Small Business, Enterprise and Employment Bill

Debate between Matt Hancock and Ian Swales

Tuesday 18th November 2014 Commons Chamber

[Matthew Hancock]

All Government amendments are, of course, perfect, at least when I am at the Dispatch Box. However, I strongly agree with the thrust of what the hon. Gentleman has said. We must take the situation as we find it and then improve it, which is what I think the Bill does. However, I do not think we should go as far as the hon. Gentleman suggests. Let me begin by tackling the transparency provision, and explaining why I think it will make such a difference.

We propose that not only the average payment terms but the percentage of invoices met beyond agreed payment terms should be published. That is a different sort of late payment, but it is still a problem. However, we also propose that the proportion of payments made within 30, 60 and 120 days of receipt be published. The hon. Member for Chesterfield (Toby Perkins) has made a great deal of the fact that he received a parliamentary answer from my predecessor about naming and shaming. My predecessor was true to his word—he did publish a list of non-signatories to the prompt payment code in the FTSE 350, as he had committed himself to doing—but we have gone further. The fact that the Bill requires transparency means that all payment practices of all large companies will be published. It is not a question of having to ask a Minister to name and shame, or even the good idea of naming and shaming on the one side and celebrating on the other. The argument about naming and shaming will be driven by the measures taken in the Bill.

[Ian Swales (Redcar) (LD)]

The Minister is right to talk about unintended consequences. Getting companies to sign up to the prompt payment code made many of them extend their standard payment terms. What does he see happening to a company such as Procter & Gamble, which has now extended its payment term to 180 days? I regard naming it in this place as naming and shaming it. It is such a powerful organisation that it can be as transparent as it likes and simply ignore any consequences.

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[Matthew Hancock]

There is a lot in what the hon. Gentleman says, and that is why we are strengthening the code and will in future kick out companies that say that they have signed up to the code but then have unreasonably long payment terms, so I think we are basically in the same place on that point.

I wanted to address a couple of points made by the hon. Member for Oldham East and Saddleworth about modern slavery. She has run an admirable campaign on prompt payment over many years, and we have had exchanges across the Chamber before. She has brought a huge amount of pressure to bear on this issue, and has pushed this agenda. I strongly agree with the direction of the agenda, and I agree with her on modern slavery, too. We are determined to work with businesses to ensure that supply chains are not infiltrated by the abhorrent crime of modern slavery. There is a new disclosure requirement in the Modern Slavery Bill, requiring all large businesses to disclose what they have done to ensure that their supply chains are slavery-free. That is an important step forward and takes into account the point she made.

New clause 1 would introduce a power allowing a new reporting requirement on the retention of money, require a review, and provide a further power to act on that review, but we already have a new obligation to report on these practices in this Bill. The transparency measures are at the core of the prompt payment changes proposed in the Bill.

We will seek the views of business bodies during the consultation. We are also aware that retentions are particularly prevalent in the construction industry, as the hon. Member from Scotland said—[Laughter.] The hon. Member for Ochil and South Perthshire (Gordon Banks), as I should have said. We are working with industry to move to a position where retentions are no longer necessary, and I would be happy to work with Opposition Members to push that further.

New clause 3 deals with prompt payment. It would introduce a maximum payment term of 60 days, and also place an obligation on the Secretary of State to write annually to all non-signatory FTSE 350 companies asking them to sign up to the code. I am delighted to say that I commit wholeheartedly to writing to all non-signatory FTSE 350 companies asking them to join the strengthened prompt payment code, and we should continue the cross-party push aimed at getting more large companies to sign up. The new reporting requirement will provide sufficient transparency, which will lead to competitive pressure on companies to improve their payment practices.

[Ian Swales]

The Minister will be well aware that many large businesses in this country are not in the FTSE 350. For example, the company that I named earlier is American-owned. Is he going to do anything in addition to writing to FTSE 350 companies to try to address this issue?

[Matthew Hancock]

Absolutely, and I would be happy to work with my hon. Friend on that. There are large private companies that are not in the FTSE. Larger companies, however they are formulated, need to be considered.

New clause 4 also deals with prompt payment. It proposes a review of how the new reporting requirement can be used to ensure the automatic payment of compensation by large companies. This is the nub of the proposal, which we discussed in Committee, that interest be automatically allowed to accrue after 60 days. We consulted on something similar during the consultation, and some bodies were in favour and others were against. Some of the bodies representing small businesses, such as the Institute of Directors, were against the proposal because of the way in which it would change contract law. I therefore do not think that the new clause is necessary, but, like Opposition Members, I want to work to strengthen payment practices. We will resist this proposal today, because we do not think the case for it has been made and we do not believe that the unintended consequences have been thought through. However, we will report back publicly on the findings of further work before the end of this Parliament.

Tata Steel

Debate between Matt Hancock and Ian Swales

Thursday 16th October 2014 Commons Chamber

[Matthew Hancock]

First, may I say that there is a remarkable amount on which the three main parties agree? I will go through the hon. Gentleman’s questions in turn.

The hon. Gentleman is right that steel underpins, quite literally, a huge amount of manufacturing and construction activity in the UK. We have taken strides to strengthen the skills provision for manufacturing, not least by strengthening and expanding the apprenticeships programme, but also more broadly. Should there be changes in employment, we will be there to ensure, as we do everywhere in the country, that people have the opportunity to reskill. However, that is not the situation at the moment because this is a sale.

