Enterprise Bill [Lords]

Melanie Onn Excerpts

Tuesday 2nd February 2016 Commons Chamber

[Sajid Javid]

Thank you, Madam Deputy Speaker.

When it comes to late payments, my Department leads by example. We pay more than 95% of invoices within five days, and more than 99% within 30 days. But many organisations are less scrupulous, including some in the public sector. The average British small business is owed almost £32,000 in overdue invoices. That is a huge sum, and for many it can mean the difference between success and failure and between keeping going for another year and throwing in the towel. However, it is not easy for a small business or sole trader to challenge a larger firm. They might not be happy, but they need that contract. They cannot afford to bite the hand that feeds them. That is not right, and it is not fair, and this Bill will do something about it.

[Melanie Onn (Great Grimsby) (Lab)]

On that point, is the Minister confident that none of those late payments is being made by the Government or any of their subcontractors to small businesses, some of which might be waiting for payment for 60 days or longer?

[Sajid Javid]

I am confident that, over the past five years, the Government have done a huge amount of work to ensure that central Government and parts of the public sector pay more promptly, but I also think that more work is required.

That is one of the reasons that we are establishing a small business commissioner with a remit to handle complaints by small businesses about payment-related issues with larger businesses. The commissioner will also have the resources to give general advice and information to assist small businesses with supply relationships and direct them to mediation services.

It is not just the late payment of invoices that is a problem. As we have seen all too graphically with the recent flooding, it is vital that insurance companies also pay out quickly. Doing so helps small businesses to help themselves and gets them back on their feet, but it does not always happen. Unnecessary delays by insurers can spell the end for vulnerable small companies, which hits employees, suppliers, the wider community and the economy. The Bill will create a legal obligation on insurers to pay up within a reasonable timeframe.

Insurance can protect many of a business’s assets from floods, theft, or fire, but at any company, the most precious asset is not the bricks and mortar or the stock in the warehouse. It is not even money in the bank. It is the skilled, dedicated workforce without which no business can succeed. Developing and growing our skills base is the key to unlocking increased productivity. It is the key to raising living standards and driving that all-important economic growth. That is why the Government have committed to 3 million new apprenticeships by 2020. We have also introduced a new apprenticeship levy on the very largest employers to help to pay for them. The Enterprise Bill will build on that success. It will introduce apprenticeship targets for public sector bodies in England. It will protect the apprenticeship brand. Unscrupulous providers will not be allowed to offer shoddy training, undermining businesses and letting down apprentices.

I am proud to say that the Bill will also create an institute for apprenticeships. An independent employer-led body, the institute will regulate the quality of apprenticeships and see that standards are driven by the needs of employers. As well as quality assurance and approval functions, the institute will have an advisory role on some funding allocations for apprenticeship standards. We will also be introducing amendments to give employers genuine control of apprenticeship funding through digital accounts as part of the digital apprenticeship service. Together, those measures will make it easier than ever for young people to access vocational training and, just as importantly, for businesses of all sizes to develop the skilled workforce they need to innovate, compete and grow in the years ahead.

Of course, it is much easier to achieve that growth if the taxman is not hovering over people’s every turn. I have already talked about how we have slashed corporation tax, ending years of punishing entrepreneurs for their success, but that is not the only tax issue facing Britain’s high streets. It is often said that small business owners are working for themselves, but because of flaws in the business rates system entrepreneurs can sometimes feel as though they are working for their local authority. We have started to tackle that by capping business rate rises. We know the appeals system also needs reform, so we are working with ratepayers to develop a modern, business-focused approach to local taxation. The Bill will further reduce the burden on businesses by applying the Government’s “tell us once” policy to business rates, and it will put in place provisions to pave the way for better information sharing between local government and the valuation office.

I am sure we all agree that local businesses are the heart of the communities they serve, and nowhere is that truer than in the great British pub. I assume that is one type of business all right hon. and hon. Members are familiar with—if they are not, they can always visit The Little Ale House in Bromsgrove, which I highly recommend. The Small Business, Enterprise and Employment Act 2015 required the creation of a pubs code. When enacted, the pubs code regulations will make life a little fairer for more than 12,000 tied pub tenants across England and Wales. We have just completed a consultation on those regulations and will publish the final version in time for the code to be in place from the end of May.

