EU-US Trade and Investment Agreement
Iain Wright Excerpts(10 years, 10 months ago)
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Mr Iain Wright (Hartlepool) (Lab)
I congratulate my right hon. Friend the Member for Wentworth and Dearne (John Healey) and the hon. Member for Aberconwy (Guto Bebb) on using their strong persuasive abilities to convince the Backbench Business Committee to agree to this important debate. This issue has not had the prominence it deserves, and I pay tribute to right hon. and hon. Members for redressing that situation. Given the potential of this agreement, this is an important discussion.
This has been an important and, on the whole, positive debate. The sheer size of the American and European economies means that the potential prize of a significant free trade agreement is huge. As my right hon. Friend the Member for Wentworth and Dearne said, together the EU and the US account for just under half of global GDP and about a third of world trade. About $2.7 billion of goods and services cross the two continents every single day—a trillion dollars every year. The proposed free trade agreement could be the biggest bilateral trade deal in world history, both in terms of its value and in the range of subjects, sectors and markets covered. Given the size of the sums involved, even modest reductions in barriers would lead to huge amounts of money—$325 billion—that could be ploughed into extra jobs, more investment and higher economic growth.
As has been said, a potential trade and investment agreement would yield an estimated increase in UK national income of between £4 billion and £10 billion a year over the next decade. That is huge and worth fighting for.
Mr Cash
Lord Mandelson said that when he was trade commissioner the over-regulation of business cost 4% of Europe’s GDP and about £6 billion a year to the British economy. Is that not something we should be tackling, and does the hon. Gentleman agree that some of his figures are based on estimates?
Mr Wright
The hon. Gentleman makes an important point. I was about to say that, as mentioned several times, the nature and structure of trade between the EU and the US is such that we do not have substantial or excessive trade barriers between the two blocs. Most of the gains would come from a reduction in non-tariff barriers. In response to his point, I would add that I am keen to see regulatory convergence.
Reductions in non-tariff barriers would result in reduced costs for producers and traders and so increase productivity, leading to greater investment and higher gains per worker. Forecasts predict that increased trade would lead to higher wage rates of between 0.2% and 0.5% for workers in this country. Again, that is a prize worth fighting for. If the free trade agreement were to focus more on tariffs than non-tariff barriers, the gains for the UK would be substantially less, as the Chair of the Business, Innovation and Skills Committee said.
What has been clear from today’s debate is that there is a huge amount of ambition in this House for this agreement, so will the Minister confirm that the scope and ambition of the agreement that will be negotiated will be as wide-ranging and comprehensive as possible, in order to ensure the maximum gains for British companies? Will he ensure that Britain is pushing for negotiations to be focused on where that maximum gain will be, which, as I have said, is on the elimination of non-tariff barriers? Will he give us an idea of the scope and scale of agreement he hopes to achieve?
Right hon. and hon. Members have rightly been talking about how the House can be involved in this process. Will the Minister tell us how he hopes to keep the House informed of progress on the agreement? My right hon. Friend the Member for Wentworth and Dearne talked about this, but will the Minister tell us a bit about what he has planned for the scrutiny of the negotiations by this House? How can we debate this matter on a periodic and, we hope, positive basis?
Will the Minister also give the House a sense, wherever possible, on when he expects the talks to be concluded? I know that that is difficult, but it has been mentioned several times in the debate, and the US vice-president has said that he hopes talks can be agreed on “one tank of gas”, which means the completion of negotiations within 18 to 24 months. This is obviously a big priority for the Obama Administration, as I think it is for the British Government, but will the Minister give us a sense of when he thinks the process will be concluded? My hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) asked about this directly, but how will this House ratify the deal? Will that be done by a full, substantial debate in Government time on the Floor of the House so that we can question and scrutinise the deal carefully?
I wish to focus on a few specific industries that could benefit enormously from a comprehensive and ambitious free trade agreement. The motor vehicles sector, which has been mentioned, is forecast to see considerable growth as a result of an ambitious transatlantic trade and investment partnership—TTIP. Estimates predict a rise in exports of between 15% and 26%. That will obviously help the German manufacturers, but we certainly should not discount the impact it will have on our important and growing automotives sector, where we are producing great-quality, high-premium cars that the rest of the world are keen to buy. That was mentioned by my hon. Friend the Member for West Bromwich West (Mr Bailey).
In that regard, I hope the Minister will reassure us that regulatory convergence to ensure great export growth will be at the top of the agenda in the negotiations. I hope he will agree that a vehicle considered safe to drive in Europe should also be considered safe to drive in the US. Will he ensure that duplication of safety and environmental standards is dealt with and that negotiations prioritise mutual recognition agreements and equivalence standards? Will he also address the point, not entirely confined to the automotive sector, that differing regulatory arrangements apply at a state, federal level? Will negotiations ensure that state differences are dealt with, too? That point will apply to many industries, such as those producing electrical goods, chemicals and cosmetics. My area has the highest concentration of chemical engineering in western Europe, and if Europe and the US had mutually accepted standards, the potential for the chemicals industry in the north-east would be enormous.
The global aerospace industry is dominated by Europe and the United States, and particularly by Airbus and Boeing, as was seen in the recent sales at the successful Paris air show. Britain is the largest player in this industry in Europe and is second only to the US in the world. The European aerospace industry generates a third of the EU’s manufacturing exports, and we in this country are at the heart of it. We have to maintain our competitive advantage. The industry is subject to fierce competition from other nations. China is particularly ambitious about launching an aerospace company—COMAC—to rival Boeing and Airbus. Does the Minister accept—this is an important point—that an ambitious free trade agreement between the US and the EU would actually help to maintain our competitive advantage in this field, as consistency of international regulatory standards should give existing firms and their supply chains an important lever to use? That was certainly the conclusion of an important Chatham House report on manufacturing published this week.
Services are a key part of the British economy; we are the best in Europe on services. Will the Minister comment on the nature of the agreement in that area? For example, a UK lawyers’ qualification is not fully recognised in the US, which is an impediment to UK lawyers’ practising. If the EU and US recognised each other’s professional qualifications, a great boost would be given to trade, which would particularly benefit the British economy. Will he discuss that a little?
The scale of the prize indicates how important it is that Britain has a leading role to play in Europe, as my hon. Friend the Member for Glasgow North East (Mr Bain) said. Does the Minister agree with Sir Mike Rake of the CBI, who said that there is an overwhelming case for Britain being at the heart of Europe for the sake of our businesses? Does he agree with my hon. Friend the Member for Ochil and South Perthshire, who indicated that he agreed with the Minister without Portfolio that it would be curtains for our ability to play any leadership role if we exited the EU? The right hon. and learned Gentleman said in a recent article:
“Irony of ironies, it is of course the EU that is making deals with the United States and Canada possible. It should come as no surprise that Obama’s officials have commented that they would have ‘very little confidence’ for a deal with the British alone.”
Does this Minister agree?
Will the Minister also address the warnings from the Obama Administration that if the UK leaves Europe, we will exclude ourselves from a EU-US trade deal worth billions and that it would be unlikely that Washington would try to negotiate a separate trade agreement with Britain? A senior White House official is quoted as stating:
“Having Britain in the EU...is going to strengthen the possibility that we succeed in a very difficult negotiation, as it involves so many different interests and having Britain as a key player and pushing for this will be important...We have expressed our views of Britain’s role in the EU and they haven’t changed…TTIP negotiations underscore why we think it’s important that it continues.”
Is it not clear from White House officials that the United States believes that one of the key reasons for the special relationship is that we are in the EU, and that it would be naive and impractical to suggest that we could negotiate a separate trade deal that could have the same potential positive effect on jobs and growth?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I would just like to be of help, because the shadow Minister has taken 10 minutes so far and he said he would only take that long. He will have reached 11 minutes in a moment, so we should be careful.
Mr Wright
Thank you, Mr Deputy Speaker. I will mention one final thing and then draw my comments to a close.
Several hon. Members, including my hon. Friends the Members for Linlithgow and East Falkirk (Michael Connarty), for Sheffield Central (Paul Blomfield), for Glasgow North East and for Ilford South (Mike Gapes), have mentioned the NHS. Will the Minister confirm that the free trade agreement will not be a green light to private health companies in the US to take over services within the NHS? Will he absolutely rule out that happening?
This agreement is a huge prize and the whole House is keen to see success on it. I hope that the Minister will be as ambitious as the House is on this, because the potential for jobs, growth and prosperity, on both sides, of the Atlantic is immense.
Oral Answers to Questions
Iain Wright Excerpts(11 years, 2 months ago)
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Vince Cable
Yes, it is a source of concern. We now have the benefits of a much more competitive exchange rate, and given the efforts that we are making to promote British exports and import competing industries, I would expect that deficit to narrow.
Mr Iain Wright (Hartlepool) (Lab)
As the Secretary of State and the hon. Member for Montgomeryshire (Glyn Davies) have said, the UKTI strategy recognises the need
“to increase exports, especially to the high growth and emerging markets of the new global marketplace”.
Yet despite this objective, and as well as sterling’s dramatic weakening in recent months, which should help exports, the Bank of England has described export performance as “disappointing”, the OBR has described it as “weak”, and yesterday’s Budget revealed forecasts of net trade rising by a paltry 0.1% until 2017. Why are we not experiencing an export-led recovery, and what will the Secretary of State now do differently to boost exports?
Vince Cable
I would have thought it was fairly obvious that when there is an economic slump in the markets that constitute half our exports, it is rather difficult to expand into them, despite the competitive advantage that we have. There are deep structural problems. Many exporters genuinely have problems in getting access to bank finance or difficulties in getting access to trained workers. These are long-term structural problems that we inherited and are now trying to deal with.
Oral Answers to Questions
Iain Wright Excerpts(11 years, 3 months ago)
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Vince Cable
I know that the hon. Gentleman shares many of my concerns about airport expansion. The wider national interest must be safeguarded and we have commissioned Sir Howard Davies to do a proper and thorough investigation into the extremely difficult issues associated with Heathrow expansion.
Mr Iain Wright (Hartlepool) (Lab)
Tomorrow marks the first anniversary of the leaked letter from the Business Secretary to the Prime Minister, in which he acknowledged the need for
“a compelling vision of where the country is heading…Where we know big investment decisions are going to be made…we need to…provide certainty to business.”
In only the past few weeks, Bloomberg New Energy Finance stated bluntly:
“Investors have made clear to the UK government that policy uncertainty has undermined investment”,
and the National Audit Office said in its report on infrastructure that
“uncertainty over government policy might lead project sponsors, lenders and contractors to defer or abandon projects in the UK for opportunities elsewhere.”
One year on from his letter, why has nothing improved?
Vince Cable
A great deal has changed. There is now a great deal of support not only in government but across business for the industrial strategy. If the hon. Gentleman had been following the news he would have seen that some sectors, particularly the car industry and aerospace, have highly impressive growth and a long-term commitment to Britain. That is what we are trying to achieve.
Oral Answers to Questions
Iain Wright Excerpts(11 years, 5 months ago)
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Vince Cable
I know that my colleague the Secretary of State for Energy and Climate Change attaches enormous importance to the green deal. It is, as I understand it, completing its state aid clearance in Brussels. When it is launched there will be a major incentive for people to improve their homes and to develop jobs on the back of that.
Mr Iain Wright (Hartlepool) (Lab)
The Minister of State tells the Institute of Directors that his Secretary of State sometimes escapes his electronic tag, while the Energy Secretary has to slap down his Minister of State over wind energy, so investors no longer know what Government policy is and Business, Innovation and Skills Ministers are too busy tracking the Secretary of State to help create clarity and green manufacturing jobs. Given that this is the season of good will, cannot the hostilities cease? Will the Secretary of State ask for permission from his Minister of State at least to undo his electronic tag a notch or do, and will not BIS and DECC Ministers snuggle up together to watch “Strictly”, eggnog in hand, and promise to come back in 2013 determined to focus on British enterprise and industry, not departmental infighting and ministerial surveillance?
Vince Cable
While we are on our links with the criminal underworld, perhaps I should explain to the House that I have responsibility for offender learning, and one of my plans for the new year is to lay on a basics economics class for the hon. Gentleman and his colleagues.
Oral Answers to Questions
Iain Wright Excerpts(11 years, 6 months ago)
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Mr Iain Wright (Hartlepool) (Lab)
1. What plans he has for vocational education; and if he will make a statement.
Mr Jim Cunningham (Coventry South) (Lab)
2. What plans he has for vocational education; and if he will make a statement.
The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)
World-class vocational education is vital for a world-class economy, so we are bringing rigour to vocational education by recognising the best qualifications, strengthening apprenticeships and introducing a Tech Bac to reward and celebrate stretching occupational education.
Mr Wright
EngineeringUK has today published a report showing that this country needs to double the number of engineering recruits and triple the number of engineering apprenticeships. It calls for face-to-face careers advice in schools and additional assistance to help schools appreciate 21st century engineering. The Government have had to U-turn over their engineering diploma, so will the Minister U-turn again and implement EngineeringUK’s recommendations in full?
Matthew Hancock
I met EngineeringUK last week at the launch of its report, so I am well versed on its recommendations and very supportive of the need to increase the number of engineers in our country, something that has been sadly lacking for far too long. As the hon. Gentleman knows, we are introducing, along with the Royal Academy, new qualifications that fit the accountability system. We will do what it takes to ensure that this country has enough engineers.
