Enterprise Bill [Lords]

Toby Perkins Excerpts

Tuesday 2nd February 2016 Commons Chamber

[Sajid Javid]

My hon. Friend makes an important point about the support offered to successful businessmen and women by their families. Whenever we develop any of these policies, we will carefully consider the impact on families, and I hope my hon. Friend will see that that is indeed the case as I progress through my speech and we release more detail on the Bill.

As I was saying, 600,000 people have become self-employed over the past eight years, but we want to do more, because, for my sins, I am obsessed with economic growth. That is why I am proud to have introduced the Bill before the House today.

The Enterprise Bill will strengthen the UK’s position as one of the best places in the world to start and grow a business. It will cut the red tape that too often strangles growth. It will support investment in the skills that British businesses need to be competitive now and in the future. And it will help deliver the economic growth and security that benefits every single one of us in this country.

[Toby Perkins (Chesterfield) (Lab)]

For someone who is obsessed about supporting small business growth, the Secretary of State’s Bill shows very little ambition. Can he say a little more about business rates, because the level of business rates is one of the major barriers to small businesses? It also impacts on manufacturing firms and retailers. Can he tell us more about what he will do to reduce the business rate bill of small businesses?

[Sajid Javid]

The hon. Gentleman will know that we have already done a lot to cap business rates and slow their growth. We have an ongoing review of business rates at the moment, and there will be more information at the next Budget.

It sounds to me as if the hon. Gentleman does not agree with his own leader, who has proposed

“adding 2% to corporation tax—“[Interruption.]

Yes, it is a quote, and the quote continues: he wants to do that to fund a “lifelong learning service”. On top of this, he proposes

“increasing corporation tax…to fund maintenance grants.”

So perhaps the hon. Gentleman agrees with his leader, who wants to see business taxes increase.

Let me turn to deregulation. According to the British Chambers of Commerce, regulations introduced by the last Labour Government cost British businesses almost £90 billion. No doubt this contributed to Labour’s great recession, destroying thousands and thousands of jobs across the country. That is a staggering burden for any employer, but it is a particular problem for Britain’s millions of small businesses, because when people are running their own company they do not just have one job: they have to be a manager; they have to be an accountant; they are in charge of human resources and procurement; they have to issue and chase invoices, source new suppliers and arrange marketing and advertising. All that on top of the day job. There are not enough hours in the day as it is, and the last thing they need is the Government on their back, weighing them down with petty rules and regulations.

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[Sajid Javid]

My hon. Friend is right to point out the economic impact of this measure. As I have said, it might not be right for every area but it is surely correct for each local authority to decide what is best for its area, and if that leads to more jobs and growth locally, that is exactly the reason why we should follow through on this policy.

If any of our friends in the Press Gallery have spent time freelancing, they will be all too aware of the problem of late payments—[Interruption.] There are friends up there. If they are not up there, they are listening somewhere else. I have heard of one writer, who may well be listening now, who says that he still has not been paid for copy that was filed two years ago. The most shocking aspect of this problem is just how common it is. In my six years as the Member of Parliament for Bromsgrove, I have been contacted by many dozens of local business owners who have been pushed to the brink by one thing: the failure of large corporations to pay up on time.

[Toby Perkins]

May I just take the Secretary of State back to the point about Sunday trading? I cannot remember a similar situation in which a Secretary of State has stood up and made a speech about a provision that is not even in his Bill but that he wished was in it. People are going to be voting tonight on the Bill’s Second Reading, and he is announcing measures that they are going to be asked to approve but which they might well be against, and which are not even in the Bill. Is not this entirely the wrong way to legislate?

[Sajid Javid]

We get this every day from those on the other side of the House. They are obsessed by process. They do not want to focus on the substance at all. They have no respect for the substance.

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[Madam Deputy Speaker (Natascha Engel)]

Order. Members are starting to make points of order again on this one issue—

[Toby Perkins]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker]

Is this a point of order on Sunday trading?

[Toby Perkins]

Yes, it is, but—

[Madam Deputy Speaker]

Order. We have had points of order on Sunday trading and if the hon. Gentleman wants to make a point of order at the end of the debate, I am perfectly happy for him to do so, but for now we must move on with the debate. We are getting bogged down in this one issue. The hon. Gentleman has his name down to speak, and I will happily call him, and he can also make an intervention, if the Secretary of State wants to take it, but these are not points of order.

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[Ms Eagle]

No, I do not, but I think the hon. and learned Lady should read the Government’s own impact assessment. The provision on the small business commissioner that the Bill proposes is so minor that the Government’s own impact assessment says that they will be able to deal with only 500 cases a year, and yet we know that late payment is a huge issue. I am not saying that the issue of late payments is trivial; I am saying that in dealing with it, the Government’s response is far too limited and very disappointing.

[Toby Perkins]

As a former small business owner, I entirely endorse what my hon. Friend says. The problem with the Government’s proposal is not that they are attempting to tackle late payments but that it is an utterly inadequate attempt to tackle one of the great scourges of all business, but particularly small businesses—late payments.

[Ms Eagle]

I could not agree more with my hon. Friend’s words.

Part 1—clauses 1 to 13—deals with the small business commissioner, so let me come on to the Opposition’s view on this. In the previous Parliament, Labour argued for the establishment of a small business administration that would be specifically tailored to focus on the very specific needs of small businesses.

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[Ms Eagle]

The right hon. Gentleman raises precisely the kind of case that has no doubt been raised with other hon. Members in all parts of the House. The only thing he missed was his own Secretary of State calling everyone who worked in the public sector, presumably including his constituent who would be affected by this cap, a fat cat. We will wish to give the provision particular scrutiny in Committee.

I turn to a subject which is not currently on the face of the Bill, but on which the Secretary of State has chosen to make announcements today. It is important that the Government publish their Sunday trading consultation response, along with all submissions. I was rather hoping that it might turn up while we were speaking today so that we could look at it before we vote on Second Reading. The Government must publish it in full and immediately, and tell us what form amendments to the Bill or new clauses relating to the deregulation of Sunday trading will take.

We all await all the details, but it is deplorable that at this late stage in the Bill’s passage through Parliament— after the Bill has gone through the House of Lords—the Government have seen fit to introduce these changes.

[Toby Perkins]

My hon. Friend will be aware that a huge number of Members are not present in the Chamber. They may well have read the Bill and may be coming at 7 o’clock to vote on it. We know that a number of Government Members feel very strongly that, for Christian reasons, they do not wish to support further extensions to Sunday trading. They may well unwittingly vote for the Bill, not knowing what has been announced from the Government Dispatch Box.

[Ms Eagle]

That is right, but God does move in mysterious ways Her wonders to perform, so perhaps between now and 7 o’clock those with an interest in the matter will realise what is going to be in the Bill, or the Secretary of State might even do the decent thing and publish the paper and the changes that he is proposing so that we can have a look at it before all of us go through the Lobby tonight.

Let me remind the House that this is a policy that was not in the Conservative manifesto, which the Government tried suddenly to crow-bar into the Cities and Local Government Devolution Bill, but which they wisely abandoned at the last minute in the face of widespread opposition, not least from their own Back Benchers. The current arrangements were legislated for separately in a stand-alone Bill which received Royal Assent on 5 July 1994. I should know, because I served on the Bill Committee. The current arrangements work well and mean that retailers can trade, customers can shop, and shop workers can spend time with their families on Sundays.

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[Andrew Griffiths]

I congratulate my hon. Friend on the work that he does to support pubs, not just in his constituency but in this Chamber, in standing up for British pubs and British brewing. He is absolutely right: this is a competitive business. Pubs are not just competing with each other for trade—for business—but with the likes of Starbucks. It is therefore absolutely essential that we allow them to invest in their estates. I will come on to that point later.

I have to admit that I was one of those who opposed the market-rent-only legislation when it first came in during the previous Parliament, because I was concerned about unintended consequences. We all want our to pubs to thrive, our pub estate to grow, and our pubs to be successful and pay a good living to the publicans who run them, but we must also be aware of unintended consequences. I warned of repeating the mistakes we made with the beer orders. I know, Mr Deputy Speaker, that you are not old enough to remember the beer orders coming before this House, but that mistake, with the Government intervening in the marketplace and sticking their oar in, led to the break-up of the successful breweries and, indeed, to the pubcos that we have today. We have to be very careful.

The debate on this subject has been contentious; there has been a great deal of heat, and sometimes it has become somewhat unpleasant. I congratulate the Minister on the work that she has done in finding a way through this. She has not only shown an immense interest in the subject in talking to both sides and properly understanding the implications of what we do as a Government, but has not been shy in standing up to both sides. We know that there is a famous tradition of female Conservative MPs handbagging people around the table in order to get the best deal possible, and that is what the Minister has done to find a way forward. We must not forget that pubs are not charities—they are businesses that employ 1 million people across our country and raise £21 billion for the Exchequer. We must therefore make sure that we have the right conditions to allow them to grow as businesses, and that is what the Minister is able to do.

