Oral Answers to Questions

Jenny Willott Excerpts

Thursday 1st May 2014 Commons Chamber

[Simon Wright (Norwich South) (LD)]

4. What steps he is taking to reduce homophobic, biphobic and transphobic bullying in schools.

[The Parliamentary Under-Secretary of State for Women and Equalities (Jenny Willott)]

This Government are committed to tackling all forms of bullying in schools, and have provided advice to schools on how to tackle this harmful behaviour. However, we know that homophobic, biphobic and transphobic bullying persists and we have therefore recently awarded the contract for a new project to identify the best ways to help drive out this type of bullying.

[Simon Wright]

I am pleased that the Government have this week announced the contract for the review of evidence of what works in tackling such bullying. Can the Minister explain how she expects the outcome of this work to be taken forward and how the findings will be made available to schools in a way that will easily and practically help to inform their approach?

[Jenny Willott]

I welcome my hon. Friend’s support for this important project. This type of bullying is completely unacceptable. It must be addressed and we must learn the best way to do that. NatCen Social Research, to whom the contract has been awarded, has already started looking at the evidence for the most effective measures to tackle such bullying. It will report in the summer and we will use its report to develop and pilot interventions in schools. The learning from those pilots will be consolidated into a single package of guidance on what works, so that we can share that experience widely across all schools. That will help to ensure that the outcomes of the project live beyond the funding that is available and that they are embedded in future support for schools.

[Chris Bryant (Rhondda) (Lab)]

What message does it send to those tackling homophobic bullying in this country that this country has a garrison in Brunei, which has just introduced the death penalty—stoning—for homosexuals?

[Jenny Willott]

That is clearly a worrying issue, which I am happy to raise with my colleagues in the Foreign and Commonwealth Office and the Ministry of Defence, as appropriate.

[Philip Davies (Shipley) (Con)]

Clearly, any kind of homophobic bullying is completely unacceptable in schools or anywhere else. I just wonder whether the Department has a hierarchy of bullying—whether it considers homophobic, biphobic or transphobic bullying to be more serious than other forms of bullying, or whether it considers all forms of bullying to be equally important.

[Jenny Willott]

Clearly, bullying is bullying, regardless of the intent behind it. All forms of bullying need to be tackled in schools and stamped out. It has a hugely detrimental impact on the ability of children to enjoy school and on their achievements and their grades at the end of it. In 2012 this Government introduced the requirement that when inspecting schools, Ofsted should consider how the school tackles bullying. That is now considered part of Ofsted’s inspection, to make sure that schools are tackling all forms of bullying, regardless of the intent behind it.

[Helen Goodman (Bishop Auckland) (Lab)]

5. What steps she is taking to support older women’s employment.

[The Parliamentary Under-Secretary of State for Women and Equalities (Jenny Willott)]

Jobcentre Plus uses a range of innovative approaches to help older claimants. Local schemes include IT support aimed specifically at older people, dedicated advisers for those aged over 50, and help to convert dated qualifications into certifications that are relevant for modern employers. Overall female inactivity is now at a record low.

[Helen Goodman]

I am rather surprised by the Minister’s response, given that unemployment among older women has rocketed by more than 40% and the Work programme has failed more than 90% of women aged over 50. Her response was complacent. What more is she going to do?

[Jenny Willott]

I am disappointed by the hon. Lady’s question. More than 3.5 million women aged over 50 are in employment, which is more than 63% of that age group. Across the UK more women are in work than ever before. There has been additional support for older women. One example of the support that jobcentres are providing that has made a real difference is the new employment allowance that helps people to set up their own business. Nearly a quarter of those who have set up businesses using that allowance are over the age of 50 and it is proving particularly popular.

[Lorely Burt (Solihull) (LD)]

Women are revered in many societies for their knowledge and wisdom, but the first thing that comes up in a Google search for “employing older women” is toyboywarehouse.com. In America, women will not stand for invisibility or marginalisation and have created OWL—the Older Women’s League—to fight for older women in public policy and the workplace. Does my hon. Friend believe that we should do the same in the UK?

[Jenny Willott]

The Government are in the process of appointing a business champion for older workers, and an announcement will be made in the next couple of months. That person will have a responsibility to ensure that older workers—in particular women, as the proposal came out of the recommendations of the Women’s Business Council—are taken more seriously by employers and have their skills and experience recognised. This may well be an issue that the champion would like to take up.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

The Minister mentioned the older workers business champion, but that was promised over a year ago following a recommendation from the Women’s Business Council. Why have we had to wait for more than a year? The Minister said that the Government are looking at appointing such a champion, but is the year’s delay a result of older women not being a priority?

[Jenny Willott]

The Women’s Business Council made a wide range of important recommendations on how women interact in the economy from school age to leaving the work force, and the Government have been working carefully to ensure that we implement as many of them as possible. That element is now in track. The older workers business champion will be appointed shortly, and I hope that we will then see the next part of the process taken forward.

Transparency and Public Trust in Business

Jenny Willott Excerpts

Tuesday 8th April 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I congratulate the hon. Member for Wigan (Lisa Nandy) on securing this very important debate. I completely agree with her about the importance of getting this issue right. As she said, it has very wide repercussions not just in the UK, but in communities across the world. British companies work in so many countries. It is critical to get it right here, because it may have such broad repercussions on thousands, ten of thousands or hundreds of thousands of people. This important subject is not debated enough in the House, so I congratulate her on securing the debate today.

Business should be, and often is, a force for good in society. However, as the hon. Lady highlighted, the financial crisis a few years ago revealed severe shortcomings in corporate governance and caused widespread and understandable loss of trust for many people in relation to not only the financial sector, but business more generally, and we need to tackle that. At the same time, there was a realisation that companies had grown so powerful that their activities could have an impact on even the largest economies. The development of such a situation was a real wake-up call to many Governments.

Among the lessons that we have learned from the financial crisis, I want to highlight three areas on which the Government are taking action, and which relate to the points emphasised by the hon. Lady—greater transparency, accountability to both shareholders and wider society, and businesses and shareholders taking responsibility for the impact of their actions.

Mandatory reporting requirements are the key lever that the Government use to increase transparency. At its best, the narrative section of a company’s annual report allows investors to make informed choices through a proper understanding of the company’s strategy, the risks that it faces and its long-term sustainability. There is also the wider public interest to consider. As I have said, companies can have a significant impact on communities and the natural environment in which they operate. Requiring businesses to report fully and openly is therefore the first essential step towards social responsibility and accountability.

As the hon. Lady highlighted, shareholders have responsibilities as well as rights. As owners of a company, they have a duty to understand its operations and hold the board accountable, which is a very important role for them to play in our economy. That is especially the case for investment companies that place funds on behalf of savers and pensioners who are not in a position to exercise their ownership rights directly. They can be incredibly powerful in their role in influencing the direction of the company and how it operates.

The Government are not just talking about transparency but have taken action to ensure that we see greater transparency. Last October, the Government’s new reporting reforms came into force, increasing the transparency and quality of disclosure by both listed and private companies. The new reporting framework requires companies to set out clearly in their new strategic report how they operate, where they are heading and how they are managing risk.

In addition, we introduced important new reporting requirements in three areas related to the issues that the hon. Lady highlighted. On the environment, companies are now required to report on their greenhouse gas emissions and other environmental impacts. On gender balance, they now need to state the number of men and women on their board, in their senior management team and in the work force as a whole. I know that she has an interest in that issue. Finally, they need to report on human rights issues, which were at the heart of some of the examples that she gave.

[Martin Horwood (Cheltenham) (LD)]

I commend my hon. Friend on the work that she and her team are doing in the Department. One point that the hon. Member for Wigan (Lisa Nandy) rightly made was that there are still voluntary arrangements in place on human rights and the environment in the supply chain. As the hon. Lady said, the risk of voluntary arrangements is that the best companies comply but those that we want to do better are allowed to get away with competing unfairly with those pursuing best practice.

[Jenny Willott]

I reassure my hon. Friend that the UK’s requirements already go beyond a lot of the voluntary principles that have been in place. We have agreed in the EU stronger mandatory reporting requirements for large companies to disclose their policies in a number of areas, including in their supply chain, which my hon. Friend highlighted and in which I know the hon. Member for Wigan is interested. That is a huge step in enhancing transparency, and for many member states of the EU it is the first time that they have had such broad requirements. The UK has traditionally been further ahead in mandatory requirements on businesses. I personally feel strongly about the issue, and it was one of the first that I raised in the Department when I took on my role. I will come in a minute, if my hon. Friend the Member for Cheltenham (Martin Horwood) will bear with me, to some of the reasons why I believe there is a driver in the UK economy for businesses to act voluntarily.

The requirement to report on human rights issues is in line with the Government’s implementation of the UN guiding principles on business and human rights, which the hon. Lady highlighted. The first annual reports under the new requirements are just being published, and early signs are encouraging. I am proud that, as I have just said, the UK is leading the way in high-quality company reporting, which will really make a difference. For example, the clothes retailer H&M now not only publishes a list of all its suppliers but sets out the standards and codes of practice that it expects them to meet. Marks and Spencer uses a social enterprise technology provider, Good World Solutions, to gather feedback directly from 22,500 workers in its clothing supply chain in India, Sri Lanka and Bangladesh, ensuring that they can raise concerns without fear of reprisals or discrimination. There are companies in the UK that are doing a significant amount to tackle some of the problems that exist.

As I highlighted to my hon. Friend, we have been negotiating with our EU partners on a related proposal to improve companies’ reporting in general. The EU non-financial reporting proposals have now largely been negotiated and broadly mirror our own regulations, and I hope that they will be adopted before the European parliamentary elections in May. They will start to drive behaviour change in the EU more generally, which will provide more of a common platform for companies operating in the EU. British domestic regulations led the way and have given our companies and shareholders a head start.

[Lisa Nandy]

As the hon. Member for Cheltenham (Martin Horwood) said, the problem is that although some companies are leading the way, there are also companies that, frankly, are not paying this the blindest bit of notice. Will the Department commit to monitoring the impact of those tougher regulations to see whether they produce the results that we seek, not for those companies that are already doing it but for those that are not?

[Jenny Willott]

Absolutely. We have the firm basis of mandatory requirements because it is important that companies provide such information. I have mentioned the measures that impose compulsory requirements and, as the hon. Lady said, it is extremely important that those measures are enforced and monitored. However, we cannot change business culture through legislation alone, which is one reason why I actively encourage businesses to go beyond the regulatory requirements and consider what more they can and should be doing.

The hon. Lady highlighted that there is real consumer demand for this approach. There is increasing awareness of the power of the money that we spend in shops and on services, and of the broader impact that that spending can have across the world. Consumers have the power to influence company behaviour. People choose not to purchase clothes that they believe to have been made in a sweatshop and instead spend a bit more money somewhere else, which drives company behaviour too.

