Business, Energy and Industrial Strategy
Andrew Griffiths Excerpts(6 years ago)
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Claire Perry
We want the men and women of the Dagenham plants and plants around the country to have the investment and skills to lead the manufacturing of a new generation of cars. Of course, we already make one in eight electric vehicles sold in Europe.
Sainsbury and Asda Merger
The following is an extract from the response to the Urgent Question on the Sainsbury and Asda merger on Monday 30 April 2018.
Andrew Griffiths
Today the Secretary of State and I have spoken to Sainsbury’s chief executive officer Mike Coupe, and Asda CEO Sean Clarke, so that we can better understand their plans. [Official Report, 30 April 2018, Vol. 640, c. 23.]
Letter of correction from Andrew Griffiths:
An error has been identified in my response to the Urgent Question on the Sainsbury and Asda merger on Monday 30 April 2018.
The correct information should have been:
Andrew Griffiths
Today the Secretary of State and I have spoken to Sainsbury’s chief executive officer Mike Coupe, and Asda CEO Roger Burnley, so that we can better understand their plans.
Oral Answers to Questions
Andrew Griffiths Excerpts(6 years ago)
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Ben Bradley (Mansfield) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
The British Business Bank supports over £4 billion of finance to over 65,000 small businesses. The start-up loans programme has further delivered more than 54,000 loans, totalling over £400 million. We are tackling late payments through the Small Business Commissioner, and 38 growth hubs across England provide access to information and advice. Through the industrial strategy we plan to unlock over £20 billion of investment in high-potential businesses, including through establishing a £2.5 billion investment fund.
Ben Bradley
I thank the Minister for his response. As in many parts of the country, Mansfield has struggled to support shops and other town centre businesses. Will he explain what action the Government are taking to support such businesses and to regenerate what were formerly bustling town centres?
Andrew Griffiths
I recognise the work that my hon. Friend has done to support businesses in his constituency. The Government have made 100% small business rate relief permanent while increasing the threshold of the relief, taking 600,000 of the smallest businesses out of business rates. We have introduced the employment allowance, giving employers up to £3,000 off their national insurance contribution, and we have established the Future High Streets Forum to provide businesses with Government leadership to better enable our town centres to grow.
Melanie Onn (Great Grimsby) (Lab)
I recently visited the food manufacturer Scratch in my constituency, which is just launching a new dough-free pizza. It has taken on an additional 25 members of staff and has asked if more could be done to support it, particularly around reducing its business rates, which would go a long way to supporting it and the local high street.
Andrew Griffiths
I recognise the hon. Lady’s point. It is good to see that kind of investment and growth in small businesses. We are investing in apprenticeships and skills—44% of apprenticeship participation is in small companies—and, as part of our industrial strategy, we are establishing a technical education system that rivals the best in the world. We are also investing £406 million in subjects such as maths and digital and technical education to support the kind of small businesses she talks about.
Helen Whately (Faversham and Mid Kent) (Con)
Microbusinesses have told me that they are struggling to get their voice heard—for instance, on their concerns about implementing data protection legislation and the implications of Brexit. What is my hon. Friend doing to make sure he hears and understands the concerns of microbusinesses?
Andrew Griffiths
Every week, the Secretary of State meets representatives of the business community from across the country, and I hold a forum with small businesses once a month to ensure that the Government are finely attuned to their needs. The Department is determined not only to understand the issues facing small businesses in our country, such as those my hon. Friend raises, but to ensure that legislation is fit for purpose.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
The all-party group on disability, which I chair, has published an inquiry report highlighting the fantastic contribution of entrepreneurs with disabilities, but they still face many challenges, such as in accessing finance. Will the Secretary of State meet the all-party group to discuss this issue and ensure a truly inclusive economy?
Andrew Griffiths
I thank the hon. Lady for the question and the great work the all-party group does. I absolutely recognise that encouraging people with disabilities to start their own businesses and contribute in this way is good not only for the British economy but for them. I would be delighted to meet her to discuss the matter further and to see what we can do to support those businesses, particularly through things such as the British Business Bank.
Bill Esterson (Sefton Central) (Lab)
Project bank accounts ring-fence the money for suppliers in construction contracts yet were not used by the Government with Carillion. As a result, 30,000 mostly smaller businesses are likely to lose money, and some will struggle to survive, so will the Minister confirm that the Government will now use project bank accounts to protect businesses and jobs in their own supply chain and guarantee there is no repeat of the Carillion fiasco?
Andrew Griffiths
The hon. Gentleman will know that the Government took swift action, led by the Secretary of State, when Carillion collapsed, to ensure we understood the issues relating to the construction industry, including by setting up a forum with trade representatives. He will also be aware that we consulted on project bank accounts in the construction industry. That consultation finished just a few weeks ago. We are considering the responses and will respond shortly.
Stephen Gethins (North East Fife) (SNP)
David Linden (Glasgow East) (SNP)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
Non-UK EU nationals account for 7% of total UK employment. Scottish businesses have had the opportunity to feed into the Migration Advisory Committee’s analysis of the role of EU nationals in the UK. We appreciate the strong contribution that EU nationals make to small and large businesses, and we have already agreed to protect the rights of EU citizens in the UK under our withdrawal agreement with the EU.
Stephen Gethins
In my constituency, fruit and veg producers and the tourism industry rely heavily on EU seasonal workers. Does the Minister recognise the damage that continued uncertainty is doing to those businesses? Two years on from the referendum, when will they get a bit more certainty so that we can maintain those EU seasonal workers who contribute so much to our economy?
Andrew Griffiths
I can reassure the hon. Gentleman that there should not be uncertainty. We have made it clear that we do not regard the referendum result as a vote to pull up the drawbridge. The United Kingdom will remain an open and tolerant country which recognises the valuable contribution that migrants make, and welcomes those with the skills and expertise that will make our society even better. The Government commissioned the Migration Advisory Committee to report on EU patterns of migration in different sectors and different parts of the UK, and it will do so by September 2018.
David Linden
Analysis shows that EU citizens contribute £4 billion a year to the economy in Scotland. We see that happening in small businesses along Shettleston Road, for example. Does the Minister agree that the devastating effect of free-movement restrictions will have a colossal impact on small businesses in Shettleston and in Scotland as a whole, and will he support the calls from the Scottish Trades Union Congress for immigration to be devolved to Scotland?
Andrew Griffiths
Our position on immigration policy and who should be responsible for it is clear, and has not changed. Since the referendum we have been engaging widely with, among others, the devolved Administrations and businesses in Scotland to ensure that we fully understand the requirements, but let me make it absolutely clear that the Government understand the issues of businesses and will ensure that the system works for them.
Mr Nigel Evans (Ribble Valley) (Con)
My hon. Friend is no stranger to the Ribble Valley. He knows that it is a jewel in the crown for the hospitality trade, which employs a great many EU citizens. Does he agree that post-Brexit there will still be many opportunities for people in the EU to come to the United Kingdom and work in the hospitality trade?
Andrew Griffiths
I can report that I have experienced the hospitality in the Swan with Two Necks, and I recommend it to the House.
As my hon. Friend will know, the Migration Advisory Committee is looking at exactly the issue that he has raised, but he is absolutely right: EU migrants play a massive role in our hospitality industry, and the hospitality industry is one of the reasons people visit this country.
Kirstene Hair (Angus) (Con)
Does my hon. Friend agree that Brexit provides a welcome opportunity for us to attract talent to our shores from all countries, not just those in the EU, and can he assure me that the Government remain committed to ensuring that all businesses have the access to the workforce from overseas that they need?
Andrew Griffiths
Absolutely. We have a competitive workforce here. The economy is thriving, partly because of the contribution made by the people to whom my hon. Friend has referred. I particularly commend her for the work that she has done in relation to the soft fruit seasonal workers scheme.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Federation of Small Businesses says that the right of EU staff to remain in the UK is vital. In Scotland, 45% of tourism and leisure businesses rely on EU staff for their workforce. They fear that they will not be able to recruit for their future needs, and their fear is heightened by the possibility that the immigration skills charge—which is currently up to £1,000 a year—will be applied. Can the Minister categorically assure employers that they will not be subjected to any charge for EU workers post-Brexit?
Andrew Griffiths
We will set out in due course the system and the scheme that will operate post-Brexit. I can, however, assure the hon. Gentleman that I regularly meet representatives of the Federation of Small Businesses, and we will ensure that the workforce is there for those businesses.
Drew Hendry
The Scottish Affairs Committee, the Home Affairs Committee in its report, and the Economics Committee in the House of Lords all see the sense of a differentiated immigration system for Scotland. Can the Minister confirm that he, too, accepts that there is a clear case for a policy that recognises the different needs of businesses in Scotland?
