Post Office (Horizon System) Offences Bill

Lord Fox Excerpts

Committee stage
Thursday 23rd May 2024 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I briefly intervene to thank the noble Lord, Lord McNicol, who has done really sterling work on this, together with my noble friend. I very much agree with his optimism that this matter can be adjusted. I think all of us realise that 13 is an unlucky number and 13 people were going to suffer a degree of injustice. This is an important matter. It is a very good example of what we were talking about earlier: how this House can work consensually to deliver the right result. I look forward to what my noble friend the Minister has to say.

[Lord Fox (LD)]

My Lords, I will follow on and, I hope, echo that spirit of consensus. One of the spin-offs from the decision to call the election is, of course, that this Bill will make the statute book quicker than it would have in the event that it had gone through a normal process. This is a good thing. However, it will have lost some of that scrutiny. The amendments set out some of the abiding issues that I hope the Minister will address from the Dispatch Box, bearing in mind that we will not have the legislative routes to do that.

The noble and learned Lord, Lord Falconer, raised the DWP in his Amendment 1, which may or may not be an issue, but the core issue that he, along with the noble Lord, Lord Arbuthnot, raised is the 13 appellants. If the Government stay firm in not accepting Amendments 2, 4 and 6, we really have to hear from the Minister at the Dispatch Box what they are going to do instead.

When my noble friend Lady Brinton and I met the Minister and his team—I thank them for that—it was clear to me that the Minister understands the injustice that is built into this. I understand that there is a wrestling about how much judges are offended in this, but the noble and learned Baroness, Lady Butler-Sloss, made it clear that the point has been made already in the substance of the Bill. The 13 are merely an extension of the same issue and have to be included in the same way, because they were the people who had the best case to defend and bravely went to law to do it, and now they are in danger of being hung out to dry. I know that is not what the Minister wants and I believe that a way must be found.

My noble friend Lady Brinton made the point that it is not for this Bill to legislate on this. However, it is for the Minister to say that, in the event that Capture proves also to have lured people into situations where they have been unjustly prosecuted, the Government of the day will act promptly and properly to make sure that they are not dragged through the same mess as those trapped by Horizon.

The noble Lord, Lord Holmes of Richmond, raised three issues in his amendments; unfortunately, he is not here to speak to them. They are all important issues for the future. I suggest that they are not substantive to this Bill, but they are issues that I hope, whichever party is in government, will be looked at going forward. The inviolability of computer evidence has clearly been compromised. The ability of organisations to make their own prosecutions has raised concern and a thorough review is needed. There is also the role of corporate governance within the Post Office to be considered. I know the noble Lord has also made comments on this on a number of occasions. Clearly, there is something wrong. Whoever is running the Government needs to understand that Post Office governance has been broken.

I would just like to say a word to the Minister, the noble Lord, Lord Offord. He came to this relatively late and picked up the issues very quickly. He has humanely and swiftly dealt with them, and he should be praised, along with the Bill team and all of those working on it. With the inclusion of the 13, I hope we can put this thing to bed.

[The Parliamentary Under-Secretary of State, Department for Business and Trade (Lord Offord of Garvel) (Con)]

My Lords, I will be moving the amendments tabled in my name. I will also discuss the other amendments tabled ahead of Committee.

Amendments 7 and 8 in my name are about condition E. They are technical amendments concerning condition E in Clause 2(6) to ensure that it is clear how the condition should operate. Condition E requires that, to be in scope of the Bill, at the time of the alleged offence, a relevant version of the Horizon software was being used in the branch where the individual was carrying out Post Office business. Currently, this condition does not have the same provision for overlapping dates, which we have in condition A relating to the offences falling within the Horizon period.

The provision in condition A ensures that convictions meet the condition if the date of an offence overlaps with the specified dates, even if it does not fall entirely within it. The absence of an overlapping dates provision for condition E means that it could be possible for a Horizon case conviction to meet condition A but not condition E, even though both are intended to relate to a relationship between the use of Horizon and the date of offending in the same way. This makes condition A less effective so, to remove this inconsistency of approach and ensure that the criteria are clear and operate as intended, we seek to amend condition E to include an overlapping date provision similar to the one included in condition A.

This approach allows us to include within the quashing the possible circumstance where, following the installation of Horizon, an alleged shortfall was identified and the Pose Office concluded that this shortfall must be as a result of theft or some other offending over a period leading up to this installation, leading to a charge offence date overlapping with the period of installation.

Turning to DWP cases, I will now address Amendment 1 in the names of the noble and learned Lord, Lord Falconer of Thoroton, and the noble Lord, Lord Sikka. I thank them for their careful consideration of this issue. It is the Government’s view, however, that the cases the DWP prosecuted are of a very different character from the cases in the scope of this Bill. Therefore, the Government’s position on this matter is unchanged. These cases were investigated and prosecuted between 2001 and 2006 by DWP investigators using different processes from those used by the Post Office. They are of a fundamentally different character.

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[Lord Forsyth of Drumlean (Con)]

I may have misunderstood but, when I spoke earlier, I understood that there had been agreement between the various parties, as my noble friend Lord Arbuthnot indicated. My noble friend said that there are “two sides to this”, but I understood that that was part of the agreement and the understanding. This is very important for 13 people.

[Lord Fox (LD)]

May I suggest that we have a 10-minute break to discuss this, please?

[Baroness Williams of Trafford (Con)]

My Lords, I suggest that consideration on this amendment be adjourned for 10 minutes while we seek clarification.

Post Office (Horizon System) Offences Bill

Lord Fox Excerpts

Report stage & 3rd reading
Thursday 23rd May 2024 Lords Chamber

On the amendment from the noble Lord, Lord Sikka, there is a concern around the DWP’s understanding of, and how much information it has on, those individual cases, as they are not part of this legislation. Looking at what happened in those cases will be very important.

