Lord Mitchell
Member of the House of Lords · Labour · United Kingdom
“In those days, no one quite understood the long-term dangers of radiation, and protection was rudimentary. For him, it was fatal. In 1998, he was diagnosed with acute myeloid leukaemia, which he knew was terminal. He told me, in his usual blunt way, “I know how this story ends and it is not pretty.”
“My Lords, on 9 October 2000, my parents-in-law, Jack and Ruth Lowy, committed joint suicide. He was dying and she had decided to accompany him on this last journey. Jack was born in Bratislava in what was then Czechoslovakia. The family were Jewish and following the events in Munich in 1938, they fled to Philadelphia.”
“My wife in particular sensed that they would carry out their wishes. After all, they were both intelligent people who had carefully thought this through. There was no one to support Jack and no one on hand to help Ruth in what must have been hell for her.”
“I cannot be certain about my mother-in-law’s motivation to join him, but they both knew that his own suicide at home could well run the risk of her being charged with committing a crime as an accomplice. What I do know is that had this Bill been law, she probably would have chosen life.”
“I always felt that the issue of antisemitism on campus did not emanate solely from the students. It also came from the laissez-faire attitude of the faculty.”
“We kept the brief tight, with no references to the Middle East; we judged that there was nothing we could do or say that could make any difference. Where we could definitely make a difference was through reference to our common UK experiences and our heritage. I think we made progress.”
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“It seems to us that the existence of the offence will give greater importance to the guidance, since those involved are likely to see compliance with the guidance as necessary in order to avoid the risk of committing an offence. Accordingly, the guidance is liable to play a significant role in determining the meaning of ‘significant influence or control’ and therefore the range of persons who fall within the scope of the new Part 21A of the 2006 Act. In the light of this, we consider that guidance under paragraph 24(2) of Schedule 1A should be subject to Parliamentary scrutiny”. We agree, and hence we have tabled this amendment.”
“The first concerns guidance about the meaning of “significant influence or control”, which is obviously a core part of the provisions. The committee stated: “There is no provision however for Parliamentary scrutiny of the guidance. The reasons given in paragraph 285 of the memorandum for not making the guidance subject to scrutiny are the fact that it will be worked up in consultation with stakeholders and the fact that it will not conflict with the statutory provisions in Part 21A. We do not find these reasons convincing. Section 790F of the Companies Act 2006 will make it an offence if a company fails to comply with the duty to gather information about persons who exercise significant control.”
“Only companies that already disclose the information that this part of the Bill requires should be subject to exclusion. Otherwise a Secretary of State could, by order, essentially produce a definition that excludes companies that should in the spirit of the legislation be covered. I welcome the fact that doing so would require the affirmative procedure, but the fact that it would still have to be limited in that way would be a useful instruction to put into primary legislation. It would also create the kind of certainty that the playing field will remain level, as it were, and that would be helpful to businesses. On the subject of delegated legislation, noble Lords will see that I have two recommendations from the Delegated Powers Committee in this group.”
“As the preamble to that document makes clear, PSCs—individuals with more than 25% of the company’s shares or voting rights—will have to be on the register and there will be a statutory obligation to update that. I struggled to find a proper definition of PSC. I think I found it in the wording but it should be clearly defined and positioned in the Bill so that there is no ambiguity on this. Turning to Amendment 37ZA, I am sure noble Lords will appreciate that what we are doing here is to test the boundaries of Schedule 3, specifically the exclusions. It is right that the Secretary of State should be able to leave out certain companies that may already have more comprehensive disclosure requirements like those that are publicly listed. However, that is the underlying principle.”
“I hope the Minister appreciates that our intention is to support the proposals and to contribute to their effective working. The main mechanism through which the principles are to be put in place is the PSC register—that is, “people with significant control”—which has our backing. The briefing that Christian Aid has provided—I wish to place on record my thanks to it for having done so—points out that only 9% of the British public believe that company ownership should be allowed to remain a secret. Given the reputation this country has for respecting the value of fair play, I can readily believe that. The Government have also helpfully published and concluded a consultation on the regulations which will be issued governing the PSC register, which will aid us as we scrutinise the provisions in Committee.”
