Part 1A — Holding an interest in a company etc

National Health Service and Care Sector Workers (Credit Union and High Cost Credit) – in the House of Commons at 2:45 pm on 19 November 2014.

Alert me about debates like this

Introduction

8A This Part of this Schedule specifies the circumstances in which, for the purposes of section 790C(5) or (10)—

(a) a person (“V”) is to be regarded as holding an interest in a company (“company W”);

(b) an interest held by V in company W is to be regarded as held through a legal entity.

Holding an interest

8B (1) V holds an interest in company W if—

(a) V holds shares in company W, directly or indirectly,

(b) V holds, directly or indirectly, voting rights in company W,

(c) V holds, directly or indirectly, the right to appoint or remove any member of the board of directors of company W,

(d) V has the right to exercise, or actually exercises, significant influence or control over company W, or

(e) sub-paragraph (2) is satisfied.

(2) This sub-paragraph is satisfied where—

(a) the trustees of a trust or the members of a firm that, under the law by which it is governed, is not a legal person hold an interest in company W in a way mentioned in sub-paragraph (1)(a) to (d), and

(b) V has the right to exercise, or actually exercises, significant influence or control over the activities of that trust or firm.

Interests held through a legal entity

8C (1) This paragraph applies where V—

(a) holds an interest in company W by virtue of indirectly holding shares or a right, and

(b) does so by virtue of having a majority stake (see paragraph 15) in—

(i) a legal entity (“L”) which holds the shares or right directly, or

(ii) a legal entity that is part of a chain of legal entities such as is described in paragraph 15(1)(b) or (2)(b) that includes L.

(2) Where this paragraph applies, V holds the interest in company W—

(a) through L, and

(b) through each other legal entity in the chain mentioned in sub-paragraph (1)(b)(ii).”.

This amendment inserts new Part 1A to Schedule 1A. Part 1A specifies what is meant by holding an interest in a company, including through a relevant legal entity, for the purposes of determining under section 790C whether a person is or is not “registrable”.

Amendment 78, page 169, line 34, at end insert—

“Joint interests

9A If two or more persons each hold a share or right jointly, each of them is treated for the purposes of this Schedule as holding that share or right.

Joint arrangements

9B (1) If shares or rights held by a person and shares or rights held by another person are the subject of a joint arrangement between those persons, each of them is treated for the purposes of this Schedule as holding the combined shares or rights of both of them.

(2) A “joint arrangement” is an arrangement between the holders of shares (or rights) that they will exercise all or substantially all the rights conferred by their respective shares (or rights) jointly in a way that is pre-determined by the arrangement.

(3) “Arrangement” has the meaning given by paragraph 17.”.

This amendment inserts provisions in relation to joint interests and joint arrangements to Part 2 of Schedule 1A for the purpose of interpreting that Schedule.

Amendment 79, page 170, line 1, after “capital” insert

“—

(a) a reference to holding shares in that entity is to holding a right to share in the capital or, as the case may be, profits of that entity;

(b) ”.

This amendment clarifies what is meant by a reference to holding shares in a legal entity that does not have a share capital.

Amendment 80, page 170, line 11, after “rights” insert

“—

(a) a reference to exercising voting rights in the entity is to be read as a reference to exercising rights in relation to the entity that are equivalent to those of a person entitled to exercise voting rights in a company;

(b) ”.

This amendment clarifies what is meant by a reference to exercising voting rights in a legal entity that does not have general meetings where matters are decided by the exercise of voting rights.

Amendment 81, page 170, line 35, leave out from “person” to “if” in line 36 and insert “holds a right “indirectly” ”.

This amendment is consequential on amendment 84.

Amendment 82, page 170, line 38, leave out from “(a)” to “that” and insert “holds”.

This amendment is consequential on amendment 84.

Amendment 83, page 170, line 43, leave out from “which” to “that” in line 44 and insert “holds”.

This amendment is consequential on amendment 84.

Amendment 84, page 171, line 17, leave out from beginning to end of line 19 and insert—

“Shares held by nominees

15A A share held by a person as nominee for another is to be treated for the purposes of this Schedule as held by the other (and not by the nominee).

Rights treated as held by person who controls their exercise

16 (1) Where a person controls a right, the right is to be treated for the purposes of this Schedule as held by that person (and not by the person who in fact holds the right, unless that person also controls it).

(2) A person “controls” a right if, by virtue of any arrangement between that person and others, the right is”.

