more job opportunities. As for apprenticeships, it is important to ensure that they stand up to scrutiny and have value. The institute will have a role to play in that process. In short, this Bill is a further step in rebalancing the economy towards enterprise, technical development, production, output and exports.
Alan Brown (Kilmarnock and Loudoun) (SNP)
As other SNP Members have said, the Bill is a typical Government effort. It claims to be ambitious, but does not do enough. It has too much of a scattergun approach and includes too many subjects, although it does allow the Tories to squeeze in old favourites, including privatisation and attacks on public sector workers.
Let me start with the Green Investment Bank—another supposed Better Together demonstration of the merits of Scotland’s staying in the UK, given the decision to site the bank in Edinburgh. Here we are a few years down the line, and it looks like that might go the way of the onshore renewables subsidies, which were also originally provided on the UK Government’s so-called broad shoulders. It beggars belief that a publicly owned green initiative should be deemed suitable for sell-off and privatisation. We therefore need to know what the Government’s commitments are to environmentally beneficial projects and specifically to Edinburgh.
On public sector payments, I have been contacted by constituents who want me to oppose part 8. Those hard-working public sector workers see it as yet another attack on their terms and conditions. We have heard about fat cats, but I can almost bet that the so-called civil servant fat cats will be the ones who get the waivers and their big lump sums. Meanwhile, lower-paid public sector workers with long service will get no waivers, and their lump sums will be limited.
We have heard a lot recently about the Women Against State Pension Inequality campaign and women who took early retirement and who are now struggling to get back into the workplace and struggling financially. That demonstrates that we should not limit people’s choices. Some women have just discovered that they need to work six years longer. They will be looking at the options, and at whether they can take early retirement and leave the workplace. The caps in the Bill could affect their choices.
Chris Stephens
My hon. Friend is emphasising the discrimination that could come from the exit payments. Does he agree with me and with trade unions such as Unison and the Public and Commercial Services Union that, before these changes are implemented, an equality impact assessment should be carried out?
Alan Brown
I fully agree with my hon. Friend. The Lords asked for an impact assessment to be undertaken, but that has not happened, so I hope the Minister will take note of that.
To finish on the public sector payment cap, what we need is good governance, not Whitehall-imposed caps. We heard earlier that this is all about devolving power to local government, and this issue is an example of where we could follow that through, rather than allowing Westminster to hit care workers, teachers, nurses and emergency workers.
Let me turn to an issue that other Members have raised: prompt payments and their effect on small businesses. Once again, I would suggest that the UK Government could take a lead from the Scottish Government. The Scottish Government have commissioned a review on public sector procurement in the construction industry, where cash flow can be a major issue.
I am a civil engineer, so I am well aware of the problems late payments can cause, particularly when companies have to make large outlays on materials as part of a job specification. I have actually been a client and a consultant, so I have been at both ends—I have received begging phone calls from companies that are desperate for money, and I have had to go cap in hand to chase up money that a company needed for its cash flow.
That is why I welcome the Scottish Government’s current project bank account trial for public sector procurement projects. Project bank accounts are ring-fenced and underpinned by legal trust status. They allow subcontractors to receive their money at the same time as contractors, rather than having to wait for it to be channelled through the main contractor, which leads to delays and allows the main contractor to withhold moneys to have leverage over the subcontractor.
Another omission from the Bill, which was raised in the Lords, is cash retentions in the construction industry. For too long, that has been the elephant in the room. The Government have not wanted to talk about it, and that seems to have been the case again today. From my experience in the construction industry, I understand the need for a mechanism to deal with snagging at the end of a project or during the maintenance period. I know how difficult it can be to get a contractor back on site once they have moved on to the next job. Equally, however, no contractor should have to wait years to get their retention money back, because that hits cash flows. The 5% retention money is also often the contractor’s profit margin on the job, which shows how important that money is to contractors. With up to £3 billion held in retentions at any one time, and with £40 million lost in 2015 alone due to insolvencies, we can see how important cash retentions are in the construction industry.
The cash-flow problems that can be caused manifest themselves in different ways, such as an inability for companies to bid for other projects because the risk is too high, or borrowing from banks being impeded. Banks do not recognise retentions as a future income because of the uncertainty that goes with the release of retention moneys. That completely impedes companies’ ability to invest in training and apprenticeships. That is counter-intuitive considering that, while one section of the Bill is about encouraging apprenticeships, it does not tackle the issue of cash retentions that stops companies taking on apprenticeships. It seems incredible that the Government recognise cash-flow issues in general, yet avoid dealing with retentions being paid years late.
We can also imagine the administration time that is wasted in chasing these retention moneys up. I mentioned main contractors using payments as leverage over subcontractors, and it is absolutely the same for retention moneys. Specialist engineering contractors have correctly observed that a scheme could be implemented without impeding the Government’s ongoing review. That review is completely reactive in terms of amendments tabled to the Bill in the Lords, and not proactive. Again, that is indicative of the UK Government’s approach.
The suggested model is a retention deposit scheme based on the tenancy deposit scheme. That seems logical, and it would easily align itself with the trial currently being operated by the Scottish Government. A constituent has said to me that he has given up on this issue being addressed in his lifetime. We can deal with it in this Bill.
Mrs Maria Miller (Basingstoke) (Con)
It is a great pleasure to follow the hon. Member for Kilmarnock and Loudoun (Alan Brown). I listened with interest to his points about cash retentions, particularly in relation to the construction industry. We have been looking at the issue in the all-party parliamentary group on the built environment, particularly the fact that such cash retentions do not apply to residential construction and whether that should be considered.
I rise to speak in support of the Bill because the most important thing that we can be doing at this time is talking about enterprise and how we further it. Let us all remember, however, that the best people to run British business are businessmen and businesswomen, and that while many of us in this House may well have run businesses ourselves in the past—I was a director of an advertising agency—that is not our role here today. That role, whether as Ministers such my right hon. Friend the Minister for Small Business, Industry and Enterprise or as parliamentarians, is to make sure that we have the right environment for business to thrive.