The voluntary approach is also important. Last year, we carried out a consultation to assess what Government, business and others should and could do to realise the full benefits of good corporate responsibility. One of the key findings from that consultation was that businesses increasingly see corporate responsibility as a source of competitive advantage because consumers are driving that behaviour. Businesses see corporate responsibility as essential to managing long-term success, which is positive.

Initial reporting of performance was limited, being produced by just a few pioneering companies, but that has now been replaced by more substantial reports with clearer business relevance. There has been huge growth in the number of organisations that are reporting and taking responsibility for the impact of their activities. There is a balance to be struck between ensuring that we have a solid baseline of mandatory reporting with which all companies must comply and encouraging businesses that want to go further. It is good that businesses see reporting as a competitive advantage and that there is a strong business case for reporting because it encourages more businesses to act in that way. Progress has also been driven by the work of international organisations such as the OECD and its guidance for multinational enterprises.

The hon. Lady talked about the business and human rights action plan, and the importance of business impacts on human rights is increasingly recognised, not least through the action plan. As she said, the UK is the first country to publish an implementation plan for the UN guiding principles in this area. The Foreign and Commonwealth Office and the Department for Business, Innovation and Skills are working together to deliver that implementation plan, and I reassure her that BIS is completely committed to the plan and is working closely with the FCO to ensure that we deliver. The implementation plan is important to me and to the Department, and in it we encourage UK companies to adopt due diligence policies to identify, prevent and mitigate risks to human rights, to understand the full extent of their supply chains in the UK and overseas, and to emphasise to businesses the importance of behaviour in their supply chains that is in line with the guiding principles to ensure that we see progress throughout the supply chain.

Supply chain relationships are just one example of where businesses can take positive action that will have a greater impact than UK or even EU regulations. The hon. Lady highlighted how badly things can go wrong with the absolutely shocking example of the Rana Plaza fire. The British public’s awareness of the importance of such action has increased. The business and human rights action plan provides a framework for businesses to engage with their supply chains overseas, and it equips UK companies to give their suppliers both the information they need and the commercial incentive to act in accordance with UN guiding principles, which is important for driving behaviour.

I am proud of the Government’s record on transparency. The UK company reporting framework is proving to be an example to others. When the EU non-financial reporting proposal is finally adopted, we will implement it to improve company reporting still further. Those reforms will need time to prove their worth. We will continue to engage with businesses and civil society in the debate on transparency and reporting, so that we continue to anticipate events rather than react to them. At the same time, we will continue to work with businesses that choose to go beyond regulatory requirements in taking responsibility for the wider impact of their actions, including the activities of their supply chains.

[Lisa Nandy]

Before the Minister finishes, will she commit to look at export credits? If she cannot answer now, I will be more than happy if she writes to me later.

[Jenny Willott]

I am happy to write to the hon. Lady on export credits.

I agree with the hon. Lady on access to justice. That is a key plank of the Foreign and Commonwealth Office and Department for Business, Innovation and Skills action plan on human rights. We support access to an effective remedy for victims of human rights abuses involving business enterprises within UK jurisdiction—that is the wording. We are working with the FCO and will report on progress by the autumn. That is an important element of the action plan.

I have asked businesses, business organisations such as the CBI and the British Retail Consortium, and Which?, Business in the Community and other non-governmental organisations and consumer groups to work with BIS to make it easier for businesses to do more and go further, as the hon. Lady highlighted. Together, we will consider what further steps will enable UK businesses to engage with their global supply chains, act on human rights issues and report on the action they are taking to make it more transparent.

The Government remain fully engaged—I hope the hon. Lady is reassured by my commitments this evening—and will continue to take action. I look forward to updating the House on progress later this year.

Question put and agreed to.

Intellectual Property Office

Jenny Willott Excerpts

Tuesday 1st April 2014 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills, Viscount Younger, has today made the following statement:

As an Executive agency and trading fund of the Department for Business, Innovation and Skills, we set targets which are agreed by Ministers and laid before Parliament. For 2014-15 our targets are:

Deliver the infrastructure and supporting regulations required for the UK’s orphan works and extended collective licensing schemes by the end of the year;

Offer faster handling of patent applications, by providing an examination report with a search report when both are requested at the application date, and meeting at least 90% of requests for an accelerated two-month turnaround for search, publication and examination;

Publish 80% of acceptable applications for national trade marks for opposition within 90 days of filing:

Ensure customer satisfaction is at least 80%;

With our partners, the Office for Harmonization in the Internal Market (OHIM) and the European Commission, deliver an international enforcement summit that provides an effective forum for the discussion and debate of intellectual property (IP) enforcement globally, and attracts an international audience, by summer 2014;

Reach an audience of 5 million people with messages to build respect for IP by the end of March 2015;

Reach an audience of 10,000 businesses through our online tool “IP for Business” by the end of March 2015;

Ensure 95% of our managers have completed a management development activity by the end of March 2015;

Achieve a 4% return on capital employed (ROCE);

Deliver an efficiency gain of 3.5%.

These targets reflect the purpose of the Intellectual Property Office, which is to promote innovation by providing a clear, accessible and widely understood IP system.

Insolvency Service Performance Targets

Jenny Willott Excerpts

Thursday 27th March 2014 Written Statements

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I have set performance targets for the Insolvency Service for the coming financial year, 2014-15.

In recent years there has been a significant fall in the number of new insolvency cases dealt with by the official receiver, from 78,000 cases in 2009-10 to a level of around 27,000 in 2013-14, with the expectation that this will fall further in 2014-15. The number of redundancy claims handled by the Insolvency Service has also dropped from a peak of 117,000 to 75,000 in the current year.

The Insolvency Service has reduced its cost base significantly to reflect reducing demand, including reducing its work force from 3,200 people to fewer than 1,900 and reducing the number of offices from 36 to 32. Such reductions will continue in 2014-15 as the agency continues to respond to a declining level of work.

In 2014-15 an important priority for the Insolvency Service will be to maintain its current high level of customer service during this period of major change. I have set targets at a level which reflects the challenges the agency continues to face.

The Insolvency Service annual plan 2014-15 will be available from 2 April 2014 at: http://www.bis.gov.uk/insolvency/About-us. This plan builds on achievements to date and the direction of travel agreed in 2012. It continues the agency’s focus on actions that support its long-term resilience: an enhanced profile and external relationships, an improved funding model, better delivery tools and investment in people capability.

Safety of Electrical Appliances

Jenny Willott Excerpts

Monday 24th March 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I apologise for my voice being about an octave lower than normal: it is part of the tribulations of having small children who breed germs.

I congratulate the hon. Member for Batley and Spen (Mike Wood) on choosing this subject for debate: it is a very important issue. As he said, it is an important consumer issue, and I am replying to the debate as the consumer affairs Minister. The specific case that he raises clearly illustrates how serious it can be when things go wrong, and shows how important it is to get this area right. We all want to ensure that the electrical appliances that people buy in the UK are safe, and that people know they can trust what they are buying. The evidence shows that modern appliances from reputable sources are inherently safe, and they are much safer than older appliances.

As the hon. Gentleman said, for the more than 26 million households in the UK the fire statistics for the latest year available show that there were 21 fatalities related to electrical appliances and cables. It is a small number, but clearly each case is a tragedy and we cannot be complacent. We need to make sure that we reduce the fatality rate further.

The hon. Gentleman highlighted the Consumer Rights Bill, and we had a lengthy debate on this issue in Committee. It was a very interesting debate, and the hon. Member for Foyle (Mark Durkan), who is in his place, tabled a new clause on the subject, so it is an issue that has been considered quite recently. I know it is of interest to a number of Members across the House, including the two Members from Northern Ireland who are in their place, the hon. Members for Foyle and for Strangford (Jim Shannon).

The way people buy electrical products is changing, and this was debated during the passage of the Consumer Rights Bill. Traditionally, people bought electrical goods by going into physical shops on the high street. Consumers were able to look at the products, see clearly what was being offered and ask questions of the retailer to assure themselves that the product was what they needed. They were more likely to know the sort of shop it was, the price and whether they could trust the retailer. That is a very different market from the one that is emerging.

The wider use of the internet has meant that distant selling has become more common, and that brings a number of issues with it. Many reputable manufacturers and retailers supply products online—I am sure many of us have purchased items in this way—but consumers can end up buying products from less reputable suppliers who deal in products that are sometimes of poor quality and unsafe and which perform badly. Such suppliers can use the internet to avoid their liabilities and responsibilities to customers. Customers are often not as well informed about the products they are purchasing, or about the person from whom they are buying, as they are when they go into a physical shop. As a result, the relationship between consumers and retailers has changed over the years.

In a very small number of cases, manufacturers will identify problems with the appliance after it has been sold and there will be a product recall—or, more correctly, a “corrective action”. Manufacturers, including importers, and distributors, such as retailers, have a duty in consumer protection legislation to ensure that the products they place on the market are safe, but corrective action is sometimes needed to remove a risk that has been identified. This includes a range of options depending on the issue, such as providing customer information and, as a last resort, recalling a product. This is complex and often very expensive.

The majority of industry recalls are undertaken voluntarily by manufacturers, as the hon. Gentleman said, because they are keen to avoid or minimise damage to their brand and to make sure that they put something right—they rely on the trust of consumers for their brand to be successful. There is a comprehensive legislative framework in place for product recalls, which is underpinned by guidance. There is also comprehensive best practice at both UK and EU level. Consumer protection legislation requires manufacturers to have a process in place to identify problems that consumers experience, so they have a feedback system. If a manufacturer of a consumer product becomes aware that it has placed an unsafe product on the market, they are obliged to tell the market surveillance authority, including trading standards, so they do have that responsibility.

Contrary to what the hon. Gentleman suggested, trading standards can insist on a recall. They have the power to ensure that a recall takes place under the general product safety regulations. This power is rarely needed as manufacturers usually do the right thing and set up a recall voluntarily, but trading standards can enforce one if they believe it is necessary. Recalls are often complex. As the hon. Gentleman highlighted, the biggest problem facing manufacturers and retailers is that it can be very difficult to trace customers. Customers often do not provide contact details when they buy a product. The difference between cars and electrical goods is that the owners of cars are in a big database and it is very easy to trace them. People are generally more loth to hand over all their contact details to the manufacturer when they are buying a toaster, so it can be much more difficult to trace them.

Consumers have the option of providing their details via warranty cards, generally for large appliances. There are, however, all sorts of reasons why they do not do so and the hon. Gentleman highlighted many of them. For many smaller items, the option is not generally available. Even if the consumer did complete the warranty card, he or she may have moved house, or changed his or her contact details for some other reason. Products are often a number of years old when the recall takes place, and contact details will have often have changed because of that. The consumer may even have disposed of the appliance by giving it away, scrapping it or selling it, and that makes recalls extremely tricky, because it is difficult to establish where products are.

