Bill Esterson
MP for Sefton Central · Labour · United Kingdom
“As the Prime Minister said on Tuesday, our energy supply and our energy security are not a question of having either oil and gas, or renewables; they are about both. It is a great pity that proper process was not followed in 2022 or 2023. [ Interruption.”
“I warmly welcome my right hon. Friend’s commitment to continuing Britain’s global leadership on climate action, including by going to COP31. I also welcome his focus on breathing space for people and businesses, but, as he said, it will take a lot more than that to deliver the growth and reindustrialisation that he is so committed to.”
“Last week the Committee heard from Claire Dykta, the director of strategy and policy at NESO, who told us: “Operational decisions are taken by authorised, trained personnel only.” Her comments were confirmed by Alastair Martin, the chief strategy officer at Flexitricity, who, in the same session, said: “I do not think the idea that the he…”
“As the Minister has just said, new nuclear is essential for energy security. It is also essential as an alternative career for workers in oil and gas.”
“Paul and Susan Robinson each worked for the Health and Safety Executive for more than 40 years. They have not been able to plan for their retirement since finishing work last year; they have been living off their savings and the small loan that they have had. They are typical of the dozens of constituents who have contacted me.”
“Hudson primary school in my constituency does a brilliant job. It is a family hub, it specialises in support for children with SEND and autism, and it has a nursery, but its building, which is 80 years old, suffers from a high water table that brings damp, mould and structural problems for the building—as does occasional flooding.”
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“Before the Division, the Minister talked about whether the commissioner should take unfair contract terms to court. She said that a quasi-judicial role would be inappropriate. Take the example of somebody in an imbalanced business relationship being offered a three-month payment term on an invoice, knowing full well that it is unfair and completely wrong, but, given their dependence on that contract and business relationship, feeling they have no choice but to go ahead with it. At a later date—this is what the amendment is getting at—there might be an opportunity for them to get some kind of redress. That would be the sort of issue in which the commissioner might intervene. The amendment suggests the commissioner might recommend to the court that the term was inappropriate, rather than take a quasi-judicial role.”
“The Minister is making a joke of it. I am intrigued to discover what it is finding and what is happening with its findings. I hope that we might hear that at some point. We do not need to hear today, but I would be very interested. I do agree that mystery shoppers can be very important in improving the quality of service and operation in a number of organisations. I accept the Minister’s assurances on new clause 7, but, again, when the commissioner has been up and running for a while, it might be good for them to look at some of the payment-terms issues in the new clause and how well things such as the prompt payment code are bedding in—that is, is it as effective as we want it to be? That might be something useful that the commissioner could do in future to make a real difference.”
“Thank you very much, Ms Buck. I have never been more popular—often this popular, but never more. I beg to move amendment 46, in clause 4, page 4, line 27, at end insert— ‘(3A) A relevant complaint may be made anonymously.” This amendment would enable the Commissioner to act on anonymous complaints from small businesses against a larger business.”
“Indeed, there are some unfortunate examples of that confidentiality not being maintained for a number of reasons when suppliers have approached the adjudicator that has no doubt created a concern among businesses, which have therefore chosen not to approach her.”
“The amendments deal with anonymity and confidentiality. I do not intend to spend too long on them, but this is an important subject area, because it is one of the places where we can learn lessons from the Groceries Code Adjudicator. One concern raised by the adjudicator was that many of the supermarket suppliers that wanted to make complaints were nervous of doing so for fear of loss of business. That explains why the investigation into Tesco that recently concluded was not the direct result of complaints being investigated; it was prompted only when the adjudicator herself decided to intervene because of suppliers’ fear of the consequences of complaining and being publicly identified. She has encountered that theme on far too many occasions over the past two years.”
