National Security and Investment Bill

Chi Onwurah Excerpts

Wednesday 28th April 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

I beg to move,

That this House disagrees with Lords amendments 11B and 11C.

The amendments made in the other place concern what is in effect a reporting requirement to the Intelligence and Security Committee in respect of the national security and investment regime. They incorporate the text of Lords amendments 11 and 15, which were considered in this House on 26 April. In addition, they would end the reporting requirements on the Secretary of State for Business, Energy and Industrial Strategy provided for by Lords amendments 11 and 15 should the memorandum of understanding that governs the remit of the Intelligence and Security Committee be amended to bring the Secretary of State’s activities under clause 26 into the scope of ISC scrutiny.

This House has already offered a view on the substance of amendments. It is disappointing that the other place has not heeded the clear and carefully considered message from this Chamber that the amendment to provide for a reporting requirement to the ISC is neither necessary nor appropriate. I welcome the Lords’ continuing attempts to find compromise, but I respectfully disagree with them. The Secretary of State has written to confirm plans for scrutiny with the Chair of the Business, Energy and Industrial Strategy Committee, the hon. Member for Bristol North West (Darren Jones), and the Chair of the Science and Technology Committee, my right hon. Friend the Member for Tunbridge Wells (Greg Clark). The ISC remains able to scrutinise the work of the intelligence services where it falls within the memorandum of understanding and in accordance with the Justice and Security Act 2013.

As we rapidly approach the end of this Session, it is essential that this vital Bill on the UK’s national security does not fall as a result of our failure to agree that the BEIS Committee will continue to scrutinise the work of the Department for Business, Energy and Industrial Strategy. I therefore urge the House to reject amendments 11B an 11C from the other place and reiterate its message about the will of this democratically elected House, to help ensure that the Bill becomes law without delay.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]]

I again thank colleagues in the other place who have worked tirelessly to improve the Bill.

Labour is the party of national security and has long called for a new regime to deal with the evolving national security threat arising from mergers and acquisitions, as the Bill seeks to do. The Bill was much improved in Committee, as the Minister acknowledged in Monday’s debate; however, as Members from all parties highlighted then, it still lacks an appropriate level of oversight for critical national security decisions. Labour believes that Intelligence and Security Committee scrutiny is essential to provide the robust and sensitive oversight and accountability that matters of national security require. The Bill gives significant new powers to BEIS, a Department traditionally lacking in national security experience.

On Monday, as the Minister indicated, the Government rejected Lords amendments 11 and 15, stating that

“it is appropriate and sufficient for oversight and scrutiny of decisions made by the Secretary of State for BEIS to be conducted by their departmental select committee”—

that is, the BEIS Committee. The Lords have responded with amendments 11B and 11C, which would allow the Government to add the Investment Security Unit into the Government and ISC memorandum of understanding, thereby removing the obligation to provide the ISC with a confidential annexe.

We maintain our position: that the BEIS Committee does not have the security clearance necessary to provide scrutiny. In Monday’s debate, the Chair of the Committee, my hon. Friend the Member for Bristol North West (Darren Jones), said clearly that the Committee

“does not have the access to the intelligence information that it would need in order to adequately scrutinise the Investment Security Unit in the BEIS Department.”—[Official Report, 26 April 2021; Vol. 693, c. 164.]

As the Minister indicated, the Secretary of State has said that classified information could be shared with the BEIS Committee on a case-by-case basis, but the retaining, recording, discussing or reporting of that information after the fact would constitute a security breach, somewhat limiting the Committee’s actions.

In this afternoon’s debate in the other place, the Government said that they will “carefully consider” ways in which classified information could be provided so that the Committee can do its job. Why do we need careful consideration when we have, through the Intelligence and Security Committee, an existing and functioning mechanism for parliamentary scrutiny on issues of national security? Earlier this afternoon, the Government were again defeated in the other place, this time by an even greater margin, showing that, despite the Minister’s efforts, support for Intelligence and Security Committee oversight is growing. I feel that it is becoming an issue of intransigence and stubbornness—or, as former Conservative Health Secretary Lord Lansley put it today, “arrogance”—by a Government refusing to prioritise national security in the National Security and Investment Bill, and determined to overturn common sense for reasons that are unclear to us all.

It is clear to us that there is a need for Intelligence and Security Committee oversight. Indeed the Chair of the ISC, the right hon. Member for New Forest East (Dr Lewis), said:

“The setting up of the new Investment Security Unit in BEIS”—

a function of this Bill—

“is…precisely the situation that the Government assured the House”—[Official Report, 26 April 2021; Vol. 693, c. 157.]

would mean that there was ISC oversight, under the memorandum of understanding between the Government and the ISC. Today’s amendment provides for ISC scrutiny until an amended MOU resolves the confusion that appears to exist—on the Government’s part, at least.

If the Government are serious about protecting the UK’s national security through this Bill, they will not force through legislation with such a significant blind spot. Labour, the Chair of the Intelligence and Security Committee, the Chair of the Business, Energy and Industrial Strategy Committee, many Government Back Benchers and cross-party consensus in the other place all agree that the ISC is best placed to provide national security oversight. Why are the Government determined to stand alone in risking our national security in this case?

[Owen Thompson (Midlothian) (SNP)]

I will be very brief. Earlier this week, my hon. Friend the Member for Aberdeen South (Stephen Flynn) made the case very clearly that we broadly support the principles of the Bill, but still have concerns over the levels of scrutiny, as we have heard from other Members. We have attempted to be constructive at all stages, and have tried to support the Government to find a balance between the needs of business and national security, particularly in relation to small and medium-sized enterprises.