I think that, in general, the legislative framework is effective and appropriate. Strict consumer protection legislation requires electrical products that are supplied to be safe, and there is legislation that places a civil liability on suppliers of appliances and producers in the event of any injury, death or damage to property. There is also legislation prohibiting misleading or untrue statements by those selling products, which covers consumers who are buying products through distance selling—over the internet, for example. So the legislation is there, but, as the hon. Gentleman emphasised, the implementation is all-important.

The Government are trying to improve market surveillance. We have funded projects to improve surveillance at United Kingdom ports with the aim of detecting non-compliant and counterfeit products, and reducing the number of such products that come into the UK. We are also trying to improve the sharing of information between authorities, and have launched a product safety focus group. We are encouraging the use of intelligence from the fire services, which are often an extremely important source of information that others do not have. Until fairly recently, we were not making very good use of that information. Through the Department for Business, Innovation and Skills, the UK is working in Europe to improve the sharing of information between the authorities in different countries. As more and more people buy and sell products across borders, particularly in Europe, we want to ensure that that information is shared as well.

[Jim Shannon]

Will the Minister say something about the role of the electrical contractors who supply the appliances and have to conform to the law?

[Jenny Willott]

In the case of appliances that are manufactured in the UK, the responsibility lies with either the manufacturer or the trader. In the case of appliances that are imported, the importer is liable for ensuring that they are in compliance with British law. All products that are sold in the UK must conform to British safety regulations. Traders are then responsible for ensuring that the goods that they sell to consumers are appropriate and safe, and comply with those regulations. It is clear that consumers will be protected by a number of different pieces of legislation so that they cannot fall into any gaps.

We are working with the Association of Manufacturers of Domestic Electrical Appliances on an industry initiative to encourage consumers to register their appliances, because the number of people who respond to recalls is extremely low. If more people register their appliances and ensure that the details are up to date, the recalls will be more effective. The leading appliance manufacturers—there is a great deal of money behind many of the big manufacturers—are trying to encourage product registration, and have committed themselves to using the power of their marketing programmes to show consumers why it is worth registering their domestic appliances.

I hope that that will debunk some of the myths identified by the hon. Member for Strangford. Many people think that they will end up on some junk mail list and be sent a load of stuff that they do not want after handing over their contact details, and do not complete the warranty forms because they do not understand why the information needs to be held. It was quite illuminating during the Committee stage of the Consumer Rights Bill to hear a number of Members say “I had no idea that that was why we were asked to fill in those cards.” If we can make people understand why it is important to provide the information, more of them will do so, and recalls will become much more effective. We are working with the manufacturers and also with trading standards and the fire service, and with consumer groups, too, because they have a very important role to play in helping consumers understand why this is important and worth doing.

This is a very important area. Although 21 deaths is quite a low number, every one of them is a tragedy and it is still far too many. As the hon. Member for Batley and Spen highlighted, as well as those tragic deaths there are also injuries and significant damage to property. We want to try to reduce that as much as possible.

I believe that the legislative framework is right, and we are working very closely with enforcers, consumer groups, the fire service, manufacturers and retailers to try to ensure we share best practice, tighten up enforcement to make sure that is effective, and in the long run make corrective action, including recalls, more effective, so that we can reduce the number of tragedies and consumers are properly protected under the law.

Question put and agreed to.

Newspaper Supply Chain

Jenny Willott Excerpts

Wednesday 19th March 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

Thank you very much, Mr Dobbin—from one subject to another.

I commend my hon. Friend the Member for Witham (Priti Patel) for securing this debate on such an important issue, albeit one that is not raised as often in the House as the subject of the previous debate. I am present to address my hon. Friend’s concerns as the Minister with responsibility for competition, but I will ensure that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), who has responsibility for retail and small shops—indeed, shops of any size—is aware of the debate as well, because it is an important issue.

My hon. Friend rightly pointed out that independent newsagents are an important part of local communities—they can be crucial—and of the UK economy more generally. I was therefore delighted to see figures from the Office for National Statistics—I have said that about five times today—that show that small stores are seeing annual growth of 8%, whereas larger stores are seeing growth of 2.6%. That shows that small stores have an important place in communities, and that their position is quite resilient.

The public’s ability to access a wide range of news, views and information about the world in which we live is absolutely central to the health of our democracy and society. Even in an increasingly digital world, access to a range of newspapers is a critical part of ensuring a healthy and vibrant democracy. It is important, therefore, that the market in the supply and retail of newspapers continues to operate in the best interests of consumers.

Newspaper publishers in the UK operate in a two-sided market, generating income from both advertising and sales. Publishers therefore take into account how circulation affects the revenue generated from both the cover price and advertising. On the other hand, wholesalers and retailers exist in a more traditional, one-sided market, so they are more likely to be interested in how changes to cover prices or delivery charges affect their sales volumes and profit margins. Although different elements of the supply chain clearly have different objectives, it is in their best interests to co-operate to promote effective newspaper sales, particularly in the face of changing consumer behaviour. As part of that, ensuring an efficient, cost-effective method of providing retailers and consumers with newspapers is important.

My hon. Friend raised concerns about competition in the market. Whenever the Government look at competition issues in sectors, they take into account assessments made by the UK’s independent competition authorities. In the case of newspaper supply, the Office of Fair Trading considered the market in a broad and detailed way over several years and, as part of those investigations, consulted widely and collected much evidence. In 2008, the OFT published competition guidance to the newspaper wholesale sector. It did not give the sector a clean bill of health on competition, but said that the industry should assess its distribution agreements against that guidance and make any necessary changes.

In 2012, the OFT looked at whether it needed to carry out a follow-up review, but decided it was unnecessary. As my hon. Friend said, the Association of Convenience Stores and the National Federation of Retail Newsagents appealed that decision to the Competition Appeal Tribunal, but the tribunal supported the OFT’s decision and said that it was right to consider that the likely consumer benefit did not justify undertaking a review.

That does not mean, however, that the UK competition authorities will not consider the issue again in the future. The new Competition and Markets Authority will launch on 1 April and take on the OFT’s and Competition Commission’s competition responsibilities. In the strategic steer to the CMA issued by the Government last October, we asked it to

“consider potential competition concerns in business-to-business markets, including the effects of differences in bargaining power between firms in a supply chain.”

This issue is therefore quite clearly in its remit.

The CMA’s draft annual plan showed that it is aware of the risks posed in particular by the current economic climate. If my hon. Friend has new evidence that anti-competitive practices in newspaper supply are causing detriment either to consumers or to businesses in the supply chain, I encourage her to submit that to the CMA for consideration.

The hon. Member for Strangford (Jim Shannon) raised concerns about contracts being changed without consultation and negotiation. That is clearly wrong: contracts should not be able to be changed unilaterally. If he is aware of evidence of such behaviour, I encourage him to provide that to the CMA because it will have strong powers to take action against anti-competitive behaviour by businesses.

My hon. Friend also raised concerns about the impact on small retailers of supermarket chains offering discounted or free newspapers. I know that that issue has been raised with several Members by their constituents; it is a concern. Large stores can benefit from economies of scale and in this very competitive marketplace they look for inventive ways to increase their market share. That can make it extremely difficult for smaller shops to compete with them; smaller shops simply do not have the same capacity to provide such offers. I have already said this to some Members, but if small retailers believe that local supermarkets are behaving anti-competitively, I encourage them to raise their concerns with the CMA, because it is within its powers to look at this area. The CMA will have wide-ranging powers from 1 April to tackle such behaviour, and I will write to it with a transcript of this debate to highlight the concerns that have been raised today and to make sure that they are on its radar.

Looking more broadly than at the supply of newspapers, the Government are aware of the need to support small retailers, to help to drive sustained growth. My hon. Friend highlighted some of the things that the Government have done. For example, the autumn statement announced the biggest business rate support package for 20 years, to try to support small businesses, with measures including extending the doubling of the small business rate relief; giving a discount of £1,000 for smaller retail premises; and introducing the option to pay bills over 12 months rather than 10. We are keen to support small businesses, particularly as we come out of the difficult financial circumstances that we have been in recently.

Alongside that, in December last year the Government announced the town centre support package, which builds on a range of other measures that have been taken to help high streets. That package could be particularly helpful to independent retailers, many of which are in high streets. They are not out-of-town businesses—I have not seen a small, independent out-of-town newsagent—so that sort of policy can benefit small retailers as well.

In addition, the Government published, “Small business: GREAT ambition”, in December last year, which sets out our commitment to make it easier for small businesses to grow. It was published on small business Saturday, which I know a number of Members across the House took part in. That event gave everyone the opportunity to celebrate small firms and it is important that we do so; often, small firms get crowded out and it is difficult for them to have the opportunity to raise awareness of what they do and the part they play in our communities. One of the businesses that I visited in my constituency on that day is a fabulous newsagent and sweet shop. It is called the Royal sweet shop and it has now been in existence in Cardiff in the same place in the Royal Arcade for—I think—103 years. It has the most amazing display of sweets that I have ever seen—I think people’s teeth practically rot as they walk in. It was very nice to have the opportunity to support the important small businesses that add vibrancy to our town centres and our communities. They have an important role to play, not only at an economic level but in supporting our communities.

I repeat my thanks to my hon. Friend for the opportunity to debate this issue today. I hope that I have managed to make it clear that the Government and the competition authorities are concerned about this issue; it is an important issue that we take seriously. I appreciate the difficulties currently being faced by independent retailers; it is not an easy time for them. I hope that, as the economy slowly starts to return to health, small retailers will be able to take advantage of the opportunities that exist for them, and I encourage hon. Members to raise their concerns with the CMA. As I said, I will write to the CMA myself, to ensure that it takes on board the concerns that have been raised today.

Question put and agreed to.

Zero-hours Contracts

Jenny Willott Excerpts

Wednesday 19th March 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I thank the hon. Member for Wirral South (Alison McGovern) for securing this debate. It is a very important issue, which has been widely discussed in the media, online and in both Houses of Parliament. She raised some important points.

The term “zero-hours contract” encompasses many different forms of employment relationship, in which the employer does not guarantee any work and the individual does not have to accept it when offered. Such contracts can be direct contracts of employment or can cover people working for agencies and so on, so they include a wide variety of different models of employment. The Government, and indeed most people now, believe that zero-hours contracts have a place in today’s labour market, but we need to make sure that people get a fair deal when they are employed on such a contract. The Government have always been clear that we will crack down on any exploitation of individuals in the workplace and the zero-hours contract consultation that has just closed is an important part of the process.

As the hon. Lady highlighted, there has been some inconsistency in the statistics on zero-hours contracts. The picture has been very mixed. That is primarily because there is no legal definition of a zero-hours contract, so it has been difficult to gather good statistics. The labour force survey, as a survey of individuals, provides an estimate of the number of people who identify as being on zero-hours contracts. The greater media coverage in 2013 is likely to have increased awareness of zero-hours contracts. The Office for National Statistics believes that that has led to the estimate rising from 250,000 people in the final quarter of 2012 to more than 500,000 people in the final quarter of 2013; in other words, it more than doubled. We do need to gather information and analyse it sensibly if we are to know exactly what is going on and to achieve the right balance between the opportunities and the risks that zero-hours contracts provide. The hon. Member for Wirral South asked what is being done on that. The Office for National Statistics has been looking at the issue and will release the results of its new survey in April. That will, I hope, give us more clarity about the current figures and the number of people working in this way.