Industrial Policy and Manufacturing
Iain Wright Excerpts(11 years, 6 months ago)
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Mr Iain Wright (Hartlepool) (Lab)
This has been an important, passionate and, dare I say it, industrious debate. I thank the Backbench Business Committee for choosing the topic, which is very much in the long-term economic interests of our country and I particularly thank my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) and the hon. Member for Warwick and Leamington (Chris White) for the manner in which they advanced their arguments. I look forward to hearing the hon. Member for Burnley (Gordon Birtwistle).
I pay tribute to the excellent maiden speech that we heard today from my hon. Friend the Member for Corby (Andrew Sawford), as one by-election victor to another. I have known him for a very long time and he has always been passionate about manufacturing, industry and his local area. He was extremely gracious to his predecessor, as the whole House will have recognised. He mentioned his passion for co-operatives and co-operation. That is a necessary value in an industrial strategy. Industrial policy is often simplified or dismissed as picking winners, but it is fair to say that in my hon. Friend the people of Corby have definitely picked a winner.
I will be as quick as I can, because there is an awful lot to get through after such an important debate. It is clear from this afternoon that there is a welcome consensus about the need for an industrial strategy with manufacturing at its heart. We in the north-east know all about the importance of manufacturing. Both advanced and emerging nations are repositioning or developing their industrial and manufacturing capabilities—we have just heard from the hon. Member for Stroud (Neil Carmichael) about Leipzig—with the aim of enhancing comparative advantage for their key sectors and maximising opportunities for growth.
We should not blindly follow our competitors into the latest economic fashion. We cannot replicate off the shelf the German model, still less the Singapore model, but it is clear that in the 21st-century global economy, business and Governments are working together to ensure that potential is realised. We can exploit our values, our tradition and heritage and our current sectoral strengths to create a bespoke one-nation industrial strategy, helping all regions achieve their potential.
As the CBI stated only this month:
“Rebalancing the UK economy must consist of boosting our productive potential, which means reviving business investment and trade as key drivers of growth. The debate is no longer over whether the UK needs an industrial strategy, but about what form this should take.”
We would all agree with that. The message from today’s debate is clear: we need to see clear leadership on an industrial strategy. I therefore fully applaud what Lord Heseltine said in his review when he stated:
“The Government must have a clear blueprint for the future to support wealth creation. This approach should then be applied without exception across the whole of government.”
I support the TUC when it said:
“If we are to move forward, government, industry and unions must agree between them what a renaissance for manufacturing actually means. . . a strong manufacturing sector, across a variety of high skill, high value industries, is both achievable and desirable”.
The CBI said this month that we should
“adopt a shared vision . . . for the UK economy, with the government reporting back regularly on how this vision is being delivered”.
We would all agree.
We hear warm words from this Government. They often talk a good game, but their actions fail to match their rhetoric, and this country’s industrial potential suffers as a result. So I welcome the Secretary of State’s 16 speeches on the need for an industrial strategy; I just wish he would implement one. I fully support what the Prime Minister said in 2010 in his CBI conference speech—that the Government should be
“getting behind those industries where Britain already enjoys competitive advantage. All over the world governments are identifying dynamic sectors in their economy and working strategically to strengthen them”.
He said something similar only this week at the 2012 CBI conference:
“Government gets it…To have a proper industrial strategy to get behind the growth engines of the future.”
I fully agree. Yet in response to the speech the director general was forced to ask, “Where’s the beef?”
I welcome the honest appraisal by the Secretary of State in his leaked letter of February 2012 in which he said that the Government do not have
“a compelling vision of where the country is heading…and a clear and confident message about how we will earn our living in the future”.
However, I remain anxious that only last month Lord Heseltine felt the need to say in his report:
“The message I keep hearing is that the UK does not have a strategy for growth and wealth creation.”
Earlier this month, the CBI stated the position even more bluntly than that.
Mr Wright
No, if the hon. Gentleman will forgive me, because I have a lot to get through.
The CBI said that
“the current hands-off approach to growth is failing to provide the confidence necessary for businesses to compete for the biggest opportunities out there”.
Most concerning was the verdict of Sir John Parker, one of Britain’s pre-eminent industrialists as chairman of Anglo American and president of the Royal Academy of Engineering, when he said last month:
“It has been two years since this Government came to power but it still has not set out a vision for Britain’s industrial future. There has been no leadership from the top—and by that I mean David Cameron—which has given a signal to society that Britain values industrial activity.”
Mr Wright
No. I hope that the hon. Gentleman will forgive me, but I am keen to make progress.
Business is unconvinced that the Government’s warm words have materialised into firm leadership and tangible action. People want to see action and a sense of urgency, but they have not seen that. Will the Minister at least acknowledge this and outline his plans to do something about it?
George Freeman
I am extremely grateful; I will be very brief. This time last year, the Prime Minister announced the strategy for the life sciences, which was warmly welcomed across industry—not least by GlaxoSmithKline, which then announced a £500 million investment in advanced manufacturing in the north-west—and has been lauded internationally. Does the hon. Gentleman accept that at least in that sector the Prime Minister personally and this Government, including the Secretary of State, have set out exactly the leadership that he is asking for?
Mr Wright
The hon. Gentleman raises an important point about consensus. If we are to have an industrial strategy, we must ensure that it has a long-term strategic focus. Political and business cycles are not aligned—we often have a four or five-year cycle while businesses, certainly in the manufacturing industries, tend to have a 30-year or 40-year cycle—and it would be good to have as much consensus and policy certainty as possible. I hope that this debate has demonstrated that.
Manufacturers’ organisation the EEF has called for
“An industrial strategy”
that
“needs to endure beyond the latest political fad or any one political party. All our politicians need to recognise the value of having a clear vision, gearing the whole of government to delivering that vision, and setting clear accountability arrangements.”
I fully agree.
In certain sectors, there has been a degree of continuity of policy. The previous Labour Government set up the Automotive Council UK. The current Government have continued with that, and we have seen substantial investments in the automotive industry as a result. We fully recognise and welcome that approach. I have said to the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), who is now in his place, that his formation of the Aerospace Growth Partnership is very welcome, and I would like a future Labour Government to pledge to continue to provide certainty for that key industrial sector. We have seen success in close relationships between Government and business in a number of sectors; the hon. Member for Mid Norfolk (George Freeman) mentioned life sciences. Will the Minister say whether the Government plan to replicate that across other key industrial sectors such as chemicals, the construction industry and pharmaceuticals?
There is concern about long-term policy certainty, which investors in manufacturing require. Energy policy has rightly been mentioned a lot in this debate. In the summer, the CBI said in its report on maximising the potential of green business that
“while business wants to keep up the pace, they are equally clear that the government’s current approach is missing the mark, with policy uncertainty, complexity and the lack of a holistic strategy damaging investment prospects.”
Will the Minister acknowledge that such policy reversals are damaging to business investment, especially for manufacturing? What is he going to do to make sure that he can put arrangements in place within Whitehall to minimise the policy reversals and procrastinations in decision making that are damaging to our long-term industrial prospects?
In the remaining time that I have, I will focus on two important points. The first is that the key to the implementation of a long-term industrial strategy must be an emphasis on business policy across Government; it must not reside just in the Department for Business, Innovation and Skills. Other Departments cannot wash their hands of growth.
As we have heard, energy policy has profound implications for our manufacturing base. The manner in which the carbon floor price is implemented will have significant repercussions on our industrial competitiveness. Our aviation and transport policies also have an impact on our competitiveness. Local government can be a driver of economic regeneration and development. The Ministry of Defence should be working closely with the Department for Business, Innovation and Skills to ensure that we have a defence industrial strategy. Of particular relevance to the Minister is the close link, which we have heard about today, between an industrial strategy, skills and what is being taught in schools. I recall that the hon. Member for Burnley made an intervention on careers advice. We must see clearer signs that there is proper co-ordination on business and industry across Whitehall. What is the Minister doing to implement the Heseltine recommendations on creating better co-ordination, accountability and commitment across Whitehall on wealth creation?
My second point relates to procurement. The Government intervene in the markets by buying things every single day, and yet Government procurement does not maximise Britain’s industrial capability or enhance the UK supply chain. What else will the Minister do to push for smarter procurement across Government to help British industry, and to encourage innovation and create jobs in this country?
We believe that there is a need for an intelligent industrial strategy. This debate has shown that our industrial and manufacturing sectors have huge potential in the 21st century, but that to flourish, they require active co-operation. The whole House seems to have supported that today. I hope that the Minister will pledge similar support.
Oral Answers to Questions
Iain Wright Excerpts(11 years, 6 months ago)
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Michael Fallon
It is being so cheerful that keeps you going, isn’t it? I would have hoped that the hon. Lady welcomed the £4.5 billion contract won by Hitachi to build the next generation of inter-city trains, creating 900 new jobs in north-east England. The north-east also did particularly well under round 3 of the regional growth fund, with 29 bids selected, worth £120 million, creating or safeguarding 30,000 jobs. I am looking forward to my visit to the north-east next week to open new factories in Blyth and on Tyneside.
Mr Iain Wright (Hartlepool) (Lab)
The 2.5% quarterly drop in construction output to which the Minister referred is dire enough, but year on year, activity in the construction sector has fallen by a massive 12%, and further decline is predicted through to at least 2014. The sector is crying out for assistance from, and co-operation with, a Government who value construction as an important part of an active industrial strategy. Will the warm words, the excuses, the complacent tone that we have heard this morning, the protestations of just how difficult it is and the bland and vague promises of help in future stop, and will the Minister take decisive action that will help the construction sector now?
Michael Fallon
As I have already said, we are investing £4.5 billion to fund new affordable homes over the spending review period, all of which is committed to be spent in this Parliament. That is leveraging in a further £15 billion of private sector investment. We are on track to deliver 170,000 affordable homes by 2015.
Enterprise and Regulatory Reform Bill
Iain Wright Excerpts(11 years, 7 months ago)
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Richard Fuller
My hon. Friend makes an excellent point. All of us are aware that the Labour party has trouble understanding aspiration and even more trouble in rewarding aspiration. I am sure that Opposition Members will reflect deeply on the point that he has made.
Richard Fuller
The shadow Minister does not agree with me, but let me point out to him the way in which the hon. Members for Walthamstow (Stella Creasy) and for Edinburgh South (Ian Murray) have spoken about Mr Beecroft. Somehow, a person becomes a word, which becomes something to be thrown around and handled in the most insulting of ways. There is no understanding of what Adrian Beecroft has done.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
New clause 25—The UK Green Investment Bank: prohibition on investment in nuclear power or the nuclear industry—
‘The UK Green Investment Bank may not engage in activities that involve facilitating or encouraging investment in nuclear power or the nuclear industry.’.
Amendment 77, page 1, line 11, clause 1, at end add—
‘(3) In undertaking investments in accordance with the green purposes outlined in subsection (1), the UK Green Investment Bank will identify opportunities in which small and medium-sized enterprises can be awarded contracts.’.
Government amendments 1 to 3.
Amendment 76, page 3, line 24, clause 4, at end add—
‘(7) Subject to the approval by the European Commission of the State aid notification concerning the establishment of the UK Green Investment Bank, the Secretary of State shall provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.
(8) The duty in subsection (7) must be fulfilled no later than 31 December 2013.
(9) It is the duty of HM Treasury and the Secretary of State to either—
(a) permit the UK Green Investment Bank to begin borrowing from the capital markets by April 2015, or
(b) to present to Parliament a report within one month of the passage of this Act giving a clear, certain, alternative date for the UK Green Investment Bank to begin borrowing, based on Office for Budget Responsibility forecasts for the public finances and advice from the Green Investment Bank on its need for borrowing powers,
both subject to the European Commission approving the State aid notification concerning borrowing.’.
Amendment 89, page 3, line 24, clause 4, at end add—
‘( ) Subject to approval by the European Commission of the State aid notification concerning the establishment of the UK Green Investment Bank, it is the duty of the Secretary of State to provide the European Commission with State aid notification concerning the intention to allow the Bank to borrow, including borrowing from the capital markets.
( ) The duty in the above subsection must be fulfilled no later than 31 December 2013.
( ) In the event the European Commission approves the State aid notification concerning borrowing, it is the duty of the Treasury and of the Secretary of State to permit the Green Investment Bank to begin borrowing from the capital markets no later than 30 June 2015, or, if State aid approval has not been received by that date, no later than one month from the date of approval.’.
Government amendments 4 and 5.
Amendment 78, page 4, line 9, clause 6, at end add—
‘(5) The Secretary of State will be required to receive independent expert review of the performance of the UK Green Investment Bank.
(6) The Secretary of State will be required to receive such a review no less than every five years.
(7) An interim review no less frequently than every two and half years.
(8) The independent expert review in subsection (5) must, in particular, include or contain information relating to—
(a) an assessment of the UK Green Investment Bank’s environmental performance in fulfilling the green purposes as set out in section 1.
(b) an analysis of the main trends and factors likely to affect the future development, performance and investments of the UK Green Investment bank,
(c) macroeconomic analysis, including assessments of demand in the UK economy and international factors likely to affect green investment and skills within the relevant industries,
(d) assessment of the competitiveness of the UK Green Investment Bank in securing competitive advantage for the UK in green and low carbon economies relative to other countries, and
(e) recommendations to improve the UK Green Investment Bank’s impact in fulfilling its green purposes in section 1.
