Small Business, Enterprise and Employment Bill

Jim Cunningham Excerpts

Tuesday 24th March 2015 Commons Chamber

[Jo Swinson]

Part 4 of the Bill will introduce a statutory code and an independent adjudicator to regulate the relationship between large pub companies and their tied tenants. It will address problems about which many hon. Members and the Select Committee on Business, Innovation and Skills have been concerned for a number of years.

The House will remember that, on Report in this House in November, a market rent only option for tied pub tenants was added by way of a vote. In the other place, my noble Friend Baroness Neville-Rolfe confirmed the Government’s acceptance of the will of this House, so we have before us a Bill that honours that commitment and remains true to the spirit and intention of the amendment introduced by this House on Report. For example, MRO must be provided for by the code, it must set out reasonable time scales for the process, and it must include certain MRO triggers. Government amendments 39, 40 and 41 amend the original clause 42, which was introduced by my hon. Friend the Member for Leeds North West (Greg Mulholland). I take this opportunity to pay tribute to his dedication to this cause, his relentless campaigning for the rights of tied tenants, and his willingness to move forward. The way he has worked and championed the measure with MPs from both sides of the House, with the all-party group and with campaigners up and down the country is a real testament to what can be achieved by someone with vision and determination.

The amendments ensure that MRO is workable within the approach taken in part 4, is legally robust, and avoids unintended consequences. They are split into three clauses for clarity, one setting out a clear framework for the MRO option, one making provision for the procedures needed to deliver it, and one providing for the adjudicator to resolve disputes.

Amendment 39 provides tied tenants with the right to a market rent only agreement at a number of trigger points: at a rent review, at lease renewal, when there is a significant and unexpected price increase, or if an event occurs that is outside the tenant’s control and has a significant impact on the tenant’s trade. Although prospective tenants will not have the right to the market rent only option, they will have the protection of the parallel rent assessment, so that they can judge if the tied deal they are being offered is fair. PRA will also be available to existing tenants and, through secondary legislation, will be streamlined with the MRO process.

Amendment 40 sets out the procedure for the market rent only option and provides that the pubs code must specify a reasonable period for the two stages of the process. The first stage is where a tenant and their pub company try to agree a rent, and the second involves the determination of a market rent by an independent assessor. Amendment 41 provides the powers to enable the adjudicator to resolve disputes over matters such as the proposed MRO agreement, the independent assessor’s determination of the market rent, and whether the MRO procedures have been followed.

The original MRO clause included triggers for MRO upon the sale of a pub or the administration of a pub-owning company. In discussions with stakeholders, it became clear that it was not the fact of sale or administration itself that was a concern; rather, it was the potential for a pub sale, whether as part of an administration or in the normal course of business, to result in adverse consequences for the tenant. After extensive consultation and discussion with stakeholders and debate in the other place, amendment 47 extends the protections of the code—apart from the market rent only option—to tenants whose pub is sold by a code company to a company outside the statutory code.

To deter avoidance and ensure fairness we are also continuing code protections—excluding the market rent only option—until the next rent review for the tied tenants of pubs owned by a code company which, by selling a number of their other pubs, falls below the threshold of 500 tied pubs. Those tenants too would have continuing rights and expectations regarding their existing lease and the protections they should have under the statutory code, and they should not lose their protections because of events beyond their control.

We believe that this is a proportionate and targeted protection. It will last until the next rent assessment or the end of the tenancy, whichever comes first. MRO will not be extended, and nor will the investigation powers of the adjudicator. Investigation powers are not continued because they are designed to uncover systemic breaches of the code. It would not be right to include in that power companies that are obliged to follow the code only because some of the pubs they own used to belong to a code company, and that are covered by the code only in respect of those pubs. However, the arbitration powers of the adjudicator do remain, so those tenants will be able to refer any allegations of a code breach during the extension period to the adjudicator.

[Mr Jim Cunningham (Coventry South) (Lab)]

What would the penalty be for any breaches?

[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.

School Funding Formula

Jim Cunningham Excerpts

Tuesday 10th March 2015 Commons Chamber

[Nic Dakin]

It is indeed. We should focus on giving young people equal opportunities wherever they are.

[Mr Jim Cunningham (Coventry South) (Lab)]

As my hon. Friend knows, debates about the school funding formula have been continuing for many years. I remember them taking place about 25 years ago. What is more important is that a quarter of the further education budget is to be cut at Coventry City college.

[Nic Dakin]

My hon. Friend has made a good point, which illustrates the complexity of the issue and the challenges that it poses. For example, sixth-form colleges currently receive no VAT relief, whereas other institutions do. One political party is going into the next election promising to create 500 new institutions. We have to ask ourselves whether that is good value for money when there is pressure on the basic budgets for young people who are in our existing institutions. It is a simple observation, and with that simple observation I shall end my speech.

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[Kevin Brennan]

As confirmed in a House of Commons Library note, the hon. Gentleman is correct to say that education funding has fallen by the greatest amount in real terms under this Government, and that secondary funding has borne the greatest burden of that, with it facing a 7.6% cut in real terms during the course of this Parliament. However, people have forgotten that the last Government started this process with a pledge to have a national funding formula, which the coalition Government promised would be delivered during the course of this Parliament, but they have been unable to fulfil that promise because it is not easy.