Many responses to the consultation raised an issue concerning the market rent-only option—the MRO. Specifically, they said that the eligibility of a tenant to choose the MRO at the point of rent assessment should not be contingent on the rent being increased. Good government is all about listening and responding positively. Clearly, that proposal would have had an effect we did not intend, so I am happy to announce that we will be accepting the argument regarding the MRO. Members in the other place tabled amendments to the Bill on that issue. Obviously, we now accept their intent, and we will be tidying them up in Committee.

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[Sajid Javid]

The hon. Lady raises an important point about the pubs code, specifically wanting to know whether we can apply it to Northern Ireland. I will discuss that with my Northern Ireland counterparts to see what can be done and to review what is currently being done to see whether there is any way we can assist.

The Opposition have a renewed enthusiasm for seizing control of the means of production, distribution and exchange. I think it is fair to say that Conservative Members do not share that enthusiasm, but we are committed to delivering the best possible value for money from those assets where the taxpayer retains an interest.

Last May, the Chancellor announced plans for a new company, UK Government Investments Limited, to better manage taxpayer stakes in businesses across the economy. This Bill contains a provision on UKGI, ensuring that the necessary funding powers are in place so it can carry out its vital work. That will include overseeing the sale of government assets in a way that will benefit the taxpayer—that will include the sale of the UK Green Investment Bank.

Established in the previous Parliament to address a failure in the market, the GIB has demonstrated to the wider world that investment in green projects makes good business sense. In fact, that bank has proved so successful that it has outgrown the need to be financed by the taxpayer. Moving the bank into private ownership will give it access to a much greater volume of capital, mobilising more investment and getting more green projects financed. The Bill contains provisions that will ensure that that move to the private sector can take place effectively and transparently. That will mean the GIB can continue to go from strength to strength, delivering its ambitious green business plan. It is that expertise and that green business plan that private investors will be buying into. As the name suggests, green investment is what the Green Investment Bank does—it is what has made the bank such a success. No sensible investor would look to change that.

[Melanie Onn]

Investor confidence in the UK renewables industry is at a record low. Does the Minister really think that selling off the GIB sends any signal other than that the Government are stepping away even further from the renewables industry?

[Sajid Javid]

I will come on to one of the measures we will put in place to make sure that the GIB keeps its mission—something the bank itself has come forward with—but I do really think this move will mean more green investment, because the bank is restricted by being on the Government’s balance sheet. If we can take it off that, it will have its own freedoms and ability to raise capital, whether equity or debt, and that will lead to more investment.

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[Chris White (Warwick and Leamington) (Con)]

The Bill contains a wide range of measures, but I shall focus specifically on the Government’s further action on apprenticeships. The target of 3 million apprenticeship starts by 2020 is a welcome ambition, but we must ensure that they are of sufficient quality to equip those enrolling on an apprenticeship with the necessary skills, and to increase the flow of talented individuals into the workplace. Addressing the skills gap must be an absolute priority.

I have seen many examples in my constituency of the value of apprenticeships to all parties, and I am pleased to report that since 2010 there have been 3,450 apprenticeship starts, no doubt assisted by the demand created through the strengthening of our economy. Some 99.3% of businesses are SMEs, and it is therefore essential that we incentivise and encourage them to take on apprentices. I welcome the fact that the apprenticeship grant for small businesses has been extended for another year.

The Secretary of State wrote in The Daily Telegraph about an imminent fourth industrial revolution, and stated:

“We led the Industrial Revolution over 200 years ago when scientific leaps and technological innovations brought enormous economic benefits and improvements to living standards.”

Industry 4.0 refers to the fourth industrial revolution and the rapid advancement of technology that will change our economic landscape further. Such technology includes machinery that can improve efficiency and productivity. It is therefore vital that our workforce are sufficiently skilled to use that new innovation.

