Small Business, Enterprise and Employment Bill

Debate between Vince Cable and David Rutley

Wednesday 16th July 2014 Commons Chamber

[Vince Cable]

Any employer foolish enough to go down that route would find themselves subject to multiple penalties and, eventually, to contempt of court if they were clearly malicious in their intention. I understand where my hon. Friend is going with this, and he might wish to pursue it in more detail in Committee.

The final employment aspect of the Bill relates to whistleblowing. If something is amiss in a company, those who step forward and blow the whistle take risks by doing so, and they want an assurance that action will be taken. Last year, a report by the university of Greenwich and Public Concern at Work found that 75% of whistleblowers expressed frustration that nothing was being done about the wrongdoing they reported. This is clearly unacceptable. The Bill will require “prescribed persons”—usually regulators—who deal with whistleblowing to report annually on reports received and actions taken, while maintaining confidentiality obligations for the whistleblower. In that way, we want to improve the general standard of best practice around whistleblowing procedures.

Company transparency has been one of the key themes of our work in Government over the past few years, including in relation to reforms of narrative reporting, reporting on executive pay, and, more recently, the directive relating to the declarations on natural resource payments. I now want to introduce measures that strengthen the provisions on corporate transparency. I will start with an area for which we have not previously had an opportunity to prepare the House. We have discussed the Bill with Opposition Front Benchers and with others, but this issue will be new to them, and it is important that we show them that courtesy. The issue relates to takeovers. I have made it clear publicly that we need to take action in this area that may well—not certainly, but very probably—involve legislation for which this Bill would be the vehicle. The approach we are adopting is that we continue to welcome inward investment as being good for the country.

We also continue to welcome merger activity as a normal part of market processes, although I have to say that the evidence on the benefits of mergers is somewhat ambiguous. What emerged as a result of the recent high-profile case of AstraZeneca and Pfizer was a lack of clarity around the enforcement of assurances. The approach we adopted in Government was to talk to the company where issues of wider public interest were involved—it was clearly involved in extensive research and development activity—to seek assurances. That is what should happen, but then the issue arises of how we make sure that any commitments given are clear and, absolutely crucially, binding. In order to ensure that that aim is realised, we are currently talking to the Takeover Panel. Legislation may well also be necessary to underpin cases where a commitment is not honoured. I will bring these proposals back to the House in due course.

[David Rutley (Macclesfield) (Con)]

I thank the Secretary of State for expressing his views on this important subject. Does he agree that although Pfizer put forward commitments that it regarded as unprecedented, it was by no means explicit about the number of employees it would have taken on should the takeover have gone forward? This sort of legislative approach—or at least a tightening of the takeover code—would help to improve the situation in future.

[Vince Cable]

I recall the major role that the hon. Gentleman played in trying to obtain commitments in relation to the north-west and, in particular, his constituency. The same issue will arise in other cases. He is right. Although commitments were made, there is an issue of enforceability. That is what we now wish to address by strengthening the rules.

Let me move on to company transparency. The OECD has reported that

“almost every economic crime involves the misuse of corporate vehicles”.

There are staggering sums of money involved. Organised crime costs the UK alone about £24 billion a year. The European Commission estimates that global criminal proceeds are in the order of $2 trillion. Of course, not all crime flows through companies, but much does. More specifically, in 2011 the World Bank carried out an exercise that suggested that 70% of grand corruption cases involved at least one corporate vehicle to hide beneficial ownership and the true source of funds. Very often, criminals create complex corporate structures spanning multiple jurisdictions to hide the involvement of a company. That is why the UK pushed the agenda for greater corporate transparency during our G8 presidency last year. We obtained agreement from G8 members that all would take action to increase corporate transparency. That is what we are now doing, thus demonstrating our commitment.

