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A

BILL

[AS AMENDED IN GRAND COMMITTEE]

TO

Make provision relating to the promotion of enterprise and economic growth;
and provision restricting exit payments in relation to public sector
employment.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 The Small Business Commissioner

The Commissioner

1 Small Business Commissioner

(1) 5A Small Business Commissioner is established.

(2) The Commissioner’s principal functions are—

(a) to provide general advice and information to small businesses (see
section 3), and

(b) to consider complaints from small businesses relating to payment
10matters in connection with the supply of goods and services to larger
businesses, and make recommendations (see sections 4 to 8).

(3) Schedule 1 makes provision about the Commissioner.

“Small businesses”

2 Small businesses in relation to which the Commissioner has functions

(1) 15In this Part “small business” means a relevant undertaking which—

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(a) has a headcount of staff of less than 50,

(b) if the business threshold condition applies to the relevant undertaking,
meets that condition, and

(c) is not a public authority.

(2) 5The Secretary of State may by regulations (“SBC scope regulations”) make
further provision about the meaning of “small business” in this Part.

(3) For the purposes of subsection (1)(b), the business threshold condition applies
to a relevant undertaking if—

(a) SBC scope regulations provide for that condition to apply in relation to
10all relevant undertakings, or

(b) the relevant undertaking falls within a description of undertakings to
which SBC scope regulations apply that condition.

(4) A relevant undertaking meets the business threshold condition if it has a
turnover, or balance sheet total, of an amount less than or equal to the small
15business threshold.

(5) SBC scope regulations may (amongst other things) make provision about—

(a) the date (“the assessment date”) on which, or the period (“the
assessment period”) for which, a relevant undertaking must meet a
requirement of subsection (1)(a) or (b) in order to be a small business;

(b) 20the calculation of the headcount of staff, turnover or balance sheet total
of a relevant undertaking at the assessment date or for the assessment
period;

(c) the circumstances in which a relevant undertaking which has been
established for less than a complete assessment period is to be regarded
25as meeting a requirement for that period.

(6) SBC scope regulations may provide that a relevant undertaking of a specified
description is not a small business even if it falls within the definition.

(7) SBC scope regulations may—

(a) make transitional or transitory provision or savings;

(b) 30make different provision for different purposes.

(8) SBC scope regulations are to be made by statutory instrument.

(9) A statutory instrument containing SBC scope regulations may not be made
unless a draft of the instrument has been laid before and approved by a
resolution of each House of Parliament.

(10) 35In this section—

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General advice and information

3 General advice and information

(1) The Commissioner may publish, or give to small businesses, general advice or
information that the Commissioner considers may be useful to small
5businesses in connection with their supply relationships with larger
businesses.

(2) In considering under subsection (1) what advice and information may be
useful, the Commissioner must, in particular, consider how useful any advice
or information would be for the purposes of encouraging small businesses to
10resolve disputes with larger businesses or preventing such disputes arising.

(3) General advice or information published or given under subsection (1) may
include general advice or information about—

(a) principles of the law of contract;

(b) other sources of rights or obligations in relation to the supply of goods
15or services;

(c) dispute resolution.

(4) General advice or information published or given under subsection (1) may
also include general advice or information about—

(a) complaint-handling bodies, ombudsmen, regulators or other persons
20(other than courts or tribunals) who, in connection with small
businesses’ supply relationships with larger businesses, may be able—

(i) to resolve or facilitate the resolution of disputes, or

(ii) to give other advice or assistance to small businesses;

(b) statutory rights to refer disputes in connection with such relationships
25for adjudication by a person other than a court or tribunal.

(5) The Commissioner may publish, or give to small businesses, general advice or
information about—

(a) complaint-handling bodies, ombudsmen, regulators or public
authorities (other than courts or tribunals) who, in connection with the
30supply relationships of small businesses with public authorities, may
be able—

(i) to resolve or facilitate the resolution of disputes, or

(ii) to give other advice or assistance to small businesses;

(b) statutory rights to refer disputes in connection with such relationships
35for adjudication by a person other than a court or tribunal.