“Clause 4 ordered to stand part of the Bill . Clause 5 Enquiry into, consideration and determination of complaints”
“I think the point was well made by my hon. Friend the Member for Wakefield and by the Minister that if a pattern of anonymous complaints emerges, that is absolutely something the commissioner may act on. Having carefully reread amendments 46 and 49, I accept that they might potentially be read in that way—that was the intention—but I am satisfied by what the Minister says and having it on the record is extremely helpful. Amendment 51 deals with confidentiality and I agree that in an individual case it might be difficult for the commissioner to act if complainants did not give information to the commissioner. Granted they might want to give it confidentially, but those are two separate matters and I am satisfied by what the Minister said. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“I beg to move amendment 50, in clause 5, page 5, line 35, at end insert— ‘(3A) Where the respondent fails to provide information voluntarily the Commissioner may investigate the failure and can enforce compliance with information requests on contract terms.’ This amendment would allow the Small Business Commissioner to investigate and require compliance with information requests on contract terms.”
“All three amendments are drawn from what happens in Australia. The Australian small business commissioner is a great success and we have discussed that in some detail, so it would be as well for the Government to consider what happens in Australia. Legal powers to demand information relevant to an investigation form a crucial part of what the Australian commissioner does—note that that includes the public as well as the private sector. That is an important reminder that as the office of the small business commissioner in this country develops, the opportunity to continue to learn from the very best practices in the world remains available. The amendments are probing ones designed to allow the Government to do just that. We have discussed such matters previously, so I need say no more. I will wait to hear the Minister’s response.”
“This is the start of a process, and the amendments, as I said in my earlier remarks, are about drawing on the good practice from Australia. I am reassured that the Minister has every intention of this being a learning organisation and that it will continue to evolve. With those remarks, I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Clause 5 ordered to stand part of the Bill. Ordered, That further consideration be now adjourned. —( Stephen Barclay .)”
“I agree that there needs to be trust and the right relationship between businesses of all sizes. I have used the term level playing field a number of times. I am not against the concept of naming and shaming, either. But there is the matter of what happens if it does not work. To be fair to the Minister, she has acknowledged that we might have to come back to some of these points. The prompt payment code is not compulsory, and perhaps we will revisit that. So, there is the question of businesses that do not co-operate and provide information and do not go through mediation. Equally, we still have the challenge of those businesses that feel unable or scared of the consequences, or feel that it will disadvantage them if they complain. We do not know what will happens then, so I think there is a long way to go.”
“We do not know, because we do not know the wording of the new clauses to be put forward by the Government.”
“The Sunday trading issue is a cause of widespread interest—some would say concern—not just in this Committee, but around the country. It causes concern to faith groups, families with workers affected by Sunday trading, trade unions and the independent retailers. Some larger retailers also have great concerns. At the moment, we have what is often described as a good old-fashioned British compromise. What advice can you give me, Mr Amess, about when the new clause is likely to come forward, how we as an Opposition can adequately address it and whether we will be able to table our own amendments? Is there some other way in which we can deal with what is—we must face it—a very contentious matter, possibly the most contentious element of the Bill?”
“The new clause I am thinking of relates to the Sunday trading laws. It was not tabled in the Lords, when there was ample opportunity. We were told that it was going to be included only in answer to BIS questions last Tuesday, as was confirmed on Second Reading the same afternoon. The Government have not been short of time. I want your guidance, Mr Amess, on how to approach the matter. Have you had an indication of when the new clause—a whole new element in this Christmas tree Bill—will be tabled? How will we adequately scrutinise the new clauses? What opportunity will we have to table our own amendments, given your advice at the start on the short time that we have and how difficult it is to get our amendments debated unless we table them in enough time?”
“On a point of order, Mr Amess. It is a pleasure to serve under your chairmanship on this important Bill. I am delighted to be on the Front Bench with this opportunity to talk about enterprise, which is very dear to my heart; I have run my own business. There are many good attributes to the Bill, which has been described as something of a Christmas tree of a Bill, with a number of not immediately obviously related parts. It could be described as having had baubles hung on it, some of which sparkle more brightly than others. Some of the sparkle is due to amendments tabled in the Lords, including on the ability of the small business commissioner to appoint his or her own staff and the market rent-only option in the pubs code. However, some new clauses have yet to be tabled, and that is the reason for my point of order.”
“Further to that point of order, Mr Amess. I asked whether we were able to amend the clauses that have already been tabled by the Government.”
