Corporate Businesses and Franchisees: Regulatory Environment

Debate between Matt Rodda and John Hayes

Wednesday 2nd July 2025 Commons Chamber

[Matt Rodda (Reading Central) (Lab)]

Will the right hon. Gentleman give way?

[Sir John Hayes]

Because I am a long-standing friend of the hon. Gentleman, I will certainly give way to him, but then I must make progress.

[Matt Rodda]

I am very grateful to the right hon. Gentleman, who does the House a favour in his work tonight. I should first declare an interest, as I have a close relative who works for the Competition and Markets Authority. I do not wish to comment on competition and mergers, though I would like to ask the right hon. Gentleman to join me in supporting the Government’s work. I believe that Ministers are shortly to do some further work to offer greater support to small businesses in terms of opening up Government procurement and in other matters. Like the right hon. Gentleman, in my own constituency I am a keen supporter of small business, and my own small business competition has provided a great deal of recognition for businesses, whether local florists, those repairing small musical instruments, people providing other services, and indeed many other forms of small business. So I do want to commend the broad thrust of the right hon. Gentleman’s work tonight, although I do not want to comment on the CMA.

[Sir John Hayes]

I am most grateful for the hon. Gentleman’s support.

During the pandemic, the UK Government introduced the business rates relief package, which allowed businesses with commercial leases to claim relief on their business rates. That was designed to help firms with physical stores compensate for lost footfall during the lockdowns, and it was an essential lifeline to those smaller businesses. This automatically applied to businesses through local councils. From 11 March 2020 to June 2021 the relief was 100% with no cash cap, and ratepayers with more than one property were entitled to relief for each eligible property.

Franchisees were eligible to receive this relief, and it would have been automatically applied to stores operated by companies such as Vodafone and not through the franchise programme. It is worth noting that some corporations that benefited from that scheme, such as Tesco—although I hold no candle for Tesco generally—have since returned the money to the Government. The question is how Vodafone used that money: did it achieve its original purpose—I would be interested to hear the Minister’s answer to that question—or was it redirected in some way that was out of tune with the Government’s intention and the proper purpose? It is worth noting that that was available not only to Vodafone, but to all those organisations that had franchises. I wonder how other organisations handled the matter and how that compares with the circumstances surrounding Vodafone.

The important thing to consider as we debate these matters is that the franchisees are small business owners with families—this was important to them. Business rates relief was of huge significance and made a meaningful difference to people, as intended by the Chancellor at the time, my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak). The Government’s stated purpose for covid-19 business relief was to assist small businesses to carry on trading at a financially difficult time when profits in bricks and mortar shops were much reduced. The question is, was that the reality? The fact that the Government later introduced caps on the relief indicates that it was intended to help small businesses—those to whom £100,000 makes a great difference—not to subsidise large globalist corporations with hundreds of stores and access to other types of relief.

What is the Minister’s assessment of how that kind of funding was used during the covid pandemic? Too often, franchisees’ payments from those who franchise them are cut drastically and with little or no explanation. Contracts are often terminated with just a few days’ notice and stores repossessed with little notice, often without valid reasons for doing so, leaving debts and loans to be repaid with no income. Franchisees claim that they faced fines and clawbacks that were grossly disproportionate to the errors in question. In some cases, the errors that led to fines were the results of failures in major corporation systems, yet the financial burden was often unfairly placed on franchisees. Communications raising serious concerns, though made, were often unanswered and pressing issues were ignored for long periods of time, leaving franchisees without support or resolution to their problems.

Moreover, it has emerged that whistleblowers had warned a series of senior Vodafone executives that scores of its franchise store owners face financial ruin. What steps are the Government taking to regulate corporate businesses’ relationship with their franchisees? As I say, we are not speaking of powerful businesses with deep legal departments and balance sheets to absorb losses but ordinary people—mothers, fathers, sons and daughters—who saw an opportunity when they became a franchisee to build a meaningful business of their own under the banner of a global household name and to make a difference to their family, their community and the towns in which they are situated. People put their savings, their homes and their reputations on the line because they believe that a franchise agreement with a company such as Vodafone—there are others too—would be safe and secure.