[Lord Fox (LD)]

My Lords, first, I apologise for arriving slightly late; I beg the leave of the House to speak.

It is an honour to follow the noble Lord, who has been very much engaged in this issue for so long, as have other noble Lords here. I echo the point about the noble Lord, Lord Arbuthnot—it is a shame that he is not here.

To address the amendment of the noble Lord, Lord Sikka, I think I heard the Minister say in Committee that, in the event that such cases did start to involve the Horizon issue, these issues would be reviewed and brought to your Lordships’ House. I hope that my understanding is correct. There is a deeper issue around finding the people who have been affected by this, because there are quite a number who are essentially missing.

That brings me to a wider point: how this Bill, when it becomes an Act, will be administered by the department. The efficient, humane and understanding administration of the Act will be central to the feeling people have of finally getting justice. I am sure that the intentions will be good, but speed is really important. Although process is important, that process needs to be expedited in order to make sure that those people find some peace at last.

I want to pick up the point we discussed in Committee, about which the Minister and others had conversations afterwards, on the subject of the 13 cases. As was touched on by the noble Lord, these people have been burned by the legal system not once but twice. To persuade them to once again put their hand in the fire may be difficult. If the only way they can get justice is to go back one more time through the legal system, it is vital that all friction is removed from it by the department and the legal system—a representative of which I am pleased to see here. If we cannot use the Act to finally exonerate these 13 then we have to rely on a humane, rapid and frictionless legal system. Anything that the Minister can say about how that can be done would be the start of being reassuring. These people will have to have a metaphorical arm put over their shoulder to persuade them once more to enter the legal fray. It is important that they get that and as much help as possible.

In closing, I echo the point that this is a really important Bill. It has taken a very long time to get to where we are. The Ministers, His Majesty’s Opposition and, I hope, these Benches have done our best to make sure that it moves as fast as possible. Once it becomes an Act, I hope very quickly, the ball passes to the administration of it. Let us get that done as quickly as we have been able to get this Bill.

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[Lord Offord of Garvel (Con)]

My Lords, I will make a statement on the legislative consent process in relation to this Bill. In the other place, the Government tabled amendments to bring Northern Ireland within the scope of the Bill and sought legislative consent from the Northern Ireland Executive to do so. Unfortunately, due to the existing expedited timescales, we have not yet been able to secure a legislative consent Motion from the Northern Ireland Assembly for this piece of legislation.

However, my department has received a letter today from the Northern Ireland Justice Minister confirming the Executive’s support for the Bill as it relates to Northern Ireland. The Justice Minister wrote: “In the absence of the Assembly’s legislative consent, it is important to note that on 9 May 2024 the Executive Committee agreed an extension of the provisions of the Bill to Northern Ireland. The Justice Committee has also considered this matter at two meetings and has informally indicated its support for Northern Ireland’s inclusion on both occasions. Finally, as noted in previous correspondence, to date there has been unequivocal support for Northern Ireland’s inclusion within the Bill from all executive parties”. I am grateful for the work of counterparts in the Northern Ireland Executive and their officials for their constructive engagement on this Bill.

[Lord Fox (LD)]

My Lords, I have some brief thank yous. I will not delay your Lordships long. I thank the Front Bench of His Majesty’s Opposition for working collaboratively, the Minister, the Whips and, in particular, the Bill team, who have had to scramble on this. The noble Lord, Lord Arbuthnot, needs a special mention in all this. I thank my noble friend Lady Brinton for her work on this issue and Sarah Pughe in our Whips’ office, who has been behind much of our work. We have worked well on this Bill together. Let us now pass it.

Company Directors: Identification

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Wednesday 22nd May 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am afraid that I will push back slightly on the noble Lord’s point. We have had extremely high degrees of collaboration with the overseas territories. We are now very clear on who the beneficial owners are of land in this country, and, as I said, we have just completed a consultation that will allow us to go further in ensuring that everything is extremely transparent. I truly believe that real progress has been made, without impinging on the ability of legitimate businesspeople to open companies, run their businesses, make profits and grow the economy.

[Lord Fox (LD)]

My Lords, I agree with the Minister that some progress has been made, but a great deal more is required. There are somewhere between 4.5 million and 5 million companies registered with Companies House, and they also need to be cleaned up. Can the Minister tell us how Companies House is getting on with that and when we will know for sure that all those companies are what they say they are?

[Lord Johnson of Lainston (Con)]

I appreciate the noble Lord for pointing back to my previous answer about the 12,600 or so companies that have had their identities checked, expunged, changed or verified. That is clearly a significant starting number, which we expect will increase over the next year or so as Companies House deploys the £50-odd million that we gave it to introduce new systems to hire new people. That goes hand in hand with the 475 new economic crime prevention officers we have hired and the £400 million we have dedicated to fight economic crime between 2023 and 2026.

Product Safety and Metrology etc. (Amendment) Regulations 2024

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Monday 20th May 2024 Grand Committee

To conclude, recognition of the EU requirements, including CE marking, in Great Britain is due to end on 31 December 2024 for the product regulations in this instrument. The instrument removes this deadline. The main objective of this instrument is to provide businesses with choice, certainty and clarity, giving UK manufacturers the flexibility to use either UKCA or CE for placing products on the Great British market. I beg to move.

[Lord Fox (LD)]

My Lords, I thank the Minister for this important announcement. I do not think that the Minister was in your Lordships’ House when we discussed the retained EU law Bill. If he was, he was very wise not to be on the Front Bench at the time. As your Lordships will recall, we were marched forcibly three-quarters of the way up the hill only to be marched back down again.

