Corporate Businesses and Franchisees Regulatory Environment 2025-07-02

Opened the debate

Speaking long before I was born, G. K. Chesterton said that “big business…is now organised like an army. It is, as some would say…militarism…without the military virtues.” Heaven knows what he would say if he was alive now, as global corporations have such influence on all our lives. Yet it is the small and medium-sized businesses in my Lincolnshire constituency and in constituencies across this country that are the backbone of our economy. They also provide the particularities—the colour and shape —of the places that each of us calls home... Small and medium-sized businesses employing up to 250 people make up about 99% of businesses, but just think of the influence and effect of the other 1%. When SMEs are accused of wrongdoing or even of breaking the law, they often have little in the way of resources to defend themselves, so they are at the mercy of powerful regulators and the caprice of giant competitors. In contrast, the big multinational companies, which have come to dominate too much of our economy, have armies of compliance officers, lawyers and spin doctors to bat away legitimate concerns... Indeed, the pandemic exacerbated the power of greedy globalists. Following research on 17,000 big firms, the trade union Unite has highlighted that average profit margins have soared by 30% compared with the pre-pandemic period...

Government Response

I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for his debate on small business support in a post-pandemic world. He rightly pointed out that more needs to be done by this Government to help businesses across our country, especially those in the hardest-hit sectors. As I have stated previously, our focus is on supporting British firms and providing them with the best possible conditions to thrive... The Government has taken steps to address some of these issues and will continue to do so. We are committed to ensuring that small businesses receive fair treatment from larger corporations and that they have access to the support they need to succeed. The Minister acknowledged the concerns raised regarding Vodafone franchisees and the merger with Three. He confirmed that the Competition and Markets Authority had reviewed the merger thoroughly and found it to be in compliance with UK competition law. The Government would investigate allegations of misuse of business rates relief and would work closely with the CMA on any necessary regulatory actions. He also committed to reviewing franchiser conduct and ensuring support for financially distressed franchisees, including through dialogue with banks about leniency measures. In the usual way, I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for securing this debate... We have already taken a number of measures to support SMEs. The Secretary of State for Business and Trade has already committed to establishing a business growth service inspired by the US Small Business Administration... Sir Wyn Williams is doing to draw conclusions about what went wrong in the scandal, and about what more we need to do to learn the lessons and ensure that nothing like that ever happens again... I recognise the concerns across the House that this case has brought up, and as a result, I will track very carefully how the court case unfolds... It is my understanding that the franchise agreements are the main instruments governing the relationship between franchisors and franchisees. Those agreements normally cover key issues such as fees, territory rights, contract duration and dispute resolution mechanisms... We've provided £500 million debt relief to affected businesses, and we are working with authorities to ensure that companies conduct business fairly. Through the audit and corporate governance reform Bill, we aim to uphold standards and independent scrutiny of company accounts while ensuring real accountability for company directors. Section 172 of the Companies Act 2006 requires company directors to frame regard in their decision-making towards a wide range of stakeholder interests and the impact on the wider community. Large companies must report annually on how their directors have complied with these requirements. Our modern industrial strategy includes an ambitious package of regulatory reforms that will support growth-driving sectors and the wider economy, but we continue to work with Members across this House for further improvements. In conclusion, I thank all hon. Members who participated in the debate and promise to look closely at how the case develops and its implications.