Enterprise Bill [HL]

Lord Borwick Excerpts

Monday 12th October 2015 Lords Chamber

[Lord Borwick (Con)]

My Lords, this Bill will help small businesses up and down the country get on with the task of making things and providing services. It will help to ensure that regulators are on the side of business, rather than in conflict with it, and it will help millions of young people develop skills and get good jobs. These are all wonderful things. I want to address the general themes of the Bill in turn and start by declaring my interests in business and enterprise as recorded in the register.

Given the problems that some small businesses have with late payments for services provided, it is good to see that a Small Business Commissioner will be introduced. The problem could possibly be solved with tighter contracts at the beginning of any deal, but small businesses by their very nature do not have the resources to deal with the hurdles that are sometimes put in front of them. It is important that any good work that the new commissioner does is taken seriously and promoted. That would hopefully have the knock-on effect of speeding up payments without the need for cases to be referred to the Small Business Commissioner. That means that it is important that we can see the tangible results that will be delivered by the commissioner and can measure his effectiveness.

Incidentally, are not slow payments the symptom of a problem, not the cause? I know that small businesses often complain about this subject, but my experience is that slow payments happen most often to boring businesses without anything that the customer regards as unique. Would it not be better for the supplier to spend his time improving his product or getting better capitalised? I am not sure how any small business proprietor will actually have the time to complain to the commissioner, and I am pretty certain that the customer who is the subject of the complaint will get himself a new supplier.

Trying to ensure that our regulators are pro-growth is a good thing, and I welcome this direction of travel. However, it is reasonable to expect that the growth duty should already be an implied duty for all regulators. The fact that this clause is needed at all shows that regulators are too often unhelpful and that they impede growth, possibly knowingly. Perhaps we do not need to change the legislation; we just need to change the regulator. I cannot but wonder whether, had this been enacted at the beginning, in the primary legislation that set up the regulator, it would have been harder for the regulators to come up with any excuses. I am pleased that the Bill finally settles the seemingly obvious matter that regulators should be pro-growth.

Extending primary authority powers will make life a lot easier for many small businesses. Dealing with one local authority has saved a lot of time for small businesses, and therefore saved them money. Bringing regulators within the scope of the scheme also demonstrates that the Government are on the side of small businesses by making their life a lot easier, but does the Bill allow for a regulated person to nominate an authority to be regulated by, with the Secretary of State accepting that unless there was a very good reason not to? It seems to me that this would put even more trust in businesses to make the right choices for themselves.

Apprenticeships are a wonderful thing. I have a background in manufacturing, so I fully appreciate what value they can bring to a company, not just in skills, but especially in loyalty and commitment, and I commend the Government’s drive to have more apprentices working in government and at Britain’s car makers, energy companies, pharmaceutical manufacturers and all the other wealth-generating businesses in our economy. If I have one concern about apprenticeships, it is how they may be vulnerable to being interfered with by educational institutions. Academic education happens in schools. Children who thrive in schools go on to university. The implication, therefore, may be that an apprentice did not thrive at school. It is not correct; I went from secondary school directly into business, missing out university. I have had the privilege of having great apprentices working in my businesses. One was so good that we promoted him to team leader within about a year of his start. I am not sure how such a promotion would fit into statutory apprenticeships. Apprenticeships and degrees are, of course, both things to be proud of, and pride is often the best driver of high standards. The Government are doing all they can to ensure that apprenticeships are valued and respected and that they are a viable path for millions of young people. That is wonderful.

The late payment of an insurance claim can be devastating for a business that is trying to get back on its feet. My only experience of a large insurance claim was a good one. There was a fire in my factory, and ACE paid out £500,000 in just seven working days. It provided a great service. I tell this story because I worry that the press will say that this section of the Bill carries with it an implication that insurers generally pay late. This is not true. As with every industry, there are good players and there are bad players. While we check the bad players, we should applaud the good ones.

It is entirely sensible to streamline the reporting of non-domestic rates. It is ludicrous that businesses have to report their information several times over. It highlights an important point on the valuation of rates. There are many consultancies in operation today that promise to reduce your business rates bill in exchange for a percentage of the saving. The fact is that they are usually right. It works. That shows that there is something more fundamentally wrong with the system if so many valuations are incorrect. There must be a good case for reform of the system if the majority of professional practitioners are working on a success fee. I am glad that the Government are working to improve the reporting processes and, hopefully, also the quality of information that is held, meaning that businesses are not paying over the odds.

Industrial development is a noble aim, but I am sure that most taxpayers and businesses do not agree that Ministers can pick winners better than the market, so while I commend the sentiment, because this Government back business, I am nervous about increasing the threshold for industrial development from £10 million to £30 million.

I again applaud the Government for their intention to end sky-high exit payments in the public sector. These deals do not really exist in the private sector to the same extent. That is not a universal rule—some very odd deals are handed out to those at the very top of the private sector—but I hope that shareholders are far more active in standing against this type of behaviour. Taxpayers are the shareholders in the public sector, so it is right that action is taken. However, I am concerned about the 28-day payment limit. Can the Minister assure me that there will be safeguards in place that mean public sector organisations cannot simply stagger these payments over two months rather than one? Is the limit in practice going to be £1,140,000 paid over a year, or would we be better to change the 28 days to one year?

In general, this is a great Bill, albeit over a bewildering variety of subjects.