(6) Advice published or given under this section must be impartial, and
information published or given under this section must be presented in an
impartial manner.

(7) The powers conferred on the Commissioner by this section to publish or give
40general advice or information may be exercised by making arrangements with
any other person in accordance with which that person publishes or provides
that advice or information.

(8) The Commissioner may make recommendations to the Secretary of State about
the publication, or provision to small businesses, by the Secretary of State of
45advice or information of a kind which the Commissioner is authorised to
publish or give under this section.

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(9) Where a recommendation is made under subsection (8), the Secretary of State
must inform the Commissioner whether anything is to be done in response to
the recommendation and, if it is, give details of the action to be taken.

(10) For the purposes of this section a small business has a “supply relationship”
5with a larger business or public authority if—

(a) the small business has an agreement to supply, has supplied or may
supply, goods or services to the larger business or public authority, or

(b) the larger business or public authority has an agreement to supply, has
supplied or may supply, goods or services to the small business.

(11) 10In this section—

Complaints scheme

4 The SBC complaints scheme

(1) The Commissioner must establish, maintain and administer a scheme (in this
20Part referred to as “the SBC complaints scheme”) under which the
Commissioner—

(a) enquires into, considers and determines relevant complaints, and

(b) may make recommendations as to how the issues raised by those
complaints may be remedied, resolved or mitigated or how similar
25issues may be prevented from arising in future.

(2) The Commissioner must establish, maintain and administer the SBC
complaints scheme in accordance with regulations made by the Secretary of
State under section 7 (scheme regulations).

(3) “Relevant complaint” means a complaint which—

(a) 30is made by a small business (“the complainant”) which has an
agreement to supply, or has supplied or may supply, goods or services
to a larger business (“the respondent”),

(b) relates to a payment matter (see subsection (4)), and

(c) is not excluded from the scheme (see subsection (5)).

(4) 35A complaint relates to a payment matter if it relates to—

(a) a request or other act, or a failure to pay or other omission, in relation
to a payment—

(i) for or in connection with the supply of goods or services, or

(ii) in connection with the relationship or possible relationship
40between the small business and the larger business so far as
relevant to the supply, or

(b)
any provision made or proposed to be made in connection with the
supply or that relationship which restricts, or purports to restrict, any
right of the small business to make a complaint under the SBC

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complaints scheme or to have a complaint enquired into, considered or
determined under the scheme.

(5) A complaint is excluded from the scheme if—

(a) it relates to the appropriateness of the price payable or proposed to be
5payable under a contract for the goods or services supplied or to be
supplied by the small business under the contract by comparison with
those goods or services,

(b) it concerns matters which are currently the subject of legal proceedings
or adjudication proceedings,

(c) 10it falls within the jurisdiction of an ombudsman, regulator or public
authority (other than the Commissioner, a court or a tribunal),

(d) the complainant has a statutory right to refer the complaint for
adjudication by a person other than a court or tribunal,

(e) the complaint relates to—

(i) 15an act or omission which occurred before the appointed start
date, or

(ii) an act or omission in accordance with a term of a contract
entered into before that date, where that term has not been
varied on or after that date, or

(f) 20it is of a description specified by regulations made by the Secretary of
State.

(6) For the purposes of paragraph (e) of subsection (5), “the appointed start date”
means the date appointed by the Secretary of State by regulations.

(7) Regulations under this section may—

(a) 25make transitory or transitional provision or savings;

(b) make different provision for different purposes.

(8) Regulations under subsection (6) may appoint different dates for different
areas.

(9) Regulations under this section are to be made by statutory instrument.

(10) 30A statutory instrument containing regulations under this section (other than
regulations under subsection (6)) must not be made unless a draft of the
instrument has been laid before and approved by a resolution of each House of
Parliament.

(11) In this section “larger business” has the meaning given by section 3(11).

5 35Enquiry into, consideration and determination of complaints

(1) This section applies where a complaint is to be determined under the SBC
complaints scheme.