(9) Prior to the commencement of a review in relation to subsection (5), the Secretary of State must request the views of—
(a) The Secretary of State for Energy and Climate Change,
(b) The Secretary of State for Environment, Food and Rural Affairs,
(c) The Committee on Climate Change,
(d) Ministers from the devolved administrations,
(e) investors and interested parties, and
(f) members of the public,
and provide a copy of the results of the consultations to the person or persons undertaking the independent review.
(10) The Secretary of State, in the capacity of shareholder, must provide such information as he considers reasonable to enable the person or body undertaking the review to fulfil the requirements of this subsection.
(11) A review made in relation to subsection (5) must be published and laid before both Houses of Parliament.’.
Mr Wright
Those hon. Members who served on the Committee will recall that we spent a great deal of time considering whether the green purposes of the green investment bank, as set out in clause 1, were appropriate—namely, whether they were too restrictive or limiting to prevent long-term investment in innovative low-carbon technologies or too wide or broad as to mean that high-carbon investments could not be considered by the bank. As I said, we deliberated over this issue in Committee at length.
Of the five criteria, only one needs to be met to justify the appropriateness of investment by the bank. Was clause 1(1)(b), which refers to
“the advancement of efficiency in the use of natural resources”,
sufficiently tight and robust to deal with the need to ensure that the green economy and the transition to a low-carbon economy are put into effect? In Committee, I used the example of a gas-fired power station that might be marginally more efficient in its use of the earth’s natural resources given 2012 levels, but might well be seen as hopelessly dirty and inefficient by 2030.
That is the purpose of new clause 22—to deal with concerns that investments by the bank might not be in keeping with its green purposes, or at least the spirit behind those purposes. That is why we thought that making an explicit link with the Climate Change Act 2008 would be the best way for an appropriate balance to be struck between giving the bank the flexibility to consider its investment portfolio and ensuring that it cannot and does not decide to fund high-carbon investments. New clause 22 therefore proposes that the green investment bank assesses whether its investment portfolio helps the achievement of carbon budget and greenhouse reduction targets as set out under the 2008 legislation.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Do the criteria that the hon. Gentleman has noted extend to nuclear energy?
Mr Wright
We can consider that when hon. Members debate new clause 25. We had considerable debate about it in Committee. The question now is: what is the purpose of the green investment bank? Is it to ensure that we can kick-start innovative technologies that cannot have market buy-in, or is it a question of ensuring that the targets set out in the 2008 Act are met? There is a conflict there, which we considered in Committee at some length. I think that there is potential to consider nuclear, certainly in respect of the nuclear supply chain and ensuring that we can achieve these objectives. I am keen to hear the debate on this matter in the next few moments. It is important to probe the Government on whether this is an appropriate avenue for the bank to invest in.
Neil Carmichael
I thank the hon. Gentleman for that generous introduction. I am glad I stood up when I did. The danger of the shadow Minister’s speech so far is that he is focusing on energy, where, of course, a green investment bank should be considering many other technologies and many issues other than energy. That is one of the problems with new clause 22.
Mr Wright
I understand that. The hon. Gentleman will recall that I posed a number of questions in Committee: could the green investment bank invest in forests or in the supply chain for the automotive industry to ensure that we have low-carbon engines? There was a whole range of different debates in Committee, which I thought were useful. As I said, there is a balance to be struck, and that is what new clause 22 is about. Is the aim to achieve what we all want to achieve—igniting, for want of a better term, the green economy—or is the provision too prescriptive? There is a balance between being too broad and too narrow.
David Mowat
I thank the shadow Minister, but I am a bit disappointed by the tone of his remarks. I want to get clarity about the point that was raised a few moments ago about nuclear, so that I can understand the position of those on the Opposition Front Bench. Would Sheffield Forgemasters, for example, which is a nuclear supply chain company, be eligible for assistance from the bank?
Mr Wright
The hon. Gentleman will recall that I mentioned this issue at length in Committee, when he quite rightly probed me on it. I reiterate my answer to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) a few moments ago. There is a conflict here. What is the purpose of the green investment bank: is it to ensure that we have innovative technologies where there is current market failure making it difficult to get investment, or is it to ensure that we do as much as possible to tackle carbon emissions, meet low-carbon targets and so forth? Within that, nuclear could be a source of investment.
Mr Wright
Before I give way, I should declare an interest in that I have a nuclear power station in my constituency. I would quite like another one, and I think that part of that supply chain could be considered by the green investment bank. I would certainly like more clarity on this from the Government.
Caroline Lucas
To be honest, I do not see this contradiction. Given that nuclear takes so long to get up and running, it is not going to help us to meet our carbon targets fast enough. It also requires Government subsidy, which is why the whole of the EMR—electricity market reform—is being rigged to deal with that. Also, the jobs that we hope the green investment bank will create will surely be jobs that we would like to see here in the UK. If we use the bank to subsidise nuclear, what we are doing is basically subsidising jobs in places like Russia, China and France.
Mr Wright
I shall come on to this in a few moments. Because of a huge lack of clarity in the Government’s energy policy—anywhere, but particularly in respect of the renewable energy component—many foreign investors will not view the UK as the destination of choice for investment in any case. We have huge potential to be the market leader for renewable and low-carbon technologies, but I think we are missing a trick when it comes to the scale of ambition and the time scale of the green investment bank. The purpose of the new clause is to probe and challenge the Government to ensure that we make this part of a growth strategy rather than to allow it to happen somewhere in the future in a way that makes it virtually meaningless.
Matthew Hancock
Given the shortage of time, it may be helpful if I deal with two points now. I can confirm first that the European Commission has granted state aid approval to the green investment bank, and secondly that the Commission strongly discouraged the inclusion of nuclear in our application for state aid. Its inclusion would have delayed approval, and nuclear projects are therefore not in scope in respect of the current application.
Mr Wright
I thank the Minister for his clarification. It is somewhat at odds with what was said in Committee by the then Minister, the hon. Member for North Norfolk (Norman Lamb), but we are where we are—and I am very grateful to the Minister for his announcement about the state aid application, because it gets rid of at least a paragraph of my speech.
Let me now deal with amendment 76, which makes an important point about what the green investment bank should be doing in the light of its potential, the huge opportunities that it provides, and the equally huge scale of the challenge presented by the need for us to decarbonise our economy. If we are to achieve what we want to achieve, we need active government. Working with business, the Government must assess our present comparative advantage in this sector, and work out how we can maintain or enhance that advantage in the future.
Mr Wright
I know that the hon. Gentleman is a keen advocate of manufacturing in this country, but we require policy certainty. I hope that he will address the point made in an excellent article by Camilla Cavendish that appeared in The Times last month. She wrote that
“instead of building the equipment in England”,
companies were building offshore wind turbines elsewhere:
“These companies remain uncertain about investing in the UK… the impression that the coalition is split has spooked companies whose boards need to commit capital for 20, 30, 50 years, whether in wind or nuclear power, biomass or solar.”
Is not the lack of the long-term certainty that is so necessary undermining the chances of jobs and growth in this crucial area?
David Mowat
I thank the shadow Minister for telling me what I should say in my intervention. What I was going to say was that, although I did not catch the name of every company in the list that he read out, I am pretty sure that the headquarters of all of them are outside the UK—as, by the way, are those of the major manufacturers of offshore wind. And, yes, it is a problem.
Mr Wright
That is why I am pleased that the hon. Gentleman will be supporting our amendment 77—which is intended to promote the growth of small and medium-sized enterprises in the supply chain and to ensure that we can realise the great potential of the green economy—and will object to the Government’s amendments 1 and 3, which state that investment can take place not in the UK but elsewhere. As someone who wants to support manufacturing in the UK and the ability of home-grown businesses to provide jobs, growth and export potential for our companies, he will doubtless be supporting us in the Lobbies.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Time will be limited for later speeches, so let me say this now. My hon. Friend read out a list of companies that had expressed concern about the mixed messages coming from the Government. I know from private discussions that I have had with people in some of those companies that they are very worried about where the Government are going, and want more clarity. The amendment provides a good way of clearing up the confusion created by the Government, and making their commitment stronger again.
Mr Wright
I agree. The same point was made by the CBI, which concluded in a report produced this summer entitled “The Colour of Growth: Maximising the potential of green business”:
“while business wants to keep up the pace, they are equally clear that the government’s current approach is missing the mark, with policy uncertainty, complexity and the lack of a holistic strategy damaging investment prospects.”
The Government and the Minister—when he is listening—must respond to that. They must provide policy certainty so that investment can be made in the UK.
In Committee, when we discussed the green investment bank and its borrowing powers, I said that we had thought long and hard about the issue. At the time the then Minister, the hon. Member for North Norfolk, said:
“The Government have also committed that the Bank will borrow from April 2015”,
although he then qualified that by using the stock phrase
“subject to public sector net debt falling as a percentage of GDP.”—[Official Report, 12 July 2012; Vol. 548, c. 793W.]
However, given the Government’s failures in relation to its own borrowing targets, that commitment is so far from being achieved as to be virtually meaningless. I would contend that a deficit reduction plan without an accompanying growth and employment programme is no deficit reduction plan at all.
Ours is one of only two G20 countries in recession. In March, the Office for Budget Responsibility reported that the Government might meet their debt target by the skin of their teeth, but since then borrowing figures have been significantly higher than forecast. The deficit is now going up—borrowing is now going up; it has increased by 22% so far this year, as a direct result of this Government’s policies. Citigroup forecasts that the Treasury may have to borrow £48 billion more than it originally forecast by 2015-16, meaning that the Chancellor’s key fiscal target of having public sector net debt falling as a proportion of GDP by 2015 will not be reached. It is widely anticipated that the Chancellor, in his autumn statement to be held in winter, will have to carry out a humiliating climbdown from that important target of his, based largely on his misguided economic policies.
Where does that leave the green investment bank? At a time when our potential as a leading market for green business is under threat, both from intense overseas competition and from uncertainty from this Government, what impact does this failure of fiscal policy by the Chancellor have on this growth area? That is the context behind our amendment 76. We want the green investment bank to be able to provide a stimulus for growth in our economy as soon as possible, but we are equally mindful of the double-dip recession that the Chancellor’s policies have inflicted on the country. Our amendment would ensure that state aid approval on the green investment bank’s borrowing power would be sought and achieved no later than 31 December 2013. What the Minister has said about that is certainly welcome, but what impact will it have? Does it mean that borrowing will take place earlier than 2015? When does he imagine borrowing from the capital markets will be permitted?
Our amendment proposes that the bank must be able to begin borrowing by April 2015 or, if that is not achievable, Parliament must be provided with a clear and alternative date as to when such borrowing may be permitted, based both on OBR forecasts regarding the state of the public finances and on advice from the green investment bank on the need for borrowing powers to achieve its objectives.
Caroline Lucas
I wonder why the hon. Gentleman is insisting on that caveat, as the position shared by his Front-Bench colleagues not that long ago was unequivocal in saying that as of June 2015 the bank should be permitted to borrow. The Opposition are now moving away from that position and I simply do not understand why. They are watering down what was there before and is contained in my amendment 89.
Mr Wright
My firm policy commitment is to ensure that we have the green investment bank borrowing as soon as possible, as a stimulus to growth. We were mindful of amendments that we tabled in Committee about that, but we also have to consider the appalling financial mess that the Government are dealing with in respect of increased borrowing. Borrowing was going down prior to the general election, but now it is going up. We do not know what the circumstances will be in 2015, so we need to ensure that there can be certainty, based on the imperative to have the green investment bank borrowing from the capital markets as soon as possible while being mindful of the need for rigour and discipline in the public finances.
Neil Carmichael
Is it not possible that the green investment bank can encourage other private organisations and banks to step in and start contributing to the green economy, as that is really what this is all about? It is about providing the right confidence, on the basis of a framework of some certainty, which the Minister has asked for and the Government are giving.
Mr Wright
Absolutely, and that is why the hon. Gentleman will be supporting our amendment 77 and rejecting Government amendments 1 and 3.
If our economy has sectoral strengths, it is right, in an active industrial strategy, for the Government to be looking to maximise those strengths. They also need to seek to develop further capabilities, as the hon. Gentleman rightly said, that could lead to greater investment, growth and employment opportunities here in the UK and, we hope, to the exporting, for commercial gain, of some of the work, expertise and capability here. We want economic benefits to flow to companies within the United Kingdom. That is not to defend protectionism, or to deny the need for competition and foreign direct investment, but to ensure that the Government, as part of a fundamental, active, industrial strategy, work with business to see how this country can gain and maintain market advantage.
Neil Carmichael
I thank the hon. Gentleman for that. It is important to understand the length and complexity of supply chains and that we do not tie ourselves down to thinking that the supply chain is just within Britain, as it goes further than that. We need appropriate co-operation from the supply chain in big operations. The Government are rightly focusing on supply chains more generally, but we need to bear that in mind.
Mr Wright
Absolutely. I think the hon. Gentleman can go to the toilet now. Recent research has concluded that capital expenditure costs for something as important and significant as offshore wind projects, in which my constituency could play a leading part, could fall by a third in the next decade if a greater proportion of the parts were made in the UK. We need to be mindful of that and the Government must work with business to enhance the supply chain possibilities, opportunities and capabilities in the UK. I suggest to the hon. Gentleman, with the greatest of respect, that that is not happening, largely because of policy uncertainty. That is what amendment 77 is designed to address.