The Bill has the credentials to suggest that the Government are doing exactly the right things to make sure that British business is thriving. They have cut corporation tax to 20%, and it is now the lowest in the G20. We have the fastest growing economy in the G7. We are building the sorts of trade links that unfortunately were neglected for too many years before this Government came to power. It is important that we acknowledge this up front, because our role is to make sure that we create the environments for businesses to succeed and that we have a Government who understand how best to do that. Our Government do have a good track record on that, and perhaps that is why we are best placed in Europe in terms of starting businesses or growing new businesses.
I urge the Minister to assure me in her closing remarks that the Government are continuing to work collaboratively not only with local authorities but with our local enterprise partnerships, because through such collaborative work my constituency is now enjoying some of the lowest levels of unemployment we have ever seen. We have secured, with the tenacity of our local enterprise partnership, designation for Basing View as an enterprise zone, with the opportunity to create thousands more new jobs through the sorts of targeted interventions that the Bill sets out. We are working with award-winning organisations such as SETsquared, which is a business accelerator helping, I hope, hundreds of new businesses to come to Basingstoke and—thinking about the comments of the hon. Member for Hartlepool (Mr Wright)—helping more businesses successfully to access finance.
There are two other aspects of the Bill that I want to talk about. The first is the importance of the Bill in supporting an even better environment for businesses to access the right people and the right practices to succeed. I applaud the measure in the Bill to further strengthen apprenticeships, and the commitment by the Government to support more than 3 million new apprenticeships. In my constituency in the past five years we have seen 4,000 people start apprenticeships. That is important because it will help to solve some of the productivity issues that we know we still have to resolve in Britain.
If this ambitious scale of apprenticeships is to be achieved, we need to ensure that the funding of apprenticeships works in the way that Ministers want it to do. I was pleased to hear the Secretary of State for Education say that she will do more to make sure that schools make children aware of the benefits of apprenticeships. I would like to hear more from the Minister about how we can ensure that, for organisations such as Basingstoke College of Technology in my constituency, which is seeing a 9% annual increase in the number of apprenticeships secured, the funding is available to support this dynamic growth in apprenticeships. There are at present more businesses wanting to place apprentices than there are apprentices coming forward. We need a flexible way of ensuring the availability of funding to meet that increased demand and need.
The second aspect is the provision for establishing a small business commissioner—an interesting way of trying to overcome the problems that many hon. Members have talked about in relation to late payments. In Hampshire we have on average £109,000-worth of outstanding payments to small businesses—a figure supplied by the Federation of Small Businesses. Further measures in that area are to be welcomed. I urge the Minister to consider how we can ensure flexibility within these measures to adapt the role of the small business commissioner if we find that new and different ways could be used to support businesses struggling as a result of late payments.
There are many provisions in the Bill. It contains a further set of measures that will help support business, and I hope it secures the full support of the House tonight.
Ben Howlett (Bath) (Con)
As the grandson of a shop keeper and as someone who ran a small haulier business, it will come as no surprise that I support the Bill. As the Secretary of State said earlier, although Napoleon used the phrase “a nation of shopkeepers” as an insult, the British public took the phrase under their wing and treated it with great affection. Small independent businesses have been the lifeblood of our country for centuries and we must do all we can to keep enterprise alive and well. It is enterprise that enables our country to grow, our small island to bat well above its weight on the international stage, and our young people to aspire to a brighter future.
In my constituency of Bath, independent small businesses keep our city alive. Without them, thousands would struggle to find employment and it would be a much less dynamic place to live. Given my own background in helping to start up a small business and having first-hand knowledge of the challenges that start-ups face on a daily basis, I was delighted to see that this Government are driving through an Enterprise Bill. We should be doing everything we can to ensure that enterprise is the driving force at the heart of our economy. That is why I am pleased to see the introduction of a small business commissioner and all the powers that come with it. Changes to late payment of insurance claims, the sale of Government shares in the Green Investment Bank, and grants or loans towards electronic communications facilities are welcome. All these changes will help Britain to continue to be the best place in Europe to do business. It is disappointing to see how few Labour MPs there are on the Opposition Benches. That shows that the Conservative party is the party of true enterprise.
As I have worked alongside the NHS and other public sector bodies for over seven years in my career before entering the House, I will concentrate in the short time available on last year’s announcement that the Government intended to end six-figure exit payments for public sector workers. Constituents will no doubt be shocked to hear that between 2011-12 and 2013-14 the cost of exit payments in the public sector was around £6.5 billion. More than £1 billion of that came as a result of exit payments costing more than £100,000. Indeed, according to the response to a freedom of information request by the TaxPayers Alliance, Haringey Council in London spent £12.6 million on pay-offs in three years.
Six-figure exit payments that are far in excess of those available to most public sector workers and others in the wider economy are not fair and do not offer value for money for the taxpayers who fund them. I therefore welcome clause 35(1), which introduces a cap of £95,000 on the total value of exit payments. The scope, level and design of the cap has been out to consultation, and I look forward to hearing more from the Minister about the specific technicalities. I hope she will also update the House on the consultation regarding the calculation of compensation terms and employer-funded early retirement in circumstances of redundancy.
During the seven years that I worked alongside the public sector, I saw numerous examples of permanent employees being shifted to a new role and getting a double pay-off. That is why I am pleased that the Government are ensuring that exit payments do not exceed £95,000. However, although I am pleased that the Bill will cap public sector exit pay-offs at £95,000, is the Minister considering whether to prevent public sector workers who receive a pay-off from being able to set up a limited company, apply for an interim role within the same department, receive a large daily rate and thereby effectively circumnavigate the reduced exit payment scheme? If we are to keep a lid on public sector exit payments, I strongly suggest that that is considered in Committee.