This amendment provides that where a share is held by a nominee on behalf of a person, the share is treated as held by that person. Where a right held by a person is controlled by another person, the right is treated as held by that other person.

Amendment 85, page 172, leave out lines 30 to 41.

This amendment removes paragraphs 21 and 22 of Schedule 1A. Provision made in paragraphs 21 and 22 is now dealt with in the new paragraphs inserted by amendments 78 and 84.

Amendment 86, page 173, leave out line 10.

This amendment is consequential on amendment 84.

Amendment 87, page 174, line 25, leave out “is entitled to exercise” and insert “holds”.

This amendment is consequential on amendment 84.

Amendment 88, page 174, line 26, leave out “is entitled to appoint or remove a majority” and insert

“holds the right to appoint or remove any member”.

This amendment is consequential on amendment 77.

Amendment 89, page 174, line 29, leave out “entitlement” and insert “right”.

This amendment is consequential on amendment 84.

Amendment 90, page 174, line 31, leave out from “is” to “and” in line 33 and insert

“by virtue of paragraph 15A or 16 of that Schedule, treated for the purposes of that Schedule as held by a person other than the person who in fact holds the interest, both the holder”. —(Matthew Hancock.)

This amendment is consequential on amendment 84.

Third Reading

Queen’s and Prince of Wales’s consent signified.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change 2:57, 19 November 2014

I beg to move, That the Bill be now read the Third time.

I would like to start by thanking all hon. Members who have contributed to the scrutiny of the Bill, both in Committee and on Report. There has been considerable consensus and agreement on many of the measures, and I welcome the support from Members on both sides of the House for our doing everything we can to improve the environment for small businesses. It is a clear goal of this Government to make Britain the best place in the world to start and grow a business, and this Bill, the first of its kind, will make a significant contribution to that. Small businesses make a huge contribution to the UK, accounting for around half of UK jobs and a third of private sector turnover, and they are vital to our prosperity and to the UK economy.

The Bill strengthens and improves the way in which regulation is dealt with in government. We have introduced the one-in, one-out and the one-in, two-out approaches to regulatory management, and these have delivered over £1.5 billion of savings per year to businesses since January 2011. I am delighted that there has been support for enshrining the principles of transparent regulatory management in legislation through the regulatory reform measures.

The Bill makes significant inroads into improving the business environment for small businesses even further while also, crucially, providing new protections for the employees who lie at the heart of our recovery. For the first time, we have addressed the abuses of zero-hours contracts. Despite Labour’s promises going back 20 years, no action was taken. Now, however, we have passed legislation to address exclusivity in zero-hours contracts.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

Will the Minister tell the House how he can enforce the provisions on exclusivity clauses?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

Thanks to the Bill, exclusivity clauses will no longer be valid; they will be null and void. The Opposition promised to do this in opposition last time around, they did nothing about it for 13 years and now they witter on about impractical solutions, whereas this Government are interested in making changes that will improve the labour market. I am proud that we are doing this at the same time as increasing the number of jobs in this economy to record levels.

Photo of Andy McDonald Andy McDonald Labour, Middlesbrough

The Minister has not said how he is going to enforce this. How will it be enforced—will he answer, please?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

As I said, not only will any exclusivity clause be null and void, but we are consulting on those powers. If the hon. Gentleman actually wanted to get into the detail of trying to sort this out, he would know that that consultation was happening—perhaps he will even respond to it. One thing that happened during the passage of this Bill was that it became clear that the Labour party had not been engaged in any of the consultations about any of the improvements we are making. Instead of making partisan points, we are making it easier to do business and to employ people, and we are strengthening people’s rights where their employment contracts are abused, but doing so in a way that can allow small businesses to continue to grow, employ and take people on.

Photo of Julie Hilling Julie Hilling Opposition Whip (Commons)

The Minister is trumpeting getting rid of the exclusivity clauses as being a marvellous thing, but how does it help workers if, instead of having one zero-hours contract with one employer, they end up with several zero-hours contracts with several employers? That does not get to the heart of the problem, which is the abuse of workers on zero-hours contracts.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

The heart of the problem is that for 13 years the Labour party, having promised to do something about this issue, did absolutely nothing about it. Tackling this issue is about making sure we remove the abusive practices while also supporting the flexible labour market to ensure that people can get jobs altogether. Our reforms demonstrate that we can both deal with the abusive practices—for example, by tackling people who do not pay the national minimum wage and tackling the abuse of zero-hours contracts—and have a jobs recovery. The best way to help people is to make sure they have access to a job.