Many amendments have been accepted, which will help to achieve this; we welcome the Government’s steps in that regard. However, the scrutiny process remains vital and we are not yet satisfied that it has been taken fully into consideration. The comments made by the Chair of the ISC earlier this week certainly highlighted that. I urge the Government to heed those words and those of my hon. Friend the Member for Aberdeen South.

Post Office Court of Appeal Judgment

Chi Onwurah Excerpts

Tuesday 27th April 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

On Friday 23 April, the Court of Appeal handed down its judgment to quash the convictions of 39 postmasters. This is a landmark judgment, and I know that colleagues on both sides of the House will join me in welcoming the court’s decision to quash those convictions. I will turn to what more needs to be done to address the wrongs of the past and to ensure that injustices such as this do not happen again, but I will begin by setting out the context to the judgment.

Over the years, the Horizon accounting system recorded shortfalls in cash in post office branches. The Post Office at the time thought that they were caused by postmasters, and that led to dismissals, recovery of losses and, in some instances, criminal prosecutions. A group of 555 of those postmasters, led by former postmaster Alan Bates, brought a group litigation claim against the Post Office in 2016. In late 2019, after a lengthy period of litigation, the Post Office reached a full and final settlement with claimants in that group.

It is clear from the findings of the presiding judge, Mr Justice Fraser, that there were real problems with the Horizon IT system and failings in the way that the Post Office dealt with postmasters who encountered problems or raised complaints in relation to Horizon. The findings of Mr Justice Fraser led the Criminal Cases Review Commission to refer the convictions of 51 postmasters for appeal: eight to the Crown court and 43 cases to the Court of Appeal. The Crown court quashed the convictions of six postmasters back in December 2020, and 42 further appeals were heard in the Court of Appeal in late March.

The Court of Appeal was asked in late March to decide whether the convictions of those postmasters were safe based on two grounds of appeal, namely whether the prosecutions were an abuse of process either because of the postmaster being unable to receive a fair trial or because of its being an affront to the public conscience for the postmaster to be tried. On Friday, the Court of Appeal announced its judgment. The Court decided to quash the convictions of 39 postmasters. The Court of Appeal also concluded that the failures of investigation and disclosure were so egregious as to make the prosecution of any of the Horizon cases an affront to the conscience of the court. In the remaining three cases, the convictions were found to be safe.

In response to the Court of Appeal judgment, the Post Office has apologised for serious failings in historical prosecutions. Tim Parker, the Post Office chair, has said that the Post Office is

“extremely sorry for the impact on the lives of these postmasters and their families that was caused by historical failings.”

The Government recognise the gravity of the court’s judgment in those cases and the hugely negative impact that the convictions have had on individual postmasters and their families, as has been highlighted on a number of occasions in this place. The journey to get to last Friday’s Court of Appeal judgment has unquestionably been a long and difficult one for affected postmasters and their families, and the Government pay tribute to them for their courage and tenacity in pursuing their fight for justice. The Government also pay tribute to colleagues across the House who have campaigned tirelessly on their behalf.

However, while the Court of Appeal decision represents the culmination of years of efforts by those postmasters, it is not the end of the road. The Post Office is already contacting other postmasters with historical criminal convictions between 1999 and 2015 to notify them of the outcome of those appeals and provide information in respect of how they could also appeal. The Post Office’s chief executive officer, Nick Read, is also leading a programme of improvements to overhaul the culture, practices and operating procedures throughout every part of its business. The Government continue to closely monitor delivery of those improvements. The changes are critical to ensure that similar events to these can never happen again.

Last week, the Post Office announced the appointment of two serving postmasters, Saf Ismail and Elliot Jacobs, as non-executive directors to the Post Office board. I wholeheartedly welcome those appointments. Their presence on the Post Office board will ensure that postmasters have a strong voice at the very highest level in the organisation. As part of the 2019 settlement, the Post Office also committed to launch a scheme to compensate postmasters who did not have criminal convictions who had suffered shortfalls because of Horizon, and who were not party to the 2019 settlement. The Post Office established the historical shortfall scheme in response.

Applications to that scheme were much higher than anticipated. Consequently, in March 2021, the Government announced that it would provide sufficient financial support to the Post Office to ensure that the scheme could proceed, based on current expectations of the likely cost. Payments under the scheme have now begun, and the Government will continue to work with the Post Office to see that the scheme delivers on all of its objectives, and that appropriate compensation is paid to all eligible postmasters in a timely manner.

While those are positive steps in the right direction, the Government are clear that there is still more to do. Postmasters whose convictions were quashed last week will also now be turning to the question of appropriate compensation, which I know will again be of great interest to the House. The judgment last week will require careful consideration by all involved. The Government want to see all postmasters whose convictions have been overturned fairly compensated as quickly as possible, and we will work with the Post Office towards that goal. I commit to keep the House informed on this matter going forward.

Finally, it is essential that we determine what went wrong at the Post Office during this period to make sure a situation like this can never happen again. To ensure the right lessons have been learned and to establish what must change, the Government launched an independent inquiry led by ex-High Court judge Sir Wyn Williams in September last year. The inquiry has made swift progress already, having heard from a number of affected postmasters and a call for evidence has recently closed. The inquiry is now planning public hearings. The Horizon dispute has been long-running. For the benefit of everyone involved, it is important that the inquiry reaches its conclusions swiftly. I look forward to receiving Sir Wyn’s report later this summer. As the Prime Minister said, lessons should and will be learned to ensure that this never happens again.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]]

I thank the Minister for advance sight of his statement.