At the general election, this Government promised to create 3 million new apprenticeships. The fact that 2.3 million were created in the previous Parliament is a fantastic achievement in itself. I pay tribute to the amazing work of my hon. Friend the Member for Stratford-on- Avon (Nadhim Zahawi), who is no longer in his place, in championing apprenticeships. When discussing apprenticeships, we often forget the superb benefits that they give to people’s lives. Not only have they provided new skills; they have turned around the lives of many and given new opportunities to millions of young people in the UK.
Mrs Drummond
Does my hon. Friend agree that older people and people with disabilities should also be allowed to take up apprenticeships?
Ben Howlett
I completely agree with my hon. Friend, who makes her point well. Apprenticeships should be available to older people as well as younger people. I hope the Minister will address that in her summation.
Apprenticeships have delivered that deeply Conservative belief of aspiration—something that an entire generation lost when I was at school from 1997, just as Tony Blair took the leadership of the Labour party, to 2003.
Ben Howlett
Thank you.
Young people who once thought that they would be second-class citizens if they did not go to university now have a new nationally recognised and praised status. Apprentices are building Britain and driving our country forwards while others have stayed static. To those millions of people who have delivered that growth for us, we must say thank you—in particular, I thank those in my constituency and Bath College for the work they have done—and we ought to do everything we can to deliver even more.
In order to do that, we must ensure that all sectors of our economy deliver. The private sector has taken the lead in creating apprenticeships. It has seen that they are hugely beneficial not only to ending skills shortages, but to productivity growth and future profitability. The same must be applied to the public sector if we are to hit our target of 3 million by 2020. I therefore welcome the amendment to the Apprenticeships, Skills, Children and Learning Act 2009.
As the Government look to increase the number of people who are able to access an apprenticeship, it would be very valuable if the Minister would consider the small number of older people taking on an apprenticeship, as mentioned by my hon. Friend the Member for Portsmouth South (Mrs Drummond). There is no statutory reason why older people cannot take on an apprenticeship, but there seems to be a stigma that prevents them from taking up such an opportunity. I hope the Minister will consider that issue in her summation.
In summary, this nation of shopkeepers has continued to grow while other nations have remained static or contracted. The British entrepreneurial spirit and tenacity for business and enterprise have created jobs and opportunity. The more we champion the sector, encourage more people to upskill, and create more opportunities for businesses to grow, the stronger Britain will become. I look forward to supporting the Bill later.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Sadly, we are running out of time. This is such a popular Bill, so I have to reduce the time limit to five minutes.
Mr Alan Mak (Havant) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Having founded two small businesses, I support the Bill because it tackles some of the biggest issues faced by business today and cements the UK’s position as one of the best places in Europe to start and grow a business. This Enterprise Bill not only strengthens our enterprise nation but builds our opportunity society—a society where anyone can work hard and get on, whether in a high street shop such as the one my family ran, or in a start-up at the heart of our digital revolution.
The Bill’s plans for a new small business commissioner, support for apprenticeships and deregulation complement the good actions the Government have taken during this Parliament to support small businesses, whether by cutting corporation tax, cutting red tape or supporting pro-business initiatives such as Small Business Saturday. Such actions have made the UK one of the best places in the world to do business.
I welcome the Bill’s proposals for a small business commissioner. Receiving payment for work done or services supplied is fundamental to any business, especially a small business. Late payments hit cash flow, affect working capital and limit growth, jeopardising the future of our small businesses. The FSB last year estimated that 59% of small businesses were negatively affected by late payments. That is why I welcome clauses 1 to 13, which will create a new small business commissioner.
The role of the commissioner will be to consider complaints made by small businesses against suppliers and to signpost small businesses to appropriate resolution services, such as sector ombudsmen. That should result in positive outcomes. The commissioner will help small businesses to settle disputes quickly and cheaply, raise awareness among small businesses of alternative dispute resolution and encourage a long-term culture change whereby businesses treat each other with respect and fairness.
Getting slow-paying businesses off the backs of SMEs is vital, but so, too, is paring back the regulatory pressures that they face. That is why, last year, the Government’s new business impact target focused Whitehall’s mind on the economic impacts on businesses of new regulations that come into force during the Parliament. It is absolutely right that the Enterprise Bill extends that target and that duty to include the action of national regulators. Businesses consistently tell me that the actions of regulators are as important as the content of legislation when determining their experience of regulation. It is absolutely right that we get the regulator off the back of businesses and on their side—not just sitting back and regulating, but stepping up and supporting the economic growth that drives our country’s prosperity.
Apprenticeships play a key role in helping people in every community represented in this House to build a more secure and prosperous future. The lifetime benefits associated with the acquisition of an apprenticeship at level 2 and level 3 are significant, and higher apprenticeships help our young people to achieve a higher level of income. It is good news that since May 2010, there have been more than 2.6 million new apprenticeship starts across England. Like my hon. Friend the Member for Bath (Ben Howlett), I pay tribute to my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who is no longer in his place, for the great work that he has done on apprenticeships.
Members from all parts of the House who organise job and apprenticeship fairs know that the most enthusiastic supporters are often private sector employers. In my constituency, Innova Design, Fasset, Greggs the baker and Barratt Homes have jumped at the chance to help our young people on to a new path of success. The Bill will ensure that the public sector also plays its rightful role in apprenticeships. I welcome the fact that the Bill will impose a new target on public sector bodies to increase their recruitment of apprentices, to ensure that such bodies play their role at the heart of the Government’s policy. That is not only strategically right, but economically right. Research from the Department for Business, Innovation and Skills suggests that apprenticeships have a high level of return on investment. The research indicated, for example, that adult apprenticeships at level 2 deliver £26 of economic benefit for each £1 of Government investment. Apprenticeships are incredibly good value for money.
In conclusion, the Bill reinforces the UK’s place at the heart of the global economy as a great place to start, run and grow a business, and as a country that invests in its young people. The Bill helps every business, in every part of the country, to play an important role in our economy and to benefit from the success that the Government’s long-term economic plan is delivering.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure to follow my hon. Friend the Member for Havant (Mr Mak) in this debate. Before I entered this place, I spent most of my career working in the private sector, and I draw Members’ attention to my entry in the Register of Members’ Financial Interests. I have worked with and for small businesses, including our family manufacturing business, which we started thanks to the enterprise allowance scheme.