“The Lough Erne declaration was signed in 2013 and reflects a good understanding of the importance of the above and I am glad to see some of the thoughts reaching fruition in the Bill. The third point from that declaration is perhaps the most relevant to our proceedings and I think it came from the Prime Minister. It reads: “Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily”. That is a sound principle with which I am sure the whole Committee will agree. Parts 7 and 8 of, and Schedule 3 to, the Bill reflect this. Today we will be testing the provisions within the Bill to try to ensure that its provisions match these principles and that they are drawn tightly enough to deliver them.”
“My Lords, I shall speak to Amendments 37ZA, 37B, 37C, 47B and 50A. I congratulate the Government on coming forward with these provisions that provide for a register of beneficial interests in companies that are not listed on the Stock Exchange. Transparency in the governance of companies is essential, as is fair taxation. They are essential for providing a level playing field on which all businesses are able to compete. Anything else undermines the kind of entrepreneurship and creativity that we want to see driving growth throughout our economy. However, transparency goes beyond the issue of business competition. It also matters from the point of view of knowing who owns a company. Who owns whom is vital to know and we will return to this issue as today’s discussions continue.”
“Parliament will be able to scrutinise these regulations to check that they are capable of delivering an accurate register. I shall pick up a remaining point from the debate about this group, and I hope the Minister will be able to put our minds at rest. Too little progress has been made in encouraging Overseas Territories and Crown dependencies to have public registers. If we return to the original Lough Erne agreement, it is clear that making progress on this issue is an integral part of fulfilling its spirit. I hope the Minister can update us on whether the Government will consider making such registers obligatory.”
“19] In your Lordships’ House there is an obligation on each of us to maintain our register of interests, which is not allowed to be more than one month out of date. Why should companies have an annual requirement? It simply does not make sense in this electronic age. In their response to the consultation, the Government said that they will continue to work through the principle that information will be provided to the central registry to ensure that there are no loopholes or unintended consequences. My concern is that this could be a loophole, so I would like the Minister to address it. My second point is about accountability. As my noble friend Lord Watson said, this amendment requires the Secretary of State to ensure that the right regulations are in place so that what is on the PSC register is accurate and complete.”
“I believe the Government see the register as providing something of a snapshot of the beneficial owners of a company, but in this day and age where technology has made instant communication the norm, rather than the exception, there is no reason why the PSC should not be kept up to date. In this context, it is worth considering the evidence put before the Committee in the other place by the Institute of Directors, which said that the PSC, “will be updated once a year and a fair number of people said in our consultations, ‘It’s going to be out of date within minutes of being published.’”—[ Official Report , Commons, Small Business, Enterprise and Employment Bill Committee, 14/10/14; col.”
“My Lords, I rise to speak to Amendment 37, to which I have put my name. I pay tribute to my noble friend Lord Watson of Invergowrie for the work he has done in this area and for that very clear exposition of the relevant issues. He has made the important points, so I shall try not to repeat what he said. Amendment 37 would give the Secretary of State power to make regulations ensuring that the PSC register is current and accurate. My noble friend Lord Watson explained the importance of that, but I shall echo his arguments. It is vital that the register be up to date if it is to do the job we expect of it and shine a light on some of the murkier examples of using anonymous shell companies to obscure the true ownership of an asset.”
“New Section 790P sets out the process through which a company, upon receiving a request for information, can either provide it or go to court. However, subsection (4), which sets out when a company does not have to comply with a request, appears to have no time limit attached. Our amendment requires it to be reviewed annually. Amendment 47A follows on from Amendment 37D in marking out the extent of the exclusions. Circumstances where a person’s details could be suppressed from a register are to be laid out in regulations by the Secretary of State. Amendment 47A would make it possible to challenge any such decisions. Taken together, these amendments would improve the clarity of these provisions and improve their ability to increase transparency about ownership of companies. I beg to move.”