“(1E) A person appointed to be the Commissioner is not eligible for re-appointment.” This amendment would provide a level of independence for the Small Business Commissioner, adapted from the arrangements for the appointment of the Information Commissioner and the Parliamentary Commissioner for Administration who are appointed by the Crown following advice from both Houses of Parliament.”
“I beg to move amendment 33, in clause 1, page 1, line 5, at end insert— ‘(1A) Her Majesty may by Letters Patent from time to time appoint a person to be the Commissioner. (1B) A person appointed to be the Commissioner shall hold office until the end of the period for which he is appointed. (1C) A person appointed to be the Commissioner may be— (a) relieved of office by Her Majesty at his own request, or (b) removed from office by Her Majesty on the ground of gross misconduct. (1D) Her Majesty may declare the office of Commissioner to have been vacated if satisfied that the person appointed to be the Commissioner is incapable for medical reasons— (a) of performing the duties of his office; and (b) of requesting to be relieved of it.”
“However, the Secretary of State still has the power to appoint and dismiss the small business commissioner. This group of amendments seeks to make the appointment a Crown appointment, to ensure that the small business commissioner is in a position to help when the source of complaint or unfairness is the public sector. If the Secretary of State appoints and has the power to abolish, there may well be a reluctance on the part of the small business commissioner to challenge the very organisation that appointed him or her and which can abolish his or her role.”
“These disputes may relate to pre-contractual negotiations as well as terms of the contract and new arrangements proposed once a contract is in place; for instance, if a firm feels it is being harmed by the other party’s unfair behaviour.” Helping small businesses thrive and grow to help our economy is very much the right way for Government to intervene in support. The list of intended responsibilities I have just read out are all concerns shared by many small businesses. There are too many examples of larger customers treating their smaller suppliers in an unfair way, but one large group of larger customers is the public sector. The Bill at present gives the Secretary of State the power to appoint and to dismiss. The Lords amended the Bill to allow the small business commissioner to appoint his or her own staff.”
“The impact assessment goes on: “It is proposing to establish a service to complement existing provision and lead a culture change in how businesses resolve—and ultimately avoid—commercial disputes. It is proposed that the new Small Business Commissioner (SBC) would: empower small businesses to resolve disputes and avoid future issues through general advice and information, related to dispute resolution and contract principles; signpost to appropriate services eg sector ombudsman or regulator, existing independent advice service, approved alternative dispute resolution (ADR) provider or SBC complaints handling function and; consider complaints by small business suppliers about payment matters arising with larger businesses which they supply.”
“The small business commissioner is being set up to support small business, according to the BIS impact assessment. That includes making it easier to resolve commercial disputes, not least relating to late payment, and to resolve contract negotiations related to late payment or otherwise. It also includes having someone to turn to for dispute resolution and in respect of being treated unfairly in tendering for work, as well as being able to maintain business relationships while in dispute, ensuring that good mediation options are available and dealing with supply-chain matters. We welcome the small business commissioner’s having a remit that supports small business in addressing those challenges. As the impact assessment says, “…small businesses thrive and grow, to help support our economy, both locally and nationally”.”
“Those businesses either grow in their own right or are taken over by larger businesses that take on board their ideas. As global competition intensifies, the ability of businesses and individuals to identify and take advantage of entrepreneurial opportunities becomes increasingly important, hence the need for Government to ensure that support for small businesses is in place. It is in the spirit of the Government’s role in creating a level playing field that we approach the Bill, to scrutinise, challenge and propose amendments. The purpose of the small business commissioner is to support small business. We want that commissioner to be as effective as possible and believe that he or she will therefore need to work independently of large business and Government.”
“It will have the power to look into complaints about poor payment practices and report back on its findings.” Small and medium-sized businesses, particularly new entrants to the market, drive economic growth by stimulating innovation, acting as a competitive spur to existing businesses. That occurs through the process of productive churn, when new entrants and existing firms become more and more enterprising, with new ideas for products and processes, and win market share, and less productive businesses exit the market. New and small businesses also complement larger firms by operating in local or niche markets and by being the first to enter new markets. Small and medium-sized businesses stimulate innovation with research, suggesting that such businesses in particular act as an important seed bed for innovations.”
