Small Business, Enterprise and Employment Bill
Debate between Lord Stunell and Vince Cable(10 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Vince Cable
I do not accept any of those propositions. It will be possible to devise a register—we have devoted a great deal of thought to this—to ensure that individual privacy is respected. We do not want the kind of invasion of privacy that occurred, for example, with life sciences companies in respect of animal testing. That is exactly the kind of problem we wish to avoid. We have discussed this extensively with business groups. We do not believe that it will have a negative effect on investment; we think that the opposite is the case, because honest, transparent transactions will be acknowledged. Indeed, moving to an open register is a process that many organisations, including business organisations, welcome. The hon. Gentleman’s starting point is quite right: the vast majority of companies are completely honest and therefore have absolutely nothing to fear from an open register.
Sir Andrew Stunell (Hazel Grove) (LD)
Somewhat contrary to the previous intervention, I strongly welcome the proposition, which includes a provision for exemptions in certain circumstances. That is no doubt a desirable legal provision, but will my right hon. Friend assure that House that it will not simply be the gateway for mass exemptions, particularly of the kinds of apparatus and companies to which he has referred?
Vince Cable
Yes, I give that assurance. We have thought hard about the balance that must be struck between the protection of privacy and openness. Many of us have had examples in our constituencies—I certainly have—of individuals who were shareholders in companies that were targeted because of animal rights issues and suffered enormously. Naturally, we wish to protect people’s individual addresses, for example, and we will take steps to ensure that the exemptions are carefully thought through and are of that kind. In general, however, the principle of openness is absolutely right.
The final element in the transparency agenda will be to prohibit companies from acting as directors—again, with exemptions—because in the past that was often used to conceal illegitimate transactions.
Vince Cable
We have looked at the idea of penalties. Certainly one country in Europe—Sweden—applies a penalty system. The problem is that it is often difficult to distinguish between those who “can’t pay” and those who “won’t pay”. Sometimes a large company is in arrears of payments because it is itself struggling, and we need to be careful to identify such matters. We therefore judge a penalty regime to be inappropriate, but greater transparency will certainly help.
There are issues concerning the banks. Despite the emergence of competitors, the four large banks still account for 80% of lending to UK small and medium-sized businesses. To try to broaden competition and choice, we will require larger banks to share data on their small and medium-sized business customers with credit reference agencies, and we will require the credit reference agencies to provide equal access to those data for challenger banks and alternative finance providers, which will make it much easier for businesses to seek loans. We are also looking at the possibility of mandatory referral, whereby banks who pass over a customer must refer them to others, including challenger banks.
Sir Andrew Stunell
I very much applaud what the Government have done with funding for lending, but will my right hon. Friend comment on the fact that the banks have reduced their lending to small businesses while sucking up all the Government money to support that lending?
Vince Cable
The issue is complex. Some banks are now undertaking substantial net lending—that is certainly true of Lloyds and Santander. RBS is the big contributor to net lending being negative, and there are specific issues in relation to the deleveraging that is taking place there. I think that my right hon. Friend is referring to the fact that, as a result of the guarantees we have given, we are now managing to encourage an emerging crowdfunding sector, which is expanding rapidly and replacing the banks.
There are specific issues for export finance. A survey suggests that about 80% of small businesses find it very difficult to get export finance from the banks. For that reason, I introduced some time ago a whole tranche of trade finance provisions for UK Export Finance, which hon. Members may recall as the Export Credits Guarantee Department. As a result, 130 exporters won overseas contracts worth £2 billion last year. Most of them are small enterprises, and we want to go further. Provisions in the Bill will give UK Export Finance broader powers to support small business, react more quickly to changes in the market and offer a suite of products comparable with those on offer overseas.
Lastly in this category, there are two very specific but important provisions. One will remove the legal barriers to invoice finance, which is important for small businesses wanting finance for their cash-flow demands. The other will make it easier to clear cheques. Nine out of 10 businesses still extensively use cheques—I recall that my hon. Friend the Member for Solihull fought a battle to keep cheques—with sole traders and small and micro-businesses. The Bill will make provision for cheque imaging, so that cheques can be paid more quickly and easily, reducing the clearing time from six days to two days or less.
Finally—I apologise for the Castro-like length of my speech, Mr Deputy Speaker—I will deal with the issues of regulatory reform. We want to ensure that businesses no longer have to wade through ineffective and burdensome regulation, and a series of specific provisions will help to guarantee that. Since the Government introduced the one-in, one-out rule, which we strengthened to become the one-in, two-out rule, we have reduced the net burden of regulation by £1.5 billion, while safeguarding the essential protections for consumers, workers and the environment. We have aggressively tackled ineffective and out-of-date regulation, and have scrapped more than 1,000 regulations.
That work must continue. That is why, under the Bill, we will set a deregulation target for each parliamentary term, with transparent reporting against that target. The Bill will also ensure that new regulations that affect business contain a review provision. Finally, some businesses are subject to poor regulatory decisions, such as those that we have discovered through the focus on enforcement reviews. There have been some really shocking examples of regulators giving rise to problems for which there is no satisfactory complaint. For example, a blue cheese maker was told that they could have absolutely no mould on their cheese. There are numerous examples of that kind. The Bill will require non-economic regulators to have a small business appeals champion to ensure that complaints and appeal processes are fair and accessible for all businesses.
There is a variety of other measures, which I will not go into, on child care registration, the work of employment tribunals, which has been mentioned, and education evaluation to provide better information about skills training.
To summarise the provisional reaction to the Bill, the national chairman of the Federation of Small Businesses has said that it
“reflects the growing recognition of the role small businesses have to play in driving forward the economy and the need to do all we can to support them”.
The Bill will make the UK a much better place for business and, therefore, I commend it to the House.
Oral Answers to Questions
Debate between Lord Stunell and Vince Cable
Vince Cable
It has happened; I have conducted it. The problem is very simple: roughly 4 million accounts are registered with Companies House and scrutinising all of them in detail is difficult. I have asked Companies House—it is now doing this—to ensure that the returns of the top-350 companies are analysed in detail for errors. If there are errors, our experience so far has been that they are very speedily corrected.
Andrew Stunell (Hazel Grove) (LD)
T3. Does the Secretary of State welcome Stockport council’s fund to assist private businesses in setting up apprenticeship organisations and schemes? Next time he comes to Stockport, will he agree to meet some of them?
Vince Cable
I have visited Stockport on several occasions. It has been an excellent council over the years, and my right hon. Friend works effectively with it and on Stockport’s behalf. I always try on my regional visits to meet apprentices and small companies providing them, and I would be happy to do that next time I come to Stockport, which I think will be quite soon.