Caroline Lucas
The hon. Gentleman is talking passionately about policy certainty, yet his amendment 76 reintroduces uncertainty. I cannot emphasise enough that it is amendment 89 that would ensure that the bank would be able to borrow from 2015. It is actually what the Liberal Democrats agreed at their party conference only a few weeks ago. If the hon. Gentleman wants policy certainty, why will he not support amendment 89?
Mr Wright
I know that the Liberal Democrats have such power and significance in the coalition that they will be able to advance that proposal. If it is one of their manifesto or conference commitments, it will certainly happen. That might not look as sarcastic as it should do in Hansard, Mr Deputy Speaker.
The serious and important point at the heart of amendment 76 and amendment 89, tabled by the hon. Member for Brighton, Pavilion, is the question of the extent to which we can have the green investment bank operating at scale as quickly as possible, ensuring that it can borrow from the capital markets as quickly as possible and be a major ingredient in the stimulus for growth while at the same time being mindful of the deterioration in the public finances that has largely been caused by the Government’s economic policies. The emphasis on austerity means that tax receipts are going down and benefit payments are going up, so borrowing figures have had to rise by more than a fifth in the past year alone.
Let me go back to the point made by the hon. Member for Stroud (Neil Carmichael). I mentioned Government amendments 1 and 3 and I find it baffling that the amendments state that investments can be considered
“whether in the United Kingdom or elsewhere”.
I fully appreciate and support the need to tackle climate change and the transition to a low-carbon economy on an international and multilateral level. The hon. Gentleman was quite right to say that supply chains are somewhat more complex than they would be if they were solely domesticated. How on earth, however, do these Government amendments to an enterprise Bill that was supposedly designed to improve the competitiveness of the UK economy help to stimulate enterprise and economic activity in this sector in Britain? Is there not a huge risk that Britain’s potential as a world leader in this field will be lost as a direct result of the Government’s amendments? I ask the Minister to think again and to reflect on the amendments we have tabled and on the new clause.
As we have only 17 minutes left to debate this subject, which is incredibly important for the future of this country, I shall now take my seat.
Matthew Hancock
I shall try to answer all the questions that have been asked and then leave some time for further comments from other Members who have tabled amendments and new clauses or who wish to speak.
The green investment bank will play a powerful role in promoting the green economy. What we heard from the Opposition suggested that they had introduced such a measure themselves, but this is a coalition measure that is testament to the coalition. It is widely and strongly supported by Liberal Democrats and Conservatives alike and will, I think, help the UK to make a successful transition to a low-carbon economy. I am pleased to have been able to confirm that the European Commission has allowed the bank to make commercial investments in a wide range of sectors. We are therefore fully on track for the bank to be operational within a matter of weeks.
Mr Iain Wright
Will the Minister talk us through a scenario in which an investment decision might be made, say, for offshore wind capability, where prices may be cheaper in, say, Germany than in the United Kingdom? Will cost or the achievement of the bank’s purposes be the key consideration? What conflict and tension exist between cost, value for money and the supply chain capability here in the UK?
Matthew Hancock
Clearly, one reason for establishing a green investment bank is to ensure that it delivers against the green purposes. Of course cost is vital. That is why we are setting up the bank so that it will act on a commercial basis. The crucial point is that it must act in accordance with one or more of the green purposes; otherwise there would be no point in it being a green investment bank.
Mr Iain Wright
I beg to move amendment 93, page 51, line 23, at end insert—
‘(1A) A representative of the company’s employees must be consulted in the preparation of any such revision.’.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Amendment 95, page 52, line 5, leave out ‘ordinary’ and insert ‘special’.
Government amendment 25.
Amendment 86, page 52, line 11, leave out subsection (b) and insert ‘(b) and annually thereafter.’.
Amendment 96, page 52, line 17, leave out ‘ordinary’ and insert ‘special’.
Government amendments 26 to 30.
New clause 27—Information about payments to recruitment and remuneration consultants in respect of directors’ remuneration—
‘After section 413 of the Companies Act 2006 (Information about directors’ benefits: advances, credit and guarantees) insert—
“413A Information about payments to recruitment and remuneration consultants
The Secretary of State may make provision by regulations requiring information to be given in notes to a company’s annual accounts about payments made in the relevant accounting period in respect of recruitment and remuneration advice relating to directors, including information specifying any fees that have been paid in proportion to the remuneration agreed for a director.”.’.
Mr Wright
Amendment 93 is in my name and those of my hon. Friends. This important part of the Bill deals with directors’ pay. We rightly spent time in Committee dealing with this, and I do not want unduly to inconvenience the House by repeating the same points, but at the heart of the debate is a disconnect between executive pay and average earnings, and between executive remuneration and the performance of the companies they lead.
As I mentioned in Committee, in 1980 the median pay of the highest-paid directors in FTSE 100 companies was £63,000, and median wages were £5,400. By 2010, the median pay of FTSE 100 directors was £2.99 million, while median wages had risen to £25,900. The ratio of directors’ and employees’ median pay had risen from 11:1 to 116:1. That trend is not confined to the UK, but has been seen throughout the developed world, most notably in the US, where, by 2008, executive pay was 200 times the median household income. Despite the difficult economic times and financial misery faced by millions, average compensation for an FTSE 100 chief executive rose by 12% in 2011, while average wages rose by only 1.4%.
In that environment of growing pay, there is no meaningful correlation between high pay and high corporate performance. Empirical evidence from research carried out in 2009 concluded that companies that pay their chief executive officer in the top 10% of remuneration earn negative results of -13% in terms of both profits and share price in the next five years.
Opposition Members support some of the Government’s reforms—in the interests of cross-party agreement, I should say that they build on work done by the previous Labour Government. However, as we said in Committee, the Government could go further and be slightly bolder. That is the basis of amendment 93, which would ensure that
“a representative of the company’s employees must be consulted in the preparation of any such revision”
to a director’s remuneration package. We anticipate this ensuring that an employee representative could sit on a firm’s remuneration committee in an advisory capacity.
Richard Fuller
The hon. Gentleman is arguing for things he would like to see, but as he is well aware, it is already within the purview of corporations to put an employee on their boards, and shareholder votes can already be held on compensation and can influence that compensation even if they fall short of the 50% hurdle. What compels him to want to make it a legal requirement, rather than to use the market to make these decisions itself?
Mr Wright
It is because, as I tried to explain in my opening remarks, over the past 30 years we have seen market failure and a huge disconnect in the level of remuneration paid to top executives, but that has not ensured commensurate performance among the companies they lead, which is what we need. I think that the Government are onside on this. The shareholder spring and activism that we have seen, including at Trinity Mirror, has largely been the result of initiatives put in place by the previous Labour Government on annual advisory votes on directors’ pay and so on. I know that the hon. Gentleman is very familiar with these issues and will support us in ensuring that shareholders—the people who own these companies—have a proper say.
Richard Fuller
I appreciate the shadow Minister’s point, but unfortunately, as is often the case, the Opposition are like the ambulance that turns up two days too late and to the wrong address. The market is already responding to these issues, and measures are being taken to change how compensation is made, as he said. The Opposition always rush to legislate restrictive control and put a hand down on aspiration, when the market itself will solve, and is solving, these problems. I fully accept that there is an issue about employee representation in companies and about the historical lack of alignment between compensation on boards, but he is going the wrong way about resolving it.
Mr Wright
The purpose of the amendments, which have buy-in from Mr Rossi, Fidelity and elsewhere, is not to seek the death of aspiration, but to encourage, incentivise and try to ensure that companies achieve as much consensus as possible on directors’ pay policy—that was also the position of the Secretary of State earlier in the year—ensuring that companies start early in the process and avoid the use of what is a somewhat blunt and brittle tool, whereby the issue is discussed only at the annual general meeting or what-have-you, which can cause tension. Getting in early and talking to shareholders means that the owners and managers of a business can reach some sort of consensus. That is the purpose that amendments 95 and 96 seek to achieve. I quoted Mr Rossi in Committee, and I will do so again:
“Companies have nothing to fear if what they propose is fair and reasonable and clearly aligned to what is good for long-term shareholders.”
The hon. Member for Bedford (Richard Fuller) is a strong and experienced Member of this House and a good champion of businesses. I disagree with what he says about regulation and employment legislation, but he will recognise that getting good consensus on directors’ pay and ensuring that shareholders have the tools at their disposal to hold managers to account is in all our interests.
Amendment 86 would have the effect of creating an annual binding vote on pay policy, an issue that, again, was much deliberated in Committee. I still firmly believe that an annual vote is hardly disproportionately onerous or somehow unduly bureaucratic. Shareholders are used to, and expect, annual corporate reporting on matters such as the annual accounts—whether they are a true and fair view—and the reappointment of auditors. I reiterate the point that I mentioned in Committee and throughout the passage of the Bill: I fail to see how such a proposal can be seen as onerous. In Committee I had a well-thumbed Financial Times editorial from June 2012, which said that
“the business secretary has missed a trick in not going for annual pay votes…His worthy hope is that this might encourage more medium-term thinking about pay. But an obvious worry is that such votes may degenerate into another exercise in box-ticking, with shareholders voting on boilerplate policies rather than specific deals.”
It went on:
“Executives will restrain their demands only when they perceive a real risk in flouting social norms on pay. Fund managers, who naturally shy from conflict with companies, still need to be encouraged to challenge bosses more—especially on this sensitive topic. Annual votes would at least put them firmly on the spot. Mr Cable’s triennial polls, however well-meaning and thoughtful, may not.”
That point was echoed by the head of the High Pay Commission, Deborah Hargreaves, who stated in evidence to the Committee:
“If you vote every three years on pay policy, it is important that that policy is detailed enough for you to have an effect. The danger is that it could turn into a box-ticking exercise, where you vote on general boilerplate policy recommendations, rather than nitty-gritty details and figures. I felt that an annual vote would include more figures and more detail, and give shareholders more power to make informed decisions about what is going on in relation to pay at the company. If it happened every three years, the fear is that they may be voting on something vaguer and more bland.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 137, Q294.]
Again, I cannot see how our proposal would be onerous, and I think Ministers should think again.
The final amendment in this group is new clause 27, the purpose of which is to improve transparency in the disclosure of information relating to remuneration consultants and the manner in which they are paid by companies. Evidence suggests that remuneration consultants have played a key part in hiking up directors’ pay. Work undertaken by Professor Martin Conyon found a direct correlation between higher-than-average directors’ remuneration and the use of remuneration consultants. Further studies have shown that, on average, pay for chief executive officers is 26% higher in companies that use remuneration consultants. As I mentioned in Committee, across the Atlantic the Congress inquiry led by chairman Henry Waxman concluded that remuneration consultants to Fortune 250 companies were paid almost 11 times as much for providing other services to those companies.
Richard Fuller
The shadow Minister is making some good points. Does he believe that the Government should provide guidelines to remuneration committees on how they should set directors’ pay, and on how they should ensure that the correlation with average earnings and with shareholder value growth is maintained?
Mr Wright
That is a fair point. There are already guidelines in place, including discretionary guidance from the industry. We also have the combined code on corporate governance, which provides a degree of guidance. We need to determine whether the issue is sufficiently serious that it requires legislation to provide firm guidance. I shall be interested to hear the Minister’s view on that, given that there is agreement across the House on the disconnect between pay and performance, and the link—which acts almost as a catalyst—between remuneration consultants.
Speaking as a chartered accountant who used to work for a “big four” accounting firm, I see a close correlation between these problems and the crisis in the auditing profession a decade ago. That led to the disclosure of fees and to greater transparency on the audit services and non-audit services provided by the accounting firms. The perception was that in corporate scandals involving firms such as Enron, the thoroughness and accuracy of the auditors’ opinion was called into question when audit firms secured additional, often more lucrative, work away from the statutory audit.
New clause 27 would therefore increase disclosure of information relating to payments to remuneration consultants, ensuring that the Secretary of State should make a provision by regulation of notes to a company’s accounts about payments made to the consultants, including information specifying fees that have been paid as a proportion of the total remuneration package of a director. My concern is that, if a contract is so designed, a consultant has an inherent desire to inflate the package to secure a larger fee. If that is the case, shareholders should be made fully aware of it via a disclosure in the annual accounts. As I have said, we applaud the Government’s general direction of travel, but we believe that they could go further, and I will be interested to hear what the Minister has to say about this.
Matthew Hancock
I give the assurance on the second point: the normal procedures will be used. The normal procedures will govern what goes into one statutory instrument and then, as we all know, debate on a statutory instrument covers all elements of the instrument. That is the procedure for a statutory instrument that is debated.
Amendment 75 proposes that account be taken of any feasibility study before the Government lay regulations on the orphan works scheme—that is, I think, the essence of the amendment. In principle, we understand the need for studies and consideration of such important questions, but we do not think that such a requirement is appropriate in primary legislation. If the proposal is that the conclusions of a feasibility study should automatically and immediately have legislative effect, we have to ask what would happen if the recommendations of a commissioned study could not, for good and legitimate reasons, be accepted. However, I can assure the House that the Government will carefully consider which bodies or body should be responsible for licensing orphan works, including whether they have the necessary independence, expertise, resources and processes.