“My noble friend Lord Watson will no doubt be able to give a more complete explanation of it in a moment, but the essential point is that the Bill as drafted appears to preclude the possibility of a journalist using the register to investigate a potential impropriety. New Section 790O(4)(d) says that any request for information should include whether or not the information is going to be passed on to another person. In an age where open data are providing insight in a variety of fields, appearing to want to prevent them being passed from one person to another seems—to me, at least—to be a rather odd decision. I am keen to hear the Minister’s explanation for that subsection. Amendment 44A is a probing amendment.”
“Clearly, it is understandable that, where there is a danger either to an individual or to national security, companies can be exempted from providing information. However, it is important that those circumstances are explicitly in the Bill, otherwise there may be exemptions for less important reasons in the future. The amendment also provides for any such decision to be challengeable through judicial review. Despite the fact that this Government have recently set about attempting to damage and degrade judicial review, it remains an important mechanism for holding the Government to account—hence its provision here. I have also added my name to Amendment 44.”
“My Lords, in moving Amendment 37D, I shall speak also to Amendments 44HA, 47A and 44 and will be returning to the central themes that I marked out when speaking to the amendments in the previous two groups: the need to ensure that the boundaries and scope of the provisions that we are talking about are adequately drawn so as to ensure that no loopholes remain and the need for appropriate transparency to make sure that the register serves the purpose that it was intended to serve. As before, I will often be probing rather than criticising the measures, which have our support. Our Amendment 37D, the first in this group, would provide for the explicit circumstances when it will be necessary to exclude otherwise necessary information from the register.”
“I thank the Minister for her reply. In general, we are reassured. Many things have been discussed today and we will all go away and reflect before Report. There was one moment when the noble Lord opposite mentioned Huntingdon Life Sciences, which made my spine run cold. There was an occasion when a private company in which I was involved, of which I guess I was the PSC, was dealing with Huntingdon. We were leasing computers to it and the animal rights brigade suddenly parked outside my house. That lasted for only a day or two, but it was quite unnerving. However, that is by the by. I thank the Minister for what she said and I beg leave to withdraw the amendment.”
“My Lords, I declare my interest as chairman of a graduate recruitment company called Instant Impact. These days it is really critical for young people to have significant CVs which are padded out with jobs that they have done. It is therefore important that they have internships. However, those who get internships tend to be better connected and wealthier people who can do them without pay. I really think that the Government should reconsider whether there should be a minimum wage after four weeks. Would the Minister agree to this?”
“In my travels, I frequently come across foreign business people who say that the UK does not take their own country seriously and how good it would be to have more ministerial and trade visits. Finally, we need to see increased help for those who want to recruit apprentices. The number of apprenticeships actually went down last year, so this is another area that the Government could usefully look at both in terms of future needs and the efficacy of current government policy. I hope that the Minister will be able to accept these amendments, which represent a good way of combining strategy planning and support for small businesses and the effective scrutiny of policy interventions. I beg to move.”
“The export-led recovery that the Chancellor promised has simply not taken place, and to meet the impossible target of £1 trillion a year by 2020 would require nominal growth of around 10% per year—way above current levels and, I must say, way beyond anything I can imagine. The OBR’s latest forecast has revised down the contribution that trade is expected to make to GDP growth for every year of the next Parliament. Policy action taken to improve this does not show much sign of having a positive effect. The £5 billion export financing facility has helped few businesses. This is a huge missed opportunity. Also, I simply do not understand why we are forever cutting back our embassies and trade capabilities. You cannot set up an environment for export if you are not represented in the countries concerned.”