I am glad that on Second Reading the Bill had all-party support and that, throughout, we have had more than enough time to consider the issues—indeed, we have had time to spare. The fairness and transparency agenda that is also a crucial part of the Bill is all about making sure that businesses that do the right thing are not undercut by those that do not.

Photo of Bob Neill Bob Neill Parliamentary Assembly of the Council of Europe (Substitute Member), Vice-Chair, Conservative Party

I recognise the importance of the initiatives set out in part 8. Does the Minister recognise that, consistent with his observation about making sure there is proportionality, before any regulations relating to part 8 are drawn up, careful consultation should take place with those directly affected in the financial sectors and, in particular, great attention should be given to the security risks that might arise if a register is held online?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

I strongly agree with my hon. Friend. Improving transparency internationally is important in ensuring that we tackle crime and have a system that people trust, but we have to introduce things in a way that supports legitimate business, does not put undue burdens on business and is secure in terms of the data held. The points he makes are important.

We have increased parliamentary scrutiny of the business impact target—the target for regulatory reduction. We heard in Committee that the Labour party would make no commitment to tackle the burden of regulation on business, whereas we have our one-in, two-out rule. We are ensuring that the targets and the associated metrics will have to be laid before Parliament when they are set or amended. We have also changed the Secretary of State’s powers on administration sales to connected parties and certain elements of the register of people with significant control, so that they are now subject to the affirmative resolution, not the negative one.

We have also introduced new topics during the Bill’s passage, making it easier for small businesses to access finance. Research suggests that 71% of small businesses approach only one finance provider. Our change will ensure that those who want to do so, having been rejected by their bank, can have their details passed on, to encourage greater competition among finance providers. One problem was that there were few different finance providers—the number of banks had shrunk over the past couple of decades—but now, thankfully, the competition is very successfully coming back into the market for finance.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

I am sure the Minister has covered this before, but it is worth saying again that one big problem for small businesses comes when the larger companies do not pay up on time and they then get a cash-flow problem.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

The hon. Gentleman is dead right about that and he anticipates my next paragraph. We have also strengthened measures to support prompt payment, acting both to increase transparency, so that when companies do not pay on time that is made clear, and to strengthen public sector prompt payment so that the sector can lead by example. I am grateful for that intervention.

We have also included a new clause on home businesses to remove the incentive, dating from a very old Act of Parliament, for landlords to prohibit tenants from operating a business from home. Home businesses are the hotbed of enterprise; 70% of new businesses are started at home, and we want to make it easier for that to happen. We have also strengthened support for the early years pupil premium to help three and four-year-olds from less well off backgrounds by amending the Bill to enable Departments to disclose to local authorities information on eligibility, while ensuring that unlawful disclosure of such data continues to be an offence.

Questions were raised in Committee about the scrutiny of complaints handling procedures in the financial services sector, so we have introduced a measure to require the independent complaints commissioners to produce an annual assessment of complaints handling. That will ensure that processes are fair and accessible to all complainants, including small business.

Finally, on pubs, the Government have listened and responded to the concerns about the burdens the measures would place on family brewers and removed these smaller companies from the scope of the code during the passage of the Bill. Yesterday, we saw the House express its will, and we will reflect on that vote during the Bill’s further passage.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

Is the Minister not being a little disingenuous to suggest that the Government have listened to what the Committee said, because they voted against the Committee on the family brewers issue and indeed yesterday they tabled another amendment to try to defeat the will of the House on that matter? Is not the truth that the Government have realised this is a battle they cannot win and they have given in?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

No. As the hon. Gentleman knows, no amendments were moved yesterday on family brewers. We will reflect on the vote on the larger pubcos and the mandatory free-of-tie option as the Bill continues its passage in the other place.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

The Minister says he is going to reflect on the vote, with the will of the House being the market rent only option. I know he has spent his time apologising to the Prime Minister for losing that vote, but perhaps I may press him on the point. This will be taken to the House of Lords. Is he going to try to overturn the will of the elected House or not?

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

As I have said, the House has made its position clear and we will reflect on that vote ahead of consideration in the other place. That is a very clear exposition of the position.