(2) The Commissioner may ask the complainant or the respondent to provide the
Commissioner voluntarily with any information or documents relevant to the
40complaint.

(3) The Commissioner must give the respondent, and may give the complainant,
an opportunity to make representations to the Commissioner.

(4) In enquiring into, considering and determining a complaint, the Commissioner
must act impartially as between the complainant and the respondent.

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(5) A complaint is to be determined under the SBC complaints scheme by
reference to what is, in the Commissioner’s opinion, fair and reasonable in all
the circumstances of the case.

(6) The determination may contain one or more recommendations as to the steps
5that ought to be taken by the complainant or the respondent to remedy, resolve
or mitigate any issue which is the subject of the complaint or to prevent a
similar issue from arising in future.

(7) Where a complaint has been determined, the Commissioner must prepare a
written statement of the determination.

(8) 10The statement must give the Commissioner’s reasons for the determination
(including any recommendations).

(9) If the determination does not contain any recommendations, the statement
must contain the Commissioner’s reasons for this.

(10) The Commissioner must give a copy of the statement to the complainant and
15the respondent.

(11) A determination made under the SBC complaints scheme is not legally
binding.

6 Reports on complaints

(1) The Commissioner may publish a report of the enquiry into, consideration and
20determination of a complaint under the SBC complaints scheme.

(2) A report under subsection (1) must not identify the complainant, unless the
complainant consents.

See also section 7(7) which requires provision to be made about factors to be
taken into account when deciding whether to identify the respondent in a
25report.

(3) A report identifies a person if it—

(a) mentions the person’s name, or

(b) includes any particulars which, in the Commissioner’s opinion, are
likely to identify the person.

(4) 30Before publishing a report under subsection (1), the Commissioner must give
the respondent and the complainant an opportunity to make representations
to the Commissioner about the proposed publication of the report (including,
in the case of the respondent, about any proposal to identify the respondent in
the report).

7 35Scheme regulations

(1) The Secretary of State must make regulations (“scheme regulations”) about—

(a) the making of complaints for consideration under the SBC complaints
scheme,

(b) the consideration and determination of, complaints by the
40Commissioner, and the making of any recommendations, and

(c) the preparation and publication of reports under section 6.

(2) Scheme regulations must—

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(a) provide that a complaint (or part of a complaint) is, except in specified
circumstances, to be dismissed if the Commissioner considers that the
complainant has not previously communicated the substance of the
complaint (or part) to the respondent and given the respondent a
5reasonable opportunity to deal with it;

(b) provide that a complaint is not to be entertained under the SBC
complaints scheme unless the complainant has referred it under the
scheme before the expiry of the applicable time limit (determined in
accordance with the scheme regulations);

(c) 10provide that the Commissioner may extend that time limit in specified
circumstances.

(3) Scheme regulations may, among other things—

(a) make provision about the content and form of a complaint and the
manner in which it is to be made;

(b) 15allow the Commissioner to fix time limits for any aspect of the
proceedings and to extend a time limit;

(c) provide that a complaint may, or may in specified circumstances, be
dismissed, if or to the extent that the Commissioner considers—

(i) that the complaint is frivolous or vexatious,

(ii) 20that the complaint concerns matters which are more
appropriately dealt with in another way,

(iii) that the complainant has not suffered, and is not likely to suffer,
any financial loss, material distress, material inconvenience or
other material adverse effect, as a result of the matter to which
25the complaint relates,

(iv) that the matter to which the complaint relates has been
remedied,

(v) that the complainant is seeking an outcome other than a
recommendation of the kind that can be made under the
30scheme,

(vi) that the complaint concerns matters that have been the subject
of legal proceedings or adjudication proceedings,

(vii) that the matter to which the complaint relates has previously
been considered under the SBC complaints scheme or by
35another complaints-handling body, ombudsman or regulator,

(viii) that any other condition specified by the scheme regulations is
met, or

(ix) that there are other compelling reasons why it is inappropriate
for the complaint to be dealt with under the SBC complaints
40scheme;

(d) provide that a complaint is to be dismissed if or to the extent that it
becomes the subject of legal proceedings or adjudication proceedings;

(e) require the Commissioner to notify the person who makes a complaint
under the scheme if the Commissioner considers that it is not a relevant
45complaint or it is dismissed in accordance with the scheme regulations;

(f) authorise or require the Commissioner to notify the person against
whom a complaint is made if it is not a relevant complaint or it is
dismissed in accordance with the scheme regulations.