Andrew Griffiths
This Government well understands the needs of businesses both throughout the UK and specifically in Scotland. As the hon. Gentleman will know, the Home Office will shortly present further details of the scheme that is to be introduced.
Daniel Zeichner (Cambridge) (Lab)
Frank Field (Birkenhead) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
We are proceeding with work on 52 of the 53 review recommendations made by Matthew Taylor, and we are currently engaged in consultations on how best to implement those measures. We are committed to ensuring that we protect and enhance workers’ rights in the modern economy, and to legislating for that purpose. We will ensure that employment law and practices keep pace with modern ways of working, while striking the right balance between flexibility and worker protection.
Daniel Zeichner
The Minister may be aware that workers at McDonalds are taking strike action in Cambridge today. One of them, Sheila, told the Cambridge News at the weekend that although she has worked for 18 years, her work is insecure, she never knows what hours she will work, and fresh fruit and vegetables are luxuries. What has the good work plan to offer Sheila?
Andrew Griffiths
Matthew Taylor set out in the good work plan how we can further enhance the protections for workers such as Sheila. There is a huge amount of day-one protections, and we are looking at what we can do with flexible working and zero-hours contracts to give greater certainty and security to workers exactly like Sheila.
Justin Madders
The Government response to the Select Committee report on a modern employment framework stated:
“The Government wholeheartedly agrees that strong action should be taken against employers who repeatedly ignore both their responsibilities and the decisions of employment tribunals.”
Those are fine words, but if they are to be meaningful the Government must back them up with action and put in place rules to prevent or deter repeat offenders from bidding for public sector contracts; will they do that?
Andrew Griffiths
The Government recognise that unfortunately some employers continue to offend repeatedly in this way. We are looking at what further measures we can take in the work plan, and more widely in the work of the Department for Business, Energy and Industrial Strategy, to ensure that such repeat offenders are clamped down on.
Frank Field
Given the work that the Business, Energy and Industrial Strategy Committee and the Work and Pensions Committee have done on the gig economy, will the Government undertake to ensure that, when they introduce a Bill based on the Taylor report, we will have a chance to stage pre-legislative hearings?
Andrew Griffiths
We have worked closely with the right hon. Gentleman’s Select Committee, and, as he knows, we greatly value his contribution. We are consulting on the work of Matthew Taylor, and I pledge to the right hon. Gentleman today that we will work hand in hand with his Committee to ensure that it properly scrutinises that proposed legislation as it comes forward.
Mark Pawsey (Rugby) (Con)
The world of work is changing as businesses respond to changes in customer demands. Does the Minister agree that many workers enjoy and appreciate the flexibility of the freedom to choose when they wish to work?
Andrew Griffiths
My hon. Friend is absolutely right. New technologies have provided a huge number of new and exciting work opportunities for people, but we also want to ensure that we not only enhance and capture that potential, but offer protections for those working in the gig economy, to make sure they are not disadvantaged.
Marsha De Cordova (Battersea) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
The Government have moved swiftly to support businesses, establishing the Carillion taskforce to ensure the co-ordination of support for firms affected by Carillion’s insolvency. This has included extra support from the banks of nearly £1 billion; British Business Bank supports to the tune of £100 million; and works with Her Majesty’s Revenue and Customs to ensure firms have advice and guidance through the business payment support service.
Eleanor Smith
Since my last question about Carillion, 239 jobs have now been lost in Wolverhampton, which is a huge loss to our city. The Express & Star, a local newspaper in Wolverhampton, has said that hundreds of suppliers and subcontractors will be left unpaid, which means more job losses. How does the Department plan to provide support for those businesses and their workers?
Andrew Griffiths
The Government recognise that there will be an impact on the supply chain and on lots of small businesses that supplied Carillion. That is why we acted quickly to ensure that the banks were aware of those situations and the pressures that would be put on those businesses, to make sure the support was in place, with access to loans and finance, to ensure that we limit the impact as much as is possible. The hon. Lady will know that, so far, 11,450 jobs have been protected in the Carillion network, and we are doing more to ensure that we protect the rest.
John Cryer (Leyton and Wanstead) (Lab)
The Minister will be aware that Carillion regularly contravened the prompt payment code without actually acting illegally. Is it not time to examine the possibility of giving the code a statutory basis, so that in future cases there could be prosecutions?
Andrew Griffiths
The hon. Gentleman makes a very valid point. We want the prompt payment code to be fit for purpose and for it to do what it says on the tin. That is why I am in discussions on the prompt payment code and why the Chancellor said in the spring statement that we would consult on late payments. He wanted to end the scourge of late payments, because this is so important for small businesses up and down the country.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Liz Twist (Blaydon) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
The retail sector is a vital part of the UK economy and we want it to thrive. In March, as part of our industrial strategy, I created the Retail Sector Council. Through that group, Government and industry will work together to contribute to the sector’s future direction, to boost its productivity and economic health.
Liz Twist
The retail sector is hugely important to my constituency, from the Metrocentre through to the small fruit and veg shops on the high street. Given that the retail sector is the UK’s largest industry, will the Minister explain the rationale behind the Government’s decision to do so little for the sector in the industrial strategy?
Andrew Griffiths
The hon. Lady just is not correct. The Government recognise the importance of the high street and the retail sector, which is why we have provided more than £18 million in dedicated funding. It is also why in the 2017 autumn Budget we announced measures worth £2.3 billion over five years to cut business rates and improve the system’s fairness, which will support the retail sector.
Geraint Davies (Swansea West) (Lab/Co-op)
Kevin Brennan (Cardiff West) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
I thank the hon. Gentleman for his good wishes. Having just returned from my paternity leave, I reassure him that, although I am not legally allowed to take shared parental leave, the Government are very supportive of Ministers being able to take up such provisions. The Government want more families to benefit from the joy that comes from shared parental leave, which is why we have invested over £1 million in an advertising campaign to increase take-up.
Jeremy Quin (Horsham) (Con)
Laura Smith (Crewe and Nantwich) (Lab)
Have the Government made any assessment of whether social care providers will go bankrupt this year due to the ruling on sleep-in shifts and the minimum wage, and whether this will have any impact on social care? If so, will they provide that assessment to the House?
Andrew Griffiths
The Government are well aware of the challenges involved in sleep-in legislation and the national minimum wage and are working closely with providers. We are also in discussions with the European Commission and will bring forward plans in future.
Nicky Morgan (Loughborough) (Con)
When will we see the review of Companies House procedures that I mentioned in my Adjournment debate on 20 November last year, which covers people who transition from one sex to another, whose records are sometimes left on the Companies House register? The previous Minister agreed to look at that.
Andrew Griffiths
I thank my right hon. Friend for that very important question. I remember the Westminster Hall debate that she had on this issue. The Government are minded to protect the rights of the transgender community. She will know that I recently brought forward a statutory instrument to allow directors to remove their addresses from the Companies House register in order to protect safety. I would be delighted to work with her to see what we can do to provide greater protections for the transgender community in this area.
Jo Swinson (East Dunbartonshire) (LD)
The industrial strategy rightly sets out opportunities arising from the new technology and STEM—science, technology, engineering and maths—sectors but says little about the increasing importance of skills that are unique to human beings, such as care. Does the Secretary of State recognise that part of our answer to increasing automation should be expanding employment in the care sector and the value we attach to it? If so, will he start treating this as a strategic priority?
Business Update
Andrew Griffiths Excerpts(6 years ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
I am today publishing a consultation document which sets out a range of proposals to reform the law governing limited partnerships, including Scottish limited partnerships.
The United Kingdom has a global reputation as a great place to do business. People looking to grow or relocate a business come to Britain confident in our high corporate standards. Part of that confidence derives from our strong transparency requirements, which ensure people know who they are doing business with. Transparency also helps combat illicit activity which is a vital underpinning of the UK’s business environment, a key theme of the Government’s industrial strategy.
The UK is a world leader on corporate transparency and we want to retain this position, so we continue to look for opportunities to improve the transparency and integrity of our legal framework. In response to concerns that limited partnerships might be being misused, we sought and received evidence last year. The evidence demonstrates that the limited partnership, including its Scottish form, continues to fulfil important functions in key sectors of our economy. But it also highlighted that there are ways in which the legal framework governing limited partnerships could be strengthened and updated.
The proposals I am consulting on aim to strike the right balance between maintaining high corporate standards while maintaining the UK’s attractiveness as a place to do business and I look forward to hearing from interested parties.
I have placed copies of the consultation document in the Library of the House.
