Small Business, Enterprise and Employment Bill

Debate between Baroness Burt of Solihull and Vince Cable

Wednesday 16th July 2014 Commons Chamber

[Vince Cable]

We will obviously consider the hon. Lady’s points, but it is worth bearing in mind that the vast majority of companies that register are extremely small and that sums of money that may seem trivial for a big international company may be quite onerous for a small company. We need to keep that proportionality in mind.

Before I leave the issue of transparency, let me deal with two other issues dealt with in the Bill, the first of which relates to director disqualification. We want to modernise and strengthen the disqualification regime, giving the business community and consumers confidence that wrongdoers will be barred as directors. To give an example of the kind of problem that currently arises, it is very difficult in disqualification proceedings at present to take into account serious abuses that have occurred overseas when individuals have been directors of companies abroad. In other cases, directors have often had multiple failures, which is perfectly reasonable in entrepreneurial culture, but some have done it with bad intent. We are familiar with the problem of phoenix companies, which deliberately fail in order to be reborn and exploit consumers. We want to make sure that those considerations are borne in mind in the director disqualification regime.

[Lorely Burt (Solihull) (LD)]

I have had a lot of involvement with companies that have suffered at the hands of such directors, who subsequently set up again, perhaps by using a pre-pack or some other way. The unsecured creditors are the people who suffer and they may have to absolve their company. One suggestion is that we should have a register to track the record of a company’s directors so that any company wishing to supply could look it up and see what is going on.

Royal Mail

Debate between Baroness Burt of Solihull and Vince Cable

Tuesday 1st April 2014 Commons Chamber

[Vince Cable]

The Government’s advisers were from Lazard, which had no financial incentive whatever in the sale.

[Lorely Burt (Solihull) (LD)]

Does my right hon. Friend agree that, despite the great hindsight shown by the Labour party, the decision was taken on the basis of the risks that we faced at the time? We should not have taken risks at any cost. If we had, the Labour party would be criticising us for a failed privatisation instead of a successful one.

[Vince Cable]

My hon. Friend is absolutely right. I strongly suggest that the Opposition Members who are getting excited read the NAO report carefully, because it spells out what would have been the costs to the taxpayer had the IPO failed.

Oral Answers to Questions

Debate between Baroness Burt of Solihull and Vince Cable

Thursday 6th March 2014 Commons Chamber

[Vince Cable]

One positive thing is that we are now getting a growth of specialist institutions that provide small businesses with a type of finance—Aldermore provides asset-based financing or new kinds of invoice financing to deal with cash flow or investment as required. However, the hon. Lady is right to say that there is a particular problem in that area of the market.

[Lorely Burt (Solihull) (LD)]

I recently had the privilege of opening the first bank in my constituency to be approved under the new Government fast-track system—Paragon bank—and it was full of praise for the help it received from my right hon. Friend’s Department. Does he share my aspiration that that will herald the beginning of much greater diversity and choice in the banking sector, and particularly help for small businesses?

[Vince Cable]

My hon. Friend is right and I thank her for her kind words. Ultimately, what will change the problem is breaking the traditional monopoly of the big four banks. Many new banks are now coming into existence, and the more flexible licensing regime operated by the regulators is playing a significant part. I believe that 20 new banks have recently been licensed and, within a few years, I think we will see real competition and diversity.

Directors’ Pay

Debate between Baroness Burt of Solihull and Vince Cable

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

I have already indicated in my statement that we are examining disclosure levels. There is an encouraging trend towards disclosure, and as the hon. Gentleman knows, the big weight of votes comes through the big pension and insurance companies. I have said that we will consider further measures if the current ones do not lead to the right trajectory, and his point is a useful one.

[Lorely Burt (Solihull) (LD)]

I very much welcome these proposals. The three-year binding pay policy will help to constrain the constant upward spiral in directors’ pay increases that we have seen in recent years. It has been suggested that the three-year pay policy agreement may turn out to be deflationary as growth improves in the economy and, hopefully, in companies. Does my right hon. Friend agree, and would he welcome that?

[Vince Cable]

My hon. Friend is right, and that was one point that institutional investors made when we consulted them. They saw that the option of having a three-year unchanged policy would be helpful in deflating top pay. She is right that the problem that we are dealing with is an upward spiral in which pay is often unrelated to performance and top executives are trying to get into the top quartile, where by definition they cannot all be.

Sunday Trading (London Olympic Games and Paralympic Games) Bill [Lords]

Debate between Baroness Burt of Solihull and Vince Cable

Monday 30th April 2012 Commons Chamber

[Vince Cable]

I am trying to understand the logic of the hon. Gentleman’s question. As I understand it, if notice is given in good time within the two-month period, a worker will be covered for the whole of the period of the Olympic games. I would be happy to clarify that in writing if he wishes.

[Lorely Burt (Solihull) (LD)]

I am very supportive of many elements of the Bill, but one aspect that concerns me is the fact that the two-month notice period will mean that shop workers will have only 21 days before 22 May in which to give notice of their wish to opt out. What methods will my right hon. Friend use to ensure that shop workers understand that they must give that notice within the next three weeks?

