Matt Hancock
Main Page: Matt Hancock (Independent - West Suffolk)Small Business, Enterprise and Employment Bill
Matt Hancock Excerpts
The Minister for Business and Enterprise (Matthew Hancock)
Have you been to see the Queen?
Mr Umunna
No, I have not been to see the Queen yet.
I will be as quick as I can, Mr Deputy Speaker.
It is good to see the Secretary of State back in his place after the reshuffle, leading this debate. I note that he has acquired some new Conservative minders. He no longer has three, but five. [Interruption.] Somebody behind him says that he needs them.
Toby Perkins (Chesterfield) (Lab)
Some of my colleagues are at the memorial service for Paul Goggins and so are unable to be here, even though they contributed to the debate. I ask for the forbearance of the House for that.
We have had a fascinating and excellent debate that has demonstrated the passion that the House has for small businesses. In the four years since my right hon. Friend the Member for Doncaster North (Edward Miliband) first set out his determination to make his one nation Labour party the party of small business, there has been a welcome change across the political spectrum in the recognition of the importance of small businesses.
Like my hon. Friends the Members for Sefton Central (Bill Esterson) and for Rochdale (Simon Danczuk) and the hon. Members for City of Chester (Stephen Mosley) and for North Swindon (Justin Tomlinson), I am a former small business owner. We were described as heroes by the hon. Member for Bedford (Richard Fuller). I therefore know that although the Government’s words have been warm and welcoming, they have not always materialised into action for small businesses. Small business Saturday, which is a significant cross-party initiative, originated with my hon. Friend the Member for Streatham (Mr Umunna).
Toby Perkins
The Minister is not the first to confuse the two.
We welcome the fact that this is the first of the Government’s Bills to have small business in its title, and it contains a number of measures that we will support. Indeed, on pub companies, late payments, zero-hours contracts and takeovers, the Bill demonstrates the extent to which the Labour party has set the political agenda. However, in the final analysis, the Bill is a metaphor for the entire Government. They know that there are important things to do, they hear what some of the key issues are, but they cannot agree on what to do, so they deliver a Bill that fails fully to grasp the nature of the challenge that faces Britain if we are genuinely to rebalance the country’s economy, support more small business growth, and create an economy that works for the many and not just the few. Members on both sides of the House are pleased that there is a small business Bill, but the sense of a missed opportunity was widely articulated by them.
On access to finance, we are four years into this Government, but net lending is still falling year on year. The right hon. Member for Hazel Grove (Sir Andrew Stunell) said that banks have sucked up Government money and reduced lending to small firms. That view was also articulated by the hon. Member for South Down (Ms Ritchie) and my hon. Friend the Member for Alyn and Deeside (Mark Tami). Labour’s plans for local lending, a beefed-up British investment bank and support for alternative sources of finances have the potential to be truly transformative for Britain’s small businesses, which have been struggling for access to finance for far too long.
On pub companies, Labour Members have argued on Opposition days and in Back-Bench debates since 2011 that the Government were wrong not to introduce an independent adjudicator, and not to put the pub code on a statutory footing. We welcome the fact that they are doing so today. On three occasions, they voted against the measures they now propose. However, the parallel rent assessment process lacks credibility, as was reflected in the comments of the hon. Member for Northampton South (Mr Binley) and my hon. Friend the Member for Easington (Grahame M. Morris). The impact on small family brewers—no one suggests that they are the cause of the problems facing the industry—was mentioned by the hon. Members for Bedford, for South East Cornwall (Sheryll Murray) and for North Swindon. The measure means that those family brewers face costly and incoherent plans that could be damaging for them.
Unless strengthened, the Bill will not deliver the change we need for Britain’s pubs. It was hard to find an hon. Member who was fully in favour of the proposals. My hon. Friend the Member for West Bromwich West (Mr Bailey), who has done fantastic work on the issue through the Business, Innovation and Skills Committee, said that the pub company model had failed. He gave the Committee’s support for a mandatory rent-only option. The hon. Member for Leeds North West (Greg Mulholland) is bewildered as to why the Government did not follow the recommendation of the Committee or of Her Majesty’s Opposition. To demonstrate the extent to which the Bill falls short of expectation, it was welcomed by the hon. Member for Burton (Andrew Griffiths). If there is a clearer definition of why the Bill fails to stand up to the test we should set for it, I do not know what it is.