[HCWS656]
Sainsbury and Asda Merger
Andrew Griffiths Excerpts(6 years ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Rebecca Long Bailey (Salford and Eccles) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the proposed merger of Sainsbury’s and Asda.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
On 30 April, J Sainsbury plc and Walmart Inc. announced that they had agreed terms in relation to a proposed combination of Sainsbury’s and Asda Group Ltd, a wholly owned subsidiary of Walmart, to create an enlarged business. There are no planned Sainsbury’s or Asda store closures as a result of the merger. The proposed deal is conditional on clearance by the Competition and Markets Authority.
The Competitions and Markets Authority will hold pre-notification discussions with the parties and, when it has sufficient information, will commence its phase 1 investigation. Usually, a phase 1 investigation will last up to 40 working days before the authority will decide whether to clear the merger or refer it on to a detailed phase 2 investigation. I understand that the parties have requested to fast-track straight to phase 2. As part of its competition inquiry, the CMA can look at the buying power of a merged company in relation to its suppliers and the impact that the merger would have on them. Decisions about mergers are taken independently of ministerial control and are subject to legal challenge. Under the Enterprise Act 2002, Ministers have the power to intervene in mergers only on public interest grounds covering national security, media plurality and financial stability.
[Official Report, 2 May 2018, Vol. 640, c. 4MC.]Today, the Secretary of State and I have spoken to Sainsbury’s chief executive officer Mike Coupe, and Asda CEO Sean Clarke, so that we can better understand their plans. Additionally, I have today spoken to the Union of Shop, Distributive and Allied Workers and Unite unions, and I will speak to the GMB union immediately after leaving here. When I spoke to Len McCluskey this morning, I made it clear that I expect Sainsbury’s and Asda to conduct proper and thorough engagement with the unions. This afternoon, I have spoken to the Groceries Code Adjudicator, Christine Tacon, to reiterate the importance of ensuring that suppliers, particularly small and medium-sized enterprises, are treated fairly.
The UK’s merger regime is designed to offer clarity for businesses and to build investor confidence. Mergers are an important part of a dynamic economy, and the Government appreciate that they can bring real benefits to consumers and the economy as a whole by attracting inward investment. We will continue to monitor the situation closely.
Rebecca Long Bailey
The landscape for retailers has become increasingly difficult over recent years, and I am sure that the Minister shares my concerns regarding this deal, given its potential to squeeze competition in the market and the risks that it poses to workers, suppliers and consumers. He confirmed that there will be no store closures, but will he also confirm that there will be no job losses, no changes to pay, terms and conditions, and no closure of any sites within each company’s estates portfolio—distribution sites and offices, for example? If so, for how long will that promise be effective, and will he seek legally binding assurances?
It is clear that a duopoly of the big supermarkets—Tesco, and Asda and Sainsbury’s—will now emerge providing never-before-seen bargaining power. Indeed, the statement this morning included a promise to bring prices down for consumers, but it is feared that that will be at the expense of suppliers, farmers and manufacturers whose prices and terms will be driven down, pushing many to the edge of collapse. Can the Minister confirm that that will not be the case? In addition, does he agree that control of 60% of the market by the duopoly may pose a risk to consumer choice and provide less incentive to entice with good offers? If so, what assurances has he received in that regard? I am sure that he agrees that an urgent CMA investigation is imperative, but can he confirm that the CMA will prevent the integration of the companies during investigation, as it is entitled to do?
The Minister will agree that many of the risks associated with this deal do not bear directly on the CMA’s remit of testing whether there would be a substantial lessening of competition. As he said, he has no power to intervene directly in the merger as it does not meet the public interest tests of national security, media plurality and financial stability. Given that the deal could radically alter the whole grocery sector—from farm and factory to supermarket shelf—will he finally use his powers to broaden the scope of the public interest test to include deals of such economic and national significance, as he has been repeatedly asked to do?
Andrew Griffiths
I thank the hon. Lady for her important points. I share many of the concerns that she voices, but she says that the CMA’s remit does not extend to the substantial lessening of competition—[Interruption.] That is exactly what the CMA does. Its role is to examine competition matters—[Interruption.] If I misheard the hon. Lady, I apologise.
The CMA’s role is to consider the impact of this merger on not just competition in the marketplace, but suppliers. The hon. Lady rightly raised the impact that the merger could have on farmers and suppliers, and that was why the Secretary of State and I reiterated to Asda and Sainsbury’s when we spoke to them this morning the importance of their engaging with not just the CMA, but bodies such as the National Farmers Union and other unions to ensure that this is a proper process that we understand. The hon. Lady will know that section 172 of the Companies Act 2006 puts a duty on directors of the new company to have regard to the impact that their decisions would have on their suppliers, and we will be monitoring that very closely in the months to come.
We must also recognise, as the hon. Lady said at the very beginning of her contribution, that the retail sector is in a huge state of flux. We must all understand that the way in which consumers purchase these days is changing dramatically. There has been a 9% increase in sales through online vehicles in the last 12 months alone. That, by necessity, means that the retail sector has to change and adapt. One of the things that the merger will offer is reduced costs for the consumer, which I hope she will welcome. We all want to protect consumers and make sure they are getting great value for money, and that is one of the things that the merger promises. I can assure her, from the discussions I have had with the CMA, the Groceries Code Adjudicator and both parties, that ensuring the supply chain is properly protected is one of the priorities and something that I guarantee we will keep a close eye on.
Mrs Anne Main (St Albans) (Con)
The Minister said that he had a conversation with Mike Coupe about store closures this morning. Given that the CMA insisted that 53 stores were offloaded when the Safeway-Morrisons merger occurred in 2003, how can Mr Coupe give the Minister such an assurance, and what does the Minister have to say about that?
Andrew Griffiths
I thank my hon. Friend for that very important question. The reassurances I was given this morning were first that there would be no store closures and secondly that the head offices of both Sainsbury’s and Asda would remain open. Those are both very positive things. My hon. Friend mentions the forced sale of particular branches, and that is clearly a matter for the Competition and Markets Authority. When Sainsbury’s and Asda move on to the phase 2 investigation, they will get down to the granularity of the merger’s impact on particular villages, towns and cities. If there is a feeling that it will cause a lack of competition in the marketplace, the CMA has the power, when making a decision, to force the sale of stores to competitors to ensure that there is greater competition for the consumer.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The Secretary of State pointed out that the merger of Britain’s second and third largest supermarket chains will need to be approved by the Competition and Markets Authority and be scrutinised by regulators such as the Groceries Code Adjudicator, which was set up to protect small suppliers. As he said, the consumers’ voice is essential, and there are very real concerns that the merger will lead to reduced competition and be bad for shoppers, potentially hitting prices and the range of products available. Despite protestations to the contrary, fears remain that this could cost the jobs of the workers upon whose hard work these companies have been built. As we have heard, the Competition and Markets Authority may well demand that the combined group sells off some stores to prevent market dominance when there is both a Sainsbury’s and an Asda in the same area, but that can only be bad news for consumers and employees. Does the Secretary of State agree that the merger must not be at the expense of consumers’ interests or jobs, and will he commit to keeping the House updated on these important matters?
Andrew Griffiths
I thank the hon. Lady for her questions; she raises some very important points. Sadly, my responsibilities do not yet run to my being the Secretary of State, but I am grateful for the confidence and faith that she has shown in me.
In relation to the consumer, this is at the heart of what the CMA will consider. It will look at how this merger will affect our constituents—people concerned about the price of a pint of milk or a loaf of bread—and it will be very attuned to such an impact. All the assertions made by both Sainsbury’s and Asda so far show that they believe that this will lead to a reduction in costs, and therefore a reduction in prices on the shelf. The CMA and the Government will of course be keeping a close eye on that, but Sainsbury’s and Asda believe that this will lead to better prices for the consumer.
Andrew Selous (South West Bedfordshire) (Con)
How does my hon. Friend believe the Competition and Markets Authority will react to the situation in the middle of Dunstable, where we have an Asda and a Sainsbury’s pretty much next door to each other, and also a Morrisons, a Tesco, an Aldi, a Lidl and an Amazon fulfilment centre in quite close proximity?
Andrew Griffiths
My hon. Friend is spoilt for choice, I would say, and that is what we want to see. We want a dynamic marketplace with great competition between retailers to provide not only greater choice, but better prices. The CMA will clearly look at that—during the six-month phase 2 investigation, it will draw together all the information in relation to particular villages, towns and cities—and I confirm to my hon. Friend that if there is any concern about choice and competition in Dunstable, the CMA will act on that and, if it has to, it will force the sale of stores to competitors.