This statutory instrument is very much indicative of the position that we arrived at after we had marched back down the hill and is infinitely more sensible than where we would have been had we enacted the original retained EU law Bill, and for that the Government and Ministers need some credit.

I have a slight concern—I may have misunderstood. My understanding is that the deadline for recognition of CE is pushed to one side and that CE will be recognised indefinitely, except the Government retain the right to impose non-CE regulations if they decide that they want to do so. That leaves an air of uncertainty, so it would be interesting to hear a response to that.

The Minister hinted at the overall future of CA. Industry has been pushing hard not to have a dual standard, and the department has done well to bow to that. However, the point that was not being made—which we were trying to make at the time—was that it would be expensive. It is good to hear that it would have cost half a billion pounds for industry to conform to that and it is glad that it did not have to do so. Why are we retaining CA? How much resource will the Government commit to the process of having a separate standard, even though the market will inevitably drive most of the players into the CE camp for accreditation? I would like some more clarity around the future of CA.

The Minister mentioned the product safety review. I think we would all like to know when it will be published, as it was promised some time ago and is still not among us. It would be really interesting to know when it will be. I have one final question around Northern Ireland. My assumption is that this solves any potential cross-border issues between the Republic and Northern Ireland, but could the Minister confirm that?

[Lord Leong (Lab)]

My Lords, I thank the Minister for introducing this SI and setting out its purpose and the noble Lord, Lord Fox, for his contribution. I, too, was not in the House when the retained EU law Bill was debated, although I read sections of Hansard in preparation for today’s debate.

It would be churlish of me not to welcome this instrument, which effectively extends indefinitely the looming deadline of 31 December 2024—a deadline already extended twice since it was first legislated for in 2020. Business will welcome this move. It will save it time and money by not having to comply with two different and, in some cases, largely completely overlapping regulatory regimes. Consumers will welcome this move too. It removes the potential double whammy of higher prices and less choice for GB consumers that would have resulted from some manufacturers deciding it was not worth their while or the cost to meet the additional bureaucracy of the UKCA regime.

Of course, the Government have welcomed their own move. It is estimated that this SI will save businesses more than £500 million in the next decade, as the Minister stated. At the risk of being churlish, I must observe that attempts to present this as an example of their being a great friend of business stretch credulity somewhat. One would not herald the captain’s decision to change course at the last minute to avoid sailing into an iceberg that everyone else knew had been looming for a long time as a “titanic success”.

This instrument will mean that businesses can now use either CE or UKCA markers when placing goods on the GB market—although not, of course, in Northern Ireland because of its unique situation. The Venn diagram of the CE regime and the UKCA regime will become concentric circles, with the former completely enclosing the later. Despite this, paragraph 6.8 of the Explanatory Memorandum states:

“The UKCA requirements which are not, however, treated as being satisfied by the above steps are the manufacturer’s obligations to … Draw up a UK Declaration of Conformity … and … Apply UKCA product marking”.


Perhaps the Minister can explain why this remains necessary for goods which are sold in the GB market. Is this not a textbook example of meaningless rubber-stamping?

Not unrelated to this, what is the Minister’s response to conformity assessment bodies that have raised concerns with the Department for Business and Trade that demand for their services in respect of the UKCA mark will fall due to this statutory instrument? How does he intend to work with the sector to support a domestic route to market for relevant UKCA marked products?

Finally, as the Minister knows, SMEs are always at the forefront of my concerns. They will have been disproportionately affected by the costs of now unnecessary preparation for conformity to a regime that was due to come into force in less than eight months’ time. While we welcome this SI, can the Minister say if there has been any assessment of the costs that will already have been incurred across different sectors, especially those with longer lead times, and SMEs in particular? There seems little value in trumpeting potential savings if the businesses that may have benefited have already scaled down, or even closed down, their export capacity.

While we welcome this sensible SI, I do hope the Minister can illuminate the Committee with answers to my questions.

--- Later in debate ---

[Lord Fox (LD)]

I asked about the quantum of continued public investment in CA, and whether the Minister can give an idea of how much investment will be going into what may become a dwindling standard going forward.

[Lord Offord of Garvel (Con)]

The noble Lord also asked about the date of review. Those are two technical issues on which, if he does not mind, I will write.

I beg to move.

Economic Growth (Regulatory Functions) (Amendment) Order 2024

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Monday 15th April 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, the Minister is the latest government Minister to wade into the sewage debate, but having previously tried to crack a joke about wading into sewage, I will not do it again.

Having had that interlude, we have had a chance to reflect on some of the comments that the Minister made. Some of the tricks of good government are timing and self-awareness. Those two things are absent from the extremely maladroit introduction of this order. At the centre of it is the conflation of Ofgem, Ofcom and Ofwat. As we heard from the noble Duke, the Duke of Wellington, these are very different markets. The communications market and the energy market are distinctly different from the privatised regional monopoly system which is the water industry. Because of that, the role of the regulator is substantially different. The idea, for example, of causing competition in the water market is irrelevant—there is no competition in the water market. This puts into focus the problem that is central to this order: it is inappropriate in the markets that it is seeking to address. That is at the heart of what your Lordships have said today.

We look forward to the Minister’s White Paper on competition. When the Truss Administration had their brief flurry, a whole bunch of stuff was said about growth and the “anti-growth coalition”. I am sure the Minister is smarter than the people who were using that language then. The role of growth in amongst the role of regulation is an important issue; the Minister is right to have broached it. On its seeking to influence the water market at this time—coming back to timing—this is not the moment to seek to rein back on regulation. This is the moment when we need to target regulation in the places where it is quite clearly breaking down.

The Minister sought to calm us about the effect of growth on environmental enforcement. Again, the noble Duke gave the lie to that issue by very clearly pointing out what I was going to point out in this document: that the two are very much conflated.