My hon. Friend the Member for Weaver Vale (Graham Evans) mentioned investment. I am pleased that the Minister’s proposals allow publicans to opt out of—to waive their right to—an MRO for the purpose of significant investment. It is absolutely right that our pubs need to be the best offering possible. They need to have good facilities, nice loos, and good heating. They need to be pleasant environments if people are going to go there and spend their money. He is absolutely right that they are competing with the likes of Starbucks. If we want people to pump money into our pubs, we have to give them security in making that investment. Why would the likes of Punch in my constituency invest a couple of hundred thousand pounds, perhaps even £300,000, in a pub to renovate it if it was likely to lose control of it in just 12 months’ time? The simple answer is that it would not. The Minister’s decision to allow the opt-out from—the waiving of the right to—an MRO will give some comfort to the industry and allow such important investment to go ahead.

I am concerned about red tape. The adjudicator, when introduced, could potentially have to deal with some 14,000 pub tenants. There is therefore a real risk that the adjudicator could be swamped with complaints. I hope that the Minister will be well aware of that when she brings forward the secondary legislation on how this thing will actually work. I am also concerned about the amount of red tape when somebody signs up for a pub tenancy.

[Toby Perkins]

Given how busy publicans are, they do not want to spend their time at the adjudicator. They want to be serving punters and getting on with running their business. What does the hon. Gentleman think it says about the way the industry is currently working if the setting up of an adjudicator creates the likelihood that it will be swamped because all those publicans are so unhappy?

[Andrew Griffiths]

I do not think creating an adjudicator does that at all. Very few tenants come forward with complaints under the current voluntary scheme. But as in any other sphere, when a new way to complain is advertised, people will undoubtedly come forward. Some of those complaints will be valid, but many will not be. We need to make sure that we do not ruin a perfectly workable system by allowing it to be flooded with the wrong kind of complaints.

The requirement first set out by the Government would have meant that a pubco had to provide more than 80 pieces of information to somebody who wanted to sign up for a tenancy, and those would all have had to be checked off and a receipt accepted. That compares with about 10 pieces of information that have to be provided to somebody signing a normal commercial lease. I agree that we should make sure that tenants walk into the arrangement with their eyes open and with all the information, a business plan, advice from a financial adviser and a clear understanding of what that business is currently doing and what their earning potential is, but we should not make it impossible for a pubco to sign up a willing tenant who understands the business and understands what they are taking on.

On time scales, the suggestion is that the measure will come in at the end of May. Time is ticking and I hope the Minister will be attuned to the fact that this is a huge thing for tenants and pubcos to understand. Will she consider some interim measures to make sure that the measure can be introduced in a manageable way, and that the information does not swamp both tenants and pubcos?

Finally, I wholeheartedly support Sunday trading, as it would be good for the pub trade. The Association of Licensed Multiple Retailers and the British Beer and Pub Association say that encouraging people to come into our town centres on a Sunday to do shopping would also be good for our pubs. I entirely support that, but I remind the House of a letter that I received from Peter Hardingham, the manager of the Octagon shopping centre in Burton. Urging me to lobby for the important devolution to councils of Sunday trading regulation, he wrote: “Such a change in the law is critical to allow bricks and mortar retailers to compete with online retailers and to satisfy the customer demand that exists.” That is absolutely right.

The legislation, devolving the power to local authorities, giving our local councillors control over what is best for their high streets, will allow our shops to compete with online retailers. We can order from the internet on our phone and get something delivered on a Sunday afternoon. How can our shops compete with those retailers? The measure is a great idea and I hope the House will get behind it. I thank the Minister for her work on pubs. Please listen to our concerns, and I will be in the Lobby supporting Sunday trading.

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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.

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[Toby Perkins]

I absolutely agree. We had long and very passionate debates about that during the last Parliament, particularly in the run-up to the Olympics, when the Government made what they said at the time was a short-term change to the Sunday trading legislation.

I have an interest in this matter in that my son works at Morrisons and is often there on a Sunday. One thing that will happen—I have had very few representations in favour of this—is that the supermarkets, finding that the others are opening, will have to start to open. That will not add any extra business, but it will extend or spread out the shopping week. It will mean that people have to work very late on Sundays, and people wanting to work during the week will find there are fewer shifts available during the week. No more business will be created; it will just be spread over a longer period. The period after 4 o’clock on a Sunday is vital to the convenience store sector, which is under incredible pressure.

[Andrew Griffiths]

I am listening carefully to the hon. Gentleman and I understand his concerns, but why does he think that the workers in Sainsbury’s and Tesco deserve to have their Sundays protected as special, but not the workers in Sainsbury’s Local or Tesco Express? They work for the same business, but one set of workers gets protection and the other does not.

[Toby Perkins]

The hon. Gentleman asks a legitimate question. All of those questions were debated at the time of the original legislation. As my hon. Friend the Member for Great Grimsby (Melanie Onn) said, a compromise was reached. The existing compromise is vital for the convenience store sector. The number employed in large Tesco, Morrisons or Sainsbury’s stores far outweighs the number employed in those other stores. I will not say anything more about that matter, but the exchange between the hon. Member for Strangford (Jim Shannon) and the Secretary of State entirely exposes the fact that many people do not entirely understand what they are being asked to vote for today.

I come to this subject as someone who ran his own small business for five and half years before entering this place and who spent the previous 20 years working in a range of medium-sized businesses—I was once a human being. I have also had the opportunity, as a shadow Business Minister, to debate many of the issues.

I was struck by what the hon. Member for Derby North (Amanda Solloway) said about the impact of late payments on small businesses in particular. Late payments beget late payments: when someone receives payments late from their customers, they end up being late payers to their suppliers, and so it goes on. She is absolutely right to say that action needs to be taken. She may want to research the amendments that we tabled to the Small Business, Enterprise and Employment Bill during the last Parliament. Those were far more powerful proposals, and I may encourage my Front-Bench colleagues to dust them off and have another look at them. Those serious legislative proposals would have outlawed late payment and removed the incentive for late payment.

When discussing late payments, we must understand why they exist. Payments are made late because businesses like to keep the money in their account for the purposes of cash flow. There will be an opportunity for a small business to go off to the commissioner and report their customer, but in the course of that process the big company may well have paid the small business. That will not get the small business paid any quicker; it just puts in place a bureaucratic process. The idea of a small business commissioner in itself is not a bad one—it may well deal with some of the disputes between suppliers—but the idea that it is the solution to late payments is entirely wrong. It will make very little difference to whether or not companies are paid late.

The hon. Member for Burton (Andrew Griffiths) spoke about major companies that are setting out with purchasing terms of 90 or 180 days. They are paying after 90 days and they are not even late. The Government may say that, if companies do not pay within 60 days, they cannot be classified as a prompt payer under the prompt payment code, but these are relatively small measures. They do not provide legislative protection against major firms in the way that the amendment I proposed in the last Parliament would have done. I urge the Government and all members of the Bill Committee to look at how we can strengthen the proposals, because this is a matter of real importance.

It always strikes me that the Secretary of State believes all regulation to be a bad thing. Recently, I met the UK Weighing Federation, which had a reception in Parliament. It said that the lack of policing of the regulations in the weighing industry leaves the UK market open to cheap foreign imports that are not compliant and that undercut good-quality British manufacturing.

I agree with my right hon. Friend the Member for Don Valley (Caroline Flint) that we do not want unnecessary burdens, but we do want a regulatory regime that protects not only the consumer, but British businesses that are doing things in the right way. A similar case was made by NAPIT recently in respect of the electrical competent persons register and the lack of policing of building regulations.

Part 7 includes measures on the pubs code. I was pleased to hear the Secretary of State say today that the Government have listened and learned from the discussions in another place, and that the four triggers that were originally put in place when the legislation passed in that famous defeat of the Government in the last Parliament will be retained in the pubs code. It is incredibly important that the code continues to operate in that way.

It is important to remind Members who were not here in the last Parliament why we decided to legislate for the pubs industry in a unique way; we have not used that for any other industry. There was a simple unfairness in the relationship between the major pub companies, with all the power they had, and the small individuals who owned a single pub, who often put their life savings into it, only to find that the information that they had going into the relationship was very misleading. As a result, those people often found that they were not in a position to get the deal that they thought they were signing up to. It was incredibly important that we came up with an arrangement where they had the opportunity, at certain trigger points, to say, “I don’t think this relationship is working for me. I’d like to take my chances on the open market and buy beers from wherever I can.”

[Greg Mulholland (Leeds North West) (LD)]

Is the hon. Gentleman concerned that pubcos are misrepresenting their investments and seeking, via that loophole, to game the legislation and avoid the market rent-only option?

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[Toby Perkins]

I am very concerned about that and I think that we need to inspect it. We want to encourage investment into the industry, but it is wrong if publicans are being told that an investment that was basically just to tidy the place up means that they no longer have the MRO option.