This is the largest legal miscarriage of justice in our history: 900 false prosecutions, each one its own story of persecution, fear, despair, careers ruined, families destroyed, reputations smashed, lives lost, and innocent people bankrupted and imprisoned. I want to congratulate each and every postmaster and their families who withstood this onslaught of false accusations and fought back. I want to congratulate the Justice for Subpostmasters Alliance and the Communication Workers Union who campaigned to get at the truth for over a decade. I want to congratulate hon. and right hon. Members across this House who fought for justice for their constituents.

I wish I could congratulate the Minister and the Government, but I cannot. I am pleased to see the Minister here making today’s statement, but the Government have consistently failed to stand with the postmasters in their quest for justice: investigations delayed, claims denied and not one word of explanation or apology as to why the Government let it take so long to clear these innocent victims.

Now, to add insult to injury, the Government are failing to deliver the proper statutory public inquiry that postmasters, their families and the British public deserve. Let us be clear: Friday’s judgment vindicates the postmasters, but to deliver justice we need a statutory inquiry with genuine subpoena and witness compulsion powers, and a specific remit to consider compensation claims. We have the greatest respect for Sir Wyn Williams, but his inquiry has no real powers and key questions about compensation, the criminal prosecutions of postmasters, and the responsibility of civil servants and Government, are outside its remit. As such, the inquiry is toothless and may even lead to a whitewash. Postmasters have been clear that they will fail to recognise and participate in such an inquiry. How can the Minister stand there with the wreck of hundreds and hundreds of lives before him, and say that this scandal does not warrant a statutory inquiry?

The sad truth is that this horrific miscarriage of justice did not happen overnight. For a decade now, we have known that there were serious problems with the Horizon system, but the Post Office denied all wrongdoing, pursuing the victims and imposing huge lawyers’ fees on the claimants. Even after the High Court ruling vindicated postmasters in 2019, the Government refused to act. Given the long litany of Government failure, there are a number of urgent questions for the Minister. The Government are the Post Office’s only shareholder, yet time and time again the Post Office was allowed to abuse its power over postmasters. That was the finding of the court. Will the Minister acknowledge the Government’s failure of oversight and due diligence with regard to public money? Will he apologise to the victims and their families today?

The postmasters were criminalised for a culture that assumed technology is infallible and workers dishonest. How will the Minister change that and what are the implications for algorithmic management? The faulty software was provided by Fujitsu. What steps are the Government taking to hold it to account? Will ongoing Government contracts with Fujitsu be reviewed? Paula Vennells led the Post Office during this time and was honoured with a CBE. Is it right that she continues to be so honoured? The Minister referred to what he described as a full and final settlement for some postmasters with the Post Office. Their compensation was largely taken in lawyers’ fees. Does the Minister agree that they should be considered for appropriate compensation? Finally, does the Minister agree that actions should have consequences, and that it is therefore essential that there is a thorough criminal investigation into any potential wrongdoing?

In recent weeks, we have heard about the special access and power that millionaires and billionaires have with the Government, Ministers and the Prime Minister personally. Compare and contrast that with how the postmasters have been treated. They did not have the Prime Minister’s personal phone number. They did not have a former Prime Minister lobbying for them. They were not millionaires looking for tax breaks. They were ordinary working people. This speaks to a broader question of whose voice the Government hear and whose justice they deliver. On behalf of the working people who have had their lives ruined, I urge the Minister to apologise, own the Government’s mistakes and commit to a real public inquiry so that justice, for far too long delayed, can finally be delivered.

[Paul Scully]

The hon. Lady makes some important points about the length of time and the egregious nature of the situation that the former postmasters have had to suffer. She talks about the time it takes to get justice, and that is one of the core reasons why we set up the inquiry under Sir Wyn Williams. The average length of a statutory inquiry under the Inquiries Act 2005 is nearly three and a half years, which is a long time. We want to get answers now for the postmasters so that we are able to answer questions about who knew what, who did what and at what point, and learn lessons.

The hon. Lady asked about the Government’s role in this. The Department for Business, Energy and Industrial Strategy is working well with Sir Wyn Williams, and we are participating fully in the inquiry, as are the Post Office and Fujitsu. Sir Wyn Williams clearly feels that he is getting the support, answers and participation that he needs from the relevant organisations. If that changes, clearly we can review that.

The hon. Lady talks about Fujitsu. As well as the inquiry, there are ongoing investigations with the police into wider aspects of the case. She talks about Paula Vennells. People will talk about Paula Vennells’ positions and awards—there is an independent forfeiture committee to consider awards—but I am particularly pleased that, having stepped back from her other roles, she has committed to participate fully in this inquiry. It is to be welcomed that the former chief executive of the Post Office is doing that.

Finally, the hon. Lady talks about the Prime Minister not being on speed dial, or however she described it, for the group of litigants and the other postmasters. I can confirm that the Prime Minister is incredibly interested in and exercised about the situation, as we all are. He wants to make sure we work with the sub-postmasters to get them the justice they want and compensation for the prosecutions, through discussion and dialogue and by working with them and the Post Office in the first instance.