It is estimated that there are 5.4 million small businesses in the UK, and that they account for 48% of UK private sector employment. In my constituency, small and medium-sized businesses are the backbone of our local economy. Newer companies such as SHS, which manufactures stainless steel handles, work alongside longer-established and often larger firms such as Whitehouse Cox and Phoenix, echoing the industrial heritage of the west midlands.
I want education, skills and business to drive our economy and a culture of encouragement that nurtures and develops aspiration, builds confidence and supports enterprise. From my own experience and from speaking to local businesses, I know we need a business framework that supports, not hinders, and that works to reduce red tape and Government bureaucracy. That is why I welcome the measures in the Bill.
One of the biggest challenges facing any business is cash flow. It has been reported that 59% of UK small and medium-sized businesses have been impacted negatively by late payments, and that the average small business is waiting for £31,000 of overdue payments, which is a lot of money. That can cause huge challenges to a business, as well as being a distraction, when all it wants to do is to get on with doing business. The introduction of a small business commissioner is therefore a very welcome move. It will boost the resilience of small businesses by helping with unfair late payments and poor contractual processes. I look forward to our being able fully to assess the contribution and effectiveness of the commissioner in due course. Perhaps the Minister will say how that will happen.
Red tape is another challenge: it can stifle and swamp a business through the volume and the complexity of it all. The previous coalition Government’s agenda delivered £10 billion of deregulatory savings during the last Parliament, and it makes absolute sense to continue to do that and to drive for greater deregulation by placing more bodies in the scope of deregulation.
There is much in the Bill to talk about and I do not have time to talk about it all, but I want to mention apprenticeships. Last week, I was able to host a meeting of local businesses, with my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi). Sadly, he is not in his place at the moment. Since 2010, over 4,000 apprenticeships have been created in my constituency, which is allowing people to earn and learn, and to develop skills for the future of the workforce, our local businesses and the greater west midlands economy.
One of the messages I hear loud and clear is the need to focus on quantity and quality, so I welcome clause 21, which will protect the term “apprenticeship” in the same way that the term “degree” is protected in legislation. That will benefit apprentices, employers and training providers, and is a clear demonstration of the importance, value and reputation of apprenticeships. Quality and reputation will equally be integral to that, and that should be embraced as a positive step. Apprenticeships should be a key part of developing key skills for today and for tomorrow, so that we can fill more jobs involving more skills locally and so that we can encourage local enterprise.
I am mindful of the clock ticking, so I will conclude by saying that there is much in the Bill to celebrate. It puts enterprise at the heart of this Government. I believe it demonstrates that this Government are backing business and that Britain is truly back in business.
Kit Malthouse (North West Hampshire) (Con)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests, as the proud founder and owner of a small business, which, miraculously, has now been going for 20 years.
I am thrilled to speak in support of my right hon. Friend the Minister for Small Business, Industry and Enterprise in her mission. She is one of our most effective performers at the Dispatch Box. I see that she has been joined on the Front Bench by another two, the Minister for Skills and the Under-Secretary of State for Life Sciences—I had to get that in—and now by a fourth, the Minister for Universities and Science. Like me, she is an ardent capitalist who knows that a well-tempered economy requires a gentle hand from the state, not hobnailed, Government-sized boots stomping all over it. On that basis, the Bill has much to commend it.
First, on the small business commissioner, all Conservatives should be on the side of the little platoons over the big battalions. Anything that gives strength to David’s arm as he takes on Goliath is to be welcomed, not least because the rise in county court costs is making it extremely difficult for small businesses to recover large sums from big businesses. The commissioner will help in that matter. I share the concerns of the hon. Member for Kilmarnock and Loudoun (Alan Brown) about the construction industry. I urge the Minister for Small Business, Industry and Enterprise to ask the commissioner to look at that sector, and at the food industry, about which many farmers in my constituency complain.
There is one other big bad beast in the jungle who is very bad at paying and to whom I urge the Minister to consider extending the commissioner’s remit, and that is the Government. Only last week, I had a couple of businessmen in complaining about how long it was taking to get their VAT reclaim, albeit with a supplement. It was causing them all sorts of problems. It would be a good discipline for HMRC if the remit were extended to it. Frankly, it should also be extended to the EU. Any rural Members who are here will have received complaints from farmers about delays in the payment of the single farm payment. It would be great if the EU was on the bandwagon too.
Secondly, apprenticeships are vital for our young people and our higher-skills economy. Given the new imperatives that were placed on the private sector in the autumn statement and the Budget, it is only right that the public sector should play its part. I am very proud of the work I did at City Hall as deputy mayor for business and enterprise to drive apprenticeships forward in London and to recruit many thousands of young people. Some of the difficulties that we saw in getting the public sector, not least Government Departments, to play ball will be solved by the Bill.
Thirdly, I have personal experience of insurance companies gaming the system, particularly in catastrophic situations. As my hon. Friend the Member for Charnwood (Edward Argar), who is not in his place, said, when a business is completely wiped out by an event, very often the insurance company will delay, hoping that the business will go bust before it has to pay, because that means that it will deal with a receiver or administrator who is more than willing to do a cheap deal on the claim. I have seen that again and again. The Bill will bring some discipline in that area.
Fourthly, the mysterious and exciting clause 28 on broadband, which is hidden away in the depths of the Bill, sounds very interesting to a Member like me who represents a constituency that is in the bottom 30% in the UK in terms of connectivity. Many businesses in North West Hampshire are literally screaming down the phone at me to get their connections put in, so the ability for the Minister and the Secretary of State to shower my constituency with grants and loans to dig up the drives and pathways up to the barns that have been converted into offices to put in high-speed broadband is fantastic.