“The latest Bank of England Credit Conditions Survey shows that credit availability fell slightly during the last quarter, while Funding for Lending figures show that net lending to small businesses remains negative, despite improvements for larger businesses. This issue will arise throughout our discussions in Committee and these figures provide the backdrop to it. The amendment would also require the Secretary of State to look closely at how best to support small and medium-sized businesses that want to export. This is vital and goes to the heart of the kind of economic recovery we want to experience. The news over the recess that the UK’s current account deficit is at one of its highest ever historic levels should serve to focus our minds on the importance of exports.”
“In the UK, responsibility for small businesses lies with the Minister of State, who has additional sectors to his brief. In the US, the head of the SBA is a member of the President’s Cabinet: surely we should have the same prominence here. Perhaps the most important area which the report sought by these amendments should look at is access to finance. There has been a great deal of activity with the intention of improving credit conditions for small businesses—but, as I have said, with only limited success. The Federation of Small Businesses’ Voice of Small Business index shows that small firms are struggling to get the finance they need and still require greater competition and choice in the banking options available to them. Without improvement in these areas, we are unlikely to see significant improvements in credit conditions.”
“This is one immediate step that could be taken towards supporting small firms. When it comes to receiving advice about how to strengthen and grow small businesses, the landscape remains confused. I have to say that when I go around and ask those who are running small businesses what is the main issue that really bothers them, it is business rates—so this needs to be looked at very seriously. In the United States, the Small Business Administration represents a successful model for providing support and advice, and indeed for directing policy, and one that we should look to imitate in this country. It is often easier for large companies, especially those which can pay for lobbying advice, to understand how to approach business and how to look for the support that government may be able to provide.”
“The second requires that, allied to this strategic review of what small businesses need from government, the Government should publish an annual report which details the steps that they are taking. Taken together, the intention is, first, that there will be a greater level of strategic thinking about the correct policies to support small business in the future and, secondly, that Parliament will be better able to scrutinise these policies. The truth is that this is required because all is not well with regards to the policy framework for small businesses. During the term of this Government, they have been adversely affected by a £1,500 rise in business rates in what by any account have been difficult trading conditions. It is our view that they should now see a freeze or a cut in business rates.”
“She may be told by the banks and by her officials that small businesses are being helped, but I speak to those at the coalface and know that many businesses strive in vain to get vital funding. We have to do more to help them. With that in mind, I turn to this first group of amendments. They are designed to ensure greater security and understanding of the action that the Government are taking with the aim of supporting small businesses. They will enable us to better account for the effectiveness of the steps taken in this direction. The first of the two amendments requires the Secretary of State to undertake an immediate strategic review of the key issues affecting small businesses and, in doing so, design better policy interventions to support them.”
“Much of the funding that has been advanced to the banking sector has been assigned by the banks to the business areas that they know well: in particular, mortgage lending, which is easy, profitable and relatively risk-free for them, as opposed to lending to small businesses, which is hard work and risky, and probably cannot make anything like the same return. Predictably, they went for the easy option and the route that minimises risk and maximises profit. As a business, why should they not? But that is not what the Government said was going to happen. Investment in small business has made little progress, which is why I called it a flop. The noble Baroness may think otherwise but I can assure her that, based on my own background in equipment leasing, I know the SME funding scene.”
“I must admit that even I have struggled to keep up with each of the announcements that the Government have made for various forms of funding for small business. Given that it is my job to keep up with all of this, I wonder what the average small business man at the sharp end makes of it all. Let us take a look at Funding for Lending. I said at Second Reading that I thought it was a flop, and the Minister—the noble Baroness, Lady Neville-Rolfe—chastised me and said that I had got it wrong. But I still have to say that I do not think I have got it wrong; I think I have got it right.”
“My Lords, first, happy new year to everybody. At Second Reading, the general tone that came from these Benches was that we welcome the Bill. We welcome it because we, the Opposition, realise only too well that national growth in productivity, investment, exporting and employment—all of which we desperately need—can come only from a strong political culture that supports small and medium-sized companies. The Government, and in particular the Conservative Party, want to lead us to believe something else, but we refute it. Labour stands for a dynamic business sector that will prosper with strong support and without the debilitating threat hanging over us of the possibly of the UK leaving the EU two years from now.”