[Vince Cable]

We are giving the message very strongly to employers that they should communicate that to their work force. There is now adequate time for workers to opt out of Sunday working, should they wish to do so. I want to make that absolutely clear; that is the purpose of the reduction of the notice period from three months to two months.

Oral Answers to Questions

Debate between Baroness Burt of Solihull and Vince Cable

Thursday 15th March 2012 Commons Chamber

[Vince Cable]

The interesting thing about this controversy is that we are being attacked with such vehemence from the left and the right, which suggests that we are just about in the right place.

[Lorely Burt (Solihull) (LD)]

We welcome the publication of the Beecroft report today. Leaks reported in the media suggest that something of a fire-at-will culture will be instilled. Does my right hon. Friend agree that, at a time when many employees are suffering an uncertain future and feel vulnerable, that would do nothing for good employment relations or, indeed, for productivity?

[Vince Cable]

The so-called Beecroft report had a series of recommendations, most of which were sensible and unobjectionable, and are being implemented. Indeed, we are championing some of the recommendations, for example those on visas, in Government. So far, there is one area of disagreement, which relates to the no-fault dismissal issue. We want to strike a balance between making it easier for micro-companies, which have genuine difficulties with staff management because of their small scale, and the danger of creating general insecurity in the labour force. I will proceed on the basis not of ideology or vested interests, but of evidence. That is why we are calling for evidence today.

Oral Answers to Questions

Debate between Baroness Burt of Solihull and Vince Cable

Thursday 2nd February 2012 Commons Chamber

[Vince Cable]

It is indeed. Employee ownership is an expanding movement, and a popular one. It allows employees to become involved in the companies in which they have a share, and we wish to see it encouraged. We also wish to see workers properly consulted; there are powers to achieve that under existing legislation, but they are not being sufficiently used.

[Lorely Burt (Solihull) (LD)]

Does my right hon. Friend agree that it is better to force companies to consult all employees, rather than consulting one individual? How would that individual be chosen, especially in a company that might be located in many parts of the world?

[Vince Cable]

My hon. Friend is absolutely right. That is why we are stressing employee participation in remuneration discussions. There are powers under existing regulations and we want to encourage people to take more advantage of them. As she rightly says, there are enormous practical difficulties involved in choosing one employee who can properly represent the whole of an international labour force.

Oral Answers to Questions

Debate between Baroness Burt of Solihull and Vince Cable

Thursday 9th June 2011 Commons Chamber

[Vince Cable]

That is exactly what I am doing, as I explained to the right hon. Member for Wolverhampton South East (Mr McFadden). Before the hon. Member for Coventry North West (Mr Robinson) writes off what we are doing, he should consider the undoubted benefits that have already flowed from it. The banks have put £2.5 billion into the business growth fund to provide equity, which is the kind of issue that he was exercised about when he was a Treasury Minister. That problem has now been dealt with.

[Lorely Burt (Solihull) (LD)]

The Forum of Private Business is calling for a return to the traditional bank manager model, and some banks are in fact now doing that. What can we do to encourage banks to give small businesses individual attention, increase the autonomy of bank managers to make decisions and get rid of the culture of “computer says no”?

[Vince Cable]

My colleague puts the point extremely well. What we are dealing with is not a short-term problem but the long-term issue of how to change the culture of banks. One bank in particular, Lloyds, which I think I mentioned yesterday, already has SME lending on its monthly board meeting agendas, and the system of incentives is being changed to create more of that type of relationship management. Crucially, there are new banks entering the market that have exactly the focus that she describes. Competition, ultimately, will help to solve the problem in a major way.

Green Investment Bank

Debate between Baroness Burt of Solihull and Vince Cable

Tuesday 24th May 2011 Commons Chamber

[Vince Cable]

There has been no change to the policy. The green deal has a very sound business model, it will proceed and it will be successful. We do not rule out the possibility of the green investment bank complementing and working with its activities.

[Lorely Burt (Solihull) (LD)]

I know that my right hon. Friend said in his statement that he does not want to be prescriptive about the nature of the bank’s borrowing or structures, but will he look seriously at the recommendations of Ben Warren from Ernst and Young, who told the Environmental Audit Committee that

“it was crucial to not only focus on big investors when looking to raise capital, but also to work on a structure that allows individual citizens to invest in the GIB”?

[Vince Cable]

That may well be one of the ways in which the green investment bank will be involved in the longer run—once it is securely established. Large numbers of people will no doubt want to invest, through individual savings accounts for example, and that could well be a product that the bank eventually produces. We certainly do not rule that out, and we want to encourage creativity.

Trade and Investment for Growth White Paper

Debate between Baroness Burt of Solihull and Vince Cable

Wednesday 9th February 2011 Commons Chamber

[Vince Cable]

The hon. Lady is right to say that trade is crucial in her part of the country, and I have had discussions with her and her neighbours about the ceramics industry, which is clearly one of our success stories, and we should promote it. I also met the chairman of her local enterprise partnership, who was a good deal more sanguine about its prospects than she is.