Mr Speaker
I am sure the hon. Member for South West Bedfordshire (Andrew Selous) is a regular visitor to all those retail outlets in his constituency, and doubtless those shopping alongside him are veritably delighted to brush shoulders with their local Member of Parliament.
Hilary Benn (Leeds Central (Lab)
Asda said this morning that it will continue to be run from its head office in the centre of Leeds, where just over 2,000 people are employed. Given that in the last few months there have been two rounds of job losses at Asda’s head office, and in the light of what the Minister has just said about the merger providing an opportunity to cut costs, what assurance can he give staff in the head office that their jobs are safe?
Andrew Griffiths
The right hon. Gentleman will understand that any merger will be designed to improve efficiency, productivity and value for money for shareholders. So far, we have been given reassurances by Asda and Sainsbury’s that there will be no store closures and no job losses in stores. I cannot confirm to him as yet the impact that the merger will have on the head offices, other than to repeat the confirmation that we have been given that both head offices will be kept open. However, this is a decision for the CMA. I urge the right hon. Gentleman and other right hon. and hon. Members to bear in mind that the CMA will make a decision based on the evidence. If right hon. and hon. Members have evidence to contribute, they should make their case to the CMA to ensure that it considers all this on the facts.
Robert Halfon (Harlow) (Con)
I thank my hon. Friend for his statement. In Harlow, we have an Asda and a Sainsbury’s, and many hundreds of local jobs depend on those supermarkets. Although the companies say today that there will be no job losses, my concern is that in a year or so’s time, when this has all been forgotten about, hundreds of jobs will suddenly be lost not just in stores, but in logistics centres, distribution centres and so on. We need guarantees that those jobs will not be lost.
Andrew Griffiths
My right hon. Friend is a doughty fighter for his constituents, and I understand that he will be lobbying hard to ensure that there are no job losses. I reassure him that some 330,000 people are employed by this joint, merged organisation. It is a huge employer. It has given us very strong reassurances about jobs in stores. I urge him to engage not only with the CMA in relation to this investigation, but with both Asda and Sainsbury’s to make those points strongly and forcefully, as he always does.
Sir Vince Cable (Twickenham) (LD)
The Minister referred to the importance of online business in driving this merger. Can he explain how the CMA’s terms of reference enable it properly to take into account competition between domestic bricks-and-mortar businesses and global online corporations such as Amazon?
Andrew Griffiths
Very few people know this area of competition policy better than the right hon. Gentleman. As I have pointed out, phase 2 of the CMA investigation will involve drawing together a panel that will consider all the facts about the size of the market and the impact. As part of that, they will use all their resources to ensure that they fully understand not just, as he puts it, the bricks-and-mortar marketplace, but competition from online retailers.
James Cleverly (Braintree) (Con)
I welcome the recent conversion of the hon. Member for Salford and Eccles (Rebecca Long Bailey) to the concept of liberal, free market competition—there is more joy in heaven over one sinner who repents and all that. Will my hon. Friend the Minister ensure that however the merger plays out, he will always promote diversity of provision and competition to give consumers the greatest freedom and choice?
Andrew Griffiths
As always, my hon. Friend makes his point extremely well. He is absolutely right that everybody benefits from a vibrant marketplace and increased competition. He will also understand that with my other hat on—as the Minister responsible for small business—I am keen to ensure that any merger such as this protects small suppliers and SMEs, which make up 99% of our business community and form the backbone of all our constituencies. Competition—yes, but it is hugely important that we have an eye to protecting those suppliers.
Rachel Reeves (Leeds West) (Lab)
Following on from the question asked my right hon. Friend the Member for Leeds Central (Hilary Benn), Asda has been headquartered in Leeds for 50 years. It is a huge part of our civic and economic life and our infrastructure. Given the Minister’s answer and the lack of assurance that he has received in his conversations with Asda and Sainsbury’s, people working at the Asda head office will be incredibly concerned about their future. The industrial strategy is about rebalancing the economy away from London and the south-east. What assurances can he give that the merger will not rebalance the economy away from Yorkshire and towards London?
Andrew Griffiths
I can give the hon. Lady the assurance that I was given by both Sainsbury’s and Asda, which is that both head offices will continue to be maintained. Over recent months, we have seen the real pressure the retail sector is under with the loss of some very well loved and well known high street names as the result of a very challenging business environment.
I make no comment on the validity or the veracity of the merger details—that is for the CMA to decide—but clearly what we see is two businesses trying to get ahead of the curve and futureproof themselves in a very challenging market. The hon. Lady is a doughty champion for her constituents, so I am sure she will engage with both Sainsbury’s and Asda to seek further reassurances, but I can reassure her that that head office will remain open.
Mark Menzies (Fylde) (Con)
For 11 years before I entered this place, I worked in the head office of Asda, alongside my hon. Friend the Member for Shipley (Philip Davies), in the constituency of the right hon. Member for Leeds Central (Hilary Benn). I can therefore understand the concerns of those who work there today. The Minister cannot provide assurances about the future of the head office—indeed, I do not believe that it will be there in a few years’ time.
I urge the Minister please not to view this as a merger. It is not a merger: it is a takeover by Sainsbury’s, in return for 42% of stock and £2.5 billion to Walmart. That is what it is, so let us stop using false terminology to describe what is actually happening. I urge the Minister to focus on the jobs in distribution centres, many of which are in working areas of the country. If this measure goes ahead, the distribution centres will be absolutely hammered a year or two down the line.
Andrew Griffiths
I understand very clearly the points my hon. Friend makes. He may not believe it to be a merger, but this is a merger within the legal definition that will be considered by the CMA. Clearly, there will be changes to the way the business is run to make it efficient and to keep it running well into the future. The assurances that Sainsbury’s and Asda have given us are that they will continue to run them as two separate businesses. I hope I can reassure my hon. Friend that, from the information we have been given, those head offices will continue.
Tracy Brabin (Batley and Spen) (Lab/Co-op)
Asda is a substantial employer in my constituency. With £500 million of efficiency savings coming down the track, will the Minister tell us what discussions he had, in the meeting with the chief executive officers, about how to protect jobs and the number of hours worked by employees? Each job loss has a massive impact on my community, which is already suffering under Tory austerity.
Andrew Griffiths
Asda and Sainsbury’s believe that the way to protect those jobs is by making the business efficient, effective and able to compete and improve its market share. The shareholders will be asked to vote to approve the merger deal, so they, too, believe that—otherwise they would not vote for it.
I think the hon. Lady needs to be careful not to cause undue concern. The public assurances provided by both Sainsbury’s and Asda so far are that there will be no job losses in stores and that there will be no store closures. Clearly, the aspiration behind the public utterances from Sainsbury’s and Asda is that they want their businesses to improve. The recent takeover by Sainsbury’s of Argos saw efficiencies and improvements in that business that lead to more people being employed. I am responsible for any merger and competition issues, which will be considered by the CMA. I urge her to engage with, and make her points to, the businesses themselves.
Several hon. Members rose—
Antoinette Sandbach (Eddisbury) (Con)
Dairy farmers in my constituency supply milk to both Asda and Sainsbury’s. Will there be an easy way for those family-run businesses to be able to feed into potential efficiencies that may threaten the supply chain?
Andrew Griffiths
My hon. Friend makes an important point—I have dairy farmers in my constituency—and this is one of the issues that I have raised with Christine Tacon, the Groceries Code Adjudicator. My hon. Friend will know that in the last few weeks, in conjunction with the Department for Environment, Food and Rural Affairs, the Groceries Code Adjudicator and the Department for Business, Energy and Industrial Strategy, we have brought forward new proposals on dairy contracts to help exactly the kind of small suppliers that she talks about. In conversations with Sainsbury’s and Asda, both of them talk about the very real relationships that they have with their suppliers—with their dairy farmers. I hope that we can get some assurances to protect those relationships.
David Hanson (Delyn) (Lab)
Just to be clear, suppliers will not be squeezed, head offices will stay open and stores such as those in Flint, where there is an Asda next door to a Sainsbury’s, will both be open in two years’ time. Has the Minister sought those assurances from the companies today?
Andrew Griffiths
Let me reiterate to the right hon. Gentleman that the matter of stores in the same town will be considered as part of the phase 2 investigation by the CMA panel. It will consider the impact of the merger on individual towns. If it believes that it is anti-competitive, that it will lead to a worse deal for the consumer if the two supermarkets—one being Asda, one being Sainsbury’s—stay open, and if it has concerns, it will force the sale to a competitor.
