Small Business, Enterprise and Employment Bill

Debate between Catherine McKinnell and Vince Cable

Wednesday 16th July 2014 Commons Chamber

[Vince Cable]

Anything that raises wages takes people out of the tax credit net. There are, of course, other ways of dealing with this problem, one of which is taking people out of tax, and that is what the Government have been doing through their tax threshold. This Bill builds on the minimum wage system—I will say a few words about that in a moment—and does not relate to the living wage. The living wage presents all kinds of practical problems, not merely that it is way in excess of the current minimum wage and therefore presents problems for employment levels. There is a perverse feature that the recommended level of the London living wage, which would introduce a regional differential, is highest in London, which is an area with the highest levels of unemployment. If we are concerned with maximising employment, pursuing the living wage may not be the best of way of doing that. None the less, I have given guidance to the Low Pay Commission on how we increase real wages, and that is a major policy objective. I think we are better doing that by strengthening the minimum wage regime.

I assure the House that the Government are taking a series of steps to ensure proper penalties for employers who fail to comply with the minimum wage. In 2013-14, 650 employers received penalties totalling £815,000 for failure to comply with minimum wage law, and we have increased the penalty percentage from 50% to 100% of underpayment. A naming and shaming regime has come in since the new year, and we have increased the maximum penalty from £5,000 to £20,000, which came into effect in March. The Bill goes one step further. The maximum penalty will now apply on a per worker basis, rather than per notice. As a result, in future overall penalties will be substantially higher for employers that owe high arrears to multiple workers.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I appreciate the points that the Business Secretary is making, but is he aware just how vulnerable some of the workers affected by these arrangements are? Constituents have come to me who dare not go to an employment tribunal. They are already in a vulnerable position because of their employment and dare not pay the costs of that tribunal in case they are unsuccessful. Has the Business Secretary really considered the reality for workers affected by the policies he is introducing today?

[Vince Cable]

The point of access for people who have such concerns is the pay and work rights helpline, which is free, so the first stage of remedying those faults and getting an investigation into illegal activity does not cost anything. The tribunal is a different process as that involves dismissal, but if we are concerned with remedying abuses of the minimum wage, we have a system in which complaints can be made free of charge—there is access to the system—and in which there is effective and prompt enforcement.

--- Later in debate ---

[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.

[Catherine McKinnell]

I thank the Secretary of State for the work that has been done in this area, but one concern that has been raised is that, although the penalties in relation to maintaining the records of the person of significant control are relatively high at a maximum of two years’ imprisonment, the sanctions for not providing that information to the public register are relatively low at £250 a day, given, as the Secretary of State has said, the staggeringly high amounts of money that are potentially involved. Has he considered whether the deterrent is sufficient?

[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.

Royal Mail

Debate between Catherine McKinnell and Vince Cable

Tuesday 1st April 2014 Commons Chamber

[Vince Cable]

I think the hon. Gentleman is the third person who has asked the same question. I will give him the same answer: an independent valuation has been made of those assets and it was published in the prospectus.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Sadly for the British taxpayer, the NAO report is no April fool. The Secretary of State claims that the sale met all the Government’s objectives. Will he now confirm which hedge funds that donate to the Conservative party benefited from the sale? If he cannot confirm that now, will he write to me and do so? Will he confirm whether that was one of the Government’s objectives?

[Vince Cable]

I can assure the hon. Lady that I have no responsibilities for the Conservative party, and I have no wish to have any.

Oral Answers to Questions

Debate between Catherine McKinnell and Vince Cable

Thursday 14th July 2011 Commons Chamber

[Vince Cable]

The shadow Secretary of State knows perfectly well that the decision to reopen the contract in relation to Hitachi was not about the tender but about the whole project. We cannot do that in the case of Thameslink—a project that was already 10 years late.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

17. What assessment he has made of the potential role of further education colleges in the work of local enterprise partnerships.

Trade and Investment for Growth White Paper

Debate between Catherine McKinnell and Vince Cable

Wednesday 9th February 2011 Commons Chamber

[Vince Cable]

It is right to say that inward investment is enormously important. We start from a position of strength, as a major host country for inward investment. One of the specific actions that we are taking is giving the Trade Minister, Lord Green, personal responsibility for developing close relations with our major inward investors, in order to build up the flow of capital into this country.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

One way to make our businesses, both large and small, more internationally competitive is to ensure that we have the skilled work force that we need for growth. Does the right hon. Gentleman agree that a vital tool in that is using public procurement, at both local authority and Government level, to increase the number of apprenticeships available? That tool was widely used by the Labour Government, and is successfully used by our European counterparts. Given that my Bill—the Apprenticeships and Skills (Public Procurement Contracts) Bill, which is due to receive its Second Reading this Friday—is supported by the Federation of Small Businesses and the British Chambers of Commerce, will the Secretary of State now lend his support to it?

[Vince Cable]

As it happens, I launched apprenticeship week on Monday, and visited several parts of the country to promote apprenticeships and raise their status. Indeed, Government support has increased, as the hon. Lady knows, with 75,000 new apprenticeships this year. There are good elements in her Bill, and I know that she is talking to the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), who is sitting beside me now, about how we can take those positive elements forward.

Industry (Government Support)

Debate between Catherine McKinnell and Vince Cable

Wednesday 16th June 2010 Commons Chamber

[Vince Cable]

That is absolutely right. The basic problem—and the reason that it is taking some time to explain the matter to the Opposition—is that the Opposition believe that the status quo must be protected because they invented it. There will, however, be fundamental changes.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Will the Secretary of State give way?

[Vince Cable]

I have taken enough interventions.

To conclude as I started, we need private sector-led growth to offset the very difficult cuts that will have to be made in the public sector to restore financial sanity. Some initiatives will require direct Government intervention, but many will not. For example, we are committed to removing the burden of regulation, which mushroomed to alarming proportions. One key step that must happen, and that failed miserably under the previous Government, is to ensure an adequate supply of credit for small and medium-sized businesses. We must have a tax system that is friendly to business, that encourages companies to come here and that is simple. Most fundamentally, however, business wants the Government to clear up the mess in the public finances, as all the business associations make absolutely clear. I do not know how many of the business associations the right hon. Member for Tottenham has talked to, but, with regard to his comments about a business recovery, the business associations make it absolutely clear that they cannot develop business in Britain unless the mess in the public finances is sorted out. They need confidence, certainty and an assurance that the cost of capital will not escalate because of the crisis in finance. That is the priority, that is what we are working on, and that is how the recovery will take place.