Last month, the Competition and Markets Authority confirmed the merger of Vodafone and Three. Will the Minister confirm that the matter of the problems with franchisees were discussed ahead of that merger being approved? Indeed, more broadly, can such a merger really be said to benefit the British public, given that it is forecast to cost 1,600 UK jobs and that evidence from overseas shows that countries with fewer mobile phone operators tend to charge higher prices to consumers? Will the Minister confirm what steps the Government are taking to investigate allegations of inappropriate use of Government relief during the covid pandemic, specifically in relation to businesses with franchisees? Will the Minister confirm that all allegations of misappropriation of Government relief schemes intended for franchisees should be investigated as part of the inquiry into covid by the covid commissioner? Will the Minister urge banks to show leniency and support to those franchisees facing financial distress, and will he commit to looking afresh at the lack of enforceable regulations governing franchiser conduct?

A key lesson from the Post Office scandal is that we must not allow the sophisticated power of a corporate body, or the impression created by an impressive balance sheet, to persuade us to ignore the voices of less powerful individuals who speak out. Many franchisees have given up stable jobs. Some have taken out personal loans, and some have remortgaged their home. They train staff, open stores, serve customers, and are told by the big business that they are partners; but when the going gets rough, when the commission cuts come with little warning, when franchisees’ performance plummets due to decisions beyond their control, and when stores are repossessed with inadequate notice, they are left out on their own, high and dry. No lifeline, no dialogue—just silence from the corporations that they once trusted. I cannot believe that this Minister does not feel as I do about corporate malpractice—about greedy, soulless, heartless firms that act irresponsibly and hide behind the high wall of their substance.

Governments have a duty not only to promote entrepreneurship and business, but to protect entrepreneurs and ensure that businesses do not take unfair advantage of their staff. We must call time on the era of corporate giants using legal structures not as a framework for partnership, but as a shield for avoidance—for avoiding responsibility and decency.

Brands that trade on their reputation and public trust must be held accountable for the actions that they take that cause real harm. We must move away from a globalist, faceless corporate model that has enriched a few, and towards a different kind of economic order, in which we shorten supply lines, encourage small and medium-sized businesses, and understand that economics must serve a civil purpose. I call that fraternal economics —an economics in which community and economic activity are bound together in a common cause. We can build that kind of economic future, but it requires Government to know when to step forward to support business, and when to step back and not suffocate entrepreneurship. That future is within our grasp, but it will require this Government—perhaps any Government —to think afresh about the power balance between large, faceless businesses, and smaller entrepreneurs. They are ordinary people, like most of us, I guess, who simply want to get on and do the best for their family and their community. I know which side I am on. I am on the side of those people, because I know that they make so much difference in my constituency, and across the whole of our kingdom.

Automated and Electric Vehicles Bill (Seventh sitting)

Debate between Matt Rodda and John Hayes

Committee Debate: 7th sitting: House of Commons
Thursday 16th November 2017 Public Bill Committees

[Mr Hayes]

With you in the Chair, Sir Edward, I feel I am surrounded by lawyers.

The hon. Gentleman is right that data collection will be vital as the technology develops. Furthermore, he is right that this is a potentially challenging area because of the sensitivity of some of that data. I would go still further and say that there is a balance to be struck between the desirable collection of data to establish what might have occurred in the event of an accident and the privacy of drivers. That balance will need to be struck with great care and must be struck internationally, because people drive across borders. I have spoken repeatedly about the development of international standards, mainly in relation to the type approval process. Those international discussions should and will include the parallel issues of data storage and data collection. As I have made clear, we are engaged in those discussions, and we will certainly want to highlight the issues raised in the new clause as those standards develop.

The debate about what data, beyond who or what was in control of the vehicle, needs to be collected has begun but still needs to conclude. That debate will include engagement about who needs to access that data, and on what basis and for what purpose they will be allowed to access it. That will need to be clearly established to avoid the eventuality—which the hon. Gentleman, given his previous professional circumstances, teasingly offered us—of countless legal cases, no doubt with countless legal fees.