Let me put the issue in a little bit of context. Zero-hours contracts can give growing companies the opportunity to grow in a relatively safe way and can be used to increase flexibility in the range of services that businesses are able to give their customers or clients—for example, by employing people in specialist roles and in different geographical locations that a permanent staffing model could not provide for.

The contracts are sometimes portrayed as simply a way for businesses to try to reduce labour costs, to the detriment of the people who work for them, but we have also heard in evidence that we have received that the contracts sometimes offer positive work opportunities to people who would find it difficult to take regular work at fixed times. For example, one quarter of all zero-hours contracts are taken up by students, who cannot necessarily commit to a fixed working pattern, as their timetables change. The contracts can allow them, for example, to be more flexible around exams and so on. Zero-hours contracts offer them an opportunity to gain useful work experience and to progress on to other forms of employment when they wish to do so. That is also true of many other people with responsibilities outside work—in particular, caring responsibilities. The additional flexibility that zero-hours contracts can provide can be greatly valued.

Having said that, we must be clear that although zero-hours contracts suit some people, they do not suit everyone and there are people on zero-hours contracts who would prefer to be in full-time, permanent work. I am sure that, as constituency MPs, we have all seen people in that situation.

[Ian Lavery]

Does the Minister agree with the comments from Lord Oakeshott, the Liberal Democrat peer, who said:

“A zero-hours Britain is a zero-rights Britain in the workplace—Beecroft by the back door. Being at the boss’s beck and call is no way to build a skilled, committed, loyal labour force”?

[Jenny Willott]

As I said, zero-hours contracts can have a place in the labour market. They can suit some people—students, people with caring responsibilities and others—but clearly they are not appropriate for everyone. Anecdotal evidence, including that highlighted by the hon. Member for Wirral South and by the hon. Member for Hayes and Harlington (John McDonnell), suggests that some individuals are being pressured into working when it does not suit them and have the implied threat hanging over them of being denied future work, which removes the flexibility for those individuals.

[John McDonnell]

I will give hon. Members just one example. The bakers’ union convened a meeting of fast-food workers a month ago, and a Costa worker turned up. Because he had not smiled enough that day, he was not going to get any work for the following week. These contracts are used as an intimidatory tool by managers, and we all have to condemn that, do we not?

[Jenny Willott]

I completely agree. The behaviour that the hon. Gentleman describes is not right and is not appropriate for a responsible employer. I am sure that hon. Members on both sides of the House completely agree with that.

Some individuals have been working regular hours for long periods only to find that they are “zeroed-down”—their hours are brought down—when demand falls, perhaps due to the loss of an order. Clearly, that dramatic change in working hours and the resultant income loss will have a significant impact on the individual, especially if they are the only person working in the household. When individuals have their income supplemented by benefits, an increase or decrease in hours and income can have quite a significant impact on their benefits, which can be very difficult to manage in terms of household income.

Hon. Members raised issues about the link between jobseeker’s allowance and zero-hours contracts. Clearly, the Government’s priority is to help people on benefits to move off them and into work as soon as possible. However, as the hon. Member for Wirral South highlighted, some media reports suggest that people claiming jobseeker’s allowance are being told that they must apply for vacancies that are advertised as zero-hours contracts. I must stress that that is not the case. In such cases, someone’s benefit would not be sanctioned. DWP decision makers cannot mandate claimants to apply for zero-hours contracts, although they are obviously free to apply for such a job if it would suit them. The uncertainty about the hours of work offered by the employer and about the amount earned and so on can present difficulties for individuals, so someone would not be sanctioned for not applying for one of those jobs.

It is very important that individuals make informed choices when applying for or accepting work, and employers must ensure that both job adverts and employment contracts are transparent. People have the right to know up front that a contract does not guarantee work, if it is a zero-hours contract, so that they know what they are signing up to. The evidence that we have received in the Department is that that certainly is not the case for everyone on a zero-hours contract, and that needs to be resolved.

Hon. Members have also raised issues about the care sector and the entitlement to payment for the time spent travelling between jobs. I want to be clear that employers must ensure that their workers are paid at least the national minimum wage for the hours that they work. Time spent travelling on business, including between house calls, counts as time worked for minimum wage purposes. Where the travelling time is time for which the minimum wage should be paid, any associated expenditure incurred by the worker in respect of that travelling is classified as being in connection with the employment. A worker who is paid at minimum wage rates would therefore need to be reimbursed the expenses for the travelling in order for the employer to be in compliance with minimum wage legislation.

[Mr Andrew Smith]

What will the Government do to ensure that HMRC’s enforcement unit steps up enforcement in this area of the minimum wage, because it is being abused?

[Jenny Willott]

I was about to come to exactly that point. We are aware that low pay is an issue for workers, particularly in the care sector, as hon. Members have highlighted. As the right hon. Gentleman just pointed out, HMRC enforces the minimum wage on behalf of the Department for Business, Innovation and Skills, and it has been conducting enforcement activity in that sector. In November, it published a social care evaluation, which highlighted a very worrying level of non-compliance. In 51% of the cases that it inquired into, the minimum wage was not complied with, and it identified more than £400,000 of pay arrears.

The Government are trying to improve compliance partly by significantly increasing the penalties so that they act as a more effective deterrent, and HMRC is currently targeting enforcement activity on the care sector in particular. We have also revised the naming-and-shaming scheme—the most recent batch of names was published a couple of weeks ago—and it is now much simpler to name and shame employers that break national minimum wage law. We are trying to ensure that we are taking more targeted action, but also that the penalties are greater, both financially and in terms of naming and shaming, so that they will act as a more effective deterrent.

The hon. Member for Wirral South asked about working across Government on the issue of zero-hours contracts and procurement. Officials have spoken with the Cabinet Office in relation to Government contracts, procurement and zero-hours contracts. We are also working with the Department of Health regarding the use of zero-hours contracts in social care. The discussions are ongoing, and the information gathered during them is also being fed into our consultation response. This is a very complicated issue and, as hon. Members have highlighted, it is of great importance to tens of thousands of people throughout the country. We had more than 36,000 responses to the zero-hours contracts consultation, which closed last week, so people clearly feel very strongly about the issue. We are looking at the responses to the consultation and will publish our response very shortly. I hope that that will respond more broadly to some of the issues highlighted by hon. Members today. I congratulate the hon. Member for Wirral South on securing the debate, because it is a very important issue. We all have constituents who have it right at the top of their agenda, and the Government are working on it.

Football Clubs (Insolvency)

Jenny Willott Excerpts

Tuesday 18th March 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I thank the hon. Member for Folkestone and Hythe (Damian Collins) for calling for this debate. He has shown his commitment to football issues over several years—issues that many hon. Members feel strongly about.

Football is a fundamental aspect of British life. I married into a family of Evertonians. My children were wearing Everton babygros before they reached the age of one—the indoctrination started early—so they have absolutely no choice in the matter of whom to support. The financial health of football clubs is a hot topic on both the terraces and the sofas of Britain. Fans are perpetually nervous about which club will be the next to struggle or fail and endlessly discuss clubs’ costs and budgets. The Government appreciate the part that football clubs play at all levels across British society. They are a fundamental part of the social fabric of communities up and down the country.

None the less, the rules that govern corporate life cannot be selectively applied. Those who deal with a football club—its suppliers, its employees, the Crown—should have the same confidence that they will be paid as they would if they were dealing with any other business in any other industry. Insolvency is a risk—hopefully a low one—in all industries, including football. No honest person runs a business expecting it to fail, but when there is failure, it is important to have an insolvency process that is fair and transparent and, where possible, saves viable businesses; that applies as much to football as anything else. The UK’s insolvency framework was recently judged by the World Bank to be 7th best out of those of 189 nations; it came ahead of France, Germany and the United States.

The hon. Member for Folkestone and Hythe pointed out that quite a number of clubs have experienced financial difficulties in recent years. The majority of premier and Football League clubs that have become formally insolvent in the last 20 years have entered the insolvency procedure known as administration.

[Mr Jim Cunningham]

Does the Minister intend to answer my questions, and those of the hon. Member for Folkestone and Hythe (Damian Collins)? What are the contents of the legislation that is to be proposed by the Government? Will the Minister support the hon. Gentleman’s Bill? Alternatively, may we have a date for when the Government will introduce legislation? The situation has been going on for far too long—for about two years—and we have heard the evidence from Coventry, which is a good test case.

[Jenny Willott]

If the hon. Gentleman gave me some time, I might be able to answer some of his questions.

Most clubs that have entered insolvency have gone into administration. The primary objective of an administrator is to rescue the company wherever possible. If the business can keep going, that is the best outcome for employees and other stakeholders. Administration is therefore a rescue procedure and, judged on that criterion alone, football administrators have been successful. In spite of the number of clubs facing difficulty, as highlighted by a number of hon. Members today, no Football League club has gone out of business mid-season since the demise of Aldershot in 1992.

Administrators are governed by statute. Their primary focus is on rescuing the company, but the survival of the company or business will always be balanced against the interests of the creditors. Put simply, an administrator cannot save the company if that is not in the interests of the creditors. As was highlighted by the hon. Members for North Swindon (Justin Tomlinson) and for Portsmouth North (Penny Mordaunt), generally, rescuing a football club is in the broad interests of the creditors and the fans. That is because the alternative to a rescue out of administration is liquidation, in which a club’s assets are turned into cash, its affairs are wound up and any remaining funds are distributed to creditors.

On liquidation, football players’ contracts are void and they receive what is known as a free transfer, which means that no transfer fee need be paid to the liquidated club. That is clearly not in the interests of creditors, as the players’ contracts are an important asset of the club, being worth significant amounts of money. As hon. Members have said, including the hon. Member for Coventry South (Mr Cunningham), the Football League is in essence a members’ club, with all the clubs having a share in it, sometimes known as the golden share. To continue membership of this club and to retain the share, members must abide by the rules. Among the rules is the Football League’s insolvency policy.

One aspect of that insolvency policy, as we have discussed today, is the football creditors rule, under which all football creditors must be paid in full if a club is to remain a member of the Football League. The list of football creditors is long, so it would be slightly tedious to read out, but it includes players, the staff of the club, the leagues, the Football Association and other clubs, as was mentioned by a number of hon. Members. Other than in exceptional circumstances, if the football creditors rule is not followed, the club will lose its share in the Football League. Without the share, the club cannot take part in league matches and will in effect cease to trade. If a football club is in administration, the loss of the share will almost inevitably result in liquidation, which, as I said, voids all player contracts. If that happens, the football club is in effect dead, which is disastrous for all classes of creditor, because there is no value in a club that has been kicked out of the league and has no players.

