Small Business, Enterprise and Employment Bill

Jim Cunningham Excerpts

Wednesday 19th November 2014 Commons Chamber

[Matthew Hancock]

I strongly agree with my hon. Friend. Improving transparency internationally is important in ensuring that we tackle crime and have a system that people trust, but we have to introduce things in a way that supports legitimate business, does not put undue burdens on business and is secure in terms of the data held. The points he makes are important.

We have increased parliamentary scrutiny of the business impact target—the target for regulatory reduction. We heard in Committee that the Labour party would make no commitment to tackle the burden of regulation on business, whereas we have our one-in, two-out rule. We are ensuring that the targets and the associated metrics will have to be laid before Parliament when they are set or amended. We have also changed the Secretary of State’s powers on administration sales to connected parties and certain elements of the register of people with significant control, so that they are now subject to the affirmative resolution procedure, not the negative one.

We have also introduced new topics during the Bill’s passage, making it easier for small businesses to access finance. Research suggests that 71% of small businesses approach only one finance provider. Our change will ensure that those who want to do so, having been rejected by their bank, can have their details passed on, to encourage greater competition among finance providers. One problem was that there were few different finance providers—the number of banks had shrunk over the past couple of decades—but now, thankfully, the competition is very successfully coming back into the market for finance.

[Mr Jim Cunningham (Coventry South) (Lab)]

I am sure the Minister has covered this before, but it is worth saying again that one big problem for small businesses comes when the larger companies do not pay up on time and they then get a cash-flow problem.

[Matthew Hancock]

The hon. Gentleman is dead right about that and he anticipates my next paragraph. We have also strengthened measures to support prompt payment, acting both to increase transparency, so that when companies do not pay on time that is made clear, and to strengthen public sector prompt payment so that the sector can lead by example. I am grateful for that intervention.

We have also included a new clause on home businesses to remove the incentive, dating from a very old Act of Parliament, for landlords to prohibit tenants from operating a business from home. Home businesses are the hotbed of enterprise; 70% of new businesses are started at home, and we want to make it easier for that to happen. We have also strengthened support for the early-years pupil premium to help three and four-year-olds from less well-off backgrounds by amending the Bill to enable Departments to disclose to local authorities information on eligibility, while ensuring that unlawful disclosure of such data continues to be an offence.

Questions were raised in Committee about the scrutiny of complaints handling procedures in the financial services sector, so we have introduced a measure to require the independent complaints commissioners to produce an annual assessment of complaints handling. That will ensure that processes are fair and accessible to all complainants, including small business.

Finally, on pubs, the Government have listened and responded to the concerns about the burdens the measures would place on family brewers and removed these smaller companies from the scope of the code during the passage of the Bill. Yesterday, we saw the House express its will, and we will reflect on that vote during the Bill’s further passage.

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[Toby Perkins]

I echo the Minister’s thanks to everyone who has contributed to the surprising and interesting passage of this Bill. I thank my shadow ministerial colleagues, my hon. Friends the Members for Edinburgh South (Ian Murray) and for Hartlepool (Mr Wright), and all the other members on our team who have contributed to the valuable scrutiny of some very important measures. The Bill posed a number of questions and challenges for the Government, and I look forward to investigating and exploring the extent to which they have been delivered.

I also thank the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), for her work—the Minister did not get the opportunity to thank her in his contribution—and all the other Members who contributed to an interesting Committee stage.

When we first saw this Bill, it was our strong belief that it was jammed full of missed opportunities. It confronted many of the big questions that people in our constituencies raise. I am talking here about late payments, zero-hours contracts, the minimum wage, insolvency and how our insolvency regimes works, and how we can provide more support to parents in the form of child care. It also addressed this key question of the relationship between pub companies and their tenants, and the Government’s role in all that.

On Second Reading, I said that this House had the chance to pass a small business Bill that did not miss out on many of those key opportunities, and I must say now that we did rather better than I expected, especially on the subject of pub companies. We can be satisfied that, as a Committee, we made progress in some of those areas. What we need is not soundbites on a long-term economic plan, but a Government who deliver on that plan and support a skills-based economy in which people go to work knowing that they can afford to pay their bills at the end of the working week. We want real investment in high-quality apprenticeships and good relationships between businesses in which we can all have confidence. I am talking there about the thorny subject of late payments and the relationship between pub companies and their tenants. This Bill leaves this House having missed out on a whole score of opportunities, but it is none the less stronger than it was at the outset, so the Committee and indeed the whole House must take great credit for that.

Labour has demonstrated real leadership in supporting small businesses through the course of this Bill. The fact that the Government agreed with the spirit behind many of our amendments, but not the specific wording, suggests that we were indeed on the right lines. I am glad that we managed to secure some concessions from the Government in a few of those areas, and the Bill is much the stronger for it.

[Mr Jim Cunningham]

I am sure my hon. Friend will agree that the test of this Bill will be in its implementation. We want to see what happens with things such as low pay and zero-hours contracts. We hear fine words in the House, but it is what happens out there that is important, because there is a great deal of insecurity at the moment.

[Toby Perkins]

My hon. Friend makes an excellent point. He is absolutely right. Let me take this opportunity to say that he is a fine MP, and I know that because he is my father’s MP. My father speaks very warmly about his contribution. The last point my hon. Friend made was typical of him. He is speaking up for a city, with a varied post-industrial economy and a proud manufacturing history. Its university is one of the most important in the country, and a massive employer in his constituency.

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[Mr Cunningham]

I thank my hon. Friend for paying such a compliment to Coventry. In the last recession, during the Thatcher years, we lost thousands of jobs in the motor car trade. We learned a lesson from that, because we diversified. More importantly though, we still have the development centre for Jaguar Land Rover and the university technical college, which is due to take off any day now.

[Toby Perkins]

My hon. Friend is absolutely right to trumpet the manufacturing excellence of his city and Jaguar Land Rover. We are delighted that Mike Wright from JLR is producing a review for the Labour party, as he is a much-respected figure. For our economy to work in the long term, it is incredibly important that we have a real skill base. I am glad that my hon. Friend raised that point. I am also pleased that he talked about the lessons that we learned from the industrial vandalism of the 1970s which that had appalling consequences for his city. None of us will forget the song “Ghost Town” that was written by the Coventry band The Specials. It reflected precisely that sense of desolation when industries disappeared. He is right to say that the city has learned lessons from that. To repay the debt, we must ensure that we never make the same mistakes again, which is why Labour is coming forward with an economic strategy that is based on skill and on competing with high-wage and successful world economies. We are not even attempting to be part of this race to the bottom or to scrap with the developing world on who can be the cheapest employer. What we are saying is that we need to look again at the way that our economy works.

[Mr Cunningham]

Interestingly, when Coventry city council joined with the university of Warwick to set up a business park, we were heavily criticised by the then Conservative Government. Two years down the road, it is clear that it was the greatest thing since sliced bread. Creating business parks was the way to go, and we did it in Coventry.

[Toby Perkins]

I could not agree more. That is an example of how Government and industry can work together to build the high-skill, high-wage economy that we want, which is in stark contrast to the kind of economy that has developed under this Government. My parents worked at Warwick university, and if we compare the size of that university in the ’70s, when I first came to the area, with its size today, we see the real difference that investment can make.