National Security and Investment Bill

Chi Onwurah Excerpts

Consideration of Lords amendments
Monday 26th April 2021 Commons Chamber

[Paul Scully]

I look forward to hearing my right hon. Friend’s explanation.

I believe that the Bill as amended by the other place through amendments 11 and 15 would require the Secretary of State to provide a confidential annexe, to be provided to the ISC. I am advised by my noble Friends Lord Callanan and Lord Grimstone that there is considerable strength of feeling in the other place about ensuring that the operation of the regime receives appropriate parliamentary scrutiny, and I welcome the passionate and expert debate that this question has already received. It has been proposed that the ISC is better placed than the BEIS Committee to scrutinise the Investment and Security Unit, despite the Secretary of State for BEIS having responsibility for the unit. The implication of the amendments is that the Select Committee responsible for holding the Secretary of State to account across their responsibilities is insufficient in that regard. It is also suggested that the ISC would have inadequate access to information to carry out its duties.

In essence, the amendments would require sensitive details to be provided to the ISC regarding the Secretary of State’s decision on final notifications given and final orders made, varied or revoked, but the ISC is already able to request such information as soon as is appropriate from the security services where it forms part of its long-established scrutiny responsibilities under the Justice and Security Act 2013 and, as I hope I have made clear, its accompanying memorandum of understanding. In addition, the Bill provides that the Secretary of State must publish details of each final order made, varied or revoked, and clause 61 already requires the annual report to include the number of final orders made, together with a number of other details. Indeed, that clause was amended in the other place to include further such information in the annual report.

We do not disagree that further information may be required for appropriate parliamentary scrutiny. Where that is the case, the Government will follow existing procedures for reporting back to Parliament, but that should be done primarily through responding to the BEIS Committee as it goes about its work of ably scrutinising the work of the Department. We will ensure that the BEIS Committee is able to access the material it needs.

It is of course right that the ISC continues its excellent scrutiny of the work of the security services. The work of the security services on investment security in support of the ISU clearly falls within the remit of the ISC. That does not require any statutory change to be made. As I said, the memorandum of understanding pertains to the continuing work of the ISC, and I look forward to working with colleagues on that Committee. As such, and with the BEIS Committee having appropriate assurance that it will be provided with the information necessary, there is no need for these changes made to the Bill by the other place to stand.

In summary, with the exception of amendments 11 and 15, I believe that this House is today presented with an improved set of measures to safeguard our national security. The ISC will not have its powers—existing powers —diluted through the discussion of the memorandum of understanding, as we have already said. Therefore, I commend the amendments, with the exception of amendments 11 and 15, to the House.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]]

Let me start by welcoming the Minister to the National Security and Investment Bill, and I would like to wish his predecessor well in his work on the vaccine roll-out. I would also like to thank colleagues in the other place who have worked so hard to improve this Bill, and the Members of both Houses who scrutinised its important provisions.

Labour is the party of national security, and has long called for a new regime to deal with evolving national security threats in corporate transactions. A robust takeover regime is also essential if we want firms in our key sectors to grow and provide good jobs here in the UK. So we support this Bill, which allows the Government to intervene when mergers and acquisitions could threaten national security. Unfortunately, the Bill in its original form lacked certain provisions, and particularly the oversight necessary to ensure it was successful in protecting our national security and national interest. So we have sought to improve the Bill along the way, and we are pleased that the Government have adopted some of our suggestions.

Members across party lines raised concerns over the capacity and capability of the new Investment Security Unit to deliver on the Bill’s ambition. We are pleased that the Government have acted on this, and Lords amendments 12 to 14 to clause 61 are based on Labour’s original amendment 31 during the House of Commons Committee stage, and a later amendment tabled by Labour at Lords Committee. Reporting the aggregate time taken for decisions will help to ensure that the new regime works more efficiently for small and medium-sized enterprises, and I was pleased to hear the Minister quoting my remarks to that effect.

We are also pleased to see that the Government have taken steps to address concerns regarding the 15% threshold for a notifiable acquisition. This follows Labour’s probing amendment 16 during Lords Committee stage and Cross-Bench concern. The Wellcome Trust labelled the 15% threshold as a

“regulatory burden for those that may not be able to afford it”.

With Lords amendment 3, the Secretary of State will still be able to call in acquisitions across the economy at or below 25%—and, if necessary, below 15%—where they reasonably suspect that material influence has been or will be acquired. But this amendment will bring the notifiable acquisition threshold in line with our allies in France, Australia and Canada. We are pleased the Government have listened to Labour and made a change that will be beneficial to small and medium-sized enterprises.

It is also welcome to see that the Government have now committed to issue public guidance, which Labour called for with our amendment 17 at the Commons Committee stage. This is good news for transparency. Our approach has been to ensure that our small and medium-sized enterprises have clarity, and that those investing in the UK understand what the rules are and how they will work. The publication of guidance will boost confidence in the new regime for national security screening.

But we are here today because of Lords amendments 11 and 15, and to vote on the Government motion to disagree. Labour believes that the Intelligence and Security Committee scrutiny is essential to provide the robust and sensitive oversight and accountability that matters of national security require. The Bill gives significant new powers to BEIS, a Department traditional lacking in national security experience. The BEIS Committee does not have the security clearance necessary to provide scrutiny, and the confidential briefings to the Chair described by the Minister will not change that.