On the question of how we can ensure that Britain can compete in the future, that we can support businesses and the jobs and prosperity that they bring, that this country is the best place in the world in which to start and grow a business, and that we make things as easy as possible for all those who have the spark of an idea and want to turn it into commercial reality, I say that there have been few Governments in history that have done more for small businesses than this one. For the first time in modern history, we are on track to reduce the burden of domestic regulation—something that was never achieved by the Labour party. With these measures in the Bill adding to a multitude of others that have already been taken, we are doing all we can to support the British people and to ensure that we have a long-term economic plan that can secure for you, Madam Deputy Speaker, and for families across the country, the prosperity that we all want to see.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills) 3:10, 19 November 2014

I echo the Minister’s thanks to everyone who has contributed to the surprising and interesting passage of this Bill. I thank my shadow ministerial colleagues, my hon. Friends the Members for Edinburgh South (Ian Murray) and for Hartlepool (Mr Wright), and all the other members on our team who have contributed to the valuable scrutiny of some very important measures. The Bill posed a number of questions and challenges for the Government, and I look forward to investigating and exploring the extent to which they have been delivered.

I also thank the Under-Secretary of State for Business, Innovation and Skills, Jo Swinson, for her work—the Minister did not get the opportunity to thank her in his contribution—and all the other Members who contributed to an interesting Committee stage.

When we first saw this Bill, it was our strong belief that it was jammed full of missed opportunities. It confronted many of the big questions that people in our constituencies raise. I am talking here about late payments, zero-hours contracts, minimum wage, insolvency and how our insolvency regimes works, and how we can provide more support to parents in the form of child care. It also addressed this key question of the relationship between pub companies and their tenants, and the Government’s role in all of that.

On Second Reading, I said that this House had the chance to pass a small business Bill that did not miss out on many of those key opportunities, and I must say now that we did rather better than I expected, especially on the subject of pub companies. We can be satisfied that, as a Committee, we made progress in some of those areas. What we need is not sound bites on our long-term economic plan, but a Government who deliver on that plan and support a 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. We want real investment in high quality apprenticeships and good relationships between businesses in which we can all have confidence. I am talking there about the thorny subject of late payments and the relationship between pub companies and their tenants. This Bill leaves this House having missed out on a whole score of opportunities, but it is none the less stronger than it was at the outset, so the Committee and indeed the whole House must take great credit for that.

Labour has demonstrated real leadership in supporting small businesses through the course of this Bill. The fact that the Government agreed with the spirit behind many of our amendments, but not the specific wording, suggests that we were indeed on the right lines. I am glad that we managed to secure some concessions from the Government in a few of those areas, and the Bill is much the stronger for it.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

I am sure my hon. Friend will agree that the test of this Bill will be in its implementation. We want to see what happens with things such as low pay and zero-hours contracts. We hear fine words in the House, but it is what happens out there that is important, because there is a great deal of insecurity at the moment.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

My hon. Friend makes an excellent point. He is absolutely right. Let me take this opportunity to say that he is a fine MP, and I know that because he is my father’s MP. My father speaks very warmly about his contribution. The last point my hon. Friend made was typical of him. He is speaking up for a city, with a varied post-industrial economy and a proud manufacturing history. Its university is one of the most important in the country, and a massive employer in his constituency.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

I thank my hon. Friend for paying such a compliment to Coventry. In the last recession, during the Thatcher years, we lost thousands of jobs in the motor car trade. We learned a lesson from that, because we diversified. More importantly though, we still have the development centre for Jaguar Land Rover and the university technical college, which is due to take off any day now.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

My hon. Friend is absolutely right to trumpet the manufacturing excellence of his city and Jaguar Land Rover. We are delighted that Mike Wright from JLR is producing a review for the Labour party, as he is a much respected figure. For our economy to work in the long term, it is incredibly important that we have a real skill base. I am glad that my hon. Friend raised that point. I am also pleased that he talked about the lessons that we learned from the industrial vandalism of the 1970s which that had appalling consequences for his city. None of us will forget the song “Ghost Town” that was written by the Coventry band The Specials. It reflected precisely that sense of desolation when industries disappeared. He is right to say that the city has learned lessons from that. To repay the debt, we must ensure that we never make the same mistakes again, which is why Labour is coming forward with an economic strategy that is based on skill and on competing with high-wage and successful world economies. We are not even attempting to be part of this race to the bottom or to scrap with the developing world on who can be the cheapest employer. What we are saying is that we need to look again at the way that our economy works.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

Interestingly, when Coventry city council joined with the university of Warwick to set up a business park, we were heavily criticised by the then Conservative Government. Two years down the road, it is clear that it was the greatest thing since sliced bread. Creating business parks was the way to go, and we did it in Coventry.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

I could not agree more. That is an example of how Government and industry can work together to build the high-skill, high-wage economy that we want, which is in stark contrast to the kind of economy that has developed under this Government. My parents worked at Warwick university, and if we compare the size of that university in the ’70s, when I first came to the area, with its size today, we see the real difference that investment can make.

