Businesses: Late Payments

Debate between Kelly Tolhurst and Drew Hendry

Wednesday 19th June 2019 Commons Chamber

[Kelly Tolhurst]

Primary legislation would be required to give further powers to the small business commissioner, so we will seek views and consult. We do want to give the small business commissioner further powers—for example, the ability to apply sanctions to businesses that do not comply with requests for information, court orders or financial penalties. Such sanctions could include binding payment plans.

My hon. Friend asked whether we would consider making it mandatory to apply interest to overdue accounts. There is currently low take-up of the application of interest to invoices, so there needs to be an education piece for small businesses, which we very much hope to achieve through the small business commissioner. With all these elements coming under one roof, he can launch an ambitious PR strategy to enable small businesses to understand what powers already exist for them.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

I thank the Minister for advance sight of her statement, which in our case arrived in plenty of time for us to look at. We welcome initiatives to curb late payments, but let us be frank: this does not go nearly far enough. For anyone tuning in to last night’s Tory hard Brexit hustings, it will come as no surprise that the UK Government remain opposed to taking the steps required to protect Scottish business. Does the Minister have the good grace to agree that it is now beyond a joke that, in place of serious policy steps, her statement merely proposes some minor technological measures and platitudes on best practice? And she did not fully answer this question, so can she confirm that she has looked at the Scottish Government’s project bank account scheme? Has she learned any lessons about how that is protecting smaller contractors and subcontractors on public procurement projects?

With the Federation of Small Businesses stating,

“If all payments were made on time 50,000 more businesses could be kept open each year”,

it is clear that small business needs legal protection, so does the Minister now regret her Government’s failure to support the Construction Industry (Protection of Cash Retentions) Bill, with which my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) aimed to stop late payments in that sector? Indeed, does she regret her Government’s failure to extend that sort of protection across the economy to all small and medium-sized enterprises?

[Kelly Tolhurst]

I stand here today and make announcements, but we also need to recognise that this is about culture. We want to use all the tools in the box to legislate and take action where possible, but we also want to work with the industry and businesses to change the culture. It is not right that large firms take advantage of smaller businesses through late payments, so today we bring forward our response to the call for evidence, to stem the scourge of late payments.

The hon. Gentleman mentions project bank accounts. As I briefly outlined in my response to the previous question, project bank accounts and the use of retention is obviously a concern for many people. It is part of the whole late payment arena. That is why, as I have said, we have worked with the industry and heard the views of both sides. A consensus has yet to be found in the industry. The challenge that we have set is that the industry must come to a way forward or we will take action.

To answer the hon. Gentleman’s question, I have indeed looked at some of the work that has gone on in Scotland and at what has happened in Northern Ireland. I highlight what the Federation of Small Businesses said today:

“Small businesses will be delighted with today’s announcement. FSB has worked very hard with government to create a whole-board approach to late payment within the UK’s large companies, and empower Audit Committees to look after the supply chain. Together with measures to strengthen the Small Business Commissioner’s powers and reform the Prompt Payment Code, the measures today could finally see an end to poor payment practice.”

National Minimum Wage Naming Scheme

Debate between Kelly Tolhurst and Drew Hendry

Tuesday 4th June 2019 Commons Chamber

[Kelly Tolhurst]

I thank my hon. Friend for raising that point. She is absolutely correct that in our good work plan we announced our intention to consult on a single labour market enforcement body. Our good work plan was a major step forward for the Government. I should point out to Opposition Members that the good work plan is the biggest reformation of workers’ rights for 20 years. It is this Government who are doing it and I am proud to be part of it.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Government’s wage policy simply is not delivering for those who need it. Under the Tories, FTSE 100 chief executive pay has gone up by two thirds; when will the Minister finally deliver for those who are not rich and match the Scottish living wage? Incidentally, the Scottish living wage is now paid by 1,300 employers in Scotland—more than a quarter of all the living wage employers in the UK. Outside London, that means a wage of £9.55 an hour paid to all workers, including those aged under 25 whom the Tories have left behind. If the Minister cannot commit to that, she should devolve powers so that the SNP Scottish Government can. Given that nearly 370,000 workers on national minimum wage contracts are being underpaid, will she commit to implementing in full the recommendations in the Low Pay Commission’s report on non-compliance and enforcement, including on naming rounds for those who do not comply?

