Small Business, Enterprise and Employment Bill

Stephen Mosley Excerpts

Wednesday 16th July 2014 Commons Chamber

[Mr Umunna]

I may have the figures wrong, but I think that at least 29 Labour-run local authorities have become living wage employers, and I think we should absolutely do all we can to encourage them to pay the living wage. That may take time because current contracts are left to run, but the more who sign up to become living wage employers, the better.

On zero-hours contracts, it is worth reminding Members what we are talking about. Let me quickly tell the story of a lady I met last year who was on such a contract—I have, of course, met many others, including my own constituents, since. She worked in the care sector and had to be available to visit clients in their homes on at least six days a week, including evenings. Her rota could change in a flash. If visits were cancelled at short notice, she would often not be paid. If visits were added at the last minute, she would have to manage her child care commitments as best she could. That was because she had a zero-hours contract which did not oblige her employer to offer guaranteed hours of work.

Thankfully, that lady has managed to find a permanent job, but she has left behind several hundreds of thousands of other care workers who are still on zero-hours contracts in England. She featured in an excellent report produced by my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), my right hon. Friend the Member for Knowsley (Mr Howarth), and my hon. Friend the Member for Wirral South (Alison McGovern). Her experience illustrates the reality of life on zero-hours contracts for many people. Such contracts put a strain on families who cannot plan and do not know when the next pay cheque is coming. They create a huge obstacle for people who aspire, for example, to obtain mortgages so that they can own their homes and do things that many others take for granted. And what is the Government’s answer to all that, in the Bill? To ban exclusivity clauses.

[Stephen Mosley (City of Chester) (Con)]

Will the hon. Gentleman give way?

[Mr Umunna]

I will give way shortly.

The Government’s answer is simply not good enough. Do they really think that, on its own, that will stop the exploitative use of such arrangements?

As well as ensuring that the terms and conditions of employees on zero-hours were made clearer and that they were free to work for other employers, we would give employees the right to demand regular contracts if they were, in practice, working regular hours for a certain period, with an automatic right to a fixed-hours contract after a year. We would also ensure that employees on zero-hours contracts were not obliged to make themselves available outside contracted hours, and that they had a right to compensation if shifts were cancelled at short notice. That is what the Government should be doing. If they did what we are proposing to do, they would be able to clamp down on these exploitative practices.

[Mr Umunna]

We, as a party, have made it very clear that we want to end the exploitative use of zero-hours contracts.

[Stephen Mosley]

Will the hon. Gentleman give way?

[Mr Umunna]

No. I must make a little progress, because otherwise the hon. Gentleman’s speaking time will be reduced to three and a half minutes, and he will blame me.

Let me now say something about takeovers, which I had absolutely no idea would feature in the Secretary of State’s speech. He made two announcements on the BBC’s “The Andrew Marr Show” over the weekend. First, he said that he wished to introduce measures that would ensure that commitments given by bidders for British companies had some teeth, and that a sanction could be applied if those commitments were reneged on. Secondly, he said he believed that the Government should have a backstop power to strengthen the existing public interest tests if that proved necessary.

I support the thrust of the Secretary of State’s proposal in relation to commitments given by bidders in takeover circumstances. As I said earlier, I suggested at the weekend that he should include such measures in the Bill. According to the legal advice that I have received, primary legislation would be required; simply amending the City code would be insufficient. I think that that is sensible, and I am happy to work on it with the Secretary of State in the context of this Bill.

As for the proposal to strengthen the public interest test, my own view—based on the legal advice that I have received—is that, if the Secretary of State wishes to change the current set of criteria, there will be no need for primary legislation. He has expressed concern—as did we, some months ago—about the need to protect our science and research and development bases in the national interest. Obviously, the way in which any provisions were crafted would be important—in particular, we would need to ensure that there was clearance from the European Commission—but, as I have already said on several occasions, we are happy to work with the Secretary of State on that.