[Damian Collins]

What the Minister says is correct, but that is down to the rules of the Football League. We could amend insolvency law to give the administrator the power to compensate all unsecured creditors equally and fairly, and it would then be a matter for the Football League to decide what it did with the club after the administration.

[Jenny Willott]

The administrators are regulated professionals and are obliged by law to perform their functions in the interests of the company’s creditors as a whole. They are complying with insolvency law. The administrators are not bound by the Football League’s rules on football creditors; they are required by law to treat all unsecured creditors equally. Those are the rules under which administrators operate, but it is clearly in the interests of a potential purchaser to abide by the Football League’s rules and to ensure that football creditors are paid in full, to be able to keep the club operating. It is usually in the best interests of administrators to sell to someone who will do that to keep the business operating and keep the club playing as part of the league. If the purchaser does not do that, there is a significant risk that the Football League will not allow the club to compete, and the purchaser would then own a worthless club.

[Damian Collins]

I question that, on behalf of non-football creditors. Under insolvency, they might get less than 1p for every pound that they are owed. What interest of theirs does the process serve? They are in effect watching football creditors being compensated fully, but are themselves walking away with what in any other administration would be considered practically nothing.

[Jenny Willott]

It is important to remember that the money being used to pay the football creditors is not drawn from the assets being used to fund the other unsecured creditors. It is not the same pot of money.

[Damian Collins]

The Minister makes an important point, but this is where legislation might be necessary, because the football authorities will withhold money that is due to the club at the end of the season to carry out, in effect, their own administration process by settling football debts that the club cannot manage. We should make it a requirement that administrators have access to those funds that are due to the club at the end of the season, so that they can be factored into the administration of the club.

[Jenny Willott]

This was looked at fairly recently by the High Court, which decided that those funds did not count as assets of the club. The assets of the club have to be divided up in accordance with insolvency law, under which the administrator has to look at all the unsecured creditors. I completely understand what the hon. Gentleman is saying, but following the High Court ruling, I believe that those funds do not count as assets of the club.

[Damian Collins]

Under the Football League rules, those funds are not necessarily due until the club completes the season. If the administrator were free to carry on the administration until the end of the season, I do not see why the administrator could not reasonably draw on those funds as well.

[Jenny Willott]

The hon. Gentleman makes an interesting point, but I have to confess that I do not know the answer. If it is okay with him, I will write to him after the debate to clarify that point.

When a football club is sold, which takes it out of insolvency, the purchaser generally funds the payment of the football creditors, or other funds that do not belong to the club are used. A different pot of money is therefore paying for the football creditors. That is one of the reasons why the football creditors rule does not breach existing insolvency law. Were the funds to come from the same pot, it would breach the law, because it would be treating different unsecured creditors differently. Nevertheless, today and on a number of occasions in the past, it has been suggested that the football creditors rule should be abolished through legislation. The hon. Member for Folkestone and Hythe has made that point today.

The number of Football League club insolvencies has declined significantly in recent seasons. In the 2003-04 season alone, six clubs became insolvent. Five years ago, there were around three or four failures per season. Happily, however, there have been no football insolvencies at all so far this season and only two in the season before that, and in one of those there were no football creditors, so the situation seems to be improving slightly. Insolvency is not the cause of a football business’s problems; it is a symptom arising from an underlying lack of financial stability.

The hon. Member for Hartlepool (Mr Wright) and other hon. Members mentioned financial fair play; the football authorities have made significant moves in recent years to put clubs on a stronger financial footing. They have introduced an early warning system for tax debts, salary caps and an agreement on financial fair play rules, which will ensure that clubs do not spend more than they earn. Those measures are possibly already having a beneficial impact in increasing financial stability, which will lead to a decrease in the number of insolvencies.

[Jim Shannon]

I intervened earlier to ask hon. Members what talks the Minister has had with other Administrations, because the Scottish Football Association is separate, and sport is devolved to the Northern Ireland Assembly and the Welsh Assembly. I am not trying to be nasty, but I want details on any discussions that the Minister has had with the devolved Administrations on these problems, which are very apparent in other regions of the United Kingdom of Great Britain and Northern Ireland.

--- Later in debate ---

[Jenny Willott]

The issues that the hon. Gentleman is raising are more connected to the administration of the game of football as a whole than to insolvency. I have not discussed those issues with counterparts in other Administrations, but Ministers in the Department for Culture, Media and Sport may have done. I am happy to write to him to clarify that point; I do not know the answer to his question off the top of my head.

It is important that we encourage the football authorities to continue with the financial fair play rules, to ensure that football has a solid financial base on which to operate. If there are no insolvencies, the football creditors rule does not come into play, so we get around the problem.

[Damian Collins]

I do not think that it is fair to say that if there are no insolvencies, we should not look at getting rid of the football creditors rule. In her opening remarks the Minister said that the rules of corporate life cannot be selectively applied, but that is what is happening. It should not; it should stop.

[Jenny Willott]

Insolvency law is applied equally to football clubs and any other businesses facing insolvency.

[Damian Collins]

The Minister says that, but there is no other sector of industry in this country that has a rule whereby it treats one group of unsecured creditors—its friends—differently from another group. I know that this has been tested in the High Court and is legal, so clubs can do it. The purpose of the debate is to question whether it should be legal, or whether we should stop it.

[Jenny Willott]

I appreciate what the hon. Gentleman is highlighting. I have sympathy for the views he is expressing.

[Mr Iain Wright]

To back up what the hon. Member for Folkestone and Hythe (Damian Collins) says with a specific example, Plymouth Argyle FC went into administration in 2011. Its football creditors were paid in full, but the unsecured creditors received a dividend of 0.77p in the pound—less than a penny. That cannot be a fair means of making sure a business can become viable. Will the Minister change legislation to change that?

[Jenny Willott]

Changing the legislation would not necessarily have made any difference. The money that goes to pay the football creditors does not come out of the pot of assets that is used to pay the unsecured creditors. There is no evidence that if we changed the football creditors rule there would be more money available for the unsecured creditors. They would quite possibly still get exactly the same return on a pound. Clearly, in the case the hon. Gentleman cited, the return was extremely low, but I have seen no evidence to suggest that it could have been greater. It is not the same pot of money that is used to pay each group.

To put the matter in the context of insolvencies as a whole, in 2013 there were about 20,000 corporate insolvencies in England and Wales, of which around 2,400 were administrations. The Government feel that using primary legislation to outlaw a provision that is relatively infrequently used is disproportionate, particularly given that the industry is already trying to improve the underlying financial stability of clubs via the financial fair play rules. Other than those to which special regimes apply, all insolvencies are subject to the same legislation, the Insolvency Act 1986. It would be potentially confusing for users of that legislation if we modified it just for football insolvencies. No other industry is treated differently under general insolvency legislation, and the Government feel that there is no compelling reason why football club insolvencies should be.

Football is undoubtedly incredibly important for fans. I understand the frustration of fans whose clubs become insolvent through no fault of those in the stands or on the terraces. Given the emotional importance of football for fans, I understand how distressing it can be when a club goes into insolvency. However, as I said at the start, the rules that govern corporate life cannot be selectively applied—they apply across the board—and those who act as directors of football clubs should act properly in execution of their duties.

A number of hon. Members have highlighted concerns about directors. The law allows the Secretary of State to undertake civil proceedings against company directors who are found to have been culpable in the failure of a company. However, until a person has been disqualified, they are free to act as a director of any number of companies in the UK, irrespective of their track record or any criminal charges that may be pending, although someone who is personally bankrupt or subject to bankruptcy restrictions is prohibited from acting as a director.

Hon. Members have mentioned the owners and directors test, which places additional restrictions on clubs. I understand that those restrictions are increasingly based on intelligence, and that football authorities are co-operating to make the test as effective as possible.

Overseas convictions were mentioned. At the moment, there is nothing to prevent a person who has been convicted of offences in connection with a company overseas from acting as a director of a UK company. However, the “Transparency and Trust” discussion paper published last year included a proposal to enable the Secretary of State to bring disqualification proceedings in the UK against anybody convicted of a serious offence in connection with a company overseas. We will publish the Government response to that consultation soon. The issue is currently being considered.

We want the UK to be a trusted place for people to carry out business. Part of that is ensuring that directors of limited companies take responsibility for their actions and have regard to creditors and employees. The majority of directors do that effectively, but action can and will be taken against those who do not play by the rules. When a company enters formal insolvency, such as administration, the administrator has a duty to report on the conduct of all directors in office in the previous three years. The Insolvency Service, which acts on behalf of the Secretary of State, looks at all reports in which the administrator suggests that misconduct has occurred, and when it is in the public interest to investigate, it will do so.

If disqualification proceedings are highlighted as being necessary, once the Secretary of State has authorised them, the company director can either give an undertaking or be disqualified. If disqualified, a director can be banned for up to 15 years, depending on the seriousness of the misconduct. Over 100 directors are disqualified each month; the average period of disqualification is around six years, and over 10% of disqualifications are for more than 10 years. That is all a matter of public record, as details are held at Companies House.

Various football directors have been disqualified over the years. For example, in 2011 four directors of Luton Town football club were disqualified for a combined total of 19 years, a significant penalty. They were found to have breached Football Association and FIFA rules and caused the company to trade at risk to, and to the detriment of, HMRC.

Hon. Members raised issues about specific clubs. I am an MP for Cardiff, where the Bluebirds now wear red, and was previously a local councillor in Merton, when Wimbledon football club was having a number of local difficulties about where they were going to play, so I have witnessed at first hand the trauma that club ownership issues can cause to supporters. A number of Members have mentioned their concerns about Coventry City football club. The hon. Member for Coventry South raised the golden share, which I mentioned earlier. My understanding is that the Football League has learned from the case of Coventry City and has strengthened its checks on who holds the golden share in response.

[Mr Jim Cunningham]

It took a long time to get an answer from the Football League on that question. It was not clear-cut at the beginning; it took a considerable period of time.

[Jenny Willott]

That may well have been the case. I take the hon. Gentleman’s point. On club ownership and the identification of club owners, the football authorities are confident that they can identify club owners. The Football League has responded to the situation at Coventry City to ensure that that picture is not replicated elsewhere.

[Mr Marcus Jones]

rose—

[Jenny Willott]

I will not give way, I am afraid, as I have about one minute left. Portsmouth football club is a strong example of a supporter-owned club. The Culture, Media and Sport Committee recommended that the DCMS set up an expert group to consider supporter ownership within the sport. That is now happening, and the experience of Portsmouth FC will be invaluable in shaping considerations on that issue.