We wish to help to deter, identify and sanction those who hide their interest in UK companies to facilitate illegal activities, as well as generally creating a more trusted business environment. That is why we are going to require companies to keep a register of the people who have significant control over that company—their beneficial owners—and provide this information to Companies House, where it will be publicly available. We will lead the way within the developed economies in having an open register. Alongside that, the Bill abolishes the use of bearer shares, which can change hands without any record and have been open to abuse for tax evasion and money laundering purposes.

AstraZeneca (Pfizer Bid)

Debate between Vince Cable and David Rutley

Tuesday 6th May 2014 Commons Chamber

[Vince Cable]

I am not making any assurances at this stage; I am merely keeping the options open. I am surprised to hear the hon. Gentleman say that the Government received assurances on Kraft-Cadbury, because our study of the record suggests that the then Secretary of State acknowledged that no such assurances were ever given.

[David Rutley (Macclesfield) (Con)]

I am grateful to my right hon. Friend the Secretary of State for his statement, for which I also called. AstraZeneca is Macclesfield’s largest employer, with 2,000 highly skilled workers based at the site, so I recognise the concerns of local residents about the potential implications of Pfizer’s bid. With that in mind, what steps are being taken fully to determine the impact the bid could have on the UK’s life sciences sector? In particular, what steps are being taken to safeguard those highly skilled advanced manufacturing and packaging jobs in Macclesfield?

[Vince Cable]

I acknowledge the strong representation the hon. Gentleman has made to me before today, and that of my hon. Friend the Member for Cheadle (Mark Hunter) on the exact same issue. I will quote again from Pfizer’s letter to the Prime Minister, with all the provisos and conditions I suggested before. It says:

“Pfizer will actively look to locate manufacturing operations of the combined company in the UK, subject to the timing of the UK Patent Box proposals, and will retain substantial commercial manufacturing facilities in Macclesfield.”

Job Insecurity

Debate between Vince Cable and David Rutley

Wednesday 5th February 2014 Commons Chamber

[Vince Cable]

Indeed, and to be fair to the shadow Secretary of State, he did acknowledge that job insecurity—particularly zero-hours contracts—was not particular to our period in office but was a long-term trend.

[David Rutley (Macclesfield) (Con)]

The Secretary of State makes an important point about the focus being on private sector, not public sector jobs, which is an important development, especially for the north-west, where my constituency is situated. Under the previous Government, far too many jobs—tens of thousands—were created in the public sector, which crowded out jobs and had a detrimental impact on the private sector. Will he confirm that this Government are putting the focus on private sector job creation, encouraging people to become first-time entrepreneurs and, through things such as the employment allowance, enabling them to become first-time employers as well?

[Vince Cable]

The so-called crowding-out problem might well be an issue, if we run into problems of labour shortage, and indeed we are running into serious vacancies in some parts of the economy, so that might be a highly relevant consideration.

The rapid results service behind me has produced an answer on the number of hours worked. Apparently, in the last quarter, 969 million hours were worked, which was a 2.5% increase on the year.

Oral Answers to Questions

Debate between Vince Cable and David Rutley

Thursday 7th February 2013 Commons Chamber

[Vince Cable]

Of course I can confirm that we are pursuing the policies I have described. I get a sense that the hon. Gentleman has not the faintest idea about the issues involved in establishing a new bank. This Government have established, through government, two new banks, one of which is already operating on a significant scale— the green investment bank. The other is the new business bank, which is going through the necessary processes. [Hon. Members: “When?”] Opposition Members ask when, but do they have the slightest idea what is involved in running a bank and doing due diligence, having presided over the collapse of the banking system ignominiously and having allowed the banks to get totally out of control, with the disastrous consequences that we are now dealing with?

[David Rutley (Macclesfield) (Con)]

3. What support his Department is providing to the life sciences sector.

Directors’ Pay

Debate between Vince Cable and David Rutley

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

Even if that perverse behaviour were to occur, there would still be the existing annual backward-looking advisory vote. If shareholders are dissatisfied, the company, subject to the Financial Reporting Council’s work, will be required to issue a statement, which will require a binding vote the following year. Checks and balances are built into the system to ensure that the abuses the right hon. Gentleman describes simply do not happen.