“The Enterprise Bill provides an opportunity to explore the proposed terms of reference of the small business commissioner and to look at how he or she can be as effective as possible in championing the cause of small business, in creating a level playing field and encouraging enterprise from the start-up to growth and beyond. According to the Department for Business, Innovation and Skills impact assessment, the purpose is to “make it easier, quicker and cheaper for small businesses to settle payment issues with larger companies by setting up a Small Business Commissioner. The Commissioner will give advice, provide information and refer businesses to services that can mediate in disputes.”
“Small businesses are the lifeblood of our economy and are at the heart of communities up and down the country. There are more than 5 million businesses employing 10 people or fewer. It is vital that the people running such enterprises are given the opportunity to thrive and that their businesses can flourish. The creation of a small business commissioner is a good step towards helping small businesses and follows the examples of the Small Business Administration in the US and the small business commissioner in Australia. In our manifesto, we proposed the idea of creating a UK small business administration and we support the principle of a small business commissioner as a step forward.”
“The Government do not intend the small business commissioner to have a role when it comes to disputes between small businesses and the public sector. As that is a source of much concern among small businesses, it seems certain that many complaints will go to the commissioner about the public sector. Even in relation to complaints against larger public sector businesses, if the Government do not like the way the commissioner is operating—this is at the heart of my hon. Friend’s intervention—the Secretary of State may decide to intervene and that implied threat could cause the commissioner to be less effective, through a reluctance to act.”
“My hon. Friend makes a very good comparison. There are many examples where the closeness of the relationship means there is the potential for a conflict of interest. There are other examples, which I will come to, where there is an arm’s length relationship: our amendment attempts to forestall this potential conflict. We certainly do not want the Secretary of State to have undue influence and the commissioner to feel constrained in his or her ability to act. After all, if we want small businesses to be as successful as possible, we want them to have independent support from the small business commissioner. People will rightly look to the commissioner to give a lead and give support, advice and encouragement to small businesses, which are, as I said at the start of my remarks, the backbone of our economy.”
“I thank my hon. Friend for her intervention. The whole area of the supply chain and whether the Government have thought through some of the implications of exactly that example are among the challenges that we have tried to deal with not just through this group of amendments but elsewhere by giving the small business commissioner the opportunity to be as effective as possible. One of the problems of the commissioner only dealing with larger businesses is that they miss an opportunity and may be constrained in many ways, an example of which my hon. Friend has just given. This group of amendments seeks to remove a potential obstacle to the small business commissioner’s being as effective as possible. Other amendments attempt to do the same thing with other elements of the way in which the Government have structured the office.”
“The institute represents many directors, owners and operators of small businesses, so I suggest that it is worth listening to what it has to say: “Together, these amendments would give the Small Business Commissioner a stronger footing from which to be a champion for small business. We fear that the possibility of abolition by the Secretary of State could potentially negatively impact the ability of the Small Business Commissioner to challenge that same Secretary of State. We hope for and anticipate a positive working relationship between the Commissioner and the Secretary of State”.”
“I am pleased that the Minister is confirming that from a sedentary position. If the small business commissioner is to be as effective as possible on late payments, we need someone who can work not on the basis of a press release or the exhortations of Members of whichever House but constructively with businesses, learning the right lessons and creating the right solutions. That means not being an appointee of the Secretary of State, doing the Secretary of State’s bidding or wondering whether the Secretary of State will intervene with the potential for abolition. It is important to note that the Institute of Directors has been forthright in its support of the amendments.”
“We are debating the first set of amendments, which are about appointment and dismissal. We will come to public bodies later. However, it is relevant to speak about them both; I have done so because the independence of the commissioner enables small businesses to have confidence that they can deal with the commissioner and that the commissioner will not be constrained by their relationship with Government, either in relation to other businesses or the public sector.”
“I thank my hon. Friend for reminding us about the difference in how the Groceries Code Adjudicator has been set up. We will talk about the Groceries Code Adjudicator at a number of points during our deliberations. Indeed, we will be discussing an amendment later on the need to review the performance of that office so far.”
