The Minister questioned whether the amendments will have the support of the Opposition. They will do, of course; we proposed a good deal of them, so it would be rather foolish for us not to be supporting them at this stage. The Minister is right to say the Bill arrives back in this House in stronger order than it left it. It looks far more like the kind of small business Bill I was talking about back in July 2014 when I said the Government ought to be taking far greater steps, and I agree with the Minister that the Bill is improved.
We said steps needed to be taken to strengthen enforcement of the compensatory award in employment tribunal cases. We are pleased the Government have today announced a naming and shaming programme that will ensure exposure of businesses that do not pay compensatory awards identified by a tribunal. We said that insolvency creditors meetings were an important part of our world-class regime and we are glad the Government accepted our amendment on that. We are glad, too, that the Government decided to exempt the Equality and Human Rights Commission from the work of the small business appeals champion—although not from the growth duty section of the Deregulation Bill, as we called for at the time. On late payment as well, we have been saying for a long time that stronger action was needed. I am therefore bound to say that the fact that these are issues Her Majesty’s Opposition have been raising, from abuse of zero-hours contracts to late payments to small firms, and from non-payment of the national minimum wage to supplier pay and stay deals—an area of pub company legislation we have already discussed—shows that it is the Opposition who have been leading the way, and the Government have been following us reluctantly.
It rather undermines the charge that Labour is anti-business when the Government keep taking action in so many of the ways we have called for. I know the Government have form in this regard; they used to suggest UKIP was mad before they adopted its No. 1 policy. However, we support the principle that the Government should be willing to listen and take action where they have got things wrong, and we think the Bill before us today is a good deal stronger as a result of that.
I want to take up the Minister’s challenge on late payments. As I said in my intervention, he is overplaying his hand when he suggests that the measures brought forward, welcome though they are, signal the end of egregious late payment practices. The steps the Minister has taken on the public sector are welcome. Particularly at the time of the bank-induced global economic crisis, the previous Labour Government took significant steps to ensure the public sector paid on time and this is putting that on to a more permanent footing, which is a positive step. However, the Minister suggested that the transparency he is introducing will create a reputational risk that means businesses and boardrooms around the country will think carefully before paying late. While the way this is going to be marketed will be different, many of the transparency measures proposed here are currently available if people choose to look. There has been no reputational risk for many of the companies that have operated in that way.
In response to what the Minister said a few minutes ago, the truth is that no new sanctions have been proposed. He said that businesses could avail themselves of the sanctions in the EU late payment directive, but they have been able to do that for several years. If a major business chooses to say, “We’ll supply you, but our terms are 90 days”, a small business will have the choice of whether to deal with it on those terms or not at all. That means that nothing has changed, and we are still in exactly the same position.
The steps that the Government are proposing on late payment are fine, as far as they go, but this is a missed opportunity. I am willing to predict that, in the next Parliament, we will not consider this issue to have been dealt with and that, at some point in the next four or five years, we will all be back here discussing late payment again and saying that something must be done, that we must change the culture, that we need to get across to businesses that late payments are unacceptable, and that we need greater transparency so that small businesses know what they are letting themselves in for. My right hon. Friend the Member for Doncaster North (Edward Miliband) stated powerfully at the Federation of Small Businesses conference last week that late payments are one of the great scandals in our economy. Small businesses are disadvantaged by the practice, and more should have been done.
Clause 3 initially created a duty for companies to publish only their payment policies. We have consistently argued that publishing policies is not enough and that small businesses also need concrete information on the performance in practice, and not just what is written in a policy book. We tabled amendments in Committee in the Commons and on Report in the Lords that would have created a compulsory reporting regime to ensure that large companies’ reporting records would be open to quarterly scrutiny with automatic interest paid for late payment. The Government voted down our proposals on both occasions. The Minister said a few minutes ago that no practicable proposals had been tabled in this regard, but that is not true. We tabled specific proposals that would have put the late payment directive on a statutory footing. He might have decided that he did not want to support our proposals, but it is not true to say that they did not exist.
However, we are pleased that the Government have made some concessions and accepted our fundamental argument that information on performance, as well as policies, must be published. This will allow large companies to be judged by their deeds, not just by their words. However, we believe that there should be a financial backstop, such as an automatic interest payment or a fines regime, as outlined in our proposals. So it remains to be seen how effective the Bill will be. It is stronger as a result of the interventions by the Labour Opposition but more could have been done and, regrettably, we will have to return to this issue in the next Parliament.
The Bill establishes small business appeals champions, whose role will be to watch non-economic Government regulators and encourage them to improve the impact on business of their policies, their processes and their approach on appeals and complaints. In broad terms we welcome this idea, but many bodies have questioned how the champions will work in practice and what relationship they will have with the general growth duty in the Deregulation Bill. We welcome the fact that the Government have taken up our argument that the guidance to the small business appeals champions in relation to the exercise of their functions should be laid before Parliament for full scrutiny and debate.
On Lords amendment 25, we are pleased that the Government have acceded to our demand that the Equality and Human Rights Commission be excluded from any of the regulatory provisions in the Bill. This will relate specifically to the work of the small business appeals champions.
On the subject of creditor meetings, I should like to draw to the attention of the House the donation made to my office of employment support from R3, the insolvency regulator. The intention of the original Bill was to end once and for all the practice of insolvency practitioners holding physical creditor meetings in all types of insolvency procedures. We felt that that was a mistake and that it could disengage creditors and weaken the strength of the world-leading insolvency regime that we have here in the UK. We very much welcome the fact that the Government have listened to some of the specific proposals we made on ensuring that the threshold for a creditors meeting should be changed to
“(a) 10% in value of the creditors;
(b) 10% in number of the creditors;
(c) 10 creditors.”
We think that is a much stronger amendment, providing the support that that industry needs to ensure that it continues to provide a service that gets record amounts of money back to creditors and is also successful in saving jobs and businesses.
4.30 pm
Let me deal with Lords amendments 88, 89, 92, 93, 100 and 101. We raised several concerns about the Government’s proposals for employment tribunals in this Bill. For example, we were concerned that fines could be levied to businesses that have not paid the compensatory award; the business could pay the fine but would not necessarily have paid that award. We are pleased that the Government have conceded and made things a bit better, but, again, they have not gone as far as we would like in covering that issue. An amendment has been accepted that includes any amount the tribunal
has ordered the employer to pay the worker in respect of legal costs within the definition of the financial award owed to the claimant for the purposes of the financial penalty for non-payment. That will ensure that an employer must comply with both the employment tribunal award for compensation and any order in respect of costs to avoid a penalty.
So we feel strongly that the Bill arrives back here and will pass into law a good deal stronger than it arrived. We feel strongly that the steps we have proposed and which have been accepted by the Government show that in many cases Government interventions can very positively support the successful running of our business and of our economy. They can ensure that workers are supported in the workplace, and they can help us to build an economy in which the prosperity of the nation is shared among the many, not the few. In so doing, they can also ensure that the rules of the game are sufficiently fair so that small businesses and big businesses are both able to compete, coexist and thrive. On that basis, this House can be very pleased with the work it has done in amending the Bill.
Lords amendment 1 agreed to.
Lords amendments 2 to 33, 63 to 85, 87 to 131, 133 to 135, and 142 to 193 agreed to, with Commons financial privileges waived in respect of Lords amendments 85, 123 and 133.