On the hon. Gentleman’s point about the sale, we are consulting on strengthening the takeover code, as he knows, to ensure that the assurances that are given are binding. He talked about consultation and communication with the work force. Of course, the sale was announced yesterday, hence that is when the consultation and communication started. Although we are at an early stage, with the memorandum of understanding having just been announced, I would point out that the proposed purchaser brought a long products plant in Italy back into operation last year. We will, of course, be in constant communication with the proposed purchaser and Tata, as well as with the Scottish Government when devolved issues are concerned.

Finally, on the big picture of the long-term future of the steel industry, the Government have overseen an increase not just in the amount of steel that is produced, but in employment in the steel industry. Far from the fall of 8 million tonnes of steel that we saw between 1997 and 2010, there has been an increase under this Government. Clear action is being taken and we will not rest. While we will support all those who may be affected by this decision, that is by no means the path down which we are going. We will keep working to expand manufacturing, as we have done over the past four years.

[Ian Swales (Redcar) (LD)]

This matter is not just about Scunthorpe. The Tata beam mill in my constituency makes beams of such high quality that they are in nine of the 10 tallest buildings in the world and the new World Trade Centre in New York. The Government must do everything they can to protect that capability. I thank the Minister for the steps the Government have taken on energy costs, but I ask him to look at the extra taxes that are still paid by energy-intensive industries in this country, which reduce their competitiveness and dwarf the extra levies on financial services.

[Matthew Hancock]

I pay tribute to my hon. Friend’s work in this area. The work that he did to restart steel production in Redcar was widely noticed. By getting on the plane around the world to bring investment into that plant, he bears personal responsibility for the restarting of that steel production. He makes an important point about the costs for energy-intensive industries. There is no point in having an economy like the one we had in the past, in which the costs that are laid on energy-intensive industries merely mean that the production moves to other jurisdictions, often with higher carbon emissions. We have taken £7 billion-worth of action, but I take on board his call for more.

Oral Answers to Questions

Debate between Matt Hancock and Ian Swales

Monday 10th February 2014 Commons Chamber

[Ian Swales (Redcar) (LD)]

4. What comparative assessment he has made of funding for sixth-form colleges and school sixth forms.

[The Minister for Skills and Enterprise (Matthew Hancock)]

The Government fund sixth-form colleges and school sixth forms using the same national funding formula—meaning that every child is treated the same—with extra support for the most disadvantaged.

[Ian Swales]

Most of the post-16 schooling for my constituents takes place at Prior Pursglove sixth-form college. I welcome the correction of the free school meal anomaly from this September, but will the Minister now correct the further anomaly that despite receiving significantly less funding, according to the Association of Colleges, sixth-form colleges are expected to pay VAT, but schools are not?

[Matthew Hancock]

Sixth-form colleges are funded on the same per pupil formula as every other school. They do pay VAT, and in return for that they have much more flexibility in their own borrowing. I recognise the campaign. Putting this anomaly right would cost £150 million, money that we do not have because of the enormous deficit left by Labour. I recognise the argument, but at present there is no money.

Horse Racing (Funding)

Debate between Matt Hancock and Ian Swales

Tuesday 22nd November 2011 Westminster Hall

[Ian Swales]

Absolutely. I cannot beat my hon. Friend’s lyrical description, but in Redcar, the race course is particularly important because it brings people into the resort activities of Redcar as well as for racing, often on the same day. Race courses play a key cultural role.

We must also remember—a point that has not been made—that bookmakers are key tenants on our hard-pressed high streets. I recently visited a bookmaker’s in Redcar, along with a representative of the Association of British Bookmakers. Although the ABB likes to remind us that UK racing is a smaller slice of the cake these days, the manager of the shop confirmed that it is still the major source of footfall in the shop. People using casino machines, for example, will most likely have come through the door because of racing. That is also true for many of those putting a bet on football on a Saturday; they are in the shop because of racing, even though the bet will appear in the bookmaker’s turnover as a bet on football. We should not accept too many scare stories from bookmakers.

[Matthew Hancock]

Does that not reiterate the need for a level playing field? Betting shops inevitably pay the levy because a shop cannot be moved offshore.

[Ian Swales]

That is absolutely true. My hon. Friend made the point earlier that independent bookmakers do not have the option to move offshore and, typically, they operate from fixed premises.

I support everything that has been said so far, and I welcome the Minister’s statement of 14 July. The suggestion that operators, wherever based, wishing to transact with UK customers would have to pay for a licence makes sense. I congratulate my hon. Friend the Member for Tewkesbury (Mr Robertson) on his hard work on behalf of the racing industry, and I agree that we have to think a bit bigger. It is high time that the levy system was scrapped; the tinkering that he mentioned will not provide a long-term solution. Commercial negotiations over the sale of the product, and a more entrepreneurial attitude from the industry, could have dramatic effects. We have seen what happens in other sports such as football, cricket and even darts when proper negotiations take place.

There is also sponsorship. Newcastle United has just decided, controversially, to rename its ground from St James’s Park, but that will net something like £10 million a year. What opportunities do race courses have in that regard?