“What will happen if the small business commissioner does not have the opportunity to expand his or her office? The issue of who appoints and whether the office can be abolished by Ministers is part of the wider question of whether the office will be effective or not, a point made very well on Second Reading by the hon. Member for Huntingdon (Mr Djanogly). It was also made many times by Members of the other place across the parties.”
“It would be a great shame if that were the case. The Government say that they envisage the role of the small business commissioner evolving over time. The workload grows and as businesses grow accustomed to the idea that there is someone to turn to, that is a likely development. If that happens, how will the office cope with the increased workload? Perhaps the Minister will consider that in her response. Remember, BIS faces sizable budget cuts. How will the small business commissioner be protected from those cuts, let alone be in a position to recruit additional staff? We know that late payment is a significant problem, as my hon. Friend the Member for Newcastle upon Tyne North reminded us in her intervention. The 500 anticipated cases a year will be the tip of the iceberg.”
“Victoria is a state with 5.8 million people, a GDP perhaps one-tenth the size of that of the UK and with perhaps one-fifteenth of the number of small businesses. It had 430 cases, while our commissioner is planning to handle 500. That does not seem very ambitious for the role of the small business commissioner. Perhaps that is related to the way that it has been set up as part of the Department, reporting directly to the Secretary of State. If the small business commissioner is set up only to address a tiny amount of work, it might raise the question how serious the Government are about making a difference to small businesses. Some might even suspect that the Government do not really intend for the office to be a great success and that therefore they will be in a position to deliver abolition down the line.”
“The Regulatory Reform Committee made an assessment which said: “We therefore consider that it is inappropriate for the Bill to confer on the Secretary of State a Henry VIII power to abolish the Small Business Commissioner without any of the procedural restrictions (beyond the need for an affirmative resolution in each House) of the nature set out in the Public Bodies Act 2011, particularly that requiring consultation”. I am concerned, as are my hon. Friends, that the general perception of how this provision was planned and developed under-appreciated the role that the body should play. The estimate is that it will deal with 500 complaints. I mentioned the Victoria commission in Australia. It dealt with 430 complaints of a comparative nature in its first year.”
“At the end of the day, the operation of the office, as things stand, will be subject to the most minimal scrutiny and the report will be given, not to Parliament, but to the Secretary of State alone, which leaves one with grave concerns. In the other place, the Minister said that if the commissioner was ineffective, there would be grounds for abolition. Surely the point is to set the post up in the first place to ensure that it is effective by giving him or her the necessary powers and independence. That means being outside the control or remit of the Department or the Secretary of State.”
“The commissioner will be someone whose terms of reference are quite clear. As things stand, he will be the creature of, and appointed by, the Secretary of State, and will have little security of employment, given the ability of the Secretary of State to dismiss him or her at the drop of a hat. He will be capable of being thrown out at the whim of a Minister. It would afford the business community a sense of confidence if our amendments were adopted. A small business that has problems with payment and other concerns about administration will find that this place person is in a job that affords the small business little or no protection or opportunity for redress of an independent character.”
“My hon. Friend is absolutely right. This is why we have tabled not just these amendments, but others, which are about making the post as effective as possible, so that it really is about championing business. This is the Enterprise Bill: it is about promoting enterprise as best we can. Small businesses are absolutely critical to driving enterprise, pushing forward productivity and improving the overall state of the economy. Getting this post right is a great opportunity to do just that. The interventions of both my hon. Friends just now demonstrate the importance of getting that appointment process right, so that the best person possible is appointed. As my hon. Friend the Member for Wakefield said, opening it up to the widest field possible is an important way of doing just that.”
“My hon. Friend is right: businesses will expect this office to be able to handle their complaints. We might reasonably expect the level of complaints to be significantly higher than 500 from a small-business population of well over 5 million. It is not a good idea when standing on one’s feet, Mr Amess, to calculate the proportion of small businesses that would be involved if more than 500 out of 5 million were to approach the small business commissioner. I am sure somebody can work it out and give us the figure at some point. It is certainly a very small number.”