Levelling Up

Chi Onwurah Excerpts

Tuesday 16th March 2021 Commons Chamber

[Eddie Hughes]

Absolutely. One key aim of the fund is connectivity and transport in local need, so that is absolutely at the heart of what this fund is about. I encourage my hon. Friend to work with local councils to identify a priority bid for his area to ensure the maximum opportunity for success.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]]

This Government have devastated the finances of local authorities, such as Newcastle City Council, cutting their funding year after year, breaking their promise to pay their covid costs and forcing them to raise council tax, which itself raises more in some areas than in others and takes money out of the pockets of those who need it most. This fund pits councils against each other to compete for meagre and recycled pots of money, with Government Departments taking all the decisions. Why does levelling up mean putting Whitehall in charge?

[Eddie Hughes]

I thank the hon. Lady for her question, but I am slightly confused. This process will allow local MPs to work with their local councils to identify priority projects for their area and will provide those councils with funding—£125,000 in the case of Newcastle upon Tyne, which is a category 1 authority—so that they have the funds available and they have the opportunity, working collaboratively, to identify a good project. I ask the hon. Lady to work with the council to get on and identify a project and bring money to her constituency.

Rough Sleeping

Chi Onwurah Excerpts

Thursday 25th February 2021 Commons Chamber

[Robert Jenrick]

Yes, I can. It was very important to us that those sleeping rough were not left out of the vaccination programme, by oversight or omission, so we launched the Protect Plus programme to provide extra support to local councils so that they can work with the NHS, weave those individuals into the local vaccination programmes or get them GP registered, which is a good in itself. That will ensure that when their time comes, they are vaccinated so that even if they return to the streets, which of course we hope they do not, they do so protected by the vaccination.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]]

During the recent cold spell, it was heartbreaking to see rough sleepers in the heart of Newcastle in the snow. Newcastle City Council has a bed for every rough sleeper, but hostel accommodation is not suitable for everyone. Does the Secretary of State agree that annual short-term programmes, however successful, will not end rough sleeping, and will he provide the long-term funding needed to support real change at a local level, as well as greater access to social housing?

[Robert Jenrick]

I pay tribute to Newcastle City Council, which has made great progress over the course of the year. Its snapshot shows that the numbers have almost halved compared with the prior year. The hon. Lady is right that we need a long-term strategy. That is why we have the rough sleeping initiative, which is now in its third year, and we are really starting to see the fruits of that work. I want to see that continue for many years. That is also why we have created the multi-year Move On accommodation programme, backed by £400 million, and of course I hope that there is a multi-year settlement across Government later this year and that my right hon. Friend the Chancellor will be able to continue that level of investment well into the future.

Leaseholders and Cladding

Chi Onwurah Excerpts

Tuesday 24th November 2020 Commons Chamber

[Christopher Pincher]

I am obliged to my hon. Friend. I appreciate the very unique challenge that she has as the Member of Parliament for Kensington. As I said earlier, the £700,000 of public money that we are putting aside to support the training of assessors will deliver about 2,000 assessors—clearly qualified assessors—who will be able to undertake the assessment work over the next 12 months, so I trust that that will also be a means by which we will not be having this conversation again any time in the future. The public money that we have set aside beyond that—the £1.6 billion—is also designed to ensure that the worst, most dangerous buildings are dealt with quickly and effectively. I hope and trust that the conversations we have ongoing with developers and owners to make sure that they step up to the plate will mean that very soon, we will remediate all the buildings that are affected, and that we will be able to see value and trust restored to those buildings and the development sector.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

My constituent is a leaseholder in one of the 2,700 blocks —I think that is what the Minister said—that have applied to the building safety fund, which has approximately enough money to remedy about 600 blocks. She does not know whether her flat is safe. She cannot sell it and she does not know how much her liabilities may be. The Minister can talk about finding innovative solutions, but it is three and a half years since Grenfell and we still do not see builders, owners or developers paying for remediation. Will he guarantee to my constituent that she will not have to be liable—that she will not have to pay for these costs—and does he agree that this is just one more example that shows that the leasehold system is broken and needs to be reformed?

[Christopher Pincher]

The leasehold system and its reform will form part of a Government White Paper and separate debates in this Chamber, and I am sure that the hon. Lady will play her part in those.[Official Report, 26 November 2020, Vol. 684, c. 10MC.] It is not true to say that developers and others are not funding remediation. As I have described, firms such as Pemberstone, Mace, Peabody, Barratt and, I think, Legal and General are all stepping forward with funds to remediate buildings for which they are responsible, resulting in something like 50% of ACM-clad buildings being remediated by the private sector. I do not know the specific issues of the buildings in her constituency to which she refers, but I am happy to talk to her separately about them. I am confident that the £1 billion of public money that we will set aside through the Building Safety Bill will be allocated by the end of this financial year, as we said it would be, and that remediation of those non-ACM buildings will begin.

Points of Order

Chi Onwurah Excerpts

Wednesday 18th November 2020 Commons Chamber

[Madam Deputy Speaker]

I thank the hon. Gentleman for raising a point of order. As I have just said in reply to the previous point of order, what is said by hon. Members and the veracity of it or otherwise is not a matter for the Chair. What is said in election literature by candidates who do not subsequently become Members of Parliament is definitely not a matter for the Chair, which is a matter of some relief for any occupant of the Chair. The hon. Gentleman asks me how he can draw his point to a wider audience. I think he has just done so.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

rose—

[Madam Deputy Speaker]

Does the hon. Lady wish to raise a point of order?

[Chi Onwurah]

indicated dissent.