In summary, the Bill will do very little harm but will not do anything like the amount of good it could do. We have an opportunity to make it a Bill that is transformational for small businesses by ending the scourge of late payments, having a regulatory framework that really supports British businesses, and ensuring that publicans are supported and that small businesses have a fair opportunity to compete. At the moment, the Government are missing that opportunity. I hope that they put that right.

[Several hon. Members rose—]

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[Louise Haigh (Sheffield, Heeley) (Lab)]

This debate is vital for our economy, particularly if the Government are ever to put any meat on the bones of the so-called northern powerhouse. In a week when jobs have been moved from Sheffield to central London, and amid rumours that the chief executive of Tech North has resigned because of attempts by Whitehall to centralise that company in London, Ministers should be increasingly worried about how they can justify such a lofty term.

The missed opportunities the Bill represents have been admirably expressed by hon. Members and by those in the other place, whether on improving finance to SMEs, a broadened scope and sharper teeth for a small business commissioner, or some real vision for our renewables industry rather than a further undermining of investor confidence and security.

The focus of my remarks today will be on the cap for exit payments for civil servants. Labour Members are all for the best possible use of taxpayers’ money. We are well aware that the headlines that disguise the real impact of the measures—to clamp down on pay-outs for so-called fat cat civil servants—will be very appealing, particularly at a time when so many people are still struggling. The Government know all too well, however, that that is not the whole tale.

On the face of it, this is a wholly reasonable policy. There are, however, several issues relating to employer flexibility, the public purse, people suffering from ill health, whistleblowers and staff morale at a time of huge change. I hope they can be ironed out in Committee. The proposals come at a time when we are about to see changes to the rules on recovery of exit payments and a consultation on reducing redundancy terms across the civil service. The latest proposals unilaterally override recently revised terms and conditions, and undermine agreements made at the highest levels of the Government’s own employer representative organisations.

The recent exit payment policy for the NHS was signed off by the Secretary of State in February last year, when NHS trade unions entered into an agreement with NHS Employers and the Department of Health to apply an absolute cap on exit payments. After extensive negotiations, it was agreed that section 16 redundancy payments would be set out by a formula that recognises length of service as its key element. This was implemented in only April last year and is on the back of Lord Maude telling civil servants in the previous Parliament that their settlements would be sustainable for a generation. We know from the Government’s own survey work that morale in the civil service is at an all-time low, with workers feeling year on year that they do not trust their leadership. Is that any wonder, when the rug is constantly being pulled from under their feet?

[Toby Perkins]

My hon. Friend is making an incredibly important case. Does she agree that there is a bitter irony in a Secretary of State, who obviously does not believe in government, spending £200,000 on employing consultants to come up to the northern powerhouse, shut the Sheffield office and move all the jobs down to London?

[Louise Haigh]

I completely agree. That point was made forcibly in the urgent question last Friday. Department for Business, Innovation and Skills workers were watching and were horrified by the Minister’s response to that question. It is not understandable that those people should be concerned that their jobs are only secure for the time being, until the Government can force through weakened redundancy terms? Given the announcement last week, people across the civil service will understandably be further concerned.

On the specific issues, people who have given long service to the public sector—midwives, nurses, librarians, social workers; people whom we, on either side of the House, could not describe as fat cats—have dedicated their lives to improving society. Is the Minister comfortable that these incredible workers will be impacted by the cap on exit payments? Why, when this policy was proposed last year by the Minister for Employment, the right hon. Member for Witham (Priti Patel), were people earning less than £27,000 explicitly exempted to

“protect the very small number of low earning, long-serving public servants”?

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[Toby Perkins]

There is talk of substantial investment, but a substantial level of investment by a city-centre pub will be far greater than a substantial level of investment by a small pub on a street corner. Is it clear what the Government mean by substantial investment?

[Greg Mulholland]

It is not clear, and I do not believe that there is sufficient understanding of the reality of pub investment. I suggest that Ministers in the Department and other Members read an excellent article in The Publican’s Morning Advertiser by Robert Sayles, published on 6 January 2015, which exposes part of the myth that has been created by pubcos and their supporters. For instance, in 2015 Enterprise Inns invested £66 million—which sounds a lot, but only amounts to £13,200 per pub across the estate—and, interestingly, made a loss of £66 million at the same time, which it can offset against tax. Who is really investing in its pubs?

BIS has said that it will look at ways of preventing the pubcos from gaming the position. However, I want to deal with another myth. The last Conservative Government were right to introduce the Beer Orders in order to bring about competition. The fact that they gave way to industry lobbying and provided a loophole to allow the creation of the stand-alone pub companies was the problem, not the Beer Orders themselves. The Government must not do the same thing again. We must have a market rent only option that is triggered in the way that was intended in the legislation, and there must be no opportunities for the pubcos to game that, including abuses of the investment waiver. I look forward to continuing to work with the Minister and her team to deliver that.

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[Anna Soubry]

Thank you very much, Madam Deputy Speaker. We do not like chuntering, do we?

I stopped speaking because I wanted to pay a big tribute to my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) and my hon. Friend the Minister for Skills for their outstanding work on the advancement of apprenticeships, which will help us to go forward and achieve our goal. We are seeing a golden age of apprenticeships—a revolution in apprenticeships—and people will now appreciate their full worth. That is what the Bill seeks to achieve by enshrining the true value of apprenticeships in law.

I can tell my hon. Friend the Member for Cannock Chase (Amanda Milling) that there will be a national advertising campaign to promote apprenticeships in the next few months. That is just a part of the great work that has been done by my hon. Friends the Member for Stratford-on-Avon and the Minister for Skills.

In relation to public bodies, I pay tribute to my own borough council under Labour: a record number of apprenticeships were created in the borough. The number rose to 20 over two years, and now, under a Conservative administration, the target is 20 each year. If we can do that in Broxtowe, other local authorities can do it.

I pay tribute to the work of my hon. Friend the Member for Burton (Andrew Griffiths), and, indeed, that of the hon. Members for Leeds North West (Greg Mulholland) and for Chesterfield, in relation to the pubs code. All three made important points today. We must get the balance right between allowing pub companies to invest in our great pubs and securing fairness for tenants. That is what I want us to do, and I believe that we are well on the way to doing it.

Let me now deal with the issue of Sunday trading. I can tell the hon. Member for Strangford (Jim Shannon) —my friend—that we will introduce legislation to improve the terms and conditions of people who do not wish to work on Sundays. We think it important to protect those workers, so that will be part and parcel of our changes in Sunday trading laws. I must stress, however, that this is not mandatory. We want to give councils the power—a power that many Labour councils want—to make local decisions that are based on the needs of their own people and businesses. If a local authority does not consider such action suitable, it will not take it. As we heard from my hon. Friend the Member for Kensington (Victoria Borwick), an authority might want to extend the hours of a garden centre to suit that particular business. It is a question of fine-tuning.

Let me repeat to the hon. Member for Strangford that working on Sundays is not mandatory, any more than it is mandatory to go shopping. Sundays will still be special for those who want to keep them special.

[Toby Perkins]

Will the Minister give way?

[Anna Soubry]

I will give way briefly, but I will take no more interventions after that.

[Toby Perkins]

What the Minister is saying, and what she is setting out to do in regard to Sunday trading, is entirely wrong, but something even more important is happening here. For the first time ever, workers’ rights are being devolved, and will become different in different areas.

[Anna Soubry]

They will not be devolved. Let me make that absolutely clear. We will introduce legislation for all work that will affect any worker working on a Sunday—

National Minimum Wage: Sports Direct

Toby Perkins Excerpts

Monday 14th December 2015 Commons Chamber

[Nick Boles]

I thank my hon. Friend for bringing us back to the important and constant theme of this Government, which is an economy that is creating new jobs at an unprecedented rate. Most of those jobs are now full time, and most not only pay more than the minimum wage, but pay more than the national living wage that will be introduced in April. It is ultimately through a dynamic economy that we will create opportunity for anyone who does not feel that they are getting a square deal from their current employer.

[Toby Perkins (Chesterfield) (Lab)]

When Sports Direct announced that it would build its factory at Shirebrook, people in north Derbyshire were delighted. It is a tragedy that an organisation that employs nearly 3,000 people should have such a terrible reputation. What steps can the Minister take to communicate with that company and try to ensure that its future success does not come at the expense of my constituents and those of my hon. Friend the Member for Bolsover (Mr Skinner)?

[Nick Boles]

I am delighted that the hon. Gentleman has pointed out how important that organisation is as an employer in his constituency. It is important we acknowledge that Sports Direct employs a great many people, and I am sure a great many people are very happy to work there. I reinforce the point, however, that no company director and no company owner will want the House of Commons to be discussing, in the terms we are discussing, the kind of breach that was alleged in the newspaper article. I am absolutely certain that, when faced with the kind of enforcement action I have set out, any employers, including those in his constituency, will want to sort themselves out.

