Enterprise Bill [HL] — House of Lords, 2015-10-12
Topic: Domestic Commerce
Lucy Neville-Rolfe (Conservative, Centre-right): My Lords, we have had an interesting debate on the measures contained in the Enterprise Bill. I am grateful to the noble Lord, Lord Stevenson, for his comprehensive summary, and to my noble friend Lord Cope for his analogy with the herbaceous border. In an autumn when gardens have been flourishing, I hope that the sun will shine on this Bill, on our small businesses and on our plans for apprenticeships I am grateful for what seems to be virtually unanimous support for this Bill from the various business groups and this House; not necessarily for every detail, but I look forward to a constructive debate in Grand Committee Enterprise has been part of the British DNA since Elizabethan times—possibly before—and this Bill will provide a new range of opportunities. It is pro-market, pro-competition, pro-innovation and pro-investment in people and technology, and not pro-vested interests, as my noble friend, small business ambassador and judge on "The Apprentice", Lady Brady said. My noble friend Lord Sheikh made similar points based on his own business experience I am pleased to note that a number of my noble colleagues, including my noble friends Lady Harding, Lady Wheatcroft and Lord Patten, and the noble Lord, Lord Curry, have expressed their support for the Small Business Commissioner. The Government are committed to helping small businesses, which unlike larger businesses do not always have the resource or expertise to fight their corner. By establishing a Small Business Commissioner we want to drive a cultural change to address late payment The noble Lord, Lord Mendelsohn, argued that the Small Business Commissioner should have a wider remit, referring to its Australian counterpart. The Small Business Commissioner is inspired by, but not the same as, the Australian Small Business Commissioner. That is deliberate. We want to adapt the Australian experience to our own circumstances. Here, the commissioner will focus on the key issue of late payment, which is of real concern to small businesses in the UK. I should advise my noble friend Lord Eccles that the definition of "small business" in Clause 2 is, in substance, consistent with the EU definition and that which we discussed during the passage of the Small Business, Enterprise and Employment Act I recently met the Australian Small Business Commissioner, Mark Brennan, to learn from his success. I concluded that finding a very good candidate for this job will be extremely important, as has been said. He told me that, in the last two years, he has had to use his power to name and shame an organisation only once. He is able to resolve most complaints informally and the threat of reputational damage encourages firms to work constructively with him Our consultation showed that the commissioner should not provide mediation directly. The real issue is awareness of mediation and of other forms of dispute resolution, which the noble Lord, Lord Stevenson, mentioned. We do not believe that yet more legislation, as he suggested, is needed, beyond the proposals that I outlined in my opening speech. What is needed is a change in culture. That means good, early decisions by the Small Business Commissioner The commissioner will seek to improve, rather than undermine, our business environment. He or she will complement existing dispute resolution services and lead a culture change in how businesses resolve and ultimately avoid commercial disputes, particularly around payment issues. It was good to hear of the positive experience that some had had of the Groceries Code Adjudicator Previous consultations showed that additional penalties would not solve the problem of late payment—that is what was felt—but stakeholders have demonstrated strong support for increased transparency. So we are also implementing a new reporting requirement. Our intention is for the Small Business Commissioner to be the custodian of the new reporting requirement. We will bring together this package of measures to drive a real change on the ground The public sector, a concern of the noble Lord, Lord Mendelsohn, is an area where we have been busy trying to lead in our own backyard. The Government have restated their long-standing commitment to pay 80% of invoices in five days and are required to report quarterly against this performance target. Where public sector invoices are not paid within 30 days and are not disputed, interest becomes payable. There are new reporting requirements for public sector contracting authorities over the next two years. The Government set out in their manifesto a commitment to strengthen the prompt payment code and ensure that all major government suppliers sign up to it. Sixteen of the 33 major suppliers to government have already signed up It is not just legislation which imposes costs on business; the actions of regulators do so as well. That is why we are extending the business impact target to regulators and introducing new annual reporting requirements for them. I welcome the support of the noble Lord, Lord Mendelsohn, for the principle of including regulators in the target and note his scepticism about the savings made under "one in, two out" in the last Parliament. The policies of the previous Administration saved businesses £2.2 billion a year, a £10 billion cumulative net saving over the course of the last Parliament. As the noble Lord, Lord Curry, said, these figures are validated by the independent Regulatory Policy Committee, whose strength is its independence. It is probably the best innovation in public administration that I found when I returned to government, and I would like to see one in Brussels. I am grateful to my noble friend Lord Lindsay for bringing his experience in the regulatory world to our debate today. The business impact target will cover the economic impact of new regulatory activity on business, including voluntary and community bodies—which I think answers my noble friend’s question—but it cannot apply to the public sector I stress that this Government are committed to matching that saving: another £10 billion of savings over the course of the Parliament. To help achieve this, we have just launched our first five reviews, in the energy, waste, agriculture, care and mineral extraction sectors. I welcome the support of the noble Lord, Lord Mendelsohn, for the growth duty. I want to clarify that this will not override or cut across regulators’ existing obligations but will sit alongside and complement them The noble Lord and the noble Earl, Lord Lytton, expressed concerns about the inclusion of the Equality and Human Rights Commission within the scope of the target. I assure noble Lords that the intention is to require regulators to measure and to report on the economic impact on business of the regulatory changes they make. We are certainly not seeking to fetter the independence of regulators, nor will we do so. While I understand the concern to protect the EHRC’s accreditation as a national human rights institution, I do not believe that being in scope of the target puts that accreditation at risk. I look forward to a meeting with the commission in November and I hope that it will agree that this is different.