Photo of Gordon Birtwistle Gordon Birtwistle Liberal Democrat, Burnley

Surely the hon. Gentleman agrees that the advances in apprenticeships and high-tech skills that the coalition Government are delivering represent progress from the previous 15 or 20 years. The number of apprentices is approaching 2 million, and many companies in the aerospace, automotive and oil sectors have jumped on the fact that we need such skills to be delivered. Does the hon. Gentleman accept that progress has been made, or is he still thinking back to the days of Thatcher 30 years ago?

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

I accept that some progress has been made. There was a real rebirth in apprenticeships over the second half of the previous Government’s time in office and the current Government have said a lot about apprenticeships. However, I was disappointed that they did not support our amendments on apprenticeships, and people will feel short-changed because the Bill represented a real opportunity for the Government to take substantive steps on apprenticeships.

The hon. Gentleman is right to point out that many employers recognise the importance and value of apprenticeships. However, the number of under-19 apprenticeships is falling, and there has been a big increase in the rebadging of programmes that were previously known as back-to-work schemes as apprenticeships. I hope that the hon. Gentleman does not mind me saying that he was the oldest new Member of the 2010 generation. Older workers are incredibly important, as is demonstrated by the vigour with which he performs his tasks, and no one would describe him as an apprentice, but many older workers with a huge amount to offer our economy are being classified as though they are apprentices.

Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales), Shadow PC Spokesperson (Wales)

The hon. Gentleman talked about the need to tackle the problem of low-wage jobs. Today’s report by the Office for National Statistics indicates that workers in Wales earn an average of £473.40 a week, whereas the UK average is £518 and the London average is £660.50. How would a future Labour Government tackle that wage inequality?

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

The hon. Gentleman makes an important point. I am glad that Members can cite important statistics by the ONS in the Chamber, given the importance of our having statistical accuracy which we have heard about.

On the hon. Gentleman’s specific question, we have a commitment on the living wage for businesses involved in major Government contracts, as well as to increasing the minimum wage to £8 by 2020. We also have a broader commitment to a skills-based economy in which we can create jobs that deliver wages that people can live on, as ultimately that is what will make the biggest difference to increasing wages, rather than the use of Government regulation as a silver bullet.

The small business community took pleasure from the arrival of a small business Bill. We give the Government credit for bringing forward a Bill with the words “Small Business” in its title, as such businesses have been overlooked in recent years. However, sadly, the opportunity to include in the Bill many of the measures that we proposed to benefit small business has passed us by. Provision on late payments is a classic example, as the Government had a real opportunity to support a late payment plan that would ensure that the onus to pursue payment—eventually through the courts, but initially through invoicing—was removed from small businesses that are owed money. Despite the sensible evidence that the Committee heard from Oliver Colvile, among others, about why small businesses do not pursue their big business customers, the Government did not support our measure, which was backed by the Forum of Private Business and the Federation of Small Businesses, and would have been a significant step forward. However, on a more positive note, the Government talked yesterday about how they could strengthen the prompt payment code and ensure that businesses with payment terms of longer than 60 days would not be considered to be prompt payers.

Photo of Eleanor Laing Eleanor Laing Deputy Speaker (First Deputy Chairman of Ways and Means), First Deputy Chairman of Ways and Means

Order. Before Toby Perkins considers giving way, I must point out to him that this is an extremely short debate, that he has had plenty of time to speak over the past two days, that many Members in the Chamber have not spoken on the Bill at all in those two days, and that he has spoken for longer than the Minister. However, I leave it up to the hon. Gentleman; he has the floor.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

Of course I take your guidance, Madam Deputy Speaker, and I shall attempt to crack on but, as we said yesterday, the programme order gives us a pathetically short period of time to debate the Bill.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

I shall give way in a moment.