Although there is some work still to do on deciding which organisation should be responsible, it is unlikely to be a new body. We looked at the arrangements in other jurisdictions: in Canada, the copyright board has that responsibility; in Hungary, the intellectual property office has it. Jurisdictions overseas locate the role in different parts of Government, according to where the appropriate expertise is found. There could be a role for collecting societies to license orphan works of a type where a collecting society already operates in that sector, but many of the orphan works held by museums and archives, for example, are not of types that are currently collectively licensed; such works include unpublished diaries, old photographs and oral history recordings.
In the light of those reassurances and given that the regulations cannot be laid until the work is completed, I ask the hon. Member for Hartlepool (Mr Wright) not to press amendment 75 and the House to support Government amendments 23 and 24.
Mr Iain Wright
I was broadly reassured until the Minister made his comments, but now I am as uncertain as ever. The Public Bill Committee spent significant time debating copyright, and rightly so, as the legislative framework—not regulation, but a legislative framework—governing copyright has been a crucial ingredient in allowing Britain to be at the heart of the global creative and cultural industry.
We lead the world in many parts of that cultural and creative sector, from publishing—as we heard, in Committee the then Minister was keen to talk in vivid and animated terms about “Fifty Shades of Grey”—to the video gaming industry, where we lead the world, to music, and I was particularly keen to talk about the Stone Roses, which was fantastic. The Minister does not strike me as being a Stone Roses man; he strikes me more as a JLS-One Direction man. I imagine that he would be keen on that. One Direction seems appropriate, given his closeness to the Chancellor.
We lead the world in different parts of the sector. With a rise in the global middle class, which wants to be entertained, it is important that we continue to lead the world. There are many reasons for our pre-eminence in the industry, not least the solid legislative framework governing copyright and intellectual property. We lose that at our peril.
As I mentioned in previous debates throughout the passage of the Bill, a partnership approach is needed, with Government identifying the competitive sectors in which Britain can lead the world and working closely with business and with those sectors to ensure growth and potential opportunities. We have not yet seen such a partnership approach. It did not seem to exist in the Government’s original drafting of the clause on copyright. The unilateral approach taken by Ministers, without consultation with the industry and—surprise, surprise—without empirical evidence or an impact assessment—where have we heard that before?—caused alarm and uncertainty among stakeholders in the industry and threatened significant and long-term investment decisions for this country.
I quoted in Committee, and it is worth repeating to the House, the submission from UK Music, which said:
“The inclusion of copyright clauses in this Bill came as a surprise to many copyright stakeholders. We widely anticipated copyright legislation, but we did not anticipate that the copyright legislation would be attached to this particular Bill. This ‘surprise’ generated a degree of confusion and alarm amongst our community. This was needless. Better communication between the Government and its key stakeholders would have prevented this.”
Opposition Members entirely agree with those sentiments.
The clause as originally drafted would have given the Secretary of State order-making powers to allow amendment of any exceptions via secondary legislation. This power was considered necessary to deal with the situation where, under the EuropeanCommunities Act 1972, the Government are able to amend exceptions to copyright and performance rights which may, so the Government stated, restrict the maximum statutory penalties. We argued in Committee and tabled amendments to the effect that the wording of the clause was too loose, lacked clarity and provided the Secretary of State with too wide a power to deal with this issue.
In Committee the Government stated that this was not so and that there was no case for our amendment. I therefore welcome the fact, although I am surprised, that the Government tabled amendments 23 and 24, which specify that regulations under this section may make only such provision as may be made under section 2(2) of the 1972 Act. I do not want to be churlish on this point and I am pleased that the Government have listened, albeit somewhat late in the process, to us and, more importantly, to stakeholders.
However, as we have hinted in interventions, there is not complete unanimity throughout the industry when it comes to Government amendments 23 and 24. Some stakeholders, who are looking to invest in the UK, such as British Pathé, are still concerned that the Government have misinterpreted section 2(2) of the 1972 Act. They argue that if that part of the 1972 Act gives the Government powers to change copyright exceptions by statutory instrument, the Government have that right. Nothing in the Bill would change that. There is therefore no need to clarify the point in the Bill, because the power already exists. The only reason for writing the power into the Bill in clause 57 would be if it did not exist. The managing director of British Pathé said to me in an e-mail last night that “the statement is redundant” unless that is the case.
There remains a concern among some stakeholders that clause 57 merely allows extensions to criminal penalties relating to exceptions. However, it has been noted that nearly all copyright infringements relate not to exceptions, but to matters such as piracy and theft, which are neither covered in clause 57, nor addressed by the Government’s amendments. Therefore, given the Minister’s move in this regard, which has been welcomed by much of the industry, will he respond to the specific concerns of companies, such as British Pathé and ITN, that remain despite the Government’s amendments? Will he reassure me on that point?
Kevin Brennan
Will my hon. Friend also seek an assurance from the Minister that, when in future he considers any piece of legislation containing clauses relating to copyright, never again will the umbrella body for the UK music industry be given absolutely no prior knowledge of it? Perhaps the Minister could give the House that assurance when he responds.
Mr Wright
I absolutely agree. I will take this opportunity to wish my hon. Friend a happy birthday for yesterday—a birthday he shares with several other Members, not least the eminent Chair of the Culture, Media and Sport Committee, the hon. Member for Maldon (Mr Whittingdale). My hon. Friend made two important interventions. When he intervened on me he mentioned the lack of consultation and the surprise of important stakeholders, such as UK Music, about these provisions. That is not the way to have clarity about Government policy on something as important as the creative and cultural sectors. I hope that that is a wake-up call, because we have seen the Government do the same elsewhere, for example with the feed-in tariffs and the oil and gas tax charges. To move without any concern for what stakeholders are thinking is not in the best interests of the British economy and industry.
The second point that my hon. Friend made, when he intervened on the Minister, relates to the use of statutory instruments. I rose to say that I felt more confused as a result of the Minister’s comments than I did when I entered the Chamber today. Part of our discussions in Committee was about the fear of bundling some of these points into a single statutory instrument. The Minister must have served on a delegated legislation Committee during his time in the House and will know that the only way the House can express a view on such instruments is by voting in favour or against; there is no way we can express a view on individual provisions. Therefore, will he clarify to what extent he will be able to bundle points relating to copyright exceptions into single SIs, which would not allow the House to express our views?
I now to turn to our amendment 75, which proposes that the Secretary of State
“must have regard to any feasibility study commissioned on the licensing of orphan works in advance of the regulations being laid before Parliament.”
We are not against the concept of orphan works, as I mentioned in Committee, provided that safeguards are in place to ensure that the party that wants to use the work has undertaken a diligent search. I recognise—the Minister alluded to this—the huge benefits that could be unlocked as a result of orphan works licensing. For example, I can anticipate SMEs building new platforms and applications for the re-use of digitised content, with innovation and new business models coming forward to use the content commercially so that Britain can lead the world, enriching the research and cultural environment and thereby consolidating the UK’s position as the destination of choice, whether literally or online, in the 21st century as the place for education and research, particularly in the cultural sector.
The Bill provides the legislative framework for orphan works licensing but is, as is probably inevitable and desirable in primary legislation, high-level and somewhat vague in detail. The crucial details that stakeholders will be looking for have yet to be determined and will be available via regulations. However, it would be useful to get on the record as much certainty and clarity as possible about the Government’s intended direction of travel in order to allow the industry, including existing players and potential new entrants to the market, to start gearing up to use the licences commercially. The purpose of our amendment is to probe the Minister on his intended direction of travel and ensure that a feasibility study considers certain aspects of the policy and that the Government take these findings into account, not in a completely solid way but making sure that these matters are addressed.
Will the Minister indicate the identity of the authorising body or bodies? He mentioned it briefly in his opening remarks, but it would be useful to put a little bit more meat on the bones. What sort of time scale is he working towards? When does he anticipate that the introduction of such schemes, and the laying down of regulations as a preliminary step, will take place? What will be the scope of the orphan work licensing schemes? Will this be done on a sector-by-sector basis? Will it be based on a “specific types of work” approach, or will there be a big bang in which all possible orphan work schemes will be incorporated from day 1?
Will the Minister outline how he anticipates that any diligent search on a work-by-work basis will move forward? I am fairly sure that every such search will have to be done on an individual work basis rather than by batching works together. Am I right in that thinking, or is he considering any change in the individual works versus batch approach? Could diligent searches be re-used within a certain time period? How will the Minister—again, this is part of the feasibility study leading into the regulations—strike the balance between the rights of the licensee, allowing the licence holder to commercially use the rights arising from that licence, and the rights of the relevant rights holder? What will happen in the event that the parent comes forward? How will remuneration be worked out in such an event? Will a certain amount of time be stipulated in regulations following the awarding of an orphan works licence?
We lead the world in the cultural and creative industries, and many people will want to take that away from us for a variety of reasons. We need to make sure that we can maintain our competitive advantage. That requires close co-operation, with an active industrial sector strategy between the industry and Government. Sadly, during the passage of the Bill, that has been lacking in the provisions on copyright. I hope that the Minister has learned his lesson and look forward to his comments.
Mr John Whittingdale (Maldon) (Con)
We do not have a lot of time, and I do not want to detain the House unduly. However, although it is recognised that this matter forms only a small part of the Bill, the importance of the creative industries to our national economy, and the contribution that they are making to growth, is so essential that we need to look very carefully at anything that affects the livelihoods of those working there—and the creative industries rest on the protection of intellectual property rights.
On Second Reading, I suggested to the Secretary of State that clause 57—then clause 56—could be used to make substantial changes to copyright law through statutory instruments. I am grateful to him for meeting representatives of a wide range of creative industries to discuss those concerns. That has led, to some extent, to the amendment that the Government have tabled. As the Minister said, several representatives of the creative industries, such as UK Music, the British Copyright Council, the Publishers Association and the Premier League, have said that they are now satisfied.
However, as the hon. Member for Hartlepool (Mr Wright) said, that is not a unanimous view across the industry. The Minister has assured us that this is about enforcing penalties but, despite the Government’s amendment, the clause does not mention penalties. I am therefore still not clear as to why the Government did not accept the suggestion that they make it absolutely explicit in the Bill that it is all about penalties. Instead, it talks about exceptions, and it still allows changes to be made to copyright law by statutory instrument. Following the Hargreaves report, there is still great suspicion on the part of many of those in the creative industries that there is an intention to try to dilute intellectual property rights. They fear that the clause could be used—perhaps not by this Government but by a future Government—to bring forward changes to copyright law.
Those fears have been expressed, as the hon. Member for Hartlepool said, by a wide range of organisations, including Associated Press, ITN, Getty Images, the Press Association, British Pathé, Agence France Presse and Deutsche Presse-Agentur. I will quote one sentence from the letter they have sent that sums up the problem that the Government face:
“It therefore remains our concern that…the true purpose of Clause 57…as drafted”
is that
“it will be used as a vehicle to push through a number of changes to copyright exceptions recommended by the Hargreaves Review, which we discussed with you at our meeting because of the detrimental impact to business and the creative industries as well as…ultimately…to the UK’s future economic growth.”
I welcome the Minister’s assurance that that is not the Government’s intention, but it must be of concern that a number of organisations that are important to this country retain that suspicion. Anything that the Government can say or do now to allay that suspicion and make it clear that they do not intend to implement the Hargreaves recommendations in a bundle, via a statutory instrument, would be extremely welcome and would reinforce the point that the provision is not about that, but about criminal penalties.
Matthew Hancock
I think that businesses would hope that legislation put in place for the long term will remain for the long term. The sunsetting in this Bill—as amended by the technical amendments that we are debating—is a major step forward, and the way in which it will be implemented is the right way forward. We are taking an ambitious and strong approach to secondary legislation that will ensure that Ministers and the Government have to check that legislation is working in the way it ought to. Therefore, I would resist the Opposition and non-Government amendments in the group, and I hope we have cross-party support for amendments 21 and 22.
Mr Iain Wright
I rise briefly to support the Government in this debate. As far as I am aware we have not tabled any Opposition Front-Bench amendments in this group. As I said in Committee repeatedly, we agree with the approach taken to sunset and review provisions, which are an important part of clause 50. We also set in train the primary authority schemes, which will be extended by clause 53. As for what the Minister said about permissive legislation—I think we are back to “Fifty Shades of Grey” again—and a deregulatory approach to free up business from unduly disproportionate and unnecessary regulation, that is something that we on this side of the House certainly agree with too.
Amendment 21 agreed to.
Amendment made: 22, page 42, line 39, at end insert—
‘except to the extent that—
(a) the power or duty is exercisable by the Scottish Ministers, or
(b) the power or duty is exercisable by any other person within devolved competence (within the meaning of the Scotland Act 1998).’.—(Matthew Hancock.)
Enterprise and Regulatory Reform Bill
Iain Wright Excerpts(11 years, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
I call the Minister [Interruption.] I meant the shadow Minister.
Mr Iain Wright (Hartlepool) (Lab)
If only, Mr Deputy Speaker.
This is my first opportunity to congratulate the hon. Member for West Suffolk (Matthew Hancock) on his promotion. It is a pleasure to see him at the Dispatch Box, as he has been many times in his guise as Disraeli, Churchill, or perhaps Sir Robert Peel, and it is good to see him in his current incarnation.