[Mr Jim Cunningham]

It is a little rich for the Government parties to raise this issue when they have had five years to sort it out. One would think they were not in government. But there is a more important point here. [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. In fairness, I have tried to make sure that every Member had a chance to speak. At least respect those who intervene and answer from the Front Bench.

[Mr Cunningham]

It is a little rich Government Members talking about young people when they are cutting further education budgets, as they have at City college in Coventry by 24%. What does my hon. Friend think about that?

[Kevin Brennan]

In fairness to the Government parties, they have acknowledged that there was record investment in education under the last Labour Government. It is a fact that we have suffered—check the House of Commons note—a real-terms cut during the course of this Parliament. Under the plans outlined, certainly by the Conservative party, there will be real problems with school funding in the next Parliament.

Consumer Rights Bill

Jim Cunningham Excerpts

Monday 9th March 2015 Commons Chamber

[Philip Davies]

I am interested in what the hon. Gentleman says. I do not want to rehearse all the arguments we have had in the past, but what we are talking about does not just happen with tickets. For example, limited edition products are sold all the time—there is a limited number of them. When a painting is sold, there is just one and the demand for it may well outstrip the supply. Is the hon. Gentleman saying that wherever demand outstrips supply and the supply cannot be increased, nobody should ever be able to make a profit? That may well be the policy the Labour party is arriving at: nobody is ever allowed to make a profit. That is a perfectly respectable position for the hon. Gentleman to hold, and he holds his positions consistently, and with great vigour, honour and determination. I do not blame those in the Labour party for being in favour of these kind of restrictions: because they are socialists, they do not want people to make a profit and they want to regulate every aspect of people’s lives. That is fair enough; I respect them for that, although I do not like it. What I object to is the fact that Conservative Members are being asked to give up on the free market.

[Mr Jim Cunningham (Coventry South) (Lab)]

I always have great respect for anything the hon. Gentleman has to say. I have to tell him that the UK Independence party has adopted the free market mantle now, as his party has gradually eschewed it.

[Philip Davies]

The hon. Gentleman kindly said that he had a great deal of respect for what I had to say, which is certainly more than can be said for most people on the Government Benches, so I am very grateful to him for that kind comment. It probably will not do much for his reputation within his party, but I am grateful for it, because I have a great deal of respect for him, too.

I believe in the free market and am not ashamed of doing so. I believe it acts in the best interests of the consumer. The hon. Member for Edinburgh South (Ian Murray) said he was surprised that I was not standing up for my constituents as consumers, but I am. I believe in the free market; I believe that people should have the right to sell on their ticket if they buy one and then find that they cannot go to the event or that somebody else is prepared to pay a higher price for it. I will happily take my chances with my electorate at the general election, to see whether they are happy that I look after their interests, just as he will put his record before his electorate at the general election—we shall see how we both get on.

The Minister glossed over the fact that the Government have done a complete U-turn on this issue. I do not know whether she is embarrassed about that or not, but I would be if I were in her shoes.

International Women’s Day

Jim Cunningham Excerpts

Thursday 5th March 2015 Commons Chamber

[Maria Miller (Basingstoke) (Con)]

I beg to move,

That this House has considered International Women’s Day.

This motion in support of international women’s day also stands in the name of my right hon. Friend the Member for Meriden (Mrs Spelman) and my hon. Friend the Member for Erewash (Jessica Lee). I should say that my hon. Friend the Member for Erewash did the heavy lifting on all this but was detained elsewhere and unable to go to the Backbench Business Committee on the day we put our bid in. I thank her, and all the right hon. and hon. Members across the House who supported our application for this important debate. It is one of the rare parliamentary moments in our calendar when, across the Chamber, there is more that unites us than divides us. I thank the Backbench Business Committee for its support in making the debate possible.

It is an enormous privilege to open this debate. It is not only here that international women’s day will be marked—more than 300 events will be held in the UK to mark the economic, political and social achievements of women across our globe. Our enduring thanks have to go to organisations such as the United Nations, Oxfam, Women for Women International, CARE International and the World Association of Girl Guides and Girl Scouts, which bring this event alive for thousands of people across the United Kingdom.

Each international women’s day gives us an opportunity to pause and take stock of the progress that we are making throughout the world in gaining a fundamental right: the right to be treated equally, regardless of our gender. The breadth of today’s debate is daunting, and I do not think that any one speaker can hope to cover every aspect of the important work that many Members are doing in the House, whether it is connected with domestic violence towards women, female genital mutilation, or a host of other issues that are equally important. I want to focus on two issues: the role of women in the workplace and their role in this place.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate the right hon. Lady and her colleagues on initiating the debate. Does she agree that we still have a long way to go before women have parity with men in terms of pay?

[Maria Miller]

I think we have made important progress in that regard, particularly under the present Government but previously as well. For women under the age of 40, the gender pay gap has all but disappeared, and when we disaggregate the overall data, we see that progress has been made. As the hon. Gentleman says, it is worrying that the gap has not disappeared completely, but, as I am sure he knows, that has much to do with some of the choices that women are making about how they want to lead their lives, which they have an absolute right to do, and also with some of the choices that they are making early in their educational careers. We need to ensure that they are fully aware of the implications of those choices.

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[Mr Jim Cunningham]

One way in which women could be helped, particularly younger married women with families, is by our having a look at the crèche facilities in this place.