As my hon. Friend the Member for South West Bedfordshire (Andrew Selous) said, where there is a wider marketplace with a huge number of supermarkets, the CMA’s view may well be that there is no impact on competition in the town as a result of the merger. However, it is clear that this will be judged on a case-by-case basis, to protect the individual consumers in the right hon. Gentleman’s constituency and mine.
Chris Skidmore (Kingswood) (Con)
Asda in Longwell Green and Sainsbury’s in Emersons Green have been huge economic success stories in recent years, taking on hundreds of extra jobs since 2010 without Government interference. Will the Minister confirm that it is not the Government’s duty to be heavy-handed about the business interests of companies, but instead to create the right economic climate that will create jobs for the future?
Andrew Griffiths
My hon. Friend is absolutely right: we want these businesses to grow and thrive. We want a dynamic retail sector. That is why, just last month, I established the Retail Sector Council to bring together the major players in the retail industry to ensure that the Government are creating exactly the conditions that he highlights, to allow these businesses to grow and prosper. But as I said, look at the facts: the combined company will employ some 330,000 people. We as a Government want to encourage those jobs—not to get in the way and prevent them.
Jenny Chapman (Darlington) (Lab)
Although I am encouraged to hear the assurances about store closures and store jobs—I am also a former colleague at Asda—I encourage the Minister to be very careful about making assurances, particularly about Asda House, but also about jobs in distribution centres. Forces are at play that are far wider than just this merger—worrying though this is—and that will not be examined by the CMA. Specifically for me, the issue is automation in the logistics and warehousing sector, where I can imagine about 80% of jobs no longer existing in the future. That would particularly hit the north-east of England, south Wales and other areas that have become dependent on these jobs. As well as looking at this issue, the Government need to look more widely at those broader trends. Is the Minister going to do that?
Andrew Griffiths
I knew that the UK was a country of shopkeepers, but I had not realised that so many Members had retail experience in our supermarkets; it is encouraging to have such a well-informed debate. The hon. Lady raises issues about the supply chain and distribution sector. Clearly, that is not within the scope of the CMA investigation. The Enterprise Act 2002 clearly sets out the role that the Government and Ministers can play in relation to takeovers and mergers, and it is important that we stick to those established rules. That is what we will be doing in this case.
Stephen Kerr (Stirling) (Con)
Following on from the Minister’s last comments, it is right that concerns be raised about jobs and consumer choice, but will he confirm that producers will be able to provide evidence to the CMA on the potentially devastating effect of this concentration of market power through this market consolidation?
Andrew Griffiths
Not only can I confirm to my hon. Friend that producers’ voices will be heard in the CMA deliberation—this six-month detailed process that will consider all the aspects, vertical and horizontal, of the merger—but I positively urge him to go back to his constituency, engage with his dairy farmers and small suppliers, and make sure they contribute to it to guarantee that their voices are heard.
Dr David Drew (Stroud) (Lab/Co-op)
I hear what the Minister says about the dairy industry, but this is not just about the small producer; it is about the relationship between the producer, the processer and the retailer—and that has been a poisonous relationship for decades. How will this increased concentration at the retail end help that relationship?
Andrew Griffiths
Clearly, the hon. Gentleman has a great deal of experience in this area—I know that his constituency was badly affected by the foot and mouth outbreak and that he did a very good job at the time. The correct formula for finding a resolution for his dairy farmers and the supply chain is through the Groceries Code Adjudicator. She has proved to be incredibly effective in standing up for the supply chain—not just for the small dairy farmers, but for the wider industry. If he has concerns, I know she will take them very seriously, so I urge him to take them up with her.
Mark Pawsey (Rugby) (Con)
Today’s announcement will be of concern to staff at Sainsbury’s store support centre at Ansty Park, in my constituency, where they are engaged in buying, design and merchandising—functions that came up to the midlands from London. I had the opportunity to visit the site a couple of years ago. Will the Minister reassure those staff that they will have an opportunity to make representations to the CMA?
Andrew Griffiths
My hon. Friend is absolutely right. Huge strides forward were made in getting these jobs out of London and further north, and I know he has done a very good job in representing employees’ views. I can reassure him that their voices will be heard. He should convene a meeting, talk to the workforce and encourage them to contribute to the CMA inquiry.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I draw the House’s attention to my declaration in the Register of Members’ Financial Interests as a member of the GMB. I met members of the GMB in Asda in my constituency last year and other retail workers represented by the Union of Shop, Distributive and Allied Workers and Unite. Does the Minister understand the concerns in Cardiff, given the loss of almost 1,000 jobs in the last year at Tesco House in Cardiff, which affected many of my own constituents, and given that his Government’s own analysis on Brexit shows it will hit the retail and food and drinks sectors extremely hard in all the scenarios?
Andrew Griffiths
I understand the hon. Gentleman’s points, which is why one of the first things I did after being made Minister was to pick up the phone to the union representatives he talks about. We want to make sure that employees’ voices are heard and that there is proper engagement over the merger. It is clear, though, that in no way is this a response to Brexit. These are businesses based in the UK and competing in the UK, and the business will continue to be listed on the London stock exchange post the merger. I recognise the hon. Gentleman’s concerns, which he raises on behalf of his constituents, but perhaps we should stop playing politics with Brexit.
Mr Philip Hollobone (Kettering) (Con)
The town of Kettering has a large Sainsbury’s and a large Asda. If this merger goes through, what Kettering shoppers and supermarket employees want to know is: will we still have both stores in two years?
Andrew Griffiths
I think that what Kettering’s shoppers and workers want to know is first that they have choice and competition and secondly that those jobs are protected. If both supermarkets are thriving, either the Competition and Markets Authority will decide that there is no competition issue and allow the merged company to continue to run both, or it will say that there is a competition issue and that it has concerns for my hon. Friend’s constituents, and it will force one of them to be sold to a competitor who will, hopefully, run it just as effectively.
Christian Matheson (City of Chester) (Lab)
May I press the Minister on the question of distribution depots, which Mr Coupe has chosen not to protect? I remind the House that many of the distribution sites were established because of the decline in manufacturing, to replace manufacturing jobs. What assurances will the Minister seek from Mr Coupe and his fellow directors to guarantee that the jobs remain in those difficult areas?
Andrew Griffiths
I understand the point that the hon. Gentleman has made. He is clearly concerned about those jobs. There are a number of distribution jobs in my own constituency, Burton being at the centre of the country and well connected.
Let me make two points. First, the number of supermarkets being serviced will be the same, so the number of lorries, distribution outlets and goods being shipped will also be the same. Secondly, I have no power over the issue of jobs in relation to mergers. The Enterprise Act 2002 limited such powers. While we can have conversations, I urge the hon. Gentleman to do the same to protect those jobs.
Andrew Jones (Harrogate and Knaresborough) (Con)
Having previously been a supplier to both companies, I read about the proposed deal with much interest. Can my hon. Friend confirm that the implications for all parties will be considered—particularly the implications for the smaller regional food producers?
Andrew Griffiths
Let me say again that, as the Small business Minister, I am particularly attuned to that issue. I think that all of us, as consumers and as parliamentarians, want those small food producers—those artisanal businesses—to grow and thrive. Both Asda and Sainsbury’s have given assurances that they want to continue those important relationships. However, the Competition and Markets Authority, within its powers, will consider the impact on the supply chain.
Susan Elan Jones (Clwyd South) (Lab)
Does the Minister think that this is a good deal or a bad deal for British farming?
Andrew Griffiths
I think the hon. Lady will understand that it is a deal that must be considered by the shareholders of both Asda and Sainsbury’s. It would be inappropriate for me as the Minister, given my role, to pass judgment on its validity or veracity.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The Minister said that he had had discussions with the National Farmers Union. Many in the agricultural sector already think that the large supermarkets have too much power over buying and prices. What assurances can the Minister give the farmers, growers and food producers in my constituency—[Interruption.] What assurances can the Minister give them that they will be able to work on a level playing field and obtain fair prices for their produce?
Andrew Griffiths
My hon. Friend can hear for herself the support that there is in the House for the suppliers, growers and farmers in her constituency.
Let me clarify one issue. I did not say that I had spoken to the NFU; I said that I had urged both Sainsbury’s and Asda to engage with the NFU to understand the position properly. As I have said, the CMA will be concerned about the impact on the supply chain, but, just as important, the Groceries Code Adjudicator will also be there to champion the small producers to whom my hon. Friend has referred.
Chris Elmore (Ogmore) (Lab)
Sadly for the Minister, here is another question from a Member who started his working life in a supermarket—luckily, probably, only as a butcher in Tesco, but there we are.
Does the Minister agree that it is unacceptable to keep workers waiting until 2019 for certainty about their jobs, as indicated in the CMA’s statement? What will he do to try to improve the process as soon as possible?