Warwickshire College, in my constituency, is doing its bit to equip young people with the skills necessary to succeed. It has recently opened an engineering block, with provision for a further 285 advanced apprenticeships and 253 higher apprenticeships. As I mentioned in a debate last year on vocational qualifications, we must work harder to achieve parity of esteem between academic and vocational courses.

[Melanie Onn]

I fully support apprenticeships; indeed, I am taking on an apprentice in my office, which I hope exemplifies the point. Government data published this week show that young people from low-income households in north-east Lincolnshire are less likely to receive post-16 qualifications than those in other areas of the country, even though they are more likely to get good GCSEs. My concern is that there is an over-emphasis on apprenticeships and insufficient support for other training opportunities, with apprenticeships being the only game in town. I am concerned that insufficient training is available for young people in post-16 education to meet the skills gap that so obviously exists.

[Chris White]

I appreciate the hon. Lady’s comments. We should ensure that each part of our society and all parts of our education system recognise what our young people need to succeed. The target of 3 million apprenticeships by 2020 is a major step towards achieving that, but we must recognise that there are other needs as well.

It is important to recognise that our young people need to see the benefits of earning and learning. The Government measure to protect the term “apprenticeship”, in the same way that the term “degree” is protected, is excellent. If the target of 3 million apprenticeships is reached, the achievement will, of course, be more significant if they are high quality.

The move will add to the strengthening of the reputation of apprenticeships as a good way to start a career. It may be worth the Government investigating the possibility of allowing those who have completed an apprenticeship to use a suffix after their name, similar to the recognition given for achieving a degree. Coventry City Council offers the freedom of the city to those who have completed an apprenticeship. I understand that it is the only local authority in the country to do so. I see such initiatives as an excellent way to build prestige around apprenticeships. I encourage other local authorities to do the same.

The all-party group on manufacturing and industry leaders, in discussing the future of the sector, made it clear that we need to make a concerted effort to invest in skills to improve our productivity and competitiveness on the international stage. Apprenticeships can be instrumental in addressing the skills gap, which is absolutely vital for the future of the UK economy.

I welcome the measures in the Bill that allow the Secretary of State to set targets for public bodies in relation to the number of apprentices employed. Progress has been made, with a number of apprentices working across Whitehall, but the new powers will ensure that the public sector is a part of that ambition. I would like to touch on the use of the Public Services (Social Value) Act 2012 and the positive effect it can have on apprenticeship schemes. Partnerships between the public and private sectors to deliver projects have resulted in the commissioning of tenders that include an aspect of social value, such as the creation of additional apprenticeships.

We have come a long way since the concept of apprenticeships began in this country in the 12th century, but their value cannot be overstated. With 2.3 million apprenticeship starts in the previous Parliament, we have made great strides. The further Government target for 2020 is to be welcomed. I sense a tipping point with apprenticeships and I, for one, look forward to a new generation benefiting from these schemes and to how strongly the initiative will contribute to our economy.

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[Toby Perkins (Chesterfield) (Lab)]

I start by drawing the attention of the House to my entry in the Register of Members’ Financial Interests.

Whenever I hear the Secretary of State speak, I am struck by the fact that I am listening to someone who appears to believe that Government do not work very well, and that business always knows better than Government. Indeed, he has set out to prove that by bringing to us a Bill that does not even contain its most contentious element. I am very concerned about the Sunday trading legislation, both because the Government are heading in the wrong direction and because this is a really important democratic matter.

The hon. Member for Enfield, Southgate (Mr Burrowes) —he has not been with us today—is very passionately against any extension of Sunday trading. Having read all the briefings and the Bill, he may very well walk into the Lobby at 7 o’clock in support of the Bill, without realising that he is actually supporting an extension of Sunday trading, as he would have heard had he been in the Chamber. He may very well be contacted by people who had previously been in touch with him, saying, “Why did you vote for Sunday trading?” He would reply that he did not know that he was doing so. How the Government are dealing with Sunday trading is an important democratic matter.

[Melanie Onn]

Does my hon. Friend agree that the current Sunday trading laws represent a great British compromise? They allow retailers to trade, customers to shop and staff to work, while Sunday remains a special day, permitting shop workers to spend time with their family.