The Government are taking sensible steps on strengthening late payments provisions down the line with respect to public procurement, but they are leaving the onus on the public sector and small businesses to avail themselves of data to discover whether or not they are likely to be ripped off if they sell to a company. Action on public sector late payment is fine, but it does not tackle the lion’s share of the problem. Seventy-five per cent. of businesses that cite late payment as a problem are talking about corporate late payment. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), who has a fantastic pedigree on the issue, spoke powerfully on the importance of tackling private sector late payment as well as public sector late payment. My hon. Friend the Member for Rochdale described the measure as a step forward and not a step change, which was a neat way of putting it. My hon. Friend the Member for Islwyn (Chris Evans) said that we need action on corporate late payers. My hon. Friends will be pleased to know that Labour will propose serious steps during the passage of the Bill that will shift the burden of responsibility off small firms that wait and on to the large firms that pay late. We will truly stand up for small businesses. Those small firms want an end to being used as a cash cow by their large counterparts.
On zero-hours contracts, the Government have done the least they possibly could. I suspect the Secretary of State recognises that the steps in the Bill offer little to employees who face a choice between the insecurity of zero-hours contracts or going back on the dole. As my hon. Friend the Member for Streatham laid out, Labour will take serious steps to recognise that the benefits of a flexible work force should not come at the expense of basic security for long-term employees.
We recognise that there will always be a need for temporary work. There will always be seasonal variations. Any sensible regime will allow for that, but the Government’s policy is all about political presentation—they want to be seen to be doing something about an issue they recognise is toxic on the doorsteps—and is not serious action to end the misery of life on zero-hours contracts for workers in Cameron’s Britain. Those whose working day is spent picking vegetables, working in a call centre, caring for the elderly or plucking a chicken deserve the right to be represented by this House. The House will speak up for them on zero-hours contracts.
The measures on public sector exit payments, as my hon. Friend the Member for Streatham said, are a bit rich coming from the Government who, in the biggest ever NHS reorganisation, sacked hundreds of senior managers, paid them off, and then discovered that they still needed them to do their jobs. I think the sense of frustration was felt on both sides of the House. The hon. Member for Bedford, who I have to say was in mid-season form and speaking very well—it is clear why he was not promoted; he is far too sensible—asked why there are no steps towards legislation on the living wage. That is a valid point, which was not properly answered.
The hon. Member for Eastbourne (Stephen Lloyd) exposed the fact that Government proposals on minimum wage fines will not deliver for workers, as the money will simply go back to the Government. My hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) said that the Secretary of State did not understand what life was like for people in her constituency struggling to get by on low incomes. My hon. Friend the Member for Glasgow North East (Mr Bain) said that the Government were closed to new ideas.
There were contributions from the hon. Members for Castle Point (Rebecca Harris) and for Nuneaton (Mr Jones). The hon. Member for Gosport (Caroline Dinenage) criticised Labour’s record on education. It was almost as though she did not represent a party that sacked their Education Secretary yesterday. The hon. Member for Macclesfield (David Rutley) welcomed the takeover plan, which, I have to say, on first hearing sounded very much like what my hon. Friend the Member for Streatham and my right hon. Friend the Member for Doncaster North proposed just a few months ago.
What is clear is that small businesses are very important, and they are respected and admired by Members across the House. However, this is a Bill that misses an opportunity to take some of the steps that really could make a very significant difference. I welcome some measures, but we feel that the Bill demonstrates a series of compromises from a Government who have run out of ideas. They have lost a sense of central purpose and are trapped in their own contradictions. They are frightened to ask the electorate for their verdict and so they stagger on unloved even by those who are in it. It is time for a Government with a fresh agenda. A Labour small business Bill would have delivered real opportunity. This is a Bill that speaks of a Government who are approaching the end. We will give Members the opportunity in Committee to turn it into a Bill that really means something: a Bill that delivers for workers on zero-hours contracts, a Bill that protects publicans, pubs and family brewers, a Bill that empowers small businesses waiting for money they are owed, that boosts our world-class insolvency regime and protects Britain’s manufacturing pedigree. That is what the Bill should be about and that is what the Bill still can be about. Let us strengthen it so that it really delivers, or admit that this Government never will deliver and let us have a general election.