This is an extremely emotive issue. Members demonstrated in their contributions how strongly people feel about football. I appreciate that Members will be disappointed that I will not commit today to changing the law in this area. DCMS Ministers have meetings with the football authorities about a variety of issues and have discussed the football creditors rule in the past. However, there has been a significant reduction in insolvencies following the introduction of the financial fair play rules, with no cases this season. We want to encourage responsible spending in football to avoid the pain, both financial and emotional, of insolvency. That is a better way for those working in or supplying a football club, as well as being in the best interests of supporters. If that does not work, the issue will merit further examination, but I hope other hon. Members remain as optimistic as I am about the situation.

Holiday Pricing

Jenny Willott Excerpts

Monday 24th February 2014 Westminster Hall

[Damian Hinds (East Hampshire) (Con)]

I am grateful for the elevation implicit in your introduction, Mr Turner. It is a pleasure to see you in the Chair. As it was said earlier, you represent the Isle of Wight, which is one of the important tourist destinations in this country.

This debate has already covered a number of important subjects, including the importance of family life and family time, the value of an education, which people do without by missing part of education, the joy and the benefits of discovery through travel, and the health of the travel industry. I hope that you will forgive me, Mr Turner, if I restrict my remarks mostly to the topic of the e-petition, which is on whether to stop holiday companies charging extra in the school holidays.

In the current tough times, of course we are focused in this Parliament on affordability of everything for families and being able to spend time together away from home is one aspect of that. In the words of the petition:

“Family time is so much more essential in the current working world, but so many people cannot afford holidays in school holidays”

and a

“break at home is not the same as getting away from it all where…focus is on family”.

Who could disagree with that?

I understand why people would say, “If holiday companies can make money charging price x in the winter, surely they must be able to make profit by charging the same price in the summer. By charging a higher price, they must be making huge profits on the backs of other people.” That is not correct. If the same is charged in summer as in winter for a popular sun-based tourist destination, those companies would be out of business and nobody would be going on those holidays. It is also worth saying that what counts as a peak period in the travel business is partly but not entirely determined by when school holidays are. Weather also plays a big part, and so does the timing of public holidays such as Easter, Christmas and, in this country, bank holidays.

A little Google research this morning revealed that for holidays on which presumably no children are involved, and therefore school holidays are not involved, there is also a big difference in price. The price for a Thomas Cook couple’s retreat in Negril, Jamaica goes up by 31% between June and August. As you will recall from when we were there together recently, Mr Turner, the price for an “Ibiza Rocks” clubbing holiday also rises by 31% between June and August. The differences in those prices are clearly not driven by the timing of school holidays.

I have a confession: I come here today as a sinner. Before coming to Parliament I spent about a decade in the travel trade. I am afraid that I was mostly involved in pricing and what the travel trade calls “revenue management.” I do not want to go into the technical detail, but revenue management is basically the discipline of deciding what prices to offer, to whom, when and under what conditions.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

It’s your fault.

[Damian Hinds]

Yes, it is my fault. I worked mostly in the hotel business, but the same principle applies to airlines and most of the travel business’s wide range of products—basically anything with high fixed-cost assets, a perishable product and fixed or semi-fixed capacity. Hotels are also suppliers to holiday companies. Package operators buy in capacity from airlines, hotels, bus companies and so on. It is also worth bearing in mind that there is an international market, especially in foreign travel. Packagers are to some extent price takers. No one in this country decides the market rate of a hotel room in Spain in the high season. Even if we believed that British companies set the prices for holidays, no one would suggest that Spanish hoteliers are within the control of Her Majesty’s Government. Resort-based travel is international in nature. People have already mentioned the timing of German and French holidays, which are already factored into the price. If people from different countries are going to a resort, the demand is an amalgam of all the incoming traffic.

I come here as a sinner, but I have not come here to confess. I do not anticipate a popularity boost from my appearance in Westminster Hall this afternoon, but the simple fact is that to a large extent we are talking about the laws of economics. There is no single year-round market clearing price in holiday resorts.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

As everyone has today, I congratulate my hon. Friend the Member for Birmingham, Yardley (John Hemming) on leading the debate in the wake of a very significant number of signatures on the e-petition.

It is interesting that this was an issue in Parliament long before I was born—I do not know whether that is a good or a bad thing, but it has clearly been an issue for many decades. I have listened with great interest to the points that have been made. There have been a variety of speeches, coming, in a number of cases, from slightly different perspectives. I agree with the hon. Member for Chesterfield (Toby Perkins) that it has been a very good debate, which on the whole, has been fairly consensual; there is a reasonable amount of agreement across the Chamber. As a constituency MP, constituents have been getting in touch with me about the subject, and I have a personal interest, as my children are heading rapidly towards school age. Along with a lot of other people, this issue is close to my heart as well.

I would like to put my comments into context at the start and make it clear that the Government do not regulate the price at which goods or services are offered for sale. We have heard from a number of Members that most people would agree that that is the way it should be. We feel that it is a commercial matter for the businesses concerned and that the Government should not intervene. It is not for the Government to dictate to any particular market how it should charge for its services, or to intervene unless there is evidence of market distortion or market failure. That is when Ministers and the Government would get involved.

As we have heard today, and as I hope hon. Members would agree, the UK holiday sector is one of the most competitive markets in the UK, if not Europe. That has made the sector not only one of the most responsive to consumer demands and preferences, but one of the most innovative. It has driven change very much over the years. It is not so long ago—only a few decades—that only the wealthy could contemplate having a holiday abroad, and even holidaying in the UK, which was more popular and much more affordable, was certainly not the norm for many people. That was the situation not that long ago. With the development of cheaper package holidays and so on, far more people have found that they can afford a foreign holiday, but the sector has developed rapidly over the past few decades and expanded in many respects.

An almost endless variety of offers are available for people, which meets the demand from consumers for more choice, flexibility, value and so on. The dynamism and innovation that is shown in this diverse sector is evidence of keen and persistent competition in the market, so the Government feel that there is no market failure and therefore no reason for the Government to intervene to impose price limits. I got the feeling today from colleagues across the House that most would agree on that point.

As the hon. Member for East Hampshire (Damian Hinds) said in his confession, prices charged across the year reflect demand, availability and the need to attract consumers in a competitive market. It is common to all competitive markets—it is especially acute in fluctuating markets, such as the travel sector—that prices rise and fall according to demand and supply. That is the way in which markets work in general. When demand is high and supply is limited, prices invariably increase to the point at which demand moderates. It is the level of demand that dictates the prices in a competitive market, so if demand increases, so do prices.

Demand appears to remain high in the travel and holiday market, despite the economic difficulties that many people are facing—it has been a very difficult time for many across the economy over recent years. The industry reports that the holiday market is buoyant and consumers are prepared to pay the prices being asked for the services on offer. If people were not prepared to pay the prices being asked, demand would drop and prices would come down, so it is being driven by the fact that people are prepared to pay the prices that holiday companies are demanding.

[John Hemming]

Given that the issue is about supply and demand, the regulations that the Government introduced affected the demand by focusing it more on one place. Is my hon. Friend as surprised as me that the Department said in the explanatory note to that statutory instrument that an

“impact assessment has not been provided for this instrument as no impact on businesses or civil society organisations is foreseen”?

[Jenny Willott]

I shall come back to the point about the schools regulations if my hon. Friend will bear with me. If he is not satisfied with my comments, he can come back to me.

There is another important element to consider in respect of the prices in this sector, and it was mentioned by the hon. Member for East Hampshire. During peak periods, the UK industry is in fierce competition with those of other countries, whose consumers want to go on holiday to the same destinations. That competition for limited facilities means that costs rise—it is not all being driven by consumers in the UK—and those costs are reflected in the price put to the consumer. As this is a Europe-wide market, consumers are similarly affected in other countries across Europe. As a result, Governments across Europe have decided that protection is needed for consumers in the package holiday sector over and above that provided by general consumer protection law.

I hope that what I say now answers a point made by the hon. Member for Chesterfield. One of the key protections in the package travel directive is the requirement that those arranging and selling package holidays and package tours have in place protection for consumers against their insolvency. That additional protection is an area in which we in the UK were leaders. The air travel organisers’ license—ATOL—system was brought in before the European regime as a result of the huge growth in the UK of the package holiday market in the 1970s and 1980s.

The extra protection is considered necessary because those operating in the package travel market are deemed to be more at risk of insolvency than businesses in other sectors. That is because the business model in the holiday industry is based on predicting demand and committing to those predictions in advance. I mention that because it is further evidence of the extent and level of competition in that market—the industry is forced by those pressures to price as competitively as it can. There is considered to be a higher risk of insolvency in that sector because the margins are thin and because the market is so competitive.

[Toby Perkins]

The Minister describes the pressures on the market, and we have heard that there was no impact assessment because it was considered that there would be no impact on the industry. Given that the change was introduced after people had booked their holidays and after the holiday companies had set their prices, does she think that it was right to say that there would be no impact whatever on the industry from the change?

[Jenny Willott]

I cannot comment on the impact assessment done by the Department for Education, but I will come back to the point about the regulations. I think it is wrong to say that the 2013 change was a significant change in the law, but I will come back to that in a minute.

Hon. Members will have gathered from what I have said that I am not convinced that businesses in the holiday market are treating consumers unfairly in the way in which they price their products. It is pressures in the market that cause the fluctuation in prices that some have concluded is unfair. However, the hon. Member for Chesterfield raised allegations of cartel-like behaviour. If hon. Members come across allegations of that nature, they should be referred to the Competition and Markets Authority for investigation. That is what it is there for, or at least it will be from 1 April. Cases like that involving Expedia, which the hon. Member for Chesterfield mentioned, were dealt with by the Office of Fair Trading, but will in the future be dealt with by the Competition and Markets Authority. However, the CMA will also have a role in keeping markets under review for breaches of competition law and consumer detriment, so it has a broader remit. It will also have a role in dealing with consumer enforcement issues when an issue has nationwide implications. This would be an area where that could be considered.

The hon. Member for Leeds East (Mr Mudie) asked about discussions between travel agents, the holiday industry and the Department for Business, Innovation and Skills. BIS is in regular contact with the holiday industry on a very wide range of issues—that is the relationship—and my officials will of course raise the points that have been raised in today’s debate when they next meet representatives of the industry, so we will ensure that hon. Members’ views are fed back.

Having said that, I am very sympathetic to those who struggle to afford a holiday in peak season. I appreciate that the difference in price between off season and high season can be very significant. If people have children, it becomes increasingly expensive and difficult to take holidays, and I appreciate that the problem places an extra burden on families. I also completely agree that family holidays are enormously important. They give children opportunities to relax and unwind and create lasting memories, as well as building family relationships and broadening the experiences of children. I have very fond memories of taking holidays as a child with my grandparents and parents and I am sure that everyone in the room would say the same. It is important that children are able to have those experiences and benefit from them.