[Maria Miller]

I know that we have crèche facilities, although I am not sure that my 12-year-old would be too excited about going there. The hon. Gentleman raises an important point, which is that at the beginning of the next Parliament, when we start to think about the working hours of this place—I know that there are many different competing demands, with people living in various parts of the country—we have to ask ourselves the questions. If, as the Conservatives will, we have many young women coming into Parliament who may have not yet started their families, and if we are to encourage them to stay here for as long as possible, we have to address the sort of issue he is talking about. I want to encourage more women who have families into Parliament. At the moment, 40% of women MPs do not have children and that is not representative of our population as a whole. In addition, women tend to have shorter parliamentary careers than their male counterparts and tend to have older children, too, so there are some forces at play that he is right to pick up on.

Electoral Registration

Jim Cunningham Excerpts

Wednesday 4th February 2015 Commons Chamber

[Sadiq Khan]

Perhaps Ministers do not realise what officials in the Cabinet Office are sending out, but they have accepted that it was their mistake.

To be fair to the Minister, his boss, the Deputy Prime Minister, has finally woken up to the mess that this Government made by speeding up the process. That must be why, last month, the Deputy Prime Minister announced £9.8 million to help with registering voters who are currently under-represented. He accepted that he had messed up. Will the Minister confirm that that money is ring-fenced solely for electoral registration activities?

Another critical factor is the extreme pressure on local authorities because of the cuts imposed by this Government. Local authorities have to write to 48 million individual voters, instead of 20 million households. Unlike the Minister, who criticises them, I take my hat off to local authorities, most of which are doing a remarkable job dealing with this massive change in our democracy, all against a backdrop of enormous pressures on council budgets.

[Mr Jim Cunningham (Coventry South) (Lab)]

In Coventry, more than 8,000 people have not been registered, the bulk of whom are students. Coventry city council, alongside the students, has organised a registration day tomorrow at both universities. The situation is very serious, and it is no good the Government blaming everybody else but themselves when things go wrong.

[Sadiq Khan]

My hon. Friend makes a very important point. I am sure we all agree it is outrageous that the Government are once again seeking to blame somebody else for cock-ups that they were warned about.

The electoral register is in a parlous state. It is just 92 days until the general election, and just 75 days until the deadline for registration on 20 April. We need action, and we need it now. Doing nothing is not an option. The main thrust of our motion is to propose a number of remedies to which the House should give its backing. A particular priority must be young people. All the evidence shows that if people vote when they first become eligible, they are more likely to vote for the rest of their lives, because voting becomes a habit. The opposite is also true: if people do not vote early in life, taking part in elections will never be much of an issue for them. There must be a greater onus on schools and colleges to provide focused activities.

SportsDirect (USC Dundonald)

Jim Cunningham Excerpts

Tuesday 27th January 2015 Westminster Hall

[Mr Donohoe]

I agree with my hon. Friend wholeheartedly. I spent most of the Christmas period attempting to contact the company, and I was treated with total and absolute contempt.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate my hon. Friend on getting the debate. We had a similar one last Thursday, about City Link. He has spoken about changes to the law, and with City Link the pattern was the same. Workers were told over the Christmas holiday period that their jobs had gone. More than 1,000 men contracted to it could not take their jobs, because of the law. We have been pressing the Minister on those points. This is very similar.

[Mr Donohoe]

I am grateful to my hon. Friend for that intervention. The Scottish Affairs Committee is about to call that company to book, or has already done so, and has approached me to ask whether to call Mr Ashley to the Committee for what he has done to the company for which he is responsible. Do we agree with the BBC’s 2009 quote from a self-confessed asset stripper that the law in such circumstances is a pirates’ charter? I wonder whether that description could apply to Mr Ashley.

Has the Magna Carta principle that no citizen should unreasonably be deprived of their livelihood been breached by Mike Ashley and SportsDirect? Given how he has behaved on the issue, is Ashley, SportsDirect’s supremo, a fit and proper person to buy shares and give loans to Glasgow Rangers football club, and to appoint his men to the board? Should not the Scottish Football Association look more closely at this person’s credentials for involvement in a team that is not just a business venture, but a Scottish—indeed, a UK—institution? His track record, particularly his treatment of USC workers, shows that he has scant regard for anything but balancing the books and maximising profits, even if loyal staff are thrown on the scrap heap as a result.

Economy and City Link: Coventry

Jim Cunningham Excerpts

Friday 23rd January 2015 Commons Chamber

[Mr Jim Cunningham (Coventry South) (Lab)]

First, I thank Mr Speaker for granting this debate, the purpose of which is to discuss the general position of Coventry’s economy, which looks very positive on many counts. I also want to take a harder look at the labour market.

The Government are using all sorts of means to make the employment figures look good, but that can mask problems with pay, stability and the type of work involved. The recent collapse of City Link is a good example of why we need to look at the type of work more closely.

I start with the positives of Coventry’s economy. The Centre for Cities annual “Cities Outlook”, published this week, looked at 64 UK cities. There is plenty of good news for Coventry. Coventry came 10th for housing stock growth, 9th for highest business growth, 7th for jobs growth, 6th for the highest private sector jobs growth, and 4th for patents issued, largely in the automotive industry. I welcome that good news. There is much to be proud of.

In the same report, however, Coventry was ranked 59th out of 64 for its employment rate. I understand that that is 8.3% lower than the UK average. The employment rate has fallen by more than 3% in the past year. I want to guard us against sitting on our laurels; it is that background that makes any announcement about job losses very serious.