The Minister for Business and Enterprise (Matthew Hancock)
It is a huge privilege to respond to this debate on the Small Business, Enterprise and Employment Bill. This is the first ever small business Bill and it demonstrates the wholehearted, full-throated and determined support of this Government for business. We give this support for a reason. We are building a recovery in which all can share, where the principle of fair exchange builds prosperity and creates jobs, with the financial security and peace of mind that they bring. Business is a force for good in society and we will do everything we can to support it. In the passion my hon. Friend, the Member for Northampton South (Mr Binley) showed in his remarks, and in the service he has given in support of business in his time in this House, he demonstrated what it means to say, “We support small businesses and we will help them to expand and grow.”
We welcome the broad support for the Bill from the Opposition. I had an inkling, from the suggestion that they want to improve it in Committee, that they will not vote against the Bill on Second Reading. I would welcome that. They made some constructive remarks, but occasionally I thought we heard a tone that was just a little bit shrill and did not quite make up for 13 years of failure to support small businesses and of burdening them with more borrowing, more regulation and more taxation. The small business men and women of this country will not forget how much more difficult it got to do business under Labour. They will not forget that every Labour Government have left office with unemployment higher than when they started. This Bill is part of our long-term economic plan and it takes steps to help to put that right.
Let me go through the parts of the Bill in turn. Many Members contributed to the discussion on access to finance. The hon. Members for Alyn and Deeside (Mark Tami), for South Down (Ms Ritchie), for Islwyn (Chris Evans)—he called late payment a moral issue and he is right—and for Oldham East and Saddleworth (Debbie Abrahams) all contributed, alongside Government Members, supporting the progress being made on access to finance in the Bill. Of course, recovering from the biggest banking crash in the history of this country takes time and is difficult. This Bill contains measures that will help us to travel further on that journey.
Many supported the proposal on regulatory reform, and I welcome the support from the hon. Member for Streatham (Mr Umunna) for putting the one-in, two-out rule into law. Underneath the bluster, I think the Opposition supported the proposal on public sector procurement—I am not quite sure—but ending the revolving door of pay-outs in the public sector will certainly help.
There was a huge amount of discussion about pubcos and strong support for that part of the Bill. The crucial action we are trying to take is to bring the balance—[Interruption.] The hon. Gentleman says, “Three years,” but Labour did nothing in 13 years. The key is to balance the need for changes and the need not to undermine the tied model as a whole, because we do not want the unintended consequence of large-scale closures. We will work to ensure we get the details right. I pay particular tribute to my hon. Friend the Member for Burton (Andrew Griffiths), who is surely the strongest supporter of pubs and beer that this Parliament has known—and my goodness, that is an accolade. The hon. Member for Leeds North West (Greg Mulholland) has rarely risen in this House to speak of anything but the need for action on pubcos. We also heard from my hon. Friend the Member for South East Cornwall (Sheryll Murray), the hon. Member for West Bromwich West (Mr Bailey), my hon. Friend the Member for Northampton South—or should we call him President Binley?—and the hon. Member for Easington (Grahame M. Morris).
Several points of detail need to be addressed. The first is the issue of smaller pubs. There are, of course, two levels to the pub code, but it is important to make sure it works for smaller pub companies and the smaller brewers, as well as the big pubcos. On the issue of franchises, most also have ties, particularly for the beer arrangements, and that is why we have included them. Several Members asked for more details. We are consulting on the level of the fines and will bring forward more details in due course.
Another important part of the Bill concerns child care—and improvements to ease access to it—and schools. Then there is the issue of education data, in part 6. Those provisions will have one of the biggest impacts on the long-term efficacy of our education system, because if we can see what earnings people take home several years later, we can know which courses work. My hon. Friends the Members for North Swindon (Justin Tomlinson) and for Worcester (Mr Walker) spoke passionately in support of that.