[David Rutley (Macclesfield) (Con)]

Does my right hon. Friend agree that there is a vital role for remuneration committees, and particularly their non-executive members, in re-linking rewards with positive performance in companies throughout the country?

[Vince Cable]

Yes, there is an important role for remuneration committees and the consultants who advise them. One thing I did not mention was the effort being made to ensure that fees for remuneration consultants are properly declared, so that there is more transparency in that aspect of the process.

Executive Pay

Debate between Vince Cable and David Rutley

Monday 23rd January 2012 Commons Chamber

[Vince Cable]

The hon. Lady refers specifically to Peacocks, on which I have been approached by several concerned elected representatives. Having looked at the facts, the Government do not judge that there are any grounds for intervention in the wider public interest, but I have great sympathy for the employees, who are in a very bad position because of bad decisions made in the past by their management.

[David Rutley (Macclesfield) (Con)]

Does my right hon. Friend agree that there is an important role for lawyers to big City firms and large plcs in advising their clients on best practice when drawing up arrangements for contracts and bonuses?

Oral Answers to Questions

Debate between Vince Cable and David Rutley

Thursday 8th December 2011 Commons Chamber

[Vince Cable]

After the hon. Gentleman’s previous contribution, I set up a visit to his constituency, which will take place, I think, in the first quarter of next year. I can discuss these matters in depth with him then, which I think is rather more than my Labour predecessor did. The hon. Gentleman has been a Member for a long time, but he has overlooked the fact that in the 13 years of Labour Government there was a decline in manufacturing output averaging 0.5% a year.

[David Rutley (Macclesfield) (Con)]

T3. Returning to 2011, what steps is my right hon. Friend taking to create the conditions for the pharmaceutical and life sciences sectors in the United Kingdom, including AstraZeneca in Macclesfield, to be able to compete more strongly in the global marketplace?

Oral Answers to Questions

Debate between Vince Cable and David Rutley

Thursday 31st March 2011 Commons Chamber

[Vince Cable]

I think that there is complete clarity. I set out the position in a letter that I sent to OFFA some weeks ago, which is available and which I can certainly make available to the hon. Gentleman. It is absolutely right that, in return for being allowed to charge the higher fee levels, universities should make the maximum possible access available to people from disadvantaged backgrounds. There is a particular problem with traditional universities, where social mobility declined in the last decade. We are determined to overcome that.

[David Rutley (Macclesfield) (Con)]

17. What plans he has to increase levels of employment in small and medium-sized enterprises.

--- Later in debate ---

[Vince Cable]

I was not in Mexico, I was in another country—Wales—discussing the issue. The simple truth is that, as I am sure we have communicated to the Mexican authorities, Mexican students are welcome to come to this country and there is no cap on the number of overseas students.

[David Rutley (Macclesfield) (Con)]

T3. The Macclesfield, Richmond and Wandsworth chambers of commerce are developing local mentoring schemes to help better support smaller businesses, and have submitted a related bid to the regional growth fund. Does the Minister agree that such approaches deserve serious consideration and will provide important insights to other local communities?

Oral Answers to Questions

Debate between Vince Cable and David Rutley

Thursday 18th November 2010 Commons Chamber

[Vince Cable]

The hon. Gentleman did not listen to my previous answer. The Prime Minister was quite explicit on this, and I will repeat what he said:

“things such as inter-company transfers should not be included”

in our proposal for the immigration cap. I have spoken to Nissan and other companies, and the Government are well aware of the needs of business. We are open to business and we welcome foreign investors. The proposal on the immigration cap will be pursued, but not in ways that damage those companies.

[David Rutley (Macclesfield) (Con)]

7. What plans he has to provide support for small and medium-sized enterprises in the next 12 months.