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Cable’s small business bill ‘removes barriers to growth’

Thu, 26 Jun 2014
Green-shoots
While headlines focused on business secretary Vince Cable’s planned ban on exclusivity clauses in zero-hours contracts, there are many other measures in the Small Business, Enterprise and Employment Bill designed, the government said, to “remove barriers to growth for small firms, strengthen the foundations for a sustainable recovery, and create jobs”.

For small firms struggling to access finance needed to expand and take on employees, the bill aims to:

  • boost competition in banking. Opening up access to small business credit data will make it easier for small- and medium-sized businesses to seek a loan from a lender other than their bank
  • introduce “cheque imaging” to speed up clearing from six days to two.

Regulatory reforms include:
 
  • a more streamlined process to incorporate a new company and register for tax purposes
  • setting a legal deregulation target “similar to the One-in, Two-out approach” and ensuring transparency about new regulatory burdens on business.

Small business will be given greater access to the public sector market through more streamlined and efficient procurement practices. There will be more help for small business expansion overseas by increasing the support available from UK Export Finance and widening its powers.

With jobs lost due to record numbers of pubs having closed in recent years, the bill introduces “a statutory code of practice to govern the relationship between pub-owning companies and their tied tenants. An independent adjudicator will enforce the code. The measures will address the imbalance in bargaining power between pub-owning companies and the 20,000 or so tenants that run tied pubs across England and Wales”.

Boosting transparency so that the UK is seen as a fair place to do business is a key aim of the bill. It introduces measures to:

  • require companies to keep a register of people with significant control over the company. The BIS says this “will help deter, identify and sanction those who hide their interest in UK companies to facilitate illegal activities. Enhanced transparency will also promote good corporate behaviour”

  • abolish bearer shares, to “remove an easy means of facilitating illegal activity, and ensure we are compliant with international standards”. It will prohibit the use of corporate directors – one company as the director of another – with limited exceptions “to help counter opaque arrangements” involving company directors.

Rogue directors will face a stronger disqualification regime “to give the business community and consumers greater confidence that wrongdoers will be barred as directors”. There will be more opportunities for creditors who have suffered from misconduct by directors to obtain compensation.

At the same time, insolvency law will be modernised and oversight of practitioners made more effective.

On employment, a range of proposals include measures to:

  • reform whistleblowing procedures to provide greater reassurance to the whistleblower that action is being taken by the prescribed person, so increasing confidence in the actions of the prescribed person

  • deter business non-payment of employment tribunal awards by creating strong financial consequences

  • reduce delays at employment tribunals caused by frequent and short notice postponements

  • increase the penalties imposed on employers that underpay their workers in breach of the National Minimum Wage legislation on a per worker basis

  • recover exit payments from public sector employees that leave and rejoin the same part of the public sector within a year.

There will be more information on learning outcomes from “tracking students through education into the labour market, identifying which schools and colleges provide the best routes to sustainable employment”.
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