I think that I have gone on for long enough. The Bill contains other measures—relating to company filing requirements, child care and schools, and education—with which we have no major issues, and the details of which we will examine in Committee.

This is not a terrible Bill but, to refer to what the Secretary of State has said about the Government’s economic policies before, it is all rather piecemeal. Given the challenges we face as a country—a country with huge potential—our constituents were entitled to expect a bit more from this Government in this Bill. The only way to get that is to change the Government and vote Labour next year.

--- Later in debate ---

[Stephen Mosley (City of Chester) (Con)]

As someone who ran a small business before being elected to Parliament and who is a director of two others, I know that small businesses are the lifeblood of our economy. They account for 99% of all businesses in the UK. They employ over 15 million people and account for half of our GDP. Small businesses play such an important role that if each small business took on just one new employee, we would eliminate unemployment overnight. As our economy moves forwards, grows and evolves, so do small businesses.

In my constituency of Chester, we have recently seen a record number of small businesses starting up—an increase of over 300% over the past two or three years. It is not just in Chester that records are being broken; record numbers of new businesses are being created across the country. We want that to continue and the Bill is all about encouraging and allowing that to happen. The Bill will make it easier than ever before to set up a new business, streamlining the process, cutting down on the paperwork required and unleashing ever greater entrepreneurial spirit and an ever greater number of new small businesses. Such businesses have great potential.

Last year, I was delighted to organise and run Chester’s first ever small business awards, which allowed local customers to nominate and vote for their favourite local shops. Local people recognise the difference that such businesses make.

[Mark Tami (Alyn and Deeside) (Lab)]

I am sure that small businesses tell the hon. Gentleman, as they do me, that one of the biggest barriers to growing, expanding and taking on more people is that the banks—regardless of what they tell us—are still reluctant to lend businesses money or constantly change the arrangements placed on them.

[Stephen Mosley]

I agree and a big section of my speech dealt with that, but as time is very limited I think I might move on and stick to what I want to say, highlighting some of the businesses in Chester that are doing exceedingly well.

In my small business awards, more than 1,000 people nominated more than 150 different businesses, such as G and M Goold funeral directors in Vicars Cross and Monogram dry-cleaners in Newton, which were winners of the awards. Next year we hope to have even more people nominate small businesses and even more people entering and backing those local businesses.

As well as receiving support from the public, more and more small businesses are accessing Government help, advice and funding. Last year, I ran a small business fair in my constituency and I know that small businesses benefit from the advice and funding that is available. More than 100 small businesses and entrepreneurs attended the small business fair at the university of Chester’s Riverside innovation centre. The feedback we received was fantastic. By bringing together the private sector, public sector and third sector bodies we can give these businesses the boost they need.

One scheme that I have been particularly impressed by is the new enterprise allowance. In Chester, more than 100 people have taken advantage of the scheme to set up their own small business. They are not just statistics. They are people like Lois Lee of Kitsch Krafts who, after finding herself unemployed, was determined to get off welfare and back into work. Today, Lois is running a successful, popular and expanding craft boutique. A year after she first set up in a corner of Saltney post office, I was delighted to be able officially to open her new larger premises on Chester street in Saltney. It is another great small business success story, and Kitsch Krafts is not alone. Oil Monster, which started in my constituency, recently received a best start-up business award. It too is growing and that benefits everyone. Indeed, the company has recently taken on three new apprentices, helping young people into work and teaching them vital skills for the future.

As the economy improves and as Bills such as this give more and more support to our small businesses, more and more people will have confidence in our long-term economic plan and will want to set up and expand their own small businesses. That is fantastic news, and the Bill shows that the Government welcome that and that we are not complacent. We want to see even more small businesses start up, we want to see more and more jobs and we want to see more and more apprenticeships and training schemes. The measures in the Bill will make it easier than ever to start up a business and for a small business to expand. It will reduce the burden of bureaucracy and red tape on our businesses, allowing them to concentrate on growth and innovation. It will help to ensure that Britain is the best place in the world to start and grow a business.