Indeed, Mr Djanogly tabled amendments, but he did not even have the opportunity—

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

I can see you, but I am saying something at the moment. The hon. Member for Huntingdon wished to move an amendment

Photo of Eleanor Laing Eleanor Laing Deputy Speaker (First Deputy Chairman of Ways and Means), First Deputy Chairman of Ways and Means

Order. This is not the moment for discussing the programme order. We have very little time left in which to consider this important Bill, and the hon. Gentleman must stick to his Third Reading points—briefly.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

I think that that rather makes my point, Madam Deputy Speaker.

At the start of the Bill’s passage, our objectives were clear—[Interruption.] The Minister for Business and Enterprise is getting angry now. I appreciate that he has had a pretty difficult couple of days, but he should have been apologising last night not to the Prime Minister, but to all the publicans he was trying to get in the way of and all the people he has let down. He turned up late to the start of the Bill’s proceedings in Committee and its passage has been a shambles. If this is his Churchillian way of taking measures through Parliament, he should have spent a little more time at the knee of the Chancellor of the Exchequer, as he might have learned a little more.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

Frankly, the right hon. Gentleman is the one who ought to be a bit embarrassed.

Let me continue by talking about pub companies. The right hon. Gentleman was not in the Chamber for much of yesterday’s debate, but had he been, he would have realised why we were able to convince people that the Government’s proposals on pub companies did not go nearly far enough and that real change was needed. It is a matter of tremendous pride that we were able to convince hon. Members on both sides of the House to express their will in support of the market rent only option. The Minister’s attitude and the approach that he is taking demonstrate how the Government have lost all the arguments on that. I am glad to see that they are not going to try to bring the family brewers back into the scope of the measure, even though he is wrong to say that no amendment was withdrawn yesterday. A series of amendments were withdrawn yesterday that would have attempted to bring the family brewers back in. I hope he reflects carefully before attempting to change in another place something that was the will of this House.

Photo of Tom Blenkinsop Tom Blenkinsop Opposition Whip (Commons)

On a slightly different note, I wanted to raise one factor that was highlighted to me. There has not been one speech or one single contribution from a Scottish nationalist during the entire—

Photo of Eleanor Laing Eleanor Laing Deputy Speaker (First Deputy Chairman of Ways and Means), First Deputy Chairman of Ways and Means

Order. That is not a point for Third Reading. I asked Toby Perkins to be brief because there are people who have had no chance to speak in this debate. I trust that what the Chair says will be listened to.

Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

My hon. Friend Tom Blenkinsop was making an important point, but I accept your guidance, Madam Deputy Speaker.

We have come to the end of the Bill. We look forward to it coming back here. It has been strengthened in respect of prompt payment and includes the market rent only option and a pubs code that the industry has demanded for many years, but we have not seen serious action on zero hours. We have seen a Government at the fag-end of their time in power doing the least they could on the question of zero hours, which shows their lack of commitment to dealing with the issue. None the less, the Bill leaves Report stronger than it arrived, and the House should be very proud of that.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 3:31, 19 November 2014

I declare my interests as they appear in the Register of Members’ Financial Interests.

On Second Reading I raised my concerns about the provisions in clause 75 and part 7, and related issues in part 8 and schedule 3, to set up a register of people with significant control—in effect, a register of beneficial ownership. I questioned whether they would have benefit in terms of countering illegal activity or investigating tax evasion, even if this was at the triple cost of loss of privacy, increasing the regulatory burden on companies and threatening investment in British companies. Since that time, my concerns that we are doing the wrong thing have been increased, not reduced.

I am sorry not to have been given time to speak to my tabled amendments. It is of concern also that the issue of privacy was not raised by any amendments tabled in Committee, with the honourable exception of the wise remarks made by my hon. Friend Robert Jenrick in the stand part debate. He raised the key question: how many of the 22.5 million English companies is it actually suspected may be subject to some wrongdoing that could be tackled by these proposals? This question has yet to be answered by the Minister or anyone else. I respectfully suggest that this is not the proper process for encouraging investment or portraying this Government as business-friendly.

The Under-Secretary of State for Business, Innovation and Skills, Jo Swinson, replied in Committee that the impact assessments undertaken indicated that

“our proposed measures are lawful, necessary and proportionate”––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 30 October 2014; c. 423.]

So I went through the impact assessment, and I cannot find such justification at all. In fact, it is by some way the weakest case I have ever read in an impact assessment. For instance, the impact assessment makes it clear that there exists little or no data or academic literature quantifying the proposition that a reduction in crime will follow as a result of a register of people with significant control.