[Kelly Tolhurst]

First, let me point out to the hon. Gentleman that we are not dropping the naming and shaming scheme. He was right to mention corporate governance and the issues around executive pay, which this Government take seriously and we are taking steps to address. He will know that the Low Pay Commission recommends national minimum wage levels to the Government. He mentioned the under-25s, but let me point out to him that almost nine in every 10 18 to 24-year-olds are paid above their wage bracket.

Post Office Network

Debate between Kelly Tolhurst and Drew Hendry

Thursday 25th April 2019 Westminster Hall

[Kelly Tolhurst]

I give way to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).

[Drew Hendry]

The Minister is making a powerful statement of commitment, but she has heard from around the Chamber the pressures faced by local post office sub-postmasters living on subsistence terms and struggling to maintain a living. Will she bring that enthusiasm, energy and commitment to sorting out their livelihoods and securing their post offices?

[Kelly Tolhurst]

I thank the hon. Gentleman for that, because that is exactly what I hope to do.

--- Later in debate ---

[Kelly Tolhurst]

I appreciate that the hon. Lady would like me to announce that we will hold a review, but fundamentally, as I have outlined, the Post Office is a commercial entity operating in a competitive market. It is owned by the taxpayer, and it is right that we are challenged and that it is run efficiently.

I point out that the Post Office has been making a surplus. We now have a sustainable network and a surplus. We have moved on from a time when there were more than 7,000 post office closures and the Post Office was over £1 billion in debt. We are not in that place today. That has been achieved by maintaining the network and investing correctly. However, I have tried to show that I understand hon. Members’ concerns about the viability of postmasters and their pay. I hope I have already outlined and expressed my determination to get to the bottom of some of these challenges and to ensure that they are addressed by the Post Office.

[Drew Hendry]

The Minister is being generous in taking interventions, and I appreciate that. She speaks passionately about her commitment to investigating this, and has commented that she believes the network is sustainable and well invested in at the moment. Will she take that a step further by coming to speak to some of the people running local post offices, particularly in the highlands and islands? They might not recognise the fact that they are within three miles of communities or that they have that kind of investment, because that is not their lived experience. Will she take up that invitation?

[Kelly Tolhurst]

I thank the hon. Gentleman for that invitation. I do speak to postmasters and, if time allows, I will be happy to go and visit post offices in any part of the country, if possible. However, we really need to look at the network and understand the operation. Post Office Ltd operates more than 11,547 stores—a sustainable network. In many of those circumstances, there will be particular differences. Of those stores, 98% are franchises, which in effect are businesses in themselves. It is acceptable to expect that there will be some churn and there will be particular issues that need to be dealt with.

Exiting the European Union (Consumer Protection)

Debate between Kelly Tolhurst and Drew Hendry

Tuesday 2nd April 2019 Commons Chamber

[Kelly Tolhurst]

I thank all hon. Members who have contributed to the debate. Just to recap, the geo-blocking regulation is an EU regulation that came into effect on 3 December 2018. It is important to note that, up to the end of February, no claims had come forward to the Competition and Markets Authority. It does not apply to transactions that take place entirely within one EU member state.

The geo-blocking regulation prohibits certain forms of discrimination in the single market, specifically: blocking access to, or forced redirection away from, a website on the basis of an internet user’s location in the EU; discriminatory terms of access, which include but are not limited to price offered, on the basis of a customer’s location in the EU when selling goods delivered across a border but still within the EU, wholly online services, excluding copyright materials such as e-books, streamed movies, music and video games, or services delivered in a specific location, such as hotels and theme parks; discrimination in payment terms on the basis of a customer’s location.

The geo-blocking regulation could not function properly on a unilateral basis in a no-deal scenario. Effective enforcement outside the UK would be very difficult, because the UK would no longer operate within the EU’s consumer protection co-operation network or enforcement agencies. EU regulators would no longer be obliged to bring actions against businesses through EU mechanisms for cross-border co-operation. UK civil and commercial judgments, which were alluded to in the debate, would no longer be automatically enforced in the EU member state’s court, and the UK Government cannot unilaterally enforce the geo-blocking regulations throughout the EU without help from regulators in other member states.