Clearly, in all of this, the dates of the school holidays are critical. It has been suggested that pressures on the industry might be alleviated by extending the periods during which families can take a holiday, thereby spreading the demand over a longer period. We have heard that idea mentioned today, and it is put forward not only by those who want cheaper family holidays; it is also supported by many in the industry. We have also heard it said a lot today that the rules on school attendance are too strict. Almost every hon. Member who spoke discussed that. People have suggested that schools should be able to approve families going on holiday during term time. Others believe that it would help if schools had different term dates. I shall come back to that point, but, on the issue of absence, despite the clear value that a family holiday can have for children and also for parents, the Government’s view is that a good education is more valuable for pupils in the long run and that getting a good education depends on regular school attendance throughout the school year.

We have heard a lot about the change in regulations in 2013. The hon. Member for Suffolk Coastal (Dr Coffey) gave a very useful summary of the legal framework. I found it quite illuminating and am sure that a number of other colleagues did as well. What the Government did in 2013 was remove the misconception held by some parents that pupils were entitled to 10 days’ absence for holidays per year. There was actually no entitlement in the previous regulations—that was not what they said. We have clarified that school heads should accept a request for a leave of absence only in exceptional circumstances.

We have heard a number of examples of cases in which requests have been turned down by head teachers. Many of them are very distressing, but I clearly cannot comment on individual cases, not knowing the full details. Let me make it clear that the Government have not said that any absence is not possible. We have given head teachers the discretion to make that call. In addition, we have not specified what constitutes exceptional circumstances, as we believe that cases need to be considered individually. A number of hon. Members mentioned the need to trust head teachers, and that is exactly what the Government are trying to do—we want to ensure that head teachers have the power and discretion to look at the individual circumstances of an application and take them into account.

[John Hemming]

Obviously, it is difficult being a Minister in a different Department. Will the Minister ask the Ministers in the Department for Education to write to me and the other hon. Members who have spoken in the debate about what pressures Ofsted is putting on schools to reduce the number of absences? I ask because if Ofsted is driving down the numbers, that affects what is considered to be exceptional and what is not. Obviously, some of the cases that I would consider exceptional, such as funerals, are not being considered as such by the schools.

[Jenny Willott]

I am happy to ask colleagues to write to my hon. Friend, because clearly I haven’t got a clue about that. As a Minister in BIS, I do not know what discussions Ofsted and the Department for Education have had, but I am happy to pass the request on to colleagues in the Department for Education.

[Mr Mudie]

Could the Minister ask the relevant Education Minister to tell the people who have attended the debate whether a child who has an excellent attendance record can have a holiday with the rest of their family only outside term-time? Can the fact that they have a perfect attendance record and so on be accepted as exceptional? That is the dilemma that heads face: the problem is not exceptional events such as funerals, but the year in, year out problem of those who cannot afford a family holiday unless they take it outside term time. Will the Minister reassure heads that that can be regarded as exceptional?

[Jenny Willott]

When we contact colleagues in the Department for Education, I am sure that we can send them a copy of Hansard so that they can respond to the hon. Gentleman and others who have raised that point. When head teachers decide whether to grant absence, they must be able to take into account individual circumstances such as the examples raised today of parents in the military or the police, or cases in which a close relative has died. We cannot legislate for such instances; they must be left to the head teacher’s discretion.

Several hon. Members have asked for head teachers to be given clearer guidance on what constitutes exceptional circumstances, and the point has been made that it is difficult to balance the provision of clearer guidance with allowing head teachers discretion and trusting them to make the right call. I will refer that matter to colleagues in the Department for Education.

[John Hemming]

A number of participants in the debate think that head teachers are making the wrong decisions. If Ofsted is putting pressure on numbers, guidance would help us to analyse that in more depth. Prior to the changes, less than 10% of parents took advantage of the process in primary schools and less than 3% in secondary schools, so it did not affect many people. Those were clearly special circumstances, but for some reason they were deemed not to be acceptable. Guidance would give head teachers strength to argue with Ofsted.

[Jenny Willott]

My figures on the number of parents who took their children out of school are slightly different from my hon. Friend’s. My hon. Friend the Member for Solihull (Lorely Burt) also said that most parents do not take their children out of school for holidays, and my figures show that in 2011-12, some 90% of secondary school pupils and 80% of primary school pupils did not miss school for a family holiday. Although the overwhelming majority of pupils are not missing school to go on holiday, therefore, a significant number of pupils are. The Department for Education was sufficiently concerned about the matter to want to tighten up the rules. I understand that in some areas, parents thought that they were entitled to 10 days’ absence a year for holidays, which was not the intention of the original regulations. The regulations introduced last year were designed to correct that misconception and clarify that schools should authorise absence only in exceptional circumstances.

[John Hemming]

The discrepancy between the Minister’s figures and mine may rest on the fact that mine deal with authorised absence, whereas hers include unauthorised absence as well. Unauthorised absence is increasing, which is another factor in this debate.

[Jenny Willott]

That may well be the case, but it does not undermine the argument that we must ensure that parents do not take their children out of school for holidays unless there are exceptional reasons for doing so. As the right hon. Member for Knowsley (Mr Howarth) said, family holidays taken during term time disrupt the education not only of the individual student but of other pupils. The hon. Member for Leeds East, whose wife is a head teacher, said the same thing. Such absences create additional work for teachers who have to try to help pupils catch up on their return while looking after the other students in the class and ensuring that their progress is not disrupted. Removing a child from school has significant implications for other pupils in the class and for teachers. The Government do not want to change the rules on permitted absences, because the effects on a child’s education and a school’s ability to teach pupils effectively are significant.

Another suggestion has been to introduce more flexibility into school term dates. The holiday industry argues that making the peak period longer would spread consumer demand, and because holiday companies could make the same amount of money over a longer period of time, they would be able to reduce prices a little for families. The spreading of demand would also reduce competition for facilities and allow them to be used more efficiently. Although there would still be competition with organisers of holidays from other countries, it would be spread over a longer period of time.

[Mr Ellwood]

Is the Minister saying that she agrees with that proposal? I gave the example of Kent, Yorkshire and Dorset having slightly different school holidays. If she agrees with the idea, how would it best be co-ordinated?

[Jenny Willott]

The staggering of school holiday periods may well lengthen the period of peak demand and help to lower prices. I completely understand the suggestion that the Government should arrange for holiday periods to be spread, but currently local authorities, not the Government, set the term and holiday dates for community and voluntary-controlled schools. Academies, free schools and voluntary-aided schools—including some church schools—set their own dates. The Deregulation Bill, which is currently before the House, will extend the power to set term dates to all schools by 2015. The Government believe that term dates should be dealt with locally, through negotiation and co-operation across an area, to take into account the educational needs of students and the practicalities of varying the school year. I cannot remember which hon. Member raised the fact that someone with a child in a primary school and a child in a secondary school wants their holiday dates to line up.

[Justin Tomlinson]

I raised that point. I accept that schools can lead locally, but the reason why the system works so successfully in Germany is because the dates are set by regions, which ensures that children in primary school are not off at a different time from those in a nearby secondary school. Although I accept that the decision should be made locally, I think that the Government might guide regions to pick the dates.

[Jenny Willott]

It is clear that such a decision will have to be made across a local authority area, or more broadly. When the Deregulation Bill becomes law, we will look at how that can be done most effectively, and with the minimum disruption, to help schools and families.

[Mr Ellwood]

I am sorry to press the matter, but I think it is an important takeaway from the debate. As my hon. Friend has just said, some co-ordination will be required. I am sitting next to my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), and we know that it is quite a challenge to get Poole, Bournemouth and Christchurch to co-ordinate. It does happen, but it takes time. It will be tricky to get all local councils to co-ordinate. I encourage the Government, or at least the Department for Education, to consider the leadership role that may be necessary. Whether the decision is taken on a county or regional basis is something for a later date.

[Jenny Willott]

As I have said, free schools, academies and some church schools can set their own dates. There is already some co-operation, or at least awareness, between some local schools regarding what others in the area are doing. When the Deregulation Bill gives more schools the power to set term and holiday dates, we will encourage schools to collaborate more widely to take into account the needs of families and other schools in the area. I am confident we can ensure that the hon. Gentleman’s views are fed into the process and taken into account by the Department for Education.

[John Hemming]

On that point, schedule 14 to the Deregulation Bill will give schools the power to set term and holiday dates, but in constituencies such as mine, one family may have children in a primary school in the Birmingham local education authority and children in a secondary school in the Solihull local education authority. I would propose bringing in the Education Committee to look at the country as a whole and suggest sub-regions wherein local education authorities could co-ordinate. A parent would not want their children in a Birmingham primary school to have different holidays from their children in a Solihull secondary school.

[Jenny Willott]

I cannot really comment on what the Education Committee should or should not look at, but I am sure that its Chairman, the hon. Member for Beverley and Holderness (Mr Stuart), will have noted my hon. Friend’s comments. Perhaps my hon. Friend and anyone else present with views on that matter might wish to take it up with the Chairman directly and suggest that his Committee initiates such an inquiry.

[Dr Thérèse Coffey]

I just want to make the Minister aware that not everyone present wants Parliament, the Education Committee or Ministers to determine schools’ term dates. We really should leave such decisions to be made locally. Schools currently manage to cope quite well. Different parts of the country already have different holiday dates for different traditions—for example, places such as Leicestershire and Wigan. We should allow local authorities to work with schools to recognise what is best for their areas.

[Jenny Willott]

I must confess that as an MP representing a Welsh constituency, I benefited significantly last week when Parliament was in recess because it was half term in England. When I went home to Cardiff, all the places I took my small children were mercifully empty because half term in Wales is this week. There is already a difference between some areas, and it is possible to enable that on a broader basis in order to extend the peak period, which would hopefully bring down prices across the sector.

To conclude, the Government are not convinced that higher prices in school holiday periods are the result of market abuse by the holiday industry. Rather, they reflect market forces in a very competitive sector, and are made worse by the fact that there is international competition as well. I recognise the fact that family holidays can be incredibly valuable, but they should not be at the expense of a child’s education. School attendance throughout the school year remains critical—we know that pupils who stay at school for longer do much better in their final exams.

[Steve Brine (Winchester) (Con)]

I absolutely agree with the Minister, but although we know that school attendance is important, we also know that parents are not daft. A constituent of mine who is a governor at a primary school in Winchester said to me that the changes to the rules are an insult to his intelligence and discretion—he would never dream of taking a child out of school at a crucial time. I find it perplexing that a Conservative Government are meddling in this area full stop, but we should think especially about the early years—reception and year 1. Does the Minister have a view on whether there should be more discretion during a child’s early years in primary school? Do we really need to come down on head teachers and question their integrity in the way that we appear to be doing?

[Jenny Willott]

I completely disagree with the hon. Gentleman. The Government are actually ensuring that head teachers have the discretion to make a decision in exceptional circumstances. Clearly, the decision that a head teacher makes will involve looking at the child’s age, the circumstances under which the parent has applied and so on. The point of the regulations that the Government have put in place is that we are leaving it to the discretion of head teachers to take into account individual circumstances and make a judgment. That is exactly the reverse of Government meddling. However, the issue is not just the effect on a child’s education. As I and a number of other Members have already said, when a child is taken out of school in term time, that does not just affect that child’s education; it has a broader impact on the school, the teacher and other pupils in the class. We must take that into account as well, and I am sure that head teachers will consider that when making decisions.

