Small Business, Enterprise and Employment Bill

Public Bill Committee, 14 October 2014.

Martin Caton (Labour, Gower)

Before we begin, I have a few preliminary announcements. Please switch electronic devices to silent. Tea and coffee, I am afraid, are not allowed during sittings.

We will consider the programme motion as on the amendment paper; a motion to allow us to deliberate in private about our questions in advance of the oral evidence sessions; and a motion to enable the reporting of written evidence for publication. Given the time available, I hope that we can agree the matters formally, without debate.

Martin Caton (Labour, Gower)

Therefore, the deadline for amendments to be considered at the first two line-by-line consideration sittings of the Committee on Tuesday 23 October is 4.30 pm on this Thursday 16 October.

Martin Caton (Labour, Gower)

Copies of written evidence that the Committee has received will be made available in the Committee Room.

I am sorry to the public, who have only just entered, but I have to ask you to leave again, because we are about to sit in private.

Examination of Witnesses

Martin Caton (Labour, Gower)

Good morning to our witnesses. Thank you for coming. Could you please introduce yourselves?

Martin Caton (Labour, Gower)

Thank you very much. May I invite Toby Perkins to ask the first question?

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

First, I should declare an interest in that I am a member of the Federation of Small Businesses and still have an interest in a small communications company, although I do no work for it at all.

When I was running my small business, one issue was that I would not want to upset my clients too much, because that would end up with them taking their business elsewhere. First, how can we try to get over that? By the time that you start using the law and everything like that, the relationship will have broken down in no uncertain terms. Secondly, why do you think that large businesses are not quite so willing to pay their bills in due time? Is it because they set out to do it or is it because they think that they can use the money better without giving it to the small business?

Matthew Hancock (Conservative, West Suffolk)

On the point about the prompt payment code, I am interested to understand why, when we went out for consultation, including on that option, the FSB’s response was not to have mandatory payment terms, but you now are calling for a mandatory prompt payment code. We went out to consultation with all of the options and the Bill broadly reflects the response of all business groups to those options as they were laid out.

Nicola Blackwood (Conservative, Oxford West and Abingdon)

But how would the mandatory prompt payment code ensure that if the small businesses are unwilling to come forward because they still do not want to take on the big businesses?

Nicola Blackwood (Conservative, Oxford West and Abingdon)

Not if they are not coming forward. Can I take you back to access to finance? I want to know what your views are on some of the other measures in the Bill, especially the proposals to bring forward the release of non-financial VAT registration. I think that is intended to increase the availability of trade credit for smaller and newer businesses. Obviously, they sometimes struggle to get access to finance because they do not have a credit history and so on. Does the FSB welcome that?

Nicola Blackwood (Conservative, Oxford West and Abingdon)

And do you also welcome the invoice financing?

Nicola Blackwood (Conservative, Oxford West and Abingdon)

What about the cheque imaging reforms?

Nicola Blackwood (Conservative, Oxford West and Abingdon)

It is very encouraging. I have heard that we would be leaders in the EU on that; we should all welcome that. What do the other representatives think about the access to financing and the cheque imaging reforms in the Bill?

Nicola Blackwood (Conservative, Oxford West and Abingdon)

Mr Sproule?

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

May I also express my thanks to you for coming and giving evidence to us? Have any of you changed your mind on the issue of prompt payment? Have you moved at all since you began to think about all this?

Nicola Blackwood (Conservative, Oxford West and Abingdon)

And Mr Sproule?

Martin Caton (Labour, Gower)

I will come back to you, but I want to invite someone else to come in.

Martin Caton (Labour, Gower)

Before we move on, Mr Sproule, did you want the opportunity to reply to what Ms Blackwood said?

Jo Swinson (Liberal Democrat, East Dunbartonshire)

On this clause and some of the later ones, we will obviously scrutinise the detail to ensure we get that right. Katja alluded to the overarching theme of trust and transparency, but I would like to probe further and ask the other members of the panel about it. How important do you think the UK’s reputation and leadership on corporate trust and transparency are, and what benefits can they deliver for our economy?

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

Yes.

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

I think we should have a league table to see who the best and worst ones are—naming and shaming them.

Jo Swinson (Liberal Democrat, East Dunbartonshire)

I will move on to some of the measures on employment later in the Bill, particularly around employment tribunals and some of the challenges for the users of employment tribunals. First, would you agree that the awards that a tribunal decides are owed to a particular claimant should be paid in full? Do you think that the penalty that is outlined for non-payment will encourage full payment more promptly? Secondly, for small businesses in particular, do you have any evidence, for example, from your members that frequent and late notice postponement of tribunal dates causes difficulties for those small businesses?

Martin Caton (Labour, Gower)

The last question and answer must be very brief. I am afraid I have to cut you off at 10.15.

Martin Caton (Labour, Gower)

Order. I am afraid that brings us to the end of the time allotted for the Committee to ask you questions. I thank you very much, on behalf of the Committee, for the evidence that you have provided.

Martin Caton (Labour, Gower)

We will now hear from Thompsons Solicitors. For this session we have until 10.45 am.

Welcome, Mr Birrell. Could you please introduce yourself?

Martin Caton (Labour, Gower)

Ian Murray is going to lead the questioning in this session.

Mark Garnier (Conservative, Wyre Forest)

You can use a ballpark figure.

Mark Garnier (Conservative, Wyre Forest)

But it was not vanishingly small or huge? It was not a remarkable number?