All that brings me to the situation with City Link. Let me be clear: it is not that Coventry is in trouble, but we need to be watchful of every major loss of jobs. We cannot be complacent and we need to make sure that we do not see a pattern of job losses. City Link provided 404 jobs in Coventry, the vast majority of which have now been lost. The collapse was announced on Christmas eve. Better Capital, the private equity firm that owned the company, is expecting to recover £20 million from the £40 million loan it gave; as a secured creditor, it will rank ahead of staff when proceeds from the company’s liquidation are distributed. The taxpayer has to foot the redundancy bill.

Why is that significant? Any unwanted job loss is a tragedy for the individual concerned. Getting new jobs is the immediate priority, and I am very pleased with how Coventry has risen to the occasion and businesses have come forward with jobs, but there are worries. I am very concerned about the self-employed drivers; at least, they are technically self-employed, but the idea is absurd—they were allowed to work only for City Link. They have been made redundant through no fault of their own. They will be doubly hit—they will not get redundancy payments, as things currently stand, and nor will they be eligible for jobseeker’s allowance.

We need to look into that type of employment, which is dangerously precarious. We need to consider the law in relation to this matter, and I am pleased that the Secretary of State for Business, Innovation and Skills agrees. We need to look carefully into what happened in the build-up to the company’s going into administration. I have met the Business Secretary, who intends to wait until the report by the administrator is complete before deciding whether the situation warrants an investigation. I personally believe that an investigation is warranted already, but I appreciate the Business Secretary’s position. Once the report is published, I will be keen to call for an investigation.

We cannot have a situation in which asset strippers can toy with workers so that thousands lose their jobs with no warning while the management are able to make plans. This is a good example of a situation in which many people who were counted as self-employed were left very vulnerable when the company collapsed. Furthermore, the owners were able to walk away with millions, while giving workers no notice period in which they could have started looking for jobs. Your type of work matters, your pay matters, your employment status and rights matter, your security and stability matters, your quality of life matters: it not just about the headline figures.

In addition to the recent job losses at City Link, a number of other companies have announced their intention to cut jobs in Coventry. This includes the recent closure of the Marks & Spencer warehouse, where about 150 jobs are expected to be lost, and recent job losses at Sainsbury’s. Peugeot Citroen will be cutting jobs, although the number now looks to be under 100. In November, Severn Trent announced plans to cut 600 jobs. Given that the city has had a decreased employment rate in the past year and is already below the national average, we need to make sure that there are no structural reasons behind this, so we must take each case seriously. I urge the Minister to pay close attention to the picture of jobs in Coventry and to comment on the attractiveness of Coventry as a place to do business.

I want to flag up a number of other concerns. Median annual pay in 2014 was £499 down on the 2013 figure, and that is £1,505 lower than the average in England. Gross weekly pay for a woman in Coventry is over £100 less than that of a man. Perhaps most alarmingly of all, Coventry was 63rd of 64 for the highest percentage of people with no formal qualifications—15.8%. That is something we really need to look at and work on.

That brings me to the bigger picture, which is that the Government are throwing taxpayers’ money at subsidising companies that pay low wages. We are seeing people pushed off JSA to become self-employed, often earning very little indeed and needing substantial income support. There is no training, support or career development—it is all about being able to keep unemployment figures down. Similarly, a third of jobs in Coventry are part-time. That figure does not show how many of these people cannot get full-time work. I have constituents who are technically employed, but for only a few hours a week. They want to work more hours, but they are not offered them, and the Government then have to top up their income. I urge everyone to watch last week’s Channel 4 “Dispatches” programme, “Low Pay Britain”. I am concerned that the employment figures are masking the reality and papering over the real problem, which is a lack of proper, well-paid, stable jobs that pay enough to live on and include future career opportunities. I ask the Minister to take this seriously, as I am sure she will. It is not enough to say there are jobs—it matters what types of jobs they are.

Cuts to local government funding have meant that Coventry city council has already cut well over 1,000 jobs and is expected to cut many hundreds more. For example, proposed cuts to the local welfare assistance scheme by central Government mean that payments under the scheme would have to come from council budgets rather than central Government. This would hurt those in the city who are in the most urgent need of help. I ask the Minister to raise this with her counterparts at the Department for Communities and Local Government. These cuts to local government mean that the council is not in a position to offer the support to the economy that ideally it might have done.

Coventry needs to take a hard look at the real story behind the employment figures to make sure that we are not storing up problems for ourselves in future and that we have a healthy and sustainable labour market that pays well and offers people a high standard of living.

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[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I hesitate to interrupt the hon. Gentleman, but I ask the Serjeant at Arms to investigate the fact that a bell is ringing somewhere.

[Mr Jim Cunningham]

I apologise, Madam Deputy Speaker—I did not realise that my phone was not switched off.

[Madam Deputy Speaker]

I take back that request to the Serjeant at Arms and accept the hon. Gentleman’s apology. The mystery has been solved.

[Mr Robinson]

Thank you, Madam Deputy Speaker, for allowing me to take part in this debate. The Minister also agreed to my taking part, as did my hon. Friend the Member for Coventry South (Mr Cunningham), whom I congratulate on his initiative. I also thank Mr Speaker for granting this important debate.