[Madam Deputy Speaker]

No, the hon. Lady just wants to leave the Chamber. In order to facilitate the exit of the hon. Lady and all other Members and the safe entrance of those who wish to participate in the next item of business, I will suspend the House for three minutes.

Towns Fund

Chi Onwurah Excerpts

Wednesday 18th November 2020 Commons Chamber

[Robert Jenrick]

My hon. Friend makes a strong case for Burnley. As I say, we will bring forward that competitive phase early next year, and before the end of this year, I hope to be announcing the successful bidders for the future high streets fund, where we will be ensuring that up to £25 million of investment flows to dozens of communities across the country. It is another fund designed before covid, but it will be ever more important as we see the pressures wreaked on our high streets by the pandemic.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It was really distressing to see such critical funding for our regions mired in political favouritism. What steps is the Secretary of State taking to ensure that the shared prosperity fund does not suffer the same fate? Will he confirm that the north-east will receive from the shared prosperity fund at least the £1 billion that it would have got from the European structural funds?

[Robert Jenrick]

As I have already said, a fair and robust procedure was used to determine the places, and many places adjacent to the hon. Lady’s constituency have benefited. I think of Blyth, for example—a community that needed investment. It saw very little of it under the last Labour Government and will now, I hope, be benefiting. She represents a great city. That was not the primary focus of the towns fund, as the name rather suggests.

With the UK shared prosperity fund, we will be ensuring that each of the nations of the United Kingdom receives the same funding as they did under the EU structural funds. We fundamentally believe that we can design better, more outcomes-focused funding streams than the European Union was ever able to do during our long years of membership. We will bring forward more details on that very soon.

Draft Competition (Amendment etc.) (EU Exit) Regulations 2020

Chi Onwurah Excerpts

Wednesday 4th November 2020 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Gray.

I thank the Minister for his opening remarks and emphasise that the Opposition believe that open and competitive markets promote consumer welfare, that healthy competition is a fundamental part of a prosperous economy, and that effective competition law is an absolute prerequisite of achieving that. Well-balanced legislation in this area can bring down prices, encourage product innovation and lead to better quality service delivery.

As a member of the European Union, the UK has benefited from harmonised competition standards across the single market for decades.  Those rules have protected UK businesses and consumers from the negative effects of so-called abusive practices from large corporations based elsewhere.  They have been developed at EU level by UK representatives in our own national interest. I am sure that the Minister agrees that European competition law was primarily instigated and driven by UK competitive ideas, practices and regulators. To a certain extent, we have left the EU with our competition law framework. Unfortunately, we are not so clear how the sovereign competition framework that the Minister mentioned will look and where it is going. Perhaps he can provide greater clarity on that.

It is certain that the weight of 600 million consumers that the European Union brings to the table has given it great clout on the international stage. The EU’s robust competition framework has been used to take on tech giants, curb unhealthy market dominance and push for consumers to be able to migrate their personal data from platform to platform. So even though the UK has technically left the European Union, in reality we continue to benefit from EU rules now. 

Today’s instrument is being laid partly to amend legislation to reflect the fact that the UK will be covered by EU protections right up until the end of the transition period, as the Minister said.  It formalises the European Commission’s ability to carry out its agreed functions under Title X of part three of the withdrawal agreement in the UK during the transition.  As the Minister set out, that includes the European Commission continuing to have the jurisdiction it needs to make final decisions on merger referrals made to it before the end of the transition period.  Of course, the retention of those rules during the transition period makes absolute sense. It limits disruption at an already difficult time and keeps our markets functioning harmoniously with our nearest neighbours. 

We will not oppose the instrument, although we have some concerns. The transition period comes to an end at the end of this year, in less than two months. Businesses with a base in the UK will continue to be subject to European Union frameworks insofar as any of their actions affect competition within the European Union, even after the transition period ends, but the UK will no longer be able to have a say in drawing up the rules. We will effectively be a rule taker rather than a rule maker. In fact, the UK courts will no longer have the facility to refer questions of interpretation of European Union law to the European Court of Justice after Brexit, which could see damaging divergences between UK and European Union competition rules that may leave businesses confused and over-burdened.

Business leaders continue to warn that we could see more red tape, not less, after the transition period because, as I have suggested, businesses operating in both the UK and the European Union—this applies to many businesses operating across Europe—will be required to deal with both the CMA and the European Union competition authorities simultaneously on mergers and competition investigations. Will the Minister confirm that that will be the case and that they will have to have regard to those authorities’ regulations? Can he offer any assurances that UK businesses will not be burdened with red tape, and will he outline how the CMA will keep that in mind?

Finally, I hope the Minister will use this opportunity to lay out how he and his Government will make sure that businesses and the public will continue to be safeguarded against unscrupulous competition practices in future. As I have suggested, the European Union has used its competition powers, and looks to do so even more in the future to address the lack of competition in data, digital and platform markets. Although we see the European Union making progress in that area, we have had no indication from the competition Minister as to whether the UK will also address the unhealthy lack of competition in platform, data and digital markets.

[Paul Scully]

I thank the hon. Member for her considered comments and for agreeing that these regulations are the way forward. As I have said, they are needed to give effect to the provisions that we have already agreed in the withdrawal agreement, so they very much relate to a specific set of cases. I will try to cover the areas that the hon. Lady talked about. We have the Penrose review into the competition regime in the UK. As soon as that comes back, we will consider it and come up with the changes and improvements that we need. We both agree that healthy markets need to function well together to ensure a fair deal for other competitors, and consumers as well. It is really important that consumers are at the heart of what we do.