Finally, I have a couple of disappointments. First, given the Minister’s hunger for capitalism and her pledges after the election on red tape, I had hoped to see a long list of repeal clauses in the Bill, but they do not seem to be there. If Members suggest regulations that could be repealed during the passage of the Bill, I ask her to accept amendments on those repeals later on. There is still a huge thicket of regulations for us to go at and I know that she wants us to help her in her task.
Secondly, I am with the hon. Member for Hartlepool (Mr Wright) in wanting the regulator’s regime to extend to HMRC. It is absolutely the case that the biggest brake on our economic growth is the sheer complexity of our tax system. It runs to 20,000 pages and comes in several volumes. As a chartered accountant, I have wrestled with it over the years and it is mind-boggling, even for me. I therefore urge the Minister to include the Revenue in her work.
Seema Kennedy (South Ribble) (Con)
I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
To enable markets to function properly, businesses to thrive and jobs to be created, the Government have a regulatory role, but there is always a fine line between correcting market distortions and passing laws that stifle entrepreneurship. I believe that the Bill is on the right side of that line. It is wide-ranging, so I will limit my remarks to three of the proposals.
I very much welcome the appointment of the small business commissioner. I know from my own business the hours that are spent every week chasing late payments, and that is a medium-sized business with a bookkeeper. I can only imagine how acute the situation must be for those with no formal in-house accounting function and for sole traders. As many hon. Members have remarked, late payments have severe effects on a business’s cash flow and, consequently, on its ability to pay its staff and, more crucially, to invest. It is estimated—we have already heard this figure—that small businesses are, on average, waiting for about £32,000 in late payments.
I note what hon. Members have said about the small business commissioner not having statutory enforcement powers and echo others in saying that whoever is appointed should have experience and authority. Does the Minister intend to lay down any criteria for recruitment in statutory legislation or guidance? Will there be any immunity or privilege for the small business commissioner’s report, above the usual defences in law? I note that respondents have a right to make representations before publication, and I fear that that could be open season for defamation lawyers.
In my role as vice-chair of the all-party group for apprenticeships, I hear from schools, further education colleges and employers about their desire for the quality of apprenticeships to be paramount. They want to make apprenticeships a real alternative to degrees, and protecting the term will preserve and enhance that brand. We must encourage more of our constituents, of all ages and at different stages of their lives, to take up apprenticeships and to achieve the laudable aim of 3 million apprentices by 2020.
I am extremely happy with provisions in part 5 that deal with late payment of insurance claims and oblige insurance companies to pay within a reasonable time. A few weeks ago my right hon. Friend the Minister for Small Business, Industry and Enterprise visited Croston in my constituency, where businesses had been affected by the Boxing day floods. She and I talked to pub and restaurant owners about the need for prompt payment by insurers. Late payment can affect a business’s ability to start trading again, and I welcome the clauses that clear up previous anomalies. There is only one way to increase productivity and the wealth of our nation, and that is enterprise. The Bill is part of the Government’s pro-enterprise agenda, and I am happy to support it tonight.
Lucy Frazer (South East Cambridgeshire) (Con)
Small businesses are critical to our economy and make up 99% of businesses nationally, and the Bill is designed to assist them. I want to focus on the resolution of disputes and debt collection, and I refer to my entry in the Register of Members’ Financial Interests. As a barrister who specialises in business law, and insolvency in particular, I have seen at first hand the impact that uncollected debts can have on a company.
Sometimes the inability to collect debts can have a significant impact on a small company. The most obvious consequence is simply the customer’s failure to pay, which means that their supplier is out of pocket. We know from BACS that an average small business has overdue payments of almost £32,000. However, it is not just the lack of cash flow, it is also the cost of collecting debts, and we know that £10 billion is spent per year in trying to recover overdue payments. It is not just the expense; it is also about management time, and in the end many small businesses simply give up. Indeed, the consequences can be even greater than that—sometimes they mean a lack of survival. R3, the trade body for the insolvency profession, has said that late payment by customers for goods and services is often cited as a cause of insolvency.
Andrew Bridgen (North West Leicestershire) (Con)
My hon. Friend is giving a great speech with her experience in insolvency. Does she agree that companies do not go bankrupt because they run out of profit; they go bankrupt because they run out of money, and late payment is part of that?
Lucy Frazer
That is absolutely right. Often, the cause is cash-flow insolvency, which is a test of insolvency, as well as the balance sheet.
The measures to introduce a small business commissioner to give free advice and information, and to operate a complaints scheme, are a welcome step in the right direction. Indeed, a similar scheme set up in Victoria Australia has had considerable success. The hon. Member for Wallasey (Ms Eagle) suggested that the Bill does not go far enough, but in 2014-15, with 704 mediation sessions, the Victoria scheme had an 80% success rate.
As my hon. Friends the Members for Huntingdon (Mr Djanogly) and for South Ribble (Seema Kennedy) mentioned, we must ensure the success of this scheme, and to do that, we must ensure that the small business commissioner has good identity, good awareness, and is effective.
We need to ensure that the person appointed has the gravitas to command the respect of businesses big and small. We need to ensure there is public awareness of the role. There are already a number of mechanisms to resolve disputes—there is already a free small claims mediation telephone service—but such schemes are successful only if the public know about them and so can use them. Finally, the small business commissioner will have to take full advantage of his or her powers to ensure speed, efficiency and an effective service.
The measures set out in the Bill are extremely welcome. The Government do not create jobs; businesses—often small businesses—do. It is our job to create the right environment for them to thrive in. This is a significant part of that process.
Kevin Brennan (Cardiff West) (Lab)
We have had a very good debate, with 25 speakers from the Back Benches. I congratulate everybody on their contributions. I will not go through them all because of the time available, but I will say it has been a very interesting debate.
A lot of Members have tried to categorise or describe the Bill. My hon. Friend the Member for Wallasey (Ms Eagle) said at the outset that it is easier to say what the Bill is not than to say what it is. Clearly, yet confusingly, it is not what it is called: it is not really the enterprise Bill. It is not a well-thought-through coherent visionary piece of proposed legislation that sets out a clear strategic industrial strategy to use every lever at the Government’s disposal to promote British business and enterprise to ease the path for British exports—a real problem at the moment—and take on the underlying fundamental problems of the British economy.