“You hear stories, such as were mentioned by the noble Baroness, of 71% of all applications being approved. However, it depends what you mean by an application. Many applications fall at earlier levels before they get to the formal point. All I can say—I shall be speaking a little later about my own experiences with a small business—is that it is incredibly tough for small businesses that have been going for two or three years to raise the money necessary for them to expand, and I am talking about successful companies. Therefore, I suppose that I take a far more pessimistic view than the noble Baroness. More needs to be done to encourage these businesses. Nevertheless, I am somewhat reassured by what she said, and of course I beg leave to withdraw the amendment.”
“I must thank everybody, particularly the Minister, for her reply. Of course, this is a probing amendment—and I think that we have managed to probe and get quite a lot out of it that is beneficial. I thank the noble Lord, Lord Flight, too. I absolutely agree that there is a huge issue with equity for small businesses. Since I started studying economics a long time ago, there has always been that equity gap that needs to be plugged. In some ways, I am not sure that a huge amount of progress has been made on it. I suppose that it depends on how you look at these things. If you go to visit some of the banks, as I do—and I hear what the Minister says in that regard—you could think that after five years it is a golden period for small businesses and that it is all absolutely rosy.”
“They tell us that they are in business to support small companies but, when push comes to shove, they revert to their old ways. Too many small businesses when rejected by their own high street bank simply give up. They are intimidated. That is why the new sources of alternative finance—the challenger banks and the peer-to-peer lenders—must continue to be encouraged.”
“That is not much help to a service business set up by two young men with no assets apart from the business itself. I went to see the very clearing bank with which I have dealt since I first started working in 1959. It knows my history and my successes inside out. A very senior manager, when I explained our requirements to her, said to me—I am not exaggerating—“Well, it looks like daddy will have to give a personal guarantee, doesn’t it?”. My answer was unprintable and my words should have no place in the august annals of Hansard . I told her that daddy has never given a personal guarantee and certainly did not intend to do so now, or words to that effect. I have to say, “How dare they?”. After all the banks have been through and after we as a nation have effectively bailed all of them out, it seems that nothing has changed.”
“Eventually, we were successful in that one of the new challenger banks—the noble Lord, Lord Flight, is the chairman of Metro Bank, so I must give him my thanks—offered a superb invoice discounting facility, but not before we endured the lethargy and inflexibility of the traditional high street banks. Of course, as a company we also had to step up our game in credit control and debt collection, and we managed to get an infusion of equity finance. The high street banks were simply awful. Do not believe for one moment that they have changed. One has the motto, “One for two”: one acceptance for every two rejections. I cannot believe that that is true. All they want is what they have always wanted—bricks and mortar security and personal guarantees.”
“However, success has brought its own issues, and the trickiest of all has been cash flow to support the rapid growth of such a company. In short, we could see that if we continued to grow so rapidly, it would put a severe strain on our bank balance. Therefore, as chairman, I was deputed to find new sources of finance. I was happy to do so but I was even happier for another reason: we talk a lot about small business but, to be honest, it is a long time since I have been in the front line, so it was pretty good to go out there and see what it was like to raise additional funding for a company that is doing quite well.”
“My Lords, I must declare, as I did at Second Reading, that I am the chairman and a shareholder of a graduate recruitment company called Instant Impact Ltd. I also have to declare that this company was founded by my son and a friend, who got to know each other when they were at Cambridge University. I know that this may have echoes of Second Reading about it, but I want to give an example of the sorts of issues that we have encountered. I think that they point towards financing in general and invoice discounting in particular. I shall not detain noble Lords for too long. Instant Impact has been very successful. After four years of operation, its projected billing for this year is £1 million and its employees now total 22. We should have many more companies like this in the UK—and if we did, maybe some of our problems would be over.”
“I thank the noble Baroness for her reply. Of course, this report will come before the Report stage of the Bill, so we can come back to it as necessary. Again, I thank her. I think that most of her response was reassuring and I beg leave to withdraw the amendment.”