The only mystery that remains to be solved is why exactly Jon Moulton made this acquisition in the way he did in an industry that was already in difficulty. One feared very much what the outcome would be for a company that had already experienced many years of extreme difficulty. The situation will no doubt be unfolded once the Department finishes its report and we have read its conclusions. Perhaps a further investigation will be necessary; indeed, my hon. Friend has called for one.

In the few minutes available to me, I want to address four aspects of concern. My hon. Friend has already said that we cannot be complacent in Coventry, but perhaps he will agree that the new leadership in Coventry has sent a very loud message that Coventry is open for business and to the new businesses of the 21st century. The internet and internet shopping are clearly going to generate a lot of such businesses. Indeed, we thought that that was what Mr Moulton was investing in and that there was a reasonable prospect for City Link’s future, although there was never any guarantee. It is a pity that the early venture has come to such a tragic and sad halt.

It is tremendous to see the approach being taken by Coventry’s leadership. After years of not making the progress we should have been making, the new leader, supported by her deputy, has made it plain that things have changed in Coventry’s approach to openness. We are looking to do things differently and are encouraging others to join us in a way that we might not have done in the past. It is in that spirit that we went down the City Link and other routes.

[Mr Jim Cunningham]

May I make it perfectly clear to my hon. Friend that in no way is this situation a reflection of the leadership of Coventry city council? I was analysing the general situation.

[Mr Robinson]

I take that point entirely and agree with my hon. Friend. Coventry has new leadership, but we have had a very bad setback. Some 400 jobs have been lost—which is a lot—on top of the other losses, to which my hon. Friend has rightly referred. We can ill afford such losses and we cannot and will not be complacent. That is why my hon. Friend wants to make sure that this has been properly handled.

I understand that Mr Jon Moulton, who guards his reputation jealousy—he has had a fairly good record up until now—is concerned that his motives be fully under- stood. The mystery is why on earth he invested to the extent he did in the first place, but that is for him to explain. He goes around saying that he has lost £20 million of his shareholders’ money—his company’s money—and £3 million of his own. That is a great pity, but he also caused the state to lose £20 million and—this is my second point, which I will come on to in a moment—1,000 drivers to lose their jobs. One can only ask: why would anyone put themselves in a position where ultimately they are held responsible for the collapse of their company? That will no doubt come out in the Department’s report.

The closure on Christmas eve was unpleasant. That is not a serious way for a businessman who guards his and his company’s reputation so jealously to run an enterprise for which planning is essential. That raises questions that should not have been raised, but Mr Moulton will now have to wait while they are investigated and we get answers.

I know that the Minister agrees with me. When we met the Business Secretary, he was very forthcoming and said that he wanted to make sure that nothing odd was going on. He was phoned on 23 December—one day before the announcement was made. The company had been trading with bad losses for months beforehand under Mr Moulton’s ownership and for years before that. What happened is hardly a surprise. The inevitable impression is that it was somehow or other contrived to be done in that way at that time. That impression will persist until we get the Department’s report in, I hope, the very near future.

If the report calls for an investigation, I know that the Minister—whom I am very pleased to see in her place—and the Secretary of State will approach it in the spirit of totally dispassionate and rigorous scrutiny. If such an investigation is needed, we shall, despite whatever embarrassment it might cause to those who agreed with Mr Moulton’s decision to make his investment, which has cost the taxpayer £20 million-plus, go to whatever lengths necessary to get to the truth of the matter. We have to do that for Coventry. We have made a new start and we are doing relatively well. We are certainly doing much better than we were. Frankly, we can do without setbacks such as this one, which came out of the blue on Christmas eve.

We look forward to the Minister’s response and I hope that she will answer the points that have been made about the report. Before I finish, I have one more important point to put to her. I am sure that everything about this incident will come out in the report, but I hope that it will also address a more general point that was alluded to by my hon. Friend the Member for Coventry South. It does not relate directly to this administration, but it does concern the 1,000 self-employed drivers. As I understand it, the drivers were self-employed but, under the terms of their contract, were not allowed to work for anybody else. They were self-employed, but they were really employed by the employer. This is a fine point of law. I am sure that the law is quite clear that the drivers were technically self-employed and that they were therefore not eligible for redundancy pay or jobseeker’s allowance, even though they had been paying in.

This is a wider point about self-employment. I know that the Treasury does not really like self-employment. It is not entirely right in that, but it is not entirely wrong either, as is always the case with the Treasury, damn it! This may be a narrow point, but the Treasury and the legal department should look at it in the context of the whole. It cannot be right that self-employed people who are making a contribution, paying their way and making no demands can end up in this situation.

There is good news about Coventry, with its new leadership. This is a setback, so we must have a report to clear it up and to see, once and for all, exactly what went on. Lastly, the position of the drivers has brought out a general point for us all to consider, and we wish to hear the Minister’s views on it.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate at such an appropriate time. He called it to talk about City Link, obviously, but also about the wider issues relating to jobs in Coventry. I know that he has been a passionate supporter of businesses and workers alike in his constituency over the years.

We all agree that this is a worrying time for the individuals who were reliant on City Link for work, a significant number of whom were based in Coventry. There is a huge amount of sympathy for those who have lost their jobs through no fault of their own. The timing of the announcement has been mentioned. It is difficult for anybody to hear that bad news, but to hear it immediately before Christmas, when people hope to be celebrating with their families, is particularly difficult, so one cannot help but feel for those individuals.