Andrew Griffiths
I can honestly say that Tesco’s loss is the House’s gain.
I recognise that this is an uncertain time for workers—that is why we have engaged with the unions to try to give them as much reassurance as we can—but this is clearly a complicated and complex process. These are huge businesses, and we need to understand properly the impacts that the merger will have—not just on jobs in those businesses, but on the supply chain and competition throughout the country. While I am keen for us to secure a resolution as quickly as possible, I think that, unfortunately, we must let the process run its course.
Tom Pursglove (Corby) (Con)
A new Asda store recently opened in Raunds; that has been particularly welcome for my constituents because of the positive impact it has had on petrol prices. What timescales does the Minister envisage for this process and is he aware of any impact on portfolio investments?
Andrew Griffiths
Those are important questions. If there is a phase 1 investigation, that will take 40 days. As I have said, both parties are urging the CMA to consider a fast-track approach. If it does that, phase 2 could be completed in six months. I can reassure my hon. Friend that the CMA will take very seriously the other issues he raises.
Jack Dromey (Birmingham, Erdington) (Lab)
I know from my union experience that supermarkets are powerful both as employers and along their supply chains. They must not be allowed to abuse that power. Does the Minister understand the dismay of employees about this announcement that came out of the blue, and will he act to ensure that the guarantees given by the two supermarkets, about which he has waxed lyrical today, are not just day-one guarantees, but can be counted on by workers in the years to come?
Andrew Griffiths
I thank the hon. Gentleman for his concern and recognise his passion as a previous trade union representative. He asks about the validity and veracity of the assurances given so far by Sainsbury’s and Asda. It is early days—we are not even at day one into this process—so we will see how that develops. On his aspiration that we protect the farmers and small suppliers, I gently point out that it was this Government who introduced the Groceries Code Adjudicator and brought in those tough measures and protections to help our farmers and the supply chain.
Kevin Foster (Torbay) (Con)
Four of the five major retail supermarket sites in Torbay are occupied by either Asda or Sainsbury’s, and the two stores are right next to each other in Paignton. What reassurances can the Minister give me that communities and local councils will be able to feed in their views to the CMA, to ensure that competition at a local level is preserved?
Andrew Griffiths
My hon. Friend raises important points, and I know that his constituents will be concerned. I can assure him that the CMA will take representations. If he would like to meet personally with the CMA, I would be delighted to try to help facilitate that.
Rachael Maskell (York Central) (Lab/Co-op)
The Foss Islands Sainsbury’s and Asda are also adjacent to each other, and staff will have woken up this morning to hear the announcement not from their employers but on the radio. What is the Minister doing to ensure staff get the support now that they need?
Andrew Griffiths
We have engaged with Sainsbury’s and Asda to urge them to speak to their staff, and we have also engaged very openly and honestly with the trade unions. We want to see proper and early engagement and consultation in this process to ensure that the workforce is protected, but the public assurances that both Sainsbury’s and Asda are giving at present are that all the stores, and all the jobs in the stores, will be protected.
Justin Madders (Ellesmere Port and Neston) (Lab)
We know in takeovers and mergers of this nature that, as sure as night follows day, it is the workers who end up paying for the efficiency savings that have been set out. I have to say that, given the number of assurances the Minister has talked about today, I think attacks on terms and conditions are almost inevitable. When that happens in two years’ time, what will the Minister do?
Andrew Griffiths
The rules under which we operate in relation to mergers and takeovers were established in the Enterprise Act 2002 under a Labour Government. They have worked well and allowed businesses to grow, develop and merge to the benefit of both shareholders and the employers. The Department is, of course, closely following what is going on, but decisions in relation to this merger are for the CMA.
General Affairs Council: April 2018
Andrew Griffiths Excerpts(6 years ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
My right hon. Friend the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lord Henley) has made the following written statement:
I attended the General Affairs Council (Cohesion) on 12 April 2018. The meeting was held in Luxembourg and chaired by the Bulgarian presidency.
The meeting was dedicated to the strategic context and priorities for post-2020 cohesion policy, and included an information session from the Commission on communicating cohesion policy.
A provisional report of the meeting and the conclusions adopted can be found on the Council of the European Union’s website at:
http://www.consilium.europa.eu/en/meetings/gac/2018/04/12.
The General Affairs Council discussed the future direction of cohesion policy in the next multiannual financial framework. Ministers and their representatives from member states presented their positions on the strategic context and priorities for post-2020, with a view to influencing the Commission’s proposals. Member states particularly focused on efforts for simplification, harmonisation, the strategic framework for future cohesion policy, and the principle of national co-financing. I intervened to reflect on the lessons learnt from the UK’s experience of implementing cohesion policy and provide some suggestions for a future cohesion policy.
The Commission provided an update on how cohesion policy has been, and could be, better communicated to the public.
The Bulgarian presidency provided an update on non-legislative and legislative items.
[HCWS624]
Draft Companies (Disclosure of Address) (Amendment) Regulations 2018
Andrew Griffiths Excerpts(6 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
I beg to move,
That the Committee has considered the draft Companies (Disclosure of Address) (Amendment) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mr Sharma. It is also a pleasure to serve on a Committee composed of such eminent and experienced hon. and right hon. Members. I am not sure whether that means that the Government are concerned that they need senior statesmen and women to ensure that we get the Government’s business through, but it is a pleasure to welcome them today.
The regulations will make it easier for people to apply to the registrar of companies to make information about their residential address on the companies register unavailable to the public. The Companies Act 2006 changed the previous general rule that a director’s residential address was publicly available on the register by protecting that information from disclosure, but that change did not apply to information filed on the register before the Act came into force. The Companies (Disclosure of Address) Regulations 2009 were made to allow people to apply to the registrar to make an address unavailable to the public in certain circumstances. The registrar can grant an application only where there is a serious risk of violence or intimidation to those living at the address because of the activities of the company. In addition, an application cannot be made in respect of information filed with the registrar before 1 January 2003.
The regulations have a number of important practical consequences. They prevent residential address information from being protected in three specific situations. The first is where someone is at risk of identity theft and fraud, rather than violence or intimidation. A report last year by CIFAS, the UK’s leading fraud prevention service, found that company directors are one of the most at-risk groups for identity fraud. Nearly 19% of identity fraud victims are company directors, despite their comprising less than 9% of the UK’s population. The second is where someone is at risk of violence or intimidation, but the risk does not come from the company’s activities—for example, where someone who is in the public eye might attract abuse. The third is where someone is at risk of violence or intimidation because of the company’s activities but the information was filed with the registrar before 1 January 2003.
The companies register was made free to search online in 2015. As a result, it is much more widely used than ever. While improving transparency, that has increased concerns about the availability of personal information. The draft regulations address those concerns in two ways. First, they allow applications where the information was filed before 2003. That information is kept non-digitally, for example on microfiche. When the original regulations were drafted in 2009, it was thought that it would not be possible to redact such non-electronic information without risking damage to the public record. However, that is no longer the case, so there is no need to retain the restriction.
Secondly, the draft regulations remove the requirement in regulation 9 of the 2009 regulations that an applicant must show they are at serious risk of violence or intimidation because of the company’s activities. That is consistent with the general approach taken by the Companies Act 2006, whereby the registrar must protect directors’ residential addresses. The draft regulations do, however, retain the test for applications under regulations 10 and 11 of the 2009 regulations. Regulation 10 allows applications from companies for the protection of the residential address information of all their members. Regulation 11 allows applications from people who register a charge.
Removing the test for company applications could result in large-scale redactions of historic information, potentially involving thousands of members’ addresses for larger companies. We do not consider that to be justified. However, an individual member who is concerned about the availability of their residential address on the register will be able to apply under new regulation 9 to have it suppressed without having to show any risk of harm.
We are also retaining the test for applications in respect of charges, as the registrar receives very few applications and no concerns have been raised about the test in that context. People who are legally required to maintain a current address on the register—for example, current directors of live companies—will have to provide a service address as part of their application. That will be publicly available on the register in place of their residential address. However, people who are not subject to that requirement, such as former directors of dissolved companies, will not need to provide a service address. Instead, their residential address will be partially suppressed to show the first half of the postcode. Public authorities, such as a police force, the Insolvency Service and the Pensions Regulator, will still be able to obtain information about a person’s residential address from the registrar, even where that information is not available to the public on the register.