Oral Answers to Questions

Toby Perkins Excerpts

Tuesday 15th September 2015 Commons Chamber

[George Freeman]

I would be delighted to feed the hon. Lady’s comments into the Government’s review of business rates, which is already in hand. We recognise that particularly in many small towns business rates have a crippling effect on the high street. That is why we have launched a major review, which is ongoing and live at the moment.

[Toby Perkins (Chesterfield) (Lab)]

In response to my hon. Friend the Member for Wakefield (Mary Creagh), the Minister did not talk about the midland main line, but gave a list of other things he was doing. The cancellation of the midland main line electrification is a significant blow to south Yorkshire, north Derbyshire and the east midlands. What representations has the Department made on the impact on businesses and regional growth of not electrifying the midland main line? Will he respond to the question and tell us what is actually happening?

[George Freeman]

I dealt with that point. The midland main line is an important strategic rail route, and we are pausing to make sure we get it right. We will take no lectures from the Labour party on economic competence, when its own shadow Chancellor, according to his biography, is committed to the overthrow of capitalism.

Oral Answers to Questions

Toby Perkins Excerpts

Tuesday 30th June 2015 Commons Chamber

[Anna Soubry]

I take a firm view that it is absolutely scandalous when people do not honour the terms and conditions of their contract and pay late. That is not acceptable, particularly in the modern world. I hear terrible stories about supermarkets; one can only imagine what would happen if someone went shopping on a Saturday and then said at the checkout, “I think I’ll settle my bill in about 120 days.” Obviously they would be told that it was not acceptable, and it is not acceptable for large businesses to treat smaller businesses in that way. That is why we take the problem so seriously.

[Toby Perkins (Chesterfield) (Lab)]

I very much welcome the tone that the Minister is taking, which is in sharp contrast with the feebleness of the Government’s efforts on late payments over the past five years.

Some 2,500 businesses go bust every year not because of a failed business model but simply because they have not been paid on time. Some £46 billion is now owed to UK firms, a figure that rose throughout the Government’s previous term. Will the Minister take serious action, and does she agree that the last Government’s actions were inadequate? What message will she send to businesses that do not pay on time about the actions that the Government will take?

[Anna Soubry]

I hope that I have sent a strong message. I could not be clearer—it is completely unacceptable. [Interruption.] There is no need to add extra regulatory burdens. The law is quite clear: if two parties have come together and settled terms and conditions through a contract—forgive me for sounding like the lawyer I am, Mr Speaker—and one party then breaks the contract by not paying on time, legal action is available to the other party. As we know, the problem is that small businesses are understandably reluctant to go to law. I am exploring other options, including the continuation of naming and shaming.

Oral Answers to Questions

Toby Perkins Excerpts

Thursday 26th March 2015 Commons Chamber

[Matthew Hancock]

I pay tribute to the hon. Lady’s long-standing and effective campaign on late payment. The amendments did not work technically, but I am prepared to consider anything to tackle the culture of late payment. We will make 30 days the normal payment term and 60 days the maximum. That is the culture change we need, and I look forward to working with her to make it happen.

[Toby Perkins (Chesterfield) (Lab)]

The Minister seems to be entering the realms of fantasy when he claims that the limited steps the Government have taken will put an

“end to the UK’s late payment culture once and for all.”—[Official Report, 24 March 2015; Vol. 594, c. 1357.]

According to the latest BACS figures, there were more than £46 billion of late payments last year—the highest figure on record—and that figure has continued to grow over the course of this Government. How much and by when would late payments need to fall for him to consider his steps successful in eradicating this culture once and for all?

[Matthew Hancock]

We do need to eradicate that culture, and I have already set out the steps we are taking. However, may I also take this opportunity to pay tribute to the work of the Business Secretary on this issue and many others over the past five years? We have had an incredibly business-like relationship working hard in the Business Department, and I pay tribute especially to his work on getting an industrial strategy that all parties in the House are now signed up to; to his work on women on boards; and on late payment. It has been a great pleasure, and I look forward to working with him in the future, too.

Small Business, Enterprise and Employment Bill

Toby Perkins Excerpts

Tuesday 24th March 2015 Commons Chamber

[Jo Swinson]

The adjudicator will be able to make recommendations so that problems can be put right, and ultimately it will have the power to levy fines. The specific details will be set out in secondary legislation, but we have a model in the Groceries Code Adjudicator. That adjudicator is already working, and we are learning from it how such a system can work smoothly in terms of staffing, for example.

Amendments 43, 44, 45, 55, 132 and 139 are consequential technical amendments to the MRO amendments. They relate to the enforcement of the code, the adjudicator’s annual report, the list of defined terms in clause 69 and to commencement.

The original market rent only clause allowed brewers that own tied pubs to require their MRO tenants to continue to sell the brewery’s products, as long as the tenant may buy them from any source. Amendment 46 implements that intention by amending clause 65 so that such a stocking requirement in a tenancy agreement would not of itself make the pub a tied pub. In stakeholder discussions, brewers requested greater clarity on what they were permitted to do under a stocking requirement; others were concerned that the stocking requirement might lead to undue restrictions on tenants who have chosen MRO.

Amendment 46 clarifies that brewers may also protect their route to market by allowing some restrictions on the sales of competitors’ products in their MRO pubs. However they will not be able to require that these pubs sell only their products and they will need to satisfy themselves that the requirements they are imposing are compliant with competition law. The restrictions may be placed only on beer and cider products and, crucially, tenants must be able to buy the brewer’s products from any source.

[Toby Perkins (Chesterfield) (Lab)]

In the event of marketing arrangements which meant that the only place that beers could be purchased was direct from the brewer, do the provisions take account of the fact that the tenant’s right to do so might be difficult to put into practice?

[Jo Swinson]

The adjudicator could look into whether practices were all fair and whether the code had been properly complied with. Depending on the circumstances, competition law may also be relevant. The companies would have to assure themselves that any restrictions that they were placing were compliant with competition law. Through the new code and the adjudicator we will make sure that there is somebody who can look into the circumstances and arbitrate on whether what is being offered is fair and compliant with the statutory code.

For completeness, I shall touch on three other important areas of debate both here and in the other place where the Government have made important commitments to use existing powers in the Bill. On Report in this House, I committed to consider calls to exempt genuinely short-term agreements from the pubs code. My noble Friend Baroness Neville-Rolfe confirmed that the Government would use the power in clause 68 to exclude from the code tied pubs that are operated on short-term tenancy at will and temporary agreements that do not extend beyond a certain limited period. We intend to consult on the length of the period for exemption.

Hon. Members will remember that pub franchise agreements are in scope of our measures. They are, after all, tied pub agreements and share many of the characteristics of traditional tied pubs. Nevertheless, consistent calls have been made in both Houses to exempt certain franchise agreements from the code, or at least from MRO, if they do not charge rent and the price of products does not affect the tenant’s share of income. After much consideration, my noble Friend the Minister announced in the other place that the Government will use the power in clause 68 to exempt genuine franchises from the MRO provisions. The remaining code protections—for example, in respect of transparency—will still apply.

Given the differences between traditional tied pubs and genuine franchise agreements, we consider this a reasonable exemption. We will consult on the precise definition of “genuine franchise”, but we expect it to include criteria such as where a turnover fee rather than a rent is paid by the tenant and the share of the profit is unaffected by the price paid for tied products. This is important as these criteria can mean that the tenant’s interests are arguably more aligned with those of the pub company because both rely on a fixed proportion of turnover. The tenant in such circumstances does not face the combination of the wet and dry rent, as tenants do in traditional agreements.

There are other agreements in the industry which may be marketed as a pub franchise that display elements common to franchises in other sectors, such as common branding. But if they charge tenants a tied rent in the traditional way, they are not inherently fairer than a tied pub agreement. The consultation will allow us to set out the criteria for a genuine franchise.

In addition, I should clarify that where a franchise pub falls within the definition of a tied pub in clause 65, it will count towards the number of tied pubs that a company owns for the purposes of the 500 tied pub threshold. This will ensure that we do not create a loophole in the legislation. Furthermore, the Government would be able to amend the regulations should there be attempts to use this exemption as a means of avoiding the legislation.

Next, I come to the matter of investment. Hon. Members will recall that Government committed to avoiding unintended consequences in introducing this legislation. In the other place, and in discussions with stakeholders, concerns were raised as to whether investment in tied pubs could be discouraged because of uncertainty as to whether a tied tenant might trigger MRO. Views vary as to the extent of this risk to investment, but the Government consider that we should act to minimise any risk. We want to ensure that investment in pubs can take place and that pubs thrive. I am sure that sentiment is shared across the House.