(4) For the purposes of regulations under subsections (2)(a) and (3)(c) and (d) it
50does not matter whether there has been a consideration of the merits of the
complaint by the time it is dismissed.

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(5) Scheme regulations must also specify matters which are to be taken into
account, or are to be taken into account in specified circumstances, by the
Commissioner in determining under the scheme whether an act or omission
was fair and reasonable.

5Those matters must include any relevant law.

(6) But nothing in this section requires or authorises scheme regulations to specify
that particular practices are to be regarded by the Commissioner, in making
that determination, as “fair” or “unfair”.

(7) Scheme regulations must make provision about factors which are to be taken
10into account, or are to be taken into account in specified circumstances, by the
Commissioner when deciding whether to identify the respondent in a report
under section 6(1).

(8) Scheme regulations may—

(a) confer a discretion on the Commissioner,

(b) 15make transitional or transitory provision or savings,

(c) make different provision for different purposes.

(9) Before making scheme regulations the Secretary of State must consult such
persons as the Secretary of State considers appropriate.

(10) Regulations under this section are to be made by statutory instrument.

(11) 20A statutory instrument containing regulations under this section must not be
made unless a draft of the instrument has been laid before and approved by a
resolution of each House of Parliament.

(12) In this section—

8 Confidentiality

(1) The Commissioner may not make a disclosure of information that the
Commissioner considers is likely to cause someone to think that a particular
person has made a complaint under the SBC complaints scheme, except where
30subsection (2) applies.

(2) This subsection applies if—

(a) the Commissioner has obtained the consent of the person concerned,

(b) the disclosure is made by the Commissioner to the respondent in
relation to the complaint or in a report published under section 6,

(c) 35the disclosure is required for the purposes of any legal obligation,

(d) the disclosure is required, under rules of court or rules of a tribunal, or
an order of a court or tribunal, for the purposes of legal proceedings of
any description, or

(e) the information has already been made available to the public from
40other sources.

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Reports and reviews

9 Annual report

(1) After the end of each reporting period, the Commissioner must prepare and
publish a report which—

(a) 5describes what the Commissioner has done during the period,

(b) contains a summary of the matters which the Commissioner considers
to be the most significant matters raised by small businesses with the
Commissioner during the period, and

(c) states the Commissioner’s recommendations (if any) as to how any of
10these matters might be addressed.

(2) As well as publishing the report, the Commissioner must send a copy to the
Secretary of State.

(3) The Secretary of State must lay a copy of the report before Parliament.

(4) In this section “reporting period” means—

(a) 15the period beginning with the day on which section 1 comes into force
and ending with the following 31 March, and

(b) each successive period of 12 months.

10 Review of Commissioner’s performance

(1) The Secretary of State must review the Commissioner’s performance for each
20review period.

(2) For the purposes of subsection (1), the Secretary of State may direct the
Commissioner to provide the Secretary of State with information specified in
the direction.

(3) The first review period is the period beginning with the day on which section
251 comes into force and ending 2 years after the following 31 March.

(4) Subsequent review periods are each successive period of 3 years after the first
review period.

(5) A review must, in particular, assess how effective the Commissioner has been
in carrying out his or her functions, and in doing so may, in particular, assess
30the impact of the Commissioner’s actions on—

(a) improving payment practices in commercial transactions;

(b) the awareness of small businesses of, or the use by small businesses of,
alternative dispute resolution procedures.

(6) As soon as practicable after a review period, the Secretary of State must—

(a) 35publish a report of the findings of the review for that period, and

(b) lay a copy of the report before Parliament.

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