Wilf Stevenson outlines Labour's concerns with the Coalition’s plans for small businesses
BIS has had a good run of legislation this parliament, with at least one “flag ship” Bill in each session. This year is no exception, with the carry-over Consumer Rights Bill nearing the end of its passage, now followed by the Small Business, Enterprise and Employment Bill. Turning in at 12 parts, 157 clauses and 11 schedules, it is a hefty piece of work affecting many Whitehall departments.
Our entrepreneurs, particularly our small businesses, are fundamental to growth in this country and create almost two thirds of private sector jobs. They are crucial to the success of large firms but this is a symbiotic relationship. Labour is committed to build an environment in which business can flourish, which is why we support the general purposes and principles of the new Bill. But we also think it can be improved, and have three major areas of concern plus one glaring omission that we will try to rectify.
In terms of our concerns, the first relates to late payment of invoices. According to the Federation of Small Businesses, 51% of members’ invoices are persistently paid late by large companies. The Bill, as written, simply gives the Secretary of State the power to direct companies to publish certain information on their payment practices. We want to shift the burden away from small businesses going out on a limb to ask for interest payments to them being paid as a matter of routine.
In the Employment sections of the Bill, we will look to introduce proper protection for workers on zero-hours contracts and also ban the exploitative use of those contracts. Under our plans, workers would automatically receive a fixed hours contract when they have worked regular hours over a period of time – unless they choose to opt out. We will also try to insist that workers are protected from employers forcing them to be available at all hours, insisting they cannot work for anyone else, or cancelling shifts at short notice without compensation. People sometimes go to great lengths and expense to turn up at work, arranging (and paying for) child care, and forking out for train or bus fares. Those on zero-hour contracts should be able to seek compensation if their shift is cancelled at short notice.
In the Commons, the government suffered its first defeat on a piece of legislation when a number of Tory and Lib Dems joined Labour and voted through a new clause giving pub tenant licensees the option of going ‘free of tie’ – so that they can buy beers on the open market – whenever they negotiate a new contract. This is the best way to ensure that large pub companies offer fair terms to their licensees and finally addresses the scandal of why so many valued community pubs have closed down. Labour’s task in the Lords will be to retain that amendment and ensure it stays in the Bill.
That brings me to the glaring omission. Missing from the government’s plans is anything about takeovers – despite the issue being trailed by Vince Cable at Commons at Second Reading in the Commons. Labour agrees with the BIS Secretary that our economy will benefit if we continue to welcome inward investment, and that we should welcome merger activity as a normal part of market processes. But unlike him we think that recent cases like AstraZeneca/Pfizer and Kraft/Cadbury reveal a problem about the enforcement of assurances over jobs and site closures, which are often given during merger and takeover negotiations. Primary legislation is required to make such assurances stick, and we will be proposing amendments on this issue.
This is not a terrible Bill and it makes some sensible proposals on late payments. But it is not going to deliver a more balanced, sustainable, skills-based economy in which people go to work knowing that they can afford to pay their bills at the end of the working week. It misses out on a whole score of opportunities, and Labour Peers will use the next few months to try to improve it considerably.
Lord Wilf Stevenson of Balmacara is Shadow Business Minister in the House of Lords. He tweets @Missenden50
Published 2nd December 2014