I will suggest a hypothetical issue: I am a regulator. I am about to implement an environmental order. This will undoubtedly affect the growth prospects of some companies in the region. Am I now inhibited by this order? The answer is: it seems so. Moreover, can the companies that receive the downside of this environmental order take it to judicial review? I believe they can. The Minister can confirm that or otherwise. So, at the very least, the environmental order is delayed.

We do not have a problem with the water industry restricting growth; we have the opposite. I cite my home river, the River Wye, as evidence of that. The unrestrained growth of the poultry industry has killed part of that river—not polluted it or made it a little bit dirty but killed it biologically. That is the effect of unrestrained growth. We need the opposite of what the Minister is talking about.

With these thoughts, I am very pleased that my noble friend has brought this amendment, and I am pleased to hear the contributions of your Lordships today. I hope the Minister will stand up and say, “We will set this aside”. If he does not say that, I hope he will say that these rules will be rewritten to make sure that the number one priority for the water industry is to solve the environmental crisis that is currently in our midst.

[Lord Leong (Lab)]

My Lords, I thank the Minister for introducing the regulation and all noble Lords who have spoken. Every day, we hear of sewage dumping. On average, a sewage dumping event now takes place every two and a half minutes. The lack of investment in our water systems over the past 14 years is a scandal that is increasingly hard to ignore. Billions have been extracted in shareholder dividends and millions in bosses’ bonuses, all while delivering a deteriorating system.

During the passage of the Environment Act, Conservative MPs had the opportunity to support a Labour-backed amendment that would have brought an end to sewage dumping. Of course, they did not do so. We should be extracting sewage from water supplies, not extracting value in unjustified dividends and overleveraged debt. Let us imagine the economic growth, the skilled jobs and supply chains that could have been created if, instead, this money had been funnelled into developing creaking infrastructure, repairing and upgrading pipelines, and preparing for the predicted increase in demand and increasing rainfall.

The Labour Party has long been making the case for the increasingly urgent need to invest for the long term and to improve quality in the short and medium term. So on this issue we agree with the Government that bringing these three regulators within scope of the growth duty will help to ensure they consider how best to promote growth in their sectors.

However, making the changes required by this instrument will obviously require dedicated resources within Ofcom, Ofwat and Ofgem. As the amendment to the Motion makes clear, these regulators already have a lot on their plates, so can the Minister indicate how they are expected to juggle this as well? Are the Government confident that the regulators have the capacity to deliver to the full extent that the order demands?

Like the regulators, we want to support businesses and stimulate the vital investment needed to ensure a quality service to current and future consumers. For example, Labour’s plan to establish “GB Energy” would create half a million new skilled jobs in the industries of the future, rebuild the strength of our industrial heartlands and reduce energy costs and carbon pollution. Labour is already thinking ambitiously about the long-term future of this country.

Given that the Government’s order is about long-term growth, could the Minister explain over what timeline they expect to see the benefits of the change, and over what timeline they will be reviewing its impact?

As far as Ofcom is concerned, the growth duty will also not apply to its regulatory functions under Part 3 of the Enterprise Act 2002, which concern mergers. In particular, it will ensure that Ofcom is not required to consider other factors when providing advice to the Secretary of State on the public interest considerations on media merger cases. Can the Minister explain the reasoning for that very specific exception?

In this regulator’s sector in particular, many noble Lords will know that I am passionately interested in the enormous potential for growth in our telecoms industry, especially in AI, but the world will not wait for us. We risk missing out on exploiting the potential commercial benefits from our world-leading research base if we do not have a clear industrial strategy, if we do not encourage and invest in tech start-ups and scale-ups, and if we do not develop a serious regulatory presence alongside the USA and the EU as global standards are being established.

To conclude, we support bringing the three regulators within the scope of the growth duty, but we regret—who could not?—the failure of the Government to prioritise the sanctioning of polluters and the cleanliness of waterways. Just last month, rowers in the world-famous boat race, some of the fittest people in the nation, fell sick because of their exposure to the water in the Thames. I would be hard pushed to invent a metaphor more apt to sum up why this Government have so comprehensively failed—on regulation, on public health, for young people today and in investing in their tomorrows. Labour stands ready to deliver the decade of national renewal that this country self-evidently needs.

While we support the regulation, we acknowledge the amendment to the Motion tabled by the noble Baroness, Lady Bakewell. We must address the sanctions needed against short-term profiteering by the CEOs of utility companies enriching themselves. I look forward to the Minister’s response.

Steel: Port Talbot

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Monday 15th April 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I thank my noble friend for that point, and she is absolutely right. If we look back six months or a year, there was very little future for steel-making in this country, and now we have one; we have a truly advanced manufacturing plan for this entire industry. This is something we should celebrate. It is a true industrial policy backed by government money, in partnership with the private sector, and supported by the extraordinary and brilliant talent of the people at Port Talbot.

[Lord Fox (LD)]

My Lords, the Minister will have noticed that the Prime Minister and the leader of the Opposition visited Barrow-in-Furness recently. The reason they went there, as he knows, is to see its submarine manufacturing process. Submarines need high-strength steel—the sort of steel that comes from blast furnaces and not from electric arc ones. Where will that steel come from? From which countries will we import it?

[Lord Johnson of Lainston (Con)]

It is very important that we have a strong defence basis; there is no question about that. The UK industry uses only about 1% of British steel. A quantity of the steel comes from Sheffield Forgemasters, which is owned by the Ministry of Defence. This plan will actually produce the right level of steel from recycled scrap, which is far more efficient for the environment, to enable us to provide for our defence needs.

