Corporate Businesses and Franchisees: Regulatory Environment

Iain Duncan Smith Excerpts

Wednesday 2nd July 2025 Commons Chamber

[Sir John Hayes (South Holland and The Deepings) (Con)]

Speaking long before I was born, G. K. Chesterton said that

“big business…is now organized like an army. It is, as some would say…militarism…without the military virtues.”

Heaven knows what he would say if he was alive now, as global corporations have such influence on all our lives.

Yet it is the small and medium-sized businesses in my Lincolnshire constituency and in constituencies across this country that are the backbone of our economy. They also provide the particularities—the colour and shape —of the places that each of us calls home. Those small and medium-sized businesses reinvest in the communities of which they are a part and provide opportunities for local people. We all know them from our daily experience as customers, but we also know them from the representations they make to us as Members of Parliament. Today, I speak in the interests of those small businesses, those entrepreneurs, those people who devote so much of their time, skill and energy for the common good—for the national interest and the common good drive all that I do in this place.

Small and medium-sized businesses employing up to 250 people make up about 99% of businesses, but just think of the influence and effect of the other 1%. When SMEs are accused of wrongdoing or even of breaking the law, they often have little in the way of resources to defend themselves, so they are at the mercy of powerful regulators and the caprice of giant competitors. In contrast, the big multinational companies, which have come to dominate too much of our economy, have armies of compliance officers, lawyers and spin doctors to bat away legitimate concerns.

The fear that many of us in this Chamber have about two-tier justice runs parallel to our certainty that there is a two-tier economy. Faceless, heartless multinational firms often have little in the way of roots here, and many tech firms use such rootlessness to justify decisions to pay little, if any, tax. Corporate behemoths have grown ever larger, ever more dominant in their sectors, ever more detached from their customers, and ever more determined to bend rules and evade justice. In recent years, we have seen profiteering by, for example, the major supermarkets, which very often give their suppliers—primary producers such as the farmers and growers in my constituency—a raw deal. We have seen them distort the food chain, yet take advantage of the disruption brought by the pandemic and the war in Ukraine.

Indeed, the pandemic exacerbated the power of greedy globalists. Following research on 17,000 big firms, the trade union Unite has highlighted that average profit margins have soared by 30% compared with the pre-pandemic period. In 2022, the profits of the 350 largest companies in Britain increased by about 89% compared with pre-pandemic levels. Contrast that if you will, Madam Deputy Speaker, with the plight of smaller businesses, which face ever greater costs and ever more unfair competition from their giant competitors.

What of the claims of the enthusiastic globalists that the world would be a better place as a result of their activities? Do you remember the globalists—those people who were addicted to modernity and change? Who has really benefited? In an economy in which standards of living are falling, productivity has stalled and the state grows ever bigger in the face of rising worklessness, it seems to me that the only beneficiaries of globalisation are a few people at the top of those corporate businesses. We need not monopolies, but a multiplicity of businesses, such as start-up firms, local firms, and firms that innovate and engage in new activities in the economy, rather than cement existing practices. Let us give those businesses what they need, which is greater freedom, while the big corporate monoliths need to be regulated so that they do not exploit the marketplace they dominate.

Think for a moment of the banks. I have a vision of banking—I hope you might too, Madam Deputy Speaker—rooted in a sort of “Dad’s Army” approach: a Captain Mainwaring figure committed to his community, in close touch with his customers and caring about the businesses they run. That was not just a fiction in my younger years. I well remember going to a bank as a young man and asking if I could borrow £500 to buy an old car—I was a student at the time. The manager, a bit like Captain Mainwaring in character, invited me in, gave me a glass of sherry, interrogated me for half an hour and eventually said, “Yes, I think we can probably lend you the £500.” Imagine that scene now. At best, you would have an online connection with someone remotely situated—

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

You wouldn’t get a car for 500 quid though, John!

[Sir John Hayes]

I think my right hon. Friend is referring to the £500 he still owes me from the days when I used to work for him.

The point is that nowadays the connection between customers and suppliers has become at best detached and at worst remote. As I say, now you would have a conversation with some remotely situated person who knows nothing about you or your circumstances, and probably cares less.

[Sir Iain Duncan Smith]

Will my right hon. Friend give way?

[Sir John Hayes]

I will happily give way. Is it about the £500?

[Sir Iain Duncan Smith]

Yes—without interest. I agree with my right hon. Friend. I also agree about something else, which is that people do not realise that the really big global multinationals, for example Amazon, do not really make their profits on what they sell. They hold your data and that is what they really sell, subsequently. That is where they make their money and their profit. You derive no income from that data, but they make a lot of money off the back of it. To try to break that process down and make things more local, we have to start with what we have all been complicit in, which is the idea of getting something for nothing. It is not for nothing—there is a cost.

--- Later in debate ---

[Sir John Hayes]

I give way to my right hon. Friend the Member for Chingford and Woodford Green.

[Sir Iain Duncan Smith]

I need not detain my right hon. Friend for long, but I very much supported the unions’ position on this, as I thought this was wrong at the time. Without straying into the issues of the bids, we should consider organisations such as CK from China. It now has links with and control over UK Power Networks, Northumbrian Water, Wales and West Utilities, and Eversholt Rail. The network it has now is intriguing, which is hugely around the power and communications networks. All of those are now falling into the hands of conglomerates that have nothing to do with the UK, but that are linked to Governments of a different country. This is the big problem we face: it is not that we do not like big businesses; it is just that so often now they operate from outside our legal empowerment.

[Sir John Hayes]

I am grateful to my right hon. Friend, who takes a great interest in these matters, and that is precisely why I posed the earlier question to the Minister about how closely he and others had looked at that merger. I will say no more about it than that, but it does seem to me to be a legitimate question to ask: were those things considered in this particular case, and how are they generally considered? If my right hon. Friend is right that there are threats that result from this, under existing legislation and regulation it is perfectly possible for the Government to become involved in these kinds of commercial affairs.