Enterprise and Regulatory Reform Bill

Debate between Brian Binley and David Simpson

Monday 11th June 2012 Commons Chamber

[Mr Binley]

I consider the hon. Gentleman to be a friend, and our views meet on a number of issues, particularly clean coal. However, they do not meet on this matter, because his suggestion would only add even more bureaucracy to small businesses. We need to lift that bureaucracy, and I ask that that point be appreciated.

[David Simpson (Upper Bann) (DUP)]

I agree with 99.9% of what the hon. Gentleman is saying, especially about small and medium-sized businesses, which are the backbone of this United Kingdom. Does he agree that it is the Government’s role and responsibility to create the environment that will help those businesses to succeed?

[Mr Binley]

I agree entirely, and I am most grateful to the hon. Gentleman for making that point much more succinctly than I did.

The Government recognise that employment regulation needs to be addressed. It is in everybody’s interests that workplace disputes are resolved as speedily as is practical. I share the concern of my colleagues on the Business, Innovation and Skills Committee that we must be assured that introducing a mandatory process will expedite matters. It is conceivable that ACAS will be involved in trying to conciliate more than 200,000 cases a year. Can the Minister provide an assurance that that will speed up the process?

In response to the earlier consultation, the Government recognised the need to increase ACAS’s resources, arguing that that would be paid for by savings from cases that would not proceed to a tribunal. However, ACAS’s report makes it clear that three quarters of claims are already resolved before that phase. What further reduction do the Government envisage under the mandatory system, and will the additional resources be provided up front? Otherwise, if we are not careful there will be as big a road block as there is in the European Court of Human Rights in Strasbourg. I ask the Minister to consider that very carefully. ACAS acknowledges that

“problems at work can be a barrier to growing a business”,

and I support that view, but it has to be properly funded if it is to do the job that the Government will ask it to do. I am not sure that we have been assured that that will be the case.

I welcome the provisions in the Bill to improve competition policy. Small businesses are capable of performing robustly in a competitive market, and we should ask whether we are doing enough to enable them to compete. When market forces fail to deliver a competitive environment, it is proper that authorities should intervene, but we need to make our competitions investigations speedier. Cartel investigations and dominance inquiries in this country take an average of more than 30 months, which is simply not good enough. We can imagine the cost involved for small businesses at the larger end of the scale that are involved in such process—it is enormous. All that we are doing is stopping good people managing their businesses for growth. We are making them defend their position simply because the law says they must. The law needs to be more helpful and understanding to them in that respect, and I ask that that matter be looked into more deeply.

Finally, I welcome the extension of the primary authority scheme in clause 52. It is essential to widen small businesses’ opportunity to participate. The existing arrangements are too prohibitive, so the reform is positive. I pay tribute to the Labour party for introducing the scheme when they were in Government—I always want to recognise value where it exists, because the House is better when it works together than when it works apart.

I repeat that this is an important Bill, and it has been brought forward at a sensitive time in the economic cycle. The voice of business could not be clearer. We need to create a simple, predictable, reliable and agile regulatory environment. We need to encourage entrepreneurs to start businesses and want to grow them here, and we need a competition regime that champions competitiveness and opportunity. Those are tough asks, and it remains to be seen whether the Bill will perform those tasks. It will if Ministers allow it to be amended effectively in Committee and on Report. I want an assurance from the Minister that the Government will be that understanding.

Finance (No. 2) Bill

Debate between Brian Binley and David Simpson

Monday 11th October 2010 Commons Chamber

[Mr Binley]

How I wish I knew the answer—but I am sure that one of the answers is to get the banks’ heads together, and perhaps do a light amount of knocking.

I recognise that the banks run businesses, but let me draw attention to what the FSB has said, which I think is very relevant. It estimated that if banks limited bonuses and dividends to pre-crisis levels, they could produce approximately £10 billion of additional capital, which would finance £50 billion of new loans. Is that not a lesson for the banks? We are not saying, “Do not pay your people”, but we are saying, “In a time of difficulty, use restraint. Transfer that money to your lending coffers, and get it out to small businesses.”

Perhaps the Economic Secretary will be kind enough to pursue that challenge, remembering also that capital reserves in banks, if lent to Government, continue to be classified as such. I think that that is a pretty important point. If lent to Government, those reserves are not considered to be risk capital, and are consequently considered to be part of their capital assets.

I shall try to wind up my speech quickly, because I always try to do what the Whips tell me. However, I want to make a few more important points. I welcome the Government’s efforts to increase the availability of the guaranteed loan scheme, but I ask the Economic Secretary to consider ways of unlocking capital reserves to increase the flow of capital available for distribution in that way.

The situation for many small and medium-sized businesses is dire. The Government know that, because we are told about it every day. Figures produced by the Bank of England give the impression that bank lending rose by 0.9% in August, but if we dig a little deeper, we find that a large proportion of those loans were issued in foreign currency, and that actual lending in pounds sterling decreased by £400 million. The truth of the matter is that bank lending this August was less than it was 12 months ago.

I wanted to talk about a couple of clauses in the Bill, but because my Whip has kindly asked me to curtail my remarks, I will do as he asks. I am an ambitious chap, and I hope that he will consider that I am being kind to him.

I welcome Clause 13, which removes the requirement for SMEs to own intellectual property in order to qualify for research and development grants. Sadly, too few small businesses are made aware of how research and development relief can benefit them—I think that the hon. Member for Wirral South (Alison McGovern) made that point earlier—and I urge the Minister to make more effort to increase awareness in the sector. I also welcome the announcement by a consortium of city financiers of their plan to create a British enterprise bank, which I understand will lend exclusively to the SME sector. That is one example of bankers facing up to their responsibilities, and we should congratulate them.

[David Simpson (Upper Bann) (DUP)]

As the hon. Gentleman said, we understand that banks are running a business, but small businesses today are finding it very difficult to provide the security that banks currently seek. The hon. Gentleman used the word “draconian”. Surely something must be done in that regard.

[Mr Binley]

Of course it must. Clauses and conditions for small businesses are now one of the major off-putting factors. Such businesses must be allowed to borrow to create the growth that we need. There is massive pressure to change overdraft to loan. Most small businesses do not want a loan. That is too much of a burden around their necks. They want an overdraft facility, but the trouble is that banks are pricing overdraft facilities out of their reach and that should be taken up, too.

May I conclude therefore—although my Whip has left? Good things are happening, but much more needs to be done if the level of growth required to assure the success of the Budget strategy is to be achieved. We are debating a Bill that facilitates that strategy, but does not do much to ensure that SMEs get the working capital that they need to provide the growth on which the strategy depends. Action is urgently needed and the House will expect to hear from the Economic Secretary what the good lady and the Chancellor will do to ensure that small and medium-sized businesses are properly resourced to play their part in restoring the country's wealth and in growing the jobs to reduce the budget deficit. Once we have balanced the budget, we can get on to dealing with the national debt, bequeathed by a Labour party that seems to think that it is morally acceptable to expect our children and grandchildren to pay for its profligacy. I find that reprehensible. I therefore look forward to being reassured in that respect, and so, I suspect, does the nation.