Code of Practice on Dismissal and Re-Engagement

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Monday 25th March 2024 Lords Chamber

The other would be to give the option to the union to obtain an injunction to prevent dismissals where there had been inadequate consultation and inadequate disclosure. For the reason that the committee’s recommendations do not find any reflection in the code of practice, I share my noble friend’s sense of regret at this code.

[Lord Fox (LD)]

My Lords, I regret that I did not have the pleasure of being present when the Bill of the noble Lord, Lord Woodley, received its Second Reading a month or so ago. I clearly understand that the nature of that debate reflects very clearly on what we are debating today.

The Minister was not in your Lordships’ House when we debated the P&O issue. Had he been, he would have experienced outrage and hand-wringing, not just from these Benches but from the Benches behind him and indeed from the Dispatch Box itself. That outrage was felt across the whole of your Lordships’ House. As we have heard, this code was supposed to help embrace that issue and try to make sure that such outrages are not repeated. As we have heard in three well-made speeches from the Opposition Benches, we do not believe that this code comes close to doing that.

The code takes a very optimistic view of human nature: it infers that there are two willing parties with reasonable actions and beliefs. That is not the case that a code of conduct needs to deal with. When reasonable people negotiate with reasonable people, we do not need this code. This code is, essentially, how normal, reasonable people would act, and, as the Minister said, most companies are reasonable companies, and most employees operate with reason. That is why this code, in a sense, merely codifies what normal, civilised behaviour should be.

That is not what a code is for. A code is to deal with the people trying to operate outside normal, reasonable behaviour. On several occasions, the Minister used the word “ensure”. This does not ensure anything, and noble Lords do not have to take my word for it. Paragraph 12 says:

“A failure to follow the code does not, in itself, make a person or organisation liable to proceedings”.


In other words, any teeth it might have had in the first place have been removed by paragraph 12. I share the belief it really had no teeth.

Many other provisions in the code—for example, paragraphs 21 and 22—use the term “reasonable”. How would we test “reasonable” in this circumstance? In Section C, around information, I would be interested to know: what is reasonable? We then move to paragraph 27, which is about commercial sensitivity and confidentiality. In every case of fire and rehire, there will be commercial sensitivity. Therefore, it makes sure that no information ever gets put forward. I am old enough to remember when the United Kingdom was part of the European Union, and we were part of the European Works Council system. That excuse is not allowable within the European Works Council. There is a system within that whereby the works councils are brought into the confidence of the management about their intentions in such circumstances. This does not allow such reasonable behaviour to occur.

Given the genuine and heartfelt comments made opposite during the P&O issue, I am disappointed that this is the result. It is toothless, as the noble Lord, Lord Woodley, said on several occasions; it does not ensure that something such as P&O could never happen again. As the noble Lord, Lord Hendy, put it, the 25% uplift is not worth a hill of beans when you look at the financial gain it has made by the actions it has taken.

[Lord Leong (Lab)]

My Lords, I thank the Minister for setting out the code of practice and express my gratitude to all noble Lords who have spoken.

Last week saw the two-year anniversary of the P&O Ferries dismissals, the highest-profile abuse of fire and rehire in recent years—but, sadly, not the only one. The Minister might say that the P&O case is not fire and rehire, but many will not agree with that sentiment. If it looks like a duck, swims like a duck and quacks like a duck, it probably is a duck. Today the replaced workers are paid less than half the national wage, as my noble friend Lord Woodley referred to, in conditions that one described as like being in jail. Workers’ pay and conditions horrendously diminished. Meanwhile, the company and its parent, DP World, was awarded £230 million in UK government contracts between March 2022 and July 2023.

This injustice has driven me to extraordinary lengths: it has made me agree with the Member for Welwyn Hatfield, the right honourable Grant Shapps. When he was Secretary of State for Transport, he described the company as

“pirates of the high sea”.

I am even minded to agree with the then Prime Minister, Boris Johnson, who said that fire and rehire was

“unacceptable as a negotiating tactic”.

The code does nothing to prevent any employer treating workers in a shabby way in the months and years to come.

Noble Lords who have run businesses, as I have, know what it is like to face difficult financial decisions. We understand that, in extreme cases, sometimes the only way to continue operating is to consult with employees on renegotiating contracts. If the company goes bust, nobody wins; everybody loses their job. Only in that situation can fire and rehire possibly be justified. Yet in court, employers do not have to prove that the fire and rehire policy would mean the difference between the life and death of the business. That widely criticised omission acts as a cloak of unaccountability, permitting employers to present unscrupulous decisions as unavoidable. All the well-intentioned recommendations in the code—that the employer “take into account” employee objections; that they engage in “all reasonable steps”; and that they do not raise the spectre of job losses too early in the process—are, in effect, neutered by this loophole.

Furthermore, several noble Lords have referred to the potential sanctions—a 25% uplift in fines at the end of a long David and Goliath legal battle—that could be factored in as a cost of doing business, as the noble Lords, Lord Fox and Lord Hendy, stated. We could see companies rewarding executives who are prepared to brush off a few bad PR headlines while making workers’ lives worse. That is appalling in principle and in practice.

The P&O Ferries example should serve as a warning; even the then Prime Minister Johnson thought so. The code does not prevent a race to the bottom; it could lead to a hollowing out of secure jobs. Roads paved with good intentions—whether labelled promises, pledges or non-binding codes of practice—lead only in one direction. It is the workers, threatened with either losing their jobs or accepting worse conditions, who end up feeling the heat. The code currently makes no reference to a necessary qualifying period of employment before it becomes applicable to an employee. Can the Minister tell the House whether the code is applicable from day one for all employees?

In light of the range of concerns raised from only 50 responses to the consultation, I hope that the Minister and the Government will address the shortcomings of the proposal. To that end, my noble friend Lord Woodley’s amendment sets out clearly why the Government should reconsider.

Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

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Monday 25th March 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, I think, the mantle having passed through several Ministers, that this is an economic crime debut for the noble Lord, Lord Offord, so I welcome him to our world. He is ideally suited to bearing down on economic crime.

We welcome this statutory instrument; it is part of the process of having debated the economic crime Bill. Many of us had high hopes for what the economic crime Bill would and could achieve, but at the centre of what we ended up with was the performance of Companies House and its strength to uphold what we need. This is another important step.

I have a couple of questions on the first part of the statutory instrument: first, the potential for multiple penalties. If we were to use the real-life Knighton example of literally hundreds of companies being registered to an unwitting property owner, in theory could Companies House levy a £10,000 penalty for each and every one of those companies registered? It would, clearly, have discretion over whether do that. My second point is on the right to appeal. If Companies House is levying those penalties on the wrongful registration of a company, what is the right of appeal? Is it judicial review—a long period of review and appeal—or is it a relatively swift action?

The Minister mentioned the opportunity to update us when the next tranche of statutory instruments comes through; this would be good. We had a very useful briefing from the Companies House representatives while we were debating the Bill, and it was clear that there was a tremendous amount of resolve there but also an awful lot to do. A full update on where Companies House is on capability and capacity—for example, on recruitment and on starting to implement these measures; I saw reports that it has taken actions that it was not able to before the passing of the Act—would be very helpful. But with those provisos, we look forward to the next 50 statutory instruments.

[Lord McNicol of West Kilbride (Lab)]

My Lords, I draw the attention of your Lordships’ House to my registered interests as director and shareholder of McNicol Consulting Limited, which is registered at Companies House.

I have read the Commons debate on this SI, and I have gone through the Act and the Explanatory Memorandum—the memorandum was very helpful, so I thank the Bill team. We will support this SI on these Benches. I have a few questions for the Minister. Will Companies House require more resources if these cases are to be dealt with internally rather than passed on to the criminal justice system? If more are resources needed, will the Government be fulfilling those needs?

National Minimum Wage Legislation

Lord Fox Excerpts

Thursday 21st March 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

The Government remain totally committed to the effective enforcement of employment rights and provide a lot of funding, including over £35 million this year to the existing dedicated labour market enforcement bodies. That is a 121% increase in funding since 2010, so a lot of money has gone into this area. On top of that, we provide funding of over £50 million per annum to ACAS, to support employment tribunals. We have had great success in reducing the number of companies not paying the national minimum wage.

[Lord Fox (LD)]

My Lords, we heard about in-work poverty in the previous Question. One reason there is so much in-work poverty is that too many workers are slipping through the national minimum wage net. One of the key areas in this is food delivery apps. Uber justifies its treatment of its employees as so-called self-employed as balancing flexibility and protection. Does the Minister agree that it is the food delivery apps that get all the flexibility, while the workers get no protection at all?

[Lord Offord of Garvel (Con)]

In the recent Supreme Court judgment on Uber, it was made clear that those who qualify as workers under existing employment law are entitled to core employment rights and that all gig economy businesses must ensure that they fulfil their legal responsibilities. We now have a situation in which the national minimum wage is two-thirds of hourly median pay, and under OECD rules that means it is no longer classified as low pay. We know that 5% of our workforce is on national minimum wage, which is a great success.

Comprehensive and Progressive Trans-Pacific Partnership (IAC Report)

Lord Fox Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, it is a great and unexpected pleasure to follow the noble and learned Lord, Lord Goldsmith, whose points I very much reinforce from these Benches. This has been a great debate, with some excellent speeches. The noble Baroness, Lady Hayter, should once again be congratulated on stepping back up to the plate and giving an excellent summary of the committee’s report.

The noble Viscount, Lord Trenchard, entreated us to be more enthusiastic. Happily, the overall average level of enthusiasm was raised massively by the noble Baroness, Lady Lawlor, which leaves me to be my normal self.

I am a member of this committee, as were several of today’s speakers, so it is not sensible for me to reiterate the entire debate. I will focus on a few points. As we heard, the committee broadly welcomes the accession of the UK to the CPTPP and any additional economic benefits that might result from new market access to Malaysia and Brunei. However, the committee also acknowledges the limited economic gains suggested by current projections, and indeed by the Government’s own impact assessment.

There are opportunities for UK manufacturers, but, equally, member countries that are geographically closer to each other might find it easier to develop those integrated supply chains that the noble Lord, Lord Udny-Lister, hinted at. When I talk to businesses, I certainly find that they absolutely prefer closer customers when making and exporting things. Clearly, when a market is 60 miles away, it is a heck of a lot easier than when it is several thousand miles away.

I have a couple of specific points. I should note that I am vice-chair of the All-Party Parliamentary Motor Group. The noble Viscount, Lord Trenchard, mentioned the automotive industry. The industry has welcomed the side letter signed with Malaysia, which essentially allows for 25% reciprocal regional content for products under a particular heading. That means there is a very high chance that content from these products, particularly engines or batteries, will originate from somewhere else—probably China. This is applicable in both directions between Malaysia and the UK, but it is something that your Lordships and the Government should keep an eye on. I suggest that there are other issues, such as non-tariff issues, around those particular products coming from somewhere outside, including future carbon border regulations and existing issues such as environmental impact and forced labour. A door has been opened and we should police that door quite carefully.

The committee was concerned about Northern Ireland’s direct trade with CPTPP countries, taking the view that it is likely to face restrictions that will not affect the rest of the United Kingdom. Therefore, as a committee, we have requested further information on the Government’s view of what they expect those restrictions to be and ways in which they may be avoided.

