Oral Answers to Questions

Jenny Willott Excerpts

Thursday 6th March 2014 Commons Chamber

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

The Government have previously considered the case for small businesses to have rights when buying goods and services that are more aligned with consumers, and consulted on this question in 2008 and 2012. We have continued to engage with representatives of small business on this matter. The Federation of Small Businesses will shortly present a report in this area and I have committed to responding and will read it with interest.

[Alex Cunningham]

I had a visit from the North East Federation of Small Businesses on Friday and was told that it has seen longer and longer delays in getting larger organisations to pay for goods and services, with one—Procter & Gamble—now having payment terms of 180 days. It says the prompt payment code has no teeth and companies just extend their terms to comply. Is it not time for the Government to intervene to put an end to these disgraceful delays and give small organisations a better chance of survival?

[Jenny Willott]

The hon. Gentleman raises an important point, and the Government take concerns from business about unfair payment terms very seriously. For example, as he says, receiving payments promptly can be critical to the survival of a small business. That is why the Department launched a discussion paper called “Building a responsible payment culture” at the beginning of December. It sought views on what unfair payment terms look like and whether legislative or non-legislative measures should be used to tackle them. The consultation closed at the end of January and we are currently analysing the responses. We will announce shortly what we want to do to tackle the issue.

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

6. In how many of the last 24 months net lending to business by banks has risen.

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[Susan Elan Jones (Clwyd South) (Lab)]

16. What recent assessment he has made of the number of complaints and the level of consumer detriment relating to estate agents’ practices in England and Wales.

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

Citizens Advice received 2,831 calls on issues concerning estate agents from February 2013 to January 2014. The Office of Fair Trading investigated 114 complaints against estate agents from April 2013 to October 2013. Trading Standards continues to carry out enforcement activity against rogue estate agents. From 1 April, the Competition and Markets Authority will work with other consumer bodies to monitor the level of detriment relating to estate agents’ practices.

[Mr Hanson]

There is growing concern about the process of sale by tender, which has the potential to push up costs for both vendor and purchaser. Does the Minister share that concern?

[Jenny Willott]

This particular issue has not been raised with me, but I am happy to take it up with the enforcement authorities and the two redress schemes. I will ask the Office of Fair Trading and the CMA to consider the matter on behalf of the right hon. Gentleman.

[Susan Elan Jones]

There is no doubt that there are good estate agents out there as well as bad estate agents, but it is surely a very bad practice when both buyers and sellers are charged a fee for the same property. Will the Minister condemn the practice?

[Jenny Willott]

As the hon. Lady says, this is a potentially worrying and emerging trend that seems to be on the increase. I have already written to the redress schemes to ask them to examine the matter. From 1 April, Powys county council takes over responsibility for the overall enforcement of licensing of estate agents, and I will be writing to it to ask it to examine the practice.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

The Minister mentions the Government’s intention for Powys county council, which serves a predominantly rural area, to take over the regulation of estate agents from April. Powys has had three different cabinets in as many months, and had to be threatened with intervention by the Welsh Government before it could agree a budget yesterday. Given that it cannot seem to get its own house in order, with practices such as double charging and mortgages by tender being put forward by estate agents, why does the Minister think the council is the right body to get house sales in order?

[Jenny Willott]

At the moment, both trading standards and the OFT possess enforcement powers relating to estate agents. From 1 April, we are simplifying the landscape by transferring the OFT’s powers to the lead authority, Powys county council. There is a precedent for having a lead local authority effectively to address functions across the nation—for example, illegal money lending teams for England and Wales do this. I have faith in the ability of our trading standards officers who are extremely effective, well trained and very responsive to the needs of members of the public, and I have every faith that Powys county council trading standards department will be able to exercise these functions perfectly adequately.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

8. If he will make it his policy to better use procurement by his Department to increase apprenticeship opportunities.

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[Mr Mark Harper (Forest of Dean) (Con)]

13. What recent assessment he has made of the competitiveness of the retail grocery market.

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

Retail is a highly competitive sector, particularly in the grocery market, with multiple companies competing for market share on price, brand and quality. Retailers are quick to respond to changing consumer preferences. The Competition Commission’s 2008 assessment of the groceries sector found that it was generally working well and that consumers were receiving the benefits of competition, such as value, choice, innovation and convenience.

[Mr Harper]

I am happy to agree with the Minister on that, and I would like to draw to her attention the behaviour of the Co-operative supermarket in Cinderford in my constituency. It is using every trick in the book to behave in an anti-competitive manner to block a planning application that has been approved by my local council and that is popular with local people. Should not it just get on with competing on the basis of price and choice, rather than on the basis of the quality of its legal team?

[Jenny Willott]

I fully support competition in the retail sector, with its benefits for consumers. The competition regime in the UK is designed to ensure that competition works in the best interests of consumers; it is not intended to protect incumbent businesses from competition. The Government remain committed to a town centre first policy, but that does not mean that shops cannot be built outside town centres where appropriate. It is up to local authorities to ensure that their local plans identify the retail needs of their local communities, and that they provide a firm basis for any planning decisions.

[Hugh Bayley (York Central) (Lab)]

14. What steps his Department is taking to encourage UK students to study for postgraduate qualifications at UK universities.

