Enterprise and Regulatory Reform Bill

Debate between Lord Bates and Lord Cotter

Monday 3rd December 2012 Grand Committee

[Lord Cotter]

My Lords, I also support the thrust of the amendment of the noble Lord, Lord Mitchell, particularly as regards SMEs. I welcome his comments regarding SMEs’ concerns around the payment of debts. The Minister will know that I and others have often raised this issue. It is important for SMEs to be directly involved but, where contracts are awarded to large contractors, small businesses have an important role in supplying those large contractors. To follow on from the point the noble Lord made about late payment, will the Minister once again renew efforts to ensure that main contractors pay their bills to SMEs on time and in due order?

[Lord Bates]

I, too, welcome this amendment but I have some questions about it on which I would like to put down some markers to which I hope the noble Lord, Lord Mitchell, and the Minister will respond. My questions concern the use of the term “SME” and how we define a small and medium-sized enterprise. That definition differs in different parts of the world. For example, the European definition of a small enterprise is one comprising between10 and 50 employees and a medium enterprise is one comprising between 50 and 250 employees. It would be useful to know what definition the noble Lord is using to define small and medium-sized enterprises, particularly when we discuss clauses further down the track. The businesses that I call micro-enterprises, which are defined in European terms as having below 10 employees, are the ones that really need help in accessing finance and are struggling at present. Therefore, it would be helpful if the noble Lord told us the parameters and the definition of enterprise that he is using when he is talking about SMEs.

Secondly, I wonder whether the amendment achieves the ends that the noble Lord, Lord Mitchell, seeks. We are talking here about incredibly capital-intensive investments. I know from one of the first of these businesses that was established in my home area in the north-east of England—an anaerobic digestion plant—that you are talking about a capital investment of £100 million. These are huge sums which would be outside the reach of most businesses. Yet, as a result of the investment through the Green Investment Bank announced just a couple of weeks ago, the project will go ahead and there will be many jobs for micro-enterprises and SMEs in the supply chain, particularly in the construction and operation of that plant.

Those are two questions that I hope that the noble Lord will take as being not at all critical of his amendment, which seeks to help SMEs and have correct in asking for a definition of who it is that we want to help.