Even if the geo-blocking regulations were not revoked, a no-deal exit from the EU would lead to a loss of protection for UK customers while imposing the same level of obligation for UK traders. The provisions of the geo-blocking regulation do not apply to transactions that occur solely within one country, so there is no benefit to retaining the version of the regulation that applies to the UK.

Let me outline the concerns relating to not revoking the EU regulation. EU consumers would receive preferential treatment in respect of UK traders, while UK consumers would be unlikely to receive any reciprocal benefits from EU traders. That is why we are proposing the revocation of the regulation. Revoking will preserve UK rights. It will not strip consumer rights, which will be lost in the event of a no-deal Brexit, but the regulation would continue to impose obligations on UK traders, with no benefits for UK consumers.

Let me answer some of the shadow Minister’s questions. He is concerned about the effect of this statutory instrument in a no-deal situation. I say to him: please support the Prime Minister’s withdrawal agreement. We have been extremely clear that we would like to uphold and maintain the highest standards of consumer protection in the UK. If we agree to the Prime Minister’s withdrawal agreement, we will be able to satisfy our ambition as a Government to maintain high consumer protections and to be able to enter into agreements and negotiations with the European Union so that we can maintain cross-border co-operation. That is what I would very much like to do. We should not only engage in the mutual exchange of information and evidence but work on a framework so that we can work collectively with the European Union on the wider detriment to consumers.

The shadow Minister asked about the impact assessment. He has rightly expressed concerns about impact assessments throughout the no-deal SI process. I have on many occasions tried to explain to him the reasoning behind what the Government have been doing in relation to some of these SIs. On this particular SI, we assessed the impact of the instrument to be de minimis because the costs are below £5 million. As the shadow Minister will know, that means that, in line with the better regulation framework, we did not need to carry out a full impact assessment. The assessment was that the maximum impact could be £1.2 million, based on around 75,000 businesses having to familiarise themselves with the new rules.

The shadow Minister also asked about consultation. On bringing forward this regulation, he wanted to know who we had spoken to and who we had engaged with. As he alluded to, we have consulted and spoken to business representative organisations, including the CBI, the Federation of Small Businesses, the British Retail Consortium, and the Association for UK Interactive Entertainment. The feedback was that they had no strong views on these regulations. However, we did publish a technical notice on 12 October 2018, which clearly laid out our plans for geo-blocking in the event of a no deal.

Let me re-emphasise a point. We have heard a lot today about a potential loss of rights for consumers. I have always been clear in any Committee in which I have spoken on bringing forward no-deal legislation that, whatever the outcome, we are both prepared for and committed to delivering on the high standard of consumer protections that we already have in the UK. We also have a track record of consumer protection in this country and of going above and beyond; in fact, many of the consumer protections in this country go further than those of the European Union.

[Drew Hendry]

The Minister says that this Government go further than many others. Can she therefore address the conundrum that I raised earlier: why are consumers in Scotland paying so much more for delivery, but being treated so badly compared with other consumers? Why is that still happening if what she is saying is a fact?

[Kelly Tolhurst]

I was going to come on to that, but I thank the hon. Gentleman for raising it. He and many of his colleagues—as well as many of my hon. Friends—have raised the issue of Scotland’s surcharges for parcel delivery. He will know that I have been working with the Consumer Protection Partnership to see how we can ensure fairness across the British Isles, but I must remind the House that we are talking about individual parcel organisations—as opposed to the Royal Mail—using these surcharges. However, it is true that many organisations are unable to use Royal Mail to distribute their products throughout the country. I remain committed to working with colleagues across the House to resolve this issue and to enable fairness for consumers right across the UK. He is right to raise it and I do take his point.

I just want to return to the point that I was making about consumers. If we want to make sure that we are able to enter into good agreements in terms of cross-border participation and consumer protection and to work with the European Union, my view is—and I will be clear about this—that we should vote for the withdrawal agreement. [Interruption.] Hon. Members reject a no-deal Brexit, but they are not prepared to support something that is on the table that would enable us immediately to have those conversations—