The committee welcomes the CPTPP’s provisions on services, while acknowledging that the benefits may be even more limited than the Government have suggested. In particular, it notes the lack of provision on the mutual recognition of professional qualifications, which is a key issue on services, as the noble Baroness, Lady Lawlor, mentioned.

It remains to be seen whether the Government’s intended trade benefits will materialise, and here the noble Lord, Lord Marland, hit the nail on the head. The future development of this treaty will be key to how much benefit the United Kingdom can have. Going forward, we should focus on digital services, professional services, and environmental goods and services, because these are the things from which we can benefit. I too join in asking the Government for their analysis of how committed the other partners are to making these substantive changes to the treaty, and how they will go about driving those changes which would so benefit the upside of this treaty.

The committee welcomes the provisions of the accession protocol which avoid threatening the European Patent Convention. It was very important that this was done; it was good work, and it remains an important part.

It also welcomes the report from the Trade and Agriculture Commission and the joint statement on the environment. These respectively state that UK food and drink rules, as well as environmental protections, do not have to change as a result of CPTPP accession. However, the committee notes the concerns raised by witnesses regarding the UK import of palm oil.

Building on a point made by the noble Baronesses, Lady Hayter and Lady Bennett, I draw attention to the evidence of LSE assistant professor of law, Dr Leonelli, who argued that the CPTPP chapter on sanitary and phytosanitary—SPS—measures could see UK regulators pressured into recognising other countries’ less stringent food safety standards, or other SPS standards, as equivalent to our own. This is a point that has been made. Unlike the UK’s trade arrangements with Australia and New Zealand, the CPTPP’s arrangement does not specify that the final judgment on SPS equivalence rests with the importing party. Instead, further state-to-state dispute settlement does not apply to the SPS chapters with Australia and New Zealand but does apply to the CPTPP. Again, this raises the point about how the Government intend to address the potential risk of equivalence provisions leading to regulatory chill, as we have heard. It would really help our understanding of that to know the Government’s approach to ISDS, which appears to flip and flop depending on which trade deal is being negotiated.

The committee raised the importance of workers’ terms and conditions and called on the Government to monitor closely the employment practices of our CPTPP partners and to be prepared to act should they identify issues. Can the Minister please confirm that this will indeed be done?

How will this best benefit UK plc? Our evidence suggests that the Government do not currently have an adequate plan for promoting CPTPP opportunities. We heard from a number of your Lordships concerns about the extent to which businesses in general and SMEs in particular will take advantage of what the treaty has to offer. The report sets out many recommendations as to how the Minister’s department should go about helping business, especially SMEs, to tap into the potential that there is. I believe that the Minister has taken note of this, and it will be important for him to suggest that he did.

I am very pleased that the Minister is here today. As I have suggested, he sometimes takes the hyperbolic end of the enthusiasm scale, so I entreat him to adopt—which I think he will—a realistic approach to the treaty. Even if UK business is effectively activated and increases its trading with CPTPP partners, the actual economic effect on UK GDP is vanishingly small, as we heard from many, including the noble Baroness, Lady Hayter. We know that the Pacific bloc has been growing quickly and faster than other blocs; I agree with my noble friend Lord Purvis that that is most likely on the back of Chinese growth, so we will see what happens going forward. But we also know that we all expect—as do the Government—to have a very tiny share of that growth. We will have only a tiny proportion of what has already been lost by leaving the EU’s huge single market. It is close to two orders of magnitude smaller: 1% of what we have lost.

In truth, if joining the CPTPP is anything, it could be seen as a statement of intent, rather than an actual deal that creates significant trade. What is that statement? A phrase that has come up on a number of occasions and is laced throughout government comments is “a tilt to the Pacific”. What does that mean? There is little supporting material beyond that soundbite to help us to understand the consequences of that tilt and whether it is beneficial to the United Kingdom. It has been said that there is potential for the CPTPP to be a forum for engagement with partners in the Indo-Pacific—despite its primary function being a free trade agreement with no secretariat and little structure. If that is the case, how will that work? Would not something such as the RCEP be a better version of that?

The integrated review and the integrated review refresh are no help, as they lack any detail on how the Government intend to utilise the CPTPP in a geostrategic manner. Therefore, the committee asks for further detail on how the Government expect membership of the CPTPP to contribute to the delivery of their geopolitical strategic aims for the region. I add: what are those aims? Several of your Lordships, particularly the noble Lord, Lord Udny-Lister, have mentioned the accession of new countries to the group. On the issue of China, to date, Ministers have ducked and dived to avoid answering questions on the Government’s position. At some point soon, it will be time for the Government to spell out their approach to the accession of other countries, including China and Taiwan, which my noble friend mentioned, and to confirm a role for Parliament in any negotiations for new countries to accede to the treaty.

Perhaps one question that the Minister can tackle, without breaching others, is whether it is the department’s understanding that the current applicants may be tackled in any order, irrespective of the order in which they lodged their application to join, or whether there is a first-in, first-considered understanding with partners. For Parliament, the Government should at least offer the same process of consultation that they would for a new, stand-alone FTA partner—that is a CraG-related process.

Overall, as we have heard, the committee reiterates the need for the Government to publish a trade policy that sets out defined priorities in areas of benefit to the UK. The UK needs to have a coherently formulated trade and investment policy that is recognised as an integral part of a wider industrial and trade strategy focused on competitiveness and productivity. That wider policy must shape trade policy, as the two work together.

In conclusion, I return to the phrase, “a tilt to the Pacific”. Fellow members of the committee will recall that I have a problem—quite a big problem—with it. We all know that a tilt—or, indeed, “a pivot”, which is used interchangeably—is a zero-sum game. Any tilt towards something is accompanied by a tilt away from something else. In geostrategy terms, is that really the message that the Government intend to communicate? If it is, and if the CPTPP is indeed a tilt towards the Pacific, can the Minister explain which regions and countries we are tilting away from and why?