“The young men who ran the company tried everything they could but the money was not forthcoming. In my role as Jack of all trades chairman, I decided to take on the job of chief debt collector as well and got on to these two companies to get in the funding. It was partially successful but they were very elusive. They said that one company had gone out of business—the usual sort of stuff you get. However, I discovered something amazing. To be honest, I never thought that I would be standing here saying how good Her Majesty’s county courts are. If you look up the county courts online, there is a facility there to issue a county court judgment online and quickly. I have to tell your Lordships that in both cases I did it and got the money plus interest within 14 days.”
“At the extreme, I do not understand why there is any credit on payments. After all, if you or I go into a shop to buy a new computer, we do not say, “Well, you know, it’s going to cost £1,000 and I’d like 60 days’ credit before I pay”. We would be laughed out of the shop. So why it is any different with a business? Why cannot payments be absolutely instantaneous? I know that I am portraying a very rosy situation here but I feel that there should be a move towards a greater reduction in the number of days’ credit that companies take. With the ease of making payments today, it should become lower and lower. I want to make one plug if I may. I have mentioned before that I am the chairman of a small company. We had two particular debtors who were each not paying us £7,000.”
“I do not know whether this is true but I am prepared to bet that more than any government support for funding that we have discussed or any new initiative to help small businesses, the one thing that would change the situation and help companies would be an improvement in the culture of late payments. I suspect that in this Room today there are many noble Lords and others who have themselves come from small business backgrounds—perhaps family businesses—or have worked in small businesses. We all know what it is like to sweat while waiting for a payment from a big company, knowing that if it does not come you may be forced into a state of bankruptcy. Therefore, I think that anything that can be done to encourage payments and to reverse this culture of companies taking more credit would be great.”
“My Lords, I think that the whole issue of late payments is to do with the business culture that exists. As the years have gone by, it has become easier and easier for large companies effectively to bully small companies so that they can maximise their cash flow. In these days of low interest, it is not a question of paying less interest but of being able to conserve cash flow at the expense of somebody else. It is a really bad situation. I am glad that the Government have taken the initiative on it, and we have come up with amendments that we think will help them.”
“Without such a safeguard, there will be understandable reluctance among many businesses to have possibly sensitive data circulating without their express consent. I hope the Government can accept this improvement to a clause that has widespread support, to ensure that no opportunities to improve access to finance for small business are missed. Finally in this group there is also a probing amendment on the likely costs of the process laid out in the clause. This is purely designed to ask the Minister to provide a little more detail than is currently available in the impact assessment as to where the costs of this change are likely to fall. I beg to move.”
“This change is supported by the Federation of Small Businesses, which says that it, “would also like to see a duty included in the Bill which requires banks and credit reference agencies to provide information about the criteria used to calculate the credit score of the small and medium sized business customer. This would increase transparency and guidance to help small firms to understand their credit score and to help them take steps to improve it. The customer would request this information in writing and no charge would be made for providing it”. We have also included in this group of amendments a safeguard to ensure that only data relevant to this process is shared, and that it is shared only with the permission of the business.”
“This amendment is also important in terms of working out whether being referred by a bank to a credit agency and alternative sources of finance will affect a business’s credit score. If it is not accepted, the effectiveness of the change which, as I have said, has our support, will be difficult to judge. For instance, if the initial rejection raises the cost of lending, a business would have been better off seeking alternative finance. That does not seem to be the Government’s intention. The amendment would ensure that the change has the effect that the Government intend.”
“You and I can contact credit reference agencies to get information about our credit scores and, in so doing, can find out more detail about how we might improve them—for example, by using a certain type of credit judiciously over a period of time. This process is also important for correcting mistakes when they affect a credit score. All businesses need the same ability to find out why they are struggling to obtain credit. In the first instance, the information lets a small business know whether or not the fault lies with its business or results from a change of policy at the bank. If the fault lies with the business, it can look at taking steps to remedy it, such as making changes to the business plan.”