“That is an excellent point. Like my hon. Friend, I find myself performing some of the roles and responsibilities set out for the small business commissioner on behalf of my constituents. Having been owner of a small business, I have sometimes been able to point them in the right direction. We would expect the small business commissioner to be in a position to give advice, support and encouragement. Later amendments will look at how that might be achieved if that office is to be given additional responsibilities.”
“It gives the office holder some guarantee of independence, but the level of independence needed for the small business commissioner is not guaranteed purely by virtue of a designation of corporation sole. Removing the ability of the Secretary of State to abolish the role is the key. If the small business commissioner is not appointed by, cannot be removed by and cannot be abolished by the Secretary of State, then he really achieves independence. This is the distinction between a corporation sole and a Crown appointment, and that is why our amendments are so important.”
“We need that protection for the role of the small business commissioner—a clear statement in the legislation that says, “This post is here to stay and it will stand independent of Government, no matter the political priorities or budget constraints of the day.” Establishing the small business commissioner as a corporation sole is a step in the right direction, but a corporation sole is more about the continuity of the post. It allows the post to pass without interval from one office holder to the next. It lays powers and legal status with the office, not the office holder, securing a level of continuity as the post passes from one person to the next.”
“By strengthening the independence of the small business commissioner, our amendment would capture that commitment and change the conditions of appointment, removal and abolition of the post, which, as they stand, may leave the small business commissioner vulnerable in future. That is a level of protection that remains even if the small business commissioner’s role sets him on a collision course with the Government of the day, as happened with the Information Commissioner over NHS IT programmes and the citizen information project. The Information Commissioner disagreed with the Government and did so publicly.”
“] I am fascinated to know what the Minister thinks is interesting, having heard what she has just said—she is very welcome to intervene and tell me. She is going to wait until her response. Late payments and unfair payment terms are a long- term problem and they call for a long-term solution, with a role that is absolutely protected from the outset. These amendments to strengthen the independence of the small business commissioner offer that protection. The current commitment to establishing the role—the commitment to championing the interests of small businesses—is laudable.”
“The Australian model, for example, is not an appointment by a Minister; it is an appointment by the Governor-General, the Queen’s representative. That is the direct equivalent of what we are proposing. Three significant steps in the right direction were taken in the other place on this matter. The first was the designation of the small business commissioner as a corporation sole. The second was the amendment to have the small business commissioner appoint his own staff. The third was the new requirements on the Secretary of State to consult on any proposal to abolish the role. That is certainly a sign that we are moving in the right direction. It is a heartening indication that there is a shared sense that the small business commissioner needs to be free to act in the interest of small business. [ Interruption.”
“The Information Commissioner is a public body, sponsored by a Department—the Ministry of Justice. In the case of the small business commissioner, we propose that BIS would sponsor the small business commissioner, so that he would not simply be part of the Department, answerable only to the Secretary of State. The Information Commissioner reports directly to Parliament. The office cannot be abolished by the Secretary of State; the individual office holder cannot be removed by the Secretary of State. The office’s decisions are supervised by the courts, not the Department. That is the level of independence afforded by a Crown appointment, and that is what is needed for the small business commissioner to be as effective as possible and to deliver for small businesses and enterprise.”
“The ability to explore the options as the office develops will be restricted if the small business commissioner is, in reality, restricted by his or her relationship with the Department for Business, Innovation and Skills. We want the small business commissioner to have the chance to be as effective as possible, and an important part of developing that effectiveness will be the way in which the small business commissioner is set up and his ability to operate as independently as possible. Otherwise, the question will remain whether the small business commissioner has the teeth to deliver for business and do the job of enabling enterprise to flourish. The amendments to make the small business commissioner a Crown appointment are based on the legislation that set up the office of the Information Commissioner.”
“She will need to ensure that every business that approaches the small business commissioner wants to go to a membership organisation, where, of course, they will have to pay a fee—because I suspect that the Institute of Directors, the Federation of Small Businesses and the chambers of commerce will continue to charge for their services, as will solicitors, accountants and other professionals, if that is what the intention is when it comes to signposting. The small business commissioner will therefore also need to be in a position to develop his or her own capacity to help with disputes, whether related to late payment or not, to consider developing an advice and support function, and to look at areas such as procurement in the supply chain.”