As the explanatory memorandum to the regulations notes, we have not consulted in this instance. Of course, in certain circumstances consultation is an entirely right and proper approach for the Government to take. However, a number of cases have recently been raised with my Department where the people involved are at risk of violence, yet cannot have their address information protected. Delaying action to consult would increase the risk that people may be caused actual harm. I believe that not consulting is justified in this case, and I hope that right hon. and hon. Members will agree, particularly as the regulations apply the principle that has been in place since 2009 that residential address information should not be shown publicly on the register.
It is important that the information on the companies register is of real practical use to those who wish to find out information about a company. At the same time, the information should not become a tool for abuse by exposing people to the risk of identity theft or fraud, or even physical harm. The regulations strike an appropriate balance between transparency and the protection of individuals, and I commend them to the Committee.
Andrew Griffiths
I thank right hon. and hon. Members for those helpful and completely understandable questions. Let me begin with the questions asked by the hon. Member for Sefton Central—as I said, it is completely understandable that he wishes to probe further. He is absolutely right about scope. He listed a number of positions and responsibility holders in a company, including company secretary, and asked whether they are in scope. I am happy to confirm that they are.
The hon. Gentleman also asked about access for authorities to this information, which my right hon. Friend the Member for Maldon also touched on in his helpful speech, when he asked how we can be sure that directors who are acting inappropriately or against the law can be found and held accountable. Such protections are important for all our constituents, who may be subject to the irresponsible or illegal behaviour of company directors. I confirm that information in relation to residential addresses will be fully accessible to all statutory bodies such as the police and the Insolvency Service, so that if there is any suggestion of wrongdoing, the authorities can trace directors and hold them accountable.
The hon. Member for Sefton Central talked about technology and asked how redactions are possible. Of course, there have been improvements to the technology, which is part of the reason why it is now possible to go back and redact information held on microfiche, but there has also been a move away from the view that doing so would damage the public register. Companies House no longer has those concerns and so is able to bring the older records in line with the current regulations.
My right hon. Friend the Member for Maldon also asked about the increasing number of complaints. To put it into context, they do not particularly relate to historical information held on company directors, but in general there is a greater number of complaints. Some of the complaints we have received at the Department are particularly relevant to older directors of companies. My right hon. Friend is absolutely right in his assertion that this is not just about fraud cases—there would not be quite the urgency if it were just about fraud cases. The reason we are not consulting and are proceeding with such speed is that there have been threats to individuals. We all take our responsibilities very seriously to ensure that nobody is put in danger simply because their information is held on the register.
It is right that we have considered these regulations in some detail. They will protect people from potential harm while ensuring that corporate transparency is maintained, and I commend them to the Committee.
Question put and agreed to.
General Affairs Council
Andrew Griffiths Excerpts(6 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
My noble Friend the Parliamentary Under-Secretary for State for Business, Energy and Industrial Strategy (Lord Henley) has made the following statement:
A meeting of the General Affairs Council (Cohesion) will be held in Brussels on 12 April 2018.
The General Affairs Council will discuss the future direction of cohesion policy in the next multiannual financial framework. Ministers from member states will present their positions on the strategic context and priorities for post-2020, with a view to influencing the Commission’s proposals. A follow-on discussion will cover how cohesion policy could be better communicated to the citizens of Europe.
The Bulgarian presidency will provide an update on non-legislative and legislative items.
[HCWS594]
Companies House Public Targets: 2018-19
Andrew Griffiths Excerpts(6 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
My noble Friend the Parliamentary Under-Secretary of State for the Department of Business, Energy and Industrial Strategy (Lord Henley) has made the following statement:
I have set Companies House the following targets for the year 2018-19:
Public targets
Ensure our digital services are available 99.9% of the time.
Ensure no vacancy within the digital area remains unfilled for more than three months.
Provide a digital service for the filing of small full accounts.
Achieve a digital take-up rate of 40% for filings for voluntary dissolution.
Ensure that 97% of companies have an up-to-date confirmation statement.
Respond to 95% of complaints about information on people with Significant Control (PSC) within 10 days.
Achieve a customer satisfaction rate of 88%.
Reduce the cost of our business activities by 3.5%.
[HCWS587]
UK Register of Overseas Entities’ Beneficial Ownership
Andrew Griffiths Excerpts(6 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
I have today published a document summarising the responses we received to last year’s call for evidence, which set out proposals for a new world first beneficial ownership register of overseas companies and other legal entities that own UK property or participate in UK Government procurement. This follows the commitment made at the anti-corruption summit in 2016, in order to combat money laundering and achieve greater transparency in the UK property market.
The response to the call for evidence outlines several areas in which policy development has progressed since the publication of the call for evidence. These include proposals for more frequent updates to ensure the timeliness and relevance of the information, and changes in the proposed sanctions to be applied through land registration law to ensure there are no adverse consequences for innocent third parties.
The new register will be the first of its kind in the world, and builds upon the UK’s global leadership in tackling corruption. As stated in the call for evidence, the downside of demonstrating such leadership is that the Government do not have an existing model to work from. The Government will therefore look to strike the right balance between improving transparency and minimising burdens on legitimate commercial activity.
The Department is currently working on the preparation of a draft Bill to deliver these proposals, which the Government intend to publish by summer recess this year. Following consideration of comments received post-publication, the Government intend to introduce the legislation early in the second session of this Parliament.
I have placed copies of the Government response to the call for evidence in the Libraries of both Houses.
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Draft National Minimum Wage (Amendment) Regulations 2018
Andrew Griffiths Excerpts(6 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Andrew Griffiths)
I beg to move,
That the Committee has considered the draft National Minimum Wage (Amendment) Regulations 2018.
It is a pleasure to serve under your chairmanship, Mrs Moon. The Government are committed to building an economy that works for everyone. Through the national minimum wage and the national living wage, we continue to ensure that the lowest-paid in our society are fairly rewarded for their contribution to the economy. Raising the minimum wage is one way that our industrial strategy creates an economy that boosts productivity throughout the UK, and provides good jobs that increase people’s earning power.
This morning’s employment figures are a testament to the success of that policy. We have a record employment rate of 75.3%, and our unemployment rate of 4.3% is the joint lowest in more than 40 years. The Government are increasing the tax-free personal allowance to £12,500 by 2020, both to ensure that workers keep even more of their income, and to take more of the lowest-paid out of paying tax altogether. Between 2016 and 2017, thanks to the Government’s introduction of the national living wage, the lowest-paid 5% of full-time workers saw the biggest increase in pay.
I am proud to introduce the latest set of inflation-busting increases to the national living wage and the national minimum wage, which will give more than 2 million low-paid workers a well-deserved pay rise next month. I am particularly pleased to announce that the biggest increases in the national minimum wage rates—the largest for more than a decade—are for younger workers.
The regulations increase all national minimum wage hourly rates, including those for workers who are entitled to the national living wage. The national living wage rate for people aged 25 and over will increase by 33p to £7.83, and the rate is on course to reach 60% of median earnings by 2020. The increase means that a full-time worker in receipt of the national living wage will receive an annual pay rise of more than £600.
The rate for 21 to 24-year-olds will also increase by 33p, which means that people in that age group will be entitled to a minimum rate of £7.38—an annual increase of 4.7%. The annual earnings of a full-time worker in that age group will also increase by £600 a year.
People aged between 18 and 20 years old will be entitled to a minimum of £5.90 per hour, which is an annual increase of 5.4%. People aged 16 or 17 years old will be entitled to a minimum of £4.20 per hour, which is an annual increase of 3.7%. Apprentices aged under 19, or those aged 19 and over in the first year of their apprenticeship, will be entitled to £3.70, which is the largest annual increase of all the hourly rates—5.7%. We estimate that more than 2 million workers will get a pay rise. Finally, the accommodation offset will increase from £6.40 to £7 per day.
I place on record my gratitude for the work of the independent Low Pay Commission. It brings together businesses and workers to form a consensus on the rates, and advises the Government accordingly. It is asked to recommend the highest possible increase in the national minimum wage, without damaging the employment prospects of low-paid workers by setting it too high, and to recommend a national living wage rate that will ensure that it reaches that 60% of median earnings by 2020, subject to economic growth being sustained. It has carried out extensive research, consultation and analysis, which have informed the rates recommendations in its 2017 report. It recommended each of the increases that I have announced.
We recognise, though, that as the minimum wage rises, so does the risk of non-compliance. The Government will ensure that every worker in the UK who is entitled to the national minimum wage or national living wage receives it.
Chris Stephens (Glasgow South West) (SNP)
The Minister knows from my written parliamentary questions that 25% of posts in the national minimum wage compliance unit at Her Majesty’s Revenue and Customs are vacant. Can he tell us whether those posts will be filled by HMRC?