The Bill as drafted does not prevent pub companies from issuing a tenant with a new lease alongside an offer of investment, and no amendment to the Bill is necessary to enable companies to do so. This would, in effect, provide a waiver from the rent review and renewal MRO triggers for five years. However, the Government recognise that significant investments may warrant a longer period of return on investment. My noble Friend the Minister therefore announced in the other place that the Government will use existing powers in clause 41 to set out in the code different rent assessment periods for different amounts of substantial capital investment offered. This will have the effect of deferring the rent assessment trigger for MRO for a longer period. It is important to note, though, that the other MRO triggers—that of a significant price increase and an economic event that impacts on a tenant’s trade—will remain throughout the deferral period.

Alongside setting out the deferral periods for different levels of investment, the secondary legislation will set out important safeguards for tenants—for example, to ensure that they accept an investment offer only after taking proper advice and that they cannot be pressurised. This is an area where both sides of the debate recognise that the need to enable investment and the need to protect tenants must go hand in hand. It is important that we can consult fully on the details so that we get it right.

These commitments regarding exemptions for certain tenancy at will, temporary and franchise agreements, and for a deferral of MRO in return for substantial investment, are not on the face of the Bill. They will be set out in secondary legislation after full public consultation.

I shall touch briefly on a number of technical amendments in this group before turning to the second issue in the group. Amendments 34 to 37 are technical clarifications to the “no worse off” and “fair and lawful dealing” principles. The key change is to make it clear that tied pub tenants should not be worse off than they would be if they were not subject to any product or service tie. Amendments 35, 36, 38, 42 and 48 to 54 are consequential on the changes made to clause 66 in this House to exclude family brewers from the provisions. This change means the legislation will apply only to a pub-owning business with 500 or more tied pubs. There are further minor technical amendments, on which I refer honourable Members to the explanatory notes for a fuller explanation.

Finally, amendments 136, 137, 138, 140 and 141 relate to adjudicator staffing and the point that I made earlier in response to the hon. Gentleman. They amend schedule 1 to enable the adjudicator to second staff from any source, in addition to the existing power in the Bill for the adjudicator to second from the public sector. The aim is to provide the necessary flexibility for the adjudicator to find suitable staff from a wider pool.

I am sure the House will agree that throughout our debates in both Houses all the pubs measures have been thoroughly scrutinised. Incorporating the market rent only option into the Bill in the limited time available to us and ensuring that it will work in practice has not been easy, but I believe that we have produced legislation that promises to be effective as well as targeted and proportionate. Crucially, these measures mark an historic moment for tied tenants of pub-owning companies. They will have the protections of a statutory code with a powerful and independent adjudicator to enforce that code. That the measures have the support of my hon. Friend the Member for Leeds North West, CAMRA, Fair Pint and others is testament to that, so I hope the House will agree to the amendments.

[Jo Swinson]

Clearly, the intention is to make sure that the adjudicator is able to recruit staff with the requisite expertise and experience, not only from the public sector pool. That is an important change and we have learned from the legislation that we have in place for the Groceries Code Adjudicator. Understandable concerns were raised in Committee about whether staff would come with vested interests. It is important that protections are in place to ensure that everybody can have confidence in the staff who are seconded, and to ensure that up-to-date experience of industry does not entail a conflict of interest.

On amendment 86 and the important matter of pay transparency, I am delighted to reiterate the Government’s support for this amendment to the employment part of the Bill that was introduced in the other place. We have already legislated in this Parliament to ensure that companies which directly discriminate against women in pay matters can be required by a tribunal to complete a gender pay audit, as well as to pay compensation. The new provision requires the next Government to make regulations under section 78 of the Equality Act 2010 within 12 months of the Bill receiving Royal Assent. Section 78 requires mandatory reporting of gender pay information by larger companies.

It is 45 years since the Equal Pay Act, and although the gender pay gap is at its lowest ever level and has been virtually eliminated for full-time workers under the age of 40, it is simply not acceptable that in 2015 we still have a gender pay gap at all. We are determined to eliminate it entirely.

[Toby Perkins]

I endorse what the Minister says about the need to deal with this matter urgently. Given that urgency, will she explain why the provision she is now bringing forward under the Equality Act 2010 has been sitting on the statute book for five years? Why is it that only at the fag end of this Parliament are we seeing some action, which the Opposition have been calling for throughout those years?

[Jo Swinson]

The hon. Gentleman says that the Opposition have been calling for this throughout this Parliament, but unfortunately that was not the case when they were in government. I refer him to the Hansard report of proceedings on the Equality Bill on 24 June 2009, when the then Labour Minister said that

“having mandatory arrangements in force by 2011 would run the risk of riding roughshod over the legitimate voice of both sides of the business community. Progress can better be made by bringing employers with us—by including, encouraging and cajoling, rather than compelling.”

My right hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone) responded:

“We cannot wait another four years…It is clear that we must take action now”.––[Official Report, Equality Bill Public Bill Committee, 23 June 2009; c. 410-432.]

We have got agreement in the Government to take that forward, but I have to say that the context of the commitments made from this Dispatch Box by the previous Labour Government during the passage of the Equality Act—they committed to a voluntary approach before implementing the legislation—certainly did not make that easier. None the less, I am delighted that we are now where we are.

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The amendment before us requires that consultation must take place before implementation. By consulting with business, we will find the best and most effective way of implementing section 78 while meeting the objective of achieving genuine transparency on pay and tackling the gender pay gap now. I look forward to the House’s support for the amendment.

[Toby Perkins]

It is a great pleasure to speak on the amendments proposed by the noble Lords.

On 16 July, we debated the Second Reading of this Bill. It was interesting, in preparing for this debate, to re-read the contributions that were made then and those that have been made by Labour Members in both Houses during its subsequent stages. Though modesty would usually prevent me from quoting extensively from the contribution that I made, it would be strange not to reflect on how widely our critique of the Bill has been adopted by the Government. We said that it had the potential to make a real difference to small businesses but that the steps that it originally proposed were a collection of faint nods in the right direction of key issues that had emerged under this Government. We said that far more robust action would be needed if this Bill was to deliver on the steps small businesses required and to take action on things like abuses of the labour market and their impact on workers in every constituency in the land. On the subject of pubs, we said that a successful small business Bill—a Labour small business Bill—would have introduced a code with a market rent only option, which the Bill now indeed contains. It would be churlish not to recognise that the Government have ultimately acted in good faith on pub company legislation.

I should place it on the record that this is the last piece of legislation that the Minister will be bringing through in this Parliament. As we fast approach the general election, who knows when will be the next time a Liberal Democrat Minister will have the opportunity to bring through a piece of legislation? She has done a good job in reflecting the wishes of the House and has acted in good faith on pub company regulation.

Their lordships’ amendments broadly achieve the objective of striking the devilishly difficult balance between proper protection for pub tenants while not imposing an overly rigid straitjacket on the industry with the potential to discourage future investment. They are positive steps forward that have faithfully built on the spirit of the historic clause 42 proposed by the hon. Member for Leeds North West (Greg Mulholland). We recognise that some aspects of the proposals will sensibly need to be included in the pubs code through secondary legislation.

There remains the thorny issue of the right of the tenant to offer a substantial investment in their public house in exchange for giving up the right to use the next rent review period as a trigger to request an MRO assessment. The letter dated 16 March from the Minister, Baroness Neville-Rolfe, to the noble Lords Mendelsohn and Stevenson details the Government’s intentions with regard to new clause 43 and specifies that it must not be used to abuse the waiver. However, this will still leave those who fought this cause for many years with considerable unease that this creates the potential for too broad an exemption for too small an investment.

We entirely agree with the Government that encouraging future investment in the stock of public houses is a crucial element in the future success of the industry, but, over four months since the original victory for clause 42, that still leaves a huge unanswered question about the scale of investment that constitutes “substantial”. I think that my party’s record on this issue means that campaigners will have confidence that the statutory code that addresses it under a future Labour Government will be consistent with the approach—

[Andrew Griffiths (Burton) (Con)]

The hon. Gentleman mentioned his party’s position on investment. What scale of investment does he believe would constitute “substantial”?

[Toby Perkins]

That is an excellent question. The whole reason this issue is being placed in secondary legislation is that we recognise that there is a very difficult balance to strike. The formula needs to be dependent on the relationship of the investment to the value of the pub. For some pubs, a £30,000 investment might be substantial. For a town centre or city centre pub, a £200,000 investment might not be so substantial. There needs to be some sort of relationship between the rateable value of a pub, the amount that it turns over, and the amount of investment.

The hon. Gentleman is echoing my point, which is that this has been left very open. A great deal of work would need to be done. I assure the House that under a future Labour Government the principles laid out by Baroness Neville-Rolfe are exactly how we would see this. I anticipate that the same would be true of a Liberal Democrat-influenced Administration, although it would be good to hear the Minister clarify that. It would also be good to hear from the Conservative party whether its manifesto will follow the Bill’s principles, or whether it will take a different approach. The industry and campaigners have the right to expect that.