In his opening remarks, the Minister mentioned that the new clause seeks to deal with perception. We should not, however, be legislating on the basis of perception, and as he spoke I became increasingly concerned that this is yet another example of an insensitive, out-of-touch Government who somehow deem all regulation as inherently bad, and health and safety legislation as all-encompassing, bureaucratic and often unnecessary.
Julian Smith
I reciprocate the hon. Gentleman’s remarks. Does he agree with the Government that perception is important in health and safety legislation in almost the same way as in employment law? Does he claim that there is no issue with perception, and does he totally disagree with what the Government are trying to do?
Mr Wright
On perception, there is a feeling in the country—it is often fuelled by the media—that the so-called health and safety culture is inevitably a drag on economic growth and recovery. We must, however, set the context, and I want to make an important point to the Minister. The TUC estimates that every year at least 20,000 people die prematurely as a result of injuries, illnesses, or accidents caused by or in their place of work. That is far too many. The shocking figure from the Health and Safety Executive of 173 workers who were fatally injured at work often excludes a large number of other work-related deaths, but that figure alone means that 173 people went to work and did not come back, and that should not happen in a modern, compassionate society.
Alison Seabeck (Plymouth, Moor View) (Lab)
Does my hon. Friend agree that improvements to the health and safety regime were out there for all to see during the construction of the Olympic site? There were no deaths and few injuries, which was because the health and safety regime had been properly applied.
Mr Wright
I agree with my hon. Friend. In the great and almost universal celebration of the London Olympics this summer, we should never forget that we saw the first Olympic stadium and village in the history of the games to be built without a single fatality. That is something to be proud of and was a result of the good partnership between Government—of all political persuasions—management and trade unions, together with workers, working to ensure that nobody was injured or killed while doing such important work.
Andrew Bridgen
Not only did I serve on the Public Bill Committee for this important Bill, but I served on the Löfstedt review into health and safety reform, as did a representative from the Trades Union Congress, Sarah Veale. I assure the shadow Minister that there was absolute agreement among those on the Löfstedt review, including the TUC, that the perception of health and safety legislation—indeed, over-perception—is wrong in this country, and is holding back business and giving health and safety a bad name. The new clause goes some way in addressing that.
Mr Wright
I will go on to address the Löfstedt report in specific terms, and say where we agree with it and where we disagree, particularly with regard to the new clause, and if the hon. Gentleman will allow me, I will expand on that point. I am conscious that my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), a proud member of the Union of Construction, Allied Trades and Technicians, also wants to intervene, but I will first give way to the hon. Member for Hexham (Guy Opperman).
Guy Opperman
I am most grateful. All hon. Members will support the fact that the Olympics produced a death-free environment during the construction phase. However, changing laws on limited civil issues from strict liability to a balance of proof civil liability would not necessarily have affected or changed that. I hope that the hon. Gentleman will agree with and acknowledge that.
Mr Wright
I understand where the hon. Gentleman is coming from. In his opening remarks, however, the Minister mentioned a degree of concern about perception. Health and safety is first and foremost an important means to achieve safety for the worker, but a safe and healthy work force and workplace can also be efficient and productive. I wish to expand on that point, but I will first give way to my hon. Friend.
Luciana Berger
My hon. Friend is generous in giving way, and I echo his welcome for the fact that there were no deaths during the construction of the Olympic site. However, there were 50 deaths in this country last year on construction sites, and as he said, 173 fatal injuries, which was only two fewer deaths than the previous year, which indicates that we have a long way to go; 173 families have been affected. The Minister spoke of perception, but I am concerned about the reality for the families of those who have tragically died at work.
Mr Wright
My hon. Friend is absolutely right. It is important that the House and the country has 28 April—workers memorial day—as a focus for remembering that people should not go to work and not come back, and that families should not be disrupted by death and injury at work. We need to pull together to ensure that health and safety is considered not as peripheral and a nice thing to have, but as central to our society and a productive economy.
Mr Wright
If the hon. Gentleman will allow me, I will move on.
There are benefits to business from an effective and proportionate health and safety regime. As I mentioned, a safe and healthy work force can be a productive and effective work force. The Institution of Occupational Safety and Health estimates that, by having an effective health and safety regime, employers could save up to £7.8 billion, individuals could save up to £5.12 billion, and the economy, each and every year, could save up to £22.2 billion. It is important that health and safety is classed not as unnecessary and bureaucratic, but as conducive to good, effective and sustainable economic growth.
It is with those figures in mind that we should consider the merits of health and safety regulations and legislation, and the long-established premise of strict liability. As we know and as the Minister said, Professor Löfstedt reported in November last year. My right hon. Friend the Member for East Ham (Stephen Timms), who speaks for the Opposition on health and safety, welcomed many aspects of Löfstedt’s review. As my right hon. Friend said, most of it was positive, sensible and evidence-based, which is not a phrase we have heard often in deliberations on the Bill, and reinforced the view that health and safety is not a burden.
Over a number of years, the Health and Safety Executive has undertaken simplification exercises, which had support from both trade unions and employers. There are 46% fewer regulations than 35 years ago, and there has been a 57% reduction in the number of forms used. There is a perception that firms, and particularly small firms, spend disproportionate time on health and safety to the detriment of business and growth, but the average business spends 20 hours and just over £350 a year on health and safety risk management and assessment, according to the Minister’s Department. Such activities therefore do not exactly take up a huge amount of businesses’ time.
Julian Smith
The shadow Minister might be about to say this, but does what he just said mean he will get on the side of the small business in Britain, as the Government are doing, and vote with them on new clause 14, or will he oppose it?
Mr Wright
The Labour party has always been on the side of small businesses, and Labour Members will continue to be so. In the 13 years of Labour government from 1997 to 2010, 1.2 million businesses were created, whereas 50 businesses each and every day are folding as a result of the current Government’s macro-economic polices and the double-dip recession. I shall therefore take no lessons from the hon. Gentleman.
Professor Löfstedt suggested that the UK needs a greater understanding of risk. We need to reject tabloid claims and the perception at the centre of the debate so far that health and safety legislation has somehow gone too far. He also recommends that education is provided to employers, workers and students on the dangers they face. However, the short section on strict liability in Professor Löfstedt’s report offers no argument or evidence for changing the current legislative arrangements, but rather an assumption that strict liability is unfair on employers. In fact, Löfstedt refers to three cases, but two were not strict liability cases, so would not be affected by the new clause. The assumption that the Government are guilty of making—they have been guilty of making many such assumptions on employment rights—is that the removal of that type of liability in some cases will boost the economy. That is economically illiterate, however, and not the solution that businesses, including small businesses, want to get us out of the double-dip recession that has been made in Downing street.
I mentioned the accusation of there being no evidence—we have heard that phrase time and again during the consideration of the Bill. There has been no consultation on the measure, which means that there could well be unintended consequences, because the Government have not sought the expertise of those who deal intimately with such issues. There has been no impact assessment on the measure, but can the Minister say why not? What are the expected costs and benefits of implementing the measure, which is supposed to liberate businesses to concentrate on economic growth? Does he have tangible, quantifiable, empirical evidence to support such claims?
Health and safety regulation has always contained a balance between different types of obligation—the majority are qualified by the phrase “reasonable practicability”, but some are strict. Although Professor Löfstedt had the insight that “reasonable practicability” has underpinned health and safety regulation, it has never been the key concept. A central point of the Opposition’s argument is that the balance has existed since the Factories Act 1937, which has been mentioned. In that three quarters of a century, the balance has been generally considered fair. Removing it risks taking us back to a 19th-century mill owner’s view of health and safety, which the Opposition could never support.
If someone is injured because of a defect in a piece of equipment provided by their employer, the law is that it is no defence for the employer to say that they had a proper system of maintenance and inspection. Most people would think that right and fair, so it is unfortunate that the Government do not. They believe it is unfair for an employer to be the subject of civil action and pay compensation when they are not at fault, but what about fairness and justice for the injured worker? They are not at fault and did not ask to be injured. The new clause would remove the right to compensation for workers in those circumstances unless they can prove fault. The Government seek to place the burden on vulnerable employees, but the employer, and not the employee, selects and provides the work equipment. Regardless of fault, it is therefore the employer and not the employee who creates the risk. That is important.
Alison Seabeck
Prior to my previous question, I should have declared an indirect interest, which is already on record.
Given the emphasis placed on business concerns by Conservative Members, does my hon. Friend agree that it is slightly surprising that the Federation of Small Businesses briefing to MPs does not mention them? Perhaps that suggests that the line he is taking is the correct one.
Mr Wright
The FSB has been incredibly important throughout the consideration of the Bill, including on the green investment bank and ensuring that the supply chain can derive benefit from the potential in the new green economy, but it did not mention such concerns. The measure is not a priority for business and its absence is not a hindrance to economic growth. The balance, which has been well established for three quarters of a century, works well and will not hinder growth or recovery.
Mr Anderson
In Committee, mention was made of anecdote, a lack of evidence and perceptions, but we have to add a new one, which the Minister led with—impressions. We now have a Government run by impressions, but they are not very good at making impressions.
Mr Wright
The Minister is the Mike Yarwood of the House of Commons. It is nice to see a good, relevant, pertinent and timely reference to popular culture, from my own point of view.
The new clause will do nothing to enhance recovery and enterprise, and might have the unintended consequence of making the health and safety environment less safe and therefore less productive and efficient. I ask the Minister to think again, because this does nothing to aid the recovery that the country so badly needs.
Mr Anderson
The Minister started with his experience in the world of health and safety. My experience is based not only on my life as someone who worked for 20 years in the coal mining industry and then as a care worker but before that on the experience of my father, who worked the coal mines in the 1930s, when, in this country, one coal miner was killed every six hours on average. Think about that. One thousand men a year did not go home, in part because health and safety was a laughing matter and put to one side, because production was all. My father was twice buried alive—thankfully, he got out both times—and had a very close friend die in his arms, having had his head crushed between two mining coal tubs. It was not a satisfactory way to spend your life.
As a result of that history, the Government in 1947 nationalised the coal mines, set up a train of processes that included health and safety committees in the mining industry and joint consultative committees, and started planning for legislation that produced the Mines and Quarries Act 1954. That Act was actually put in place by a one-nation Tory Government, but they did it for the right reasons—to improve the conditions of people who were vital to the economic success of this country. As a result of that legislation and the improved techniques and machinery, the number of people dying in mines in the 1980s could be counted in single figures. The work force was depleted by about 70% between the 1930s and 1980s, but the number of health and safety measures fell from 1,000 to fewer than 10. For me, that history is vital to understanding how important health and safety issues are.
In 1989, I moved from the mines to become a care worker taking care of elderly people. Members might think that that is a completely different scenario, but let us think about it. The Minister gave the example of the bottle of bleach in the cupboard. It is important to know what is in cupboards to which people might well have access, particularly older people who might not have the capacity to understand what they are dealing with. That is why we introduced measures such as the Control of Substances Hazardous to Health Regulations 2002, which were about protecting people dealing with dangerous liquids.
There were issues around the lifting and handling of people who were not mobile. The impact on care businesses was huge. People accepted, however, that if they wanted to do things properly and protect not only the workers but the people they were taking care of, they needed to introduce such measures. There were other issues around medication—how to supply it, how to make it safe, how to make sure it was not given to the wrong person, how to make sure that medication records were kept up to speed—that were all part and parcel of the health and safety measures that we should all be pleased are in place.
The discussions on the Bill have been marked, certainly in Committee, by a lack of real evidence. The man tasked by the Prime Minister with reviewing employment law, Adrian Beecroft, was questioned during the evidence-taking sessions, particularly by my hon. Friend the Member for Vale of Clwyd (Chris Ruane). In response to the question about what the empirical evidence and research was based on, Adrian Beecroft said:
“I accept the accusation that my views on whether the change would improve the efficiency of people working in businesses are based on conversations with a sample of people, which is not statistically valid.”––[Official Report, Enterprise and Regulatory Reform Public Bill Committee, 21 June 2012; c. 145, Q330.]
Matthew Hancock
My hon. Friend makes the point with great power that those who are out of work pay for an uncompetitive economy. They are the people whom we need to support.
Mr Iain Wright
If this is about costs and benefits, why is there not an impact assessment for the new clause?
Matthew Hancock
The benefits are set out clearly in Löfstedt. Most importantly, because it is necessarily difficult to ascertain the amount of over-compliance, Britain’s health and safety system will benefit from being able to compete and focus its resources on avoiding substantive breaches of health and safety law rather than on technicalities and over-compliance. All parties should focus on problems such as death in the workplace due to negligence. The hon. Member for Paisley and North Renewfreshire—[Laughter.] North Renewfershire—
Jo Swinson
New clause 15 amends the definition of “estate agency work”, which determines the application of the Estate Agents Act 1979. This fulfils our commitment to introduce a measure on this issue following our recent targeted consultation, which was developed as part of the disruptive business models/challenger businesses theme of the red tape challenge.
New clause 15 extends a current exemption to that definition of estate agency work. Intermediaries, such as internet portals for private sales, will be out of the scope of the Estate Agents Act if they merely enable private sellers to advertise their properties and provide a means for sellers and buyers to contact and communicate with one another. Such intermediary businesses will therefore not be obliged to comply with requirements that are relevant to full service estate agency businesses, such as the disclosure of any self-interest in a property transaction and membership of a redress scheme for residential estate agents. These private sales businesses are not actively involved in property transactions, but offer a lower-cost alternative of enabling individuals to market their own property and buy and sell privately.