That is why our focus is on ensuring that those who have found themselves out of work as a result of the City Link administration find new work as quickly as possible. We are helping the employees and subcontractors to do just that. We are also ensuring that City Link employees who are eligible for statutory redundancy payments get the money that is due to them as quickly as possible. The Jobcentre Plus rapid response service is available to employees and subcontractors at City Link. That is delivered at the discretion of each local district. That support is already being provided around the country. It can include things such as information, advice and guidance, help with job searches, CV writing, interview skills, identifying transferable skills or any skills gaps, and training to update those skills and to get certification to improve employability.

In Coventry, Jobcentre Plus is working with a local skills and employment company to provide extra support on employability and moving into work. Earlier this month, three sessions were held to support workers. In addition, the Coventry city council job shop and the local enterprise partnership’s growth hub are working closely with Jobcentre Plus to identify employers who have vacancies. It is positive that a number of local employers have expressed an interest in taking on City Link staff in Coventry. Although this remains a difficult time, it is encouraging to hear of City Link workers in Coventry who are already finding new work.

When the employer’s insolvency has led to dismissal, employees are guaranteed to receive—subject to certain limits—their wages and other payments they are owed, and that money comes from the national insurance fund. A dedicated team in the redundancy payments service is already processing those payments, and we will ensure that claims are processed as quickly as possible. Any City Link employees who want guidance on that redundancy pay can find that information at gov.uk.

Hon. Members mentioned those who are self-employed and could not necessarily work for any company other than City Link. They do not qualify for redundancy pay because of their self-employed status. We recognise that that issue is significant and has grown over recent years. We have protections for employees, a separate set of protections for workers that are not quite as enhanced, and then there are the self-employed. For many people, being self-employed works well, but some employers try to use different categories so that those people do not have the same level of employment rights. The Department for Business, Innovation and Skills is undertaking an employment status review to consider those issues in detail.

[Mr Jim Cunningham]

In one case that I am aware of, the individual is owed something like £90,000, which puts them in a terrible position.

[Jo Swinson]

Indeed, and individuals will be in different circumstances. As I said, for some people being self-employed works well depending on their circumstances, but the difficulty comes if that is used effectively to mask what is an employee-employer relationship. In addition to any concerns the Treasury might have, there are also issues about workers’ rights.

[Jo Swinson]

I am not a lawyer so I will not give legal advice, but employment tribunals can consider the facts of any case in front of them. It is not simply what is declared in a written contract that determines the nature of an employment relationship; it is also about the facts of the case. Employment tribunals are able to interpret a case based on whether there is mutuality of obligation, and in previous employment tribunals, judgments on exclusivity clauses have been used to demonstrate that kind of relationship. I will not pronounce on any individual case, but there is flexibility in the employment law system for employment tribunals to consider individual facts. Because there is uncertainty about different types of employment—some of that is related to growth in zero-hours contracts and we are legislating to prevent the kind of exclusivity clause that has been outlined—we are undertaking that employment status review. I do not suggest that the solution is straightforward or simple, because a wide range of issues are being considered. Employment law and status have developed over many decades, and that review is an important piece of work.

The hon. Member for Coventry South mentioned the importance of quality jobs. Positive employment figures are a great good news story, but as the economy recovers we want to encourage employers to ensure that the jobs they create are quality jobs, and that where they can afford to they do not pay just the basic minimum wage. That safeguard and safety net is rightly there as a protection for the most vulnerable people in our labour market, but the minimum wage should not be a target. Responsible companies that are profitable and doing well generally want to pay above the minimum wage, and the Government encourage them strongly to do so.

On an investigation into City Link, the process after any company fails is that we ask whether it has been managed correctly, which is fair. We need to establish the full facts before coming to a judgment, as the hon. Member for Coventry North West (Mr Robinson) said. As a result, the administrators have a legal duty to report confidentially to the Secretary of State within six months of their appointment on the conduct of the directors. We are trying to reduce that time in legislation to three months. It is important to point out that we do not expect a report to take six months; they are often done earlier than that. Insolvency Service investigators are currently in contact with the administrators and expect to be able to identify any matters that should be investigated well before that final six-month deadline.

When the necessary information has been received from the administrators, the Insolvency Service is in a position to consider whether there are any grounds for bringing disqualification proceedings against the directors. The administrators’ view is a relevant consideration, although ultimately the assessment of whether grounds for the disqualification of directors exist will be based on the Insolvency Service’s independent view and conclusions. A director can be disqualified for anything between two and 15 years. It is important to set out that process. We need to wait for the information. On a point of clarity for the hon. Gentleman, the report that is produced on the directors’ conduct by the administrator is produced confidentially to the Secretary of State. That will be assessed by the Insolvency Service. On that basis, it will then decide whether further action should be taken.

We have discussed the importance of City Link, but the hon. Member for Coventry South set out wider issues in Coventry’s economy. We are dealing with the damaging City Link situation, but it is worth recognising that there is a lot to welcome in the local economy in Coventry and Warwickshire. It is one of the higher-performing local enterprise partnerships in terms of investment and jobs created through foreign direct investment. It is an important location for firms experiencing employment and growth. Last weekend, Newcross Healthcare Solutions announced plans to open a new base at the Middlemarch business park, where City Link was based, which will create 100 new permanent jobs.