Instead, the Bill is, to use yet another description, a bit of a lucky dip: stick a hand into the bran tub and we will not be quite sure what will come out. Long-serving, modestly paid workers in the public sector—in some cases, as we have heard, even in the private sector where workers, including those at Magnox, have been privatised—might want to remove their watches and rings before they put their hand into the bran tub. The Government are not just after top earners with their exit payments cap; they are drawing on those who have worked loyally for many years on modest pay. They are, as the Secretary of State would say, fat cats. That is what he called them in his opening remarks. He said this provision would capture fat cats. What a disgraceful thing to say about loyal public and private sector workers who will be caught by the provisions. The Government will have to think again and look very carefully at the effects of the provisions. We will scrutinise these parts of the Bill extremely closely in Committee to see if the people the Secretary of State talked about really will be caught by the provisions. Every single one of those individuals will be insulted by what the Secretary of State said earlier on.
We now hear that the Government are adding another little surprise to the bran tub. They are introducing changes to Sunday trading hours, having abandoned previous attempts and having studiously avoided putting the proposal in the Bill when it was introduced in the other place. We now hear they intend to table amendments to the Bill tomorrow. They were not prepared to let us have them today by putting them in the Library, as we asked for. There are, of course, bishops in the House of Lords. I wonder whether the Government were afraid to mention Sunday trading when the Bill was going through the Lords. I wonder whether that had anything to do with it.
How very convenient for the Government that the result of their consultation on Sunday trading should be published the day after Second Reading in this House and not when the Bill was going through the House of Lords. How very unfortunate for the House of Commons that the Government, with all the resources at their disposal, could not manage to publish the consultation before today’s Second Reading, despite having had it for five months, or even manage to timetable the debate for a time after the consultation was ready to be published. How interesting that the Government are rushing into Committee next week, without leaving the customary two weekends between Second Reading and the Committee stage to allow this House enough time to prepare and table amendments. That was done without the usual indications when discussions were held. I will not go into what is said via the usual channels. It is enough to say that a whole new controversial proposal has been introduced into the Bill. That is typical of the Government’s modus operandi—governing from the shadows and treating the House and proper democratic accountability with utter contempt.
The Government have no mandate in their manifesto to change the laws on Sunday trading, no compelling case or evidence of significant economic benefit, and no justification for the late addition to a Bill already more than halfway through its parliamentary scrutiny. It has been through First Reading, Second Reading, Committee, Report and Third Reading in the Lords, and now Second Reading in the Commons, without our having seen the proposals. It is not in their manifesto or the Bill we are voting on tonight, and it is not even in the Library of the House of Commons, so extra time will have to be made available on Report to consider it. They will have to give way on that.
It is a lucky-dip Bill. We can pull out some nicely wrapped goodies, but, as so often with a lucky dip, on unwrapping and closer inspection, it might well leave us underwhelmed by our prize. We welcome the proposals for a small business commissioner, but the Government’s proposal is a pale imitation of what is needed. There are more than 5 million small businesses in this country, but the Government anticipate that the small business commissioner will deal with just 500 cases per year. We know about Australia’s experience, particularly of the small business commissioner in the state of Victoria, the splendidly named Mark Brennan—no relation as far as I know, so I do not have to declare an interest. We know from their experience, that for a small business commissioner to work, they must have the right roles and responsibilities. Our Labour colleagues in the other place have strengthened the small business commissioner proposal, but the Government’s model does not live up to the best practice shown in Australia, or to the Small Business Administration in the USA.
We welcome other bits in the bran tub of the Bill, such as the extension of the primary authority scheme—the local authority one-stop shop for business regulation, which the last Labour Government introduced—and the emphasis on apprenticeships. We also acknowledge that the Government want to build on the achievements of the last Labour Government in rescuing apprenticeships from near oblivion and expanding their numbers considerably, but we need to know about their quality and how the Government will pay for their plans, as my hon. Friend the Member for Wallasey rightly indicated. We also need to know how it will impact on the proposed apprenticeship levy and public services.
We welcome the amendment to the Industrial Development Act 1982 and the extension to digital, but that needs to be set in the context of a proper industrial strategy for the country, not an anti-European, laissez-faire free-for-all that will lead to a race to the bottom for jobs, wages and productivity.
The clauses on late payments and non-domestic rates are welcome, but I want to mention two new items in our lucky dip introduced in the other place. The first are the provisions on the pubs code, which has been mentioned already. I recall as a Minister in the Department, back in 2009-10, clearing all the necessaries before proceeding with the proposals for pub tenants. I went so far as to square them off with the Tory Opposition Front Benchers to ensure that they would proceed after the change of Government. Since then, the coalition and now this Government have had to be dragged reluctantly to do the right thing. As has been said, a market rent option at rent renewal was the minimum required for the Government to fulfil their commitments to tenants, so I welcome the Secretary of State’s acceptance of Labour’s amendments in the Lords. It is about time the Government stood up for local pubs, instead of just sucking up to the pubcos.
The other place introduced amendments relating to the UK Green Investment Bank. The proposed privatisation of the bank by the Government, deleting its statutory green purpose, has become even more pressing with the Chancellor’s announcement about Lloyds bank. Do the Government accept that their privatisation proposals are a mess? They said that they would remove the changes made in the House of Lords to the Green Investment Bank, but do they have a mechanism that will satisfy the Office for National Statistics—my hon. Friend the Member for Wallasey asked for that—and guarantee the bank’s green mission? If they do not satisfy the Office for National Statistics, how can they possibly proceed with the privatisation of the Green Investment Bank on those terms?