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

For the record, the Conservative party’s position on this issue is exactly the same as that of the Government.

[Toby Perkins]

Excellent. I am glad that that has been placed on the record. That will give people considerable confidence in the Bill, and many campaigners will be grateful to hear what the Minister has just said. In the unlikely event of a Conservative victory, we will hold him to it.

[Matthew Hancock]

Get ready.

[Toby Perkins]

We understand that Lynton Crosby has been telling the Conservatives to get ready for the past four or five months, but they never seem to reach the point he promises. We will no doubt debate that over the next six weeks.

The Government’s Lords amendment 39 replaces clause 42. We were proud to support the new clause tabled by the hon. Member for Leeds North West. We did not think that Report stage was the time to get into a detailed discussion of all the nuances of each individual line, and we know that a tremendous amount of work went into drafting a clause that would offer all the necessary protections. We felt, however, that ultimately it was too prescriptive and could have unintended consequences, and we are pleased to have worked with the Government on the drafting of the new provision.

Lords amendment 39 retains the triggers of renewal of tenancy, rent assessments and significant and unexpected price increases or other events beyond the tenant’s control that have a significant impact on their level of trade. The amendment omits the transfer of title and administration triggers that were in the original clause.

On balance, we support that omission, albeit not without reservation. We believe that the impact on the natural order of a competitive market that would have resulted from pub tenants having the right to opt out at the point of transfer of title would have caused a real disincentive to invest. Ironically, it would have meant that when a pub was sold from a major pub chain to a microbrewer, fledgling pub operator or family brewer, the MRO could have been triggered, acting as a disincentive to the sort of business transaction we want to support and encourage as part of the diversification of the pub market.

That means that campaigners and the next Government will need to be vigilant to prevent any attempts to use the amendment to game the legislation and exempt from the rights companies with any association with companies that we would expect the legislation to cover. The Minister in the other place has made specific the Government’s intentions and we have heard that there is consistency across the coalition.

On the subject of tenants of pub-owning companies that go into administration, we fear that, at a time when the whole future of a large number of pubs would be very uncertain, the original provision would have made the task of the administrator a great deal more difficult. When they would be attempting to bring order to a complicated situation, some of the stock they were trying to sell off to new providers would disappear and move into the free trade sector. We concluded that that would make it much more difficult for pubs to survive in the event of a major pub-owning company failure. For those reasons, we support those omissions from Lords amendment 39.

On Lords amendments 47 to 53, we are pleased that the Government have not sought to reintroduce to the code pub-owning companies with fewer than 500 pubs. The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson) and I have enjoyed many a to and fro on the subject during the Bill’s various stages, but I remain of the view that, in voting the way we did, some egregious practices may not be covered by the protections. However, without that concession, we would have been less likely to win the support of the House for the MRO option. In the final analysis, that prize was worth the sacrifice. As a gesture of good will to the industry and as a matter of honour, this House should stick to what we have given it to believe we were legislating on, namely a code containing provisions for businesses owning more than 500 pubs. We are therefore pleased to support the Government’s commitment.

The Government have probably got the balance right in Lords amendment 47, which accepts our suggestion of extending code protections—apart from the MRO option—to tenants whose pubs are sold from a pub-owning company covered by the Bill’s provisions to a company outside the Bill’s scope.

Lords amendment 46 also performs a delicate balancing act by retaining the protection for pub-owning brewers to offer free of tie while also retaining their right to insist that their product is marketed. The question I asked the Minister is important, because some pub-owning brewers might think that retaining their stock and the right to market it is more important than their wholesale business. In that eventuality, if a brewer stops selling through their wholesale business, which they are perfectly entitled to do, a tenant who is in principle free of tie will still be forced, under the provision, to buy from that brewer as the only option available. We will need to look at that again.

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[Matthew Hancock]

I am grateful for that intervention. I, too, have personal experience of poor payment performance having a massive impact on the businesses I worked in. Frankly, the late payment culture is a problem with our contract law. Good contract law means good payment against a contract. I think these transparency measures will have a significant impact, changing prompt payment from being an issue for finance directors to being an issue for the board. Through these transparency measures, we will not allow it to be deemed reasonable to pay late. I think that 60 days as a maximum and 30 days as a norm is a perfectly reasonable place to settle.

[Toby Perkins]

I fear that the Minister is rather over-selling the measures he proposes, welcome though they are. When he says that 30 days will be the norm and 60 days the exception and nothing beyond it, will he make clear what happens when businesses do not pay within that time frame? What sanctions will they face under this new regime?

[Matthew Hancock]

There are already sanctions under EU law relating to interest payments, but the transparency measures will crucially mean that we can have league tables of payment performance. The transparency in this area, alongside the public sector payment practices, will change the culture. We considered and debated in detail going further in changing contract law, but a contract is signed up to by both sides, and no practical amendment was put down to make it more binding than the existing law, which already says that 60 days should be the maximum unless both sides agree to it. Any contract, of course, has to be agreed to by both sides. It is a matter of finding a way to make this practical in law.

Part 2 deals with regulatory reform, and the Bill brings forward significant measures to reduce the burden of regulation. The small business appeals champion will ensure that small businesses’ concerns about regulators are heard. There was extensive debate in the other place on whether the Equality and Human Rights Commission should be excluded from these measures.

We have always maintained that the EHRC should not be subject to the duty to appoint a champion and had originally considered that an exemption in secondary legislation would be sufficient. Concerns were expressed, however, that this might put at risk the EHRC’s “A” status as a national human rights institution. In the light of those concerns, we agreed to eliminate this potential risk by excluding the EHRC from scope of the duty on the face of the Bill.

On the business impact target, the other place questioned the definition of voluntary and community bodies in clause 27. The Government listened to this concern and amendment 28 simplifies the definition by removing the minimum membership threshold for certain smaller unincorporated associations. It also ensures that such bodies are not excluded from the proposed definitions of small and micro businesses later in the Bill by virtue of the size of their membership. Those are relatively technical changes. The principle of a business impact target to ensure that in future Governments are transparent—as this Government have been—about the impact of their overall regulatory approach on the burdens of business was well supported, and is made clear in the Bill.

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In all, these amendments strengthen the Bill, the Bill will strengthen business, and strong business will strengthen Britain. The amendments before us have the full support of Government and I hope will have the support of the House.

[Toby Perkins]

The Minister questioned whether the amendments will have the support of the Opposition. They will do, of course; we proposed a good deal of them, so it would be rather foolish for us not to be supporting them at this stage. He is right to say the Bill arrives back in this House in stronger order than it left it. It looks far more like the kind of small business Bill I was talking about back in July 2014 when I said the Government ought to be taking far greater steps, and I agree with the Minister that the Bill is improved.

We said steps needed to be taken to strengthen enforcement of the compensatory award in employment tribunal cases. We are pleased that the Government have today announced a naming and shaming programme that will ensure exposure of businesses that do not pay compensatory awards identified by a tribunal. We said that insolvency creditors meetings were an important part of our world-class regime and we are glad the Government accepted our amendment on that. We are glad, too, that the Government decided to exempt the Equality and Human Rights Commission from the work of the small business appeals champion—although not from the growth duty section of the Deregulation Bill, as we called for at the time. On late payment as well, we have been saying for a long time that stronger action was needed. I am therefore bound to say that the fact that these are issues Her Majesty’s Opposition have been raising, from abuse of zero-hours contracts to late payments to small firms, and from non-payment of the national minimum wage to supplier pay and stay deals—an area of pub company legislation we have already discussed—shows that it is the Opposition who have been leading the way, and the Government have been following us reluctantly.

It rather undermines the charge that Labour is anti-business when the Government keep taking action in so many of the ways we have called for. I know the Government have form in this regard; they used to suggest UKIP was mad before they adopted its No. 1 policy. However, we support the principle that the Government should be willing to listen and take action where they have got things wrong, and we think the Bill before us today is a good deal stronger as a result of that.

I want to take up the Minister’s challenge on late payments. As I said in my intervention, he is overplaying his hand when he suggests that the measures brought forward, welcome though they are, signal the end of egregious late payment practices. The steps the Minister has taken on the public sector are welcome. Particularly at the time of the bank-induced global economic crisis, the previous Labour Government took significant steps to ensure that the public sector paid on time and this is putting that on to a more permanent footing, which is a positive step. However, the Minister suggested that the transparency he is introducing will create a reputational risk that means businesses and boardrooms around the country will think carefully before paying late. While the way this is going to be marketed will be different, many of the transparency measures proposed here are currently available if people choose to look. There has been no reputational risk for many of the companies that have operated in that way.

In response to what the Minister said a few minutes ago, the truth is that no new sanctions have been proposed. He said that businesses could avail themselves of the sanctions in the EU late payment directive, but they have been able to do that for several years. If a major business chooses to say, “We’ll supply you, but our terms are 90 days”, a small business will have the choice of whether to deal with it on those terms or not at all. That means that nothing has changed, and we are still in exactly the same position.