--- Later in debate ---

[The Minister of State, Department for Business and Trade (Lord Johnson of Lainston) (Con)]

I thank all noble Lords for the extraordinary, high-quality debate that we have enjoyed today. I hope people at home are watching this discussion, because it is great proof of the value of this House and its contributions.

[Lord Fox (LD)]

They are crowded around their television sets.

[Lord Johnson of Lainston (Con)]

They are hopefully crowded around their iPads; the noble Lord should know that we have updated from the old-fashioned wireless—which, of course, we have in my household.

I want to say thank you, genuinely, to the noble Baroness, Lady Hayter, and the noble and learned Lord, Lord Goldsmith. I thank the International Agreements Committee for its report. I have a draft set of responses to the report, which will be formulated appropriately and given to the noble Lords as soon as possible. It really was excellent, and I think all the points that the Government have been challenged on are worthy of a response. I am extremely grateful for the mature approach the report took to the value of this trade deal and seeing the optimistic benefits of the CPTPP, within the reasonable framework that we will operate to.

It is possible that noble Lords may hear cheering if they listen carefully, because a few moments ago the Bill was passed in the House of Commons. I am sure we all feel the ripple—the Mexican wave, which is appropriate as it is a CPTPP member—coming down the Corridor to us. Before I go further and answer many noble Lords’ points, I refer Members to my register of interest. I do not believe there are specific conflicts, but I do have interests in CPTPP countries.

I have tried to group the comments made in this important debate and so, if I may, I will go through them. I will try to refer specifically to noble Lords themselves. I will highlight a few individuals, particularly the noble Baroness, Lady Lawlor. I congratulate her for giving a succinct and powerful description of the benefits of free trade, which often we forget. It is right that, in a scrutiny environment such as this House, we look at the problems, issues or challenges that might present themselves with a piece of legislation or a new treaty. To have the truly positive case for free trade made so clearly and powerfully is something that I welcome, and I am very grateful to the noble Baroness for that.

I am very grateful to the noble Viscount, Lord Trenchard, for his words. Again, he has been a passenger on the free trade express over the last year and a half since I have taken this position. I am extremely grateful for his advice and expert opinion on Japan, and the very positive case that Japan makes in terms of our trade relationship with the CPTPP and the associated benefits we have, both through having a trade agreement and an association with it through this process.

I thank the noble Lord, Lord Marland, for his very generous comments about our joint efforts to spread the benefits of UK trade around the world. If anyone has the most air miles on these red Benches, it must be a close competition between the noble Lords, Lord Purvis and Lord Marland. Both noble Lords are doing such important work, whether in spreading democracy and helping complex situations be resolved, or in pushing the Commonwealth. While this is not a debate about the Commonwealth, it is important to note how many countries that make up CPTPP are Commonwealth members. It is absolutely right that we should use this as further leverage to work with our Commonwealth peers. I will certainly take to my colleagues in the Foreign, Commonwealth and Development Office the comments made by the noble Lord, Lord Marland.

I am always grateful to the noble Lord, Lord Kerr, for his comments as to how we can better manage our trade process. If I may, I will just draw his attention, as someone so distinguished and who lauded the EU’s FTA negotiation process, to the fact that I do not think the EU has done a trade deal in my political lifetime. The most recent one was after a culmination of 17 years of negotiation, and the current ones are all live after many years. We have managed to close this deal in an extremely effective time period.

I turn to the process of CRaG which has been well raised by noble Lords. We made a clear commitment under the Grimstone convention that, if there was time, we would have a debate, and this is exactly what we are doing today. My colleagues and I have made ourselves totally and freely available to engage on every issue. Officials have been extremely open in responding to questions and challenges and I am glad to see some of them here today. I am particular aware of issues, such as SPS protection which was raised by the noble Baroness, Lady McIntosh, or agriculture, raised by the noble Lord, Lord McNicol, as well as points made by other speakers on the Front Bench from all parties. I think we have exceeded expectations in the work we have done in order to project that necessary element of debate.

I am not trying to avoid the point, but it is not for me to comment on the activities of the other place. I will leave that to them. It is right to be very comfortable in knowing that any new accession will be equally bound by the CRaG process. This is extremely important. It would be completely unreasonable if that were not the case. The Government have committed to that and I am very comfortable in making a further Front Bench commitment to it.

It is worth touching on some of the sub-issues that have come up in this debate. The noble Lord, Lord Fox, wisely raised SPS measures, and comments were made about ISDS. I believe we had a discussion earlier in this Chamber about the brevity of speeches and the importance of avoiding repetition, but I am going to have to repeat myself, if I may, and test the patience of noble Lords. There is no derogation. It says so in Hansard. It has been in Hansard before. There should be a collected, bound edition of my repeated statements in Hansard about free trade agreements that do not derogate from the security of our sanitary and phytosanitary provisions. It is very important to be comfortable about this. Hormone- injected beef, chlorinated chicken or dangerous pesticides which are banned here are not allowed into the UK on account of the FTA. This is a matter under our own control. It is important that consumers hear this.

When I talk to people about free trade deals, a lot of them worry that, somehow, this will result in a tidal wave of deadly products. The noble Baroness, Lady Bennett, referred to the UK becoming a dumping ground for dangerous products. Any decision to allow so-called dangerous products into the UK is a matter for the UK Border Agency, the food safety authorities and the Government. If that is the case, it has nothing to do with this FTA, which is important in the sense that it changes our position on tariffs and how we trade with each of the different countries. I just want to reassure noble Lords and the public that nothing will change.