Andrew Griffiths
The hon. Gentleman raised that issue just a few days ago—in a Westminster Hall debate, I think. He will know that the Government have doubled their investment in enforcement of the national minimum wage. There is, of course, always a turnover of staff, but we intend to have the compliance enforcement unit up to its full potential as soon as possible. We are actively taking steps to tackle non-compliance, sending a clear message to employers that minimum wage abuses will not go unpunished. We have invested £25.3 million in that this year—almost double what was invested in 2015. The Government have also invested £1.5 million in an awareness campaign to highlight the rights and responsibilities of workers and employers.
We have seen a jobs miracle in this country. More than 400,000 more people are in work than were a year ago, showing that the labour market remains a key strength of the UK economy, and proving that the UK can accommodate a higher minimum wage. The economy has grown continuously for more than four years, and UK businesses have created a record number of jobs. I pay tribute to the workers and employers who made that happen.
According to the Resolution Foundation, the national minimum wage and the introduction of the national living wage have contributed to the elimination of extreme low pay. The Government estimate that more than 2 million workers will directly benefit from the uprating of the national minimum wage and the national living wage next month. Raising the minimum wage is just one part of the “good work” agenda that underpins our vision for a more productive and motivated workforce. Between April 2015 and April 2017, the wages of the lowest-paid have been increasing fastest, thanks to the national living wage, with the wages of those in the fifth percentile of the earnings distribution growing by almost 7% above inflation. That is faster than at any other point in the earnings distribution.
The Prime Minister committed that this would be a Government that worked for everyone. It is right that the lowest-paid workers in our society are fairly remunerated for their contribution to the economy. I commend the regulations to the House.
Laura Pidcock (North West Durham) (Lab)
I have a somewhat different take on the state of the economy from the Minister. Real wages, excluding bonuses, are still down by 0.2% and are still £15 a week lower than 10 years ago. That is a starkly different picture from the one painted by the Minister.
No one would expect me to oppose this increase in the minimum wage for working people, and the increases to the minimum hourly rate. However, this small rise in the minimum wage cannot go without comment or critical analysis; I wish that the Government would do some critical analysis of the growth in employment, the nature of that employment, and how precarious, insecure and low-paid it still is, specifically in the north-east, the region I represent.
I acknowledge that this increase in the minimum wage will be helpful, but it certainly will not be transformative for the many who are the lowest-paid. The Government seem obsessed with keeping the minimum wage at the lowest level at which it is possible to maintain a subsistence existence—it is called the Low Pay Commission for a reason. Perhaps the Government do that because they mistakenly believe that keeping wages low is good for business, or that it is not the state’s job to set wages, but rather the law of the markets that does that.
What the Government fail to acknowledge is that increasing wages, particularly of the lowest-paid, will immediately increase demand in the economy, which in turn will stimulate production, retail and services. It will also decrease Government expenditure on subsidising low pay, while increasing Government revenue—for example, where tax thresholds are exceeded. Improving the quality of life and economic wealth of the least well-off is not a cost, but an investment in society.
No Government should ignore—though the Minister did ignore it—the huge pressure on wages due to the fact increases in the cost of food, energy and transport, and other living costs, have outstripped increases in wages over recent years. The 33p an hour increase for those over 21 is, I repeat, a help, but not the transformational change we need to help working people in very difficult times.
Let us briefly talk about what might bring about that transformation. I am sure the Minister has read the Labour party’s manifesto in depth, so he will know that Labour would set the minimum rate of pay at £10 an hour by 2020.
There can be no more inspirational story about low pay than that of the striking McDonald’s workers. I met some of them on Monday evening, when they eloquently expressed the hardship that they endure working for the minimum wage. What an injustice it is that people work extremely hard each week to create enormous wealth for the McDonald’s corporation, yet their pay scarcely affords them an existence. Will the Minister join me in congratulating those workers who took industrial action and achieved a 6% pay rise, and will he encourage fellow fast-food workers, and indeed any group of workers, to take collective action against their employers if their pay does not afford them an existence?
On an associated point, what exactly is the rationale for the sharp decrease in minimum wage when we move between age brackets, and in particular for the difference between the rates for those in the 18 to 20 bracket, and those in the 21 and above bracket? It would be really helpful if the Minister set out the assumptions that led the Government to conclude that workers aged 18 to 20 should be paid a different rate from those aged 21, for exactly the same work. That would be instructive; that way, the the voting public, young and old, could understand our different political positions on this. As he knows, the Labour party is committed to a minimum wage of £10 an hour for all workers aged 18 and over by 2020.
The pay changes that will take place in April are a result of recommendations by the Low Pay Commission, as has been said. It is important that the state sets a minimum rate of pay based on the commission’s recommendations, but does the Minister agree that it would be so much better, and so much more dignified, if workers had direct control over setting their pay, through national sectoral collective bargaining? It is workers who understand their work intimately, and who ultimately are best placed to bargain over what they are paid for that work, within a negotiating framework.
Andrew Griffiths
I am listening to the hon. Lady’s speech, and she is making some very powerful points, but could she clarify something? Does the Labour party support the Low Pay Commission or not? From what she is saying, I am beginning to doubt that it does support the commission.
Laura Pidcock
I have said twice in this short speech that of course a rise in wages is welcome, but we have a completely different philosophy on how wages should be increased.
Laura Pidcock
I will address the Minister’s point: we support the Low Pay Commission’s making these recommendations; that is absolutely right. However, we would prefer that power to be in the hands of workers, through national collective sectoral agreements, so that they could bargain over their terms, pay and conditions. Our position is that that would be preferable.
I support these increases—I say that for the third time—but it is my priority and responsibility to be critical of low pay in this nation. The Minister must acknowledge that even with these changes, there will still be people in poverty, struggling, and that there are other solutions to low pay. I support these increases within the limited parameters of today’s discussion and decision-making process.
Andrew Griffiths
I thank hon. Members for their valuable and detailed comments. I am disappointed, but not surprised, that the hon. Member for North West Durham talks down the state of the economy. She may view a pay rise of £600 a year as “small”—I think that was the word she used—but I do not. I draw her attention to the fact that the annual earnings of a full-time minimum-wage worker will have increased by more than £2,000 since the introduction of the national living wage in April 2016. I do not think that that is small; I think it is important.
Grant Shapps (Welwyn Hatfield) (Con)
I wonder whether the Minister has fully taken into account the impact of the increase in the amount that people can earn before they pay any tax at all. My recollection is that it was £6,475 back in 2010; perhaps he will tell us what it is today.
Andrew Griffiths
My right hon. Friend makes a hugely important point. The fact that we have taken so many people out of paying tax altogether has made a huge difference to the money in their pocket at the end of the month. Through the national living wage and through changes to taxation, we have made a huge contribution to the take-home pay and the bank accounts of the people we represent, particularly the poorest in society.
Laura Pidcock
It is not a victory to take people out of tax if they are still so low-paid. Would the Minister not prefer that they were paid more and therefore paid tax?
Andrew Griffiths
What I am concerned about is ensuring that the lowest-paid in society keep more of their money, so that they have more money to decide what to do with and to look after their families with.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Whether the threshold is £13,000 or £10,000 does not really make any difference to someone on £5,000, does it?
Andrew Griffiths
That is why, as a result of the decisions we make today, those people will be £600 a year better off.
The hon. Members for North West Durham and for Glasgow South West both raised the issue of differences in pay according to age. Let me explain the rationale behind that. The age-related rates protect younger workers, who are more vulnerable to the labour market. For example, between November and January, the unemployment rate for people aged 16 to 24 was 12.3%, compared with 3.1% for those aged 25 or over. We are rightly cautious for this group and do not want to harm young workers through the policy, which was intended to benefit them.
Nobody wants to see people paid less than they would hope for. When coming to its conclusions, the Low Pay Commission bears in mind the impact that its decisions will have on the lowest-paid in our society, but it also has a mind to the impact on jobs, the economy and the businesses that have to pay. Bear in mind that this is employers’ money that we are spending; it is they who have to bear the brunt of the decision we make. Unlike the hon. Member for North West Durham, who seemed to be quite negative towards the Low Pay Commission, I pay tribute to it and the work that it has done.
Our industrial strategy aims to build a country that works for everyone, wherever they live and wherever they work. It recognises that it is people who drive success, whether they are innovators, entrepreneurs or workers. Good employers have long recognised the value of investment in their workforce. Ensuring that we have a fair minimum wage is just one way in which the industrial strategy is working to build and support the investment in people. The Government continue to build an economy that works for everyone. Making work pay for the lowest earners in our society is a key part of our commitment. I commend these regulations to the House.
Question put and agreed to.