“For example, Funding Circle, a major peer-to-peer lender, has provided more than 36,000 loans with a value approaching £500 million, so this is already an important and fast growing market. We support the provisions in Clause 4 and believe it is crucial that we look at expanding the provision of finance to small business. These amendments are aimed mainly at helping those who are refused access to finance but for whom it is not immediately clear why that is the case. As I mentioned earlier, many small businesses that are turned down by high street banks just turn tail and do not seek alternative providers. We must encourage the small business community to say, “If your bank turns you down, there are plenty of others who can advance finance to you”.”
“We are very pleased that the Government are addressing this measure but we believe that we can go much further in toughening up its implementation. These amendments concern the ability of SMEs to work out how their credit rating is calculated and would place a duty on credit reference agencies to increase the transparency around how the scores are worked out. Clause 4 gives the Treasury the power to require banks to share information with credit agencies to increase the likelihood of SMEs accessing finance, even if they are initially turned down for a loan. This is important as there is a growing market of alternative finance providers that can help small businesses get the credit they need.”
“My Lords, 2015 got off to a cracking start for me. On 1 January, my football team, Tottenham Hotspur, put five goals past Chelsea. For those who do not follow football, that is as good as it gets. Then, on 2 January, the new rules on payday lending came into effect. Having campaigned on the issue for three years, that was a wonderful outcome. When I was involved with payday lending, I became aware of how important it is for large banks to share individuals’ credit references with much smaller credit providers. If the credit information is not provided in a timely manner, it is much harder for loans to be advanced. Small businesses suffer from the same malaise. To advance credit, providers need data, much of which are historic. Without data, lenders are simply shooting in the dark.”
“I should like to respond to the Minister by thanking him for his support on the subject of payday lending. There were some dark days in this three-year campaign, and he and I had private meetings in which he gave me a lot of encouragement. Me saying that from this Dispatch Box will have totally ruined his career, but he was very supportive and for that I am grateful. I thank him for the points he made, which are helpful. We will, of course, come back to all this on Report. I beg leave to withdraw the amendment.”
“For the rich kids, for those whose mummies and daddies can open doors, unpaid internships are a sure-fire way to get a good job. But what about the poor kids whose families cannot afford for them to work for nothing and whose parents have no such contacts? I hope the Government will back me in this. They should do if they are in favour of equal opportunity. But if they do not, I am determined and confident that Labour will support me. Certainly, I will be introducing amendments at later stages of the Bill to right this wrong. Quite simply, unpaid should become paid. I have taken a smorgasbord of issues that I aim to address as the Bill goes through your Lordships’ House, and I look forward to our debates in Committee.”
“There is no reason why the UK has not produced its own Google or Amazon, but we must make it easy for our successful companies to scale up quickly. Finally, I wish to address the issue of unpaid interns. I am prepared to bet that even in these Houses of Parliament there are many young people working for nothing. It is outrageous. Certainly, up and down the country many young hopefuls are forced into taking unpaid internships just so that they can enhance their CVs or in the hope that someone might notice them and offer them a full-time job. There is a word in English that defines forcing people to work for nothing—“slavery”. Indeed, the Modern Slavery Bill is currently going through your Lordships’ House. Unpaid internships are another form of slavery.”
“The Scale- Up Report on UK Economic Growth makes a very clear proposition: the game is not about creating companies, laudable though that may be; the real game is about scaling up our successes. As Reid Hoffman, the co-founder of LinkedIn, put it: “First mover advantage doesn’t go to the first company that launches, it goes to the first company that scales”. A “scale-up” is an enterprise with average annualised growth in employees or turnover greater than 20% per annum over a three-year period and with more than 10 employees at the beginning of the observation period. Why do we lag behind the US in companies being able to scale up? There are five reasons: the skills gap; leadership capability; accessing customers in other markets; accessing the right combination of finance; and navigating infrastructure.”