SMEs Lose Out in Queen’s Speech
Queen’s speech in brief — Bills affecting business:
Equality Bill: businesses with more than 250 employees will have to report on gender differences on pay and publish the results. Agency workers to be given equal treatment with permanent staff after 12 weeks in a job.
Digital Economy Bill: universal broadband to be introduced.
Bribery Bill: makes it an offence if businesses fail to prevent a bribe being paid by an employee.
Economic recovery and growth were the leading themes in this year’s Queens’ Speech, but the small business sector was largely overlooked in the Government’s legislative programme.
Key measures included a curb on City bonuses and plans to tackle inequality of pay between men and women working in large firms.
The speech also unveiled a legal obligation for the Government to halve the budget deficit within four years under the Fiscal Responsibility Bill. Full details are due to be set out in next month’s Pre-Budget Report.
But with only 33 legislative days left in the House of Lords before the election next June, some doubt whether there is sufficient time for the planned bills to become law.
However, the British Chambers of Commerce welcomed plans to cut the deficit, saying that the UK urgently needed a credible plan to shrink debt, reduce public borrowing and enable businesses to return to growth.
“Work to cut borrowing needs to start now ― protecting areas of spending that underpin the productive economy, such as infrastructure, while paring back the overall size of the public sector,”
said BCC director general, David Frost.
Equality Bill to narrow Pay Gap
A proposal to narrow the pay gap between men and women was also broadly supported by the BCC, but it warned against increasing red tape for businesses.
Under the Equality Bill, businesses with more than 250 employees will be required to report on gender differences on pay and publish the results.
The speech also confirmed the previously announced step to give agency workers equal rights to permanent staff after 12 weeks in the job.
“The Equality Bill’s original purpose, to simplify and consolidate, is welcome,” said Frost. “But the mechanisms it uses will increase the administrative burden on business, and are unlikely to have the desired impact in terms of equality.”
Digital Economy Bill to improve Broadband Access
The speech also announced a bill that would “ensure a communications infrastructure that is fit for the digital age, and one that supports future economic growth,” but contained little actual detail on when universal UK broadband will be introduced.
The controversial broadband tax, which will see the Government collect £6 a year on all phone lines, was also not mentioned but is likely to be brought in next year as part of the Finance Bill. The Government is aiming to use the funds to expand broadband networks to 90% of the country by 2017.
The BCC called for further clarification from the Government.
“Universal, high-speed broadband is a crucial piece of business infrastructure that the UK badly needs,” said Frost.
“But it’s not yet clear how to fund this infrastructure without financially impacting on businesses,” he added. “A new telephone line levy will add to business costs at a time when they can least afford it.”
According to the Department for Business, Innovation and Skills (BIS), more details will be available later this month when the Digital Economy Bill is published.
Bribery Bill proposes Tougher Penalties
Due to come into force in 2010, the Bribery Bill will make it illegal for an individual to bribe a foreign official to obtain or retain business. The Bill will also make it an offence if businesses fail to prevent a bribe being paid by their employees or by other firms on their behalf.
The new corporate offence means that unlimited fines may be imposed on businesses if found guilty.
Financial Services Reform
The Financial Services and Banking Bill largely focused on consumer banking issues, although the powers of the Financial Services Authority (FSA) are due to be extended in order to curb excessive bonuses.
While the Bill lacked specific banking reform measures aimed at small firms, the Federation of Small Businesses said that lending levels still needed improvement.
“Access to finance needs to be improved through more competition for small business banking on the high street,”
said FSB national policy chairman, John Walker.
“Any changes in financial regulation should not be political rhetoric but should translate into better lending opportunities.”