My prediction is that these part 7, clause 75 and schedule 3 provisions will not work. In many instances there will be confusion as to who or what is a shareholder with significant control—for instance, in terms of family holdings, let alone complicated trusts, with expensive advice then required. The proposed data collection method is based on self-reporting, with no verification mechanism, which could make it easy, especially for non-resident shareholders, to misreport or simply to give the shares to someone else to hold.

For the purpose of this debate, let us take as our starting point the G8 agreement that companies should know who their shareholders are. I repeat: companies—not commercial competitors, NGOs, direct marketers, spammers or providers of financial services looking for clients, let alone criminals, fraudsters and all the others who could use or misuse information provided under these provisions.

Now we have the further G20 communiqué proposing a crackdown on secret shell companies. However, this was not accompanied by a call for share registers to be made public. So how did we get from the narrow G8 and G20 proposals to what we have in the Bill?

Photo of Bob Neill Bob Neill Parliamentary Assembly of the Council of Europe (Substitute Member), Vice-Chair, Conservative Party

My hon. Friend is making a powerful case and I very much agree with him. Is it not significant that on the back of the G7 discussions these proposals might be extended to the British overseas territories and Crown dependencies, many of which are already well in advance of most other jurisdictions on transparency on an international scale?

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

That may be the case, but it has not been said in public.

There is a hint in the impact assessment that, amazingly, provides only two alternatives—do nothing and rely on voluntary campaigns, or jump all the way to the Bill provisions and propose company registers, with companies reporting annually to Companies House. But why does the impact assessment not review more focused registration regimes? That will now need to be addressed in the other place.

This is not an academic issue. In particular, there seems to have been a wholesale disregard for the material impact that these provisions will have on privacy. People can buy assets privately unless the asset is public, such as a listed stock. They may not want other people to know what they own; they may have cultural, security or even religious-based concerns about people knowing that they own part of a company. What evidence do the Government offer in the impact assessment to justify destroying this right of privacy? Very little.

As for the increase in the regulatory burden, the impact assessment talks of implementation costs on companies and ongoing costs. It also says that the costs to people who need to register their interests cannot be ascertained, and those are the same people who may have to take expensive advice.

Investment in British companies is also threatened. The impact assessment methodology is again flawed, because it looks at the quantity of companies affected, not the quality. In other words, one lost huge Chinese investor deciding not to use or invest in an English company could be very damaging to UK plc, even if a thousand single-owner tiny companies say that this measure will not impact upon them. Again, the impact assessment does not support the Government’s contention that they remain convinced that this reform will be good for business and the UK business environment.

What the IA actually says is:

“There is a risk that we have not accurately accounted for this potential impact on overseas investment in the UK and UK competitiveness . . . particularly since the UK will likely be a ‘first mover.’”

One has to ask why we should be the first mover, with associated risks as we claw ourselves away from recession.

And here’s the rub: foreign companies will not have to keep this register, which means that British people who legitimately wish to retain their privacy will be forced not to use English companies, but to use, say, Irish or British Virgin Islands ones instead. As always, it will be the relatively small, unsophisticated businessman who bears the weight of regulation aimed at catching drug smugglers, which I suggest these proposals will fail to do anyway.

Looking at this Bill as it goes to the other place, I would consider abolishing the need for companies to file annual returns of their PSCs—that is, returns that will be outdated within five minutes of being filed. Accepting that the company PSC register is instigated to comply with the G8 and G20 requirements, if the company does not wish to release the PSC register voluntarily, the applicant should have to ask the court for access. I suggest that the proper purpose grounds for access should be restricted to national security, personal safety issues and tax investigations.

In this way Government crime and tax agencies would be able to make their inquiries, but the registers would still protect privacy for those companies that wished to respect this right. At the same time, the unjustified costs and regulation of keeping the central register would be abolished and foreign investors would not be put off investing in the UK. Finally, investors, especially British investors, would be saved the irrationality of having to trade through UK branches of foreign companies in order to retain their privacy rights. There is time for the other place to review these provisions, and I hope it does so.