Those intermediary businesses will be able to provide a means for the seller and prospective buyer to contact one another, for example online; to provide a branded for sale board to the seller to assist this process; and to pass on to a prospective buyer solely the information provided by the seller in their advertisement, by whatever channel of communication. If, however, the intermediary offers any personal advice to a seller or a buyer, or other ancillary services, such as preparing property particulars or photographs or an energy performance certificate, the intermediary will be in the scope of the Estate Agents Act and bound by its obligations. The Estate Agents Act will therefore continue to apply to businesses that are involved in or have scope to influence property transactions.
The Government have found uncertainty and a range of views among stakeholders as to the application of the Estate Agents Act to intermediary businesses, particularly online. This is unhelpful to consumers who might wish to use an intermediary, and unhelpful to businesses, whether intermediaries or more traditional estate agents, or those interested in entering the market. Stakeholders are also concerned that consumers should be protected where they rely on a service provider in relation to a transaction as valuable and important as a house sale or purchase. Clearly, for most people it is the highest value and most important purchase they will make. The Estate Agents Act will continue to apply to businesses providing personal advice about a potential sale or other ancillary services.
For those reasons, this is a limited deregulation. It addresses the perceived uncertainty as to the scope of the Estate Agents Act and it brings benefits to consumers and to the industry, but, crucially, it does not unduly reduce consumer protection in relation to services that involve the service provider in the property transaction.
Mr Iain Wright
I thank the Minister for her helpful comments and I have also read her written ministerial statement to the House on this matter from 13 September. As she rightly says, Government new clause 15 updates and extends an exemption to the definition of estate agency work, as set out in the Estate Agents Act 1979. The legislation pre-dated the rise of the internet, and as the Minister rightly said, the world of buying and selling a house has been revolutionised by the internet. Buyers and sellers are now more likely to looking at the likes of Rightmove, Zoopla or PrimeLocation online than to be using a traditional high street estate agent, at least in the early stages of the process.
From the Minister’s comments I understand that some private sales internet portals may be exempt from the Estate Agents Act while others may be within its scope, depending on whether they provide advertising space or allow prospective buyers and sellers to match up via an online messaging board.
The Minister mentioned the Government’s report “Removing Red Tape for Challenger Businesses”. I was struck by a particular comment that is relevant to this part of the Bill. It states:
“Stripped-down business models, offering competitive prices to home buyers and sellers in exchange for limited, online services are caught by current legislation which applies a broad definition to ‘estate agency work’. Once legally categorised in this way, these innovative businesses are tied to regulation which can be disproportionate to the range of services they offer, and which may be inhibiting the growth of this alternative method of house buying and selling.”
The Opposition do not necessarily disagree with the Government’s approach to this, and we would certainly welcome innovation and improved competition to support, first and foremost, the consumer in what is, as the Minister rightly said, probably the biggest and most significant purchase or sale in his or her life, but we do have a number of questions that I hope the Minister will be able to address.
Discussions about amending the Estate Agents Act 1979 go as far back as February 2010, when the Office of Fair Trading reported on its study into home buying and selling. I fully appreciate that the study strongly stated that innovation could have an impact on the cost of buying and selling a home and that the current legislation might be hindering the emergence of new business models, but it also stated that overall satisfaction with estate agents had improved in recent years and that, where there were problems in the process, consumers on the whole did not tend to think that the estate agent was at fault. The OFT found the existing legislation to be both comprehensive and wide-ranging and that further regulation was unnecessary.
I appreciate—I say this before the Minister intervenes—that the amendment is deregulatory in nature, but the OFT report concluded that the focus should be on improving the enforcement of current rules to guard against serious breaches. That being the case, and notwithstanding my earlier, hopefully supportive, comments welcoming the introduction of a greater degree of innovation in the industry, will she go back to first principles and outline the specific benefits that the new clause will produce? What forecast has she made regarding how and in what numbers she anticipates new entrants will come into the market? What estimates has she made regarding cost savings to consumers? Has she been able to quantify the savings to business that such a deregulatory approach would produce?
For a Bill that purports to be all about enterprise, the theme of our deliberations during its passage through the House has been a spectacular lack of evidence to support its provisions, so it would be useful if she could provide some quantifiable and empirical evidence. What consideration has the Minister given to consumer protection in the light of the new clause? Is there a risk that people will not have access to the suitable, robust and—one would hope—impartial advice that could be provided by an estate agent? Has she thought about the potential risks to vulnerable people, particularly the elderly, some of whom might be susceptible to scare tactics and unscrupulous behaviour? What is in place to ensure that those people do not see a reduction in their consumer protection as a result of the new clause?
The Minister might also be aware of concerns raised by the National Association of Estate Agents about a potential breach of the UK’s anti-money laundering regulations as a result of the new clause. Estate agents are covered under the third money laundering directive, which I understand has been implemented in the UK through the Money Laundering Regulations 2007. The Minister referred to those regulations in her written ministerial statement last month, stating that the Terrorism Act 2000 and the Proceeds of Crime Act 2002 incorporate the definition from the Estate Agents Act 1979 in applying particular standards to regulated sectors, which include estate agents. Can she therefore confirm that the new clause will deal with the risk of money laundering? Can she—for my purposes, rather than anybody else’s—clarify that those estate agents who will be taken out of the scope of the 1979 Act because they provide a slimmed down business model will still be seen as a regulated sector for the purposes of money laundering regulations? I hope that she can answer these questions comprehensively, but the Opposition can certainly support one of the things she proposes with regard to injecting a greater degree of innovation into the market and embracing new business models. I look forward to hearing what she has to say.
Jo Swinson
I welcome the hon. Gentleman’s general support for the new clause. He is right to point out that the world has changed since the current legislation on estate agents came into force and that the internet has been absolutely revolutionary in that regard. He mentioned a number of popular and well-known property websites. I just caution him not to conclude that those household names would necessarily be caught by this limited deregulation. That is not the intention of the new clause at all. To put it into perspective, there are currently about 14,000 traditional estate agent offices in the UK—virtually all of them also have an internet presence—but there are fewer than 30 private sales portals in the UK, all of which are small and medium-sized enterprises, so that is quite an undeveloped part of our market. As for how many property sales go through estate agents, in 2000 the figure was 87%, with only 11% sold privately. That compares with other markets where it is rather less than that; for example, in the United States about 20% of sales are undertaken privately.
Mr Iain Wright
The Minister will recall that I mentioned concerns about money laundering. Will she say a few words about that?
Jo Swinson
The companies covered by this deregulation would not be involved in the transaction of money, because if they were they would remain caught by the Estate Agents Act. We therefore do not need to worry about this in relation to making it easier to undertake money laundering. Of course the Government maintain their provisions to try to make sure that they enforce the existing rules against money laundering in an appropriate fashion.
I hope that in the absence of any other questions from Members we will be able to proceed with a fair degree of consensus on this useful, though limited, deregulatory measure.
Question put and agreed to.
New clause 15 accordingly read a Second time, and added to the Bill.
New Clause 9
Listed buildings in England: agreements and orders granting listed building consent
‘(1) The Planning (Listed Buildings and Conservation Areas) Act 1990 is amended as follows.
(2) In Chapter 2 of Part 1, after section 26 insert—
“Buildings in England: heritage partnership agreements
26A Heritage partnership agreements
‘(1) A relevant local planning authority may make an agreement under this section (a “heritage partnership agreement”) with any owner of a listed building, or a part of such a building, situated in England.
(2) Any of the following may also be a party to a heritage partnership agreement in addition to an owner and the relevant local planning authority—
(a) any other relevant local planning authority;
(b) the Secretary of State;
(c) the Commission;
(d) any person who has an interest in the listed building;
(e) any occupier of the listed building;
(f) any person involved in the management of the listed building;
(g) any other person who appears to the relevant local planning authority appropriate as having special knowledge of, or interest in, the listed building, or in buildings of architectural or historic interest more generally.
(3) A heritage partnership agreement may contain provision—
(a) granting listed building consent under section 8(1) in respect of specified works for the alteration or extension of the listed building to which the agreement relates, and
(b) specifying any conditions to which the consent is subject.
(4) The conditions to which listed building consent may be subject under subsection (3)(b) in respect of specified works are those that could be attached to listed building consent in respect of the works if consent were to be granted under section 16.
(5) If a heritage partnership agreement contains provision under subsection (3), nothing in sections 10 to 26 and 28 applies in relation to listed building consent for the specified works, subject to any regulations under section 26B(2)(f).
(6) A heritage partnership agreement may also—
(a) specify or describe works that would or would not, in the view of the parties to the agreement, affect the character of the listed building as a building of special architectural or historic interest;
(b) make provision about the maintenance and preservation of the listed building;
(c) make provision about the carrying out of specified work, or the doing of any specified thing, in relation to the listed building;
(d) provide for public access to the listed building and the provision to the public of associated facilities, information or services;
(e) restrict access to, or use of, the listed building;
(f) prohibit the doing of any specified thing in relation to the listed building;
(g) provide for a relevant public authority to make payments of specified amounts and on specified terms—
(i) for, or towards, the costs of any works provided for under the agreement; or
(ii) in consideration of any restriction, prohibition or obligation accepted by any other party to the agreement.
(7) For the purposes of subsection (6)(g), each of the following, if a party to the agreement, is a relevant public authority—
(a) the Secretary of State;
(b) the Commission;
(c) a relevant local planning authority.
(8) In this section “specified” means specified or described in the heritage partnership agreement.
(9) In this section and section 26B—
“owner”, in relation to a listed building or a part of such a building, means a person who is for the time being —
(a) the estate owner in respect of the fee simple in the building or part; or
(b) entitled to a tenancy of the building or part granted or extended for a term of years certain of which not less than seven years remain unexpired;
“relevant local planning authority”, in relation to a listed building, means a local planning authority in whose area the building or any part of the building is situated.
26B Heritage partnership agreements: supplemental
‘(1) A heritage partnership agreement—
(a) must be in writing;
(b) must make provision for the parties to review its terms at intervals specified in the agreement;
(c) must make provision for its termination and variation;
(d) may relate to more than one listed building or part, provided that in each case a relevant local planning authority and an owner are parties to the agreement; and
(e) may contain incidental and consequential provisions.
(2) The Secretary of State may by regulations make provision—
(a) about any consultation that must take place before heritage partnership agreements are made or varied;
(b) about the publicity that must be given to heritage partnership agreements before or after they are made or varied;
(c) specifying terms that must be included in heritage partnership agreements;
(d) enabling the Secretary of State or any other person specified in the regulations to terminate by order a heritage partnership agreement or any provision of such an agreement;
(e) about the provision that may be included in an order made under regulations under paragraph (d), including provision enabling such orders to contain supplementary, incidental, transitory, transitional or saving provision;
(f) applying or reproducing, with or without modifications, any provision of sections 10 to 26 and 28 for the purposes of heritage partnership agreements;
(g) modifying any other provision of this Act as it applies in relation to heritage partnership agreements.
(3) Regulations made under subsection (2)(a) may, in particular, include provision as to—
(a) the circumstances in which consultation must take place;
(b) the types of listed building in respect of which consultation must take place;
(c) who must carry out the consultation;
(d) who must be consulted (including provision enabling the Commission to direct who is to be consulted in particular cases); and
(e) how the consultation must be carried out.
(4) Listed building consent granted by a heritage partnership agreement (except so far as the agreement or regulations under subsection (2) otherwise provide) enures for the benefit of the building and of all persons for the time being interested in it.
(5) Subject to subsection (4), a heritage partnership agreement cannot impose any obligation or liability, or confer any right, on a person who is not party to the agreement.
(6) Section 84 of the Law of Property Act 1925 (power to discharge or modify restrictive covenant) does not apply to a heritage partnership agreement.”
(3) After section 26B insert—
“Buildings in England: orders granting listed building consent
26C Listed building consent orders
‘(1) The Secretary of State may by order (a “listed building consent order”) grant listed building consent under section 8(1) in respect of works of any description for the alteration or extension of listed buildings of any description in England.
(2) The consent may be granted subject to conditions specified in the order.
(3) Without prejudice to the generality of subsection (2), the conditions that may be specified include any conditions subject to which listed building consent may be granted under section 16.
(4) A listed building consent order may (without prejudice to section 17(2)) give the local planning authority power to require details of works to be approved by them, and may grant consent subject to conditions with respect to—
(a) the making of an application to the authority for a determination as to whether such approval is required, and
(b) the outcome of such an application or the way it is dealt with.
(5) A listed building consent order may enable the Secretary of State or the local planning authority to direct that consent granted by the order does not apply—
(a) to a listed building specified in the direction;
(b) to listed buildings of a description specified in the direction;
(c) to listed buildings in an area specified in the direction.
(6) An order may in particular make provision about the making, coming into force, variation and revocation of such a direction, including provision conferring powers on the Secretary of State in relation to directions by a local planning authority.
(7) Nothing in sections 10 to 26 applies in relation to listed building consent granted by a listed building consent order; but that does not affect the application of sections 20, 21 and 22 in relation to an application for approval required by a condition to which consent is subject.