If it is the wrong time to sell Lloyds, why is it the right time to sell the GIB? Does the Minister agree with her colleague, the hon. Member for Waveney (Peter Aldous), about the privatisation of the GIB? At the Environmental Audit Committee on 26 November, he said to the Minister:
“Why now? The bank has just made £100K profit. Some people might accuse you of selling your turkey on August Bank Holiday and not Christmas Eve.”
The Minister answered:
“I think it is the right time to do it. The market is in a good place and clearly people are interested so let’s get on with it and do it.”
Christmas eve has come and gone, and the Chancellor tells us the market is far from in a good place, so what is the rush to truss up the GIB and sell it at this point? Would it not be prudent, if the Government want to sell it off, to fatten it up first and sell it later rather than now—if indeed it is possible to privatise it without it losing its green purpose? I put that to the Minister.
In conclusion, my hon. Friend the Member for Wallasey commented on the smallness of this Bill’s vision in comparison with the hyperbole of the Government’s rhetoric. It lacks the ambition to set out a real strategy to meet the real challenges facing British business and industry. Some of its contents are helpful; some are likely to have unintended consequences and cause harm to the lower paid, pensioners and industrial relations. We will scrutinise it carefully in Committee and, if necessary, oppose the parts that are likely to cause harm. We shall not vote against Second Reading this evening, but there are issues in the Bill that we will undoubtedly have to divide on at a later stage. If this is a lucky dip Bill, it is one where the main prize—a proper strategy for UK enterprise and business—has been left out with the raffle.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
I congratulate everybody—and I mean everybody—who has contributed to what I believe has been a very good debate. I am going to look at the areas of contention and the particular topics in respect of which hon. Members have made good points and raised good concerns. I shall not go through all the clauses and topics in the Bill, but deal with it in the way I have suggested.
This may be a small Bill, but I think it is beautifully formed. Each part of it, each small piece, cog, wheel, nut and bolt is not perhaps in every instance beautifully and finely finished, but if we bring all of them together, it forms a wonderful small machine that is part of the bigger engine—the role of business in our economy. That is indeed what provides jobs and prosperity, and in turn the money that allows us then to provide services for everyone throughout our nation. It is an important Bill.
I pay tribute to my right hon. Friend the Member for Basingstoke (Mrs Miller), who rightly said that it is all about creating the right environment for business. I believe that the Bill is part of that. It is interesting that, with the exception of the hon. Member for Chesterfield (Toby Perkins)—others will correct me if I am wrong—it is only from Conservative Members, such as my hon. Friends the Members for Aldridge-Brownhills (Wendy Morton) and for North West Hampshire (Kit Malthouse), that we have heard the voice of business from those who have actually run businesses themselves and who, frankly, know what they are talking about.
Let me deal first with apprenticeships. We heard some good contributions, including from my hon. Friends the Members for South Ribble (Seema Kennedy) and for Warwick and Leamington (Chris White) and from the right hon. Member for Don Valley (Caroline Flint). I am afraid I had too many enterprising criminals when I was working as a criminal barrister, but I look forward to the contribution that she will undoubtedly make in Committee. I pay particular tribute—[Interruption.] There is a lot of chuntering going on.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The right hon. Lady is right: there is a lot of chuntering, and if it gets any louder, I will have to stop it.
Anna Soubry
Thank you very much, Madam Deputy Speaker. We do not like chuntering, do we?
I stopped speaking because I wanted to pay a big tribute to my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) and my hon. Friend the Minister for Skills for their outstanding work on the advancement of apprenticeships, which will help us to go forward and achieve our goal. We are seeing a golden age of apprenticeships—a revolution in apprenticeships—and people will now appreciate their full worth. That is what the Bill seeks to achieve by enshrining the true value of apprenticeships in law.
I can tell my hon. Friend the Member for Cannock Chase (Amanda Milling) that there will be a national advertising campaign to promote apprenticeships in the next few months. That is just a part of the great work that has been done by my hon. Friends the Member for Stratford-on-Avon and the Minister for Skills.
In relation to public bodies, I pay tribute to my own borough council under Labour: a record number of apprenticeships were created in the borough. The number rose to 20 over two years, and now, under a Conservative administration, the target is 20 each year. If we can do that in Broxtowe, other local authorities can do it.
I pay tribute to the work of my hon. Friend the Member for Burton (Andrew Griffiths), and, indeed, that of the hon. Members for Leeds North West (Greg Mulholland) and for Chesterfield, in relation to the pubs code. All three made important points today. We must get the balance right between allowing pub companies to invest in our great pubs and securing fairness for tenants. That is what I want us to do, and I believe that we are well on the way to doing it.
Let me now deal with the issue of Sunday trading. I can tell the hon. Member for Strangford (Jim Shannon) —my friend—that we will introduce legislation to improve the terms and conditions of people who do not wish to work on Sundays. We think it important to protect those workers, so that will be part and parcel of our changes in Sunday trading laws. I must stress, however, that this is not mandatory. We want to give councils the power—a power that many Labour councils want—to make local decisions that are based on the needs of their own people and businesses. If a local authority does not consider such action suitable, it will not take it. As we heard from my hon. Friend the Member for Kensington (Victoria Borwick), an authority might want to extend the hours of a garden centre to suit that particular business. It is a question of fine-tuning.
Let me repeat to the hon. Member for Strangford that working on Sundays is not mandatory, any more than it is mandatory to go shopping. Sundays will still be special for those who want to keep them special.
Anna Soubry
I will give way briefly, but I will take no more interventions after that.
Toby Perkins
What the Minister is saying, and what she is setting out to do in regard to Sunday trading, is entirely wrong, but something even more important is happening here. For the first time ever, workers’ rights are being devolved, and will become different in different areas.
Anna Soubry
They will not be devolved. Let me make that absolutely clear. We will introduce legislation for all work that will affect any worker working on a Sunday—
Ms Angela Eagle
On a point of order, Madam Deputy Speaker. The Minister is spending time talking about provisions that no one but her has seen, because they are not in the Bill. How can that be in order?