Photo of Matthew Hancock Matthew Hancock Minister of State (Department for Business, Innovation and Skills), Minister of State for Portsmouth, The Minister of State, Department of Energy and Climate Change

Given that there will be no winding-up speeches in this debate, I would like to say for the record that many of the points that my hon. Friend has made, and made eloquently, will be considered in the consultation and, no doubt, in the other place. The key is to deliver on the agreements we have made internationally, and to do so in a business-friendly way. There are reassurances we can give on some of those points, and I know that he is meeting the Minister responsible in due course. I hope that gives him some satisfaction.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

I am very pleased indeed to hear that confirmation from the Minister. I look forward to having further meetings and seeing progress, because I can assure the House that there is a lot of concern about these provisions out there in the country, and it needs to be listened to.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central 3:39, 19 November 2014

The Bill has the words “Small Business” firmly in the title, but the measures it introduces also cover employment. We did not discuss what Mr Djanogly talked about at all, but a strong theme running through much of what we did talk about was the insecurity that is endemic in our society today, whether for small businesses or in employment. The question that I do not think has been answered in Committee, on Report and on Third Reading is whether the measures in the Bill will address that insecurity.

We had some very good debates on pub companies, and an amendment that will help family brewers was made in Committee. That will go a long way towards helping that sector. Then we had yesterday’s fantastic decision by the House to support the market rent only option, which Members across the House and many outside have long campaigned for. I know that Elaine Lynch of the Weld Blundell in Lydiate will be one of many publicans in my constituency who will welcome that decision.

Another issue we debated long and hard, including on Report, was late payment. As my hon. Friend Mr Cunningham said, we will have to wait and see whether the Bill makes a difference in practice. One in five business failures are the result of late payment. Some £39.4 billion in late payments, or £38,000 on average, is overdue to small businesses. The Government have missed an opportunity by not supporting our amendment on an automatic 8% charge on late payments. As the Forum of Private Business has stated, that would have made a significant difference and gone a long way towards reducing the time and cost that small firms spend chasing late payments, allowing them to concentrate on growing their business and creating jobs.

I think that opportunities have been missed with regard to employment, zero-hours contracts, the exploitation of workers and abuse of the national minimum wage. The Government have promised to do things without actually putting measures in the Bill. We will have to wait and see whether they make a difference or not. In my constituency, 40% of workers are paid less than the living wage. Across the country that is a huge problem for many people and their families, whether as the result of the growth in part-time work, zero-hours contracts or bogus forms of self-employment. The reality is that the change in the nature of employment and the growth in low pay are fundamental reasons why the deficit has gone up, despite the Government’s claim that they would get it down, because tax receipts are not being collected. That is the reality of what life is like—

Photo of Eleanor Laing Eleanor Laing Deputy Speaker (First Deputy Chairman of Ways and Means), First Deputy Chairman of Ways and Means

Order. I asked the hon. Gentleman to be brief. I trust that he will listen to the Chair.

Photo of Bill Esterson Bill Esterson Labour, Sefton Central

Thank you, Madam Deputy Speaker. I made that point because the Bill was an opportunity to tackle some of the problems at the heart of our economy, to build an economy that works for small businesses and for ordinary people, and I do not think that the Government have come anywhere near that. That is why we need a Labour Government to support small business and people on low pay. This Bill is a missed opportunity. I hope that the Government can deliver on some of the things they said in Committee and on Report, but we will have to wait and see.

Photo of Nadhim Zahawi Nadhim Zahawi Conservative, Stratford-on-Avon 3:43, 19 November 2014

In the short time remaining I will make only a few points and post the rest of my speech online. This is an ambitious Bill. The Government have, for the first time, legislated specifically for small business, which will strengthen the recovery and see further support directed to Stratford’s job creators.

On procurement, the Labour party left office with only 6.5% of public procurement going to small and medium-sized businesses. Not only were smaller firms denied a chance to compete on a level playing field, but the taxpayer was denied value for money. The Bill will put that right.

Next, and crucially for businesses in my constituency, the Bill contains important measures on access to finance. Everyone agrees on the need for more competition in the business lending market. The Bill will open that market. Banks will be required to refer businesses to other providers and, crucially, business lending data will be available for new challengers. This is about making sure that finance keeps up with the economic recovery.

Alongside access to capital, the Bill addresses cash flow through, in particular, measures to create a more responsible payment culture. The payment practices of all large companies will now be published, the prompt payment code will be strengthened, and the public sector will lead by example.

Three hours having elapsed since the commencement of proceedings on consideration, the debate was interrupted (Programme Order, 18 November).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

Question agreed to.

Bill accordingly read the Third time and passed.