[Lorely Burt (Solihull) (LD)]

I warmly welcome this statement, particularly the measures for SMEs. The previous Government were very good at helping with weapons and the aerospace industry, but this is one sector that really needed some help. What can my right hon. Friend do to publicise the scheme to ensure that all SMEs that are thinking of exporting can benefit fully from the measures that we are taking today?

[Vince Cable]

I would not completely deprecate efforts to promote the aerospace industry—I am doing the same—but my hon. Friend is right to say that the key message of the statement is about SMEs. Compared with countries such as Germany, the number of our small businesses that export is relatively small, and we have to publicise that help through bodies such as the Federation of Small Businesses and the chambers of commerce, as well as through our website. We will be active in doing that.

Oral Answers to Questions

Debate between Baroness Burt of Solihull and Vince Cable

Thursday 14th October 2010 Commons Chamber

[Vince Cable]

We are anxious to ensure a fairer solution than the existing graduate contribution system that we inherited. The right hon. Gentleman has used the analogy of mortgage payments, which is interesting. No building society or bank that I am aware of would exempt people from any payments until they were earning £21,000 a year, which is the progressive element that we are trying to introduce. He has rightly referred to the difficulties that would arise if certain Russell group institutions were allowed to charge very large variable contributions. That is why I made no commitment on Tuesday on how we would deal with that problem, on which we need to reflect further. He is right that there is an issue of fairness, which we will address.

[Lorely Burt (Solihull) (LD)]

Will my right hon. Friend do all that he can to stop higher education from disintegrating into a free market free-for-all, either by imposing a cap or by requiring a high proportion of additional fees levied by some of the top universities to be paid out in bursaries to poorer students?

[Vince Cable]

Yes, my hon. Friend is quite right; there has to be choice and there will be some competition among universities, which is welcome. That is very far short of a laissez-faire free market. We do not want that. There has to be protection for low-income students when they graduate. We will build in those protections and will ensure that there is a proper progressive scheme.

Industry (Government Support)

Debate between Baroness Burt of Solihull and Vince Cable

Wednesday 16th June 2010 Commons Chamber

[Vince Cable]

I have taken an enormous number of interventions; I will take one from the hon. Gentleman later.

Before I leave the car industry, I must point out that these projects were part of an assistance scheme for the industry, and I think that the Opposition Front-Bench spokesman would acknowledge that they were time limited. Other projects have already made applications, which are being properly considered, but we cannot have a situation in which the car industry, or any other, assumes that it can come to the Government for money, just because it has an interesting project.

It is worth underlining the point that, in large parts of the British car industry, brilliant companies have got through the recession without Government support. My first visit as a Minister was to the Bentley factory in Crewe—[Laughter.] Hon. Members might laugh, but that factory provides thousands of highly skilled jobs and a high-quality product. It is a subsidiary of BMW. It was very badly hit by the recession—it lost half its output—but it kept going. The management took a big pay cut, and the workers joined them, accepting that they had joint responsibility for the company. The company survived; it is now flourishing—it has some of the most sophisticated technology in Britain—and it did all that without a Government guarantee.

[Lorely Burt]

Land Rover, in my constituency, is another brilliant example of a company that has weathered the economic storm. It is now surging forward, and it is investing in research and development. I welcome the decision on GM and Ford, and we should all be concerned about having a level playing field in relation to the UK economy and those in other parts of the world. Can we use R and D investment and capital investment in advanced manufacturing plants such as these to provide at least a level playing field in relation to other countries, and to secure investment for the United Kingdom?

[Vince Cable]

I know that my colleague takes a close interest in these matters. She has represented the interests of Solihull and the factory extremely well over the past few years. I am very happy to talk about her proposal, but I want to emphasise the fact that the automotive assistance scheme does not have a permanently open door. Applications have been made, and they will be dealt with on their merits.

I was giving examples of car companies that have flourished and coped with the recession without coming for Government support. Before I went to visit Bentley, I went to another factory, Cosworth—one of several Formula 1 manufacturers in this country, using very high technology. It was flourishing, providing highly skilled manufacturing employment and was not dependent on Government support, like many others. It is not just the specialist producers either, as mass producers—Honda, for example—are also relevant. Honda took a big hit during the recession and the work force accepted part-time working and cuts in pay in order to keep the company together. They did so, and the company did not come forward asking for specific Government assistance. That will now be the pattern.

We have made it very clear—I made it clear in a speech—that we are willing to do what we can to support growth in the British economy, and we will do it by helping build up competences, skills, research and development and so forth, but we are not in the business of handing out money to individual companies. Quite apart from the merits of the proposal, there is an issue of affordability in the financial climate in which we now operate.

Let me start to conclude by clarifying some things that we want to do. We believe, like the right hon. Member for Wolverhampton South East, that the Government have a role. I do not believe in laissez-faire. The Government have a role; there are many market failures; there is, of course, an important role for Government in this field. It has to be cost-effective, however, and it has to be affordable. Let me summarise some of the things we are starting to do, having been in office for only a month.

The first element is skills. One of the first decisions made by the Government when they came into power was to fund 50,000 apprenticeships. That compares with the 200,000 built up under the last Government over 10 years.