Mark Garnier (Conservative, Wyre Forest)

So more people did not enjoy than did enjoy.

Martin Caton (Labour, Gower)

Order. I am sorry to interrupt, but I have to bring this session to an end. I thank you very much, on behalf of the Committee, for the evidence that has been provided.

Martin Caton (Labour, Gower)

Will the witnesses please introduce themselves for the record?

Mark Garnier (Conservative, Wyre Forest)

When I say “enjoy”, I mean—

Ian Murray (Labour, Edinburgh South)

Yes, of course.

Mark Garnier (Conservative, Wyre Forest)

Let me give you an example. Somebody could find out a credit reference for a competitor small business. There may be a less than favourable one, and if that information were broadcast among potential customers, it could be an unfortunate use of that data. It might even be an illegal use of data, but the information would be out in the open space.

Martin Caton (Labour, Gower)

If there are no further questions from Members, I thank the witnesses very much for their evidence this morning.

Graham Brady (Conservative, Altrincham and Sale West)

Good afternoon. I welcome the witnesses. We are going to hear oral evidence from the Law Society. For this session we have until half-past 2. Will the witnesses please introduce themselves for the record?

Graham Brady (Conservative, Altrincham and Sale West)

Are there any opening remarks you would like to make before taking questions?

Mark Garnier (Conservative, Wyre Forest)

Thank you.

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

I should like to declare an interest in that I still have shares in a company that I set up in the first place, which dealt with communications within the property sector. When I was doing that I had a job in the constituency of the Secretary of State for Justice. We got planning permission on behalf of the client and helped him through all that. The following day he decided he was going to close down the business and he left us unable to get our money out of the whole thing. I have endless stories from people who come to see me in my constituency who say, “We agreed to do some work on behalf of a company, but ended up finding that we could not get the money we were owed.” How do we actually stop these rather crooked people setting up as directors of companies, further down the road eventually going bankrupt and then, probably two days later, opening up another company and doing exactly the same thing? This is a real concern about how you can get trust in people to do business. The concept of our shaking hands and saying, “Thank you very much indeed for doing business with us” and then not being paid for it is very bad for a lot of small businesses. We need to have some action taken. What would you do?

There is a stunned silence.

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

If he or she has gone bankrupt three or four times, that certainly should be included in paperwork or anything like that. That is my personal opinion, anyway.

Andy McDonald (Labour, Middlesbrough)

It would be interesting. Thank you.

Graham Brady (Conservative, Altrincham and Sale West)

No one has caught my eye, so there are no further questions. I thank the witnesses for their evidence and we will move on to the next panel.

Graham Brady (Conservative, Altrincham and Sale West)

Good afternoon. Thank you for coming to give evidence. We will now hear oral evidence from the trade unions—GMB, Unison and Unite—and for this session we have until quarter past 3. Will the witnesses please introduce themselves for the record?

Graham Brady (Conservative, Altrincham and Sale West)

Are there any other brief comments?

Ian Murray (Labour, Edinburgh South)

And the shame, of course.

Sheryll Murray (Conservative, South East Cornwall)

Forgive me if I misheard you, Mr Smith, but I thought you said, when talking about zero-hours contracts, that tenancy agreements require you to submit a contract of employment. Will you give some examples? I have never heard of this before. I have never heard of anyone who goes to rent a property being asked to produce a contract of employment.

Graham Brady (Conservative, Altrincham and Sale West)

Okay. We have at least three more questions coming in the next 14 minutes, so obviously the quicker the questions and answers, the more likely we are to get to everybody.

Mark Garnier (Conservative, Wyre Forest)

It would be very helpful if you could.

Graham Brady (Conservative, Altrincham and Sale West)

May I ask for a very brief response?

Graham Brady (Conservative, Altrincham and Sale West)

Very briefly.

Graham Brady (Conservative, Altrincham and Sale West)

Would you maybe put that in writing for the Committee? I will quickly call Oliver Colvile, and I am trying to get to Andrew Griffiths.

Graham Brady (Conservative, Altrincham and Sale West)

That brings us neatly to the end of the time available for this panel. I thank the witnesses. We will have a short break—partly due to illness and the fact that one of the next witnesses is not here. We might move to the final panel ahead of time, but we are waiting for everybody to arrive, so it is probably sensible if we take a short comfort break until 3.30 pm.

Examination of Witness

Graham Brady (Conservative, Altrincham and Sale West)

DCI Jonathan Benton, I welcome you and thank you for accommodating our changing timetable.

Graham Brady (Conservative, Altrincham and Sale West)

That brings us almost to the end of our allotted 15 minutes. Thank you for joining us, Mr Benton. We will move on to the next panel.

Examination of Witnesses

Graham Brady (Conservative, Altrincham and Sale West)

Good afternoon. We will now hear oral evidence from the TUC and the Chartered Institute of Personnel and Development. We have until 4.15 pm for this session. I ask the witnesses to introduce themselves for the record.

Graham Brady (Conservative, Altrincham and Sale West)

Sorry to interrupt, but we must move on to another question.

Graham Brady (Conservative, Altrincham and Sale West)

Thank you very much. I am trying to squeeze another two members in if we can in the last three minutes.

Oliver Colvile (Conservative, Plymouth, Sutton and Devonport)

Yes.

Graham Brady (Conservative, Altrincham and Sale West)

I am afraid that that brings us to the end of the time allotted for this panel. I thank both the witnesses for giving their evidence.