Madam Deputy Speaker (Mrs Eleanor Laing)
The Minister can choose what she wants to talk about as long as it is related to the Bill. When it is not related to the Bill, I will stop her.
Anna Soubry
Thank you, Madam Deputy Speaker. I specifically wanted to deal with those points, because I think that the hon. Member for Strangford made them better than anyone else.
In the six minutes that remain, I want to talk about the small business commissioner. We heard an excellent speech from my hon. Friend the Member for Huntingdon (Mr Djanogly) and contributions from the hon. Member for Livingston (Hannah Bardell), my right hon. Friend the Member for Basingstoke, my hon. Friends the Members for Bath (Ben Howlett), for Havant (Mr Mak), for Aldridge-Brownhills and for South Ribble, my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), my hon. Friend the Member for Derby North (Amanda Solloway), the hon. Member for Chesterfield, the right hon. Member for Don Valley, the hon. Member for Hartlepool (Mr Wright) and others.
I just want to say about the small business commissioner that many will say “Well, it sounds like a good idea, but he or she won’t have the teeth and the powers.” It is important to understand that the many businesses that rightly complain about late payment already have a contract with the other party, so the late payment is a breach of that contract’s terms and conditions and they do therefore have redress to law, as Members have outlined. However, the following good point was made: this is not just about the cost of going to litigation; it is also about the relationship between the smaller business and the other party and it not wanting to undermine that relationship. There is, therefore, a reluctance to go to court. Those people can go to the SBC to make their complaint, but it would be wrong to put that person in some quasi-judicial role given that there is an existing legal relationship between the two parties in that instance and they can go to law.
The other sort of case that we anticipate will interest the SBC is when a small business is in effect making a complaint before a contract has been signed about terms that are being put on them by the other party. They will be able to go to the SBC and raise that complaint.
What happens in Australia has been mentioned. I have spoken to the SBC in Australia and have learned a great deal from his wise words. He does not have any greater powers—[Interruption.] No, he doesn’t—not in relation to late payments. What he does do, however, and what he has achieved by virtue of the huge credibility he brings to the post and the huge respect he has, is change the culture, and that at its heart is what we seek to do. We want to change the culture so those bigger businesses understand that this is no longer acceptable, regardless of whether they put it into their Ts and Cs or just in practice do not pay small businesses in a reasonable length of time. This is about changing culture. That is what we seek to achieve, and I am confident we can do that.
I just want to finish off by dealing with exit payments. I want to say a few words to the hon. Member for Ynys Môn (Albert Owen) and my hon. Friend the Member for Charnwood (Edward Argar). I say to the hon. Gentleman that Wales will get the benefit of the extra powers we intend to put in. I pay credit to him for the work he and the Secretary of State are going to do to make sure we extend superfast broadband throughout the whole of the UK—and to make sure everybody can get a proper mobile phone signal, too. That is absolutely critical.
On public sector exit payments, I want to say the following. On Magnox workers, I am more than happy to meet any Members to discuss this important issue in relation to them. On NHS workers, I specifically asked for that work to be done and my officials tell me that no NHS employee on £47,000 will be affected—[Interruption.] Opposition Members say that is not true; I do not know whether they have done the work on it, but my officials have. I am absolutely determined that we will look at these figures when we go into Committee. We will get that evidence and we will make sure that the figures are put to everybody so that we all know the real situation. What we do know is that there is a very small number of workers in the public sector on about £25,000 who could be caught by this—[Hon. Members: “Ah!”] But those are extremely rare conditions. We will do this in Committee. I urge everybody to vote for the Bill.
Question put, That the Bill be now read a Second time.
Lady Hermon (North Down) (Ind)
On a point of order, Madam Deputy Speaker—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The House must be quiet, as I am trying to hear a point of order.
Lady Hermon
I am most grateful to you, Madam Deputy Speaker, for accepting this important point of order. I think that this is the first time that this has arisen. I am in no way challenging the certification by the Speaker of provisions in this Bill as exclusively English or English and Welsh only. The guidance I seek relates to the Order Paper published for today’s business, which on page 6, under the title “Enterprise Bill [Lords]: Second Reading”, gives a note of Mr Speaker’s certification. At the very end, it states:
“The Northern Ireland Assembly decided not to approve a Legislative Consent Motion in respect of this Bill.”
That unfortunately gives the impression that the Northern Ireland Assembly has considered the whole Bill. Since we are in a three-month trial period, I wonder whether I might have some guidance.
I will stand corrected if this is wrong, but it is my understanding that as of this evening the only provision of the Bill that the Assembly actually considered was considered on 7 December 2015. In a letter dated 9 December, the Clerk to the Assembly wrote:
“I am writing to notify you”—
that is, the Clerk of the House of Commons—
“that…the Northern Ireland Assembly did not consent to the provisions dealing with public sector exit payments contained in the Enterprise Bill”.
To the best of my knowledge, the Assembly has not yet fixed a date to consider whether to pass a legislative consent motion on the rest of the Bill. I am simply looking for guidance on the notes that appear in the Order Paper.
Madam Deputy Speaker
I am grateful to the hon. Lady for drawing her concerns to the attention of the House and to my attention, and I will, of course, pass that on to Mr Speaker.
The hon. Lady is correct about the wording of page 6 of today’s Order Paper, and I appreciate what she says about what has actually occurred in the Northern Ireland Assembly, about which I have no information, but I will take it that the hon. Lady’s description is correct, in which case there might be a discrepancy between what has occurred in one place and what has occurred through this Order Paper in this place.
As the hon. Lady rightly said, we are still in the experimental stages of this type of consideration of legislation—[Interruption.] Order. The House must be quiet when I am dealing with a point of order. As I said, the hon. Lady is aware that we are still in an experimental period, and the point which the hon. Lady has made is one that ought to be taken into consideration, and it will be taken into consideration, first, I am sure, by Mr Speaker—I will draw his attention to it—and also, I am sure, by the Procedure Committee, when it looks at how this new procedure is working. I am grateful to the hon. Lady for drawing this matter to the attention of the House.