The steps that the Government are proposing on late payment are fine, as far as they go, but this is a missed opportunity. I am willing to predict that, in the next Parliament, we will not consider this issue to have been dealt with and that, at some point in the next four or five years, we will all be back here discussing late payment again and saying that something must be done, that we must change the culture, that we need to get across to businesses that late payments are unacceptable, and that we need greater transparency so that small businesses know what they are letting themselves in for. My right hon. Friend the Member for Doncaster North (Edward Miliband) stated powerfully at the Federation of Small Businesses conference last week that late payments are one of the great scandals in our economy. Small businesses are disadvantaged by the practice, and more should have been done.

Clause 3 initially created a duty for companies to publish only their payment policies. We have consistently argued that publishing policies is not enough and that small businesses also need concrete information on the performance in practice, and not just what is written in a policy book. We tabled amendments in Committee in the Commons and on Report in the Lords that would have created a compulsory reporting regime to ensure that large companies’ reporting records would be open to quarterly scrutiny with automatic interest paid for late payment. The Government voted down our proposals on both occasions. The Minister said a few minutes ago that no practicable proposals had been tabled in this regard, but that is not true. We tabled specific proposals that would have put the late payment directive on a statutory footing. He might have decided that he did not want to support our proposals, but it is not true to say that they did not exist.

However, we are pleased that the Government have made some concessions and accepted our fundamental argument that information on performance, as well as policies, must be published. This will allow large companies to be judged by their deeds, not just by their words. However, we believe that there should be a financial backstop, such as an automatic interest payment or a fines regime, as outlined in our proposals. So it remains to be seen how effective the Bill will be. It is stronger as a result of the interventions by the Labour Opposition but more could have been done and, regrettably, we will have to return to this issue in the next Parliament.

The Bill establishes small business appeals champions, whose role will be to watch non-economic Government regulators and encourage them to improve the impact on business of their policies, their processes and their approach on appeals and complaints. In broad terms we welcome this idea, but many bodies have questioned how the champions will work in practice and what relationship they will have with the general growth duty in the Deregulation Bill. We welcome the fact that the Government have taken up our argument that the guidance to the small business appeals champions in relation to the exercise of their functions should be laid before Parliament for full scrutiny and debate.

On Lords amendment 25, we are pleased that the Government have acceded to our demand that the Equality and Human Rights Commission be excluded from any of the regulatory provisions in the Bill. This will relate specifically to the work of the small business appeals champions.

On the subject of creditor meetings, I should like to draw to the attention of the House the donation made to my office of employment support from R3, the insolvency regulator. The intention of the original Bill was to end once and for all the practice of insolvency practitioners holding physical creditor meetings in all types of insolvency procedures. We felt that that was a mistake and that it could disengage creditors and weaken the strength of the world-leading insolvency regime that we have here in the UK. We very much welcome the fact that the Government have listened to some of the specific proposals we made on ensuring that the threshold for a creditors meeting should be changed to

“(a) 10% in value of the creditors;

(b) 10% in number of the creditors;

(c) 10 creditors.”

We think that is a much stronger amendment, providing the support that that industry needs to ensure that it continues to provide a service that gets record amounts of money back to creditors and is also successful in saving jobs and businesses.

Oral Answers to Questions

Toby Perkins Excerpts

Thursday 12th February 2015 Commons Chamber

[Matthew Hancock]

We constantly review the scheme to ensure that we get the best possible deal. The majority of the enterprise finance guarantee goes through other banks, which, as far as we know, are performing impeccably. On the RBS aspect, we have met RBS to discuss that. It is reviewing the matter, and we will make sure that it works in the future. The big picture is that the scheme is working well and helping small firms to access finance.

[Toby Perkins (Chesterfield) (Lab)]

Following a year of my right hon. Friend the Member for Delyn (Mr Hanson) raising this issue, RBS has admitted that there has been mis-selling of the EFG scheme.

Rebuilding confidence in our banking sector will be one of the key tasks facing the next Labour Government. From interest rate swaps to tax evasion and now mis-selling of EFG loans, the Government have been slow to act and slow to investigate whether there are problems. Does the Minister now accept that only through investigating and repairing mis-selling in Britain’s high street banks will confidence in the sector return?

[Matthew Hancock]

The hon. Gentleman has a bit of a cheek, because the investigation required, and the sorting out of confidence in banks, was an enormous issue that we had to take on in 2010. We have regulated and passed legislation throughout this Parliament to ensure that there is more confidence in the banking industry. Of course, there is more to do, but considering how far we have come over the last five years, the hon. Gentleman ought to be saying we have done a good job and be helping us to do that.

Oral Answers to Questions

Toby Perkins Excerpts

Thursday 8th January 2015 Commons Chamber

[Matthew Hancock]

The timing of the announcement was clearly very difficult, but we are doing all we can to support those affected by the decision. Both the Secretary of State, who was constantly in touch with the company and the unions over Christmas, and I are working hard to support those affected.

[Toby Perkins (Chesterfield) (Lab)]

One of the things that the Government could do to support small businesses is to support Labour’s plans to outlaw pay to stay agreements. We very much welcome the fact that, on the back of pressure from the Opposition, Premier Foods has ceased its pay to stay arrangements. The Government say that such arrangements are unacceptable, but at the same time they refuse to outlaw them. Does the Minister consider some forms of pay to stay acceptable, or are the Government so hostile to any form of regulation that they are willing to stand by while unacceptable business practices evolve and to leave small firms at the mercy of their big business customers?

[Matthew Hancock]

I know that the hon. Gentleman likes to chip in to this debate, but recent events have clearly demonstrated the power of transparency in relation to late payment to small business. As he knows, we are radically improving the position through the small business Bill. When the contracts came to light, the company was held to account and did a U-turn. [Interruption.] They were brought to light by the Federation of Small Businesses, to which I pay tribute for its work in highlighting the issue.

Business Investment (Outer-City Estates)

Toby Perkins Excerpts

Thursday 18th December 2014 Westminster Hall

[Toby Perkins (Chesterfield) (Lab)]

It is traditional at this point in a contribution to say what a pleasure it is to serve under your chairmanship, Mr Davies. It is always a pleasure to see you on the Back Benches as well. You are always keen to make contributions, some of which have been among my favourites and will no doubt find their way into my leaflets in April.

I congratulate my hon. Friend the Member for Nottingham North (Mr Allen) on not only the contribution he just made, but the wider work for which he is recognised and admired across the House. His description of the specific work being done on rebalancing outer estates was informative and thought-provoking. He described it as long-winded, but the time positively flew by for me. It was also a pretty strong sales pitch for cross-departmental work and the impact that that can have on areas such as his constituency. He was typically pragmatic and non-partisan, which may be something for me to aspire to in future years, but we cannot escape the political dimension of many of the challenges that his community faces. However, I understand why he would choose not to introduce that into this debate and into his promotion of his cause. He made some thought-provoking points about the challenges and the positive steps that his project can take to make a difference. He spoke at length about the importance of partnership working and bringing on board the private, voluntary and public sectors, local enterprise partnerships and various other networks.

My hon. Friend highlighted that a project such as this will face a lack of core capacity, so where will that capacity come from? In the main Chamber today, we had a statement on local government funding. In many areas, local government would have been the glue that pulled together the fantastic work that he described. We have already seen unprecedented local government cuts over the past four and a half years, and if the events of the past few weeks have taught us anything, it is that if we continue down the path the country has taken over the past few years, local government will experience even greater ravages. In somewhere like Nottingham, which has an excellent local authority, that will inevitably have an impact on capacity.

[Mr Allen]

Since we have a little time to spare, I am prompted by my hon. Friend to mention two things. First, in terms of all-party working or working “across the aisle”, it will often be the case that the serious things that we need to do will stretch across more than one Government and more than one political complexion. When talking about intergenerational change, it is important that we attempt to find some common ground across all parties, but there will always be differences.

Secondly, further to my hon. Friend’s point about today’s statement, local government funding is relevant to today’s debate, because I am a strong advocate of proper devolution to local government. Even in the direst circumstances, those in the localities will spend money, limited and diminishing though it is, much more wisely. I pay tribute to the men and women in Whitehall, but local people will spend money more wisely than those in the centre. I hope that my hon. Friend, in his exalted position on the Front Bench, will continue to push that point with his colleagues in Her Majesty’s Opposition.

[Toby Perkins]

I do not think that it needs a great deal of pushing. My hon. Friend will be aware of the report produced by Lord Adonis, and the Labour party is enthusiastically pursuing many of its ideas, which would represent significant steps towards devolution. We recognise that whatever Government follow the next election will still be working in straitened economic times and tough decisions will still need to be made, but we disagree about the sustainability of the scale of the proposed cuts. Projects such as my hon. Friend’s must be able to survive from one Government to the next as Governments change colour. The local authority devolution agenda, involving combined authorities working with local enterprise partnerships and bringing in the best of the public, private and voluntary sectors, is a vision that we share.