26D Local listed building consent orders
‘(1) A local planning authority for any area in England may by order (a “local listed building consent order”) grant listed building consent under section 8(1) in respect of works of any description for the alteration or extension of listed buildings.
(2) Regulations under this Act may provide that subsection (1) does not apply to listed buildings of any description or in any area.
(3) The consent granted by a local listed building consent order may relate—
(a) to all listed buildings in the area of the authority or any part of that area;
(b) to listed buildings of any description in that area or any part of that area.
(4) The consent may be granted subject to conditions specified in the order.
(5) Without prejudice to the generality of subsection (4), the conditions that may be specified include any subject to which listed building consent may be granted under section 16.
(6) A local listed building consent order may enable the local planning authority to direct that the consent granted by the order in respect of works of any description does not apply—
(a) to a listed building specified in the direction;
(b) to listed buildings of a description specified in the direction;
(c) to listed buildings in an area specified in the direction.
(7) An order may in particular make provision about the making, coming into force, variation and revocation of such a direction, including provision conferring powers on the Secretary of State.
(8) Nothing in sections 10 to 26 applies in relation to listed building consent granted by a local listed building consent order; but that does not affect the application of sections 20, 21 and 22 in relation to an application for approval required by a condition to which consent is subject.
(9) Schedule 2A makes provision in connection with local listed building consent orders.
26E Powers of Secretary of State in relation to local orders
‘(1) At any time before a local listed building consent order is adopted by a local planning authority the Secretary of State may direct that the order (or any part of it) is not to be adopted without the Secretary of State’s approval.
(2) If the Secretary of State gives a direction under subsection (1)—
(a) the authority must not take any step in connection with the adoption of the order until they have submitted the order or the part to the Secretary of State and the Secretary of State has decided whether to approve it;
(b) the order has no effect unless it (or the part) has been approved by the Secretary of State.
(3) In considering an order or part submitted under subsection (2)(a) the Secretary of State may take account of any matter the Secretary of State thinks relevant.
(4) It is immaterial whether any such matter was taken account of by the local planning authority.
(5) The Secretary of State—
(a) may approve or reject an order or part of an order submitted under subsection (2)(a);
(b) must give reasons for that decision.
(6) The Secretary of State—
(a) may at any time before a local listed building consent order is adopted by the local planning authority, direct them to modify it in accordance with the direction;
(b) must give reasons for any such direction.
(7) The local planning authority—
(a) must comply with a direction under subsection (6);
(b) must not adopt the order unless the Secretary of State gives notice of being satisfied that they have complied with the direction.
(8) The Secretary of State—
(a) may at any time by order revoke a local listed building consent order if of the opinion that it is expedient to do so;
(b) must give reasons for doing so.
(9) The Secretary of State—
(a) must not make an order under subsection (8) without consulting the local planning authority;
(b) if proposing to make such an order, must serve notice on the local planning authority.
(10) A notice under subsection (9)(b) must specify the period (which must not be less than 28 days from the date of its service) within which the authority may require an opportunity of appearing before and being heard by a person appointed by the Secretary of State for the purpose.
(11) The Secretary of State must give the authority such an opportunity if they require it within the period specified in the notice.
26F Considerations in making orders
‘(1) In considering whether to make a listed building consent order or local listed building consent order the Secretary of State or local planning authority must have special regard to the desirability of preserving—
(a) listed buildings of a description to which the order applies,
(b) their setting, or
(c) any features of special architectural or historic interest which they possess.
(2) Before making a listed building consent order the Secretary of State must consult the Commission.
26G Effect of revision or revocation of order on incomplete works
‘(1) A listed building consent order or local listed building consent order may include provision permitting the completion of works if—
(a) listed building consent is granted by the order in respect of the works, and
(b) the listed building consent is withdrawn after the works are started but before they are completed.
(2) Listed building consent granted by an order is withdrawn—
(a) if the order is revoked;
(b) if the order is varied or (in the case of a local listed building consent order) revised so that it ceases to grant listed building consent in respect of the works or materially changes any condition or limitation to which the grant of listed building consent is subject;
(c) if a direction applying to the listed building is issued under powers conferred under section 26C(5) or 26D(6).”
(4) After section 28 insert—
“28A Compensation where consent formerly granted by order is granted conditionally or refused
(1) Section 28 also has effect (subject to subsections (2) and (3)) where—
(a) listed building consent granted by a listed building consent order or a local listed building consent order is withdrawn (whether by the revocation or amendment of the order or by the issue of a direction), and
(b) on an application for listed building consent made within the prescribed period after the withdrawal, consent for works formerly authorised by the order is refused or is granted subject to conditions other than those imposed by the order.
(2) Section 28 does not have effect by virtue of subsection (1) if—
(a) the works authorised by the order were started before the withdrawal, and
(b) the order included provision in pursuance of section 26G permitting the works to be completed after the withdrawal.
(3) Section 28 does not have effect by virtue of subsection (1) if—
(a) notice of the withdrawal was published in the prescribed manner and within the prescribed period before the withdrawal, and
(b) the works authorised by the order were not started before the notice was published.
(4) Where section 28 has effect by virtue of subsection (1), references in section 28(2) and (3) to the revocation or modification of listed building consent are references to the withdrawal of the listed building consent by revocation or amendment of the order or by issue of the direction.”
(5) Schedule [Local listed building consent orders: procedure] (which inserts Schedule 2A to the Planning (Listed Buildings and Conservation Areas) Act 1990) has effect.’.—(Matthew Hancock.)
Brought up, and read the First time.
Matthew Hancock
I shall speak to new clause 9 and new schedule 1 in the first instance. Those provisions are intended to improve the effectiveness of the listed building consent regime and they follow the Penfold review of non-planning consents. They introduce a new system of national and local class consents, and received broad support during consultation. The new system is designed to reduce the number of listed building consent applications for works that have neither a harmful nor significant impact on a building’s special interest. It will be possible to grant consent automatically for certain categories of work or buildings—where the extent of the special interest is well understood—without the need to make an additional application. Thus, the new provisions will protect listed buildings. I, like many others in this House, have a special adoration for the heritage of our listed buildings in this country, not least the one in which we are standing. Our approach will also improve the operation of the regime. [Interruption.] I suppose that I should declare an interest, although it is not the one that the hon. Member for Hartlepool (Mr Wright) thinks; I work in a wonderful listed building and I want to ensure that it is protected.
The changes will also reduce burdens on applicants and free up local planning authority resources to focus on the listed building consent applications that really matter. The Secretary of State will be required to consult English Heritage before making a national order and will be able to apply conditions to consent granted by an order, as with listed building consent at the moment. Both the Secretary of State and any local planning authority will be able to direct that an order does not apply to a specified building, or to buildings of a specified type or in a specified area. The Secretary of State will have the power, at any time, to revoke a listed building consent order, having first served notice on the local planning authority and given it an opportunity to make representations.
The Secretary of State or the local planning authority must have special regard to the desirability of preserving the listed buildings to which the order applies, as well as their setting and any features of special architectural or historic merit that might be affected. We envisage that the processes leading to a class consent will involve the same level of public notice, engagement and consultation as applies to listed building consent currently. These provisions will reduce regulatory burdens without diminishing protection for important heritage sites and buildings. New clause 9 also restates, with minor technical changes in some of the consequential Government amendments, provisions on heritage partnership agreements which were already in the Bill.
New clause 10 introduces a new certificate of lawfulness of proposed works to listed buildings, which will provide certainty to owners and developers of listed buildings—this proposal also received support during consultation. Works to a listed building that do not affect its character as a building of special architectural or historic interest do not require listed building consent. However, interpretations of whether or not consent is needed can vary, and local planning authorities are often reluctant to give a view because it is ultimately a matter for the courts to determine. That means that those seeking to make changes to listed buildings are sometimes required to submit a formal application for listed building consent in order to gain certainty as to whether or not proposed works would affect the special interest. We hope that certificates of lawfulness of proposed works will provide a simple, straightforward mechanism for owners and developers of listed buildings to gain the certainty they require, while reducing the number of unnecessary consent applications. I therefore trust, not least given the widespread support we had in the consultation, that hon. Members will support these new provisions, and I commend them to the House.
Mr Iain Wright
As I mentioned during the Committee stage, we have no issue with some of the Government’s provisions for heritage planning. Indeed, when we were in government we prepared something similar, in the guise of the Heritage Protection Bill. I am on the record as saying that the merging of conservation area consent and planning permission is sensible and helps us to streamline the process so that it is efficient for the benefit of all concerned. I reiterate the point that I made in Committee that Opposition Members recognise the merits of heritage planning agreements. They have the potential to provide greater efficiency and time savings in the planning process while ensuring, as the Minister has rightly said, that our listed buildings are safeguarded for future generations.
The new clauses, however, raise a number of questions about the Government’s approach. The Department for Culture, Media and Sport document “Improving Listed Building Consent” had a consultation period of only four weeks—from 26 July to 23 August. The Heritage Alliance rightly raised significant concerns that that was insufficient and I agree with its written submission to the consultation:
“One month is an extremely short period of time in which to co-ordinate the responses of third sector and voluntary organisations, many of whom meet monthly or quarterly, and may not have an August meeting because of the holiday break. A consultation period over the summer break, which includes the Olympic Games, should be longer not shorter, because potential respondents are on holiday and/or their decision-making bodies do not meet in August.”
Will the Minister directly address that point? Why was the consultation period curtailed, especially when it involved a Department that had geared itself up for the Olympics, which were taking place at that time?
John Penrose
Perhaps I can provide some clarity, as I was the Minister involved at the time. The simple answer is that we were struggling as a team to get everything ready in time—it was a very compressed time scale—and, as the hon. Gentleman has pointed out, many of the issues had already been discussed extensively and consulted on throughout the heritage sector as a result of the previous Government’s Heritage Protection Bill. Many of the arguments had already been discussed extensively in public and informally, so we thought it was possible to do it in a short period, particularly because, if we did not do it that fast, we would not be here today getting this Bill on the statute book—subject, of course, to the will of the House.
Mr Wright
I am grateful for the hon. Gentleman’s insider knowledge of the deliberations. There could have been further legislative opportunities. The essential point is that the consultation period was short and in August, at a time when the world was focused on the Olympic games, so not everyone’s views were reflected, as would normally happen. It was contrary to the Cabinet Office’s suggestion of a 12-week consultation period. Notwithstanding the fact that we agree with much of what has been said, we could have had a more considered approach so that people felt they had had their say.
John Penrose
I should also mention that we had extensive discussions with representatives from many interested groups, such as the Heritage Alliance, and were able to reassure them in face-to-face meetings that their concerns had been understood and that their substantive worries or issues were being incorporated. At that point, I think that the Heritage Alliance was reassured, compared with its starting position in the original submission, which the hon. Gentleman has read out.
Mr Wright
Again, I am grateful to the Minister for his intervention. [Interruption.] I apologise—the hon. Gentleman is a former Minister, but it can only be a matter of time before he is made a Minister again. I am grateful for his useful perspective.
In new clause 9, proposed new section 26C(4) to the Planning (Listed Buildings and Conservation Areas) Act 1990 means that, when conditions are imposed, the listed building consent order may provide that the requirement to have prior approval for works ceases to apply if the local planning authority or the Secretary of State fails to notify the decision within a prescribed period. That seems to be a reasonable approach, with the onus on the relevant authority. However, such heritage provisions raise questions about resources and the capacity to deliver those objectives. Given the cuts and staff reductions in local authorities, the pressures on all services and the fact that local authorities are rightly having to prioritise differently, what work can the Minister do, perhaps with his counterparts at the DCMS and the DCLG to ensure that local planning authorities can prioritise this matter sufficiently?
Oral Answers to Questions
Iain Wright Excerpts(11 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Michael Gove
I am proud of the success of academies and free schools, but they are not the only thing that the Government are doing; we are also making sure that we improve inspection, teacher recruitment, the curriculum and examinations. As for playing fields, we have ensured that the rules have changed so that they are better protected under this Government than they were under the last one.
Mr Iain Wright (Hartlepool) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Education (Michael Gove)
It is a pleasure to announce that 55 new free schools are opening this year. They will provide young people across the country with a high standard of education and the facilities that they deserve. I am delighted that we are building on the good work of Labour reformers such as Lord Adonis in bringing forward the programme.
Mr Wright
How on earth can it be fair that pupils in Dyke House and High Tunstall in my constituency, as well as those in other constituencies, could obtain the same mark in the same subject from the same examining body in the same year and yet get different grades? What urgent work is the Secretary of State doing to ensure that pupils affected are not disadvantaged and that they will be able to take up the college place or apprenticeship course of their choice?
Michael Gove
The hon. Gentleman has been a highly effective Minister in his turn and he knows how important it is, when dealing with questions of examinations, to ensure that there is consistency over time. He will also be aware that Ofqual, the regulator, is the appropriate body to look into these matters. It published an interim report last Friday, which I hope he has had the chance to read. He will be aware that Ofqual is doing more work this week and will be talking not just to teachers’ representatives but to all interested parties. I hope that he will make a submission to Ofqual.
The hon. Gentleman will also know, as a former Minister, that Ofqual is accountable to Parliament and not to Ministers. That means that if there are further questions to be asked of Ofqual beyond those that I and other Ministers are asking, it may be appropriate for the House to ask those questions, through the Select Committee or other means.