Others have chosen Coventry recently, such as LeanNova Engineering, which is creating 60 jobs, and Sitel UK, which is set to create around 300 new jobs, with potentially more to follow. They sit alongside high-profile names such as Capita and Bupa, which are expanding within Coventry. That builds on Coventry’s major manufacturing and engineering base, including such major employers as Tata, Jaguar Land Rover, Aston Martin, BMW, Rolls-Royce and Alstom.

It is not just the Government and I who see signs of encouragement. Coventry’s success was highlighted in a Centre for Cities report published this week, which notes that Coventry has outperformed its west midlands counterparts over the past decade, achieving an 8% increase in jobs and a 22% increase in business stock, which is a third higher than the national average. It has the second-fastest growth in private sector jobs among UK cities. I appreciate the concern about other companies mentioned in the debate, but there are none the less reasons for optimism in the Coventry economy.

[Mr Jim Cunningham]

I do not disagree with the hon. Lady. Lots of good things are happening in Coventry. I made that point, but I also considered other areas where we have got to do better.

Oral Answers to Questions

Jim Cunningham Excerpts

Thursday 15th January 2015 Commons Chamber

[Mr Vaizey]

I know that the hon. Gentleman and, indeed, other MPs met Ofcom at the end of last year. There are some technical difficulties involved in broadcasting to Wrexham. Unfortunately, because of those technical difficulties to do with spectrum, local TV cannot broadcast in all areas. I know that Ofcom will write to the hon. Gentleman. I would, of course, be delighted to have a meeting with him and any other interested MPs to discuss the issue further.

[Mr Jim Cunningham (Coventry South) (Lab)]

6. If he will discuss with the organisers of the Rugby World Cup the use of non-playing facilities at the Ricoh arena for events connected to that tournament.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)]

The selection of host city venues and team training camps is a matter for England 2015, the tournament organisers.

[Mr Cunningham]

Is the Minister aware of the wonderful facilities at the Ricoh arena in Coventry, particularly for sport? There are also restaurants and tourist facilities there. I would like to say that Ministers have been very helpful to Coventry in respect of the Charterhouse project for tourists.

[Mrs Grant]

I do know of the wonderful facilities in Coventry, and I am confident that there will be opportunities for Coventry to benefit from England hosting the rugby world cup. That could include participation in the domestic trophy tour in the Festival of Rugby. I recommend that local authority venues in cities, including the Ricoh arena in Coventry, continue to discuss opportunities with England Rugby 2015.

Oral Answers to Questions

Jim Cunningham Excerpts

Thursday 8th January 2015 Commons Chamber

[Matthew Hancock]

Yes, I do. We are working incredibly hard—in fact, no Government have done more than this one—to tackle late payment. Changes coming into effect at the end of this month will ensure that 30-day payment terms are driven down the supply chain from public sector purchases. There have been 9,400 business start-ups in my hon. Friend’s constituency during this Parliament—one of the highest figures across the whole country, thanks in no small part to her hard work.

[Mr Jim Cunningham (Coventry South) (Lab)]

A Minister told one of my hon. Friends earlier that the Government would review employment law. Will the Minister for Business and Enterprise also review company law, certainly in relation to City Link? I am sure my hon. Friend the Member for Coventry North West (Mr Robinson) will support me in saying that we should review company law as well as employment law. What happened at City Link, with redundancies being announced on Christmas day, was an absolute disgrace. How would people feel if that happened to them?

[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.

Small Business, Enterprise and Employment Bill

Jim Cunningham Excerpts

Wednesday 19th November 2014 Commons Chamber

[Matthew Hancock]

I strongly agree with my hon. Friend. Improving transparency internationally is important in ensuring that we tackle crime and have a system that people trust, but we have to introduce things in a way that supports legitimate business, does not put undue burdens on business and is secure in terms of the data held. The points he makes are important.

We have increased parliamentary scrutiny of the business impact target—the target for regulatory reduction. We heard in Committee that the Labour party would make no commitment to tackle the burden of regulation on business, whereas we have our one-in, two-out rule. We are ensuring that the targets and the associated metrics will have to be laid before Parliament when they are set or amended. We have also changed the Secretary of State’s powers on administration sales to connected parties and certain elements of the register of people with significant control, so that they are now subject to the affirmative resolution procedure, not the negative one.

We have also introduced new topics during the Bill’s passage, making it easier for small businesses to access finance. Research suggests that 71% of small businesses approach only one finance provider. Our change will ensure that those who want to do so, having been rejected by their bank, can have their details passed on, to encourage greater competition among finance providers. One problem was that there were few different finance providers—the number of banks had shrunk over the past couple of decades—but now, thankfully, the competition is very successfully coming back into the market for finance.

[Mr Jim Cunningham (Coventry South) (Lab)]

I am sure the Minister has covered this before, but it is worth saying again that one big problem for small businesses comes when the larger companies do not pay up on time and they then get a cash-flow problem.

[Matthew Hancock]

The hon. Gentleman is dead right about that and he anticipates my next paragraph. We have also strengthened measures to support prompt payment, acting both to increase transparency, so that when companies do not pay on time that is made clear, and to strengthen public sector prompt payment so that the sector can lead by example. I am grateful for that intervention.