My hon. Friend also mentioned the impact of austerity on his constituents, which cannot be overstated. We are all conscious of the link between poverty and educational underachievement, but for too long the focus has been on spending more on education to deal with educational underachievement, rather than dealing with poverty, which is an approach that this Government could have taken. In communities that have faced challenges over many years, people will often have to deal with welfare cuts, may have a greater reliance on food banks and may have to deal with other social ills, which will inevitably have an impact on the educational attainment of the area and on other things that my hon. Friend is attempting to address. Placing that on the record is important.

I entirely agree with my hon. Friend about the importance of careers guidance, and I hope that that aspect of his plan is taken up and supported. Careers advice and getting careers advisers in schools in his constituency is a key goal of his project. In fact, one of my most loyal party members in Chesterfield was previously a careers adviser in a school in my hon. Friend’s constituency.

I know how important such work is in raising the aspirations and expectations of people from more deprived communities. My hon. Friend should be reassured that, more broadly, the Labour party has publicly identified previous attempts by successive Governments to boost social mobility as having too often focused on getting more young people from disadvantaged backgrounds into the traditional professions. In many cases, we need to see those young people’s aspirations and expectations opened more broadly, in particular with support for them to set up and run their own small businesses, which is a key part of his focus.

My hon. Friend will also be pleased, I hope, to know that a future Labour Government intend to get a representative of the business community on to every board of governors in every secondary school in the country. Schools do excellent work to ensure that young people pass exams, but alongside that there is real potential in ensuring a focus on the links between schools and the business community, which can have a positive impact on the educational aspirations of young people. He is very much pushing at an open door on the broader approach with what he is looking to introduce in his constituency through that project. I am supportive of his specific initiatives as well as of what needs to be done more generally.

My hon. Friend spoke about personal employability being one of the key criteria that his project wants to support. He is absolutely right to acknowledge the wide recognition of the need for an education system that supports people in their personal employability at the school level and through further education. He was entirely right to say that, although some streamlining of qualifications was necessary, there is a real worry about the focus moving away from vocational education and about the great narrowing of the further education opportunities available to people.

When people leave school, we need to get them on to courses that will not only give them rewards for studying, but get them turned on to study, or there is a real possibility of all of the prevalent problems that come from the absence of that. My hon. Friend was absolutely right about personal employability, but he was also right about the importance of the vocational further education landscape.

I want to touch on and take up the business support challenge set by my hon. Friend. He is absolutely right that if we want to see more people from deprived communities setting up businesses, we need them to have the support. I ran three businesses, at least one of which was successful, so I know how important business support is for people when they first set out on that path. It gives them the huge array of knowledge necessary.

When people become a new business owner, they instantly become the salesperson, the marketing person, the buyer, the legal person and the accountant—they are supposed to have all those skills and knowledge bases. Having someone able to support people and understand the kind of environment that they come from and the kind of challenges that they will face, ensuring that they are given correct guidance on the process, is incredibly important business support.

In recent years, in particular in the absence of Business Link, we have seen that business support tends to collect where most businesses are, so the areas already doing well and growing well are pretty well provided for with business support networks, but in areas such as my hon. Friend’s on the exterior of cities, or even more so in small towns and rural areas, business support networks are much more spread out and patchy. As a result, we tend to find most businesses being set up in exactly the areas that are already performing best, and the fewest businesses being set up in the very areas that need them the most. I support what my hon. Friend is attempting to do with the project that he has set up. I make the wider point that his project is perhaps providing a road map for some of the ills that face our country more broadly. That is a challenge that the Labour party will be enthusiastic to take up.

I congratulate my hon. Friend again on his excellent contribution and on the work that he is doing. I support his approach and, even more than that, the need for broader devolution in tough times. He provides a road map that gives us all food for thought about some of the challenges that face a future Government. The principles that he has set out for how Nottingham North can be developed would be listened to by a sensible Government in a much broader context.

--- Later in debate ---

[Toby Perkins]

Just before the Minister moves on, I welcome what he said a moment ago. Does it reflect a slight softening of the Government’s approach to careers guidance that suggests that they now recognise its value on the ground and face to face? Is he saying that they recognise that that sort of careers guidance should happen, particularly in areas of greater deprivation and, if so, are we likely to see that change of approach more generally across the board?

[Nick Boles]

I thank the hon. Gentleman for asking that question because it allows me to remind him and other hon. Members of the Government’s announcement just last week of a new careers company. That company is specifically charged with identifying those areas of the country—sadly, too many—where, frankly, the headline duty on schools to ensure the provision of independent advice and guidance for young people, to inform their choices both of qualifications and for further progression in the education system and into the world of work, is not being properly met.

Schools need to provide that guidance—it is extremely explicit that they should—although we have tried not to be too prescriptive about how they should do so. When any of us visits a good school, of whatever kind, in whatever community, we find that it provides that guidance. It is not, therefore, something mysterious to those running schools, but unfortunately not all schools do it. There are different ways of doing it; it is not necessarily the case that every school will want to employ its own full-time careers advisers or work-life coaches—it may be that schools will want to work with some of the many social enterprises and charities that do such work. But it is clear that, for schools and communities facing the very particular, deep and deeply entrenched challenges that schools in the constituency of the hon. Member for Nottingham North face, it is right to look to try to support that kind of very specific project to employ work-life coaches; of course, that particular project will have to prove itself and have benchmarks and a data review to see whether it has had an effect. If other schools choose to use their direct schools grant, which we have been able to protect despite the cuts elsewhere in public expenditure, they will not hear any criticism from me.

I turn back now to the disadvantaged learners pilot. I am looking vaguely at the officials in the box to see whether that is something over which I have more influence, as I do not know, but I suspect my influence is still none—one of the great discoveries on becoming a Minister is how little power one has, not how much. However, again, I say that I cannot think of a better place for that money. To be honest, the figures that the hon. Gentleman has shared with us make it quite clear that it is hard to think of a place where learners are more disadvantaged than in Nottingham North. So again, if the project proposed and being worked on by the local economic partnership and Rebalancing the Outer Estates is able to meet the criteria, I will be a strong enthusiast for it.

I want to respond to one final specific point. The hon. Gentleman said that he felt that the reform of qualifications—he himself acknowledged that that was much needed—with its winnowing out of soft and unproductive qualifications, had caught up some courses and qualifications, particularly those related to employability skills, that he thought had value. If he, or indeed anyone else—it is a general invitation—writes to me with specific details about a qualification that they think was valuable, and can provide evidence of how, I am always happy to have another look. The qualifications he is thinking of were probably removed for a reason, but that does not mean that every such decision is always right or was made when all of the evidence was available. Certainly no decision is ever for ever.

Finally—in this season of good will, I do not wish to test anyone’s patience, Mr Davies—I will reflect on the general points that the hon. Gentleman made about the nature of engagement in areas such as his. He referred to his own long-standing support for localism. That was the first thing that brought us together, before I was elected to this place, and I share his support for it. I know that he welcomes the progress the Government have made with local growth deals, city deals, local economic partnerships and, most interestingly of all, the recently announced agreement with Greater Manchester that will see a substantial devolution of powers and budgets to the new combined authority, not least in the areas of skills and employability. I hope that that is just the first of those moves. I know that my colleagues will be looking forward to receiving proposals from other areas of the country and I will certainly be happy to lend my support to any proposal for Nottingham, led by the hon. Gentleman, to be a candidate for receiving further powers of that sort.

Oral Answers to Questions

Toby Perkins Excerpts

Thursday 20th November 2014 Commons Chamber

[Matthew Hancock]

The hon. Gentleman is absolutely right. The 22,000 firms that have received start-up loans have been supported, but the new British Business Bank, something that we have not had before, has supported £2.3 billion of financing, a lot of it to the scale-up firms that he is talking about. Ultimately, we need a strong banking system. After the chaos the banking system was left in, we have been turning that around with stronger regulation. Banking balance sheets are starting to improve and move in the right direction, but it has taken an awfully long time to turn the mess around.

[Toby Perkins (Chesterfield) (Lab)]

As we head towards small business Saturday, which enjoys the support of the entire House, one group of small businesses that will be feeling better supported and be looking forward with more optimism are the nation’s tied pub tenants. The run-up to Tuesday’s vote saw the Government mired in confusion, as last-minute changes and amendments were proposed and dropped with alarming speed. Will the Minister tell the House what steps he will be taking to ensure that this important change is delivered in a way that works for everyone who cares about Britain’s great pubs?

[Matthew Hancock]

We are considering and reflecting on the will of the House as it was expressed this week, but be in no doubt that it is this Government who support pubs and publicans more than possibly any Government before: the first cut in beer duty in decades, two cuts in beer duty, and support through ensuring there is community support for pubs. We will not rest in our support for British pubs.