Company transparency is an issue that the Prime Minister has pushed hard in the G8. We heard cautionary words from my hon. Friend the Member for Huntingdon (Mr Djanogly), as well as strong and passionate support from the hon. Member for Newcastle upon Tyne North (Catherine McKinnell). There are important measures on company filing and one-click—I will mention that now because nobody else did—that will make it easier to start a business. There was broad support on director disqualification. On the insolvency measures, I thought my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) made a strong speech about his personal experience in the printing industry and the importance of ensuring that pre-pack works properly and is not abused.
Finally, let me turn to the part of the Bill that deals with employment law. There was strong support, particularly from the Opposition Front Bench, as well as from my hon. Friends the Members for Warwick and Leamington (Chris White) and for North Swindon, for the measures to ensure that the national minimum wage works properly, with proper penalties for those who breach it. I am a strong supporter of the national minimum wage, and this Government support it strongly. We are putting it up in relation to average earnings. The hon. Member for Streatham mentioned the policy of putting it up relative to average earnings, but it is at record highs relative to average earnings and has gone up relative to average earnings under this Government, so I do not know what exactly he is looking for.
Many Members mentioned employment, particularly youth employment. One reason why we love small businesses so much is that they create so much employment. We heard, however, an unfortunately partisan tone from a couple of Opposition Members. The hon. Member for Sefton Central (Bill Esterson) launched into an argument about how things were not getting better in his constituency, but youth unemployment in Sefton has fallen by 52% over the last year. In Easington, it is down by more than a third, so I think that the complaints from the hon. Member for Easington were overdone. In Glasgow North East, youth unemployment is down by 42%, and in Newcastle upon Tyne North—I see that the hon. Member for Newcastle upon Tyne North has just left—it is down by 37%. The same issue was raised by my hon. Friend the Member for Warwick and Leamington (Chris White), where youth unemployment is down by 63% over last year, which is extraordinary.
That amounts to huge progress, and it matters to each and every young person whose whole life chances are benefited from having a job early on. We have not one ounce of complacency on this issue, however, and every young person not in education, employment or training is one too many. We will not rest until we eliminate this problem through our drive on youth unemployment.
In my last couple of minutes, I want to pay tribute to a couple of Members who spoke particularly strongly and passionately. My hon. Friend the Member for Newton Abbot (Anne Marie Morris) leads the all-party group with verve and determination. I always listen carefully to all her points, and always try to go back and read the Hansard because she gets so much into her four minutes that I want to be able to reflect on every single point. I pay huge tribute to the work she has done to add to and strengthen the Bill: engaging early, getting measures in and making changes to ensure that we have a legal definition of what a small business is—much of that came from her work. I will look further at her point about the definition. She made the point that more people going to arbitration instead of tribunals is a good thing. The Opposition’s employment lawyers need to learn that.
The hon. Member for Rochdale (Simon Danczuk), who is still in his place, said that small business is an agent for social mobility, and I agree wholeheartedly. That is why we Government Members love small businesses so much. I would like to let the hon. Gentleman know that 20 new banks have come into existence since 2010. I agree with him that the Leader of the Opposition is past his sell-by date—and for a man who runs a deli, I guess he knows what he means. I also agree with him on his point about small business being an agent for social mobility.
Finally, I mention my hon. Friend the Member for Hertford and Stortford (Mr Prisk), the previous Minister, who kicked off the measures introduced by this Government to support small business. He argued for the importance of cutting the stock of regulation and improving the quality, as well as reducing the quantity, of regulation. Of course, he is right that this is part of a plan, but only part of our long-term economic plan, albeit an important one.
The Bill rises to the challenge of trying to make this country the best place in the world to start and grow a small business and to employ more people. For the first time in our history, we have a Bill with small businesses at its heart. They are a driving force of our economy. I want the UK to be the best place in the world to start, to thrive and to scale up a business. We have made a contribution today—a crucial part of our long-term economic plan—and I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Small Business, Enterprise and Employment Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7),
That the following provisions shall apply to the Small Business, Enterprise and Employment Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 6 November 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Gavin Barwell.)