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[Ann McKechin (Glasgow North) (Lab)]

19. If his Department will make an assessment of the main causes of insecurity in the workplace.

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

The 2011 workplace employment relations study measured insecurity. It showed that job insecurity is related to three factors: whether a workplace had been subject to recent redundancies; if managers felt that the recent recession affected the business; and the number of changes to working terms and conditions experienced by employees.

[Ann McKechin]

The Minister will be aware that research from the Chartered Institute of Personnel and Development shows that approximately 1 million people in this country are currently employed on zero-hours contracts. We know that many of these are exploitative, so will the Minister confirm whether the Government will use the opportunity of the forthcoming Queen’s Speech to legislate to end the misery that is suffered by so many in our communities?

[Jenny Willott]

The hon. Lady will know that the Government looked at zero-hours contracts last summer, and are currently consulting on related issues such as exclusivity clauses and so on, which are just some of the problems that people have highlighted. Following on from that consultation, we will look at what measures need to be taken to ensure that such contracts are used positively and not to cause problems for those who are being exploited by them.

[Richard Graham (Gloucester) (Con)]

22. What steps he is taking to raise awareness of export support services among small and medium-sized businesses.

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[Mr Cunningham]

Will the Secretary of State say what the latest position is regarding Hibu, as he met a small delegation of MPs some months ago to discuss the situation? He will know that many of the shareholders have lost a lot of money, especially those in Coventry.

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

The hon. Gentleman is right that many people have lost significant amounts of money, and they are clearly keen to see action. The administrator has a statutory duty to report on the behaviour of Hibu’s directors, and that report is due before the end of May. At that point, the Secretary of State and the Insolvency Service will look at whether action needs to be taken to disqualify the directors.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T2. Will the Minister join me in congratulating Lancaster chamber of commerce and Lancaster and Morecambe college, ably supported by the Lancaster Guardian, on putting on courses for local businesses to demonstrate the benefits of apprenticeships? Does he accept that such local initiatives will build on this Government’s success in putting real apprenticeships back on the career map?

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[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

T7. A major hotel chain in my constituency employs a conveyor belt of young people. They are all on zero-hours contracts, tips are pooled and loosely accounted for and if workers have the audacity to question anything they are rewarded —punished—with fewer shifts. When will the Secretary of State stop consulting and start doing something about exploitation through zero-hours contracts?

[Jenny Willott]

As I said in answer to a previous question, we are in the process of consulting. It is important that we get this right so that we do not penalise employees by getting the rules wrong. Many employees benefit from zero-hours contracts and we need to ensure that we take the right action rather than hasty action. We will respond to the consultation and make proposals to get rid of the exploitative factor in zero-hours contracts.

[Mel Stride (Central Devon) (Con)]

T6. Agriculture matters in my constituency yet the average age of my farmers is about 60, so we have a desperate need to encourage young people to go into farming. I know that my hon. Friend the Minister for Skills and Enterprise made a statement to the House yesterday about the reforms to the apprenticeship scheme, but will he outline how his reforms will encourage young people to use apprenticeships to go into farming?

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[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

My constituent, Mr Rundell, paid for an additional guarantee scheme from a high street retailer for an electrical item on the basis that he would get a replacement. It later turned out that that was not the case. What assessment has the consumer affairs Minister made of the way in which these policies are sold to constituents and to people across the country, because very often such a policy turns out not to be what they have been promised?

[Jenny Willott]

As the hon. Gentleman will know, the Consumer Rights Bill is in Committee and a number of Members here today are on that Committee. One of the issues we are looking at is warranties and guarantees and ensuring that consumers are aware of their statutory rights. There is protection for consumers. I recommend that the hon. Gentleman’s constituent contact the Citizens Advice helpline, which will be able to point him in the right direction to ensure that if he has been mis-sold something, he can get the remedies due to him under the law.

[Gordon Birtwistle (Burnley) (LD)]

I thank my right hon. Friend for visiting Burnley last week to open a new industrial estate and visit a number of rapidly expanding companies that are embracing the Government’s economic policy. Does he agree that if the success being achieved in Burnley was replicated across the country, our economic position would be growing much better?

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

The House is awaiting the response to the BIS consultation on pub companies, but now that the London Economics research has been exposed as fundamentally flawed and does not follow the brief given to it by BIS, and the firm has charged £26,000 for fieldwork that did not take place, will my right hon. Friend ignore this bunkum and listen to the Federation of Small Businesses’ research, which shows that the market rent-only option would benefit the UK economy by £78 million?

[Jenny Willott]

As my hon. Friend knows, responses to last year’s Government consultation numbered in the thousands. We are looking at all the evidence that was put before us, including the research he mentioned. We also received evidence from thousands of individual tenants who contacted us to tell us about their circumstances and the impact the proposed measures could have on their business. We are looking at all of that and will bring forward proposals shortly.

[Julie Hilling (Bolton West) (Lab)]

Apprentices in Bolton West have told me that teachers tried to dissuade them from undertaking apprenticeships, particularly if they were high-flying students. What is the Department doing to educate teachers and ensure that proper careers guidance is in place?