[Chi Onwurah]

Will the Minister indicate when the Penrose review will be completed?

[Paul Scully]

The review is working at pace. I cannot give a timescale at the moment, but as soon as the review comes back we will consider it quickly, because we want to make sure that we have the best competition regime. As the hon. Lady stated at the beginning of her speech, UK competition specialists were at the heart of the EU regime. We are leaving the regime, but we are leaving with our competition experts, so they will be at the heart of what we do. We have made it clear in our published proposal for the comprehensive free trade agreement with the EU that we intend to maintain international co-operation on competition enforcement. The EU has expressed a desire to maintain UK-EU co-operation on competition law matters in its own proposals as well. We want to make sure that the CMA continues to participate in multilateral networks such as the international competition network and the OECD.

Without the regulations the UK would fail to implement its obligations in competition law under the withdrawal agreement. Inconsistencies between the withdrawal agreement and competition law would cause significant uncertainty for UK businesses, the CMA and UK courts. The changes that I have described today are required to complete the process of preparing the UK statute book for the transition. I hope the Committee approves the regulations.

Question put and agreed to.

DRAFT STATE AID (REVOCATIONS AND AMENDMENTS) (EU EXIT) REGULATIONS 2020

Chi Onwurah Excerpts

Tuesday 3rd November 2020 General Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a great pleasure to serve under your chairship, Mr Davies. I am glad to be on the Committee considering the regulations.

I am particularly pleased that a Conservative Government recognise the role that state aid can play in the development of key sectors in a nation’s economy. If deployed as part of a robust industrial strategy, it can help to create decent jobs, kick-start businesses and rebalance regional inequalities. State aid, public ownership and workers’ rights are important building blocks of our nation’s economic model, and getting them right will be crucial to our future prosperity and the nature of any post-Brexit settlement. EU state aid rules on innovation clusters, broadband, culture and heritage, as well as on small and medium-sized enterprises, general economic interest and local infrastructure projects, have allowed member states lots of room to invest in and pursue their domestic priorities.

I should declare an interest here. When I worked for Ofcom I worked on state aid rules with particular regard to investment in broadband—for many years and in quite a lot of detail, although I shall not indulge myself by going into that during this debate, Members will be glad to know. However, I can say that state aid rules allow for support for industries of general economic interest. It is true that they prohibit heavy-handed state aid when it distorts competition, but there have always been ways to strengthen and support industries without falling foul of EU guidance.

State aid rules are a critical concern in providing the right level of financial and other support, but even within the EU different countries have interpreted state aid rules in different ways. Other countries within the European Union have always, shall we say, been far more innovative, creative and supportive with their strategic industrial capacity than the UK, despite the same state aid rules environment. The UK did not keep up with strategic investments. For example, the Government provided just 0.38% of GDP in state aid in 2018, compared with France’s 0.79%, Germany’s 1.45% and Denmark’s 1.55%.

I give those figures to emphasise to the Minister that the Government cannot continue to hide behind the false excuse that it was the EU regime that was the reason for the lack of strategic investment. Further, it is strange that the state aid regulations should cause such an impasse in the negotiations, given the lack of support from the Conservative Government over many years for strategic investment and subsidy. While the Minister says that state aid is an EU concept, it is certainly recognised in the WTO subsidy regimes, which are essentially the same thing. When I asked the Secretary of State for International Trade in the House on 14 September, at column 35, what the difference was between the European Union state aid rules, which had been rejected, and the Japan trade deal state aid rules, which were being accepted, I did not get an answer. I hope that the Minister will perhaps give us some clarity on that.

[Kevin Hollinrake]

Is not the difference the fact that we would be able to make our own rules unilaterally; but if we remained part of the jurisdiction of EU state aid we would have to go to the European Court of Justice, potentially, or to the European Commission, to determine what support we might offer to business? Does the hon. Lady propose that should still be the case once we have left the European Union?

[Chi Onwurah]

I am afraid that the hon. Gentleman has entirely misunderstood me. We are leaving the European Union, as I said. In fact, we have left the European Union and the transition period is coming to an end. My question, like my question to the International Trade Secretary, was very specific. It was about the difference between state aid rules. In the case of what was agreed with Japan it is not something unilateral. In the Japanese trade deal state aid rules were agreed—as they are in all trade deals; it is difficult to agree them unilaterally with another country. My question was about the difference between those rules and those that were rejected as part of the European Union trade negotiations.

[Kevin Hollinrake]

The European Union position in the negotiations is that it wants us to be accountable to the European Union. That is exactly what it is saying, and that is what is different. Whereas in the Japan deal that was not the case, with the EU it is. There would be a requirement for us to agree our measures with the European Union. Is that what the hon. Lady wants? That is what the EU wants. That is its position.

[Chi Onwurah]

What I wanted to understand was the difference—comparing the rules agreed with Japan and the existing rules within the European Union state aid agreement. The way in which they are managed in the future is obviously part of the negotiations, but I wanted to understand the difference. I still do not understand what the difference is, and am not sure whether it has been set out clearly anyway; but I am sure the Minister will explain it to me.

As has been said, we have left the European Union, and the end of the transition period is fast approaching, so we call on the Government to protect British jobs and support regional communities that have been held back after 10 years of austerity. State aid can and should play an important role in that. Labour does not want a return to top-down subsidies and command-and-control intervention in the economy. Instead, we want to build an economy where public bodies work with the private sector to promote innovation and drive economic growth. The Government have had over four years to put together a replacement state aid regime. We were promised a framework way back in March 2020 and we are still waiting to see it. We agree with the need for this statutory instrument and will not be opposing it, but we believe it important for businesses and, indeed, for all of us, to have greater clarity.