We have also included a new clause on home businesses to remove the incentive, dating from a very old Act of Parliament, for landlords to prohibit tenants from operating a business from home. Home businesses are the hotbed of enterprise; 70% of new businesses are started at home, and we want to make it easier for that to happen. We have also strengthened support for the early-years pupil premium to help three and four-year-olds from less well-off backgrounds by amending the Bill to enable Departments to disclose to local authorities information on eligibility, while ensuring that unlawful disclosure of such data continues to be an offence.

Questions were raised in Committee about the scrutiny of complaints handling procedures in the financial services sector, so we have introduced a measure to require the independent complaints commissioners to produce an annual assessment of complaints handling. That will ensure that processes are fair and accessible to all complainants, including small business.

Finally, on pubs, the Government have listened and responded to the concerns about the burdens the measures would place on family brewers and removed these smaller companies from the scope of the code during the passage of the Bill. Yesterday, we saw the House express its will, and we will reflect on that vote during the Bill’s further passage.

--- Later in debate ---

[Toby Perkins]

I echo the Minister’s thanks to everyone who has contributed to the surprising and interesting passage of this Bill. I thank my shadow ministerial colleagues, my hon. Friends the Members for Edinburgh South (Ian Murray) and for Hartlepool (Mr Wright), and all the other members on our team who have contributed to the valuable scrutiny of some very important measures. The Bill posed a number of questions and challenges for the Government, and I look forward to investigating and exploring the extent to which they have been delivered.

I also thank the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), for her work—the Minister did not get the opportunity to thank her in his contribution—and all the other Members who contributed to an interesting Committee stage.

When we first saw this Bill, it was our strong belief that it was jammed full of missed opportunities. It confronted many of the big questions that people in our constituencies raise. I am talking here about late payments, zero-hours contracts, the minimum wage, insolvency and how our insolvency regimes works, and how we can provide more support to parents in the form of child care. It also addressed this key question of the relationship between pub companies and their tenants, and the Government’s role in all that.

On Second Reading, I said that this House had the chance to pass a small business Bill that did not miss out on many of those key opportunities, and I must say now that we did rather better than I expected, especially on the subject of pub companies. We can be satisfied that, as a Committee, we made progress in some of those areas. What we need is not soundbites on a long-term economic plan, but a Government who deliver on that plan and support a skills-based economy in which people go to work knowing that they can afford to pay their bills at the end of the working week. We want real investment in high-quality apprenticeships and good relationships between businesses in which we can all have confidence. I am talking there about the thorny subject of late payments and the relationship between pub companies and their tenants. This Bill leaves this House having missed out on a whole score of opportunities, but it is none the less stronger than it was at the outset, so the Committee and indeed the whole House must take great credit for that.

Labour has demonstrated real leadership in supporting small businesses through the course of this Bill. The fact that the Government agreed with the spirit behind many of our amendments, but not the specific wording, suggests that we were indeed on the right lines. I am glad that we managed to secure some concessions from the Government in a few of those areas, and the Bill is much the stronger for it.

[Mr Jim Cunningham]

I am sure my hon. Friend will agree that the test of this Bill will be in its implementation. We want to see what happens with things such as low pay and zero-hours contracts. We hear fine words in the House, but it is what happens out there that is important, because there is a great deal of insecurity at the moment.

[Toby Perkins]

My hon. Friend makes an excellent point. He is absolutely right. Let me take this opportunity to say that he is a fine MP, and I know that because he is my father’s MP. My father speaks very warmly about his contribution. The last point my hon. Friend made was typical of him. He is speaking up for a city, with a varied post-industrial economy and a proud manufacturing history. Its university is one of the most important in the country, and a massive employer in his constituency.

--- Later in debate ---

[Mr Cunningham]

I thank my hon. Friend for paying such a compliment to Coventry. In the last recession, during the Thatcher years, we lost thousands of jobs in the motor car trade. We learned a lesson from that, because we diversified. More importantly though, we still have the development centre for Jaguar Land Rover and the university technical college, which is due to take off any day now.

[Toby Perkins]

My hon. Friend is absolutely right to trumpet the manufacturing excellence of his city and Jaguar Land Rover. We are delighted that Mike Wright from JLR is producing a review for the Labour party, as he is a much-respected figure. For our economy to work in the long term, it is incredibly important that we have a real skill base. I am glad that my hon. Friend raised that point. I am also pleased that he talked about the lessons that we learned from the industrial vandalism of the 1970s which that had appalling consequences for his city. None of us will forget the song “Ghost Town” that was written by the Coventry band The Specials. It reflected precisely that sense of desolation when industries disappeared. He is right to say that the city has learned lessons from that. To repay the debt, we must ensure that we never make the same mistakes again, which is why Labour is coming forward with an economic strategy that is based on skill and on competing with high-wage and successful world economies. We are not even attempting to be part of this race to the bottom or to scrap with the developing world on who can be the cheapest employer. What we are saying is that we need to look again at the way that our economy works.

[Mr Cunningham]

Interestingly, when Coventry city council joined with the university of Warwick to set up a business park, we were heavily criticised by the then Conservative Government. Two years down the road, it is clear that it was the greatest thing since sliced bread. Creating business parks was the way to go, and we did it in Coventry.

[Toby Perkins]

I could not agree more. That is an example of how Government and industry can work together to build the high-skill, high-wage economy that we want, which is in stark contrast to the kind of economy that has developed under this Government. My parents worked at Warwick university, and if we compare the size of that university in the ’70s, when I first came to the area, with its size today, we see the real difference that investment can make.