[Matt Rodda (Reading East) (Lab)]

I share the Minister’s concerns about this point. As a non-lawyer, I must admit that my knowledge of the legal aspects is somewhat limited. However, I represent a constituency with large IT businesses, and I urge him to consider the IT industry’s views about the management of big data. There is an ongoing debate in the industry about the various international conventions and rules that govern data. Will he and his officials consult the industry and take on board its concerns about the impact of Brexit and, indeed, our ongoing relationship with the United States on the management of that data? A number of those businesses operate in the European Union, the US and the UK, and I hope that they continue to do so.

[Mr Hayes]

I regard Brexit as the prospect of a dream coming true. It is a subject of great joy and delight to me. However, I do not want to open up—

Automated and Electric Vehicles Bill (Sixth sitting)

Debate between Matt Rodda and John Hayes

Committee Debate: 6th sitting: House of Commons
Tuesday 14th November 2017 Public Bill Committees

[Mr Hayes]

Quite. I know the Hansard writers are wonderful people.

The aim of the Bill is to create greater clarity and consistency about access and payment. We are confident that the powers are sufficient to do that. It is necessary to consult the industry on this and I commit to doing so. We want to do this as much as we can as a result of that collaborative, co-operative dialogue, but we will take powers as necessary to provide the certainty that we all seek. That seems to me to be important and urgent and it is very much in tune with what the shadow Minister said.

The second point made by my right hon. Friend the Member for West Dorset was about the location of charge points in those places where it is less straightforward and where there is not easy access.

[Matt Rodda (Reading East) (Lab)]

I thank the Minister for giving way and for mentioning our brief conversation at lunch time; it is very good of him. On his point about the location of charge points, as someone who represents a constituency with poor quality air—we suffer greatly from air pollution in Reading, as do many other urban areas, even relatively small or medium-sized ones—I not only commend his interest in encouraging charge points but urge him to speak to his officials and other partners, including the industry and local authorities, to see whether areas with air pollution problems can be prioritised as we roll out this new technology. Residents in those areas would be very grateful and appreciative if thought were put into whether that is possible.

[Mr Hayes]

The hon. Gentleman, with great courtesy, gave me notice as part of the civilised conversation we had at lunchtime that he would raise that very point. When he mentioned it to me informally, I said that it was an interesting thought. It is not incompatible with the zonal approach we have taken to air quality. As he knows, we have developed an approach that focuses on areas that are particularly severely affected by poor air quality. I cannot give a definitive commitment to do exactly what he says, but I am certainly prepared to think about it. It would not be out of tune with the Government’s approach; as well as raising the quality of air for everyone, we have done extra work in parts of our country—typically urban places—that are particularly badly affected. I think he can take that as a small win, in that he has made his point, which I have acknowledged and committed to going away to think about more.

My right hon. Friend the Member for West Dorset made a point about existing powers. He will be aware of the powers granted by the Alternative Fuels Infrastructure Regulations 2017, which I think he referred to. They have just been introduced in the UK and will go part of the way to solving the problem. Those regulations require that all charge points offer ad-hoc access without requiring people to have membership, as some existing systems do. They are about creating the greater consistency that he seeks.

In a former life I was the Energy Minister, and I remember dealing with Ofgem and others, as my right hon. Friend will have done in the roles that he has had. I hear what he says about the practical business of ensuring that the appropriate powers are employed in the way that we seek, and I will think more closely about that, too. It might be necessary to do that in primary legislation in the way that he described, but there may be other ways of achieving that end, and I want to give it further consideration.

It is certainly essential, if we are going to make this multiplicity of charge points as widely available as possible, to address the issue of off-street charge points. As my right hon. Friend and others will know, some local authorities have already made progress in that regard. I am delighted to be able to tell the Committee that just this weekend, London boroughs took the lead. Wandsworth approved a plan to convert all lampposts so that they have charge points, which is notable and important, and Kensington and Chelsea announced the conversion of 50 lampposts as a first step to converting all its lamp posts. So, there is some progress in London.