With less than two months to go, there is regrettably no time left to carry out a meaningful consultation on a new, ambitious plan for state aid before the end of the transition period. Businesses that I am talking to are understandably frustrated. As we have discussed, negotiations with the European Union broke down earlier this month and Lord Frost confirmed that the UK would be operating under WTO rules from January 2021. While this gives a modicum of clarity to stakeholders—which is to be welcomed—we know that WTO rules are suboptimal, lacking in important detail on state aid. They also do not include provisions on services, which is a critical part of the UK economy.

On 11 March, the Chancellor of the Duchy of Lancaster told the Committee on the Future Relationship with the European Union that Great Britain-based businesses trading with Northern Ireland would categorically not be subject to European Union state aid rules come January 2021. Many experts say that WTO do not operate effectively as a subsidy control regime, and that a reliance on WTO rules should only be a stopgap. Does the Minister agree? Will he give an indication of what a future state aid regime built on the proposed WTO framework would look like?

We hope the Government will improve on the WTO baseline quickly and get this implemented, not only because that would that give further clarity to UK businesses, but because it would improve free trade negotiations with the EU and other countries.

Businesses have raised concerns that under the Government’s current proposals, subsidies made outside of Northern Ireland might still be regarded to have a potential effect on trade between the European Union and Northern Ireland. The Minister talked about the impact of these rules on Northern Ireland, but these outside subsidies could necessitate a European Union state aid assessment. What is the Minister’s view and can he allay those concerns by confirming that the Government will prevent EU state aid rules from reaching back into the UK for trade between Great Britain and Northern Ireland, which is covered by the Northern Ireland protocol?

Before I conclude, I wish to say that we have long been concerned about how the Government’s flagship shared prosperity fund might interact with a UK state aid regime. The Government have promised that details regarding would come with a comprehensive spending review, but the CSR has been curtailed to just one year and the consultation has not even started yet. Can the Minister assure us that we will have some details of the framework before the end of the transition period? Will that framework ensure that regional leaders and devolved Administrations are consulted and included in decision making?

We should remember that the structural funds received from the European Union were always allocated based on where they were most needed according to relative deprivation. Will a future state aid regime reflect that? Given the controversy around allocations from the towns fund, how can the Government assure us that the appropriate safeguards will be in place to prevent cronyism arising from Ministers’ own “qualitative analysis”? Finally, I would like to hear from the Minister the ways in which the Government intend to allocate state aid funding other than via the shared prosperity fund.

[Paul Scully]

I am grateful to the Committee for its consideration of the regulations and the valuable contribution of the hon. Member for Newcastle upon Tyne Central to this important debate.

I have talked about the fact that the EU state aid rules were created to meet the needs of the EU, but, with us leaving the EU and the single market, as we have heard from my hon. Friend the Member for Thirsk and Malton, whether for the Japan deal or for our future deals, we want to have a system, controls and regulations that fit the UK economy and our objectives, which can be enforced and administered by the UK as an independent sovereign nation.

The hon. Member for Newcastle upon Tyne Central talked about certainty for businesses and I totally agree with her. This is a specific, technical statutory instrument that does not look at our future subsidy control regime beyond the WTO. Clearly, we will want to build on that and work out where we need to go with businesses. It is important that we involve businesses to develop any future additions, should we choose to build on the WTO. In terms of the certainty that businesses require now, we will publish guidance as soon as possible on the international commitments that will apply in the UK on 1 January 2021. That will cover WTO rules and subsidies and any commitments that we have made in the free trade agreement to date.

Our approach will have implications for businesses and all public authorities that grant subsidies with taxpayers’ money, including the devolved Administrations. It will take time to listen closely to those voices and design a system beyond 1 January that promotes a competitive and dynamic economy throughout the whole UK.

[Chi Onwurah]

Can the Minister give more clarity about the timescale he envisages to develop the state aid regime, given that we will have left the European Union and the existing state aid regime will no longer be applicable?

[Paul Scully]

Clearly the timescale will involve two things: our negotiations with the EU and other countries in terms of free trade agreements, and our discussions with businesses and government at every level, including the devolved Administrations, to ensure that we get it absolutely right.

We can be sure that on 1 January 2021 we will be leaving with the subsidy control, as outlined by the WTO. The guidance for businesses at that point will be there for them to see. We need to ensure that with anything to do with the transition—whether it is changes to company administration, organisation supply chains or subsidy control of state aid—it is important that businesses look at gov.uk/transition website. Whether we have a deal with the EU or not, companies will have changes to make. It is important that they are on top of that, especially small businesses that do not necessarily have available the big resources to work on those matters at such extraordinary times, as they work on a day-to-day basis.

The objective today is to revoke the retained EU state aid law, rather than looking forward beyond that—that is appropriate and necessary—and to ensure that consequential amendments to other retained EU law and UK domestic legislation that refers to state aid rules continue to operate appropriately for businesses and Government after the end of the transition period.

In conclusion, I confirm that we are revoking the retained rules that have been preserved through the withdrawal Act. The regulations will provide the legal certainty for businesses and aid-granting authorities. I therefore hope that the Committee will approve the regulations.

Question put and agreed to.