Finally, I congratulate the House on this very lively debate. It has been a really good example of a debate in which a number of different views have been put forward but the tone has remained extremely pleasant. I have an awful lot of points to feed back to the Department for Education, and I am sure that Ministers have been listening carefully and will respond to Members’ concerns. Thank you very much, Dr McCrea, and I congratulate Members again on a really good debate.

Children’s Toys (Gender–specific Marketing)

Jenny Willott Excerpts

Wednesday 5th February 2014 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)]

I thank the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) for securing a debate on this major issue. As my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff) said earlier, the matter is important and of fundamental significance to our future economy; it is not just a side issue, which is how it can sometimes be portrayed.

As the hon. Member for Newcastle upon Tyne Central said, those of us with young children cannot help but be aware of how highly gendered children’s toys are. I should declare an interest in that I have two small boys, so my house is full of blue things—very little pink comes through my front door.

One can see at a glance when entering a shop what is intended for girls and what is intended for boys. As the hon. Lady said, that may be blatant—the shelf may say “girls” or “boys” on it—or otherwise girls’ and boys’ toys may be colour-coded or displayed in separate aisles. What message does that send out? What are we telling our children? We are telling them that girls and boys are different, that they like different things and that they have different interests and skills. We are telling them that their gender defines their roles in society and their dreams about the future.

“Pink is for girls and blue is for boys”—such associations are often discussed as though they were fixed, natural and unchanging. As the hon. Lady said, however, it is a recent phenomenon. A couple of years ago, I read an article that referred to advice for new parents from the beginning of the last century—some 100 years ago—that urged parents to dress their boys in pink, because it was such a definite colour, and to leave wishy-washy blue for little girls. That shows quite how much such things can change over time.

The hon. Lady mentioned that if we google images of children’s toys from the 1970s, we find images of a totally different array of toys from those of today. Some toys were certainly intended for girls and some for boys, but plenty were intended for both. We see far less pink and blue and far more bright primary colours, such as orange, yellow, green and red—I appreciate that those are not all technically primary colours—as opposed to pale, pastel colours.

I have with me some images of toys from the ’70s, including an orange toolbox, a blue kitchen and a blue and grey ice cream parlour with girls and boys playing in it. They are from only a couple of decades ago—during my own childhood—but they show a very different image of childhood. If the space hopper were invented today, it would not be iconic orange; there would be a pink version that looked like a cupcake and another version in camouflage khaki. That shows how much things have changed over the years.

Why does the gendering of toys matter? The subject can appear to be something of a fringe interest, but it matters to individuals because it is not fair. Children are actively learning all the time how they are supposed to feel and behave and what will make them acceptable to their social group, family and so on. It is not fair to make little girls feel that they should not be kicking footballs or building with Lego, and it is equally unfair to make little boys feel ashamed of playing netball or of pushing a doll along in a pushchair.

Children should not be made to feel guilty or ashamed about experimenting with different toys and different kinds of play, but that is what we are effectively doing by implicitly labelling toys “not for you”. That process starts at a young age. Children learn through play, and if we want them to explore their skills and interests and to develop to the limits of their potential, we must not restrict that at the age of two, five or 10 by restricting their choices of play.

A boy who has never had a sewing kit may never discover his talent for design. A girl who has never had a Meccano set may never discover that she has real potential as an engineer. Clearly, not every girl who plays with Lego is going to be an architect. I was excellent at designing Lego houses, but my future was obviously not in architecture. Nevertheless, why should we limit girls’ aspirations at so early an age by making things so rigidly defined?

As the hon. Lady said, the issue also matters to society and our economy more broadly. Today, women make an enormous contribution to the UK and there are more women in work than ever before, but they still do not have an equal chance to succeed. Women continue to earn less than men. We are under-represented in senior roles and over-represented in low-paying sectors. More women than men work part time or not at all. Some of that is down to the practical barriers that women face that can stop them getting on in work, and the Government are working with business to remove those barriers wherever we can find them, but some of it comes down to the simple fact that we do not encourage girls to believe in their own potential and explore the full range of their skills.

The way we play as children informs the skills we develop and how we perceive ourselves. Girls and boys take into the classroom assumptions that they develop as part of playing. That has a significant impact on how they then develop, and on their future career aspirations. It is therefore unsurprising that boys who have routinely experienced the sense of accomplishment associated with designing and building something, which can often can come from playing with what would be seen as a boy’s toy, feel more at home with subjects such as maths and science, which utilise such skills more.

If they do not have such experiences when they are younger, girls feel less confident, and it is just a small leap from that to assuming that they are not good at those subjects. That really affects how they progress at school. Assumptions and stereotypes about girls’ abilities and interests—the perception that certain subjects, just like certain toys, just “aren’t for you”—go on to shape the choices girls make at school. Those choices have significant implications.

By the time they get to university level, boys and girls are strongly segregated in some areas with, on the whole, boys dominating in the subjects that can lead to the most financially lucrative careers. In 2013, only 6,600 girls took A-level physics, compared with just over 25,000 boys. That is a massive difference—girls made up just over 20% of the cohort. Of the 13,000 students who took further maths at A-level, only 3,700 were girls. That shows a clear differentiation. Of university places accepted, only 13% of engineering places, 18% of technology places and 22% of mathematics and computer science places are taken by women. Fewer than 9% of engineers in the UK are women, compared with around 20% in Italy and 26% in Sweden. There is no intrinsic reason why we should not be able to make a significant difference to that in the UK.

On the other hand, women made up 89% of students studying nursing and 85% studying education—areas of work that are often poorer paid than those that follow from a science degree. That not only results in women being poorer than men—as the hon. Lady said, 22% of the gender pay gap can be explained by the industries and occupations in which women work—but it also costs our economy significant amounts. There are skills shortages across the science, technology, engineering and maths sector, but as long as girls continue to feel that that world is not for them, our businesses will continue to miss out on vital talent that they need for future development. Put simply, we cannot afford not to allow girls the opportunity to enjoy and pursue the whole range of subjects, starting right at the beginning with their learning through play.

The hon. Lady asked what the Government were doing. They are playing their part. Public pressure on companies helps a lot on this issue, and a number of the organisations she mentioned have been extremely effective. The Government support the Women’s Business Council, which has done excellent work to raise girls’ aspirations. Alongside the council, we are taking action in schools on career advice, apprenticeships, technical colleges, STEM careers, enterprise, child care, equal pay and flexible working, all of which will help girls to reach their full potential in the workplace. In response to the WBC’s recommendation, we are currently developing an online resource for parents of teenage girls that will help them to guide their daughters to make confident and informed career choices independent of gender stereotypes and representations. Hopefully, that will lead girls to make different decisions in future.

My hon. Friend the Member for East Dunbartonshire (Jo Swinson) held two round-table discussions towards the end of last year to look specifically at raising girls’ aspirations. Officials have met retailers, manufacturers and others to discuss the issues we are talking about today.

[Chi Onwurah]

I was not aware that the Government had been meeting retailers and others. Can the Minister share some of their responses?

[Jenny Willott]

I can get back to the hon. Lady with more information on that. There has clearly been some progress on the issue—she cited some examples of the moves made by retailers in response to the pressure on them. Some of them are beginning to recognise that there are wider implications to gender-specific marketing. The issue is not just about selling twice as many bikes because pink and blue cannot be used interchangeably; there are broader implications for the economy as well.

There have been some really positive moves from retailers, some of which the hon. Lady talked about. For example, she mentioned Boots, but Debenhams and The Entertainer have also stopped gender-specific labelling of toys, and M&S has committed to making its own-brand toys gender neutral. I find it enormously encouraging that there is starting to be a recognition that things have gone too far and something must be done. I hope that those companies lead the way so that we see such changes emulated more widely.

I recognise that there are some arguments in favour of the gender marketing of toys. For example, science and engineering kits are aimed at girls by using pink and purple to attract them to play with them more, and there are also pink Lego sets, pink globes and so on. It is argued that such products sell well and show girls that science and other potential careers are for them. That might be true, but it raises the issue of whether, in the longer term, that just reinforces the notion that if it is not pink and pretty, it is not for girls. That concerns me. As someone who never wears pink, I feel that we should be able to broaden out. Girls should have wider aspirations, rather than just assuming that they have to play with it if it is pink.

It is often suggested that those of us who oppose gender-specific toys are somehow going against nature and attempting social engineering against children’s perfectly natural and hard-wired preferences, but nothing could be further from the truth. I am not trying to stop boys from playing football or girls from playing with dolls. Nature undoubtedly has a role in how children play and interact with toys. My three-year-old son is completely obsessed with cars, trains and diggers, and he always has been, but he also makes a mean cup of pretend tea and is very good at making pretend cakes. Nature has a role to play, but it is not the be-all and end-all.

[Chi Onwurah]

The Minister is making an excellent point. Does she agree that the issue is not about saying that boys should be playing with cookery sets or that girls should or must be playing with engineering sets, but about letting them and their parents have the choice, free from external pressures?

[Jenny Willott]

I could not agree more. There will be boys who grow up to be fantastic chefs and designers, and there will be girls who will be professional footballers or engineers or scientists. The issue is about ensuring that children have the choice and are able to play with a wide range of toys to develop their skills across the board and decide what is best for them and where their interests and skills lie. That will be different for every child.

The issue is also about ensuring that parents are able to help their children have that choice without feeling completely bound by the marketing that suggests they are supposed to buy only certain types of toys for their child because of the child’s gender. We should free people to make choices based on the interests, skills and desires of the children, rather than on the associated marketing. Surely it makes sense that when children first start to explore the world and discover their interests and skills, they should be completely free to let their imaginations roam and to identify what they want to do with their lives.

I sense that most reasonable people would agree that it is wrong to limit our children’s horizons, particularly at such an early age; wrong to restrict their creative play and, as a result, their occupational opportunities; and wrong to shame them for wanting to explore a wide range of toys. Perhaps where people differ is on how important they think the issue is and how much impact it has. We could do with some rigorous, high-quality research to help guide parents, teachers, manufacturers, retailers and advertisers on the right and responsible way forward. I have looked, and there seems to be little, if any, research in that area. It would be good to see some research on what impact the issue has; that might persuade people to change how they retail or advertise toys and help parents shape the choices that they make on behalf of their children.

Toys are a hugely important part of our children’s learning and development. It is of course for children and their parents to choose the toys they play with, as we were just discussing. They should be able to make those choices freely from a full range of toys. How our children play helps to shape their aspirations for the future, and I want those aspirations to be based on their abilities and interests, not on stereotypes. I value the right of every single child to be treated as a unique individual and to be given the opportunity to explore their own interests and develop their own potential and talents, wherever they may lie. That is important not only for children now playing, but for the future of the economy.

Question put and agreed to.